THE VALUATION OF MINES AND OIL PROPERTIES 245 
“basic ” price represents the point at which the mineral produc- 
tion falls off to such an extent that a rise in price results. 
Mr. Hoover in his “ Principles of Mining ” states that safety 
lies somewhere between the “basic” and “ normal” prices. 
No such limitation should be placed on the exercise of the 
judgment of the valuating engineer, as this assumption cannot 
hold good during the years following protracted periods of finan- 
cial depression such as the hard times of 1893 to 1898. The 
“normal ” price of many minerals estimated on a 10-year or 20- 
year average basis was for a considerable period of time following 
this depression less than the actual value of the mineral. 
For illustrative purposes certain tables of statistics giving the 
production and average prices of four important metals (copper, 
lead, silver and zinc) from 1880 to 1914 are given at the close of 
this Chapter. Curves have been plotted which illustrate the 
relative increase in the production of these metals from year to 
year and also the changes in the average annual price. (Fig. 4 
to Fig. 7.) For comparison normal curves of production and price 
(based on ten-year averages) have been plotted assuming that 
the average figure for production and price are applicable midway 
of the ten-year period. By continuing these normal curves to 
date on the assumption of a five-year future history for the 
metal, a present “ normal ” price can be obtained that will be 
as close an approximation as can be made. 
Valuations for Purchase and Sale. — When a valuation of a 
mining property is needed because of a contemplated change in 
ownership, the most satisfactory method of valuation is the 
straightforward one involving the determination of the value 
of the ore body on the basis of its production past, present and 
expected. 
Such a valuation includes an estimate of the probable life or 
expectancy of the property under the actual or an assumed rate 
of production, an estimate of the price that the mineral product 
will bring in the markets of the world and an estimate of the 
cost of producing the mineral. This method requires the use of 
all available information as to geology, actual operating costs,