N E W MEXICO BUREAU OF MINES
AND MINERALRESOURCES
OPEN FILE REPORT 77
COSTOFURANIUMMINING
D o n a l d B.
I N NEW MEXICO
Buddecke
RELATIONOFCOSTS
AND TAXES
FOR
NEW M E X I C O ' S URANIUMPRODUCTION
ChristopherRautman
Frank K o t t l o w s k i
.
!IJ)
.
OPEN FILE REPORT 77
.
~
COSTS OF URANIUM M I N I N G IN NEW MEXICO
A t the request of Frank E. Kottlowski, director
f o r t h e Energy ResourcesBoard,
a study wasmade
of t h e NMSM&K?,
o f . t h e c o s t of uranium ex-
writer has no f i n a n c i a l i n t e r e s t i n
t r a c t i o n i n New Mexico.The
acting
uranium
companies o r p r o p e r t i e s i n New Mexico, nor has he any.uranium clients.
1
This report attempts to present costs
future, extending
i n the reasonable foreseeable
t o a t l e a s t 1980, f o r a presently operating "typical"
i n northwestern New Mexicoand
the cost of bringing
on s t e b
mine
a new uranium
mine i n t h a t a r e a .
Sources of
i n the references; additional cozt
the cost data are listed
information was obtained from equipment suppliers, underground miners, cont r a c t o r s , andfrom
my experience as amine
contractor and mine operator.
The operating costs and pre-production costs of
in the past year far
above a normal r a t e .
a new mine have increased
The writer believes the unusual
i n c r e a s e s i n p o s t e d p r i c e s of yellow cake had an adverse effect,on good mining
practices'which increased the costs
and decreased
t h e e f f i c i e n c y of operations.
COST OF PROCURING LEASES
To acquire a l a n d p o s i t i o n i n t h e
known Grants Mineral B e l t , which extends.
from t h e Fdo Puerco on t h e e a s t t o Church Rock on the west,
difficult.
A l l known f e e ,r a i l r o a d ,I n d i a na l l o t m e n t ,s t a t e
i s presently very
and f e d e r a ll a n d s
have been leased and e s s e n t i a l l y t h e oilly way t o a c q u i r e a n a r e a i n t h e p a s t
years has
been t o buya
block of land
3
from another lease holder.
For an exploration target zone t o have some p o t e n t i a l of success, a
block of
from 5 , 0 0 0 t o 10,000 acres would be needed, although only
portion may be of value.
per acre
T h i s acreage i n a favorable area
up t o $150 per acre for front-end costs, plus
a small
would c o s t from $50
a yearly rental.
The
e
-2-
acreage probably would not be i n one block, but
blocksthroughoutthe
add suchoverhead
Belt.
To t h e above front-endcosts,the
c o s t s as l e g a l f e e s , a b s t r a c t s ,
Uranium land leases acquired during
five-year period
would be s c a t t e r e d i n s e c t i o n
company m u s t '
'
and geological research.
a standard exploration program over a
would cost a mining company i n cash bonus, y e a r l y r e n t a l s ,
and i n l e g a l and overhead charges approximately:
Low p o s i t i o n , a small company
High p o s i t i o n , a major company
$500,000
$1,500,000
COST OF EXPLORATION AND DISCOVERY OF THE ORE BODY
The c o s t of exploration and discovery of an ore bodywould
geological staff, contract drilling
holes, assay
include the.
of the exploration holes, logging
of t h e
work, surveying, mapping surface location work, clean-up en-
vironmental work,and
possibly the use of consultants, both geologic
and
engineering.
The d i r e c t c o n t r a c t d r i l l i n g c o s t i s t h e major item and depends on t h e
depth drilled, difficulty in penetrating the drilled material, as well
added items as d r i l l i n g mud and casing.
$50,000 t o $75,000 p e f h o l e f o r d e p t h s
about 1,500
and clean upwork
C odnr$
tir5
lal.ci0nt0g/ f t . .
Lagging
$1.20/ft.
Assaying
report
Geological
Location and ,clean up
To d r i l l a 10,000-acre block
s i z e o r e bodywould
Mt.
Taylor may c o s t
below 3,000 feet.Standard
feet in depth should average
logged with location
D r i l l holes near
as
drill holes
$10,000 t o $20,000 per completed hole
as follows:
$7,500
$1,800
$ 200
$
500
$1,000
$11,000 p e r d r i l l e d h o l e
on 500-fOOK c e n t e r s and d r i l l - o u t a m i l l -
require a minimum of approximately 500 d r i l l holes. This
would r e q u i r e a period of about four years
of exploration and development
-3drilling.
The mining company's exploration budget during this period
would be
approximately:
1 , 0 0 0 t o 1,500 f ed
e rt i l l i ndge p t fho
t,or teaxl p l o r a t i o n
3,000 f e e t and
below
d r i l l i ndge p t ht o
; t aelx p l o r a t i ocno s t
FRONT-END
COST
OF
The front-end cost
$4,000,000
$10,000,000
SETTING UP AN UNDERGROUND M I N E
of s e t t i n g a complete mine operation would include dual
mine s h a f t s , v e n t i l a t i o n s h a f t s / h o l e s , s u r f a c e p l a n t ,
underground haulage
development d r i f t s and workings, power, haulage equipment, and a l l mine equipment and supplies needed i n t h e mine operation.
depth t o t h e o r e body, ground conditions, water
h o i s t i n g equipment, and type ofmining
The mine c o s t s depend on t h e
pumping, v e n t i l a t i o n , size of
methods t o be used.
For shallow shafts less than 700 f e e t , t h e c o s t c o u l d
m i l l i o n andbelow
3,000 f e e t as much as $150 million.
a t about 1,500 feet depth, the costs
a 3-year period: This
'
be a s much a s $2.5
For a mine operation
would be between $ 2 5 ' t o $50 million over
assumes a mill-size o r e body, with the mine hoisting
capacity of 1,000 t o 1,500 tonsperday,
l i s t i n g of costs could be
and w i t h f i r s t - c l a s s
equipment.
The
as follows:
1,500 contracted
shaft,
a t $1,50O/ft.
Headframe, surface buildings, shaft
steel
Underground haulage and development
workings
V e n t i l a tdiho
ro
inllle s ,
secondary escapeway
plant surface
Power plant,
Mine equipment and supplies
Administration and supervision
Engineering and consultants
. .
$3,000,'000
$2,000,000
$4,000,000
$1,000,000
$6,000,000
$8,000,000
$1,000,000
$1,000,000
$26,000,000
The cost estimates range
fromalow
of $10 m i l l i o n t o a high of
$50 million,
depending on conditions and s i z e of operation.
COST OF M I N I N G
The c o s t of mining normally i s c a l c u l a t e d i n c o s t p e r t o n
dire::
c o s t which includes labor,
of o r e a s a
overhead on labor, mine supplies such as
-4-
explosives and drill steel, mine equipment, ventilation, power, safety and
supervision.
The
cost
per
ton
an
older
has
been
in
done
in
per
tona new
in
mine,
the
process
direct mining cost. In
a new
pre-production,
Examples
are
and
as
since
hence
of
mine,
mine
is
much
much
of
the
extracting
however,
development
ore;
most
would
be a capitalized
higher the
thancost
and
may
development
cost
to
be
work
in
an
thus
be
counted
work
would
of
uranium
cost
per
may
per
be
calculated
pound
depends
on the
in
per
grade,
or
.
pound
the
Per Pound
U
0.15%
$7.50
Supplies
7
Equipment
4
Power
2
Haulage
of
.
contained
number
of pounds
3.50
*0.10%
.2.33
1.33
2-00
-67
- ventillation 1
Supervision __
1
Administration
$30/ton
Total
1.00
-33
-50
.33
.50
$10.00/lb.
increase
0
$5.00
Safety
the
be
ton
of ore. Representative costs might be:
Labor
Note
cost
ore
per ton
of ore
&
a
follows:
In the GMB, costs
The
m
amortized.
Old Mine, developed & operating' .$20-30/ton
New Mine, small,
at shallow depth $30'40
New Mine;large,
at deep depth $40-50
uranium.
old
in
the
cost
grade drops from .15%(3.%/tOn) to
per
pound
of
.
$15.00/lb.
yellowcake
which
occurs
as
or
-10% (2%/ton). The grade.determined for
an ore body is
an in-place value, and not the recoverable value. The recoverable
pounds/ton
=
is
alowas
than
the
in-place
value,
and
costs
per
recoverable pound are correspondingly higher. The recovery rate on
depends
many factors including ground conditions, distribution of uranium in
the
host
Large
rock,
mines
and
the
must
skill
operate
of
in
the
lower
individual
grade
ore
miners.
in
order
to
keep
production
high and to pay-out the large capital cost. Cut-off grades in stopes may be
-5I
as
low
as
-07% U;08,
A misnomer
the
uranium
and
has
down
been
mines
may
to
- 0 5 % in development drifts.
applied
"high
to
uraniummining
grade"
the
ore
when
it
has
been
stated
deposits
a higher
to ship
grade
uranium concentrate and to decrease the operating cost. The term "high grading"
refers
to
the
Later it was
stripping
practice
applied
off
to
higher
of
miners
the
in
gold
practice,
values
along
in
one
mines
small
wall
of
stealing
mines
and
with
leaving
gold
from
the
vein-type
of deposits,
lower
grade
materia
the mine. It is not practical to "high grade" uranium oreofdeposits
the
sandstone
tributed
zone..
type
because
throughout
The
tration
higher
of
the
the
grade
higher
contained
mining
zone with
material
is not
percentage
of
uranium
a ton in
of
grades
ore
is
unevenly
from
- 0 5 % to .20% in
located
in
the
dis-
same
such
a manner
that
a.concen-
uranium aoxide
ton of
in ore
could
be
,
mined
differently from the rest of the ore body. The operators mine to the economic
'
cut
off,
During
which
the
is
'process,
material, so that
the
mine-run
retreat
the
the
grade
both
the
mine-run
at
which
higher
average
,
the
3
of
sible
.
stopes
except
material
the
shipping
is
mining
left
costly
to
both
and
collapse,
'The costs
Yearly
per-day
cost
is
taken
grade
(but
with
to
the
not
owing
of
to
uranium
mill.
the
dangerous
high
retreat
thus
any
grade
system
and
low
presently
lo
If
of
mining,
unmined'areas
redevelopment
of
drift
grade
would
mater
roofs
not
be
tunnels.
COST
OF
SETTING
UP MILLS
setting aup
uranium mill are well known. They are increasing
inflation
mill
would
in
equipment
cost
and
engineeringA costs.
2,000 ton-
around
$30 million a t 1977 prices,
-including
of land, power, tailings pond, water, interest
on loan, and taxes. Some
mills
pr
the
.
FRONT-END
.
are.covered
8
uranium
are
by
costs
grade
left will be lost to any future mining.
In the
of
all
off
U 0 percentage is raised to meet added cost,on then
the
cut
system
the
are
quoted $15,000
et
per-ton-day
but
that
figure
is
low
and
a
-6-
probably
does
not
The
mill
usually
captive
include
mine,so that
outside
is
the
fed
a company
by
mine-mill
economic
feasibility
the
body
is
not
custom-
or
tolled-mill,
a cost
ore
a ore
cost
study
of
able
overhead.
..
and
of uranium
supply
owned
complex
inplace
is
normally
value.
. If
the
to
a mill,
carrythen
which
calculated
an
economic
the
then
fromits
ore
must
feasibility
must
be
in
be
of
processed
in
considered
as,toits
total feasibility.
custom miUing cogts
about $6.00 per
milling
cost
are
pound,
but
by
a company
cost
mining-milling
run
the
and
costs
of
from
$2.00 to .$5.00 per
in
ores
future
ore,
on.0.20%
or ore
crude
capacity
be must
available.
URANIUMORE INCLUDING
but
are
ton
milling
range
uranium
complex
mill
These
of
excess
mill
COST OF MILLING
Milling
about
$25 per
are
large
environmental
poundof U 0
3 8'
ENVIRONMENTAL
the'
COST
lowest
of the
expense
part
increases
are
Direct
of
the
in
expected
fuel to
costs.
between
$10 to $ 2 0 per
ton
for
a company
mill
including
haulage expenses from the mine. This would be approxmately
$2.00 to $5.00
per
pound
heads
1
for
0.15% mill
OPEN
Costs
unlikely
Grants
foran
that
except'some
the
cost
be
mine
any
new
low-grade
type
MINES
are
difficult'to
It is
estimate.
open-pit in
operations
the future
of
near
operations
with of
a cut-off
3 8
near
per
uranium
will
very
URANIUM
With the low-grade material, the cost per pound
U 0 of
3 8'
be
pit
there
around .04% U 0
would
open
PIT
that
ton
of
underground
would
be
much
operation
lower.
costs
Examples
with
are
higher
grade,
althoug
uranium
theTexas
open-pit
deposits, where shipping-mill heads costs are about $25/lb
-04%for
U 0 ore.
3 8
The
Wyoming,
in
New
cost
of
Texas
and
Mexico;
operating
Colorado,
there
is
in
other
seem
very
by
little
uranium
my
proQucinq
states,
calculations,
to be similar
difference
in
cost
to
such
as
those
between
states.various
*
1.
. . ..
-7-
SUMNARY
costs t.o mine
operations
OF
uranium
in
areat'nearmaximum
URANIUM
New
OPERATION
Mexico
cost,
COSTS
cover
a large range. Pr
.esently,
mainly
owing
to
the
higher
posted
price, which affects labor, efficiency, and speed of extraction,
all of
which
add
to
the,operating
duction
cost
then
Mineral
Belt,
average
mill
new
to
cost.
Old
uranium
mines ahave
much
lower
mines.a new
For operationin the
discover
a mill-size
grade 0of
.14% U 0 for
3 8
uranium
ore
body 3of
million
production
Grants
pounds
in
1980 would
pro-
with
an
require:
$ 1
$ 6
millioninlandleasecost
$ 0.30/lb.
million in exploration cost
$ 2.00/lb.
$25 million in front-end mine costs
$ 8.00/lb.
$30 million in front-end mill costs $10.00/lb.
$20.30/lb. capital and interest cost
Mining production cost
Milling extraction cost
Total
fora new
of
$ 4.00/lb.
$17.00/lb.
undiscovered
mine
to
be
put
on stream
with
mine-mill.
1980's thus is $37.3O/lb. in 1977 dollars.
REFERENCES
ERDA USBM -
ERDA
NMEI
Survey
of
US
Uranium
Statistical
Data
Uranium
1976
in
UNM
- Uranium
at
of
Marketing
the
Acitivity,
uranium
Sandia
. .
Industryin'NewMexico
Exploration
Steel
Kerr-McGee
United
Todilto
Company
Corp.
Nuclear
Corp.
Exploration
and
Development
Corp.
>
Reserve
. .
Oil
and
Minerals
Inc.
1976
Industry, 1,
January
1976
Sohio L-bar Ranch Mine (nameJ.isJ. No. 1) operations
Ranchers
April
by
mid
spot
-8-
Jones Drilling
Various miners, contractors, and suppliers in Grants area
References
from
Chemical
Engineering,
BACKGROUND
Mining
Engineering
and
Mash
& Stevens
DATA
Donald B. Buddecke, Consultant Mining Engineer, Registered Professional Engineer,
New
MexicoPE 4040, member
Society
of
Mining
Engineers,
AIME,Newand
Mexico
Mining Association. Graduated B. S. in Mining Engineering, UTEP, School
of
Mines, El Paso, Texas. Twenty years
of experience in mining
in USA, Latin
America, Greece and Africa. Past
8 years
Part
owner
and
manager
of small
have
gold-silver
.been
mine
independent
with
mill
Mine
near
Consultant,
Winston
in
Sierra County, New Mexico. Instructor in Mining Engineering at New Mexico
Institute of Mining and Technology in Socorro. Mine Contractor in underground
development
in
New
Mexico,
Washington,
and
Latin
America.
&J*,+.,
e
0
mLATION OF COSTS AND
mLATI0N
TAXESFOR,NEWMEXICO'S
,/Pe..L&W'k.
/Pe..L&w'k.,w
4/&4 / 4 5 $ .
URANIUM
PRODUCTION
1. Gross value taxes, such
as severance taxes, add to direct
costs in uranium mining and production. The higher the tax, the higher
the
cost,
uranium
and
that
the
more
will
be
uranium
lost
that
in
can
mining
not
the
mined --profitably
.
be
higher
grade
ore.
A net income or profit tax would encourage mining of more
2.
uranium, and thus entail less
l o s s of resources.
Major expenditures in producing uranium (exploration, sinking
3.
shafts,
on
building
loans)
are
mills,
buying
front-end
mining
costs,
equipment
and
incurred a
before
single
part
pound
of
of
the
interest
yellowcake
is sold. These costs need to be recovered, as well as the actual mining
and
costs,
as part of the selling price U
when
0 is produced.
production
3 8
4. ERDA's uranium reserve calculations, used to suggest the
possibility ofa high severance tax rate, are on
based
forward costs
(capital
and
required
donot include
for
future
development
as well
sunk
costs
such
ERDA reports
5.
that
50% of
yellowcake
will
period
through1985, less
as
as
much
operating
of
the
costs)
front-end
through
1980 and in1984 and 1985 more
be
sold
at
than18% of
less
$20 than
per pound,
all
uranium
will
and
be
expenditures.
than
in
sold
the
at
prices
more than $30 per pound in any one year. Costs of production .range from
slightly
The
uranium
ceptions
less
than
following
mined
of
.
has a large
persons
pound
not
in
to
New
the
proposed
Mexico
are
familiar
with
ERDA's
reserve
estimates
high-grade
uranium
ore,
of
of
$30 per
more
thanpound.
to
relative
processed
view
amount
per
comments
and/or
A simplistic
.
$10
mining
tax
to
increases
on
clear
up
miscon-
operations.
suggests
which
New
Mexico
supposedly
could
be
mined to yield high profits. Unfortunately, ERDA's cost estimates are
only
on
"forward
costs"
which
are
those
costs
yet
to
be
spent
in
mining
and milling the ore. ERDA's calculations do not include
"sunk costs" of
exploration
develop
the
and
land
mines,
leases,
or
capital
interest
on
investments
these
to
front-end
build
the
mills
and
costs,
yet
these
sunk
t
2
I
..
.
-2-
c o s t s m i l s t be 'recovered o r amortized a t some point.
not include, for
The forward c o s t s do
exarrgle, t h e m i l l i o n s o f d o l l a r s a l r e a d y s p e n t t o d i s c o v e r
o r e bodies, build
m i l l s , and sink expensive deep shafts.
and discovery of an o r e body to
On the average, fro= exploration
mining of t h e f i r s t ore, t & e s 8 years before the stock holder
on o r e mined, m i l l e d .
company can be paid a dividend
a
of
andsold-,
The
s e l l i n g p r i c e o f Yne uranium concentrate, "yellowcake", must not only
cover the ERDA forwzrd c o s t s ol' o r e mining and milling, b u t also the previous 8 years of front-end costs,
and i n t e r e s t on t h a t c a p i t a l i z a t i o n .
Thus, t h e ERD3 reserves data must be u t i l i z e d . o n l y w i t h full knowledge
of exploration, develoLm%t, mining
The "spot market" price
and processing costs.
of uranium has been highly publicized.
d e s p i t e news z r t i c l e s of s a l e s of "yellowcake"
per pound, over one-half
Zesearch and Deirelopent Administration
p r i c e p e r pound of yellowczke through
1985.
Datafrom
$40
at prices
t h e U. S. Energy
(ERDA) semi-annualmarketingsurvey
1.
of J u l y 1, 1976 a r e s c m a r i z e d a s F i g u r e
each year!s corniaents
a t prices greater than
of t h e n a t i o n ' s uranium w i l l be sold
of $20 per pound o r l e s s each yearthrough
Yet,
These d a t a show the average
1985, a s well as the percentage Q €
to be delivered i n $5 price increments.
1985, only 10% of tine uraniurn s o l d i n t h e
Even in
United Stafes w i l l bring more
than $30 p e r poun&.
Estimation of t h e c o s t t o produce a pound of yellowcake i s exceedingly
difficult.
The d a t a is of a proprietary nature,
conpany to company, de?ending on
of mineralization, type
geologic facets,
from
many factors such as depth to ore, grade
of h o s t r o c k , e x i s t i n g c a p i t a l f a c i l i t i e s , d i f f e r i n g
and type of mining.
p e r pound for older, shallower
C o s t s a r e n o t much lowerthan
$10
mines, and a r e i n e x c e s s of $20-30 p e r
imund f o r newer deezer m i n e s i n hTew xexico.
XexicoEnergy
and t h e c o s t s v a r y
A recent' study for the
New
Rssources Board by Mining Engineer Donald Buddecke gave an
estimated cost of 537 p e r pound to bring into production
by the mid-1980's
a 2 ore'bodjj t h a t can y i e l d 3 million pounds of U 0
3 8Uraniun orebodias are ccmplex e n t i t i e s , w i t h h i g h e r
and lower grade
material intermixed
i n a.more or less unpredictable fashion. frequently
s e v e r a l - l e v e l sv e r t i c a l l y .
Ezch orebodycanonlybe
mined a s a whole,
on
'
..
-3-
under
a'pining
plan
deveioped
for
that
body.,
under
specified
engineering
at
and economic conditions. It emphatically cannot be mined for one.grade
economic
cut-off
conditions"X", and
grade
The
when
steps
later
economic
involved
reworked
conditions
in
the
for
material
below
the
first
change
"Y". to
development
and
mining
of
an
orebody
may
be helpful in understanding the problem. Essentially all moderately deep
uranium
ore
bodies
are
found
100-150 foot centers (Figure
2).
ore
mass
must
mine
appears
ment
drifts
be
delineated
by
surfaceon roughly
drilling
Evaluation of the profitability of the
made
on the basis of this density of information.
If a
feasible,
a shaft
are
and
driven
is
into
sunk ain
suitable
the
location,
ore 3 (Figure
) , segmenting
the
and
develop-
ore
into
large pillars. As the development drifts extend toward the margins
t h e of
mineralized
area,a decision
is
made
as
to
what of
grade
material
willbe
mined and what will be left as waste. This decision must bea made at
point in time under the then existing economic conditions. Once the cut-off
grade is determined, and the extent of "ore" ("ore" is only that mineraliz
material
margins
which
of
can
the
be
mined
at a profit)
orebody
are
delineated,
the
piecemeal,
with
removed
pillars
on the
mining
slowly
retreati
toward the shaft. As the pillars are extracted, the unsupported roof
caves-falls
in-(Figure4 ) , rendering
it
extremely
hazardous
and
essentially
impossible to return for lower grade material
at a future date. In terms
of
time,
retreat
mininga developed
of
orebody
may
occupy
the
bulk
of
the
mine life. However, price increases during the retreat stage'can allow
only
minor
changes
in
the
mining
plan
as
determined
prior
to
than
the
beginning
retreat.
If
economic
conditions
dictate
a cut-off
grade
higher
grade
at which the "ore" is largely continuous, the efficiency of the extraction
decreases
rapidly,
Figure 5' shows
the
and
considerable
grade
material
is
forever
distribution a of
hypothetical
lost
mineralized
due
to
caving-
area.
Figures 6, I , 8 , and 9 show the extent of "ore" at various economic conditions
which dictate cut-off grades of
.05%, .15%, .25%, and .35% U 0
3
3'
a'
Note the
changes which occur in the geometry of the orebody. In9, Figure
the shape
of
the
economic
will
is so irregular
ore
feasibility
reveal
only
and
and
a mine
certain
patchy
was
pockets
that
even
constructed,
of
ore;
if
surface
underground
much
uranium
drilling
indicated
development
will
remain
undis
-4-
I n addition, the
z a t e r i a l is l a r g e l y l o s t as mining proceeds and
lower grade
t& ground caves(Figure10).
P o s s i b l e w i n d f a l l p r o f i t s have been predicted because of t h e u
r
a
n
u
im
1973.
priceescalationsince
mination argues for
However, t h e formula f o r c u t - o f f g r a d e d e t e r -
a t a x based onincome
or profit, rather than
a severance
and/or processing tax.
s u l ~of c o s t s (mining,hauling,
cut-offgrade
(8)
=
milling,
r o y a l t i e s i, n t e r e s t g
, r o s sv a l u et a x e s )
.
s e l l i n g p r i c e x . m i l l recovery x s c a l e f a c t o r
I f any cost item increases, the cut-off grade must'increase as well,,unless
compensated by an increase
i n the selling price.
are increased by an order of
If t h e g r o s s v a l u e
magnitude, then the cut-off grade must be
increased by a l i k e amount, since many s a l e s c o n t r a c t s c o n t a i n
no provision for
taxes
tax pass-through.
Such a l a r g e i n c r e a s e i n t h e c u t - o f f
grade would i n e v i t a b l y l e a d t o t h e s i t u a t i o n
shown i n F i g u r e s 6 tlrcoagh 10.
T h i s would r e s u l t i n h i g h l y i n e f f i c i e n t e x t r a c t i o n
of uranium ore, and a
corresponding loss of uranium reserves from the national energy
country can ill afford such losses
l i t t l e or
bank-
This
a t t h i s time.
Conversely, a t a x based on n e t income o r p r o f i t g u a r a n t e e s t h a t , w i t h
care, a companymaymake
t h u s encourage t h e e f f i c i e n t
a p r o f i t , andwould
e x t r a c t i o n of mineralized material.
greater time period, gross payroll
As more o r e would be mined over a.
incomeand
i n New Mexico w i l l be increased, as well as
equipment and supply purchases
more workers employedand
more
income, property, and sales taxes paid.
Christopher Rautman
Frank Kottlowski
KeW Mexico Bureau of
Mines & Mineral Resources
d i v i s i o n of New MexicoTech
This b r i e f r e p o r t
i s a summary of material requested by the h'ew Mexico
Energy Resources Board t o e v a l u a t e c o s t s
New 1,Iexico.
Costs are based
of uranium mining
i n l a r g e p a r t on a review
and m i l l i n g i n
by Donald Buddecke,
Mining Engineer a t Ne% Mexico Tech.
2 1 February 1977
O
m
c)
B
0
e
Q
0
0
0
f)
” .. 2
!3”
ffi
5
”_
.. .
I. I I .I
....
....
.
.- ..
I
..
a
..
e
W
U
9
w
0
I
.w
0
w
. .
FIGURE 9. Possible d e v e l o p m e n t of hypotheticax orebody under 0.35%
cut-off grade. Compare with Figure
5 and note pockets of u n d i s c o v e r e d o i e - g r z d e material. Efficiency of e x t r a c t i o n is poor.
area affected
.
by roof collapse
5
4
r-
*
non-disco-.
vexed ore
*.
pod.
L
/
,
>‘ v
J-
A
1
-
FIGURE 10. X i c e shown i n F i g u r e 9 f o l l o w i n g e x t r a c t i o n of
material
p i l l a r s a n d roof c o l l a p s e . N o t e o r e - g r a d e
lost b e c a u s e of caving and non-discovery,
\?
..
’ _
1.
':
- 3. Telegraph mining d i s t r i c t , Grant County, New Mexico.The
being mrked i s
5 miles
deposit now
north and west of the RedRock post Office.
FromRed.Rock post office it i s reached over a rather poor road for
autos and trucks,
RedRock, New Mexico, post office i s reachedover
goodimproved gravel roads from Silver City, New Mexico, a distance of 53
miles, andfrom Lordsburg, New Mexico, a distance of 23 miles.
Silver
City i s shipping point on Santa Fe railroad and Lordsburg i s shipping
point on Southern Pacific railroad. Actual
di'stance of truck haul from
deposit to Silver City i s 58 miles and from Lordsburg 28 miles.
The
deposit and nearby camp are on w
hat i s known as Alder Creek, a tributary
of the G i l a River.
ELT?VATION
The elevation of the deposit is between 5,000 and 5,500 f e e t abow
sea level.
TOPOGRAPHY
The topography of the area i s mountainous,and
i s very rugged.
Erosion has cut a deep narrow crooked canyon gorge across the deposit
and eventually the drainage reaches the G i l a River.
WATER
-
TIMBER
- POMER
Water f o r domestic purposes only is available a t a spring just below
the deposit of ricolite.
It is not thought tha
. t. enough water i s con-
tinuously available that would furnish a processing plant on the ground.
Timber
is absent in the area, except i n the bottom of the canyon,
.
.
and this i s not of quantity or q u a l i t y t h a t can be used for any purpose
whatever except minor f u e l requirements for camp.
There is no available electric power i n the area.
f o r power must be planned for.
A l l provisions