With the exception of gold, metal prices are subject to frequent fluctuation, resulting in corresponding variations in the value of their ores.

Metal prices are quoted periodically in technical and trade journals and average yearly prices in the principal markets are discussed in the Minerals Yearbook, published annually by the Bureau of Mines. From time to time charts have been prepared showing price trends of the principal metals over long periods; a recent one was published by the Engineering and Mining Journal.

Prices are quoted delivered f. o. b. at certain basing or delivery points such as New York for copper, New York and St. Louis for lead, and St. Louis for zinc. For several years the Federal Government has established prices for silver produced from domestic ores, which have been considerably above the world market price. Lake Superior iron ores are quoted f. o. b. lower lake ports at prices per unit of contained iron that vary with the class of ore and the total iron content.

A discussion of metal prices and the marketing of metals and ores is beyond the scope of this bulletin, and the subject is mentioned merely to introduce the discussion that follows. For information on marketing the reader is referred to the work of Spurr and Wormser, to which 30 well-known specialists contributed.

Although the quoted prices are used as a basis for computing the value at the mine or mill of nonferrous metals contained in the ores or concentrates, the mine value is less than quoted value by charges for freight on ores or concentrates to the smelting plants, smelting charges, and smelter deductions for losses in treatment and for deleterious constituents of the ore, cost of shipping unrefined metal to refineries, and the refining charges, marketing costs, and the like.

From the value of Lake Superior iron ores quoted delivered at lower lake ports must be deducted cost of rail freight from the mines to upper lake ports, handling and loading charges at the docks, lake freight, cargo insurance, unloading cost and sampling charges at lower lake ports, and selling costs to arrive at the net value at the mines (see footnotes 39, 40, 41, table 61).

Table 56, included under the discussion of ore dressing, gave examples of open schedules covering gold and silver ores at western (United States) lead smelters. Table 62 gives similar schedules at copper smelters.

It is noted that no payment is made for zinc in lead ores and concentrates but that, on the contrary, there is a penalty for zinc in excess of specified maximum percentages. On the other hand, ordinarily no payment is made for small amounts of lead in zinc ores and concentrates; for larger percentages of lead most schedules include payment for part of the lead at a price considerably below the quoted price. Where zinc occurs in copper ores or concentrates in excess of certain maximum percentages, copper smelters usually charge extra for smelting, which reduces the net value of the copper to the shipper. Zinc smelters usually pay for part of the copper if in excess of stipulated minimum percentages but at a price considerably below the current quotation.

To illustrate the effect of the factors mentioned in a general way above, the following examples of schedules and calculations from Information Circular 6926 are given:

Payments for Metals

Gold.—If 0.03 ounce per dry ton and up to and including 3.0 ounces, pay for all at $19.00 per troy ounce; if over 3.0 ounces, pay for all at $19.50 per troy ounce, plus 90 percent of realized gold premium in excess of $20.67 per troy ounce. Under present Government price this is equivalent to paying for 100 percent at $31.81825 per ounce when under 3.0 ounces and $32.31825 per ounce when over 3.0 ounces gold content per ton.

Silver.—If 1.0 troy ounce per dry ton or over, pay for 95 percent at the applicable Handy & Harman quotation, or at the present realized Mint price of 77 cents per ounce, provided silver qualifies for Government purchase and affidavit is furnished; minimum deduction 0.5 ounce.

Copper.—Deduct 0.75 unit from wet copper assay and pay for remaining copper at prevailing electrolytic cathode quotation, less a deduction of 2.5 cents per pound of copper paid for.

Lead.—Pay for 60 percent of wet assay less a deduction of 3.5 cents per pound at prevailing lead quotation. No lead paid for if less than 2.0 percent by wet assay.

Quotations.—Silver, lead, and copper quotations are based on average for calendar week including date of arrival of last car of each lot at plant of buyer, and on a bullion freight rate of $12.50 per ton to New York City.

No payment will be made for any metal or content except as above specified.

Deductions

Base charge.—$3.50 per net dry ton on ores having a gross value of $20.00 or less. Increase base charge 10 percent of excess gross value above $20.00 up to a base charge of $5.50 per ton.

Sampling.—A flat charge of $5.00 will be made for sampling, handling, and assaying each lot containing less than 10 tons dry weight when value per ton is $200.00 or less. When value per ton exceeds $200.00, sampling, handling, and assaying charge will be $7.50 per lot. No charge will be made for sampling, handling, and assaying lots containing 10 tons or over dry weight.

Impurities.—Zinc 6 percent free; charge for excess at 30 cents per unit. Arsenic and antimony combined, 2 percent free; charge for excess at 50 cents per unit.

Freight.—All railroad, freight, and delivery charges are for the account of the shipper. Deduct from settlement, freight, and other advances made by buyer.

Assaying.—Buyer’s assays will govern if seller fails to make or submit assays prior to acceptance of payment. Seller should advise at time shipment is made whether or not he desires to submit assays and also direct buyer where to send control pulp samples.

Duration.—Rates on ores not under contract are subject to change 30 days after date shown above. This rate cancels and supersedes all former rates quoted.

Example of Calculations

The method of calculating returns on a shipment of ore based on the preceding schedule follows;

Wet weight of lot, 36.28 tons.
Moisture, 8.5 percent.
Dry weight of lot, 36.28 (1.00—0.085) = 33.20.

In this example the gross value of the ore per dry ton based on full quoted market prices of the contained gold, silver, and copper would have been as follows:

After deductions are made for metal losses, this figure becomes $42.33, as shown; and after smelter charges and penalty deductions it becomes $36.71 per ton, 75.9 percent of the gross value (not including zinc). Assuming that the smelter is some distance from the mine, a further deduction would be necessary to cover freight.

Example 2

Domestic Dead Ores and Concentrates

The following terms are subject to the general clauses and are subject to prompt acceptance. Unless shipments are begun within 30 days this quotation is canceled automatically.

Payments

Gold.—If 0.03 ounce per dry ton or over, pay for all at the rate of $20 per troy ounce plus 90 percent of the realized gold premium in excess of $20.67 per troy ounce. Under present Government net realized price ($34.9125), this is equivalent to $32.81825 per troy ounce.

Silver.—Pay for 95 percent (minimum deduction of ½ ounce) at the average Handy and Harman New York silver quotations for the calendar week, including date of arrival of last car of each lot at plant of buyer; or, if higher, at the realized Mint price, provided silver qualifies for Government purchase and affidavit is furnished, less a deduction in either case of 1½ cents per ounce. Present Mint price is 77 cents per ounce.

Lead.—Deduct from the wet-lead assay 1.5 units and pay for 90 percent of the remaining lead at smelter quotation less 1.425 cents per pound of lead accounted for. Nothing paid for lead if less than 5 percent by wet assay.

Copper.—Deduct from the wet-copper assay 8 pounds and pay for 95 percent of the remaining copper at the daily net refinery quotations for electrolytic cathodes as published in the Engineering and Mining Journal of New York averaged for the calendar week, including date of arrival of last car of each lot at the plant of the buyer less a deduction of 5.025 cents per pound of copper accounted for. Nothing paid for copper if less than percent by wet assay. No payment will be made for any metal or content except as above specified.

Deductions

Base charge.—$3.70 per net dry ton of 2,000 pounds; provided the sum of payments for gold, silver, load, and copper does not exceed $26 per ton. Add to the base charge 10 percent of the excess over $25 to a maximum charge of $6.70 per ton.

Insoluble.—Allow no units free; charge for all at 5 cents per unit, fractions in proportion.

Zinc.—Allow 5 units free; charge for the excess at 30 cents per unit, fractions in proportion.

Sulfur.—Allow 2 units free; charge for the excess at 20 cents per unit, fractions in proportion. Maximum charge $2 per dry ton of material.

Arsenic.—Allow 2 units free; charge for the excess at 50 cents per unit, fractions in proportion.
Antimony and tin (combined).—Allow 1 unit free; charge for the excess at $1.50 per unit, fractions in proportion.

Bismuth.—One-tenth of 1 percent (0.1 percent) of the lead content by wet assay will be allowed free. The excess will be charged at 50 cents per pound, fractions in proportion.

Moisture.—A minimum deduction of 1 percent will be made from wet weight; when over 1 percent is contained, the actual moisture will be deducted.
Delivery.—F. o. b. unloading bins.

Taxes.—Deduct Federal or State taxes, import duties, stamps, and/or other charges now or hereafter imposed.

Freight.—All railroad freight and delivery charges for account of shipper. Deduct from settlement freight and other advances made by buyer.

General Clauses Governing All Open Schedules

1. Weighing, moisture, and ore sampling (at which seller or a representative may be present), as done by buyer according to standard practice, promptly after receipt of product, will be accepted as final. The absence of seller or a representative shall be deemed a waiver of the right in each instance. After sampling, the product may be placed in process, commingled, or otherwise disposed of by buyer. In case of disagreement on assays, an umpire shall be selected in rotation from a list mutually agreed upon, whose assays shall be final if within the limits of the assays of the two parties; and if not, the assay of the party nearer to the umpire shall prevail. Losing party shall pay cost of umpire. In case of seller’s failure to make or submit assays, buyer’s assays shall govern.
2. All schedules on ore not under contract for a definite period of time are subject to change without notice.
3. The rates quoted herein are for carload lots. On any lot containing 1 ton or less there will be a sampling and handling charge of $10. This charge will be decreased by $1 for each ton in excess of 1 ton.
4. The rates quoted apply only to ore in bulk. Fifty cents per ton additional will be charged for ore in sacks to cover extra cost of handling.
5. In the event quotation date should fall on a legal holiday or one upon which no quotation is issued, the next succeeding quotation will be used in settlement.
6. In this schedule where the word “ton” is used it is understood to be a ton of 2,000 pounds avoirdupois; where the word “ounce” is used, as referring to gold and silver, it is understood to mean the troy ounce; and where the word “unit” is used it is understood to mean 1 percent of a ton, or 20 pounds avoirdupois.
7. In order that delivery of the ore at our plant may not be delayed unnecessarily we make it a general rule that the freight charges must be prepaid or guaranteed by the shipper.
8. The rates quoted herein are based on present existing scale for common labor at the smelting works and present published all-rail freight rates on lead and copper bullion from smelter to New York City. Any increase or decrease is for account of seller, and proper deduction or credit shall be made accordingly.

Example of Calculations

The method of calculating returns based on the foregoing schedule follows:

Wet weight of lot, 137.2 tons.
Moisture, 3.0 percent.
Dry weight of lot, 137.2 (1.00 — 0.03) = 133.1 tons

In this example, the gross value per dry ton of the contained gold, silver, and copper only, based upon full quoted market prices, would have been as follows:

After deductions for metal losses, this figure becomes $18.93 as shown, and after treatment charge and penalties is further reduced to $9.75 per dry ton, which is only 45.4 percent of the gross value of the gold, silver, and copper. Net value at the mine would be less than this by the cost of shipping to the smelter.

It is common practice for the smelter to pay the cost of freight and deduct it from the payment made to the shipper.

To further show the relation of gross value to net returns, the data in table 63 are presented. These data are taken from actual returns made to shippers, and bases of payment, deductions, and charges are given in the references (see column 1).

It is noted that for gold and silver ores shipped in the crude state or in the form of concentrate (first six mines listed), the net return to the shipper varies from about 54 to 84 percent of gross value at full quoted prices; whereas at the Vulture mine, where the gold and silver are shipped as high-grade precipitate, the net return is 92.7 percent. Where the precious metals are shipped in the form of semi- refined bullion the return is often even higher. It is, therefore, decidedly to the advantage of the shipper to reduce gold and silver to bullion if his ore is amenable to treatment by amalgamation or cyanidation. In some instances recovery of part of the gold and silver by these processes and of the remainder in concentrates may be the most economical practice.

In general, the data in table 63 serve to emphasize the point previously discussed under “Ore dressing” with respect to the advantages of concentrating the valuable metals within the smallest bulk possible commensurate with good recovery to obtain the highest not return on the contained metal value.