Cost Keeping for Small Metal Mines Page: 7
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APPLICATION OF A COST-KEEPING SYSTE-M.
Also, suppose that as a result of this expenditure the company is
a going, profitable concern with ore broken in stopes plus reasonably
assured. ore reserves estimated at 100,000 tons. It will simplify
matters to assume that the cost of developing these reserves was the
above set forth figure of $100,000, or $1 per ton. The cost of
breaking ore, if the $30,000 expended for this purpose has yielded, say,
10,000 tons of ore broken in the stopes and ready for loading, is $3
per to... The broken ore has thus far cost $4 per ton and the remain-
ing reserves $1 per ton. As this broken ore is removed or the
developed ore is mined these charges should be transferred to the
operating account, and the deferred expense account correspondingly
credited., Otherwise the mine will show a fictitious profit. The
above example is simple in the extreme and is capable of almost
indefinite elaboration, but it indicates the necessity for adequate,
systematic accounting and cost keeping during all stages of prepara-
tion, equipment, and operation.
THE APPLICATION OF A COST-KEEPING SYSTEM.
SPECIMEN COST STATEMENT.
To illustrate the application of a cost-keeping system to small or
medium-sized mines the following example is given: A supposititious
lead-silver mine of moderate size, situated in a western State, and
'having railroad communication, works a fissure type of deposit by
the shrinkage stoping system. The mine run of ore is concentrated
by simple jigging. The resultant lead concentrates are sold f. o. b.
railway cars at the mine under a long-time contract. The property
is well equipped. All accounting is done at the mine and there is
no head office. A specimen cost sheet for such a mine is submitted
in Form 1. The main cost headings are ore breaking, development,
shaft sinking (which comprise the total cost of mining), milling,
power, and overhead.
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Pickering, J. C. Cost Keeping for Small Metal Mines, report, February 1919; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc66479/m1/7/: accessed April 25, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.