The method of treatment for the gold ore must be known before a gold deposit can be valued, because a knowledge of the recoverable percentage is as important as that of the gross value of the ore itself. It has been established that the recoverable percentage is usually a factor that relates metallurgical recovery and operating costs. Practically every gold ore can be treated and almost all the metal contents recovered, but the real problem is to know the method and percentage of recovery which will yield the most remunerative result, if any. This limit to profitable gold recovery regulates the amount of metal which should be lost, and the amount of metal which consequently must be deducted from the gross value before the real net value of the gold ore can be calculated.
It has been noted that a compromise has to be made with nature, and analysts take what the project can get profitably. For instance, a gold ore may be leached and a 98% recovery obtained. Under certain conditions this might be done at a loss, while the same ore might be concentrated and yield a profit with a 70% recovery. An additional 20% might be obtained by leaching the residues from concentration, but this would probably result in expenditure far greater than the value of the 5% recovered. If the gold ore is not already under treatment on the mine, or exactly similar ore is not under treatment elsewhere, with known results, the method must be determined experimentally, either by the project manager or by an experienced metallurgist.
Where partially treated products, such as gold flotation concentrates, are to be sold, not only will there be further losses, but deductions will be made by the smelter for deleterious metals and other charges. All of these factors must be found out, and a few sample smelting returns from a similar ore are useful. In order to cover the whole field of metallurgy and discuss what might apply, and how it might apply, under a hundred supposititious conditions would be too great a digression from the subject in hand. It is important to mention that the fact that the residues from every treatment carry some metal, and that this loss has to be deducted from the gross value of the ore in any calculations of net values.
The mining engineer, not only has he to weigh the amount of risk inherent in calculations involved in the mine itself, but also that due to fluctuations in the value of gold. If the concentrate is shipped to custom works, it is necessary to contemplate also variations in freights and smelting charges. Gold from the mine value point of view has fluctuations. It alone among the earth products gives no concern as to the market price. The price to be taken has to be decided before the mine can be valued. This introduces a further speculation and, .as in all calculations of probabilities, amounts to an estimate of the amount of risk. In a free market the law of supply and demand governs the value of metals as it does that of all other commodities.