{"id":2442,"date":"2019-10-02T19:52:38","date_gmt":"2019-10-02T19:52:38","guid":{"rendered":"https:\/\/www.gsnv.org\/shop\/valuation-of-stone-aggregate-and-industrial-mineral-properties\/"},"modified":"2020-02-24T18:17:37","modified_gmt":"2020-02-24T18:17:37","slug":"valuation-of-stone-aggregate-and-industrial-mineral-properties","status":"publish","type":"product","link":"https:\/\/www.gsnv.org\/shop\/valuation-of-stone-aggregate-and-industrial-mineral-properties\/","title":{"rendered":"Valuation of stone, aggregate, and industrial mineral properties"},"content":{"rendered":"","protected":false},"excerpt":{"rendered":"<p>Mineral property valuations are typically requested by<br \/>\nmining companies, property owners, banks, attorneys, and public<br \/>\nentities, and may involve federal, state, and county agencies.<br \/>\nMineral valuations are also often required for stock assessments,<br \/>\nbank financing, damage claims, eminent domain condemnations,<br \/>\ntax audits, public offerings, and acquisitions and<br \/>\nmergers. Valuations of mineral properties require expertise in<br \/>\ngeology, mining engineering, hydrology, hydrogeology, surveying,<br \/>\nfinancial analysis, and market research.<br \/>\nStone includes building stone, landscaping rock, and<br \/>\ncrushed stone, such as limestone, dolomite, granite and basalt.<br \/>\nAggregate includes sand, gravel, and crushed stone. Common<br \/>\nindustrial minerals include limestone, dolomite, gypsum, clay,<br \/>\nsilica sand, quartz, barite, anhydrite, zeolites, diatomite,<br \/>\nfeldspar, and asbestos.<br \/>\nIn this hypothetical example, the mineral property is a<br \/>\n1000-acre tract that is underlain by limestone that can be<br \/>\nprocessed into crushed stone that meets Department of Transportation<br \/>\n(DOT) specifications for road and bridge construction.<br \/>\nThe landowner is leasing the property to a limestone<br \/>\nproducer who is currently mining the property at less than<br \/>\npotential capacity. The landowner desires to determine the fair<br \/>\nmarket value of the property on the open market.<br \/>\nThe fair market value is the cash amount the mineral property<br \/>\nwould be sold by a knowledgeable owner willing to sell to<br \/>\na knowledgeable purchaser who desires to buy. Neither the<br \/>\nowner nor the purchaser is obligated to initiate and complete the<br \/>\nsale. There are three approaches to determining the fair market<br \/>\nvalue of mineral interests: market, income, and cost.<br \/>\nThe market approach consists of the prior sales approach<br \/>\nand the comparable sales approach. The prior sales approach is<br \/>\nthe best approach and considers previous sales of the mineral<br \/>\ninterests in question, which seldom exists. The next best is the<br \/>\ncomparable sales approach, which considers comparative sales<br \/>\nof similar mineral interests. These types of sales are rare<br \/>\nbecause mining operations are unique with respect to size, location,<br \/>\nmarket access, production rate, and operating costs.<br \/>\nThe income approach is the next best approach and is<br \/>\nbased on actual or assumed royalty income from the mineral<br \/>\nproperty over a specified time period, and the cash flows are<br \/>\ndiscounted at a specified percent rate of return over the time<br \/>\nperiod. During the mineral property valuation process, the percent<br \/>\nrate of return is used to determine the discount rate and<br \/>\ncapitalization factor. These are applied to the royalty payments<br \/>\nto adjust for the time value of money. As the saying goes,<br \/>\n\u201cA dollar today is worth more than a dollar tomorrow.\u201d<br \/>\nThe final approach to value is the cost approach, which is<br \/>\nalmost always an inappropriate approach. The cost approach<br \/>\nassumes that the cost of all aspects necessary to explore for<br \/>\nand\/or produce a mineral is the fair market value of the mineral<br \/>\nproperty, and this assumption is seldom true.<\/p>\n","protected":false},"featured_media":4734,"comment_status":"closed","ping_status":"closed","template":"","meta":{"pmpro_default_level":""},"product_cat":[154],"product_tag":[],"_links":{"self":[{"href":"https:\/\/www.gsnv.org\/wp-json\/wp\/v2\/product\/2442"}],"collection":[{"href":"https:\/\/www.gsnv.org\/wp-json\/wp\/v2\/product"}],"about":[{"href":"https:\/\/www.gsnv.org\/wp-json\/wp\/v2\/types\/product"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gsnv.org\/wp-json\/wp\/v2\/comments?post=2442"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gsnv.org\/wp-json\/wp\/v2\/media\/4734"}],"wp:attachment":[{"href":"https:\/\/www.gsnv.org\/wp-json\/wp\/v2\/media?parent=2442"}],"wp:term":[{"taxonomy":"product_cat","embeddable":true,"href":"https:\/\/www.gsnv.org\/wp-json\/wp\/v2\/product_cat?post=2442"},{"taxonomy":"product_tag","embeddable":true,"href":"https:\/\/www.gsnv.org\/wp-json\/wp\/v2\/product_tag?post=2442"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}