The Journal of the International Machinery Volume 32, Issue 1, 1st Qtr 2016 & Technical Specialties Committee of the American Society of Appraisers
$35.00 ASA Members, MTS Discipline $50.00 ASA Members, Non-MTS Discipline THE M&TS JOURNAL
Contents
MTS Editorial 5 Brad Hartsburg, ASA, CPPA, CSA Chairman’s Report 6 John J. Connolly, III, ASA Governor’s Bulletin 7 Richard Berkemeier, ASA and David Crick, ASA, MTS Governors Finding the Right Appraiser is as Easy as ASA 9 Richard Berkemeier, ASA State of the Helicopter Market 11 Sharon Desfor, ASA Ethics in the Global Real Estate Market - A New International Coalition 19 Tony Grant, FRICS Supportable Evidence in Appraisals 25 John Mathe, ASA MTS214 Identification and Appraisal of Mining and Mineral Processing Equipment Course 29 Alan C. Iannacito, FASA and Allan K. Bowles, PE Virtual Chapter News 37 American Society of Appraisers IRONTRAX LLC Mining Industry Insight (Winter 2015) Mining Industry Statistics 39 Joseph Santora, ASA 9th International Conference of Plant and Machinery and Equipment 44 Leslie H. Miles, Jr. FASA, FAPI The Past and Future of Compliance and Fraud in Aviation: Don’t Fly Blind 46 Peter J. Turecek Technological Obsolescence Finally Arrives in the Metal Stamping Press Industry 50 Harry J. Richardson, ASA / Edited by: J. Barry Savage ASA, Emeritus The Ideal Pricing Index 53 Walter W. O’Connell M.E., ASA, SCSP Freight Railcar Basics 56 Tom Sexton, ASA ASA Trains ODR Analysts on Machinery and Equipment Valuation Methodology 64 Jack Beckwith, ASA, CEA Archived Articles Available for Your Library 66 Brad Hartsburg, ASA, CPPA, CSA
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American Society of Appraisers 11107 Sunset Hills Rd, Suite 310, Reston, VA 20190 800-272-8258 ext 125 Editorial Office: Fortress Machinery Appraisals and Consulting Inc. 24 Clover Lane, Calgary, Alberta, Canada T3Z 1G9 Business Office: Asset Valuation Source, P.O. Box 39 Rowlett, TX 75030-0039
© 2016 American Society of Appraisers. All rights reserved. For permission to reproduce in whole or in part, and for quotation privilege, contact ASA’s International Headquarters. Neither the Society nor its editors accepts responsibility for statements or opinions advanced in articles appearing herein, and their appearance does not necessarily constitute an endorsement.
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The International Machinery & Technical Specialities Committee
MTS Committee Officers Paul Cogley, ASA – Rhode Island - Treasurer John J. Connolly III, ASA - New Jersey - Chair Robert W. Clark, ASA - Pennsylvania – Immediate Past Chair Samuel Shapiro, ASA - Massachusetts – Vice Chair Richard Berkemeier, ASA – Rhode Island - MTS Discipline Governor Karen M. Milan, ASA - Texas – Secretary David Crick, ASA – Australia - MTS Discipline Governor
MTS Committee Members William M. Engel, ASA - NY Charles W. Ruth, ASA - NM Ildefonso Acevedo Reyes, ASA - Mexico Brad Hartsburg, ASA - Canada Joseph M. Santora, ASA - OH Nuno S. Agostinho, ASA - Argentina Norberto J. Levin, ASA - Argentina Bradley Schulz, ASA - IL Jamie Allen, ASA – IL Irina Rykun, ASA - Russian Federation Garrett Schwartz, ASA - CA Keith Bransky, ASA - GA Kevin S. Reilly, ASA - WI John C. Wood, ASA – Australia Peter J. Campbell, ASA - MI Harry J. Richardson, ASA - MI Michael R. Crismyre, ASA - IL Alexander Ruden, ASA - GA
Emeritus Members Melvin Fineberg, ASA - NV H. Denis Neumann, ASA - CA Merritt Agabian, FASA - MA Alan C. Iannacito, FASA - CO Robert Podwalny, FASA - CA Kal Barrow, ASA - NY William F. Jacobs, ASA - OR Barry Savage, ASA - OH J.M. Clarkson, ASA - TX Norman F. Laskay, ASA - LA Robert Svoboda, ASA - TX John Connelly, III, ASA - NJ Leslie H. Miles, FASA - TX Victor Thompson, ASA - KY
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MTS Editorial Brad Hartsburg, ASA, CPPA, CSA
I welcome you to the first edition of the MTS Journal for the 2016 calendar year edition Volume 32, Issue 1, 1st Quarter 2016. I wish everyone a Happy and Prosperous 2016 and would like to thank all of you that assisted with interesting articles for this issue, there is a lot of great information and we hope it assists you with your daily work and activities. We continue to look for interesting articles our members and readers want to learn from. If there is a topic you are passionate about, please do not hesitate to contact me. I am more than willing to work with you on your article. Check your calendars and plan to attend the interesting conferences and courses that are planned for this year. Please see ASA website www.appraisers.org. Our Chairman, John Connolly III, ASA has written to let us know what is happening with the MTS discipline. Our Governors, David Crick, ASA and Rick Berkemeier, ASA have updated us on the happenings of our MTS discipline and the society as a whole. Richard Berkemeier, ASA wrote an article on how to find an appraiser and some information about how to make this easier. Sharon Desfor, ASA, MRICS has written an article about the state of the helicopter industry in 2015 and going forward. Tony Grant, FRICS has written an informative article about ethics in the global real estate market. John Mathe, ASA, has written an article on how to support your evidence in your appraisal report with some do’s and don’ts. Allan K. Bowles, PE Mining Engineer and Alan C. Iannacito, FASA have provided us with a report of the MTS214 Identification and Appraisal of Mining and Mineral Processing Equipment Course in Butte, Montana, September 9-11, 2015. Joseph Santora, ASA has provided an interesting economic update about the mining industry. Leslie H. Miles, Jr. FASA, FAPI has provided a report on the 9th International Conference of Plant and Machinery Equipment held in Tokyo, Japan on October 26-28, 2015. Peter J. Turecek, Senior Managing Director, Investigations & Dispute at Kroll has written a very informative article dealing with the past and future of compliance and fraud in aviation. Harry J. Richardson, ASA wrote an article that explains technological obsolescence in the metal stamping press industry. Walter W. O’Connell M.E., ASA, SCSP has written an informative article about the ideal pricing index. Thomas A. Sexton, ASA has written about freight railcar basics and explained the workings of them. And, Jack Beckwith, ASA, CEA has provided a report about an ASA onsite training course for Oregon Department of Revenue Analysts on Machinery and Equipment Valuation Methodology. I hope that you enjoy this edition of the MTS Journal! Sincerely,
Brad Hartsburg, ASA, CPPA, CSA - MTS Journal Editor Fortress Machinery Appraisals and Consulting Inc. Calgary, Alberta, Canada - 403-650-1122 E-mail - [email protected] Website - www.fortressmachineryappraisals.com
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Chairman’s Report John J. Connolly, III, ASA
Happy New Year to all ASA M&TS Members, The goals of the committee continue to focus on the advancement in our educational offerings and increasing our membership numbers. Our educational offerings are the leaders in our profession, and they are continually updated to reflect current theories and topics. Our ASA webinars are one of the key factors in helping all in the discipline stay current on issues and trends. We are teaching our Principles of Valuation (POV) classes around the world including Germany, Japan, Italy, Russia, Africa, Canada, England, Australia, and South America as well as in the United States of America. We also have special courses in Mining, Inventory, Aircraft, Financial Reporting and Marine Appraisals. The ASA 2015 International Appraisers Conference, Las Vegas, Nevada was held on October 18 – 21, 2015 and had the best attendance yet of any annual conference. Many thanks to those that participated and to the organizers and contributors for the great and interesting programs – fantastic job! The MTS handbook, “Valuing Machinery and Equipment” (3rd Edition) is currently under rewrite and we are anticipating a March 2017 release. If you are interested in making comments or suggestions please forward them to me and we will consider all input. Under the direction of Richard Berkemeier, ASA and his team of experts from around the world, the MTS courses are being rewritten and we anticipate having them all completed by Mid-2016 with MTS 204 being the first off the press by March 2016. The Body of Knowledge is also being rewritten which is a major undertaking as well. Your MTS committee is hard at work and we are always looking for additional help. The pay is poor but the feeling of accomplishment in helping our Profession is GREAT. Perhaps I may see you at one of our many other course offerings. Please feel free to contact me with any questions, concerns or input you may have. May you all have a happy and prosperous 2016! John J Connolly, III, MTS Chairman [email protected] Office 1-201-670-7400 Cell 1-201-264-1109 Get the latest information on inventory valuation, aviation, marine appraisal techniques and report writing and ethics.Hard copy and/or e-Book versions available. Order online at www.appraisers.org or by phone at (800) 272-8258.
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Governor’s Bulletin Richard Berkemeier, ASA and David Crick, ASA, MTS Governors
On the Education front we are planning on holding course offerings in London, Tokyo, Puerto Rico, Cuba, Kiev, Lagos, Melbourne, Moscow and Amsterdam over the next 12 months. We anticipate holding 12-15 webinars this year and are always looking for new topics. In 2016-2017 we will be offering the new 2016-17 update to Personal Property USPAP. We continue to see tremendous growth in our Chapter in Australia, Japan and Europe. Australian MTS Seminar The Australian Chapter is holding its fourth annual MTS seminar in Glen Waverley, Victoria, Australia on the 10th & 11th of March 2016. The presentations this year include Classic and Prestige Cars, CNC Machining & Equipment, Renewable Energy and a module on Report Writing. There will also be a tour of the Bombardier Rail Vehicle Manufacturing Plant. The seminar would not be complete without the annual awards dinner. Registrations are strong as is the anticipation of the topics and field trip. Corporate Jet & Helicopter Conference, London, UK The sixth annual London event of the aircraft and helicopter industry is being held in Kensington, London from 1 - 4 of February 2016. The sessions are tailored for those involved in aircraft transactions including sessions by appraisers. ASA Appraisers that will be presenting at the event include Mr. David Crick, ASA, Ms. Sharon Desfor, ASA, Mr. Daniel Hall, ASA and Mr. Chris Miller, ASA. Call or email if you need anything – all the best in 2016! [email protected] Rhode Island, USA [email protected] Australia
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5TH ANNUAL EQUIPMENT VALUATION CONFERENCE 8-9 June 2016 Metropolitan at The 9 | Cleveland, OH
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Finding the Right Appraiser is as Easy as ASA Richard A. Berkemeier, ASA
After the savings and loan crisis in the 1980s, and again in 2008, the banking industry responded with new rules and additional safeguards for better risk management. One of the most significant changes involves aircraft appraisals. Prior to 2008, a simple market evaluation by a resale broker, often with just a quick look at the current edition of the Aircraft Blue Book, was sufficient to secure as much as a 90% loan-to-value ratio for a preowned aircraft. That is no longer so. Today, most banks, leasing companies, and insurance underwriters require that all loan collateral, including business jets, be valued by a qualified, certified appraiser before financing is approved. Those appraisers must comply with the Uniform Standards of Professional Appraisal Practice (USPAP), which was created in 1989 by the Appraisal Foundation, and is the generally accepted standard in Canada and Mexico as well as the United States. Two organizations provide such appraiser certification: theInternational Society of Transport Aircraft Trading (ISTAT), which focuses primarily on commercial airliners; and the American Society of Appraisers (ASA), which teaches, tests, and confers credentials to its members, who conduct professional appraisals for business and personal property valuation. The ASA’s Machinery and Technical Specialties division offers the only program to train and certify business aircraft appraisers. Appraisers earn that aircraft specialty accreditation by completing a rigorous curriculum and peer evaluation. ASA (American Society of Appraisers) accredited appraisers must adhere to the professional standards set forth by ASA’s Code of Ethics and Principles of Appraisal Practice, and well as USPAP in North America, or the International Valuation Standard elsewhere in the world. The two levels of ASA – American Society of Appraisers certifications that are available is: 1. AM - Accredited Member 2. ASA - Accredited Senior Appraiser - which is based on the number of years of appraisal experience, with continuing education courses required to hold either accreditation. The recent rebound in business jet transaction activity has increased the demand for certified appraisals. To meet that need, two established aviation organizations, Jet Support Services, Inc. (JSSI) (www.jetsupport.com) and Embry-Riddle Aeronautical University (ERAU) (www.erau.edu) co-sponsored and co-hosted two American Society of Appraisers (ASA) accreditation courses earlier this year, one at ERAU’s campus in Daytona Beach, Florida, and the other at JSSI’s European headquarters in Farnborough, U.K., with more courses planned for this fall. What does this mean for you, the aircraft owner? If you are interested in monitoring the value of your aircraft, whether for financing, refinancing, or sale; or to verify hull value for insurance coverage, you will need to have your aircraft appraised by an ASA certified appraiser. This will ensure that you have the most accurate and lender acceptable data available.
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On average, expect the appraisal to take about one week, with the physical inspection process usually one full day onsite, and the rest reviewing records and report writing. The appraiser will conduct a systematic inspection of the interior and the exterior of the aircraft, including: engines, airframe, avionics, instrumentation, and other systems; as well as provide a methodical review of your aircraft’s flight and maintenance log books, FAA registration, title, and owner’s documentation. Most business jet appraisers avoid “desktop only” appraisals because the inspection and review of the records is extremely important. In 2015, the average cost for a full appraisal and inspection – required by most lenders – is about $5,000, perhaps up to $7,500, plus expenses. Be aware, however, that a standard appraisal is not the same as a pre-buy inspection for purchase, which can run between $10,000 to $50,000 depending on the size and scope of the work. Rules for lending have changed dramatically in the past six years. If you have not been in the market recently, know that a proper appraisal will ensure that you secure the right equipment at the right price, while meeting your lender’s requirements. For more information about and to find an accredited Appraiser search the American Society of Appraisers website at www. appraisers.org or call 1-800-272-8258. About the Author Richard A. Berkemeier, ASA, is chief appraiser for CB Appraisal Review and Management Group. An active member of ASA’s Board of Governors with 30 years’ banking and leasing experience, he was VP of Citigroups’s Investment Bank.
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State of the Helicopter Market Sharon Desfor, ASA
2015 was a difficult year: stock market volatility, Eurozone volatility, financing volatility, and for those of us in the helicopter industry, oil price volatility. Why is the Price of Oil so Important to Helicopter Values? In 1948, oilmen and fur trappers in Louisiana were in a dispute about the oilmen’s marsh buggies (used to reach drilling sites) trampling the muskrat breeding grounds, the birth cycle, and in turn the trappers’ economy. A very young Bell Helicopters brought in a demonstrator to show how the oilmen could bypass the breeding grounds by replacing marsh buggies with helicopters. Bob Suggs took that idea and ran with it, forming the company Petroleum Helicopters Inc., and helicopters found full- time work in the oil patch. While PHI remains a strong presence in offshore oil & gas, they have been surpassed in size in the intervening decades by Bristow Group and CHC Helicopters. Oil and gas companies spend significant amounts of money outsourcing personnel transportation. At the beginning of 2015, Douglas-Westwood was forecasting expenditures of $24 billion on offshore helicopter services in the 5 year period between 2014 and 2018. This predicted a 57% increase in offshore helicopter service expenditures in comparison to the 2009-2013 period. That, of course, was before oil production volume skyrocketed and oil prices fell dramatically during the year. Since then, we’ve seen the major operators downsizing, watching their shrinking profits, and suffering from falling stock prices. The link between rig counts, oil prices, and offshore operations is easy to see. Look at the ebb and swell of the lines in the following three charts.
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Despite timing lags, the matchup is very visible. In truth, it’s nearly impossible to deploy workers to (or rescue them from) a drill rig or production platform by any mode of transportation other than helicopter. Crew members can’t drive, take a train, or land on a helipad with an airplane, and not all platforms have sea-level elevators. They could ride in a frog from a workboat up to the deck, but not all platforms are equipped with the safety hoist that allows personnel transfer. In the North Sea and other inhospitable areas, Sea State 4 and others can make it impossible to safely transfer crews from the water line, which makes helicopters the only answer for more than half the year. If you haven’t guessed by now, offshore oil support is the single largest source of income in the helicopter industry. As go oil prices, so go helicopter values. Think back to 1980, and again to 2008. There was a bubble in helicopter values and production at each of those points, along with a dearth of used inventory on the market. Now look at this chart.
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The top light-green line is the price of crude oil per barrel trended to 2010 dollars. It peaked around 1980, and again in 2009. During those peak periods, contracts for oil support helicopters skyrocketed, the supply of used helicopters dissolved, manufacturers hit multi-year backlogs, and speculators crowded the market, buying and selling delivery positions for profit. The fewer helicopters available for sale, the higher the values went. And when oil prices crashed, so did helicopter values. This means that as low as helicopter values are right now, they will continue to fall in reaction to oil prices and rig counts, not to mention a strong US dollar. Yes, it will improve eventually. But it’s going to fall more first, and then it’s going to need a trigger for improvement. Which will probably need oil prices to rise again? So that’s the impact of oil prices. Why does it impact the values of non-offshore machines? The old saw, “a rising tide raises all boats,” has a lot to do with it. We belong to a tiny industry, and helicopters are pretty easily reconfigurable. So a helicopter that’s been offshore could easily become an EMS machine, or a basic utility craft, or vice versa. The State of the Industry Today we have a serious glut of excess inventory on the market. Roughly 10%-11% of the fleet is available for sale, whereas in a “normal” market (if there is such a thing) we’d more likely see 6% to 9% available. And the size of the available inventory is not shrinking at all. Light single-turbine helicopters continue to flood the world market. There are over 700 light singles on the market. A fifth of them are Bell 206B series machines, and a third is the Airbus AS350B/H125 series. That shouldn’t come as a surprise, since that’s probably the approximate allocation of those models in service as well. We’ve also seen some slight growth in the used light twin inventory. There are 250 light twins on the market. Two thirds of those are corporate/VIP configured. Three quarters are ten years or older. The Agusta 109 series makes up very nearly half of
Volume 32, Issue 1, 1st Qtr 2016 13 THE M&TS JOURNAL all light twin listings. There isn’t a strong secondary market for these machines, with the exception of the BK117, which has found some new life in the utility and oil & gas/mineral exploration markets. There is noticeable softening in the medium and heavy markets due to replacement of older models like the S76A/B/C and AS332L/L1/L2. Older Super Pumas are being traded in on newer models, and nearly three-quarters of those are unlikely to be rebuilt and will instead be scrapped. Current Issues in Economic Viability We’re seeing a 15% loss of value due to VIP configuration and history. Corporate profits overall don’t have a lot of influence over the helicopter market since most helicopters are income-producing assets. That said, profits in the oil & gas companies do impact contracts, and therefore demand and ultimately resale values. Fleets are moving heavily from owned to leased. The Bristow, CHC and Era fleets already comprise 20-30% of leased aircraft. Most major operators plan to move up to about 35% leased aircraft, making our industry for the first time look more like commercial airlines. Owned ships are being sold off – oldest technology first – or to a lesser extent grounded. Leased ships are suffering from postponed or cancelled deliveries. Lessors are seeking new lessees, even at lower rates, just to get the machines into service. Lessors are pretty insistent on power-by-the-hour programs (which, of course, the lessees are expected to pay). There are good reasons for this: protection of their assets, improvement in residual value at lease termination, and smoothing out of the predictable but still large surges in maintenance, overhaul and repair expense. Even owned helicopters are moving steadily in this direction. It benefits the helicopter’s owner, regardless of whether they’re a lessor or an operator. Values at Year-end 2015 The prices ranges below are from The Official Helicopter Blue Book® at year-end 2015, for helicopters with 0% to 60% component usage, given in 2015 US dollars, single outright owner with no title encumbrances. They are shown in alpha numeric order by manufacturer.
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Make Model Low to Mid time - EOY 2015* Factory Base 2015 Agusta 109C $525,000 $825,000 Agusta 109E Power $1,060,000 $2,970,000 Agusta 109S $2,220,000 $3,600,000 Agusta 109SP $4,130,000 $5,230,000 $6,210,000 Agusta 119 $1,200,000 $2,200,000 $3,350,000 Agusta 139 $5,650,000 $11,060,000 $11,300,000 Bell 204B $780,000 $1,120,000 Bell 205 A-1 $2,430,000 $3,320,000 Bell 206B $174,000 $330,000 Bell 206BIII $330,000 $1,010,000 Bell 206L-1 $390,000 $600,000 Bell 206L-3 $466,000 $815,000 Bell 206L-4 $790,000 $1,865,000 $2,445,000 Bell 212 $1,530,000 $3,350,000 Bell 214B $1,500,000 $3,000,000 Bell 214ST $1,414,000 $2,500,000 Bell 222U $250,000 $400,000 Bell 230 $300,000 $450,000 Bell 407 $1,480,000 $2,985,000 $3,040,000 Bell 412 $1,725,000 $3,000,000 Bell 412SP $2,010,000 $3,490,000 Bell 412HP $2,280,000 $3,780,000 Bell 412EP $3,470,000 $8,750,000 $10,850,000 Bell 427 $655,000 $1,070,000 Bell 429 $3,750,000 $5,700,000 $6,175,000 Bell 430 $650,000 $1,300,000 Enstrom F-28C-2 $90,000 $140,000 Enstrom F-28F $110,000 $210,000 $485,500 Enstrom 280C $80,000 $130,000 Enstrom 280F/FX $160,000 $340,000 $485,500 Enstrom 480 $290,000 $490,000 Enstrom 480B $470,000 $700,000 $1,215,000 Erickson S64E $19,570,000 $24,770,000 Erickson S64F $22,610,000 $27,610,000 Airbus 117A4 $650,000 $800,000 Airbus 117B-1 $1,040,000 $1,960,000
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Make Model Low to Mid time - EOY 2015* Factory Base 2015 Airbus 117B-2 $1,170,000 $2,000,000 Airbus 117C-1 $1,140,000 $2,420,000 Airbus EC120B $530,000 $1,050,000 $1,960,000 Airbus EC130 $1,110,000 $1,840,000 $3,200,000 Airbus EC135P1 $1,200,000 $1,745,000 Airbus EC135P2 $2,330,000 $4,305,000 $5,300,000 Airbus EC135T1 $1,200,000 $1,745,000 Airbus EC135T2 $2,330,000 $4,305,000 $5,300,000 Airbus EC145/BK117C-2 $3,860,000 $5,500,000 $8,393,000 Airbus EC155B $2,280,000 $2,840,000 Airbus EC155B1 $3,900,000 $5,640,000 $12,240,000 Airbus EC225 $13,400,000 $27,000,000 $21,460,000 Airbus 330J $1,540,000 $2,500,000 Airbus 332L $4,750,000 $7,250,000 Airbus 332L-1 $6,250,000 $8,750,000 Airbus 332L-2 $8,500,000 $10,500,000 Airbus 350B $235,000 $425,000 Airbus 350BA and 350B1 $300,000 $700,000 Airbus 350B2 $450,000 $1,875,000 $2,240,000 Airbus 350B3 $800,000 $2,160,000 $2,809,000 Airbus 350D $275,000 $500,000 Airbus 355F1 $396,000 $600,000 Airbus 355F2 $416,000 $750,000 Airbus 355N/NP $810,000 $1,930,000 $3,750,000 Airbus 365N1 $740,000 $1,320,000 Airbus 365N2 $1,500,000 $2,480,000 Airbus 365N3 $2,160,000 $4,210,000 Kaman KMAX $5,250,000 $7,000,000 MD 500C $360,000 $550,000 MD 500D $500,000 $800,000 MD 500E $535,000 $1,140,000 MD 520N $570,000 $940,000 MD 530FF $650,000 $1,540,000 MD 600N $550,000 $750,000 MD MD 900/902 $1,130,000 $2,870,000 Robinson R22 Beta $80,000 $140,000
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Make Model Low to Mid time - EOY 2015* Factory Base 2015 Robinson R22 Beta 2 $110,000 $190,000 $285,000 Robinson R44 $100,000 $205,000 Robinson R44 Clipper/Clipper 2 $110,000 $465,000 $482,000 Robinson R44 Raven 1 $100,000 $365,000 $375,000 Robinson R44 Raven 2 $200,000 $455,000 $456,000 Robinson R66 $490,000 $750,000 $855,000 Sikorsky S-61N $1,540,000 $2,500,000 Sikorsky S-76A $325,000 $450,000 Sikorsky S-76B $670,000 $1,230,000 Sikorsky S-76C+ $2,920,000 $4,800,000 Sikorsky S-76C++ $7,000,000 $9,200,000 Sikorsky S-92 $1,410,000 $31,000,000 $31,000,000
Sharon Desfor, ASA, is president of HeliValue$, Inc., the world’s most trusted helicopter appraisal firm, and publisher of The Official Helicopter Blue Book®, the accepted standard for helicopter resale pricing information. Sharon was recently elected International Secretary/Treasurer of ASA (American Society of Appraisers). She has participated in leadership roles at ASA for the past decade, at HAI longer than that, and before that, at the Helicopter Foundation for fifteen years. Sharon enjoys teaching finance people about the helicopter industry, and helicopter people about the finance industry. She lectures frequently for aviation/finance conferences, and writes for magazines in the aviation and appraisal industries. Sharon is an Accredited Senior Appraiser of the ASA, is past Chair of the Helicopter Foundation International and of the HAI’s Finance & Leasing Committee, and served as Editor of HAI’s finance handbook, Helicopter Funding: Assembling the Pieces of the Puzzle. For more information, please contact: Sharon Desfor, ASA | www.helivalues.com | [email protected] | +1-847-487-8258
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2016 International Appraisers Conference Boca Raton Resort & Club | Florida September 11 - 14, 2016
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Ethics in the Global Real Estate Market - A New International Coalition Tony Grant, FRICS
When I began my career, 52 years ago, few people were predicting the arrival of a truly global market in real property. Now it is here. And it is massive. The World Bank estimates that 70% of global wealth is held in real estate. According to a report last year from Price Waterhouse Coopers, the global stock of investable real estate will rise by more than 55% to around $45.3 trillion by 2020, from a 2012 total of $29.0 trillion. It will have expanded again at a similar rate by 2030. And as it changes and grows, so must our approach to developing and enforcing international ethics. There is a substantial body of evidence which suggests that transparency and ethical conduct are becoming increasingly important for business everywhere. Responsibility to the wider community is regarded as not only a matter of integrity, but a key to commercial success. And yet codes of conduct among real estate practitioners are still local, national and regional. And sectoral. That contradiction represents a serious limitation and is hampering progress in our industry. Investors are willing to place funds in all regions of the world, but in doing so they face different environments and cultures. What may be prohibited in one country could be perfectly acceptable in another. The need is for the entire industry to speak with one voice by making a declaration of consistent standards. That is why a new International Coalition of organizations representing the property and related professions has been established. The Evolution of Professional Ethics Over recent years we have witnessed an evolution in professional codes of conduct. Traditionally, up to the end of the 20th century, they were concerned principally with how to conduct business in a manner that reflected honesty in dealing with clients’ affairs. Today, those responsibilities are being extended. Many professional bodies require their members to fulfill obligations to all stakeholders affected by their actions and to society as a whole. They must demonstrate professional competence at all times. And they are expected to have regard to modern concepts of social justice. A good place for us to start thinking about international ethics is the Declaration which has been signed by 70 professional bodies (so far) upon joining an earlier and separate Coalition addressing International Property Measurement Standards: “Ethics guide everything we do and foster public trust. To complement property measurement standards, we support ethical principles that guide and unite our international profession.” That is the underlying motivation for the new International Ethics Standards Coalition which was founded in October 2014 at an inaugural meeting at the United Nations in New York. It aims to advance the public interest by developing and implementing the first industry-wide ethics standards for property and related professional services. The goal is for property practitioners to work in an ethically consistent way, regardless of where they are located and the nature of their practice. The Challenge Let us now take a step back and attempt to analyse in more detail the challenge that exists in the international real estate market with regard to ethical standards. It cannot be denied that some elements of the real estate industry have a poor reputation. We can identify four main problems:
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FIRST: Sad to say, but there are still firms and individuals lacking in integrity and in the skills required for their work. And here we should remember that having the knowledge, training and experience to act competently is an ethical requirement. Clients are at serious risk when practitioners attempt to advise and represent them without possessing the necessary expertise. Such action is a form of express or implied misrepresentation. SECOND: In many parts of the world, even where standards are in place, they are not adequately enforced by governments or even by professional and business associations. THIRD: Members of the public simply do not know how to identify practitioners who undertake to adhere to standards of honesty and trustworthiness. FOURTH: The fourth problem area is a little more subtle. It is that the connection between the adoption of professional standards and the growth of market confidence is not widely appreciated. And here we have come to a key point. It is that ethical conduct leads to market confidence. And, of course, market confidence leads to market stability and improved values. It is no exaggeration to say that ethics in property are not just about doing the right thing. They attract customers. They motivate staff. And they encourage investors who need to know that their financial affairs will be conducted in a morally acceptable way. In a nutshell, good ethics mean good business. Historic Areas of Public Concern At this point, we should identify the principal areas where, over many years, there has been continuing public disquiet about unethical practice within the real estate industry. There are nine of them: • Misrepresentation of property and project information. • Financial misconduct, including fraud and misappropriation of third party funds. • Inadequate skills and expertise to provide the professional services offered, as previously mentioned. • Conflicts of interest. Also a lack of impartiality when an independent assessment has been promised. • No proper insurance for errors and omissions (also known as professional negligence). • Accepting or offering corrupt payments, gifts and hospitality. In a word, bribery. • Unfair discrimination and a failure to respect human rights. • Concealing relevant facts and acting without transparency. • Unauthorized disclosure of clients’ confidential information; New Challenges Now let’s consider the requirements of modern social responsibility. At last year’s inaugural meeting of the Coalition at the United Nations, many of the participants felt that one could legitimately ask to what extent are today’s new, 21st century challenges a matter of professional ethics? Here are some topical questions: • In this age of computers and mobile devices, is there an ethical duty to take active or even pro-active steps to protect individual privacy and electronic data? Would that go too far beyond the established norm of respecting client confidentiality, or is it simply keeping up to date technologically? • Is there an ethical obligation to report any suspicion of money laundering or the financing of terrorism?
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• How about sustainability ? The majority of informed people around the world believe that reversing climate change is vital for the future of human civilization. Does it follow that there is now an ethical requirement for professionals in real estate to carry out their work based on a ‘green’ agenda ? On the face of it, the answer is obvious. And a number of professional organizations have already made good environmental behavior a vital part of their code of conduct. But there is another side to the coin which the International Coalition will at least have to take into account. Some legitimate authorities still question the scientific basis for the theory of global warming. They insist that, in any event, the moral priority is to alleviate extreme poverty in under-developed parts of the world through economic growth and wealth creation even if the current level of pollution is maintained. The point here is that in creating common standards for land and the built environment we will need to reconcile, or at least acknowledge, some very different approaches, to put it mildly. That theme can be further extended, for example, to today’s development of office buildings. Is it anethical requirement that new commercial buildings must actually advance healthy living? Should those buildings contribute to the welfare of people working there by providing best air quality, high levels of natural daylight and good recreational facilities? Is this one of several points at which social welfare, productivity and professional ethics ought to march hand in hand? How far should ethical standards in real estate go in fulfilling the modern idea, reinforced by the United Nations Global Compact, that individual businesses - including professional practices - have a duty to society that extends well beyond delivering a return on investment for their owners? Should today’s standards for real estate – which is only one industry among many - cover aspects like good working conditions; equal employment opportunities for women and for minorities and fairness in the treatment of employees, suppliers and customers? Or is that notion, which encompasses the entire range of human rights, too political to be a matter of ethics in our professional lives? A growing number of business leaders are convinced that adopting a genuine corporate integrity, to the benefit of customers, shareholders and employees, is the way forward and is not in conflict with profitability and asset value. It will be interesting to see the extent to which the new International Ethics Standards for real estate are able to answer those questions. The Solution - International Ethics Standards The majority of non-profit real estate organizations have long promoted their own codes of conduct which are a vital part of their member value proposition. It is important to understand that the existence of these numerous ethical codes is not a problem in itself. That is because: • Most, if not all, have a similar foundation in that they demand decent and trustworthy behavior as well as competence in the services offered; • Many codes are based on established norms and customs and are published by associations in specific localities, states or regions. Examples are: - The German Property Federation - The European Council of Real Estate Professions - The Real Estate Institute of Victoria, Australia Other organizations set out to regulate single disciplines, such as brokerage, valuation, architecture and management. They do not attempt to address all sectors of the industry. Examples are:
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• The Counselors of Real Estate • The International Union of Architects • The Institute of Real Estate Management • The International Right of Way Association Some organizations do both, such as: • The Council of European Geodetic Surveyors; • The Royal Institute of British Architects; • The American Society of Appraisers Once again, we are led to the same conclusion. The real problem is that there does not exist in the highly competitive global marketplace a single statement of principles which is universally recognized. The absence of a central authority on ethics can result in uncertainty at best and confusion combined with widespread mistrust at worst. The solution is to introduce - at an international level - one shared set of high quality, clear and consistent standards on which everyone can agree and to which all are held accountable. Such standards have the potential to become a recognized benchmark of integrity for services provided by real estate professionals throughout the world. The idea of international standards underpinning a single profession is not new. There is the Hippocratic Oath in medicine which is very well regarded the world over. The global accountancy profession has its International Ethics Standards Board for Accountants to which most of the leading national boards are affiliated. In Law, there are standards applied by the International Bar Association which includes in its membership more than 190 bar associations and law societies from all continents. In the wider profession of real estate no such structure has existed up to now. The intention of the new Ethics Coalition is to achieve global consistency across different markets; to promote comparablility, assurance and trust; to work to a formula that is collaborative and self-governed; to reduce unnecessary risk in transactions and business practices and to construct a sound framework for cross–border working. No Conflict with Existing Codes Contrary to the fears of a few national associations that their own codes of conduct will somehow be under threat, the adoption internationally of fundamental but high quality principles will leave a vital and permanent role for individual professional bodies. They will be free to retain their own more specialized and possibly more stringent rules if they wish. And the implementation of global standards will be carried out through the codes owned and enforced by Coalition member organizations. The Coalition will establish clarity and demonstrate harmony on vital concepts of integrity and professional competence. In doing so, it will reinforce the authority of its members’ existing codes of ethics. In fact, the new standards will underpin those codes. The result will surely be an enhanced reputation for the entire profession and greater public trust. In this positive atmosphere, confidence in the ownership of real estate is bound to strengthen globally. This will lead to less volatility and, in the long term, enhanced values. Ultimately, there will be a significantly improved rating for property itself as an investment asset class.
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The Process is Key Now we come to the process of administering the Coalition and creating the new International Ethics Standards. The process is regarded as key on the assumption that, through active participation, the associations which make up the Coalition, and their individual members, will identify with its output. Therefore, all organizations which join the Coalition are directly involved in its governance. Each member has appointed a Trustee (and an alternate). The Members and their Trustees are equal in authority and make major decisions by majority vote. As more countries and organizations become committed, the likelihood will grow that what is finally produced will gain universal acceptance and will actually be implemented. However, the challenge is to ensure that in the drive to gain approval from so many different sources we do not dilute the Standards to the point where they become irrelevant. Many under- developed countries lack the political and economic structure to regulate business. As a result, corruption has a devastating effect on vast populations. Our task, which is not an easy one, is to define the principles of acceptable conduct in both emerging and advanced economies so that the property industry can contribute to a solution. The Ethics Standards themselves are being written by an independent committee of leading global experts nominated and elected earlier this year by the Trustees. It is called the “Standards Setting Committee” and consists of 20 specialists in the field of codes of ethics, governance and professional conduct. They are researching existing rules, both within real estate and outside, and will be codifying ethical principles so as to create the new International Standards. That process is expected to be concluded during the first half of 2016. When the Committee’s work is completed, the Coalition members will become joint owners of the Standards. They will legally share the intellectual property and will participate fully in implementation and compliance. The new International Ethics Standards, or IES, will join at least four other global standards: • International Financial Reporting Standards • International Valuation Standards, and • International Property Measurement Standards. • International Construction Measurement Standards The first three are already in existence and are of growing importance in world markets. Continuing Role of the Coalition The adoption of these new ethical standards across the world will take time and the Coalition is expected to have a long term role. This will be: 1. To create and publish high quality international standards in several languages using terminology that is readily understood. 2. To promote, through close collaboration among its member organizations, the adoption, implementation and enforcement of the Standards by (i) leading professional bodies; (ii) national, regional, state and local governments; (iii) private sector entities, and (iv) public sector entities. In all likelihood, this will lead to the Coalition and its members providing guidance and training for real estate professionals. It is worth commenting that, in the long run, ethics standards that are not enforced are no standards at all. So, ensuring compliance is an absolutely vital part of the Coalition’s purpose.
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It is not far fetched to anticipate that that the Coalition could maintain and publish a register of organizations and individuals who have undertaken to adhere to the Standards. This might ultimately lead to internationally regulated practitioners and corporations. 3. The third element of the Coalition’s long term role is to update the Standards, as needed, from time to time while offering advice on their interpretation and application. Also, helping to resolve disputes on their content and meaning. The International Standards will be promoted through associations’ own guidance and codes (as mentioned earlier); the training of professionals around the world and by businesses endorsing the Standards while choosing advisers and brokers who comply with them. We can expect the result to be a wider understanding among the general public of how the Standards work and why they are beneficial. Conclusion One cannot over-state the significance of numerous, prominent professional bodies from all parts of the world voluntarily coming together to create and implement International Ethics Standards. Global adoption of those Standards will establish a new 21st century, moral foundation for all human activity in land and buildings, including construction, finance, occupation and investment. We can reasonably expect the public perception of the entire property profession to be enhanced. This is a vital opportunity for our profession to demonstrate the benefits of self-regulation while working in constructive partnership with the public sector. The new Coalition has the potential to advance decency, competence, transparency and integrity as the professional norm everywhere. As we have seen earlier, that is not just the right thing to do but it is likely to result in more stable markets and substantially improved business conditions. Tony Grant FRICS, FIABCI Past World President, Deputy Chairman, International Ethics Standards Coalition. Tony Grant was born in London, UK in 1942 and has spent a lifetime in the real estate profession. He founded Grant & Partners (Property Advisers, Appraisers, Surveyors and Estate Agents) in London in 1965. The firm initially specialized in industrial and warehouse agency, but later diversified into office property, development and investment consultancy as well as project management and property management. By 1987 Grant & Partners had grown to a total of 12 partners and 140 support staff. In that year, Tony Grant was invited by one of his firm’s major clients, Ladbroke Group PLC (later Hilton PLC), to head up their United States property subsidiary, London & Leeds Development Corporation. He ended his executive involvement in Grant & Partners and moved to New York on a five-year contract. He was appointed President and Chief Executive Officer of London & Leeds with direct responsibility for a 4.7 million square foot office development program in Boston, New York, Washington D.C. and Miami representing approximately $1.5 billion of investment. Tony Grant returned to London at the beginning of 1993. In June of that year he joined the Board of Olives Property PLC as Chairman & Joint Chief Executive, having purchased a substantial interest in the company. Olives was a small UK based public property investment and development company whose shares were quoted on the main London Stock Exchange. During the subsequent five years the gross assets of Olives Property grew from approximately £5.6 million to £58 million. Olives was sold to Hemingway Properties by means of an agreed takeover transaction in May 1998 and Mr. Grant left the Board to take up the World Presidency of FIABCI, the International Real Estate Federation, for a one-year elected term. Between 1999 and 2002 Tony Grant was active in the UK as a real estate investor and developer utilizing his private family funds. This activity was transferred to South Carolina in January 2003 when he moved to the USA as a permanent resident and continues to the present time. He became a U.S. Citizen in 2007. In 2014 Tony Grant was appointed as Deputy Chair of the International Ethics Standards Coalition which now comprises approximately 60 major property, construction and infrastructure organizations from every part of the world.
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Supportable Evidence in Appraisals John Mathe, ASA
Disclaimer: The writer of this article does not profess to be a legal expert and this article should not be construed as legal advice. It is simply my view based upon my experiences as an MTS valuer/ appraiser. Introduction This discussion focuses on creating supportable evidence utilized in appraisal reports, in particular, when using the sales comparison approach. I want to share with you some methods that I use to support the evidence when writing appraisal reports. MTS appraisers are often called upon to appraise assets for litigation matters. Many appraisers utilize the sales comparison approach as it is often recognized as sound evidence (after adjustments) for supporting the appraiser’s opinion of value. Notice I said “opinion of value” and not “conclusion of value”. As appraisers we do not conclude value, rather we provide an opinion of value. The reason I emphasize this point is that in most legal jurisdictions, opinions from expert witnesses should be based upon facts (see rule 702 Testimony by Expert Witnesses (USA)). However, this does not mean that an expert’s opinion will automatically be admissible as evidence. In significant case law; (Australia) Makita Pty Ltd v Sprowles [2001] NSWCA 305, Dasreef Pty Ltd v Hawchar [2011] HCA 21 and (USA) Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), important determinations were made regarding the standard for admitting expert testimony in courts. In “Dasreef” the Court held that to be admissible, the opinion must satisfy three criteria. Firstly, the opinion must be on a subject matter that is “expert in nature” secondly, the expert witness must have ‘specialized knowledge based on the person’s training, study or experience’ specific to the opinion required; and thirdly, the opinion must be “wholly or substantially based on that knowledge”. The High Court reiterated, it is ordinarily the case, as Heydon JA said in Makita, that: “the expert’s evidence must explain how the field of “specialized knowledge” in which the witness is expert by reason of “training, study or experience”, and on which the opinion is wholly or substantially based’, applies to the facts assumed or observed so as to produce the opinion propounded.” By now you must be wondering why I am discussing case law? Many appraisers never get involved in litigation matters. However, as appraisers, we all provide professional opinions which other parties rely upon, and that leaves us potentially open to being sued for damages over an allegedly poor or deficient appraisal report. After many years of preparing appraisal reports for litigation, I have found there are a number of rudimentary things one can do to support the evidence that forms our opinions in appraisal reports. • When using the sales comparison approach, if possible, physically inspect and photograph all the comparable sales. Your evidence carries considerable weight if you have physically inspected the asset as opposed to just downloading an image and basic data from the internet. In fact, your evidence may be deemed inadmissible if you cannot convince the court of the suitability of the comparable sales. • When making adjustments, applying depreciation and obsolescence, use industry acceptable methods. These should be based upon sound science and you should be able to quantify the adjustments. Using adjustments based upon
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‘gut feel’ just doesn’t cut it. Even if you use basic calculations to make the adjustments, showing how you got from A to B to C in a logical and quantitative way helps to support your evidence. • Keep detailed notes of conversations with clients, industry colleagues, machinery & equipment retailers, other appraisers and industry experts. Although file notes may not be classed as self–authenticating, (See Rule 902 Evidence That Is Self-Authenticating USA), the best advantage is that it demonstrates the level of investigation that the appraiser has undertaken and gives weight to the stakeholders that you have carefully considered a broad range of factors and other professional opinions. • Use excerpts from credible industry publications such as professional appraisal organization publications and guidance notes. These can assist in reinforcing the formulas and methodologies that have been utilized within the report. • Have a third party review your report. If you know a report will likely be used in litigation, include an amount in your fee to account for a third party to review your report. Using a lawyer or appraisal reviewer can sometimes discover potential areas of weakness that may have gone undetected. Lawyers and professional reviewers are experts at uncovering weak spots in arguments and can be invaluable in mounting a credible defence for your client. Your client wins, you win. • Include a risk matrix in your report. It doesn’t have to be a complex matrix, but it will demonstrate that you have considered the effect risk has on values of the assets you are appraising. • Double check your spelling and grammar. It can give the impression to the client that you have not checked the report for errors and the client could easily lose confidence in the quality of the report. • My final tip is to go to court and sit in on trials involving appraisal reports and observe the areas of the reports that the lawyers and the judges test for credibility. Sitting in on trials can give you an insight into potential weaknesses in appraisal reports and will help you develop methods to support your evidence. Conclusion Scrutiny, accountability and due diligence will continue to stay at the forefront of appraisal work and reports will continue to be judged on their merits and the strength and credibility of supportable evidence that we as appraisers produce. If you prepare your appraisal report with supportable evidence using sound and proven methods, then I believe you will achieve the following; • You will feel more confident in your reporting. • You will be less likely to feel anxious about being challenged. • You will provide a better service to your clients. • You will create a competitive advantage and a point of difference against other appraisers. • You will help to improve the reputation of MTS appraisers. Thank you for your consideration of my article and I hope I have contributed to the appraisal standards debate. References https://www.law.cornell.edu/rules/fre/rule_702 https://www.law.cornell.edu/supct/html/92-102.ZS.html http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/nsw/NSWCA/2001/305.html?stem=0&synonyms=0&query=~%20makita http://www.mondaq.com/australia/x/140858/Personal+Injury/Is+the+expert+evidence+admissible+or+not https://www.law.cornell.edu/rules/fre/rule_902
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About the Author John Mathe, Valuer & Senior Appraiser, MSAA, AVAA, ASA, API, is an Accredited Senior Appraiser and API (CPV) Certified Practising Valuer and the owner of Henley Valuers (www.henleyvaluers.com.au) located in Adelaide, South Australia. John Mathe’s career began in 1984 working in an auction house of machinery, equipment, antiques, vehicles and general goods. He regularly provides appraisal reports for litigation, financial reporting, market evaluations, insurance, mergers and pre-purchase. I welcome any comments which can be forwarded to the editor of this publication or to me directly at admin@ henleyvaluers.com.au.
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Machinery and Equipment Appraisals
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MTS214 Identification and Appraisal of Mining and Mineral Processing Equipment Alan C. Iannacito, FASA and Allan K. Bowles PE
Course in Butte, Montana, September 9-11, 2015 A current MINING ENGINEERING magazine features an autonomous heavy ore hauler. Unless you are a hobby miner, the days of pick, shovel, jackass powered ore cars and brutal mining conditions are a thing of the past. Too, the days of trade routes across the Sahara, ships trading for gold from Africa, coal, iron ore, silver or salt from various desert and sea sources has brought mining multinational. Therefore, mining is influenced by international politics, economic control, warring factions and improving technology.
History supports evolution towards things that work and the processes that make those things dependable. As a microcosm of industry and progress ASA’s course, MTS214, The Appraisal of Mining and Mineral Processing Equipment, takes a historical but progressive look at what helped that evolution from extraction and refining of useful, nature provided materials. As machinery and technical appraisers it is important that we study and keep up with diversity such as the extractive metallurgical, coal and rare earth industries. This year’s MTS214 was taught for a second time in Butte, Montana, “The Richest Hill on Earth,” and home Instructors Allan K. Bowles, PE Mining Engineer and Alan C. Iannacito, FASA to legendary “Copper Kings.” Nine Students and two instructors were ushered through the MONTANA RESOURCES open pit mine, a huge copper and molybdenum pit adjacent to Anaconda’s former Berkley Pit, and the ore processing “concentrator,” where the rock is broken, ground, put through flotation cells, filtered, dried and loaded into super-sacks for delivery to the smelter.
Denver Equipment Co. ~ 1940’s Public Domain
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MTS214 Butte Class of 2015 L-R: Joseph E. Roberts, ASA Kent R. Amareante, ASA, David Milan, Karen Milan, ASA, Christopher Bischof, Alan Iannacito, FASA, Charles Dixon, ASA. John Mathes, JP “Buck” Ward, ASA, Steve Prahl, ASA, Allan Bowles, PE, Mining Engineer.
Typical of large scale open pit mines, Montana Resources operates through exploration, drilling, blasting, loading, hauling, crushing, grinding, flotation, separation, drying packing and shipping. The principal product is copper ore with a secondary recovery of molybdenum and trace amounts of silver. Unique to the process is another facet of recovering copper from the adjacent Berkley Pit. This is mining by precipitation. Montana Resources recovers 60% to 70% copper through cycling water from the pit through concrete cells loaded with shredded scrap steel cans in a process called, “plating.” (Source: Montana Resources Brochure: People are our greatest asset). The final product is used in a myriad of industrial and consumer products from copper electrical wire to automobiles, cookware, and molybdenum for high strength steel and high tech products. Also germane to mine and mill equipment valuation is the importance of economics, world political climates, market adjustments caused both by greed, need, technology and the impact on asset values. Unlike a commercial vehicle or a household appliance, mining and mineral processing equipment can range, in value, from extraordinary high RCN to scrap in the matter of a few bad market hiccups. The class discussed the economics and depreciation of physical assets but also about “intrinsic value,” of seemingly idle machinery on the market but going nowhere during the downtimes.
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Mining ore at Montana Resources; Inside Ball and Rod Mill Section of Montana Resources Concentrator
Mining is forever because the world popular needs her resources. There are always the down times, the plateaus of value and the long periods of inactivity of popular but occasional idle equipment spreads. MTS214 looks for variety with a history of the present and a trip to the past. The first day of the three day class is a mine tour. Montana Resources personnel have been gracious in time and the willingness to take the class through the processes. As in the past, we then spend the afternoon through a mining museum and underground tour. This year’s tour is adjacent to Montana Tech of the University of Montana in Butte. Here we learn about the evolution, the ups and downs of the industry and what strategic purpose mining is to mankind. Mining is forever because the world popular needs her resources. There are always the down times, the plateaus of value and the long periods of inactivity of popular but occasional idle equipment spreads.
A head frame at Montana’s World Museum of Mining
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Day Two and Three Here in the classroom we start with the mining portion of the course. The afternoon continues with the ore processing and review continuing on the third day. Saturday Exam, and done by 12:00 Noon. We have found that the class can be modified to take only a total of three days. Next year’s class will have a different format allowing attendees to get back home before the weekend. But for those who like to remain a couple of days, there are other reasons to attend this event.
Instructor: Allan Bowles, PE Mining Engineer and MTS214 Class Class member Charlie Dixon, ASA after the exam with a nice fish
The following are some photos from David Milan at Montana Resources and Butte, Montana September 2015
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About the Authors Alan C. Iannacito, FASA has over 45 years in the mining machinery, mineral processing, chemical processing and food processing equipment industries. He is a full time appraiser as well as a former dealer, liquidator, buyer, seller, dismantler, rebuilder, manufacturer of mine, mill and processing equipment. He is the co-presenter of ASA MTS 214 course - The Identification and Appraisal of Mining and Mineral Processing Equipment. Alan was also the first MTS Chairman, MTS text book co-author, MTS Journal contributor and is an expert witness. Allan K. Bowles, Mining Engineer, PE has a 45 plus year career in the mining, equipment, and environmental area which includes 22 years with the Pittsburgh & Midway Coal Co. as a senior project engineer (2 years in Denver), and working 20 years at active coal strip operations in Kansas, Missouri, and Gallup NM. Other experience includes working as a Product Line Manager for Mine Safety Appliances marketing underground coal equipment and as a mining construction engineer for Boyles Bros Drilling Co. working on mine shaft and tunneling jobs including the construction of a 2400 ft. deep shaft for the AMAX Henderson Molybdenum Mine (Empire CO).
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Virtual Chapter News
Q4 2015 • NOW AVAILABLE - ONLINE ON-DEMAND POV COURSES – GJ/PP 201 & BV 201: ti ffe online OnDemand format ti ffi tarti tifi ti ft ti
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