Know How to Calculate the Value of Mineral Rights

The people of U.S are lucky to get all the rights related to the minerals in the property which the own. It is not like every property will have minerals. Few properties do have minerals and the moment one knows about the minerals underneath they are anxious to know about their value and how much it costs. So, in order to make your own estimations here are simple steps. Remember this is an rough estimate and will never give you the exact values.

  • Before making your own estimations and calculations it is often better to order a mineral report from the geologists. The geologist will conduct a complete exploration of your property which includes an estimate of the size of the mineral deposits, including type, area, depth and concentration.
  • Using those exploration report you can estimate the size of the mineral field useful for extracting the minerals. It can be calculated by multiplying the area if the mineral location with the suspected depth of the minerals.
  • The estimated amount of mineral contained can be calculated by multiplying the field size by the number of tons of mineral contained per acre foot.
  • Now try to calculate the recoverable amount of minerals. Choose the recovery type and multiply the recovery rate by the estimated total amount of mineral which gives you the amount of mineral extracted.
  • The worth of your mineral rights can be now calculated by multiplying the amount of extractable mineral by the average royalty amount offered on it.

This way you can have a rough estimate of the value of your mineral rights so that you can grab the best deals which offer a good value for your rights.