Let me propose this investment rule: No mine anywhere has adequate funds for closure. Do not get stuck with shares in companies with many mines about to close.

As a corollary, consider well before investing in a closed mine on the basis of a promise to reopen.

As background to and justification for these investment rules, consider some of the reasons why mines close:

1. Economic, due to either low commodity prices of high costs leading at times to company voluntary administration of receivership.

2. Geologic, due for example, to an unanticipated decrease in grade or size of the orebody.

3. Technical, due to adverse geotechnical conditions or mechanical or equipment failure.

4. Regulatory, due to safety of environmental breaches.

5. Policy changes, which occur from time to time, particularly when governments change.

6. Social or community pressures, particularly from NGOs.

7. Closure of downstream industries or markets.

8. Flooding or inrush.

On this last point, seek out via Google (www.goldminco.com ) the story of why the Browns Creek Mine closed due to an inrush of water, why they want to reopen it, and the new investment opportunities associated with its reopening.

In Canada there is the Faro Mine (www.faroyukon.ca and www.faromineclosure.yk.ca) which closed and which for a while some folk sought to reopen.

The real issue with all this is whether the closure bonds are adequate to cover the cost of closure. Regarding the situation in Australia one author (Lawrence) notes: The average bond over the past 25 years was approximately $1.75 million. The estimated cost of rehabilitation was much higher at $10.8 million. Due to difficulty in obtaining this data from both regulators and companies, these estimates represent a sample of mines only. However, it does clearly represent the discrepancy between the two sums.

I know of no comparable data for Canada or the United States. Although many numbers carrying the same message have been thrown around in the debate over the 1872 Mining Law. You do not want to find it out as an investor.