(1) Gross value for purposes of the mines net proceeds will be determined at the point where mining processes end and manufacturing or non-mining processes begin as discussed in ARM 42.25.1104.

(2) Listed in the order in which they are to be considered, gross value at the point of valuation will be determined using one of the following methods:

(a) The producer's actual sales prices for mineral products sold at the point of valuation will be considered the best evidence of value provided the sales are arm's length and represent approximately 30% of total mineral production. � Sales of less than 30% of total production may be acceptable indicators of value if the sales price per unit is corroborated with other representative market data for minerals of like kind and grade. � Upon request, the producer must provide documentation for this method to the department.

�(b) If the producer does not have the sales information discussed in (2) (a) above, a market survey of other producers' sales of like kind and grade mineral products may be done. � If this method is used, the producer must obtain market data for three or more other producers. � This data must represent the results of competitive transactions in markets with a substantial number of unrelated buyers and sellers. � The producer must document that all values used are for minerals of comparable quality sold in quantities approximating the producer's level of production. � It may also be necessary to consider the geographic area served by the markets used for comparison. � Upon request, the producer must provide all information obtained that supports this method to the department.

(c) If the information required by (2) (a) and (b) above is not available, the proportionate profits method may be used to compute a value in the absence of adequate market data. � The general formula for this computation is:

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������������������������������������valuation point

Taxable value/unit = ������������������� � x Sales price/unit

�����������������������������������Total direct costs

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(i) Direct costs through the valuation point will include overburden removal, drilling, blasting, loading, hauling, crushing, sorting, drying, mine reclamation, production taxes and royalties and any other direct costs incurred through the valuation point.

(ii) Total direct costs will include, in addition to those noted above, all direct costs applied to the mineral products up to the point of production of the first marketable product or group of products that have not been manufactured or fabricated. These costs will typically include grinding, burning or calcining, blending with other materials and treatment effecting a chemical change.

(iii) The sales price per unit will be the weighted average price of the first marketable product or group of substantially similar products sold in significant quantities by the producer.

(iv) Only direct costs may be used in computing the cost ratio for the formula. � No costs that benefit the operation as a whole or are not directly related to a specific phrase of the mining or processing of the mineral product will be included in the ratio.

(d) If warranted by an unusual situation, the department may use an alternative valuation method.