- 24 -
landowners in late 1998, with higher royalties typically going to
sand-and-gravel mines located very close to construction sites
due to the low value-to-volume ratio of sand and gravel and the
cost of transportation.
The Hamblen Road property is small, so we find it most
reasonable to assume that its deposits would mostly be sold as
aggregate, in contrast to a variety of differently priced grades
of sand and gravel, and would attract a single price and yield a
single royalty per ton. Ebanks credibly testified that the
average royalty rate paid to the Assemblies of God Foundation for
materials mined from the first property donated to it was
$0.71/ton, which was paid during a 14-month span which includes
November 15, 1998. We think this is the best evidence of a
reasonable royalty for sand and gravel from the subject property,
especially since it falls well within the range in the local
market. We therefore find that $0.71/ton is a reasonable royalty
rate to use in the hypothetical mining plan.
At $0.71/ton, the value of the royalty interest in the
expected 2,754,111 tons that can potentially be sold from the
subject property is $1,955,419. However, we must take into
account that this number represents a value received over time as
the sand and gravel is mined and sold. To arrive at the figure
Terrene may properly claim as a charitable deduction, we must
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Next
Last modified: November 10, 2007