Gilpin observer., 1917-06-28
lNslNcERlrv in MINING DEALS

I'm scme former times mines ma,
have changed ownership by spontam
eous spct-cash transactions. Thos.
days will never be duplicated. Sys
tenn has been Introduced into mirin,
deals whereby each sale is the sesml
OF preliminary negctdal icns, tht
gmntirg CT an option to pure hase a
a stated price upon fixed terms, ex
pert examination and, finally, furthe
negotiations.
Cauicn In all kinds of dealing Is
commendable. We have become ac
cus.cmed to hear slurring remarks tC
the effect that mine purchase is
about ninety-nine ger cent haza nd bu
we always s.renCpusly refute the
saander; lit oannct be verified by fig
ures. On .he other hand, statis.i.
clans agree that the percentage oil
is as low as. if not lower than, in
enterprises in any o. her lire of com.
mercialism. 1t is no more necessary
to exercise caution in buying a mine
than i. is in pure hasing clc:hlng
store or farm.
Before any wise investor places
capital in mining project, he will
secure am engineers favorable report
A report involves personal iuspec-
tion. This is new rarely made until
en- option is signed up. An option
protects both parties concerned 1t
gives the party of the second part
exclusive right Of way, as it were, for
definite period. The owner, on
the other hand, feels that the option
obligates the pur> haser to prompt
inspection of the premises and decis-
ion concerning the deal.
. But why should not an owner VINO
has PROPERTY Of merit, knowing he
ehhi1ot sell it until 1t is appraised
by an expert, permit an inspection
of his mine without first tying it up
under option? The insistenoe that
Optic precede examinations Is not
demanded solely by purchasers. Fire.
quently we find investors who would
be glad to order their engineers to
proceed wi examiratiors If pernis-
sion were not refused by owners:
Many holders of mining ground
positively refuse permissicn fer in
specticn of their properties unless
options are taken by prospective buy
ers. This practice is more or less
open to criticism. 1t is responsible
fer many unpleasant final relations
between investors and miners. There
are many instances in which the plan
is fully warranted; but there are like
wise many properties. the unrestrict.
ed examination of whi h would prove
decidedly advantageous to their pos
SCISSORS who desire sales.
If a man owns a prospect or
mine that he desires to sell and if
I lit has real merit, he should be glad
to display it. When a dealer seeks
to sell an auto, for instance. he does
net withhold the inspection of the
car until he can tie his prospective
customer with am option. 1t cannot
possibly injure a good piece of prop
erty to let it be examined. And the
time is rast when secrecy is main
tanned regarding ere reserves and
geological formations in mia ing prop
critics.
The prevailing custom Of insisting
upon options pricr to examinations
tncurs several fea ures that are IRA.
tional and that lead to insincerity on
the part of both vendor and buyer.
The owner, in his effort to induce
AN examination of his property. al
mcst invariably (peihaps unconscious
ly) over-rates his property's showings
or probabilities. The price is fixed,
generally in advance. so the repres-
en:ations as to the mines worth must
be made to fit the price. 1t is
small wonder that, after the engin-
eer concludes his duties, his valua-
ton falls short Of the fixed price and
the deal fails to culminate. How
much better it would be to have the
appraisement preo EIDE negotiations as
to price.
Tn the side of the buyer. he fire.
queiitly Is earnest in see, ing The pur-
chase of mining property. but he is
preoluded from securing authentic
knowledge regarding any properties
until he dickers with owners and
binds himself wi h options. Prices
are fixed arbitrarily instead of ra-
tionally. In each case the Investor
Is required to accept a stated price
before he can order his engineer to
, proceed Often. these optiors or con-
tracts to pure hase are therefore en-
tered into simply to provide an OPP
9or;uniay 10 maize examina;isn TO
, this extent buyer evidences insin-
rerily