The New York herald., 1921-12-15
ss,OOO,OOO LOST IN
MINE, SAY EXPERTS
Continued from First Page.

as an inducement 10 stock buyers, and
giving all other evidence in relation TO
the enterprise the contesting claimants
will demand an accounting of the funds
of the Salvador company, with view
to ascertaining how much money went
into developing the property and pro-
ducing ores. 1t will be set up in court
that a large part of the money which
came from the sale of stock was not
used in mining. The defendants state
that such a charge is without founda-
ton, as they will prove readily.
Report on EI Salvador Mine.
The report, now in We hands OF
many OF the stockholders. regarding the
fsl Salvador silver mines WAS prepared
under the direction OF James f. McClel-
land. manager of the industrial depart
ment of the Liberty National Bank.
Yeatman & Berry. consulting mining
engineers of III Broadway. made the
technical examination Alan Bateman
was the geologist and the auditing was
done by Lovejoy, Mathcr. Hough &
Stagg of 1913 Liberty street. The In
vestigation OF the Salvador mines was
completed in January last.
The assertion that the mines con-
tanned $4,000 tons OF gold assaying s.5
ounces silver ton and some gold was
entirely problematical, as the ores are
not fully developed and there was little
possibility. even based on the claim
made. that n profit could be yielded
the engineers stated. They continued ::
The wisost course for the FL Saliva
dor company to pursue would be to cut
off further expenditure as quickly as
possible and drop the whole proposi-
ton to avoid further loss. We recon-
hat he do
believe any mining venture is safe or
good business to assume higher price
than 60 cents an ounce for silver over
a period of ten years.
"All the data indicate that much Of
the estimating of reserves was based on
hearsay evidence and largely on data
supplied by representatives of the sellers
previous to the formation Of the present
company. The possibiliti Of Develop
ing sufficient quantities OF commercial
ore to make the mines profitable is prac-
tically nil. There is no way to justify
an expenditure for new plant. The es-
innate is that a new mill would cost
at least s350.000. and that expenditure
could not be justified"
Mr. Bateman stated in his report that
''the estimates of the ore were specuIa-
tive and erroneous and that the avail
able amount was greatly less than
stated"
Says Mines Arc Exhausted.
The report states that total of As. .9Os
tons has been nlilled during the l!fe OF
the mines. with an operating loss OF
$3.50 ton even with silver selling at
s1.13 an ounce. which is far above re-
cent market prices. The geologists re-
port continues:
''-rhe mines are practically exhausted
further exploitation would exceed the
value. The mines were approaching ex-
haustion at the time of the purchase by
the present company. / believe they are
not worthy of further investigation. The
ore is shallow and is classed with such
metals as tertiary lavas, common in
Mexico. There are veins of volcanic
rocks. irregular and small. Exploitation
would exceed :he value of the ore found.
"One cannot escape the inference that
the mines were purchased at a period of
their life Immediately proceeding exhaus-
ton, when the cream of the ore had
been removed and the low cost explora-
tion completed, leaving only the lower
grade ores and the most costly. inacces-
sible ground 10 be explored, when the
/ chances of finding ore were less"
/ The report OF the auditors who went
| over the Salvador books and accounts
Is that from February Is to November
! 80, 1921. the loss In operating the New
York Office was $4,000; that the ex-