Mohave County miner and our mineral wealth., 1922-09-22

inc rlSkS Ol investing III any puSl- ness enterprise at its inception, or in its first stages, are greater than they. are in the later stages, when the un- dertaking is established and perhaps earning a profit. This is true with mining propositions to greater de- gree than with most other commercial or industrial undertakings. There are, too, certain features in connection with all mining investments increasing this risk often not duly considered by the prospective investor, who, at the time of investing, is likely to be more or less under the spell of the mining vendor or the stock salesman and self blinded by the promise of very large gain in the transaction. '
 It is but seldom that mineral de- posits are found, which can be deter mined to be of sufficient commercial value to justify a mining operation without much expensive labor. A mineral deposit, the extent and value of which is unproven, is termed a 'prospect"--an obvious name. The value of prospect is difficult'to mea- sure, and it's profit possibilities, if. any, are latent. It is in this prospect stage that much money is lost in min ing, not only by investors, but by skilled and experienced miners and engineers.
 A prospect mining proposition is essentially and inherently hazardous. The mining engineer and the mining men will not deny this; in fact, they recognize t by offering to the invest or a large interest at low figure, or by associating with others in the cost of the development to divide the risk. This great risk is evidenced al- so in the low price of the shares in prospecting and developing companies. There is a chance either of a failure and total loss, or of a success, which may mean a many-fold gain for all.
 If the investor goes into prospect mining proposition with his eyes open to the risks, which risks he takes for the chance of the great gain expect e1. no blame should Joe attached to anyone if loss ensues. However. be- cause of the great physical risks in a mining prospect great business pte- cauri.ns should be taken.ts
 The first consideration is the tile. It hardly seems necessary to mention such an elementary matter, bat the, fact is that mining stock inves- tors often have no knowledge and make no inquiry as to the title under which the company holds the property. Mining property in the, western Unit ed States and in Mexico may be held under location" or Announcement that is, the title is in process. lire quently, companies offer stock when the title to their properties is in, this stage. :7 S@-+1 <. To. '. Ordinarily, this is reasonably safe, but there is chance of the full title failing to issue on a technieality or ir- regularity. Therefore, it is best for the investor to insist upon tine protec- tion of full face title to the property, or upon guarantee, or to hold a string on his money until title is per fected-ordinarily matter of few months. Many stocks are sold by com panies which hold their properties un- der form of contract, customary in the mining business, known as "lease or bond" The owner gives to the company, or to the promoter, a lease with the right to develop and operate the property for given period, usual ly one or two years, and an option to purchase for a stipulated price and terms during tine period of the lease. The idea of this negotiation is self evident. . r< '~'
 The purchaser of the property has opportunity to prove to his satisfac- tion that the property is worth the price. Ordinarily it is stipulated that development and exploration. shall be done. This form of contract is sound and is; usually resorted to by exper-' fenced men in negotiations for unde- veloped and unproven properties. On the other hand, the mining investor; is often unfamiliar with the business risks involved in a lease and bond proposition. -..
 The investor often does not know that the property, encouraging reports of which may be before him, does not belong to the company offering him it's stock, and this fact is some- times not impressed upon him duly. He does not know that should the ex- pensive work necessary, part of which he is to pay for, prove the property to be of no ~alue, the company must then pay many thousands or a million or more for the property; and he does not consider that if the property should be proven to be very valuable, his associates in the transaction may not be financially able to complete the deal ,or the conditions of the engotia- tions may be such that the money tc purchase the property cannot be rais- ed The ipvpctor uho roac into o |