Gilpin Observer

Schwab's Profits in Nevada.

Charles M. Schwab has paper profits in Tonopah, Goldfield and Bullfrog gold stocks of $25,000,000. His total investment is believed to have been less than $1,000,000, says the Boston News Bureau. He secured his first interest in Tonopah by the purchase of 500,000 shares, par value $1, of the capital stock of the Tonopah Extension Gold Mining Company at 80 cents per share. This stock sold last week in New York at $15 per share.

Mr. Schwab contemplates a consolidation of sixteen or seventeen properties in Tonopah, Goldfield and Bullfrog. The first step in this consolidation of gold properties was the organization of the Montgomery-Shoshone Consolidated Mines Company, which combines the Montgomery-Shoshone, Polaris and Rands Crystal companies in the Bullfrog district.

We understand that the big consolidation contemplates the placing of the following properties under one management: Tonopah, Tonopah Extension, Golden Anchor, McKane Co., Midway Co., Red Rock Co., Tonopah & Pittsburg, Belmont Extension, Goldfield: Florence, Jumbo Co., Red Top Co., Goldfield Mining, Diamondfield Co. and Jumbo Extension, Bullfrog; Montgomery-Shoshone, Polaris, Rands Crystal, Gibraltar, Tramps. The new company will probably be called the Schwab Exploration and Mining Company, with Mr. Schwab as president and D. B. Gillis, vice president.

Mr. Schwab does not control all of the above companies, but he is in negotiation for the control of fifty-one per cent. of the stock of the companies he does not control.

Mr. Schwab has recently closed a twenty-five-year contract with the American Smelting and Refining Company for the treatment of the ores of all his companies at a price under the figure paid for smelting by the Tonopah Mining Company. This contract with the smelting company was only negotiated after Mr. Schwab had decided to build his own smelters. This smelting contract will be turned over to the new company without consideration, although it is considered a valuable asset.

The defined Nevada gold fields, including Tonopah, Goldfield, Bullfrog and Manhattan, are 180 miles long and seventy miles wide.

Tonopah was discovered in 1901 and the above camps have since produced $20,000,000 in gold. The first year Tonopah was discovered it produced $8,000,000 in gold, and for the second and third years produced practically nothing, as freight rates and smelting charges were prohibitive, and the operators had secured sufficient money the first year the camp was discovered to permit them to develop the properties and withhold their ore from the market. Last year the product was $2,000,000, but this year the gold output is expected to very large.

The same conditions existed at Goldfield. The first year the production amounted to $5,000,000, but the second and each succeeding year the ore has been withheld from the market. Railroad facilities and improved smelting conditions have now enabled the companies to materially increase their production.