How Different Would Our Lives Have Been...

Bertha, Buddy, Betty, Berdell, Bud & Ina c. 1930

On November 19, 1942, the Central Eureka Mining Company entered into a leasing agreement with T.E. Wood and his partners, R.M. Clark, Gordon Estes and J.A. Millar on eighteen unpatented claims in Copper Basin, known as the Acacia and Hawkeye placer and lode claims.

Central Eureka was based in San Francisco and was one of the most successful gold-mining companies in California’s Mother Lode region. Because of Limitation Order L-208 that prevented large scale gold mining during WWII, the company began investigating strategic metal properties near Battle Mountain. Copper Basin contained a combination of copper and gold. They were hopeful that there was enough copper to make this endeavor worthwhile. ISARCO (International Smelting & Refining Co.) was prospecting neighboring properties at the same time and had just completed a floatation mill at Copper Canyon earlier in the year.

What the legalese of the lease with option to purchase boiled down to was this:

·       Central Eureka had a lease on the claims from 1942-1946

·       They were not only allowed, but had to work and explore the claims

·       Royalties were to be paid on production

·       Central Eureka could earn the right to buy the claims outright for $60,000 ($1,229,150 in 2026 dollars)

o   The $60,000 purchase price could be paid in installments

§  $11,000 on or before September 1, 1943

§  $3750 due quarterly from 12/01/43 – 09/01/46

§  $4000 on or before 12/01/46

The lease also had a mandatory labor requirement for at least one hundred 8-hour shifts per month. This was more stringent than many lease-option agreements and prevented Central Eureka from just tying up the property and doing nothing. That clause demonstrated serious intent. But it also may have been difficult to fulfill since so many men were enlisted in the armed forces at the time.

The part of the agreement that was more beneficial to C.E. was that any royalties paid could be applied to the purchase price – essentially “lease to own.”

Concurrently, Central Eureka signed an identical lease to purchase agreement with the Lemaire family on their Copper Queen claims, which were adjacent to the Acacia and Hawkeye properties. The only difference was that the Lemaire’s purchase total was $150,000, which indicates that their claims assayed at a higher rate. Central Eureka did not enter into agreements with any other groups.

However, by May 1943, Central Eureka was virtually broke. In 1941 they showed a net profit of $240,951. In 1942 their net income was $4945. An article in the Nevada State Journal dated July 15, 1943, stated the following:

FUTURE PLANS ARE IN DOUBT – Central Eureka Work Not Conclusive

While work done during the past eight months near Battle Mountain by the Central Eureka Mining Company has been encouraging, nothing has been discovered to enable to company to reach a decision concerning the course to be taken after the option expires July 15, 1953, officials stated to the Mining Journal.

Up to early June about $20,000 had been spent on development and rehabilitation work and several hundred tons of ore had been blocked out or stockpiled. No shipments had been made to the smelter. No payment was made for the option, other than the company’s agreement to carry on development work.

The ground includes the Copper Queen, Gold Cash, Tomboy, No Money and others about twelve miles from Battle Mountain.

About one week later Central Eureka relinquished its leases and options on several copper properties in and near Copper Basin. The quitclaim deed signed by Central Eureka that relinquished the leases had already been signed on July 1, 1943.

It is interesting to note that Central Eureka, along with several other gold-mining companies, went on to sue the federal government in the 1950s over the implementation of limitation order L-208. They argued that forcing their mines to close amounted to the taking of private property under the Fifth Amendment and that they were therefore entitled to compensation.

The case was first heard in the Court of Claims, which found on behalf of the mine owners, however it was appealed by the United States. The U.S. Supreme Court reversed the decision made by the Court of Claims based on the following:

·       L-208 was a wartime regulatory measure

·       The government did not occupy, use or physically seize the mines

Therefore, it should not be considered a compensable taking under the Fifth Amendment.

How Different Would Our Lives Have Been...

Bertha, Buddy, Betty, Berdell, Bud & Ina c. 1930

On November 19, 1942, the Central Eureka Mining Company entered into a leasing agreement with T.E. Wood and his partners, R.M. Clark, Gordon Estes and J.A. Millar on eighteen unpatented claims in Copper Basin, known as the Acacia and Hawkeye placer and lode claims.

Central Eureka was based in San Francisco and was one of the most successful gold-mining companies in California’s Mother Lode region. Because of Limitation Order L-208 that prevented large scale gold mining during WWII, the company began investigating strategic metal properties near Battle Mountain. Copper Basin contained a combination of copper and gold. They were hopeful that there was enough copper to make this endeavor worthwhile. ISARCO (International Smelting & Refining Co.) was prospecting neighboring properties at the same time and had just completed a floatation mill at Copper Canyon earlier in the year.

What the legalese of the lease with option to purchase boiled down to was this:

·       Central Eureka had a lease on the claims from 1942-1946

·       They were not only allowed, but had to work and explore the claims

·       Royalties were to be paid on production

·       Central Eureka could earn the right to buy the claims outright for $60,000 ($1,229,150 in 2026 dollars)

o   The $60,000 purchase price could be paid in installments

§  $11,000 on or before September 1, 1943

§  $3750 due quarterly from 12/01/43 – 09/01/46

§  $4000 on or before 12/01/46

The lease also had a mandatory labor requirement for at least one hundred 8-hour shifts per month. This was more stringent than many lease-option agreements and prevented Central Eureka from just tying up the property and doing nothing. That clause demonstrated serious intent. But it also may have been difficult to fulfill since so many men were enlisted in the armed forces at the time.

The part of the agreement that was more beneficial to C.E. was that any royalties paid could be applied to the purchase price – essentially “lease to own.”

Concurrently, Central Eureka signed an identical lease to purchase agreement with the Lemaire family on their Copper Queen claims, which were adjacent to the Acacia and Hawkeye properties. The only difference was that the Lemaire’s purchase total was $150,000, which indicates that their claims assayed at a higher rate. Central Eureka did not enter into agreements with any other groups.

However, by May 1943, Central Eureka was virtually broke. In 1941 they showed a net profit of $240,951. In 1942 their net income was $4945. An article in the Nevada State Journal dated July 15, 1943, stated the following:

FUTURE PLANS ARE IN DOUBT – Central Eureka Work Not Conclusive

While work done during the past eight months near Battle Mountain by the Central Eureka Mining Company has been encouraging, nothing has been discovered to enable to company to reach a decision concerning the course to be taken after the option expires July 15, 1953, officials stated to the Mining Journal.

Up to early June about $20,000 had been spent on development and rehabilitation work and several hundred tons of ore had been blocked out or stockpiled. No shipments had been made to the smelter. No payment was made for the option, other than the company’s agreement to carry on development work.

The ground includes the Copper Queen, Gold Cash, Tomboy, No Money and others about twelve miles from Battle Mountain.

About one week later Central Eureka relinquished its leases and options on several copper properties in and near Copper Basin. The quitclaim deed signed by Central Eureka that relinquished the leases had already been signed on July 1, 1943.

It is interesting to note that Central Eureka, along with several other gold-mining companies, went on to sue the federal government in the 1950s over the implementation of limitation order L-208. They argued that forcing their mines to close amounted to the taking of private property under the Fifth Amendment and that they were therefore entitled to compensation.

The case was first heard in the Court of Claims, which found on behalf of the mine owners, however it was appealed by the United States. The U.S. Supreme Court reversed the decision made by the Court of Claims based on the following:

·       L-208 was a wartime regulatory measure

·       The government did not occupy, use or physically seize the mines

Therefore, it should not be considered a compensable taking under the Fifth Amendment.