Wednesday, August 31, 2016

Leadfield: Scams with a Side of Geology

I've personally run into several mining or exploration scams doing field work in the west; these were small-scale attempted hoaxes perpetrated by smalltime, would-be hucksters, most of whom lacked any finesse whatsoever and all of whom were technically outside the mining or exploration industry (most were posers trying to pass themselves off as prospectors, a few were lawyers or accountants, others were swindlers of unknown affinity). Stories about these scams are mostly unwritten and therefore unpublished. I’ve also heard rumors of a few other larger scale hustles or double-dealings effected by people in the mining or exploration business, people I usually knew only from a distance. The reports of these particular offenses have come to me by way of rumor and innuendo, so I don’t know enough about either the details or the truths behind the vague to extravagant allegations to write about them myself. Of the noteworthy historic scams I've lived through or read about, I’d have to say that the two that have impressed me the most have been the Bre-X scam and the Leadfield scam or swindle. One C.C (Courtney Chauncey) Julian was the main player at Leadfield.  More on that a little later.



As for our continuing Titus Canyon excursion, we had just barely arrived in the lower portion of the southeastern branch of Titus Canyon, sometimes known as Lost Canyon (Lengner and Troxel, 2008), where the ghost town of Leadfield sits.
A partly ruined "Cousin Jack" dugout sits right beside the road as we come to the main part of Leadfield.
Just beyond this first ruin, we come to a little pullout on the right. The Leadfield sign sits here, right in front of a fabulous polychrome bluff.
We're looking northwest, nearly straight down the Titus Canyon road. 
Let's look at a little geology before we read the sign. As in previous posts, the the geologic formation abbreviations and contacts below are mostly from Niemi (2012). I've sprayed a cyan line between the foreground and background because the two areas don't hook up completely due to viewing angle. The two faults I've drawn are not the same fault: Though they appear to hook up across the sprayed line, they don't. The fault in the foreground (thicker blue line) is a major fault, possibly what has been called the Lost Canyon Fault (Lengner and Troxel, 2008); the fault in the background (thinner blue line) is a fairly minor fault. Both faults are normal and down to the east (right).

The main branch of Titus Canyon, which is running entirely in front of us near the base of the bluff, heads about 5.25 miles north of our position. It comes into the photo on the right, runs behind the foreground colorful beds marked EOgtc and in front of the farther reddish beds, also marked EOgtc, then exits the photo on the left behind the gray slopes of Cb (so the main canyon is essentially behind my sprayed cyan line but this side of the bluff).
Same photo as before, with geologic labeling.
In this particular area, Niemi has shown two aerial photos in his report, with formation contacts drawn in some detail, so my contacts are pretty darned close to being at actual formational boundaries. We're looking at carbonate of the Cambrian Bonanza King Formation (Cb), which in the foreground is in fault contact with variegated sediments of the Eocene to Oligocene Titus Canyon Formation (EOgtc). The Titus Canyon Formation is overlain by greenish sediments of the Miocene Panuga Formation (Tg), which in this area contains three whitish marker horizons that may be tuffs. The Tg is overlain by the Miocene Wahguyhe Formation (Tw), which contains layers and masses of rhyodacite to latite flow rock correlating with the Rhyolite of Picture Rock (Trp). My contacts around the Trp are somewhat approximate. Above the Tw is a stack of several Miocene ash-flow tuff sheets that erupted from the southwestern Nevada volcanic field; Niemi lumps these sheets into the Crater Flat Group (Tc), the Paintbrush Group (Tp), and the Timber Mountain Group (Tm).


What about the Leadfield story?
Here we can read a simple version of the history of Leadfield.
A lot has been said about Leadfield—you can read a little about it at many many places online—so I won't tell the whole tale here. And I won't direct you to most of the websites, because in my opinion most throw in a few casual statements that are incorrect from either a mining or exploration standpoint. Beyond that, the easily available reports also don't agree about all the details, with the specifics of the scam or swindle being reported quite variably as to timing and even as to who did what, so that without accessing primary sources, one can't even be sure who started the Western Lead Mines Company (WLMC), a key entity in the story. Two major sources agree on most of the facts, Lingenfelter (1988) and Tygiel (19941996), and I've come to rely largely on these two books, one of which I bought, the other of which I was able to read most key points between two different online sources – Google and Amazon. I've wondered if some of the discrepancies I’ve seen in other sources are because of the Leadfield Chronicle (the Library of Congress lists Leadfield, CA, as its place of publication, when it was actually published or printed in Tonopah, NV, according to Lingenfelter, 1988 and Bryan and Tucker-Bryan, 2015). The reporting by the Leadfield Chronicle was apparently nearly as wild as C.C. Julian’s own advertisements, and according to some sources (Lingenfelter, 1988; Earl, 2002), its editor was appointed by Julian, so it shouldn’t necessarily be considered neutral.
The view of what I call "the main dump" at Leadfield, a couple of still-standing buildings, and a nice, broad fold in the carbonate rocks of the Bonanza King Formation as a backdrop. Also, a fault: Can you see it?
The basics of the Leadfield saga are clear and generally agreed upon by all sides, all parties, but remember, definite sides did develop, seemingly right from the start. The agreed upon bits go like this. Early in the 20th century a couple prospector types discovered what they claimed to be shipping grade lead ore in Titus Canyon, in the portion of the canyon where now sits the ghost town of Leadfield. The distance to market was too great—meaning that what they found was technically not ore—so they abandoned their claims in favor of other areas with better potential economics. Some years later, a couple more prospectors  (onetwo, or three) came into the area. They, apparently encouraged by what they saw, staked claims and formed the now well known Western Lead Mines Company (WLMC). Eventually they brought in the flashy, well-known though controversial, oil promoter C.C. Julian. Promoters often have, or end up with, a bad name, and this one had already run afoul of the California Corporation Commission (part of the DOC; now the DBO) for his alleged over-issuance of stock during his previous venture, the promotion and operation of the oil company, Julian Petroleum ("Julian Pete"). Promoters can be useful, however, and they can be necessary for raising the money needed for exploration or mine development.

It's about here where disagreements begin, mostly as to C.C.'s character and complicity in what really looks like quite a stock scam—or swindle, as it is often called—but also as to the character or worth of the mining camp of Leadfield itself. One side, essentially touting Julian as the victim of a serious grudge on the part of the Commissioner of Corporations, Edwin M. ("Mike") Daugherty, and also the victim of being scammed by the prospectors who brought him into the WLMC, is best exemplified here (Latschar, 1981; this article or section, part of a large historic inventory report, references a large number of original sources, although its specific citations are quite general). The other side, which I have to lean toward with all I've been able to read, is covered by the two books I mentioned earlier ( (Lingenfelter, 1988Tygiel, 19941996).

I think there are some things worth noting in all of this, and these issues can be grouped under a few main headings: 1) advertising, leading to 2) were there really handbills or ads showing the Amargosa River, with steamships, flowing to Leadfield or Titus Canyon?, 3) what was the nature of any ore present at Leadfield, as to composition (mineralogy), grade, and size, leading to 4) did Julian really salt the dumps—and with ore from Tonopah?!

As for C.C. Julian's ads, today we would generally consider them excessively promotional in nature and extremely over-the-top (OT) overall. I've found actual examples of these ads only in books. I'm not sure which of the several ads I've seen are the most absurd or OT, but you can see a few examples by following this link (Tygiel, 1994). One thing to note is that Julian had taken an "art form" that had been practiced in the oil boom of L.A. (still ongoing during the Leadfield frenzy)—where almost anything went in attracting prospective buyers, investors, or suckers, depending on who you listened to—and had added his own style. Tygiel explains it this way, "His talents lay in writing advertising copy that encapsulated the hopes and dispelled the fears of the small investor." And then he gives a perfect example of quintessential Julian from his early oil promotion days (1922):
Julian Refuses to Accept Your Money
Unless You Can Afford to Lose!
Widows and Orphans, This Is
No Investment for You!
C.C. Julian continued with this bold style during the Leadfield days.

Many have stated, or repeated, that Julian moved the Amargosa and filled it with more water than it rarely has, allowing steamships to load ore directly at Leadfield or from the lower reaches of Titus Canyon. This assertion seems to be from Tucker (1971), who lists no sources. Tygiel, citing a 1956 source I haven't been able to locate online, mentions the possibility of steamships in parentheses:
(In some instances, Julian allegedly took even greater liberties. His promotional literature for the East reportedly depicted ocean steamships laden with lead ore docked in Death Valley.)
And Earl (2002) states that Lingenfelter had doubts about steamships on the Amargosa, although it's not clear to me where Lingenfelter expressed such doubts. Darn, I really wanted to see a picture!

More than Julian's splashy style of advertising, however, I think what has to be considered is what was actually said about the ores or potential ores at Leadfield, whether it was accurate or exaggerated. Sure, investing in any kind of oil or mining venture carries risk. And as an exploration geologist, I might tend to get more financial backing from a company if I downplay any negatives, really talk up the positives, and inflate the likely size or grade of a favorite target of mine. I might, however, not last long in the business if every property I want to drill is the "best" or "largest" or "highest grade" — or if every single one of my projects is a supposed world beater. Julian brought in several so-called "experts," who according to Tygiel not only weren't really experts in the exploration, mining, or engineering fields, but who considerably distorted or overestimated the value of what might be at Leadfield. The Leadfield orebody was reported as "very large," "one of the largest deposits of the west," and "the largest lead discovery in the United States" (Tygiel, 1994; Latschar, 1981; Tygiel, 1994). And then there are some reports that practically have suggested that there is nothing at all at Leadfield. Which is it?
What lies on this dump? What did the oldtimers hit while digging in these hills? Enquiring minds want to know.
Lots of grade numbers have been thrown around with regard to Leadfield. Many of the numbers are really quite average; a few are fairly high. I'm going to run through them to see what can be discerned. One first note: lead (Pb) and zinc (Zn) assays are often historically given in dollars per ton ($/ton); they are also noted in percent (% Pb). With the first method, you have to know the price of lead on the day of the assay, or you won't know how much lead was present (this is also true for any commodity where the value is stated in dollars, e.g. "30-dollar rock"). Prices of lead and zinc are usually listed as dollars per pound ($/lb). One, therefore, might need to do a little calculating to know what the assay really means. I personally have little doubt that there was (and probably still is) some lead, silver, and zinc at Leadfield (given what I've read and the sources used by the three main writers: Tygiel, Lingenfelter, and Latschar).

1905: Samples of the original prospectors at Leadfield assayed "as high as" $40/ton when taken to nearby Rhyolite (Latschar, 1981). $40/ton is the same as 40% Pb at an approximate average 1905 price of $0.05 per pound, and 40% Pb is a number that would be considered ore grade in almost any time period. So here's a thing: "Ore grade" means that if the economics are right and there is also enough of this type of rock, it is ore. The size and economics are unknown to an assayer, so we say "ore grade" not "ore." That way, we aren't lying. And here's another thing: Were these higher numbers gotten from samples that were "high-graded" or sampled selectively? We don't really know. When I go out and sample something, I can take several kinds of representative samples, which when looking for gold will often come up with nothing or very low values. Or I can take a "high-grade" or "select" sample of some kind, maybe choosing only vein material, maybe choosing rock that contains visible galena or some other mineral or characteristic I consider a favorable indicator of ore. This type of sampling is necessary: I want to know if anything is there. If something (Pb, Au, Cu...) is there, then I can go about trying to figure out how much is there and what the average grade is (usually by drilling).

After 1905, there were several estimates, or statements, or results of assays given.

1926 Probably early in the year, Julian’s experts "obligingly found no ore specimens assaying less than $30 a ton" (Lingenfelter, 1988). Now this is nowhere near as high as what was supposedly found in 1905, unless the statement or assay was really 30% Pb, not $30/ton! Thirty dollars per ton would have been about 16.7% Pb, where I used the average price of lead for 1925 of $0.09/lb. An assay of 16.7% was nothing to sneeze at, but it may not have technically been ore. (The 1925 average price I used was higher by a little than the average price for 1926. Lead was on a slow, downhill slide. I don't know the daily, weekly, or monthly value of lead, and don't know when the $30 value was calculated. So the actual percent might be, maybe, 15% to 20%.)

1926 Probably February, the average Pb value in the WLMC tunnels was given at 8 to 30% Pb by Latschar (1981). Here's something to think about for this range of 8 to 30 percent: That's quite a range for supposedly "average" values, but maybe that indicates that the values were not "high-grade" samples, but were instead representative sample taken along the ribs (walls) of the drifts or tunnels. Another thing to note: Given that 8% Pb translates to about $14.40/ton in average 1925 prices, and given that it supposedly would cost about $18/ton to haul rock to the rail terminal in Beatty (Latschar, 1981; the only estimate or statement of shipping costs I could find), the lower values are not ore. The higher values of 30% Pb, which translates to about $54/ton in average 1925 values, would have likely been ore.

1926 In late February, Walter Abel, mining engineer with the California Corporations Department “predicted” that the actual ore found at Leadfield would not exceed 200 tons with a net value of $16,400 (Tygiel, 1994). Let's see what that means (other than his obvious implication that the ore deposit, if there really was one, would be quite small). What we know is that 200 tons of x% ore would generate $16,400. The rock, therefore, was $82-dollar rock; it would assay at $82 per ton. This is definitely ore grade, and depending on size of the deposit, it might be ore. As for the actual percentage of lead in the rock, let’s do the math. I don’t really know what price Abel used to come up with his $16,400 number, so we’ll use a high value of 0.1 lb/ton, a nice round number that is somewhat higher than the average 1925 price of Pb. Our ore is worth $82/ton, so at a price of $0.10 per pound, we have 82/0.1 or 820 pounds per ton, and 820 pounds in 2000 pounds (1 ton) equals 41% Pb. If we use the average price of $0.090/lb for 1925, we would get an value of 45.56% Pb; and at the average price of $0.084/lb for 1926, we would get 48.8%. Abel was therefore predicting, implying, or calculating a small ore deposit of relatively high grade: about 200 tons of something like 40 to 50% Pb.

1926 In September or Octobter, the Pacific Lead Mines, Inc. reported "lead assays" of 8% (Latschar, 1981) – again, this is about $14.40/ton using the higher 1925 average Pb price of $0.09/lb: not ore.

1926 In late October, once again according to Latschar, the WLMC hit their target ledge and it contained only 2% Pb; this "mineralized waste rock" (as we often say in the business) was worth ~$3.60/ton using average 1925 prices, probably less than that, given the slow slide in the price of lead.

1938 (From Weight, 1977) "Probably the best estimate of its surface value was made by the California Division of Mines in 1938: 'At various points for a distance of about two miles, galena is disseminated in hard blue limestone. The ore bodies exposed carry from five to seven percent lead, with five ounces of silver (per ton) and five to six percent zinc.'" Here's what our calculations will tell us: 6% Pb = $10.80 @ 0.09 $/lb (1925); 5 opt Ag = $3.45 @ 0.60 per ounce (1925); 5.5% Zn = $8.36 @ 0.76 $/lb (1925). This means the ore bodies noted in 1938 were worth about $22.61 per ton in average 1925 prices. With shipping to Beatty at $18/ton, and including other mining costs (development and driving tunnels, paying miners, blasting, milling and/or concentrating, and smelting) of at least $5/ton (my low-ball estimate, IANAE, I am not an engineer) these Pb-Zn-Ag orebodies did not likely qualify as ore.

It does sound for sure, to me, like the size of the projected, undeveloped deposit or unconnected deposits at Leadfield were overstated by Julian’s “experts,” but maybe not so much the grade. And, the advertising he put out was wild, but advertising and tours were expected. Did he salt the area with ore "from Tonopah"? The only secondary reference I can find for this assertion is Tucker (1971), again with no primary sources given. Other references to the salting appear to be quoting or paraphrasing her. Latschar goes so far as to say, "He in no way salted the mines [...]" when referring to the possibility. Earl (2002) once again states that Lingenfelter "feels" that Julian did not salt the area, but this is a reference I haven't been able to check. I just wonder why taking volcanic-hosted vein ore from the Ag-Au district of Tonopah into the carbonate-hosted, non-vein (manto? chimney? ledge?) Pb-Zn-Ag country at Leadfield would even be considered. The prospectors and miner-types driving the adits and trying to hit the ledges would have noticed the incongruous vein rock; perhaps the people that came up on the train from L.A. wouldn't have.

My conclusion: The area was worth prospecting and developing to the extent that one could find whether it was worth mining, but I wouldn't use my money for the project. This conclusion is similar to that of Ira B. Joralemon, a respected mining engineer, who said that WMLC was a prospect worthy of "careful development," provided that exploration expenses be kept at or below $100,000 (Tygiel, 1994).



Back to a bit of geology:
The main dump is on the left; the far west cabin is off-picture to the right.
The geology (next photo) is kind of simple: broadly folded carbonates of the Cambrian Bonanza King Formation (Cb) are in fault contact with poorly outcropping Titus Canyon Formation (EOgtc). The main adit above the main dump appears to be driving toward the carbonates or the fault itself. The yellowish-orange color on the left side of the dump might be from oxidation of sulfides. If sulfides were intersected when reaching a target ledge near the end of the tunnel or adit, they might be found way down at the lower outside edge of the dump (if any sulfides were hit).

The adit at the far west cabin appears to start in Tertiary megabreccia; that's what was mapped (Reynolds, in Lengner and Troxel, 2008), and it does look like a breccia in photos I have. We'll see those photos next time. Possibly that adit is driving for the carbonates or fault, or even for the orangey-looking ledge just above or along the trace of the fault.
Geology! Most of the foreground is Quaternary alluvium and colluvium.
The orangey rock, located between the main dump and the farthest west cabin, kind of above the adit at the far west cabin would be the sort of thing that might have looked attractive to the original prospectors.
Next time we'll walk out to the far west cabin.

Selected References:
Bryan, T.S., and Tucker-Bryan, Betty, 2015, The explorer's guide to Death Valley National Park, Third Edition: University Press of Colorado, 496 p. [ref for location of publication of the Leadfield Chronicle]

Earl, P.I., 2002, C.C. Julian and the great Leadfield swindle: Death Valley’s last mining rush, in Proceedings, Death Valley Conference on History and Prehistory (6th), p. 79-99. [ref that Leadfield Chronicle editor appointed by Julian; some speculations about the salting and steamships on the Amargosa]

Latschar, John, 1981, Leadfield, in Latschar, John, and Greene, Linda (eds.), Historic Resource Study: A History Mining in Death Valley National Monument, California - Nevada: National Park Service.

Lengner, K., and Troxel, B.W., 2008, Death Valley's Titus Canyon & Leadfield ghost town: Deep Enough Press, 175 p.

Lingenfelter, R.E., 1988, Death Valley and the Amargosa: A land of illusion: University of California Press, 622 p.

Niemi, N.A., 2012, Geologic Map of the Central Grapevine Mountains, Inyo County, California, and Esmeralda and Nye Counties, Nevada: Nevada, Geological Society of America Digital Maps and Charts Series, DMC12, 1:48,000, 28 p. text.

Tucker, B.J., 1971, Death Valley's Titus Canyon: Desert Magazine, v. 34, no. 4 (April), p. 26-27. [reference to salting, moving the Amargosa and using steamships to haul ore]

Tygiel, Jules, 1994, The great Los Angeles swindle: Oil, stocks, and scandal during the roaring twenties: University of California Press, 398 p. (The 1996 edition is the one I purchased, same pagination.)

Weight, H.O., 1977, Leadfield died of complications: Desert Magazine, v. 40, no. 11 (November), p. 34-38. [ref to 1938 CA Div Mines assessment]

Woodruff, D., 2013, Titus Canyon, in 2013 Death Valley Visitor's Guide: Golden Gate Media Group, p. 4-11. [nice pics, ref to a Julian expert stating 1 million tons of milling ore at $30 per ton; also to state engineer finding only 200 tons, etc.]

Location map

Related Posts:
The Approach to Titus Canyon: Tan Mountain
The Approach to Titus Canyon: Up and over White Pass
The Approach to Titus Canyon: To Red Pass
The Approach to Titus Canyon: Just Below Red Pass
A Hike at Red Pass, Titus Canyon Road, Death Valley, CA
Titus Canyon Road: A Little History and a Few Maps
Down into Titus Canyon: We Leave Red Pass Behind (Finally!)
Titus Canyon: The Upper Part of Lost Canyon

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