Correspondence, Levi Syphus to Sadie B. Clayton

Pan&ea, Hernia September 3, 1938 To The Owners of the Prosperity and Success Group of Mining Glaives - Greeting* Several weeks of Illness has prevented an earlier remittance of this statement. In ae much as I an not converts* te the proposition of granting a lease to anpene upon any of the principal exposures of ore, upon the basis of the removal of a small annual minimum tonnage, I herewith respectfully submit the followiag proposition for the consideration ef the respective owner# is said dLaime by way of finding out whether or not it will asefc the approval of all of the claimants, andif not, whether or not the owner# of a substantial majority interest in the property consider# it favorably. I am doing this because it seems possible there can be a small tonnage of ere disposed of for ceramic purposes and which might eventually develop into a substantial business. By ceramics I mean the production ef vitrioue products such as porcelains and kindred wares which require kiln baling. % proposition is that all of the owners, if possible, and if not, then the owners of a substantial majority interest in the property, shell enter into sueh agreement# or eontracts with parties who will begin the use of the ore, to supply the same te them on beard ears on the St. Thomas branch rail­road. Sueh agreements or contrasts to be of a character that will assure sueh users that they will be supplied with a reasonable quantity of ore as there business will probably develop into as they are able te expand it, said agreements to bo for a period of ton years, if desired. Said agreements to provide that in the event the owners shall lease or sell the property within that period of time, they may be freed from their obligations under the contrast providing they, in the leaning or selling agreement shall substitute said lessee or purchaser for themselves and place bpsa them the burden ef carrying out their contrast with the eeramle users. Further, I suggest that tbs owners should, in the near future, appoint an executive 'committee of three persons, the majority vote of which shall, in all cases where there is not unanimous agreement, be binding upon, and be the aetion ef sueh committee. It shall not have the right to mater into any contrast er agreement for or on behalf of all ef the owners nor the owners of a substantial majority interest in the deposit. It shall, however, be their business to contrast or hire the mining, trucking, and loading onto the ears the ore contrasted to be supplied by the owners, and to e©licet and disburse the money received for sueh ore subject te the directions of the owners who are parties to the selling agreement. It should alee be their duty to decide upon the location ef roads, the construction or improvement of the came, to determine To The Owners of Prosperity and Success Group of Mining Clains - 2 tbo asthod of aixting, the typo <uM eonstrust ion of loaiiai facilities at thoaino the typo aai eonstruetion of facilities for loading tbo ore into tbo car# at tbo railroad if and when tbo business justifies such. Prior to tbo ttwe tbo buoiaooo will justify the sane* to rout sueh loading facilities ao afotoT available for loading at the railroads or contrast to tbo earners of snob faoilitieo tbo job of plaoing tbo oro|into tbo ears. In my opinion tbo owners should charge $4 * 0 0 per ton tor the ore f.o.b. that railroad. If, however, tbo Majority fool that it would bo tbs bettor polity to obargo only $2*50 por ton* f.o.b.* I shall have no objection to that rate. I further propose that the owner* shall pay a eowwission of §f> of the per ton not earnings accruing froa sash sarload of ere so sold by than* providing the not shall bo as auoh ao $1.05 por ton* ouch eonaiseion to apply on all not in excess of that aaount. Such eoas&saion to be paid to any owner or owners who show eonelusivoly that they h a w brought purchasers of the ore to the owners* steh eoaaission, of essiree to bo paid only on suoh bueinoss ao is brought by then. It nay soon a saali eoaMiesion, but if any owner can bring buyers whoso business should expand t© 10*000 tons por year* it would bo a $500 por year ooasiooios for hi*. It being undorotood that tho eonnission would run for tho 10 year period providing tho purchaser continued his use of the oro for that period. & study of 0. 8. Bulletin 871 with rospoot to tho Garten dioxide content of tho Magnesite of our deposit and likewise a study of all other analysis ws have h»d nad* of the ore* exeepliag those upon a few picked lunp sa*ples, also tho exception of a 4*inch streak, and of a 2.2 foot streak* both at tho tunnel in tho south elds of Ksolin Wash, wo find that the Garten dioxide content of our M&gnssite oro docs not oxoood 4Q/C andnueh of it is two or throe percent lower than that. Therefore, if we take 40% as tho average carbon dioxide eontent of our Magnesite ©re* which will give tho buyer of tbs ors a Utils tbs test of the bargain with respect to the solid natter contained in it, we will be able to determine the quantity of ore it takes to yield one ton of solid witter tor tbs use of the eeraMiet* who will of •ourso slain that he has to discard and waste the gas. Working that out we will find that 3,333 l/3 pounds of ore containing 60% of solid natter and 4$I gas will give the buyer hie ton of solid Matter end 1*333 1/3 peimde or £«rT As sussing that he does have to waste the gae* he would* under a $4.00 rate for the ere* f.o.b.* te paying $6.65 2/3 for each ton of solid aattor ho received f.o.b., and under a $4.00 freight rate on the railroad to Loo Angeles, h# would also have to pay the railroad $5.65 2/3 for oaeh ton of solid Matter delivered there for bin* That would leave the gas free to hi* in 0 1 Angelos. Therefore his ton of solid natter in Los Angeles will have cost M m twice $6.36 2/3, or a total of $13.33 l/3 por ton, which is considerably less the prlss at which high grade Kaolin can, on the average* te purchased for in that city. Again* under the $3.50 rate per ton* f.o.b.* working that out, we will find that 3*333 1/3 pounds of ors containing 60% of solid natter and 40% gas will give the buyer M s ton of solid eatter and 1*333 1/3 pounds of gas. Assuning that te does have to vasts the gas, he would* under a $3.50 rate for tho oro* f.o.b.> te paying $3.83 1/3 for eaeh ton of solid aattor ho received f.o.b.* ths rail rats being $4.00 per ton* it will cost hia just as Much to deliver the $3.50 ere in L. A. as it would for ere for which he paid $4.00 f.o.b. Therefor# wo add to M s f.o.b. cost tho rail rate eost of $6.66 2/3. Therefore, the total cost of his S3 lid natter in L. & * would b* $1^•SO» With rsspset to too {as, 2 will say that it isnot a difficult mat tor to capture it as it escapee fro* the coramie kilns. Several eminent chemists hare informed me that the gas content of our ore is clean and ready for use without scrubbing or other expensive treatment* Therefore* it seems to wo that the buyer of our ore would bo able to sell it if he fixed the price for it a little below that which ueoro of the gas are paying for the gas they obtain fron other sources. 1 am not fully Informed as to Just what that is, hut X have reason to believe that th* 1*333 1/3 pounds of gae he would roooivo free in L. A. with his ton of eoXid matter ean bo sold at the rate of $2.00 per ton, which, if so, would correspondingly reduee the pries of hie solid matter* Therefore I think, that under a $4.00 rate he would be getting eur materiel at a euffieiently lew prieo* To The Owners of Prosperity and Success Group of Mining Claims *«•«.*«•> The coraaic business is the only one X know ef for which our material can be used without some refining. For metal making practically all of the lime and silica would have to be removed* For plastic magnesia and/or oxalica somoni, of the lime and most of the silicates would have to he removed and the gas would have to bo driven off down te about F/U The preduets ef this cement material are not vitrieusand do not have to be kiln baked* When we are in a position to eliminate those impurities fron the ore there will be a tremendous business open to us, providing such elimination can be made at a cost so low that the practically pure magnesium oxide ean be delivered in ImsAngeles at a seat ef $20.00 per ton, because at that pries (the material being only one half the weight ef Portland cement and practically double its strength) it could invade and take a large part ef the Portland earnest business. I am sure in my own mind that when the power question isfla&L iy settled so that the consumer will knew definitely what it isgoing to cost him, and the point# at which he will be permitted to use it, it will not be very long there­after until a process will appear, with the capital to back it, to take up this large business. When it does appear* however, its owners will want to contrast for the ore in the mine* de hisown mining, trade iug and leading, in order to out his expenses to the lowest point possible, so as to get his oxide into the market at a prise lew m»aagh to take the trade and make hie profits. Whoa that time comes, 1 do not think ws will be able to get a royalty of more than a dollar a ton in the mine, and in order to be in a position to be able to help him work out the proposition, as X see it, we will have to be able to turn over to him the best and most cheaply mined exposures ef the deposit without having^to buy out or put upon him the burden ef buying out lessee* who could told such a deposit indefinitely at very small sost providing he iabound only by small annual minimum tonnage. That le one, and there are a number of ether equA ly cogent reasons, why X am not eenvertod to th# proposition of granting someone > or to anyone for that matter, a lease on eneof the principal ere exposure# under a low minimum tonnage production. We agreed to lease to the Incas Dry Xee people in 1930 or 1931 at $1.00 per ten in the mine, conditioned however, upon their removing and paying for not lees than 10,000 tons per annum. Whenever I have named $1.00 a tea royalty ithae been only with the thought that it would apply only where such large tonnage is taken. The owners havs never authorised a dollar a ton royalty under a email annual production. If a probable lesesesaw fit to put up $2,000 in each or thereabouts * guaranteeing the taking of 5,TOO tone per annum, X think we might reasonably consider that. Uader the plan X propose there need be no hindrance to taking up ouch business as night be open to us by supplying it f.e.b. as I have proposed. Personally, I do not believe eueh business for oeranie purpose* will ever expand to very great proportions because* in the light of past experience in trying te M t it going* I know tho obstacles that euro in its way* sons of which I realise sill bo removed when tho ceramists come to remodelling sad electrifying thoir plants* Thors is a possibility that they cay then use our ero in considerable quantities* If and when that tins soatss vs can change our methods to asst it as say be required* I think toe* that ay {deposition is fair to all concerned* I sill add* in conclusion* that very cheap and effective processes for producing metal are now in existence and I think we need bars no concern or fear but that a largo part of that business alii some our say* But as conditions aro as cannot rush it and sill have to salt our tins* Please 1st ae hoar froa you as to whether or not you approve ay proposition* or if you iavo some pl^n which you think better please state it, so that under soae heading or ether so eon come to soae understanding or asthod of Control* Ihile I hops wo will be able to reaeh unanimous approval of coho plan* yet if we e&xaaot do ee» then* in that event the ownere of a substantial majority interest to the property can legally proceed to handly or operate it* making proper account and settlement » ot course» with the owners of tho minority interest as the courts and law provide* It is to be understood that the proposition I have submitted ie subject to aaendaent* and that under the final instructions and authorisation given to the executive committee* will strictly define and limit the amount of money it dial! have to spend for improvements. Provisions will also be mads fully protesting sash owner as to the amount of money he is entitled to receive out ef the net proceeds from the business* Provision will also be made for payment to sash owner the money which he will* from tine to tie® be entitled*" The cost or expense of the executive committee should be only light unless they should do the actual work* That work would have to be paid for to the event* With kindest regards and best wishes to all* I am* To The Owners ot Prosperity and Suoeooo Group of Mining Claims— -— 4 Very truly yours* 4-