ODDS ‘N’ SODS — The last laugh

The Quebec Ministry of Mines used to publish lists of claims that were about to expire. These were studied by stakers like myself, since one never knew when some hot property was going to come open. Plus, the list gave us a few weeks advance notice.

A couple of years after a pretty good discovery in northwestern Quebec evolved into a major staking boom, a group of claims owned by major mining company appeared on the list. The company had done a fair amount of work but failed to pay taxes on the property. This happened often and usually created a pack of problems for small independents like me, as bigger companies usually won the claim back after it was re-staked.

I was given the run-around by the president of the firm that owned this ground, and I had it in for him. In the original boom, I had staked several thousand claims in this area and sold hundreds of them, making quite a bit of money. I considered this area my personal kingdom.

The day before the expiry date, I checked with the mining recorder. He told me, over the phone, that the claims would come open at 7 a.m. the following day.

“Expect some competition,” he added.

With three other stakers, I flew into the site. The next morning, I contacted the air base by radio. The base soon relayed the message from the mining recorder’s office that the claims had become open.

We were the only crew on site, and started putting up our claim posts. A lot of ground was covered by an enlargement in the river, so it was easy staking. Several planes flew in, but turned back when they saw us.

“Make big posts and put lots of blazes,” I told the crew. “Make sure your work can be seen from a distance.”

A couple of days later, with staking complete, I took my recordings to be filed.

“You’re too late,” the recorder said. “The taxes have been paid. I can’t accept your recordings.”

When I reminded him that he told me the claims were open, he replied that I could always complain to the ministry. “You damn well know that this outfit is bigger than you are, and that they always win,” he told me.

“Like hell,” I said. “On this one, I’m bigger than they are.” With that, I left his office, madder than hell. We were out a few thousand dollars, but I was more upset with the president of the company than with the mining recorder. I was also hoping that my parting statement would prove to be true.

Before the taxation laws came into effect in 1970, a prospector and members of his grubstake didn’t pay taxes on any profit made from the sale of a property. This made it attractive to investors. By the same token, you could not apply the losses against your income. A grubstake was a pretty loose agreement based on trust and faith, and usually done just as a staking rush was developing.

Time was of the essence, so most partners would give the OK to the organizer over the phone. While the organizer was in the bush, they would deposit their pre-dated cheques into his bank account. The most important thing was to have everything dated before the first claim posts were erected. The date of the cheque and the deposit was an investor’s only proof as a grubstaker.

On several occasions, I never met, or even knew, some of the members since they would participate indirectly through other investors.

Living in Noranda, I organized a lot of these grubstakes. Most of my members were geologists at large mining companies and mining consultants. Once in a while, doctors, lawyers, businessmen, stock brokers and even friends would be involved.

The first two grub stakes I put together were mildly successful. The third was a bonanza — on it, each member received $1,500 for every $100 invested.

I usually paid my partners in cash in order to lower bank costs and reduce paper work. I didn’t really care who was involved, as long as he put up the money before I got back into town.

On several occasions, a geologist with the then-largest mining company in the world put up money on behalf of a silent partner. Every time this silent partner was involved, I never made a deal. But every so often, he would put up more money. I didn’t know who he was, just that he was someone important.

When I told my geologist partner what was happening, he told me to meet him in his office.

“Close the door,” he told me when I arrived. “Forget what you’re going to hear,” he said as he picked up the phone. He dialed the operator, asked for the Ministry of Mines in Quebec City, then requested to speak with someone whose name I recognized.

“I think we’ll own those claims,” he said when he hung up.

The next day, the mining recorder called me to say that I should send my recordings in and that they would be accepted this time. He was very apologetic.

I later heard through the grapevine that the president of the company which lost the claims was livid. I would have been happy to sell him his property back — at a high price, of course — but he never called. A year later, we let the claims lapse.

-The author, a retired prospector, resides in Pierrefonds, Que.