1937 – The Desert Silver mining company begins operations at Nivloc
Around the turn of the 20th century the State of Nevada reported a population of just 42,335; gold was discovered at Goldfield (bringing a flood of prospectors to Nevada), construction began on the Hoover Dam and in a remote corner of the state, 169 miles south-southeast of Reno, a Shoshone Indian discovered silver.
Remote and desolate as the area was, its people were no stranger to exploration and mining. About seven miles to the northeast the town of Silver Peak, the nearest community, came into existence by way of a silver discovery in 1864.
By 1920 the Shoeshone (unfortunately his name is lost in history) who made the discovery had turned it over to a Mr. Colvin of Chicago who opened the Nivloc (his name spelled backwards) Silver mine shortly thereafter. Mr. Colvin spent a great deal of money to develop the mine, attaining a total depth of 1,100 feet and several hundred feet of lateral work on various levels. Unfortunately practically no ore of commercial grade was found during this campaign and Mr. Colvin, becoming discouraged, abandoned the mine. It then passed into the hands of Mr. F.A. Vollmar who expanded the land package and eventually secured an R.F.C. (Reconstruction Finance Corporation) loan on the property. The expenditure of the money from this loan opened several very good orebodies and he was able to sell the mine to a group of individuals who formed Desert Silver, Inc. in the year 1937, with Mr. Ira B. Joralemon as its President.
By October 1st 1937 the new company had built a 175 ton per day (tpd) cyanide mill and purchased equipment for the mine to produce 200 tpd of ore. In the last 5 months of 1937, 17,158 tons of ore were milled, with a production of 201,099 ounces silver and 417.5 ounces of gold.
The silver price in 1937 was 77 cents, but in his February 15 1938 report to his shareholders for the year ending 1937 the company President wrote about his concerns for the price of silver in 1938.
“The reduction in price of newly mined silver from 77.57 cents to 64.64 cents per ounce, effective January 1st, 1938, is a serious blow to your company. It will more than double the time necessary to clean up the company indebtedness. Fortunately the reduced income is partly compensated by a revised option agreement with underlying owners, effective in December, 1937. Under this agreement the minimum semi-annual payments are reduced with lower silver prices, although the final purchase price is not reduced. With the price of silver effective in January, 1938, the annual property payments will total $75,000.00 per year instead of $100,000.00 as in the original contract.”
In the same report Ira B. Joralemon expressed his concern with the issues of the encumbering option agreement and curtailed development expenditures;
“Because of the uncertainty as to silver price, the amount spent for development and equipment was cut to an absolute minimum. Operating profit in the first few weeks was therefore used to complete payment for buildings and equipment. As a result, there was not sufficient money available to complete the property payment of $50,000.00, including royalties, due on or before December 20, 1937. In order to meet the payment, $26,000.00 was borrowed on short term notes from two stockholders.”
As we follow the President’s reports over the life of the mine we will see this theme repeated again and again; concerns about the silver price, frustration with the terms of the option agreement, and cuts in development expenditures.
In future blog instalments, in addition to looking at historic production figures, we will begin to learn about the various levels in the old Nivloc Mine, the way mineralization occurred, and where the original miners were headed in their search for additional veins.
Kevin Hull
