"Because rich ore generally peters out fast. The rich mines always catch the suckers easily, and they're the ones who lose. A few cents a ton profit on an immense deposit of low-grade ore means a sure return, because, as a rule, such ore comes from a very old geological formation where the gold is evenly scattered, and labor-saving machinery can be put in with a certainty that those few cents of profit will continue indefinitely.
"Gold, as you know, Jim, is always the same price. This has been agreed upon by all nations. It is the one standard of value. It is worth a fraction over $20 an ounce. Year in, year out, all over the world, gold is worth the same.
"As a result, a gold-mine manager who knows the exact proportion of gold per ton in the ore of his mine, can calculate to a cent how much he can afford to pay for mining the ore, crushing it, and separating the gold by chemical processes. He must figure on the cost of installing his machinery, on his interest for original outlay, on depreciation, on the cost of power for his machinery, on the water power needed for crushing and washing, on transportation for his supplies and on wages. Usually he will have to build his own railroad and his own aqueducts. A little saving in one place—even a few cents per ton—will enable him to make a big profit; a little extra cost, such as an increase in the price of fuel, of chemicals, or of wages, will make him bankrupt.
Where Deserts Yield Millions.
Mill of the Pittsburg-Silver Peak Gold Mining Co., Blair, Nevada.
The Eater of Mountains.