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Vhe Homestake Mine BY ARTHUR P. METZGER > PARTNER, SAN FRANCISCO OFFICE Sunk more than a mile deep into the Black Hills that rise above the old buffalo grazing lands of South Dakota is the gold mine of Homestake Mining Company. Home-stake has been a client since 1935 when Jim Runser, long the partner in charge of our San Francisco Office, journeyed there to make the first independent audit of the Company. The Homestake Mine has been a successful enterprise for almost 90 years. Although mining gold today bears little resemblance to the work of the early-day prospectors and miners, it is still confronted with problems that call for the same venturesome spirit, tenacity, and ingenuity. Getting gold from the earth has always been a tough and risky business—in terms of both human effort and economics. Miners are a hardy breed. Today, Home-stake must bring from the depths of the earth more than three tons of hard rock in order to extract one ounce of gold for which it receives $35, a price fixed more than 30 years ago by the Federal government, which by law is its only customer. With constantly rising costs and the need to follow the ore body ever deeper into the earth, Homestake has had to search continually for new methods by which the ore can be mined and milled and the gold recovered more efficiently. Inflation and the fixed price of the product have to some extent obscured spectacular achievements, but the fact that the mine is still profitable is evidence of the Company's character and resourcefulness. Gold and Indians Homestake's history begins in 1874, when General George Armstrong Custer carried out a reconnaissance into the Black Hills, Dakota Territory. Rumors of major gold discoveries soon turned a minor rush into a stampede of prospectors to mountains which were sacred to the Sioux. Custer's Last Stand on the Little Big Horn River in 1876 was not unrelated to this conflict of interest. In the same year, two prospectors discovered the Homestake Ledge or Lead (pronounced "Leed," meaning an outcrop of ore); hence the name of the mining town which grew up around the Homestake Mine. A San Francisco group including Senator George Hearst, father of William Randolph Hearst, and L. B. Kellogg, an expert and practical miner, optioned the Homestake and one other claim for $70,000, and the Company was established in 1877. Ox teams hauled equipment almost 300 miles from Sidney, Nebraska, the nearest railhead of the Union Pacific. Homestake's first financial statement for the period to August 31, 1880, reported revenue of $1,925,000 and dividends of $600,- 000. The Homestake Mine has been in almost continuous operation for nearly a century and has produced almost $1,000,000,000 of bullion at today's price. With annual revenue of over $20,000,000, the mine today is one of the world's major gold mining properties and the largest gold producer in the Western Hemisphere. H&S in a Mining Camp A short uphill walk from our lodgings in the Company's apartments on Main Street brings us to a rather inconspicuous marker which pronounces the altitude to be one mile above sea level. Looking on up the hill to the green line of jack-pine against the snow, we recall tales of how Jim Runser used to walk with his audit assistants through the upper streets of Lead (once at 40 degrees below) for a break before their regular evening 15
Metzger, Arthur P.
Mineral industries -- Accounting
Runser, James A.
Chetkovich, Michael N.
Gustafson, John K.
Chetkovich, Michael N.
Runser, James A.
McLaughlin, Donald H.
H&S Reports, Vol. 03, (1966 winter), p. 14-18
|Source||Originally published by: Haskins & Sells|
|Rights||Copyright and permission to republish held by: Deloitte: Photography by Roy Stevens;|
|Format||PDF page image with corrected OCR scanned at 400 dpi|
|Collection||Deloitte Digital Collection|
|Digital Publisher||University of Mississippi Library. Accounting Collection|