The Kelly Mine and the Tri-Bullion Mining Company
-A History as Rich as Gold
The Kelly Discovery
When J. S. Hutchason (“Old Hutch”) staked the first mining claims on a rich lead outcrop near Magdalena in the early spring of 1866, he knew he wasn’t the first one there. Scattered about the locality were adobe and stone ruins among numerous prospects, clearly an indication that the Spaniards had been there perhaps a century prior.
Hutch had already staked several claims, and told his friend Andy Kelly to locate the rich lead outcrop. Kelly was a sawmill operator at nearby South Camp, and took the opportunity to strike it rich seriously. But with low silver values, Kelly wasn’t much interested, and dropped the claims. Hutch thought better of their potential and restaked the property. Hutch had also located the Graphic mine in the fall of 1866. Both mines went on to glorious history as major producers of ores for about a half a century.
The Kelly Mine became known as a lead property, and was prospected heavily through the early 1880’s, though they did not have any regular production. The silver values were simply too low for economic production. Afterall, the massive lead mines of Missouri and Kansas were producing most of America’s lead. All that began to change in the mid 1880’s. In 1884, the Kelly joined the ranks of paying and producing mines. Among the striking examples of this class, the Kelly mine of Magdalena District…is cited
Mr. Gustav Billing had bought the mine in 1883 and expended a considerable sum in the exploration and development of ore. He built a 180 ton per day smelting plant nearby and announced he had three years of ore in sight, which meant that he thought he had three years of mineable reserves. When he completed the purchase, Burchard noted in the 1883 Report of the Director of the Mint:
The Kelly Mine is, so far as present development can demonstrate, the most important mine in the Magdalenas. The ore is a low grade carbonate carrying galena…averaging 12 ounces silver to the ton and 35% upwards of lead…with 4000 feet of tunnels.
The prophecy turned real. The ore lasted about the three years projected, then the mine was thought to be exhausted. Billing, however, astutely explored for more ore, and in late 1887 announced that new ore had been located at the lower levels, primarily rich sulfide ore.
The demand for lead remained somewhat low because of the massive production of the Tri-state deposits in Missouri and Kansas. Very little production took place at the Kelly between 1888 and 1904. In conflict of this statement, however, was the report of F. Jones in New Mexico Mines and Minerals that stated that the combined production of the Kelly and Graphic mines up to January 1, 1904 was $5.8 million, “with Kelly in the lead.”
Tri-Bullion Company Formed
In 1904, the use of zinc began to increase in the United States. The associated rise in the price of the metal brought new excitement to the Kelly mine camp. Additionally, a new company had been formed to explore and develop ore at the Kelly. The Tri-Bullion Smelting and Development Company had been incorporated in Arizona in late 1903 with an initial market cap of $5.25 million. The initial officers included Howard Paschal as president, Louis Hedden as Vice President and Sam Taylor as the general manager.
The Tri-Bullion S&D Co. operated as a normal publicly held mining company. They had property holdings in several western mining districts, explored those properties for ore, developing reserves at some locations, and dropping properties along the way that were uneconomic. Their key property was the Kelly Mine at Magdalena, New Mexico. It is from this property that the company name was derived. Tri-Bullion in this case, means lead, zinc, silver; three closely allied metals found together naturally in certain ore depositional environments. It was a unique name, clearly separating them from any competitors, a good move from the view of a legitimate public company. Their stock would not be confused with that of others.
Other Tri-Bullion Mine Properties
Early property holdings of the Tri-Bullion S&D Co. included the Kelly Mine in Socorro County New Mexico, the Starlight mine in the Stanley Butte District, Gila County, Arizona and the Michigan Gold Mine near Ishpeming, Michigan.
The Starlight mine had been discovered in 1886 and was an ore deposit somewhat similar to that of the Kelly. It was a contact type of deposit, with ore reportedly averaging 8% copper, 10 Troy ounces of silver and 0.11 Troy ounces of gold per ton held in the mineralized carbonates. The Starlight may have been the first mine that the Tri-Bullion S&D Co. put into production. By 1905 they had developed two shafts to depths of 500 feet with drifts exploring ore up to 1000 feet. The ore was shipped directly to a smelter in El Paso. The Company sold or dropped the Starlight several years later, possibly concurrent with the market crash.
The Michigan Gold Mine was certain to attract a lot of attention. It was the best and most famous gold mine in Michigan, discovered in 1885 during the heat of copper mining activity on the Keweenaw Peninsula. The Tri-Bullion S&D Co. used the Michigan Gold Mine for publicity, but after a short exploration program revealed the deposit as uneconomic, and the property was dropped. By 1908 the property was no longer mentioned among the company’s holdings. Much has been written on the Michigan Gold Mine, though most of it pre-1895 and post-1940. Little is known of the post-1900 boom period when every gold and silver prospect in America received much attention after the rich discoveries at Tonopah and Goldfield, Nevada.
Other properties were explored by the Tri-Bullion S&D Co. These included copper property in Jefferson County, Montana.
Tri-Bullion Production at the Kelly Mine
By early spring of 1904, the Tri-Bullion S&D Co. had the Kelly Mine in full production. The Mining and Scientific Press reported that there were 150 men employed working two shifts per day in July. Reports of the number of employees varied from 125 to 150 over the ensuing summer months. In August, the Company reported a production of 85 tons per day of high grade zinc-lead ore. In September the mine was hurt by a flood, but recovered within a couple of months or faster.
Meanwhile, the mine lease expired at the end of August, 1904. In November, it was reported that the mine had sold to J. B. Corliss et al of Detroit. Corliss was later secretary of the Tri-Bullion S&D Co., and was acting on the Company’s behalf to buy the property. By December, it was reported in the Mining and Scientific Press that the Tri-Bullion owned the Kelly Mine.
Normal mining companies operate the same was today as they did one hundred years ago. Once a public company is formed, it acts as a “shell”, holding a number of other privately held companies under the public company banner. These private companies are often created as operating entities for certain aspects of the mother company’s business. In this respect, The Tri-Bullion S&D Co. created the Tri-Bullion Mining Company to operate and manage the Kelly Mine. This operating entity was only mentioned in the news during a very brief period of January to February, 1905.
Zinc Production Soars
The calendar year 1904 saw great changes in the zinc business. The metal’s price had risen about 22% over the year. The Tri-State and New Jersey mines were responsible for about 75% of the US production, and new zinc producers were cropping up in the western United States. Among the most important were the mines at Leadville, which brought zinc onto the market in 1899. New Mexico was new to the marketplace, centered in St. Louis and New York.
The Kelly and Graphic mines shipped their ores directly to Kansas City. They produced 21,000 tons of zinc in 1904 at a value of $168,000 and 17,800 tons in 1905 at a value of $222,500. The market was on an upswing, and the price of zinc again rose about 22% in 1905. Production was up in 1907, and the Tri-Bullion S&D Co. tried to build a smelting facility in Albuquerque, but it failed. The Company’s ores were reported to average 25-35% zinc, 12-15% lead, 10 Troy ounces of silver and 0.10 Troy ounces of gold per ton. That year they announced a ten year reserve, which normally would have been a great announcement to the stock market. But the financial scandal associated with bogus mining companies precipitated by the Goldfield marketplace badly hurt the legitimate companies. Indeed, even the great Goldfield Consolidated MC had to regroup to procure funding for expansion operations.
The Kelly continued strong metal production for decades with varying numbers of employees, usually with more than 100 men continually employed. The mine had developed large reserves and attracted the attention of the New Jersey Zinc Co., which had begun to have a monopoly over the zinc market but new competition was on the horizon.
About 1912 the ownership picture of the Kelly mine gets murky. In local newspapers, New Jersey Zinc was reported as purchasing the mine from the Tri-Bullion S&D Co. The period of development was an important one for not only the Kelly, but for all zinc mines. New metallurgy was being developed to more economically remove and separate zinc and related metals. Much of this work was headed by the renowned metallurgist Phillip Argal, who developed a floatation process on lead-zinc ores in New Mexico. The floatation process involved using oils to separate different metals. It was a process that developed over more than a decade, allowing mining companies to develop unoxidized ore deposits rich in sulfide minerals.
Strong production continued through the teens, and several mills of differing capacity and methodology were constructed for Kelly ores. Production in 1917 had climbed to 73,900 tons, up from 41,852 tons in 1916 and 39,970 tons in 1915.
Meanwhile, various editions of the Copper and Mines Handbooks reported the ownership had remained with the Tri-Bullion S&D Co. The 1925 Mines Handbook reported that the Arizona and New Mexico properties were leased, with a royalty income of $6,000. Little mention was ever made again of the actual production statistics by that company, and in 1927 the Tri-Bullion S&D Co. had their assets purchased by a new company, the Tri-Bullion Corporation. Within just a few years, that company was dead, their stock having no trading value in 1936.
The Tri-Bullion Ingots
Several gold, rectangular ingots have surfaced bearing the name Tri-Bullion Mining Co. over the years. These ingots have generated much interest, while little research of value has taken place. Research of the Tri-Bullion companies for this paper revealed yet another Tri-Bullion gold piece, this one a die struck gold medallion in a private collection known to the New Mexico Bureau of Mines.
During the author’s twenty-nine career in the mining business, many gold ingots of differing descriptions were observed within the industry. Many of these are presentation pieces, made for Board members, Officers, or major investors. Indeed, long before my first paper on historical ingots was published, I followed custom and produced ten special gold ingots (rounds, in this case) from the Gold Bar Mine in Nye, County, Nevada, given to Board members and investors of the mine. Many similar ingots have been described in my various published papers on historical ingots.
The Tri-Bullion ingots at first presented a research problem. They carry the name Tri-Bullion Mining Co. instead of the parent Tri-Bullion Smelting and Development Co. A second apparent problem surfaces when it appears that the Company’s major properties are tri-bullion, or lead, zinc copper properties. No mention was ever made of the gold produced as a by-product. Zinc and lead were the primary metals produced.
The Tri-Bullion Mining Co. Name
The use of the name Tri-Bullion Mining Company was only found in January and February, 1905 issues of the Mining and Scientific Press. Issues of the Engineering and Mining Journal were not consulted, and these may add to the knowledge already gained.
The Tri-Bullion Mining Co. appears to have been a wholly owned subsidiary, apparently a private operating company for the Kelly Mine in Socorro County, New Mexico. The specific use of this name, in conjunction with its limited use in the media, suggest a rather specific date for the ingots, January to February, 1905.
Questions and Answers Regarding the Tri-Bullion Gold Ingots
The multiplicity of the ingots suggests that they were perhaps distributed to officers or directors, a somewhat customary practice. The addition of the die struck medallic gold piece also adds an enormous amount of credibility, because it shows clear intent by the Company to issue a gold commemorative piece.
The gold in the ingots is doubtful from the Kelly Mine. It is far too difficult to go through the zinc reduction process, later separating and refining the metals. The precious metal recovery from zinc processes are discussed in many detailed advanced metallurgical texts, and in contemporary professional papers published concurrent with the Tri-Bullion ingot, such as “The Recovery of Bullion From Zinc Box Sludge” in the Mining and Scientific Press. Tri-Bullion probably purchased the gold on the open market. That is precisely what is done today, and has been known to have been done customarily. It should also be noted, however, that the reported grade of gold of 0.10 Troy ounces of gold per ton is very significant, and would have created much needed revenue. As a byproduct, it was nearly as valuable as the zinc itself.
Other possible sources of the gold might be argued. Gold was also a byproduct of the Starlight Mine, a significant Tri-Bullion mining operation in Arizona for several years. The mine had similar metallurgy to the Kelly, thus it appears unlikely that it was the source. The key revenue for the Company, as well as the larger tonnage throughput, was from the Kelly Mine. It makes less sense for the Starlight to be the source. The Michigan Gold Mine might also be argued as the source material, but there is absolutely no record of production there by the Tri-Bullion Company while the mine was under their stewardship. Certainly any production would have been noteworthy, and to date, no information has been located.
Another question might arise about the authenticity nature of the ingots. My initial response to that query would be “Why would someone want to make a fake ingot from the Tri-Bullion Company? It is not a romantic company, had no mine holdings that are ripe with stories, treasures and intrigue. It is a company very difficult to research – indeed, it took me more than six months to get this far. It makes no sense to me whatsoever, that someone would want to fake a Tri-Bullion gold ingot. A potential faker would make more questions in the creation than there are answers. It is not a likely target. Likely targets are those already faked in abundance – Wells Fargo, and many assayers of the California gold rush era. In each case, the faker has taken a romantic company dear to numismatists (not miners) and perpetrated a fake, usually leaving tell-tale signs of invalidity.
.5 oz Socorro County,NM – c1904 – Tri-Bullion Mining Co. Gold Pendant
This fascinating and rare pendant was produced in the early years of the 20th century by a company in New Mexico that had various mining interests. The explanation for the company name comes from the three metals it primarily mined: lead, zinc, and silver. However, there were small but profitable amounts of gold also mined and this pendant was produced from that mined gold. It is assumed that this pendant was created for a company officer. Triangular in shape, the pendant has an imprint on each side.
One side reads: TRI / BULLION / MINING CO. / GOLD F. .5 OZS/ 999.
Reverse reads: U.S.M. / $10.
An extremely rare and important piece of mining history. Measures: 23 x 30 mm with loop attached.
[03/1982] https://archive.org/details/henryhcliffordco1982bowe/page/n107/
Tri Bullion Mining Company (Terr, of New Mexico). $10 triangular gold bar (no doubt reflecting the name of the company), used as a pendant (having contemporary loop attached at top). Extremely Fine. A piece that probably dates from around the turn of the century.
The obverse has a five line inscription in raised letters and numerals: TRI / BULLION / MINING CO. / GOLD F. OZS. / 999. The weight, expressed as .5 (one half ounce) has been punched before OZS. The fineness, .999, has been placed directly below the letter F., as shown. Hand-punched reverse inscription: U.S.M. / $10. The piece is 1.75 mm. thick and weighs 245 grains (loop included).
Obtained from John J. Ford, Jr. in 1965. Originally discovered in a jewelry shop in Wallenberg, Colorado (in the south of that state).
[10/2010] https://www.icollector.com/Socorro-County-NM-c1904-Tri-Bullion-Mining-Co-Gold-Pendant-5oz_i9799644 (Passed)
[01/2008] https://www.icollector.com/Tri-Bullion-Mining-Co-Gold-Pendant-0-5-Ounces_i7633480 ($23,400)
[06/2011] https://www.icollector.com/NM-Socorro-County-c1904-Tri-Bullion-Mining-Co-Gold-Pendant-5oz_i10679110 ($11,750)
Another example was auctioned as part of the “: “S. Hallock du Pont Collection”, March 4, 1983, Parts II and III. European Coins
Tri Bullion Mining Co Gold Ingot .5 oz, U.S.M. $10
