Kempt Gold Mining Company
Our stories about historical mines are usually pieced together from various documents, such as Department of Mines annual reports and company records. It is unusual to have a mine’s full story told in one document written by a person who actually lived it.
So, a 1930 letter by Arthur White Eakins, Secretary Treasurer of the Kempt Gold Mining Company, is a bit of a rarity. It tells the remarkable story of how a long string of operators failed to make a profit at the Kempt gold mine, despite its rich ore.
The Kempt mine’s story is illustrative of the problems many historical mines faced, such as lack of capital and mining expertise, the rudimentary science of the day, and poor management.
At the time he wrote the letter, Eakins had been the company’s Secretary Treasurer for 46 years and was the only “surviving member of its original Board of five Directors.”
He wrote the letter because a “Notice of Call” was being issued to company shareholders. This meant they had to decide whether to invest additional funds in the company or surrender their shares. Because the company was almost half a century old and many of the original investors had passed away, Eakins felt the shareholders needed a history of the company to make their decisions.
Eakins wrote that gold-bearing rocks were found in summer 1885 in the woods in Kemptville, Yarmouth County. One boulder, three feet long and eighteen inches wide and thick, “was brought to Town and exhibited in a shop window. It was said later that this one piece of rock, when broken up and milled, yielded 15 ounces of gold.”
Gold-bearing quartz veins were discovered in the area by James and Joseph Reeves, brothers who staked the area. “Having no capital, however, with which to finance the purchase of equipment and machinery to carry on actual and effective mining operations,” the Reeves raised some money from investors in Yarmouth so they could dig a shaft to prove the deposit.
“At this point, a Yarmouth Company was formed and took over at an agreed price the interests of the Kemptville people and their Yarmouth Associates. A Nova Scotia Charter was applied for under the name of ‘THE KEMPT GOLD MINING COMPANY, LIMITED.’ The capital was to be $30,000,00, divided into 100,000 shares of the par value of 30 cents each. Twenty cents a share was to be paid up at once, and the remaining ten cents subject to call, if and when required.”
The Reeves and their investors were paid $16,200 for the property, leaving the Kempt Gold Mining Company with $3,800 in cash and another $10,000 in commitments from its shareholders.
Mr. Foreman Hatfield of Tusket was hired to manage the mine and work started around November 1, 1885. However, by the time of the company’s first annual meeting on January 24, 1887, the mine had “merely ‘scratched the surface’ from a Miner’s standpoint,” so a call of two cents per share was issued to raise funds.
Signs of trouble soon started to appear.
At the Kempt Company’s second annual meeting, on January 23, 1888, the board said, “In presenting to you our Second Annual Report with a statement of the affairs of the Company at this date, we regret that it is not as encouraging as a few months ago, it gave promise of being.”
A new crusher had been installed in December 1887 but the building housing it burned down in early January 1888, so another call was needed to raise funds to pay for the damage. In the meantime, the board hoped to raise about $500 by crushing ore at the Cowan gold mine, which was near the Kempt mine.
The fire was not the only problem with the Kempt mine’s milling. “The gold obtained from the quartz crushed at the mill during the few days it was running, was not up to our expectation in quantity. The POMPEII quartz [vein] had yielded as high as 8 oz. to the ton at the Cowan mill, but we only got one oz. to the ton at ours. An assay [test] of the tailings, however, gives $80.00 to the ton more. From this it appears that we only saved one-fifth of the gold in the quartz…We were trying to economize in the working expenses by dispensing with the services of an experienced amalgamator, but it seems to have been false economy.”
This was a common problem at historical gold mines. The science behind milling ore was rudimentary in the historical era compared to how sophisticated it is today. Also, mills were often operated by people with little to no experience or expertise. As a result, historical mines often lost significant amounts of gold to the tailings, as the Kemptville mine did. They also often caused environmental damage because 100-150 years ago was long before environmental awareness or scientific understanding of how human activities could affect the environment. (Learn more about historical tailings at https://notyourgrandfathersmining.ca/modern-gold-mining).
“Notwithstanding the lack of Dividends thus far, your Directors are more than ever convinced that the property of the Company is a very valuable one, and that it only needs a little more capital to make it pay handsomely. The Cowan Company adjoining us, and on the same belt of leads, are now running night and day with about forty men, and appear to be doing well. This fact serves to strengthen our confidence in our mine, and to inspire us with confidence in the future.”
Another common problem experienced by historical gold mines was financial challenges caused by either a lack of capital, or by spending too much and generating too little in revenue. A July 4, 1888, meeting of the board discussed the fact that the company owed $851.95 but had no funds to pay it. The most recent call on shareholders, the company’s third, had raised $1862.30 but a total of $800 had not been paid by shareholders. The board passed a motion instructing Eakins to hire a debt collector: “If any shareholders refuse or neglect to pay after being called upon, or written to, the Secretary is instructed to sue them forthwith.”
By April 11, 1889, the company had sold at auction 7050 shares surrendered by 16 shareholders. However, this raised only $11 - $10 of which was paid to the auctioneer, netting the company only one dollar. Eakins wrote, “I suppose that as the purchaser was buying a liability he showed considerable courage in buying the shares at all.”
To solve its financial problem, the company accepted an offer in 1888 from William H. Nash of Reading, Massachusetts, who wanted to lease the mine for two years in exchange for paying the company a royalty of 10% of the gross value of the gold produced. Nash would have the option of buying the mine at any time during the two years for $18,000.
Nash paid the company a total of $324.23 in nine royalty payments by February 1890, suggesting that he had produced $3242.30 in gold. Eakins wrote, “We have nothing to show what his expenses were, but I think he was doing a good deal of what miners call ‘dead work’ in getting ready to mine in a larger way and produce enough quartz to keep a ten-stamp mill (which he expected to build) fully employed. Anyway, it seems that he and his New York backers were satisfied, because of a new proposal…Nash now proposed to lease the Mine for another three years….” If Nash decided to buy the mine, the purchase price would now be $23,000.
This deal was agreed to on October 1, 1894, but the deal was now with the Consolidated Mining and Milling Company, Nash’s New York backers, not Nash himself. Unfortunately, the company wrote to Eakins in December 1895 saying, as Eakins described it, “they were interested in some large and promising mining operations in the Western States, which so occupied their attention that they decided to let their lease of the Kempt lapse. Personally, I think that they, like ourselves, had reached the end of their resources.”
Edward F. Walton worked the mine next and paid the company $500 in royalties in October 1897. The mine then lay idle until April 1899 when Walton and Leander G. Britton made an offer to buy it for $35,000 with $5000 down and then six annual payments of $5000 each.
The board accepted the deal but the first payment was made on October 18, 1899, by the Imperial Gold Mining Company of Boston, to whom Walton and Britton had sold their rights.
With cash in hand, a dividend of four cents per share was paid to shareholders and Eakins was reimbursed for years’ worth of expenses, totalling about $1000. The board also voted to pay him an annual salary of $20.
In 1900, the Imperial Gold Mining Company defaulted on the second payment of $5000 so Walton and Nathaniel W. Dunbar took over.
Walton and Dunbar formed the Argonaut Mining and Milling Company of Canton, Massachusetts, and operated the mine until spring 1903. However, Argonaut defaulted on a payment that year after failing to find a buyer for the mine. Argonaut had paid a total of $19,704.25 of the mine’s purchase price and the Kempt Gold Mining Company had paid out multiple dividends to shareholders.
By 1903, shareholders had put $26,000 into the Kempt Company and received a total of $22,000 in dividends – $4000 short of breaking even.
Walter A. Nickerson of Maine worked the mine from 1904 to 1905 and paid the Kempt Gold Mining Company a royalty. The company induced Nickerson to keep working for another year by extending the deadline for his final payment.
In September 1905, the mill burned down so the company again rejigged their agreement with Nickerson to keep him working. Among other things, Nickerson was given the $1350 in insurance money to pay for a new mill. The mill, “very much larger and better than the old,” was not operational until May 1906.
By 1910, Nickerson was broke and unable to pay the Kempt Gold Mining Company what he owed it.
The mine was abandoned until 1924 when George Byron Bower, then living in Swampscott, Massachusetts, struck a deal with the Kempt Company. He had been a miner at the Kempt mine previously and felt that he knew how to make it profitable.
Eakins described what happened: “The Bower Mining Company – or perhaps the men in charge of its operations – seem to have felt sure that they had acquired a lease of a very valuable mining property, one which would warrant the expenditure of a large sum of money in getting ready for effective work in mining and crushing the quartz, so many veins of which were in evidence. They bought real estate in farms and wood lots; bought a dwelling house and reconditioned it at considerable expense; built a ten stamp mill; sunk a splendidly built working shaft, a depth of 160 feet, and, although having the Mill nearly ready to start running, did not try to produce an ounce of gold.”
Eakins estimated that Bower spent approximately $48,000 on digging shafts and tunnels in 1926-27, and about $20,000 on equipment. Bower also acquired the old Cowan mine and a property at nearby Snare Lake that showed potential for lead, zinc, copper and silver.
The Bower Mining Company went bankrupt in 1930.
The Kempt mine has been prospected intermittently ever since.
The Kempt mine is an example of why we say new mines are often found next to old mines. The historical activity there suggests there may be a significant resource. However, the obstacles faced by Nova Scotian gold miners in the 1800s and early 1900s – such as lack of funds and infrastructure, insufficient mining expertise, and rudimentary science and technology – prevented them from extracting it.
Today, historical sites like the Kemptville gold district have the potential to be mined profitably and environmentally-responsibly with modern science and engineering.
In addition to his work with the Kempt Gold Mining Company, Arthur W. Eakins was a Yarmouth municipal councillor and successful shipowner and merchant. In 1874, he and Edward F. Parker founded the Parker-Eakins Company which owned a fleet of trading vessels that carried lumber, fish and farm produce to the West Indies and brought back sugar, molasses and rum. The company also shipped a variety of Nova Scotia products to other places such as Great Britain.
James Reeves, one of the discoverers of the Kempt mine’s deposit, also worked in the Gold River district, Lunenburg County, in the early 1900s: https://notyourgrandfathersmining.ca/gold-river
