By Joel Warner
By Michael Roberts
By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
By Patricia Calhoun
By William Breathes
part 1 of 2
In 1977, when the inactive Glory Hole mine near Central City was being promoted as a tourist attraction, a visitor seated himself near the rim of the mine's chasm and began eating a picnic lunch of fried chicken. The 900-foot-long gorge blasted down through 300 feet of rock has a crude grandeur that tends to impress sightseers. Few would go out of their way to stare at the large hole on Quartz Hill had it occurred naturally. But the men who made it found a lot of gold down there.
The picnicker might have been ruminating about those untold fortunes as he sat looking into the rubble of the Glory Hole, perched at a vantage point just fifteen feet from an abandoned mine shaft. He probably didn't realize that active gold mines are considered much safer than inactive ones. "The ground just opened up," says a state mining official. The man and his lunch disappeared down the collapsing entrance shaft into the underground portion of the mine. It took days to recover the body.
The picnicker wasn't the first or the last visitor to be taken at the Glory Hole. The mine's founder, a Chicago dentist and entrepreneur named Dr. William Muchow, discovered as early as the 1930s that the Glory Hole could prove more profitable as a means of raising capital than as a working gold mine. Modern con men came to the same realization, including a fast-buck artist from California who ran a multimillion-dollar gold-bullion scam involving the Glory Hole and another mine in the early 1980s. Two local men were killed, their relatives believe, because they uncovered the hoax. Dropped down a 400-foot mine shaft, their bodies and their pickup truck weren't found for nine years.
Nobody knows exactly how much wealth was extracted from the Glory Hole--or how much gold may still be inside Quartz Hill. Postcards for sale in Central City say $200 million in gold was pulled from the pit before steady mining stopped in 1959. A historical sign on a road above town says $89 million in gold was produced by all the thousands of mines in Gilpin County. If historians can't sort such things out, it matters little to the miners, who tend to put more stock in hard rock than hard figures.
"There's more gold left in Gilpin County than was ever taken out," says Norman Blake, who owns 57 mines in the area. The former director of the state Division of Mines, Blake estimates that 90 percent of the gold discovered in the county is still underground. Don McCoy, a geologist hired by Glory Hole owner Colorado Chain O' Mines, Inc., values the mine's existing ore reserves at $5.3 billion. Others scoff at that figure. "All sorts of figures have been put out about that mine over a lot of years," laughs Van Cullar, a geologist and former Gilpin County commissioner who lives in Black Hawk.
But gold mining is a business where men will crush and sort through two tons of rock to get an ounce of metal--and consider themselves lucky. There has always been a tolerance for dross, whether in the mining or in the figuring. As Harvard geology professor Hugh McKinstry wrote in his 1948 tome on mining geology, "Ore reserves consist chiefly of hopes."
The hopes of three men are now tangled up in a convoluted legal battle for control of the Glory Hole and more than 100 other Chain O' Mines properties in and around Central City. Harold Caldwell, 74, claims to be trustee for the land, mines and milling equipment mothballed by Muchow when price controls and inflation made gold mining unprofitable. Robert Barnes, also 74 and a judge in Texas, wants to put the Glory Hole and other mines on the auction block to satisfy an $18.5 million judgment he won against Caldwell following what he describes as a Texas land scam pulled by Caldwell. Caught in the middle is 32-year-old Scott Hobbs, a handyman at a Fedco store in Southern California who says an auction will steal his family's inheritance--a stake in Chain O' Mines passed on to him and his relatives by his great aunt, Nettie MacDougall, one of the company's ten original investors.
"We've got judges lying, lawyers lying and other people lying," says Hobbs, who lives in Newport Beach. "You expect something like this in the Old West, but not in 1994."
Hobbs has allied himself with Caldwell in the dispute. But last year a Colorado district judge called Caldwell's purported trusteeship "a classic textbook case of fraud." Judge Kenneth Barnhill of the Jefferson and Gilpin County combined courts ruled that Caldwell is not a trustee at all but the actual owner of the properties. Because of that, Barnhill ruled, the Glory Hole and other properties must be auctioned off to pay Robert Barnes. But that sale will now have to wait until a personal bankruptcy filed by Caldwell in California this fall is resolved.
Meanwhile, Hobbs has filed a complaint with the Texas Judicial Conduct Commission against the Hidalgo County judge whose judgment against Caldwell included $10 million in punitive damages on a debt that was originally $1.25 million. The judge should have recused himself from the case, says Hobbs, because for years he has known Barnes, who, as a visiting state district judge, routinely works in the same courthouse. "It's so damn crooked," Hobbs complains of the situation.