Mr. FUMICH. Yes, sir. Mr. JOHNSON. You spoke about several in the various States. How do you people look at it? Is there an interest in gold? Should there be an interest in gold? Mr. FUMICH. Sir, the only way we can base it is because of the activity participating in our program. In other words, like I said, last year when gold and silver were made a part of our program for the first time, of the 20 contracts that we executed, 9, or almost 50 percent related to gold and silver. This year we have signed seven contracts and four of the seven relate to gold and silver. We have two approved that are in the field for signature. Both of those pertain to gold and silver. We have 28 applications that we are processing now and 21 of the 28 involve gold and silver and 14 of the 21 involve gold, so based just on our particular program, we can see that there is quite a bit of interest in gold and silver. Mr. JOHNSON. With this pegged price at $35 just how are they going to get into production? Mr. FUMICH. Our program is based on certain criteria. Before we award a contract we send a geologist out. If it looks like there is going to be a geologic probability of a significant discovery we approve it on that account. Second, we try to make sure that the project, the size and the grade of the mineral commodity would be commensurate with the aniount of money involved in the project, not only ours, but the applicant's; third, we think about the accessibility of the area and of course the background of the applicant. These were the criteria that were set up when the program was originally enacted. Those are the things that we pass on before we award a contract. Mr. JOHNSON. You give no thought whatever to production as far as production is concerned? Mr. FUMICH. That factor enters into it indirectly because if we do not think the discovery is going to be significant, and when I say significant, I mean we are thinking about the grade, the size of the deposit, and if we do not think that there is a good chance of being paid or getting our money back, frankly we do not go into the project. Mr. WHITE. Will the gentleman yield? Mr. JOHNSON. Yes. Mr. WHITE. You still go through the process of a certification at some stage of the project near its completion, do you not? Mr. FUMICH. Sir, after the work is in effect for some time, usually about an average of 6 months, we send an engineer or geologist out to the project. He examines it and if the work is going along all right, if the drill holes and everything show that things are looking up and everything, we go along with the project. On the other hand, if it looks like the man himself is dissatisfied with the results, or our professional man is dissatisfied, we come to an agreement to terminate the project at that time. Mr. WHITE. That was not exactly what I meant. I meant certification for repayment. Mr. FUMICH. As far as the certification for repayment, at the end of the project we send our representative around and after looking at the report made by the geologist or engineer or the applicant him self or the firm who has applied for the project, and of course our man, if we think that it looks like there is a possibility of production coming out of that property within the next 10 years, why we certify it. Mr. WHITE. In answer to the question of the gentleman from California, the OME would have to pass on the commercial aspects of this property as to whether this would be repayable or would not be repayable under all existing conditions. Is that not correct? Mr. FUMICH. Indirectly, yes, that is because if we think there will be production within 10 years, we, of course, believe that maybe within that 10-year period the market prices will either change more favorably and that thing will become competitive, and there is the chance for some production but when we go into the project initially we do not require the man to go into production at all. Our main purpose, of course, in the program is to try to build up our within-the-ground reserves. Mr. WHITE. In light of that, do you not have a certification that you enter into sometime, as an amendment to these contracts? I think I had such a certification at one time, called a pseudocertification. Mr. FUMICH. Yes. That was under DMEA. We have not had any under OME. Mr. WHITE. That is one thing I wanted to establish at this time, whether you have that possibility under OME. Mr. FUMICH. We have not executed any under OME. Mr. EDMONDSON. Will the gentleman yield to me? Mr. JOHNSON. Yes. Mr. EDMONDSON. A moment ago I asked that this list be supplied of participating companies in the Stabilization Act. I would like to make a formal request at this time that if there is no objection that this table of participation and also of expenditures in connection with this program be made a part of the record at the conclusion of Mr. Fumich's testimony, and that it include the name and address of the company and the amount of payments made to the company as of December 31, 1962. There is some information in there, tonnage information on eligibility that I do not see any particular point of including in the printed record with regard to these companies, but I do think that the actual report of the payments made to the companies should be a matter of record and the identification of the companies and also the overall operating cost of this program since it started. I would like to know further for the record, since mention was made of two companies by name, that as of December 31, 1962, the Tungsten Mining Co., at Henderson, N.C., had received a total payment of only $13,052.36 and the Sunshine Mining Co., of Osborne, Idaho, while identified as eligible, had received no payments as of that date under the program. Those are the only two that were recognizable as big producers. Mr. EDMONDSON. Without objection, the complete table of participation and the payments that have been made will be made a part of the record following Mr. Fumich's testimony. Mr. JOHNSON. In this exploration program what percentage of the mines are placer? Mr. FUMICH. Most of the projects we have had so far have been buried placers; in other words, prehistoric placers. Mr. JOHNSON. There has been no lode mine activity in the program? Mr. FUMICH. I do not think so. There might have been possibly one. Mr. JOHNSON. How would you people consider a lode mine that had closed down due to high costs for making application for a loan? Mr. FUMICH. Sir, we have had several of that type applications, but we only have $750,000 in our whole budget and for a nationwide program we do not believe that we should go into a program and dewater mines and everything just to make an examination and see whether the geologic feasibility of granting that loan is good. In other words, we just do not think that it is good business to go into a thing like that, so as a result we refused all applications involv ing a dewatering program before we can go into the premises to make an examination. So far, practically all of our old lode mine applications have been in that particular category. Mr. JOHNSON. You heard Mr. McCaskill when he was before us, that this would not be a feasible program as it relates to our balance of payments. Why are we in this exploration program in the field of gold, then? Mr. FUMICH. We believe it fits into the criteria that we have for minerals which we believe are, or will be, in short supply now or within the next 20 or 30 years and as a result we think that gold and silver fit into that particular category. Mr. JOHNSON. Don't you think gold is in short supply now? Mr. JOHNSON. And do you agree that we still have a great deal in the way of a gold resource? Mr. FUMICH. I am not in a position to answer that question. Mr. JOHNSON. We are carrying on an exploration program with some idea that there is a source of supply. Mr. FUMICH. Of course, we believe that there will be more gold found but, as far as the extent and so forth, I would not be able to answer that particular question. Mr. EDMONDSON. If the gentleman will yield, we will get the geological survey people to testify on that. Mr. JOHNSON. You people are very familiar with this because we are participating in a program for the mining of gold and I think somebody should have some real background on this as far as whether we are doing the right thing or not. Mr. FUMICH. Frankly, I think we are doing the right thing. I think we operate on such a small scale that as far as the international picture is concerned it does not make a ripple and as a result I think we can do a job without worrying about that particular aspect. Mr. JOHNSON. At one time we were the chief producer of gold. Now we are down to about a poor fifth and maybe we are going clear out of business. Whether that means anything or not, I do not know. I still think it does. I cannot understand. There is more gold being mined throughout the world than ever in its history. It is all being utilized for various purposes and uses. I still think it is very important that our country get in the business. That is why I am trying to ask these questions. I agree and I was very glad when you added gold and silver to the list to be eligible for funds and I think the explorer, if he finds a supply of gold, in a deposit, he should mine it. If we mine, I think we are going to have some help in another type of program. I do not think it has to be the drain on the Treasury that some of our other subsidy programs are. I think it would work well as a selfsupporting program after given a start. Certainly the industrial uses of gold fill enable it to get a higher price because they are getting a higher price for the end product. You say we only had three applications from California? Mr. FUMICH. You mean lead and zinc? Mr. JOHNSON. That were certified? Mr. FUMICH. Lead and zinc? Mr. JOHNSON. No, in the gold, three that were certified? All I know of were the three certified, as I read about it. Mr. FUMICH. No. We executed three contracts for gold this year and one of them was from California. We have approved another contract from California. One has already been executed. It is not certified. It is just an executed contract. When we are talking about certification we are getting into the other aspect of exploration, or into the stabilization program. Mr. JOHNSON. I am speaking about the exploration program as it relates to gold and gold application. You approved one in Plumas County and one in Sierra County. Mr. FUMICH. That is right. Mr. JOHNSON. They talk about a third one. I do not know whether it has been approved. Mr. FUMICH. We have another one we have approved, but it will take a little title work on the part of the applicant. We are not quite sure whether the defect can be rectified in the near future, but we have approved the contract so if these all go through to completion, there would be three gold contracts with California, and, of course, we have some silver. As I say, right now gold and silver are playing major parts in the program. Mr. JOHNSON. The lands all have to be patented lands? Mr. FUMICH. Yes, some claim of possession or ownership for enough period of time to repay our loan. Mr. EDMONDSON. Will the gentleman yield to me at this point? Mr. JOHNSON. Yes. Mr. EDMONDSON. Do you have any further questions? Mr. JOHNSON. No. Mr. EDMONDSON. Thank you very much. We have a desire to question Mr. Lamb, if he is at all available to stay with us, and Mr. Ankeny and possibly one or two others here within the time limits that I set out. Mr. Lamb, could you come forward please, sir? (The chart previously referred to follows:) |