Business: Jumbo Optioned

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Staked by two hard-pressed prospectors m the winter of 1935 in Nevada's Slumbering Hills northwest of Winnemucca was a gold claim now known as the Jumbo Mine. For $10,000—$500 down—the Jumbo was sold a few months later to one George Austin, a grizzled oldster who ran the hotel and general store in a nearby flag stop called Jungo on the Western Pacific". Jumbo ore assayed as high as $1,495 per ton. Other members of the Austin family staked adjoining claims, signed an agreement among themselves not to sell out except as a group for 50 years. With primitive equipment the Austins were quietly digging out $500 per day when Herbert Hoover suddenly put them on the national mining map last summer. Out of "purely geologic curiosity" the great engineer journeyed across the Sierras from his home in Palo Alto to inspect the Jumbo, was greatly impressed, advised the Austins to hang on (TIME, Aug. 31). George Austin announced that he would not sell at any price. Discovery of unsuspected veins last autumn added to Jumbo's lustre, touched off a local boom in surrounding territory.

Last week George Austin got an offer he could ill afford to refuse. To a syndicate of Texas oilmen he leased the Jumbo for 35 years with an option to buy it outright within 20 years for a cool $10,000,000. Under the lease the Austins will get from 10% to 20% of gross production, depending on the grade of the ore, but in no case less than $100,000 per year. Mr, Austin also stipulated that should the option be exercised, the $10,000,000 must be paid in instalments of not less than $1,000,000 annually. The $250,000 down payment last week was split equally between Mr. Austin, his thrifty wife Bernice, his brother Jess, two sons, Wilfred and Kenneth, and his daughter, Mrs. Bonnie Jean Austin Sobrio. What the Austins will do with their fortunes is a mystery. Rugged old Mr. Austin once declared: "I have two sons, and half a million would probably make loafers out of them. . . . The boys will appreciate it more if they have to dig the money out themselves." The people who will do the digging now are J. K. Wadley of Texarkana and H. L. Hunt of Tyler, Texas. Mr. Hunt bought out the interests of Columbus Marion ("Dad") Joiner, the oldtime wildcatter who brought in the East Texas oil field in 1930. Mr. Wadley got his start on Louis iana & Arkansas R. R., made a fortune in Porter-Wadley Lumber Co., is now one of the biggest independent oil operators in East Texas.