Queries Beaulieu Yellowknife a horror story

You’ll find attached a copy of a share certificate from a company that may have been a gold producer in the 1940s. My grandfather bought the stock at my father’s suggestion after the Second World War. When he bought it, Beaulieu Yellowknife Mines was trading at $2 a share and reached a peak of $7 before plunging into oblivion. Can you tell me anything further about Beaulieu Yellowknife? P. LaF., Vancouver

Yes, we certainly can tell you something about Beaulieu Yellowknife Mines. It was one of the real horror stories of the big post-war gold boom.

After all kinds of hype, that company built a small mill (90 tons daily capacity) to treat ore from what was billed as a very high grade gold deposit which it had developed underground in a far-north property in the Beaulieu River area of the Northwest Territories in the late 1940s. But when things didn’t shape up according to plan, the company hired a Toronto mining engineer, A. D. Hellens, to make a detailed report for its shareholders. Following a 10-day examination, that report proved something of a shocker.

“Beaulieu examination cuts ore to two weeks’ supply” was our heading in the issue of Jan 22, 1948. The story went on — “The 104,000 tons grading approximately one ounce gold per ton had shrunk to 1,200 tons grading 0.65 oz,” Hellens reported, adding that the plant, equipment and mill were all oversized and unjustified by the indicated ore.

The diamond drill results that gave rise to the original enthusiastic publicity were misleading and were occasioned by drill holes running parallel with the veins and at times converging to within a few feet of each other where favorable results were obtained. Reported widths of as much as 35 ft in fact represented true widths of only three to four feet. Need we say more?

Oh yes, it may be of interest that after this highly critical story came out the market manipulators of this stock were sufficiently simple or bullheaded enough to push the share quotations to a new high in the face of heavy selling. But in the next two weeks the stock broke right down to 9 cents per share

The company was subsequently reorganized into Consolidated Beaulieu Mines on a 1-for-5-share basis in an unsuccessful effort to revive it. That was the end of this sad story, which means, unfortunately, that your shares are quite worthless.