The following account was provided by Jere Baker and originally appeared in Lassen County at 150.
In 1929 the Honey Lake Valley Gold Mining & Development Co. was incorporated. Two years prior to that event, Hilding Sundberg, a mining man from Oakland, California took possession of an abandoned gold mine called the Badger Group located some six miles southeast of Milford on the Diamond Mountain range at an elevation 6,000 feet. Sundberg began work on the property with a new cross-cut tunnel, reaching a small vein of gold 300 feet in. The property was incorporated in 1929 with Sundberg as the new president and general manager of the new company. A second tunnel was cut 720 feet into the mountain, 500 of which were driven along a ledge of gold ore. Assayed samples taken from tunnel no. 2 showed an average of $55.00 a ton. A third tunnel was started at the mining company’s base camp at the 5,000 foot level. Sundberg took a calculated risk that a horizontal tunnel driven far enough would reach the same vein of gold, whereby the entire body of ore could be mined by gravity at a much lower cost.
In August 1930, the company went public when shares of stock were put on the market. The stock promoter for the company was Susanville resident Claude Compton, who sold shares of capital stock at $1.00 a share. When stock sales were brought to a close in 1932, the total came to nearly 86,000 shares sold.
By the summer of 1933 the lower tunnel was over 2,800 feet with no ore in sight when the company suspended all mining indefinitely. The company had exhausted its funds and was faced with a liability of $31,000. Creditors had started legal action when Sundberg filed bankruptcy in federal court at Carson City, Nevada on November 1, 1933. Susanville attorneys R.M. Hardy and Harden Barry, as stockholders in the company, stepped forward to prevent a bankruptcy sale of the property and all its assets. The attorneys won a victory when the court agreed that the mine was worth more than its debts and granted the stockholders full control of the property. The company’s first cash payment to the creditors of $17,000 was due at the close of the bankruptcy court proceedings, with the balance to follow in six months, which the stockholders intended to pay from the profits of ore shipments.
Men and material arrived at the mine in February 1934 to put tunnel no. 2 into production. When the ore was finally blocked out and ready for shipping, samples were taken and assayed, which came no where near the 1930 assayed values of $55.00 ton. To ship enough low-grade ore to the smelter at Salt Lake City would have taken far too long to make a profit large enough for the creditor’s first payment. The stockholder’s failed to save the company, and the court took possession of the mining property for a bankruptcy sale. The stockholders lost everything that spring of 1934.