The bitter taste of money

Al Kulan struck it rich in the Yukon. Art Jellinek could have. Kulan lived to regret it. Jellinek died to escape it. This is their story

CATHERINE BRESLIN December 1 1967

The bitter taste of money

Al Kulan struck it rich in the Yukon. Art Jellinek could have. Kulan lived to regret it. Jellinek died to escape it. This is their story

CATHERINE BRESLIN December 1 1967

The bitter taste of money

Al Kulan struck it rich in the Yukon. Art Jellinek could have. Kulan lived to regret it. Jellinek died to escape it. This is their story

CATHERINE BRESLIN

ONCE UPON A TIME there was a land, a northern colony called the Yukon, which fell prey to a raging gold fever. The fever drew men from far across the world and led them into dreadful and marvelous adventures. A few became rich from the gold, but most stayed poor and a few died of heartbreak. Now all this happened long ago, in the 1890s — but it is also happening today.

This is the tale of two prospectors, two tough little men who were doggedly able to see fantastic wealth in this land’s cold grey rocks. Al Kulan came from Toronto, Art Jellinek came from Hungary, but both of them belonged in the Yukon. And only the Yukon could have taught them the surprising and ironic lessons they learned about wealth — and survival.

With his prematurely grey hair and crooked smile, AÍ Kulan looked a little like a bartender or an insurance salesman. Art Jellinek’s pipe and moustache gave him the air of a schoolteacher. Both were short, wiry men in their early 40s, and some people might have said that was all there was in common between Kulan, a congenial family man, and Jellinek, a lonely eccentric. But that judgment would have overlooked each man’s most distinctive quality: a hard-driving obsession for rocks. And one thing the Yukon has plenty of is rocks. It has 200,000 square miles, 15,000 people and almost as many mountains. Except for welfare and government, its only industry comes from its rocks.

In olden days the Yukon prospectors were pick-and-packsack men, often illiterate, interested only in gold and quick to unload anything they found for ready cash. The new breed use helicopters and Geiger counters, and they carry a pickaxe in one hand and a briefcase in the other. The best are selftaught geologists well versed in marketing conditions, tax and law problems, finance, foreign affairs and whatever else might affect their claim. Like prospectors of old, they work for a grubstake, always taking the big risk in hope of a big find; but, unlike the old-timers, they always hang onto a percentage of the action. And they no longer search only for gold. Since 1950 they have been looking mainly for base metals — copper, lead, zinc — and for asbestos.

One thing about prospectors that never changes is “a really pure toughness about them that they carry to their graves,” says one mine developer. In the Yukon’s short, four-month season a prospector must work furiously, prowling through the wilderness under a 45-pound pack which, as one of them puts it, “is too much to carry and not enough to get along on.”

Because, as Al Kulan once said, “this brush will chew a pair of pants off you in three wet days,” prospectors’ trousers are usually patched with canvas sample bags and liquid cement — “then you patch the patches.” Their pockets are stuffed with rice, raisins and unsweetened chocolate. Most prospectors go 10 miles a day, but a demon like Al Kulan can cover up to 50. He has been known to work until 1.30 a.m., toss his sleeping bag onto some rocks and / continued on page 59

THE BITTER TASTE OF MONEY continued from page 33

The trail led to fool’s gold—and then a prospector’s dream

and then be up again by 5 a.m.

Yet even Kulan admits, “I’ve quit a hundred times — usually after a heavy rain.” The Yukon, he allows, is “beautiful to look at, but all I can see are the blackflies and mosquitoes. And your feet are always sore.”

Al Kulan was raised in Depression days, when kids were tough enough. The son of a CPR railroad conductor, one of five children, he finished high school in Toronto and fought a war in Europe, where he was wounded in the groin (“I was a scared man for a couple of minutes”). In 1946, “a kid out of the army completely lost,” he took his $5,000 wartime savings up to Yellowknife in the Northwest Territories to learn how to prospect rocks, because “this is one way you can do something on your own.” He learned by spending several summers in the bush with “a real old-timer.”

Two years later in Lower Post, which others have called “a living Dogpatch in upper BC,” he met a pretty and adventurous redhead who had quit an insurance-office job in Dawson Creek to work in a roadside lodge. Kulan came back after the summer season to work at odd jobs around the lodge and married Winifred Camsell before the winter was out.

Over the next years he spent his summers prowling the bush, his winters trying to make ends meet: clerking in a construction office, working on road graders and an army-base maintenance camp. In his spare time he took prospecting courses.

In the winter of 1951 he happened upon the Silver Dollar Lodge on Mile 843 of the Alaska Highway, 40 miles south of Teslin. The owner of the place was Bert Law, a Californian with a nagging ambition to discover a mine in the Yukon. AÍ Kulan had just exhausted his money and energy fruitlessly prospecting the Watson Lake area. As Law says, “AÍ had no idea of what to do next — didn’t have a wristwatch or a vehicle, didn’t know where his next meal was coming from. But when you're looking at this fellow you know you’re looking at one who goes places and does things.” The two men became partners to prospect the area around Ross River, a settlement of 40 timid and destitute Slavey Indian families who habitually fled into the bush whenever strangers, such as the government health teams, came by.

After a winter of oatmeal and potatoes the two men bought an old

truck and drove into Ross River. They convinced the Indians they would make the town into a booming city in exchange for all the clues the Indians could give them about the rocks in the area. Gradually, a tangle of colorful stories emerged.

According to one tale, two white men had once been seen fighting over gold on Vangorda Creek. Kulan and

trip without a pack to look for that gold we'd heard about.” He found it rather quickly: fool's gold that crumbled in his hand. He was walking away when, out of habit and curiosity, he cracked off a chunk of the wall rock. Hefting it, he realized it was very heavy — heavy enough to be lead-zinc.

They came to town, desperately

Law put little stock in this story, but nothing came of the more plausible stories they heard that first season. The next year, out with a team of Indian guides and pack dogs trying to locate the mica deposits that one Indian called “white-man’s windows,” Kulan and Law had to cross Vangorda Creek. “We never did find the mica, although it’s undoubtedly still there,” said Bert Law. “It was a grueling trip, maybe our last because we were out of time and money. So AÍ volunteered on the way out to make a 10-mile side-

trying to raise funds for more prospecting, and approached Ted Chisholm, the newly settled representative of Prospectors Airways, then a subsidiary of Anglo-Huronian, a Toronto mining company. Chisholm recalls, “The seat was out of their pants. They didn’t even have enough money to record the claims.” Chisholm helped them stake 16 claims and persuaded Prospectors Airways to advance them $5,000 on a quarter-million-dollar option. The two prospectors went to the bank and stuffed their pockets full of

$20 bills. Then they went home and just showered Kulan’s wife Wynne with the green bonanza: “She scrambled all over the place, just about went mad.” Kulan hadn’t seen a spare $20 for a good many years.

Eventually, Kulan, Law and the Indians of Ross River, who had helped them, made about $160,000 from the Vangorda find. The Prospectors Airways people spent about a mil-

lion dollars drilling the property but have not yet brought into produc-

tion the $25-million mine they planned; this is the way things

happen in the Yukon.

Kulan cared not a bit. He bought a dairy (as they call a milk-reconstituting plant in the Yukon, which has no cows) and a popbottling plant, and he never went hungry again. “At least there wasn’t the financial pinch there was before.” said Wynne.

But Al Kulan was still hungry to find a mine.

And where was Art Jellinek all this time? The interesting thing is: nobody knows. Art Jellinck provides the mystery every good tale ought to have. If you poked and pried you might find out that he was born in Hungary, that he came to Canada in 1946, and that he studied geology at the University of Alaska. If you guessed his age as 41 he would grumble, “Well, somewhere around that,” then add angrily, “I like to keep to the principle, not to personal things.” Even the men who worked beside him for years found out little more than that about him.

In the 1950s he prospected somewhere in northern Ontario, British Columbia and around Pine Point in the Northwest Territories. No one remembers quite when he slipped into the Yukon about 10 years ago. No one especially noticed, except possibly to remark on his stunted legs and scraggly red moustache, which made him a little oddlooking even for a prospector.

Art Jellinek’s public history begins in the summer of 1960 when he and “a good old-time chap,” Pete Rummer, were exploring the Bear River country under a grubstake agreement with the White Pass Railroad. Poking over the barren ground one day Jellinek picked up a rock that looked just like the surrounding grey rock, but was in fact a chunk of iron ore so pure it “looked like cast iron.” (In that cold climate iron ore acquires none of its usual rusting or weathering.) After one brief explosion of excitement, Jellinek “started to think what would be involved, and the longterm difficulties were evident. Finding high-grade silver, gold or copper ore,

THE BITTER TASTE OF MONEY continued

Jellinek to gamble $200 million? They knew he was crazy

you might get excited. But iron way up there? It flashed into your mind— bang, you've got yourself a heck of a pile of sweat, blood and work.” White Pass Railroad was politely but totally uninterested in any iron find 500 miles from the nearest port — “quite rightly,” said Jellinek. But he himself was haunted by the possi-

bility. In 1962 he and Rummer went back in and. "with plenty of reservations in our own minds,” staked it for themselves. But nobody else seemed interested in their find. If anybody was going to develop it, it would have to be Jellinek himself.

Back in Whitehorse that winter, between shifts in an underground

mine. Jellinek read every mining journal he could get his hands on, picked every mind he came across. He studied the iron-ore situation in Australia, Brazil, Mauretania, Goa, Peru and Tasmania. In 1964 he quit his job. formed a company — Pacific Giant Steel — and intensified his study. Sometimes, hungry for human

companionship, he dropped into the Yukon News office, where his chats with staffers usually ended up on iron ore. More often he worked through until a 3 a.m. dinner at a short-order restaurant.

Finally, he decided he could build a working mine for $200 million, including $100 million to lay down a railroad to the Pacific coast. Right then, around Whitehorse, they knew he was crazy. Until that time the most anyone had spent to bring in a mine in the Yukon was five million. “We heard him say with a straight face he was going to build a 500-mile railroad,” one citizen reported, “and he doesn't right now have three dollars in his pants.”

Yet Jellinek’s wild scheme was soon thrown into new light by AI Kulan’s persistence — and good luck. In 1954, Kulan had made what he tfv ught was a good find only 10 miles from the original Vangorda Creek property. He got Prospectors Airways to try testdrilling it, but the drill they sent in was too small and it got stuck in the overburden. “They were screaming for a bigger drill but it was too late in the fall, and next year the company went soft on the whole area,” said Ted Chisholm. “Al had enough guts to stick with it.”

Pursuing the search. Kulan moved in and out of several partnerships. In 1964 he became the fourth leg of a Vancouver-based syndicate called Dynasty Explorations. It was a talented group. Aaro Aho and Gordon Davis, two Vancouver geologists highly regarded in the Yukon, contributed the latest scientific techniques to the prospecting. Ron Markham, Dynasty’s salesman - manager, proved adept at wheedling funds from Vancouver brokerage sources. And Kulan himself had an intimate knowledge of the area that interested Dynasty most — the Ross River region.

With these talents and resources, the Dynasty team mounted one of the most thorough, scientific and expensive explorations ever made in the Yukon. Highly mobile, they started with large-scale aerial photographs and grid maps, then made helicopter surveys with a magnetometer suspended from a cable. They did geochemical. geophysical and geological surveys. They drilled a dozen locations. Expenses ran to $50,000 a month.

Eleven holes washed out. The twelfth happened to be the same location that AI Kulan had persuaded the Prospectors Airways people to explore with the too-small drill in 1954. The Dynasty crew started a couple of hundred feet away from the original hole, went to the bedrock which the earlier drilling had not reached, and struck a 50million-ton lead-zinc-silver ore body. A week before, as one mining man put it, AI Kulan “couldn't have raised a nickel on the streets of Whitehorse.” Now he and his partners had a find worth more than one billion dollars.

Working frantically through the summer, they staked 2.600 claims— 150 square miles — at a cost of $78.000. That fall, the scene shifted to Vancouver — to the financial world where mines are made. Kulan moved his apprehensive wife and children from their small four-room log cabin continued on page 62

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Suddenly a “pipedream” looked good to those who’d scoffed

in Whitehorse to a 13-room, $60,000 house in Vancouver, which came complete with maid. He took to wearing a white shirt and tie and carrying an attaché case as he flew back and forth to the intricate negotiations necessary to turn a find this large into a mine. Once a month he jetted to Los Angeles, where he became familiar with

Sunset Strip and the Beverly Hilton swimming pool, as well as the gleaming executive suites where Dynasty Explorations evolved into the Anvil Mining Corporation, 60 percent controlled by Cyprus Mines of Los Angeles. The Anvil mine was scheduled to be brought into production in 1969 at a cost of nearly $60 million. As one

of the four Dynasty partners, Kulan emerged from the deal with about a quarter million shares of stock, worth several million dollars.

Back in the Yukon, the Dynasty find had touched off a ferment of prospecting that reminded some people of the golden days of the ’90s. In the exuberant rush, people took a second

look at Art Jellinek, whose $200million pipedream suddenly appeared a good deal more feasible. In his fiveroom office above an insurance company, Jellinek sat on a desk in his baggy grey trousers and too-big tweed jacket (“He’s worn the same goddam scruffy clothes for eight years,” said a friend), chewed on a well-used pipe, and explained to anyone who would listen, “The total cost doesn’t matter at all; what matters is the proportional profit.” His blue socks needed darning but he sat flanked by a Telex, a photocopier, an adding machine, three typewriters, a $4,000 blueprinting machine and a six-button phone— all necessary tools for a modern-day prospector-turned-mine-developer. The problem with iron ore, Jellinek explained, is that its low unit value requires huge tonnage to make it worth developing. But if Bear River had that tonnage, as he believed, the money would be no problem.

People meeting this strange pedantic little man for the first time found it hard to realize that he was trying to pull off a feat which, if successful, would rank as one of Canada’s great mining triumphs. Trapped in his almost pathological privacy, he couldn’t talk — even to friends — of anything more personal than his struggle to build the mine: “You’re living it, eating it, sleeping it 24 hours around the clock. You become a slave, actually — you can’t do it any other way.”

Around Whitehorse, people who had laughed at Jellinek viewed him now with grudging respect. And those who had scoffed at the chance to buy Dynasty stock for 70 cents a share (it sold a few months later for $22) now flocked to buy Pacific Giant Steel at $1.50. Skeptics fretted that “a whole bunch of little people trying to get rich are going to lose their life savings in this crazy thing.” But one old-time prospector called Jellinek “the living argument against a lot of chronic pessimism here.”

Jellinek believed that with his meticulous, obsessive 18 - hours - a - day work he had solved two of three critical problems: remoteness and

markets. He had laid plans for a 500mile railroad that could “open up the whole country all the way through” and might even be able to pay its own way. And he got a signed agreement from Itoh and Company of Tokyo, a major Japanese trading company, to buy at least five million tons of ore a year if production was feasible.

One question remained: was there enough ore in the ground — at least 200 million tons — to justify the investment? “We've taken most of the gambles out,” said Jellinek. “Now we’re down to the final one — probing nature.”

In the summer of 1967 Pacific Giant began a quarter-million-dollar drilling program that would give them the answer.

A bachelor with no apparent family, Art Jellinek was then living a monastic life in the Stevens Hotel in Whitehorse. “I’ll bet the guy doesn't spend $100 a month,” sighed Ken Shortt, editor of the Yukon News.

“The life I have isn’t particularly pleasant in itself,” Jellinek admitted, “but when you have a goal in mind there’s a big satisfaction in these things.”

Meanwhile, Al Kulan was living the fat life in Vancouver. He bought his wife a mink coat, an emerald ring, a French-lace cage dress and “things like that.” For himself there was an 18-karat Inca ring and “the biggest goddam Cadillac convertible you ever saw.” He took a trip to Hawaii and spent a month in South America. He joined the board of directors of a dozen mining companies. He even picked up a part interest in a miniature submarine now leased to the U.S. Navy.

None of it made him happy, and his pockets now were filled with tranquilizer pills instead of rice and raisins. He donated $25,000 to plant trees in Whitehorse. The girls at the local Bank of Montreal voted him the man they’d most like to be marooned on a desert island with, but other people enviously shredded his character nightly over their dinner tables. (“Up here where a wealthy person is a real standout, he’s considered next to a rapist or a murderer,” explained one mining man.)

After driving the Cadillac 5,000 miles, AI Kulan traded it in for a Pontiac station wagon rugged enough to travel the gravel roads of Ross River, where he was spending more and more time trying to build a town. With typical Kulan drive, he started a trading post, restaurant, air strip, garage, motel, cocktail lounge and sawmill. And the only trouble was, they all lost money — $100,000 last year, according to one estimate.

Back in Vancouver, Kulan’s poised and capable wife Wynne had discovered she hated bridge and golf and women’s clubs. And she found herself with almost nothing else to do, “except go shopping for clothes and things you don’t need.” When she went out, strangers “all asked how does it feel to be suddenly rich — which is so much crap, really.” She finally got used to rattling around the beautiful big house, “but it never felt like home. I didn’t really have enough to do.” The best part of having a maid was “just having someone around to talk to sometimes.”

In the summer of 1967, at the age of 45, Al Kulan finally realized that the point of having lots of money was living where he wanted and do-

ing what he liked. “Sure as Vancouver wasn’t our place.” he clared. To Wynne’s great relief, they pulled up stakes, moved back to Ross River, and began to build a new house with five bathrooms and a gymnasium, modeled on the house he had just in Vancouver. The main difference was that it cost twice as much about $120,000. not counting an door swimming pool — because every stick and brick had to be trucked 147 miles from Whitehorse.

Except for 60 log huts built by the government for the Indian population, Kulan’s palace was then the only permanent structure in Ross River. Yukon Airways consisted of two small trailers and a sign nailed to a hydro pole; Ross River Motors was a plywood shack with no visible gas pumps. The schoolhouse Kulan’s two youngest children would attend, the cocktail lounge and the jail were all converted trailers, and the newly arrived Mountie wore brown work pants.

The town had only 300 people, but last summer it served as a centre for some 30 mining companies exploring the golden area around it. One was Al Kulan's Spartan Explorations. Satiated with “the good life,” Kulan resigned most of his directorships, sold off most of his businesses and “got back to what I used to be doing: prospecting rocks.”

His new syndicate was a grouping of a half dozen seasoned, middle-aged prospectors, such as Arnold Racicot,

who during his years in the bush had poked out an eye, broken his skull, split a kneecap, shattered some ribs, shot a hole through his foot, sunk numerous canoes and walked away from several plane crashes, but “never found a mine, that’s for damn sure.” Using advanced techniques — their own magnetometer, a private plane and a radio link direct to Al Kulan’s Vancouver office—the Spartan group seemed to have a better-than-average chance of success.

Yet this time AI Kulan was prospecting with a difference: his belly was full. Kulan himself admitted the difficulty: “You work better hungry — always.” Once his greatest ambition had been “to have $100,000 with everything paid up. Now I’d feel insecure without a million.” He smiled sadly. “A dream coming true can be the worst thing to happen in a man’s life. You think it’s the money that drives you, but when you get it you find out it wasn't the money after all.” He grinned. “But just try to get mine away from me.”

Art Jellinek has also gone back into the bush. On Friday, August 4, after a normal week's overwork, he bought a 12 - gauge double - barreled shotgun and a box of number-three buckshot at Hougen’s department store before it closed at nine. He told the salesman he needed it for the bears that were bothering the drillers on the Bear River property. Then he walked off into the bush around Riverdale.

His staff became alarmed the next day by his unread mail, his unrumpled bed. But not until the next Tuesday did they find the note he had tucked away in a survey file. It was addressed to Pacific Giant’s president, Gerry Leverman. In it, Jellinek praised the company but said that seven years of working day and night with no relief had got the better of him. He made no mention of any family, and he left his property to his staff.

“He’s too much of a man to use the word ‘lonely,’ but you could read that between the lines,” said Leverman. “In his own determined way, he did what he wanted.”

The Mounties, just in case Jellinek had absconded to Brazil with an embezzled fortune, combed the company’s books but found nothing amiss. Jellinek’s friends searched the bush for several weeks, without success.

Why, with so many apparent hopes to live for, had Jellinek done it? Not for business reasons, insists Leverman, who is carrying on the company work: “We had a particular problem with the last hole we drilled, but there wasn’t any reason for Art to panic on that because this is normal to the business.” Most believe, like Leverman, that Jellinek’s reasons were compounded of overwork, loneliness and whatever dark experiences had caused him to lock his past in secrecy.

His reasons might have had something to do with the cold, cruel Yukon itself. As Gerry Leverman puts it, “A lot of people outside never appreciate what we northerners go through up here, just to be human.”

Jellinek’s reasons might also have something to do with fear — the special fear that can come to a man who understands life only as struggle when he finally, suddenly glimpses the pot of gold within his grasp. ★