Aunt Net's Legacy: Glory Hole Curse -- Heirs May Never See A Cent From Gold Mine

CENTRAL CITY, Colo. - Truth is, none of Nettie MacDougall's kin paid much heed when she spun yarns about owning a chunk of a famous gold mine here. Just fanciful talk from "ol' Aunt Net," everyone assumed.

So it wasn't until long after MacDougall had died that her great-nephew, Costa Mesa, Calif., handyman Scott Hobbs, picked up the phone last year to ask the family trustee about his inheritance.

Trustee: "At the lowest estimate, you know how much (the gold mine) is worth, Scott?"

Hobbs: "How much?"

Trustee: "Five billion dollars."

Here in this town in the foothills on the eastern slope of the Rockies, 1,000 miles from the Southern California Fedco store where Hobbs, 31, toils at $10 an hour, sits the Glory Hole, which his great-aunt helped establish during the Depression.

Although the precise worth of Aunt MacDougall's precious property remains a matter of some debate, Hobbs hopes soon to swap his handyman's apron strings for a millionaire's purse strings.

The mine and the plum real estate where it resides are at the center of a sinuous tale with all the makings of a spaghetti Western: Bodies stuffed down mine shafts. Hills containing tons of $390-an-ounce gold. And a lawsuit involving a Texas judge who managed to turn a $1.25 million claim into a $15.5 million judgment.

All of which may mean that no one in the MacDougall line will get as much as an ounce of fool's gold.

The three main players: Hobbs, the handsome, unassuming heir hoping to trade his rags for riches; Harold Caldwell, 74, the weathered trustee of the Glory Hole; and Judge Robert Barnes, a gravel-voiced south Texan who uses phrases such as "nervous as a pregnant nun" and is dead-set on settling an old score with Caldwell.

James Kreutz, one of 19 attorneys involved in the case, blames gold fever, an ailment that has broken out with periodic virulence in this part of the country since James Buchanan's days in the White House.

"Gold," said Kreutz, "has a way of obscuring people's vision."

Historians have penned entire books on the Glory Hole and its place in Colorado's century-old gold rush. Area gift shops peddle postcards of it, trumpeting the more than $200 million in gold that the 700-foot-long mine has produced when gold went for a few dollars an ounce.

Before the legalized gambling boom hit this county three years ago, before casinos began dotting the mountainous landscape and slot machines became Central City's hottest tourist commodity, this was a town that was defined by the lure and mystique of gold.

From the first discovery of gold in 1859, thousands of settlers stormed the Central Rockies in Colorado to lay claim to minerals that could bring an industrious miner a small fortune.

In the 1920s, Chicago dentist William Mark Muchow bought the Glory Hole and the rest of the roughly 300 mines in the region and merged them into a gold-producing conglomerate called the Chain O' Mines.

Nettie MacDougall, a railroad machinist supervisor, signed on as one of the original 10 investors.

At its peak between 1929 and 1937, the Glory Hole ranked as one of the biggest mineral producers in the country. But it sat silent for years, its crater testimony to the difficulty of trying to wring a fraction of gold out of a ton of silt and stone.

None of MacDougall's heirs showed an interest until 1993, eight years after her death, when Hobbs began asking questions.

The Chain O' Mines machinery can churn through 750 tons of rock and minerals a day, processed through a rickety, musty, wooden mill built in 1926.

But in later years, production was plagued by problems: caps on gold prices; two "swindles;" and personal problems that Caldwell said have left him with scant time to restart full-scale mining at the Glory Hole.

These distractions took a macabre turn in 1981, when two miners vanished near the Glory Hole. Relatives suspected they had been murdered and their bodies dumped into one of the hundreds of mines peppering the area. Their skeletal remains were found buried in their pickup truck in an abandoned 400-foot shaft.

Two men were convicted, but authorities couldn't corroborate testimony linking the killings to a California businessman who went to prison for orchestrating a multimillion-dollar scam involving the mine.

In 1989, Judge Barnes successfully sued Caldwell for reneging on a $50,000 cash loan and on a promise to repay a $1.2 million bank loan Barnes took out on Caldwell's behalf.

The mine became subject to the judgment against Caldwell, was put into receivership, and last week was ordered sold off to satisfy the judgment, which ballooned to $15.5 million. According to the Hobbs family, it all amounts to a plot to lay claim to their gold at a time when its price - nearly $400 an ounce - and technological advances make mining quite lucrative.

Just how much the Glory Hole and the rest of the Chain O' Mines properties are worth today depends on whom you ask. Estimates range from $792 million to $22 billion.

Skeptics insist that the real gem of the company's portfolio is the land it owns near downtown Central City, where casino owners are parting with handsome sums to put up Las Vegas-style gambling houses.

But old-timers believe the gold-steeped veins of the Glory Hole and surrounding mines have barely been scratched.

Even if the Hobbs and MacDougall families succeed, other surviving heirs of the original 10 Chain O' Mines investors might surface and lay claim to the Glory Hole.

"The prize," Hobbs said, "is so damned big."