Higher Gold Prices Stir New Interest in Western Mines

As the icy waters of Clark Creek swirl in his gold pan, Ken Anderson expertly reduces the contents, first to small pebbles, then smaller ones, then to a little sand.

BURNT RIVER CANYON, Ore. — As the icy waters of Clark Creek swirl in his gold pan, Ken Anderson expertly reduces the contents, first to small pebbles, then smaller ones, then to a little sand.

"There's still too much there," he said. "When we get it down to a couple of tablespoons, we'll look."

A few more expert swirls and dips isolate a film of black sand in the bottom, and with a gaze born of 55 years' experience he spots it. It's no bigger than a pinpoint, but it's "colors" -- gold.

"They say when you see gold you'll know it, no matter how small it is," said Anderson, 78, a retired mining engineer from Baker City.

Mining can be a pricey, risky proposition. "Maybe one prospect in 50 will turn out to be something, and most of those won't turn out to be much," said Anderson.


Still, with an ounce of gold in the $420 range, more people are revisiting the West's historic gold-producing regions.

Though it isn't a gold rush yet, Greg Visconty, area mining geologist for three national forests in northeastern Oregon, said, "In the past year mining claims have just about doubled."

There are probably 4,000 claims in the area, about 250 of them active, he said, noting that interest rises as the price hits $400 and stays there. "A lot of people just enjoy mining. Some are trying to make a living at it," he said.

While earlier miners tended to "go for the big pieces and let the `fines' (dust) go," he said, the latter has proved increasingly profitable as technology improved. A modern operation can show a profit at .08 of an ounce per ton of ore, he said. Some say even less.

Even now, however, "very few mines make it," he said.

"The price has certainly raised the level of activity in Nevada," said Russell Fields, president of the Nevada Mining Association.

"Here it's mostly industrial. Very few `mom and pops' are able to muster the capital needed to do grass roots exploration," Fields said.

"It involves geochemistry, geophysics, survey drilling, sampling, environmental permitting," he said. Larger companies, he said, use satellite imaging.

Ground not known as gold-bearing 40 years ago is readily identifiable as such today, he said.

While most new ventures are small, Denver-based Newmont Mining Corp., the world's largest, is building a $200 million project near Battle Mountain, Nev.

Newmont expects to get 420,000 ounces of gold and 21 million pounds of copper a year from the project for 15 years.

"Newmont will be cleaning up the remnants of old mining and bring today's technology to the site," Wayne Murdy, chairman and CEO of Newmont, said at the December opening.

East of Sacramento, Calif., Ross Gunther is pumping 3,000 feet of water from the old Idaho-Maryland Mine, which produced more than $1 billion in gold at today's prices before it closed in 1956.

He said the mine has measured resources of 472,000 ounces and possibly 952,000 ounces more. He figures the mine can produce gold for about $200 an ounce, probably in two years.

But the go-it-alone flavor of the Old West hasn't vanished entirely.

Jimmy Juhola works alone and figures he has worked Clark Creek in Eastern Oregon's Burnt River Canyon for about 19 years.

With a white beard, slouch hat and a pistol on his hip, Juhola could be from central casting.

He doesn't have a claim. He uses other peoples'. Anderson, who knows the miners in the area, says they don't mind since he takes potential paydirt only by the bucket and not with machinery.

And they watch where he digs, Anderson said. Juhola can read the ground like a map.

"Now this up here," he said through a hand-rolled cigarette, "this should pay about $7 (per cubic yard). This here below won't pay you nothin'. But this down here, this is good, this could be $40 dirt."

Juhola knocks some loose with a pick. Back at the creek outside his small trailer, water swishes in the pan, the top gravel washes off and the residue gets finer and finer. "I got three colors," he announces, peering into the pan.

He produced a vial half-full of small nuggets coaxed from the dirt in earlier efforts.

"I needed some beer real bad so I sold half of it for $40," he said. "The fellow was going to weigh it and give me the rest of what it's worth."

Most mining is suspended in the canyon until spring because of snow, but not his.

"In the old days the smart fellows, just before the freeze-up, why, they'd go into town and get as drunk as they could and throw a brick through a window, or something," he said.

"Then they'd have food and a warm jail to sleep in for 90 days or so. Around March, when their time was up, they could head back to the hills."

He considers himself a cut apart from the larger operators.

"They're always complaining because their hydraulics' broke," he said. "I'm my own hydraulic. I run on beans and alcohol."

There aren't many Jimmy Juholas out there.

New efforts run the gamut from two- or three-man operations like Anderson's to massive open pits in California and Nevada. If Nevada were a country, its 7 million or so ounces of gold a year would put it third, behind South Africa and Australia.

States except Oregon and Montana allow "heap-leaching," which involves running a cyanide solution through the ore. The solution dissolves the gold, which is recovered by processing the runoff cyanide.

Environmental groups have opposed it. "The process is extremely efficient, but it poisons local lakes, streams, and aquifers, killing fish and other wildlife as a consequence," the Sierra Club says on its Web site. "Pollution most often occurs when the lining in the pit tears or rainstorms cause the holding pools to overflow."

Laura Skaer of the Spokane, Wash.-based Northwest Mining Association, said Oregon is studying easing its restrictions on heap-leaching, which miners like Anderson and Juhola say holds back mining's potential.

Skaer said gold started to climb in late 2003, partly because of Iraq uncertainty and a weak dollar. "We're seeing quite a bit of interest we haven't seen for some time," she said, especially in Alaska and Nevada.

"It takes awhile to gear up," said Mark Ferns of the Oregon Department of Geology and Mineral Industries, "and the industry as a whole is suffering from a shortage of trained exploration geologists."

When the price was low many exploration geologists got out of the business and not many are being trained, he said.

Anderson, the retired mining engineer, does some freelance exploratory work. At the abandoned Virtue Mine outside Baker City, Ore., Anderson picked up a piece of quartz, in which gold is often found, and examined it carefully.

"Looks mighty hungry," he said, giving it a toss. "Most of this isn't high-grade stuff. But if you can see the gold in it you don't need much of it."

Most miners in northeast Oregon are placer miners, mining creek gravel.

While today's methods handle large volumes, the principle hasn't changed much since the days of the '49ers. It is based gold's weight, five times that of common rock.

Dirt or gravel is placed in a long drum where it is washed (gold often clings to the mud) and the larger rocks discarded. The smaller residue that can pass through a screen is placed in a sluice box, a trough with ridges across it. Water washes away the remaining gravel and leaves the gold and some sand caught along the ridges.

Today, Anderson said, hopeful amateurs may pan a few samples from a likely spot, find nothing and walk away. Others may find a nugget and go to work.

"Both are mistakes," he said. "You have got to do enough to look at an average. Otherwise you could fool yourself. In mining, that's easy to do."

Source: Associated Press