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Section: Daily Dispatches

Gold Fever Strikes Mom and Pop Prospectors in the West

By Laura Zuckerman
Tuesday, September 14, 2010

SALMON, Idaho -- When John Brewer's construction business soured along with the U.S. economy, he sought to replace lost income by prospecting for gold from the river valleys of central Idaho to the wilds of Alaska.

Armed with the tools of the trade -- a metal detector, gold pan, and sluice box, a series of screens that sort gold from alluvial material like sand and gravel -- the Montana man represents the new face of a pursuit that once paved the way for settlement of the Western frontier.

The poor economy and a record price of gold have renewed interest in prospecting in Western states where public lands are rich with deposits and small-scale operators are all but free from government regulation.

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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource

Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.

For Prophecy's complete press release about its production plans, please visit:

What Brewer has in common with 19th-century prospectors is a drive for gold equaled in intensity only by the instinct to keep quiet about its location and volume.

"Asking a miner where they found it and what they found is like asking an angler about his secret fishing hole," said Brewer. "We're not going to tell anybody. As soon as you tell anybody, there will be a crowd -- and that would be counterproductive."

Gold prices hit a record $1,275.20 per ounce on Tuesday. Some gold mining sites economically feasible for the first time in years, prompting mid- and large-scale operators to apply to mine on national forests and on acreage overseen by the U.S. Bureau of Land Management in the Rocky Mountains.

"When gold goes over $1,000 an ounce, everybody becomes a miner," said Russ Bjorklund, minerals manager with Salmon-Challis National Forest in Idaho.

He is among federal land managers reporting a marked resurgence in gold mining, from amateurs armed with pans to corporations working hardrock mines.

Susan Elliott, geologist with Humboldt-Toiyabe National Forest in Nevada, said the rush is on in a state that is the fourth largest producer of gold in the world.

Elliott linked a 75 percent increase in mining activity on the 6.3 million-acre (2.5 million-hectare) forest to the rise in gold prices in recent years.

"We've got all types: individuals out there with pick and shovel and companies with heavy equipment," she said.

Jon Cummings, who promotes gold-mining adventures at his Idaho resort, says finding what prospectors call "color" in the pan ignites a passion.

"You start finding a little gold in the pan -- that's when gold fever kicks in. It's like a drug and you're ready to work all night," he said.

International gold-mining giant Barrick Gold Corp. in February gained approval from the federal Bureau of Land Management to expand its Bald Mountain mine in northeastern Nevada. Bald Mountain represents one of the company's 25 operating mines, eight of which are in the western United States.

Large-scale operators like Barrick must clear a number of hurdles in advance of gold mining, often a years-long process.

But Ray TeSoro, minerals specialist for the U.S. Forest Service region that includes Montana, also described an influx of "mom and pop operations."

Those small-time prospectors, like Brewer, mostly engage in low-impact, stream-side mining like gold panning and sluicing, techniques which rely on gravity to separate heavy gold from sediment.

In the mountains of central Idaho, gold fever is behind trespassing incidents. Beverly Cockrell, a rancher near Salmon, Idaho, has confronted strangers with "sticky fingers" on her creek-side land, including one who reportedly raided a sluice box.

"We're having to run people off," Cockrell said.

And some economists take a dim view of the gold rush.

"You've got this pretty metal -- what does it do?" said James Hamilton, economics professor at University of California, San Diego. "It doesn't create dividends, it doesn't create more productivity; it's a hedge against certain kinds of risks."

But it will take more than discouraging words to dampen the enthusiasm of gold hunters like Brewer, who declined to say what profit he turns from prospecting.

"It doesn't replace a full-time job with benefits, but you work hard enough at it, you might get lucky," he said.

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Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property

On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.

Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."

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A Canadian gold opportunity ready for growth