Faltering US economy spurs new gold rush in California

Home > Gold Prospecting Stories - Reports > Gold Price = New Gold Rush Articles > Faltering US economy spurs new gold rush in California

Home > Gold Prospecting - FREE TIPS > Panning For Gold > Gold Panning Tools > Gold Panning Equipment > Gold Panning Supplies > Gold Prospecting Stories - Reports > Gold Price = New Gold Rush Articles > Faltering US economy spurs new gold rush in California

Faltering US economy spurs new gold rush in California

Article courtesy of: McClatchy newspapers guardian.co.uk, Wednesday October 22 2008

Image: A prospector pans for gold in northern California circa 1890. Photograph: Bettmann/Corbis

In the cold deep canyons of the Stanislaus River, James Anderson isn't worried about the stock market. The weak dollar doesn't bother him. Slumping home prices? No problem. He's got no house but a bed in the back of his 33-year-old Dodge van.

Gold prices are up - and for Anderson and the legions of other prospectors scouring California's old mining sites, that justifies the tedious and back-breaking work.

"When you rinse it away and see the gold sitting there, it sends something through your blood," said Anderson, 68, who lives on Social Security and whatever nuggets, flakes and dust he finds in this rugged Mother Lode riverbed, near the town of Columbia in northwestern Tuolumne County. "It's like an adrenaline shot."

Stock market volatility, high metal prices and the popularity of outdoor adventure has triggered California's biggest mining boom in three decades. As gold more than doubled in the last decade - now approaching $800 an ounce - Americans are returning to the foothills, buying picks, filing mining claims and sifting for their fortune, though few ever get rich or even earn enough to pay for the gas to cover the trek.

"Gold's real. It is tangible, as opposed to what's in a bank. Who knows what will happen to it there?" said Dr Eric Madrid, a Temecula, California-based physician who left the stock market and put his savings into gold coins.

Madrid was among 80 members of the Gold Prospectors Association of America who recently gathered to dig at this historic site, named after Italian prospector Joaquin de Lucca, an illiterate but hardworking man who wore gold earrings and made a fortune in the late 1800s in this remote canyon, nicknamed "pneumonia gulch".

In the past year, membership in the national club has climbed 25% - from 40,000 to 50,000. Inspired by rising gold prices and two prospecting shows on the Outdoor television channel, they arrive with pets and families. They bring picks and shovels, but also minivans, wetsuits, cellphones and generators.

Equipment shops report a surge in business. "We're getting phone calls from people all over the world, asking 'Where can I go? What can I do?' said Rob Goreham of 49er Mining Supplies in Columbia, California. "They ask things like 'Where can I go to get gold?' It's nonsense. It's like another gold rush."

Gold isn't as sophisticated as investments like derivatives and hedge funds. And though it's out-performed stocks in the past year - with gold rising 11% compared to stocks falling 22% - its long term track record hasn't been as lucrative: over the last two decades, gold rose 18%, while stocks on the S&P 500 jumped 565%. But in uncertain economic times, gold offers deep emotional security. Even before the US Mint issued the first gold coins in 1795, Americans looked to the yellow metal as something to trust.

"It'll never turn into zero," said Ken Rucker, general manager of the prospectors association.

For Walter Hills, who holds an explosives license and survived a rattlesnake bite while prospecting, it's about control. "With stocks, you have to wait to see if it goes up or down. I can go out with my backhoe, dig to 9 feet, and start seeing my money right now."

"It's your own work," said Hills, who is retired and considers prospecting a hobby.

That's the challenge. The early miners who came to these hills in the mid-1800s found and recovered the biggest nuggets and richest deposits. Chinese laborers followed them, recovering lower grade deposits and tailings. During the Depression, a third wave of desperate prospectors scoured these canyons.

What's left is what those early miners, with their rudimentary techniques, couldn't find. Some fresh gold also has rinsed down hills during recent winter storms. But officials warn that only large-scale operations, handling "tonnes of low-grade ore", can really be profitable, according to the US Geological Survey.

On a recent cold autumn morning in Italian Bar, after morning coffee and one verse of the national anthem, prospectors went to work. Some crouched on river rocks, panning. Others waded into the river, setting up powerful underwater vacuum cleaners called suction dredges. A few hiked steep trails with metal detectors. One team dug a deep ditch into an nearby ancient channel then fed heavy buckets of dirt into sluice boxes.

Joking about the challenging terrain, Roy Davis of Delhi cracked: "The rule of thumb is, if there's no poison oak, there's no gold."

Buoyed by the camaraderie, they swapped romantic tales that have energised gold miners for generations. "We found almost 10 ounces in one day - opened up the dredge box and found nothing but gold," said Davis.

Recalled Rucker: "Once I'm putting this pump back together and I look over at the waste pile - there was a piece of yellow rock, dead center. I started shaking."

While many enjoy companionship, other prospectors scour the wilderness alone to stake a claim that might make them rich. More than 2,000 new mining claims were filed in California this year, according to state records. In 2005, there were 16,829 claims; now there are 24,905. It costs $170 to record a new claim, giving the holder mineral rights to the federal land.

"I get people coming in all the time who are out of work and desperate; intelligent people who see an advertisement for a mining claim and might try to buy it and make a living on it," said geologist Gregg Wilkerson of the Bureau of Land Management.

Some people seek to live on mining claims after a home foreclosure, said Tim Carroll, also a BLM geologist. Others, taking advantage of current demand, "just want to locate their claims to sell them on eBay or set up bogus operations to sell to the unsuspecting".

The new quest for gold is sending ill-prepared amateur prospectors into the state's dangerous abandoned mines, where there are still rich veins of gold, according to Wilkerson. Located in remote wilderness, they were ignored for decades; now, due to all-terrain vehicles, they are more easily accessible. In May, three young men died of carbon monoxide poisoning in an old Madera County mine. They were using a gas-powered pump to drain water from an abandoned mine.

"It's hard work. And people put their lives on the line," said Goreham.

"They don't realize the dangers. If you dig under a boulder, you get killed. Or shafts cave in, then next thing you know, you're dead. There could be methane gases. Or dead air. You feel fine and stir up the air, then walk out and drop dead. You never see it or smell it or nothing."

In the season's fading sunlight, surrounded by the bubbling Stanislaus and russet-colored hills, Greg Foley of Kansas City, Mo., knows there are risks. He recognizes that any weekend discoveries won't offset the huge losses to his 401(k).

"But when I'm down in the river, I'm not worrying about anything," he said. "Finding gold - that's just a bonus."

original text: http://www.guardian.co.uk/business/2008/oct/22/creditcrunch-useconomy

Gold Prospecting Questions? EMAIL US

VISIT US ON FACEBOOK

READ THE GOLD FEVER BLOG

Gold Prospecting Equipment / Buy Gold Nuggets
Gold Panning Paydirt / Mining T-Shirts
Drywashers / Metal Detectors
Suction Dredging for Gold
Browse Site Map