Minnesota Gold Discovery

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Sliver of gold grabs geologists' attention Posted on Fri, Jul. 30, 2004

DISCOVERY: Unusually high concentrations of tiny gold grains are found in sediments near Soudan where a gold rush first struck more than a century ago.

BY JOHN MYERS

NEWS TRIBUNE STAFF WRITER

Don't go trading your day job for a good mule and a shovel just yet, but geologists have found what's believed to be the largest concentration of gold in Minnesota in years.

Minnesota Department of Natural Resources geologists -- taking routine samples of sand, dirt, gravel and clay from above bedrock near Soudan -- recently found tiny gold grains in large numbers and excellent condition.

Of 32 sediment samples taken from the area in June, 28 contained small amounts of gold common for that area, usually less than 10 grains in each sample.

But four of the samples held gold ranging from 67 to 641 grains each, state geologists reported Friday. Samples with more than 30 grains are considered rare in Minnesota.

"In my experience, and I think anywhere in the state, these are the highest numbers of gold grains we've seen," said David Dahl, a DNR geologist in Hibbing who is heading the project.

It's not only the biggest find in years, but it's expected to drum up the first interest in gold exploration in the state in nearly 15 years. Geologists found the fragments on public forest land 6 miles northeast of Soudan.

With gold hovering near $400 an ounce, commercial interest in gold discoveries is up worldwide. Over the past 15 years, gold had fallen as low as $300 an ounce and prospecting in Minnesota had all but ended.

Geologists are looking for gold in Minnesota by digging on top of bedrock where it is usually found. They send soil samples, taken from just below the surface, to a lab in Ontario to see if they contain any gold grains.

Any gold found likely was scraped out of the bedrock by glaciers in the last ice age. But scientists are never sure if the source of gold, the mother lode, is just a few feet or a few hundred miles away from where the grains are found.

Because the recent samples were in such pristine condition, however, speculation is that the source of gold is nearby.

"The glaciers acted like a bulldozer to push the gold out of the rock," said Dennis Martin, senior geologist for the Minnesota DNR. "In this case, we think it may not have been pushed very far."

Harvey Thorleifson, director of the University of Minnesota Geological Survey, agreed, saying the finding hints at a previously undiscovered local source of gold.

"These numbers are very consistent with those from areas of Canada where there is active gold mining going on," he said. "We didn't expect to see numbers this high."

Still, scientists note the gold grains found were so small that they can be seen only under a microscope and that there is no concrete evidence of a mineable lode of gold nearby.

"It's the most interesting thing we've found in gold in a while, but it's still just a finding," Dahl said. "We're a long way from seeing any gold mined."

The findings are being reported before the Oct. 13 state lands mineral lease auction, and the DNR concedes there's public relations value in the discovery. Private companies and prospectors can bid on mineral exploration rights on state lands, with lease fees paid to the state's school trust fund. And private land owners in the area also may find prospectors knocking on their doors.

In addition, the state or other landowner would get a royalty off any gold actually recovered.

Finding gold in the Soudan area isn't new.

Gold was discovered near Lake Vermilion in the 1860s, triggering a mini-gold rush that never quite panned out. Small amounts of gold were found in the 1980s, locked in the area bedrock, but low mineral prices and the relatively small amounts of gold never stirred much interest among prospectors. Other gold rushes a century ago -- at Rainy Lake and Gunflint Lake -- also failed to produce much wealth.

It will take a solid finding to attract a gold mining company to Minnesota, the experts said.

"They essentially need a million ounces of gold on one site to make it viable," Martin said.

But even if those deposits exist near Soudan, they may be hard to find. Gold veins generally run up and down in the bedrock, and it's hard to find the tip of the often- narrow vein. Once discovered, mining companies would dig a shaft alongside the vein and dig into it from the side.

Underground gold mines are usually less intrusive to the land and environment than the traditional iron ore mines common on the Iron Range. Still, the area's proximity to pristine lakes and the Boundary Waters Canoe Area Wilderness will draw environmental scrutiny, and any gold deposits found on the area's federal lands would be subject to strict National Forest Service regulations.

"If a mineral development ever gets proposed up there, there will certainly be a major public debate of the environmental review process," Martin said. "That is a very public process that is likely to take years."

Environmental groups concerned with preserving the BWCA's wilderness character will watch every step.

"Mining for gold leaves some horrific scars on the landscape and, so, we would be opposed," said Melissa Parker Lindsay, executive director of Friends of the Boundary Waters Wilderness, a Twin Cities-based advocacy group.

There are several active gold mines in Ontario, including some just a hundred miles north of the recent Minnesota finding, and geologists note some of those mines are on the same geological formations found near Soudan.

Northern Minnesota also has seen renewed interest in copper and nickel mining in recent years, especially near Babbitt, where commercial mining efforts are slowly moving forward. And Lake County has been a hotbed of mineral leases searching for platinum, which is even more valuable than gold, Martin said.

-------------------------------------------------------------------------------- The St. Paul Pioneer Press contributed to this report.

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