Small-scale gold mining grows as prices remain high

Doug Lindstrand/

While major mining companies continue to produce and explore Alaska’s gold, smaller-scale efforts are increasing their reach.

Recreational and smaller-scale mining efforts throughout the state are on the rise, due in part to increasing gold prices, reality television, and regulatory obstacles Outside.

Kerwin Krause, from the Alaska Department of Natural Resource’s Division of Mining, Land, and Water, said permit applications have increased over the past few years. Gold is off its record high prices but is still trading for more than $1,725 per ounce.

The 2013 numbers are not yet finalized, as applications will come in until April. So far, the state has received 27 new hard rock permit applications, and 146 new placer applications. Total, there are 69 hard rock applications, 420 for placer mining, and 211 for suction dredging.

Those are nearly the same as the January 2011 to November 2012 figures, which includes two seasons of mining, rather than just one. For that time frame, the state received 98 hardrock permit applications, 549 placer applications and 272 suction dredge applications.

And not everyone who tries mining in Alaska needs a permit. Some new prospectors visit places like Crow Creek Mine in Girdwood or claims owned by the Gold Prospectors Association of America, or GPAA, both of which have also seen an the increase in interest.

Bill Dunlevy, vice president of the GPAA’s Anchorage chapter, said there are a lot of folks interested in recreational gold panning, both in-state and Outside.

“There’s a lot of interest in the gold mining,” Dunlevy said.

The association has been getting six to 10 new members every month. The organization has about 60 to 100 active members, and 300 total.

Dunlevy also fields calls from people from all over the United States — and even as far away as Frankfurt, Germany — looking for places to rent or lease equipment when they come to the north for a gold-oriented vacation. While the most basic equipment isn’t too expensive, there aren’t many rental options. So after talking to the would-be miners, sometimes Dunlevy just lends them his own gear.

Different people use different equipment, but Dunlevy said the common types are high banking, sluicing, and dredging. Dunlevy said that the most basic equipment probably costs less than $200. That’d cover picks, shovels, a good sluice box. For a metal detector or dredging equipment, a prospector can expect to pay thousands.

Many of the GPAA miners go prospecting most weekends throughout the summer, Dunlevy said.

As a group, they have a few functions each year. This year they did season-opener and closer gatherings at Crow Creek Mine in Girdwood, and went to Chicken for July 4. Those gatherings give newcomers a chance to learn from someone more experienced.

The rest of the time they go out on their own.

“There’s quite a few members (who) have their own claims,” Dunlevy said.

The Kenai Peninsula is a popular destination for Southcentral miners, and also home to a GPAA chapter that meets in Kenai. But creeks elsewhere in the state, including near Fairbanks and Valdez, are also prospecting destinations.

Dunlevy said the GPAA claims can be used by members, and are located throughout the country. The Alaska claims range from smaller sites on the road system, to mining camps in Nome and other gold hot spots. Using those can be easier than navigating the permitting and claim processes, Dunlevy said.

Some of the camps have been around for 20 years, Dunlevy said. They see as many as 200 or more people a week, some staying as long as six weeks.

While prospectors have a lot of options for where to mine, Dunlevy said there’s not enough. Increasing interest means an increasing need for claim sites.

“I just wish that we had more open area up here,” Dunlevy said.

Dunlevy is on the small-scale miners committee for the Alaska Miners Association, where they discuss regulations that help and hinder Alaska’s prospectors. Dunlevy said he tries to encourage the Forest Service and Bureau of Land Management to open up more land. That’s the biggest issue, he thinks.

“I just keep encouraging them to open up more creeks, more areas for that sort of thing,” Dunlevy said.

But for now, when Dunlevy’s phone rings with a would-be miner from out-of-state, he often suggests they go to Crow Creek Mine, in Girdwood. There they can pay a daily fee, and don’t have to worry about claims or permits.

Despite the increased interest, last summer didn’t necessarily go smoothly for miners, Dunlevy said. The best gold is often in the center of the waterway, so high and fast creeks and streams from the heavy rain made mining difficult.

Dunlevy said the mining TV shows are just one contributor to the growth in prospecting. The national GPAA actually produces some gold-related shows that air on TV, in addition to the well-known reality-style shows like Gold Fever and Bering Sea Gold.

But Dunlevy said other factors are also at play: difficulties mining Outside, and the high price of gold. New regulations have shut down dredging in some states, or just made it harder to get a permit, Dunlevy said.

“It’s getting tougher and tougher to gold mine,” he said.

The price of gold also spurs interest. While it isn’t high enough to pay for a vacation to Alaska to try mining, it’s high enough to pique people’s curiosity.

Nate Williamson from Crow Creek Mine agreed that people are more interested than ever.

“I think people are more interested, they’re paying more attention for sure,” Williamson said.

Crow Creek offers people the opportunity to try their hand at mining, and educates them about the industry, Williamson said. Visitors now know a little more about mining than they used to, he said.

“People know the terminology, they’re interested in it,” Williamson said. “I can definitely say that people that are coming know a lot more about it.”

Williamson said the recreational mine gets about 100 visitors a day in the summer, and around 15,000 over the course of the season.

Most of the miners are Alaskans who bring their families or visiting guests.

“A lot of people come out to the mine every weekend with their kids,” Williamson said. He also sees a lot of recreational miners.

Would-be miners at Crow Creek mine mostly pan for gold. Williamson said he also educates them on sluice boxes and metal detecting.

He also tries to provide information about the realities of mining, including on an industrial scale, so they know more than what TV shows.


Placer operations increase

Gold panners aren’t the only source of growth in small-scale mining. Permit data shows that placer operations are also on the rise.

A new operation in Nome has 26 leases for marine placer mining.

Placer Marine Mining is owned by AngloGold Ashanti and DeBeers, who also co-own AuruMar, a technical services contractor that does much of Placer Marine’s Nome work.

So far, Placer Marine is focused on baseline and conceptual studies, along with exploration. Mining could commence in 2017 if the early work pans out, said AuruMar General Manager Gary Van Eck at the recent AMA convention in Anchorage.

The company is reliant on more than a dozen contractors, including AuruMar. Many of those are Alaska-based, including Sitnasuak Native Corp.

While placer mining is small-scale compared to some other mines, the permitting and pre-mining work is still extensive.

This summer, Placer Marine’s Nome efforts included permitting, environmental baseline studies, geophysical surveys, core samples, and economic modeling, said Neil Fraser, a venture manager for AuruMar.

Much of this summer’s work included looking at the seafloor. The currently available information is from WestGold’s dredging more than 20 years ago. The new program is trying to update that.

This summer’s survey work relied on two vessels looking at a 20-mile by 2-mile area. The initial data provided high quality sea floor images. Some of the work shows the type of ground, while other images show the topography.

A full suite of seismic work was also part of the summer’s program, Fraser said. The company also worked on a resource estimation from some of the sampling that was done.

Overall, the work enabled the company to get funding for another summer’s effort.

With some placer operations just getting started, and more Outside miners coming north every year, the current upswing in popularity doesn’t look like it’s ending anytime soon.

“I think it’s going to be here for quite a while,” Dunlevy said.

New shows are still enticing new prospectors. And Dunlevy said there’s nothing like the thrill of finding a little flake of gold for the first time. Once you catch gold fever, he said, it’s hard to shake it.

“I’ve been doing it about 47 years,” he said. “I still get excited.”

11/11/2016 - 8:29pm