GUEST COLUMN — Placer gold mining thrives

America has a lot of flakes, especially of the gold variety. The country also holds its share of gold nuggets and dust, and, each year, prospectors and miners search for these forms of the yellow metal from Maine to Alaska.

The hunt for gold is a recreational pursuit for most of these prospectors, while some make serious investments in order to work placer deposits in stream valleys, terraces, beaches or dry concentrates.

About 80% of the nation’s annual domestic gold supply is collected from its 25 largest gold mines, whereas the remaining 20% is derived from about 175 smaller mines, as a byproduct of base metal processing (chiefly copper), and from placer deposits.

Estimating placer gold production is difficult, and in 1994 the U.S. Bureau of Mines stopped collecting such data. Domestic placer gold production from 1990 to 1993 was estimated at 1-2% of the nation’s yearly output, down from 2-3% in the 1980s.

Gold production in the U.S. increased to 10.3 million oz. in 1995, up from about 2.1 million oz. in 1984. That same year, the Bureau of Mines reported that 2% of production (or roughly 200,000 oz.) was placer gold. The U.S.

produced a record 10.7 million oz. in 1993, less than 1% of which, according to the Bureau of Mines, came from placer mines. In the past decade, placer gold production in the U.S. has ranged from 100,000 to 200,000 oz. per year.

Each of the 14 gold-producing states has streams that yield placer gold, though most of them rely on lode mining for the bulk of their output. The exceptions are Oregon and Alaska, the latter being the U.S. leader in placer gold production.

The Alaska Department of Natural Resources estimates that 141,882 oz. gold were produced there in 1995, of which 95.6% was placer gold. The remaining 4.4% was recovered from the newly opened Nixon Fork hard-rock mine near McGrath. Before that mine opened in 1994, all of the state’s gold — some 182,100 oz. — came from placer mines.

A total of 145 mechanized placer mines operated in Alaska in 1995, down from 196 in 1993. The placer industry, which employs many rural Alaskans, was expected to shrink further in 1996, owing to flat gold prices and environmental concerns. About 975 Alaskans were employed as placer miners in 1995.

Alaska classifies the size of placer mines as follows: a large operation produces more than 2,500 oz. per year; a medium project yields between 650 and 2,500 oz. annually; and a small mine produces fewer than 650 oz. per year.

In 1995, according to these classifications, Alaska had four large placer mines, five medium and 11 small, which, in total, produced about 50,700 oz.

gold. The large mines processed gold at a cost of $341 per oz.; the medium, at $245; and the small, at $231.

Placer miners must contend with winter weather conditions in mountainous areas, and in Alaska these conditions can be severe. A late spring or an early winter can shorten the mining season, causing placer mining firms to lose up to 25% of their annual gold production.

Although large-scale placer miners (most of whom are in Alaska) file production reports, many smaller miners probably never report their gold finds to government. Unless they sell their gold, they are not required to do so. Miners who find a large quantity of gold may use it for bartering, trading raw gold dust or small nuggets for goods or services. This practice still takes place in more remote areas of the north.

Placer miners are also active in the west and, to a lesser extent, in the southeast and New England. Apart from Alaska and Oregon, states that produce substantial quantities of placer gold are Arizona, California, Colorado, Montana, Nevada, Washington and Wyoming.

— From a report entitled “Gold Production in the U.S.A. (1995),” published by Columbus, Ohio-based Earth Publications.