What is the true value of gold?

What is the true value of gold?

There’s something about gold. It possesses us, sometimes entire nations to accumulate more and more of it. Humans have had a strong affinity for gold since the times of the ancient Egyptians and the Aztecs. Gold has been used as currency for thousands of years. Wars have been fought for it, entire civilizations slaughtered for their gold.  Pindar, the ancient Greek poet, described gold as “a child of Zeus, neither moth or rust devoureth it, but the mind of man is devoured by this supreme possession.”

goldCoins

It’s hard to describe the feeling of finding your first gold nugget in an old stream bed.  It sits there in your pan shimmering, the way that only gold can.  You immediately recognize it’s power, it is intoxicating.  This is what drives prospectors past and present to take great risks in the search for gold.  There’s more than just the value of gold that attracts us to it.  The word “placer” itself comes from the Spanish word meaning “pleasure”. For some it is an addiction, for others it symbolizes wealth. You’ll be hard pressed to find a member of the human species who wouldn’t be interested in some gold.

Gold has several properties that make it desirable.  Most importantly it does not rust or tarnish.  Gold artwork discovered in the tombs of Egypt looks just as lustrous today as it did 5000 years ago.  Why is that?  Gold belongs to a group of metals called the “Noble Metals”.  They’re called noble because like nobility in old time monarchies they don’t associate with others.  It’s fancy way of saying that the metals don’t readily react.  Conversely iron will readily react with oxygen to form iron oxide (aka rust).  Gold and other noble metals, such as platinum, possess a very strong atomic structure that requires a lot of energy to disrupt.

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The ability to maintain over time is common of all valuable substances.  A diamond for example produces a characteristic glow when cut and faceted properly but what good would it be if it disintegrated a month later?  Diamonds are extremely hard and have a rock solid crystal structure.  Other valuable gemstones all share similar properties, emeralds, rubies, sapphires and garnets all sit at the high end of the hardness scale.  While gold isn’t hard in a geological sense it maintains it’s shape and luster indefinitely.

Gold is also very malleable.  Meaning that it can be hammered or pressed into various shapes without cracking or losing its consistency.  You could stretch an ounce of gold into a wire 80km long or produce a sheet of gold leaf 80 meters by 80 meters wide.  Gold is also an excellent conductor.  Not quite as good as copper but a better conductor than nickel, brass, iron, tin, and aluminium.  Gold conductive wire is used in many critical electronics applications such as computer motherboards, smart phones and satellites.

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Carajás iron mine, Brazil

What really makes gold valuable though is it’s scarcity at the earth’s surface.  Approximately 165,000 metric tons of gold have been produced in the entirety of human history.  While that may sound like a lot the amount of gold produced by mining is extremely small in comparison to other metals.  For example the Carajás Mine in Brazil produces an average of 300 million metric tons of iron per year and has a deposit estimated at 7.2 billion metric tons.  And that’s just one mine.  All the gold ever produced would fit inside one Olympic sized swimming pool.

It is often stated that you can’t eat gold.  While that’s not entirely true, (see gold covered pizza) an all gold diet wouldn’t provide much nutrition, and you’d probably have some digestive issues.  The yellow metal doesn’t appeal to our basic needs for survival but neither does money or a smartphone.  That doesn’t make any of these things less valuable.

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We typically think of value in dollar terms.  When evaluating an investment such as stocks or real estate it’s hard to think of anything else.  Dollars are not constant though, they are subject to manipulation and inflation.  For at least 6000 years gold has been used as currency and unlike modern currency is not subject to inflation.  Modern currencies are what is called “Fiat Currency”.  There is no standard on what a modern currency note can be exchanged for.  Their value relies solely on people’s faith in it.  Or more correctly their faith in the government.  Inflation rates can severely affect the spending power of a dollar.  There are countless examples, the most striking is the inflation of the German Reichsmark which rose from 4.2 marks to USD in 1914 to a peak of around 4.2 trillion marks to the US dollar by November 1923.  At that time a wheelbarrow full of German marks wouldn’t even buy a newspaper.

Historically world currencies were backed by the gold standard which meant that by law any amount of paper money could be exchanged for a specified amount of gold.  In the 1920s each US dollar was backed by 1.5 grams of gold.  The dropping of the gold standard in Germany during WWI allowed for the hyperinflation that followed.  The United States dropped the standard during the great depression to avoid the federal gold supply from being completely depleted.  Canada followed suit in 1933.  There’s much debate on the merits of dropping the gold standard.  What resulted though is the ability for the government to completely control the currency without requiring tangible assets (ie. gold) to back it up.

Gold bars
Gold bars

So if the dollar is backed by nothing and can be manipulated at will how do you gauge the value of gold.  Or anything for that matter.  True value depends on what people are willing to trade for your goods.  Money makes it easy to barter and trade goods since it’s ubiquitous and there is an agreed upon value at any given time.  For example if you want to sell your car on craigslist you’ll have an idea of how many dollars you want for it.  Lets say you have a used Honda Civic.  You could sell that easily for $4000 CAD.  That same Honda Civic could be traded for a 1 carat diamond engagement ring.  50 years from now a used car might sell for $25,000 dollars due to inflation but the exchange rate of car to diamond ring would remain the same.

The old adage that an ounce of gold will buy you a nice suit still rings true today.  In the gold rush era (1848-1900) an ounce of gold would trade for about $20 USD, and would also buy a nice suit.  A typical suit today would cost you about $450 USD.  So it would seem that today’s gold would buy you 3.5 nice suits.  You have to consider that in the 1800s nice clothing was not mass produced.  To compare accurately you’d have to look at a tailored suit.  A mid range tailored suit made in the United States costs between $1650 and $1800 today.   At present gold is trading at about $1250 USD so the suit adage falls just above the quoted dollar value of gold.

Indian River Yukon

What really gives gold it’s value is the cost of exploration and production.  Being very rare it takes a lot of effort to find gold.  Once it’s found it is expensive to produce as well.   For example Barrick’s Cortez mine in Nevada has an average grade of 2.11 grams per ton.  That means that for every ton of ore processed they average 2.11 grams of gold.  Barrick’s published production cost at the Cortez mine is about $900/oz.  It really is remarkable that they can move and process the 15 tons of rock required to obtain an ounce of gold for $900.

The cost of producing an ounce of gold varies for each mine.  In a placer operation it is a constant cat and mouse game to keep costs low enough to make production economical.  When gold commodity prices fall below production costs mines shut down and less and less gold is produced.  The production cost, driven by scarcity is the single most important factor that drives the price of gold.

RC Drill in Action

Gold exploration is also very expensive.  In the times of the North American gold rush placer and hard rock gold was discovered all over the Western part of the continent.  From the 1840s to 1900 new gold districts were popping up every year as discoveries were made.  Trending almost in sequence Northward from California to the Yukon as explorers made their way through the wilderness.  In more modern times most of the easily reachable areas have have been at least partially explored.  Exploration today mostly takes place in more and more remote areas, such as the Canadian Arctic or other places with a small human footprint.

To properly explore a claim in these areas requires a camp. helicopters and all kinds of equipment.  A typical small exploration program in the Northwest Territories can cost well over $1,000,000 per season with slim chances of success.  While advancements in exploration technology such as geophysics and aerial imagery can provide information that wasn’t available to previous explorers there is no silver bullet.

The costs of thousands of exploration ventures that didn’t amount to a mine are factored into the price of gold as well.  For the estimated 100,000 explorers that took part in the Yukon gold rush only a select few managed to recoup their costs.  Some made made great discoveries but many more spent their life savings on an adventure but returned with no gold.

Big Al Jig

Gold’s value is based on it’s unique properties, people’s desire for the very special metal and the work required to find and produce it.  The value has nothing to do with the the dollar value attached to it.  For every ounce of gold produced tons of rock had to be excavated, the deposit had to be discovered and mapped, and the ore milled and smelted to extract the gold.  As you gaze upon your gold ring and admire it’s beauty think about the story that it could tell you.

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Harrison Lake Adit Exploration

Harrison Lake Adit Exploration

Last week my neighbour phoned me and asked if I wanted to go on a road trip to check out an adit by Harrison Lake.  Of course I said yes.  Who wouldn’t be down for a short road trip to check out an old mine adit.

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The trip only took two hours from my home in Abbotsford, BC.  We drove up to Harrison Hot Springs then transitioned to the 4×4 road called Harrison East FSR.  Conditions were great for the trip out we got hit by rain on the way back but that’s to be expected on the West coast in March.

I brought along my mountain bike night riding light and it worked awesome!  You can see the difference between my super light and a standard headlamp in the video.  Check out the video below showing our exploration in the adit:

This adit was created a long time ago, probably a during the period of the Fraser River and Cariboo gold rushes (1860s – 1880s).  No records have been found from that time period describing the adit though.  During the gold rushes the Harrison was one of the major routes to the Cariboo and many miners worked in the region.

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The adit extends for approximately 50m with a slight bend half way in.  It cuts through altered schist formations and has several small quarz veins exposed inside.  We sampled one of the veins which will be sent to a lab for fire assay.  The map below is taken from a 1983 geological report of the area.

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In addition to the 50m adit a vertical shaft had also been excavated.  Unfortunately the shaft is filled with water so it cannot be explored at this time.  Both excavations were carried out to explore a sizable quartz vein.  The shaft is right on the 1m wide vein and driven vertically into the bedrock.  The adit that we explored was intended to intersect the shaft and the vein.  It seems that the miners missed.  It is difficult to tell by how much.

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Inside the adit there are wooden tracks that line the whole tunnel.  These were probably part of an old rail system used to remove the excavated rock.  It is not known why the miners abandoned the property, without any information we can only guess.  There are other adits in the area that we’ll explore another time.  Not bad for a Tuesday afternoon.

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Mining the Ocean Floor with Robots

Mining the Ocean Floor with Robots

Mining under Earth’s oceans is just starting to happen.  We have gotten pretty good at mining deposits that are accessible by land but 71% of the Earth’s surface is covered by water.  To date no large scale mining operation has succeed under the ocean which means that it’s all virgin ground.

Amazingly the human race has spent more time and money exploring outer space than we have under our own oceans.  Over 500 people have been to space while only three have ventured to the deepest part of the ocean, the Mariana Trench.  We have better maps of the surface of Mars than the bottom of the ocean, although the ocean maps are pretty cool.

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The same geological processes that happen on land also take place under the ocean.  There are volcanoes, mountain chains, faults and earthquakes.  All the same types of mineral deposits occur under the ocean such as epithermal gold, porphyry, and placer.  There are also diamond pipes, massive sulphides and everything else that we mine at the surface.

Deposits

The ocean also has types of deposits that we can’t find on land.  One special mineral deposit is called Polymetallic Nodules.  These are concretions of metallic minerals that occur under the ocean.  The nodules grow sort of like stalactites do in a cave, over time layers of metallic minerals precipitate out of seawater and add to the nodule.  The growth of nodules is one of the slowest known geological processes taking place at a rate of one centimetre over several million years.

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Polymetallic nodules are roughly the size and shape of a potato and contain primarily manganese as well as nickel, copper, cobalt and iron.  They can be found on the sea floor or buried in the sediment.  Nodules can technically occur anywhere in the ocean but seem to be in greatest abundance on the abyssal planes around 5000m deep.  Nodule mining would be similar to placer gold mining except under water.

Anouther resource that is unique to the ocean floor is Ferromanganese Crusts.  These are similar to nodules but occur as a coating on other rocks.  These crusts can be found all over the ocean with thicknesses ranging from 1mm to 26cm.  Ferromanganese crusts typically occur in the vicinity of underwater volcanoes called seamounts or near hydrothermal vents.  Crusts with mineral grades that are of economic interest are commonly found at depths between 800m and 2500m.

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Ferromanganese Crust

Ferromanganese crusts are composed primarily of iron and manganese, hence the name.  Typical concentrations are about 18% iron and 21% manganese.  Cobalt, Nickel and Copper occur in significant quantities as well.  Rare earth metals such as Tellurium and Yttrium can be found in metallic crusts at much higher concentrations than can be found on the surface.  Tellurium is used in solar panels and is quite valuable.

Sea-floor massive sulphides (SMS) are a younger version of volcanic massive sulphides (VMS).  The two deposits are similar except that VMS are typically ancient and SMS are currently forming.  SMS deposits occur where superheated hydrothermal fluids are expelled into the ocean.  They typically form around black smokers near continental rift zones.  SMS are know to hold economic concentrations of Gold, Copper, Silver, Lead, Nickel and Zinc.

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BlackSmoker

Black smokers create SMS deposits by expelling superheated sea water that is rich in metallic elements.  Cold sea water is forced through the sea floor by the pressure created from the weight of the water column above it.  The water is then heated to temperatures in excess of 600°C when it is brought close to the magma that lies below.  The heated water becomes acitic and carries with it a high concentration of metals pulled from the surrounding rocks.  Once the hot, metal rich, water comes into contact with cold sea water the metals crystallize and deposit on and around the black smoker.

Mining

Large scale ocean floor mining has not taken off yet.  Attempts have been made since the 1960s and 70s  but failed due to technological and financial challenges.  Small scale shallow ocean mining has been a lot more succesful in recent years.  A great example is the popular TV show Bering Sea Gold.  The miners in Nome Alaska are using modified suction dredges to comb the sea floor in shallow waters.

Currently proposed sea floor mining ideas are essentially super high-tech placer mining.  They involve ways to dig through the surface layers of the ocean floor, bring the material to the surface and ship it to a processing facility.  Its a lot like dredging but on a massive scale.  As mentioned above, normal hard rock deposits also occur under the ocean but no plans have been proposed to build open pit mines under the ocean.  That would involve all the challenges of building a mine on land with the added complexity of operating under the ocean.

Why is ocean floor mining possible now when it wasn’t 20 years ago?  The answer comes down to one word, robots.  The world of under water mining is the domain of autonomous drones and human controlled ROVs.  Robot submarines are nothing new, they have been around since the 70s and have been used to explore depths of the ocean that are very difficult for humans to get to.  UUVs or unmanned underwater vehicles are a little bit newer, they are basically an autonomous version of ROVs.  Ocean mining robots have just been invented and share a lot of the technology used in these devices and they look like something straight out of science fiction.

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The Cutter

The first deep sea mining project is currently being developed off the coast of Papua New Guinea.  The project is called Solwara 1 and is being developed by a Vancouver BC mining company called Nautilus Minerals.  Solwara 1 is a copper/gold SMS deposit with estimated copper grades of 7% and gold grades in excess of 20g/t and an average gold grade of 6g/t.  The property sits at about 1600m depth.

Nautilus has developed a suite of underwater mining robots and a complete system to mine the precious metal and bring it to shore.  There will be the bulk cutter pictured above, an auxiliary and a collection machine.  Please take a moment and marvel at these amazing achievements of engineering.

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 After the robots dig up and collect the ore a custom designed Riser and Lift System (RLS) will bring the material to a giant ship that acts as the mine control center dubbed the Production Support Vessel (PSV).  The RLS is basically the world’s most powerful suction dredge.  It’s pretty complex, this is the description on the Nautilus Minerals website:

The Riser and Lifting System (RALS) is designed to lift the mineralised material to the Production Support Vessel (PSV) using a Subsea Slurry Lift Pump (SSLP) and a vertical riser system. The seawater/rock is delivered into the SSLP at the base of the riser, where it is pumped to the surface via a gravity tensioned riser suspended from the PSV.

Once aboard the Production Support Vessel the mined slurry will be dewatered and stored until anouther ship comes to take the material on shore for processing.  The removed sea water is pumped back down the RALS which adds hydraulic power to the system.  Pretty cool stuff!  Check out the video below for an visual explanation of how it will all work.

Exploration

Ocean floor prospecting is not a good place to be gold panning or hiking around with a rock hammer.  It is also difficult to take usable photos due to poor light and lots of debris in the water.  So how do you explore for minerals in the ocean?  Geophysics and robots.

Geophysical exploration is not unique to the ocean.  The same techniques are used routinely on land to find every type of mineral deposit.  Ocean geophysics is also not new.  The main workhorse of mining exploration is magnetometry.  Which means mapping changes in earth’s magnetic field using a specialized sensor.  The technique was actually developed to detect enemy submarines during World War II.  Since then magnetometers and the science behind them have evolved into accurate tools to measure geology.

I’m using a proton precession magnetometer in the photo below.  There is some sample magnetometer data on the left.  Mag maps look similar to a thermal image except the colour scale represents magnetic field changes (measured in nanoTesla) instead of temperature.

Walk Mag in ActionSampleMag

Magnetometers are excellent tools for ocean mining exploration.  They are not affected by the water and are excellent at detecting metallic anomalies.  There are now underwater drones that can collect ocean magnetometer surveys without the need for human intervention.

Autonomous Magnetometer Drone
Autonomous Magnetometer Drone

Other geophysical techniques have been used in ocean mineral exploration.  Electomagnetics (EM) techniques are also great tools for exploration under water.  EM works in a similar way to magnetometry except that they emit their own source.  Conventional metal detectors are actually a small version of an EM system.  While mag passively measures Earth’s magnetic field EM measures the difference between a source and received pulse.  EM also works great for discovering metallic anomalies and is being incorporated into autonomous drones as well.

There are other types of ocean geophysics such as seismic refraction which uses a giant air gun to send a sound wave deep into the crust and measures the response on floating hydrophones.  Sonar and other forms of bathymetry can provide detailed maps of the ocean floor.  Bathymetry techniques can create imagery similar to LiDAR that is used on land.

Sample Bathymetry
Sample Bathymetry

Ocean mining is just in its infancy and some really cool technology is being used.  Advancements in the robotics have allowed mining and exploration to be completed without a person having into enter the water.  As technology advances further we will be able to explore vast areas of the ocean floor and discover immense mineral reserves that are presently unknown.  It is estimated that we have only explored about 5% of the ocean floor, who knows what we’ll find down there?

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How Much Gold is Left on Earth?

How Much Gold is Left on Earth?

Is the world running out of gold?  That seems to be a common theme in investment circles in recent years.  This eye catching article on Visual Capitalist estimates that we’ll be out of gold by 2030. This article based on a report from Goldman Sachs claims we’d hit “peak gold” in 2015, GoldCore.
Gold_reservePeak gold is the same idea as peak oil.  Where the peak is the moment when maximum world production is reached and declines from then on, eventually reaching zero production.  Unlike oil though gold is not used up in consumption.  It is typically stashed away in a vault or worn as jewellery.

Estimates for all the gold in the world mined to date hover around 165,000 metric tons.  Some estimates go as high as 1 million tons but most experts would agree that under 200,000 is accurate.  World gold supplies are difficult to quantify. That is because gold reserves are not always reported accurately.  Over 50% of gold above ground is used for jewellery which makes it difficult to track.  Gold rings, necklaces and such can change hands without any records.  About 35% is stored as bullion for investments and reserves.  Large holders of gold give misleading numbers regarding their reserves, presumably for security reasons but who knows?

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The United States, Germany, Italy and France are the worlds largest holders of gold respectively.  Each has their share of controversy surrounding their claimed gold deposits.  There are conspiracy theories about the amount of gold stored in Fort Knox.  Some believe it is empty and the government is just pretending its full of gold.  Without seeing it for ourselves we’ll just have to accept the disclosed numbers.

To further add uncertainty to global gold production small scale miners do not typically report their take.  This is especially true in third world countries.  A lot of gold is mined in this way, primarily placer but hard rock as well.

AfricaMiners

How much gold is left in the ground?  Nobody really knows.  Mining companies of all sizes spend their exploration budget to map out potential deposits.  They are a long ways from mapping the entire earth.  The peak gold estimates are based on proven and indicated reserves that are reported by public mining companies.

There is no shortage of gold on earth.  The problem is that it is much deeper than we can mine.   Current scientific theories estimate that there is enough gold in the core to cover the surface of the earth with a 4 meter thick layer of pure gold.  The density of the core is measured using several techniques including seismic geophysics.  Seismic waves are measured from earthquakes all over the world.  The wave properties change as they pass through the liquid outer core and the super dense inner core.  S-waves can’t travel through liquid, that is how the outer core is mapped.  The density of the inner core is greater than iron at 5,515 kg/m3.  Clearly there are large amounts of substances that are heavier than iron to achieve that density.

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We are limited to several thousand meters below the surface as far as mining is concerned.  Check out this blog post on the origins of gold.

Lets do a little math.  The average concentration of gold in Earth’s crust is estimated to be between 0.0011 ppm(source) and 0.0031 ppm(source).  Now we can calculate the volume of the portion of the crust which can potentially be mined.  The deepest gold mine in the World is TauTona Mine in South Africa which reaches 3.9 kilometers below ground.  The TauTona mine, operated by AngloGold Ashanti, is a gold mine so its a good yard stick for how deep we can go.

The volume of the earth (approximated as a sphere) is 1,086,832,411,937 cubic kilometres.  The calculated volume for the earth with 4km stripped off the top is 1,084,788,886,213 km3.  Subtracting the two and using the average abundance of 0.0031 ppm we arrive at 6.3 billion cubic meters of gold in the top 4km of the crust.  One more calculation, gold has a known density of 19.3 tons per m3.  Which gives us a total mass of 122,264,143,828 or 122 billion metric tons.  That is a lot of gold.

Nuggets

Our calculated estimate of 122 billion metric tons of theoretical gold includes the entire surface of the earth.  Currently we are not equipped to mine the oceans, although technology is advancing quickly.  Check out this article on sub-sea mining robots, LINK.  The same processes that accumulate gold into deposits occur in the ocean just as they do on land.  With 71% of the surface covered by ocean that is a significant area that is yet to be explored.
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Lets adjust our estimate to account for only continental land which can be mined with today’s technology.  So by subtracting the oceans we are left with 35 billion tons of gold on dry land.

Global production throughout the entirety of human history is 165,000 metric tons as previously mentioned.  So in a very theoretical sense we have mined 0.00047% of the world’s surface gold.  That’s very encouraging.  Although not all of that gold is accumulated in mineable deposits.  Typically you need at least 0.5 ppm to make a mine profitable.  Depending on logistics, location, overburden and other factors that cut off grade can rise quite steeply.  So all of that 35 billion tons is not really available to us.

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Once gold is discovered it will be mined.  We are too greedy to leave it in the ground.  Take a look at the gold rushes of North America between 1849-1900.  There are some great blog posts on the subject here, Gold Rushes.  The hoard of gold hungry prospectors would descend on a creek once a discovery was made.  They would move in, erect a town and mine it for all its worth.  Within 2-3 years all the easy gold is gone and only the tenacious miners would remain to mine the small gold.  The rush would continue elsewhere and repeat the cycle.  The same thing happens with hard rock mining but on a longer time scale.

Peak gold takes this phenomena into account.  Much like peak oil we’ve picked the low hanging fruit wherever it has been found.  Gold is a little different because it is very hard to find.  When it comes to oil reserves the big ones stick out like a sore thumb.

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Typically it takes about 20 years to go from discovery to full scale gold mine.  That involves all the steps to test a property using prospecting, geophysics, and diamond drilling.  Delineating the reserve and all the stuff that it takes to build a modern mine (permits, studies, infrastructure and so on).

With the current state of the mineral exploration that 20 year lead time is going to come back to bite us.  Over the last few years mineral exploration has dropped off to the point that it is almost non-existent.  That seems counter-intuitive if we are running out of gold.  Exploration is a high risk investment and people don’t take the risk unless commodity prices are high.  The good news is that when prices spike again like they did in 2010 there will be a massive feeding frenzy.

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So we’ve estimated that within 4000m of the surface of Earth’s crust there is 35 billion tons of gold.  With a remaining 87 billion under the ocean.  Only a small portion of that is concentrated enough to mine.  Its a big world out there and we’ve only properly explored small pockets of it.  The super easy stuff is largely gone but with advancements in technology and some ingenuity its there for the taking.  For those explorers who are willing to put on their thinking cap and step outside of their comfort zone there is a bonanza waiting for us.

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The Search for Klondike Lode Gold

The Search for Klondike Lode Gold

In the summer of 2010 I was hired to work with a team to find hard rock gold in the Klondike.  We explored a group of claims on the Indian River.

IMG_1741My crew stayed at a camp operated by a character called Big Al.  That name might sound familiar because he has been featured on the popular TV show Yukon Gold on the History Channel.  Of course at that time we had no idea he was going to be a celebrity.  During the trip we heard a rumour that Hoffmans working a few claims over were filming for a TV show, it turned out to be the hit series Gold Rush on Discovery.  We were surrounded by gold mining TV stars but didn’t know it yet.

Klondike Tailings Piles
Klondike Tailings Piles

Indian River Yukon

The Klondike is a place that has a very storied history and was the site of the greatest gold rush of them all.  California, Oregon, and British Columbia had their gold rushes and stories but the Klondike was like no other.  Between 1896 and 1899 over 100,000 adventurers made the journey from all over the world to the largely uninhabited Yukon territory in search of gold.  What made this rush different is the long journeys and overall inexperience of the Argonauts.  At the time of discovery El Dorado and Bonanza creek were the richest creeks in the world.  Some claims on El Dorado were getting $27 to the pan once they hit the pay streak.  That is equivalent to about $750 per pan in today’s money.

My team met up in Whitehorse the capitol city of the Yukon Territory in early August 2010.  We then rounded up some remaining gear and drove in a rented truck up to Dawson City.  As you arive in Dawson City you can see the remains of over 100 years of placer gold mining. Before you reach the town you can see large tailings piles lining the sides of the highway.  When looked at from above they look like something that was produced by a giant insect.  The tailings piles were put there by humongous dredges that scoured the Klondike drainages until 1966.  It is estimated that each of the dredges were producing as much as 800 ounces of gold per day!

Aerial View of Kondike Tailings
Aerial View of Klondike Tailings

Dawson City is a cool town.  The residents have maintained the look and feel of Dawson’s heyday during the Klondike gold rush.  The streets are dirt with wood plank sidewalks.  Most of the buildings are original in the downtown area and many commercial buildings have the false front that was the norm during the gold rush era.  There is even a law that all signs have to be hand painted.

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There are no corporate stores or businesses in Dawson.  Everything is locally owned and operated.  Some of the original establishments from the 1890s are still in operation today.  Diamond Tooth Gerties is one such establishment which offers games of chance and nightly can can dancers 7 days a week.  Anouther is Bombay Peggy’s which operated as a brothel during the gold rush.  It has turned into a classy bed and breakfast now.

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My Crew posing with the Can-Can girls

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Dawson has several historic bars as well.  One such bar is the Downtown Hotel.  We stopped in there one night after visiting several other bars and took part in a local tradition.  It is called the Sourtoe Cocktail.  Only one of my crew was willing to take the shot with me.  The Sourtoe Cocktail is a shot of Yukon Jack whiskey taken with an amputated human toe in the glass.  They keep the toe in a jar of salt above the bar.  Apparently the tradition started with a bootlegger losing his toe due to frostbite.  I was informed that this was their 6th toe which makes you wonder where they new ones came from.

Bombay Peggy'sThe Toe

The Bonanza Creek Road is the main access to Indian Creek.  Along this historic route there are plenty of relics of past mining adventures.  Most notably the historic Dredge No. 4 which mined Bonanza Creek until 1959.  There are other dredges as well and plenty of old heavy equipment that was abandoned by miners of the past.  There are abandoned bulldozers, excavators, trucks and other random big machines.  There is such a surplus of iron that many bridges use large dozer shovels as retaining walls.

Dredge No. 4
Dredge No. 4

We were tasked with finding the source of the placer gold in the Indian River.  We stayed at Big Al’s camp and were exploring mineral claims that overlapped his placer claims.  His knowledge of gold bearing benches as well as historical research was very important in our search.  Likewise our findings were beneficial to Al in exploring new placer areas.  Most of our time was spent exploring old miner’s trails on quads and by foot.  I’d be lying if I said it wasn’t a great time.

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We came across several old mine shafts and evidence of placer mining was everywhere.  My crew participated in some of Big Al’s cleanups too.  It was exciting to see the amount of gold that he was pulling out.  We participated in all the steps of his cleanup process from cleaning the sluice to the concentrator jig and so on.  At each stage a fair amount of rum was consumed it seemed fitting when surrounded by hundreds of ounces of gold.

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Yup, that's exactly what it looks like.
Yup, that’s exactly what it looks like.

In our hard rock exploration we employed several techniques utilizing traditional prospecting as well as soil sampling and statistical pebble counts.  The soil sampling was conducted with helicopter support which made it a lot easier.  We were bagging close to a hundred samples per day each which was more than we could carry in the bush.  At the end of the day we’d chop out a helicopter landing area and radio the chopper.  Then we’d pick up the samples that we cached during the day.  Hard work but a lot of fun too.

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We spent a total of six weeks prospecting the area.  We took a lot of samples to be sent in for assay from all over the claims.  Prospecting in the Yukon is similar to BC, there is not a lot of exposed rock around.  Unlike the barren lands of the North West Territory and Nunavut there is plenty of forest and vegetation covering the rock.  We spent a lot of time in the helicopter scoping out rock outcrops.

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There seemed to be a correlation between the garnets that were showing up in the placer operation and high grade gold.  When the placer miners hit the paystreak they got a lot of garnets with it.  We started prospecting up a creek called “Ruby Creek” assuming it was named for the abundance of garnets.  The hunch turned out be be right.  We chased the garnets up to some large outcrops near the top of the mountain.  The samples contained a lot of garnet but not a lot of gold.

100_1595 SoilSampling

From an old mineshaft that we found near a cabin we discovered that the miners hit a layer of pure quartz conglomerate.  And it was loaded with gold.  We then knew what to look for.  The search for the source of the Klondike gold continued for several weeks.  We encountered giant moose, grizzly bears, Northern Lights and some great people.  On several occasions we thought we found the fabled mother lode but the samples returned disappointing assay results.  Some of the more random samples showed the highest grades.  They say gold is where you find it.  We did not find the source of the klondike but we did manage to have a great time and got paid for it.

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Top Ten Gold Rushes of BC – Part 1

Top Ten Gold Rushes of BC – Part 1

Prior to the gold rushes in BC this part of the country remained almost entirely unexplored.  The Clovis people and their descendants the North American Indians were the first settlers of North America.  The Clovis crossed the Beringia Land Bridge from Siberia to present day Alaska approximately 13,500 years ago.  When Europeans began exploring the area, first by sea in the late 1700s and later by canoe, they encountered aboriginal groups covering much of the province.  Many Indians had seen gold in creeks but had little use for it.  They did not have the knowledge or motivation to mine gold until they came into contact with Europeans.  After learning the value of gold to the British they began to mine it and trade for goods.

Map of British Columbia Goldfields circa 1858
Map of British Columbia Goldfields circa 1858, click for larger image

The Spanish explorers on the other hand were completely obsessed with the yellow metal.  Spanish explorers were motivated primarily by legends of “El Dorado” in their search of the Americas.  Each Spanish explorer had the ultimate goal of returning to Spain with a ship full of gold.  Most of their attention was focussed in South America where their superior weaponry, armour and small pox allowed them to quickly decimate tribal empires and steal their gold.  There is evidence of Spanish gold exploration in BC as well.  Most of the Spanish exploration took place on Vancouver Island and other coastal areas such as Haida Gwaii.  One Spanish expedition travelled inland as far as the Okanagan and Similkameen regions.

Fur trading is what led to the first European settlement of British Colombia but the impact remained relatively small.  The first settlements were established by early explorers such as Simon Fraser, Alexander Mackenzie, and David Thompson.  Early forts were established along the river routes that these explorers used as well as along the coast.  The area became a recognized fur trading district called New Caledonia and it held that name until it became a British Colony in 1858.

Fort St. James was founded in 1806 and was the first major inland fur trading post in BC and still bears that name.  Other notable early forts are Ft. George (now Prince George), Ft. Kamloops, Ft. Langley and Ft. Victoria (1844).  During the fur trade the European population slowly grew to a few hundred people but little effort was put into exploring new ground outside of the established trade routes.

EarlyBC

1851 Haida Gwaii Gold Rush

The Haida Gwaii gold rush was the first recorded gold rush in BC but was very short lived due to hostilities with the local natives.  The rush began in 1851 when a Haida man traded a 27 ounce nugget for 1500 blankets in Fort Victoria.  A Hudson’s Bay Company ship was sent up there soon after and discovered a very high grade lode deposit.

The HBC crew began mining the lode deposit but the Haida Indians soon turned against them and prevented further mining.  In 1852 a ship with 35 adventurers from San Francisco set out for the islands.  They arrived at “Gold Harbour” in the Tasu Sound but did not have much luck finding gold.  They did however manage to trade with the Haida Indians for gold.

1857 Gold Found At the Nicoamen River

Placer gold was discovered in Nicoamen River which is a tributary to the Thompson River.  The Nicoamen enters the Thompson about 12 kilometers up stream from the confluence with the Fraser River at Lytton.  A local Indian discovered gold there by chance and soon the majority of the tribe was mining the area.  This discovery is credited with igniting the Fraser River gold rush.

1858 Fraser River Gold Rush

The Fraser River gold rush involved one of the largest populations of migrant prospectors in history.  It is estimated that around 30,000 people rushed to the lower Fraser River in 1858.  The rush began after an 800 ounce gold sample was sent from Fort Victoria to San Francisco for assay.

Yale in 1868
Yale in 1868

Soon after a shipload of 800 American prospectors from California arrived in Victoria to hunt for gold on the Fraser River.  The influx of American prospectors overwhelmed the small government that managed the territory.  HBC Governor James Douglas requested immediate help from Britain to control this massive foreign population .  The British Government responded by formally claiming BC as sovereign British Colony in 1858.  The new government quickly enacted mining laws to prevent the mayhem that took place in the California goldfields.  Along with the declaration came British military support and the Royal Engineers who went on to build several major road systems including the Cariboo Wagon road and Dewdney Trail.

The early work centred around the community of Hope where steamboats allowed for easy access.  The majority of the gold rushers were participants in the California gold rush that fizzled out a few years earlier.  As a result the population of Yale was largely american and the town was modelled after San Francisco.

Lower Fraser River Circa 1862
Lower Fraser River Circa 1862

A story in the San Francisco Bulletin is credited with igniting the rush.  According to the newspaper:

“In one month the Hudson’s Bay Company fort in Victoria had received 110 pounds of gold dust from the Indians … (prospected) without aid of anything more than … pans and willow baskets.”

Numerous bars were prospected and mined between Hope and Lytton.  Some communities along the Fraser are still named after the bars that were mined such as “Boston Bar”.  Like most gold rushes the men who arrived first snapped up the good claims and the the majority of the adventurers ended up working for them.

Cariboo Wagon Road in Fraser Canyon 1867
Cariboo Wagon Road in Fraser Canyon 1867

The British Royal engineers developed a route from Port Douglas at the head of Harrison Lake to Lillooet to accommodate the influx of miners.  Many new communities popped up and some are still settled today.

The Fraser rush brought people from all over the world but the bulk of the miners came from California.  At the peak of the rush there were over 10,000 miners operating on the section of river form Hope to Lillooet.  The bars depleted rapidly and by 1860 most of the miners continued on the other gold rushes in BC.

1858 Rock Creek Gold Rush

Gold was discovered in Rock Creek in 1858 soon after miners rushed in from the United States and the rest of the world.  The Rock Creek rush was also instrumental in the development of British Columbia.  The discovery was made by two American soldiers who were chased North of the boarder by a band of Indians.  Just 5km from the border where an unnammed creek entered the Kettle River they found gold.

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At the time of the discovery the colony of British Columbia was only a year old.  American miners tried to claim the area as part of the United States due to the high grades and the fact that it was discovered by Americans.  The Rock Creek claim issues prompted the construction of the Dewdney Trail as a means to separate the new colony from the United States.  The Dewdney Trail snaked its way from New Westminster all the way to Wild Horse in the Kootenay region staying just North of the Canada-US border.

Soon after the discovery an estimated 5,000 prospectors migrated to the newly established town of Rock Creek.  In the beginning there were two saloons, a butcher’s shop, a hotel and five stores.  Within the first year a revolt broke out due to tensions between Chinese and American miners and refusal to pay for mining licences.  The incident became known as the Rock Creek War.  The governor of British Columbia Sir James Douglas travelled there from Victoria to straighten out the miners.  He threatened to send in 500 British soldiers if they couldn’t behave themselves.  Sir Douglas was successful and soon the miners paid their claim fees and mined the creeks in peace.

There were some amazing claims on Rock Creek.  Adam Beame’s claim on Soldier’s Bar  in 1859 allegedly netted $1,000 in six weeks.  That gold would be worth $70,500 today!  Other bars such as Denver Bar and White’s Bar produced similar results.

1859 Cariboo Gold Rush

Gold was discovered on the Horsefly River in 1859 by prospectors who participated in the Fraser River rush.  They were guided by a local Indian and shown a spot on the Horsefly River with abundant gold and nuggets the size of wheat kernels.  The rush was on as more miners from the Fraser River rush migrated North to the Cariboo.  Soon a town was erected near the strike that exists today.

Cariboo Map Circa 1862
Cariboo Map Circa 1862

In 1860 gold was discovered on Keithly and Antler creeks to the North of Horsefly.  Other notable creeks of the region are Lightning, Lowhee, and Williams Creeks, the Quesnel River and Parsnip River.  Towns popped up all over the place with the most exciting being Barkerville.  That town was named after a British prospector named Billy Barker and had a popluaton of 10,000 at its peak.  His claim on Willams Creek was one of the greatest gold producers in history yielding an estimated 37,500 ounces of gold.  Barkerville was restored in 1997 as a tourist historic town that is a popular attraction in the area.

Barkerville1868
Barkerville circa 1868

The Cariboo gold rush saw 100,000 people flood into the area during 1862-70 from all over the world.  By 1864 the Cariboo Wagon Road was completed from New Westminster all the way to Barkerville.  This allowed for easy travel of people and supplies, wich substantially brought down the costs.  It also allowed for stage coaches to securely move gold from the mines.  The stagecoaches operated on this road from 1863 to 1917 carrying people, mail, express packages and of course gold.  The stagecoaches saw surprisingly few hold ups, even though they carried literally tons of gold.  There are only five hold ups on record, two of which were successful.

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By 1870 the gold rush had largely fizzled out.  The good claims were now owned by mining companies who could gather the money needed to undertake underground drift mining.  Those who didn’t stick around to work in underground mines spread around other parts of BC’s North and some sparked gold rushes in new areas.  Others settled in and started up cattle ranches or logging companies.  Gold mining in the Cariboo is still active today, as a matter of fact I have a couple claims near Keithly Creek.

Cariboo Drift Mine
Cariboo Drift Mine

1863 Wild Horse River Gold Rush

Gold was discovered on the Wild Horse River in the Kootenay region in 1863 once again by American prospectors.  The Wild Horse held great gold reserves and still does today.  Early in the rush huge nuggets were found with the biggest tipping the scale at 36 ounces.  The first town that was built was called Fisherville.  Apparently after one resident found a nugget under his house the size of his fist the whole town burned their houses down to dig underneath.

A town was erected named Galbraith’s Ferry, named after John Galbraith who operated a ferry across Kootenay lake.  Later the town was re-named Fort Steele after the legendary Sam Steele.  A second gold rush broke out in the same area in 1885.  Later hard rock silver rushes spread around the region.

The Wild Horse River is estimated to have produced over $7,000,000 in the initial gold rush which would be worth about $490,000,000 today.  There is a very well preserved historic town at Fort Steel that is a popular tourist spot with many actors playing the roles of old time blacksmiths, prospectors, sheriffs and so on.  It is located North of Cranbrook at the intersection between Highway 93 and 95.

The initial gold rush ended after about 6 years but soon the great silver rush would flood the region.  Places like Nelson, Kaslo, Slocan grew out of the silver rushes that blanketed the Kootenay region.

 

1864 Leech River Gold Rush

The Leech River gold rush started with a letter from Robert Brown who was Commander of the Vancouver Island Exploring Expedition.  Yes that was the correct name of the VIEE expedition.  The expedition was launched by the British government in Victoria.

1880Leechtown
1880 map depicting the locaton of Leechtown

A letter from Brown published in the British Colonist newspaper on July 29, 1864 ignited the rush.  Here are some exerpts from the letter:

..the intelligence I have to communicate is of too important a nature to bear delay in forwarding to you, even for one hour…

The discovery which I have to communicate is the finding of gold on the banks of one of the Forks of the Sooke River, about 12 miles from the sea in a straight line, and in a locality never hitherto reached by white men, in all probability never even by natives. I forward anquarter eighth of an ounce (or thereabouts) of the coarse scale gold, washed out of twelve pans of dirt, in many places 20 feet above the river, and with no tools but a shovel and a gold pan. The lowest prospect obtained was 3 cents to the pan, the highest $1 to the pan, and work like that with a rocker would yield what pay you can better calculate than I can, and the development of which, with what results to the Colony you may imagine.

Leechtown - Berks Hotel
Leechtown – Berks Hotel

A town called Leechtown was built near the discovery.  By November that year there were an estimated 6 general stores, 3 hotels and over 1,200 miners at work in the area.  By 1866 an estimated 200,000 ounces of gold had been produced in the area and the gold rush had passed its peak.  It was over in a flash as the Leech and Sooke river placer deposits, although high grade, were limited in size.

In the span of one decade gold rushes turned the vast unexplored fur trading district of New Caledonia into a sovereign British Colony.  By the end of the 1860’s the new region had gone from a population of under one thousand people to a colony with several major wagon roads and towns covering much of the Southern half of BC.  The gold rushes continued and led to more development in British Columbia.  Stay tuned for part 2.

Check out part two here:

Part 2: Top 10 Gold Rushes

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Hard Rock Prospecting near the Thompson River

Hard Rock Prospecting near the Thompson River

In September I went out to check out a claim in the Thompson River area of Southern BC.  This claim has an adit on it that was hand excavated prior to World War 1.  A government report from the 1930s says that a sample from this adit assayed at 9.12 g/t Au.  The report also claims that the adit extended 80m into the rock face and intersected several large quartz veins.

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The claim was staked in 2006 by the previous owner who held it for several years.  They were able to locate the adit in 2007 but were not willing to enter the portal because of its precarious position on a vertical rock face.  It seems as though nobody has entered this lost mine since the 1930s era.  Naturally I wanted to check it out.

ClaimLocationJune

I was accompanied by a guy that I met on the internet named Rob.  He turned out to be a great partner, and took most of these photos.  We geared up with some rock climbing gear as well as prospecting equipment and a camera.

ClaimLocationAdit

The claim covers an area with a couple of narrow valleys with steep sides.  Its beautiful country but tough to get around in.  According to a prospecting report from the previous claim owner they were able to photograph the adit from the other side of the valley.  Take a look at their photo below.

Adit Location

So we had a photo and even a coordinate from the report.  We were ready to show up and heroically rappel into the adit.  We did not know exactly what we would find in there but I wanted to verify the old assay and hopefully find some gold.  Whoever put in the time and effort to dig an 80m tunnel into solid rock held a strong belief that there were riches in there.  It was all looking good and as usual I remained skeptically optimistic.

Heading Out

Right off the bat we headed up the creek towards the coordinate from the 2007 report.  It didn’t take long to reach the location.  There were no signs of an adit or anything that matched the picture.  It is difficult to tell though when looking straight up a rock face.  We proceeded to hike along the bottom of the vertical wall trying to spot the entrance.  Later we climbed to the top of the ridge to see if we could spot the adit from above and rappel down as planned.

Me on June Cliff

We did not have any luck.  We walked all over that ridge but were not able to spot the adit.  We went around for one last look and managed to find a decent quartz vein.  The vein was a decent size and seemed to continue in to the rock.  I took a sample which will be sent to a lab for assay to see how much gold is in it.  No gold was visible to the eye but it rarely is.  The quartz looks pretty good though, some iron staining and nice crystals in part of it.

Quartz Vein on June Bug
Quartz Vein on June Bug

While taking the sample my camera fell out of my packpack and tumbled all the way down to the creek.  It must have bounced down at least 100m.  I scrambled after it expecting to find it in pieces to my surprise it was not shattered just soaking wet.  I was able to dry it out several days later and it seems to be OK.

Quartz

  QuartzCrystals

Having failed to find the old mine we climbed the opposing ridge across the valley.  It was somewhat easier climbing since there wasn’t much vertical rock to deal with.  It was mostly talus which poses its own challenges.  We tried to recreate the photos from the report.  Rob and I took lots of photos with the hope that we could later spot the adit using a computer.  Sadly none of the photos turned out well because the sun was facing us straight on.

Veiw From Across Valley
Veiw From Across Valley

What started out as a plan to saunter up to a lost mine adit and rappel into it.  It turned into an all day scouting adventure and climbing two different steep mountain ridges.  It almost seems as if we were cursed, every attempt to locate the adit had failed.  Fortunately nobody got hurt and we did manage to get a nice quartz sample, even my camera survived.

I’ll be back soon to find that adit.  Our failure gives me even more enthusiasm to find this thing.  I just refuse to be beat by the mountains.

 

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Where Does Placer Gold Come From? – Part 2 Deposits

Where Does Placer Gold Come From? – Part 2 Deposits

In part 1 of “Where Does Placer Gold Come From?” we discussed the origins of gold and how it appeared on earth.  Now we’ll discuss how it moves into mineable deposits.

LodeGoldwide

Gold is spread relatively evenly throughout the crust of the earth at approximate concentrations of 1 part per billion.  To put that into contrast, low grade mineable gold deposits need to be concentrated to at least 1 part per million which is about 1000 times more concentrated than the background.  High grade gold deposits are in the order of 20-100 ppm.  Gold concentrations are usually expressed in grams per ton, which is interchangeable to ppm.

So if gold is evenly spread through the crust how does it become concentrated?  There are several natural processes that allow this to happen and they are all driven by the same force, plate tectonics.  Plate tectonics is the force that moves continents, creates mountains and most volcanoes, and of course earthquakes.  The image below shows the current tectonic plates and their names.

Tectonic Plates

The plates are constantly moving, crashing into each other and subducting, they are pushed by convection currents in the mantle.  In the distant past there have been several supercontinents where all the continents had come together to from one.  Past supercontinents have names like Rodinia, Godwana and Pangea, it is predicted that a new supercontinent will occur in the next 250 million years.

Subduction

At the boundaries of these plates is where the excitement happens.  It is at these areas such as the West coast of North America where volcanic processes squeeze gold into veins.  There are two main ways that this happens.  Orogenesis (mountain building) takes place as the force of two plates hitting each other forms mountains as the edges of the plate buckle and slide.  In the mountain forming process rock is squeezed to the point of breaking and creates fissures and faults that extend deep into the crust.  These cracks allow heated and pressurized water to come up the cracks.

The other way is driven  by volcanoes forming from the subducted plate.  When the edge of the plate is far enough below the surface it re-melts and the newly molten rock builds up pressure.  This pressurized molten rock is what forms the volcanic chains inland from the subduction zone.  As volcanoes form they crack and fissure the surrounding rock and contribute to the same epithermal process.

HotSprings

Imagine the rock as a sponge and when it is squeezed the water is expelled through the cracks.  It is actually the same way that hotsprings work but with more squeezing.  This kind of gold mineralization often takes place near volcanic or geothermal activity such as hot springs or geysers.  When the mineralized water cools it leaves behind the minerals in solid form which we then call a vein.  Typically we are looking for quartz veins.  Vein deposits are often called lode deposits in artisanal miner vocabulary.  Placer miners will often refer to the “mother lode” that is the quartz vein or veins that broke down into rich placers.

 

There are other hard rock gold deposits other than epithermal lodes.  There are Greenstone, volcanic massive sulphides, porphyry and Calrin trend deposits.  All of these depend on volcanism as well and occur in similar ways as described above.  Areas high in volcanoes and seismic activity are good places to look for gold.  The Pacific ring of fire is an area surrounding the boundary of the Pacific tectonic plate.  This area contains 3/4 of the worlds volcanoes and is responsible for 90% of the world’s seismic activity.  In the gold rushes of the 1800’s prospectors envisioned a world wide gold belt.  It wasn’t until the 1950’s that plate tectonics became an accepted scientific theory and decades later we mapped out that gold belt.RingofFireROFdepositsOf course not all gold is found in the ring of fire.  The largest known gold deposit on earth is in Witwatersrand, South Africa.  It is estimated that 50% of the gold mined on earth has come from this mine.  Witwatersrand is actually a huge placer deposit from 3 billion years ago.    In my next post we’ll finally get to the formation of placer gold deposits.  Stay tuned.

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Where does placer gold come from?

Where does placer gold come from?

If you are trying to find gold it helps to know where it came from.

gold-panning

To start with there is only one kind of gold.  Placer gold and lode gold both come from the same place and are made of the same stuff.  Gold is not actually formed on earth it was formed millions of years ago in distant stars.  In large stars, much larger than our sun elements are combined together in their cores through the process of nuclear fusion.  Our sun like all stars runs on fusion too but it does not have enough mass to produce atoms larger than carbon or oxygen.  Larger stars can generate the gravitational force and heat in their cores necessary to produce elements as heavy as iron.  To create things like gold even more energy is required and that takes place in a supernova.


Supernova

When a large star runs out of light matter the fusion reaction is no longer sustainable and the star begins to collapse on itself very rapidly.  The supernova collapse takes place in a matter of seconds.  While the star is collapsing it produces heat very rapidly and explodes in what is essentially a humongous nuclear bomb.  Supernova events are so bright and powerful that they are brighter than then entire galaxy that hosts the star.  This nuclear explosion allows for higher energy fusion reactions that can produce heavy elements like gold.  The explosion also scatters the newly created material over great distances.
SolarNebula

So how did the star dust make it into the mountains and rivers on earth?  When our solar system began approximately 4.6 billion years ago it was a cloud of dust and gas called a nebula.  This nebula was composed of the remains from older stars that had spread their guts around the universe in supernova explosions.  The molecules of the nebula naturally pulled on each other by the force of gravity growing more and more dense.  As the nebula was collapsing in on itself it also started to spin faster and faster.  The condensing and spinning action formed the nebula into a disk, much like you spin dough into a pizza.  In the center where the force of gravity is the strongest a new star was created, our sun.  The swirling mass around the sun clumped together into the planets, moons, asteroid and comets that we see today.
Early Earth

The early solar system was different that it is today.  The big planets did not form all at once, it was a gradual process.  Small plantoids formed first and crashed and coalesced into each other to form larger planets.  In theory the distribution of gold was basically even in all the rocky material that made up the early solar system.  In the early earth, while it was still completely molten the heavy material (such as iron and precious metals like gold) all sunk to the center of the planet to form the core.  The process is similar to the way that dense material sinks to the bottom of your gold pan.  If you could mine the core you would be very rich but it would be very difficult with current gold mining equipment.  Current scientific theories estimate that there is enough gold in the core to cover the surface of the earth with a 4 meter thick layer of pure gold.


earth-core

We can only reach gold that is trapped in the crust of the earth.  The precious metals in the crust were put there by meteor bombardments that took place after the crust had formed.  As these meteorites crashed into the surface of the earth they disintegrated and mixed their material into the upper mantle.  The meteorite guts had the effect of enriching the amount of precious metals in the crust.

 

So we know where gold came from and how it was formed.  Stay tuned for a future post to learn how the gold formed into deposits in the mountains and streams that we mine.

 

Check out Part 2 & 3 here:

Where Does Placer Gold Come From? – Part 2 Deposits

Where Does Placer Gold Come From? – Part 3 Placer

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