What is the true value of gold?

PlacerGold Science April 3, 2017aerial imagrey, exploration, geophysics, gold, gold mining, gold rush, gold value, Klondike, lode gold, placer 0 Comment

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.”

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.

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.

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.

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.

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.

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.

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.

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.

Placer Exploration in the Yukon

PlacerGold Trip Reports June 8, 2016drill, gold, gold mining, gold mining equipment, gold pan, gold panning, gold rush, Klondike, Nodwell, northern lights, placer, yukon 9 Comments

In the spring 2016 I was hired to help on a large scale placer exploration program in the Yukon. The property is located in a part of the Yukon where very little placer activity has taken place. We had a small team of three guys and a lot of equipment.

The Yukon, like BC and Alaska, was explored and settled by prospectors in the late 1800s. The Klondike gold rush of 1896-1899 was the largest and most storied gold rush in history. It is estimated that over 100,000 gold seekers migrated to the Arctic territory from places like San Fransico and Seattle. The Yukon’s economy is still driven by mining and the local culture is completely saturated with gold rush era influences. A great example is Yukon Gold, the flagship beer of the Yukon Brewing Company, has part the the famous poem “The Cremation of Sam Mcgee” on the label.

The Robert Service poem is part of Canadian heritage and is part of the school curriculum across the country. After several trips prospecting in the Yukon it takes on different meaning than a quirky poem that you have to read out loud in grade three.

There are strange things done in the midnight sun
By the men who moil for gold;
The Arctic trails have their secret tales
That would make your blood run cold;
The Northern Lights have seen queer sights,
But the queerest they ever did see
Was that night on the marge of Lake Lebarge
I cremated Sam McGee.

On a Monday night in early April at 9PM I received a phone call. “Your flight leaves Vancouver in the morning for Whitehorse. We’ll fill you in on the way.” Typical for this kind of job. I had been expecting the call for a few weeks but it still caught me a little off guard.

On arrival to Whitehorse I had been advised that one of our crew would meet me there. I had never met this guy before but I knew he was an old placer miner. The Whitehorse airport is small and we were the only flight. There were several people waiting for passengers so I had to guess. I noticed a guy wearing rubber boots and looked like a placer miner to me. I introduced myself and luckily he was the right guy.

We spent a couple hours rounding up additional gear before catching the charter to the camp. I was crammed in a Cessna 206 with the pilot and a bunch of gear. We had all the 5 gallon pails we could buy at the Whitehorse Home Hardware, drill bits, my gear, a 45 gallon drum of diesel, and a bunch of other stuff.

Soon after leaving Whitehorse we flew over Lake Lebarge which is the location where Sam Magee was famously cremated.

The pilot warned me that the runway was a little rough. We took a couple passes and lined up to land. It was rough all right, made of gravel and ice, we bounced so hard that we almost took off again. My two crew members were waiting to greet me at the plane. They were excited to meet me, especially since I brought a 24 pack of Kokanee. The beer didn’t last the night.

The two guys that I was working with had already been there for several weeks. It’s a rustic camp and there was no water available for showers or anything. I thought my team mates smelled pretty bad when I arrived but after a few days we all smelled the same. A few weeks later temperatures were high enough to rig up a pump system and a shower. This is not the first rustic camp that I’ve been to where we have satellite internet and no showers. These are interesting times to be an explorer.

The camp consists of three canvas tents, a seacan and an outhouse. The tents have “hippy killer” stoves that burn wood. They work well most of the time but you have to chop wood every time you want heat. Wood floors had been constructed which is certainly a luxury over dirt floors. Our kitchen is in the same tent as the office. There’s a propane stove/oven and plenty of food. We used paper plates so we wouldn’t have to wash them, they worked great for starting the stoves when we were done with them.

The main goal of this program was to carry out a sampling over the property. The drilling and sampling will allow us to find and evaluate economic placer deposits. Our primary tool was a Nodwell mounted drill with a 12″ auger. Some areas were sampled by excavator where the ground was not suitable to drill. Material was collected with the drill and excavator and processed on site with a small wash plant. In addition to gold values we developed an understanding of bedrock depth, characteristics and the distribution of placer gold.

Most of the gear was brought in on the winter trail. The trail is about 100km from the closest dirt road and requires the ground to be frozen and snow covered. Our two Nodwells, Toyota track truck, quads, fuel and everything was brought in over the trail. With a light load it can be travelled by snowmobile in about 4 hours each way. With the heavy equipment it takes 3-4 days. There are impromptu camps along the way but nothing with heat and very little shelter. The guys were prepared of course.

Nodwells are pretty cool machines. They were invented in the 1950s to service the oilfields of Northern Alberta and the Arctic. These beastly machines have super wide tracks to spread their weight on soft terrain. They have a unique drive system that uses rubber tires on the track. Operating one is similar to driving a tank. You pull levers to brake the track on either side. We had two of them, a big Nodwell for the drill and a smaller one for a support vehicle. The Nodwells have a lot of character, check out the yellow plywood interior and gun rack. The small one is named “Picasso”. The photos will expand when clicked.

We located and mapped several trenches that were used for ground sluicing dating back to the 1898 Yukon gold rush. The old timers diverted the creek to flow through hand cut trenches. The water was then controlled via a series of gates to strip away overburden. Sort of like hydraulicking. There’s not much left of the old workings today but it gives us an idea of where the pay streaks are.

Old Timer's Trenches — Old Timer’s Trenches

Sampling is key to any placer operation. Sloppy or inadequate sampling spells the death of many mining operations. After all you wouldn’t get married without going on a date first. We collected samples with a rugged 12″ auger drill. Each sample had a set depth interval and a measured volume. With accurate measurements we can extrapolate the sample data to evaluate the deposit over large areas. For example if we sample 500mg (1/2 gram) from 10 pails of material, that equates to just over 3 grams per cubic yard. We did have some just like that, and better.

After collection by the drill our samples were run through a mini wash plant. We were using a cool machine called “The Prospector” by Goldfield Engineering. The Prospector uses a water driven pelton wheel to create a vibration. That’s awesome because all it needs is a 2″ pump to run. The wheel rotates an eccentric weight similar to the way the a cell phone vibrates but on a larger scale. Using this machine I processed over 15 cubic yards of samples over 7 weeks.

The Prospector really eats through material. The shaker screen breaks it up almost as fast as you can feed it. It struggles when there is a lot of clay though. After each sample interval is run a cleanup is necessary. With this machine it’s a quick procedure. The concentrates from each sample are panned out with a gold pan. The gold is then dried out and weighed to be used in grade estimates.

As the summer solstice approaches the days get longer in the Yukon. In the summer the sun does not set in the Arctic it is after all the land of the midnight sun. The lack of darkness takes a little getting used to. In early May we had a couple of Northern lights shows that were pretty good. At that time there was about 2 hours of darkness where the Northern lights were visible. A week later it would no longer be dark enough.

We encountered few animals on the trip. This is described as a “hungry” part of the Yukon. One bear tried to enter our camp. It was a very large black bear, the electric fence slowed him down but it took a few bear bangers to scare him off. A huge mangey wolf casually pranced right in front of us one night. All the animals are big in the Yukon. Even the mosquitoes. They are so big that they often get up and fly away after you swat them. Unless you are willing to really smack yourself in the face, they are not going to die.

For some samples we had to use the excavator. The auger drill does not work well in areas where the permafrost has melted. We tried a few spots and the mixture of water and loose gravel would not stay on the auger flights. The excavator does not have that problem since it scoops up a bucket full of material, water and all. We used a huge 4″ pump to drain the holes first then sampled the bedrock and regolith with the hoe. The samples were of course put into pails and we measured the volume before processing.

We had a few other machines to help out as well. A couple of bulldozers, some quads, a side by side and a ’96 Toyota pickup with tracks instead of wheels. We took the tracks off once the snow was all gone using the hoe to lift the truck. Why bother with jacks when you have those Tonka toys kicking around.

The winter trail conditions rapidly deteriorated as the weather warmed up. The ground here is like muskeg with lots of water and mud. Just about everything got stuck at some point, except for the Nodwells. We had to cross a few creeks, mud and sometimes straight trough the trees.

The pursuit of gold will make men do strange things. In our case it involved a ton of work travelling over unforgiving terrain to drill holes down to bedrock. Our persistence and determination paid off though and we discovered a pay channel that extends over much of the drilled area. It is going to take some more work to map out the full extent but we already have clear evidence of a great deposit.

After 50 straight days it was time to go home. Our ride out was a DHC-3 Turbo-Otter, an impressive aircraft designed by de Havilland, a Canadaian company, in the 1950s. The Otter took our whole crew and all our gear without any issues. The turbine engine gives it the STOL capabilities to takeoff and land in a rugged bush airstrip like the one in this camp. We stopped along the way to drop off one of our guys and pick up some much needed beer before landing in Whitehorse.

I had a wild night in Whitehorse to close off the trip before heading home to BC. It was a good time in the bush but it is nice to return to the comforts of modern civilization.

Drone Mapping of a Coal Mine

PlacerGold Drones April 18, 2016drone, DSM, lidar, mining, mining drone, orthomosaic, point cloud, uav, vancouver, Vancouver drone 1 Comment

West Coast Placer was contracted to conduct high resolution aerial drone mapping of a coal mine in Alberta, Canada. We were hired by the environmental department to map two parts of the coal mine to aid in their reclamation efforts. We produced high resolution imagery and 3D models.

With our fixed wing mapping drone we were able to produce several custom mapping and imagery products. We made a beautiful high resolution orthophoto, a digital surface model (DSM) with topographical accuracy up to 30cm, a LAS format point cloud and one more 3D model. We were also able to format the 3D data so that it could be used in their mine planning software (Minesight).

Two sections of the mine were surveyed. We flew a total of three flights in the same day. The mine asked to have the main pit flown two times to confirm the accuracy and repeatability of the data. We were happy to oblige and of course the flights matched within 2cm of each other. Each section that was flown was about 2 square kilometers and our drone has the flight duration to cover each section in one flight.

The photo quality on the still photos and orthomosaic was outstanding. We were able to achieve an image resolution on the georeferenced mosaic of 4cm/pixel. That means that each pixel in the photo represents a real world footprint of 4cm by 4cm. That kind of resolution cannot be matched by current satellite imagery providers. Actually they are not even in the same league. The best satellite imagery that you can buy today is provided by WorldView-3 satellite and has a resolution of 31cm/pixel. It also costs a lot of money. Google Earth come in at a pitiful 65cm/pixel in the best locations.

Here are some examples of our imagery. First is a shot of the truck that we used as a base station for the drone. You can clearly see the truck, the two operators and even the pickets in the bed of the truck. You can click on these images for a larger view.

Here is a Google Earth image of the exact same location. I love Google and everything that they do but this image is just no comparison. To start with it’s three years old (despite the 2016 copyright note at the bottom), the mine does not even look like that today. The resolution is so poor that you can’t even tell what you’re looking at.

Here are a couple more shots from the same flight. You can clearly see this orange excavator and other details.

The 3D data is also incredible. Check out the video below for a great example of the 3D data that we produced. That video shows a virtual fly though of a LAS point cloud. LAS is the same format that LiDAR data produces.

Drone technology is just making it’s way into the mining world. With the low cost and amazing imagery it is a no brainer for many applications. In the case of this coal mine the environmental team now has excellent data to aid in their reclamation planning that would not have been available only a couple years ago. Check out this post on drone applications in mining.

Our client was very happy with the products that we produced especially for the price. Check out our Drone Services page for details on pricing.

Harrison Lake Adit Exploration

PlacerGold Trip Reports April 1, 2016gold, gold mining, gold rush, lode gold, lost mine, mining, vancouver 5 Comments

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.

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.

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.

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.

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.

How To Program Your Radio for BC’s Backroads

PlacerGold Equipment March 26, 2016baofeng, communication, FSR, programming, radio, vancouver 52 Comments

In the last couple years the BC government has changed the radio frequencies used on all the forest service roads (FSRs). They used to post the frequencies used so that you could type them in to your handheld radio. With your radio programmed you are able to communicate with other users of the road, ie. logging trucks. The radio system is primarily there as a safety procedure to prevent collisions on BC’s narrow backroads. The cryptic system that they are now using takes away that safety tool if you are not prepared.

I was caught off guard in 2015 when the radio frequency was removed from the West Pavillion FSR which I use to access some of my claims. A sign that mentioned the change was in place but it did not state the new channel.

Here is the government site showing which channels are used on which roads: Resource road radio channel maps

This post will help you program your radios for BC’s new RR radio system. You will need a few things for this:

A Radio
Programming Cable
A Computer
Radio Software

I am using a Baofeng UV-5R programmable radio. I can’t say enough good things about this radio. It is inexpensive (~$30), powerful and has lots of memory channels. The coolest feature is that they are field programmable too. More on the Baofeng UV-5R here, Gear Review: Baofeng Handheld Radio. This guide works for other radios such as a Kenwood or Motorola, although you might need different software.

The cable that I’m using is a FTDI 2-pin Kenwood style. It works for Baofeng and Kenwood radios. For this post I’m using my laptop running Ubuntu linux. But this guide will work with Windows too.

The software is really the key to the whole programming procedure. There is an excellent open source program called CHIRP which stands for CHInese Radio Project. CHIRP was designed to make it easy to program cheap Chinese radios such as the Baofeng, it also works on just about any other radio out there and its free.

OK lets get started. The first thing that we have to do is get a list of frequencies. I found them on a government website, but I’ll save you the trouble and post them right here.
You need to download and install CHIRP, on Ubuntu all you have do is run this command:

sudo apt-get install chirp

That will download and install the latest version from Ubuntu’s repositories. If you are running Windows or Mac you can download CHIRP from their website here, CHIRP Site. Installation is easy, just run the .exe file and you’re good to go.

Next start up the program, on linux you need to run it as root (AKA administrator) you can do that with the following command:

sudo chirpw

OK, now that CHIRP is started you have a few options. You can clone your radio’s existing channels and modify them. You can start a new file or load in an existing one. Lets start one from scratch. Click on the File menu and select “New”. In my example I added a couple extra channels at the top.

It’s a pretty straightforward application. The window functions a lot like a spreadsheet, there is a row for each channel and different parameters are defined in each column. The BC RR channels are pretty basic so you can ignore most of the columns. The RR channels are simplex, that means that they use the same frequency for transmit and receive. Most public channels are simplex. They have no carrier tone or any other funny business. So we just have to enter the frequencies and the name. Leave the rest of the settings at the default values.

After entering all 35 channels you are ready to load them onto the radio. To do that first connect the programming cable to the radio. It plugs into the port where you can add an external microphone. See photo below:

Make sure the radio is turned off when you connect the cable. Otherwise it could shock the memory and wreck the radio. The software will need to know which serial port you have connected to. In linux you can get that information with the following command:

dmesg | grep tty

Look for the line that looks like this:

[147117.481257] usb 2-3: FTDI USB Serial Device converter now attached to ttyUSB0

That is telling us that the programming cable is on port “ttyUSB0”. In Windows the easiest way is to look at your serial ports in the device manager.

Now you can upload the channels to the radio. Turn on the radio with the programming cable attached. Then choose “Upload to radio” from the Radio menu in CHIRP. You’ll be prompted for the serial port, in my case ttyUSB0. You will also need the radio make and model.

Once you hit OK, the upload will begin. You’ll get a nice progress bar to show you how its going.

That’s about it. Make sure that you turn off the radio before you disconnect the programming cable. Now you’re ready to hit the back roads and communicate with other travellers.

Update on Laws Regarding Programmable Radios 2021

There has been a lot of feedback about this post stating that Baofeng radios are illegal, you need a license, and things of that nature. We were recently contacted by a representative of Innovation, Science and Economic Development Canada (ISED, formerly Industry Canada) and we’ll share the factual information here.

First of all, it’s not illegal to program your own radio in Canada. ISED wants you to have a license for the channels that you are using though.

Most of the regulations in the Radiocommunication Act depend on two principles.
1) Radio spectrum is a limited resource
2) Prevention of “Harmful Interference”

ISED likes to state that the radio spectrum is a limited resource. What does that really mean? Well, there is a limit to the number of frequencies that can be used in a particular area without having overlapping signals. Spectrum management is important in congested areas to maintain quality for all users. This is one of the main goals of ISED. They regulate a lot of radio stuff beyond VHF frequencies on backroads, including cell towers, police and military communication, maritime communication, aviation, and other wireless transmissions. Managing wireless radio is important for our society to function properly. Calling it a “limited resource” is a little weird but management of the frequencies that are being used is important.

According to the ISED representative that contacted us the reason for most of the regulations is to prevent harmful interference. This is the definition that was provided by ISED:
“Radio interference is an adverse effect that could degrade, obstruct or interrupt the use or functioning of a radio. Radio interference can happen for a variety of reasons, and most of the time they are unintentional. In certain situations, the interference can be harmful.

Public safety agencies are critically dependant on their radio systems to provide services to the public. When their radio systems are interfered with, the ability to protect and serve the public is impaired, leaving human lives and property at risk. Non-public safety operations can be negatively impacted by degradation or repeated interruptions to radiocommunication systems. In some cases the interference may not be harmful, but it could still reduce the quality and usability of a radio system. When providing access to spectrum and regulating its use, ISED seeks to maximize the economic and social benefits that Canadians derive from the spectrum, and minimizing interference is a key part of this objective.”

The Radiocommunications Act defines harmful interference as follows:

harmful interference means an adverse effect of electromagnetic energy from any emission, radiation or induction that

(a) endangers the use or functioning of a safety-related radiocommunication system, or

(b) significantly degrades or obstructs, or repeatedly interrupts, the use or functioning of radio apparatus or radio-sensitive equipment;

OK, that’s some background on the laws. So what does that have to do with Baofeng radios and using them to communicate for safety reasons on BC’s backroads? The short answer is nothing.

If a radio is programmed correctly it won’t interfere with other radios and won’t cause “harmful interference”. A Baofeng radio is fully capable, and often much more capable, than a Kenwood, Icom or Motorolla that you can purchase from a certified radio shop. We’ll see some of the specific laws below.

Radio equipment in Canada requires licensing. There are two areas where a license is needed. The radio itself needs to be certified, this is usually done at the manufacturer level. Radios that aren’t certified by the manufacturer are required to have a license issued for its use. The criteria for obtaining such a licence is available here: RSS-119 – Land Mobile and Fixed Equipment Operating in the Frequency Range 27.41 – 960 MHz.

Baofeng radios cannot be licensed in Canada because they allow the user to program frequencies with external controls. That goes against Section 3.2 of the Radio Standards Specification

3.2 Transmitters With External Frequency Selection Controls
In order to prevent radio interference caused by end-user transmissions on unauthorized frequencies, transmitters with external frequency selection controls and/or frequency programming capability shall conform to the following:

(a)Transmitters with external frequency selection controls shall operate only on authorized channels which have been preset by the manufacturer, equipment supplier, service technician or maintenance personnel.

(b)Transmitters with frequency programming capability must have at least one of the following design characteristics, which prevent the user from altering the preset frequencies:

Transmitters with external controls available to the user can only be internally modified to place the equipment in the programmable mode. Furthermore, while in the programmable mode, the equipment is not capable of transmitting. The procedure for making the modification and altering the frequency program is not available to the user of the equipment.

Transmitters are programmed for frequencies through controls that are inaccessible to the user.

Transmitters are programmed for frequencies through the use of external devices or specifically programmed modules that are available only to the service technician or maintenance personnel.
Transmitters are programmed through cloning (i.e., copying a program directly from another transmitter) using devices and procedures that are available only to the service technician or maintenance personnel.

Since the Baofeng radios cannot be licensed use of these radios contravenes subsection 4(1) of the Radiocommunication Act which states:

4 (1) No person shall, except under and in accordance with a radio authorization, install, operate or possess radio apparatus, other than

(a) radio apparatus exempted by or under regulations made under paragraph 6(1)(m); or

(b) radio apparatus that is capable only of the reception of broadcasting and that is not a distribution undertaking.

According to ISED violation of Section 4(1) can carry a potential fine up to $250. Although that is really just academic since they don’t actually enforce that law.

According to ISED, for a radio using RR and LADD channels, a radio license is required. ISED will only issue a radio license for a radio that is certified and meets the certification requirements. A certified radio should display an IC number on its label (usually this is next to the FCC number). The conditions of use for RR and LADD channels are noted here: RR — British Columbia Resource Road Channels and B1 — Western and Northern Canada Mobile-Only Frequencies.

An ISED radio license costs $42.65/year per radio and is valid from April 1 to March 31 (the following year). This is a flat fee and not dependant on the number of channels.

Operating without a license can theoretically face fines if ISED finds out that you are doing so and has your contact information. You can see the potential fines under the Administrative Monetary Penalties (AMP).

According to the AMP penalties, operating without a license carries a potential fine of $1,000 for the first offense and up to $2,000 for the second offense.

Here’s the kicker though and this is really important, ISED depends on “voluntary compliance”. I asked the representative from ISED for evidence of fines that have been given out in the past and he confirmed that they don’t actually give out fines. They have no means to enforce these laws and do not check what radios people are using. There have been rumors on certain 4×4 groups that ISED sets up roadblocks on FSRs to catch people with illegal radios. Those rumors have been confirmed to be false by the ISED.

It seems odd that the FSR roads are open to the public but the Canadian government is limiting access to radio use by means of a licensing program. It’s also odd that they go out of their way to prevent users from using an inexpensive field-programmable radio. ISED’s explanation of “harmful interference” is ridiculous. In reality, you are protecting yourself and other road users by having communication available.

In summary, there are laws regarding field-programmable radios but they are not enforced. Similar to how there are laws regarding downloading movies or consuming fake maple syrup (actually, that law was repealed in 2019).

To get set up with a compliant radio in BC will typically cost about $1000 for something like a Kenwood NX1200 plus programming costs. Plus $43/year for the rest of your life. In contrast, you can get a BaoFeng UV-82HP for less than $100 CAD which is a better radio and no additional costs. The truck-mounted version is also a very good choice (BTECH Mini UV-25X4).

When driving on backroads in BC it is essential to have a radio. There are loaded logging trucks coming around tight corners and they will not know you’re there unless you have an appropriate radio and are calling out kilometers. A programmable radio such as a Baofeng will not cause interference of any kind and will allow you to communicate safely for a reasonable price. If you’re the kind of person who loses sleep because they downloaded a movie off a BitTorrent site then you should probably get an ISED radio license and a certified radio. For everyone else, there are great options out there and you can use this useful guide to program your own radio.

It should be noted that there are serious radio laws that are actually enforced. Such as transmitting on police or emergency bands. Don’t ever do that, as a joke or otherwise. It is perfectly legal to listen on those channels but very much illegal to transmit.

Also keep in mind that RR and LADD channels are for professional use and your own safety, not for chit-chat or talking to your buddies. There are thousands of channels and if you have a programmable radio you can set a special channel for you and your buddies while keeping the RR channel open for legitimate use.

Introducing WCP Placer Mining Club

PlacerGold Services March 15, 2016Claims For Sale, gold, gold mining, gold pan, gold panning, mining, placer, placer claim, Similkameen, Tulameen, vancouver 23 Comments

Hey guys, I am pleased to announce that West Coast Placer is starting a mining club. There have been a number of inquiries from people who want to prospect and mine on WCP claims. So we’re starting a club that will provide the opportunity for members to use our claims.

Club members will have access to all of West Coast Placer’s claims. Currently that includes 12 placer claims and two mineral claims in BC. Access to some of my partner’s claims is also available. We have claims all over BC including the Tulameen, Similkameen, Fraser River, Cariboo and Kootenays.

Members will be able to work the claims as if they own them. You can run a sluice, pans or whatever you want. Of course members can keep all the gold that they find.

You will be able to camp on the claims in tents or with an RV (where accessible). Family members are automatically included in your membership. Gold panning is a great activity for the whole family, kids love it. You can bring your friends too, the more the merrier.

There are a few obligations that will have to be met.

The first rule of prospecting club is you do not talk about prospecting club. Just kidding I had to throw that in there.
Members must follow all the regulations regarding placer mining in BC. If you don’t know all the regs don’t worry, information will be provided.
Activities will have to be recorded. This will help with our reports to the MTO. It’s not much work, just keep some notes on the work that you do. Keep track of things like, hours spent working, size and location of holes, and take pictures. This information will also be shared with the group.
If you plan on running a sluice or highbanker you will need to have a Free Miner’s Certificate. If you need help getting one, just ask.

There will be an annual fee of $50. Why a fee? That is required to limit club membership to people who are truly interested. $50 is pretty much free compared to similar clubs. The others are looking for $300 and up. We’re not interested in making money off of memberships.

As a member you will also have the opportunity for instruction in the art of gold prospecting. This is great for novice miners. You can join myself and more experienced members on prospecting trips. That is the best way to learn, you can watch youtube videos and read books all day but nothing beats hands on training.

Members will have support from experienced miners. You can even get help with your own MTO reports for your own personal claims. You can ask advice at any time and we’ll try our best to get back to you as soon as possible.

As a member you will be entitled to a discount on the purchase any of West Coast Placer’s claims. There will be more perks as the club grows.

Update 2021
The club has been active for 5 years, we have a good group of recreational miners. We are still accepting applications for new members.

If you are interested please send an email through the WCP contact form on this link, Contact Form. Explain why you want to join the club and we will consider your application. Not all applications will be approved.

We will not accept applications made through the comments section. See instructions above.

Mining the Ocean Floor with Robots

PlacerGold Drones, Science March 7, 2016aerial imagrey, drone, Ferromanganese Crust, geophysics, gold mining, gold mining equipment, lode gold, magnetometry, mining, ocean, placer, Polymetallic Nodules, SMS, uav, vancouver, Vancouver drone 0 Comment

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.

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.

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.

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.

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.

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.

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.

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.

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.

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?

How Much Gold is Left on Earth?

PlacerGold Science January 18, 2016core, geology, gold, gold mining, gold rush, lode gold, mining, placer, placer claim 22 Comments

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.
Peak 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?

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.

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.

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.

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.

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.

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.

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.

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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