Mines are being reopened as gold fever sweeps state

Gold fever is sweeping Arizona.

Mining companies are scouring the earth, looking for new deposits and working to reopen venerable mines, some with histories that date to territorial days.

With the yellow metal selling for just under $900 per ounce, more weekend gold diggers are heading for the hills with pans, picks and metal detectors.

Prospecting outfitter Promack Treasure Hunting in Apache Junction has seen its business triple in the past year, and membership in the Superstition Mountain Treasure Hunters gold-panning club has grown to 400 from 70 in the same period.

Club leaders say members can return from a weekend of prospecting with $1,000 or more in gold.

"I wouldn't recommend quitting your day job, but you can make some real money out there," "Minnesota" Ray Ose said.

Ose said he has been prospecting in Arizona since 1948, when he and his father came out from Minnesota to search for the Lost Dutchman Mine in the Superstition Mountains.

Investors increasingly have looked to gold as a haven because of falling stock prices and the real-estate slump.

Demand has pushed up the price of gold as much as 45 percent in the past 12 months and brought a dozen or so mainly Canadian mining companies into the state.

While the state is known as one of the world's top copper-producing regions, it also has a gold-mining legacy.

Gold has been found at thousands of locations around the state, with the largest concentration of claims and mines in Yavapai, La Paz, Mohave and Pima counties. Since 1860, Arizona has produced more than 16 million ounces of gold, valued at today's prices at about $15 billion. It also is home to one of the world's best-known "lost" mines: the enigmatic Lost Dutchman.

All of Arizona's gold mines eventually closed as ore bodies played out or price declines made them unprofitable. The last, the Gold Road near Oatman, closed in 1998.

But interest is surging again, and a lot of the activity is focused in La Paz and Mohave counties in western Arizona.

There, American Bonanza Gold Corp. of Vancouver, British Columbia, is working to reopen the old Copperstone Mine, 10 miles north of Quartzsite. Bonanza President and Chief Executive Brian Kirwin said the group has identified a high-grade gold deposit of about 400,000 ounces and has made new discoveries nearby that are being evaluated.

Bonanza is converting the original open-pit mine, which produced 500,000 ounces of gold before closing in 1993, into an underground operation.

The company hopes to have the Copperstone back in production by 2010, with a full-time crew of about 100 miners.

Kirwin said the company also is exploring other promising sites along "Walker Lane," a narrow gold-bearing strip that runs through Arizona, California and Nevada.

"There are a lot of potential gold mines in western Arizona that have been overlooked for a long time," he said.

Other companies prospecting for gold or looking to reopen old mines include:


• Columbus Gold, exploring four projects in western Arizona.


• Patriot Gold, drilling at the Moss Mine near Oatman.


• Tonogold Resources, which optioned the Deeman mine property and is exploring the site west of Kingman.


• Sage Gold, which optioned the Gold Hill property and is exploring the site in Maricopa County north of Phoenix.

Investment capital

"There are a lot of people out there looking," said Nyal Niemuth, chief mining engineer with the Arizona Department of Mines and Mineral Resources.

The activity has been spurred by soaring prices for copper, silver and gold. Since 2002, gold prices have risen to more than $900 per ounce from $280, and copper has gone from 60 cents to more than $3 per pound. Silver prices also have increased substantially.

The high metals prices are making old mines economically viable again and are attracting investment capital, which is helping drive exploration.

"There are a lot of people who want to put money in mineral exploration," said Andy Wallace, owner of Cordex Exploration Co. in Reno.

Wallace is exploring several Arizona gold prospects for Vancouver's Columbus Gold Corp.

Arizona Deputy Land Commissioner Jamie Hogue said applications for permits to explore for minerals on state trust lands are up significantly. The 12-month permits cost $100 and cover 20 acres.

Hogue estimates they will bring the state $300,000 in revenue this year, up from $96,000 in 2006. If something is found, the discoverer then has to negotiate a mineral lease before any mining can occur.

Unlike federal leases that require no royalty payments, Arizona collects an excise tax on the value of the extracted ore.

Mining claims on federal land in Arizona also have risen sharply.

Weekend prospectors

While high metals prices have drawn companies to the state, they also have sparked an interest in weekend prospecting and treasure-hunting.

Membership in gold-panning clubs, which often own their own claims and leases, has skyrocketed.

"These days, our store is constantly full of people," said Dan Ware, owner of Promack Treasure Hunting. Promack sells gold pans, scales, sluice boxes, rockers and other weekend gold-mining supplies.

Gold-panning is allowed on Bureau of Land Management and U.S. Forest Service land where there are no existing claims. Determining ownership of surface and mineral rights can be a complex process, however.

The Lynx Lake Area near Prescott has been set aside for recreational gold-panning. Gold pans and hand tools can be used, but not mechanized equipment. No permit is required.

Weekend prospectors can pick up bits of ore to turn into cash, but many dream of stumbling into a bonanza, as legend says Phoenix prospector Jacob Waltz did in the 1880s.

Nicknamed "the Dutchman," Waltz died penniless in 1891 but told a caretaker about a fabulously rich mine he had discovered in the Superstition Mountains east of Apache Junction. People have searched for the mine since, and tales of mysterious deaths, peculiar signs and enigmatic stone maps have embellished the story.

The Superstition Mountains have been declared a wilderness area. Mining and motorized equipment are prohibited today, as is taking any artifacts. But the lore of the Dutchman has made Apache Junction sort of a treasure-hunting mecca.

Although some believe the Lost Dutchman is a myth, Ose is convinced it is real.

"I can tell you where it isn't," he said, "but it's out there somewhere."



Reach the reporter at max .jarman@arizonarepublic.com or 602-444-7351.