Buying a placer claim or investing in a placer mining property comes with plenty of risks. You need as much information as possible about the mineral deposit in order to minimize those risks. The easiest and best way to get the required information is with a mineral report. Mineral reports, as well as the property itself, should be evaluated before buying or acquiring an interest in a placer property or mining operation. Can you believe everything in the mineral report? The only real way to evaluate a placer property properly is to walk as much of it as possible and see for yourself.
What we are all looking for are sleepers that have not been discovered. Even after 150 or more years of mining and exploration, there may still be sleepers out there that could be bonanza grade but have not been substantially mined. My goal is to help you recognize a placer property that has potential for a successful mining venture, to point out what questions you should be asking and the telltale evidence to look for.
The evaluation should begin with the mineral report itself if there is one. Does it answer your questions? You should have a whole list of questions. Obviously the most important question about any mining property is, “Can I make a profit by mining it?” Closely related to this is,”What is the average grade of the ground?” How a mineral report answers this second question will make or break the property. This is of the utmost importance to the buyers and the sellers, so beware of deceptive wording. If there is misleading wording anywhere, it will be in the sample data and in reserve/resource estimates.
The potential buyer should try to figure out the mining and prospecting history. How much has been mined and how much is left to mine? Are there values left in the mined ground and what is the tenor of the virgin ground? You want to see a lot of samples that were properly taken and accurately represent the material to be mined. If the property is not a producing mine, then there may not be a lot of sample data. There may be only a few random pan samples taken from a gravel bar or shallow pits.
If the property has a history of production, then there should be adequate sample data and assay reports. So the amount and quality of sample data can depend on the degree of development of the property. Also, the amount of sample data can reflect the professionalism or lack of it on the part of the mine owner.
What type of placer deposit is it? Is it a stream or beach? If it is a stream (the most common type), then what type of stream? In a desert, a stream placer can be a debris flow or a typical stream. The difference it makes is debris flows are dirtier and have the gold particles scattered throughout, while a typical stream placer is more likely to have a bedrock concentration as well as scattered gold and less mud.
Are there hand-stacked rocks and old mining equipment as in figure 1? Are there open shafts and prospect pits as in figure 2? Is bedrock exposed in the bottom of the valley? Are there old ditch lines on the hillsides? Perhaps some unnatural looking deposits (figure 3) scattered about the landscape? If miners were present, they probably lived in a cabin and had campfires. Is there evidence of human activities, new or old?
While you are on the ground, take notes on the thickness of overburden, the thickness of gravel layers, the depth to the water table, and what the bedrock is doing. Is there enough water for mining? Are there boulders? Would the amount of clay be a problem?
Unfortunately, reclamation destroys much evidence of past mining and prospecting. Reclamation has been required for about forty years. Depending on the vegetation and climate, it is usually possible to recognize the younger vegetation from the older, natural vegetation. Often certain plants are the primary succession plants for a particular climate. In fact, these are usually the same plants that the government agencies are recommending or requiring in your area for present-day reclamation. If you can differentiate these primary succession plants from the long-term, dominant species, it can be very helpful in knowing what was reclaimed and what has never been mined.
Reclamation—or at least revegetation—can happen naturally in minescapes. If it happened long enough ago, it can be extremely difficult to recognize past mining. In these cases it may be necessary to dig down a few feet to get a look at the gravel or soil. Is there a thick, well-developed soil layer? Respread soil tends to be thinner and have a sharp contact with the underlying material (tailings). Tailings usually show no horizontal layering; rather, the bedding will be steeply sloping as in figure 4. The fine tailings in figure 4 were dragline dumped and were probably wet at the time, so they flowed out at a gentler slope than dry tailings would. If this pile was sheared off during reclamation, it would still have inclined bedding beneath the sheared off material.
How much of the ground has been mined and how was it mined? Older mining done before the days of hydraulic excavators is to our benefit because they could not rip bedrock as effectively. Dragline miners used only the weight of the bucket and pulling for ripping bedrock. They could not increase the weight of the bucket by downward pressure as hydraulic excavators can now do. If bedrock was soft, then draglines may have done a good job of cleaning bedrock. Otherwise, they left gold on bedrock.
So, what is the bedrock like? How rugged and hard is it? How deep is it? Does bedrock appear to be shaping the stream valley by sticking into or out of the valley floor? Is the bedrock outcropping on the property? What is the disposition of the bedrock? What is the composition and structure of it? For example, if the bedrock is nowhere to be seen, then bedrock is likely to be deep. If it is a the surface, what is it doing? Does it jut out into the valley floor as a natural riffle? If the bedrock in the sides of the valley is highly fractured, it is likely to have fracture traps under the valley fill. If bedrock is limestone or marble, it could have big holes and even caverns beneath the valley fill sediments. Is bedrock under the water table? Answers to these questions can provide valuable information about the potential value of placer ground.
Is there mining on other properties close by? Are they placer or lode mines? What information is there about their mining activities? Have the nearby benches been mined? What has been mined besides gold in this area? Sometimes you can find answers to these questions with some library research in publications by the US Geological Survey, the US Bureau of Mines, and your state mineral research bureaus.
It is a good idea to calculate a rough estimate of the volume of the mineral resources while there on the ground. This is best done with an accurate topographic map and recent aerial photos. Google Earth and Flash Earth (www.flashearth.com) can be very useful for figuring the area of the unmined and mined ground. Another method is pacing or “eyeballing” the width and the length, but coming up with a depth is the “iffy” dimension. The claimant/miner may have some numbers about the depth to bedrock. If nothing else, use the vertical reach of a likely to be used excavator. When you have a volume, it can be multiplied by the average sample grade for the ground to yield a very rough estimate of how much gravel can be mined and how much gold can be produced.
Sampling as much as you can while in the field is a given. At a minimum, pan sample every place that is convenient and where the claimant/miner recommends to sample. When sampling such sites, scrape off a few inches of the surface in order to minimize the risk of salting, and sample adjacent areas to those recommended by the owner.
Look at gold in the supplied samples. Is it similar enough to come from one mine? If the gold sizes and shapes vary from coarse, angular nuggets to small, smooth flakes, you should be suspicious—it may be from more than one source. The same is true of different colors of gold. It is possible there was no tampering with the samples, but you need to be aware of the possibilities.
Shoot lots of pictures of everything relevent to mining. Include landscape shots too because you may need all these refreshers when making your decision later on when you are back home or at your office and when other people are helping with your decision making.
Finally, take notes about the access to the property. Is there timber that must be dealt with? Are there electric lines nearby? Are the elevation and climate going to be a factor? Are there fish in the creek or other critters that may cause problems?
The decision-making process when examining a placer property can be complicated and technical. You need all the information you can get to decide about investing in or buying a claim or mine. Answering these questions should help you in your evaluation.
The metal is expensive, not because it is rare but because of the expense to produce and work it. The minerals mined for titanium are all oxides, unlike many base metals that are mostly mined as sulfide minerals.
November 2014 As a plaintiff in one of the lawsuits, I’m not allowed to talk about specifics in the court-ordered negotiations currently underway in San Bernardino. However, I do want to let you know we are making progress…