Assignment 7

Renewed interest in California gold mining grows

Thursday, February 21, 2013

More than half a century after the state's big mining operations closed there is renewed interest in California gold. Its value has shot through the roof and so has the momentum to bring back mining operations. The first of them is about ready to start up. In this Assignment 7 report, we take you inside a genuine gold mine.

In the Sierra foothills, there are still reminders of California's golden past. A stretch of Amador County was called "the mother lode" for a reason -- more than 7.5 million ounces of gold were mined there. But by the 1950s gold prices dropped and the last of the big mining operations closed. Towns built by prospectors catered mostly to tourists. Now the miners are coming back.

"We believe there's a lot more gold that just hasn't been found yet," said Leanne Baker from the Sutter Gold Mining company.

The Sutter Gold Mining company has set up shop in Downtown Sutter Creek.

"We are in the heart mother lode. We are in the 10-mile stretch of the mother lode that produced 60 percent of all the gold produced," said Baker.

The company is just weeks away from starting full-scale mining. They'll begin at the Lincoln Mine off Highway 49, in the middle of a four-and-a-half mile stretch of the mother lode the company has the right to mine. About 3.5 million ounces of gold have already come out of this land and the company knows there is more.

"We have a reserved estimate of approximately 650,000 ounces," said Art Campo, a chief geologist.

With gold today hovering around $1,700 an ounce, they're convinced they are sitting on more than $1 billion in gold. They use explosives to dig mine shafts and each blast puts them five-and-a-half feet closer to the gold.

"Do you have earplugs on?" said general manager Ed McGoldrick said to our photographer.

Underground, miners dig deeper. They will tunnel hundreds of feet.

"This is typical of the type of vein structures that we follow," said McGoldrick.

The gold is often small and hard to see.

"A lot of times you'll see a little piece of gold that will sometimes be sticking out," said McGoldrick.

There are 150 tons of rock will be trucked out of the mine and sent to a mill for processing. Today they can get gold the 49ers couldn't even see, gold as fine as talcum powder.

"The efficiency of the recovery is about 30 percent more efficient than what the old timers could have done," said Paul Danio, a mill designer.

Those old time mines devastated the environment, leaving a toxic mess. The regulations on new mining are so stringent it took nearly three decades for the mining companies to get more than 40 environmental permits to start work.

"It's really exciting to bring mining back to this area. It's going to provide a lot of new jobs to the area," said Ed McGoldrick.

The unemployment rate in Amador County was nearly 12 percent last year. When the mine is fully up and running, 110 people will work here. And the new gold rush is already spreading to other industries that support the mine. County Supervisor Brian Oneto says businesses from catering to construction have seen increases.

"And that's where there's a lot of additional employment and monetary benefit to the community," said Oneto.

And there's more than just jobs -- there's also the return of a legacy.

"It's exciting when you walk into the mines and you can actually see free gold in the wall," said maintenance superintendent Pat Carney.

"It's neat to bring back to life, to be able to really do something historical, but in a modern way," said associate mine engineer John Gates.

The Sutter Gold Mining Company has already poured its first ceremonial gold ingot. They hope to be up and running at full-steam by the end of March.

Written and produced by Ken Miguel

(Copyright ©2014 KGO-TV. All Rights Reserved.)

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