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March 16, 2008

By Paul Fattig

Mail Tribune

Gold miner Tom Kitchar didn't exactly kick up his heels upon learning the price of gold has reached a record-high $1,000 an ounce this week.

Yet he was all smiles. After all, he knows it will give a boost to the local economy, an important point in Southwestern Oregon where the unemployment rate was 9.5 percent in January.

"But for me, it's never been a dream about striking it rich," said the seasoned miner who has placer claims near Holland, a remote hamlet half a dozen miles southeast of Cave Junction.

"It's been more about the lifestyle it allows me to live — I work for me," he added. "I'm not getting rich, but I'm living."

But he allows that with the high price of gold, living could get just a bit easier for those who toil for the precious yellow metal.

Agencies that oversee mining in Southwest Oregon report a surging interest in both recreational and industrial mining since gold prices shot up. Local businesses associated with the mining community also say business has increased with the record-high prices.

The region has a history rich in gold. It was first discovered in the Oregon Territory in the Jackson Creek drainage in what is now Jacksonville in 1851.

In less than a year gold was found on Josephine Creek in the Illinois Valley. The long defunct town of Waldo in the southern portion of the Illinois Valley was first known as Sailor's Diggings after sailors jumped ship in Crescent City to head for the gold fields of the Oregon Territory.

The record price has brought a rush of modern-day argonauts to the Armadillo Mining Shop in Grants Pass which sells mining equipment. It also buys the lion's share of raw gold brought in from the region.

"There is no doubt it's been fueled by the price of gold at $1,000 an ounce," said owner Mike Higbee, noting the business the shop is experiencing now typically doesn't occur until at least May.

"Most people want to know where to go and have a chance to find a little gold and do it legally," he said.

From his perspective, the high price of gold couldn't have come at a better time.

"With the economy the way it is in Southern Oregon now, a lot of people are out of work," he said. "In the past, the majority of customers did it for fun and recreation. If they got paid for it, they were tickled to death.

"But, at $1,000 an ounce, you can go out and pan and sluice and make better than minimum wages," he said.

Experts stress it takes a willingness to work as well as a bit of luck to earn a living at mining.

"The majority of the mining community does small-scale mining, a lot of mom and pop operations, weekend-type operations," said Higbee who has several placer mining claims along the Klamath River in Northern California.

Over at Rogue Valley Coin Exchange in Medford, gold buyer John Cotta is also seeing an increase in raw gold as the price increases.

"Little by little, we're seeing more nuggets come in," he said.

Both businesses — there are several others in the region that also buy gold — pay 75 percent of the daily gold price for raw gold.

"Normally, that price applies to fines," Cotta said, holding up a vial containing perhaps a quarter ounce of small flakes of gold. "With bigger nuggets, the price is negotiable."

He displays several nuggets, most of which came from Southern Oregon or Northern California. But the largest, a huge 7-ounce nugget, hailed from Australia, he said.

Although there has been a recent boost, he figures there was a greater volume of gold brought in 20 years ago, albeit at a cheaper price.

"It seems like there were more miners out there then, and the ones who were there are older now," he said. "It's hard work. A lot of the older ones may not be able to go out."

He estimates up to a dozen miners periodically drop by to sell their gold at the Medford store.

"Most of the miners, when they find a big one, they don't like to let go of them," Cotta offered, noting it gives them bragging rights in the mining community.

"A lot of the big nuggets were found years ago," he added. "But there is still gold out there. With big storms and the like, things get turned over in the streams. Sometimes they'll find a pocket that hasn't been disturbed before. It is definitely possible to still find big nuggets of one, two, three, four, five ounces or more. Now and then that happens."

When would-be gold panners come into the Armadillo Mining Shop in Grants Pass, Higbee often suggests they try their hand on state land along the Rogue River from Gold Ray Dam down to the Applegate River which is available for gold panning.

"You can't file a claim on the property but you can pan and sluice," he said.

However, he cautioned the river corridor where recreational mining is allowed does not include private land along the river or other public lands that have been withdrawn from mining activity.

Panning and hand sluicing is generally allowed year-round on many public lands, although there are seasonal restrictions in many areas. The use of a suction dredge, which requires state permits, is restricted from July 1 through Sept. 15 to protect salmon spawning grounds.

Anyone interested in mining is encouraged to find out where and when mining is allowed by contacting state or federal agencies who have jurisdiction over a specific area.

Back at his claim near Holland, Kitchar (president of the Waldo Mining District, established in the spring of 1852 when Oregon was still a territory) figures there are still a few large nuggets to be found.

"The biggest I've found was a nugget just under half an ounce," said Kitchar, who has been a gold miner for more than two decades in Southwest Oregon. "But a couple of years ago, a guy on the same creek I've been mining on found a nugget that weighed a little over five ounces."

That would be on the east fork of Althouse Creek, the very same drainage where a 17-pound gold nugget was discovered in 1859, he said.

"I hoped they missed at least one," Kitchar said. "I'd like to find one big one. Actually, I'd like to find two big ones. I'd like to keep one and sell the other."

Reach reporter Paul Fattig at 776-4496 or e-mail him at pfattig@mailtribune.com.

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