"There isn't one man in America, if he's got anything inside him, who wouldn't want to be here with us" ~JackHave you seen that show on Discovery Channel- Gold Rush Alaska? The show follows an economically distraught group of men who head to Alaska to strike it rich mining gold. The show appeals to me both as a mining engineer and as an adventurer (and I can't seem to get enough visual stimulation of the Alaskan Wilderness). I love what Jack said in the opening episode, "There isn't one man in America, if he's got anything inside him, who wouldn't want to be here with us." I sense that they felt the same way the earlier pioneers did when they left their homes to populate the West in search of Gold. The the anticipation of striking it big, the stunning and unfamiliar country, and the element of fear surely fired up those first gold rushers. Most failed to make any money at all, but I bet they had stories to tell and little regret for going after it.
I enjoyed watching the show. How could you not with all the guns, gold, and glory. I really, really wanted these guys to succeed, but my sensible side kept telling me that they were doing it all wrong and striking it rich would be nothing short of dumb luck. So much potential seemed to be wasted.
3 lessons they should have known beforehand but learned the hard way:
Know what your're digging. For the most part, they were just digging holes with no real rhyme or reason. It was a poke and hope approach. They must have said "just a few more feet and we'll hit the good gold" about a million times. How could they know? Lets see...it cost them $1000/day to mine. All they need is 1 oz of gold per day ($1400) to make a profit. Going a step further, they put 1000 tons per day through their processing plant. Therefore, to make profit they would only need a gold grade of 1oz per 1000 tons. That is an extremely low grade. Chances are the gold grade is much higher in areas of their claim, possibly 1 oz per ton or more but who really knows? That is the problem. What they were doing is guessing, gambling even. In modern, large scale mining operations, you know what is in the ground and have a computer model to guide you. Companies spend millions of dollars on exploration drilling so they don't waste time digging where they shouldn't be. It takes all the fun out of it then, doesn't it?
Short haul is king. Towards the end of their mining season, they shortened their haul road significantly. Why weren't they doing it all along? This is a pretty basic concept in mining. If you can decrease the amount of time it takes to get a load of ore from the mining pit to the processing facility, you can get more loads. More loads=more money...assuming there is gold in the dirt to begin with.
It takes big time capital investment to run a mine- They dumped over a quarter of million dollars into starting their small scale gold mine and essential have nothing to show for it. They spent money frivolously and borrowed without hesitation. The capital to start a modern, "real" mine could exceed 1 billion dollars.
I applaud them for their efforts though. They took a chance and went all in. Despite many failures and setbacks, they learned from their mistakes. A few more seasons of mining and they will be raking in the dough. Gold prices are so high right now that even modest success could bring significant money. It is a perfect time to try one's luck at gold mining.