Psst, wanna buy a gold mine?
Mark Twain is credited to have said “a gold mine is a hole in the ground with a liar standing on top.” In my experience, this isn’t that far from the truth. In the early 1990s, BreX, a Canadian mining company, made announcements about a fabulously rich gold discovery in Indonesia. The announcements continued until many investors bid the price of the stock from a few pennies to over $200 a share. Even the government of Indonesia wanted a piece of the action. When a major mining company wanted to buy the discovery, it sent geologists to verify the find and discovered that it was a scam. Billions were lost when the stock crashed and it took until 2006 for the gold investment industry to recover. The president of BreX disappeared, later to surface in a Caribbean country with no extradition treaty with Canada. If he hadn’t died from a heart attack while partying too hard, he’d still be free and enjoying the sun and sand. The geologist involved in the scam suffered a worse fate; he was pushed out of a helicopter while flying over the jungle.
I was working in South America at the time of BreX and my boss would harass me by asking, “why don’t you find a deposit like that?” I’d tell him that it sounded too good to be true but what does a lowly geologist know. As a consultant, I was called to evaluate several mining properties in Mohave County that turned out to be scams. I wasn’t liked by some in the Mohave County mining fraternity because I’d reject their properties even though they said their mines would be bigger than Mineral Park.
One of the properties I evaluated was in Detrital Valley downstream from the White Hills mining area. The promoter was selling shares in his venture to recover all the silver that had washed down from the mountains. He claimed it was all under the surface in Detrital Valley. He had a secret process to recover the silver and the gold and platinum that would make this the richest mine in all of North America. I reported to the investor that hired me to run, not walk, away from this “great opportunity.”
How did I know this was a scam? First of all, only rarely does silver make placer deposits. Unlike gold, silver is soluble under the right conditions and seeps into the ground in solution, depositing on other sulfides, so the idea of a large placer silver deposit made no sense. Secondly, platinum doesn’t occur in the rocks that outcrop in the White Hills.
Most mineral deposits are genetically associated with certain types of rocks - diamonds with kimberlite, copper with quartz monzonite, nickel and platinum with ultramafic rocks. When a prospector brings me a sample and claims that it has platinum, I always wonder how many catalytic converters he crushed to get enough platinum to “salt the sample” (adding gold, silver or platinum to a worthless sample to make it assay as valuable).
One of the most common mining scams is the one where the prospector has a type of gold that can’t be fire assayed. It can only be detected by using his “secret method.” I’ve been told that this type of “ore” can be found in the Gold Basin area, the Cerbat Mountains and well, essentially everywhere there are gold miners. The fire assay method has been around since Biblical times, references to fire assaying can be found in the Bible. Fire assaying is still in use today. I tell the prospectors that instead of mining the ore that can’t be fire assayed, they should submit it to the United States Geological Survey and collect the $1 million dollars the USGS offers for such an ore. For the many years that the USGS has made this challenge, no one has collected.
Arizona is famous for the Lost Dutchman Mine. It’s supposedly lost in the Superstition Mountains northeast of Phoenix. I spent some time prospecting in the Superstition Mountains and found no gold but there’s lots of copper in the Superior and Globe areas. What’s interesting is that at the same time the Dutchman was traveling to Phoenix from the east, the Vulture Mine was operating near Wickenburg, west of Phoenix. What if the Dutchman was in on the stealing at the Vulture Mine? Taking the gold from his partners and traveling around so he entered Phoenix from the east to throw off suspicions. I wonder if the Dutchman knows he lives on in the mystery he created rather than the gold he stole?
The honor for the start of the Great Diamond Hoax of 1872 also belongs to Arizona. Two men found quartz crystals near the town of Ft. Defiance, NE Arizona. Finding out that, although the crystals looked like diamonds to them, the crystals were worthless. They cooked up an elaborate scheme to sell diamond claims to wealthy business owners in San Francisco, California. A great read on the web are the accounts of the “Great Diamond Hoax.”
The next time someone wants to sell you a gold mine where the gold can only be assayed by his secret method and, by the way, it has platinum too, give me a call. I also have a gold mine to sell.
Check out the AZ Geological Survey website for more information on Arizona mining scams: http://repository.azgs.az.gov/category/thematic-keywords/mining-fraud
