the gold state

By the numbers, gold is king in the Silver State.

By CHARLIE JOHNSTON | September/October 2009

More than 150 years ago, the discovery of gold on the western flanks of the Sierra Nevada encouraged one of the largest human migrations in American history. Almost every settler who reached the California gold fields by land—nearly 200,000 people—crossed through what is now Nevada, mostly along the California Trail. Many of them made camp near the confluence of the Humboldt River and Maggie Creek in northeastern Nevada. As the settlers slept, many surely dreamed of the riches that awaited them after another month of arduous travel, ironically unaware that they were mere thousands of feet above one of the most prolific gold deposits the world would ever know.

The gold in the area, often referred to as the Carlin Trend or Unconformity, has yielded more than 50 million ounces—worth about $47 billion at current rates—since its discovery in the mid-1960s, helping to make Nevada the fourth-largest gold producer in the world. The state is also responsible for 80 percent of gold produced in the U.S. By comparison, the entire California Gold Rush produced about 40 million ounces, worth about $37 billion at today’s rates.

Mining is the major employment engine in rural Nevada and of huge historic significance to the state—many towns would not exist if not for their mining legacy. It is responsible for unemployment rates in counties such as Elko, Eureka, and Lander that hover as low as four percent while statewide unemployment climbs past 10 percent. Mining has been a key player in Nevada’s history since before statehood in 1864, and all indications point to it remaining just as important for many years to come. As Tim Crowley, president of the Nevada Mining Association puts it, “If it isn’t grown, it has to be mined.”

GOLD (AND SILVER) FEVER

Nevada’s large-scale mining history started with the discovery of silver on the Comstock in 1859. Over the next 20 years the deposits of high-grade ore produced nearly $400 million in silver and gold and spurred many advances in mining technology. The mines of the Comstock started declining in 1874, and by 1880 Nevada’s mining industry was almost dormant. The discovery of silver in Tonopah in 1900 brought Nevada mining back to its feet and was followed shortly by the discovery of gold in Goldfield two years later. By the time Tonopah’s mines ceased operations in 1921, their yield reached about $120 million; Goldfield’s operations halted in 1918, earning about $125 million. Though silver and gold dominated early Nevada mining, prospectors were aware of vast low-grade copper deposits in the mountains west of Ely as early as 1900.

By 1908 rising copper prices encouraged greater attention, and Ely’s copper mines were born. The operations experienced phases of prosperity and decline through the Great Depression and both World Wars, but continued to produce ore. Copper-mining operations continue in the area today. The copper reserves of White Pine County are, however, an exception. Most precious metal-rich deposits are, as history shows, short lived. Even the Carlin Trend is not expected to yield ore for more than another 15 to 20 years.

Nevada’s early precious mineral discoveries on the Comstock and near towns such as Tonopah and Goldfield were hard-rock operations, in which miners followed rich veins of gold and silver in shafts and tunnels descending thousands of feet into the earth. The copper operation in Ely marked a new method of ore removal in Nevada mining. The low quality of the ore made tunnels and shafts inefficient, so engineers instead opted to remove large quantities of dirt from the earth via open-pit mining, in which immense holes are dug above deposits of ore to extract thousands of tons of rock. The rock is transported to facilities where the target mineral is extracted, and the resulting overburden is returned to sites near the mine and deposited onto adjacent hillsides.

Today, gold and other minerals continue to be removed via hard-rock and open-pit mining. The similarities stop there. Mining today is drastically different from the common conception of a dusty miner striking a sparkling vein of gold in a poorly lit tunnel—most miners in fact rarely see the gold they extract. Nevada’s gold is microscopic and dispersed through tons of rock. A truckload of the richest ore in the state looks no more valuable than a truckload of regular rock. This means large quantities of rock must be processed to yield relatively small amounts of gold. And isolating the microscopic gold particles within the ore requires extensive, costly processes (see “From Ore to Oro” below). All of these factors combine to make Nevada’s gold mines immense, multimillion dollar operations. A single mine in Elko County, Barrick’s Goldstrike, covers more than 10,000 acres and has cost Barrick about $7 billion to operate since the company’s 1987 acquisition of the property. In the same period, Goldstrike has made Barrick more than $3 billion in profits. Though Goldstrike is the state’s largest mine, more than a dozen other gold mines experience similar success.

A DIFFERENT KIND OF BOOM

Early discoveries of silver and gold in Nevada brought with them staggering population booms. Virginia City exploded from a handful of residents to a bustling city of nearly 30,000 by the height of the Comstock Lode in the early 1870s; Tonopah was established following the discovery of silver in 1900 and grew to more than 3,000 residents in two years; and Goldfield, founded in 1902, reached 30,000 residents by 1906. Equally astounding were the individual fortunes amassed in these boomtowns. Men such as George Hearst, John Mackay, and William Ralston used their influence and ingenuity to become multimillionaires. Hearst eventually became a U.S. Senator.

The mood of today’s mining boom is remarkably less frenetic, but significant nonetheless. Modern mining towns, such as Battle Mountain and Elko, have experienced more modest population surges—Battle Mountain’s population has increased by about 30 percent since 2000, and Elko has grown modestly in three decades from 8,700 residents in 1980 to an estimated 17,000 in 2007.

Where the boomtowns of old were often lawless clusters of hastily built bars, brothels, and shacks that sprang up solely to serve the mines, today’s mining communities are just like any other American town. Their established infrastructures and diversified industries make them less likely to suffer the same busts experienced by their predecessors. And while miners’ incomes sit comfortably above statewide averages—in 2007 the average mine worker grossed $67,392, about $25,000 more than Nevada’s statewide average—the overnight millionaires that typified earlier booms are absent. Earnings from modern mines also go to help their surrounding communities and the entire state. Services and goods required by the mines and their more than 14,000 employees generate another 102,000 jobs in Nevada and adjacent states, according to Crowley. And in 2007, Nevada mines paid more than $200 million in taxes.

MINING AND THE ENVIRONMENT

Few, if any, people are critical of the benefits to Nevada’s economy afforded by mines. But an industry that relies so heavily on land use is bound to raise environmental concerns. Historically, Nevada’s mines have a less than stellar environmental record. In James W. Hulse’s book, Nevada’s Environmental Legacy: Progress or Plunder, Comstock reporter Dan DeQuille writes that at least 80 million feet of timber and lumber were consumed annually on the Comstock Lode, used for tunnel support and fuel for smelting. DeQuille adds that more than seven million pounds of mercury (used to separate precious metals from ore) were lost into the ground over the life of the Comstock Lode. Hulse points to numerous other environmental low points for Nevada mining, such as violations of the Environmental Protection Agency’s federal clean-air standards associated with Ely’s copper operations and McGill smelters, numerous relocations of the town of Ruth to accommodate expanding open pits, and uranium contamination associated with the Anaconda Copper Mine near Yerington.

Today, mining interests are striving to change this image. “Mining is one of the most regulated industries in the nation, and Nevada mining sets the bar for safety and environmental excellence,” Crowley says. Nevada mines played major roles in implementing Nevada’s Voluntary Mercury Reduction Program in 2006 and cyanide, a component of the gold extraction process, is voluntarily handled in accordance with the International Cyanide Management Code, which standardizes the safe handling and disposal of the chemical. Barrick and Newmont both follow the standards of the ICMC.

Heap leach pads, ponds, and process facilities are engineered to meet strict regulatory standards that prevent cyanide from being released into the environment, and monitoring systems are placed for all leach pads to ensure that no cyanide escapes. Stringent chemical-handling standards employ double-walled tanks and other measures to reduce spills and protect groundwater from contamination. Water used in mines, for ore processing and dust suppression, is recycled or treated and returned to the aquifer or used for irrigation on nearby ranches.

Mines, particularly open pits, require a lot of acreage and thereby disturb wildlife habitat. Through cooperation with government and non-government organizations, areas that have outlived their mining use are returned to their previous state by re-contouring and re-vegetation. Barrick won the 2007 Nevada Excellence in Mine Reclamation Award for wildlife habitat restoration at Goldstrike.

From ORE TO ORO

How gold gets from microscopic particles to rings, microchips, and more.

Once gold ore is removed from the ground, it is trucked to a crusher where it is pulverized. The loose ore is oxidized by either of two processes: roasting or autoclaving. A roaster accomplishes oxidation by heating ore to high temperatures (1,000 degrees Fahrenheit) while an autoclave uses high pressure to achieve high enough temperatures and oxygen levels to facilitate oxidation. The oxidation step helps to separate sulfur and organic carbons from the ore, thereby making it more susceptible to cyanide leaching, the next step in the process. The ore (now called a slurry) is combined with a sodium cyanide mixture to further isolate the gold particles through a chemical reaction called the Eisner Equation in which cyanide and oxygen separate gold from other molecules in the slurry. At this point the gold molecules are attached to carbon molecules and exposed to high temperatures and an acid solution that separate the gold and carbon. The resulting gold is refined through electrowinning, in which a current is passed through the gold, and smelting, then poured into bars for shipping. This gold will eventually be used for jewelry, space exploration, computer circuits, electronics, pharmaceuticals, dentistry, foods and beverages, and even beauty products.