Gold Mining and Prospecting Hotter at Today’s Prices

by Kenneth E. DuBose on December 8, 2011

Gold prices have remained high long enough that we’re beginning to see an increase in gold mining and prospecting across the U.S. That means gold might be as important in some places as it was in the old gold rush days in California.

At almost $1,800 an ounce, it doesn’t take much to rationalize drilling a few wells and digging a few holes to figure out what lies below the surface. There’s potential for a mine in Alaska that could be the largest new mine in decades and there are multiple smaller efforts getting under way in places like Easton, Michigan.

For the most part, a typical oil & gas lease does not address gold minerals and mining.  If you’ve had gold production on your property at any point in history, it is something you need to consider. You’ll want to address the potential in your mineral or land leases to ensure proper development is possible. Having gold you can’t mine or oil you can’t drill is pretty much the same thing as not having it at all.

Aquila Resources, a Toronto-based company with an office in Michigan, this fall drilled 22 holes east of Thornapple Creek Road in the town of Easton to explore what is known as the Reef Deposit. The company plans to drill another 32 holes this winter and has purchased mineral rights from landowners across 356 acres.

The deposit was explored by a different company, Noranda, in the 1970s and 1980s, which estimated up to 120,000 ounces of gold could lie beneath Marathon County soil. With the price of gold today at about $1,700 per ounce, the deposit could be worth as much as $200 million — and could be more profitable to mine now than in the 1970s.

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