There's still lots of wealth in the hills of the Golden West. New techniques make formerly marginal mines worth working

At the Pitt Mill and Elevator Company, lumber and plumbing supplies have been selling briskly. This summer the ``no vacancy'' signs went up early, and frequently, at Felton's Motor Inn and the 2 Stiffs Motel. Brenda's truckstop is back open for business. For years, the economy of this one-traffic-light town in the northwestern part of Nevada has been in a half nelson. But now there is at least a veneer of vibrancy, produced by one of the oldest forces in the West: gold.

Men and machines are again gnawing away at the dry, elephant-hide hills outside of town. The activity is yielding fat paychecks and thinner unemployment rolls.

``In the last five years, there had been a downward trend among small businesses here,'' says Mayor Hugh Montrose, over a cup of coffee at Jax Restaurant. ``But now we're going the other way.''

The story is similar in many other communities speckled throughout the Rocky Mountain mineral belt.

While most of the mining sector remains moribund, gold is the one jaunty exception. Lifted by new technology and a strong price for the metal, gold mining is undergoing one of its biggest booms in decades.

``Right now gold is the star jewel in the crown,'' says Richard Reyburn, head of the Nevada Department of Minerals.

The signs of the industry's revival are dramatic:

In California, more than a dozen major mining projects are in either advanced stages of exploration or are scheduled to come on stream soon. Gold production in the state, virtually nonexistent six years ago, may hit 350,000 ounces this year.

In Colorado, roughly 10 news mines are expected to be opened by the end of 1986. At the largest, Galactic Resources' Summitville operation in the southern part of the state, 425 people are working on site.

In Nevada, the country's largest gold producer, 32 large new mines have opened in the past three years, though many smaller operations have shut down. Gold production has more than tripled in the state since 1981.

``It is the one bright spot in the metals industry,'' says John Lucas, gold commodity specialist for the United States Bureau of Mines.

The current rush is rooted in the price hike of the late 1970s and early 1980s. Back then, when gold soared to $850 an ounce, mineral companies of all sizes began picking through old deposits and scouring for new ones.

When the value of gold dropped shortly thereafter, many of the mom-and-pop enterprises and individual prospectors pulled out. But a number of the large operations kept going, some of which are just now pouring their first bullion.

They were able to survive partly because of the changing nature of gold mining. Once an industry heavily reliant on underground mining, most new sites are surface, open-pit operations. Although these excavations take years to set up, they can go through tons of low-grade ore each day.

To extract the metal, companies are also using a variety of new techniques, the most popular of which is ``heap leaching.'' This involves crushing the ore-bearing rock into marble-sized pellets, mounding it in huge heaps, and then dousing the material with chemicals, usually diluted cyanide solutions. The dissolved gold is then recovered and processed.

1 | 2

Next