There's still lots of wealth in the hills of the Golden West. New techniques make formerly marginal mines worth working
Lovelock, Nev. — 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.
Heap leaching does away with the need for a lot of expensive milling. Roughly one-quarter of the nation's gold production is now done using the technique. Users claim it can cut extraction costs up to $200 an ounce. With the precious metal currently fetching over $400 an ounce on world markets, many companies have a tinge of gold fever.
``With heap leaching technology, money can still be made with gold at $300 an ounce,'' says Dennis Wheeler, president of Idaho-based Coeur d'Alene Mines Inc., which owns a large operation outside of town here that just began pouring gold and silver.
Further stimulating interest in US gold production has been political uncertainty in South Africa, the world's leading supplier, as well as the issuance of a new US gold coin.
The boom is bringing a horn of plenty to many rural towns across the gold belt. Sonora Gold Corporation is putting in a huge mining operation in the flaxen foothills near Jamestown, Calif., a sleepy settlement 125 miles east of San Francisco. Some 500 construction workers are on site now, and a permanent work force of 175 is expected to be needed once the mine opens, early next year. Company officials figure the operation will generate $500,000 a year in new taxes for the county and pump millions into the local economy.
In tiny Del Norte, Colo., rental housing has been scarce and grocery stores have been humming since major work on the nearby Summitville mine began. Terry Haynie, part-owner of a local auto parts store, has seen his business jump 50 percent over a year ago.
``You name it, they've broken it,'' he says of the mining trucks that ply the rutted roads. ``The mine has had a big impact on the area. ''
Here in Lovelock (pop. 2,000), a new stimulus was sorely needed. The twin flywheels of the economy, agriculture and mining, have long been depressed. Things hit a nadir a few years ago when Interstate 80 was routed around town.
Suddenly, the community was in fear of losing much of its business trade, as well as up to $40,000 a year in traffic violations.
The three gold and silver mines now opening in the area have provided a boost, though not a bonanza for the community.
``No, we will never be a Reno or Las Vegas,'' says Shirley Schmidt, a local innkeeper, sitting in her small office beneath a display case of obsidian arrowheads. ``But we are not going to be a ghost town either. ''
Workers have been queueing up for the high-paying jobs in the mines, and not all of them are locals. Bearded Wayne Anderson left his $6-an-hour job as a machinist in Idaho to operate one of the crushers at the Coeur Rochester Mine near here.
Mr. Anderson has doubled his hourly wage, and, for the past two months, has been toiling seven days a week, 12 hours a day.
``It's almost like having a day off when you only work eight hours,'' he says, after a breakfast of bacon, hashbrowns, Danish, and a Spanish omelet. ``But I've made real good money.''
Still, the gold rush will do little to help many Western mining communities reliant on copper, uranium, and other minerals for their grubstake. Depressed metal prices continue to keep many of these mines mute.
Moreover, gold mining is not a labor-intensive industry, so there is a limit to the number of jobs it will create. Environmental concerns are being raised about some projects as well.
Nevertheless, for now, it is the only game in town for many hamlets. ``It's not going to be the savior for many of these rural counties,'' says Ralph Loyd, a California state geologist. ``But it helps.''