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Beware Exaggerated Richness of Gold Mines & Claims

The business of buy and selling mining claims has gotten larger in recent years, particularly with the more recent increase in precious metal prices along with the renewed interest in mining due to several television shows. Many people make a living by simply “flipping” mining claims, in the same way that other people sell homes.

It is important for anyone interested in buying a mining claim to understand exactly what they are buying and what they are not buying. In most cases, the mining claims that are often being sold for thousands of dollars have almost no actual value. The “perceived” value of the claim is based almost purely on here-say rather than hard data.

Patented and Unpatented Mining Claims

First and foremost, it is extremely important that you educate yourself on the different between patented and unpatented mining claims. Most of the mines that are for sale are unpatented claims, which means you are purchasing the mineral resources on that tract of land, but you are NOT buying the land itself. The land is still public, and other people can camp, fish, hunt, hike, birdwatch, pick berries, or any other thing they want to do. All you are buying is the mineral rights.

Lode vs. Placer Claims – Cost of Operation

Quite often, the mines that are for sale are old lode mines. They are tunnels in the ground that were eventually abandoned. Often these mines have been unworked for over 100 years.

Ask yourself, how are you actually going to extract gold or silver from this mine profitably? A lode mine is vastly different from a placer claim that you can use a simple gold pan or sluice box to capture gold. Extracting metals from ores is an extremely slow process, is extremely expensive, and will almost always require the use of large equipment to mine profitably. If the mine is located on federal lands, this means LOTS of permits. Getting a mining operation set up can take years, even decades. The way things seem to be going today, it may be all but impossible to expect you will be able to get the mine up and running.

Exaggerated Reports

Another thing that is often used to get you to buy a gold mine is to show an old assay report that claims the ores are of extremely high value. Trust me when I tell you that these ore values are often highly exaggerated.

There are several reasons for this. For one thing, it was common practice for miners to collect only the pieces of ore that appeared to be high-grade and send to be assayed. The result was a highly skewed evaluation of the ores value. Sending in a few pieces of ore is not enough sampling to evaluate general ore values when determined at a price-per-ton.

Historical reports were often highly exaggerated as a way to drum up investment. Simply put, the numbers were simply made up or at the very least “exaggerated” to get people excited to invest in the mine.

So the value of a mine on paper is not necessarily the actual value of the mine.

Buying Sight Unseen

Would you buy a car without test driving it? Would you buy a home without walking through it? Then why would you buy a mining claim without spending some time sampling it for gold?

Beginners often get so excited about “owning” their own gold mine, that they throw caution to the wind when they buy a mining claim.

Your time and money is much better spent researching historical mining areas and learning to find your own gold rather than buying a mining claim from someone you have never met before and just assume that it has gold.

Other Options

Rather than going out and buying a mining claim when you have almost no mining experience, why not join a local mining club instead? You don’t even NEED a mining claim to prospect for gold. There are millions of acres of public land that are still open to prospecting that you can search for gold. There are undiscovered gold deposits out there that have yet to be found.

Also Read: Classify your Gravels to Retain More Fine Gold

And: Digging for Gold in Ancient Tertiary Rivers

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