Nome’s Remote-Operated Submersible Gold Mining Dredges

Tramrod was Nome's first remote-operated submersible gold mining dredge.

Tramrod was Nome’s first remote-operated submersible gold mining dredge.

The Tramrod was Nome’s first remote-operated submersible gold mining dredge, operated by the WestGold mining company in 1989 and known locally as the “Underwater Miner”. There have also been several other attempts at diverless or remote-operated submersible gold mining dredges offshore Nome in the decades since. Here I attempt to document the various attempts and their results:

Tramrod; 1989, 1990; WestGold; Very little production, did not pay for fuel. Program cancelled, crawler refurbished and used in another part of the world more suited to it.

JAG Crawler (aka Pac Man); about 2003; Little to no production, did not pay for fuel. Placed in storage until 2012, see Rebel Crawler.

Casa de Paga Crawler; 2004 to present; Casa de Paga; Producing a profit for each of the past 11 years. Decent profit margins on good ground with high gold prices. Can still be out dredged by a diver on a 10″ in certain conditions. Gold mined has paid for fuel and upgrades, as well as modest income for operators. This is the crawler I operate.

Mad Max Crawler; about 2007; J5 Mining; Major design flaws. No mothership, support boat floats sold and reused on the Eroica. Promising trials, but severely mangled in storm, stored then parted out.

Gold Fish; about 2008 to 2011; John Mihelich; Successful remote arm, innovative design features. Poor coverage. Required ground that was both higher grade and shallow. Combination of resource depletion, DNR regulation changes, and lease owner policy changes caused this to be decommissioned and parted out.

A 1 atmosphere mining sub designed for offshore Nome. Never got enough gold to even pay for fuel. Has not moved since 2011.

A 1 atmosphere mining sub designed for offshore Nome. Never got enough gold to even pay for fuel. Has not moved since 2011.

G-Force Submarine; about 2009; One atmosphere submarine with rigid snorkel, designed to drive from the beach into the water and mine in depths up to 90′. Horrible design, but very well built. Never got enough gold to pay for fuel.

Persistence (aka Tiny Feet); about 2009, 2011, 2015; various owners, latest is Pacifica; serious design flaws in both crawler and mothership. Buyback crab boat. Has a few days of production each of the years it’s been tried, then a few years of refurbishment and repairs. Gold mined has not paid for docking fees let alone fuel.

Rebel Cralwer under development and testing offshore Nome, Alaska in 2012. Last seen for sale.

Rebel Cralwer under development and testing offshore Nome, Alaska in 2012. Last seen for sale.

Rebel Crawler; 2012; The pac-man crawler refurbished and rebuilt with a new mothership, a buyback crab boat named the Rebel. Failed to get enough gold to pay for fuel. Last seen offered for sale out of Dutch Harbor.

Kentucky Golden Rod; 2012; Palmerosa Mining; Serious design flaws, built by smart people with zero offshore Nome mining experience. Vessel refurbished as a 10″ diver dredge.

Alaska Golden Rod; 2012; Serious design flaws, expected free flowing sand. Vessel refurbished as a 6″ diver dredge.

“R.O.D.V.”; 2014;  Poor design, too small, no mothership. Has only gotten wet once, has not produced any gold yet. Built with support from a German TV show about Nome gold mining.

Golden Seahorse; 2015; Vern Atkinson and EddyPump; Poor design, too small, can easily be outperformed by a diver with a 4″ dredge. Designer thought gold was in free flowing sand. Used diver to watch crawler and 7 guys on surface to support the dredge. Was portrayed on the TV show Bering Sea Gold: Under the Ice as having made half of it’s capital cost in one month of ice dredging. Claim is dubious (the TV show is thought to frequently give false gold counts) and portrayed profit disregards the high operating costs. This EddyPump dredge sat idle for most of the summer 2015 season, and was finally taken out for a few days in September 2015.

Surf-Crawler-on-shoreSeveral more have been attempted to be built over the years but never got wet. There have also been several “surf crawlers” which are basically like the Christine Rose, except on giant tracks. All surf crawlers sat idle for most of 2015 due to inherent design limitations and poor grade.

 

Reddit IAmA Gold Miner, AMA

I am Andrew C. Lee, a Bering Sea Gold Miner. AMA.

I’ve been a gold dredger for 9 years, mining offshore Nome, Alaska. I’ve designed, built, and operated several gold dredges, 6″, 8″, and 10″. My 10″ dredge was featured on Discovery Channel’s Bearing Sea Gold. Because the name “Ziggurat” was deemed too brainy for American audiences, it was called “The Edge” and later “The Eroica” on the show.

Currently I am a partner in the largest most successful suction dredge operation offshore Nome. We operate an 18″ ROV suction dredge on our 3200 acres of mining leases.

Proof: http://safonatt.com/reddit-iama-gold-miner-ama/

Ask Me Anything. There are certain topics that I will not answer in detail because they are trade secrets, such as gold production and certain technical details.

Read my AMA on Reddit: I am Andrew C. Lee, a Bering Sea Gold Miner. AMA.

Bering Sea Gold Nuggets, mined by Andrew Lee

Bering Sea Gold Nuggets, mined by Andrew Lee

Andrew C. Lee, Bering Sea Gold Miner

Andrew C. Lee, Bering Sea Gold Miner

Andrew C. Lee with a few pounds of gold he mined off the Bering Sea floor near Nome, AK

Andrew C. Lee with a few pounds of gold he mined off the Bering Sea floor near Nome, AK

A several pound sample of placer gold mined from the floor of the Bering Sea near Nome, Alaska.

A several pound sample of placer gold mined from the floor of the Bering Sea near Nome, Alaska.

Gold sample drying on an outdoor propane camp stove.

Gold sample drying on an outdoor propane camp stove.

Gold sample. Dried and screened to several sizes to determine the distribution of each mesh range.

Gold sample. Dried and screened to several sizes to determine the distribution of each mesh range.

Construction of my ice dredging hut

Construction of my ice dredging hut

View from inside ice hut though tailings hole.

View from inside ice hut though tailings hole.

Using 48" chainsaw to cut hole in the ice.

Using 48″ chainsaw to cut hole in the ice.

The main pieces of equipment. Mini-ex, tracked ATV, and my ice hut design.

The main pieces of equipment. Mini-ex, tracked ATV, and my ice hut design.

Andrew C. Lee in Nome working on sub-sea crawler.

Andrew C. Lee in Nome working on sub-sea crawler.

Estimating Nome Dredge Gold Production

One of the biggest errors I see with new operations, besides the wrong equipment and a total lack of experience, is their projections when it comes to estimating gold production and revenues.

Here is what the inexperienced newbie often does: We can have a crew of 3 (or 4) and work 8 hour (or 6 hour) shifts each, so that’s round the clock 24-hours a day. And gosh darn it, we are hard workers, so we are going to work 7 days a week. June, July, August, September, and (because we are hard core awesome) October is 26 weeks. So we are going to do 4368 hours of mining per summer. And because I heard a rumor once about a guy getting 1 ounce per hour we figure that will be 4368 ounces per season. And since the price of gold once hit $1800 per ounce that comes out to well over $7.8 million, yee-haw!

Ok, that is an extreme example, and I’ve only seen it that bad a few times, but more often than you might think.

More reasonable, but still way too idealistic is the following example, that I’ve actually heard: We can have a crew of 4 and work 5 hour shifts each, so that’s round the clock 20-hours a day. And gosh darn it, we are hard workers, so we are going to work 6 days a week (only because Sunday is a day of rest). Mid-June, July, August, September, and through mid-October, minus a few weeks for storms is 14 weeks. So we are going to do 1680 hours of mining per summer. And I heard that a skilled crew, when they are on the good stuff can average 1/3 ounce per hour we figure that will be 560 ounces per season. And the price of gold has been around $1200 per ounce that comes out to well over $670,000, yee-haw!

Ok, now we are getting the the realm of possibilities. There have been dredges that have got that much gold in one season. These have been commercial 10″ dredges with a veteran crew of highly experienced divers, on the best leases out there. And even then, they don’t do that every year.

So how should people estimate, what do I recommend based on my 9+ years running dredges offshore Nome with 6″, 8″, 10″, and 18″ dredges of both recreational and commercial scale. There are several factors that go into the estimate, multiply them together to predict the range of revenue you can expect:

Ounces of gold mined per hour: Now we’ve all heard the 1ozt/hr and even the 2 or 4 or 6 troy ounces per hour stories. Ignore them unless you have first hand knowledge of you doing that yourself. These rumors are mostly not true, or are for a very select subset of time. It is true that with an 8″ dredge I have mined over 10ozt in 8 hours, but that was a very hot spot where I was singing in my mask for 8 hours. For estimating purposes, we need to figure on the long term average gold per nozzle hour, including prospecting, moving sand, weak days, and yes, the super hot hours. The more skilled the operator, generally the better the rate. The better the lease, the better the rate. Here are some guides which I would use:
6″ dredge: 0.05 to 0.25 ozt/hr (Typical 0.20 for skilled on good ground)
8″ dredge: 0.10 to 0.33 ozt/hr (Typical 0.33 for skilled on good ground)
10″ dredge: 0.25 to 0.75 ozt/hr (Typical 0.50 for skilled on good ground)
Excavator: 0.10 to .75 ozt/hr (Not enough info for a typical estimate)
18″ dredge: (Secret)

* Hours in a day: This depends on weather, seaworthiness of the vessel, endurance of the divers, number of divers, etc. This is for actual nozzle hours, working, sucking up the gold hours, it can easily take 12 wall hours to get 8 nozzle hours. Here are the numbers I would use:

6″ dredge: 4-8 hours per day, number of divers doesn’t increase this because the day breeze will kick you out, a fit diver can do this by themselves daily or two divers could each do 4 hours daily, 4 divers could each do 4 hours every other day.

8″ dredge: 4-12 hours per day, number of divers doesn’t increase this because the day breeze will kick you out, a fit diver can do 8 to 9 hours by themselves daily or two divers could each do 4-6 hours daily, 4 divers could each do 6 hours every other day.

10″ dredge: 4-20 hours per day, a fit diver can do 5 to 6 hours by themselves daily. You better be a skilled and fit diver to do this every day.

Excavator: 16 to 18 hours per day, time is lost due to maneuvering, anchor management, maintenance.

18″ dredge: (Secret)

* Days in a season: This depends on weather, equipment, fatigue, ice/seasons, endurance. In general, you can count on sea ice to leave by June 15th, but if your stuff is on the barge, don’t plan on being ready until early to mid July, because of final assembly and troubleshooting. Things start freezing overnight at the end of September, Sometimes October can be wonderful, sometimes the opposite. Count on about 4 total weeks of storms/turbidity during the season. If you are here in Nome from May 21 through October 10th, with working equipment, and able crew, then these are the typical numbers you will see, sometimes more, sometimes fewer:
6″ dredge, 30 to 45 days/year
8″ dredge, 35 to 55 days/year
10″ dredge, 35 to 65 days/year
Excavator, 65 to 80 days/year (depends on size/type of platform)
18″ dredge, 65 to 80 days/year (depends on size/type of platform)

* Cost of the lease: If you are small enough to work in the Rec areas, this is 3% to Alaska for anything above $40k. If you are on a lease held by someone else, then also first take 20% off the top for the typical deal.

* Net Smelter Return (NSR), this is often overlooked by newbies. The gold that you mine is not pure, it’s a natural alloy. Plus, depending on how skilled you are at cleanup, it may be dirty which will increase your melt loss from your raw dry weight. I discuss this in more detail in another post. Question About Selling Gold. Basically, take your clean dry weight and take off 15% to 20% to get your pure gold equivalent.

* Price of gold: Gold buyers typically use the London PM Fix, it is generally safe to use the lowest price that gold has been in the past 5 years. If gold goes higher, great a bonus, but this will give you a good margin of safety.

So lets put it all together:
(Gross Revenue) = (Gold per hour) * (Nozzle hours per day) * (Days per season) * (1-Cost of lease) * (Net Smelter Return) * (Price of gold)

Example 6″ dredge with 2 fit operators in their second year on the rec area: (0.10ozt/hr)*(8hr/day)*(45day/season)*(.97 after State tax)*(.85 NSR)*($1100) = $32,650 per season. Subtract expenses and split two ways. Assuming fuel, moorage, and incidentals were $7,650, that’s $12,500 each for 6 months of time.

Example 8″ dredge with 2 fit skilled operators in their fourth year on a good lease: (0.33ozt/hr)*(12hr/day)*(55day/season)*(.97 after State tax)*(0.80 after lease fee)*(.85 NSR)*($1100) = $158,000 per season. Subtract expenses and split two ways. Assuming fuel, moorage, and incidentals were $18,000, that’s $70,000 each for 6 months of time. Sounds pretty good, but of course this assumes skilled operators and that the equipment is operator owned and paid off, and doesn’t count the high cost of living in Nome.

Example Excavator with low-paid operators, run by unqualified managers, who raised money by paying 10% of capital raised to professional money raisers, who have never successfully mined before, despite years of trying, and are mining on low grade leases very far from harbor that they own: (0.10ozt/hr)*(12hr/day)*(65day/season)*(.97 after State tax)*(.85 NSR)*($1100) = $70,750 per season. Subtract expenses and multiply by 70% for the investor’s share. Assuming fuel, moorage, crew, management, and incidentals were $430,000, that comes out to a loss of $360,000 per year. In this example, they would need to find ground that could produce an average of 7.3 ozt per day, or 0.60ozt/hr just to break even; or for a mere 10% return would need 1,200ozt/yr which would need a sustained very high average of 1.50ozt/hr for this type of operation. (You may think that I’m talking about Blue Water Gold, or their new company called Blue Water Mining, but I will not confirm nor deny this. Investors should always be leery of companies like Blue Water Mining are trying to raise yet another round of several million dollars, and using projections that they will be able to mine more every day than their past performance has been able to do in a month.)

If someone is trying to get your money to invest, they will typically have outrageous numbers, which are fairly easy to spot if you know what to look for. Be wary if they project the price of gold going up significantly into the future, especially if they need the price to double within 3 years to make their investment sound appealing. Be aware of large numbers of ounces projected to be mined every day. Be aware of large numbers of days projected to be mined. Be aware of idealistically low projected expenses. Be aware if they omit Net Smelter Return, especially when they project a large number of ounces mined each day.

If you are experienced with offshore dredging in Nome, you know what you can make or lose. If you are not, then I would suggest you use as an upper limit, the estimates I give in this post. Never estimate more gold than you got last year doubled plus 100ozt. For a newbie this would be no more than 100ozt even if the formula above shows something higher. For a new crew or new dredge, increasing the number of workers typically only adds more expense, not more production.

If you are a small operation, under 25 acres mined per year, and have a hired geologist on the staff, whose main role with the operation is to do geology work, then you will likely fail, divide these estimates by 10. The geology around Nome is already well studied and well understood, sampled, researched, and published. It has been for well over 20 years. Sure it’s fun to understand what rocks are what, but that does not help with gold recovery in this area. If you are not familiar enough with gold mining offshore Nome to understand how a geologist is no longer needed for a dredging operation here, then you likely have other serious flaws in your plans and designs.

A several pound sample of placer gold mined from the floor of the Bering Sea near Nome, Alaska.

A several pound sample of placer gold mined from the floor of the Bering Sea near Nome, Alaska.

Andrew C. Lee with a few pounds of gold he mined off the Bering Sea floor near Nome, AK

Andrew C. Lee with a few pounds of gold he mined off the Bering Sea floor near Nome, AK

Product Review: Goldfield GoldTron (videos)

One of our best upgrades in recent years want the addition of this shaker table to our gold cleanup room. We had been using a batch centrifugal concentrator, which worked very well, but could only hold about 70ozt per batch, and had quite a bit of mob/demob time per batch. So we only used it for larger runs, and never for sample processing.

With the GoldTron, we can quickly and easily run a one gallon of concentrate from a sample area up to and beyond hundreds of gallons of material. We can breakout the batches quickly or blend them all together. It’s as easy as letting the hopper clear and swapping the collection buckets.

Continuous cleanup is the way to go if you have a lot of concentrates, and if you want to go through them quickly and keep track of many batches.

This table is very easy to use. It does require more tweaks, attention, and maintenance than the batch bowl we had been using, but the processing speed is so much faster and doing the adjustments while is actually enjoyable most of the time.

Major drawbacks include the requirement for very clean water and a constant water pressure. This is not a challenge for everyone, but for us who get our cleanup water from a pond with biomass, it has been an issue. We managed to hobble together a fine enough filter (20 micron is plenty) with enough flow to not bog down our pump. Next year we will bring up a large pool or spa filer and housing, which should solve this issue. Without clean water, little stuff would clog all the little jets, which we would clear by quickly turning up then down the flow on that jet.

The table likes a consistent flow of material, no surging. This is accomplished by the hopper and screw, with careful monitoring by the operator. With clean water, we found that one person could both feed the machine and keep the jets adjusted properly.

Like all tables, there are differing strategies on how clean to get the top, middle, and bottom outputs. We always try to keep all gold out of the bottom. Sometimes we run the top dirty, so there is little to no gold in the middle. Sometimes we run the top clean (and the GoldTron gets it very clean); and leave the middle dirty, then rerun it later, with different jet settings.

We always screen our material to 1/8″ before feeding it in, the gold we get from the Bering Sea is small and rarely has pieces over this size. The plus 1/8″ is easy to pan, especially if we screen off the 1/4″ and pan that separate. The table cuts the material into three sizes, and there are different options for which sizes these are. One size goes to the right side of the table, another to the left side. The larger size goes across a mini sluice. We were skeptical about this sluice at first, but are happy with the outcome. The water bar for the sluice could use some improvement, the water flow is uneven.

All in all, we are very pleased with this shaker table. It’s not for everyone. First, you need to actually get enough gold for the $15k to $18k price tag, plus shipping. Don’t spend more than 5% of your annual production on cleanup. If you have more time than gold, then use a $100 cleanup sluice, $200 in screens, and $50 in pans; then work almost as well, but take a lot more time and skill. But if you have a large amount of concentrates that you need to work through frequently and quickly, without needing panning skills and strenuous/tedious panning, then maybe the GoldTron is for you.

We should have bought one sooner.


http://youtu.be/QL-PUQb8ZbA


http://youtu.be/UZ4HFUvQcFE

Nome sees sharp decline in offshore gold dredgers, port usage

2014 saw a sharp decline in the number of active dredges mining for gold offshore Nome, Alaska. Despite the high numbers of valid mining permits for this type of gold mining, the number of gold dredges moored in the Port of Nome (including the inner harbor, the Snake river channel, and the outer cells) numbered merely 76 at its peak this summer. Gold mining vessels in dry storage on Port of Nome property that never got in the water during 2014 numbered around 28. A similar number of dredges were being stored throughout town on private property in people’s yards; like Blue Water Mining’s $250k 8″ dredge that was in dry dock all year.

This compares to around 90 dredges operating out of the harbor in peak years of 2011 and 2012, when gold prices were 50% higher, and right after California outlawed gold dredging. The decrease in total dredges is mostly due to fewer 6″ and 8″ dredges in the water; these recreational sized operations mostly last less than one year. The lower gold prices combined with lower unemployment and better opportunities at home have decreased interest. And with good reason, most first-year Nome gold miners would have been money ahead if they had stayed home and worked a minimum wage job.

While the number of 10″ dredges has remained about the same, there has been a slight increase in the number of larger excavator-style operations. These vessels take up more space in the harbor, so the overall feel seems to be about the same, as far as crowding goes. The pullout of the Cashman Mining operations, after blowing $7.5M has opened up some space. I expect that Blue Water Gold aka Blue Water Mining won’t be able to afford to return again with their $600k 10″ dredge, after getting less gold than a decent 6″ inflatable dredge for the third year in a row; that should open us some more room.

The Port of Nome reports a sharp increase in port usage since 2011, but this is a flat out lie manipulated figure, designed to try to get more state and federal funds. The increase in numbers is due mostly to the fact that the Port started requiring docking permits for vessels parked in the Snake river (which is probably a violation of state law to charge for this) and they started counting and charging for skiffs. For example, 2011 and prior, we were one vessel; 2012 and after we are counted as 3 vessels (one boat and two skiffs).

For 2015, I expect the trend to continue, much fewer 6″ dredges, several fewer 8″ dredges, about the same number of commercial 10″ dredges, and about the same number or a couple more of larger commercial gold dredges. Most likely there will be some newer in each category, and not all of the past ones will return.

If you are interested in coming to Nome, contact me for more information.

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Dry dock all summer 2014

Question About Selling Gold

Question sent in by “Ordell”

I got one question. There are gold buyers who purchase gold from the miners on the spot. They are paying for the gold at the current rate. So how do the buyers make any money? Are they counting on gold to go up? Making something with it and charging a premium?

The gold buyers charge an assay and refining fee per lot, then they return some percentage of the gold, typically 98% (they keep 2%), and 90% or no percent of the silver (they keep 10% to 100% depending on the buyer). The per lot fee is several hundred dollars, and pays for the overhead of melting and assaying the lot. If a buyer comes with less than some amount, like 10ozt or less, then the buyer typically will buy it outright, over the counter, for something like 60%, which is a better deal than paying the fees.

Here is a made up example of how it typically goes:

Deliver 100ozt clean and dry gold.
Fees are charged to account and are taken out of the first payout later. -$450
The gold is melted and assayed.
Melt loss: 10ozt of impurities, remaining weight 90ozt
Assay of that 90ozt: Gold 88% (79.2ozt), Silver 9% (8.1ozt), other 3%.
A “next day” sell order is placed by me, the next day’s London PM fix is used as the sale price, lets say this was $1200/ozt
Payout: Gold: @$1200/ozt, 98%: 79.2ozt*98%*$1200=$93,139.
Silver: @$20/ozt, 90%: $145.8
Fees: -$450
Check issued for $92,834 no sooner than two weeks after the gold was delivered by me to the gold buyer.

Some gold buyers do it differently. This example might be a bit low for us, since we get our gold very clean. It seems that the result is about 85% of the raw dry clean weight times the gold price.

Question About Ice Dredging

Question from “topdogintampa”

The Pomrenkes sound like they didn’t do so well over the winter season

Basically no one does well over the winter season. It’s twice as hard, takes twice as many man hours per nozzle hour, and the gold per hour is less than half as good as it is in the summer.

I did through the ice one year in 2011, it was horrible. There was us and one other gold mining operation on all of the Bering Sea. I lost money on that venture. Even if I didn’t have any capital costs, and with gold at $1700/ozt like it was then, I made less than minimum wage.

The Discovery production company wanted us to do it again in 2012 when they filmed the first season under the ice; and we would have if they paid enough and had given us enough warning so we could have staged our equipment differently, as it was our gear was under a 15 foot snowdrift.

My ice hut did end up on one season, the green shelter on skis that they portrayed as Zeke’s. That turned out to be about $12.50/hr for the guys working on it; and they were by far the most successful.

The only reason anyone does through the ice a second year is for the TV show, or they live in Nome year round and have nothing else to do. They would do better working as a checker at a grocery store.

Construction of my ice dredging hut

Construction of my ice dredging hut

Using 48" chainsaw to cut hole in the ice.

Using 48″ chainsaw to cut hole in the ice.

The main pieces of equipment. Mini-ex, tracked ATV, and my ice hut design.

The main pieces of equipment. Mini-ex, tracked ATV, and my ice hut design.

View from inside ice hut though tailings hole.

View from inside ice hut though tailings hole.

Ad Critique: Invest with West

Check out this very exciting opportunity someone posted on an angel investor website for an offshore Nome, Bering Sea Gold, mining operation:

Looking for investors in up and coming JR Mining company with claims in Nome Alaska, can see more details on Discovery Channels hit TV show “Bering Sea Gold”. Great returns, project potential is in the Billions. Can anyone help out? Seeking investors for Gold Mining Operation in the Bering Sea, off the coast of Nome, Alaska. My company is 1 of 30 that control the gold rights, where there is est. 10 Million ounces of reserves off shore. Finished up the sampling, and raising the money for our first heavy lift mining vessel. We know for a fact we can run 40-80 ounces a day, we will give all of our investors the collateral in the equipment, and 70% of the gold until payout, then 50% for the life of the mine and equipment. This vessel can produce enough gold per season to pay partners a 50% return on their investment for the next 20-30 years. Nome Alaska is home of the most successful gold rush in american history, and the price of gold finally met with the technology needed to extract the reserves offshore as low as 350 per ounce. This is a very unique position, and very low risk with the exit strategies we have already put together. Message me for details. #Gold Mining #Precious Metals #Joint Venture #PrivatePlacement #Gold #Commodities #AngelInvestment
West B.

Now here are some of the things wrong with this ad:

His estimate of gold reserves offshore is high, and that is before the BIMA pulled it’s 45,000 ozt out, and the fleet of suction and excavator dredges have worked the area over for 20 years. The high grade stuff is almost all gone.

Now there is a large amount of medium grade gold offshore Nome, but the larger an operation the weaker the grade is that you can count on. This is because the smaller a rig, say a 8″ to 10″ diver operated suction dredge, will follow the narrow trails of gold much better and not waste time on the weaker stuff. For large operation, like the one I run, it’s not economical to skip over that weak ground, the cost determining grade and moving is too high. The grade we run is much lower, but the overall gold amount is higher.

I have dredged on the leases this company owns. Prior to the 2011 lease sale most of these new leases were held under lease from the 1999 lease sale or previous. The specific ones held by this company, I did not find enough gold on to keep my interest enough to bid very much on them. There are vast areas of leased and claimed ground around Nome that are very weak. Yes, there is gold everywhere, but a commercial operation needs to produce paying quantities. And counting on gold going to $10000 per ounce is not a sound business strategy.

It’s basic math that 70% of a small number is a small number. I’ve mentioned West Budreau’s operation in a few of my posts. Over $2,000,000 spent and over 2 seasons with large crews and they still have gotten less gold in total than I’ve done in a month with an 8″ I built for $60,000. As with anything, INVESTOR BEWARE!!!

The size of vessel and scale of operation that would be able to produce their 40 to 80 ounces per day estimate on their ground would be larger than the BIMA, and would cost a great deal more than $350 per ozt to operate.

So this is the third year of a “sampling operation” that is surprising. They don’t even have their second dredge in the water this year and I don’t think their main dredge has worked even 30 days yet this year. Their crew has never indicated that they were on a sampling mission. Last year they spent a large amount of what little dredging time they actually did on a lease owned by someone else.

People can always contact me for the inside scoop and background info on potential Nome deals. If you are someone with a large amount of money and interested more in having a great adventure than you are in reaping a large return on investment, I can also help you out with that, and help you avoid the bad schemes out there.

-Andrew C. Lee

PO Box1370, Nome, AK, 99762