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Eureka! DNR strikes more gold near Lake Vermilion

There's gold in them thar hills south of Lake Vermilion, the Minnesota Department of Natural Resources reported this week.

The DNR reported significant gold findings on state forest land across an area from Cook to near Babbitt, along the historic Vermilion Iron Range.

The DNR didn't find the mother lode — at least not that they're saying — but found lots of gold "grains" across the area, including several hot spots with so-called "pristine" deposits. By far the highest concentrations were found on state land south of Soudan and north of Embarrass.

The results mirror the DNR's finding in 2004 of record amounts of gold grains, also in the Soudan area. But geologist Dennis Martin, DNR minerals development manager, said the latest findings are in new areas including some "we didn't know about before."

"Much of that area has been explored before. But in this case, where Don (DNR geologist Don Elsenheimer) found them, these were areas nobody had ever discovered until now," Martin said.

Before you dig out your shovel and pick, however, know that the vast majority of the gold grains were less than 100 microns, barely visible to the naked eye.

Martin explained that the grains slough off gold deposits in the rock, then are pushed to the surface over time — enough that they can be found by shallow sifting on the surface. The samples were sent to a private lab for analysis.

The grains usually pop up within a mile of their original below-ground source, Martin said. It's an inexpensive but imprecise way to search for gold without having to do much digging, and it often means more gold is down below.

The new findings are very similar to other places where valuable "bedrock gold deposits" exist, the DNR notes.

"It's the exact same geology as Ontario where there are some gold mines being developed," Martin said.

In fact, the method used to find the gold grains and hone in on hot spots in Minnesota is the same one used to develop the New Gold gold mine just 40 miles northwest of International Falls. The new mine claims to have a mineable resource of about 4 million ounces of gold — about $4.7 billion worth of gold.

It's been known for more than a century that gold existed in northern MInnesota rock, and several false gold rushes occurred, including in the Lake Vermilion area. But there never was enough gold documented close enough to the surface to make it worthwhile to mine.

Unprecedented test drilling in recent decades to search for copper, nickel and other minerals has revealed gold across the region — enough so that proposed copper mines are counting gold they expect to recover as part of their business plan.

The DNR conducts the gold surveys in part to drum up interest from mining exploration companies to come and look closer, hoping they will find gold on land where the state holds the mineral rights — and provide a windfall for Minnesota tax coffers.

The DNR says it uses the survey findings to help plan land use in the area — which means they are likely to hold on to any state land they have that holds gold, and keep it open to prospecting and mining in future years.

Rick Sandri, president of Minnesota-based Vermilion Gold exploration company, said the DNR's findings could be very interesting. But he said it's not just the amount of gold grains discovered that matters; it's what they look like.

"The simple rule of thumb is that if the grains are finely weathered, smooth on the surface, they could have come from as far away as the Arctic and were left here by glaciers," Sandri said. "But if they are rough and gnarly, the (deposit below ground) could be within a few hundred feet. We're going to want to take a look at what they found."

Sandri said the state's work is important to help geologists hone in on areas that not only hold valuable minerals but also where they are mineable — far enough away from private land and popular lakes and recreation areas to make mining practical.

Vermilion currently is prospecting where gold is likely just north and west of the Mesabi Iron Range and near Virginia.

The most recent DNR findings were part of a three-year effort that sampled 172 locations for gold grains across 200 square miles, including 33 last fall.

About once each year the DNR holds silent auctions for mineral exploration rights on state lands. The federal government does the same thing on national forest lands in the area.

Both state and federal agencies have been busy offering leases on the east end of the Iron Range near Ely, Babbitt and Hoyt Lakes, where the proposed PolyMet mine is now under environmental review. Dozens of test mine shafts have been drilled on DNR and Forest Service lands in that area in recent years as prospecting companies search for deposits that might be affordable to dig.

Now, the DNR is betting that improved exploration and retrieval technology will lead to more interest across new areas — especially as the price for gold still makes it worthwhile to search for and dig up.

"These (recent gold findings) are the easy part," Martin said. "The goal here is to have someone take a chance at a mineral lease in those areas and try to find where that gold is coming from. That's the hard part. But it could pay off for them and for the state."

Gold was trading at $1,169 per ounce Wednesday, below the sky-high $1,800 range of a couple years ago but still far above the historic average.

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