Wyoming Mining Hopes Rise With Gold Prices

STEVE INSKEEP, host:

Well, the price of gold has more than tripled in the past decade. Over the last several months, as investors have been growing nervous about the economy, they are fleeing to the safety of gold once again. It's been trading at well over $1,200 per ounce.

The run-up in gold prices has had an impact in Central Wyoming at a spot called Rattlesnake Hills.

Here's Wyoming Public Radio's Molly Messick.

MOLLY MESSICK: It's early in the morning and Quinton Hennigh is rummaging through boxes filled with hefty sections of rock. They're striated at about the length of a man's arm. He uses a hand lens to examine them for tiny veins.

Dr. QUINTON HENNIGH (President, Evolving Gold): The dark gray material - in fact, you can almost see it here. You kind of see a shimmer.

MESSICK: Hennigh is an exploration geologist, and this rock was drilled for more than a half a mile underground. But that shimmer isn't gold. In fact, Hennigh doesnt expect to see any gold at all. He's fairly sure its here, but the quantities are too small to be visible.

Dr. HENNIGH: The fine sparkle you see is pyrite, which is fool's gold. And funny enough, fool's gold is often associated with gold. That's just the way it is.

MESSICK: Hennigh is the president of a company called Evolving Gold. In the last couple of years, while most people have dealt with scarce jobs and stubborn unemployment, Hennigh says he's had some of the most rewarding years of his career. After all, there's nothing like a global economic downturn to get people talking about gold. From conservative talk show host Glenn Beck, to billionaire investor George Soros, interest in gold is way up, and that has big effects on the ground.

Jon Nadler is a senior analyst with Kitco, a metals retailer.

Mr. JON NADLER (Senior Analyst, Kitco): It's basically the biggest gold rush ever on the global scale.

MESSICK: Nadler says that since about 2005, exploration has surged and old mining sites have been reopened. As he puts it, people are digging everywhere.

(Soundbite of movie, "The Treasure of Sierra Madre")

Unidentified Man (Actor): (as narrator) Up into the forbidding majesty of the great Madre range go men, their pasts buried in silent secrecy. Their future is hidden in the mystery of adventure - men drawn together in their search for gold.

MESSICK: The process of looking for gold has changed a lot since Humphrey Bogart's character struck out for the mountains in "The Treasure of Sierra Madre."

Nadler says what's pushing the search for gold now is a huge difference between what it costs to produce gold and gold's price on the market, which brings us back to Quinton Hennigh. He would love to find a rich vein of gold in the Rattlesnake Hills. But he doesnt have to for a mine to be profitable.

Dr. HENNIGH: In surface mining you might be looking for maybe a couple of grams, a few grams per ton, which would be like a fraction of an ounce, like maybe a 10th of an ounce, something like that.

MESSICK: A 10th of an ounce per ton of rock.

Dr. HENNIGH: Tiny amounts. Yes, they are. That's why gold is valued where it is. Exactly.

(Soundbite of laughter)

MESSICK: So far this project that Hennigh is overseeing is not a mine, and there's a good chance it never will be one. Evolving Gold has spent over $15 million exploring in the Rattlesnake Hills. Hennigh estimates theyll have to spend twice that much to figure out what the ground here holds.

(Soundbite of banging)

MESSICK: There's not much here, other than dirt roads and the drilling rigs that run day and night. The workers have just pulled a 10-foot section of rock from almost 3,000 feet below ground.

(Soundbite of banging)

MESSICK: Hennigh can trace his life according to gold prices. He got interested in geology at a high point. Later, when prices were way down, he was out of work. In other words, this is the time he's been waiting for. But what if gold turns out to be just another bubble?

John Nadler, the analyst at Kitco...

Mr. NADLER: The entre of hedge funds and speculative funds, which even a year or two ago were busy buying strange derivatives, now are enamored with gold and have found a new golden toy with which to play. And this is what raises my concern.

MESSICK: And if gold prices take a big hit, so could Quinton Hennigh's dream of a mine in Central Wyoming.

For NPR News, I'm Molly Messick.

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