More miners opening claims to tourists

AS the price of gold hit a 26-year high of over $725 an ounce in mid-May, it wasn't only hard rock miners who were celebrating. Placer miners in Alaska are raring to go this season, and so are all kinds of people who have never attempted mining before in their lives. Recreational mining is rapidly expanding, and long-time placer miners are seeing the opportunity to open up their claims to tourists. The Department of Natural Resources is still in the process of drawing up regulations to deal with the new permitting issues that have arisen from combining mining with tourism.

Some long-established venues in Alaska already offer tourists the opportunity to go gold-panning, such as Crow Creek mine in Girdwood, near Anchorage. But their owners are experienced in the tourism side of the business and they make most of their money from that. What's unusual is that miners who have discouraged tourists in the past are now welcoming them - and the miners have to learn a new business.

One of the miners who hopes to attract visitors for the first time is Tod Bauer, who has been operating under the company name Goldorado since 1986. Bauer filed a land use permit application recently and a 30-day public comment period was initiated by DNR. His claims are at Gold Creek, about 30 miles north of Talkeetna, and can only be reached by train or boat. Bauer was reluctant to bring in tourists at first, because they might interfere with his regular mining operations, but he was persuaded by Noel Wilson, the owner of an adjoining Native allotment.

Three-hour tour would be offered

Bauer and Wilson have formed a company together called Chunilna Heritage, and they plan to offer a three-hour tour that would include both mining and Native heritage, enabling visitors to return to Talkeetna on the train or boat the same day. The visitors would be able to try gold panning, and eventually they may also be able to use dredges. Bauer uses a GC10 wash plant about five miles from the tour site, which in the future tourists might be able to view, too.

"It's good to show the public how resource development works," Bauer told Mining News. A log cabin on the property will be converted into a gift shop, and a boat launch area will be developed for visitors who arrive from or return to Talkeetna by boat. "There are a lot of details to work out yet," Bauer said. Safety is one of the concerns, especially when Goldorado is moving granite for the Alaska Railroad to use as riprap. Miners who bring tourists to their property must have liability insurance.

In an effort to simplify the permitting process, DNR has produced a two-page recreational mining fact sheet, which briefly explains which permits may be needed and how to apply for them. According to the fact sheet, a recreational mining business is "a business that charges clients for the opportunity to recreationally mine - typically pan for gold with some guidance or instruction. The business may limit services and only charge clients for the recreational mining use of an existing mineral claim. The mining activity could occur on state land with or without a mineral claim."

Business license, bond, royalties required

Mining tourism also requires a business license, a performance bond, and - if the claims are on state land - royalties on production. This includes royalties on the gold that clients extract from the claims. DNR acknowledges that it can be difficult for a miner to keep track of production by recreational mining clients, so there is an option for miners to pay royalties based on the net income of their tourism business, by including royalties in the client fee structure.

Permit fees for recreational mining businesses are not particularly high. In Bauer's case, the land use permit is required because he plans to use temporary structures that remain overnight for more than 14 days. The application fee for the land use permit is $100, plus a fee of $500 for facilities that are in place for less than six months of the year, or $1,000 for facilities that are in place for over six months of the year, and an additional $2 per visitor day.

Miners who intend to use only temporary portable camps that will be moved two miles every 14 days only need a commercial recreation permit, which costs $500 plus $2 per visitor day. Day-use activity with no facilities that remain overnight requires general recreation registration for a fee of $25 if the application is made online or $50 if it's hard copy.

"The main question that is unresolved in this process regards miners wanting to enter into long-term leases for the sites," Stephen Bethune, a natural resource specialist with DNR, told Mining News. "DNR has not solved the issue yet of how to allow for competitive long-term leases when the claimant holds the mineral rights to that spot. In the meantime we are working on permits and short-term leases - five- and 10-year authorizations - as interim authorizations."