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Law Offices of Ronald W. Rutz
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July 17, 2004: Gold Prospecting

Q: Why haven’t you written about gold prospecting for a while? Is it no longer permitted in Colorado?

A: Oh, to the contrary! There are just too many topics to cover and too few column opportunities. But since I am asked about gold prospecting several times a week, and almost daily this time of year, let’s quickly run through a few fundamentals.

First, if you live in Colorado, I would suggest experiencing some of the state’s historical opportunities – go on a cattle drive, visit ghost towns, attend a rodeo, ride in a wagon or stage over one of the old trails, etc. – and yes, try gold or diamond prospecting.

But before you venture forth, do a bit of research. Find out where gold has been discovered in the past, whether it is in Colorado’s golden rectangle stretching approximately 50 miles wide and about 250 miles long from just west of Boulder down and past Durango, or in several places out on the plains, or northwestern Colorado. But you will probably find historic gold activity close to where you are vacationing even if you are not in those areas.

Be sure you are on public property, although I have had good success asking permission to look on private property, especially if there is agreement with the landowner to split what is found. The going rate seems to be 90% to the gold seekers and 10% to the owner, although some property owners might request a flat fee such as $50. But there is so much available public land, I would suggest just sticking to BLM and Forest Service property.

Next, check with the Forest Service and BLM when you have a location in mind. Some property has been withdrawn from public access while other areas may have rules and restrictions imposed by the local public servant in charge. If you run into an administrator that seems unreasonable, try another location and deal with someone receptive to you.

Again, as a very general rule, as long as you are a recreational panner, a bond and an environmental impact statement are not required. But observe the local rules such as not digging into banks and filling holes. I am told that a permit might now be required on Forest Service property, but telephone ahead to be certain.

Also be careful not to be a "claim jumper." If someone has a claim it should be apparent at the site. Respect the posted area and just move to a non-claimed area.

In gold country, placer gold is probably found in significant accumulations in maybe 1% of the area. Colorado’s "flour gold" and "pickers" (very small pieces of gold) are moved around by water activity. Look where water slows during our spring floods thereby dropping the relatively heavier golden material (gold is 20 times more heavy than water). In reality, the "Midas touch" or "nose for gold" is really seeing what nature is revealing.

Take along a plastic pan (which only costs a few dollars), a bucket, and a change of clothes, including socks and sneakers. Additionally, have a screwdriver or knife along to explore inside cracks and crevasses where you are panning.

Finally, except for learning about Colorado’s history and spending time in stunningly beautiful surroundings, you probably will find absolutely nothing unless you do one other thing – practice before you go. Mix up your "witches brew" of pebbles, mud, sand, rocks, and BB pellets. Then, over a washtub filled with water, dip your pan into the mixture and practice washing out the contents in the water trying to end up with one or more BBs in your pan. Some panners will have the "touch" immediately. Others will struggle. But without perfecting the technique, a person will wash out of his or her pan more gold than he or she will ever know, never seeing that flash in the pan while joining the chorus of those who chant that, "There ain’t no more gold in them thar hills!" (I have even heard a few so-called rock hounds express those sentiments too.)

Finally, do all of this for fun. Do not come down with a bad case of "gold fever" when you find something. Although some of us feel we can make a very good living this way, almost everyone else probably cannot. So do not quit your day job and just enjoy the experience. And yes, you do get to keep everything that you find and from what I am told by the CPA’s, you do not have to declare it as income until you cash your gold in or otherwise exchange it for value.

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