Offshore gold miners off West Beach.

DNR offers off-shore leases for gold mining

If you missed the first Nome gold rush in 1898 and then again were caught snoozing for the 2011 stampede, your days are looking brighter. The State of Alaska Department of Natural Resources has announced the sale of eleven offshore lease tracts, which have become available. The tracts total about 1,060 acres and range in size from 34 acres to 375. Prospective miners are invited to send their sealed bids to the State of Alaska. The auction began on Jan.1, 2020 and will close on February 28. There will be a live, public reading of the sealed bids on March 23.  
In 2011, 83 leases totaling 23,793 acres were sold for a total of just over $7 million. The median price averaged around $600 an acre with some going for up to $1,600 an acre. The sale launched a large number of gold dredges into the waters around Nome and spawned Discovery Channel’s Bering Sea Gold, a reality TV show which romanced the allure of the yellow metal and the lives of those who seek it. The lack of Ferraris cruising Nome’s Front Street and other ostentatious displays of fabulous wealth suggests income from working the leases has been modest. But the continued presence in Nome of offshore miners, while fewer than five year ago, means there is money to be made. Word on the street is those who work hard are rewarded for their labor.
All the 2020 leases are for tide and submerged lands and are referenced in the state’s Land Administrative System at http://dnr.alaska.gov/landrecords/.
The successful bidders in the lease sale are granted exclusive rights to the locatable minerals within the boundaries of the state-owned tide and submerged land. Before proceeding with mining the operator will have to acquire the necessary permits from all regulating agencies having jurisdiction.  
“We make more money if there is a producing operation,” said the Department of Natural Resources’ Heather Lescanec. “We get the production royalties which are three percent of whatever their positive net income is. So we benefit from that financially.” There is also annual rent. The rent is not high but it makes a contribution to state coffers. “The reason the rent is so low is because we want to encourage people to mine,” said Lescanec.  
What about Nome? Does the city benefit from having offshore miners in town? “Offshore mining is an important feeder to our local merchants,” replied former mayor and former interim city manager John Handeland. “Hardware and grocery stores, restaurants and fuel sales derive business from this sector.”
Lescanec has watched the Discovery Channel reality show Bering Sea Gold. “I’ve seen it enough to know that those guys are producing,” she said. “It throws up a red flag because that’s not the same thing they’re saying on their paperwork. We’re working on doing things to keep people honest on their production. How can we do that legally? Maybe in the future there will be some statute and regulation changes that will allow us to be more liberal in asking for information about those sorts of things. So things they hold close to their chest we’ll be allowed to look at.”
Leases from the State of Alaska are good for ten years. That means the leases sold in 2011 expire next year. There could be another lease sale. “Or they might be closed for the time being until we get all of our ducks in a row to open those up again for leasing,” said Lescanec. “But in the meantime I’d like to have a mineral closing order on some of those areas. It’s hard for us because of manpower issues to go check on the diameter of someone’s suction dredge, or their horsepower that they’re using.”
The State of Alaska has published online a handbook for miners interested in bidding on a lease. It explains most aspects of the process of bidding, who is eligible, what are the rules and regulations a miner must adhere to should he or she win the bid.
The extensive instructions are found at http://dnr.alaska.gov/ mlw/mining/nome/    

 

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