On his recent journey from Atlanta to Missoula, Dan Hollis found himself at a Holiday Inn somewhere between Idaho Falls and Dillon. A flight mishap left him stranded in Chicago, he was detoured through Salt Lake City, and then, instead of waiting overnight for a flight to Missoula, he decided to rent a car and drive. It was a trying couple of days, he said, but he was hoping there'd be a pot of gold at the end of the rainbow.
And there might be.
Hollis is the CEO of Dutch Gold Resources, a small, Atlanta-based mining company that has its sights set on a claim about 15 miles west of Philipsburg, in the hills above Upper Rock Creek, the blue-ribbon trout stream that feeds into the Clark Fork. He was headed to the site, known as Basin Gulch, to monitor the progress of his company's exploratory drilling, which the Montana Department of Environmental Quality approved in February. "We've had a reserve report completed that shows that there's an exceptionally large gold body on the property," he says.
- Photo by Chad Harder
- Drumlummon miners drive pneumatic drills into rock.
He's also coming in search of other mining prospects, because, he says, Dutch Gold is seeking "a significant presence" in Montana.
"We're doing drilling for the purpose of defining the resources that could be high-grade underground mines," he says. "Our hope would be that over the next six months we're able to identify and develop, consistent with permitting and regulatory issues, a small-scale mine that could be into production—let me emphasize, test production—next year."
Proposals like Dutch Gold's don't signal the kind of boom that had people heading for Sutter's Mill in 1849 or the Klondike in 1897—or even Montana in the 1860s—but Hollis could be in the vanguard of a new, 21st-century-style rush for Western metals.
From a regulatory standpoint, the Basin Gulch Mine hasn't even been officially proposed, but Dutch Gold already has bet $4 million in exploration costs, according to the company's annual report, that it will be able tap "several million ounces" of gold in the rugged terrain above Upper Rock Creek. And that gold is as valuable as it's ever been: On May 2, two days before Hollis departed for Missoula, the price of an ounce reached an all-time high of $1,575.79, topping records that had been set in 11 out of the 12 previous trading sessions.
"We've been very, very excited," Hollis says, "and we think it's going to continue to go up at a reasonably modest pace...We think gold's made a base somewhere between $1,000 and $1,200 now, and at that price, we can build what we hope will be a very profitable operation at Basin Gulch. And if gold prices continue to go up, we'll be much happier."
Gold prices began to spike with the onset of the recession in 2008, and they've generally inched upward since, propped up by low interest rates and unease about inflation.
"A lot of this is just the fear in the world and the country about the economy," says economist Larry Swanson of the O'Connor Center for the Rocky Mountain West at the University of Montana. "We've spent about three years where we've been in terror about what's happening to banking, what's happening to housing, and what people do when there's a lot of fear, particularly when the stock market is plummeting, is they invest in gold."
The Missoula Gold and Silver Exchange, on Brooks Street, has seen its business nearly double in recent months thanks to the record-high gold prices and 31-year-high silver prices, says owner David Hakes. "We've been absolutely swamped over the past two months with people buying and selling," he says. "Oh boy, have we." Kevin Pfaul, owner of the pawn shop Liquid Assets, in downtown Missoula, has seen a surge in the number of customers selling jewelry, gold nuggets, placer gold, and even dental fillings. "The gold market's been real active now for about two and a half years, and doggonit, actually, I hope it doesn't go much higher," Pfaul says. "It doesn't bode well for our economy. It shows the weakness of the dollar, and all in all, that's just not good for America."
- Photo courtesy of U.S.G.S.
- Atlanta-based Dutch Gold says it’s spent about $4 million in exploration costs on its Basin Gulch prospect, which sits about 15 miles west of Philipsburg and about two miles away from Upper Rock Creek.
But it's certainly good for mining companies, which dismays many environmentalists.
Dutch Gold's interest in Basin Gulch "is one of a number of [prospective mines]," says DEQ Environmental Management Bureau Chief Warren McCullough. "And in fact, I would say that the immediate future of mining in Montana, as far as new projects go, will probably focus mainly on relatively small, high-grade, underground gold mines."
Like in Marysville, where the 140-year old Drumlummon Mine—a rough model, Hollis says, for Basin Gulch—has come back to life.