Gold

by Matthew Hart

  The first market with a chance to react was Tokyo: “Exchanges in Tokyo Unloading Dollars,” New York Times, August 16, 1971, http://query.nytimes.com/mem/archive/pdf?res=F70A12FD3D591A7493C4A81783D85F458785F9.

  As dismay spread around the globe, the White House awaited the American response: Stein, Presidential Economics, 180.

  “When you wake up in the morning, do you care about the price of gold?”: Floyd Norris, “In a Focus on Gold, History Repeats Itself,” New York Times, February 2, 2012, http://www.nytimes.com/2012/02/03/business/in-rise-of-gold-bugs-history-repeats-itself.html?pagewanted=all.

  CHAPTER 5: THE DISCOVERY OF INVISIBLE GOLD

  “While I was working in the field”: Ralph J. Roberts, A Passion for Gold: An Autobiography (Reno: University of Nevada Press, 2002), 28.

  “On those trips into the mountains”: Ibid., 47.

  He stepped off the bus in Winnemucca: Ibid., 29.

  There was a working gold mine in the heart of Willow Creek: Ibid., 34.

  Mining in Nevada had a long pedigree: “Outline of Nevada Mining History,” Nevada Bureau of Mines and Geology, quarterly newsletter, Fall 1993, http://www.nbmg.unr.edu/dox/nl/n120.htm.

  To explain what had happened, Roberts hypothesized: Roberts, A Passion for Gold, 34.

  In 1939, when Roberts began his explorations: Ibid., 40–43.

  The writers described huge tables of Triassic rock: Arnold Hague and S. F. Emmons, “Descriptive Geology,” in United States Geological Exploration of the Fortieth Parallel, ed. Clarence King (Washington, DC: U.S. Government Printing Office, 1877), 601. The volumes have been digitized by the Boston Public Library and are available online. The geology volume can be accessed at http://www.archive.org/stream/descriptivegeolo00hagu#page/n11/mode/2up.

  He struck out along the Antler range in his happiest state—alone: Roberts, A Passion for Gold, 41.

  When the ocean plate and continental plate collided: Dean G. Heitt, “Newmont’s Reserve History of the Carlin Trend, 1965–2001,” in Gold Deposits of the Carlin Trend, eds. Tommy B. Thompson, Lewis Teal, and Richard O. Meeuwig (Reno: Nevada Bureau of Mines and Geology Bulletin 111, University of Nevada), 2002, 35ff, http://www.nbmg.unr.edu/dox/b111/history.pdf.

  “As I approached the western margin of the range”: Roberts, A Passion for Gold, 44.

  Ralph Jackson Roberts was born in 1911: Ibid., 12–19.

  Even the Roberts Mountains of north-central Nevada: Ibid., 83.

  “Our eyes met and held for a long moment”: Roberts’s wife, Arleda: Ibid., 28–29, 51–53.

  He saw that the feature called the Roberts Mountains thrust presented a continuous geological relationship: Ibid., 84.

  William Vanderburg: J. Alan Coope, Carlin Trend Exploration History: Discovery of the Carlin Deposit (Reno: Nevada Bureau of Mines and Geology Special Publication 13, University of Nevada, 1991), 5, http://www.nbmg.unr.edu/dox/sp13.pdf.

  “Bill wanted to show me this unusual ore”: Roberts, A Passion for Gold, 86.

  “When we entered Maggie Creek Canyon”: Ibid., 87.

  “My excitement grew”: Ibid., 88.

  In 1960 Roberts put his thoughts: “Alinement of Mining Districts in North-Central Nevada,” United States Geological Survey Professional Paper 400-B, 1960, B17–B19.

  One man stayed behind: John Seabrook, “A Reporter at Large: Invisible Gold,” New Yorker, April 24, 1989, 69–70.

  John Sealy Livermore: Ibid., 62. See also “John Sealy Livermore, 1918–2013,” obituary in Napa Valley Register, February 14, 2013, http://napavalleyregister.com/obituaries/john-sealy-livermore/article_3048b3d8-7646-11e2-9e18-0019bb2963f4.html.

  Livermore’s search for invisible gold began in 1949 at the Standard mine: Seabrook, “A Reporter at Large: Invisible Gold,” 65.

  “We did some churn drilling”: John Sealy Livermore, “Prospector, Geologist, Public Resource Advocate: Carlin Mine Discovery, 1961; Nevada Gold Rush, 1970s,” Western Mining in the Twentieth Century Oral History Series (Berkeley: University of California, 2001), 29; navigate from http://bancroft.berkeley.edu/ROHO/projects/mining/.

  In Livermore’s conjecture: Seabrook, “A Reporter at Large: Invisible Gold,” 65.

  “I get lonely sometimes, too”: Ibid., 68.

  “That really got me interested”: Livermore, oral history, 66.

  Then Livermore visited Harry Bishop: Ibid., 68.

  “My God, it was a beautiful ore body”: Seabrook, “A Reporter at Large: Invisible Gold,” 73.

  We don’t know a thing about him except where he slept his hopes away: Biggest goldfield in America: Lewis Teal and Mac Jackson, “Geologic Overview of the Carlin Trend Gold Deposits,” in Gold Deposits of the Carlin Trend, 9.

  CHAPTER 6: GOLDSTRIKE!

  Three years later the gold price passed $180: For historic gold prices, see http://www.kitco.com/charts/historicalgold.html; http://www.kitco.com/gold.londonfix.html.

  “Nobody in his right mind”: “Gold Surges Again in a ‘Buying Fever,’ ” Associated Press, December 28, 1979, http://query.nytimes.com/mem/archive/pdf?res=F00A1EF73F5410728DDDA10A94DA415B898BF1D3.

  In 1944, when the German wartime occupying force: Early Munk family details: Anna Porter, Kasztner’s Train: The True Story of Rezso Kasztner, Unknown Hero of the Holocaust (Toronto: Douglas & McIntyre, 2007), 222ff.

  Six years later he and business partner David Gilmour founded Clairtone: See for example Nina Munk and Rachel Gotlieb, The Art of Clairtone: The Making of a Design Icon, 1958–1971 (Toronto: McClelland & Stewart, 2008); http://www.clairtone.ca/projectg/.

  A 1967 commercial posted on YouTube: http://www.youtube.com/watch?v=K7wiQ1At_9Q.

  The Clairtone company was falling apart around them: Nina Munk, “The Lesson of Clairtone,” Canadian Business, May 12, 2008, 42; also http://www.ninamunk.com/documents/ClairtoneLesson.htm, under the heading “My Father’s Brilliant Mistake.”

  “Munk was too good a salesman for his own good”: Ibid.

  “Desperate for capital”: Munk’s hotels, and interview with Lord Inchcape: Michael Posner, “Peter Munk’s Reflections on Being a Winner,” Globe and Mail, Toronto, February 18, 2011, http://www.theglobeandmail.com/news/national/peter-munks-reflections-on-being-a-winner/article567172/?page=all.

  In one biography he arrives for his deportation from Hungary brimming with unconcern: Richard Rohmer, Golden Phoenix: The Biography of Peter Munk (Toronto: Key Porter Books, 1997), 9.

  Another chronicle contains a well-worn story about Munk: Posner, “Peter Munk’s Reflections on Being a Winner.”

  He built the biggest gold miner in the world: See for example Liezel Hill, “Barrick to Lead Wave of Gold-Mining Asset Sales in 2013,” Bloomberg, January 8, 2013, http://www.bloomberg.com/news/2013-01-08/barrick-seen-leading-gold-asset-sales-in-2013-corporate-canada.html, in which Barrick is called “the largest producer of the precious metal”; Trefis Team, “Barrick Gold Can Still Sparkle Despite Higher Costs and Impairment Charges in Results,” Forbes, February 19, 2013, http://www.forbes.com/sites/greatspeculations/2013/02/19/barrick-gold-can-still-sparkle-despite-higher-costs-and-impairment-charges-in-results/, where Barrick is called “the largest gold producer in the world.”

  Barrick bought its first mine in 1984: Account of Barrick’s growth from interviews with Peter Munk and Alan Hill, and from Peter C. Newman, Dreams and Rewards: The Barrick Story (Toronto: Barrick Gold, 1996).

  In raising the money, Munk showed the financial audacity: See “Jolly Gold Giant: How Peter Munk Built the World’s Biggest Gold Miner from Scratch in Just 25 Years,” Economist, April 17, 2008, http://www.economist.com/node/11045502.

  Goldstrike powered the company into the ranks of the world’s biggest gold producers: For the success of Goldstrike, see for example Clyde H. Farnsworth, “Profile/Peter Munk; Lucky Gold Strike and Wise Hedging Help Keep His Shareholders Smiling,” New York Times, May 30, 1993, http://www.nytimes.com/1993/05/30/business/profile-peter-munk-lucky-gold-strike-wise-hedging-help-keep-his-shareholders.html
?pagewanted=all&src=pm.

  In forward selling, a miner contracts with a commercial bank: The mechanics of forward selling were explained to me by Peter Munk and by Richard Young. Young is president and CEO of Teranga Gold Corporation, and a veteran of gold mine finance and of Barrick.

  A single input can demolish the forward seller’s math: “Barrick to Sell $3 Billion in Stock to Buy Back Hedges,” Reuters, September 8, 2009, http://www.reuters.com/article/2009/09/08/us-barrick-hedge-idUSTRE58767F20090908.

  CHAPTER 7: LINGLONG

  In a ten-year exploration binge: See for example Maria Kolesnikova, “Top 10 Gold-Producing Countries in 2011,” Bloomberg, April 5, 2012, http://www.bloomberg.com/news/2012-04-05/top-10-gold-producing-countries-in-2011-table.html; for China replacing South Africa in 2007: Shu-Ching Jean Chen, “China Became World’s Top Gold Producer In 2007,” Forbes, January 18, 2008, http://www.forbes.com/2008/01/18/china-gold-production-markets-econ-cx_jc_0118markets02.html.

  They were buying gold too: “China to Overtake India in Overall Gold Demand: GFMS,” Reuters, November 8, 2012, http://in.reuters.com/article/2012/11/08/gold-china-gfms-india-idINDEE8A706R20121108.

  All together, they produce more than 300 tons: Kolesnikova, “Top 10 Gold-Producing Countries in 2011.”

  My attention settled on a picture: Yellow book: Gong Runtan and Zhu Fengsan, The Gold Mining History of Zhaoyuan with a Review of the Gold Industry in the P.R. [People’s Republic of] China, editor-in-chief, Wei Youzhi (China Ocean Press and Placer Dome China Ltd., 2004), 4.

  In ancient times, the legend says: Ibid., 53–54.

  The Chinese were mining gold by 1300 BC: And cinnabar as indicator: Ibid., 2–7.

  “If in the mountain grow spring shallots, there will be silver under the ground; if leek in the mountain, gold.”: Ibid., 34.

  In 1980 researchers at the University of London: Christine A. Girling and Peter J. Peterson, “Gold in Plants,” Gold Bulletin 13, no. 4 (December 1980): 151–57, http://www.link.springer.com/article/10.1007/BF03215461?LI=true.

  A 1998 article in Nature: Christopher W. N. Anderson, Robert R. Brooks, Robert B. Stewart, and Robyn Simcock, “Harvesting a Crop of Gold in Plants,” Nature, October 8, 1998, No. 395, 553–54, http://www.nature.com/nature/journal/v395/n6702/full/395553a0.html.

  In 2004 a New Zealand researcher: Jen Ross, “Money That Grows on Crops,” Christian Science Monitor, April 14, 2004, http://www.csmonitor.com/2004/0415/p17s02-sten.html.

  And a paper published: Victor Wilson-Corral, Mayra Rodriguez-Lopez, Joel Lopez-Perez, Miguel Arenas-Vargas, and Christopher Anderson, “Gold Phytomining in Arid and Semiarid Soils,” paper at the World Congress of Soil Science, August 1–6, 2010, Brisbane, Australia, http://www.iuss.org/19th%20WCSS/Sympo sium/pdf/1593.pdf.

  They had novel ways of refining gold: Gong and Zhu, The Gold Mining History of Zhaoyuan, 43.

  At the beginning of the first millennium: Gold reserves equal to those of Rome: Ibid., 3.

  When the Mongols came to power: Ibid., 6.

  In the seventeenth century Linglong came into the hands of the famous eunuch Wei Zhongxian: Ibid., 7. See also “Wei Zhongxian—The Most Powerful and Notorious Eunuch in Chinese History,” Cultural China, http://history.cultural-china.com/en/47History6380.html; “Wei Zhongxian,” Encyclopaedia Britannica, http://www.britannica.com/EBchecked/topic/638872/Wei-Zhongxian.

  The new Manchu rulers hated gold mining: Gong and Zhu, The Gold Mining History of Zhaoyuan, 10.

  By 1888 China was producing 700,000 ounces a year: Ibid., 11. Gong and Zhu use the figure 432,000 liang. I used two online converters: http://www.convert-me.com/en/convert/weight/cliang.html; http://www.convertcenter.com/chinese-liang. Each gave a metric weight of 21.6 million grams, which I divided by 31 to convert to troy, finding 696,774 ounces.

  “The accumulated snow on Mount Linglong had not yet melted”: Account of Japanese occupation: Gong and Zhu, The Gold Mining History of Zhaoyuan, 64ff.

  Approved by Mao Zedong to root out what he saw as capitalist sympathies: See for example Roderick MacFarquhar and Michael Schoenhels, “Red Terror,” Chapter 7, Mao’s Last Revolution (Cambridge: Harvard University Press, 2006), 117–31.

  Spurred by the prospect of potential gains: Establishment of the Gold Army: Gong and Zhu, The Gold Mining History of Zhaoyuan, 91.

  Zhu became adviser to the top Gold Army leaders: Details of Zhu’s rise from Zhu Fengsan and Greg Hall, an Australian consultant geologist, and friend of Zhu’s. Hall is a director of four gold mining companies, including China Gold International Resources Corp. Ltd., whose majority shareholder is state-owned China National Gold Group. He was an executive of the Australian subsidiary of Placer Dome, a large miner (later bought by Barrick) that entered China in 1997 to look for a gold property.

  CHAPTER 8: THE BANDIT CIRCUS

  In 1993, to encourage exploration: Greg Hall and Zhu Fengsan interviews with author. But see also William L. MacBride, Jr., and Wang Bei, “Chinese Mining Law Overview,” available as a pdf from Gough, Shanahan, Johnson, and Waterman, a Montana natural resources law firm. The paper says mining law had not changed until 1996, but mentions “regulations being promulgated in 1993 and 1994,” http://www.gsjw.com/catalogs/catalog110/section174/file51.pdf. In a March 13, 2013, email to author, MacBride speculated that the 1993 regulations were China’s signal to the West that mining investment would be encouraged in the rewrite of the mining laws that China was then drafting.

  In 1997 China was the world’s fifth-ranked gold producer: United States Geological Survey, “Gold Statistics and Information,” http://minerals.usgs.gov/minerals/pubs/commodity/gold/.

  Placer Dome had a five-year plan of its own: Greg Hall, interview with author. See also slides of Hall’s presentation to Prospectors and Developers Association of Canada conference, 2003, http://www.pdac.ca/pdf-viewer?doc=/docs/default-source/publications-papers-presentations-conventions/hall.pdf.

  It was a pleasure the Chinese were anxious to supply to others: Account of Mundoro experience from Colin McAleenan interview with author. I confirmed the details of McAleenan’s version of events with an investment banker familiar with the story, who for reasons of business stipulated that I not name him. He said that, generally, Western gold miners had not done well in China. Email from richdad.com confirmed Robert Kiyosaki as an investor; Frank Crerie is now deceased.

  In November 2003 they took the company public and raised $13 million: See company press release, December 4, 2003. (To view public documents such as press releases and material change reports for Canadian listed companies, go to http://www.sedar.com and navigate from the “Company Profiles” tab. The SEDAR system is maintained by the Canadian Securities Administrators, comprising regulators from every province and territory of Canada.)

  One of the most hyped of these was the Boka prospect: See for example “Southwestern Resources Corp.: Positive Drill Results, Boka Gold Project, Yunnan Province, China,” BusinessWire, August 31, 2005, http://www.businesswire.com/news/home/20050831005839/en/Southwestern-Resources-Corp.-Positive-Drill-Results-Boka.

  Southwestern’s market capitalization grew to more than three quarters of a billion dollars: Brian Hutchinson, “Gold Mine’s Results Transcended Belief,” National Post, December 22, 2010. (The Internet link to the story has expired.)

  “The problem,” said an official: Shao Da, “Yunnan Gold Prospecting Project Held Up,” China.org.cn, September 5, 2006, http://www.china.org.cn/english/2006/Sep/180144.htm.

  Southwestern’s share price later collapsed: Hutchinson, “Gold Mine’s Results Transcended Belief”; and including Paterson sentence: David Baines, “Former Geologist Sentenced to Six Years in Prison for Assay Fraud,” Vancouver Sun, January 18, 2013, http://www.van couversun.com/business/David+Baines+Former+geologist+sentenced+years+prison+assay+fraud/7841963/story.html.

  They raised another $25 million: See Mundoro Mining release, October 6, 2004, at http://www.sedar.com.

  Instead of 79 percent of profits: See Mundoro Capi
tal August 2, 2011, press release accepting deal, and calling it “the best current available alternative for shareholders of Mundoro to participate in the future development of the Maoling Gold Project,” http:www.sedar.com.

  When China made the 1993 decision to encourage mine development, it allowed any Chinese company: X. D. Jiang, vice president of production and executive director, China Gold International Resources Corp. Ltd., interview with author.

  Then it caught the eye of Robert Friedland: Friedland as billionaire: “The World’s Billionaires,” Forbes. In March 2013, Friedland’s net worth was said to be $1.8 billion: http:www.forbes.com/profile/robert-friedland/. Friedland as “Toxic Bob”: see for example Scott Condon, “ ‘Toxic Bob’ vs. Wealthy Neighbors,” Aspen Times, July 16, 2009, http://www.aspentimes.com/article/20090716/NEWS/907159977; David Robertson, “ ‘Toxic Bob’ Admits Defeat in Power Struggle,” Times (London), April 19, 2012, http://www.thetimes.co.uk/tto/business/industries/naturalresources/article3388506.ece; Joshua Zapf, “Robert Friedland,” Mining.com, June 29, 2012, http://www.mining.com/robert-toxic-bob-friedland-49502/. Friedland cyanide spill: “Cyanide-Spill Suit Is Settled in Colorado,” New York Times, December 24, 2000, http:www.nytimes.com/2000/12/24/us/cyanide-spill-suit-is-settled-in-colo rado.html.

  Chang Shan Hao presented a similar opportunity: I relied on X. D. Jiang for the chronology of Friedland/Jinshan involvement at Chang Shan Hao, as he was intimate with the development from the beginning. Jinshan press releases and material statements may be viewed at the website of China Gold International, which took over Jinshan: http://www.chinagoldintl.com, and enter “Jinshan” into the search field.

  The year that China moved into first place: See United States Geological Survey, Gold Statistics and Information, http://minerals.usgs.gov/minerals/pubs/commodity/gold/.

  Gold became a restricted commodity: X. D. Jiang and Greg Hall, interviews with author. See also for example “Foreign Investors’ Gold Rush in China Restricted,” http://www.chinastakes.com/2008/4/foreign-investors-gold-rush-in-china-restricted.html.