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Alaska Gold Dredging Adventure Part 1

Hi,

I have decided to go gold dredging next summer and thought I would invite you all along for the ride via the Internet. Some partners and I have ground up in the historic 40 Mile mining district of Alaska on Jack Wade Creek. The creek has been mined for over 100 years so there is no question there is gold there. The question is after all that mining how much can we get with a suction dredge? I would not have got all that excited over the prospects except for some 100 year type flooding that occurred the summer before last. http://www.adn.com/2010/07/13/1364917/taylor-highway-remains-closed.html The gold in the area is heavy, thick, well worn stuff. Old gold reconcentrated from ancient river channels. Here is 1.5 ounces I found detecting in the area to give you an idea what the gold looks like. The stuff is deceptively heavy compared to the quartzy gold I am used to finding and adds up fast.

[attachment 251576 image.jpg]
1.5 Ounces of 40 Mile Gold

I am going to partner up with my brother and use a Keene 6218GHM 6" dredge for the main operation. We will generally work split shifts but double up if need be. Long daylight hours in Alaska means we can both get a full days work in each day. Details on the dredge can be found at http://markkeeneeng.blogspot.com/2010/11/getting-gold-with-keenes-model-6218-six.html I am going to rig it with 30 feet of suction hose and outriggers to carry the extra forward weight of the motor combo. The long hose is not for going deep, it is to allow the dredge to stay in one location while a large area is worked. We should be working well under 10 feet deep at most but that is another area a bit unanswered at the moment. But I am hoping maybe 6 feet to bedrock at most.

[attachment 251571 image.jpg]
Keene 6218GHM 6" Dredge

I expect we may get high water that keeps us from dredging at times so I have also ordered a Keene 175X12 power sluice with extended 12 ' sluice and 3" dredge attachment. I intend on adding more suction hose and a 3" HydroForce nozzle to vacuum shallow gold bearing gravel from an exposed bench location on the claim. More on the power sluice here http://www.keeneeng.com/Merchant2/merchant.mvc?Screen=PROD&Product_Code=175X12&Category_Code=PDS The extra long sluice is not for gold recovery so much as getting sufficient clearance for dumping tailings.

[attachment 251572 image.jpg]
Keene 175X12 Power Sluice with 3" Dredge Attachment

I filed for the permits this summer while I was busy on other projects so have all that taken care of already. This is federal land and it took several months to get all my permits lined up due to heavy case loads these days so plan in advance on this stuff. The main issue was long term camping which took a bond in this particular case.

So mostly dredging, some high banking, and also breaks for detecting in the area depending on our mood and weather, etc. We will start mid-June and run an open ended operation. If the gold is good we just keep going until we get froze out but we will probably burn out before then. It all really just depends on gold and weather more than anything.

I am starting pretty fresh equipment wise so will keep you all informed as I go as to thought processes and costs just in case anyone is actually thinking of doing something like this or at least just curious. Old hat for me but not something I have done tons of for awhile so a bit of a switch from detecting. I did get a couple solid weeks of nozzle time on a 4" this summer just to get back in the swing of things. Just made me miss a 6" more than anything.

So far $6995 for the 6" and $2745 for the power sluice. In for almost $10,000 so far and barely got started, but that is a big chunk of it. That will probably go in on a 5 year depreciation schedule though that is up to the accountant and new tax changes. I am not going to count claim costs and permitting costs directly as I have several partners in the claims so that all gets spread out over the years we own the claims. The main immediate overhead in that regard will be the 10% the partnership collects for claim expenses and cost recovery. Since I am funding the operation I will probably take another 10% myself to cover wear and tear on equipment and fuel costs. My brother and I will split the remaining 80%. All he needs to do is pony up for travel costs, food, and his drysuit.

NOTE ADDED 1/31/13 - I have been fine-tuning the original post as I think of new stuff, the latest version can be found at Alaska Gold Dredging Adventure 2013

Steve Herschbach
 
Sounds like fun. Wish CA would lift the dredge ban so I could go back to work. Good luck.
 
I will be following your Alaskan adventure Steve for sure! Hope the
gold is good for you guys and the weather holds after you get all
the equipment up there. GL and yellow gold to ya both..........
Gold Nuggets :wiggle:
 
Best of luck to you and your brother, I hope you guys really get into a great paystreak. I will keep an eye on your progress via the internet.

Lots of cash, Mining ain't cheap!

Whats wrong with the dry suit you used this last summer? Did you leave it behind (I cant remember)?
 
Hi Steve -

Thanks for all your info and stories of adventures you have up there in Alaska. I was there in 1988 and did quite well with a 4 inch dredge up around the Alaska Range. If your shopping for a dry suit I have a commercial grade DUI crushed neoprene dry suit I would be willing to sell/trade if your interested.

[attachment 251680 DUIdrysuit.JPG]

I used to be a commercial diver and purchased this suit in 2000. It is in great condition but I have doubts about the zipper. I am retired now and If I was going to use it I would replace the zipper ($300). altho the zipper is rated for 2000 cycles and still slides well I would test it before seriously using it. All the seals look good with no cracking or dryness and the suit over all is in great condition. In 2000 I paid $2800 for the suit and used it 40 - 50 hrs bottom time while working for a salvage company. It has a tool pouch on the leg, warm neck collar, knee pads, zipper flap - to keep sand/silt out of zipper and is one tough suit. the purge valve is on the shoulder with inflation valve on chest. I am 5' 10" tall and weigh 180 lbs. and this suit has lots of room for underwear and has a blousing belt to fold extra suit length for better fit. size 12 attached boots for lots of room for insulation of your choice on your feet. I am in Az. at this time but will return home in April, where the suit is. I would be willing to sell/trade. Asking $1000 for suit or would trade for gold or MD of equal value. I am willing to dicker.
 
Steve - post script:

I would love to get my hands on a GB2 in good condition.
 
But...who will keep the coffee pot boiling and dinner on the table? Sounds like another great adventure! Good Luck

fred
 
Hi Chris,

I sold everything I had this fall for various reasons, one being to get a little more serious on the tax issues and start fresh with new gear all properly accounted for and written off. The last couple years have been more prospecting and this is more a make money operation so I am cleaning up the books.

Steve Herschbach
 
Hi Ray,

Thanks for the offer but I will be getting a brand new suit. I am very possessive of my drysuits and want to be the only person that has used the one I have.

Steve Herschbach
 
I have heard that most divers urinate in there suites. :yikes: Or may be that was just wet suits.
 
My prospecting is a for profit enterprise, one that has made me a surprising amount of money over the years. As such I run it as a business. I have a business license for Herschbach Enterprises and file a schedule C yearly. Been a going concern under a couple different names for over 30 years now.

The key is to be serious about running things in a businesslike fashion. I have a business checking account and keep my business spending separate from my personal spending. I have been very low level the last few years but now that I am ramping up in 2013 I am cleaning up the books. I even went so far as to buy Quickbooks and am working on getting everything plugged into that now. Since I am retiring from my regular day job at AMDS Herschbach Enterprises will now be my main source of income.

It is something rarely discussed, I assume because most people do this as a hobby. Even then if you do it right you can wite off the expenses against the profits, but you cannot show a loss. I rarely show a loss myself though in a year where I make a lot of purchases and hold back on gold sales it can happen. But with the price of gold as high as it is now it does not take much selling to end up showing a profit.

If you are someone who is actually finding any quantity of gold it is something well worth learning about.

Business or Hobby? http://www.irs.gov/uac/Business-or-Hobby%3F-Answer-Has-Implications-for-Deductions

Hobby Deductions. http://www.irs.gov/uac/Is-Your-Hobby-a-For-Profit-Endeavor%3F

Placer Mining Business http://www.irs.gov/pub/irs-mssp/placer.pdf
 
Hey - I resent that comment! You just don't urinate in a $2,800 dry suit! I never have and would never in the future nor have I ever done that in a wet suit! machineman - would you be the one to urinate in a dry suit and spend your bottom time (up to an hour) with that in your suit? A lot of people have a "relief" zipper installed if they have small bladders (must go to surface and get out of water) but that is not the case for me. Always someone out there who doesn't understand but ready to make juvenile comments. I am a professional and would never try to put a fouled suit onto anyone! Even to urinate in a wet suit is a foul thing to do as the smell and, what ever else it could cause, is always in the suit.
 
What is going on? Urinating in your wet suit is one of the pleasures of life. I guess a dry suit is different, but back in 1969 when I took up scuba diving, the ocean was colder. That was before all the global warming. We would swim out and tie up our raft to the large kelp. Then dive down so we were in the (55 deg F) ocean for hours. That one warm shot we got was one of the pleasures of life. Urine is sterile and those leaky wet suits we had back then flushed the salts out, Come on, some of you skin divers back me up!
 
In so far as you are writing and selling articles about your prospecting operations, you can write off your prospecting expenses against writing income as well. Writing at home or on the road opens up additional possible deductions.
 
A gross subject and not my way
 
Steve, would you have any interest in selling this adventure-story to one of the TV production companies... It would be more than refreshing to see a Gold/Alaska Adventure story/ program about, and done by, a guy like you (that has the "street cred" to back it up...)

(I am not mentioning this because I want to buy it... But I would LOVE to watch this adventure unfold in video format... and I would love to spend 30 minutes a week with you on your claim...
(I think if you took a poll you may find that there are a lot of people with similar thinking)

Good Luck with it ,and it's gonna be fun to follow you on this story .. Thanks , and we are all looking forward to it...
 
I doubt they would be interested in it because I am not terribly wanring to be portrayed as a buffoon or an a-hole on national TV. They are looking for dramas and I try to keep drama at a minimum.

However, Mr. Producer out there reading this, for enough money I probably could stand being a buffoon or an a-hole or both on national TV. Just saying.

I do plan on shooting lots of video this summer of dredging, detecting, etc. for my upcoming Youtube channel or maybe for a little DVD.

Steve Herschbach
 
http://www.detectorprospector.com/steves-mining-journal/alaska-gold-dredging-adventure-2013-part-1.htm

I have been fine-tuning the original post here at the location above as I think of new stuff.

Steve Herschbach
 
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