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SPEAKER 1: Gold in Minnesota? You must be kidding. Well, not really. As it turns out, the state of Minnesota, the Department of Natural Resources is getting ready to conduct its annual mineral lease sale next week, and companies from all over the United States will be bidding for the rights to look for gold. Five years ago or so, there was not much interest in gold. Now, about 25 companies are prospecting on state land, and there will probably be more after the upcoming lease sale.

In Ontario, just a few hundred miles North, gold mining is already a major industry. And a growing number of people-- geologists, prospectors, people who should know think that Northeastern Minnesota contains the next big gold find. We're going to spend the hour talking about gold today. We'll begin with the Main Street Radio Documentary, and then we'll invite your questions for Bill Brice, who's the director of the Division of Minerals for the Department of Natural Resources. But to begin, Leif Enger from our Main Street Radio Team has this look at the search for gold in Minnesota and the effect one Canadian gold mine has had on community life.

LEIF ENGER: In a deep secluded thicket on the remote northern edge of Minnesota's Iron Range, geologist and prospector Bill Uland pushes ahead toward a Rocky outcropping he hopes will yield gold. Uland wears heavy brown boots and canvas pants that shrug off cockleburs. The brush is so dense Uland sometimes has to use his pickaxe to clear a path.

BILL ULAND: One of the things we look for when we're exploring for gold is the right general rock type, which in Minnesota, we call a greenstone. And actually, these sort of greenish rocks you see down here are greenstones.

LEIF ENGER: Uland has been prospecting this part of the country for about a dozen years, and says he has more than 20 favorable prospects. His company, The American Shield Corporation of Duluth, works together with large resource companies like Chevron in the search for mineable gold veins.

[ROCKS SHATTERING, RUSTLING]

BILL ULAND: This is what you might expect gold-bearing rock to look like. You can see that this greenish rock has been fractured and these quartz veins have invaded the fractured rock.

LEIF ENGER: Uland Doesn't play safe when making predictions. He says, it's only a matter of a year or two before somebody finds gold and finds it big. The same geologic formation that's brought Ontario the richest gold mine in decades runs right down into the Iron Range. The gold is here, he says, and prospectors like himself are closing in on it.

BILL ULAND: We statistically know it's here in the state. I mean, we're pretty sure that there's one in the Ely Tower Area or in the Gilbert Biwabik area. I'm on record predicting that we'll have a couple of discoveries here within the next few years, and I think we could have as many as 10 discoveries by the end of the century.

LEIF ENGER: Looking for gold in Minnesota isn't a new idea. It was gold, in fact, that led to the discovery of the huge iron ore deposits that became Northeast Minnesota's chief industry. In 1865, rumors of thick gold veins near Lake Vermilion led to the formation of more than a dozen exploration and mining firms. Northern Minnesota was set for the biggest gold rush since California in 1849, but prospectors never turned up more than small amounts. DNR Minerals Chief Bill Brice.

BILL BRICE: They found iron ore and they quit looking for gold, and we haven't had another good gold rush in Minnesota since. So, in a way-- [CHUCKLES] in a way the, incredible iron ore deposits have set us back.

LEIF ENGER: The rise of the Iron Range displaced gold fever in Minnesota, creating towns and providing jobs. It wasn't until the mine shutdowns and cutbacks of the early '80s that the range became a gold target again. Brice says, resource companies are now prospecting along the ridge of exposed bedrock known as the Canadian Shield. The Shield dips down from Ontario into Northeastern Minnesota, covering a rough triangle from Ely to Hibbing to International Falls.

BILL BRICE: The Canadian Shield is a very stable, very old geologic environment that's millions of years old. And the greenstones within that environment are old volcanic rocks. Within those old rocks, there's been a great deal of mineral wealth found in Canada.

LEIF ENGER: Ontario, in fact, has become one of the world's foremost gold producing regions. The province now boasts 29 producing gold mines, and there are plans to open about 10 more within the next year. Geologists say Northeastern Minnesota has the same rich ground, and for a look at the future, one might head to Ontario-- to a town where gold mining is common work. A town like marathon.

A long day's drive Northeast of Duluth, Marathon rests on a small Hill that descends gently into the northernmost waters of Lake Superior. Flanking the town, several larger and much more dramatic hills rise up and back from the lake. The hills are covered with pine trees and prospectors. This is Canada's Gold Coast.

If you climb up the Stephen Street Hill through the middle of town, you can see much of Marathon's history. The boom doesn't show at first glance. Down to your right, past the Hudson's Bay Store, the Everest Tavern shares an old building with a local café and the town paper. Off to the left stands the blue municipal office building, large and overheated. And beyond that, the modest bowling alley.

Down at the water's edge, a stack of woodchips waits for processing in the James River Pulp Mill. The mill was Marathon's real reason for being until gold was struck in the early part of this decade.

[INDISTINCT CHATTER]

At the Golden Giant Mine 20 minutes East of marathon, a fresh shift of men is just coming on duty. Wearing orange hard hats and thick coveralls, the group tromps into an elevator that will drop them into the ground for another eight hours.

WARREN KERR: 49. I don't know.

LEIF ENGER: How far under are we?

WARREN KERR: 1,500 feet. Somewhere in that order. This is our-- this is out take takeoff point.

LEIF ENGER: OK. The Golden Giant is one of three neighboring mines that make up the Hemlo Development-- the largest recent gold discovery in North America. Stepping off the elevator nearly half a mile underground is almost like walking into an auditorium-- high-ceilinged, well lit, and drafty. Safety coordinator Warren Kerr is responsible for the occasional visitor.

WARREN KERR: OK. We're just going to go through into the garage. These doors-- these doors are shaft doors, ventilation doors. All they do is control the air, and they stop it from going up the shaft.

[LOUD SNAP]

LEIF ENGER: Away from the elevator, the tunnels narrow down quickly to about 15 feet wide and nearly that high. Fool's gold, iron pyrite, glitters in the walls. The real gold is to fine to see. Kerr adjusts his headlamp and leads the way down an unlit branch tunnel to a small but well-stocked store room.

WARREN KERR: You've got different types of explosives in different sizes and packaging. It's very, very safe. If you look at a broken stick, it's about the consistency of putty.

LEIF ENGER: Occasionally underground, one can feel the percussion as gold or a few tunnels away is blasted free from the mother rock. Before they can be sent to the surface for processing, the chunks of ore must be hauled to a giant crusher by diesel tractors in loads of up to 26 tons at a time.

WARREN KERR: That's the [? 5-yard ?] machine there to your right. It's got an eight cylinder diesel engine in it. It's an extremely powerful machine.

LEIF ENGER: Yeah. Since starting production three years ago, the Golden Giant has become one of the most efficient gold mines in the world. It produces gold for about $100 an ounce, then sells it at the market price-- currently more than 400 an ounce. At an ounce of gold per three tons of ore, the mine produces some 75 pounds of gold a day-- about $400,000 worth. Add that to the gold from the other two Hemlo mines, and you have a total of roughly 200 pounds of gold a day-- $1 million. And at least for now, 1,000 jobs.

WENDY BELL: There was a lot of consternation in town about the miners being bad guys that were coming into our nice, quiet town. And I think that was dissipated in two or three months.

LEIF ENGER: Wendy Bell is the mayor of Marathon.

WENDY BELL: People found out that, gee, they were coming into town all right, but suddenly, new playground equipment turned up at the Pan Lake Park. And it all painted and they found out that there were welders and whatnot from the mines that had put these in. It got so that they were just like the regular guys. Most of them were married men with kids, who had a vested interest in keeping the town squeaky clean.

[CHILDREN PLAYING, CONVERSING]

SPEAKER 2: I want to be next.

SPEAKER 3: She wants to go too.

SPEAKER 4: I'm next. I'm next. I'm next.

ALL: (SINGING) High, low, medium, slow

Jolly ol' Pepper--

LEIF ENGER: Its noon hour at the marathon public school-- grades kindergarten through eight. 370 children attended here five years ago. 673 today. Principal Ted Lake says nothing has been the same at his school since work began on the mines in 1982. Out behind the traditional brick school building is what lake calls his Tinkertoy School. A wooden structure built in a big hurry to accommodate the waves of new students.

TED LAKE: I suppose the major challenge is knowing the children. In order to plan programming and deal effectively with kids, you really have to know them. You have to know them well enough-- on a first name basis You have to know their families, their family situations, their brothers, their sisters. I had a young fellow in grade eight come in to register, and we were his 29th school.

LEIF ENGER: The case is extreme, but not unique. Many miners move often, and there's a constant churning of students-- new ones coming in. Others going out. Still, Lake says, the school has been able to manage. The cost of expansion has been roughly equal to the revenues taxed from the mines, and Lake says, administrators are learning how to plan ahead with help from the mining companies.

TED LAKE: We've developed a formula that allows us to say, if they have a hundred new jobs, then there will be 60 children coming to our school. Sometimes, we're right and sometimes, we're wrong, you know? One of my favorite expressions is an old German expression-- we aim for the moon and sometimes we hit London.

LEIF ENGER: If the influx of families into Marathon has brought some confusion to the schools, it's also caused cautious excitement downtown.

[BALLS ROLLING, PINS CLATTERING]

The local bowling alley used to be empty most nights of the week. Since the mines opened, it's been filled to overflowing. Tonight, it's mixed doubles. Miner Norm Wells is here with his wife.

NORM WELLS: I'm from the East Coast, from Newfoundland originally, so just that big sea of water out there makes me feel real at home anyhow. [LAUGHS]

LEIF ENGER: Wells has worked at Hemlo for the last three years. Looking around the room, he describes the other bowlers-- mostly miners with similar backgrounds, including his own brother-in-law.

NORM WELLS: We both transferred to Rotan Mines together-- two families, then we got-- I got an interview down here, and he got one the same time. We came down, got interviewed together, and started a job together. So the two families have been together now for 12 years.

LEIF ENGER: Wells says he likes Marathon. He'd like to raise his family here, but he also knows the perils of the mining industry. No matter what the mineral, prices can fall, mines can dry up. Mickey Harris who runs the bowling alley with his father says they'll enjoy the crowds while they last, but they're looking beyond the boom.

MICKEY HARRIS: Because we've seen it happen in too many other places around here. Geraldton was a boom town and a mine. When the mines quit, the town died. Wawa a boom town, you know? And once the mines started to fade there, that town more or less died. They lost a lot of businesses. So we've got to be careful.

LEIF ENGER: Marathon itself has been careful in trying to control its growth. Instead of allowing developers to come in and buy up lots to sell at a profit, the town itself acted as developer, turning over property to new residents at cost.

In 1982, Marathon's population was about 2,300. It's now at about 6,000. And with the opening of a new residential subdivision this fall, it will top 7,000. Mayor Wendy Bell.

WENDY BELL: If you don't have time for planning, then your development will take place anyway. And it'll be helter skelter. It'll be shantytowns here and shacks going up there. And you have to be able to anticipate where you're going to be, and you have to be able to foresee problems that are going to come down the line. And having done that, you have to resolve them before they're there.

LEIF ENGER: The obvious problem Marathon will eventually face is what to do when the gold does run out. Bell says the answer is diversification-- using money taxed from the mines to attract new business. But if that fails, she says, the town must be willing to shrink.

WENDY BELL: Its just good planning. That's all it is. And you have to be ready. Even the subdivision layout, we can close sections. We can virtually cut the water and sewer off, and, if we have to, plow the houses down in 30 years. So there has been a lot of planning going into this.

LEIF ENGER: While Marathon and several other nearby communities have boomed on the strength of Hemlo gold, it's important to realize they're the exceptions. Ontario, like Northeastern Minnesota, has mined quantities of iron ore. And like Minnesota, now has any number of failing towns that used to depend on iron mines.

But the gold industry is growing. Officials estimate that the Hemlo mines will continue producing for 20 to 30 years, and the sites for prospective future mines number in the dozens. In Minnesota, there's increasing expectation that the next survey-- the next drill hole-- will show a major gold strike. Some say it'll bring prosperity and jobs back to the Iron Range, but most Iron Rangers-- people who have seen more taconite than gold-- are skeptical.

[INDISTINCT CHATTER, LAUGHTER]

Back in Minnesota, Downtown Virginia, in the heart of the Iron Range, at Fiola the Clippers crowded Barber shop, Julius Fiola moves an electric shaver over the face of a paying customer. Haircuts are $2 a head here. Gossip is free.

JULIUS FIOLA: You notice I never use a scissor, do you, sweetheart? No hits, no runs, and no hair. Bingo. That's the name of my slogan. Ain't that smooth and mellow?

SPEAKER 5: You see what kind of haircut he has?

LEIF ENGER: Fiola has been in business here for 55 years. He says, in that time, no one has ever come in talking about gold.

JULIUS FIOLA: We cover the world here, but not dead gold situations.

LEIF ENGER: Most Virginians seem equally cautious when it comes to gold. Six years ago, more than a third of area residents-- some 4,700 in all-- were at work in nearby taconite mines. With the subsequent downturn, close to 3,000 of them lost their jobs. In recent months, the local mines have started to boost their payrolls again, but residents are wary of any development that involves minerals. Virginian Matt Mattessich.

MATT MATTESSICH: The thing is, remember, after a boom, you get this. What we're going through or we've been going through. What we need is nice stable growth like they got in the Twin Cities or your Brainerd area. That type of growth. You go get a boom, the people around here-- young people won't-- right now, you can't give a house away. They won't be able to afford a house, right?

LEIF ENGER: The boom-bust cycle of the Iron Range is one reason Minnesota is attempting to diversify its minerals industry. To produce not only taconite, but silver, platinum, palladium, nickel, and copper, and especially gold.

[LOUD CLACKING]

At the DNR Minerals Office in Hibbing, Head Mineral Researcher Hank Dahlberg is hammering apart old drill core samples from across the Iron Range. The samples were first taken by companies looking for iron ore. Dahlberg says the same rocks hint of gold.

HANK DAHLBERG: Yeah, they seem to be-- I won't call it a one to one relation, but a very close relation between where you find iron formations and where you find gold. And because we know that it was the gold that brought these people to the iron ore, I am more than convinced that if we continue to look for mineable reserves, on the long term, we will have to find it.

LEIF ENGER: The Hibbing Office includes one of the biggest libraries of drill cores in the world-- a mausoleum of dark aisles housing thousands of labeled boxes, millions of feet of rock. When a company wants to begin looking for Minnesota gold, it comes here to find out where the good ground is. This is the first stage of modern prospecting. DNR Minerals head Bill Brice.

BILL BRICE: We kind of characterize it as it takes a million acres to find 1,000 good places to lease land, to find hundreds good places to drill a hole, to-- maybe if you're lucky-- to find one good mine.

LEIF ENGER: Once a company has decided where to look for gold, it has to lease the land. State leases to corporate prospectors start at just $2 per acre per year, plus royalties from any mineral profits. The company willing to part with the largest percentage of profits from attractive land is awarded the lease. Exploration is heating up. Seven years ago, Brice says, one company was looking for gold. Now, there are about 25, including major ones like Chevron and Boise Cascade.

BILL BRICE: We have about 220,000 acres under lease. The federal government in The Superior and the Chippewa have a fair number of permits outstanding, and there probably is at least that much private land under lease.

LEIF ENGER: All told, companies spend an estimated $15 million a year surveying, drilling, and analyzing potential mine sites. Still, DNR officials say, it's important that exploration increase. Hank Dahlberg.

HANK DAHLBERG: He simply said, the more eyes that are scouting and looking for it, the better the chances. So this translates, of course, in money and in facilities and in companies that have to be involved. We would like to see more companies coming in and spending considerable amounts of money to find this-- what is to be found there.

LEIF ENGER: Minnesota does have a few disadvantages in the search for gold. First, the simple fact that there has never been a gold strike deters some prospectors from coming here. More importantly, Minnesota's reputation as an environmentally cautious state has made companies equally cautious. Before a mine could be constructed or even drawn up, the mining company would have to go through permitting steps that would take years to complete. Ralph Fitch is us exploration manager for the Chevron resource company in San Francisco.

RALPH FITCH: I think, in prior years, many companies have had real concerns about the cost or even the possibility of mining in Minnesota, and I'm sure this has kept several players away.

LEIF ENGER: Chevron has what Fitch calls a medium-sized commitment to Minnesota gold exploration. The company keeps one or two geologists in the field along with several helpers and regularly does aerial surveys for research. He says, Minnesota is viewed as something of a hot property in the industry simply because of its proximity to Hemlo. But, he says, it still isn't as industry friendly as other gold producing states.

RALPH FITCH: The time to permit a mine in Nevada is probably going to be substantially less than the time it takes in Minnesota, and there are a lot of legislative uncertainties in Minnesota. And I think those things are certainly points that one thinks about very carefully before you put in a large program into a new area.

LEIF ENGER: DNR Minerals Head Bill Brice.

BILL Brice: Our political climate hasn't always been very positive towards minerals. And, relatively speaking, we're doing a good job of increasing the interest here in Minnesota. It's not as high as I think it needs to be. The only way you find it is have an exploration company looking, and if there are not very many looking, it's going to be a long time before you find it.

LEIF ENGER: Brice lists several legislative moves designed to make Minnesota more attractive to resource companies. A minerals tax law passed three years ago made Minnesota competitive with the Western states, a two-year-old mineral diversification bill provides funding for increased geological study, and a new project to test the state's mine permitting system is just getting underway. A find the size of Hemlo might be too much to expect, but Minnesota, Brice says, is beginning to take gold seriously.

BILL BRICE: I believe there will be-- if the companies are allowed to continue to look, there will be discoveries in Minnesota. Everything is right. We have the right geology. The indications are that the companies are finding the things that interest them. There's good showings of gold in a lot of places. In '82, there were about two places that we could take you and say, there's gold in this outcrop. Today, we could take you to a lot of places. Maybe 20.

[ROCKS SHATTERING, RUSTLING]

LEIF ENGER: If gold is struck on the Iron Range, chances are Minnesotans will see some of Marathon emerge. A mine will be built, a town will thrive, and more people will head for the rifts and gullies where the clues to gold are found. On the Iron Range, prospector Bill Uland.

BILL ULAND: Certainly, you can look at the volume of rock we have and the geology we have, and just-- it just take the number of discoveries on the other side of the border and extrapolate those figures here and come up with probably 30 gold deposits in Minnesota. Those are pretty good odds to work with.

[ROCKS SHATTERING, RUSTLING]

LEIF ENGER: Gold, New Prospect On the Iron Range is a Main Street Radio Production. Scott Bridgewater was the engineer. Editorial assistance from Kate Moose and Sarah Meyer. This is Leif Enger.

SPEAKER 1: It's now about 23 minutes or so past the hour as we continue talking about the prospects of finding gold in Minnesota. You met Bill Brice during the documentary. He's joined me now in the studios. Bill Brice is director of the Division of Minerals for the Department of Natural Resources, and we'll open up the phone lines for your questions about gold mining.

Bill Brice is here and he will respond to you. In the Twin Cities, the phone number is 227-6000. 227-6000 in the Twin Cities. Elsewhere within the state of Minnesota, toll free 1-800-652-9700. And if you're listening in one of the surrounding states, you can call us directly at area code 612. And the Twin Cities number is 227-6000.

Bill, welcome. Nice to have you in the studios today.

BILL BRICE: Thank you.

SPEAKER 1: If there is in fact so much gold in Minnesota, how come nobody's found it yet?

BILL BRICE: Well, finding gold is-- as you heard in the preview, it's very difficult. The deposits tend to be very small and very high grade, so it isn't surprising that you might find a deposit that's maybe only 10 or 20 feet wide and buried by glacial drift. And the prospects of finding that through drilling or whatever are very difficult and it takes time.

SPEAKER 1: So we're not talking about, probably, one or two great big finds. We're talking about a whole bunch of little mines all over the place basically, then, huh?

BILL BRICE: Yes. Yes, I think so. What we're used to in Minnesota is the taconite mining, where we have huge mines and large mining areas. And it's a whole different mindset to think about gold in Minnesota, where you're talking about incredibly rich very small deposits that I characterize as sort of needle in the haystack to kind of research to find them.

SPEAKER 1: Supposing that gold were found somewhere today or tomorrow, how long would it take before it would be possible for somebody to actually begin pulling it out of the ground, when you consider the state permitting that would be involved and so on and so forth?

BILL BRICE: Well it's hard to it's hard to guess, of course, but it takes probably a year or two to put together an environmental impact statement. And the permits associated with proposing such a mine. Before you can do that, though, you have to go through a fair amount of development work by the company to see if a gold discovery really has the right grade and the right size to make it into a mine.

So it may take the company two or three years, and then there may be a couple of years put into getting permits ready. And then, the construction period for such a mine could be 18 months to two years, so you're probably talking about 5 to seven year period, I think, when you put it all together.

SPEAKER 1: Do you think that they are just as likely to find gold at one of these high- quality, small deposits? Are they just as likely to find it today or tomorrow as they are in a year, five years, or 10 years?

BILL BRICE: Well I guess the likelihood of finding it is related to how many people are looking and how many holes are being drilled.

SPEAKER 1: Mm-hmm.

BILL BRICE: And so if it takes 1,000 drill holes to find one mine, we've been having on the order of 80 to 120 drill holes a year put down in Minnesota, and so maybe-- you never know for sure, but--

SPEAKER 1: How much does it cost to developer to do one drilling, for example?

BILL BRICE: Well, drilling costs about $30 a foot these days. And so in the greenstones, where they're mostly interested in gold, you're talking about drilled holes that may be 500 to 1,000 feet. And I guess you'll have to multiply it. I'm not quite sure the total.

SPEAKER 1: It's a lot of money in any case.

BILL BRICE: That's right.

SPEAKER 1: Bill Brice is with us. The director of the Minerals Division for the Department of Natural Resources. His is the agency that really has jurisdiction over the gold mining activity in Minnesota. Bill has been director of minerals for a year and a half. He did a lot of the environmental work for the Minerals Division before he got into the administrative end of it. So you're well qualified to answer the question, what kinds of environmental concerns are there with gold mining?

BILL BRICE: Well--

SPEAKER 1: It sounds like it's a much different kind of mining, certainly, than iron ore and taconite. Iron ore involves gouging out those huge mines. Taconite is a different matter. Now, here with the gold, it's small deposits in specific areas. What are the environmental issues associated with that?

BILL BRICE: Well, when you think of taconite mining, you think of a large land use kinds of questions, being close to neighbors. A lot of the communities were built right on the iron formation on the range, so you have neighborships problems and you have large land use kinds of problems.

When you talk about gold mining, the size is small, it's probably remote, so the concerns there are more related to making sure that we have adequate water quality protection. There aren't there aren't very many air quality concerns related to this kind of mining. You also, though, end up in some pretty remote areas, so there are-- it's kind of a different kind of land use question relative to parks and other kinds of things that may be nearby.

SPEAKER 1: Mm-hmm. Bill Brice is here, and the phone lines are open if you have a question for him about gold mining in Minnesota. 227-6000 in the Twin Cities. Elsewhere, 1-800-652-9700. Have you got the gold bug yet? Give us a call. 227-6000. Here's a listener on the line now. Go ahead. You're on the air with Bill Brice.

SPEAKER 6: Well, when you talk about a vein or whatever it is that extends down from Canada, to me that sounds like the Boundary Waters. And it always disturbs me when people start putting down drill holes all around the edges of the Boundary Waters.

And Dr. Puskar from Butler University in Indianapolis studied the bogs up there, and I know of him and his work. And it seems to me that, when you talk about environmental impact, this would be a pretty important consideration because my understanding is that there's only a little, small, small, small percentage of gold in the ore. And then, what are you going to do with all of the remainings, and are we going to have the problems that we had with taconite in Lake Superior?

BILL BRICE: Well, let me try your first question first. The geology of Minnesota is greenstones. And those greenstones extend all the way across to Northern Minnesota, way out into the extreme Western parts over in Norman County and counties where, normally, we don't even think of having good geology, good mineral potential.

It also goes quite a ways South, and so a lot of Minnesota really isn't in or near the Boundary Waters. Some of the hot places that people have been interested in-- for example, the first gold rush was in the Ely, Soudan area. And certainly that's closer to the Boundary Waters. As a policy, we stay out of the Boundary Waters-- have for years. We've fought lawsuits to make sure that the Boundary Waters are protected, and we expect to continue to do that.

So we're very concerned about the Boundary Waters, and the folks who are interested in gold mining would have to show that same sort of concern or they wouldn't be able to get the permits that would be needed for that.

SPEAKER 1: Is there any drilling going on in the Boundary Waters itself right now?

BILL BRICE: No, there's no drilling going on. The only exploration that I think has occurred in the Boundary Waters was back in the '50s and '60s, and that was part of a big lawsuit that the DNR actually was trying to prevent the exploration going on in there. And of course, since that time, there's been congressional set asides to make sure that doesn't happen again.

SPEAKER 1: Part two of the caller's question had to do with waste rock that might be associated with any gold mining.

BILL BRICE: Most of these deposits-- as far as waste rock is concerned-- you're right. The ore grade is-- a good ore deposit for gold-- the one that was in the program earlier was Hemlo. Runs around 0.25 0.5 per ton, and so 99% of what you mine ends up as waste rock. And that's ground very finely. And the majority of that's used as fill in the mine.

In the old days, when you mine-- even in Minnesota-- you mine underground, you often cut the rock out, and you left it these big openings underground. Today, you fill those openings with the waste material. And so, you take care of a large percentage that way.

SPEAKER 1: I see. Let's move on to another listener with a question for Bill Brice. Hello. You're on the air now.

SPEAKER 6: Well, good afternoon. Let me explain my position. I prospect in two states. In the wintertime I prospect in Nevada and in the summertime I prospect in Minnesota here. And I've come across some deposits, but not knowing how Minnesota operates, I send my rock to the University of Nevada at Reno for analysis. Is there such a program in Minnesota?

BILL BRYCE: Yeah, if you're a private citizen and you find a rock sample that you think is interesting, we have a public sampling program here in Minnesota, where you can send that to the Minnesota Geological Survey. And they will look at it, try to identify what it is. If it's interesting from a mineral deposit standpoint, they'll have it analyzed for you and they'll return the information.

SPEAKER 1: What would an individual do then? What's the next step?

BILL BRYCE: I guess, at that point, you'd want to know who owned the mineral rights. In Minnesota about 70% of the mineral rights are privately owned by individuals or companies. And then, of course, the state owns a lot of mineral rights through the trust funds or the tax forfeiture process and so on.

SPEAKER 1: Well, supposing that you own a hunk of property somewhere and you go up there and look around and you find something, it isn't necessarily true though that just because you own the property you own the mineral rights. Is that true?

BILL BRYCE: That's correct. Mineral rights in Minnesota, in many cases where there's been past mineral interests, have been severed from the surface. And so the mineral owner and the surface owner aren't necessarily the same.

SPEAKER 1: What if the mineral owner and the surface owner don't agree on what ought to be done?

BILL BRYCE: Well, they have to get together one way or another.

SPEAKER 1: I See.

BILL BRYCE: When we lease minerals for example and we don't own the surface, we require the mineral lessee to go to the surface owner and work out an agreement.

SPEAKER 1: All right. Let's move on to another listener question. Hello, there. You're on the air.

SPEAKER 7: Yes. My question is concerning actually all minerals. Not specifically ore or gold. But my concern is, what is the potential for other minerals and specifically nickel in Northern Minnesota if there is a potential, and then what is that potential? I'll hang up and listen to the answer.

BILL BRYCE: Well, in Minnesota, I think the best kept secret is the potential for lots of minerals. We have-- the current biggie, I guess, is gold at the moment, but in Northeastern Minnesota, there's good potential for platinum, palladium group metals, copper-nickel. There's a very large resource up there that was identified in the '60s and '70s, and quite a bit of evaluation work was carried on.

In other parts of the state, we have a growing business in dimension stone. We have interest in the Southwest in clay. We have interest in the Southwest in manganese. A number of minerals. It's sort of an exciting area, and I try to discourage people to get too excited about just gold because, in order to have a reasonable economy, you need to be diversified in as many different kinds of activities as possible. And certainly, in the minerals area, that's true. You need to have that kind of diversity so that you don't run into the problems that were talked about-- earlier about boom and bust, and at least you minimize those things.

SPEAKER 1: You mentioned a whole bunch of different minerals here. Are the environmental concerns with them similar to gold or are they quite different?

BILL BRYCE: Well, every mineral has its own little idiosyncrasy. And so when you get into base metals such as copper, zinc, they're generally associated with sulfides. And then, in sulfide mineral deposits, you have to control things like acid drainage and that sort of thing.

SPEAKER 1: Some of these minerals are smelted to then, commonly, aren't they?

BILL BRYCE: Yes. One way or another, all of them are. Even iron, of course, is smelted to make--

SPEAKER 1: Yeah.

BILL BRYCE: --or the iron ore is smelted to make iron. And to varying degrees, there's technology out there to recover the metals. In the United States, there's been just a tremendous change in and improvement in the technology over a number of years ago. It used to be that you could take people to places that were just environmental horror stories on sulfur dioxide and other metal releases. And today, those things have pretty much been cleaned up. We still have to live with some of the things that we did wrong in the past, but new technology today pretty much can control many of the concerns that we used to have.

SPEAKER 1: All right. Back to the telephones and more questions for Bill Brice, head of the Minerals Division for the DNR. Go ahead, please.

SPEAKER 7: All right. This is a very interesting program, and I have one question. Have you ever considered to look for gold in the lake itself? In Lake Vermilion?

BILL BRYCE: I've never considered it, but there are-- the geology of Lake Vermilion is greenstones. So there's a fault just North of Lake Vermilion called the Vermilion Fault, and there's a lot of exploration activity that starts East of Shagawa Lake and goes way West of Lake Vermilion.

The geology is exactly the same, and there's no reason why you might not have mineral deposits under lakes. And it's not uncommon for mining to occur under lakes and underground mines. It happens quite often in Canada and there are lots of examples around.

SPEAKER 1: Next, your question, please. Bill Brice is listening. Go ahead. Hello there.

SPEAKER 8: Hello?

SPEAKER 1: Yeah.

SPEAKER 8: Have you ever heard of the Guineas Gold Mine? I'm calling from somewhere near Rochester. There, they had a well that kept continuously bringing up flakes of gold-- little particles. And they attempted to open a mine there, but it wasn't enough they could find it was successful. And this is somewhere near North of St. Charles and the Whitewater Area. Thank you.

BILL BRYCE: I've never heard of the specific mine you're talking about, but in the literature, there's a lot of information about finding gold in streams. And the two places that they talk about are the Southeastern part of Minnesota and the Northeastern part of Minnesota. Generally though, most people don't get lucky enough to find any flakes. So I was at a legislative hearing last night, and there's concern that there isn't much mineral potential in Southeastern Minnesota. And I don't believe that's the case. I think there's some good possibilities down there, so it's interesting to hear that there's that kind of situation.

SPEAKER 1: What do you think is in Southeastern Minnesota?

BILL BRYCE: Well, the case for southeastern Minnesota is that there's a lot of younger rocks overlying older rocks. And so what you really need to do is get a better idea of what is down there. The legislature in fact, just this morning, approved the final phase of what we call aeromagnetic surveying, which will include southeastern Minnesota. And from that, we should be able to get a much better idea of what the potential is for that area.

Existing right today, we have, of course, limestone and dolomite that's mined down there. We have silica sand that's mine down there and we have dimension stone for buildings that are mined down there. In the old days, there was interest in lead-zinc from similar to what you find in Wisconsin. In the Platteville area.

SPEAKER 1: We have about 20 minutes left with Bill Brice. Let's move on to your question for him now. Hello.

SPEAKER 9: OK. I'd like to ask two questions. First of all, what is the DNR's policy towards mining and state forests and national forests and parks as well? And secondly, what environmental impact studies must be undertaken before a mine is put into operation?

BILL BRYCE: Well, as far as-- we have a leasing program that is a public program, and we issue a least book and what's available and all of that. And before we do that, we have a very extensive screening process to determine what kinds of lands we really don't want to offer. So when you say state parks, we don't offer mineral lands in state parks.

In state forests, we offer mineral lands depending on the circumstances. In other areas, for example, we put special conditions on lands such as areas where there's trout streams. We try to make sure that the exploration won't impact the water quality of the trout stream, and we try to make sure that it doesn't change the temperature. So we put special conditions on the leases or else we exclude land where there's a serious environmental concern.

SPEAKER 1: In the documentary that we heard at the beginning of the hour, there was somebody from-- I forget the company, but somewhere in California who was quoted as saying that Minnesota has not a very good reputation among the mining companies in terms of the environmental restrictions and so on, and not a very good place to do business, they think. Is that changing, should it change, or should we be as tough as we have been or even tougher?

BILL BRYCE: Well, I think the cornerstone of a good mineral development program in Minnesota has to be environmental protection. And I do several shows a year to go out and talk to mining companies, and the one thing I never do is apologize for our environmental protection. Environmental protection in Minnesota is-- you look at all the people's interests, and that's very key to our future. And what we don't need is bad examples of new mining development here.

SPEAKER 1: But are our regulations so much stricter than other states that they're going to go elsewhere before they come here and close off the possibility of some development and growth in Minnesota?

BILL BRYCE: I think in some cases we are. If you compare Minnesota to Nevada, I would say that our regulations are more strict. But then, we have water and they don't have water, so we have a good reason to be more strict. So yes, we are more strict in some cases, but we have tremendous potential and we have to balance that all.

SPEAKER 1: What's our potential compared to neighboring states?

BILL BRYCE: The geology of the Canadian Shield comes down into Northern Michigan in the upper Peninsula and also into northern Wisconsin, and there is some interest in both of those states to varying degrees. It does not come down-- or at least it's overlain by younger rocks over in the Dakotas, so generally, you don't think of the Dakotas in the same sense as Michigan, Wisconsin Minnesota.

SPEAKER 1: All right. Thanks for waiting. We'll take your question next. Bill Brice is listening.

SPEAKER 9: Hi. My folks live up in Sedan in the Iron Range and have for many years. And this boom and bust cycle of minerals development has been particularly hard on the people who-- you know, the long-time residents, and I was wondering.

In the pre-recorded piece, you had a statement by the mayor of Marathon in Ontario, where the city had done something to prevent this speculating boom, which is-- you expect the minerals to play out. But if people, especially the people who currently live there, are priced out at the beginning, it's particularly harmful to them. And I'm wondering, are there state laws to prevent that kind of thing occurring or would the cities have to work on it individually as the need arose or--

Because I know, for instance, right around Sedan, they are prospecting for gold at Mud Creek and a few other places. And I worry that they're going to have another speculative boom up there and price out all of-- in my case, my relatives--

SPEAKER 1: OK.

SPEAKER 9: --which I would find terrible.

SPEAKER 1: Sure. Bill, what do you think?

BILL BRYCE: Well, in Minnesota, we don't have a specific law that requires that, but all the companies that have been active recently I'm sure sit down with the local officials and try to work out an arrangement. We have a kind of a peculiar situation in Northern Minnesota in that the survey that was done in the late '70s for copper-nickel, we had excess capacity for most of our public services. And so you wouldn't tend to get the same sort of situation that Marathon has.

Marathon was really a one horse town. They had a paper mill and they had a few hundred people. What, 2,000 people, I guess?

SPEAKER 1: Mm-hmm.

BILL BRYCE: And there are no towns nearby. You drive 50 or 100 miles before you get to anything at all, which is another 2,000 person town. And so we have kind of a different situation, but there will be socioeconomic things at the beginning that will have to be dealt with in any new mine development. And it'll have to be through work with the local officials, and making sure that they have adequate funds up front to provide the services that are important and, including residential.

SPEAKER 1: Maybe if there is a boom that, barber will be able to boost his price to $4 for a haircut.

BILL BRYCE: Well, I wish I could get a haircut for $4.

SPEAKER 1: [LAUGHS] All right. On to you. What's your question please for Bill Brice?

SPEAKER 10: There are a number of large glacial deposits South of the line between Motley and Brainerd and Central Minnesota. Since those glaciers came down from the North, is there any likelihood that the glacial deposits may bear gold?

BILL BRYCE: Sure. There's likelihood that occurs. It's also likely that they're probably pretty spread out and low grade because glaciers, until you get to the rewashing and rewashing of drift through lakes, river systems don't tend to get high grade placer deposits, and that's the kind of deposit you'd get in that kind of material.

There's a couple of places, I believe, in the extreme Western part of the state in gravel pits where companies have actually recovered a little bit of gold as part of their screening process. So we know it occurs, but we don't know of any places where it's high enough grade to be talking about placer mining.

SPEAKER 1: In the state owned land or at least where the state owns the mineral rights and the developer would pay royalties to the state for being able to extract the ore, what kind of royalty income are we talking about and what use might be envisioned for that money?

BILL BRYCE: Well, we manage the minerals for the school trust funds and we also manage them for the University trust funds and all the tax forfeited minerals for the counties. And the only example I can give you is our typical revenues from iron mining run around $4 million a year, and those are redistributed to the various funds.

For example, the school trust fund, about almost 80% of the whole account is from minerals, and it reduces your property taxes by about, I don't know, 7% to 9%. Something like that. And so it actually has resulted in a pretty big trust fund.

SPEAKER 1: So you would anticipate that any gold royalties would be used in a similar sort of fashion?

BILL BRYCE: They would go with the ownership. And maybe another example, in the tax forfeited case, they would go to the county 80%. And so Saint Louis County, for instance, receives, I think, about $1 million a year, every year from these kinds of programs because of the extensive taconite mining.

SPEAKER 1: Bill Brice is director of the Minerals Division for the Department of Natural Resources as we talk about the prospect for gold in the state of Minnesota. We've got about 10 minutes left. Go ahead. You're next. What's your question?

SPEAKER 11: Hi. I'd like to know what regulations there are, if any, that would govern panning of gold by an individual and what sort of success there has been with that type of technique? Also, thanks for a really golden show.

BILL BRYCE: Oh. [CHUCKLES SOFTLY]

SPEAKER 1: All right, Bill.

BILL BRYCE: Well, I get a phone call about every two weeks from somebody who wants to pan for gold and, honestly, I tell them to go to South Dakota because in the streams in South Dakota over in the Black Hills, you have at least a decent chance of finding some. And we tend not to get gold in the streams here.

There are some-- like I said, some historical data that somebody has found at some point, but the odds are just against you. It's actually against the law--

SPEAKER 1: It is.

BILL BRYCE: --because of the disturbance of the stream bed to do anything like any dredging or anything like that. And so, basically, the odds are terrible, and we don't encourage it. Also, we don't encourage it because our deposits are covered by thick layers of glacial drift, and the chance of an individual finding a major deposit here are just terrible. It's a very expensive kind of corporate-- regrettably corporate-- kind of investment.

SPEAKER 1: Thanks for calling. You're on the air now with Bill Brice. What's your question for him?

SPEAKER 12: Yes. I would like to know where a person would send samples of ore, and what is his address in case we'd like to ask a mining company to come in and explore?

BILL BRYCE: If you're just an individual here in the state and you have a sample that you found that seems interesting, you send them to the Minnesota Geological Survey. And the address is 2642 University Avenue, Saint Paul, Minnesota, 55114.

SPEAKER 1: And if somebody wants to write to you, what's your address?

BILL BRYCE: That's a good question. It's 500 Lafayette Road, Saint Paul, and--

SPEAKER 1: You don't know what the zip code is?

BILL BRYCE: I can never remember the zip code.

SPEAKER 1: It might get there anyway, even without the zip code, if the mailman is being agreeable that day. Let's move on to your question. Hello, there. Bill Brice is listening.

SPEAKER 13: Yes. My question is more of a comment. I'm a student up in Bemidji State University. And several fellow students and I are interested in gold and looking around, but what I seem to find is a lack of state help as far as hiring us or putting us to work even on an internship basis to help solve this problem. And I can't help but think that if more students were hired for this purpose that it would help the state as well as the students.

BILL BRYCE: It would, and we hire probably 5 to 10 students every summer in our programs to-- in our field work programs. So I don't know who you've contacted. Maybe there were just too many applicants, but we do have intern programs for students.

SPEAKER 1: How many mining companies are actively exploring for gold right now?

BILL BRYCE: I can't tell you how many for gold specifically because they're looking for more minerals than just gold, but currently, we have 20 companies that are registered explorers. That means that they have gone through the testing and the regulations necessary to be able to drill holes.

SPEAKER 1: And do you actively promote them? Do you actively encourage them to come here?

BILL BRYCE: We actively encourage them to come to Minnesota as long as they understand that we're not going to apologize for our environmental concerns and that we're going to demand high standards.

SPEAKER 1: All right. Let's move on to another listener question. Hello. Thank you for calling.

SPEAKER 14: Hi. I guess I have a comment and sort of a question. But I've lived through many of these kind of campaigns by the mining industry in Minnesota, and it seems like what we're doing is softening up the electorate for something that we should know better as a result of our past history.

It was the Department of Natural Resources that gave Reserve Mining the permit to go into Lake Superior with their tailings. It was the DNR that, although they now say they're going to protect the Boundary Waters-- let me tell you, there's more to Minnesota than the Boundary Waters Canoe Area that needs protection here. Now, if we're in the process of designing a tax policy that, like the Taconite Amendment did, led to a boom again, I think we should have none of this.

SPEAKER 1: A response from Bill Brice.

BILL BRYCE: Well, you're certainly right about the Boundary Waters being not the only place to protect. I was deeply involved in the Reserve Mining case, and I cringed every time somebody says, well, the water flows towards the Boundary Waters, so we really don't want a tailings basin in this location. Let's put it somewhere else. And I keep thinking to myself, yeah, but the water on the other side flows towards Lake Superior, and we don't really want to mess up Lake Superior either.

So we have to have a standard that's statewide. We have to have good regulations in that regard. The permitting back in 1948-- I've gone through the hearings on that quite a bit because I ended up, like I said, too involved maybe in the reserve mining case. But that was a case where the company clearly didn't follow through on the things that they promised in those earlier permits. And, of course, the court case finally resulted in forcing them to go on land. There were some mistakes made there, and we hope those things don't happen again. And we're trying to plan so that those won't occur again.

SPEAKER 1: Five minutes left with Bill Brice head of the Minerals Division of the Department of Natural Resources as we continue to discuss the prospect of finding gold in the state of Minnesota. Thank you for waiting. Go ahead. You're on the air now.

SPEAKER 15: Yes. You mentioned that most of the areas, especially here in the Virginia Area, is covered by six layers or more of glacial drift, but right now, they're running their drill in this area between Gilbert and Virginia, and there's a lot of exposed greenstone seeds. So there is no glacial drift on top of it.

BILL BRYCE: You're right. In Northeastern Minnesota, we have the highest percentage of outcrop, where there's no glacial drift. And as you go West and South, the layers of glacial drift get thicker. The geology, though, underneath that is quite similar. So when you go out to the West, the drift may be a couple hundred feet thick, but the greenstones are still down there.

The area in Virginia, Eveleth, and Gilbert is-- I would classify that as kind of a hotspot. They're very interested in that area. There was a publication back in, I believe, the '30s by a university professor identifying gold in that area, and I think there's drilling going on there today.

SPEAKER 1: What general kinds of geographic formations do the explorers look for as being somewhat promising? In other words, they've got this general area in mind, but what prompts them to put a drill bit in a specific spot when you consider the high cost of doing that?

BILL BRYCE: Well, in Minnesota you can't-- other than in the Northeast where you can see the rocks. In the rest of the northern part of the state, there's infrequent rock outcrops. And so what you use is indirect techniques. You use what we call aeromagnetic surveys that the Minnesota Geological Survey has done, and that gets you into the right region. It's sort of like saying, well, this is elephant country. And so it gets you into that part of the area.

And then you go back and you do ground geophysics or maybe geochemical sampling to try to figure out where the right place to drill the hole is. And if you get lucky, you drill it in the right place. And the odds are against you, of course, because a drill hole is an inch and a half in diameter, and you're trying to find a very small deposit.

SPEAKER 1: The price of gold is tremendously volatile. It's very subject to the emotional feelings of the financial markets about inflation. It's subject to the amount of supply that's available. Other countries are increasing their gold mining. Certainly, the Soviet Union is and so on. What impact does the price of gold have on what's being done here in Minnesota, and is there a point at which gold could drop that would no longer be profitable economically for the companies to continue their exploration?

BILL BRYCE: Well, as you said, the price of gold has historically been pretty volatile. And I guess the interesting thing about Minnesota is the deposits that have been found in Canada that are very similar to what you'd expect here tend to be very rich small deposits. And so the fluctuation of the price of gold doesn't have quite as much of an impact.

For example, at Hemlo, it costs them-- I think their published figures are around $100 an ounce to produce an ounce of gold. And even though the price is now dropped, what $3.98 or something the other day--

SPEAKER 1: It's below $400 anyway. Mm-hmm.

BILL BRYCE: Yeah. It's recently dropped-- they're still making a heck of a profit up there. On the other hand, they spent a lot of money trying to find that place too.

SPEAKER 1: Mm-hmm.

BILL BRYCE: In the Western US, where the gold deposits are much lower grade, they tend to be mined with lower mining costs as well, but they may be more sensitive to price fluctuations than a lot of the new Canadian mines.

SPEAKER 1: So Minnesota's gold ought to be safe at least above $100 an ounce?

BILL BRYCE: Sure. I'm not into predictions like that, but-- All

SPEAKER 1: Right.

BILL BRYCE: --it's certainly a better business because of the high grade potential.

SPEAKER 1: Bill Brice, thanks very much for coming in and sharing the hour with us.

BILL BRYCE: Thank you.

SPEAKER 1: Bill Brice, head of the Minerals Division for the Department of natural resources-- the agency which is responsible for regulating the exploration and development of Minnesota's mineral deposits. Earlier in the broadcast, we heard the Main Street Radio documentary on gold mining, gold, the prospects for the Iron Range.