In the Mojave Desert, a gold rush sparks a mini real-estate boom for old mines

Los Angeles Times

04-12-2024

It's a brisk day in Johannesburg, a tiny mining town tucked among the Rand Mountains in the Mojave Desert.
The landscape is vast and rugged, a mish-mash of rock, dirt and creosote bushes, swaths of gray and brown under a deep blue sky. The terrain appears completely untouched by man, but a closer look reveals dozens of cavities pocked across the rolling hills. They look like monster snake holes.
Those curious holes are abandoned mines, and they're driving a real-estate boomlet in a place that hasn't had one in more than a century. As the price of gold climbs, the demand for Randsburg's craggy land has been reawakened.
'The market is heating up,' said David Treadwell, a real estate agent based in Hemet. 'I get 2-3 leads per month on buyers looking for patented mine claims. If you can get the gold out of the ground, there's money to be made.'
Treadwell has carved out a niche for himself in the desert, selling multiple gold mining properties over the last few years. He helped his uncle sell a 47-acre gold mining property in 2017, buying ad space in a local mining journal to spread the word.
'From there, people would call and say, 'I saw you're selling a gold mine. Wanna sell mine too?'' he said.
Treadwell has sold mines to amateurs and professionals alike. Small claims sell for less than $50,000, while bigger properties with more potential bring in a few hundred thousand dollars or more. Last year, he sold the St. Elmo mine — a historic mining property in Atolia with 11 mining shafts on it, some of them hundreds of feet deep — to entrepreneur Sean Tucker.
On a cold November Tuesday, a mile outside of town, Tucker's bright yellow Diedrich D-120 drill rig pierces the desert silence.
His two-man team is drilling holes and gathering samples, boring into the earth two feet at a time to see which spot has the most gold to set up larger mining operations next year. They crowd around the towering machine as the rig starts burrowing into the dirt with a 140-pound hammer, digging into the ground with swift, strong strokes. After about 30 seconds, the drill reaches two feet underground, creating an eight-inch-wide hole.
They pull out the auger and take a sample of the excavated dirt.
'There's gold here,' he said with a smile.
Then the drill goes back into the ground to burrow two feet further, or until they reach bedrock. There's no time to waste. There are many holes to be dug, and the winter sun is fleeting.
The Golden State
The discovery of gold at Sutter's Mill in 1848 is one of the defining moments in California history, with roughly 300,000 forty-niners flocking here to make their fortune from the U.S. and abroad. California became a state by 1850 — the genesis of its evolution into the fifth-largest economy in the world.
While most of the mining took place in Northern California and the Sierra Nevada mountains, Southern California experienced smaller, more disparate gold rushes in the following decades — in places like Big Bear, Azusa Canyon, Silverado Canyon in Orange County, the Cuyamaca Mountains of San Diego County and the Picacho District in Imperial County. One of the largest was in the Rand District in Kern County, where gold was discovered in 1895.
The sun-blasted town of Randsburg sprang up virtually overnight, and the area's largest mine, the Yellow Aster, produced the modern equivalent of more than $25 million over the next 30 years.
Gold prices eventually stagnated after the Great Depression, hovering under $40 per ounce from 1933 to 1970. Most miners moved on.
But over the last few years, the price of gold has soared to an all-time high; it currently sits at $2,630 per ounce. As a result, prospectors — both professional and amateur — are journeying back into these high desert mines for a chance at finding the the precious metal that moves mountains.
'It's a modern day gold rush,' Tucker said. 'People are snapping up claims as quickly as possible.'
In 2020, Tucker founded Gold Discovery Group, a gold mining operation based in Johannesburg, a mile from Randsburg. He owns 97 acres across five properties in the area and also leases the mining rights to 2,519 acres across 37 properties.
Through geological surveys and historical documents, he estimates that there is $2 billion worth of gold under his properties.
Of course, it's not as simple as digging down and getting it. He needs drilling permits from the Bureau of Land Management, mining permits and reclamation plans to show how he plans to restore the land once he's done mining it.
But according to Tucker, the business model is there. His all-in sustaining cost — the total cost of getting the gold out of the ground — sits at roughly $1,220 per ounce. The price of gold is north of $2,600, leaving a profit margin of roughly $1,400.
He's spent about three and a half years acquiring permits and surveying the land, and he's currently in the discovery phase, which involves drilling small holes to see which spots have the most gold. His team — master driller Martin Delgadillo and assistant driller Roderick McVay — has been permitted to drill 393 holes. So far, they've drilled 226.
Working in the open desert can be brutal. The summer sun is unrelenting, with temperatures soaring past 100. Winter brings howling winds and freezing lows.
Tucker has spent about $5 million so far and estimates he'll spend $4 million more before his mines start producing gold. His plans call for placer mining, a process that involves separating gold from the dirt and gravel beneath the ground, which he estimates was deposited in Johannesburg through ancient flash-flood and heavy rain events.
'It's primal. There's something in the ground that we want, and we're getting it out,' Tucker said. 'It's what California was founded on, but now we're coming back with modern technology.'
No stranger to out-of-the-box endeavors, Tucker owned a pro bicycling team, Toyota-United, in the mid-2000s before founding Galleon Ventures, a deep-sea treasure hunting company that aimed to find sunken treasures in shipwrecks off the coast of Colombia. When drama within the Colombian government shut down his operation, he started seeking out a different kind of treasure: one buried in California.
Tucker plans to start mining by next fall and will hire 80 people within the next three years. He owns an entire city block in Johannesburg, where he plans to build housing for the miners.
'Now, we just have to hope the market stays where it is.'
Real estate gold mine
While California has come a long way since the gold rush, many of its mining towns haven't.
In its 19th century heyday, Randsburg boasted a population of 3,500 with churches, saloons, hotels and a thousand-seat opera house. Today, a sign leading into the community describes it as a 'living ghost town.'
A cluster of Old West-style wooden buildings line the quiet promenade, and a handful of shacks and ranches dot the surrounding hills. It is dead still on a Tuesday in November. The 2020 census lists a population of 45, with an average age of 73.
Randsburg holds a special place in gold mining lore as the producer of the largest known nugget in California history. Known as the Mojave Nugget, the 156-ounce behemoth was found there with a metal detector in 1977 and now sits on display at the Natural History Museum of L.A. County.
Many properties in the Randsburg area come with patented mining rights, which is key.
If you lease mining rights from the BLM (which anyone can do if you pay the yearly fees), you can mine the property, but you're prohibited from building anything on top of it. If you buy a normal property, such as a house, you typically don't get the mineral rights, so you can't dig too far down — typically the limit is 20 feet.
But if you buy a property with patented mineral rights, you own the surface and all the land beneath it, and you're free to do whatever you want. Buyers can build a house or burrow hundreds of feet into the ground looking for gold.
'In order to receive a patent back in the day, you had to prove the existence of significant mineral production,' Treadwell said, implying that properties with patents likely have plenty to mine beneath the surface. 'This one I'm listing is 1,700 feet north of the Calico mines, so chances are there's something down there.'
Plenty of gold is still being found. California led the nation in new gold discoveries last year, and a total of 10,373 gold-bearing locations have been unearthed in the Golden State, according an analysis of U.S. Geological Survey data by SD Bullion.
Gregory Kuchan, a Douglas Elliman real estate agent, is currently listing a property with two mine shafts on it for $49,950. The lot spans 30 acres in Garlock, an old mining town-turned-ghost town just outside Randsburg.
Kuchan, who's based in Del Mar, said it's outside his normal listing area, but he's leaning into the forty-niner history and the gold rush potential to market the property.
'You only need to find about 18 ounces to make this property pay for itself!' said the listing's marketing materials.
The Wild West
California's original gold rush was an era of terror and lawlessness, as greed among miners led to murder, native massacres and citizen vigilantism.
Things are more quiet today. But in the desert, there's a muted sense of danger, a feeling that the normal protections of civilization are gone.
Brian Fergusson, a 68-year-old crane operator who lives in Nevada and works in San Pedro, bought a 50-acre gold mine in Randsburg for $105,000 in 2020. He threw himself into the project, spending a week installing a 2,600-gallon water tank, an outhouse and a plywood shack to sleep in with stud walls and a steel door.
Then, he went back to work. When he returned a few weeks later, it was all gone.
'I've talked to people in the area, and there's an extreme problem with thieves,' Fergusson said. 'They don't steal the gold — that requires work. If something sits on the land, someone will take it.'
There's also inherent danger in the mining itself: cave-ins are a problem, but bad air is the real killer.
'You can crawl into a pocket with no oxygen without even realizing it, then black out and die,' he said.
Fergusson has been prospecting as a hobby for about a decade, and finally bought his own claim after searching around for five years. He chose this one because a U.S. Geological Survey document said that 2,500 ounces of gold had been taken from the 20 mines on the property in the early 1900s, which would be worth more than $6.5 million today.
Right after buying the land, he crushed up a piece of ore and found what miners call flour gold — tiny, fine specks of gold. The 20-30 pieces didn't even add up to a 10th of a gram, but it was enough to know that there's more to be found.
Since then, he's been drywashing, a waterless process that uses air to separate heavy materials, such as gold, from the lighter dirt and sediment.
Fergusson has sunk money into other hobbies: rock climbing, scuba diving, etc. But this is the first hobby he's had that pays him back. He expects the land value to go up as well; he spent $105,000 on his claim in 2020, and someone recently bought a smaller lot near his for $175,000.
But for him, it's about the hunt.
'When you wash out the pan and there's gold in the bottom, it's euphoric,' he said.
Rudy Salazar, a 61-year-old truck mechanic from Orange County, got into gold mining less as a hobby and more as a moneymaking opportunity. David Treadwell pointed him toward a 58-acre property in Randsburg, and he spent nine months staring at it on Zillow before pulling the trigger in 2022.
'When I started looking into chasing gold, I realized the ground is still packed with it. Man has only scratched the surface,' Salazar said. 'We're all sitting on a gold mine in California. So why am I not going after it?'
His land features five gold mines and shares a fence line with the famed Yellow Aster mine, so he's confident that there's plenty of gold beneath the surface. Reaching it will be the tricky part.
As opposed to placer mines, his property holds lode mines. To get it out, he'll need to extract the gold from veins hidden within solid rock. Salazar spends his days exploring the mine shafts and sampling veins to see which ones hold the most gold. He'll ramp up operations within months or years, depending on the samples.
In the meantime, it's a struggling business venture — one that he spent his entire retirement savings on.
He's aware of history potentially repeating itself. During the gold rush, most miners didn't find fortunes, but the merchants — people selling pans, or garment makers such as Levi Strauss and his copper-rivet blue jeans — did. So far in the modern gold rush, real estate agents are making more than the gold-seekers.
'Getting a job that pays well, that's real gold. People love the gold rush story, but I'm also aware of its outcome,' Salazar said.
But he's happy with the investment so far. And like so many Californians before him, he's fueled by the promise of wealth, the secret riches buried in the earth, the 'Eureka' moment always just out of reach.
'I sit there alone. Everybody's gone. My hands are waterlogged,' Salazar said. 'It's not easy. But I hope it pans out.'