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Originally published Saturday, November 24, 2012 at 6:01 AM

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Modern-day miners go for the gold in California

For the first time in half a century, underground gold mining has returned to the California foothills. In the grassy slopes above the Amador County towns east of Sacramento, modern-day miners are blasting and mucking in pursuit of more than $1 billion in glistening deposits.

The Sacramento Bee

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SUTTER CREEK, Calif. — The first time this town put a major wager on a golden future was in 1851 when a local resident, R.C. Downs, talked budding tycoon Leland Stanford into joining him in investing in an underperforming mine.

That venture — and a mine renamed from the Union to the Lincoln — ultimately unearthed 100,000 ounces of gold. For years, camps in Sutter Creek and nearby Amador City roared with economic life and rolled with hard-boozing saloons and bordellos.

Now, for the first time in half a century, underground gold mining has returned to the California foothills. In the grassy slopes above these Amador County towns east of Sacramento, modern-day miners are blasting and mucking in pursuit of more than $1 billion in glistening deposits.

That is the anticipated reward Sutter Gold Mining is banking on, based on current gold prices and projections it can unearth up to 680,000 ounces of gold. It plans to reap its haul by boring new tunnels from an old mine and exploiting multiple layers of quartz veins, snaking south to the edge of Sutter Creek and, later, north toward Amador City.

Sutter Gold recently started underground development for gold exploitation. Inside earthy tunnels humming with sophisticated ventilation systems, detonation crews drill cores into rock and insert explosives, setting off three daily blasts.

Miners in lighted hard-hats, driving compact diesel-powered vehicles with heavy scoops, navigate narrow arteries to clear out the rock.

Though mining technology has advanced since the Gold Rush, the harsh underground pursuit is the same. "You drill, blast, muck and advance," said Tom Apodaca, the mine supervisor.

The $20 million complex includes laboratories, work buildings and a mill, where trucks will dump tons of ore into a "jaw crusher" and a streaming network of conveyors and gold-gleaning machinery. The steel-beam and concrete buildings are rippled with corrugated metal in architecture honoring the Gold Rush era.

"Everyone on our team has a passion for bringing gold mining back to the Mother Lode," said Leanne Baker, president and CEO of Sutter Gold Mining. "There's a romance to it. There's an excitement. We really do believe we're making history again."

No simple thing

Even in her hard hat and work books, Baker, who has a doctorate in mineral economics from the Colorado School of Mines and is a former equities-research analyst for Salomon Smith Barney, hardly resembles a gritty 1850s Argonaut.

She laughs off comparisons to Leland Stanford, who cashed in his riches from the old Lincoln Mine to help build the first Transcontinental Railroad before becoming governor of California.

Sutter Gold, a development firm whose major investor is RMB Australia Holdings, expects to pour its first gold bar in Sutter by mid-December from previously mined ore on the property just north of Highway 49.

The endeavor is the first project for the company, which also holds mining rights in a historic gold region in Baja California. Baker said Sutter Gold expects to be fully operational in Amador County — with 110 employees pulling out 150 tons of ore a day — by next spring.

Despite high values for the precious metal — over $1,760 an ounce — company officials say their venture is no precursor to another Gold Rush.

Since production all but collapsed during World War II, California has lagged well behind Nevada in gold extraction and also trails Alaska, Utah and Colorado. And the Sutter project underscores the difficulty of restarting in the mining business.

After Amador County supervisors approved the project in 1998, it took 14 years and more than 40 permits from myriad state and federal agencies to get the project under way.

In Amador County, the company controls land that once had seven working mines. Combined, they produced 3.4 million ounces of gold before the last mine — the Eureka — closed in 1958.

"I would say we haven't really touched it — as far as the amount of gold that is still remaining in the Mother Lode," said Paul Skinner, Sutter Gold's chief metallurgist.

Fine wines, boutiques

In 1998, when the county approved the Sutter project, local residents were divided over mining's return. They argued over a since-abandoned plan to bury tailings on the opposite side of Highway 49 and trucks rumbling through quaint Gold Country towns.

Since then, the county has built a bypass route to Highway 49. And Sutter Gold says most traffic will be confined to the mining property, where tailings will be kept on site — most put back into the ground — "cleaner than when they came out," said general manager Ed McGoldrich.

Pat Carney, Sutter Gold's maintenance superintendent and an Ione resident who recently worked in clay and aggregate mining, hails the region's return to its gilded heritage. Sutter Gold is bringing in miners, mechanics, technicians, geologists and engineers.

"It's a beautiful thing," Carney said. "It's what created Amador County."

But these days, the picturesque towns of Sutter Creek, home to 2,500 residents, and Amador City, population 150, celebrate the Gold Country heritage with wine and cheese and daffodil tours.

So while Sutter Gold's new employees frequent Sutter Creek restaurants, enjoying leafy cranberry and walnut salads, the place hardly resembles a mining camp.

"It's just not like the old days," said Mary Jo Pingree, manager of Sutter Creek Wine Tasting. "They're going to find a lot of good wines and good restaurants, fine antiques and some very whimsical boutiques."

John Gates, 28, who attended Amador High School in Sutter Creek, and grew up panning for gold in local creeks, came back to be part of a new mining future.

Gates, who earned a degree in mining engineering at the University of Nevada, was working for an aggregate-materials firm in Modesto when he heard of Sutter Gold's startup. He was hired as an associate mining engineer. "I couldn't pass up on the chance of restarting gold mining in my hometown," he said.

Other locals embrace the new mine but are frustrated there is little for visitors to experience for themselves.

Two years ago, Sutter Gold closed a popular tourist draw, in which visitors were scurried down a 1,200-foot mine incline and treated to gold-history movies in an underground theater. The attraction was deemed incompatible with actual mining, due to safety rules and insurance costs. The company says it may consider an overlook in the future.

At the Sutter Creek Visitors Bureau, which features photos of historic local mines, director Lisa Klosowski frets. "We tell people mining's back in town and they say, 'That's cool. What do we get to see?' " she said. "It needs to be a tourist attraction."

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