Gold Attracts a New Breed of Prospectors : Mining: They gamble that the price of the metal, near a six-year low, is about ready to climb again. With modern methods and equipment, they want to be ready when it does.

A new generation of “forty-niners” has descended on this gold rush town in northern Washington to mine the precious metal with 1990s techniques.

The four-wheel-drive pickup truck has replaced the mule. And forget about finding biscuit-sized nuggets; the gold leaving the hills these days is in the form of microscopic specks.

One to six tons of ore must be pulverized and leached with cyanide to produce one troy ounce of gold, worth about $350 today. That price is close to a six-year low and the break-even point most mines need to reach to stay in business.

Still, gold exploration companies hoping to strike it rich continue to drill hundreds of test holes in Ferry and Okanogan counties.

“Right now, there are probably 20 major companies kicking over rocks in northeast Washington,” says Joe Maher, manager of Hecla Mining Co.’s Republic Unit and its hard-rock Golden Promise Mine.

A leader is Crown Resources Co., a Denver-based exploration company that has entered into joint operating ventures on some of the region’s more lucrative gold properties.

With an average of six years between discovery and production, exploration and mining companies are gambling that the price of gold will rise, says Lou Lepry, vice president for corporate development at Crown Resources.

“We reason and hope that the gamble is not too severe,” he says. “But with such a lead time between discovery and actual mining, we think that the price of gold will, in time, rise. There is also the undying hope that you will bump into a discovery that is not terribly sensitive to the price of gold.”

One such discovery appears to be the Crown Jewel project on Buckhorn Mountain near Chesaw in Okanogan County. The joint venture between Battle Mountain Gold Co. of Nevada and Crown Resources would become Washington state’s first large-scale open-pit gold mine.

Drilling has indicated a sheet-like body of gold reserves of at least 1.6 million ounces.

The Crown Jewel is the latest of a number of gold properties developed in the northern Washington gold province in the last three years.

In Ferry County near Republic, Hecla has expanded and modernized its underground Golden Promise operations and Echo Bay Mining Co. has opened a new underground gold mine--another Crown Resources joint venture. Other properties are expected to come on line in the next two to three years.

Asamera Minerals Co.’s Cannon Mine, the state’s largest underground gold mine, continues to expand near Wenatchee.

All of this has made Washington state the nation’s sixth leading producer of gold, while adjacent states lag.

Gold exploration in Oregon last year was “somber” and activity in Idaho was down 50% in 1991 from the year before, according to the Bureau of Mines.

Meanwhile, gold exploration in northern and north-central Washington state continues at a strong pace.

“The rush in the Republic District is very exciting,” says Douglas B. Silver, a mineral economist in Littleton, Colo.

After reaching a six-year low this spring, the price of gold has begun to rebound, partly, Silver suspects, because of what he calls the “popcorn effect.”

“I think gold investors are like popcorn. You heat the oil, it reaches a certain temperature and one kernel gets going, then a couple more, then a whole bunch,” says Silver, whose Balfour Holdings researches the minerals industry for mining companies and banks.

“The thing is, the price has been down for so long that even people who despise gold are looking for an excuse to get in there and start buying.”

Gold prices have been on a downward slide since they peaked at more than $800 an ounce in 1980.

The current boom in northern Washington may be tied to investors’ beliefs that the price has been down so long it has no where to go but up, Silver says.

Another reason for the renewed activity in the Republic District is that some larger mines--such as Battle Mountain’s flagship in Nevada--are beginning to play out, Silver says.

Those mining companies are scrambling to replace production and profits that will be lost when those mines close, he says.

Existing mines, such as Hecla’s, are making exploration a top priority so that they can get into production quickly should prices take off, said Golden Promise’s Maher.

The break-even point for paying the operating costs for gold mines in the United States is about $340 an ounce, Lepry says. Not far below that mark, mines begin to close and gold supplies shrink, he says.

Contract miners start at $13 an hour, but top miners can make twice that. Between them Hecla and Echo Bay employ as many as 300 miners.

Work in the Golden Promise means looking for veins of quartz-like material thought to be the mineralized remains of ancient hydrothermal springs, much like those at Yellowstone National Park.

The swirled black and white veins look like fudge marble ice cream that can be easily distinguished from the dull gray rock that surrounds them.

The gold, found in minute traces in thin black lines, is blasted with dynamite and mucked out by 10-ton loader-haulers that replaced the one-ton ore carts of years past.

After the ore is crushed and processed at the mine’s mill, a sludgelike paste is refined into 40-pound bars of mixed gold and silver, called dore.

If luck is with them, the mining companies will get more for those bars tomorrow than they do today.