Gold Rush

by Jim Richards

  In August 1993 Nick put me on to drilling a zone that had some high-grade gold hits and had been causing confusion. The area was right beside the Great Northern Highway, which was the main road that connected the north and south of Western Australia and bisected the mine site.

  I reviewed the old drilling results and saw there were indeed some very high-grade gold intersections of up to 300 grams per tonne (10 ounces to the tonne!): bonanza grade. However, these hits appeared to be all over the place and didn’t show any kind of consistent geological thread to tie them all together. This rendered the results worthless. They had to hang together in a predictive manner in order to be mined.

  I decided to start again. The prospective area was about 120 metres long by 50 metres wide, and I systematically drilled a series of holes (on a 20 by 10 metre grid) to give the best coverage. I carefully logged and recorded each metre of drill returns and then plotted the geology and assay results onto cross sections.

  It was a puzzling scenario, with gold hits and quartz veins all over the place and still without any obvious cogent pay-zone. I would stare at the sections, trying to figure out some kind of geological order among the seemingly random chaos.

  After drilling the first two lines of holes, the answer became clear. There was a 2-metre-wide dolerite dyke (a fine-grained, dark-coloured igneous rock) running straight down the middle of the prospect. Every time I hit this dolerite dyke, exactly 1 metre below it there was a particular blueish quartz vein, 1 to 2 metres thick, that ran bonanza grades of gold every time. Unlike the other high-grade quartz gold hits in the area, this one was geologically consistent. That meant it could be mined.

  Inspired by my find, I wanted to test my theory in the next drill hole. The following day I was back on the rig, drilling away. I had worked out from my cross sections that we should hit the dolerite dyke at 70 metres depth and the quartz vein at 72 metres. As we approached the target depths Ross Atkins drove up.

  ‘What’s going on, Jim?’ Ross asked.

  ‘I reckon I’m onto something here, Ross. Wait for the seventy-metre bag,’ I replied.

  The bag arrived, I sieved some of it and showed him the dolerite dyke.

  ‘Wait for the seventy-two-metre bag, Ross, and I’ll be panning two-ounce dirt from it.’ (Two ounces of gold to the tonne being the grade.)

  I predicted this with some nervousness as it was a big call, but it certainly got Ross’s attention.

  We got the 72-metre sample bag and I panned some of it off: it was dripping with gold. Ross called for Nick on the radio and together we walked the possible strike (length) of the vein. It was only 2 metres wide and ended up being a decent 170 metres long. But the grade made it a mighty prize, with assays up to 700 grams per tonne (22 ounces per tonne).

  There ended up being about 160,000 ounces of high-grade gold in this discovery (worth around $190 million at today’s prices), which came within 2 metres of the surface. The top 2 metres were alluvium (water-transported material), which was why the old-timers had missed it.

  Unfortunately, geologists who work for mining companies do not get paid on commission (apart from in Peru, under a most enlightened law). I was on A$45,000 per annum, a good salary back then, but we were not getting rich out of it. We just had to take whatever glory we could grab and try to leverage it into a pay rise. No luck at St Barbara’s on that one.

  We named the deposit, rather unimaginatively, the Great Northern Highway (GNH) vein, as it sat right next to the highway. The mined hole in the ground is still clearly visible today on the eastern side of the road, behind the bund (safety wall of rock).

  The most important lesson that I learnt from discovering the GNH vein was not geological, it was about human nature. You could stand on the roof of the geologists’ office at the mine site and throw a stone that would land on top of the GNH deposit. For ten years geologists had sat in that place, missing a bonanza that was within 80 metres of where they were sitting. They had never thought to drill a hole in the area they were gazing at out of the window every day.

  Around this time, the mine was going through a highly profitable period and was producing strongly. I managed to get into the gold room to see a gold pour. A large hot crucible was tipped by two men using tongs and the red-hot molten gold poured out into a series of 500-ounce ingot moulds.

  These gold bars were then broken out of the moulds and cooled in a bucket of water. There were six 500-ounce bars: 3,000 ounces of gold in total, worth around $3.6 million at today’s prices. That was just five days mine production.

  I was impressed. The mill was a machine that effectively printed money; no marketing, no arguments, just pure gold. As the saying goes: ‘Gold is money, everything else is just credit.’

  As summer approached, temperatures soared. In the early mornings we would watch the rising sun with dread, knowing that we were to be beaten by it over the course of the day. The rocks on the ground became so hot you could not pick them up, and the radiated heat from the red ground was intense. I cut up cotton sample bags and sewed them into something resembling an Arab’s keffiyeh to protect my face; any bare skin was seared by the sun and hot wind. One afternoon the sole of my boot detached from the leather, because the glue had melted.

  I had been in Meeka for nine months and had learned a lot about the industry, but was not really progressing my aim of having my own operation. I was getting restless, and the lack of women in the place didn’t help.

  I spent much of my spare time looking at trade journals and newspapers, dreaming about how I could get myself into the position of the major shareholders and directors of one of the exploration or mining companies I was reading about.

  Sitting on the edge of the pit, I would watch the mining taking place. Large areas were marked by red tape: this was the high-grade ore, greater than 3 grams per tonne gold. I would work out in my head just how much profit the company would make by treating this material; it was in the millions. This was where I should be, like Ross Atkins, controlling one of these companies. It looked like a much more effective way to make money than diving in rivers in Guyana.

  This was an important change in my thinking, but I just couldn’t work out how to make the leap. I thought about pegging some gold leases myself, raising money to drill them and finding a resource upon which to float a company on the stock market, but there appeared to be too many obstacles in the way, not least of which was the amount of money it would require, and I had virtually none. But the seeds for a future stock market float were sown at this point, and it was an idea I found most attractive.

  However, the kind of entrepreneurial behaviour that I now needed to adopt did not come naturally. So despite thinking about it, I just did what I did best, and tried to find another job that would broaden my experience, get better pay and hopefully move me closer to the day I might, perhaps, float a company.

  I scoured the paper every Saturday for jobs. My time in Meeka had already paid off and won me a far-reaching asset: permanent residency in Australia. I was now able to go and work anywhere, secure in the knowledge that I could freely return to Australia to live and work. After many weeks, a particular job ad caught my eye:

  Exploration Geologist – Gold

  Reconnaissance work in Laos, South-East Asia.

  I rang the recruitment consultant and he set up a telephone interview with Alan Flint, exploration manager South-East Asia for Newmont Mining, one of the largest gold mining companies in the world.

  During the interview Alan seemed more interested in my military knowledge than my geological work. After my experience with David Fennell in Guyana I was beginning to think this was normal.

  Alan asked me how much I was looking to earn, and I asked for a sum that I felt was outrageous. He agreed, and I got the job. I would start in a fortnight, after I had worked out my notice.

  By now I was eager to be moving on, hopefully to bigger things, and was brimming with anticipation for what lay ahead in the mysterious country of Laos.

&nbs
p; CHAPTER 13

  HEART OF DARKNESS

  The journey from Perth into Laos was an exotic and refreshing change after the monochrome of life in Meeka. I picked up a guidebook along the way and acquainted myself with one of the poorest and most isolated countries in South-East Asia.

  Laos is a landlocked country bordered by China, Myanmar (still locally referred to as Burma), Thailand, Cambodia and Vietnam. The country is about the size of Britain, mountainous with thick jungles and a population of around 6 million. Relatively undeveloped, the main industries of Laos are the subsistence growing of rice, logging and cultivation of the opium poppy. The north-western corner of Laos forms a part of the Golden Triangle of Asian opium production.

  The mighty Mekong River flows through Laos from China in the north to Cambodia in the south and, for some of this journey, defines the border between Laos and Thailand. Laos is short on basic infrastructure and the Mekong River is a crucial transport route.

  When I arrived, Laos was governed as a one-party state, which had been operating since the communist Pathet Lao seized power in 1975. I noted that there was a low-level civil war from this time still dragging on.

  It was December 1993, and Laos was a partly closed country. Flying directly there was not easy, so I ended up having to go in overland from Thailand (after getting my Laotian visa in Bangkok).

  Following a comfortable night in the Thai town of Nong Khai, I crossed into Laos over the Mekong River via the strangely named Friendship Bridge. The Laotian border guards were armed with AK47s and did not look friendly, but the business visa and a smile got me through.

  I was met on the other side by Dao, Newmont’s Mr Fixit. Dao was one of those smooth, multilingual middlemen who act as company representatives in far-flung places. We got into the company vehicle, which was an ex–Russian army jeep, a UAZ (pronounced ‘waz’) and drove through the chaos of cars, bullock carts, tuk-tuks (motorbike taxis), logging trucks and chickens to Vientiane, the capital of Laos.

  As we drove, Dao described one of his holiday exploits to me. ‘I spent an entire week in a hotel room with a girl and all we did was have sex, sleep a bit and get room service. That was the holiday.’

  ‘Didn’t you go out even once?’ I asked.

  ‘Why? We were only in Vientiane.’

  There was still a lot of French influence in Laos.

  At the company office I met Simon Yardley, the country manager for Newmont. He had the world-weary look of the lifetime expat. Simon gave me a warm welcome and a background briefing.

  Mining in South-East Asia had recently been ignited by a number of dazzling new gold discoveries. Newmont had found a giant copper-gold mine at Batu Hijau in Sumbawa, Indonesia, and Papua New Guinea and the Philippines were also delivering some rich gold deposits. Mining companies were throwing money at putting geologists on the ground all over the region. The aim was to find new, large gold mines in areas that were under-explored. It was a type of corporate-sponsored gold rush and I found myself in the middle of things.

  Nowhere was more under-explored than Laos. As a result of politics and geography, no western geologists had been here since the French colonialists had left in the 1950s. As far as exploration geology goes, this was virgin territory and as thrilling a place to prospect as you could find. A geologist could walk up a remote river here and stumble over an outcropping world-class gold mine. There were not many places in the world you could still say that about.

  This apparently was my job, and it sounded pretty damned good to me.

  ‘Jim, do your expenses, grab your maps and then it’s straight off to the airport. You’re flying out to the field by helicopter this afternoon,’ Simon said.

  ‘No problem, whatever is required,’ I told him, although I wouldn’t have minded a night in town, which looked most exotic, at least compared to Meekatharra.

  Simon briefed me on the kind of work I was to do, mainly collecting stream sediment samples and geological mapping and prospecting along the way. There was a lot of the unknown about what I was letting myself in for here, but I could see a great opportunity opening up with this job and I was determined to do well. My navigation and geology skills were good, and after my previous stints in the army and South America I felt confident enough in my abilities.

  ‘A Canadian geologist will be out there with you for a few days. Mitch will give you a full handover and show you the ropes,’ Simon assured me.

  Dao and I headed out in a car packed full of food and supplies. He gave a running commentary on almost every woman we passed. He was not just commenting on their appearance, but their personalities; then it dawned on me – he actually knew them all.

  When we arrived at the heliport I could see several large Russian-built military helicopters – HIP gunships and HOOK transports – a reminder of the ongoing insurgency. Sitting to one side was our helicopter, thankfully a reliable Canadian-built Jet Ranger, which looked tiny in comparison to the Russian choppers.

  For some reason, every civilian helicopter flight in Laos had to be accompanied by a military officer; now that was paranoid. Given there are only five seats on a Jet Ranger, one of which is for the pilot, this extra body was a pain.

  We loaded up and Dao rather ominously wished me good luck. The chopper took off and followed the Mekong River to the north-west. After a while we left the river, and the terrain became mountainous and covered with thick jungle. I could not see any roads or signs of civilisation. The military observer was keeping a beady eye out with his binoculars, following the route on his map and making copious notes in his field-book. He seemed enthusiastic in his observations and I was wondering if I was missing something.

  After about an hour we came in to land at an isolated valley, which was set among basalt mountains and jagged karstic cliffs of limestone. We landed in the only flat and open space, next to a village made totally out of bamboo, surrounded by fields carpeted red with opium poppies.

  A mass of brown faces gazed into the windows of the chopper. Most of these people were wearing traditional hill-tribe costume and looked friendly enough, though a contingent of smoking, gun-toting, young Pathet Lao soldiers also stood threateningly to one side.

  I jumped out of the chopper and with some relief saw a large white guy striding towards me: this must be Mitch. I could hardly hear anything as the chopper rotors were still turning.

  Mitch put his hand out, I shook it and he handed me a sheet of paper.

  He shouted in my ear, ‘Good luck, mate, you’ll fucking need it,’ and jumped onto the chopper, spoke to the pilot and the machine picked up rotor speed and took off.

  Oh crap. But at least I got some handover notes. I looked down at the piece of paper. It said: ‘Good luck, mate, you’ll fucking need it. Cheers, Mitch.’

  I turned around to see 300 brown faces, some with guns, rushing towards me.

  Everyone formed a large circle. The girls giggled and poked, the children laughed and tugged at me, and the guys with guns just looked like guys with guns.

  A group of three men pushed their way into the circle. They looked Laotian but were dressed as westerners, all wearing the pocketed waistcoats used by geologists the world over.

  ‘Newmont,’ they said.

  ‘Newmont,’ I replied.

  I turned to the first one. ‘Speak English?’ I asked.

  ‘Vietnamese.’

  I turned to the second.

  ‘Russian,’ he said.

  In desperation I turned to the third.

  ‘Français,’ he said.

  I had been an absolute duffer in French at school, although my skills had improved when I had spent six weeks as a student doing geological mapping in the Maritime Alps. My French was better than my Laotian, Vietnamese or Russian, so it would have to do.

  That night we slept in a bamboo hut on stilts. I was kept awake all night by the smell and snorting of pigs underneath. Next morning, there was rice for breakfast, then I had to answer the call of nature. There were no toilets anywhere.
Like the rest of the village, I went in the nearby bush, which was not a pretty sight.

  Planning for the day ahead commenced. The French-speaking geologist, Khamhung, showed me on the maps which areas had already been sampled and we then planned our next expedition, which would last a week.

  We mustered our motley crew in the centre of the village. We had about ten soldiers armed with Kalashnikovs and RPG-7s. I had no idea what they were doing there but Khamhung assured me they were necessary. The soldiers were led by a menacing-looking, thickset sergeant with rotten teeth, whom neither the villagers nor the soldiers seemed to like much.

  About fifteen local men acted as porters. We loaded them up with bags of rice, dried fish, meat and sampling equipment on improvised bamboo backpacks. These locals were led by their pho ban, which literally translates as ‘father of the village’. This village’s head guy was about fifty and looked very able. Some of his village porters were also armed.

  Khamhung and the other two Laotian geologists were attempting to direct this group, and there was much gesticulating and raised voices. My greatest concern was one of the weapons accidentally going off, and I ensured they were all ‘made safe’ (that is, that no round was loaded into the breach).

  I was armed with a map, compass, field notebook, geologist’s hammer and hand lens, and a rucksack with a set of spare clothes and sleeping gear. The maps were 1:100,000 scale; they had been made by the French in colonial times, drawn from aerial photos. There were large blank areas marked ‘Non Carte’. This was indeed uncharted territory.

  Finally we set off around eleven, the army out ahead, then myself and Khamhung, with the villagers and the other two geologists behind.

  We started walking through hilly rice fields. These were not the wet paddies I had seen in Thailand; this was tung hai (hill rice), grown without the intense water cultivation of the lowlands. Most of the land though was given over to poppy cultivation. We were deep inside the Golden Triangle, where the bulk of the world’s opium is grown.