Work has stopped at Barrick Gold Corp.'s Cortez Hills mine, a part of the company's 1,000-square-mile Cortez gold mine in Northern Nevada. Sirens echo across the open pit, warning employees to get out. Bruce Krajewski, a blaster for Barrick, opens a small, red detonation box he has set in a berm of dirt and rock, high above the 1,500-foot-deep pit.
The countdown ends, and Krajewski detonates the charge. Puffs of dust shoot 60 feet into the air with a pop. A shelf of rock near the pit's bottom groans, then slumps with a rumble.
It's another day in the life of Barrick's Cortez, the world's second-largest gold mine. Cortez produced 1.42 million ounces of the precious metal in 2011, and is on course to yield as much as 1.25 million ounces in 2012. With a fresh pile of ore in the pit's bottom, miners are set to add a few ounces to the year's tally.
It took eons of roiling geological forces, eight years of permitting, more than $600 million in development and construction costs and three years of lawsuits to set off today's blast. The explosion freed microscopic gold from earth that has held it for hundreds of millions of years. In a few short weeks, that gold will join the world's multibillion-dollar-a-day gold trade.
The blast is a brief but crucial chapter in the story of Nevada's gold.
Our story begins on a sere hillside 75 miles southwest of Elko. There, under rolling acres of sun-scorched wild cabbage and squat juniper shrubs, lies earth laced with precious metals. An inexperienced visitor sees barren desert; a geologist spots rock formations that hint at metal-forging tectonic events.
"If you're looking for gold, you're looking at structure," says Mark Bradley, Barrick's acting chief exploration geologist. "You're trying to unravel the structural pictures of the land."
Fiery volcanic eruptions, heaving fault lines pushing up shelves of rock, miles of now-extinct seas - all combined 350 million years ago, about 100 million years before dinosaurs stalked the planet, to draw boiling water into subterranean cavities.
Thanks to a few chemical reactions, gold formed and concentrated in the water. As the fluid cooled and receded, it deposited gold on rocks below ground and left chunky, distinctive outcroppings above. These clusters of deformed rocks, called breccia bodies, ripple across Northern Nevada, and they've made the region one of the world's most productive gold-mining districts for the better part of 150 years.
That's why this countryside crawls with Barrick workers and contractors one August morning. They're involved in exploration, the first step in getting Nevada's gold to market.
Barrick will spend a company-record $200 million to $220 million in 2012 to explore North American ore veins, mostly in Nevada. It's an investment made possible by today's gold prices. Gold averaged $1,572 an ounce in 2011 and surged toward $1,800 an ounce in mid-September, up from just $280 in 2000.
Those big price gains are credited to a 1999 agreement among central banks to shore up gold by limiting bullion sales, as well as emergence of exchange-traded funds, which make it easier for individual investors to buy.
Inflation fears in developed countries and rising jewelry sales to growing middle classes in developing countries such as China and India have also driven up demand.
At Barrick's Goldrush operation, also at Cortez, earthmovers level hillsides for exploratory drill pads. On the western edge of Red Hill, 100 Barrick employees and 200 contractors prepare the 50-acre exploration site and work on a dozen drill rigs, boring down more than 1,000 feet - about twice the height of the Eiffel Tower copy at Paris Las Vegas - to collect samples that will allow tests of just how rich Goldrush is.
It takes half an hour to drill five feet, so core sampling can take days or weeks. The three-foot limestone segments that come out of the ground look like charcoal or graphite, with no visible gold. It's a far cry from Nevada's original Gold Rush, in the 1860s and '70s, when prospectors found nuggets in bedrock.
Today's miners move mountains to extract microscopic bits recognizable as gold only in the assay lab. Barrick will use those lab reports to peg gold percentages and map the best places to mine.
High-quality ore could contain an ounce or more of gold per ton. Lower-grade ore might hold less than a tenth of an ounce per ton. In its earliest stages, Goldrush has shown both extremes and everything in between.
Barrick will explore for two years at Goldrush and develop a mine plan. Then it will complete an environmental impact statement with the Bureau of Land Management, which owns the property. It'll take up to 10 years and tens of millions of dollars to finish the statement and get mining permits. Lawsuits, like the one the Shoshone tribe filed over Cortez Hills' environmental-impact process in 2008, could add millions more.
Much about Goldrush is up in the air. Until assays reveal what the ground holds, Barrick officials can't say whether the mine will be underground or open pit, how much land the digging will cover or even how many ounces of gold actually lay underground. But as of late 2011, the company was looking at potential resources of 7 million ounces at Goldrush.
Barrick com-munications director Lou Schack says the company is "generally very conservative" in its modeling. Officials don't want to say an ore body has 10 million ounces when it really has only 5 million.
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