Why Small-Scale Gold Mining Operations Fail (Part 1)

 (Small-scale gold mining in its most basic form.)

 A Sobering Fact

First off, let me give you my definition of what small-scale gold mining operations are as they pertain to the topic of this post. "An individual or group-level attempt to mine gold for subsistence (making a living) or to make a profit." That's about as clear as it gets brothers and sisters.

Dickies Work Clothes

Here's a sobering fact for you to ponder: it's estimated that nearly 75% of small-scale gold mining operations fail, many of these in their first year or two of operation. Granted, this includes both hard-rock or lode mining as well as placer mining, but the point remains the same.

Reasons for Failure

Why is this, you ask? There are any number of reasons, some of which I've outlined for you below. As you read these, it may come to mind that the small-scale mining "poster boys" seen every Friday night on the "Gold Rush" TV reality series fall right into the failure category (despite their financial "propping up" by the Discovery Channel).

Inadequate financial resources: One of the biggest mistakes made by many small-scale gold miners or mining "consortiums" is a failure to obtain enough financing ($$$ that's either their own or borrowed) to support their mining operations. These resources include the costs of claim ownership or leases, fuel, food, shelter or housing, equipment, repairs, payrolls, and any or all unforeseen/incidental costs along the way.

Tips on Mining and Prospecting

Lack of mining knowledge and experience: Let me use an analogy here: how could any of us expect to fly an airplane if we've never read or studied anything about flying or taken flying lessons? Ditto for small-scale mining. How can anyone expect to make a living through mining (let alone turn a profit) if he or she has little or NO acquired mining knowledge or experience?

(Small-scale placer mining on a larger, mechanized scale.)

Failing to sample properly or thoroughly: Another big mistake that many small-scale miners make is failing to sample properly or thoroughly BEFORE beginning mining operations. How can anyone, anywhere expect to recover enough gold to feed a family or make enough money to stay in the "black" if they don't know where the gold is and what value per cubic yard they can expect to average? In my mind it's sheer idiocy to violate this basic gold mining precept (yet in my time I've seen it done again and again...go figure).

That's it for this round. Remember, gold mining always was (and continues to be) very hard work for essentially small returns. To paraphrase the late John Wayne here: "Gold mining is tough work; but it's tougher if you're stupid."

Good luck to you.

If you liked this post, you may want to read: "The 6 Levels of Gold Mining Experience"

(c)  Jim Rocha (J.R.)  2011

Questions? E-mail me at jr872vt90@yahoo.com


  1. I have one year of prospecting under my belt and I could do a better job than those idiots in Alaska! lol

  2. Correct you are Phil! Thanks for commenting. J.R.

  3. Gold Rush lacks pure common sense they are getting slightly better but from the bottom up not the top down LOL.


  4. You are on the money with that comment Alan. They'll stumble and bumble their way into some decent gold I suspect...whatever makes for good TV. J.R.

  5. Basically its how much volume can you wash per day and what is the returns for that effort against the material cost of doing so?
    if you spend 100 dollars a day in cost to run your site with salaries included and your pulling in only $75 in gold...Your going Broke FAST!! know your cost and how much volume you can process and how rich that ground is per cubic Ton...
    same principle applies to any business, Know your cost real COLD! then everything above that is a profit...
    But again
    How tough are you? how long away from your family are you going to be or can you tolerate? ect ect...AND KNOW THYE PAPERWORK from the GOVERNMENT!!! those are the real CROOKS!!

    1. Excellent comments. Thanks for your perspective.


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