May 2001


  1. Editorial

  2. The Great Gold Conspiracy - Brad Williams
    Is there a conspiracy to keep the price of gold low?

  3. Unique Walhalla - Mountain Gold - Sue "Goldie" Reynolds
    A unique mountain village - where gold was once plentiful

  4. Finding New Gold Sites - Laurelle Murphy
    How to Find New Gold Sites

  5. New Coils - New Directions - Brad Williams
    Just where is coil technology going

  6. Light Emission Properties of Gold - Jim Foster
    Some mysterious properties of gold

  7. Flecks - Snippets of interesting information

  8. Strikes - Recent Finds

  9. Next Lode - What's in next month's Gold Net Magazine


1.  EDITORIALGold Nugget
The discovery of several large nuggets in recent months has certainly stimulated activity throughout the prospecting fraternity. Two months ago a large nugget weighing 368 ounces came from the ground in Western Australia. A month ago a 72 ounce nugget came from another area in Western Australia.

This month there was an 82 ounce nugget unearthed in Victoria - which received wide publicity. There are rumours of another nugget near 200 ounces that has also come from Victoria in recent times. It should be remembered that these are only the ones that we hear about - It is clear that many other large nuggets are being unearthed but never see the light of day.

We simply never hear about them as the finders wish to remain anonymous for a number of reasons.
Gold is still out there. There is a lot of dirt between nuggets but it is still there. And it is still coming out of the ground as we of the prospecting fraternity seek the illusive metal - in more ingenious ways - with improved detectors - coils and better research.

We have a long long way to go before all the gold in this land is depleted.


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         by Brad Williams

Is there a conspiracy to manipulate the price of gold? That is a question that has been asked on more than one occasion, and with some validity, as it appears that there is considerable evidence that this may in fact be the case.

From the beginning of the Clinton Presidency the gold price appears to have been well controlled by the US Treasury and a number of major world banks.
One would ask - why did this occur? Speculation is that when governments worldwide would find their economies failing the gold price lifted, indicating that all was not well with the economy. It was a clear indication to the population of the relevant country that all was not well with their economy.
This caused considerable difficulty for politicians who were keen to reduce the influence of gold on their economies, as traditionally it had been a leading indicator of a nations economic health.

Government's worldwide have seen the political benefits and have as a result continued with manipulating the artificial price of gold. This has had a two-fold effect on the mining industry. It has reduced investment in mining gold and at the same time has restricted the price of gold worldwide. It has also resulted in a stabilising effect on economies world wide, at the expense of market forces.

Additionally, governments world wide have shown a reluctance to retain gold as a financial reserve, as was shown when the British Labor Government announced that is would sell off 400 tons of gold - the gold price dropped US$30.00 per ounce. It has not recovered to date.

Reginald H. Howe - Click to enlarge The US government has apparently retained its massive gold reserves, but although claiming there is over 8,000 tons of gold held within the US - no official government audit has been carried out for over 50 years to confirm this fact.

There is also ample evidence that when gold does move upwards the world's banks move to thwart the increase by manipulating financial markets to reduce the impact and restrain the impact.
This is a clear breach of federal US law and has resulted in a well-publicised legal challenge in the USA.

Reginald H. Howe - is a Harvard trained solicitor who specialised in civil litigation with a Boston based law firm. His investment in the gold industry and the negative manipulation of gold prices spurred him to action by suing a number of prominent organisations and the US federal Reserve.

Among the defendants are -

Bank for International Settlements
Alan Greenspan
William J. McDonough
J.P. Morgan & Co. Inc.
Chase Manhattan Corp.
Citigroup, Inc.
Goldman Sachs Group, Inc.
Deutsche Bank
AG Lawrence H. Summers, Secretary of the Treasury

The law suit in general states:

"This is a complaint for damages and injunctive relief arising out of manipulative activities in the gold market from 1994 to the present time orchestrated by government officials acting outside the scope of their legal or constitutional authority and certain large bullion banks active in the over-the-counter gold derivatives markets and on the Commodities Exchange (COMEX) in New York. The complaint alleges horizontal price fixing in violation of Section 1 of the Sherman Act, securities fraud in violation of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (Exchange Act), common law fraud and breach of fiduciary duty by the directors of the Bank for International Settlements with regard to holders of its American issue, and violations of the Constitution by federal officials acting under color of federal law but wholly outside the scope of their legal or constitutional authority."

The crux of the complaint is encapsulated in the following paragraphs of the law suit.

34. This complaint alleges manipulation of gold prices from 1994 to the present time by a conspiracy of public officials and major bullion banks. This manipulative scheme appears directed at three objectives: (1) to prevent rising gold prices from sounding a warning on U.S. inflation; (2) to prevent rising gold prices from signaling weakness in the international value of the dollar; and (3) to prevent banks and others who have funded themselves by borrowing gold at low interest rates and are thus short physical gold from suffering huge losses as a consequence of rising gold prices.

35. Support for the price fixing allegations in this complaint comes from various sources, including: (1) official reports of the BIS, OCC, Fed and ESF; (2) analyses of market data; (3) statements by certain participants in the manipulative scheme; and (4) statements by others with knowledge of the manipulative scheme.

36. The basic model for the manipulation appears to be the London Gold Pool, which operated without formal agreement under the auspices of the BIS from 1961 to 1968. However, the present scheme differs in three critical respects: (1) it aims to subvert the free market price of gold rather than to defend an official price sanctioned by formal international agreement; (2) leasing rather than outright sales is the preferred method of bringing central bank gold to market; and (3) gold derivatives, built on a foundation of leased gold, are a new and important tool giving the manipulators a high degree of leverage.

37. While using gold derivatives to force down prices whenever possible, the manipulators must also find or coerce sufficient supplies of gold bullion to meet strong physical demand, particularly from Asia, responding in part to the low prices resulting from their own manipulations.

38. In July 1998, Fed Chairman Alan Greenspan, testifying before the House Banking Committee, stated: "Nor can private counterparties restrict supplies of gold, another commodity whose derivatives are often traded over-the-counter, where central banks stand ready to lease gold in increasing quantities should the price rise." This statement amounted to a declaration that the gold price had been and would continue to be controlled. Not only did it constitute an open invitation to take advantage of the gold carry trade at very little risk, but also it pressured private holders of gold bullion to sell or lease their gold, thus augmenting the physical supply needed by the manipulators.

39. In a formal letter to Senator Joseph I. Lieberman dated January 19, 2000, Mr. Greenspan elaborated on his 1998 congressional testmony: "This observation simply describes the limited capacity of private parties to influence the gold market by restricting the supply of gold, given the observed willingness of some foreign central banks -- not the Federal Reserve -- to lease gold in response to price increases." Thus the Fed chairman himself has admitted that some central banks lease gold not to earn a return on it as they often claim, but primarily to supply physical gold to the bullion banks during periods when strong demand is pushing up prices.

The law suit is extensive and this is just a small portion of the claim.
One man against the might of the worlds banks and governments might seem a hopeless task - but Reginald H. Howe is still in there batting away for us all.

We will continue to monitor his progress as the litigation continues and report. Perhaps the new Bush regime may return to a free market approach and we will see the price of gold rise to as much as the predicted US$ 600 per ounce.
Lets hope this will be the case, and we can get some serious dollars for our hard gotten gold.


         by Sue "Goldie" Reynolds

As a young man I lived for a time in the Gippsland area. The incredibly imposing Great Dividing Range with the majestic blues that radiated from that range held many secrets. From time to time when I ventured to the lower slopes of that magnificent range, new places were explored with the youthful vigour that I had at that time.

Most of the time these trips were to the Valencia Creek and Boisdale regions but the nature of the Australian bush in all its glory was always there. Its pristine form and uniqueness breathtaking.

Walhalla, being in similar countryside has a uniqueness and beauty that words of this language find hard to describe. Tall straight trees ranging hundreds of feet towards the blue skies, with native ferns in abundance covering the forest floor - making this an area of unequalled beauty.

Man Street - Walhalla - Click to enlarge Tucked away in a steep valley, this small but quaint village inherits and exudes the spirit of the past that 140 years ago made this place home to some 4,000 people who relied on gold for their existence.

It was in the early summer of 1962, when Edward Stringer and a small group of prospectors following the mighty Thompson River, discovered alluvial gold in a small creek. He registered his claim in January 1863.

This of course started a rush to the area, and it was in the middle of February when an outcrop of gold bearing quartz was found further along the same creek. Cohens Reef - as it became known was one of the richest gold bearing reefs in Australia.
This reef was worked for about 50 years - by a number of companies established specifically for the purpose.

The steepness of the mountains in this vicinity were a distinct disadvantage, and engineering feats that were exceptional for their time were performed to enable the wash dirt to be processed.
The surrounding forests provided 34,000 tons of timber to the mining companies each year, which contributed to the denuding of large tracts of forest in the vicinity.

Over 45 miles of tramway were constructed to transport the fuel. A steel bridge was constructed over the Thompson River to access the timber on the eastern side of the Baw Baw Mountains. The Thompson being notorious for flash flooding when it rained.

The real hey-days of Walhalla were from 1880 -1895 - when the village and other surrounding settlements numbered 4,000 inhabitants. There were several hotels, and breweries, 40 shops, two banks, a police station, four churches, and a school that had over 500 students. Chinese market gardeners provided the townsfolk with fresh vegetables from the rich soil that surrounded the village.

Walhalla Cemetery on Hill - Click to enlarge Road access to Walhalla was always tenuous in those times. Washaways were frequent and the steepness a difficulty for all. In 1910 a narrow railway line from Moe some miles to the south was completed thus making access much easier to the local residents.
A new period of prosperity was envisaged.

Unfortunately the two major employers the Long Tunnel Extended Mine closed in 1911 and the Long Tunnel Company closed in 1914. In fact the major contribution the railway made to Walhalla was in removing and carrying most of the dwellings to other gold prospecting areas.
The last train left Walhalla in 1944.

By 1920 the population was no more than 250. This area is bush fire prone and several fires and floods wreaked havoc - as they can in this forbidding terrain.

Today the permanent population of Walhalla is no more than 20 people. Many use this area for weekend's retreats - using shacks to enjoy the unequalled atmosphere. Weekends will see the town abuzz with tourists. Looking seeking discovering what makes Walhalla unique.

Like the fire station that straddles Stringers Creek, and the huge slag dumps. The cemetery that sits like a sentinel on the slopes of a steep hill overlooking the village. The Band Rotunda neatly restored to its former glory. The numerous buildings and weekenders - tucked neatly onto any flat piece of ground that could be found. The old town of Walhalla has all the qualities that attract the curious and interested in the former history of this pristine region.

The Long Tunnel Extended Mine Company alone produced 13.7 tons of gold for its holdings. This mine had an extensive labyrinth of tunnels that extended for almost 9km, and extended to a depth of 923 metres, below the machinery chamber.
Guided tours are now available in this old mine, with development work continually being undertaken to open up this area further to tourist activities.

Walhalla itself deserves more than a day or two of investigating - but the surrounding area contains a myriad of settlements and surprises around almost every corner. It is indeed a magnificent area to explore and to enjoy.
Sadly I did not have sufficient time to explore the area as I would like to have, but that guarantees that in the future I shall be back. I want to see and learn more of this area. To me, places like this are a magnet. A place just begging to be explored, learnt about, and respected.
I will return.


4.  FINDING NEW GOLD SITESGold Nugget             
         by Laurelle Murphy

Finding the illusive metal is indeed a daunting task. It is darned hard to find and it gets harder as each year goes by. As each small piece is removed from the ground by ever vigilant detector operators gold becomes less and less in recognised auriferous ground.

Fresh Ground - Click to enlarge Finding new gold sites in well known auriferous areas is difficult - but it can be done. But how one asks. We often hear of novices striking it rich the first time out. Such occurrences are well publicised and well known. But are they lucky - or are we getting it wrong?

Historical records from the gold fields were well kept at the time - but in time many of these have been lost - and accurate records for a large number of gold fields particularly in Victoria have been lost - or at the least are very scarce.

From these records we have recognised the major gold fields throughout Victoria and detected them mercilessly. But we should remember that most of this country 150 years ago was not fenced, and consisted of sheep runs of thousands of acres. Today large areas of those old gold fields are now fenced and sewn down to pasture - and almost no evidence of gold fields is displayed.

One only has to go to well recognised areas such as Wedderburn, Maryborough and Dunolly, to find gold fields in scrub right up to a fence line with level pasture ground adjacent. Clearly the old gold fields did not stop at the fence line but continued across what is now pasture.

Each gold field needs to be carefully researched. There are many records kept in archives, and within historical societies that will give the serious detectorist immediate clues as to the location of old gold fields. Not always are these records accurate - but in general they give an excellent indication of where the gold was in the old days.

New Ground - Click to enlarge It should be remembered that 150 yrs ago the gold that was taken was almost all in wash dirt and not the red clay that abounds through these areas - and which still holds good gold even today. I know I concentrate on the red clay areas - and this approach has been quite successful.

I recommend that researching for new gold areas is a vital element to successful detecting. In fact one should spend more hours researching that one does eventually detecting. Many professional detectorists spend untold hours pouring over old records. Their rewards are obvious as they continue to operate.

Most of us know about the well known gold areas - but if one does more and more research - there are some lesser known auriferous areas that have yet to be discovered. Perhaps some have been lucky enough to research well enough to find them. But to name just a few - to whet the appetite - these areas may be quite new to you.


Balmoral - Mather Creek - Mt. Difficult - Greensborough - Beremboke - Plenty - Benalla - Neerim - Tamleugh - Mallacoota Inlet.


North Albury - Nerrigundah - West Wyalong - Yalwal - Dalton - Goramba - Copeland - Moonan Flat.

Now don't expect me to tell you more about these areas - but they are auriferous and have in the past produced considerable amounts of gold.

In other States there are excellent unexplored auriferous areas. They are just not that well known, but with research there can be treasure troves of gold out there for the taking.
Many well known gold areas have been lost. For example the well known lost Chinese Village in the Pyrenees. Having spent many hours wandering with a detector throughout this region looking for gold and with one eye open for signs of this lost village - one comes to realise just how easy it is to lose great gold producing areas, even in well travelled country like the Pyrenees.

I cannot do your research for you as I have enough trouble finding time to do my own - but there are a lot of lost and new sites out there - yet to be discovered. So if you want your own little patch - it's up to you to go get it for yourself. See you out there sometime.


        by Brad Williams

Where are coils going? That is a very difficult question to answer - as in reality it is unlikely that detector and coil manufacturers really know.
The cutting edge technology associated with these products is certainly reaching into the unknown.

Technology is an ever evolving phenomenon - that reaches into the future every day. Some technological advances are speedy - while others take years and years of research. None could be more obvious that to the metal detecting fraternity. In the last ten years or so - the developments within the industry, have been giant steps.

Ever since Minelab introduced their SD series of detectors the advances were obvious. With each new model the technology was improved - in most instances markedly. Coupled with these advances the introduction of Coiltek coils into the equation really boosted gold finds.

The ultimate detector combination would be a device where one turned a switch to a selected metal - like gold - and the device only reacted when that metal was detected within the ground. Such a device has not yet been invented and with available technology it is unlikely that in the foreseeable future we will see a device that can actually perform that task.

4 Feet Wide Coil - Click to enlarge Coil technology has progressed dramatically in the last 2-3 years. At the leading edge of these advances is Coiltek - whose well recognised brown coloured coils are operating throughout the world on the Minelab range of detectors.

To obtain the success that Coiltek has achieved has not been without some cost - and Research and Development within Coiltek takes up a good deal of time and money to produce coils that specifically "get" good gold in all circumstances.

Detector and Coil technology are closely related in successful gold recovery. They are intertwined together - one without the other is useless - but operating at peak efficiency together - they can be an awesome combination in gold recovery.

But where do we go from here? I really don't think even the coil makers really know the answer to that question, at least at this time. Experiments are continuing with some interesting configurations, including a figure 8 coil.

Perhaps the highest level that the human is reasonably comfortable operating is a 24" coil. The round coils were recently replaced by the Coiltek UFO - and this oval shaped mono coil proved to be an instant hit. It could still cover the ground and was extremely stable and sensitive. The coil was lightweight and covered a lot of ground in one sweep.

Further developments into lightweight coils are always under consideration and the new configurations now presently being presented by Coiltek are proving very popular. They are certainly very practical - and highly effective in gold recovery.

Just how big can coils get? Realistically the way the detector is configured dictates in general how a coil will be attached. However, adaptations have resulted in some very large coils being manufactured that cover large areas of ground. Some have a diameter as wide as 1200mm - and can be towed behind small vehicles, at below walking pace. Others have been attached to wheels and walked wheelbarrow fashion across ground, with moderate success.

New Lightweight Coil - Click to enlarge But where are coils really going? Speaking to John Kah at Coiltek this week the answer to that question was elusive.
It really will depend on a combination of factors. Further technological development of metal detectors coupled with corresponding development of coils will certainly be made. Will there be quantum leaps? In the foreseeable future that is unlikely, as present technology will restrict development much further.

Use of lighter materials to reduce weight of coils is the obvious direction at this time, and Coiltek have been very successful in achieving some outstanding light weight coils - that are still very capable of finding gold at depth. Framed coils are now the norm - and further developments in this area can be expected. Different configurations than the usual Mono or Double D coils can be expected to be developed in the future.

At this time however, coil technology is restricted by the technology of the metal detector itself. Further developments with processors and software may well allow technological advances to improve coils.

Quantum leaps do occur from time to time. Will this happen to coils?
Well that scenario is unlikely at this time. But one never knows. Research and Development might just make a break through tomorrow or next week. In any case we will all be there waiting for that next leap forward that will assist us in gold recovery.


         by Jim Foster

The discovery of unexpected light emission properties of gold by a Texas A&M University chemist is leading to a wide range of applications in medicine, genetics and chemistry.
John P. Fackler Jr., Distinguished Professor of Chemistry and Toxicology at Texas A&M, discovered six years ago that some gold compounds were emitting fluorescent light in a much longer time than expected.

When a chemical compound is hit by light, it gets excited, and further emits fluorescent light. Fackler discovered that the fluorescent light emitted by some gold compounds could last one million times more than usually observed. "The light must get trapped inside the compound," says Fackler. "Then the light bursts into a glow in longer times than expected."

Fackler noticed that this fluorescence occurs when gold atoms are arranged in chains and the distance between them is 3.5 angstroms (one angstrom is one millionth of a centimeter). "The gold compound emits fluorescence because gold atoms form linear chains and interact with each other," Fackler says. "The distance between the atoms is very important. If it is over 3.5 angstroms, you do not get fluorescence; if you are below that value, the light changes its color."

The fluorescent light also changes its color depending on the atoms surrounding gold. So different atoms can reveal their presence by the different colors of the fluorescent light emitted by the gold compound.
"These gold compounds have some beautiful capabilities for becoming sensors to detect the presence of small concentrations of components, because light changes its color when gold interacts with different components," Fackler says.

The light emission properties of gold can also be used to detect diseases when gold attaches to nucleic acids in cells.
"As demonstrated by Chad A. Mirkin, professor of chemistry at Northwestern University, gold clusters have been designed to probe nucleic acid structure that might be associated with a particular disease," Fackler says.

One of the most important applications of gold is its use in medical drugs. "In the early 1900s, it was found that gold compounds, particularly gold with sulphur, made people with rheumatoid arthritis feel better," Fackler says. "That led to major efforts to develop drugs that dealt with rheumatoid-like diseases." These drugs originally were introduced in people by injection. About 15 years ago, gold drug pills became available.
"This has been a godsend for a lot of people who can just pop a few pills and get out of bed," Fackler says.

Golden Statue - Click to enlarge The healing properties of gold in rheumatoid arthritis patients may be due to the way gold interacts with a substance called peroxynitrite, a poison probably produced by the affected cells. "Peroxynitrite may be the major villain in the deterioration of cells and components of bone that are associated with rheumatoid arthritis. Gold is clearly involved in the production of peroxinitrites, but the details are still under study," Fackler says. Gold drugs are effective for only 25 percent of the patients, however. Many patients develop allergic reactions and other conditions that prevent them from using the drugs.

Gold-based therapy, called chrysotherapy, is also used to cure patients from cancer. Scientists are developing gold drugs to be used in the treatment of prostate cancer. " The hope is that some of these gold drugs will be as useful in prostate cancers as the platinum drugs are," Fackler says. "To this time, we have not found any that have been as successful as the platinum compounds, but there are still a lot of new compounds that have been generated with gold that may well demonstrate effective properties."
The new gold compounds discovered by Fackler are also used in chemistry. They can act as catalysts, which are intermediaries helping chemical reactions go faster and lead to new chemical products.

"Probably the most exciting applications involving gold follow from the development of brand new catalytic systems," Fackler says. Besides all the fascination associated with gold as a sign of wealth, gold is now proving to be as fascinating for its many applications.


7.  FLECKS ! - Glints from here and thereGold Nugget


United States 8,136
IMF 3,468
France 3,024
Italy 2.451
Switzerland 2,403
Netherlands 911
Japan 763
ECB 766
Portugal 606
Spain 523
UK 462
Taiwan 410
China 395
Russia 388
Australia 79


8.  STRIKESGold Nugget
        Recent Finds

AprilTalbot82 oz.
AprilW.A.62 oz
AprilW.A.53 oz
We will only publish information that has been authenticated. This is by no means a comprehensive list as many quality finds are not disclosed. - Ed.

62 oz nugget 53 oz nuggett


9.  THE NEW LODE - Next Month's Issue

  • The Gum San Gold Museum
    This New Tourist Attraction is Now Open
  • Pitfalls and More
    We look at the trouble you can get into in the bush
  • Tolmer and the Gold Escorts
    Alexander Tolmer and the Gold Escorts
  • Wheat from Chaff - Minelab's new GP
    Facts and Fiction relating to Minelab's GP


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