Gold Nuggets—The Rarest of the Rare
by Rusty Henry

Gold is a unique metal. Since the very beginning of time, the human race has had a strong fascination and love affair with the elusive yellow metal. "Gold Fever" is real and all through history, men have accomplished unbelievable feats, and in some cases even sacrificed their lives, in order to obtain it and retain it!

METAL DETECTING is only one way of finding gold nuggets, but since readers of the MDI have a specific interest in this method of recovery, and since I made my entire living with metal detectors finding (and selling) gold nuggets in Australia from 1980-1990, I was asked to submit an entire article on this subject. Until now, I have never actually written an article about gold and what it does to people, or how and where it is found, or how to obtain top dollar should you decide to let go of any you have been fortunate enough to find.

Gold nuggets are not easy to find. Gold as a metal is already very scarce and gold in nugget form is the rarest of all. In fact, out of all the gold that is still currently being mined all over the world, gold nuggets are not even considered as part of the total production. For example, out of all of the gold nuggets found in Australia since 1980, including some huge ones like the 875 oz Hand of Faith, not one ounce has been added to Australia's total production. When it comes to alluvial (Australia's term) or placer gold (meaning gold "free from its original source"), it was all pretty much considered found back in the 1800's by the original prospectors. This is good for the countless detectorists who have been quietly and systematically extracting those "non-existing" gold nuggets from the ground with their metal detectors for the past 25 years.

It's fascinating to consider that all of the gold that has ever been recovered on earth not only still exists (since it's impossible to destroy gold), but that it also would only fill about 6 railroad box cars. That includes all the gold bars from Ft. Knox, the gold reserves from other countries, all the gold jewelry and gold coins, dental gold and even the ornate golden thrones from the tombs of ancient civilizations. I guess that means that all of the gold nuggets that still exist would not even fill up the trunk of a Fiat.

Does this discourage the average nugget hunter? Hardly. Conversely, out of all the various metal "treasures" we can search for with a metal detector, the fact that gold nuggets are the most difficult to find, merely provides that much more incentive to do the research and devote the hard work necessary to find them.

It is interesting to note that all through history, no matter what the method of recovery has been-from sluicing, to hard-rock mining, to open-pit operations, the ratio of success to failure has always been that 10% did outstanding and got wealthy from gold, 40% just made wages, and 50% never found anything and went broke.

I know that when I immigrated to Australia with my family in 1980, I was determined to do whatever it took to be one of the 40% and knowing that it only took one spectacular nugget or one big patch of nuggets to put me up into the 10%!

When I first arrived in Australia, I found out very quickly that people were going to tell you very little about where the gold was being found. If I was going to be successful finding gold nuggets, then I was going to have to figure it out on my own. This was not because I was an American in a foreign country because, in fact, Americans are very well received in Australia. But rather that I represented additional competition, especially since I had already been swinging metal detectors for 12 years and had all the best equipment available at that time.

But having the right detector and being skilled with it coupled with perseverance are still not the key ingredients for finding gold nuggets. The most crucial factor is being in the right spot. It may sound like common sense, and it is, but no matter how good a gold detector you have or how hard you work with it, you are not going to find gold if you are not going over it!

"Trial and Error" is a good formula once you are in the right area, but in order to ensure I had the right spots, I spent many days researching at the Department of Mines in the various capital cities. I studied old mining records in Sydney for New South Wales and in Melbourne for Victoria and then again in Perth for Western Australia. I scanned the records looking up key words like "coarse" and "nuggety" and that told me specifically where the larger nuggets were mainly found by the original prospectors.

Another thing that this research provided was how the gold from a particular area assayed. If I knew beforehand that the gold from a specific set of diggings had all ran about 95% purity, for example, then I knew I would be finding high dollar buttery yellow nuggets there.

I quickly discovered that there were nuggets, and then there were nuggets. Nuggets found up in Queensland were only running about 60% gold with the rest of the weight being copper and silver and these "impurities" gave the nuggets a dingy brassy look. With no added eye appeal, all I could do was wait until I had a few ounces and the bullion price was up and then go straight off to the refinery with them. On the other hand, almost all of the nuggets being found in Victoria were so beautiful that it was not unusual to get at least twice their bullion value when selling them to individuals. If the nugget had exceptional color and exceptional shape as well and a suitable size for a pendant, then 3 times spot was not out of the question. That is the beauty of finding a rare piece of Mother Nature in the form of a natural gold nugget. Quality becomes even more important than quantity.

There was a small town in Victoria called Avoca (about 120 miles NW of Melbourne) and just south of Avoca was the Lamplough Lead (pronounced leed as in "you lead and I will follow"). Each separate set of diggings was called a lead and got its own name. The gold on the Lamplough Lead was buttery yellow (about 23 kt), sparkly, and since it had not traveled very far, it had all the little ridges and indentations to give it a lot of extra character. Every nugget found there was beautiful and a potential piece of jewelry. Depending on its size, it could be a pendant piece or paired up with another for pierced earrings, for example.

After the word got out as to how extraordinary the gold from there was, I can remember guys who had found a lot of gold in Western Australia coming over from there or New Zealand just to hunt Lamplough for a couple days so they could find a piece or two from there-not to sell, but just to have it to keep.

Even though we lived about 600 miles North of there in New South Wales, I was fortunately able to make many 2-3 week trips to the Avoca area over a two year period before the Lamplough Lead got totally thrashed with metal detectors. Some of the other Leads around Avoca had colorful names, like the Strip-Me-Naked Lead and the Linger-And-Die Lead. Another one called the Frying Pan Lead was supposedly named because the first bloke to find gold there only had a frying pan to use for panning!

For the most part, the nuggets from Lamplough Lead were fairly small (1/2 oz or less) and no one was really expecting to find anything very big.

I was always very careful with my digging there as one nasty pick mark could reduce a spectacular piece right down to scrap gold. On one particularly hot day at Lamplough, I made myself physically ill by being careless. The sweat was dripping off my headphones, and I had the usual 50-60 flies all over my face and back, and I had found several large pieces of trash in a row. I got a signal that I expected to be a tin lid very shallow. I drove the pick into the ground and out rolled a beautiful flat 1½ oz piece in the shape of a horse's head. I just knew I had hit it with the pick and sure enough, when I rolled it over in my hand, there was the deep gouge from one end to the other. I had just reduced a $2000 piece of gold to a $500 piece.

I suppose there are still people out there who would look at a natural gold nugget as just a piece of metal that happens to be gold and would not consider paying more than bullion value for it. Obviously, if they ever purchased a metal detector and went out to look long and hard enough to actually find a few small pieces of gold, they would have a completely different idea of their worth.

The fact that nuggets are made of gold can be a double-edged sword when it comes time to sell one for a fair value. On the one hand, they are highly desired because they are unique, a piece of Mother Nature that is one of a kind. But on the other hand, the fact that they are made of gold means that their bullion value will always enter the picture and ultimately limit the maximum amount that anyone will pay for it.

When I personally price a nugget, I put it on the scale and weigh it and that establishes the minimum amount it can be worth-bullion value. If it has exceptional color, I double that price. If it has exceptional shape as well (basically a lot of eye appeal), I triple the basic "metal value." Now we are getting up into the $1000/oz range, and you start seeing some real resistance when going above this level. Bartering (trading gold for other goods and services) is another excellent way to receive top dollar from a gold nugget.

If a nugget resembles something like a bird or an animal, it is called a "picture" nugget and it is worth basically what someone is willing to pay. The very most that I ever got per ounce for a nugget I found in Australia was a ¾ oz piece in the shape of an American Eagle. It only stood about 1" high but it was almost an exact replica of the eagle found on the back of the 1921-35 US Peace Type Silver Dollars. It had the shoulders, the head, the eye, the beak and even the little hook on the beak. A man who had an extensive collection of uncirculated Peace dollars gave me 5 times spot for it. Actually, it was more than 5 times spot because we weighed it up as if it were pure gold and about 10% of the weight would have been impurities.

The "Golden Glove" is a good example of a top dollar "picture" nugget.

I didn't even want to sell it then, but I had the thrill of finding it, have a picture of it and could even go see it anytime I want. You can't eat it, so I had to let it go.

As a rule, the most profitable nuggets to find would be small beautiful prices in the 2-4 dwt [1 dwt (pennyweight) = 1.66 grams]. They may only contain $50 worth of gold but will consistently bring $100-$150 as a pendant piece.

The most frustrating sized nuggets to try to get a fair price for would be the big ones. The bigger a nugget is in ounces, the rarer it is. A 10 oz nugget is probably at least 1000 times rarer than a ¼ oz nugget. Whereas it is not unusual to get $1000/oz for a ¼ oz nugget, it is very difficult to get $10,000 for a 10 oz piece even if it looks like Snow White & the Seven Dwarfs. Its scrap gold value starts involving more and more dollars, and the prospective buyer becomes more and more bullion conscious.

Diamonds, rubies, emeralds, etc., which are also regarded as rare pieces of Mother Nature, have purely aesthetic value. Smash one of these flat with a hammer and you have zilch. Smash a 10 oz nugget (which is probably 10,000 times more rare than an equivalently priced diamond) with a hammer and you still have approximately $3000!

To demonstrate this inequity at its extreme, consider the Hand of Faith purchased by the Golden Nugget Casino in Las Vegas.

I was only a few miles away when this nugget was found in Victoria in 1980. The older couple who found it were asking for 1 million Australian dollars. That was only $870,000 (US $) at the time, and I thought surely the Australian government would purchase it to put on display in the gold museum in Ballarat, Victoria. I mean, how do you put a price on an 875 oz nugget-the largest existing nugget in the world today? There were many that were larger but they were found and melted down in the 1800's. The very biggest nugget ever was the 2580 oz Welcome Stranger found in Moligul, Victoria in 1869!

When the Golden Nugget Casino heard about the Hand of Faith nugget, they could not get to Australia quickly enough to plunk down 1 million (US dollars)-less than $1,200/oz! They then insured the nugget for 5 million before the plane ever left Australia as they wanted to get something closer to what the nugget was really worth should the plane go down in the ocean.

In order to fully appreciate just how rare the remaining "upper echelon" gold nuggets are, we need to consider several factors.

Nuggets only form very near the surface so future finds are limited by nature itself. Many nuggets found in Australia were not even near the surface, they were on the surface. The first prospectors to wander into Kanowna, near Kalgoorlie in Western Australia about 1900 found many nuggets in the 5-10 oz range lying right on the surface in plain view. They had been there for millions of years and had moss growing on them.

These "easy pickings" along with thousands and thousands of ounces of some that were a little harder to recover were all sold and melted down as they were found in the 1800's. This was happening not only in Australia but also in California and Alaska where a good supply of nearby water made the original prospectors even more proficient at cleaning the areas of nuggets.

Through crude recovery methods or carelessness, a certain percentage of nuggets were tossed out accidentally on the tailings piles ("mullock heaps" in Australia) or missed entirely in what we refer to as "new ground." Remember, they didn't have metal detectors in the 1800's and could not afford to turn a whole hillside over for just the odd nugget or two. These nuggets and specimens (gold in quartz or other host rock) enabled the new modern day "electronic" gold rush to start about 1980. Even out of all the new nuggets and specimens being recovered by metal detectors, at least half were sold at gold price because they were either too flat and water worn to have any character-particularly those found in or near streams in California or Alaska or they had been chopped in half with a pick, etc.

Out of the nicer nuggets left, many were made into jewelry and are still being worn. I occasionally wear an ounce piece myself that is in the form of Australia that I found near a dry salt lake in Western Australia.

What I'm trying to say is, "If you find a beautiful, uniquely shaped nugget, hang on to it"! The day is coming when people realize just how truly rare they are and they will be priced like gold coins that have a very rare date.

At the time this nugget was formed, Australia would have
looked even more like this as Tasmania was still attached to the mainland.

Think about it. In the case of the most valuable rare gold coins, they still minted several, whereas Mother Nature only minted one each of natural gold nuggets.

As the value of natural gold nuggets and specimens keeps going up, so does the temptation of the unscrupulous to try to duplicate a gold nugget and make a big profit from scrap gold. There are already many fake or phony (man-made) gold nuggets floating around but they are not difficult to identify, and the more that people try to make nuggets, the higher the demand will be for the real thing.

Tips On How To Positively Identify Natural Gold Nuggets
To start with, "fool's gold" [iron pyrite (iron sulphide), chalcopyrite (copper pyrites or copper sulphide), or bismutite (carbonate of bismuth)] will only fool someone who has yet to see the real thing. The color alone is enough to identify fool's gold for what it is. If you study a gold nugget under a constant light source, whether sunlight or artificial light, you will see that the dull wax-like yellow color will remain the same no matter how the nugget is turned. "Fool's gold" on the other hand may look similar at one angle but then have a shiny, bright appearance when turned.

There should be no doubt at this point but if still unconvinced, place the sample on a flat metal surface and hit it with a hammer. Instead of breaking up in many small pieces, gold, being so malleable, will continue to flatten out and also retain its waxy dull color. Just remember before using the hammer test, that there is no use telling an interested buyer that the flat yellow pancake in your hand used to be a perfect miniature of their pet poodle as shaped by nature.

Perhaps a safer final test would be simply a drop of nitric acid which will not change the color of the piece if it is gold.

      
This 1¼ oz piece is unusual, since from one side it looks like a solid nugget,
and yet, when it is turned around, we find that it is actually a specimen!

I am making the assumption that anyone seriously considering the purchase of a gold nugget would not be fooled by any other substance that has simply been painted by gold paint. Gold has a very high Specific Gravity (SG) of 19.3, which means it is very heavy! More than 7 times heavier than an equivalently sized stone that you might pick up from the ground. Even lead, which is the heaviest other metal that the average person has ever held only has an SG of 11.3. That means that a genuine gold nugget should be more than 50% heavier by volume than a piece of gold painted lead of the same size! By the way, it is possible to determine very closely how much gold is in a gold and quartz specimen (without destroying it) by using Archimedes Principal involving specific gravity.

                                                       The formula is:

24 grains (gr) = 1 pennyweight (dwt)
20 pennyweights = 1 ounce (oz) troy
480 grains = 1 ounce (oz) Troy
12 ounces Troy = 1 pound Troy

Unfortunately, I have only a small percentage of gold left that I have found over the years. That obviously makes the pieces that I have been able to retain very special. Pictured below is the largest nugget I have left to show from all those years prospecting in Australia.

It is a 5 oz nugget and I have hung on to it because of its exceptional color and shape. What is it worth? I do not know, since it is worth whatever someone is willing to pay for it. One thing I can tell you for sure, however. I would go ahead and starve to death before I would ever sell it for less than $1000/oz. There are nuggets, and then there are nuggets.

Rusty Henry is an authorized Tesoro dealer and operates Rusty's Detectors located at 321 Circle P Drive, Prescott, AZ 86303. If you have any questions about Tesoro metal detectors, you may reach him at (928) 445-6451 or email him at krhjah@msn.com.