Prospecting the Gold Colonies

From its headquarters at York Factory on Hudson Bay, the Hudson's Bay Company (HBC) controlled the fur trade throughout much of North America for several centuries.

Gold discoveries were not reported – it was good policy (as we shall see), on the part of Hudson’s Bay, and other fur companies, not to talk about gold because protection of the fur trade was their overriding corporate interest.

“Small quantities of gold were reported by traders in the 1830s and at some posts became current in local trading, though not common or in quantity. Hudson's Bay Company policy, or the good judgement of the Chief Trader, kept news of such discoveries quiet until a large trove was brought into Fort Kamloops in 1856 by members of the nearby Tranquille tribe. When news of the find, and a large poke of gold dust brought to James Douglas, Chief Factor of the Columbia Department at Fort Victoria and also Governor of Vancouver Island, decided to ship it to San Francisco for smelting. Some historians have suggested he did so deliberately to spread news of the gold find so as to provoke a gold rush so as to force Britain's hand on the status of the British mainland north of the 49th parallel, which since the Oregon Treaty had remained unincorporated and had remained solely the domain of the fur company and its native clientele. American miners had been appearing more frequently on British soil and Douglas felt he had to take action.” Wikipedia

The Gold Colonies

News of the gold discoveries in New Caledonia (New Caledonia, today’s north and central British Columbia, was a fur-trading district of the Hudson's Bay Company and was part of the British claim to North America) spread like wildfire. From 1858 to 1863, tens of thousands of miners and others, all infected with ‘gold fever’, invaded the interior of B.C. – HBC’s native fur-trading territory.

The first major gold find was 15 kilometers south of Fort Yale at Hill's Bar where miners worked alongside Chief Kowpelst and his people. During its heyday Yale was the largest town north of San Francisco and west of Chicago, hitting a peak population of roughly 16,000.

Two French miners raped a native girl near Lytton, they were caught, killed, and their beheaded bodies sent floating down the river as a warning. Several dozen miners and natives were killed before an accord was reached and the Fraser Canyon War ended.

On hearing of the atrocities Governor Douglas set into motion his plans to enforce British authority and sovereignty on the mainland. Douglas declared the Colony of British Columbia and was sworn in as its first Governor, on August 1, 1858. Also in 1858, at the age of 39, Matthew Baillie Begbie, BC’s famous hanging judge, was sworn in as a ‘circuit’ judge to bring British law to the colonies scattered mining communities.

Miners spread farther and further afield into the new colonies interior.

Discovery after discovery, gold rush after gold rush followed; Wild Horse Creek, Big Bend, Similkameen, Cassiar, Omineca, Tulameen, and of course the largest and most famous, the Cariboo.

Gold was discovered in 1859 on the Horsefly River by Peter Curran Dunlevey. Other strikes were on Keithley Creek and Antler Creek in 1860. Further strikes along Williams Creek in 1865 pushed the Cariboo Gold Rush into full swing.

From the Cariboo Sentinel comes the following:

  • June 17th-July 29th 1865 – unparalleled yield of gold taken off Erikson claim in Cariboo. Above $160,000 taken out in 7 weeks.
  • Increase of Gold production of nearly 100% (or 1/2 million dollars) in one year. Production for June/July 1865 = $950,648. Production for June/July 1864=$475,158.

Barkerville was named after Englishman Billy Barker whose claim was the richest and most famous yielding 37,500 ounces of gold for the seven partners. At the peak of the gold rush Barkerville had about 10,000 residents.

All this activity focused attention on the mainland and led to increased development. Governor Douglas built, in response to the Cariboo Gold Rush, the 650-km Cariboo Wagon Road from Yale to Barkerville providing an important transportation route for further development of his newly created mainland colony.

The colony of Vancouver Island was also affected. Most miners, after sailing north from California, landed in Esquimalt Harbor not far from Fort Victoria to stock up on provisions and businesses boomed.

“The search for gold is the single most dramatic event of British Columbia’s early history. Although European settlement originally was founded on furs, it was the gold rushes of 1858 through the 1860s that changed the direction of development in this province for considerable time. These gold rushes not only brought a sharp increase in population and wealth but also initiated development of an early infrastructure of roads and services and directly influenced the shape of British Columbia’s politics.”  Miners At Work, B. Griffin

Not for nothing were the colonies of Vancouver Island and the new mainland colony called "the Gold Colonies".

Today, what is Canada’s Province of British Columbia would very likely belong to the United States if it wasn’t for Douglas, gold and prospectors.

Seekers Of Gold

“You see we prospectors are a dying breed. The world doesn't function around us anymore like it used back in the gold rush. The people who care for you can’t understand. What in the world would make you want to risk your life to look for gold? They don’t understand the dream, but in the old days everybody understood. You didn’t have to worry about your wife leaving ya or your friends scorning you because you wanted to find the gold.

Everyone was doing it. Everyone dreamed of the day when they would be the one to strike it rich. represent freedom for all, but what does it mean to people today? I’ll tell you, a big house and a nice car. People don’t see that it’s so much more than just finding the golden score. It’s not seen as a building block for freedom. It’s been twisted and messed up to the point of being stuck on a scratch and win ticket. That is what is left of the prospector’s dream in today’s world. All the people around you don’t understand, they can’t see the freedom and the hope it brings you when you chase the dream. They just think you’re dreaming, but we know the truth don’t we?

The truth is you’re living and they are the ones that are dreaming. Their search for the big car and the nice house. Ha! Illusions I tell you brought onto their brain less minds by a media machine. How I wish I could chase after it still, but the fight’s over for me lad. I’ve got a bad ticker you see, but you can, can’t you son?" he explained eyeing me almost enviously, there is nothing better than standing high up on a mountain top and gazing down upon the world. It makes you feel like your own man. Free from all prison that the world tries to make of your life. You see the world doesn’t want you to be your own man. If they did, they wouldn’t be trying to make you swallow the lie all the time and you know how they do it. Through that little box over there, he said pointing to the television across the room.

Look at those people over there, he explained pointing to the people staring at the TV. They’re swallowing every word of it and it makes me sick. Our pioneer brothers are rolling in their graves I tell ya. They wouldn’t have wanted it this way, this isn’t freedom. People today don’t know what freedom is. That little box over there tells them that they’re free, but they’re not. You see when somebody tells you something enough times you’ll start to believe it. Tell me you won’t give up, tell me you will follow the dream to the ends of the earth. If not for yourself then do it for your pioneer brothers who help create this world and you become one of them. Remember freedom is worth dying for and I’m not talking about dying in a war fighting for some illusionary freedom that your government tells you have. I’m talking the real stuff that comes from the open spaces and when you spent enough time in the mountains you’ll know what I’m talking about. It will grab your soul and won’t leave you until the day you die. It’s what pushes all great men and once you see it you’ll chase it for the rest of your days.”

Seekers of gold is dedicated to all the prospectors out there who have searched for the dream and all of those who are still out there searching for it.  Daryl Friesen author, Seekers Of Gold

Prospectors are today still scouring the bush, in remote, and not so remote places – chasing the rainbow and its pot of gold – looking for the next discovery. Alaska, Canada’s Yukon Territory and Province of British Columbia are still vast and underexplored places.

Prospecting is of course the integral first step in the process of discovery, walking the bush and hammering rocks means boots on the ground. It's people walking through the bush that have found the worlds mines. A prospectors contribution to our society and to our overall economic well being is in their ability to find brand new mineral occurrences. These findings are what leads us to new deposits, new mines and all the benefits that spring forth.

Old time prospectors are independent minded, bush savvy and, geologically speaking, very knowledgeable. Unfortunately for them they lack the wherewithal to advance their discovery and most often option their property, or project if you will, to a junior they hope will raise money and develop it to the point where a more senior company wants to get involved, or perhaps take it over outright.

Making a deal with a junior resource company, a vendor’s agreement, is often the second step – the prospectors claims are turned over to be worked for shares and or cash and a one or two percent net smelter royalty (NSR) from a mine if the showing goes all the way. Being publically traded they have access to capital and expertise the prospector most often does not.

It’s hard to invest in a prospector. Fortunately, if you want to invest in a potential discovery or the building of something of value – be in on the discovery of a mineral deposit and be there as the company moves it down the development path towards a mine there are quality junior companies, both private and public, to choose from. There exists enormous opportunities to back excellent management teams with your investment money. We can dream of discoveries made and money hard won, we too can chase the rainbow through our publically traded junior resource companies – prospecting success and drill programs that are targeting these showings should be on every investors radar screen.

Juniors outperform majors

Mining is a self-depleting industry meaning mines have an inherently limited lifespan. Every day a mine operates, it is that much closer to running out of ore. The industry needs to find new deposits in order to replace these ever-depleting mines.

For the past decade, junior mining companies have outperformed senior miners at finding new mineral deposits and generating wealth for stakeholders.

“These are among some of the findings released in a study conducted by resource company strategist MinEx Consulting, which analyzed the performance of explorers and producers operating in Canada between 1975 and 2014. What the consultancy firm found is that, in the last decade, junior companies were responsible for more than three quarters of all new mineral discoveries and were approximately 30 percent more effective than senior companies at generating wealth…

In 2009, 2010 and 2012 senior companies failed to make a single new discovery.

Juniors handily beat the seniors when it comes to the total number of discoveries. Of all the deposits found, over three quarters were made by junior miners.

Prospecting the Gold Colonies - Mineral discoveries made in Canada by Junior explorers

Juniors also spent more than the seniors on exploration – $14.6 billion compared to $12.5 billion – and their discoveries collectively had a much higher valuation – $12.1 billion compared to $7.9 billion.” Frank Holmes, Junior Mining Companies Have Taken a Senior Role

Prospecting the Gold Colonies - Spend and Performance in Canada 2005 - 2014

Conclusion

A prospectors place in the resource sector food chain is to explore for and find mineral showings. A junior resource companies place is to acquire these showings and develop, to a certain point, the world’s future mines. Nowhere are prospectors and juniors more important to mining then right here in British Columbia, a vast and under explored treasure trove of minerals.

When was the last time you heard of a major mining company making a discovery? Prospectors/juniors find most deposits and prove them up to the point where a major would step in and buy them.

Today the relationship between juniors and majors is so inextricably linked that it’s doubtful a major mining company could replace its mined reserves, let alone grow them, without keeping a close eye on junior’s activities and a check book handy.

FACT – Without our prospectors and juniors many of today’s operating mines would simply not exist.

“Without new exploration our mining industry will languish. Without mining and the encouragement to develop new and large mines, all industries that support it, such as transportation, utilities, banking, and the service sectors ranging from catering to equipment manufacturing and sales, will suffer immensely.”

Perhaps the importance of prospecting and junior resource companies in the exploration and mine development food chain should be on all our radar screens. Are they on yours?

Richard MillsRichard lives with his family on a 160 acre ranch in northern British Columbia. He invests in the resource and biotechnology/pharmaceutical sectors and is the owner of Aheadoftheherd.com. His articles have been published on over 400 websites, including:WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette, VancouverSun, CBSnews, HuffingtonPost, Beforeitsnews, Londonthenews, Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire, Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks, SeekingAlpha, BusinessInsider, Investing.com, MSN.com and the Association of Mining Analysts.

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