Mineral Exploration Companies take the Road of Bones to new Resources
By Andrew K. Burger
Across the North Pacific from western Canada, prospects of mineral wealth are drawing North American miners to Russia’s Far East, one of a number of natural resources-rich areas of the world where climate, as well as political and economic change, is opening up new opportunities.
The region’s mineral riches have attracted the interest of domestic and foreign miners for centuries. Their efforts have been plagued not only by the size and remoteness of this vast region and the severity of its winters, but by a legacy of poorly, even tragically, mounted efforts to exploit its stunning wealth of natural resources, its mineral resources in particular.
That’s not stopping the march of time or progress, however. A new generation of miners is making inroads in Russia’s Far East, including ambitious Canadian juniors such as Vancouver’s Golden Reign Resources Ltd. (TSX.V:GRR), which, through a joint venture with Status LLC, is now developing two gold properties in Magadan Oblast, and may acquire additional mining concessions in other provinces.
Gold mining in Russia’s Far East got its start in the 1820s with the Crown issuance of the first exploration and mining permits. These entrepreneurs, who relied primarily on their natural skills and wits, trudged into the mountains of southern part of the region and prospected mainly by digging test pits, according to Vladimir Kroupnik’s editing of the 1994 book Russian Gold.
Some of these early prospectors, or staratels, such as Masharov - the Napolean of the Taiga - went down in mining legend for their abilities and successes. Their efforts resulted in the Gold Rush of the late 1820s and 1830s as hundreds deposits of alluvial gold were found and thousands of Russians, many of whom were serfs fleeing their masters in search of freedom as well as wealth, flocked to the region. By 1855, gold output in western and central Far Eastern Russia reached 17.4 tonnes.
The Russian government registered 2,955 mining claims and 790 alluvial mines between 1870 and 1899, vaulting the country into the ranks of the world’s largest gold producers, according to Kroupnik. Gold was first discovered farther east in the Amur River basin in 1850-51 by an expedition led by a mining engineer named Metlitsky and again in the Maya River several years later by an expedition led by Anosov, another mining engineer. The first hard rock gold deposit was discovered at Gold Hill, Zolotaya Gora, in 1891, which has been mined intermittently up until recently. The Zeyski, the Amur region’s major gold district, yielded some 66.8 tonnes of gold between 1876 and 1900.
Road of Bones
The lure of vast riches and greed for wealth and power also led to tragedies, exemplified by the Kolyma Highway, or Road of Bones, that traverses the vast region. Built by laborers imprisoned during the Stalin Era, the road is considered a memorial to those who died building it and whose bones were incorporated into the roadbed.
Development of gold, uranium and other mineral resources have taken a heavy toll on communities and the environment. Towns such as Balei and Krasnokamensk are considered environmental and economic disaster zones due to mining projects that took little if any responsibility for the environmental and health effects their operations would have in the region. Residents can only trust that with gold and uranium prices reaching record levels, the Russian and foreign mining companies once again looking to develop Far Eastern Russia’s mineral resources will take better care of the resources they are granted rights to develop.
Gold Mining in Russia’s Far East
Golden Reign is one of a number of Canadian miners looking to develop gold properties in Russia’s Far East today. The company is half-partner with Status LLC, the mining division of Moscow-based CentroCredit Joint Stock Commercial Bank, in the Gold Mining Corp. joint venture, which has been granted comprehensive 20-year mining permits for the Butarni and Durozhni properties in far eastern Magadan province.
The Magadan Region is considered one of the world's richest mining areas, with gold being the main resource of the region, according to the company. “There are approximately 2,000 placer gold deposits, 100 gold ore deposits and 48 silver deposits. Total probable gold reserves in the Magadan Oblast are estimated at 4,000 tons (128,000,000 ounces),” according to Golden Reign, citing resource estimates published by Kommersant.
“We signed our agreement with Status in June when they received the regional license and then registered a brand new joint venture company called Gold Mining Corp. and transferred the licenses to that company. We have rights to earn 50% of the company and for this year the Russian partner and we each put in US$1 million so we are happy with them and the conditions,” Zoran Pudar, Vice President of Exploration recounted.
