From the November/December Gold Prospectors Magazine
By Steve Nubie with contributions from Dave Varabioff
The Gold Hard Facts
There is no such thing as gold from nature that is 100 percent pure. Even gold nuggets that appear to be gold through and through have impurities embedded and blended into the matrix. The purest natural gold is actually found in Australia, where the gold content of some nuggets has been assayed as high as 99 percent.
In North America the average purity for prospected and mined gold averages around 85 percent, although Nevada gold can be as low as 65 percent due to its high silver content. Any found sample can measure as low as 45 percent and still have the lustrous appearance of gold.
The impurities in natural gold consist of metals including silver and copper and other minerals that have combined with the gold on a molecular level. Whether it’s a beautiful dendritic gold leaf in quartz or the shine of flakes and fines in the crease of a gold pan, gold in its natural state has an unknown level of purity. Tests done to measure the purity of gold is referred to as an “assay.”
Types of Gold
The type of gold any buyer is interested in varies and it’s usually defined by its form. You’re probably familiar with the various ways gold occurs, but you may not have found gold in all of its variations and some forms (or mesh size) command a higher price. Here are the basic ways that gold shows up and the relative value on the market moving from lowest relative value to highest.
Gold dust consisting of flour, fines and flakes
This is the stuff most prospectors find as a result of any panning, sluicing or dredging efforts. It has value, but compared to the other forms it has the lowest value because the level of impurities can have a wide range and even the best efforts sometimes leave some black sand and other heavy minerals in the mix.
Small Nuggets
Nuggets are a step up from gold dust but even though the nugget may appear pristine, there are natural impurities embedded in the gold itself. Their average weight starts at about 1 gram.
Medium Nuggets
A medium nugget has the same potential for internal impurities but sometimes command a higher price because higher weights are more marketable. Their average weight is up to 1 troy ounce or 31 grams.
Large Nuggets
A large nugget is generally defined as any nugget with an average weight of 1 troy ounce and up. Larger nuggets usually command higher prices because the assay of a large, single nugget is a one-time test rather than across multiple specimens, and some large nuggets are considered museum quality and valued at the highest price.
Gold in Quartz
Gold in quartz is sometimes classified as a collector’s item and even a museum piece, but most is gold ore and the price is dependent on the amount of gold in the specimen or sample.
Specific gravity tests are used to determine the gold percentage and, because of the amount of testing and eventual processing and refinement necessary, the prices vary widely.
Dendritic Gold in Crystalline Quartz
Gold in nature will sometimes form a crystal with leaf-like appendages that are geologically defined as dendritic crystals. They are exceptionally rare and any specimen is highly prized and are often sought out and displayed by museums and even in the windows of some high-end jewelry stores as a centerpiece to a jewelry display.
What’s My Gold Worth?
There are a few things you can do at home to arrive at a rough estimate of any gold sample:
• Weigh it in grams
There are 31.1 grams in a troy ounce, which is the unit of measure for precious metals.
• Determine the day’s spot price for gold
The price is usually based on a troy ounce (31.1 grams) of gold. An Internet search will usually find the daily spot price.
• Do the math
And either multiply or divide the weight of your gold by the daily spot price.
• Remember that the gold purity will affect the value
And that most raw gold from nature is 60 to 85 percent pure. If you haven’t had your gold assayed for purity, assume the lower percentage as an estimate.
• Understand that the buyer will have costs
Such as additional assays, refinement and business costs that will further reduce how much they will pay.
You may not have a totally accurate assessment of your gold’s value but you’ll at least have a ballpark estimate.
Who buys prospected gold?
The majority of gold bought and sold comes from large, established mines where the mining and refining of gold is complex, sophisticated and expensive. Mines also have an established network and pipeline for selling their gold and the entire process is well established to specific standards. That’s not so easy for the average prospector.
However, there are possibilities, including:
Private buyers
Private buyers have their reasons for buying raw gold and they usually show up on eBay, Craigslist and other online auction sites. On occasion auction houses will host live event auctions and include gold as part of the auction. The experience prospectors have had with private buyers varies.
Refiners
Refiners usually are contracted by large gold mining operations but some smaller refiners will purchase gold from prospectors in any form or mesh size, but they tend to have the highest minimums in terms of weight for any sale. Refineries sometime pay as high as 95 percent of assay minus a refining fee. Some refiners can be found with an Internet search.
Jewelers
Jewelry stores with active jewelers on staff crafting and repairing jewelry will sometimes purchase gold from prospectors. They, too, will do an analysis of any sample to determine purity. Many variables affect what they will pay, including assay tests, the refinement costs they’ll incur to ensure the gold has the integrity for jewelry making, and any costs associated with their business and those processes in addition to their immediate need for raw gold.
Pawn shops
You never know with a pawn shop. Some may have the equipment to analyze raw gold and others will not. They’ll all probably offer you something, but the price will vary widely and it may be the lowest price you find for your gold.
Organizations
There are many organizations that are aligned with the growing interest in gold. Some are clubs for homemade jewelry makers, geology clubs and groups, and even organizations like the GPAA. All have members and occasional fundraisers and events, and are generally interested in gold.
It’s possible that at certain times they will be interested in purchasing raw gold for their members or fundraisers. Look for their websites and contact information to inquire about their interest in buying your gold. As far as the GPAA is concerned, your local chapter members might be able to offer you some good advice about how to sell your gold on the open market.
Museums
Museums have little interest in gold dust or any other gold form that falls in the category of a commodity. Their interest is in striking geological specimens of gold. This would include exceptionally large nuggets with unique characteristics, gold in quartz and dendritic specimens. Find their website and send a photo to the curator to assess interest if you think you have a museum-quality specimen.
Steps to selling gold
Gold buyers expect gold to be presented in a certain way for any transaction. There are some simple steps to make your gold marketable. Here’s what to do based on a general consensus of opinions.
Clean up your placer gold dust
• Starting with a completely dry sample. Use a magnet to remove any black sand. A neodymium magnet is best and has the highest degree of magnetism.
• You should also do a final rinse in the pan to remove any sand or grit that is not magnetic after using the magnet.
• Let the gold dry and bottle it carefully.
Clean your nuggets
• Ammonia or any of the “cola” type sodas work wonders. Put the gold and soda in a small plastic container with a lid and shake for a few minutes. Rinse and repeat a few times.
• Don’t scrub with a brush or any abrasive materials.
• Let dry and store in a small plastic bag, case or pouch.
Gold in Quartz
• If it’s ore, don’t do a thing. Specific gravity tests and other tests can determine purity and gold percentage. Collect it in a crate.
• If it’s a dendritic crystal in quartz, do even less.
Don’t touch it. Wrap it carefully and treat it like fine crystal.
The Gold Sale “To-Do List”
• Consult with your network of prospectors, organizations, social networks and forums to get some additional insight, information and connections to figure out how to sell your gold.
• Look into and ask for policies, procedures pricing and how prices are determined and when payment can be expected and any other requirements from a number of potential buyers, and then list the pros and cons for dealing with each.
•Understand how to get your gold assayed for purity, relative value, marketability, specific gravity tests for ores and any analysis to understand how to assess its value. Some buyers will offer to do this for you. Determine if you want to pay for your own testing to be sure.
• Weigh your gold using an electronic digital scale. Remember that gold is measured in troy ounces. A troy ounce is heavier than a regular ounce. Troy weights are used to weigh all precious metals. A troy ounce = 31.1 grams and a regular ounce = 28.3 grams. Measure your weight in grams to determine its value and to convert to troy ounces. Gold sales are often measured in grams due to the wide variations in gold weights.
• Gold is also measured by pennyweights or grains. They’re unusual terms but could come up in a gold sale.
• 1 troy ounce = 31.1 grams
• 1 troy ounce = 20 pennyweight (or dwt)
• 1 pennyweight = 1.55 grams
The list goes on but an excellent website for weight conversions across all weights and measures is calculator-converter. com.
• Weigh only the dry gold and not in any container. Remember that any weight is a relative measure subject to the sample’s purity. Compare your weight to the average price for spot gold but remember that few buyers will ever pay 100 percent of the spot price even for pure gold with the exception of remarkable specimens that fall in the category of museum quality or very large nuggets. In those instances, they will often pay more than the spot price.
• If possible, make your first transaction with a new buyer the smallest, minimum to assess your experience and satisfaction with the overall sales process.
If you are shipping your gold to a gold buyer, make sure you understand their requirements for packaging and shipping and inquire about insurance, certified mail, or any other safeguards for your shipment.
Final thoughts
Be patient. Shop around to not only get the best price but to find a buyer who aligns with your expectations. You could also think about consolidating your gold with a fellow prospector or two if none of you have sufficient quantity to meet a buyer’s minimum. When you feel you have had a successful transaction with a buyer, continue the relationship and know that you now have a trusted source for future gold sales.
GPAA Member Steve Nubie has been writing professionally for 45 years and resides in the North Midwest. He fondly remembers gold panning on family vacations with his dad in Colorado.