The GemHunter

Professor Hausel's Guide to Finding Gemstones, Diamonds, GoldRocks & Minerals 

MINING & PROSPECTING SCAMS (Great Diamond and Gold Hoaxes) 

"A gold mine is a hole in the ground with a liar standing over it" - Mark Twain.

For me, I loved investigating mining scams. Most were totally outrageous and perpetrated by people with little prospecting and mining experience. Nearly all had many things in common - they were located near a paved road, they contained as much if not more gold than had already been mined in all of human history, other valuable metals or gemstones were always later accidentally found in the deposit and the scam artists decided out of the goodness of their hearts to throw those valuable commodities in with the gold at no charge to the investors, assays were all ridiculously high, the assay and metallurgical reports always came from unknown assaying companies located in Arizona and Utah, all of the gold was what was referred to as 'Noseeum' gold, or invisible gold, that required some very unusual heap leaching processes to get the gold out of the ore. In one scam I investigated in California, the crooks were planning to sprinkle water on mined gravel to extract the invisible gold and make it visible.

The people who perpetuated these scams were used car salesmen, high-ranking members of questionable religious groups, and politicians. Why anyone would believe these people was beyond my understanding. The more ridiculous the scam, the more investors were standing in line to throw away money. It was extreme greed on both sides. 

For example, one scam I accidentally walked into years ago (about 1980), I had been interested in looking as some pyritiferous graphitic schists on South French Creek in the Medicine Bow Mountains of Wyoming. The schists produced a very nice gossan from the weathering of the massive pyrite and pyrrhotite, but the samples I collected from this area contained no detectable gold. However, a scam artist from Nebraska was selling blocks of ore for $10,000 each. When I walked into this scam, the perpetrator was talking to two investors from Idaho who had already invested a considerable amount of money and wanted to see the property. When they found out I was a geologist, the scam artist was not excited, but the two investors followed me around for about an hour and asked me what I thought. I told them outright, I found no evidence of gold on this property, and based on the reported average assays - more than 20 ounces per ton gold with some assays running over 100 opt, I should have found visible gold. They listened to my facts and then told me "thank you" but  that they were planning to invest another $20,000 each. This same used car salesman was never prosecuted and many years later in 2008, began a new scam in the same area where he had also accidentally found diamonds.

Another scam I investigated was a 'cold case'. This scam occurred in 1871 and 1872 and milked some civil war generals, a couple of Senators and even a former president. At the time, diamonds had been discovered in South Africa, and few people knew anything about diamonds, so scam artists Arnold and Slack, decided to salt an outcrop of rock in the extreme northwestern corner of Colorado at a site that is now known as 'Diamond Peak'. By far, the best treatise on this scam was published by the Wyoming Geological Association in their 1995 Guidebook and authored by W. D. Hausel and S. Stahl.

The two old prospectors (Arnold and Slack) were working for a diamond-drilling company out of San Francisco, so they decided to ‘salt’ an area with some of the diamonds and other gems. The other gems included ruby and garnet. The diamonds were from the South African diamond fields which had just been discovered at the time, the source of the rubies is unknown, and the garnets were pyrope and pyrope-almandine garnets collected from Arizona anthills. These were scattered over a small flat sandstone outcrop along the northern base of what is now referred to as Diamond Peak in Colorado (Hausel and Stahl, 1995; Hausel, 1994a;  Hausel, 1994) (40o57’01”N; 108o52’41”W). 

What is amazing about this scam was the perpetrators did not realize pyrope garnet would later be recognized as a pathfinder mineral used to find diamond deposits. All they understood was the garnet was the color of ruby and were under the impression they were salting the area with ruby and diamond. Even more amazing is that the area they chose in northern Colorado sits within a favorable region for diamond deposits. This site is only 50 miles south of the Leucite Hills lamproites, 60 miles east, southeast of the Butcherknife Draw anthill garnets, 60 miles east of the Cedar Mountain diamondiferous lamprophyres, and 175 miles west of diamondiferous kimberlites in the Colorado-Wyoming State line district. There are even reports that the Bishop Conglomerate at the top of Diamond Peak contains pyrope garnets and chromian diopside (both pathfinder minerals for diamond) (McCandless and others, 1995).

Many, if not all of the garnets used in the salt were collected by Arnold and Slack in the four corners region near Shiprock, New Mexico and Garnet Ridge, Arizona. In this area, the Colorado Plateau was penetrated by explosive volcanic eruptions. Ship rock is a distinct volcanic neck with radiating dikes (search Google Earth for Ship Rock, NM or search for the coordinates 36o41’22”N; 108o50’11”W).

The presence of rounded pyrope garnet in these volcanic rocks attest to their deep-seated origin as they erupted from the earth’s mantle forming diatremes and eruptive breccias at the surface. Pyrope is chrome-bearing magnesian garnet that originated from a geological environment requiring considerable pressure to compress these cations into the garnet crystal structure. In many areas of the world, pyrope is considered to be path-finder mineral that can lead to diamond deposits. The rocks in this region that contain pyrope are described as serpentinized breccia, lamprophyre and minette. In the past, some researchers even described these as kimberlite diatremes, but they are mostly a lamprophyre known as minette (Hausel, 1998; Erlich and Hausel, 2000). Minettes sometime contain diamond.

The garnets are mined by local Indians for gemstones and also used by ants as ballast for anthills. They are recovered from host rocks, drainages and anthills. The ants collect the majority of the gems on the surface over considerable distances (for an ant) and drag them to their hills. This is a unique concentrating process that allows mankind to sample the concentrates from anthills. 

During the Great diamond hoax, Arnold and Slack collected garnets and mixed them with the diamonds and rubies and scattered them on a sandstone outcrop in Colorado. When I initially sampled this site with Lowell Hilpert with the US Geological Survey, I was able to pan 4 diamonds, 17 rubies and 24 pyrope garnets left behind by the scam artists. Later, Lowell requested I send my specimens so he could get high-quality photos for a USGS publication (and book) we were planning. Unfortunately, Dr. Hilpert passed away around this time and my gems were never returned. Upon contacting his estate, one of our staff members was told that the minerals were now part of the Hilpert estate and I could purchase my gems for $1 million! Not bad for a bunch of industrial stones that were worthless other than for their historical value. So, my gems were never returned. At the site of the scam, one could still see sieve piles left behind by the King Survey who explored this discovery in 1972 and proved that the discovery was a scam base on the fact that the only place one could find gemstones at that time was next to footprints, etc. 


Yes bears are cute until they start eating your hand or eating your field partner. 

It was 1988 and 1989, I was working for Western Gold Mining in Alaska, a company owned by DeBeers and Gold Fields and we were working in the middle of no where in the Kuskokwim Mountains of southwestern Alaska. It was up to each individual  geologist to carry whatever necessary for self-protection - no I'm not talking about condums. No one carried bear repellent in the bush as it was common knowledge that bears favored the repellant as spice for their meat. I had been told that Skin-so-Soft was great to take to Alaska as it was suppose to be good for keeping away mosquitos - well no one told the mosquitos and two geologists from Anchorage claimed that it was a favorite beverage for bears. So, if you were one of the unlucky souls who carried pepper spray and Skin-so-Soft, your time in Alaska was very limited at best.

After I saw my first bear, I realized that my 44 mag was not large enough. Bears in Alaska are large and they think geologists are there as a gummy treat.

One night (it never got totally dark) we heard screams outside our tent and a succession of gun shots. My tent mate and I staggered out of our sleeping bags to see what the problem was and we found our driller outside his tent without his bottle neck glasses and a smoking 357 in his hand. He had shot in the air to try to scare away a bear out looking for a night-time snack and had another geologist cornered on top of his tent straddling the tent supports. Since the driller couldn't see without glasses, he shot in the air. 

My tent mate - Paul. took the 357 while the driller highlighted the bear with a flashlight as the bear was checking out another part of the menu (us). Paul shot the bear between the eyes and the 357 round ricocheted off the skull. So, he pulled the trigger a second time to find the driller had already spent 5 rounds in the air. Luckily, the bear had enough for the night and ran off with a terrible headache. Yogi came back the next evening for more gummy geologist snacks and one of the Eskimos in the camp shot it with a 30.06 and finished it. 

On another occasion, I had to leave Alaska to go back to Wyoming to work. The company transferred a geologist from Chile to take over my work - I always worked alone mapping in the bush from my ATV. I noticed Pedro didn't have a gun but he boasted the bears would not bother him. 

A few months later, I heard Pedro had a change of heart. He quit his job after one week. While out in the bush, he noticed a couple of bears were trying to hot-wire his ATV. So, he walked back to camp after surrendering his ATV to be bears. So much for the macho.