prospecting legalities

[gmichels]

I am doing research on a fiction story and would like to make it somewhat realistic.

I have no experience in prospecting nor do I know anyone who does. That's why I came here. I have tried researching the internet and the info is confusing.

Question: When prospecting (the Dakotas or Colorado), on open public land, assuming that a small quantity of gold is found, does the prospector have to file a claim? If not, does he have to prove where he got the gold (to show he found it on public land and not from some other claim)?

Is there a limit to how much gold can be sold from prospecting?

If the gold is sold to a refinery or other such business, is there withholding for the IRS and if so, how much?

many thanks
gmichels

 

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[Terry Soloman]

I am doing research on a fiction story and would like to make it somewhat realistic.

I have no experience in prospecting nor do I know anyone who does. That's why I came here. I have tried researching the internet and the info is confusing.

Question: When prospecting (the Dakotas or Colorado), on open public land, assuming that a small quantity of gold is found, does the prospector have to file a claim? If not, does he have to prove where he got the gold (to show he found it on public land and not from some other claim)?..

No. If you are prospecting on public land and make a gold discovery, you are under no obligation to make a mineral rights claim with the Bureau of Land Management (BLM), [url]http://www.blm.gov[/URL] but, why wouldn't you? No, in America we don't have to prove anything. Nobody "lost" it, and nobody "stole" it.

Is there a limit to how much gold can be sold from prospecting?..

No.

If the gold is sold to a refinery or other such business, is there withholding for the IRS and if so, how much?

many thanks
gmichels

Yes. If there is a paper record the IRS becomes involved. Most gold prospectors sell their gold privately to long time cash buyers. Some gold nuggets like "Figural" nuggets that look like a State, or a Dog, or Airplane, can sell for three-times their weight value.

 

[gmichels]

Quick reply! I love your answers


Yes. If there is a paper record the IRS becomes involved. Most gold prospectors sell their gold privately to long time cash buyers. Some gold nuggets like "Figural" nuggets that look like a State, or a Dog, or Airplane, can sell for three-times their weight value.[/QUOTE]



When selling to these "long time cash buyers", is it safe to assume that (for non-nuggets) they don't pay market price but some lower percentage, especially if we are talking unrefined gold dust?

Thanks again for responding so quickly!

 

[Fullpan]

GM, the average price paid for "dust" is between 75-85%

 

[Terry Soloman]

GM, the average price paid for "dust" is between 75-85%

I agree with Fullpan. I've seen gold buyers pay as little as 65% of spot, and as much as 75% in Arizona. Most Cental Arizona gold comes in around 20-22K, so it is fairly pure. Here is some info that might also help you.
How to Calculate Gold Price By Karat & Weight

First, divide the karat (24; 18; 14; 10) by 24. Now multiply that number by today's gold price per gram. So, if you have a five-gram 10K gold ring, and the current price of gold is $1,600.00 per ounce - or $51.45 per gram ($1,600.00 divided by 31.1 grams), then your 10K gold ring is worth $21.44 per gram ($51.45 x .4167), or $107.20.

10k = 10/24 = ... .4167
14k = 14/24 = .5833
18k = 18/24 = .750
22k = 22/24 = .9167

If you have five- grams of 14K, and gold is $1,600.00 today, then $1,600 divided by 31.1 would equal $51.45. That figure, multiplied by .5833 (14K) comes out to $30.01 per gram. $30.01 x five- grams equals $150.05.

Many gold buyers use pennyweight (DWT) instead of grams. There are 20- pennyweights per troy ounce. Let’s say you want to sell your gold. You know it weighs 25 grams. You go to the buyer but they use pennyweights, not grams. Here's how to calculate the conversion: 25 grams of gold x 0.643 = 16.1 pennyweights.

Pennyweights to Grams............divide by 1.55517

Grams to Pennyweights............Multiply by 0.643

 

[NeoTokyo]

From my research as a sniping n00b I found that places pay between 60-83% of spot up here in Redding Ca. depending on who you go to, some of these places actually pay less for nuggets because they claim to have more impurities in them.

Ebay is a much better place to sell your gold, gold on ebay sells very close to spot and sometimes over.
I followed an auction last week of a small 2dwt vial of 20-30 mesh Alaskan placer (3.11 grams) that sold for $186 with 20 bids, this is more than spot even at 24k purity. That same gold today if 24k would be only worth $168 at full price.
That is not normal but you can see where the bidding bug can get you more for your gold.

Now lets not forget the cost of shipping + insurance, cost of listing and cost of using paypal.
The seller still did well.

Of course selling on ebay has a paper trail for the IRS to check into.