Advice from a Real Alaskan Gold Miner with Augie Krutsch - TAS #22

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This week on The Alaska Show Podcast, with gold just hitting $2,000 an oz, I talk to Augie Krutsch, the owner of AKAU Alaska Gold Mining Adventure Camp in Nome, Alaska, and Emily Riedel, Bering Sea gold dredger - to talk all things gold mining in Nome. Augie's family has been mining this area since the 1930s - and he paints a picture of the history of the place and his own adventures in commercial gold mining. Augie tells me how to win the mining game and why he doesn't care when guests walk out with 5 oz nuggets they find on his claim on the historic Anvil Creek.

See his operation here:


Interview Notes

Augie is the owner of AKAU a gold mining adventure camp in Nome, AK.

People come to AKAU to prospect and look for gold. Augie has clients early in the season who are bird-watchers, historians, adventurers and photographers, but most come for the gold mining.

Augie provides the equipment - dredgers, sluices, highbankers, pans, etc. They supply the guest the equipment and the paydirt. They’re located in Anvil Creek which is where the three lucky swedes discovered gold and started the rush.

People can try tons of types of gold mining - they have a special type called “slick plate.” People wash the material and get the gold out of it. Augie didn’t want to highbank - he wanted to make gold quick. He invented it.

There’s gold all over Nome. It’s cool at Augie’s because they have a lot of big nuggets. The biggest one someone has found is 5 oz. There have been quite a few 2-4 oz.

Where is the dirt coming from? There are some old benches and material that he set aside when he was mining. He has ancient river channels in specimen gulch which is an offshoot of anvil creek that has good paydirt. There are good paystreaks all over Augie’s land. When the price of gold went down to $260 an oz in 2002 and 2003 he stopped mining commercially. In the 80s there was a big rush and it was a hopping town. There were 10k people in the summer - bars were standing room only. Augie always had a dream when he first started mining when he waas 18 to open an adventure camp - something different - because he saw a lot of interest.

When Augie got on a plane to fly home he never wanted to tell people he was a gold miner because he would get tons of questions. He figured it could be lucrative so he welcomed the curious people. A guy named Barrow Morgan had a bus company and picked up the tourists and brought them to Augie by the busload to show them his operation. At first Augie wanted to just mine and didn’t want tourists, but they let some tourists pan some gold.

Emily Riedel is on the line also.

Augie’s grandfather came up to Alaska on a Chinese cattle boat in 1933. He stowed away under the cows with his friend and they got kicked off in Ketchikan. They then worked their way over to Homer cleaning honey buckets for $3 a day.

Then Augie’s grandfather made it to Circle/Fairbanks - they hiked there. He got on with a mining company and mined for years. Then he became a boxer and boxed at night. Then prohibition was starting to hit. There was a hotel/casino and became friends with them and started bouncing at the door there. Then he became partners with the owner of the saloon. Next thing you know they were making all kinds of money mixing alcohol. 10-15% of the barge coming to Alaska was allowed to have liquor. People would come in and pay for drinks with nuggets. He had a lot of old guns he’d collected and fought a lot and kicked people out.

When World War 2 came he left and fought in the Pacific when gold mining was shut down. When he was done he went back to San Diego and started other businesses there. One of them was collecting scrap iron and starting a scrap iron business. The whole time he sent money home from Alaska and put his brother through school and sent his mom money. His brother went through school and was very into animals and biology and they were just starting to build the San Diego zoo and needed walrus.

Augies’ grandfather Gus went with his brother to St. Lawrence Island, Alaska to get walrus for the San Diego Zoo. That’s how he spent some time in Nome, because that was the main port. Gus saw the railroad tracks going nowhere and bought the track, took it out in the 60s, and sold it. Some of it went to Disneyland and he was going to build a railroad around Catalina Island, but his partner took off with half the money. He was in Nome when they auctioned off tons of old tax lien mining claims and this is some of the property he got. He had quite a few stories.

Deep shaft mining is drift mining. They didn’t have any hard hats when they started - they’d go down and thaw the ground with steam and they would drift. Dig these shafts and follow the paystreak for hundreds or thousands of feets or miles. THey’d roll wheelbarrows back to a bucket sitting in a spot, dump the material, and pull a line tied to a bell at the top. The guy at the top would pull a system with a double pulley and crank that bucket up. They’d stockpile it in giant piles all winter and then in the spring when the water started melting they’d run that material.

In Nome this is Placer Mining.

It had to be pretty rich since they were only getting $30 an oz at that time.

What is Nome like in the world of gold mining? Square by square foot it was one of the richest places in the world. Anvil Creek was one of the richest finds ever. They bucket dredged it twice and they hand-mined it and now it’s not as rich. There are still good spots. In today’s value - they probably pulled $5 billion in gold off Anvil Creek. There are still people in Nome conducting profitable operations.

What was Augie’s mining experience before the adventure camp? As a kid Augie’s family mined. Augie mined with his father up till 18 when his father died. Then his mom took a loan out for him to mine himself after he worked with someone else on the Casa de Paga. They hired some mechanics - one was Steve Pomrenke who was a great mechanic. They gave Steve his first piece of property - they got a little dozer and a backhoe and Shawn worked with him. Slowly they lost the Pomrenkes to mining their own claim.

Augie saw a lot of gold in his time. He used to have piles of gold on the tables and have tons of nuggets. He’d give people nuggets for fun - nowadays it’s totally different. Even $1,100 to $2,000 the price is different.

Augie’s clients get gold fever bad. Once they see it on the highbankers or find it with metal detectors they’re hooked.

Once Augie sees a dredge operator he gets a sense that one person will do ok and another is hopeless.

Nowadays Augie wishes people total luck - he wants people to succeed. He hates people who are crooks or are thieves or are bringing in drugs. Those people can leave, but everyone else who is genuine who wants to learn and do it - he gives them the benefit of the doubt. He tries to talk them out of their horrible ideas.

What do you wish you could tell everyone who’s trying to gold mine? Just come for a season and observe. There are a lot of ways to skin a cat. Observe the people who are making money - coming year after year. Doesn’t hurt to have a high price or have tv behind you. It’s hard to come back during those learning years. If you can make it past those learning years and get stronger - that’s something you have to tell people. Those people couldn’t get past those years. They were in it to win it and had nothing to back that up.

Emily wishes she could tell people to just observe for a season. It doesn’t matter what people say - all that matters is they have gold. If people are going out all the time and mining - they are probably profiting. If they’re just sitting in the bar talking all day you probably shouldn’t take their advice. It’s interesting here - they are providing the gold mining experience. Augie is providing his visitors the pay dirt. The miners have to go out and look for it.

Augie has a good nose for gold, but he wouldn’t stake his family’s livelihood on it. You make one mistake and it kills you. You could be on the hottest streak ever - and if the commodity price drops you’re done. Augie decided then to mine the miners. The one thing we had was a camp - even when the gold prices were bad. Augie built pads and roads on the tundra and leveraged it in a different way.

Augie and his mothers become partners in the AKAU gold camp, just like back in the day. His mother does internet work and paperwork and answering phone calls - Augie does boots on the ground work. The first few years people came up and got quite a bit of gold. Some people got amazing amounts of gold. There have been several hundred ounces of gold found in an area as small as the house - big nuggets - and he’s been working that for a while. There’s a lot of gold and reserve areas left.

Does it pain Augie to see a client get a lot of gold? It bothered his mom at first, but not now. He just thinks about the amazing advertising it would pay for.

Nome has changed radically over the years. As a kid Augie saw a lot of old timers. There were a lot of folks that were in the mining industry. When he was a kid everyone knew what they were going to do in life - work for the dredge company, Alaska Gold. They were going to be a welder, a geologist, work in the shop, a jogger, a surveyor, work on the line crew, whatever. Everyone had a sense of “one.” You go to the bar downtown and everyone has their jacket on and the dredge on the back. There were a lot of old timers teaching the new generations these trades. There were still a lot of small family operations too.

It has shrank big-time. The gold price dropped, but there’s also very little private land left because much has gone back to the natives. A lot of the land you can claim and mine is gone. That’s not a bad thing - it’s just a different era. It’s going back to the way it was before 1898/1900. It’s boomed and shrank and repeated. The only boom left now is in the Bering Sea - as far as what controls the population of miners. Augie thinks there will be a number of other boats and ships and tourism as the gateway to the Arctic. Plus the environmental laws are taking things away. If you didn’t experience it - we probably won’t see it again.

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