Gold Rush actual gold totals?

[Manch.]

Last year, I think they did a short segment on Gold Rush: The Dirt with Tony Beets on how the gold is actually processed, but I can't find anything with a Google search that really goes into detail about gold processing.

From what I understand, if the Hoffman's collect 1,000 ounces of gold, it is then melted down into bars, and after the gold is melted down into bars, about 20% is lost/burnt off due to dirt and fine/small rocks being mixed in with the gold, and that leaves approximately 800 ounces left.

Out of that 800 ounces, the gold is sold to someone at 80% of market value, leaving approximately of what amounts to 640 ounces that the Hoffman's actually put into their pockets.

So if gold is $1,000 (a nice round number) an ounce, the show states that the Hoffman's have collected $1 million worth of gold for the year, when in reality, they have only cashed in on $640,000 in actual gold.

I know it's mostly scripted TV and the $1 million sounds a lot better than $640K, but with running costs and salaries, that is probably chump change and I don't see how this can be profitable for small time miners like the Hoffman's, and that big corporations are the one's that actually MAKE money digging for gold. I can see why not everyone is in Alaska digging holes.

Also, as we know, Discovery Channel is not paying the Hoffman's that much money to cover these overhead costs.

For those who know more, is what I detailed above pretty accurate?

 

[Lemon Thrower]

your main point is correct that this is a money losing effort for most people. if you've ever panned gold at a roadside stand, you understand that the only thing you are likely to get is a sore back and a light wallet.

you are also correct that the gold has to be refined - i.e. purified. but 80% is a made up number. the gold flakes you get from panning are almost pure. a nugget might be 85-90% pure, but a really large nugget might have a lot of inclusions (i.e. not gold) in it. silver is often found with gold so the inclusions can be valuable, but gold is about 60x more valuable than silver. Eighty percent is probably on the low side. 90% might be a better guess, although of course it varies from location to location, and the bigger nuggets are more likely to include impurities.

as for refining, if depends on the purity but its not that hard to do yourself. I know a dentist who does his own. I would guess that the max cost would be 3%

also, big nuggets are desired by collectors for their novelty and can sell for a premium to gold content.

 

[Lemon Thrower]

your main point is correct that this is a money losing effort for most people. if you've ever panned gold at a roadside stand, you understand that the only thing you are likely to get is a sore back and a light wallet.

you are also correct that the gold has to be refined - i.e. purified. but 80% is a made up number. the gold flakes you get from panning are almost pure. a nugget might be 85-90% pure, but a really large nugget might have a lot of inclusions (i.e. not gold) in it. silver is often found with gold so the inclusions can be valuable, but gold is about 60x more valuable than silver. Eighty percent is probably on the low side. 90% might be a better guess, although of course it varies from location to location, and the bigger nuggets are more likely to include impurities.

as for refining, if depends on the purity but its not that hard to do yourself. I know a dentist who does his own. I would guess that the max cost would be 3%

also, big nuggets are desired by collectors for their novelty and can sell for a premium to gold content.

 

[jy2581]

I love the show, watch it religiously, but I'm convinced it's scripted, and they're earning far more actually filming it than mining. For instance, don't they burn like $5k in gas a day? If so in 3 months they're going to burn through $450k, plus salaries, land use fees, etc. It just doesn't add up, at least not if they're pulling up 1000 ounces like they claim.

 

[Manch.]

LT, I know most of them refine their own gold, but when they sell it, are they selling at market value, or do they sell at 80%, thus the purchaser makes their 20%?

jy2581-I agree, overhead is enormous, a lot more, I believe, than they are actually digging up.

Heck, Fred Dodge and his little 4 man crew claim to have collected 400 ounces by themselves, and an operation the size of the Hoffman crew must bring in a lot more than the 1,000 ounces that they claimed.

Also, I find it funny that they always run out of gold on one part of the claim and they don't know where to start digging next. Most of us at home realize that if they are that inept, they would be eating the dirt they are digging up. I am sure that they have test holes all over those claims and know exactly where to dig next or where the gold is, instead of guessing and praying when they run out of pay.

Again, I know most of it is scripted for TV entertainment, I was just curious on how much that they actually pocket after collecting "a 1,000 ounces".

 

[DanC78]

I was thinking the same thing when watching. They are profitable, but not over the top profitable....so it seems at least.

My guess is that they are working many other angles not gold related outside of what we see on TV to make cash, especially if they own the machinery.

The gold part is maybe just a small, but interesting part of the big picture of what they do for a living.

They could own a construction company where they build roads for the government for all we know.

I watch Wicked Tuna as well, their numbers don't add up either. They have to be running and gunning year round to be profitable on level where it's worth while.
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[DanC78]

One more thought.

They could simply sell enough gold they find to pay their employees and overhead, and then sit on the rest for 10 years or more letting it appreciate. That would make them hella profitable in the long run!
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[dmm5157]

As a Gold Rush watcher, I have wondered this myself.

Every time they talk about their operating expenses, I just can't help but shake my head at how Discovery can make this an attractive venture for the Hoffmans. Tony Beets is legit, been doing it for decades, but the Hoffman's lose money at every turn.

 

[BelemNole]

Aside from Parker most of these guys started with money from other successful businesses. How the Hoffmans ever ran a successful business I'll never know, but apparently they did because you need a lot of money up front to start one of these gigs. Parker got his start up cash from his grandpa.

 

[jy2581]

Originally posted by dmm5157:
Every time they talk about their operating expenses, I just can't help but shake my head at how Discovery can make this an attractive venture for the Hoffmans.

I think this kind of speaks to my point that the show is basically your average reality tv show, and the draw for the Hoffman's is the check from Discovery. The ratings for Gold Rush are really high, so I'm sure they can afford to offset a lot of their costs. I think of it basically as a big tv/movie set they're mining on. Again, it's hard to know but if you look at the math (1000 ounces, minus overhead) it seems this is the only plausible scenario to how they do it.

 

[TarponSpringsNole]

Heck, the Bering Sea miners seem to do much better overall than the Hoffmans et al, but I really like Gold Rush. It's the only reality TV show I'll watch. Fairly soon, "pulling a Hoffman", or "damn, he hoffmaned that" will be a part of the vernacular.

I have to admit, that I would love to pan/sluice gold for a summer.
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[Manch.]

I watched another "Gold" show and these two guys collected a couple of hundred of ounce working out of a single camper/mobile home that looked the camper was worth $1,500 and their equipment was outdated, rusted out and basically ran off of a generator that one would use to keep the house refrigerator going while the power was out.

They must collect a lot more than the 1,000 ounces that they claim.

I do like the show, but anyone that inept would not be in business four years in a row, there's no way they could afford it unless they had millions hidden away or a lot if very naive investors.

I know on Deadliest Catch, most of those guys fish year round, from salmon to crab, or they go home and work construction or something else.

When the Bass Pro opened up here last year, they had a couple of the guys from Wicked Tuna, and these guys wouldn't know west with the sun setting and me pointing.

 

[maddog69]

Now that's a show I'll watch!!!!! TSN sluicing for Gold.
This post was edited on 3/4 4:44 PM by maddog69

 

[Lemon Thrower]

here is a link to a refinery and their prices. this is where people who metal detect and scavenge garage sales send their stuff. a lot of that stuff is 14K, which is 14/24ths pure (58%). they pay you 90% of the spot metal price in cash, and they keep your gold. (they add your gold to other folks and make huge bars that they sell in big deals or whatever. Their implicit charge is 10% for both refining and converting your gold to cash, but then you have to add the amount lost to refining. nothing is really lost - it just if you have a rock that weighs 10 ounces to start with, what you don't realize is that it might be only 90% pure, meaning 9 oz of gold and 1 oz of something else - quartz, silver, dirt, etc. The refiner makes it pure, and vouches for the purity. people who buy gold generally want a pure bar or a bar of known purity.

taking something that is only 58% pure and making it 99.9% pure is a lot of work. taking something that is 90% pure and making it 99.9% pure is much less work, and costs less.

silver - sterling is 92.5% pure, and u.s. silver coins are only 90% pure. you'll see this refiner charges different amounts based on the purity you start with. they always refine to 99.9% pure, which is the standard for reselling bullion.

Mid West refinery

 

[Renegade 86]

I still crack up over the old mans name: Jack Hoffman. Say that fast three times, or just once!

 

[TarponSpringsNole]

Originally posted by maddog69:

Now that's a show I'll watch!!!!! TSN sluicing for Gold.
This post was edited on 3/4 4:44 PM by maddog69

Start a grass roots petition. Let's get this rolling.

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[NDallasRuss]

Originally posted by TarponSpringsNole:

Originally posted by maddog69:

Now that's a show I'll watch!!!!! TSN sluicing for Gold.

This post was edited on 3/4 4:44 PM by maddog69

Start a grass roots petition. Let's get this rolling.


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I'm going to not look up the definition of "sluicing" and continue to believe that it's something that I'd pay money to see Tarpon do.