Two-pound gold nugget has colorful Oregon history

Two-pound gold nugget has colorful Oregon history
LA GRANDE, Ore. (AP) - A large gold nugget that recently changed hands in a quiet deal typical of the precious metals business may have a little more history than the new owner expected.
     
Rick Gately first saw the 2-pound chunk of ore when a middle-aged miner recently walked into his La Grande Gold and Silver store claiming to have just found it.
     
It weighed a staggering 33.3 ounces and measured 7-by-6 inches, a massive nugget by modern standards.
     
Among the largest chunks of gold ever found in Eastern Oregon is the 7-pound "Armstrong nugget," allegedly found near the ghost town of Susanville in 1913 by miner George Armstrong. It's on display at a U.S. Bank branch in downtown Baker City.
     
About 5.5 million ounces of gold have been extracted from Oregon's mountains and streams since the frontier era, according to the U.S. Bureau of Land Management. Half to two-thirds came out of Eastern Oregon.
     
Gately calculated the gold content of the new nugget at 13.3 ounces, giving it a value of more than $8,000, with current gold prices hovering around $613 an ounce.
     
Its owner spun him an intriguing tale about finding it in a tailings pile of gravel and rock in Baker County, where an electric gold dredge processed ore until the 1950s.

More than 1,600 acres of tailings are a reminder of the days when electric gold dredges turned the landscape topsy-turvy near the town of Sumpter while extracting gold valued at more than $10 million.
     
Gately agreed to buy the nugget, planning to make it a permanent display in his store.
     
The miner told him that the nugget was in a rotted wooden box when he found it, suggesting it may have been hidden in the tailings by someone long ago, Gately said.

The story led to speculation that the nugget had been stolen during the frontier era - and the thief met with foul play before he could return to get it.
     
The miner refused to provide details, Gately said, and he refused to name the man for client confidentiality reasons.
     
"These guys are very cloak and daggery about this type of thing," he said. "When I'd try to corner him on something, he'd say, 'That's all I'm saying."'
     
Shortly after buying it, Gately sold the nugget to a collector friend with the agreement that he could display it in his store through the Christmas holidays.
     
But on Tuesday, Gately got some new information about the nugget when another miner walked into his store and recognized the nugget in the display case.
     
The new story, according to the second miner: The nugget actually came from a mine in Homer, Alaska, in the early 1900s, bought for $1,250.

Someone then brought it to Baker County to "salt" a mine near Sumpter. Salting worthless gold mines to excite potential investors was a hanging offense in those days but was common nevertheless.
     
Whether the scheme worked out - and whether anybody was hanged - have been lost to history. The nugget has changed hands several times, and now with gold prices up, the latest owner decided to sell it, Gately said.
     
The new wrinkle actually could add to the latest nugget's value, he said.
     
"Its value now, with its pedigree, is probably even greater," he said. "It's part of Oregon history now."
 
 (Copyright 2006 by The Associated Press.  All Rights Reserved.)