It’s July in Nome, Alaska. You’re a gold miner and you have a problem: you have too much gold.
Why? Because it’s payday.
You just worked a week straight of 12 hour days on the dredge. Then you spent a couple more days cleaning the sluice box and panning until your eyes crossed. All of that hard work was rewarded with several ounces of nice, shiny G.
You’re now ready for a burger at the Gold Dust Saloon followed by at least a few drinks at Breakers. You need supplies and fuel for your dredge and/or your truck. You need groceries and a shower at the rec center. And with how expensive living in Nome, Alaska is, you’re inevitably short on cash since it’s been a few weeks since your last payday.
This isn’t the Klondike Gold Rush. You can’t just sprinkle some gold dust on the bar in exchange for dinner. You need to turn that gold into cash. So how do you do it?
There are four main ways to go about it:
The not-so-official, possibly-a-little-shady way to sell gold in Nome
The quickest way for miners to exchange their gold for cash is through a cash buyer.
Nome usually has one or two readily available. The miner walks in and sells him gold, no questions asked. The biggest drawbacks to this is that cash buyers in Nome will only pay 80% of spot, the current market rate for gold, which is a bad deal when you consider Nome’s beaches and seafloor has some of the purest gold in Alaska at around 89%-93% purity.
Sometimes miners will find private buyers who will pay a little more than 80% spot, but not by much.
Of course, that gold has to be clean enough to buy. If the buyer is savvy, he’s not going to accept some dust that’s half black sand. The cash buyers will usually make a binary decision about whether or not it is “clean enough” to buy for 80% of spot.
That creates an incentive for the seller to get the gold just clean enough. A miner who’s hard up might squeeze a few extra shekels out of a cash sale by leaving some other heavy material in it on purpose (not to mention saving some time panning). But leave too much and the buyer won’t take it - you’ll have to go back to cleaning gold when everyone else is out on the town.
Since it’s a cash sale, there’s no record sent to the IRS. Claiming it on taxes is up to the miner.
The Official Way
Miners will bring their gold to the local representative of these companies who weigh it and, because miners usually need money right away, cuts them a check for about 40% of spot price as an advance.
At that point the gold gets sent to the refinery where they will determine the purity of the gold.
The assayer will melt down the gold and create a gold purity report showing the actual amount of gold and any other precious metals it contains. Oxford will show silver content while GRC will give a more detailed breakdown of the metals such as silver, platinum, copper, zinc and such.
The miner will get the report stating how pure their gold is and the percentage of other metals found. They have two options after that.
The first is to sell at that time to the refinery for the rest of their money minus about 1.5% of spot price for the cost of services, which is a better rate than the cash buyer.
The second option is to let the refinery hold the gold in a vault for the miner to sell at a later time. The drawback to this is that the miner doesn’t get as much money upfront but it’s a free way to securely store his gold until he’s ready to sell. Refineries will report the income to the IRS to be claimed on the miners taxes as income.
The high-tech option
More of a middle of the road option is Gold Buyers of Alaska, located in Nome. It’s the fastest way to get cash and at a price as close as possible to spot, but it relies on a new technology that some miners distrust.
If someone wants to go through Gold Buyers of Alaska, they need to bring them their gold in ingot form where it’s tested using an X-Ray Fluorescence Gold Assaying laser (XRF Gold Assay). In XRF gold assaying, the gold sample is irradiated by an X-ray beam. The gold assayer then judges the metal purity depending on the intensity level of the X-rays emitted. This is a fast non-destructive method for testing the gold purity of the ingot but not always the most reliable according to some miners.
Our favorite way to sell - the creative way
The final way is to get creative, cut out the middleman, and sell your gold directly to gold lovers and investors all over the world!
That’s why we started BeringSeaPaydirt.com - to offer gold mined on the Eroica from the Bering Sea directly to you with no middle man.
The cons of this are it’s a lot of extra work to build a website, a product, and to serve customers all over the globe! But we think the pros far outweigh it because we get to connect with fans everywhere and have fun creating value-added products.
If you’d like to get your hands on some real Bering Sea Gold you can buy Gold by the Gram or if you’re up for a challenge of panning get one of our Bags of Paydirt and get the chance to win 1 troy ounce! All gold sold on this website currently is mined by Emily Riedel on the Eroica.
$74.60 Now you can buy real gold from the Bering Sea! Natural placer gold from the Bering Sea is often only available for sale to locals in Nome. Experience a taste of the hardship and the rewards of diving for gold… read more
Bering Sea Gold-by-the-Gram
Now you can buy real gold from the Bering Sea! Natural placer gold from the Bering Sea is often only available for sale to locals in Nome. Experience a taste of the hardship and the rewards of diving for gold… read more
Many factors play into how miners sell their gold in Nome but usually the deciding factor is how badly they need cash at that moment. As we’ve seen, living in Nome is not cheap and even the daily essentials can be many times more expensive than we pay in the lower 48 leading miners to take a huge loss on the value of their hard earned gold simply to survive to the next clean out, hoping to find a honey hole that leads to the motherlode.