ANCHORAGE, Alaska -- The golden shores of Nome, where miners rushed to get rich at the turn of the century, have proven to be a bust for a company that operated the world's largest offshore mining dredge.
The impressive-looking Bima, a giant contraption that dredged the ocean floor for the riches in the sands that the Gold Rush miners couldn't reach, churned up its last flecks of gold from the sea bottom Oct. 11.
The dredge, owned by Western Gold Exploration and Mining Co. of Golden, Colo., was en route Wednesday to Tacoma, Wash., where it was to be put up for sale.
From 1986 until its shutdown, the Bima mined 130,000 ounces of gold.
But its owners lost money and the Bima never panned out as had been hoped, said James Simon, spokesman for Inspiration Resources Corp. of New York, which owns WestGold in partnership with Luxembourg-based Minorco.
The decision to halt Alaska's only offshore gold mining operation has also cast doubts on plans for a federal auction of offshore gold tracts tentatively planned for March, Robin Cacy, a spokeswoman for the federal Minerals Management Service, said.
Although the Bima operated in near-shore state waters, it was the kind of dredge operation envisioned by federal officials planning their first auction of mineral tracts in federal waters off Alaska.
WestGold leased 21,741 acres up to 2 miles offshore in Norton Sound, though much of that remained untouched when the Bima quit work.
Federal officials identified 147,050 acres farther offshore for gold mining leases to be auctioned next year.
But with the Bima gone, prospects have dimmed for recovering more gold offshore, though others continue to mine lands around Nome for gold.
'Mining is a difficult business,' said Gerald Gallagher, the state's director of mining. 'When you try it underwater, it becomes more difficult.'
Cacy said federal officials would survey potential bidders to gauge their interest before holding the minerals lease auction for waters near the area abandoned by WestGold.
But even if other companies are interested in dredging the waters for gold, it won't be with the Bima, which left Nome Sunday for the 2 -week trip to Tacoma.
The Bima was built in 1976 by Billiton Mining, a subsidiary of Royal Dutch Shell, to dredge for tin off Malaysia. When tin prices dropped and gold rose, the Bima's new owners moved it to Alaska.
Inside the 14-story, 15,000-ton Bima, a gravity system separated the gold from 30 cubic feet of gravel and sand brought up in each of the 137 four-ton buckets on a conveyor system that operated non-stop each year from June to November, bringing up bucket after bucket from the sea floor.
In an initial 40-day test in 1986, the Bima brought up buckets containing 3,000 ounces of gold. In June 1987, as soon as the ice melted on Norton Sound, with gold selling for $490 an ounce, the Bima went to work, recovering 36,700 ounces.
Gold production came in at 35,500 ounces in 1988 and 30,661 ounces last year, according to the state Division of Mining. This year, with gold prices down more than $100 an ounce from 1987, production dropped to 24,000 ounces.
'It was a matter of economics more than anything else,' Simon said, explaining that plunging gold prices made it too expensive to support the high-cost operation, which was limited to the five-month ice-free season.
The Bima also suffered technical problems.
State and federal officials, meanwhile, have estimated that the sea bottom off Nome still contains more than 500,000 ounces of gold.
Nome's Golden Sands, as they were named, gave up $60 million worth of gold by 1911. WestGold may have recovered gold worth just about that much in its four years of dredging, but Simon said the company never made a profit.
Although Simon declined to detail its finances, an Oct. 25 statement from Inspiration Resources said the company was taking a third quarter $16.5 million equity loss from its 50 percent ownership in the Bima operation. Simon said the amount was essentially a write-off to bring its investment down to zero. Presumably, with Minorco's 50 percent interest figured in, this translates to a $33 million loss.
WestGold employed between 55 and 70 seasonal workers and 20 permanent staff, said Clifford Nelson Jr., Nome operations manager. He said offices in Nome and Anchorage would close.
'People in Nome have known about the offshore mineral deposits since 1899,' Gallagher said. 'WestGold was the first to mine them successfully. I'm disappointed they're leaving. I don't anticipate anyone else moving in there immediately.'
Gallagher added that the Bima was not ideally suited to mining Nome's underwater deposits, and something better will have to be invented.
Now, Nome's buried sea treasure is likely to stay where it is for years to come, Gallagher said, unless gold prices rise or some 'gutsy forward-thinking company with new technology' finds a profitable way get it.