Reno Chris

Buying Your Own Mining Claim: Let The Buyer Beware

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The investor has fronted money for purchase of recovery equipment, plus expenses, received nothing in return, yet is convinced that with more money to buy different (better) equipment he will realize his profit.

It's the "Sunk Cost Fallacy." When someone has already invested so much money they are easily convinced that just a few thousand more will finally get them the riches that they deserve.


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People generally want to believe what they want to believe, and as long as you play to that it is relatively easy to con people. I could have been a great con man but my parents raised me right. Being in business I did see many played however.

The three most common I saw in Alaska were:

1. Selling worthless ground by association/proximity. All you have to do is stake worthless ground on or near good proven ground, the more famous the better. For example, Bonanza Creek produced tons of gold, but only in the last five miles of its eight mile length. Stake claims on the worthless upper three miles, point at all the history and production downstream - easy sale.  Regular folks do not understand how gold deposits work and think if found in one part of a location it is found everywhere else.

2. Just a little more money needed. We have this great ground, and have invested much time and money, and are now almost to the fabulous glory hole. All we need is for you to invest XXXX dollars now and by this fall you will get ten times that back. Somehow most of the money goes to paying my expenses/wages and the glory hole never gets found. Goes well with number 1. above.

3. Believe it or not I have seen the gold from water scam played repeatedly. Glacial silt in water is a popular source of micron gold that can be recovered with the right magic filters. Due to all the glacial silt in Alaska waters and the general Alaska mystique it is a popular destination for people running this scam.

The fun part is you are generally wasting your time trying to talk people out of being conned. They will often defend the scammer and even get angry if you push it too hard. The "sunk cost" fallacy from the post above also applies to minds made up. We have invested ourselves into a decision, and will resist being proven wrong. So much so that when presented with contrary evidence, we will decide the evidence is wrong before admitting we are wrong. Attempting to talk someone out of being conned can actually make people more inclined to accept the con.

Outright scams blend seamlessly into legal marketing and so caution is always called for. In general, if you are being told what you want to hear, be cautious.

A. If you buy this detector device, learn it well, put in the time to research and hunt the right places, and work real hard at it, you may do well.

B. If you buy this detector device, it will easily pay for itself.

The difference is obvious - beware easy answers.

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You just never know.   My neighbor invested $10,000 in the mine in New Mexico – he liked the guy and had Visited the area of the mine and decided it would be cool to be able to go there anytime He wanted. He asked me to look at all the paperwork and told him I would not spend my money on it but that in was a non-recourse arrangment, the worst that could happen was to kiss the $10k goodbye. He was convinced he wanted to go ahead.  About eight months later the mine got sold and my friend tripled his money – so much for my expertise and advice.  Lol

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  Hey Fred! I have a mine with $1,000,000 of gold. Would you happen to have $2,000,000 to invest?

 Happened to get another call from a claim owner that seems to have been defrauded. That's 4 this month.

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Chris ; I don't have a lot of sympathy  for someone who buys a "gold mine" with out doing their own diligent appraisal and I have never charged any one for my opinion of a mining property even though that opinion may be worth upward of 2 cents. The problems I am getting questions on are posting over the top of a recorded and registered claim with a fraudulently dated location notice, floating a claim with repetitious recordings until the claim can be marketed on a website, telling a legitimate claimant that "this is my claim but some one must have removed the location notice", claiming to have constructed a 3' rock mound with a 2x2 wooden stake erected in it in February - in the Gold Lake area and some that I won't mention on a public forum as it looks like they may wind up in court. Your always welcome to call anytime and I can be a little more specific. 

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This sounds so familiar. Oh wait I have seen about 100 of these in my NORTHERN CALIFORNIA area. Oops. I think the two guys here that do this are simply bad people. I've met both on numerous occasions and I got nothing for ether of them. I really don't like it when going to a claim with friends and they've had it for decades and there's a location notice. I noticed that these people never looked up the claim and they don't have the right area of where they claim to have claimed. It's horrible just horrible. These painted red little posts and a pile of rocks or some in concrete just got waisted. Time and money that could have been spent legally and legitimately to reach their goal. I'm just sick!

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