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Turning mushroom hunting into gold in the Yukon

In Canada's Yukon Territory, Bob Simon found a man whose technique for finding mushrooms inspired him to create a method to find gold that's made him the Yukon's biggest gold prospector

The following is a script of "Gold Rush" which aired on Oct. 19, 2014. Bob Simon is the correspondent. Tom Anderson and Michelle St. John, producers.

The Klondike, it's always been about gold since the first gold rush in the late nineteenth century when miners stampeded into the Yukon, a pristine area in northwest Canada just east of Alaska.

It's been more bust than boom since then but recently a new stream of money has been rushing into the Yukon, largely because of the discoveries of one prospector.

He used to be a penniless trapper and mushroom picker but the gold he says he's found could be worth billions.

And that might be just the beginning because the government has decided to open a whole new stretch of wilderness to mining.

Miners and prospectors are a secretive lot, but we decided to take our chances and see what's happening in the Yukon, a place that's changed very little since the first gold rush over a hundred years ago.

It's one of the most remote stretches of wilderness in North America, home to more caribou than people. Thousands cavort over the mountain tops in their annual migration. The Canadian territory is bigger than California, but only 36 thousand people live here in scattered communities like Dawson, a dirt-road town next to the Yukon River that was ground zero for the first gold rush. There's an Old West feel to the town.

They still dance and gamble at Diamond Tooth Gertie's. Tourists and locals. You can tell them apart. The tourists come here for the history and pan like the old timers.

dawson-burlesque-show.jpg

A lot of real gold miners still work around town. They bring their discoveries in mason jars and coffee cans to an unmarked shack. That's where Simon works. . .at home. He buys miners' gold and melts it down. Anywhere else, there would be guards and guns, but Simon, who asked us not to use his last name or reveal his address, just went about his business, proving that gold doesn't really glitter until you give it a scrubbing and turn it into a dazzling bar worth $200,000.

Bob Simon: Have you ever sort of calculated how much gold has passed through this shed in the last 18 years?

Simon: Oh, I wouldn't want to comment on it, but it's been-- there's been a bit. Yeah.

Bob Simon: One guy we've been hanging out with says that he gives you about 10 million bucks' worth a year. That's pretty good, huh?

Simon: Yeah. Yeah. Yeah, he probably does.

Bob Simon: But why is everybody so secretive around here?

Simon: Well, who knows? You know, and it's like everybody's bank account. You know, you're not going to flop your checkbook out in front of me and show me the balance.

In the last gold rush, 30,000 miners burst into Dawson. Some struck it rich. Many others went broke or died. Dawson looks pretty much the same today. You can still see the old miners' shacks near the aptly named Bonanza Creek, where the first gold was discovered. It's called placer gold, the name used for river gold.

"I'll tell you what keeps me up at night. I fear to stop a mile short of the next ore deposit."

Shawn Ryan: The old prospectors would put a shaft down under the creek.

Shawn Ryan, a prospector, says a lot of placer gold has been mined here.

Shawn Ryan: They figure, at the turn of the century, there was somewhere between 13 and 20 million ounces of placer gold taken out of the Klondike.

Bob Simon: Which was worth what then?

Shawn Ryan: Right now that'd be worth well over, you know, between $13 billion and $20 billion worth of gold. At today's prices, so.

A hundred years later, they're still mining the same creeks and riverbanks.

The miners use back hoes now, not the gold pans you see in Clint Eastwood movies. Ian Thomas is digging dirt that's already been mined once. He's looking for leftovers. His equipment separates rock from dirt and then gives the dirt a bath to wash out the gold.

Bob Simon: How you doing?

Ian Thomas: We have good years, we have bad years.

Bob Simon: In other words, you don't really want to answer the question.

Ian Thomas: Not really.

Dave Miller also didn't want to tell us how much gold he finds, but he did show us the Frisbee-like device he uses to separate his gold from dirt.

Bob Simon: That, I mean, that looks like gold.

Dave Miller: Yes. That is gold. That is placer gold. There's about two ounces of gold in there.

Bob Simon: Okay.

Dave Miller: So that's $2,400. Give or take...

gold-smelter-6.jpg

Bob Simon: This is 2,400 bucks?

Dave Miller: Yep.

Then Miller showed us the most valuable thing his family's found in 40 years: a three-ounce nugget.

Bob Simon: Now that's impressive.

He'll let you hold it for a while, but just for a while. There are no free samples in Dawson.

Dave Miller: We don't find too many nuggets anymore. This would be big stuff compared to what we find today.

But prospector Shawn Ryan says he's found a lot of big stuff. And investors have poured money into the Yukon because of him. Ryan doesn't dig up riverbanks. He prospects in the mountains. It's more challenging and if you do it right, he says, infinitely more lucrative.

"I actually give a lot of credit to my gold discoveries based on the mushroom picking."

Bob Simon: So now you're a multimillionaire. And look at you. You don't look like a multimillionaire.

Shawn Ryan: Well, listen, all I feel like is a squirrel that just found the big acorn patch. And I got a bunch of acorns in the base of the tree. So you don't really change.

Not that long ago Shawn Ryan was dead broke. To survive he trapped animals and picked mushrooms. He says you can make $50,000 a season picking these delectable morels. When we heard that mushroom picking helped Ryan become a gold prospector, we went to track him down on a steep, burned-out mountainside, where he still picks mushrooms for fun.

shawn-ryan-mushroom-picking-1.jpg

Shawn Ryan: Okay, into the mushroom patch. This was last year's fire.

Bob Simon: Started by lightning?

Shawn Ryan: Yeah.

Bob Simon: How do you know where to look?

Shawn Ryan: Well, that's where you research it. These mushrooms come one year after a forest fire. And it only happens for a month. It's kind of like magic. They magically appear. And it's only in that period of time in history. And then they go dormant for the next 200 or 300 years, or until the next forest fire.

The magic mushrooms got him through some pretty tough times.

Shawn Ryan: We lived in a 300 square foot shack. Turn of the century cabin, with no running water or electricity.

Bob Simon: Were you warm enough in the wintertime?

Shawn Ryan: Pretty well. Sometimes your hair would get stuck to the back wall if it was 40 below.

"...This is the only probability where the norm is to fail."

When there was money to spare, Ryan could afford to do aerial surveys of charred forests. He started researching soil quality, topography and the contour of the land. He found even more mushrooms and discovered that the same research that helped him find the morels could help him find gold.

Shawn Ryan: I actually give a lot of credit to my gold discoveries based on the mushroom picking. Because I was able to understand, scientifically, the parameters of why these mushrooms grow up here. And roughly how many are going to come out of each different fire.

Bob Simon: You say that you come to a place like this and there are no mushrooms, but you have faith that they're going to pop up.

Shawn Ryan: That's exactly it.

Bob Simon: It must be quite a thrill.

Shawn Ryan: Well, it is and that's about the same thrill as predicting where gold is.

Shawn Ryan says all the gold found in the rivers had to come from somewhere, most likely from the mountains, and that's where he has staked more than 50,000 claims.

He and his team walk the ridges and take soil samples they send to a lab for analysis. Finding gold is always a long shot. And the unexpected can happen at any time.

Shawn Ryan: Oh...there's a bear right here. Hey! Hey! Ok. Where's your bear spray? Where's the bear spray? Whoo ... yo bear! Hey... ha, ha, ha.

Groundtruth Crew Member: There he is...

Shawn Ryan: Look at the dog doesn't know...look the bear is trying to figure out. Oh, look at this...Oh...

Groundtruth Crew Member: Go get him Ursa! Go get him!

Shawn and his team lucked out with the bear. All he has to do now is get lucky with the soil.

Shawn Ryan: So the idea is that when we run these ridges...

He taught himself how to study maps and surveys and how to use a computer to help evaluate his claim and try to find the hot spots.

Bob Simon: The pinks are where the pay dirt is.

Shawn Ryan: Yeah.

Bob Simon: Okay. But what percentage of hotspots actually will give you gold?

Shawn Ryan: I'd give that one in 10,000.

Bob Simon: Are you serious?

Shawn Ryan: I mean, because the probability, this is the only probability where the norm is to fail.

To better his odds, Ryan and his team use a drone that makes a detailed aerial survey of his claim. They also send electrical charges 300 feet into the ground to get more precise physical data on where the gold might be located.

[Shawn Ryan: Whooo...ha, ha, ha...excellent!]

The images from the drone and the electric data help create a three-dimensional underground virtual map, which helps pinpoint where to go digging.

Bob Simon: What are the odds that there's going to be gold there?

Shawn Ryan: Extremely high. Like pretty well, I could almost guarantee gold.

[Shawn Ryan: Well they got you with lots of samples...]

Shawn Ryan has become the biggest gold prospector in the Yukon and believes he's found seven million ounces of gold. But he doesn't actually mine the gold himself. He options his claims to larger companies and keeps a royalty. Ryan says he expects digging to begin in a few years.

Bob Simon: Seven million ounces at today's gold prices, what would that be worth?

Shawn Ryan: It's probably close to $10 billion.

Bob Simon: Ten billion? But that's not for you?

Shawn Ryan: No.

Bob Simon: Out of that you'd only get one or two percent.

Shawn Ryan: That's right.

Bob Simon: And what would that make?

Shawn Ryan: Might be in... close to $100 million range.

Bob Simon: Yeah, that's our arithmetic as well.

Shawn Ryan: That's how your math is working.

It is math, but Shawn Ryan says it's also a poker game, a game miners like because it's just another way of playing the odds.

Shawn Ryan: If you play one blackjack game the probability you're going to lose. If you play 20, if I'm lucky two or three are going to be a winner.

Bob Simon: And that's enough?

Shawn Ryan: And that'll pay for the moose pasture that I walked over and didn't find anything.

Bob Simon: Moose pasture being where there was nothing?

Shawn Ryan: Nothing, yeah just swamp.

"It's wild. There's no roads for 100 miles. There's no development. There's no towns. I think it's special...really."

But it's actually in the moose pastures and the caribou migration routes north of Dawson where the next gold rush could take place. It's the Peel Watershed and is believed to be rich in minerals.

Most of the Peel is part of the Yukon but you have to take a float plane to get there, to the 26 thousand square miles of mountains and lakes that extend up to the Arctic Circle. The government recently took the first steps to open most of the area to mining. Environmentalists were furious. So was wilderness entrepreneur Chris Widrig. He takes hunters to shoot caribou and the occasional grizzly. One of those grizzlies nearly killed him and left him scarred for life.

peel-watershed-1.jpg

Bob Simon: How much territory would the miners mine?

Chris Widrig: Too much. There's a frenzy, basically. You know, a gold frenzy. It's all staked. They can't get across the border right now but, you know, they would like to.

To push back the miners, several groups have taken the government to court.

Bob Simon: What is it about this place?

Chris Widrig: It's wild. There's no roads for 100 miles. There's no development. There's no towns. I think it's special...really.

In a replay of what once happened in America's Wild West, native Canadians, called the First Nations, are fighting to protect what was originally theirs. Ed Champion is one of their chiefs.

Bob Simon: Why do you feel so strongly about this?

Chief Ed Champion: Our people have been using this land. Have been traversing it, using it for hunting, fishing, sustenance. And, you know, for many of our people it's been their university. It's been their church. It's been home. Has been home.

Bob Simon: And once you're opening up, what, seventy percent of the land to the government and what the government decides, you no longer have any control over what they do?

Chief Ed Champion: That's a major concern.

The biggest concern is that the wilderness would turn from this into this, an abandoned mine just south of the Peel Watershed.

abandoned-gold-mine-1.jpg

Chris Widrig: All it would take would be one road.

Bob Simon: The mining companies promise that they'll leave it as pristine as they found it?

Chris Widrig: There's no such thing as a pristine mine that's been abandoned.

Shawn Ryan hopes the wilderness will be opened up for mining because it would create jobs. But he is not going there. He is too much in love with the mushrooms around Dawson. And believes that this is where he might just find what men have been searching for in the Yukon for a hundred years.

Shawn Ryan: There's still this elusive source of the Klondike.

Bob Simon: The mother lode?

Shawn Ryan: Yeah. And nobody's ever found that yet. I'll tell you what keeps me up at night. I fear to stop a mile short of the next ore deposit. So that's what keeps me going.

Bob Simon: And now, after all this time, you still get a thrill?

Shawn Ryan: I get so excited sometimes. I feel like an eight year old on an Easter egg hunt. You know, when you're out there and you find another Easter egg, well, there's another Easter egg to be found.

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