LA GRANDE, Ore. – When dealer Rick Gately recently bought a 2-pound gold nugget from a miner, he discovered the buyer must always beware – even when what glitters really is gold.

The huge nugget turned out to have a long and shady past.

Gately first saw the 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.

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 put it on 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. That led to speculation that the nugget had been stolen way back when and that perhaps a frontier-era thief met with foul play before he could return to get it.

The miner wouldn’t be more specific about the box or where he found it, Gately said. He declined 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 proviso that he could display it in his store through the Christmas season.

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.

Just how the scheme worked out – and whether anybody was hanged – has 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 guy I bought it from was kind of holding back on the story,” he said. “He told me the truth, but he told it out of context.”

The nugget’s new owner said he probably will never know the true story. “The older guys who would know about this are all dead now,” he said. He asked not to be named to protect his holdings.

The nugget’s history raises the specter that other large nuggets on display as relics of Eastern Oregon’s gold rush years actually might have come from Alaska or Australia to salt mines and bilk investors, Gately said.

But the new wrinkle actually could add to the latest nugget’s value, he said. Before the new information came to light, Gately thought the nugget might command $20,000 at auction as a curiosity in spite of the granite, copper and other low-value minerals mixed with the gold.

“Its value now, with its pedigree, is probably even greater,” he said. “It’s part of Oregon history now.”


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