Donald McCoy: The first Arizona scam I remember coming across my desk was the infamous cinder cone gold implacements of Western New Mexico and Northern and Eastern Arizona. In 1981. I was the youngest exploration geologist in the acquisitions dept. of a small gold mining company. I had seen many low grade deposits that were touted as being much richer, but I had never seen an outright scam. These deposits were Tertiary to Holocene cindercones that came up supposedly through breccia pipes and narrow veins in the classic Arizona sedimentaries underlying Mogollon Rim (Redwall Limestone up through the Kaibab Limestone). The Augite-Hornblende rich magma supposedly worked as a concentrator entraining gold and silver as it worked its way up through the veins and breccia pipes, then spewed itself out in easy to crush, gold-rich cinders.
The prospect had very convincing maps, assays and metallurgical data covering thousands of acres on BLM land. These were the days when assessment work consisted of filing an affidavit of labor for how ever many claims you wanted to file, pay one $25 fee and you too could own the upatented mineral rights to a half a million acres. The BLM only investigated conflicting claims so you didn’t even have to put monuments up. Well these guys were good, because they had bamboosled a bunch of Doctors and Dentist and raised $20million that went into some Toyota Land Cruisers, a dry trommel and screen plant with a baghouse that had controls with lights and buzzers that all worked and a secret black-box room that no one was allowed to go in except the metallurgist, the CEO and the supposed SEC licensed broker who was going to take the whole thing public as soon as they could get some operating capital, about $100 million because they had spent all the rest of the money on exploration and R&D. Of course, with a find this valuable, they did not trust any labs to do assaying and met work, so they did it all in-house.
Everyone in our office had to sign NDNCs and then personally swear to their CEO that we wouldn’t tell a soul, not even family. I did so with my fingers crossed. I took some of the maps and knew where some of the cinder cones were out East of Flagsaff, found the exact spots on the map and took samples to Bondar-Clegg. Guess what? Where they showed as much as 2 oz/tn Au, I couldn’t break the detection limit. What a surprise. Those guys knew the gig was up after the question I grilled them with, When I called DOJ and SEC they were both already tightening the loop around their necks. I never heard if they caught them, but someone bought the screen plant from the bankruptcy court, sized various products and made millions selling cinders to AZDOT for highway road base and traction on highways during snow storms and to aggregate companies via the train that went right by for building materials!