Dear Reader,
In the heart of Nevada’s barren landscapes lies one of the most intriguing stories in modern mining history — a tale that blends a century-old law, a major mining company, and an untapped treasure trove of gold...
In 1994, Barrick Gold Corporation secured federal land under the Mining Law of 1872, paying a shockingly low price for what would become a multi-billion-dollar asset.
Let’s dive into the ultra-specific details of this acquisition, the historical significance of the land, the legal proceedings, and the political backlash that followed.
The 1872 Mining Law: A Frontier Relic
Before we delve into Barrick Gold’s acquisition, it’s crucial to understand the 1872 Mining Law, a relic of the frontier days...
Enacted under President Ulysses S. Grant, this law was intended to promote westward expansion by allowing prospectors to extract valuable minerals from public lands for a mere pittance. The law permits individuals and companies to stake claims on federal land, paying only a few dollars per acre, with the option to “patent” the land — essentially transferring ownership from the government to the claimant.
Under this law, once a mining claim is patented, the land can be bought for as little as $2.50–$5.00 per acre. For context, even in the 19th century, this was a bargain.
But there’s more: The law allowed claimants to exploit the land’s mineral wealth without paying any royalties to the federal government. So by the time Barrick came along in the 1990s, this meant the company could legally extract gold worth billions while paying just a fraction of its market value.
Barrick’s Big Score: The Specifics
On August 26, 1994, Barrick Gold struck gold — not just in a literal sense but in one of the most profitable land deals in modern history...
You see, Barrick acquired over 1,950 acres of land in Nevada for a mere $10,000 under the Mining Law of 1872. The price? Just $5 per acre!
But the real prize wasn’t the land itself; it was what lay beneath — one of the richest gold deposits ever discovered in the United States.
The land Barrick acquired was part of the Goldstrike property, located on the Carlin Trend, one of the world’s most prolific gold mining districts.
At the time of purchase, the gold reserves were estimated at over 30 million ounces. That means Barrick had effectively paid less than 34 cents per ounce of gold!
Fast forward to today, with gold prices hovering around $2,450 per ounce, and the value of that gold has skyrocketed to nearly $73.5 BILLION.
Barrick’s upfront investment, measured against today's valuation, represents a staggering 7.3 million percent return.
The Legal Saga: A Judge’s Ruling
The deal did not go unnoticed, however, sparking outrage among environmentalists, taxpayers, and politicians who criticized the outdated law that enabled such a lopsided transaction. In the ensuing legal battles, federal judges were asked to rule on the legitimacy of Barrick’s acquisition and whether the company’s actions aligned with the original intent of the 1872 law.
A pivotal moment came on November 2, 1994, when U.S. District Judge Bruce Jenkins ruled that Barrick’s acquisition was lawful under the 1872 Mining Law, even though it meant the federal government received only a fraction of the land’s true value.
Judge Jenkins noted that while the law was “outdated and arguably flawed,” Barrick had followed all legal requirements to obtain the patents.
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Political Firestorm: The Quotes
The Barrick acquisition didn’t just spark legal battles; it also ignited a political firestorm. Critics from both sides of the aisle were quick to voice their displeasure...
Then-Senator Dale Bumpers of Arkansas, a longtime critic of the 1872 Mining Law, famously stated, “This is the greatest gold heist since Butch Cassidy. The American people have been swindled out of billions by an archaic law that no longer serves our national interest.”
On the other side, Nevada’s own Senator Harry Reid defended the law, arguing that it was crucial for the economic development of his state. Reid, who had deep ties to the mining industry, said, “While the Mining Law of 1872 may not be perfect, it remains a cornerstone of our local economy and provides thousands of jobs in rural Nevada.”
The controversy also drew comments from then-Interior Secretary Bruce Babbitt, who lamented, “We are literally giving away a fortune in public assets, and it’s high time we reconsidered this 19th-century relic.”
The Aftermath: Calls for Reform
The Barrick Gold deal was a wake-up call that spurred numerous attempts to reform the Mining Law of 1872.
Politicians, environmental groups, and taxpayers alike called for changes that would require mining companies to pay fair market value for public lands and to pay royalties on minerals extracted.
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But despite several reform attempts in the years that followed, the 1872 Mining Law largely remains intact, still offering mining companies access to federal lands at a fraction of their true value.
For Barrick, the deal was a massive win that positioned the company as one of the world’s leading gold producers. But for critics, it remains a stark reminder of how a 19th-century law continues to shape the fate of 21st-century resources.
Today, the land Barrick acquired for just $10,000 generates millions in revenue each year, underscoring the enduring value of this controversial deal.
Conclusion: A Golden Legacy
Barrick Gold’s 1994 acquisition under the 1872 Mining Law is more than just a business transaction — it’s a vivid illustration of how outdated legislation can lead to windfalls for some and losses for others.
The story of Barrick’s big score continues to be a point of contention and a catalyst for ongoing debates about the fair use of public lands. As gold continues to glitter, so does the legacy of a law that has shaped the American West for over 150 years.
As it stands, the Barrick Gold deal is a stark reminder of the need for modern legislative reform that better aligns with today’s values of environmental stewardship, economic equity, and public interest.
Until then, the saga of the 1872 Mining Law will continue, with Barrick Gold standing as a testament to the power — and the pitfalls — of antiquated laws in a modern world.
Brian Hicks
P.S. Barrick Gold isn't the only company that's found a way to potentially reap HUGE profits from this antiquated law. In fact, our chief investment analyst and resident former Wall Street investment banker, Jason WIlliams, recently tipped investors off to a tiny company with massive profit potential that all stems in part from this little-known law. I encourage you to learn all about the company and the potential blockbuster profits in this FREE report he just released.
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