Heart of gold: Colorado: Denver now capital of U.S. gold industry.

• Author: Buchsbaum, Lee
• Position: Public companies

Tom Hendricks has held onto his dream for more than 35 years. It's a powerful dream: the fierce pull of honest wealth brought out of the ground with your own two hands, a pull that has historically moved men, towns, civilizations and mountains. High above Nederland, in alpine Boulder County, Hendricks--who's business card names him "Gold Miner, Calais Resources Inc., President and CEO"--has been steadily working his claims, consolidating most of the mineral rights near his mine and tunneling thousands of feet into Caribou Hill.

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Using 21st century digital technology, Hendricks has mapped what he says is a massive gold deposit that might become Colorado's largest find in half a century. More importantly, Calais Resources' planned New Millennium mine, which Hendricks hopes will begin commercial operations in 2009, will be a model of environmental responsibility. "An example," said its CEO, "of a green mining company."

"We've come from being a small pick-and-shovel mine to what may be the next big underground gold producer," Hendricks said, "and every bit of it a full-circle green environmental operation." Under Calais Resources' business plan, more than 120,000 ounces of gold and 3 million ounces of silver could be extracted annually for upwards of 20 years. At today's market prices, that's a haul worth more than $73 million a year, and perhaps up to $2 billion over the life of the mine.

But Hendrick's proposed underground operation is an anomaly within the international gold-mining industry. Led by the world's largest producer--Denver-based Newmont Mining Corp.--the business today is dominated by powerful multinational conglomerates like Golden Cycle Gold Corp, and AngloGold Ashanti Ltd., whose joint-venture Cripple Creek and Victor Cresson Mine is Colorado's only active commercially producing gold mine. This modern, open-pit, cyanide-leaching operation utilizes the power of scale to extract minute quantities of gold from enormous amounts of low-grade ore. While Newmont, AngloGold Ashanti, Gold Fields Ltd. and other mining companies have come under increasing pressure from environmental groups in the U.S. and abroad for operating such potentially hazardous mines, the value and demand for the gold they produce has greatly increased, especially since 9/11 and throughout a long-term devaluing of the U.S. dollar.

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Today, although only a fraction of the world's gold supply is extracted from the nearby mountains, Denver continues to function as America's intellectual gold mining center. The city remains "a hub of exploration," Hendricks said. "It represents part of the old West combined with the new--using space-age technology to find the dream of the mother lode."

Across Colorado, the nation and beyond, concern over gold-industry mining methods exploded in 1993, when, in order to avert the poisoning of an entire river, the federal Environmental Protection Agency seized control of the...