Gold Vs. National Treasure -- Speculators Want To Mine Shi Shi Beach

SHI SHI BEACH, OLYMPIC NATIONAL PARK - The first four shovelfuls turned up nothing but beach. On the fifth try, after sifting the sand through a freshwater stream, Craig Gagnon found what he was looking for stuck to the bottom of his blue plastic pan: A few dozen tiny gold flecks.

For Olympic National Park officials, those flakes are quite a headache.

The park acquired Shi Shi in 1983, the final piece in preserving a 65-mile stretch of the Olympic Peninsula's ruggedly spectacular seascape. What the park didn't obtain were mineral rights, which had been reserved by a family that owned the beach nearly 70 years ago.

Gagnon, in partnership with the heirs to those rights, has submitted plans to mine the sands for gold, platinum and other minerals. They think they've hit a prosperous vein, whether another shovelful of sand is ever turned on Shi Shi.

"People think this is all a big scam. It's not," says Gagnon, a professional diver and self-described entrepreneur who grew up scrambling across the great heaps of driftwood on this wild coast. "I panned here as a Boy Scout. There's no question there is gold here."

In proposals to the National Park Service, the partners claim the beach contains gold and platinum deposits worth hundreds of millions of dollars. They say they have offered to sell the mining rights for up to $10 million.

Park Service officials, who made an initial offer of $15,000, consider those values dramatically inflated. But it won't make public its own assessment.

After nearly five years of hush-hush talks, the two sides haven't even agreed on a way to test the beach for mineral deposits.

At Shi Shi, the turbulent surf collides with a majestic rain forest of cedar, hemlock and alder.

Sea arches of dark basalt rise from the sea, shadowing the beach with an otherworldly cast. It is one of the most remote and pristine spots in Olympic National Park, difficult to reach ever since the neighboring Makah Tribe closed the main access trail five years ago.

While the heart of Olympic National Park was carved out from Forest Service and other public lands, the park expanded its coastal area by buying or condemning property that had often passed through many owners. In many cases, the paperwork trail was messy.

When A.W. Hammond, a major southwestern Washington landowner, sold 168 acres to a timber company in 1928, he retained title to all future mineral rights. The property later was obtained by the state of Washington and, finally, by Olympic National Park. Park officials realized the mining rights remained in private hands. But Rick Wagner, land-resources director for the regional office of the National Park Service, Wagner says they lacked the resources to search for the heirs and clear up the matter.

Enter Gagnon. The beefy, gravelly voiced Olympic Peninsula native has tried his hand, with marginal success, at putting together deals for oil and natural-gas exploration along the coast.

In 1985, he got a ticket from the Park Service for letting his dog roam unleashed on Shi Shi Beach. While unsuccessfully challenging his fine, Gagnon discovered during a title search that the mineral rights remained in private hands.

Gagnon and a partner, Oregon geophysicist Kenneth Koenen, spent the next two years searching for the owners. They struck gold when a clerk at the Pacific County Courthouse revealed that Hammond's three grandsons lived in Mount Vernon, Koenen says.

"Hey, if there weren't any park there, we could dragline the whole beach. It's worth a fortune," says Koenen, who has traveled the world scouting for oil and minerals and doesn't mask his distaste for the federal bureaucracy. "It's too damn bad they turned it into wilderness."

If the prospect of mining equipment churning up the beach is fraught with environmental and public-relation perils, the precedent of buying up those rights has created its own worries for park officials.

Wagner fears similar mining claims may abound in the Olympics. Indeed, Gagnon is negotiating with another mineral-rights holder in the park.

"I'm concerned that this isn't a domino, creating a speculative market for people to start mucking around on these beaches," Wagner says.

Last year, President Clinton cut a deal with Noranda, the Canadian mining giant, promising the company $65 million of comparable public land in exchange for dropping its proposed gold mine just outside Yellowstone.

In several Alaska parks, the Park Service is tied up in disputes over private mining claims that existed prior to the parks. Inside North Cascades Park, private landowners possess mining patents on 250 acres in a remote roadless tract.

Most of those claims are based on an 1872 mining law that allowed mining companies to take title to public lands with significant known mineral deposits for little more than the price of a latte - $2.50 to $5 - per acre. If the value of those claims remained unproved by the mid-1970s, the claims expired.

The Shi Shi rights have a different legal pedigree, one that Wagner says makes it harder to dismiss the claim or completely rule out mining on the site.

Hammond's grandsons - Scott, Craig and Art Watson - are a lot less gung-ho than their partners about the mining prospects. Craig Watson insists that the family wasn't originally interested in mining the beach, only getting a fair price for the rights. But that price has gone up, Watson says, in the face of what he considers delay tactics by the Park Service.

"We're not interested in taking a grain of sand off this beach. That'd be a shame," says Craig Watson. "But we've got seven years of frustration with the Park Service. They won't even let us find out what it's worth."

Putting a price tag on the beach remains a contentious matter.

Relics of small mines dot the park's coastal stretch, including abandoned gold sluices. While there was never any large mining operation, there are stories about an unnamed miner who supposedly panned thousands of dollars worth of gold from the beach in a single weekend.

But the rugged weather and lack of a maintained road into Shi Shi all raise questions about the economic viability of large-scale mining, park officials say.

The tidal waters are protected as a marine sanctuary, potentially carrying its own layer of even stricter regulations.

The park has another powerful incentive for holding down the price of any buyout: The National Park system's total land-acquisition budget nationwide this year is $45 million.

Gagnon's group has claimed that a gold-mining operation could be done without major disturbance to the beach, with shifting tides filling in dredged holes and limiting any damage. Their initial proposals to the Park Service, though, discussed digging large pits and removing millions of tons of sand and gravel, a process that would require the use of heavy equipment.

Neither Wagner nor Gagnon will be surprised if the courts have the last word on the mining rights. "Look it, there's no easy way to measure its value," says Wagner. "But if the public had its druthers, they'd expect us to protect this beach. Even on the courthouse steps."