D. Bhebhe - Faculty of Natural and Agricultural Sciences - University ...

2.17 Financial Benefits of Gold Panning
The financial benefits of gold panning can be viewed from the perspective of the individual
panner and is represented by gross average income. From the results presented earlier, the
median income from gold panning in the week prior to the survey was $33 per panner for full
time panner, estimated annual income was $1 680 based on finding the median yield every
week. For part-time panners the estimated annual income over 27 weeks was $890
The income estimates are based on the prices actually received by the panners for their gold,
which was roughly 65% of the official Reserve Bank price.
2.18 Financial Costs to the gold panning activities
The financial costs of any commercial mining activity are represented by the private marginal
costs of extracting and marketing the ore. The costs should include all factors of production
such as the cost of land (purchasing or leasing), labour and capital. The survey did not
directly ask panners about production costs but these can be estimated.
The cost of land to an individual panner is either zero (where mining is done illegal or on
behalf of a claim holder), or the cost of the permit (where the panner is following the Mining
Alluvial Gold, Public Streams 1991 Regulations). The regulations rural councils charge
individuals an annual fee of $20,000 in return for the right to pan along a 50-meter stretch of
river. In this study, the costs associated with 1991 regulations are used as a proxy for land
costs
On considering the costs for the individual panner, this could be measured by the opportunity
cost of his or her time in the best alternative occupation. If for example, a panner earns $50
per day and the alternative is $75 per day, the opportunity cost to him is $25 per day. For the
financial analysis, we assume no opportunity cost of labour to individual gold panners. It is
very unlikely that panners count the cost of their time as a cost of production.
Shava, 1991 noted that, capital costs are small for gold panning and may range from buying
material for sluice boxes, building a small hut, buying shovels and picks, etc. We estimate the
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