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MINING IN MISSOURI
by Mason Spurgeon, Certified General Real Estate Appraiser
What is the first thing you think of when you hear the word, ‘mining’? I immediately think of the many gold mining TV shows filmed in Alaska, but did you know there are mining operations right here in Missouri? Well, in full disclosure, they aren’t gold mines but geode mines. Some of the most colorful geodes in the world are found on properties in northeast Missouri.
We were recently contracted to perform an appraisal on a property with a geode mining operation. This really added to the difficulty of the project. As you can imagine, there are limited sales of these types of properties, even in our market. But at Spurgeon Appraisals, we bid every project and never shy away from a challenge. Below I describe the steps I took to complete this unique project, along with my conclusion.
I began my research on this property by looking through our extensive database of sales data in the area. I was able to locate one sale northeast of the subject property that sold on the market approximately 4 years ago. After a careful analysis of the sale, I found no evidence of a premium paid for the property because of the geodes, even though both the buyer and the seller were aware of the geodes on the property. The buyer even owned a geode shop and had been mining geodes from the property for several years.
My research also uncovered an MLS listing for another property with geodes in a different county in northeast Missouri. I realize this property will produce a different type of geode because of the different minerals in the area, but it is a geode property none the less. Again, after comparing this sale with other similar tracts in the area without geodes, there did not appear to be an adjustment for the presence of geodes.
I then called several realtors, appraisers, and land traders/sellers in the area. Through talking with each of them, I determined that they all had the same conclusion that the geodes on the property would be an added benefit for the buyer/seller, but they have no knowledge of someone willing to pay more for a tract because of the geodes.
After visiting with each of the above market participants, I then called a local geode miner/seller. He informed me that it is very difficult to know exactly how many geodes are remaining on the property and the value of the geodes. The cost of excavating the geodes can be very expensive due to the need to use heavy machinery. Also, one must clean, cut, and market the geodes after they are mined, and this can sometimes cost more than excavating them.
My conclusion, after an extensive amount of research, is that the current owner can benefit from mining geodes on the property, but the revenue it generates will be entirely dependent on the owner’s management and negotiating skills, not the real estate itself, and the revenue has no guarantee of continuing if the property sells. Also, while finding a buyer that places value on the presence of geodes may not be impossible, it is just not likely in this market.
These were the steps I took to appraise a unique property in northeast Missouri. This is the type of service and attention to detail you can expect from every appraisal you order from Spurgeon Appraisals. We do our very best on every appraisal assignment and we don’t cut corners. When you need an appraisal, hire the BEST. Call Spurgeon Appraisals – We can help!