When 28-year-old John Gates was growing up in Sutter Creek, California, a town of 2,500 people with a charming Old West façade in the heart of the Sierra Nevada foothills, the biggest thing going on was the rivalry between high-school soccer teams. Along with senior-year team-captain duties, Gates, whose athletic build, sandy hair, and pale-blue eyes suggest a J. Crew model, expended his energy and enthusiasm on camping, canoeing, and rock-climbing trips. After he graduated from the University of Nevada, Reno, with a major in mining engineering, friends expected him to exploit the opportunity for adventure and pursue mining jobs in Australia. But Gates stayed put, and as he walks through a set of 12-by-15-foot steel gates into a portal carved directly into the Sierra hillside, he couldn't be more excited. Into a 2,800-foot-long slope of a hill, a labyrinth of dark, damp tunnels is being built, where miners are blasting, digging, and drilling toward several recently discovered virgin veins of that most coveted metal: gold.

"The legacy of the forty-niners, the stories of gold fever—something about gold draws people to it," says Gates, who is helping to oversee the Sutter Gold Mining company's $40 million project to mine the untapped stores of the historic Mother Lode region. "The value of what you're pulling from the ground is just mind-boggling. We're looking at $39 million a year from a tiny hole in the earth."

During the century after 1848, when James Marshall, a carpenter from New Jersey, found several small nuggets in the American River, spawning the California gold rush, the riverbeds and hills of this Northern California region were hacked apart in hopes of discovering the Mother Lode—a name since bestowed on the collection of a thousand-plus mines in this area. But for most of the free-spirited prospectors who flocked to this region around the newly minted town of Sutter Creek, the big payoff never panned out—gold production proved to be slow, expensive, and dangerous. As other industries took center stage in the 20th century, gold mining dwindled. In 1958, the last mine in Amador County was shuttered. In the decades that followed, the only subterranean activity has involved tourists on gold-mining tours and the occasional spelunkers.

But a funny thing happened to gold on the way to irrelevance. In 2007, the financial markets imploded, and the rest of the U.S. economy soon followed. The price of just about every investment—stocks, futures, homes, your Ferrari 458 Italia—went down the toilet. But gold just kept shining ever brighter. The worse the economy got, the higher the price climbed. Sutter Gold, which formed in Canada in 2004, had bought the rights to 551 acres in Amador County, which included the site of the historic Lincoln mine, and began aggressively soliciting investors. In 2008, a South African company called RMB bought in, soon providing the cash infusion Sutter needed to recommence mining, and in December 2012, gold production returned to the largest contiguous chunk of the Mother Lode.

Now everyone wants in on the action: commercial miners like Gates, cutting-edge investment boutiques, and digging-in-the-dirt prospectors. Last year, the United States Geological Survey stated that more than 72 million pounds of unmined gold exist in this country, primarily in Alaska, California, and Nevada. Reborn amid economic adversity, gold mining is on a trajectory that rivals that of the tech industry. Welcome to the 21st-century gold rush.

The Sutter company has a head start, thanks to its mineral rights in Mother Lode territory. The most recent surveys done by the company's geologists and engineers reveal its astounding potential: Sutter is sitting on an estimated 681,958 ounces of gold. At roughly $1,700 an ounce, that would represent gross return of over $1 billion. The company's CEO, Leanne Baker, a former managing director at Salomon Smith Barney in San Francisco, estimates the annual production for the next five years will be around 23,000 ounces, or about $39 million in today's market. "It's hard not to be bullish on gold," she says. A quick look at recent history shows why: In 2002, an ounce of gold traded at just $310, about a fifth of its value today, according to Suki Cooper, a precious-metals analyst for Barclays in New York City.

For Gates, the company's discovery is an opportunity to build a lucrative career at a time when his home state is facing unemployment numbers slightly above 10 percent. "I was always fascinated by rocks, and thought for a while about going into geology, but as a high-school student, I heard a speech from a professor at the University of Nevada who really turned me on to mining," he says. "The opportunity to build something and see things no one has seen
before . . . When I got my mining degree, I thought, 'How cool would it be to reopen these old mines in my back yard?' And now it is happening."