Old computers are panning out in an unexpected way. Entrepreneurs are mining obsolete computers for gold, silver, platinum, palladium, and copper, culling as much as $22,000 worth of precious metals from a single mainframe.

Back in the 1960s and early '70s, when gold was a relatively cheap $35 to $42 an ounce, computer manufacturers used it extensively because it is an excellent conductor of electricity. But when the price of gold shot into the hundreds of dollars per ounce, palladium began to take its place for as little as a third of the cost. In recent years, as old computers were taken out of service and replaced by faster, more powerful models, companies have begun to reclaim the troves of precious metals in the old machines.

Richard Forsythe, president of Chicago-based Forsythe McArthur Associates Inc., a computer leasing company, got into the reclamation business about two years ago. A friend who is executive vice-president of Sipi Metal Corp., a large precious metal refinery in Chicago, told Forsythe that such companies as IBM, Honeywell, and Burroughs were extracting gold and silver from production scrap and suggested that Forsythe could find the precious metals in the computers he could no longer lease. A joint venture of the two companies, Forsythe Computer Associates, was formed.

Most of the dismantled computers are 8-to-10-year-old models that are now obsolete. Under the direction of Joseph Zabelle, the plant manager, the computers are dismantled. Then, the "guts" of the computer -- contact points, chips, and electronic circuitry -- are smelted and refined at Sipi Metal. Forsythe Computer takes a 15% commission on the net market value of the metals reclaimed.

Naturally, Forsythe says he can't guarantee all dismantled computers will contain enough precious metals to make the investment pay off. But the company keeps records of the quantities of metals extracted from various types of computers; based on those records, the company can estimate how much of each metal can be reclaimed. Forsythe has found the IBM 360 series to be a particularly rich lode. The 360/20 model, for instance, yields an average $600 to $900 worth of gold, and the larger 360/65 model is likely to contain $8,000 worth of gold. Recently a Sperry 1108 computer system produced 1,600 pounds of precious metal scrap, including $15,000 in gold. Early Honeywell equipment usually provides a good haul of precious metals, Forsythe says.

When Forsythe started his reclaiming business two years ago, the company was dismantling 60 computers a month; today it does 200 a month, drawing clients from all parts of the United States and Canada. The reclamation service has caught the attention of a wide range of companies -- and even the federal government. Since the U.S. government is the largest user of computers in the world and tends to hold onto equipment longer than most, says Forsythe, it could be sitting on a gold mine.