http://www.krcrtv.com/news/local/butte/paradise-prospector-a-golden-opportunity-at-the-damaged-spillway/370298858
(snip)
"I see a lot of gold potential there," said Van Camp, estimating that there could be "pounds and pounds" of gold just at or near the surface.
"Because gold is so heavy it always seeks the lowest area," he said. "It constantly wants to go down."
"This dirt came off the hillside and is full of gold," he added, pointing to the video.
The main dam itself is constructed of tailings from earlier hydraulic gold mining operations.
https://cdnc.ucr.edu/cgi-bin/cdnc?a=d&d=MT19660421.2.33
“The dredge tailings, once considered as unsightly and almost worthless mess, have proved excellent material for dam building.”
This google earth view along the river south of town shows evidence of dredging in the past. Must be the area where the dam borrow was obtained.