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A laboratory simulation was developed to provide mechanistic information about placer (nugget) gold development in the natural environment. To initiate the simulation, ionic gold was immobilized to a high capacity by Bacillus subtilis 168 (116.2 μg/mg dry weight bacteria) as fine-grained intracellular colloids (5–50 nm). During the low-temperature diagenesis experiment (60°C), the release of organics due to bacterial autolysis coincided with the in vitro formation of hexagonal-octahedral gold crystals (20 μm). This octahedral gold was observed to aggregate, forming fine-grained placer gold (50 μm). In addition to achieving a fundamental understanding into secondary gold deposition, a significant economic benefit could be realized by employing this environmentally safe procedure to concentrate widely dispersed gold in placer deposits to facilitate mining by conventional methodologies.