From: Kerana Todorov, Reuters
Published February 15, 2006 12:00 AM

Firm Hopes Reopen Long-Dormant California Gold Rush Mine

GRASS VALLEY, Calif. — Half a century after the last major gold mine closed in the heart of California's Gold Country, efforts are under way to revive the industry that lured mass settlement in the 19th century.


Grass Valley, a town of 13,000 people in the heart of California's Sierra Nevada, was once home to the state's two richest mines -- the Empire Mine and the Idaho-Maryland Mine.


Emgold Mining Corp , a Vancouver, Canada-based company, says there is still gold in thar hills, and is planning to spend about $100 million to reopen the latter mine, possibly in 2007. Gold production would not begin before 2010.


"We think it's a very, very rich mine," Emgold Vice President Ian Chang said.


The Idaho Maryland Mine produced more than 2.3 million ounces of gold between 1862 and 1956, but with costs rising and the price of gold fixed at $35 an ounce, a century of production came to an end and the tunnels eventually flooded with water.


An effort that did not make sense at $35 a ounce is very much worth making with current prices above $550, company officials say.


Jack Clark, 85, an underground mine superintendent when it closed in 1956, fondly remembers the importance of the mine for Grass Valley and neighboring Nevada City.


"Mining built the two towns," he said, recalling that even during the Depression the mines were able to offer jobs. "If I were young, I'd probably do the same thing."


Author of "Gold in Quartz - The Legendary Idaho Maryland Mine," Clark is now an Emgold adviser seeking to revive some of that lively past.


Company officials say the mine could yield 1.4 million ounces of gold over 20 years, and are using 4,000 old mine maps as well as old geological samples to guide them to the gold ore.


The company's plans call for draining water from 70 miles of underground tunnels and to reuse the mine's tailings -- the mine waste materials -- to produce ceramic tiles.


Ross Guenther, an Emgold director and the Idaho-Maryland Mining Corp. project manager in Grass Valley, said the mine could employ 200 miners and another 200 workers at its ceramic tile manufacturing plant.


Earlier plans to reopen the mine were shelved in the 1990s after the price of gold dropped to $250 an ounce, a 20-year low, Guenther said. Today he heads a staff of about 25 engineers, geologists and technicians working right above the mine's flooded tunnels.


TOWN UNSURE ABOUT MINE


Grass Valley officials are now reviewing Emgold's plans, a process that includes in-depth environmental studies that could last through the summer of 2007. The mayor and city council must approve the project as the land would have to be rezoned to operate as a mine again.


Mayor Gerard Tassone said he has not yet made up his mind about the mine project but has expressed concern that nearby residential wells could run dry when the water is pumped out of the mine's tunnels.


He also questions the cost of a "tremendous" natural gas consumption the ceramic plant would require, referring to Emgold's plans to use 2.1 billion cubic feet of natural gas per year to operate its ceramic tile manufacturing plant.


Another city council member, Dean Williams, argues that the land should be used for apartments and offices instead of a mine.


Although the business community has expressed support for the project, other community members have raised questions about the project. They worry about air, noise and traffic pollution from the mine and the company's proposal to empty treated mine wastewater into a tributary of Wolf Creek, a stream that travels through town.


Rick Sanger, president of the Wolf Creek Community Alliance, a Grass Valley-based group that wants to build a pedestrian walkway along the creek, questions the mine wastewater's effect on the creek's natural habitat.


But Ray Shine, a Grass Valley attorney who grew up in town, would love to see the mine reopen, in part because it would create jobs and keep young families in the area.


"I think it's a wonderful idea, assuming they can do what they say they can do," he said.


Source: Reuters


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