Regulations stall California projects

Two new regulatory actions in California have placed the future of two gold mining projects in doubt.

California’s Surface Mining and Reclamation Act has been amended to force mine operators to backfill all new open pits within a mile (1.6 km) of any native American sacred site, and to rehabilitate project sites to the sole satisfaction of the affected native community.

In addition, new regulations under the act will force metal mines to backfill all open pits to their original surface elevation. The new regulations also require mines to re-contour overburden, waste and leach piles “to achieve the approximate original contours of the mined lands prior to mining activities.” The backfill must be engineered and compacted to prevent runoff water from ponding and to protect groundwater quality.

The regulation has an immediate impact on two gold projects. In Imperial Cty., near the Arizona border, Glamis Gold (GLG-T) has kept its Imperial project on hold since early 2001, awaiting permitting from the U.S. Bureau of Land Management (BLM). The Department of the Interior rescinded an earlier denial of the project’s plan of operation in October 2001, but the new state regulation applies directly to the project.

Imperial is near the Fort Yuma Quechan reservation, whose residents have designated the property a sacred site. Quechans have used a trail passing through the property for traditional purposes, and the tribal council wants to block the project to preserve the trail.

In April 2000, a directive from the solictor’s office of the Department of the Interior instructed the Bureau that it had discretionary authority to block projects if native cultural or religious concerns were raised. The then-Interior secretary, Bruce Babbitt, denied the Imperial project’s plan of operation three days before the 2001 swearing-in of the new U.S. administration; in October 2001 the new Interior secretary, Gale Norton, reversed the decision.

The new state regulation would require Glamis to backfill the Imperial pit, which has a resource of 80 million tonnes grading 0.6 gram gold per tonne and a stripping ratio of 2.7:1, implying that about 300 million tonnes of engineered fill would have to be returned to the pit.

Charles Jeannes, Glamis’s corporate counsel, says Glamis still believes there are legal avenues for challenging the state policies, by arguing that federal law takes precedence on federal land.

If the new law and regulations prove valid, Jeannes says, “it would dramatically change the economics” of the project. He adds: “We’re very disappointed the state has effectively killed open pit mining in California.”

Canyon Resources (CAU-X), which operates the Briggs gold mine in Inyo Cty., had been examining several gold zones in the Panamint Range area as possible satellite pits for the Briggs operation, 6 km to the south. One deposit, Cecil R, has an estimated resource of 2 million tonnes grading 1.3 grams gold per tonne, while at a second, Jackson, no resource has been calculated, but drill intersections indicate higher grades than at Cecil R.

Canyon says the new regulations “essentially eliminate” any possibility of developing new pits on the two gold deposits.