Vancouver — The stalled permitting process at
In January 2001, the Department of Interior denied the permits in accordance with a Clinton administration directive that substantially changed the rules governing mineral development on public lands. Bruce Babbitt, then secretary of the Interior, said the open-pit project was too near Indian cultural and religious sites and that these sites, sacred to the Quechan tribe, would be irreparably harmed by development. Glamis then appealed the decision, and was successful.
“We are extremely pleased with this turn of events,” says Chief Executive Officer Kevin McArthur. “We look forward to working with all concerned parties in finalizing the permitting process.”
The wholly owned project, situated just west of the company’s Picacho mine, will be developed as a run-of-mine heap-leach operation which will process simple, oxidized ores over 10 years. The initial capital investment would be US$57 million, resulting in average annual production of about 120,000 oz. gold at a total cash cost of less than US$200 per oz.
The deposit hosts proven and probable reserves of 86 million tonnes grading 0.55 gram gold per tonne.
The new interior secretary, Gale Norton, suspended the veto power of the Clinton administration’s directive when she took office in January. The veto power has since been eliminated for good. (Before the Clinton directive, mining on public lands was governed by regulations approved in 1980. In March, the BLM proposed suspending Clinton’s regulations.)
However, the administration of President George W. Bush has decided to keep two standards that regulate the use of cyanide in the leaching of gold and in controlling the acid that drains from rocks exposed to air and water. It also is retaining the new reclamation bond.
“The environmental community for years has advocated strict bonding standards for all operations and strong performance standards to protect resources from cyanide and acid rock drainage,” says Interior spokesman Eric Ruff. “We agree, and that’s why we have kept these key provisions from the previous administration’s rule intact.”
The bond requires that all mining operations prove, before opening, that they can pay for damages following closure. The bond must be equal to 100% of the estimated cleanup cost.
New regulations issued by the BLM will take effect in the new year. “We are happy with the ruling but not sure where the procedure goes from here,” says David Hyatt, Glamis’s vice-president of investor relations.
Meanwhile, Glamis has closed a $50-million bought deal earmarked for its Millennium project, situated on the Marigold property, near Winnemucca, Nev.
The financing consisted of 8 million shares priced at $5 apiece. The underwriters also exercised an option to acquire an additional 2 million shares at the same price.
In all, US$50 million in proceeds will be applied to the developing a deposit discovered last year on the Marigold property. Aptly named “Millennium,” the deposit is oxidized, amenable to run-of-mine processsing and is situated well above the water table.
The final feasibility study for this new project will be completed in November 2001, and equipment purchases are expected to commence in the first quarter of 2002.
Minable reserves are pegged at 45.3 million tonnes grading 1.13 grams gold, including the Millennium deposit. The figure is based on a cutoff grade of US$275 per oz.
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