Cleanup costs to $60m — Summitville casts pall over U.S.

Companies looking to develop new mines in the U.S. could face a tougher ride through the permitting process because of environmental problems at the Summitville gold property in Colorado.

The project’s ongoing problems are becoming well-publicized, with the clean-up of the former gold producer now expected to cost US$50-60 million. The company that placed the mine into production, Galactic Resources, filed for bankruptcy in November of last year. It had previously posted a US$4.7-million bond for reclamation and clean-up.

Environmental clean-up costs are being borne by the Environmental Protection Agency. Colorado state agencies are investigating the entire matter and may attempt to recover costs by looking into the personal liabilities of Galactic’s former directors.

(Up until June, 1990, the driving force behind Galactic had been Robert Friedland. He stepped aside to devote his attention full-time to Ivanhoe Capital, a mining venture capital company. Earlier this year, Galactic filed for bankruptcy.)

Problems first surfaced in 1986 when the heap-leach pad and protective liner were discovered to be leaking cyanide solution. Current concerns pertain to the discharge of acidic water and metals such as copper and zinc into the Alamosa River, which poisons fish and causes other problems. Sources in the Colorado mining industry say investigative reporters have visited the Summitville site and will probably report their findings on national television this autumn.