No Slow Down at Gold Mine Despite Possible Sale

5-19ccv mine3 (2)-2The future of one of Teller County’s biggest and richest economic players, with longstanding community ties, still remains in limbo.
But despite some unknowns regarding possible ownership and management changes for the Cripple Creek & Victor Gold Mining Company (CC&V), don’t look for any slowdown in activity, as CC&V prepares for a major $20 million-plus project outside Cripple Creek. In additon, the company may soon embark on the first underground hard rock mining venture in decades. And it’s full speed ahead for CC&V’s current construction ventures, including a new valley leach facility, a processing plant and new mill as part of its mine life extension, allowing CC to do active mining in the district until at least 2026. By the end of this year, CC&V will bustle with more than 600 employees and a payroll that exceeds $35 million.
These was the main messages delivered by CC&V Community Affairs Manager Jane Mannon during a “Mine Shots” forum last week before a group of residents at the CC&V visitor center in Cripple Creek.
Mannon confirmed that plans to sell the company are moving ahead by the South Africa-based AngloGold Ashanti, CC&V’s parent company. It had announced intentions to enter into a joint venture deal with a future operator or consider an outright sale of CC&V’s assets earlier in the year.
According to Mannon, representatives from about five major mining companies recently toured their facilities and may have submitted bids to the South African owner. She declined to reveal the probable bidders, but indicated they are big names in the mining industry.
The CC&V spokesperson expects an announcement to be made by AngloGold by the end of June regarding CC&V’s immediate and long-term ownership.
Under a best case-scenario, company officials are hoping for a joint venture, allowing AngloGold to maintain the role as project manager with a future operator obtaining a 49 percent ownership role. But Mannon conceded that a complete sale of CC&V and its assets is a definite possibility.
Ultimately, AngloGold is seeking to reduce its debt by at least $1 billion. Plus, the declining price of gold has entered into the equation for the mining giant.
“There is a fear of the unknown,” said Mannon, In citing some concerns over uncertainty with the current CC&V ownership situation. “It’s still up in the air.”
But in any case, she doesn’t see any change in operations, especially with the current expansion work underway. “There will be no changes in what we are doing,” said Mannon. At last week’s forum, the CC&V spokesperson made it clear that AngloGold values CC&V, its sole mining property in North America, as a prime asset. “This isn’t going to be a fire sale,” said Mannon.
And if no deal occurs, she doesn’t believe this would create any financial problems for CC&V. She said AngloGold has already sold several properties in Ghana and that could alleviate some of the financial pressure.
Underground Mining Gets Thumbs-Up
The issue that commanded attention at last week’s presentation focused on CC&V’s plans to pursue the first underground operation in decades, in a spot referred to as the Chicago Tunnel. The operation, which could net 32,000 ounces of gold a year based on preliminary estimates, is part of a plan to ply for high-grade gold. The underground operation would be located in an area just east of the Mollie Kathleen Mine. Preliminary plans call for the company to use part of an old tunnel, last used in 1988, or to continue doing extensive tunneling work there.
The project would allow CC&V to plunge several thousand feet underground, below where historic operations occurred in the 1890s. “The old miners didn’t stop because they ran out of gold. They stopped because they got shut down,” said the community affairs manager.
Mannon said CC&V officials are optimistic about high grade gold discoveries in this area.
Several residents at last week’s forum were enthused about the prospects of reliving the era of underground mining and even inquired about the hiring of hard rock miners. One meeting participant reminded Mannon of the hard rock mining now occurring in the Ouray/Silverton area.
According to Mannon, the company will soon embark on an exploratory mission. “We want to see what is there,” said the community affairs manager. “We believe we could start production in 2017.”
The first major infrastructure for this project will consist of a portal development, with a possible connection to an area known as CC&V’s “high wall,” and possibly more work inside the Chicago Tunnel area. CC&V officials are quite excited about the prospects of reviving underground mining for the first time since the 1960s. “It’s been the dream of a lot of folks,” said Mannon, when the project concept was first discussed several months ago during a county commissioners meeting.
Also, starting this year, work will move forward on the highly publicized North Cresson project near Poverty Gulch, located directly across from the Cripple Creek Heritage Center.
At one time, this venture was heavily opposed by elected leaders in Cripple Creek. However, a compromise was reached between the city and mine. We feel we have really turned the corner,” said Mannon, in discussing public opinion regarding the North Cresson venture. She attributed this to CC&V’s strong role as an active community player for key events and projects.