Takeover Bid Won’t Impact Gold Mine
~ by Rick Langenberg ~
The Cripple Creek/Victor mining district still abounds with plenty of riches, as the old-timers may have left plenty of gold behind.
As a result, Newmont Cripple Creek and Victor Gold Mine (CC&V) officials want to pursue a $200 to $300 million exploratory underground operation to snag higher-grade quality gold and metals. And if Newmont corporate officials give the okay, the operation could begin this year. A potential development date for the underground mine still remains uncertain.
Last week, CC&V general manager Mike Schaffner briefed the Cripple Creek City Council on the company’s plans for the underground operation, a development that has been long-awaited in the district. “We are very excited about the underground project,” said Schaffner, when addressing the council. “We are set up perfectly for this.”
More importantly, the CC&V general manager expressed much optimism about what the exploratory mission would yield in terms of higher-grade gold. This quest ultimately could lead to an extension of the life cycle of the Cresson operation, slated to end in 2027.
But unlike previous proposals considered by the previous South African owners, AngloGold Ashanti, this time the underground operation would not occur in the Chicago tunnel area but would develop right under the actual Cresson pit.
Schaffner said the exploratory mission, to be handled by contractors, would feature 26,000-foot drifts and would examine 12 to 13 prime targets. It would involve a vertical exploration decline, allowing teams to sample a wide cross-section of potential underground areas, according to company officials.
More details of the operation will be unveiled this week during a series of community meetings in Victor and Cripple Creek, scheduled for March 12 and March 13 (see Mountain Almanac for details).
In some ways, CC&V officials describe the project as a way to capture the riches the old-timers left behind. The entire district is considered ripe with millions in gold reserves. “We have got to get higher grade coming in,” said Schaffner.
On a regulatory standpoint, Schaffner didn’t see any problem in obtaining the necessary permits.
Schaffner said an underground operation has always been a goal of CC&V. In fact, the previous owners announced plans for an underground project, months before they sold out to Newmont.
AngloGold Ashanti had wanted to do their venture near the old Chicago tunnel area. Schaffner, though, cited major hurdles with this plan, including extensive costs in rehabbing the Chicago tunnel structure.
According to CC&V spokesman Brad Poulson, who has worked with both ownership groups, the Chicago tunnel underground operation fit well with Ashanti’s model. However, with Newmont it just wouldn’t work as the company ships a considerable amount of gold and ore products to Nevada.
The idea of an underground operation has enthused locals for years, with many wanting to bring back the good old days, capped by the gold rush boom of the late 1800s.
When Newmont bought CC&V from Ashanti for $820 million in 2015, it appeared to put the underground venture on hold until it did more market research. But CC&V officials now tout a future underground operation when addressing residents and community leaders at regular meetings.
As far as other big projects this year, the company will be doing phase two of their valley leach field project. According to Poulson, this was previously permitted.
In addition, the company is moving full-speed ahead with their mining projects outside of Cripple Creek’s Poverty Gulch area, across from the Heritage Center, referred to as the Globe Hill and Schist Island sites. Poulson said the company has been meeting with residents on a regular basis who are concerned about this mining activity to mitigate their issues.
Tougher State Regulations Raise Concerns
The news is not all great, though, on the mining front. Schaffner told Cripple Creek leaders last week the company may need the city’s assistance in combating the new efforts of state lawmakers. With a Democratic-controlled House and Senate, mining, oil and gas companies may have to deal with tougher regulations. Schaffner cited one bill, HB1113, which could make it practically impossible for new mining companies to obtain permits with the proposed requirements. He said this law wouldn’t impact CC&V because it is an existing operation. But the CC&V manager expressed concerns at how fast this regulatory law was moving through state House. “We may need your help,” said the CC&V manager.
The city council vowed to assist CC&V on the lobbying front however they could.
And when it comes to the Newmont corporation itself, Schaffner briefly discussed the latest developments dealing with bids for buy-outs, mergers and such. He said Newmont faced a hostile takeover by rival Barrick Gold. Newmont, though, rejected their offer for a $17.85 billion buy-out.
However, the door is still open for a joint operation between Newmont and Barrick in Nevada. “This will have little impact on CC&V,” said Schaffner. “There is not a lot of reason to be concerned.”