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III IIIIIIIIIIIIIIII
<br />999
<br />Gold.-Total gold output in the State
<br />rose almost 36 % from that of 1990
<br />despite mine closures and temporary
<br />shutdowns. Gold production was
<br />reported to the U.S. Bureau of Mines
<br />from siz mines, one each in Costilla,
<br />Gilpin, Lake, Rio Grande, San Juan, and
<br />Teller Counties. The Summitville
<br />Consolidated Mining Co. (Galactic
<br />Resources Ltd.) Summitville Mine in Rio
<br />Grande County reported the largest
<br />production, followed by the Battle
<br />Mountain Gold Co. San Luis Gold Miae
<br />in Costilla County.
<br />Colorado's newest and largest gold
<br />producer, the San Luis Gold Mine in
<br />Costilla County, came on-line in 1991.
<br />Opening of the mine followed a State
<br />Water Judge's decision, late in 1990, that
<br />allowed Battle Mountain Gold to use
<br />water formerly designated for agricultural
<br />use. The 554 million mining and milling
<br />operation came on-line in late April, and
<br />the first bar of gold waz poured in May.
<br />The opetation is expected to employ
<br />about 100 people, including about 80
<br />from the Costilla County area, when the
<br />operation is at full production. Battle
<br />Mountain can run 4,535 metric tons
<br />(5,000 short tons) of ore per day through
<br />its milling operation. Gold production is
<br />expected to reach 1,897 kilograms
<br />(61,000 troy ounces) per year. The
<br />mining end milling operations are
<br />expected to lazt 7 to ]0 years.
<br />The San Luis mining property was
<br />mined in 1890 for lead and silver.
<br />Asarco leased the property in 1931 and
<br />1959, and Inspiration Consolidated
<br />Copper Co. leased it in 1968. Earth
<br />Sciences Inc. (ESI) of Golden, CO,
<br />leased the property in 3972 and
<br />delineated two ore zones. Battle
<br />Mountain optioned the property from ESI
<br />in 1987 and exercised its option that same
<br />year with ESI retaining a 3.5 % interest.
<br />Total minable reserves at the San Luis
<br />project are estimated at 10.98 million
<br />metric tons (12.1 million short tons) of
<br />ore grading an average 1.13 grams of
<br />gold per metric ton (0.04 troy ounce per
<br />short ton). The deposit contains m
<br />estimated 13,219 kilograms (425,000 troy
<br />ounces) of recoverable gold. Production
<br />costs are estimated at 5206 per troy
<br />ounce. The project is a typical open pit
<br />mining operation with two pits being
<br />worked 24 hours per day. The carbon-in-
<br />leach milling plant has a rated capacity of
<br />4,463 metric tons (4,920 short tons) per
<br />day and was recovering 92% of the gold
<br />when production started in May. Tailings
<br />from the milling operation are treated
<br />with sulfuric acid to liberate and volatilize
<br />the cyanide and ere pumped to a lined 81-
<br />6ectare (200-acre) impoundment with an
<br />underdrsin system that returns water to
<br />the mill for reuse.' i
<br />The Summitville Gold Mine in Rio
<br />Grande County continued to be plagued
<br />by environmental problems in 1991.
<br />Galactic Resources (parent company of
<br />Summitville Consolidated Mining)
<br />reported continued operating losses
<br />resulting from both a cracked cyanide
<br />leach pad, first detected in 1989, and low
<br />gold prices. A crack in the dike
<br />containing cyanide leaching solution
<br />resulted in the heap-leach operation being
<br />shut down for most of 1989, and a
<br />change in mining contractors resulted in
<br />less ore being placed oo the leach pad
<br />and lower than expected gold recoveries
<br />in 1990. In March 1991, Galactic
<br />Resources decided not to resume mining
<br />operations at Summitville because of
<br />ongoing environmental and gold recovery
<br />problems that resulted in gold production
<br />in 1990 of only 50% of that expected.
<br />By May, the company had decided the
<br />mine would operate for one more summer
<br />to recover about 907,000 metric tons (1
<br />million short tons) of gold bearing ore.
<br />In November, the State Department of
<br />Health confirmed there had been at least
<br />two more cyanide leaks from the leaching
<br />operation and some fines were assessed.
<br />Mining waz completed in October but
<br />leaching operations were expected to
<br />continue into 1992. Summitville was the
<br />largest gold producer in Colorado prior to
<br />startup of the San Luis project in Co- la
<br />County.
<br />A 1990 decision by Echo Bav .mes
<br />Ltd. to write off its entire rove; .~eot in
<br />the Alta Bay joint-venture Sumyside
<br />Mine in San Juan County was seen by
<br />some az an indication of things to come
<br />in 1991. Indeed, in January, the San
<br />Juan County Mining Venture operators
<br />laid off S people employed at the
<br />underground mine where copper, gold,
<br />lead, silver, and zinc had been mined for
<br />a century. Factors affecting the layoff
<br />included increased costs from vendors
<br />and smelters, increased cost of employees
<br />benefits, and lower base metal prices. In
<br />May, the operators announced that
<br />because of continuing depressed metal
<br />prices the ,nine would be shut down in
<br />July with 137 of the remaining 148
<br />employees being laid off. The remaining
<br />employees wi^ perform minor ~
<br />tnaintenancr, and continue exploration.
<br />Closure of .he mine was postponed until
<br />August to futish mining of some defined
<br />ore reserve::. In November, Alta Gold
<br />relinquished its 40.2% effective interest
<br />N [he Sunnyside Mine to Echo Bay in
<br />return for interest in four other
<br />properties. Asa result of the mine
<br />closure, Sil~erton is expected to lose one-
<br />third of its residents and the county will
<br />lose 25% to 30% of its tax revenues.
<br />In Teller County, better mining news
<br />came from the Cripple Creek mining
<br />district. During the 100th anniversary
<br />year of the discovery of gold in this
<br />district, the t,ripple Creek & Victor Gold
<br />Mining Co. Joint Venture amounted a
<br />major expansion in the company's
<br />reserves. Pikes Peak Mining Co.
<br />(subsidiary ~~f NERCO Minerals Co.),
<br />with an 8C % effective interest, and
<br />Golden Cycle Gold Corp. form the joint
<br />venture. NERCO acquired Texazgulf
<br />Minerals and Metals Inc. and its 64%
<br />share of the joint venture from Societe
<br />National Elf Acquitaine in August 1989.
<br />later that ~~ear, NERCO phased out
<br />mining operations and concentrated on
<br />exploration because the venture had
<br />nearly exhausted its supply of gold ore.
<br />NERCO has reportedly spent 525 million
<br />in the past 2 years acquiring land in the
<br />Cripple Creek mining district and
<br />expanding opertions.
<br />Based on ~ 20 meters (150,000 feet)
<br />of explorar: tilling in 1990, the joint
<br />venture : raced in January that they
<br />had sub ...ual near-surface gold deposits
<br />in [he distri~:t. According to Golden
<br />Cycle news n:leases, the Cresson deposit
<br />alone has almost 10 million metric tons
<br />(11 million short tons) at ao average gold
<br />li COLORADO-1991
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