Reclamation Plans, Financial Assurances Main Topics of Grass Valley Workshop on Emgold's Proposed Mine

Published on Feb 15, 2008 - 3:31:25 PM

By: YubaNet

On Wednesday evening concerned citizens gathered at Condon Park for the 3rd in a series of four public workshops hosted by the city on the proposed re-opening of the old Idaho-Maryland gold mine by Emgold Mining Corporation (www.emgold.com). The topic - the reclamation process and financial assurances the junior mining company from Canada would have to provide if the project is approved by the City of Grass Valley.

If mining occurs at the Idaho-Maryland, abandoned since 1956, it will be Emgold's first mining operation since it began trading on the TSX Venture Exchange in 1989, the only medium- to- large scale mine operation in California, and the only one located within a city's borders.

To gain access to the underground mine workings, Emgold will have to dewater 72 miles of flooded mine shafts, treat it to remove contaminants, and divert the water into Wolf Creek. In addition to operating a gold mine, Emgold plans to open a ceramic tile factory and convert half of its mine waste into consumer products via a proprietary process it calls "Ceramext" (www.ceramext.com, www.goldenbearceramics.com). The rest of the waste, in the form of cyanidized tailings and waste rock, will be dumped back into the mine shafts, which will eventually fill with water.

On hand to present the information was Grass Valley Planning Director Tom Last, Environmental Science Associates consultant Jeff Harvey (www.esassoc.com) and Nash Gonzalez from Pacific Municipal Consultants (www.pmcworld.com).

Phase 3 Is Underway

Tom Last gave a quick recap of the environmental review process.

The Master Environmental Assessment (MEA), the first phase of the 3-step process, was completed in June 2006. Phase 2, the Notice of Preparation (NOP) of the EIR and Initial Study (IS), was published in September 2007. Both of these documents can be downloaded on the city's Idaho-Maryland Mine Project Public Document Page.

One more public workshop (traffic, project alternatives, and cumulative impacts) will be held on March 12, prior to the release of the draft EIR in about 2 months. Agencies and the public will have 45 days to review the draft EIR and comment, and a public hearing will be held. Then, the final EIR will be completed.

If the city approves the project, permits would be issued in 2008, full production would be achieved in 2015, and operations would continue until 2029, at which time a year-long reclamation and clean-up process would begin. According to the Initial Study "... it should be noted that continued mining and ceramic production could proceed past 2029 using industrial minerals (e.g. non-gold bearing material) from the mine or imported ceramics feedstock." Following reclamation, the property would be converted to another industrial use.

SMARA and Financial Assurances

Harvey and Gonzalez shared the task of explaining SMARA, the Surface Mining and Reclamation Act, passed by the California legislature in 1975 to encourage mineral extraction while minimizing the environmental impacts. The idea behind SMARA, said Harvey, is to "ensure the mine has a positive legacy to prevent harm to the community, contain impacts to the mine itself, and prepare the site for a subsequent use." Before any mining begins, SMARA requires both a reclamation plan and financial assurances to guarantee reclamation.

SMARA requirements apply to anyone who disturbs more than one acre or removes more than 1,000 cubic yards of material. Emgold plans to excavate 2,400 tons of material daily, when the mine is operating at peak production. It takes between 20 - 100 tons of rock to yield enough gold for one wedding band. The company plans to excavate down to approximately 5000 feet, about 2000 feet deeper than the original mine.

Reclamation includes minimizing flooding, erosion and damage to wildlife and riparian habitat. The topsoil is typically replaced and revegetated with suitable plants. The mine buildings, said Harvey, could remain, if the future tenant wants to use them. Or, they could be removed.

On the state level, SMARA is administered by the Department of Conservation's Office of Mine Reclamation (OMR) and the State Mining and Geology Board (SMGB). The OMR provides technical assistance to lead agencies (e.g. the City of Grass Valley) and operators (e.g. Emgold). The SMGB is responsible for compliance related matters.

How SMARA Works on the Local Level

If Grass Valley approves the mine, Emgold would be responsible for the preparation and submission of a reclamation plan to the city. Emgold would also have to submit an annual report to the state and the city on the status of mining activities, and annual updates of financial assurances.

The financial assurances can take the form of surety bonds, irrevocable letters of credit, or trust funds, which are accessible by the city in the event of mine abandonment. "Financial assurances are based on a cost estimate (of reclamation) prepared by the operator (Emgold), and must be recalculated annually," said Harvey. "These costs are determined by the costs of earthmoving, revegetation, equipment and building removal, planting, hydroseeding, monitoring, supervision, mobilization and demobilization of labor and equipment."

It's up to the lead agency, in this case Grass Valley, to make sure Emgold is abiding by SMARA requirements, said Harvey. The city would be responsible for approving Emgold's reclamation plans and financial assurances, and for inspecting the mine annually. The city would submit these annual reports to the OMR. The city would also approve any amendments to Emgold's reclamation plans. Copies of the inspection reports would be distributed by the city to the state and Emgold. The mining company, not taxpayers, would shoulder all costs incurred by the city.

In sum, if Emgold goes into the mining business in Grass Valley, the city goes into the business of administering SMARA on a local level, with Emgold footing the bill. If the city doesn't have the personnel or expertise, then "we'd hire a firm that specializes in doing annual inspections," said Harvey.

The next public workshop will be held on March 12 from 6-8 p.m. at the L.O.V.E Building in Condon Park.

Links:

The city's mine website: http://www.cityofgrassvalley.com/services/departments/cdd/IDMDMINE.php

YubaNet's 5-part special report, "Golden Gamble in Grass Valley" and all related mine articles: http://yubanet.com/specialreport.php

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