Golden Gamble in Grass Valley, Part 3: Dewatering an Old Gold Mine

Apr. 11, 2005 – It doesn’t take a background in hydrogeology to know that water runs downhill. It’s also easy to grasp that, underground, water collects in aquifers. But things get tricky when you begin trying to predict how water moves underneath the Sierra Nevada foothills.

In western Nevada County, groundwater collects in granite fractures of various shapes and sizes that even high-tech equipment can’t map in great detail. This leaves guesswork for the drilling crews who search for reliable water sources that can supply private wells.

That’s called “the random element,” said Tom Knoch, whose many professional titles include hydrogeologist.

“No one knows what the general trend is or what the fracture density is. It’s a roll of the dice when you drill a well in the ground,” said Knoch, who has an office in Grass Valley, Calif. “Mathematically and using physics, it is indeterminate.”

That underlying geological uncertainty fuels some of the biggest public concerns about the proposed Idaho-Maryland Mine project in Grass Valley, population 13,000. Emgold Mining Corp. wants to reopen the mine, which closed in 1956 as California’s No. 2 underground gold producer.

To explore for gold on the leased mine property, Emgold, a junior mining company based in Vancouver, B.C., needs to pump millions of gallons of water from underground, where 70 miles of tunnels remain from the mine’s glory days. Dewatering will have an unknown effect on the wells, springs, ponds, wetlands and vegetation on surrounding properties, many contend. The mine would be dewatered to deeper than 3,000 feet, but many of the surrounding wells sit much higher, at depths of about 300 feet or less. After the water is removed, it would be treated at the mine and discharged into South Fork Wolf Creek, which flows to Wolf Creek in downtown Grass Valley. Wolf Creek feeds the Bear River, a tributary to the Sacramento River.

If approved for reopening, the Idaho-Maryland would be California’s only medium- to large-size mine operation and the only one within a city’s borders. And with its intensive use of groundwater arise questions that stray into the thorny realm of property rights: Can even the potential for lost or diminished well service impact adjacent property values, and whose water is it anyway?

“Groundwater is unregulated, it’s like the law of the jungle, it’s the proverbial example of the tragedy of the commons,” said Robert Glennon, a University of Arizona law professor and author of “Water Follies: Groundwater Pumping and the Fate of America’s Fresh Waters” (Island Press 2002). “Think of an aquifer as a giant milkshake glass and each well as a straw in the glass. Like most American states permit, if you allow limitless access to a finite resource, that is a recipe for disaster.”

In Grass Valley’s case, with the impact of dewatering the mine an unknown, Mayor Gerard Tassone is insisting that Emgold go beyond having a backup water-supply plan; he wants the company to connect well owners to the Nevada Irrigation District system before dewatering would even begin. Having Emgold ship residents bottled water for drinking, irrigating and other uses as they wait for a permanent water source would be impractical, he said.

“One thing you don’t want to do is react to a situation where people don’t have any water,” Tassone said. “If you can’t assure through studies or geological reports or whatever that the wells won’t go dry, my thought is, don’t even go down that road. Just go ahead and hook them up with NID.”

This isn’t Emgold’s first attempt to go underground. In the 1990s, then called Emperor Gold Corp., the company got the permits needed to dewater and explore the mine after lengthy and contentious public debate.

Knoch was then working for a subconsultant to a company hired by Nevada County to conduct the environmental impact review. He attended many public meetings and took numerous questions from residents.

“I was asked, ‘Will any wells go dry?’ My comment was that I was not God and there was no way anyone would know,” said Knoch, who later went on to work for Emgold before starting his own consulting business.

Emgold says it needs to initially pump 700 million gallons of water — or 2,500 acre-feet, with an acre-foot equaling one acre covered a foot deep in water. Dewatering would begin at a rate of about 12 acre-feet per day and take about seven months. During exploration, an average of 1,375 acre-feet a year would be dewatered over a course of five years. It would mark Emgold’s first dewatering operation as a company, although Idaho-Maryland project director Ross Guenther said people within the company have dewatered mines elsewhere.

The company hopes to be permitted by next year and working underground by 2007. Under that schedule, it says, mining would last until 2027. But city officials indicate they want to move cautiously. Beyond getting the permits needed to operate, Emgold would need to have parts of the mine rezoned by the city, which is the lead agency this time because most of the mine property would be annexed into Grass Valley.

Since the mine closed 49 years ago, homes, businesses and roads have sprung up around the mine property, generally near Brunswick, East Bennett and Idaho-Maryland roads. “There’s a lot more people who live here now and a lot more live directly on top of it,” said Tod Herman, a Nevada County planner who led the county’s 1990s review process.

Most of those residences have private wells, whose owners worry what might happen should the mine begin drawing water from deep underground. Emgold plans to draw the water using pumps at the New Brunswick shaft, in the proposed mining operation’s southeast corner. Guenther said the water would be drawn in 1,000-foot increments, with the pumps sent deeper into the mine for each phase. Emgold believes the mine contains gold veins that were left untapped when the mine was drilled to about 3,000 feet decades ago, and that more gold remains down to about 5,000 feet.

Among the closest properties are 17 three-acre residences in the area of Beaver Drive. Eric Gibbons lives in one of them. During the 1990s, he was a vocal member of the Bohemia Area Residents Committee, when Emperor sought to reopen the mine.

Emperor eventually dashed its plans when gold prices fell below $300 an ounce and never wound up dewatering the mine. This time, said Gibbons, whose well depth is about 350 feet, his issue remains the same: Will there be a backup plan if the wells go bad because of dewatering?

“They have to do it right. They have to have a responsibility to this community. They can’t just come in here with stock money from Canada,” he said. “They’re talking about coming in and being responsible. I think at least half of that is marketing because I’m sure they don’t want to face the opposition they did before.”

Last time, Gibbons and others say, public pressure forced Emperor to provide financial assurances in case the dewatering process accidentally siphoned private wells. The money would have been used to truck in emergency water and connect residences to the Nevada Irrigation District (NID) system.

Emperor was required to get $1.8 million in bonding, a figure Gibbons called insufficient. Later terms would have allowed the mining company to lower the bond amount to $250,000 after a year of dewatering.

“The assumption is that if the wells didn’t dewater right away, they most likely wouldn’t. At that time they would only need to maintain a $250,000 bond,” Gibbons said. “It seems reasonable on the surface, but look at what happened (on San Juan Ridge in the 1990s). Boom, a massive unexpected dewatering occurred and affected a number of wells — $250,000 would then be inadequate.”

Gibbons said it took political pressure to get financial assurances, although many weren’t pleased with the final dollar amount. “We believed it was inadequate, but it was something, it was a start,” he said. “They fought bonding, and they were going to swear on their honor, and that was not acceptable.”

Dan Ketcham is a certified property appraiser whose house sits over the mine. He said the Idaho-Maryland could deter house shoppers partly because private wells are seen as an asset. “Even though a solution is in place, there’s still a risk of (well depletion) occurring, and any buyer of that property would view it as a negative,” he said. “It’s something you have to disclose. It diminishes buyers’ interest. It’s likely to have some negative impact.”

Residents switched from wells to NID would have incurred the cost of service, according to the 1995 Environmental Impact Report. “I don’t think that issue was ever quite resolved to the neighbors’ satisfaction,” Herman said.

At that time, the report said, the utility cost of powering a 1 horsepower pump to run a well was $6.39 for two months. The minimum residential NID service at the time was $22.85 for two months, according to the report. And there would be a delay in getting residents NID service. According to Tim McCall, the water agency’s chief engineer, hook-up time would take about nine months.

Gibbons and Ketcham support aspects of the project; they are encouraged by Emgold’s promise of 400 full-time jobs and a possible return to Grass Valley’s mining glory. But they worry about the potential impacts inherent in hardrock gold mining: more traffic, dust, industrial noise and light pollution. The mine would operate 24 hours a day, 7 days a week, with employee and trucking levels remaining constant throughout the year.

Gibbons said he can’t sympathize with people who complain about a neighboring industry if they buy a home right next to that industry. He pointed to a case in San Jose, where newcomers helped shut down a preexisting airport because they didn’t like the noise. “In my view, tough luck, you shouldn’t have moved there,” he said.

He bought his house in Grass Valley 12 years ago. “Some people say the mine was here first, but I’m sorry, the mine hasn’t been here for 50 years,” he said.

“I didn’t buy next to an operating mine,” he later added. “I bought next to a vacant lot. True, it was zoned industrial, and I have to put up with that, but I didn’t know that could entail pumping millions of gallons of water and impacts on my well.”

That Emgold seeks to reopen the mine must be disclosed by homesellers, said Realtor Chauncey Poston, a member of the Nevada County Board of Realtors. He’s not sure how that will play on property values in an area where the median housing price hovers around $350,000. “I don’t know if it drops the value so much as it drops the saleability, which puts the seller in a rough spot,” Poston said. “I’m not going to say it renders it unsaleable. I’m going to say it gives a buyer pause.”

Poston is a former Grass Valley planning commissioner who in the 1970s worked on mine reclamation issues for Nevada County. Of the Idaho-Maryland project, he said, “I know they’ve provided a pretty good picture of what’s going to occur out there, but I can just tell you that applicants for mining projects are eternal optimists. They paint a pretty rosy project.”

Poston, like Gibbons, brought up the San Juan Ridge Mine as an example of what can go wrong when mining operations tread near personal wells.

“It was just a disaster,” Poston said.

The San Juan Ridge Mine was the county’s last industrial-level mine. Located near Tyler Foote Road about eight miles east of Highway 49, it was permitted in June 1993 and at one point employed several dozen people, said Herman, the Nevada County planner. In 1995, workers struck an underground water-bearing fault zone, accidentally dewatering several private wells up to two miles away. “It did a lot of damage,” Herman said.

Herman said the mine, operated by Siskon Gold Corp., closed in August 1998. “It basically became a big money pit.”

But Guenther calls it apples and oranges to compare the geological risks of the San Juan Ridge and Idaho-Maryland mines. The San Juan Ridge mishap involved the mining of an ancient gravel channel where water flowed, while the Idaho-Maryland’s issues involve “relatively small fractures,” he said.

Robert Pease was project geologist for the San Juan Ridge Mine and now works for Emgold on the Idaho-Maryland project. Guenther declined a request to interview Pease about the San Juan Ridge Mine.

Liese Greensfelder, chairwoman of the San Juan Ridge Taxpayers Association’s mining committee, recalled that 14 wells, including one that served Grizzly Hill School, were either destroyed or seriously impaired.

Greensfelder has lived on San Juan Ridge since the 1970s and had seen other mining projects proposed for the property. But the others involved open pit mines, not underground mines. So when Siskon came in with a plan to mine underground, residents were more receptive. But they also remained cautious.

“Because this mine was sitting right in the middle of San Juan Ridge, and surrounded by homesteads, and rich in water, and had a lot of water flowing through it, we were very worried,” Greensfelder said. Siskon officials told residents the dewatering plans were safe, Greensfelder said, “but with our analysis of the hydrology study and what we knew of hydrology, we were not reassured by their reassurance.”

Siskon received a conditional use permit from Nevada County in 1993. In September 1995, Greensfelder said, mine workers “broke through what was called a bedrock fault, which had huge amounts of water flowing through it, like an underground river.”

Siskon went on to spend a lot of time and money to plug the hole. At huge expense, they also tried, sometimes unsuccessfully, to fix some of the damaged wells. Meanwhile, Greensfelder said, the company continued to mine. But in 1997, unstable rock halted operations. Basically, she said, “The floor of the tunnel started pushing up, so it became impossible to mine.”

Greensfelder said that Siskon discharged over a million gallons of water a day into adjacent creeks for many months, creating unnaturally high flows that scoured the bed of Spring Creek. “Spring creek used to have a healthy population of trout,” she said. “They disappeared when that happened and I don’t know whether they’ve recovered yet or not.”

The Idaho-Maryland has harder, more reliable ground than the San Juan Ridge Mine, Greensfelder said, but both share an element of the unknown when it comes to hydrology studies. Her advice for residents near the Idaho-Maryland: form a committee and work closely with city and Emgold officials. And if the mine gets permitted, she said, demand beforehand that the committee is kept apprised of mining plans.

Gold mining is an inherently risky business, both as an investment and a geological endeavor. In Emgold’s investor packet, a Dec. 31, 2003, financial report under the section Risks and Uncertainties begins: “The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines… Unusual or unexpected formations, formation pressures, fires, power outages, labour disruptions, flooding, explosions, cave-ins, landslides … are involved in the operation of mines and the conduct of exploration programs.” The same report also cautions that ” It is not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons.”

With the Idaho-Maryland, Guenther said, the surrounding private wells are at little risk because the mine’s water depths are already at about 265 feet, lower than some surrounding wells, and no complaints have been reported. He said the company has been gathering baseline data on water levels for the past several years with monthly visits to private wells. He also said Emgold is again willing to set aside financial assurances — perhaps $3 million this time, figuring in inflation since the 1990s.

“It appears that all of the domestic wells are in fractures that are not related to the mine water,” Guenther said.

But appearances can be deceiving, experts say.

Knoch, the certified hydrogeologist who worked for a subconsultant on the 1990s review process and later worked for Emgold, said he made three-dimensional maps of the mine’s underground. Working for the subconsultant, he helped with a statistical analysis that ranked numerous surrounding wells from high risk to no risk. Twelve wells were ranked high or moderate risk. The high-risk wells were over the mine, which underground encompasses about 2,700 acres, while the no-risk wells sit much further away. Many wells are primarily along Brunswick Road to the Cedar Ridge Y, East Bennett Street, Greenhorn Road and the Whispering Pines area.

“The bottom line of that study was, there was no guarantee,” said Knoch, owner of GeoSolutions, a consulting firm, and also a registered geologist and engineering geologist.

That inconclusiveness, he said, led to the county requiring financial assurances. Now, Knoch said, the data from that analysis is probably “stale” because more data has been collected. Nearly 10 years have passed, and the area surrounding the mine has undergone more development, including the drilling of more wells.

Tom Myers, a Reno, Nev., hydrologist who worked in the mining industry but now consults with public interest groups on mining projects, said, “We have great technology, but what we don’t have is great geology,” he said. “You can make a computer model of every cubic meter (underground), but we don’t know what exists in every cubic meter to make it worthwhile.”

Myers becomes leery when companies claim an impermeable underground wall separates the mine from private wells. “There are many examples of where an underground mine has drilled into a mountain and drained a lake 1,000 feet above,” he said.

Knowing the full impact of mines on well-water levels is often a matter of time and space, Myers said. “It could be years after the mine shuts down. They could dewater and then operate for a period of years and then shut down, and then the wells could have problems because the draw down continually expands.”

Further, he said, unanticipated impacts could be felt even several miles away.

“You don’t know until you pump. My hydrology buddies tell me that there’s no such thing as completely impermeable surfaces. Everything’s relative,” said Glennon, the Arizona professor, whose book includes a look at mining in Nevada. “It may take years and even decades before it becomes obvious that the groundwater pumping has affected surface water. “Surface water moves quickly. Groundwater moves through sand and gravel, but it still moves. It still moves.”

Almost as boggling as granite fractures are the laws that seek to govern the water within them.

Groundwater rights generally belong to the property owner, according to state officials, but exceptions can apply. Asked if exceptions apply in the Idaho-Maryland’s case, State Water Resources Control Board spokeswoman Liz Kanter said, “This would be an after-the-fact determination. If surrounding property owners demonstrated that the water level in their wells declined when dewatering began, Idaho-Maryland would be taking their neighbors’ groundwater and would be liable for damages.”

Speaking generally, Roger Masuda, a water rights lawyer based in Turlock, Calif., and not involved in the Idaho-Maryland project, said, “It’s (Emgold’s) water. It’s on their property. It’s like a landowner is entitled to use the water underneath the property. There gets to be issues when everybody’s pumping and the water levels drop.”

Gary Pierazzi was a member of the Bohemia Area Residents Committee that scrutinized the Idaho-Maryland project in the 1990s. He said Guenther has remained available to discuss the project. And since Dec. 15, 1994, he said, he has received monthly reports in the mail from an Emgold-hired contractor that takes baseline readings of his well and those of his neighbors.

But he realizes the numbers are a “before” snapshot. Emgold hopes to pump millions of gallons from the ground next to his property, and dipping a gauge down his well doesn’t tell him the “after.”

“It just gets down to, do we agree with how a hydrologist can make a calculation that there’s never going to be a problem,” Pierazzi said. “They can’t say for certain that we won’t be affected. I understand that. That’s fine. But we need assurances.”