State approves mine exploration permit

New tunnel proposed

Drilling activity on Mount Emmons could significantly increase this spring due in part to a decision made by the Colorado Department of Natural Resources to allow greater exploration for molybdenum by Lucky Jack developers.

The state agency responsible for regulating mining last week approved an amended exploratory drilling program or “notice of intent” for the Lucky Jack project allowing for a new access drift to be built—a feature opponents claim could assist with future mining operations.
According to community liaison Perry Anderson, Lucky Jack project developers US Energy and Kobex submitted the amended application after determining the Keystone mine did not provide safe access for underground exploration of the ore deposit. He says the mining companies requested permission to build a new access tunnel (“drift”) parallel to the existing drift to bypass the old workings. The 8×10 tunnel will be approximately 5,000 feet long, according to Anderson.
The drift will allow project engineers to collect core samples from the ore deposit, which will be used to evaluate the economic viability of the mine for investors, Anderson says.
He adds the access drift is not a service drift and will not be used for mining activities.
Lucky Jack is owned and operated by Kobex Resources Ltd. and U.S. Energy Corp. The companies acquired more than 5,000 acres of patented and unpatented claims on Mt. Emmons, known locally as Red Lady, and an accompanying water treatment plant as the result of a 2005 district court ruling.
Shortly after, the company announced its intent to pursue a molybdenum mining project on Mt. Emmons and renamed it the “Lucky Jack” project. Mt. Emmons is believed to hold one of the world’s largest deposits of molybdenum and is predicted to have 22 million tons of high-grade molybdenum ore and 220 million tons of low-grade molybdenum ore—more than the Henderson mine or Climax mine.
Currently, opponents say the access drift is a new mining feature that will not only have negative impacts on the surrounding environment, but could also assist with future mining operations.
High Country Citizens’ Alliance mineral resources director Bob Salter says the approval of the amended program comes as a surprise, considering the potential negative impacts of a new drift. He says a new drift would involve a great deal of surface disturbance, produce waste rock and could intercept ground water.
“The ground water will flow into the void and add to the water quality problems we already have up there,” Salter says.
Anderson says the mining companies believe the new access drift will have little impact on the surrounding area. “You won’t be able to see it or hear it,” Anderson says, noting the drilling operations conducted within the drift will include taking five- to six-inch core samples from various locations. “We are going to do an extensive amount of drilling to prove the deposit,” Anderson adds.
Salter says building a new drift has never been a part of the discussion and is an attempt by the mining companies to bypass regulatory measures.
“This is a significant change and our concern is it’s a feature that could become a part of the fully built mine,” Salter says. “It’s avoiding the scrutiny of the permitting processes.”
Salter says the new drift is not necessary to evaluate the ore deposit. He says the core samples could be taken from the surface with minimal impact on the environment. He says the mining companies should be required to provide more information as to why the drift is needed. “There are certainly other long-term uses for it,” Salter says.
The mining companies have submitted the new amended work program to Gunnison County for review, according to Anderson. County Commissioner Jim Starr says exploratory drilling is subject to the County’s permitting processes and the County will review the newly approved work program.
He says he doesn’t believe a new permit will be required unless there is significant surface disturbance or increased magnitude of activity other than what was originally anticipated. The Town of Crested Butte was also informed of the newly revised program.
According to Crested Butte Town attorney John Belkin, despite the amended program, the mining companies are still subject to the town’s moratorium preventing development within the town’s watershed.
“We consider it a development activity and we have a moratorium of development in place,” Belkin says.
The ordinance was put into affect last August and was recently extended to June while the town revises its outdated watershed ordinance.
The moratorium restricts all development, defined as any activity that disturbs or modifies the condition of the surface or subsurface land or water in the town’s watershed.
“They can’t construct a drift until they have a permit from the town and we have a moratorium on development in the watershed,” Belkin says.
Anderson says the new drift and exploration drilling is expected to be completed by mid-2009, depending on when the town’s watershed construction moratorium is lifted. He says the mining companies will continue to collect environmental data concurrent with the exploration drilling for the companies’ plan of operation, which is now expected to be submitted to the US Forest Service in the third quarter of 2008.
Keith G. Larsen, CEO of US Energy Corp. stated in a press release dated February 15, “The projected submittal to the USFS during the third quarter of 2008 will allow the completion of additional technical information to be incorporated in the plan of operation.”
Carl Mount, senior environmental protection specialist with the Colorado Division of Reclamation, Mining and Safety, the agency that gave the approval, says he cannot comment on specific notices of intent or permits because of confidentially clause in the Mine and Land Reclamation Act. He did say notices of intent and permits are governed by similar professional and environmental standards, and public comments are solicited only for permits and not notices of intent.
According to a US Energy press release dated February 14, the development timeline for the mine should not be affected by the change of plan for exploration. “This approach should not significantly impact the time for completion of the entire mine development and permitting process,” according to the press release.