gold mineworker

New Gold In Old Northwest

September 12th, 2016 by

gold mineworkerAquila Resources has received draft approval of mining and water discharge permits for its proposed Back Forty gold mine in Michigan’s Upper Peninsula after ten month’s of review. The open pit mine will sit on the shores of the Menominee River, which marks the state line between Michigan and Wisconsin. The site is the only minable gold deposit in Michigan, but faces several additional hurdles aside from the usual ones before it can become operational.

The draft approval by the Michigan Department of Environmental Quality is a major milestone for Aquila, which has already spent ten years and $70 million on land acquisition, mine planning, and environmental surveys. Final approval will mean that Back Forty will be the only operating gold mine in Michigan, and only the second in the state’s history to be profitable.

Could Hardly Pick A Worse Spot

Aquila’s mine site could hardly be in a worse spot. Ancient Indian burial mounds are on the property. The Menominee River, where the mine will be located, serves as the border between Michigan and Wisconsin. This means abiding by the environmental laws of two states. The river is a major tributary of Lake Michigan, and the site of a $6 million effort to save the Great Lakes sturgeon. Part of the site is regulated wetlands. Locals who prize the area’s remoteness and quiet worry about noise and pollution, especially of their groundwater.

Ancient Indian Burial Grounds

Among the most vocal opponents of the mine are the Menominee Tribe of Wisconsin. The tribe originally spread throughout Michigan’s Upper Peninsula and Wisconsin, centered on the river that carries their name. From 1817 to 1831, the US government forced the Menominee to give up all their lands in Michigan. Further treaties eventually pushed the tribe onto a reservation in northwestern Wisconsin.

The site of the proposed Back Forty gold mine contains ancient Menominee burial mounds near the river along with centuries-old farming plots. While Aquila has promised the tribe that the graves are in no danger from mining operations, the farming plots are situated right where the open-pit mine will be excavated. Tribal members have joined forces with environmental groups in trying to get Back Forty shut down. “The beginning of our very nation starts at the mouth of the Menominee River,” said Guy Reiter, a Menominee and member of the tribe’s Conservation Commission. “The creator gave us responsibility for watching out for that water thousands of years ago.”

Return of the Sturgeons

According to River Alliance of Wisconsin, there are only about 3,000 Lake Sturgeon of breeding age left in Lake Michigan, from an estimated 2 million at the start of the 20th Century. Sturgeon Falls on the Menominee River is a major breeding ground for sturgeon, but they have been blocked by dams from getting there. Millions of dollars have gone into building methods for sturgeon to get up the river and back down. The sturgeon have to pass by the Back Forty gold mine site to their breeding grounds, then again when migrating back to lake Michigan. Conservationists fear a mine spill could wipe out years of efforts to save the endangered fish. The chance of a spill is heightened by the fact that the edge of the mine pit will be only 150 ft from the riverbank. Flooding could wash chemicals into the river from the mine.

Not In My Backyard

protestMany local residents, especially the retiree community, are not thrilled with the idea of big dump trucks rumbling through the area, fumes and smoke from the mine, and possible pollution of the river and groundwater.  The possibility of Aquila pulling out of the project (or going out of business) and leaving a toxic mess is also a common concern. In an effort to address concerns by county officials, Aquila commissioned a third-party environmental review by Foth Infrastructure and Environment of Green Bay.

The Story of the Back Forty Gold Mine

The story of the Back Forty gold mine began in 2001, when diggers of a residential well hit a zinc-rich sulfide deposit. More than 500 test bores to determine the size of the mineralization have been drilled by Aquila to date. Generated revenue is expected to be split 40% gold, 40% zinc, 14% copper, 5% silver, and 1% lead.

The proposed open pit mine will measure 83 acres (nearly 336,000 m²) and 700 ft (213m) deep.  The estimated lifetime of the mine is 16 years from the start of production, after which, the pit will be backfilled and the land restored to a natural state. It is expected that over 16 million tons of rock will be excavated over the life of the mine, at an initial throughput of 5,350 tons a day. Lifetime yields for the Back Forty gold mine are expected to be:

  • 532,000 troy oz of gold
  • 4.6 million troy oz of silver
  • 721 million pounds of zinc
  • 74 million pounds of copper
  • 21 million pounds of lead

Total estimated capital cost is $261 million.

Benefits of the Back Forty Gold Mine

According to a study by the Labovitz School of Business of the University of Minnesota Duluth, which was commissioned by Aquila, some of the economic benefits of the mine will include:

  • $20 million a year in total tax revenue (local, state, and federal)
  • $11.7 million a year in revenue for state and local governments
  • $13 million a year mining royalties to the state of Michigan
  • ~1,300 construction jobs during build-out
  • ~250 high-paying jobs during operations

Aquila is committed to enhancing the quality of life for local residents, instead of endangering it. Some measures to win friends in the area include building a boat ramp on the Menominee River, becoming involved in civic events and organizations, donating to local causes, and sponsoring a drinking water well survey to show that the mine has not affected local groundwater.

Environmental Protection

environmentAquila will spend a large amount of energy on risk mitigation and environmental protection. Since Wisconsin and Michigan both hold environmental authority over the Menominee River, the states came to an agreement regarding compliance by Aquila: On any particular point of environmental law, the state with the most restrictive will take precedence.

Aquila began environmental studies in 2007. According to the FAQ section of their website devoted to the Back Forty (pdf), “environmental baseline studies were conducted beginning in 2007.  The studies were designed to meet Michigan’s strict permitting standards and covered a wide range of topics including ground and surface water, wetlands, air quality, flora, cultural resources, visual and noise studies and more.

Proposed environmental mitigation measures include:

  • numerous monitoring wells and surface water quality stations;
  • on-site water treatment to ensure safe discharges into the Menominee River
  • a 1,300 ft wall between the river and the nearest parts of the mine.
  • measures to prevent accidental spillage of acidic water, or water with cyanide.
  • a land swap deal with the state where Aquila will purchase and hand over wetlands equal to the acreage that will be destroyed by the mine

Time To Be Heard

The Michigan Department of Environmental Quality has announced that Aquila’s plans for the Back Forty gold mine have met the requirements for approval under Michigan’s mining law, Part 632 of the Natural Resources and Environmental Protection Act.

megaphoneThe state DEQ has declared a public comment period through November 3, to get feedback on the project. Joe Maki, Upper Peninsula District Geologist and DEQ Mining Specialist welcomed informed feedback on the proposal, saying “We need detail on how their proposal is not going to meet discharge regulations for water and air. You show us how we missed something.” “Don’t just tell us ‘we don’t want it because it’s going to kill the sturgeon,'” he said. “You tell us how that’s going to occur.”

In acknowledgement that no one can catch everything, he said “We hope to get somebody that has (gone into the documents), looked closely and considered something we haven’t.”

 

 

 

 

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.