BUCKHORN OPERATION KEEPS MINING ALIVE IN WASHINGTON
Domestic Mine article by Harold Hough
Despite a measure of hostility by Washington State bureaucrats and environmentalists, mining hasn’t disappeared from the Northwest. There is no better example than the Kettle River - Buckhorn gold operation and its owners Kinross Gold Corporation. The properties are located in Ferry County in the State of Washington. The properties cover approximately 3,075 hectares through patented and unpatented mining claims and fee lands. Kinross acquired Kettle River through its acquisition of Echo Bay on January 31, 2003. At the time, the mine was undergoing care and maintenance. Kinross resumed operations on the Emanuel Creek deposit in December 2003.
Kinross is one of the largest primary gold producers in the world, with an annual production of nearly 2.24 million ounces. A Canadian firm, it has expanded worldwide and now has 10 operations in eight countries.
One such operation was Kettle River in Washington State, which was acquired with the merger with Echo Bay Mines. The operation is unusual in that it doesn’t have a major mineral deposit and large reserves to work with. Since opening up in 1990, Kettle River has mined eight ore deposits that, on average, have only lasted two to three years each.
The small elusive deposits that Kettle River depends on aren’t unusual for the area. Over one hundred years ago, John Welty spent a whole summer prospecting along one creek in vain. When the winter came and snow covered the ground, he got a job in town and gave up prospecting. However, gold fever struck again and he was soon back searching the same creek bed that had disappointed him a few months earlier. This time, he made a discovery and within a few months, the boomtown of Republic was founded. The Kettle River operation is just couple of miles from the small town.
LONG TERM PROSPECTS
The nature of the Kettle River deposits has effected operations at the mine. While other mines can run marathons with large deposits, Kettle River must run several sprints with ore from several ore deposits. When one is exhausted, another one is brought on line. This means always looking for new deposits, which means a very active exploration program. Over the years, Kettle River geologists have gone as far a field as Canada to find promising gold deposits to feed the Kettle River mills.
There is a price for running out of ore deposits. In the early 1990s, the operation had to cut its workforce as the first two deposits; the Kettle and Overlook ran out of gold at the same time as gold prices fell. In order to keep its $54 million mill operating, the company opened up two small ore deposits called the Key East and Key West. These ran out in 1994, but they provided a bridge to a larger and more profitable ore deposit called the Lamefoot.
The current operations center on the Buckhorn deposit, which is the eighth discovery in the history of the operation. In August 2006, Kinross acquired the Buckhorn gold deposit, located approximately 76 kilometers by road from Kinross' Kettle River gold milling facility. Originally conceived as an open pit mine, Buckhorn was redesigned and developed as an underground mine, and the Kettle River mill was refurbished to process the ore. The primary mining method employed is cut and fill, with a target production rate of 900 tonnes per day. The Buckhorn mine ore is trucked 75 kilometers to the Kettle River Mill, which has a 1,800 tonne per day capacity. The Buckhorn mine began production in October 2008, and produced 173,555 gold equivalent ounces at an average cost per ounce of $294 in 2009.
Of course, the future depends on continuing exploration. Kinross is looking at deeper deposits at Buckhorn and a mineralized skarn unit underneath the SWZ orebody. There are also several junior exploration companies acquiring promising deposits in the same mineralized region.
However, Buckhorn would have probably been impracticable if it hadn’t been for a change in attitudes towards mining both at the state and federal level during the Bush Administration. The Buckhorn Mountain project had formerly been called the Crown Jewel project when Battle Mountain Gold owned it. As such, it had a difficult development history due to environmental issues and was eventually written off by Battle Mountain. The application received strong disapproval from local residents and environmentalists that wanted to protect the natural beauty of Okanogan National Forest, where the deposit was located.
Regulatory relief came from Washington DC. The Bush Interior Department finally overturned a Clinton-era interpretation of the 1872 Mining Law that limited the amount of land that could be used to store mine tailings. The change in the law made opening Buckhorn Mountain easier by allowing Kinross to stockpile waste rock at the Kettle River operation and making it unnecessary to build a mill on site.
Although the Pacific Northwest remains a tough mining regulation environment, the success of Buckhorn Mountain proves that mining hasn’t died there. Mining companies with good environmental records will find that opportunities will remain there if they persevere.