By Mark Esper
A Denver-based firm planning to reactivate the Pride of the West Mill at Howardsville is hoping to get state regulators to approve a “dry-stack” approach to tailings disposal, which would allow the dormant facility to be used for custom milling of ores.
In December, the Colorado Division of Reclamation, Mining and Safety (DMRS) turned down an application from Colorado Goldfields Inc. to use a tailings pond to dispose of a slurry comprised of 85 percent water and 15 percent solids.
The company says it plans to seek a new permit amendment in March, proposing a filtered tailings or dry-stacking system.
In that process, mill tailings are filtered (de-watered) to remove approximately 85 percent of the water at the mill plant itself. The resulting material can be transported by belt conveyor or trucks to a disposal area where it can be placed in an environmentally contained area and handled with earth-moving equipment.
“This approach to tailings disposal should remove all regulatory agency concerns surrounding the existing tailings ponds, since those ponds will be reclaimed,” said Stephen Fearn of Silverton, a consulting engineer for Colorado Goldfields.
“Furthermore, and maybe even more importantly, this approach will increase the ultimate useful life and financial viability of the mill by several years,” Fearn said.
But Colorado Goldfields still faces some mahor hurdles to get the Pride of the West Mill going again. Company officials say they need “significant capital” to implement their business plan
Stock in the company is sold in the “over-the-counter” market since it is unable to meet requirements to be listed on regular exchanges.
The stock price was selling at about one-tenth of one cent per share on Wednesday, Feb. 9.
Meanwhile, DRMS has ordered the company to post another $196,476 bond to assure proper reclamation of the mill site. The company said it has negotiated an extension on the time required to post that bond, which is now due in June.
The joint stipulation between the company and DRMS calls for four payments of approximately $49,000 beginning in March and ending in June this year. Colorado Goldfields will have posted a total financial warranty of $515,130 as of June
A Colorado Goldfields press release issued Tuesday, Feb. 8, states that the firm “has successfully identified the funding source for the required payments, which will place the company in compliance with the financial warranty increase requirements.”
The company’s financial statement issued in January said the firm needs capital to fund $650,000 in exploration commitments on its mining property options, and payment on a $650,000 promissory note which is collateralized by the Pride of the West Mill and related accrued interest of $102,022.
It also needs money to pay accrued interest to “related parties” totaling $306,751, and re-activation expenses for the mill.
Stephen Guyer, chief financial officer for Colorado Goldfields, said the company is aggressively seeking additional equity or debt financing.
He said the company has gotten an extension on its mortgage for the Howardsville mill and he sees hope in the proposed change for handling tailings disposal.
“We believe that this new approach to tailings disposal, the one-year extension of the mill mortgage to Dec. 31, 2011, and the successful arrangement with Division of Reclamation Mining and Safety for funding the bond increase will move the business plan forward rapidly,” Guyer said.