LEAD — The Deadwood Standard Project isn't the first mine proposed for the Ragged Top area southwest of Lead near Spearfish Canyon.
Lawrence County Commissioners and Planning and Zoning officials reviewed a mining proposal as recently as 18 years ago in the same location.
Planning and Zoning Commissioners voted to approve a Conditional Use Permit to allow the Minerva Mine to move forward in December 1993, but the CUP was denied by the Lawrence County Commission in a 3-2 vote in January 1994.
County commissioners at that time were Ralph “Tubby” Carr, Hank Frawley, John Ervin, Rand Williams and Jerry Apa.
According to minutes from the Jan. 4, 1994 commission meeting, an original motion to allow the CUP with minor wording changes and an added condition requiring the mining company to notify county and state officials within 24 hours if potentially acid forming materials were encountered, failed in a 2-3 vote.
Williams' proposed condition, number 33 on the list, also included wording that Minerva be required to present a plan that insured the integrity of the water resources before mining could begin.
Apa and Williams voted to approve the CUP while Carr, Ervin and Frawley voted nay.
Commissioners cited possible harm to Spearfish Canyon, water contamination concerns, potential acid rock drainage, the impact on county roads from haul trucks, disturbance to nearby residents including noise and dust, and no mining history from Minerva Explorations, the Canadian-based company seeking the permit, as reasons to deny the CUP.
Carr stated the issues that persuaded him to vote against the permit included safety and the water issue, which included potential harm to groundwater and the Spearfish Canyon watershed, which had recently been included on the preliminary list of “special, exceptional, critical or unique lands” by the South Dakota Department of Environment and Natural Resources at the request of the Spearfish Canyon Homeowners Association.
Williams said he believed the condition he had suggested would have protected the water.
Carr reminded the board there had already been problems in Squaw Creek due to mining and Richmond Hill was directly above that creek and would be processing more ore from Minerva.
Williams pointed out Richmond Hill was spending $10 million to remedy their acid drainage problem and that remedy was as an effective remedy as one could get.
Ervin stated based on the public hearings, dozens of letters and the public's discussions with commissioners, the majority of the people of Lawrence County seemed overwhelmingly opposed to the mining project for all the reasons discussed.
Apa and Williams, who voted in favor of the CUP, pointed out the many benefits the proposed mine would have in Lawrence County, including the economic boost.
They also noted the proposed distance from the Canyon rim, safeguards the company had taken to ensure water safety, oversight by the county and DENR and the company's proposed mining plan that included concurrent reclamation to lessen the visual impact of mining at the site.
A letter from Deadwood attorney Jon Mattson noted that the current CUP application was the same project for which a CUP was issued to Homestake in 1984.
According to documents filed at the Lawrence County Planning and Zoning office, Minerva Explorations planned to operate under a mining permit transferred to them from Homestake Mining Co., a request that was granted by the South Dakota Board of Minerals and Environment in October 1991.
Since the issuance of the (Homestake) permit in 1984, Mattson noted that Minerva Explorations, Inc. had expended over $2.4 million in connection with the original CUP, and Homestake had expended an additional $3 million.
Those expenditures were made in good faith based on the validity of CUP No. 72, Mattson continued.
“The CUP No. 7 would still be in effect and active except for the fact that Lawrence County Commissioners canceled CUP No. 72 on Sept. 8, 1993 because of the transfer by Homestake to Minerva Explorations,” the letter stated.
County officials explained the original CUP was canceled because no actual mining had occurred since 1984. Both state and county permits needed to be in place before mining could start, said the officials.
A subsequent motion to deny the CUP passed 3-2.
Minerva Explorations, Inc. out of Toronto, Canada had proposed a large-scale mine on 122 acres of the Ragged Top Mountain/Johnson Gulch area, located approximately 800 feet above and a quarter mile east of the canyon floor.
Minerva officials said the proposed mine site was not within the “rim-to-rim” definition of the Canyon itself.
The company expected a mine life of two to five years, and an anticipated 870,000 tons of ore to be mined.
The CUP application stated that the site would not be visible from the floor of Spearfish Canyon and only from two highest points near the area. In addition, mining operations would be at least 200 feet back from the rim with existing trees left as an additional sight and sound buffer.
“The tree and vegetation buffer and hours of operation will minimize the possibility of noise disturbance to canyon residents,” the application stated.
A study by the South Dakota School of Mines and Technology determined the sound level from mine operations at the point of the mine nearest the canyon rim would be “low to inaudible in the Savoy area of the Canyon.”
The application noted the richest ore was located no farther than 50 feet below the surface, and the company would practice concurrent reclamation on any new excavations as well as areas deemed unsafe due to previous underground mining on the property.
Ore would be crushed on site and transported to nearby Richmond Hill mine for processing.
Further, the company proposed the hiring of 30 to 35 additional workers besides the 31 who were currently Richmond Hill employees and would be involved in the Minerva project.
They listed an estimated annual payroll of $1.6 million.
Data from socioeconomic studies indicated the Minerva Mine would contribute $522,558 to the state's mining severance tax fund during its life, calculated at 2 percent of gross revenue and 8 percent on the net mining income.
According to the Planning and Zoning documents, Minerva estimated development costs of $1.3 million, operating costs of $13.3 million and local purchases of nearly $800,000.
Minerva noted it could remain profitable even if the price of gold dropped as low as $200 an ounce.
The price of gold on Jan. 4, 1994 was $395.10 per ounce according to the history of London gold prices. Gold prices in 1993 had ranged from a low of $327.55 an ounce to as high as $405.60 per ounce.