A Canadian company trying to reopen the historic Bunker Hill Mine has renegotiated the lease-purchase option after defaulting on payments in October.
For the next year, Bunker Hill Mining Corp. will pay $60,000 in monthly rental payments for the underground lead-zinc-silver mine in Kellogg instead of the $200,000 previously agreed upon, with plans to make up the difference later.
“We are very pleased to have worked out an agreement with the mine owner, Placer Mining Corp., to enable us to continue our effort to ultimately reopen the mine and make it a productive asset,” said John Ryan, the interim chief executive officer.
The Toronto-based company is working to raise $3 million from investors and also is in talks with the U.S. Environmental Protection Agency for short-term relief for payments related to environmental cleanup, according to Ryan. However, he said the company will honor the settlement worked out with the EPA and the U.S. Department of Justice in March, which set the terms for the mine’s reopening.
Bunker Hill Mining agreed to pay $20 million to the federal government on Placer Mining’s behalf over seven years, and about $1 million annually to treat future discharges from the mine, which releases about 1,300 gallons of water polluted with heavy metals per minute.
The payments will help the EPA recover part of the $24 million the agency has spent on water treatment at the mine.
“We settled on a price – I think it’s fair,” Ryan said. “This is just to get us through a tough period.”
Bunker Hill Mining will submit a written plan to the EPA by the end of the week outlining a proposal for a short-term reduction in payments.
The Bunker Hill Mine and smelter complex was once the largest employer in Idaho’s Silver Valley, with about 2,200 workers. Noah Kellogg discovered the mineral outcropping in 1885, and the mine and smelter operated for nearly a century until a previous operator filed for bankruptcy.
Besides providing a funding source for environmental cleanup, reopening the Bunker Hill Mine could solve the problem of acid mine drainage from the property, Ryan said.
Previous studies identified the areas of the mine where the acid mine drainage is occurring. If those areas could be walled off, the quality of the water flowing from the hardrock mine would improve, Ryan said.
Raising money to put the Bunker Hill back into production has been slower than expected, he said. Crews have been unable to conduct drilling operations in the mine, demonstrating that the Bunker Hill still has mineral assets. That work is on hold until a secondary escape route is developed, providing another way for workers to leave the underground tunnels in the event of an emergency, Ryan said.
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