Dick Osborne’s first trip to the warm, damp underground took place at the Silver Valley’s Galena silver mine.
Dozens of years later, Osborne, now the head of metals giant Asarco Inc., laid out the details of how the Galena and its sister mine, the Coeur, will soon produce silver again. The Coeur sent miners home in 1991, the Galena in 1992, both because of low silver prices that dipped below $4 an ounce. For Osborne, this trip back into the Galena is no less adventurous than the first one.
“We are placing a bet on the ‘Come’ line on the craps table, in a sense,” Osborne told 120 enthusiastic business owners and Silver Valley residents Tuesday at the Wallace Elks Club. “I have to say I am terribly proud to come back here today and move to fulfill the hope of these very significant investments we’ve made.”
Osborne said new mining technology boosted the mines’ reserves and helped make them more efficient, making the restart a better bet. Asarco and Coeur d’Alene Mines Corp. formed Silver Valley Resources Corp. in 1995 to share ownership and expertise in the two properties.
For Wallace and surrounding communities, the mine reopenings mean much-needed jobs.
Since the mines were put on “care and maintenance” when silver prices plunged below $4 an ounce in the early ‘90s, Asarco and Coeur have spent $18 million keeping the mines dewatered and ready to restart.
Last Friday, Osborne and Coeur d’Alene Mines Chairman and President Dennis Wheeler approved an additional $3.5 million for exploration and development at the mines. The Coeur should produce 475 tons of ore each day by June.
Silver Valley Resources General Manager Michael Lee said the recall of former Coeur and Galena workers will start immediately. About 100 new miners will join the 43 already working the facilities there, he said.
The Silver Valley will reap $3.44 million in 1996 payroll and $300,000 in annual property taxes. The company also expects to spend $5 million-$6 million on equipment, Lee said.
After exploration crews ready the Galena over the next 18 months, possibly 35 more workers could be added to the company. The payroll could climb to as high as $5.22 million each year, Lee said.
However, there are no promises how long the mines will remain open, Osborne said. He would not specify a minimum silver price needed to keep the mines open.
“We’re not going to make a lot of money with silver at $5.75 an ounce,” he said. “But we’re confident that the market will improve and that we have an excellent chance to have a long-term relationship here. There is nothing certain in this business.”
Silver closed up a nickel at $5.70 on the New York Commodities Exchange spot market Tuesday. Some analysts attributed the mines reopening announcement to a six-cent drop in the price on Friday.
The Coeur and Galena will be leaner, more efficient operations than in their previous incarnations. That allows Silver Valley Resources to open them up at lower silver prices.
“These mines have historically been the lowest cost and highest producers in the Silver Valley,” Wheeler said. “But I don’t view this as a reopening. With the new technology we’ve used here, it’s as if we’re opening a whole new mine with the Galena.”
The adjacent Caladay mine, which has yet to produce an ounce of silver, also appears quite promising for Silver Valley Resources. With more than $30 million of infrastructure already invested in Caladay, Wheeler believes the company is very close to reaching silver-laden ore there.
The Silver Valley has begun to rally around the mines, said Nancy Banks of the Wallace Chamber of Commerce. Already, she has seen renewed interest in chamber membership.
“It’s just a wonderful thing to have happen to us,” she said. “It’s exciting.”
Lifelong resident and Shoshone County Commission Sherry Krulitz commended the valley’s determination to wait for a mining renewal.
“I want to commend the residents and businesses that have brought tourism into the valley after the mining jobs left,” Krulitz said. “But mining is what built this place, and mining is what’s going to bring us back.”
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