Pegasus Fined For Polluting Water Company Blames Overflow On Heavy Rainfall Last May

Spokane-based Pegasus Gold Corp. has been fined $25,300 for polluting water near its Zortman/Landusky mine complex in northcentral Montana in late May.

The fines by federal and state environmental agencies are for discharging mine drainage.

But the company says heavy rainfall on Memorial Day weekend, not company neglect, caused the overflow.

“It was one of these one in 100 year events,” said John Pearson, head of investor relations for Pegasus. “It was an act of God.”

The company notified both the Montana Department of Environmental Quality and the Environmental Protection Agency of the overflow at the time, he said. The company was notified of the fine in late August and has 30 days to respond.

Pearson said only that the company “will find an equitable solution.” No decision has been made yet on appealing the fine, he said.

In late August, Pegasus laid off 90 employees to cut costs in the wake of continued low gold prices. Around that time, the company also pulled its request for $15 million in state tax-exempt bonds to help with reclamation work at three of its Montana mines, including the Zortman project.

That came after the director of the Montana Board of Investments recommended that board reject Pegasus’ request. Pegasus said then it would resubmit the requests later this year.

Last year Pegasus agreed to pay a total of $34 million to reclaim the open-pit mining projects and install a wastewater treatment plant and other items needed to comply with EPA and state DEQ requirements.

Pegasus agreed to pay $2 million in fines to the EPA and Montana DEQ, and $1 million to two Indian tribes that joined the lawsuit in 1995.

, DataTimes