Revival of mining near the top of Mt. Lemmon is sought

Canadian firm to buy company with the rights
2010-08-24T00:00:00Z 2014-07-15T17:58:10Z Revival of mining near the top of Mt. Lemmon is soughtTony Davis Arizona Daily Star Arizona Daily Star
August 24, 2010 12:00 am  • 

Editor's note: The headline on this story has been changed from "atop" to "near the top of" Mt. Lemmon. In addition, Gold  Hawk Resource's press release mentioned production numbers, but did not say if those numbers were for copper or for copper ore, which is copper mixed with other kinds of rock. The story below has been changed to reflect that while the reporter awaits clarification. 

A Canadian company says it will pay $17.5 million for the right to refurbish and reopen an aging underground copper mine near the top of Mount Lemmon.

Gold Hawk Resources Inc. said it had signed a letter of intent to buy all of the shares owned by another Canadian firm whose U.S. subsidiary, Oracle Ridge Mining LLC, owns the rights to copper, gold and silver in the old Oracle Ridge Copper Mine, on the north side of the Catalina Mountains, north of Tucson.

That mine, which dates to the late 19th century, last operated from 1991 to 1996 before closing due to operating difficulties and low copper prices, said a news release from Gold Hawk Resources, which is based in Vancouver, British Columbia.

The mine site, still containing buildings from past operations, is about 1 1/2 air miles and six to seven road miles below the village of Summerhaven. It's accessible by the dirt Forest Service road heading downhill from Mount Lemmon to the community of Oracle, in Pinal County.

The mine was producing about 1,000 tons per day at the time it closed, Gold Hawk said in its news release. The release did not specify whether the production referred to copper or copper ore, which is copper mixed with other kinds of rock. A 1994 study looked at the feasibility of expanding production to about 2,000 tons per day, the release said.

If the release were talking about pure copper production, those estimates would be much larger than the expected production from the proposed Rosemont Mine in the Santa Rita Mountains southeast of Tucson. Rosemont's owner has said it will produce 301 tons of copper daily for 20 years, starting in 2012. Rosemont's owner, Augusta Resource Corp., also of Vancouver, British Columbia, paid $20 million in 2005 for the mine site.

But if the release was talking about copper ore production - which local industry experts say is a common meaning of the word "production" when used by smaller mine operators - the actual copper production at the Oracle Ridge Mine would have been much smaller. And, a news clipping from the time the Oracle Ridge mine was operating suggests that this may be the accurate interpretation of the press release.

The mine was producing about 1,000 tons of copper a day at the time it closed, Gold Hawk said in its news release. A 1994 study looked at the feasibility of expanding the mine's production to 2,000 tons a day, it said.

Those estimates are much larger than the expected production from the proposed Rosemont Mine in the Santa Rita Mountains, southeast of Tucson. Rosemont's owner said it would produce about 301 tons per day for 20 years, starting in 2012. Rosemont's owner, Augusta Resource Corp., also of Vancouver, British Columbia, paid $20 million in 2005 to buy that mine site.

News clippings from the time the Oracle Ridge mine was operating showed a much lower production rate, however. Tom Olsen, the mine's general manager in the 1990s, told the Star in 1992 that it produced about 50 tons daily, or enough to fill two truckloads with copper concentrate. He described Oracle Ridge as "dinky" compared with the state's large copper mines.

The Gold Hawk news release says the 1994 study estimated the site has 8.14 million tons of proven and probable copper ore reserves, containing 379 million pounds of copper, and another 16.57 million tons of possible ore reserves, containing 772 million pounds of copper.

The total possible copper at this Catalinas site is far less than what Rosemont says it will be able to extract in the Santa Ritas.

A Gold Hawk official said on Monday that officials won't comment on the company's plans for reopening the mine until it closes on the purchase at the end of October, other than to say that the timetable will be "a factor of permitting."

"It's probably not a wise thing talking about something we don't own yet," said Jason Mercier, Gold Hawk's investor-relations director. "We've obviously talked to people and done our due diligence."

To reopen, the company would need an air-quality permit from Pima County and an aquifer-protection permit from the state. The air-quality permit would place limits on particles and other emissions from the mine's tailings and equipment it uses.

The aquifer permit is supposed to ensure that mines and other discharges don't pollute the underground aquifer. The company may need a separate state permit for discharging material into surface water, said Mark Shaffer, an Arizona Department of Environmental Quality spokesman.

Although U.S. Forest Service land surrounds the mine property, mining companies typically need permits from the service only to use federal land for activities such as disposal of tailings or waste rock.

Pima County owns about 1,000 acres of open space one mile downhill from the Oracle Ridge parcel. But the County Administrator's Office has no position on the mine because officials don't have enough information yet, said Nicole Fyffe, executive assistant to County Administrator Chuck Huckelberry.

"We'd need to know more about what type of impacts there would be and how long the project would last," said Fyffe, adding, "It's way too early for us to say anything."

Four Mount Lemmon residents and property owners said they either have no problem with the mine or don't know enough about it to have a position.

"It won't affect Mount Lemmon at all. We're totally oblivious to what happens down there," said Bob Zimmerman, whose family is Mount Lemmon's largest landowner. "Even when they are in operation, they don't make any noise or anything."

Fred Pace, a retired general contractor and architect who owns a cabin on Mount Lemmon, said he didn't think it would be a big concern, although he would have to think about it if it were a very large mine.

"People have to make a living," said Pace (no relation to Rod Pace, Rosemont Copper's president and CEO).

But County Supervisor Ray Carroll, a vocal opponent of the Rosemont proposal, said he will lead the opposition to reopening of the Oracle Ridge Mine. Republican Carroll's district includes that site and the Rosemont site.

"It seems that more and more speculators are buying defunct mines near the national forest," said Carroll, an apparent reference to the fact that the Rosemont site lies in a historical mining district. "Everybody in Tucson loves Mount Lemmon and wants it to remain as it is."

Contact reporter Tony Davis at tdavis@azstarnet.com or 806-7746.

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