Wonkfest: Sunnyside #GoldKingMine Settlement, explained: Why has a mining company forked out millions for an accident in a mine it didn’t own? — @Land_Desk #AnimasRiver #SanJuanRiver #ColoradoRiver #COriver

From The Land Desk (Jonathan P. Thompson):

Last week’s $90 million settlement relating to the 2015 Gold King Mine Blowout that turned the Animas and San Juan Rivers TANG-orange for over 100 miles downstream did not bring an end to the legal saga that has dragged on for more than six years (lawsuits against the federal government are still pending). But when the agreement is finalized, Sunnyside Gold Corp—the owner of the nearby, now-shuttered Sunnyside Mine—will finally be free of the mess. Extricating themselves from any further liabilities has cost them about $67.6 million: $40.5 million to the feds; $6.1 million to the State of Colorado; $11 million to the State of New Mexico; and $10 million to the Navajo Nation, not to mention the tens of millions they’d already spent cleaning up a century’s worth of mining mess.

In agreeing to the payments, Sunnyside and its parent company, Canada-based global mining giant Kinross, have made it clear that they are not admitting wrongdoing or liability. They don’t own the Gold King Mine and never did. So why did the company fork out so much money?

The simple answer is that the bulkheads Sunnyside installed in the American Tunnel in the 1990s and early 2000s caused water to back up inside Bonita Peak and make its way into the Gold King Mine, resulting in the 3 million-gallon blowout. The truth is a bit more complicated.

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The real question is not whether Sunnyside’s bulkheads backed up water into the Gold King Mine. That’s pretty much a given. More important is exactly where the water came from in the first place. And to get at that answer, we need to go back in time a century and some to the days when the Gold King Mine was one of the most profitable operations in Colorado.

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A Timeline of the American Tunnel

1887 Olaf Arvid Nelson, while working at the nearby Sampson Mine, surreptitiously locates the original Gold King claim on the slopes of Bonita Peak, and goes to work on it immediately. He eventually digs a 50-foot shaft and a 50-foot drift, but never makes money from it.

1891 Nelson dies, perhaps from pneumonia, silicosis or just overwork. A year later his widow, Louisa, patents the Gold King claim, taking title to it. And in 1894 Louisa sells the Gold King claim to Northeastern capitalists Cyrus W. Davis and Henry Soule, for a mere $15,000. They hire local Willis Z. Kinney to run the mine.

1897 About 40 employees pull ore from the Gold King mine’s 2,000 feet or so of underground workings and ships it down a 5,600-foot long tramway from the mine opening’s lofty perch on Bonita Peak’s slope to a new mill at Gladstone for processing.

1898 The Gold King owners form the American Mining and Tunnel Co. and begin construction on a lower-elevation, safer access to the Gold King Mine several hundred feet below the current access adit (Gold King Level #1). They originally name the lower access point the American Tunnel, but after it is completed in 1903 and becomes the mine’s primary portal, it will be renamed the #7 Level of the Gold King Mine. This is level that will blowout in 2015 and is not the same American Tunnel in which Sunnyside placed its bulkheads many years later.

1900 USGS geologist Frederick Ransome visits the Gold King Mine, noticing that the main adit—or opening to the mine—is not draining any water, which is highly unusual for the area. He hypothesizes that the American Tunnel #1 (aka Gold King Level #7)—which at the time was under construction—is “deep draining” the water from the Gold King’s upper operations.

1900 The Gold King Mine owners begin construction on another American Tunnel (still known by that name today) at Gladstone. They plan to burrow into Bonita Peak until they are directly below the Gold King workings, then connect the two via a 1,000+ foot shaft. This will enable them to bring ore directly to the Gladstone mill, obviating the need to move it by tram across avalanche-prone terrain. But the project is abandoned after only 700 feet of tunneling (they need to go more than a mile underground before they will be in position to link with the Gold King).

1906 (or thereabouts) A photo of the Gold King Mine #7 Level appears to show about 200 to 300 gallons of water draining from the mine adit.

1908 The structures at the mouth of the Gold King #7 Level catch fire, destroying the tram terminal, boardinghouse, compressor house, carpenter shop, and stables, killing six. The mine rebuilds, but it will never be the same. In 1909 the new boardinghouse burns, killing a waiter, and in 1911 an avalanche hits the boardinghouse, killing four people. After that operations are on-again, off-again and profits hard to come by.

1921 The Gold King miners are working again to open the Gladstone tunnel, aka. the American Tunnel, that goes from the Gold King mill at Gladstone into Bonita Peak and under the Gold King Mine, about 860 feet below the Gold King #7 Level. The intent is to provide a long haulage tunnel for Gold King ore, thereby rendering the treacherous trams obsolete, but the connection to the upper mine is never made. A later report indicates that the American Tunnel is 6,233 feet deep when work is finally halted. The tunnel “deep drains” the groundwater of Bonita Peak, leaving the Gold King mine virtually dry.

1922 The Gold King Mine’s parent company goes bankrupt, leaving the Sunnyside Mine, on the opposite side of Bonita Peak, as one of the region’s biggest mines. But it struggles because the mine opening is above the workings, meaning water and ore must be pulled up and out of the mine, against gravity, which increases operational expenses.

1960 Standard Metals takes over the dormant Sunnyside Mine and plans to revive it by extending the unused, partially complete American Tunnel to access it. The tunnel will provide gravity-assisted ore-haulage and water drainage for the Sunnyside by way of Gladstone. When it’s finished, the tunnel is 11,000 feet long, and brings mining, and prosperity, back to Silverton.

1978 On a Sunday, when no miners are working, the floor of Lake Emma collapses into the Sunnyside Mine, sending tens of millions of gallons of water shooting out the American Tunnel at Gladstone and shutting the mine down for months. To this day some folks remain suspicious of the collapse, theorizing that it was planned by a beleaguered company looking for an insurance payout: Miners had warned management about increasing amounts of water pouring into the mine and worried that they were getting too close to the lake’s floor. Ultimately, Standard Metals received $9 million, but they had to drag the insurance company to court to get it. The company will go bankrupt in the early 1980s and sell the Sunnyside Mine to Echo Bay, a Canadian company, doing business as Sunnyside Gold Corp.

1986 Meanwhile, a company called Gerber Minerals takes over the Gold King and sets about to re-open it. They apply for a mining permit for the Gold King, but not a discharge permit, because: “No drainage occurs from any of the portals—the district is deep-drained by the American Tunnel located at Gladstone.” As a result, the American Tunnel flows with about 1,600 gallons per minute of acidic, heavy-metal laden water draining into Cement Creek and, ultimately, the Animas River. Note: The first mile and some of the American Tunnel runs through Gold King Mine patented claims, meaning it belongs to the owners of the Gold King.

1987 Donald “Donnie” Goode killed when a 100-pound rock falls from the ceiling of Gold King #7 Level, about 2,500 feet underground, striking him in the head.

1988 Sunnyside overhauls the old American Tunnel water treatment plant. It uses one ton of lime per day to raise pH levels, causing toxic metals to precipitate out of solution and settle into ponds, cleaning the 1,600 gallons per minute of discharge to a level that can support sensitive fathead minnows. The process costs approximately $500,000 per year, and results in 365 tons per year of metal-laden sludge.

1991 The Sunnyside Mine closes for good. A year later the re-born Gold King suspends operations, as well, but holds onto its permits. In preparation for plugging, or bulkheading, the American Tunnel, Sunnyside Gold and Washington Mining Co. commission an exhaustive hydrological study of the Sunnyside, which concludes that bulkheads in the American Tunnel should not cause flooding of the Gold King, and that it would take 150 years for mine pool water to reach Cement Creek.

1994 Animas River Stakeholders Group is formed as a citizen-led effort to study and address mining pollution in the watershed and propose realistic water quality standards. It’s seen as a collaborative alternative to Superfund. Bill Simon is chosen as coordinator. Other notable members include Peter Butler, who had just received his Ph.D. in natural resource management, Larry Perino of Sunnyside Gold, and Steve Fearn.

1996 Sunnyside enters into a consent decree with the state, a sort of pollution trading scheme. Sunnyside will install three bulkheads in the American Tunnel, one on its property to back up water into the Sunnyside’s workings, and two more on Gold King property nearer to the surface. They will also clean up a list of abandoned mines in the watershed in order to offset the increased heavy metal loading that will result when Sunnyside turns off its American Tunnel water treatment plant. At about the same time, the state division of minerals and geology inspects the Gold King and finds that it’s draining just one to two gallons of acidic, metal-laden water per minute, a mere trickle.

1996 The valve is shut on the first bulkhead over 6,000 feet into the American Tunnel, beyond the Gold King property line. Water backed up behind this will inundate the Sunnyside Mine workings and create what’s known as the Sunnyside mine pool. By robbing the system of oxygen, it should slow acid mine drainage reactions. Sunnyside also dumped 625 tons of lime in from the top of the mine to raise pH levels.

1991 The Sunnyside Mine closes for good. A year later the re-born Gold King suspends operations, as well, but holds onto its permits. In preparation for plugging, or bulkheading, the American Tunnel, Sunnyside Gold and Washington Mining Co. commission an exhaustive hydrological study of the Sunnyside, which concludes that bulkheads in the American Tunnel should not cause flooding of the Gold King, and that it would take 150 years for mine pool water to reach Cement Creek.

1997 A Gold King Mines environmental protection plan notes that the mine is discharging between 4 gpm and 30 gpm, with a pH as low as 2.25. However, the authors of the report theorize that it’s groundwater, not Sunnyside mine pool water, based on the 1992 hydrology report. A 1998 inspection finds that the Gold King #7 level portal had collapsed, just inside the portal, and is impassible. It does not say how much water is draining from the mine.

1999 A water analysis report of the Gold King Mine finds that the mine is discharging between 11 gpm and 30 gpm with a very low pH and very high concentrations of dissolved metals. The following year Steve Fearn buys the Gold King mine from CCTC, trustee for Pitchfork “M” Corp. The state inspection later that year notes: “Though this year has been abnormally dry, the No. 7 level discharge appears to have increased significantly … from around 30 gpm to around 45 gpm.”

2001 The Sunnyside Mine Pool is thought to have reached equilibrium, based on the findings of the 1992 hydrological study. The mine pool, some 1,200 feet deep, exerts nearly 500 psi on bulkhead #1. Sunnyside then installs bulkhead #2, which is closer to the surface and, in 2002, bulkhead #3, which is right at the surface, in preparation for its exit from the area. By now Sunnyside Gold has spent upwards of $25 million on cleanup and reclamation. Discharges from both the Gold King and the nearby Mogul Mine—which was also mostly dry prior to the first bulkhead installation—continue to increase.

2003 A byzantine agreement transfers ownership of the Sunnyside water treatment plant to Gold King owner Fearn, allowing Fearn to treat Gold King water, and allowing Sunnyside to leave—in theory. Also involved in the deal is Todd Hennis, owner of the Mogul Mine in the Cement Creek drainage, who acquires most of the Gladstone townsite. The deal will go bad a year later when Hennis evicts Fearn, and thus the water treatment plant, from his property at Gladstone, shutting down water treatment for good (proving detrimental to downstream fish populations). Meanwhile, Fearn’s mining ventures have gone broke. Hennis will acquire the Gold King and in coming years set about to mine it, first with a new company called Colorado Goldfields, and then on his own.

2005 Gold King mine discharges have increased to 200 gallons per minute or more. Animas River Stakeholders Group calls in the Environmental Protection Agency to help figure out the cause and potentially fund a solution. In its annual report to the Security Exchange Commission, Colorado Goldfields says it intends to re-open Gold King #7 Level, and that it hopes to enter into an agreement with the EPA allowing it to deal with increasing flows of acid mine drainage, which the company believes are coming from the “2150 vein workings of the Sunnyside Mine.” The report also notes the danger for a “blow out of potentially impounded mine waters.”

2009 The State Division of Mining Reclamation and Safety calls the Gold King, now dumping nearly 200,000 pounds of metals into the watershed per year, “one of the worst high quantity, poor water quality draining mines in the State of Colorado.” It backfills the mine portal, or opening, because it had collapsed, and installs drainage pipe.

2014 Sunnyside Gold Corp. offers $10 million towards water treatment and other upper Cement Creek cleanup—as long as Superfund isn’t declared.

2015 EPA contractors begin excavating dirt piled up at the opening of Gold King Mine #7 Level until the operator notices a “spring” spurting from the dirt. Within minutes, the tiny fountain has grown to a 3-million gallon torrent of electric-orange, acidic, heavy metal-laden water pouring into the North Fork of Cement Creek far below.

So, yeah, I know: That made it about as clear as the Animas River was in the days following the blowout. This puzzle will never be solved definitively. Bonita Peak’s hydrology is all a tangled maze of fractures and faults and veins, a sort of lithic Swiss cheese comprised of hundreds of miles of drifts, shafts, crosscuts, and tunnels, creating innumerable potential paths the water could follow.

But from what we can glean from the history we can conclude:

• The Gold King Mine had water flowing through it early on. When the first American Tunnel, aka #7 Level, was dug, it deep drained the upper levels, making them appear to be dry.
• About 200 to 300 gallons of water per minute flowed out of the #7 Level adit until the new American Tunnel was drilled under the Gold King in the 1920s, deep draining the entirety of Bonita Peak.
• It wasn’t until after Sunnyside installed bulkheads in the American Tunnel that drainage returned to the Gold King #7 level (as well as to the Mogul Mine). It’s safe to conclude in this case that correlation is causation: The installation of the bulkheads caused drainage to return to the Gold King.

Not clear, though, is precisely where the water was coming from: Did the Sunnyside mine pool water back up, then find a pathway through to the Gold King Mine? If so, then it would seem that Sunnyside is at least partially responsible for the resulting 2015 blowout, since that nasty orange water originated on its subterranean property. Or did the lower two bulkheads—which are on Gold King property—simply return Bonita Peak’s hydrology to a pre-American Tunnel state of affairs, or a “natural flow regime,” as one Sunnyside employee put it in the early 2000s? In that case it is not Sunnyside Gold’s water, it’s the Gold King’s, which would absolve Sunnyside of responsibility.

While conclusive answers to those questions aren’t exactly forthcoming, a look at the timeline suggests that the water that spewed from Gold King #7 Level on Aug. 5, 2015, may have come from both sources. Drainage from the Gold King first started increasing—albeit only marginally—in 1997, after bulkhead #1 had been installed but before the next two were sealed. But flows remained pretty low until after the valves on bulkheads #2 and #3 were closed. It was only then that the Gold King became a major source of acid mine drainage and conditions established that would lead to the blowout.

But at this point maybe it doesn’t matter: Even if Sunnyside could prove that it’s not liable for what happened in 2015, it still would have been the last and only viable mining concern in the vicinity when it happened. Whether it’s culpable or just happened to be in the wrong place at the wrong time is probably irrelevant. In either case, the company would have had to take responsibility or else risk damaging its corporate image. That’s the price one pays for playing the mining game.