With the revival of two major mines, 2012 marked a resurgence of mining in Ouray County.
In January, The Watch reported that Star Mine Operations LLC, a subsidiary of the Denver-based private mining company Silver Star Resources, had a lease-purchase agreement on 500-600 acres of patented and unpatented mining claims associated with the Revenue-Virginius mine.
Company officials announced that it was drafting documents to obtain a production permit to allow underground mining at the Revenue-Virginius as soon as 2013. Ultimately, Project Manager Rory Williams said, the mine could produce about 250 tons of silver-rich ore per day, employing “up to 50” local residents year-round over perhaps a decade of operation. “It will be quite a big operation.”
In its heyday, the mine was a profitable venture, producing more than 14.5 million ounces of silver between 1876 and the late 1940s. It weathered the Silver Panic of 1893, while many other silver mines in the region and across the West failed.
“We’ve been looking all over Colorado to find good mine like this one, with a good background and history, and strong data,” Williams said.
The process of restarting the Revenue-Virginius became a reality in June when a crew of about 25 workers started commuting to the historic silver mine on a daily basis, working to refurbish surface facilities and making the 125-year-old underground workings safe for more extensive mining operations.
Conditions at the Revenue-Virginius had become unstable since the 1980s when it was last active. “The tunnels weren’t safe,” Williams said in June. “We have to go in and rehabilitate all of the tunnels and put up proper concrete structures. Technology has come a long way since the last time the mine was in operation. We have had to modernize, but it’s not an overnight process. It is a really big mine, and will take a long time.”
An internal feasibility study conducted by a previous mine operator in 1998-1999 projected that the Revenue-Virginius property could be reopened at a production rate of approximately 2.5-3 million ounces/year following a $12-15 million capital investment. Net cash costs of production at that time were estimated to be approximately $4/ounce.
Meanwhile a deal to acquire Ouray’s most famous historic mine and bring it back into operation was underway as well.
In a deal that was finalized on Sept. 22, the newly formed Caldera Mineral Resources, LLC became the new owners of the Camp Bird Mine and has plans, a best case scenario, of reopening the mine and employing up to 70 miners and mill workers year-round.
“Caldera looks forward to becoming a stakeholder in the community,” Project Manager Gary Gough and Chief Financial Officer/co-owner Sturges Karban said. “We’re excited at the prospect of digging in.”
Before that can happen, Caldera must get approval from the Colorado Division of Reclamation, Mining and Safety for a technical revision filed in mid-August, outlining the scope of its intended plans at the Camp Bird Mine. Items in the technical revision include rehabilitating the 14 level portal opening and tunnel, addressing drainage issues and building a settling pond. The company also intends to renovate historic buildings on the property which are still structurally sound.
Should the Camp Bird Mine succeed in once again reaching a steady state production capacity, Karban said, there could be a “substantial” hiring base.
“If everything goes the way we anticipate, with three daily shifts and a potential mill, that could mean as many as 70 workers,” he said. “It’s hard to say exactly.”