Red Mountain Mining Claims Revert to Public Domain
by Samantha Wright
Jul 04, 2012 | 3455 views | 0 0 comments | 9 9 recommendations | email to a friend | print
CONSERVATIONISTS celebrate the recent acquisition of almost 1,000 acres of mining claims in the Red Mountain district by the United States Forest Service and Bureau of Land Management. (Photo by Samantha Wright)
CONSERVATIONISTS celebrate the recent acquisition of almost 1,000 acres of mining claims in the Red Mountain district by the United States Forest Service and Bureau of Land Management. (Photo by Samantha Wright)
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OURAY COUNTY – Conservationists are celebrating the recent acquisition of almost 1,000 acres of mining claims in the Red Mountain district by the United States Forest Service and Bureau of Land Management.

The acquisition was the product of a settlement negotiated by the Environmental Protection Agency involving the former owner of the mining claims, Standard Metals. It serves a capstone to the Red Mountain Project of a decade ago, bringing the total amount of protected land in the area to over 10,000 acres, according to USFS Lands Forester Jim Dunn.

“We had tried to purchase these claims several years ago, but were unable to complete a deal,” said Ouray Mayor and point man for the Red Mountain Task Force Bob Risch. “It is nice that they ended up as public land, in any case.”

The land was transferred to the BLM and the USFS via quit-claim deed on March 7. The patented mining claims conveyed – over 100 in all – contain a total of 981.304 acres, more or less, according to the deed.

Most of the claims are contiguous within the Red Mountain area, and lie to the south of Engineer Pass.

“They are all along the ridgeline at the top of Red Mountain, clip over to the south and all the way diagonally toward Gunnison,” Dunn said. “There are old mining structures, waste rock and tailings on a few of them, but most are plain old raw land that never produced.”

Dunn estimates that 70-80 percent of the claims are in Ouray County, with the remainder in San Juan County, where Standard Metals operated the Sunnyside Mine for decades. The land on the San Juan County has been transferred to the BLM, according to San Juan County Treasurer Bev Rich, while that on the Ouray County side is now under management of the U.S. Forest Service.

The land conveyed has no conservation easement on it. Now that it has entered back into the public domain, however, the property is no longer open to mineral entry, except for oil and gas, Dunn said, closing it to hard-rock mining forever.

“When the U.S. government reacquires property that at one time was patented, it loses its ability to be re-patented again,” he explained.

Dunn hopes the land acquisition will inspire more people to explore and appreciate the mining history of the Red Mountain area. “It’s important for our public to go out and see some of this,” he said. “They are good claims back in federal ownership, and we are very happy, very pleased to have acquired them.”

The land deal strikes a bittersweet note for Standard Metals, once a regional giant in the mining industry with headquarters in New York City and properties stretching from Arizona to Alaska.

Now it is an insolvent corporation in the process of closing down.

Its administration has dwindled to a staff of two – Correspondent Secretary Bess Parmerter and Vice President and Acting CEO Winston G. Gresov – whose job it is to oversee the death throes of the company.

“We are a postChapter 11 organization heading toward final dissolution,” Parmerter said. “We haven’t been operating since 1997, but takes a long time to close down a large company.”

The land transfer on Red Mountain is part of a much larger settlement with the Environmental Protection Agency.

The settlement has a “huge back story,” Parmerter said, partly related to the Sunnyside Mine with its vast underground workings and huge gold reserves near Silverton. Standard Metals Corporation purchased the Sunnyside in 1959 and operated the mine for decades. During that time, the company picked up the claims around Red Mountain for their speculative value, but never succeeded in developing them.

In June 1978, Standard Metals was dealt its first death blow, Parmerter said, when a small alpine lake called Lake Emma collapsed into the underground workings of the Sunnyside Mine, which lay directly beneath the lake bed. The entire contents of the lake drained into the mine, destroying everything in their path. The mine eventually reopened, but never regained its profitable status. Due to a poor metals market, Standard Metals was forced to close the Sunnyside in January of 1985. Other companies gave it a go, and were similarly unsuccessful; the Sunnyside closed for good in 1991, laying off 150 miners.

Standard Metals was struck another a mortal blow in the late 80s, Parmerter said, when the EPA discovered contamination in eight Standard Metals mine sites in Alaska, Arizona and Colorado (the majority associated with the Sunnyside Mine). Four federal agencies and the State of Colorado filed a complaint against Standard Metals, pursuant to the terms of the Comprehensive Environmental Response, Compensation, and Liability Act, seeking reimbursement for the cost of cleanup.

“Standard Metals eventually settled the suit for $30 million in damages and cleanup costs by indicating willingness to quit-claim its remaining property to the U.S. government, to be divided as they wished between the BLM and Forest Service,” Parmerter said.

The settlement was negotiated in the summer of 2008, and was finalized and filed in January 2009.

“The government had a five-year span of time to examine the properties and decide which it wanted, and to divide those properties among its agencies,” Parmerter said. “They spit out the ones they didn’t want and kept the ones they did.”

EPA enforcement attorney Andrea Madigan, from the EPA’s Region 8 Denver office, spearheaded the settlement, working with Standard Metals from the beginning to the end of the negotiations.

“It was quite a professional coup for her,” Parmerter said. “The company was bankrupt, and had no assets and $20 million of debt. There was nothing the company could offer other than its land. It was a huge sweeping project and process that involved Washington folks and Colorado folks, and required a lot of careful negotiation.”

While Standard Metals held talks with the Trust for Public Land in 2001 about deeding some of the land over to the Red Mountain Project, it was not free to sell the land at that time because it was not transferable until the EPA suit was settled, Parmerter said.

The settlement has wiped the company’s debt off the books with regard to the EPA claims.

“This was a very unusual way of finding a solution,” Parmerter commented. “It could sound as though we were wonderful people who just wanted to give our land away to the public, but there was a lot more to the story than that.”
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