A Tale of Two Mines: Gold in the Black Hills

Two mines open pit gold mines in the Black Hills illustrate the differences that can occur when mining an oxide ore body relative to a sulfide ore. The Wharf Mine has mined an oxidized ore body and has averaged about 70,000 ounces of gold per year  since the 1990s. It has a clean environmental record. The second, the Gilt Edge Mine, operated from 1994 to 2001. The mine went bankrupt due to a collapse in gold prices and the overwhelming amount of acid rock drainage (ARD) generated by an exposed sulfide ore body. The site became a US EPA Superfund site and as of the early 2000's contained 160 million gallons of sulfuric acid along with leaks into surrounding streams. Remediation by US EPA contractors has resulted in containing the ARD and reduced the total amount to 30 million gallons as of late 2016. Meanwhile, the surrounding streams have been remediated. The following essay elaborates on the stories of these two mines which are sited about six miles apart. 

Both the Wharf and the Gilt Edge Mines used heap leaching, a process whereby low grade gold ores (< 1oz of gold/ton ore) are mined at a relatively low cost thus making them economically recoverable.  Heap leaching involves open-pit operations where economies of scale accruing from using large 100-ton haul trucks and the like allow more massive amounts of ore removal at a lower cost per ton than would be the case in an underground mine.  For example, at the Wharf Mine from 2010-2014 about 3.5 million tons of ore was removed annually using explosives and heavy equipment.  Once removed, the ore is crushed into 1/4 inch pieces and then stacked on pads underlain by an 80 mil non-permeable liner where for the next 18-24 months a solution containing diluted sodium cyanide (50 ppm) is sprayed onto the heaps of ore.  The sodium cyanide then percolates through the heap dissolving the gold. The gold bearing solution is then collected and processed through a series of coconut-based charcoal filters and electro-winnowing cells that allow the gold to precipitate (come out of solution) and concentrate.  The resultant black sludge is then sent to a refinery in Salt Lake City where pure bars of gold and silver are poured.  As noted, the Wharf averages 70,000 ounces gold per year and another 95,000 ounces of silver.

Blasting an ore body with AMFO

Leach pad with processed ore

Sludge prior to refining

The main environmental issues facing the Wharf are: (1) potential conflicts with surrounding land uses, most notably a ski resort, (2) nitrate infiltration into groundwater (3) reclamation of the land subjected to open pit mining and (4) post-mining land uses. Potential land use conflicts involving an adjacent ski resort have been handled by the Mine purchasing partial ownership in the ski resort and using their equipment to extend ski runs, realign and resurface access roads and construct mitigation berms.  Nitrate infiltration has been minimal and a series of monitoring wells keeps track of subterranean nitrate levels.  The massive pits are back-filled with waste ore and then re-contoured.  The former top soil held in storage is then re-applied and seeded with grass. Natural succession processes will likely cause ponderosa pines to re-establish a forest within 20 years. Finally, the post mining era, likely to commence at some point in the 2020's, requires a 68 million post closure bond and monitoring plan.  Given the elevation of 5,980 feet and the proximity to Terry Peak, I would not be surprised to see a recreational development of some sort occur after closure (golf course and various types of residences comes to mind) 

Economically, the Wharf employs roughly 130 people and pays twice the regional average wage and supplies $5 million in tax revenues.  In addition, the mine also supports a variety of high-wage support jobs relating to equipment purchases and maintenance along with fuel acquisitions.

The gold deposits are located in Dakota Sandstone formation and were placed by a series of hot water intrusions during the Tertiary.  The mined ores contain between .012 and .027 ounces of gold per ton of ore, hence the size of the pits and the extent of the waste ore.

The Gilt Edge Mine serves as an example of multiple failures occurring simultaneously.  First in the late 1990s gold process collapsed and dropped below the mine's cost per ton, thus locking in sustained operational losses.  In the meantime, the sulfide ore body when exposed to oxygen, precipitation and solar radiation began to cook and produce prodigious amounts of acid rock drainage that soon  proved overwhelming.  In 2001,  Brohme Mining filed bankruptcy.  The land reverted to the State of South Dakota, which then petitioned to place the site on the US EPA Superfund list.  The immediate problems were two fold: (a) the wastes rock repository which was producing ARD and sending it into nearby streams, and (b) exposed rock faces and large pits full of sulfuric acid.  The former has been dealt with by constructing an impermeable cap over the waste rock repository, the use of concrete grout to seal off subterranean cracks, and the construction of a parallel channel along the flank to convey surface runoff around the repository.  In effect the ARD causing repository has been sealed.  The second issue remains on-going.  EPA contractors have constructed a lime-based treatment plant to neutralize much of the on-site sulfuric acid.  Final remediation involves filling the pits and sealing off the exposed rock faces thereby pre-empting the formation of ARD.

Capped waste  rock repository

Exposed sulfide ore body 

ARD waste water treatment plant

Are there lessons to be learned?  Certainly.  The first lesson is that ARD can be treated by constructing a lime-based treatment plant from the the beginning of operations to ensure that any ARD produced is mitigated immediately.  The second lesson involves a more rigorous financial viability review of the proposed mining operation during the permitting process emphasizing two points.  First, can the proposed operation whether a market downturn and keep a treatment plant running during harsh economic times? Second, a robust performance bond needs to be posted in the event that bankruptcy occurs the state will have the wherewithal to step-in and pre-empt a major environmental disaster. Finally, another lesson involves the ability to blend oxide ores with a sulfide ore to weaken its ability to produce ARD thereby making mitigation easier.  Unfortunately, the latter option was not available at Gilt Edge because the oxide ore body was located on adjacent US Forest Service property rather than on the mine site. ​

All photos taken by Martin Mitchell, 2010-2016