Higher gold prices spur new interest in Black Hills mining

RAPID CITY, S.D. (AP) - Higher gold prices are generating new interest in drilling in the Black Hills of South Dakota.

At least five companies are currently drilling for gold in the mountainous region, which extends from western South Dakota into Wyoming. After being under $1,400 per ounce for several years, the price for gold has climbed above that level in recent months.

F3 Gold, of Minneapolis, is funding an environmental assessment it hopes will lead to the approval of its plan to drill on Black Hills Forest Service land near Silver City South Dakota, which about 15 miles west of the state’s second-largest city, Rapid City.

“When a down market hits, the exploration sector is the first one to suffer,” said Rob Bergmann, an F3 Gold partner. “When the market comes back up, then the money finally starts funneling down into the exploration sector.”

Another factor driving exploration interest in the Black Hills is its well-known history as a gold-producing region, the Rapid City Journal reported.

Nelson Baker, president and CEO of Mineral Mountain Resources in Vancouver, Canada, said, “We look at the Black Hills as actually pretty largely under-explored. The potential to find other Homestake-style deposit is definitely real.”

The former Homestake Mine near Lead became the largest and deepest gold mine in North America and generated 40 million ounces of gold during its 126-year life. In 2002, it closed and became an underground research facility. Homestake’s origins were in the Black Hills gold rush of the 1870s.

Baker’s company, Mineral Mountain, has a drilling rig located in the forested mountains near the central Black Hills hamlet of Rochford, about 20 miles south of the Homestake Mine on land Mineral Mountain has acquired.

Exploratory companies such as Mineral Mountain do not usually develop their own mines. They sell their drilling information or partner with larger mining companies.

Mark Bowron, Hull professor in the Mining Engineering and Management Department at the South Dakota School of Mines & Technology, said the environmental ramifications from exploratory drilling are minimal.

“They get permits, they have to comply with the regulations of the DENR, they have to plug the holes, a drill pad occupies a space about the size of this office,” Bowron said, referencing a faculty office at Mines, “and it has to be reclaimed.”

Lilias Jarding, of the Black Hills Clean Water Alliance, said she and other activists who are against exploratory drilling are considering the future.

“What we’re concerned about is protecting water in the Black Hills,” Jarding said, “and if there’s exploration that can lead to mining, and mining has never been friendly to water.”