EagleHerald Staff Writer
MENOMINEE—Gold Resource Corp. has received approval from the Michigan Department of Natural Resources’ Administrative Board for a metallic mineral lease renewal for the Back Forty Project in Stephenson, the company said Tuesday.
“This was just very similar to any business renewing their business licenses or leases on their property,” said Ann Wilkinson, vice president of investor relations and corporate affairs at Gold Resource Corp., a Denver-based publicly traded company.
The company acquired the Back Forty Project when it purchased Aquila Resources on Dec. 10. Gold Resource Corp. operates the Don David Mine in Mexico, where for over 10 years it has produced gold, silver, copper, lead and zinc.
Wilkinson said the Back Forty Project could be one-and-a-half times the size of the Don David Mine in terms of production. That mine has produced about 40,000 ounces of gold equivalent per year over the past several years, despite COVID. For the first nine months of 2021, it produced 28,000 ounces of gold equivalent, generating revenue of $87 million and net earnings of $5.3 million, Wilkinson said. The mine employs about 530 workers, she said.
But the company is a long way from opening a mine at the Back Forty near Stephenson. Wilkinson said it could take four or five years to receive the necessary permits and construct the mine. “Right now, it’s a field. I call it a project,” Wilkinson said.
“We’re in the middle of doing the definitive feasibility study. Once that’s completed, we’ll have a better idea of what we think the reserves will look like. We’ll have a flow sheet and a mine plan that will flow from that,” Wilkinson said.
“First things first is a feasibility study, and we’re being very careful and methodical,” she said.
The previous owner of the Back Forty Project, Aquila Resources, submitted the application to lease 1,988 acres of state-owned mineral rights on April 9, according to a Jan. 10 letter from Kirk Lapham, a manager in the Minerals Management Section of the Michigan Department of Resources (DNR) informing State Sen. Ed McBroom of the Administrative Board’s approval of the lease on Jan. 4, 2022.
McBroom, the Republican chair of the Senate Natural Resources Committee, was among a group of lawmakers who sent a letter to the Michigan Department of Natural Resources Dec. 17 expressing their support for the lease renewal.
Besides McBroom, among those signing the letter are Sen. Wayne Schmidt, Sen. Jon Bumstead, Rep. Sue Allor, Sen. Jim Stamas, Rep. Beau LaFave, Rep. Sara Cambensy, Rep. Greg Markkanen, and Rep. John DaMoose.
In the letter, McBroom said, “All of us have been approached, lobbied, cajoled, and/or even verbally assaulted by those who are undoubtedly also pressuring you to not renew this lease.”
But he said the arguments opposing the Back Forty Project don’t merit revoking the lease, largely because it is only step one in a lengthy process that would determine whether the mine should be approved.
The legislature passed Part 632 of the Natural Resources and Environmental Protection Act 451 without opposition to ensure the economic development potential of mining is considered while protecting the environment, McBroom said. The act says in part, “The special concerns surrounding nonferrous metallic mineral mining warrant additional regulatory measures beyond those applied to the current iron mining operations.”
McBroom’s letter also discusses the economic opportunity the mine presents. “The opportunities for area jobs and investments are real. One need to look no further than Marquette County to understand not only the economic impact, where Eagle Mine has invested over one billion dollars into the economy, but also evidence of the reality that, as Governor Granholm envisioned, today’s mining can safely co-exist with good environmental stewardship.”
The letter also said: “We implore you to immediately renew the lease and then join us in advocating for the expediting of the permitting process with your counterparts in the administration and DEGLE (Department of the Environment, Great Lakes and Energy).”