DEADWOOD - As gold prices exceed $900 per ounce, the Wharf Resources gold mine near Lead plans to expand its surface mine for the second time in less than a year.
The Lawrence County Commission gave its blessing this week to a surface gold mine expansion that would allow Wharf Resources to set up a processing pad on the western side of the mine.
Wharf's plan is to expand its surface cut by 38 acres.
The expansion was presented as a revision to the mine's existing conditional-use permit during a hearing held Tuesday during the regular commission meeting.
The proposed work site is within Wharf's permitted mining boundary but county regulations require a public hearing if the expansion is 20 percent or more of the total mine area.
Wharf operates an open-pit, multiple bench, truck-and-loader surface mine and heap-leach operation. Wharf reported on its Web site that it produced 62,471 ounces of gold in 2005.
Wharf engineer Ken Nelson said the expansion would enable crews to extract gold from rock mined from the Trojan Pit area. It would hold five million tons of ore and would take about 18 months to process.
The South Dakota Department of Environment and Natural Resources has final say on the expansion.
Gold prices have risen over the past six years from less than $300 per ounce to more than $900 per ounce. Wharf currently employs about 125 people in the mining and reclamation activities at its site near Terry Peak.
Wharf Resources is a wholly owned subsidiary of Goldcorp Inc.
Wharf Resources' mining project is in the historic Bald Mountain Mining District. At one time, there were more than 30 small mines operating in the area, according to a 2005 Wharf report. The Bald Mountain mill shut down in 1959. Wharf began exploration activity in the 1970s and received its first state and local mining permits in late 1982.
According to Wharf reports, gold is recovered from the ore by crushing the rock to about an inch, placing the ore on one of four pad areas and leaching with a dilute sodium cyanide solution. After the gold is leached from the ore, the ore is rinsed of residual cyanide.
Nelson said the pads are designed with a four-layer containment system using four heavy plastic liners and a layer of absorbent bentonite - the same material used in cat litter.
There is also an automated leak-detection warning system in use at the mine, Nelson said.
Mine staffer Carol Koerner said there have been promising prospects within the mine's existing boundary for new gold extraction ideas, but those haven't been developed into a project yet. Reclaimed land could also be re-mined without much state interference, Koerner said.
