Mineral Mountain Resources raised $1.74 million for gold drilling south of Rochford.

Opponents of exploratory drilling for gold near Rochford in the Black Hills are fighting a battle they might not be legally capable of winning.

Mineral Mountain Resources, a Canadian company, has submitted an operating plan to the Black Hills National Forest for 21 drilling sites on federal land about 2 to 3 miles south of Rochford, in the quiet remote north-central region of the Black Hills.

Another 12 sites will be drilled on nearby private land, where the company already has a permit from the South Dakota Department of Environment and Natural Resources.

Some private landowners near the proposed National Forest drilling sites are asking the Forest Service to reject the project. But according to Gary Haag, a Forest Service geologist who is reviewing the company’s plan of operations, the Forest Service can only add conditions to the plan.

“There isn’t an option to turn it down,” Haag said. “What they’re doing is covered under the 1872 mining law.”

Haag was referring to the General Mining Act of 1872, a controversial and still-valid federal law that upholds the right of virtually everyone — including foreign companies with U.S. subsidiaries — to explore for minerals on federal public land. Mineral Mountain Resources apparently meets that criteria, because although its main office is in Vancouver, British Columbia, it also has a registered corporation in South Dakota.

Doug Rees, of River Forest, Ill., whose wife, Lynn, is originally from Sioux Falls, said they own a cabin near one of the proposed drilling sites. He wrote a letter to the Forest Service explaining his opposition to the project, for reasons including his desire to protect the Rapid Creek and Castle Creek drainage areas from proposed withdrawals for the drilling rigs, his aversion to the project’s potential noise and equipment traffic, and the project’s likelihood of becoming a large and unsightly mine if the company finds gold in quantities and locations that are economical to recover.

Rees also called attention to the finances of Mineral Mountain Resources, a public company traded on the TSX Venture Exchange in Canada. He cited documents published by the company for the quarter that ended June 30, which listed a cash balance of $420,055 against current liabilities of $439,838.

“In short,” Rees wrote to the Forest Service, “the interests of local landowners, South Dakota residents, American citizens, and international tourists in preserving the beauty and resources of the Black Hills should far outweigh the private profit interests of a financially strapped Canadian company, Mineral Mountain Resources, and its shareholders.”

Rees additionally expressed concern about the company’s track record, which includes a 2012 incident when the company was doing exploratory drilling near Keystone and some drilling water and bentonite leaked into Battle Creek, temporarily causing the creek to turn a milky color. Drilling was stopped for a week, but state regulators said the spill posed no hazard to people or fish. The company eventually gave up on prospecting near the Keystone area to focus on Rochford.

Another landowner near the proposed drilling sites, John Hopkins, who identified himself as a resident of Rochford, has also written a letter to the Forest Service.

“There is no sane reason for the United States, South Dakota, nor Pennington County to consider allowing a foreign for-profit only corporation to desecrate the Black Hills,” Hopkins wrote.

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Both Hopkins and Rees alleged that their property was trespassed upon by representatives of Mineral Mountain Resources who placed claim stakes in the area.

The Journal sought a response from Mineral Mountain President and CEO Nelson Baker, whose corporate biography says he is an alumnus of the South Dakota School of Mines & Technology in Rapid City.

“At this point, the process is still ongoing and there is currently no permit issued for drilling on federal lands,” Baker wrote in an email. “MMR respects the process and welcomes any public inquiry, but at this point without an approved permit, we feel it is not appropriate for us to respond to inquiries and circumvent the ongoing procedure directed by the Forest Service.”

Haag, of the Forest Service, said it will take months for the agency to fully analyze Mineral Mountain’s proposed plan of operations and the written comments submitted by the public. Depending on the outcome of that analysis, the Forest Service could decide to subject the proposal to an environmental impact study — which could add months of time and extra cost for the company — or the Forest Service could decide that the potential impact of the project is minimal enough that an environmental impact study is not needed.

The proposed plan of operations submitted to the Forest Service by Mineral Mountain Resources says the expected duration of the project is eight months, with work occurring 24 hours per day by two crews working 12-hour shifts. Drill sites will each be about 25 by 40 feet. Holes will be drilled 1,500 to 5,000 feet deep, and the number of holes at each site will depend on the results of the drilling.

Mineral Mountain plans to use a water truck to pull water from the Rapid Creek or Castle Creek drainages. An anticipated 5,000 to 10,000 gallons of water per day will be used to flush drill cuttings, although the amount could reach 20,000 gallons per day under difficult drilling conditions. The maximum amount of water to be used during the duration of the project is 1.8 million gallons.

The water used during drilling will be captured in tanks and recycled during the project, and then disposed in accordance with state regulations, possibly at a sewage treatment plant. The cuttings will be allowed to settle out of the water and will then be dispersed on the ground and covered with organic material.

Equipment at the sites will include a track-mounted or rubber-tired, diamond-core drill rig, ATVs, pickup trucks, and a mini-excavator or small skid-steer loader. A staging area will be set up along Forest Service Road 238.1A.

The drilled holes will be capped, sealed and plugged with grout and cement, and the surface area at each site will be smoothed, contoured and seeded with native grasses after the drilling is completed.

Mineral Mountain has said in company documents that it considers the Rochford area to be under-explored for gold and similar to the geological environment of the former Homestake mine in Lead, where much of the 45 million ounces of gold mined in the Black Hills since the 1800s was found.

The only current large-scale gold mine in the Black Hills is operated by Wharf Resources near Lead. The company reported a haul of 109,175 ounces of gold and 105,144 ounces of silver from the mine last year.

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Contact Seth Tupper at seth.tupper@rapidcityjournal.com

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