Mining engineer Jerry Aberle looks over the area of a proposed gold mine near Central City on Friday. The site yielded positive test results during preliminary drilling and could begin operations within a couple years if permits are secured. 

LEAD | After traipsing the globe in search of precious metals, South Dakotan native Jerry Aberle has returned home for a treasure hunt in his own Black Hills backyard.

After 22 years as a mining engineer with the Homestake Gold Mine in Lead, Aberle left the company in 1998 to explore consulting opportunities in mining and exploration around the world. His vocational adventure took him from the remote wilds of Canada’s Yukon Territory thousands of miles south to the isolated Andes near Chile’s famed Atacama Desert, as well as a half-dozen spots in between.

Now, after three years spent securing mineral rights to about 3,000 acres in the Northern Hills, in August his company, the Reno, Nev.-based Dakota Territory Resource Corp., applied for and received state permission to drill up to 30 exploratory holes as deep as 1,200 feet as a part of its “Blind Gold Project.”

“Exploration is like a treasure hunt,” Aberle smiled as he scanned some of the company’s holdings Friday a few miles west of Central City off Maitland Road. “It’s the most fun job imaginable.”

State Department of Environment and Natural Resources engineer Eric Holm said this week that Dakota Resource submitted applications for permits for its project from the state in early August and that the applications were reviewed, site-inspected and approved, and only await deposit of a $20,000 reclamation bond before taking effect.

“Exploration permits are fairly straight-forward,” Holm added, even though the state issues just two or three per year on average. “The bonds ensure the mining company plugs holes and reclaims any surface materials disturbed by exploration activities.”

Homestake a model?

Dating to the earliest days of America’s last great gold rush in 1876, Homestake Mining was in it for the long haul. The company dug shafts to 8,000 feet deep where water flowed freely and the temperature of the rock exceeded 130 degrees. Its workings extended for miles underground and its size ensured it would weather world wars, market recessions and downturns in the price of precious metals that put marginal operators out of business and forced miners to set aside their pick-axes.

Homestake took advantage of recessions and depressions to buy out competitors, wield political clout and earn a reputation as a company that took care of its people and the communities it affected. But even the Homestake mine could not overcome $250-an-ounce gold — not when it was costing $400 per ounce to get it out of the ground.

When parent Toronto-based Barrick Gold Corp., the largest gold mining company in the world, decided to shutter its shafts and close Homestake Mine in South Dakota in the summer of 2002, it did so after the mine had produced 40 million of the 44 million ounces of gold unearthed in the Black Hills.

But in the latter stages, a couple of decades before its closing, long-term plans for Homestake proposed building the company’s gold reserves by extending tunnels to follow the high-grade ore of the Homestake Formation north of its Lead operations. As such, Homestake secured mineral rights and spent 11 years and $70 million drilling hundreds of holes, securing core samples and assaying for gold. Positive results from a few of those test holes led to heightened interest.

Today that research, much of which is housed in the collections of the Homestake Adams Research and Cultural Center in Deadwood, is providing Aberle and his associates with relevant and potentially lucrative clues to the golden treasure they all seek.

Aberle’s college roommate, Rick Bachman, earned a degree in geological engineering and the two joined Homestake in 1980 and eventually traveled to the Yukon and Chile. Bachman, who led Homestake’s $70 million exploration program in the Black Hills and who now serves as chief executive officer of Dakota resources, also explored for gold across South America, as well as diamonds in Brazil and lead in Bosnia.

Standing at a mine in Chile four years ago, Aberle said he and Bachman started questioning the high costs of operations in the remotest regions of the world, fears of nationalization, endless politics and many nights sleeping in hotels.

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“What all the major mining companies were looking for at that time were giant low-grade porphyry deposits with 30 to 40 million ounces all in one place,” Aberle recounted. “These types of mines have great longevity, running 20 or 30 years. We asked ourselves why we wouldn’t we go back to the Hills. Both of us worked at Homestake for 22 years. We know the area. We know mining.

“We feel really good that we ended up at the right place at the right time,” Aberle added as he surveyed a stand of Ponderosa pines. “The mining industry is looking at North America because it’s stable, the laws don’t change, and you aren’t going to be nationalized.”

Back to the Black Hills

Both returned home, did their due diligence, then relied on their experience and accessible data about the Homestake lode and, with the aid of a handful of former Homestake executives and entrepreneurs, decided to form the publicly traded Dakota Territory Resource Corp.  

“This is a safe, low-cost jurisdiction that has already produced 44 million ounces,” he noted. “Our targets are high-grade gold deposits, something every miner seeks. It’s never a sure thing, but the Hills have great potential and it’s a great place to look for gold.”

Dakota resources plans to drill its exploratory holes on private land beginning in 2015, said Aberle, the company chief operating officer. If those core samples prove attractive, the company would eventually apply to the state for necessary permits to mine underground for gold, he said.

If such permits are sought, the DENR would conduct a “special lands determination” by evaluating the area for any features that are exceptional, critical or unique, and then issue its findings, according to Holm. At that point, the public would have several opportunities to comment on the company’s plans, he said.

“A project like this could go one to two years for permitting because they need to establish baseline data, the reviews by the state, the public comment period with a chance for the company to answer concerns, and then go before the state Board of Minerals & Environment for approval,” Holm explained.

Aberle, a svelte businessman who once backed a bar and restaurant on Lead’s Main Street, said he was undeterred by the permitting process in South Dakota.

“Miners don’t have a problem with a tough, thorough process,” he said. “You don’t start a mine overnight. It takes seven or eight years to build a mine, and South Dakota is a good place to do that.”

Like most treasure seekers, Aberle is reluctant to reveal clues or speculate much on what DTRC might find. But, as is the case with most hunters of the elusive Eldorado, he remains the eternal optimist.

“We’re drilling for another Homestake,” he admitted. “That mine produced $52 billion in gold in today’s dollars, and just look at what it did for the region, the communities, by providing high-paying jobs, and the severance and property taxes.

 “When in elephant country you hunt elephants, and our elephant is another Homestake.”

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