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Dana Bender, a partner with the Deadwood Standard Project, stands on the edge of Spearfish Canyon, looking down onto U.S. Highway 14 near Spearfish Canyon Lodge in 2012. VMC and one of its managers, Don Valentine, has been fined $11,000 by state regulators for violations of a permit to explore for gold.

An exploratory gold driller in the Black Hills has agreed to pay an $11,000 fine after being caught drilling holes that were hundreds of feet deeper than allowed, and committing other permit violations.

The South Dakota Department of Environment & Natural Resources announced Thursday that it has reached a settlement agreement with VMC LLC and Don Valentine.

VMC received its exploration permit, which is officially known as an exploration notice of intent, in 2012 to drill in an area west of Lead near the rim of Spearfish Canyon. Backers called the effort the Deadwood Standard Project.

In the agreement, VMC and Valentine, who was responsible for overseeing the drilling operation, agreed to pay a penalty of $11,000, which will be deposited in the state's substance-response fund. In addition to the penalty, VMC and Valentine have agreed to complete reclamation of the disturbed areas by June 1.

“The failure to comply with the exploration notice of intent did not cause any groundwater contamination, but our job is to make sure exploration activities follow all requirements of its approved exploration plan,” DENR Secretary Steve Pirner said in a written statement.

The permit covered property owned by Valentine located 7 miles west of Lead. The permit allowed for the drilling of up to 100 holes with a maximum depth of 100 vertical feet.

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In September 2017, DENR inspectors discovered that several holes had been drilled on property owned by Valentine in excess of the 100-foot depth limit, including one 800-foot hole.

In another violation of the permit, the drillers failed to provide the Department of Game, Fish & Parks with a map showing the location of all historic open mine workings, so that the mine workings could be assessed for use by bats. In addition, GF&P was not notified that exploration activity, including drilling, within 100 feet of a historical mine shaft was being conducted.

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DENR officials said they found no environmental damage due to the drilling. After sampling the holes, all holes were immediately plugged with a bentonite grout in accordance with applicable regulations.

VMC LLC is a South Dakota corporation that lists managers Kenneth Jensen, of Mobridge; Mark Nelson, of Nemo; Don Silva, of Hayden, Colo.; Valentine, of Steamboat Springs, Colo.; and Dana Bender, of Rapid City.

The VMC drilling project is not associated with another ongoing exploratory gold drilling project near Rochford, which is being conducted by Mineral Mountain Resources of Canada.

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Contact Seth Tupper at seth.tupper@rapidcityjournal.com

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