Golden Sunlight could close in May, depending on what the company finds in the ground over the next two months.
Barrick Gold Corp. announced the Whitehall mine's possible closure Thursday. The Toronto, Canada-based company had been planning to start mining for gold in an underground tunnel called Apex this year.
Dan Banghart, Golden Sunlight general manager, said by phone Wednesday that drilling and exploration will continue and there is still some active mining going on in a vein along the edge of the Mineral Pit. That work is visible at night from Interstate 90.
But the gold reserves in the ground are nearly depleted. A final mill run to process gold ore is currently scheduled for May.
Golden Sunlight currently employs 55 people and also has about 90 contract employees. Most of those contractors work with Redpath, a Canada-based underground mine drill company.
Banghart said there have been no layoffs so far. But that could change in May, he noted.
Banghart said the mine is still exploring the potential to drill in the underground Apex Mine, which was recently permitted but has not been fully realized. Banghart expressed hope that it could still be a go for the company and that Golden Sunlight could survive past late spring.
Golden Sunlight has been in operation since the 1980s.
Banghart said the company’s future will depend on both the price of gold, which is currently around $1,318 an ounce, and the grade of ore the company finds through drilling and further exploration.
Leonard Wortman, chair of the Jefferson County council of commissioners, said this week that Golden Sunlight has been talking about closure “for a while.” He also said the company isn’t seeing profit.
“Right now, with the grade of gold, they’re just exchanging dollars. They’re not making anything. They (mines) all reach the end of their life,” he said.
Wortman said the county’s hard rock mining money, which is a reserve fund that would kick in upon the closure of the mine, will help soften the financial blow. But Wortman said that pot is “not huge” because of significant layoffs that occurred in 2015 when Golden Sunlight ceased open-pit mining.
Bonnie Ramey, Jefferson County clerk and recorder, said that the county gave the schools a total of $780,000 from the Hard Rock Trust Account when the mine shut down three years ago. The account currently has $335,042 left in it. The money can be spent on both the schools and the county.
While the mine opened an underground operation known as "2Bug" the next year, it has already played out, Banghart said.
Wortman said the county has “eased into” the reality of a smaller tax base that the loss could mean for the county if the mine does close. He said the county’s tax revenue had already “gone down a lot” when open-pit mining stopped.
Banghart said that the mine is considering reprocessing old tailings — waste produced from mining — as a source of future revenue and operations.
First, though, mine officials are working to understand the grade of gold that is in the old tailings waste. If it is worth recovering, the mine would start construction on a new flotation plant or refurbish the existing mill.
“We’re trying to turn over every rock we can think of,” Banghart said.
If closure does happen, it would mean an end to Golden Sunlight's small miner program, which enables local miners to reclaim old mine dumps. Small miners process old waste from century-old mines that dot the mountains around southwest Montana. That program has put more than $45 million into the local economy since 2011, Banghart said previously.
As Golden Sunlight faces the prospect of shutting down, Banghart said reclamation of the site is already underway and is two-thirds of the way complete. One major hurdle that remains is the need for the mine to build a water treatment plant, since water that would otherwise collect in the former Mineral Hill pit will have to be pumped and treated in perpetuity.
Banghart said the company is looking at water treatment technologies. He said the water would be kept within the site and not discharged into the nearby Jefferson River.
Wortman said the county and the company have discussed the possibility of the county reusing some of Golden Sunlight’s buildings at the site to possibly attract new businesses. Wortman also noted that the county has a special tax increment financing district in the area northeast of Whitehall where the mine is located. That district could be used to fuel reinvestment at the site.
Barrick recently merged with Ranggold, a South African mining company. The $18 billion merger made Barrick the largest gold mining company in the world.
But soon after the merger, Catherine Raw, Barrick's chief operating officer, said the company would be emphasizing its largest holdings that have at least a 10-year mine life ahead. That does not fit Golden Sunlight's profile.
If it does get off the ground, the Apex Mine is only projected to last until 2021 — at best.
“We’re a mature operation,” Banghart said. “We’ve been at this site awhile. It’s a nonrenewable resource. Basically, we’re working our way out of a job.”