Idaho Rediscovered As Major Mining Region
(Kitco News)- New technology, new players andnew ideas are helping revitalize Idaho’s mining sector more than 150 yearsafter gold was first discovered and led to the creation of the state.
While Idaho has always been oneof the top mining jurisdictions in the U.S. and the world, the region hasrecently toiled in obscurity; it has been nearly two decades since gold wasproduced in the area.
However, perceptions are startingto change. In an interview with Kitco News, C.L. "Butch" Otter, governorof Idaho, said that the state is open for business as it works with a variety ofnew junior miners that see untapped potential in the region’s mineralization.
Otter noted that Idaho has richmineralization and is home to the historic Coeur D'Alene silver valley andmajor silver producer Hecla Mining (NYSE: HL). The region is one of the richest miningareas in the world, producing metals valued at $2 billion since 1885.
“Mining is part of Idaho’s DNA,”he said. “We have established a reputation that we are doing business in theright way. Capital wants stability, security and predictability, and those areall things our government is providing for the resource sector.”
Major producers are even startingto take notice of Idaho’s renewed potential as Barrick Gold (NYSE: ABX, TSX: ABX) recently invested$38 million in Midas Gold, which is pushing its Stibnite gold project throughthe permitting stage, which could be concluded by 2020.
Along with Midas Gold (TSX: MAX), otherjunior companies like Revival Gold (TSX.V: RVG)and Integra Resources (TSX.V: ITR) are pushing forwardwith their plans to revive historic projects.
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| Intregra Resources' DeLamar project |
Integra Resources is currentlydeveloping its DeLamar project, which produced 1.6 million ounces of gold and100 million ounces of silver. The mine closed in 1998 because of lacklusterprecious metals prices.
George Salamis, president and chiefexecutive officer, said when his team was looking for a new mining opportunity,Idaho fit his criteria of being a world-class jurisdiction. He added he expectsto see further interest in the state from major precious-metal producers.
“You just can’t ignore the richmining culture and history in Idaho,” he said. “Idaho is at the turning pointof being recognized once again as a major mining jurisdiction.”
One factor that is helping tochange investor and market perception, he said, is the state’s commitment tothe resource sector.
In a specific example, Salamissaid that the state government has been a lot more proactive during thepermitting process. He noted that it took only six weeks for Integra to getexploration drill permits. This past year the company has spent $10 million ona drill program, the first exploration program on the property in the last 25years.
Not only is Integra providing afresh look at its project resource, but Salamis said that the company is takingadvantage of technology and a new understanding of the region’s geology toreview and find new drill targets.
“There has been a lot of advancesin the geology and we are using some of the latest thinking in how deposits areformed to guide us where to go next, and it is bearing fruit,” he said.
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| Revival Gold's Beartrack property |
Revival Gold is currentlyexploring and developing its resource at its Beartrack property, which produced600,000 ounces of gold in the 1990s.
Hugh Agro, president and CEO ofRevival, said that his company is looking to capitalize on what he sees will bea new bull market in gold. He added that officials are excited to be working inIdaho not just because of the projects potential but because of strong supportfrom the government.
“There is a resurgence ofinterest in projects in the United States, and Idaho is a big piece of that,”he said. “The state has an interest in growing its economy and doing so byleveraging its resources sector in a responsible and sustainable manner.”
He added that in the currentenvironment with growing political uncertainty, investors are putting a premiumon projects in safe jurisdictions with established rules of law.
“Idaho is probably one of themost mining-friendly states and that gives investors some security,” he said.“The last thing investors want is to be sideswiped with a political issue,which renders their investment ineffective.”
Finally, Agro added that thisteam was attracted to Idaho because of its geology. He explained that the Beartrackmine suffered because of low gold prices and a lack of focus. However, he saidthat a new understanding of the area’s geology is helping to revive theproperty and adding resources.
In July, the company revised itsresource and identified 1.2 million ounces of indicated gold and 800,000 ouncesof inferred gold resources.
“Idaho has great geology and isrich in resources that we are only starting to understand,” he said.
While there is momentum andperception that Idaho is a world-class jurisdiction, the industry alsorecognizes that more work needs to be done to maintain this energy.
Benjamin Davenport, an executivewith the Idaho Mining Association, said companies like Integra and Revival arenot just breathing new life in the sector, but in also communities that havesuffering economically.
“People are getting excited inour communities again that that is a great thing to experience,” he said.
Davenport said that theassociation is working with the government and regulators in an ongoing effortto improve the development of the resource sector. He added that some of thelaws and regulations haven’t been updated since the late 1970s.
“We want to make sure there areclear expectations for projects,” he said. “Everything we are doing is creatinga high level of confidence in the sector.”
Davenport added that theassociation is also working with the state’s geological survey to get anupdated picture of the state’s resource.
By Neils ChristensenFor Kitco News
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nchristensen@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.