State Raises Gold Mine's Bond By $31 Million
The owner of the only active, large-scale gold mine in South Dakota has to post millions more in bond money.
The Wharf Mine is near Lead, in the northern Black Hills. Coeur Mining is the Chicago-based company that runs the mine.
South Dakota requires Coeur to post bonds. That's in case the company ever goes bankrupt. If that happens, the state could use the bond money to clean up the mine.
The amount of the bonds is $64 million. But the state Department of Environment and Natural Resources said it's reviewed the amount, and it’s too low.
The department wants to avoid a repeat of the Brohm Mining bankruptcy 21 years ago. That left the feds and the state responsible to clean up the Gilt Edge Mine, which is also near Lead. More than $100 million has been spent on that cleanup, and it's still not finished.
The DENR's Eric Holm said that was a hard lesson.
“That was many years ago. We’ve learned a lot from that process. Yes, the bond was severely under-calculated.”
So the department wants a bigger bond at the Wharf Mine. The state Board of Minerals and Environment agrees. The board voted Thursday to raise Coeur Mining’s bond requirement by $31 million, to a new total of $95 million.
The company’s deadline to post the additional bonds is December.
Coeur mined 84,000 ounces of gold from the Wharf Mine last year. That equates to more than $160 million in value at the current price of nearly $2,000 an ounce.
-Seth Tupper is SDPB's business and economic development reporter.