FAIRBANKS (AP) -- State officials say an Ester gold mine is responsible for drying up five wells and for cracks that have surfaced in the nearby Parks Highway.
A five-month review of water and well data led the state Division of Mining, Land and Water to conclude that Yellow Eagle Mining Co. caused the water supply problem when it gouged the water table last year.
The abundance of water in the mine's pit has also weakened a gradual sloping wall abutting the highway, according to the report.
State officials do not think there will be a catastrophic failure of the highway but are closely monitoring developments as temperatures warm.
Ryan Hull, a geologist with the state Division of Mining, Land and Water, said a large layer of ice-rich soil bordering the highway's right of way is going to melt.
''To what extent the damage may or may not be is for nature to determine,'' Hull said.
But the company's financial problems may make it difficult to reach a solution.
Company president John Miller still hasn't secured the investment capital he needs to restart the mine, which shut down last October. Miller said the company is insolvent, with more than $1 million in debt.
''If we can find the money to come back and mine, we stand by our commitment to the people of Ester,'' Miller said, referring to the company's promise to pay for any damage caused by the mine's open-pit placer operation.
Just prior to the mine's closure, five nearby residences reported that their wells had dried up and two more reported having water quality problems.
Miller said his hydrologist would probably disagree with the state's conclu-sion that the mine is to blame.
Jim Vohden, a state hydrologist, said he could not draw an exact link between the mine and wells but that the supporting data led back to Yellow Eagle's operation.
''We've seen no evidence to support an alternative conclusion,'' Vohden said.
Vohden said he reviewed well logs from nearby homes and noticed a sharp decline after Yellow Eagle struck the water table, flooding its open pit located just off the Parks Highway.
Vohden also found that water in the mine's pit had a similar chemical makeup to the supply in nearby wells. The wells were also replenished during the winter, after the mine shut down.
One homeowner has since redrilled his well and another has regained use of the existing system. Two residents now purchase water commercially and another obtains water from alternative sources, according to the report.
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