Miners resume search for platinum near Platinum on Bering Sea coast

Posted: Sunday, September 09, 2001

PLATINUM (AP) -- Miners prospecting for platinum near the village that bears the same name are using new technology with old equipment to protect the area's pristine environment.

Goodnews Bay Platinum Mine, owned by Hanson Industries in Spokane, Wash., has resurrected a 60-year-old bucketline dredge to claw the steel-gray metal from the river drainages around Red Mountain on Cape Nushagak.

''It's a 1937 dredge, but we're using today's technology so that we can run it in the Salmon River drainage,'' said mine manager Mark Moyle. ''We're going the extra mile to use practices that are acceptable. We want to comply (with environmental regulations) and we will comply.''

Goodnews Bay Platinum Mine is in the Salmon River Valley six miles south of the village of Platinum, population 41, according to the census last year. The village is a ragged collection of 63 tumbledown buildings on the Bering Sea 440 miles southwest of Anchorage.

The dredge was built in 1937 with a $500,000 federal loan by the Goodnews Bay Mining Co. The dredge uncovered enough platinum in the bedrock around the mountain to pay off the loan in its first year of operation. The dredge processed about 1 million yards of dirt and gravel a year until it stopped operating in 1976.

More than 600,000 ounces of platinum have been processed by the mine in its lifetime.

Hanson purchased the claims in 1980. The company owns 196 federal mining claims in the area.

Clean water regulations enforced by the Environmental Protection Agency and the Army Corps of Engineers limit the amount of sediment allowed in drainages around the mine. The company's greatest challenge has been operating the dredge without dirtying the Salmon River.

Moyle has responded by developing a method to clean waste water after processing it for ore by filtering out the sediment.

The filtration system appears to be working. State and federal overseers have approved the mine's permit to prospect on more than 15 acres this year.

Dave Kelley, natural resource specialist with the Bureau of Land Management in Anchorage, said his agency is mostly concerned with keeping the river clear for spawning salmon.

''The fishery is our priority,'' Kelley said. ''But they've been working with the Department of Fish and Game to establish as much passage as possible.''

The company plans to reprocess deposits of gravel that were first sifted through in 1939. Company officials believe that advances in mining techniques will reveal platinum missed the first time.

After shifting through the earth and gravel scooped up by the buckets on the dredge, miners are left with a fine-grain black sand that contains the metal, according to Moyle.

''There's still a lot of platinum left in the black sand,'' Moyle said. ''The energy cost is too high to process here. It's cheaper to send it to Spokane.''

The company has already shipped 209 tons of unprocessed sand to Washington.

Protecting the environment around Red Mountain has added to the cost of prospecting, but the company is confident that advances in mining technology will allow it to be profitable and responsible at the same time.

''We can't run the thing if we dirty the Salmon River,'' Moyle said. ''That's been our biggest hurdle to get over. We have to have clean water to make it work.''

Red Mountain is thought to be the source of platinum that ended up in placer gravel deposits along area streams. Platinum was discovered at Red Mountain by Walter Smith, a Native prospector from Goodnews Bay, in 1926. Placer mining began in the area soon after and for decades it has been the only producer of the metal in the United States.

After purchasing the mine, Hanson Industries operated the dredge for six years, but had trouble meeting federal clean water standards and stopped in 1986. Since then, the company has used the site mainly for experimental work to develop environmentally friendly mining techniques, plus field support for exploration of lands surrounding the mining claim.

Platinum, worth $447 an ounce Aug. 25, is used in car exhaust systems to reduce air pollution.

The company didn't operate the mine last year and when Moyle returned to Platinum this spring, he found the dredge under several feet of water.

The dredge had become stuck in ice covering its pond. Mountain streams full of snowmelt rushed over the dredge's deck and sank the hulking mass. The dredge had sunk and been raised before in 1986.

''If the dredge hadn't of sunk we would have been operating two months ago,'' Moyle said.

The mining site costs $1 million to operate from April to November.

The company hired 21 residents of Goodnews Bay and Platinum this year to clean up the mine site. The company currently employs five local residents and six workers from the Lower 48.

''Once we're fired up, we'll have to bring on a whole lot of new people to keep the dredge operating full-time,'' Moyle said.

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