The new golden state

Alison Calkins

Saturday, Sept. 28, 1996 | 11:59 a.m.

First of two parts in the SUN.

ELKO -- A trip into what will be the largest producing gold mine in the United States starts in a cramped metal cage that goes farther down than the Stratosphere Tower goes up.

It's the Barrick Gold Corp.'s new $180 million Meikle Mine in Northern Nevada, 30 miles northwest of Elko, near Carlin.

The mine, which officially opened Sept. 21, is located on the Canadian company's Goldstrike property in the heart of the Carlin Trend -- a 35-mile stretch containing some of the richest gold deposits in the United States.

While descending, Mine Supervisor Steve Long extolled the virtues of the mine's $18 million cooling system that will allow miners to produce 2,000 tons of ore a day.

With the cooling power of 3,000 residential air conditioners, it's the largest mine refrigeration system in North America to lower underground temperatures.

"It gets up to 140 degrees down here," he said. "The system pumps 40-degree air through the mine at about 600,000 cubic feet per minute. Without that, we couldn't mine. It's just too harsh."

The cage travels at 500 feet per minute and deposits visitors 1,480 feet later into a 22,000-foot labyrinth of 14-by-14-foot man-made tunnels -- or "drifts," as they're called in mining lingo.

There, the lights and noise of huge machines roaming the drifts seemed to stalk walkers.

The 20-ton trucks and other equipment got there by being lowered through the 1,320-foot ventilation shaft.

Underground etiquette requires those on foot to step to the side when equipment approaches. It also requires that you don't shine the bright light on your hard hat into anyone's eyes -- especially the equipment operators.

Even with the cool air blasting through the drifts, it's hot.

The heat, the uneven darkness, the shadows, the smells and the steam spurting from crevices in the rocky earth inspire inevitable images of a very unpleasant place.

Long laughed.

"No. It's not hell. Actually, we're getting closer and closer to God's country. Look."

It was a large "crystal cavern," opened by the blasting and preserved by the miners for its eerie beauty.

Strategically placed lights reflect the greenish glow of calcite crystal formations covering the cavern. A small stream wanders through. And a wooden deck allows observers to go only so far.

While slogging though the noisy, sometimes muddy drifts, Long talked about mining at Meikle.

He explained that each ton of ore produces 0.68 ounces of gold, which at the rate of 2,000 tons of ore a day, means Meikle will be good for about 10 1/2 years. Total gold production is anticipated to be 400,000 ounces a year. At $400 per ounce, that's $160 million.

And exploration continues for further reserves in the area.

"There are two types of rock down here," Long said. "Ore, which is mineral-bearing rock, and waste, which is non-mineral-bearing. The main facilities are built in the waste rock so the ore can be mined out."

That's done by starting at the bottom of the ore body, blasting and removing the ore from 25-foot-wide by 100-foot-long by 50-foot-high "stopes" -- holes that are later backfilled with concrete made at an underground plant that mixes 20 tons at a time.

Automated loading pockets measure the ore into 10-ton loads that are hoisted to the surface.

When a stope has been completely mined and backfilled, it becomes the floor for the next stope.

And so on until the gold is gone.

"When the mine is exhausted, we demobilize the equipment, seal the collars to the entrances and reclaim the surface," Long said. "Some structures stay here and the major excavations will all be backfilled. One of the attractive parts of underground mining is that there is minimal surface disturbance from a mining standpoint and a lot less reclamation when it's all said and done."

Glenn Miller, professor of environmental and resource sciences at the University of Nevada, Reno's Mckay School of Mines, agreed.

He compared the impact of the Meikle Mine to Barrick's open pit Betze-Post mine on the same property.

"Open pit mines have an irreversible and permanent impact," he said. "The Meikle permit was held up for a while because of dewatering issues from the Betze-Post mine that drain into the Humboldt River. Betze-Post will continue to be mined for quite awhile and the dewatering will continue. But the Meikle addition doesn't appear to be a substantial increase in impact."

Long noted that the Meikle Mine has some unique features, including "lots of automation and sophistication, more overhead lighting than most mines and a milling facility already operating at the Goldstrike facility."

The rest of the gold-making process takes place topside.

After being hoisted above ground, the ore is loaded into 190-ton trucks at a drive-through loading station and processed at an autoclave facility about a mile away at Goldstrike.

Finally the gold appears, in the form of 70-pound bricks that sit on a small table like glistening loaves of bread -- in a building under tight security.

Mining lore has it that if you can pick one up with your left hand, it's yours. There haven't been any takers.

Goldstrike's process manager, Andy Bolland, said the bricks are shipped to a Salt Lake City refinery where they're melted down to become "four nines gold."

"That means it's 99.99 percent pure," Bolland said. "Our gold is 94-95 percent pure. Ours is a little higher than usual because of the ore body. A lot of other mines are between 80 and 90 percent pure. It all depends on Mother Nature."

To put things in perspective, Bolland said it takes 16 of those 190-ton trucks of ore to make one gold brick. That's not counting the eight to 10 trucks of waste per truck of ore.

"It's more like 160 trucks for one bar of gold. And we're one of the lower cost operations," he said, referring to the mine's $125-per-ounce production cost.

The new mine is significant for a couple of reasons, said Joseph Tingley, a research geologist for the Nevada Bureau of Mines and Geology at UNR.

"It's the largest underground mine in North America," he said. "And we've had a long period of time where open-pit mining is how mining is done. This is a flagship that says underground mining is alive and well.

"The more successful operations that come along motivate others to start looking underground."

Barrick celebrated the opening of the new mine by inviting more than 300 guests to a barbecue at the Goldstrike property earlier this month.

There was also a warm Western reception at the Elko Convention Center that included a visit from former President George Bush and former Canadian Prime Minister Brian Mulroney, both members of Barrick's international advisory board.

Mulroney also is a company director.

After arriving in the convention center via the kitchen door, Bush shook the many hands offered to him in a long reception line and then took to the podium for some friendly remarks to the mostly local folks who were thrilled to meet him.

Later, Bush explained that he's actually an honorary senior adviser to the board and that his job is to bring a world perspective to the company's officers.

"In other words, it's not that I can contribute that much, but I have strongly held views on the importance of China and Latin America," he said. "I think the management of the company likes to check with people that have, at one time or another, been responsible for some matters."

But now that the parties are over, it's back to business for Barrick, which with 10 producing mines and two in development ranks as the world's most profitable and largest gold producer outside of South Africa.

Meikle Mine Manager Rod Pye said the company is excited about the challenge of the new mine.

"We've taken technology deeper with this facility. It represents state-of-the-art underground mining and we're looking forward to making it the most productive gold mine in the country."

In 1995, Barrick paid $15 million in state and local net proceeds taxes for the Goldstrike property. As Meikle starts producing, it's estimated that figure will increase by one-fourth to one-third. The company also paid sales and uses taxes on the $180 million capital investment.

Earlier this year, Barrick received a patent on the land, which was acquired under the 1872 Mining Law for a mere $5 per acre.

Following a court order, Interior Secretary Bruce Babbitt reluctantly approved the patent, calling it "the biggest gold heist since the days of Butch Cassidy."

"The American people who owned this gold will not receive one penny in royalties," he said.

Babbitt tried to block the final transfer of title, but in March a federal court directed him to turn ownership of the land over to Barrick by June 20 in compliance with the 1872 law.

The Mining Act of 1872, signed by President Ulysses S. Grant, was meant to provide an incentive for the settlement of the West.

It has not been substantially changed since then. So while the states and private landowners routinely charge royalties for mining on their property, the federal government does not charge for hard-rock minerals such as gold, silver, copper, platinum and uranium. In contrast, coal, oil and gas companies must pay royalties to mine or drill on federal land.

Congress has been debating changes in the law for years, but mining interests and many Western lawmakers have fought attempts to rewrite the law.

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