County feeling pain of slumping gold mining industry

Thursday, Feb. 25, 1999 | 10:32 a.m.

Preliminary figures show net mining receipts for the county will fall to only one-third of the current year - from $178 million to $50 million next fiscal year.

The sharp decline means the county will take in only $364,000 in tax revenues from mining companies in the coming year. Eureka County School District will take in another $375,000, Eureka County Auditor Mike Rebaleati said.

It would be the first time Eureka County has failed to take in more than $1 million in tax revenues from mining since 1989.

"If it goes farther we're going to be looking at real serious implications," Rebaleati said. "Fiscal year 1999-2000 we'll have very, very few capital improvements done, if any."

An estimated 1,800 mine workers have lost their jobs in Nevada over the past 15 months due to low gold prices and increased foreign competition, state officials say.

It's the first time that Newmont Mining Co., one of the two main gold producers in the county, is projecting it won't pay any tax on net proceeds, Eureka County Commission Chairman Pete Goicoechea said.

In addition, county taxable property values have dropped 9 percent, from about $440 million to $399 million, Rebaleati said.

Goicoechea explained the shortfalls last week to members of the Crescent Valley town board, who were requesting graveling of streets on the west side of town.

"Our revenues are now 50 percent of what they were two years ago," Goicoechea said. "We keep crying wolf, wolf, but he's starting to get hungry."

The Eureka County Board of Equalization earlier allowed Newmont to reduce its appraised property values from $192 million to $174 million, partly due to the closure of a mill and equipment depreciation.

Low gold prices are the primary reason for the mines' low net proceeds, not a write-off for new development projects, said Sharon Byram, Newmont manager of ad valorem taxes.

"We've taken the opportunity to make ourselves a stronger company in this lower price environment," Byram said.

Newmonth Gold still will be paying taxes on $7 million in royalties. The $7 million is included in the $50 million in net proceeds anticipated next year.