KELLOGG — Stop me if you’ve heard this (or something like this) before, but the new owners of the Bunker Hill Mine say that they are planning on opening it back up (in some capacity) within the next year.
Silver Valley residents and miners have heard similar news like this regarding Bunker Hill many times over the years, only to be let down.
But according to Bruce Reid, the CEO of Liberty Silver Corp. (also known simply as “Liberty” or “Company”), this time looks like it is the real deal.
Detailed in a conference call on Nov. 8, led by Reid, Liberty has been moving along with bringing one of the most historic mines in the county back to life since it announced in May that they had “entered into a non-binding letter of intent to acquire the Bunker Hill Mine Complex.”
On Aug. 28, Liberty signed an agreement with the Placer Mining Corporation (the current owner) to lease, with an option to purchase, the mine.
Reid explained that the Company has spent the last year confirming that old ore projections are correct and digitizing their information in preparation to mine.
Liberty estimates that there are roughly 60 million metric tons of “reserve and resource” still present.
Grades of the ore slightly vary from zone to zone, but Reid said that they are “roughly seven percent zinc, two percent lead, and one ounce of silver.”
The three zones in particular that they are looking to conduct operations in are the Quill, the New Guard, and the UTZ.
These were the same zones that crews were working on in 1981 when the mine was shut down by the Environmental Protection Agency (EPA).
Reid made sure to point out that the mine’s closure back in the day was not related to a lack of ore.
“The mine did not shut down because of the mine,” he said, “it shut down because of the smelter.”
The “smelter,” Reid referred to, were the two now-defunct metal smelting plants formerly located in Smelterville.
During their time in operation, the plants released copious amounts of toxic chemicals and metals into the Silver Valley’s air, soil, and water.
Though the EPA played a significant role in the closure of the plants with emission regulations, the direct cause of the closures involved multiple factors such as commodity prices and labor disputes.
As far as the agency’s role in the mine reopening today, Reid expressed that the company and the agency are working very closely with one another.
“The EPA has been extremely helpful and I would almost describe them as our partners in the middle of this,” he said.
The deal Liberty made to acquire the mine has them paying the underlying owner (Placer Mining) $25 million over 12 years starting Dec. 1, 2017.
Another $20 million will be paid to the EPA over 9 years so that they will continue to operate the Central Treatment Plant (CTP) in Kellogg.
As part of the superfund clean-up, the EPA and the U.S. Army Corp. of Engineers have been treating effluent coming out of the mine with the use of the CTP.
The plant is in the process of an upgrade and expansion that includes the addition of a groundwater collection system to stop contaminated runoff from reaching the Coeur d’Alene River.
In addition to keeping the CTP operational, the money going to the EPA will secure Liberty a Water Discharge permit, which Reid said is “the only permit we need to put this mine back into production.”
Liberty will also acquire a “consent decree” from the EPA, which gives the company immunity against “any historical environmental liabilities.”
Reid stressed that, “our intention is to try to be the greenest project that is out there.”
On the list of things to do in order to open the mine, Liberty must find a mill(s) to take their ore to after it is pulled out of the ground.
Bunker Hill’s original mill was demolished, along with the smelting plant, by the EPA.
Reid explained that there are currently two empty mills in the Silver Valley and both the owners of those facilities are “extremely interested in pulling our ore through their mills.”
The use of these mills would be temporary, as Liberty has plans to complete their own modular-style mill in two years.
This mill, Reid said, would be capable of processing 1,500 metric tons of ore a day with the possibility of expansion in the future.
Another positive Reid mentioned about reopening the Bunker Hill Mine is its proximity to a working smelting plant.
“The Trail Smelter is about a three and a half hour drive north, just across the border in Canada, and it is operated by Tech (Resources).”
Tech has already expressed interest in receiving concentrates from the mine.
To understand how he came to be CEO, Reid explained that the eventual acquisition of the Bunker Hill Mine by Liberty Silver Corp. started three years ago when Bobby Genovese, Chairman of BG Capital Group, approached him with an offer to run the company.
Reid initially declined the offer, but Genovese continued to offer the opportunity to him over the next three years.
In 2016 when Reid sold the mining company he was with at the time, Genovese asked him what it was going to take to get his attention.
“Well, get the Bunker,” he replied.
Reid is known within the mining community in the Silver Valley for his work with the Galena mine in 2006.
When approaching the question of how to get the Bunker Hill Mine going again, Reid said he is using a familiar strategy.
“I’ve put together a very experienced management group,” he said. “It was very similar to the group that I used in U.S. Silver when I acquired the Galena Mine complex and we took that mine...back into production.”
Referring to it as a “turn key” project at the moment, Reid boldly stated that, “if we get a tolling contract with one of these empty mills near us, we believe we can easily be in production in less than a year- maybe less than six (months).”
Reid explained that the current condition of the mine is good.
The bottom third of the mine is flooded with water, but the remaining two thirds are available to work in.
The hoists and ramps are also in working order.
If and when the mine first opens up, Liberty will be hiring around 100 people initially to run Bunker Hill’s operations- 50 to 75 underground, 12 to 15 in the mill, and 15 as office staff.
“When we get into full production at 1,500 tons a day, I expect that it will expand to over 100 people,” he said.
In the next 12 months, Reid wants to raise $5 to $7 million (most of which is spoken for) by the end of November and $20 million before Christmas.
This money will go toward repairs at the mine.
Liberty plans to acquire a 43-101 (a Canadian National Instrument resource and reserves calculation) by February of next year.
Obtaining this will allow them to be listed on the Toronto Stock Exchange, then lead to being on the New York Exchange.
At the end of the call, Reid was incredibly upfront when he explained what his, and Liberty Silver’s, intentions are with the Bunker Hill Mine.
“My job is not to empire build....The way I have always operated is to de-risk operation, build it as far as i can- in this case take it into production, and ultimately sell it.”
For more information on the Bunker Hill venture, visit http://bunkerhillmining.com/.