DGRI in the local newspaper
By Jeff Duewel
of the Daily Courier
MERLIN — Fred Wilcox scooped out a handful of dull, gray mud from a large fiber sack.
You wouldn’t know it, but thar’s gold in that mud — about 18 ounces per ton, produced at Dutch Mining’s mill at the back end of the Rendata Industrial Park, formerly the site of Miller Redwood.
“This isn’t a new industry here, it’s one that’s coming back,” said Wilcox, the mill superintendent, alluding to Southern Oregon’s mining roots.
Dutch Gold Resources, which owns Dutch Mining, recently completed a $4 million upgrade to the mill, which now can process more than 300 tons of ore a day, up from previous capacity of 120 tons.
A few truckloads were hauled from the Benton Mine beginning in mid-March, and the company hopes to ramp up to full production within a year, Wilcox said. That could mean 30 workers at the Benton Mine and about 10 at the mill. The company went public in January. It has already hired several miners from Nevada, Idaho and Alaska, mining-rich states.
It’s the culmination of 13 years of work, investment and, like any mining operation, some luck.
When the price of gold spiked last May to about where it is now, about $675 an ounce, the company hastened the mill upgrade which began in 2005, said Patrick Engel, CEO of the Rendata Industrial Park and a shareholder in Dutch Gold Resources
Dutch Mining formed in 1994 to investigate re-opening the Benton Mine, which from 1935 to 1942 supported 60 miners and produced $550,000 in gold. The underground mine is located in the Whiskey Creek drainage above the Rogue River a few miles northwest of Grave Creek Bridge.
Dutch Mining did small amounts of test milling for several years at Rendata, slowed by a slump in gold prices in the late 1990s. With the expansion, the company anticipates moving into the Gold Bug Mine adjacent to the Benton.
Inside the 320-foot-long mill building, ore is crushed, pulverized in a rotating ball mill, and mixed with an alcohol-based solution in flotation cells where gold particles stick to bubbles. The solution is then run through a thickening tank, and another filter to produce the mud concentrate that contains the gold.
Leftover sand and mud, or tailings, are unloaded in the former log ponds for Miller Redwood.
The concentrate is sold to a buyer who trucks it to Mexico for smelting into gold bars, Engel said. The ore also produces small amounts of silver, aluminum, copper and iron.
“The increase in mill production bodes well for us as we anticipate additional opportunities exist for us to mill neighboring mines’ ore,” said Dan Hollis, CEO for Dutch Gold Resources, in a company news release.
There are hoops to jump through before Dutch Gold gets close to processing 300 tons a day year-round, despite having permits from the Department of Geology and Mineral Industries, Department of Environmental Quality, Department of Water Resources and others.
At the Benton Mine, the company still operates under an exploratory permit from the 1990s, according to Ben Mundie, reclamationist for DOGAMI.
That allows mining of only 5,000 cubic yards of material a year. Wilcox said ore from the Benton is 3.27 tons per cubic yard, so the permit allows about 16,000 tons, which would run the mill about 50 days at full capacity.
To go beyond, the company needs an operational permit, and there are only a handful of mines with a full operating permit in the state, Mundie said.
“They’re touting themselves as a fully operational, fully permitted gold mine,” Mundie said. “There’s going to be some engineering required to get that operational permit. It will have a lot tighter control than the current permit.”
“We are applying for that right now,” Wilcox said. “By the time we get to the point where we need that, we’ll have it in place.”
The company is also seeking gold ore from other sources to run through the mill.
Mundie said one thing in the mill’s favor is that gold-bearing ore from Benton does not contain sulfides, which create acidic runoff from tailings. A good example is the ill-fated Formosa Mine in the Cow Creek drainage between Glendale and Riddle, where acid runoff has polluted Middle Creek. The mine, defunct since 1993, has been proposed for a Superfund site for cleanup. The Dutch Mining mill has some equipment formerly used at Formosa, Wilcox said.
“The water quality issues at the (Rendata) site aren’t as severe,” Mundie said.
Engel is confident Dutch Gold will eventually operate at or near full capacity.
“This thing will grow,” Engel said. “We’re in it for the long haul. So far we’ve been lucky and well situated.”
