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nvtaylor

09/16/12 11:54 AM

#56304 RE: M_T_Pockets #56254

M_T, your observations state the problems that many mine/mill owners go through. However, based upon my experiences permitting a mill shouldn't take over 2 years if the company is working on the permitting full time. We took a 15 yr old, mothballed 350 t/d mill here in Nevada to full operational in less than a year.

Several of the mines in the area are shipping their ores out of state to other mills and seem to be doing fine. But one fact that people unfamiliar with mining assume is that the operator just opens the door, turns on the lights and begins producing 350 tons/day. It takes a lot of time and underground/surface development to get the infrastructure in place to consistently produce those numbers. For example, the last mine I worked at started the underground development full time in 2005 and they weren't to 350 tons/day until 2008 and have spend over $100 million to get there. That's why I made the statement that for the mines to be ready for the mill next year, they need to be working right now.

Another issue is permits. A Colorado 110 permit only allows for no more than 70,000 tons to be mined in a year or 200 days of milling. But that is only one permit needed, there are literally 20-30 permits needed to start operations from the county, state, federal, USFS, BLM, etc. Depending on the environmental work needed to be done it can take anywhere from 1-2 years for an EA (environmental assessment) to 5-7 for an EIS (environmental impact statement). Again that is why the mines need to be working now.

If you go the MSHA website, any mine or mill needs to apply for a Federal ID with the Mine Safety and Health Administration to be legal to work. Currently there are no mines in the Silverton area active and only 5 intermittent ones in Ouray. Again someone needs to be developing to be ready.