Shafter mine owners say two years possible

Sam Rinehart checks out a silver vein in Shafter mine

The Shafter mine could be pulling silver out of the ground within two years, say executives with the mine’s new owner, Vancouver, B.C.-based Aurcana Corp.

The two men - Ron Nichols, vice president exploration, and Andy Nichols, vice president operations - were in the Big Bend area last week talking to residents about plans for the mine.

The two-year timeframe is the optimistic, “if everything goes right” plan,” Andy Nichols said.

First, the company must update its pre-feasibility plans and ensure that all state and local permitting and paperwork has been completed. That process could take a year.

Once that’s done, new construction and refurbishing at the mine will take another year.

When opened, the mine is expected to employ up to 100 workers, many of whom will be local.

“We wanted to get down here and talk to local Shafter citizens and listen to their concerns [about the mine reopening],” Ron Nichols said.

More than 20 Shafter-area residents met with the Aurcana representatives last Thursday. Most of their concerns seemed to center on water and noise.

“Our operations will have no impact on the local water supplies,” Andy Nichols said.

(By the way, Andy and Ron are not related).

Currently, the mine is flooded, but pumping out the water will be a routine engineering job, they said.

As for noise, they are looking at ways to place the rock crusher - which is a very noisy machine, they said - within the walls of the mine itself, thus muting its sound.

“We’re going through engineering studies at the moment because the previous studies are dated - prices and costs change,” Andy Nichols said. “What we’re doing is a pre-feasibility study to update previous work.”

“We’re also looking at alternatives on the mining,” Ron Nichols said. “The old study was based on mining through the existing shaft, which is pretty small. Remember, you have to get all your men, material, equipment and waste through that little shaft.

“So the alternative is a mechanized ramp down from the surface,” he said, “which will handle all those things plus specialized trucks and the bigger underground equipment, which makes for more efficient mining.

“We can even get the crusher in there, which could mean great lessening of the noise.”

The deposit has been a known commodity since 1942, when the mine closed not from lack of ore but by the War Act.

The reopening of the Shafter mine is a simple matter of economics, the men said.

For much of the past couple of decades, the price of silver has been in the $5-$6 range. It spiked recently at $20 an ounce and was at $17.50 an ounce on Wednesday.

The price of silver dropped dramatically in the early 1980s after spiking at $68 when the Hunt brothers of Dallas tried to corner the market. After the Hunts failed, the price dropped dramatically.

“Since the price has risen - as a 2004 study indicated - prices are such that we should have a very good chance to be ahead of the game,” said Andy Nichols.

“When the mine opens, 80 to 100 people will be employed - operators on the ground, mill operators, engineering people, chemists, accountants, etc.,” he said. “We want to hire as many people as possible from local communities.”

He added that they do not want to have Shafter turn into a “company town.”

Aurcana Corp. started as Cane Silver in 1917 and worked in silver mines in the Ontario area.

“In the past few years, we were more an exploration company,” Ron Nichols said, “but the market has not necessarily been good for early-stage companies. We made a decision in 2002 to look for mines that had a good history that could be put back into production. That means that we’ve been on the lookout for mines such as Shafter that have proven reserves.

“We started negotiating to purchase the Shafter mine from Silver Standard Resources Inc. some time,” he added. “For them, it was a small percentage of their assets, for us it would be a big part of our company going forward.”

Jack Burgess, an Alpine High School and Texas Western graduate and longtime West Texan, has been instrumental in Aurcana’s efforts to bring the Shafter mine back to life. Burgess, who lives in Albuquerque, N.M., has also worked closely with the Chihuahuan Desert Research Institute.

While talking with the Avalanche last week, Burgess made the point that the Shafter mine “will be one of the safest mines anywhere” because of the ground it sits in.

“Results we have at the moment say it would last 10 to 15 years,” Ron Nichols said. “And we see exploration potential that would expand that.”

“These are expensive holes,” Andy Nichols said, “Between 1978 and 1982, Consolidated Gold Fields, based in South Africa, spent close to $20 million on the Shafter mine as an exploration play.”

Notes: The Shafter mine was the site of a key scene in the Oscar-nominated film “There Will be Blood.” starring Daniel Day Lewis.

Sam and Troy Rinehart, brothers and fourth-generation Shafter residents, are maintaining the property for Aurcana Corp. “Our family has been in this area since 1856, the first coming over from Ireland,” Sam Rinehart said. …

When the Shafter mine closed in 1942, its boiler was transported to Los Alamos and put to work as part of the Manhattan Project. …

See more about Aurcana Corp. at www.aurcana.com/s/Home.asp

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