Thanks go to my colleague Polar Bear Dave for filling in the blanks and sending me his pictures from the trip.
“A hungry dog believes in nothing but meat.”
Anton Chekhov, The Cherry Orchard
Every so often, I’ve been privileged to visit a project that is SO woeful that I’ve started to think mid-tour that there must be a hidden upside; something I’ve missed that everyone else can see. A trip to Morocco years back springs to mind. We were there to visit a VMS project which wasn’t. It was a small, shear zone hosted base-metal occurrence. About 600 stream sediment samples had been collected in a 10x10km concession(!) looking for more “VMS” occurrences; enough geochemistry to spot a discarded AA battery 3 miles upstream, despite the total lack of hydrothermal alteration in the country rock.
I mentioned another travesty in my last post A Few Thoughts About Optimism in Exploration. This one was blind optimism on such a grand scale that I was actually in awe of the guys showing us around. The total lack of common sense was exceeded only by the hopelessness of the project. When it was over, my colleague Dave and I drove back to Vancouver alternately stunned into total silence or engulfed in hysterical laughter at what we’d just witnessed, checking our notes to make sure it was real.
Zombies Ate My Brain!
We’d done an office review of hundreds of zombie juniors on the Venture Exchange; companies with no cash that may have had a stalled project in need of funding. The work flagged a gold project in an old Mine near Wenatchee in Washington; the self-proclaimed Apple Capital of the World by the locals, who’ve obviously never been to Kent in southeast England where I grew up.
Abandon Hope
On paper it looked interesting. A highish-grade gold resource near an old abandoned mine. We decided that a reasonably straight forward exploration program might add value to the project assuming it was real, so we arranged a visit, booked a motel, jumped in Dave’s truck and headed south to Wenatchee to meet the guys from the company.
That night, they turned up at the motel with a laptop, a projector, but no screen -they thought we might bring one with us on a mine visit- so the presentation was given on a sedately waving bedroom curtain. Naively, Dave and I hoped to see some technical information on project. Instead, we were treated to a video taken underground at the old mine by the local caving club: a gripping blockbuster featuring amateur spelunkers exploring dark tunnels and dodgy looking stopes full of unstable piles of rubble.
But wait! That was no ordinary pile of rubble, they announced proudly. Woo hoo. It was blasted ore that was never processed and it contained a lot of gold, maybe as much as 150,000 ounces, yessiree. All we had to do was run it through a plant and get the gold out. We asked the obvious.
Dave. “Is there a plant nearby or is the old one still functional?”
Them. “No and er…no.”
Dave. “So how do we process it?”
Them. “You build a plant and use the revenue from processing ore to pay for it.”
Dave. “Morons.” (Actually, Dave didn’t say that, but he should have.)
Ralph. “Well, I’m sure we’ll see tomorrow.”
That night, over a steak dinner, we convinced ourselves that the next day would be better. It couldn’t be worse than the wobbly caving movie. Something a little meatier would emerge for sure; maps, or cross sections, or maybe drill core. There had to be something. So, the next day, after a bad motel breakfast -those reconstituted spongy eggs and suppository sausages- off to the mine we went, full of the childish excitement that comes when geologists get kitted up to go underground on a project for the first time.
We’re All Libtards.
Our first stop was to see the mine caretaker to get the keys. He lived in a small, run down house near the mine. From the sour look on his wizened face, I guessed he was at least 123 years old, most of which he’d spent being thoroughly miserable and rude to people. He cottoned on that we weren’t locals when Canada and Vancouver were mentioned. Within 5 minutes he was shouting pro-gun vitriol at us with NRA-branded sweat oozing out of every pore. Canadians were commie-pinko-liberal-faggots (slightly redundant there…) who shouldn’t be let into the US because, you know, satanic gay libtards and The Second Amendment.
The piece de resistance was a superbly crafted rant about the FBI, SWAT teams and gun confiscation, scripted by a master polemicist, which ended something like “..and when those fuckers from Obama’s FBI land their helicopters on my front garden and come looking for my guns, I’m coming out shooting at them, those unconstitutional fucks.”
Dave gave me a sideways glance; the quietly panicky type that implied our violent deaths were imminent and could we please leave? Bear in mind, the Mad Caretaker was only the 5th person we’d spoken to, so Wenatchee was doing quite badly on the people front -a dubious start, apples or no apples.
“Well, this is fascinating stuff. Thank you for sharing -lots of food for thought- and we’d love to stay and chat some more over coffee, but I think we have to go underground and gouge our eyes out, right?” I shouted over the increasingly hysterical ranting.
Them: ” He’s er.. got a point don’t you… What’s that? Please stop shouting. Oh right… yes…the mine.”
We bade the caretaker a fond farewell and jumped back into our alarmingly unarmoured truck. Dave wrote dryly in his field notes “The Wenatchee residents are “distrustful” of outsiders, especially suits.”
The Cherry Juicer
“I keep expecting something to happen, like the house caving in on us.”
Anton Chekhov, The Cherry Orchard
We headed for a small warehouse just through the mine gate. It was the kind of place where good ideas go to die. Sure enough, inside it was chaotic and cramped, full of filing cabinets, racks of mine maps, and a tangle of tanks and pipes that used to be some kind of processing plant and turned out to be another key part of the unfolding debacle. A few years before, they’d tried to reinvent the mining company as a Cherry juice producer, all very logical for a junior ExploreCo because production is production right? Who gives a monkey’s what you make when you have cash flow? They opted to spend their treasury on a high-pressure juice processor/pasteurizer which worked a couple of times, then broke down and never squeezed again, leaving them cashless and juiceless.
I’m Going Underground
Determined to see the train wreck through to the end, Dave and I pressed on, donning hard hats, lamps and steel toed boots, gamely pretending to ourselves that somewhere behind the wobbly facade there must be value.
After a 5-minute drive, we got to a gated adit entrance on a small bench cut into a hill side, the same one the local cavers had used. It accessed seven miles of partly flooded underground workings. Our goal was to visit an old mining stope two thousand feet ahead of us which, we were told, was full of rubble -unprocessed ore according to the guys, 200,000 tonnes of it abandoned by previous operators with an estimated grade of between 0.15-0.2 oz/short ton (5-7g/t Au). It had been blasted and broken and could (in theory) be drawn and hauled to surface for processing. I was doubtful. My experience as a mine geologist was that such a large amount of high-grade ore is rarely left in place once blasted.
Eventually we stopped at a side tunnel which opened up into a largish stope full of rubble; their broken up high grade ore. After staring proudly at it for while, they pitched us the first part of their development concept. The 200,000 tons of rock in the stope could be stripped out under a rehabilitation license, rather than under a mining permit (aka. we’d be lying to the permitting authorities.) Once it was “rehabilitated”, it would be crushed and run through a non-existent plant that the revenue would later pay for, thus extracting the nasty gold contaminant, leaving waste sand that could be sold for concrete aggregate. Hey Presto! We/They/Whoever would be left with nice empty stopes, lots-o-gold to sell, no waste and we’d get additional revenue from selling the sand. They even showed us a large pile of sand they’d made running a few tons of ore through a very small bench top plant. Dave and I looked at it skeptically.
Dave whispering: “Pssst. Ralph, what’s that, the shiny bits in the sand?”
Ralph: “I think it’s pyrite.”
Ralph: “Er, guys, what’s the shiny stuff in the sand? There’s lots of it.”
The: “Looks like pyrite.”
Dave: “What’s the sand going to be used for?”
Them: “Concrete aggregate.”
Dave: “Won’t the pyrite oxidise and become acidic? That’s bad for concrete and cement right?”
Them. *crickets*
Concessions, What Concessions?
” I was born here … without the cherry orchard my life has no meaning for me.”
Anton Chekhov, The Cherry Orchard
We moved on to the last stop on our engaging tour, up a nearby hill to take in the view and marvel at the size of the gold property. Lots of ooh-ing and ahh-ing ensued as we gazed on some very attractive orchard country; a bucolic landscape, a little snowy in places, that was distinctly lacking in large mine head frames.
Across the valley along a ridge line was a Cherry Orchard, a lovely old established cherry orchard surrounding a big house. Underneath that cherry orchard, they said, was the highest-grade part of the gold deposit, but it was 2,000 feet down. It had been drilled years back and was definitely there. Really. And not to worry, they had it all worked out. All we had to do to get to it was run a 1.7-mile-long inclined adit from the old mine to the deep ore body, at an estimated cost of about US$15m. On the way down, the adit would go through another ore body they’d seen on the plans, which could be mined and processed for gold to fund the adit. When the adit was complete and mining had started, an ore shaft could be developed 2,000ft vertically up from the ore body to surface where it would emerge in the cherry orchard, the back yard of a seriously resentful orchard owner.
Oh, and by the way, it would take about 6 years to permit a new mine.
And then we got to the kicker. The as-yet unspoken crux of their delusion. Our hosts casually admitted that the concessions covering the deep orebody had expired because they’d forgotten to renew them, so the adit would be heading to an ore body they didn’t own.
Even if they did have the permits, we asked, wouldn’t the cherry orchard owners object to a fucking big head frame and ore pile despoiling their world-famous cherries? There was a long pause and some nervous foot shuffling.
It was time to go home, and as we drove we mulled over the outline plan we’d been presented with:
Stage 1)
With no permits, haul 200kt of possible-ore-but-might-be-barren-rubble from an old stope. Extract gold by running rock through what? -a broken-down high-pressure cherry juicer? -then lie to the permitting agency about why you’re moving the rock. Sell gold and sell crushed up pyritic rock for use as acid-generating cement aggregate.
Stage 2)
After at least 6 years of permitting, blast a 2km adit from old mine, through a possible-but-not-definite ore body that might or might not pay for the adit development once processed through the cherry juicer, to access an ore body they’d lost the concessions for, and then build a 2,000ft ore shaft which would daylight in a cherry orchard owned by someone who had a big house there and would likely shoot the first person to turn up with a drill.
Oh For God’s Sake Stop It.
Funny enough, the company was cease-traded about one year after our visit. We weren’t the only visitors to come away underwhelmed by show-and-tell and they eventually ran out of money and couldn’t file their financials.
But we did have a nice bottle of red from Oregon at dinner in Wenatchee and ended up with a good story to tell so all was not lost.
Post Script. Duck and Cover
OK, I will admit that the visit wasn’t a total waste of time, thank God.
As we trudged along the main underground haulage, past cross cuts and side adits, we noticed some were full of what we thought was garbage, big old cans and stacks of boxes. But the cans were marked: “Office of Civil Defense. Drinking Water. 171/2 gallons”, and the boxes read “Cracker. Survival. Civil Defense.” They were survival rations from the depths of the 1960s Cold War, when the threat of communist nuclear attack was thought to be imminent, and the kids practiced Duck and Cover every at school.
The US Office of Civil Defence had dumped barrels of water, boxes of crackers and cases of blue jeans in the mine in case the Russians attacked. It was one of hundreds of similar dumps across the US. The survivors of Armageddon were supposed to hide in the tunnels, where they’d live for years months days on a scurvy-inducing diet of water and crackers, wearing nothing but blue jeans as they succumbed to radiation sickness and oozing blisters. The jeans had long since been stolen as valuable collectors’ items and the crackers and water barrels had been vandalised by visitors using the tunnels to party before a gate was installed.
It was the one genuinely interesting part of the visit.
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