Hall Stewart made a presentation at the Sunsites Community Center July 22 about his company’s plans in the area. The Pearce-Sunsites Chamber of Commerce hosted the meeting. About 150 people attended, many supportive of the proposed mines and many concerned about local water depletion and contamination.
The Commonwealth Project is held by Commonwealth Silver and Gold Corp. (CSGC), a private Arizona company, incorporated in 2010. CSGC is 100-percent wholly owned by Commonwealth Silver and Gold Mining Inc. (CSGM), a company incorporated under the federal laws of Canada.
Hall is Vice President, Exploration and a Director of CSGM and President and Director of the US subsidiary CSGC. Hall and CEO and President Micheal Farrant are co-founders of both companies.
Stewart said he decided to make the presentation to dispel inaccurate information making the rounds locally, as well as false statements made by a website, www.commonwealthmine.org, whose bloggers have failed to identify themselves to Commonwealth Silver and the public.
Commonwealth Silver’s website is www.commonwealthsilver.ca, and Stewart said his contact information is available on the site for anyone with questions or concerns (Cell – 520-820-2686 and email – firstname.lastname@example.org).
“I’m proud of my work. I put my name on it. Nowhere on their website do they identify themselves and they are making very unsubstantiated claims,” Stewart said toward the end of the meeting.
Stewart told the audience it had been two years since their last meeting and it was time to give an update on the progress the company has made. The company has however provided presentations and updates annually at the Old Pearce Heritage Days in each of November 2011, 2012 and 2013 during Thanksgiving.
Farrant attended and spoke minimally during the presentation.
Stewart explained the three projects the company is working on: Commonwealth Project at Pearce Hill, San Ignacio Hill, about a mile east of Commonwealth Mine next Highway 191 and Blue Jeep, northwest of Kansas Settlement Road and Highway 191.
The Commonwealth Project is an advanced exploration development project located at Pearce Hill, where the deposits were mined for high grade silver and gold ores beginning in 1895 (known as Commonwealth Mine), with commercial scale mining of the high grade ores ending in the late 1920’s. Small scale mining continued through 1942. During this time, the Commonwealth Mine produced about 12 million ounces of silver and 138,000 ounces of gold, making it Arizona’s second largest historic primary silver producer. Further exploration and drilling continued from the 1970s through mid 1990s until a sharp decrease in silver and gold prices.
“Arizona is one of the most important mineral producers in the U.S., second only to Nevada, with $5 billion in minerals – mostly copper,” he said. “Until 1981, Arizona produced a half billion ounces of silver. The state is under-explored for silver because they do mostly copper. Commonwealth Mine was the second-largest producer when silver was its primary project. No. 1 was Tombstone.”
Stewart said the company must complete two mineral resource estimates, meet quality assurance and statistical acceptability. The first step is continuing the mineral deposit analysis and the second is to determine economic feasibility -- maximum profitability with acceptable impact.
In June, the company acquired Pearce Ranch, a 1,320 acre ranch contiguous to the patented claims at the Commonwealth Project, to add to their with 34 unpatented mining claims and 64 drilling holes at Blue Jeep (10), San Ignacio (18) and Six Mile Hill (6).
“We hold one of the oldest mining claims in the country dating back to 1898 under President McKinley – everyone knows this is mining property,” he said. “There are 208 holes drilled on our property, 155 of which were drilled before we got the property. We will do more drilling before the mine opens.”
“We have to have measured resources that indicate adequate confidence. Indicated resources show a high level of confidence and inferred resources are those that are too speculative, as we can’t say what the cost is to produce results,” Stewart said. “There are 31.1035 grams in a troy ounce, and it takes 60 tonnes (2,205 pounds each) to get an ounce.
“In our Preliminary Economic Assessment, the pre-tax Net Present Value (NPV) of the Commonwealth Project is $141 million. There will be an after-tax NPV at a 5-percent discounted rate of $101.3 million and we expect a 58.2 percent rate of return. This is stunningly good,” Stewart said. “Pre-production capital cost is $27.2 million to build the mine and just over one and a half years to get paid back. We’d expect to move 20,000 tonnes a day for nine years, recovering 312-thousand ounces of gold at $1,350 per ounce and 10.9 million ounces of silver at $22.50 per ounce, as of the PEA study we did on Feb. 13, 2014.
He added that the corporate tax rate is 25 percent, and the payroll taxes generated would also be good for the state.
While opening the mine is “two years from receiving the aquifer protection permitting,” when it begins operation it will require 145 employees with an average salary of $50,000 a year – from the mine manager’s $300,000 per year to processing and blasting employees making $12 to $15 an hour, Stewart said. He suggested that students or others wanting to join the company begin their studies now for the many opportunities that will be available.
“We have spent $7 million locally for supplies and work from a local drilling company, as our preference is always to use local contractors (which they will need for all trucks and mining equipment),” he added.
Stewart said their biggest investor is Coeur Mining, Inc., a major U.S. mining company, and Commonwealth Silver also signed an agreement in April to merge with Delta Gold Corporation this year.
“We’re here to hit a homerun, but we haven’t hit yet,” he said.
This year the plans are to acquire more surface rights, study the area’s metallurgy and begin the environmental permitting process.
As for the local public’s concern with water depletion and contamination, Stewart explained that they have data back to 1975 and they have also been allowed to test some private wells for current data.
Records indicate that pre-2000 water level was a 4,110 feet (280-290 feet below the surface) and by December 2012, the water level dropped to 4,035 feet. He said that records show the water level dropped about 75 feet in 40 years, but not in a linear decline. “It dropped about a foot per year since 1975, and this is conjecture, but likely that is about three feet per year now,” he said.
These numbers do not take into consideration seasonal crops which may have higher water demand or two new large agricultural wells on on Kansas Settlement and on Dragoon roads, noted Murray McClelland, president of the Pearce-Sunsites Chamber of Commerce, who has asked for a Legislative study on the area’s underground water resources.
Stewart explained that the mine will be a “closed circuit (recirculating) zero-discharge” mine, with two storm water retention pools for which two inches of rainfall will provide water for two weeks from each pool, with water recycling and the only loss from evaporation.
He said the structure of the mine will include two wells, and a heap leach pad which will be monitored for toxics, pollutants, arsenic, etc. for at least a year before a permit is requested.
The mine’s open pit will be 3,300 feet long with a hill 100 meters tall. He said, “The pit is below today’s water table and it’s only at 40 feet, but we will be monitoring water levels and in years ahead water will be down drawn.”
Stewart explained that the area where their projects are is broken into two aquifers – the Willcox Basin including the Commonwealth and Blue Jeep projects and the Douglas Basin, which includes the San Ignacio Hill project.
He said the mine will “be a new commercial user of water resource. Our water consumption will be 580 acre-feet per year, or 230 to 360 gallons/minute - -not the 3,000 gallons/minute reported earlier in the Arizona Range News and the Ghost Town Trail newspaper. That number is what is circulating.”
He said the amount used per year (580 acre-feet per year) is comparable to a center pivot crop circle of alfalfa (a high water usage crop) or three crop circles of corn, which used less water.
“Using Google Earth, we will be one of 366 comparable sized water users in the area,” he noted.
An attendee asked if cyanide was still around from the old Commonwealth mine closed down in 1926.
“There are 200,000 pounds of tailings left, but the cyanide is inert. It likely broke down within two years,” Stewart said.
“We will keep mining on patented mining claims with processing on private land and the crusher nearby. The cyanide solution will be poured across the leach pad. We want to catch all the cyanide, as it is full of gold – we have the financial incentive,” he said.
“Sodium cyanide is toxic, but it takes a lot to kill you. There have been no documented human deaths from cyanide-related access in 50 years,” he said. “It is poisonous to animals, but plants love it – it’s fertilizer.”
Stewart said the school was built on patented mining claim land that was leased to them in the 1890s, but Commonwealth Mine retained the mining rights.
“We will be very careful not to blast at the nearby site during school hours, but we will pay for busing the students to Cochise School if you want them to,” he said of a question about student safety at Pearce School.
To a question regarding arsenic in the Pearce School’s well water, Stewart said the school failed water quality tests recently because the regulations changed with the Clean Water Act in 2006. “The amount of arsenic in the well water did not change; they lowered the concentrations.”
Stewart also said that none of the all five types of rocks in the acid mine drainage area were acid generating when tested, but were already oxidized and are instead slightly basic or neutralizing.
He was asked what the company’s plans were for giving to the community and what percentage of the revenue would be donated to the community.
Stewart said a percentage has not been determined, but as of the meeting, Commonwealth Silver has bought Our Lady of Victoria Church with the intention of restoring it, bought chairs for the Pearce School, helped fund the construction for a medical helipad site, and A.Y. Smith House, known as the “Commonwealth Mine Manager’s House.”
When asked about where the mine would send the gold and silver for processing, he said they’d likely use a refinery in Massachusetts or Salt Lake City, Utah and then it will be sold on the international market.
One person complained that employees working on the mine were not obeying speed limits and dust was being created. Stewart told the Sheriff’s Office deputies at the meeting for security to take note and the employees to obey the speed limits.
Another person asked whether the leach ponds would have liners as some liners in Oregon have recently leaked. Stewart said there would be liners and “all crushed rock on the leach pad would be crushed to at least less than one-half inch and no trucks will drive onto the heaps,” as was the case in on the Oregon leach pad that leaked. “We will use a conveyor belt” to put the rocks on the pad.
“It is not in the company’s interest to allow them to leak. That’s like pouring gold into the ground,” he said, adding, “We are using newer technology and will continue to use the best practices we can. We must also have a hazardous spill prevention plan.”
He added that Arizona Department of Environmental Quality inspects the mine every six months.
“Last time we were inspected, along with two other companies nearby, we were in compliance. The other two received one citation and several citations. We had no citations,” he said. “We still have a lot of permits to get before we start mining.”
“Would you want your house by this mine?” asked a man in the audience who would not give his name for publication.
Stewart replied, “I didn’t buy a house next to a mine.”
“We’re glad you’re coming here. Let’s give him a hand,” shouted out Tom Whiteman, a geologist from Sunsites.
When www.commonwealthmine.org was asked by the Range News for identification, the reply was as follows:
“We wish not to identify ourselves individually since many of us are members of Anonymous, which you can learn a bit about at https://www.youtube.com/watch?v=x82TWGp2Tlw. We can tell you that our members involved with the Commonwealth Mine Project include people in the Pearce area, Tucson, Phoenix, Scottsdale, California, New Mexico, Texas, Canada, etc. We also conduct ongoing activities against Commonwealth Silver through Christian faith based organizations, human rights groups (clean water is a human right btw), and numerous environmental organizations listed on our site.
“It is important to note that our activities concerning Commonwealth Silver are just a small portion of our ongoing projects to eradicate the cancer of Canadian mining which is wrecking havoc on the State of Arizona, our nation and the world. In the big picture, Commonwealth Silver is a small fish in a small bucket, however, any human life they negatively impact is not.
“Note that nothing we share is unsubstantiated. Our site and other activities are all linked to facts that back up everything we say, including the fact that Canadian mining companies will murder or cause serious physical harm to anyone who becomes too much of a problem. Hence, we are Anonymous.”
It was signed, “The CommonwealthMine.org Team.”
In response to their claim that “nothing we share is unsubstantiated,“ Farrant said, “Almost all of the “claims” on their site are, in fact, unsubstantiated. Goldcorp Inc. has nothing to do with the Commonwealth Project and has not invested a single cent in either Delta Gold Corporation or Commonwealth Silver. They are not our partner. That is not to suggest that it would be negative or positive if they were. The fact that they are not involved in any way is simply a fact. While I worked for Barrick Gold Corporation at a point in time, none of what is alleged against Barrick occurred during my tenure and many of those claims are unsubstantiated. We have never lied to the people of Pearce and are more than happy to field any questions that anyone may have about our plans and business practices.
Both Hall and I would be happy to engage them in a public debate to test the theory that all the information on their website is fully substantiated. You can post all the articles in the world (which it appears that they have done) concerning environmental mishaps and allegations of corruption and that doesn’t for a second mean that it applies to us.
“Frankly, when an organization such as the Willcox Range News is providing good, unbiased reporting, websites like CommonwealthMine.Org are an insult to our collective intellect and sensibilities as human beings. To suggest that we would cause them physical harm if their identities were known is ridiculous and would suggest that we would ignore the rule of law in the United States and act solely of our own accord... again, ridiculous.
“I would urge you and all others who strive to present fair an unbiased information such that the public can be informed to call these cowards out and label them as such until they have the courage to reveal themselves to all of us. Only those afraid of the real truth have reason to hide,” Farrant said.