HELENA, Mont. - The Drumlummon gold and silver mine near Marysville hit pay dirt last month.
According to mine officials, ore recently excavated from the site as part of its exploration work yielded 1,200 ounces of gold and 33,700 ounces of silver. With gold going for about $1,200 per ounce and silver fetching $17 per ounce, the metals are worth about $1.99 million.
What's particularly interesting to John O'Donnell, chairman of Toronto-based RX Exploration Inc., is that the ore in which the gold and silver was found didn't all come from the main "Charly" vein, which has been the focus of the company's attention. Instead, the ore was a blend of rock from the Charly vein and lower grade rock that was loose on the ground from old mining activities, along with what's called "gob backfill" - and is just like the name sounds.
"The old timers left a lot of rock down on the ground when it wasn't economical for them to mine it," O'Donnell said. "So we're averaging (2.2 ounces of gold and 24 ounces of silver per ton of ore) and that's not looking at just the high grade."
In fact, their samples have shown a high of 13 ounces of gold and 2,036 ounces of silver per ton of ore. That's thrilling to O'Donnell, since some mines currently operating recover only about 0.4 ounces of gold per ton, or less.
"Obviously, there aren't really high grade sections everywhere, but we certainly love to see that kind of stuff," O'Donnell said. "It's exciting to see the black - that's silver ore - and the gold flecks on the side of the core. We continue to be very happy with this."
Murray Nye, president of RX Exploration, said it's good to have money coming in from the mine, since the company is investing about $1 million per month as it moves toward re-opening. He didn't have current figures, but as of last April that had amounted to about $15 million. Among other items, the money is paying for treating arsenic-contaminated water that's being pumped from the lower levels of the mine; blasting new tunnels; and taking core samples, which are being milled at a facility in Phillipsburg.
About 36 people are now employed at the mine, Nye said, along with eight or 10 at the Phillipsburg mill, where the precious metals are being extracted from the ore.
"So we've created a few jobs, which is nice," he added. "We'll be hiring more as we need to.
"And it's good, clean ore, which is nice, especially from an environmental standpoint. Nothing has to be done to the ore that impacts the environment in any way."
Nye said the company believed that the old miners didn't get all the gold, but that he was "pleasantly surprised" to see the results from the recent samples. He added that they think they've also found another interesting area lower than the Charly vein, which is showing some good color.
"It's very encouraging," Nye said. "We've got a lot of money going out, so it's nice that we're getting a little coming back in."
The Drumlummon Mine goes back to the 1880s, when Thomas Cruse discovered gold back into the mountainside. The mine gave up about $50 million in gold and silver, and was the largest underground gold producer in Montana. However, legal battles and the flooding of the mine's lower levels ended major exploration and excavation efforts in the 1950s.
When gold prices started rising earlier this decade, RX became interested in the old mine and started exploration efforts last year. If all goes as planned, the company expects to eventually seek a production permit from the state.
"It's certainly a nice project, and everything is going well," Nye said.
He noted that in recent months, the Drumlummon has been featured in The New York Times and on NBC's "Today" show. On the morning television show segment, the reporter was on hand when Mike Gunsinger, the mine operations manager, opened a package that was sent to him through the mail. Out dropped 12 pieces of gold, all nicely stamped into thin, 1-ounce rectangles.
The reporter was stunned, looked at Gunsinger and asked: "Wait. You got this in the mail?"
Gunsinger look quizzically back at the reporter, saying with a smile: "They mailed it. We're in Montana, you know."
The Independent Record is a Lee Enterprise newspaper, as is the Elko Daily Free Press.