Gold Resource Corp. Stalls Listing of Menominee Cultural Landscape on National Register of Historic Places
March 20, 2023 - A petition filed Gold Resource Corp. (GORO), owner of the proposed Back Forty mine in Menominee County, Michigan, has delayed – but not stopped – the inclusion of the Anaem Omot historic and cultural site on the National Register of Historic Places (NRHP).
The Jan. 23, 2023, GORO petition called on Joy Beasley, the Keeper of the National Register, to reject the nomination of Anaem Omot by the Menominee Indian Tribe of Wisconsin.
Beasley has now concluded that the listing of the cultural site on the NRHP is justified by the evidence provided in the tribe’s nomination papers.
However, she has returned the nomination with instructions to make “technical corrections” to clarify the archeological significance of certain parts of the proposed site.
The Menominee Tribe considers the nominated area along the Menominee River as a vital historic and cultural resource. Members of the tribe occupied the area on both sides of the river for generations before they were relocated to a reservation in Wisconsin, and members of the tribe still use the site for religious and cultural purposes.
The nomination has already been approved by the State Historic Preservation Offices in both Michigan and Wisconsin. Approval by the NRHP is the final step before the nominated area is listed on the national register.
“I have determined that the property appears to be eligible for listing in the National Register but have returned the nomination to the Michigan State Historic Preservation Officer for certain corrections,” Beasley wrote in a letter GORO’s attorney. “Please note that a ‘return’ is not a rejection of the nomination.”
Beasley denied GORO’s claim that the tribe’s nomination of the Anaem Omot was not adequately documented and that the Michigan and Wisconsin Historic Preservation Offices did not follow proper procedures in processing the tribe’s submission.
“The next step is for the State Historic Preservation Offices to make those corrections and resubmit the nomination to the Keeper so that the property may be listed in the National Register,” said Sherry Frear, deputy Keeper of the Register, in a March 19 email.
“A resubmitted nomination is not subject to public notice requirements, e.g., notice of its receipt will not be published in the Federal Register, and the Keeper may take action as soon as they have reviewed the nomination and have determined the corrections have been made,” she said.
Both Gold Resource Corp. and the Menominee Indian Tribe of Wisconsin have been contacted for comment on this post.
March 20, 2023 - A petition filed Gold Resource Corp. (GORO), owner of the proposed Back Forty mine in Menominee County, Michigan, has delayed – but not stopped – the inclusion of the Anaem Omot historic and cultural site on the National Register of Historic Places (NRHP).
The Jan. 23, 2023, GORO petition called on Joy Beasley, the Keeper of the National Register, to reject the nomination of Anaem Omot by the Menominee Indian Tribe of Wisconsin.
Beasley has now concluded that the listing of the cultural site on the NRHP is justified by the evidence provided in the tribe’s nomination papers.
However, she has returned the nomination with instructions to make “technical corrections” to clarify the archeological significance of certain parts of the proposed site.
The Menominee Tribe considers the nominated area along the Menominee River as a vital historic and cultural resource. Members of the tribe occupied the area on both sides of the river for generations before they were relocated to a reservation in Wisconsin, and members of the tribe still use the site for religious and cultural purposes.
The nomination has already been approved by the State Historic Preservation Offices in both Michigan and Wisconsin. Approval by the NRHP is the final step before the nominated area is listed on the national register.
“I have determined that the property appears to be eligible for listing in the National Register but have returned the nomination to the Michigan State Historic Preservation Officer for certain corrections,” Beasley wrote in a letter GORO’s attorney. “Please note that a ‘return’ is not a rejection of the nomination.”
Beasley denied GORO’s claim that the tribe’s nomination of the Anaem Omot was not adequately documented and that the Michigan and Wisconsin Historic Preservation Offices did not follow proper procedures in processing the tribe’s submission.
“The next step is for the State Historic Preservation Offices to make those corrections and resubmit the nomination to the Keeper so that the property may be listed in the National Register,” said Sherry Frear, deputy Keeper of the Register, in a March 19 email.
“A resubmitted nomination is not subject to public notice requirements, e.g., notice of its receipt will not be published in the Federal Register, and the Keeper may take action as soon as they have reviewed the nomination and have determined the corrections have been made,” she said.
Both Gold Resource Corp. and the Menominee Indian Tribe of Wisconsin have been contacted for comment on this post.
Back Forty Mine Plans Under Revision in Cost-Cutting Effort
March 3, 2023 - Initial planning for the proposed Back Forty mine in Menominee County, Michigan, “resulted in higher costs than we felt were acceptable,” said Gold Resource Corp. president and CEO Allen J. Palmiere in a conference call with investors March 3.
Palmiere cited “inflation and supply chain issues” for driving up the anticipated cost of building and operating the proposed mine.
As a result, “we made a decision to slow down work on the study to evaluate alternative mining approaches and process flow sheets as well as site infrastructure layouts, all in an effort to reduce capital and operating cost,” Palmiere said.
The cost estimates are part of a feasibility study for the Back Forty that must be completed before the Gold Resource Corp. board of directors can decide whether to approve the project. Palmiere said that additional engineering work for the revised feasibility study may be completed by the middle of 2023. Preparation of state permit applications would begin after board approval of the project is secured, Palmiere said.
Gold Resource acquired the Back Forty project from Aquila Resources, Inc., in December of 2021 for C$30.9 million in stock ($22.9 million in current U.S. dollars). The company has spent an additional $8.8 million on planning costs since then.
Prospects for the Back Forty are complicated by the fact that Gold Resource experienced a net loss of $6.3 million on its Mexican mining operations in 2022. in a March 2 news release, Palmiere blamed the loss on "global challenges such as inflation and localized challenges such as ground support and ventilation" at the company's underground Don David mine.
Further clouding the Back Forty’s short-term prospects is an anticipated 2023 decline in the quality of gold ore at the Don David mine. The company extracted 34,122 ounces of gold from the mine in 2022 but expects to recover much less in 2023 – less than 20,000 ounces.
“The forecast for 2023 while generating cash flow sufficient to meet our capital needs in Mexico and cover our anticipated expenditures elsewhere -- is tight,” Palmiere said. As a result, Gold Resource has suspended dividend payments to investors “to preserve our cash,” he said.
Recent exploratory drilling at the Don David mine has produced results that “are very encouraging and give us confidence in the potential for additional high-grade results,” Palmiere said.
If the higher-grade resources prove out, the company’s financial results should improve “into the near- and mid-term,” Palmiere said. “While it takes time to develop the resource from initial drilling, we're excited about the future and it's our objective to increase our resources and reserves this year through exploration and infill drilling programs.”
March 3, 2023 - Initial planning for the proposed Back Forty mine in Menominee County, Michigan, “resulted in higher costs than we felt were acceptable,” said Gold Resource Corp. president and CEO Allen J. Palmiere in a conference call with investors March 3.
Palmiere cited “inflation and supply chain issues” for driving up the anticipated cost of building and operating the proposed mine.
As a result, “we made a decision to slow down work on the study to evaluate alternative mining approaches and process flow sheets as well as site infrastructure layouts, all in an effort to reduce capital and operating cost,” Palmiere said.
The cost estimates are part of a feasibility study for the Back Forty that must be completed before the Gold Resource Corp. board of directors can decide whether to approve the project. Palmiere said that additional engineering work for the revised feasibility study may be completed by the middle of 2023. Preparation of state permit applications would begin after board approval of the project is secured, Palmiere said.
Gold Resource acquired the Back Forty project from Aquila Resources, Inc., in December of 2021 for C$30.9 million in stock ($22.9 million in current U.S. dollars). The company has spent an additional $8.8 million on planning costs since then.
Prospects for the Back Forty are complicated by the fact that Gold Resource experienced a net loss of $6.3 million on its Mexican mining operations in 2022. in a March 2 news release, Palmiere blamed the loss on "global challenges such as inflation and localized challenges such as ground support and ventilation" at the company's underground Don David mine.
Further clouding the Back Forty’s short-term prospects is an anticipated 2023 decline in the quality of gold ore at the Don David mine. The company extracted 34,122 ounces of gold from the mine in 2022 but expects to recover much less in 2023 – less than 20,000 ounces.
“The forecast for 2023 while generating cash flow sufficient to meet our capital needs in Mexico and cover our anticipated expenditures elsewhere -- is tight,” Palmiere said. As a result, Gold Resource has suspended dividend payments to investors “to preserve our cash,” he said.
Recent exploratory drilling at the Don David mine has produced results that “are very encouraging and give us confidence in the potential for additional high-grade results,” Palmiere said.
If the higher-grade resources prove out, the company’s financial results should improve “into the near- and mid-term,” Palmiere said. “While it takes time to develop the resource from initial drilling, we're excited about the future and it's our objective to increase our resources and reserves this year through exploration and infill drilling programs.”
Gold Resource Corp. Reports $6.3 Million Net Loss for 2022
March 3, 2033 - Gold Resource President and CEO Allen Palmiere blamed the company's 2022 $6.3 million loss on "global challenges such as inflation and localized challenges such as ground support and ventilation" at the company's Mexican operations in a March 2, 2023 news release.
Palmiere touted "very promising" results of exploratory drilling at the Don David Gold Mine that may deliver "higher grade resources into the near- and mid-term mine plan."
However, he also acknowledged that the grade profile at the Don David mine is expected to decline in 2023.
Meanwhile, "work continues with the feasibility study to advance the Back Forty Project in Michigan with a deliberate and measured approach," Palmiere said.
According to the news release:
Work related to Back Forty metallurgy and the economic model is expected to be completed in the first half of 2023.
Once the feasibility study is completed, the Company’s board of directors will evaluate the current economic climate and make a decision on how to move forward with the permitting and construction of the Back Forty Mine.
The Company continues to meet with the community and government agencies to demonstrate the value of the project.
March 3, 2033 - Gold Resource President and CEO Allen Palmiere blamed the company's 2022 $6.3 million loss on "global challenges such as inflation and localized challenges such as ground support and ventilation" at the company's Mexican operations in a March 2, 2023 news release.
Palmiere touted "very promising" results of exploratory drilling at the Don David Gold Mine that may deliver "higher grade resources into the near- and mid-term mine plan."
However, he also acknowledged that the grade profile at the Don David mine is expected to decline in 2023.
Meanwhile, "work continues with the feasibility study to advance the Back Forty Project in Michigan with a deliberate and measured approach," Palmiere said.
According to the news release:
Work related to Back Forty metallurgy and the economic model is expected to be completed in the first half of 2023.
Once the feasibility study is completed, the Company’s board of directors will evaluate the current economic climate and make a decision on how to move forward with the permitting and construction of the Back Forty Mine.
The Company continues to meet with the community and government agencies to demonstrate the value of the project.
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Can Gold Resource Keep Its Environmental Promises at the Back Forty Mine?
Jan. 21, 2023 - The potential for a catastrophic tailings dam failure was a key concern of opponents to Aquila Resources’ plans for the Back Forty mine. Now that Gold Resource Corp. has taken over the project, it has indicated that it will use dry stacking – a safer way to store tailings – at the Back Forty if the mine goes into operation. But can Gold Resource afford to keep its commitment to dry stacking? Prof. Al Gedicks of the Wisconsin Resources Protection Council has doubts. “Given GORO's limited ability to raise capital for the project, the likelihood of investing in a dry stack and avoiding a dam safety permit is next to zero,” Gedicks said in a Jan. 18 email to mine opponents. Mine tailings are environmentally hazardous materials that are left over after ore is processed to remove any valuable minerals. The tailings come out of the processing plant as a semi-liquid slurry – part finely crushed ore, but mostly water. At the Back Forty, processing of ore and storage of the tailings would take place on site. |
Photo courtesy Gold Resource Corp.
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The conventional – and less expensive – way to store tailings is in a large basin with a dam and/or embankments to keep the semi-liquid tailings in place until the solids separate and sift to the bottom of the impoundment. The water is then pumped off the top, reused or treated and released into the environment.
If an impoundment fails – as it did famously at the Mt. Polley mine in Canada (2014) and at a mine in Brumadinho, Brazil (2019), the tailings, which are highly toxic, can escape into the environment – including, in this case, the Menominee River west of Stephenson, Mich.
The results can be disastrous – and tailings dam failures happen more frequently than you might expect. According to Gedicks, there have been 46 in the past 20 years. He said a recent study reveals that mining waste failures are increasing in frequency and severity because lower grade ores have necessitated larger, open pit mines for economies of scale. “As mines grow bigger, they generate larger volumes of waste, stacked into higher tailings dams,” Gedicks said.
Gold Resource has addressed concerns about a potential tailings dam failure by stating publicly that it intends to use dry stacking at the Back Forty – removing most of the water from the tailings before they are deposited in piles at the mine site.
However, dry stacking can be five- to ten-times more expensive than a tailings basin, Gedicks said – costing at least $213 million over a seven-year life of mine, compared to Aquila’s $42.6 million estimate for a conventional tailings pond.
That’s the conservative estimate of the cost of drying stacking. Even so, it would increase the cost of the Back Forty from a 2020 estimate of $250 million to $420 million, if Gedicks’s data are correct. He questions whether Gold Resource can pay the higher cost of dry stacking, given its apparent difficulty coming up with a Back Forty financial plan that is attractive to investors.
Gold Resource CEO Allen Palmiere acknowledged the funding problem last fall.
“We're having to work very hard at optimizing the Back Forty,” he said in a conference call to investors on Nov. 1, 2022.
“Commodity prices and cost pressures are making cost and capital projections for the Back Forty challenging in an inflationary environment with declining commodity prices and escalating capital costs.”
So it remains to be seen whether Gold Resource can keep its commitment to dry stacking, which poses less of an environmental threat than a tailings basin, and still attract the hundreds of millions dollars in investments it needs to fund the Back Forty mine.
If not, the company may be forced to fall back on a more hazardous conventional tailings basin to lower the project cost, re-igniting public concerns about the potential environmental impact of the mine.
Prof. Gedicks adds the following:
Whether dry stacking is a workable solution is debatable. Lindsay Newland Bowker, an environmental risk manager who studies accidents at mining dams, thinks the technical hurdles are significant because of the low grades of ore that companies are digging up. Meanwhile, “dried material could still become saturated with water, or become eroded over time. I call it the dry stack myth,” Ms. Bowker said. “And I am trying as a community environmentalist, to get people to stop demanding it.”
According to Priscilla Nelson, a geotechnical engineer at the Colorado School of Mines, “the best tailings dam is no dam at all.”
UPDATE: Kimberly Perry, Gold Resource CFO, provided the following information in response to a request for comment on this report:
"Gold Resource is committed to deploying dry stack tailings storage at the Back Forty project. Conventional tailings storage is not an option being contemplated at this time. Our experience building the filtration plant and dry stacking the tailings in Mexico gives us confidence to make this commitment.
"In Mexico, we built the filtration plant in 2021 and have been running the dry stack facility for the last year. The total capital cost to build the facility in Mexico was approximately $15 million. I am not certain what source Dr. Gedicks is using to estimate the quoted $213 million cost; however, since it looks like this includes operating costs, it is faulty logic to simply add the operating cost amount to the start-up capital.
"Finally, it appears an incorrect assumption has been made that we have “limited ability to raise capital.” Mr. Palmiere’s statement in November was not related to “funding problems” but more focused on the impact the global markets were having on 1) commodity prices, and 2) costs across the board (e.g. steel, labor, concrete, etc)."
END OF UPDATE
If an impoundment fails – as it did famously at the Mt. Polley mine in Canada (2014) and at a mine in Brumadinho, Brazil (2019), the tailings, which are highly toxic, can escape into the environment – including, in this case, the Menominee River west of Stephenson, Mich.
The results can be disastrous – and tailings dam failures happen more frequently than you might expect. According to Gedicks, there have been 46 in the past 20 years. He said a recent study reveals that mining waste failures are increasing in frequency and severity because lower grade ores have necessitated larger, open pit mines for economies of scale. “As mines grow bigger, they generate larger volumes of waste, stacked into higher tailings dams,” Gedicks said.
Gold Resource has addressed concerns about a potential tailings dam failure by stating publicly that it intends to use dry stacking at the Back Forty – removing most of the water from the tailings before they are deposited in piles at the mine site.
However, dry stacking can be five- to ten-times more expensive than a tailings basin, Gedicks said – costing at least $213 million over a seven-year life of mine, compared to Aquila’s $42.6 million estimate for a conventional tailings pond.
That’s the conservative estimate of the cost of drying stacking. Even so, it would increase the cost of the Back Forty from a 2020 estimate of $250 million to $420 million, if Gedicks’s data are correct. He questions whether Gold Resource can pay the higher cost of dry stacking, given its apparent difficulty coming up with a Back Forty financial plan that is attractive to investors.
Gold Resource CEO Allen Palmiere acknowledged the funding problem last fall.
“We're having to work very hard at optimizing the Back Forty,” he said in a conference call to investors on Nov. 1, 2022.
“Commodity prices and cost pressures are making cost and capital projections for the Back Forty challenging in an inflationary environment with declining commodity prices and escalating capital costs.”
So it remains to be seen whether Gold Resource can keep its commitment to dry stacking, which poses less of an environmental threat than a tailings basin, and still attract the hundreds of millions dollars in investments it needs to fund the Back Forty mine.
If not, the company may be forced to fall back on a more hazardous conventional tailings basin to lower the project cost, re-igniting public concerns about the potential environmental impact of the mine.
Prof. Gedicks adds the following:
Whether dry stacking is a workable solution is debatable. Lindsay Newland Bowker, an environmental risk manager who studies accidents at mining dams, thinks the technical hurdles are significant because of the low grades of ore that companies are digging up. Meanwhile, “dried material could still become saturated with water, or become eroded over time. I call it the dry stack myth,” Ms. Bowker said. “And I am trying as a community environmentalist, to get people to stop demanding it.”
According to Priscilla Nelson, a geotechnical engineer at the Colorado School of Mines, “the best tailings dam is no dam at all.”
UPDATE: Kimberly Perry, Gold Resource CFO, provided the following information in response to a request for comment on this report:
"Gold Resource is committed to deploying dry stack tailings storage at the Back Forty project. Conventional tailings storage is not an option being contemplated at this time. Our experience building the filtration plant and dry stacking the tailings in Mexico gives us confidence to make this commitment.
"In Mexico, we built the filtration plant in 2021 and have been running the dry stack facility for the last year. The total capital cost to build the facility in Mexico was approximately $15 million. I am not certain what source Dr. Gedicks is using to estimate the quoted $213 million cost; however, since it looks like this includes operating costs, it is faulty logic to simply add the operating cost amount to the start-up capital.
"Finally, it appears an incorrect assumption has been made that we have “limited ability to raise capital.” Mr. Palmiere’s statement in November was not related to “funding problems” but more focused on the impact the global markets were having on 1) commodity prices, and 2) costs across the board (e.g. steel, labor, concrete, etc)."
END OF UPDATE
Mine Opponents Fear “Short-Circuiting” of Back Forty Permit Review Process
Jan. 10, 2023 - Back in September of 2021, Gold Resource Corp. CEO Allen Palmiere told investors that the company planned to submit an “omnibus” permit application for the proposed Back Forty mine, and that state regulators “have indicated they will try to deal with this on an expedited basis.”
Those statements have caused mine opponents to cry foul.
“The pages in five applications can easily be over 40,000” wrote Mary Hansen and Jeff Budish of the Coalition to SAVE the Menominee River in a Jan. 6, 2023, letter to the Eagle Herald. Once the applications are filed “a public hearing will then be scheduled where We the People will be allowed the usual time of three minutes to voice our concerns. In combining five permits no one can absorb all the information given to make an informed statement in that amount of time. Written statements are accepted but can never pack a punch like a public speaker can.”
The issue arose now because the Environmental Protection Agency (EPA) posted a document that indicates one of the five required Back Forty permits is expected to be submitted in “early 2023.” Mine opponents interpreted this to mean that Gold Resource Corp. might roll out its proposed “omnibus" permit package soon. However, no air quality permit application has been submitted by Gold Resource as of Jan. 11, according to Dale Burie of the Coalition.
Adam Wygant of the state Dept. of Environment, Great Lakes, and Energy (EGLE) reinforced concerns that the agency might short-circuit the normal permit review process when he claimed that “the public likes to have [permitting] actions bundled so that public comment periods and hearings are consolidated” in an email exchange with Dale Burie of the Coalition.
Wygant’s statement seemed to echo Palmiere’s 2021 suggestion that the “permitting process can be -- not short-circuited, that's not the term, but it can be, in fact, expedited such that we would hopefully obtain all of the permits by the end of next year” (2022).
Later in the email, Wygant backtracked on the possibility of a consolidated process, writing “to be clear, the Back Forty Mine, if the company reapplies for permits, will be … processed in normal fashion for a new permit application and in no way will public engagement or technical review be short-circuited.”
Mine opponents remained wary of the agency’s intent.
If EGLE has agreed behind the scenes to an “expedited" schedule, “then Wygant's assurance of no ‘short-circuiting’ of the permit review process is worthless,” said Prof. Al Gedicks of the Wisconsin Resources Protection Council, who had access to the email exchange. Gold Resource Corp. “WILL HAVE HIJACKED PUBLIC PARTICIPATION IN THE PERMIT PROCESS. THIS IS UNACCEPTABLE” (punctuation in the original).
Melanie Humphrey of EGLE’s Marquette, Mich., office, has been communicating with citizens who are concerned about how the Back Forty permitting process will unfold. She seemed to downplay their concerns in a Jan. 9 telephone interview.
“In the past we have encouraged, if there are multiple permits involved, to coordinate those reviews,” Humphrey said. "For consistency, we do encourage them to be submitted in similar time frame.”
“But you can't do a consolidated permit,” she said “You still have to submit separate applications. There’s no provision that would speed up the process.”
Responding to a request for comment, Gold Resource CFO Kimberly Perry said:
"Mr. Palmiere’s comments in 2021 were meant to convey the message that we would be coordinating our efforts such that we would submit the relevant applications around the same time in the interest of streamlining the process and creating transparency for the public. It is my understanding that there is not the option to submit one application (a.k.a. “omnibus application”) covering all requirements. We believe this approach will help the regulators and stakeholders with their review.
"Bottom line, we will always strive to follow the process as laid out by the authorities and, where possible, offer all parties an opportunity to achieve efficiencies. One of our core values is transparency; we continue to have an open door with the Menominee Tribe and encourage a two-way dialogue with all interested parties."
The Back Forty project is a proposed open-pit and underground mine on the Menominee River west of Stephenson, Mich. If completed, it would produce gold, silver, copper, lead and zinc. Gold Resource Corp. acquired the project from Aquila Resources, Inc., on December 10, 2021.
Jan. 10, 2023 - Back in September of 2021, Gold Resource Corp. CEO Allen Palmiere told investors that the company planned to submit an “omnibus” permit application for the proposed Back Forty mine, and that state regulators “have indicated they will try to deal with this on an expedited basis.”
Those statements have caused mine opponents to cry foul.
“The pages in five applications can easily be over 40,000” wrote Mary Hansen and Jeff Budish of the Coalition to SAVE the Menominee River in a Jan. 6, 2023, letter to the Eagle Herald. Once the applications are filed “a public hearing will then be scheduled where We the People will be allowed the usual time of three minutes to voice our concerns. In combining five permits no one can absorb all the information given to make an informed statement in that amount of time. Written statements are accepted but can never pack a punch like a public speaker can.”
The issue arose now because the Environmental Protection Agency (EPA) posted a document that indicates one of the five required Back Forty permits is expected to be submitted in “early 2023.” Mine opponents interpreted this to mean that Gold Resource Corp. might roll out its proposed “omnibus" permit package soon. However, no air quality permit application has been submitted by Gold Resource as of Jan. 11, according to Dale Burie of the Coalition.
Adam Wygant of the state Dept. of Environment, Great Lakes, and Energy (EGLE) reinforced concerns that the agency might short-circuit the normal permit review process when he claimed that “the public likes to have [permitting] actions bundled so that public comment periods and hearings are consolidated” in an email exchange with Dale Burie of the Coalition.
Wygant’s statement seemed to echo Palmiere’s 2021 suggestion that the “permitting process can be -- not short-circuited, that's not the term, but it can be, in fact, expedited such that we would hopefully obtain all of the permits by the end of next year” (2022).
Later in the email, Wygant backtracked on the possibility of a consolidated process, writing “to be clear, the Back Forty Mine, if the company reapplies for permits, will be … processed in normal fashion for a new permit application and in no way will public engagement or technical review be short-circuited.”
Mine opponents remained wary of the agency’s intent.
If EGLE has agreed behind the scenes to an “expedited" schedule, “then Wygant's assurance of no ‘short-circuiting’ of the permit review process is worthless,” said Prof. Al Gedicks of the Wisconsin Resources Protection Council, who had access to the email exchange. Gold Resource Corp. “WILL HAVE HIJACKED PUBLIC PARTICIPATION IN THE PERMIT PROCESS. THIS IS UNACCEPTABLE” (punctuation in the original).
Melanie Humphrey of EGLE’s Marquette, Mich., office, has been communicating with citizens who are concerned about how the Back Forty permitting process will unfold. She seemed to downplay their concerns in a Jan. 9 telephone interview.
“In the past we have encouraged, if there are multiple permits involved, to coordinate those reviews,” Humphrey said. "For consistency, we do encourage them to be submitted in similar time frame.”
“But you can't do a consolidated permit,” she said “You still have to submit separate applications. There’s no provision that would speed up the process.”
Responding to a request for comment, Gold Resource CFO Kimberly Perry said:
"Mr. Palmiere’s comments in 2021 were meant to convey the message that we would be coordinating our efforts such that we would submit the relevant applications around the same time in the interest of streamlining the process and creating transparency for the public. It is my understanding that there is not the option to submit one application (a.k.a. “omnibus application”) covering all requirements. We believe this approach will help the regulators and stakeholders with their review.
"Bottom line, we will always strive to follow the process as laid out by the authorities and, where possible, offer all parties an opportunity to achieve efficiencies. One of our core values is transparency; we continue to have an open door with the Menominee Tribe and encourage a two-way dialogue with all interested parties."
The Back Forty project is a proposed open-pit and underground mine on the Menominee River west of Stephenson, Mich. If completed, it would produce gold, silver, copper, lead and zinc. Gold Resource Corp. acquired the project from Aquila Resources, Inc., on December 10, 2021.
Back Forty Planning Delayed by Unfavorable Economic Conditions
Nov. 1, 2022 - Gold Resource Corp. announced today that financial planning for the proposed Back Forty mine in Menominee County, Michigan, has slipped into 2023, despite earlier indications that it would be completed this year.
“We're having to work very hard at optimizing the Back Forty,” said Gold Resource President and CEO Allen Palmiere in a conference call to investors today. “Commodity prices and cost pressures are making cost and capital projections for the Back Forty challenging in an inflationary environment with declining commodity prices and escalating capital costs.”
Gold Resource must complete a feasibility study that shows the Back Forty is an economically viable project before the company can secure funding and proceed with permit applications for the mine. Gold Resource expects to spend about $9.5 million on the Back Forty initiative this year.
The company will reduce Back Forty expenditures to about $4.5 million dollars in 2023, Palmiere said.
Gold Resource Corp. has been consistently profitable in the past but reported a net loss of $9.7 million in the third quarter of 2022.
“Financially it wasn't an overly robust quarter,” Palmiere said. “I would like to point out that notwithstanding the fact that we did experience a loss we still were able to maintain all of our expenditures on exploration and development in Mexico and our work on the Back Forty.”
Gold Resource owns and operates the Don David Gold Mine in the Mexican state of Oaxaca.
UPDATE: Kimberly Perry, Gold Resource CFO, responded to a request for comment with the following statement:
"The only clarification I would like to make is that the Back Forty planning is not entirely delayed due to unfavorable economic conditions. While unfavorable economic factors are contributing to challenges in obtaining accurate and relevant quotes in today’s inflationary market, the bulk of the work remaining is related to the metallurgical work we are conducting to ensure we optimize recoveries."
Nov. 1, 2022 - Gold Resource Corp. announced today that financial planning for the proposed Back Forty mine in Menominee County, Michigan, has slipped into 2023, despite earlier indications that it would be completed this year.
“We're having to work very hard at optimizing the Back Forty,” said Gold Resource President and CEO Allen Palmiere in a conference call to investors today. “Commodity prices and cost pressures are making cost and capital projections for the Back Forty challenging in an inflationary environment with declining commodity prices and escalating capital costs.”
Gold Resource must complete a feasibility study that shows the Back Forty is an economically viable project before the company can secure funding and proceed with permit applications for the mine. Gold Resource expects to spend about $9.5 million on the Back Forty initiative this year.
The company will reduce Back Forty expenditures to about $4.5 million dollars in 2023, Palmiere said.
Gold Resource Corp. has been consistently profitable in the past but reported a net loss of $9.7 million in the third quarter of 2022.
“Financially it wasn't an overly robust quarter,” Palmiere said. “I would like to point out that notwithstanding the fact that we did experience a loss we still were able to maintain all of our expenditures on exploration and development in Mexico and our work on the Back Forty.”
Gold Resource owns and operates the Don David Gold Mine in the Mexican state of Oaxaca.
UPDATE: Kimberly Perry, Gold Resource CFO, responded to a request for comment with the following statement:
"The only clarification I would like to make is that the Back Forty planning is not entirely delayed due to unfavorable economic conditions. While unfavorable economic factors are contributing to challenges in obtaining accurate and relevant quotes in today’s inflationary market, the bulk of the work remaining is related to the metallurgical work we are conducting to ensure we optimize recoveries."
Mining Company Not “Outraged” by Historic Designation of Menominee Indian Cultural Sites
Sept. 30, 2023 - The company that is attempting to develop the Back Forty mine does not share the “outrage” expressed by Upper Peninsula lawmakers at the nomination of Menominee Indian cultural sites to the National Register of Historic Places.
The Michigan Historic Preservation Review Board unanimously endorsed the tribe’s nomination of the Anaem Omot (“Dog’s Belly") location to the National Register at its Sept. 23 meeting. The nominated area is 50 miles upstream from the mouth of the Menominee River and includes the site of the proposed Back Forty mine. The location contains burial mounds, raised agricultural fields and ancient dance rings of cultural significance to the Menominee Indian Tribe, which occupied the area for generations before it was forcibly removed to a reservation in Wisconsin.
Upper Peninsula lawmakers were quick to condemn the board’s decision.
“This action is a flagrant taking of private property rights and opportunities,” said Sen. Ed McBroom, R-Waucedah Township in a news release.
Representatives Sara Cambensy (D-Marquette), Greg Markkanen (R-Hancock) and Beau LaFave (R-Iron Mountain) joined McBroom in slamming the Review Board’s support of the Anaem Omot nomination. The lawmakers pledged to defund and reform the State Historic Preservation Office (SHPO), which includes the Historic Preservation Review Board, and to seek a legislative resolution condemning recent SPHO actions and calling for the removal of its director and staff.
However, a representative of Gold Resource Corp., which owns the Back Forty project, downplayed the extent of its opposition to the Menominee Tribe’s nomination effort.
“We first and foremost acknowledge that there are cultural resources (on the Anaem Omot site) that are important to preserve,” said Kimberly Perry, the company’s chief financial officer, in a telephone interview.
Perry characterized Gold Resource’s objections to the nomination, which it expressed at the Sept. 23 Review Board meeting, as an attempt to correct “inconsistencies” in the Menominee Tribe’s proposal.
“Our opposition was if this is going to be raised to the national registry, is that we just want to make sure that the facts being presented were accurate and that the process that is being followed is the right process,” Perry said.
“If the (National Park Service) does choose to put it on the registry we will absolutely follow suit and do whatever we need to do to make sure that we continue to identify, disclose and mitigate anything that we're doing on that property. So, it doesn't really change the way we're doing things.”
Inclusion of the Anaem Omot location on the National Register of Historic Places might trigger a requirement that the mining company engage in extensive consultations with the Menominee Indian Tribe to ensure that its concerns about protecting the area’s cultural resources are addressed.
Perry said Gold Resource Corp. “has been doing that consultation the entire time,” and was open to following any additional requirements imposed by the federal law that covers sites listed on the historic register.
Sept. 30, 2023 - The company that is attempting to develop the Back Forty mine does not share the “outrage” expressed by Upper Peninsula lawmakers at the nomination of Menominee Indian cultural sites to the National Register of Historic Places.
The Michigan Historic Preservation Review Board unanimously endorsed the tribe’s nomination of the Anaem Omot (“Dog’s Belly") location to the National Register at its Sept. 23 meeting. The nominated area is 50 miles upstream from the mouth of the Menominee River and includes the site of the proposed Back Forty mine. The location contains burial mounds, raised agricultural fields and ancient dance rings of cultural significance to the Menominee Indian Tribe, which occupied the area for generations before it was forcibly removed to a reservation in Wisconsin.
Upper Peninsula lawmakers were quick to condemn the board’s decision.
“This action is a flagrant taking of private property rights and opportunities,” said Sen. Ed McBroom, R-Waucedah Township in a news release.
Representatives Sara Cambensy (D-Marquette), Greg Markkanen (R-Hancock) and Beau LaFave (R-Iron Mountain) joined McBroom in slamming the Review Board’s support of the Anaem Omot nomination. The lawmakers pledged to defund and reform the State Historic Preservation Office (SHPO), which includes the Historic Preservation Review Board, and to seek a legislative resolution condemning recent SPHO actions and calling for the removal of its director and staff.
However, a representative of Gold Resource Corp., which owns the Back Forty project, downplayed the extent of its opposition to the Menominee Tribe’s nomination effort.
“We first and foremost acknowledge that there are cultural resources (on the Anaem Omot site) that are important to preserve,” said Kimberly Perry, the company’s chief financial officer, in a telephone interview.
Perry characterized Gold Resource’s objections to the nomination, which it expressed at the Sept. 23 Review Board meeting, as an attempt to correct “inconsistencies” in the Menominee Tribe’s proposal.
“Our opposition was if this is going to be raised to the national registry, is that we just want to make sure that the facts being presented were accurate and that the process that is being followed is the right process,” Perry said.
“If the (National Park Service) does choose to put it on the registry we will absolutely follow suit and do whatever we need to do to make sure that we continue to identify, disclose and mitigate anything that we're doing on that property. So, it doesn't really change the way we're doing things.”
Inclusion of the Anaem Omot location on the National Register of Historic Places might trigger a requirement that the mining company engage in extensive consultations with the Menominee Indian Tribe to ensure that its concerns about protecting the area’s cultural resources are addressed.
Perry said Gold Resource Corp. “has been doing that consultation the entire time,” and was open to following any additional requirements imposed by the federal law that covers sites listed on the historic register.
Michigan Preservation Review Board Backs Historic Designation for Proposed Back Forty Mine Site
Sept. 23, 2022 - According to social media reports, the nomination of Menominee Indian cultural sites along the Menominee River was approved unanimously by the Michigan Historic Preservation Review Board at its September 23, 2022, meeting.
The Anaem Omot historic district is in Lake and Holmes Townships, west of Stephenson, Michigan, and includes the site of Gold Resource Corporation's proposed Back Forty mine. It also extends along the Wisconsin side of the Menominee River. The Wisconsin Historic Preservation Review Board unanimously approved the nomination of the site to the National Register on Nov. 19, 2021.
The Michigan review board's approval clears the way for the final step in the nomination process. The application now goes to the National Park Service, which will decide whether to include the Menominee cultural sites on the National Register of Historic Places.
The Anaem Omot area is also known as the Dog's Belly or Sixty Islands location. The Menominee Indian Tribe occupied the site for generations before the tribe was relocated to a reservation in Wisconsin.
The tribe's Historic Preservation Officer, David Grignon, worked with archeologist David Overstreet to prepare an extensive justification for the site's nomination to the National Register. The tribe persuasively documented burial mounds, garden beds, dance rings and other cultural features on both sides of the Menominee River.
The nomination was opposed by Gold Resource Corp., according to Tom Boerner, a local property owner and mine opponent who observed the review board meeting on line.
Sept. 23, 2022 - According to social media reports, the nomination of Menominee Indian cultural sites along the Menominee River was approved unanimously by the Michigan Historic Preservation Review Board at its September 23, 2022, meeting.
The Anaem Omot historic district is in Lake and Holmes Townships, west of Stephenson, Michigan, and includes the site of Gold Resource Corporation's proposed Back Forty mine. It also extends along the Wisconsin side of the Menominee River. The Wisconsin Historic Preservation Review Board unanimously approved the nomination of the site to the National Register on Nov. 19, 2021.
The Michigan review board's approval clears the way for the final step in the nomination process. The application now goes to the National Park Service, which will decide whether to include the Menominee cultural sites on the National Register of Historic Places.
The Anaem Omot area is also known as the Dog's Belly or Sixty Islands location. The Menominee Indian Tribe occupied the site for generations before the tribe was relocated to a reservation in Wisconsin.
The tribe's Historic Preservation Officer, David Grignon, worked with archeologist David Overstreet to prepare an extensive justification for the site's nomination to the National Register. The tribe persuasively documented burial mounds, garden beds, dance rings and other cultural features on both sides of the Menominee River.
The nomination was opposed by Gold Resource Corp., according to Tom Boerner, a local property owner and mine opponent who observed the review board meeting on line.
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Water Celebration Brings Mine Opponents Together on Stephenson Island
July 23, 2022 - The proposed Back Forty mine has slipped from the public spotlight as a new mining company develops revised plans for the project, behind the scenes. However, opponents of the mine expect Gold Resource Corp. to pursue new environmental permits for the project sometime soon, perhaps as early as the end of the year. They are urging the public to stay alert and be ready to rally against the mine proposal when it emerges from the shadows – and they drove that message home at the second annual Water Celebration on July 23 in Marinette, Wisc. The event was staged by the Coalition to SAVE the Menominee River, with participation from the Menominee Indian Tribe of Wisconsin, the Western Mining Action Network, the Wisconsin Resources Protection Council and the Upper Peninsula Mining Action Group. "Now is the time to bolster your confidence and support the Coalition to get stronger," said Dale Burie of the Coalition. "If you're serious about protecting your own water -- and I think you should be -- now is the time get active and be proactive to support the opposition and keep sulfide mining from the toxic poisoning of our watershed." |
David Grignon (left), Historic Preservation Officer of the Menominee Indian Tribe of Wisconsin, and others, listened as a parade of speakers brought their environmental messages to the stage. Grignon also spoke at the event and described the tribe's deep-seated cultural and archeological ties to the Menominee River, including the area where the proposed Back Forty mine would be located.
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Lake Township Supports Listing of Dog's Belly/Sixty Islands on National Register of Historic Places
July 13, 2022 - The Lake Township Board of Trustees has unanimously passed a resolution supporting the nomination of Native American cultural sites along the Menominee River to the National Register of Historic Places. The endorsement is especially significant because residents of Lake Township would be the property owners most directly affected (on the Michigan side) by the listing of the site, which is culturally significant to the Menominee Indian Tribe of Wisconsin.
The resolution acknowledges the tribe's long history in the area. It states that a NRHP designation does not impair property rights in the affected area, and may promote tourism.
July 13, 2022 - The Lake Township Board of Trustees has unanimously passed a resolution supporting the nomination of Native American cultural sites along the Menominee River to the National Register of Historic Places. The endorsement is especially significant because residents of Lake Township would be the property owners most directly affected (on the Michigan side) by the listing of the site, which is culturally significant to the Menominee Indian Tribe of Wisconsin.
The resolution acknowledges the tribe's long history in the area. It states that a NRHP designation does not impair property rights in the affected area, and may promote tourism.
Menominee County Board Supports Historic Designation for Tribal Cultural Sites
May 10, 2022 - The nomination of the Dog's Belly/Sixty Islands area for listing on the National Register of Historic Places has received the support of the Menominee County Board of Commissioners on a 5-4 vote.
The board had previously deadlocked, 4-4, on a letter of support for the nomination. But the matter was revived so that Commissioner Steven Gromala, who had been absent at the earlier meeting, could vote in favor of the nomination and break the tie.
A letter of support will now be forwarded to the Michigan State Historic Preservation Board which is expected to vote on the nomination Sept. 23.
May 10, 2022 - The nomination of the Dog's Belly/Sixty Islands area for listing on the National Register of Historic Places has received the support of the Menominee County Board of Commissioners on a 5-4 vote.
The board had previously deadlocked, 4-4, on a letter of support for the nomination. But the matter was revived so that Commissioner Steven Gromala, who had been absent at the earlier meeting, could vote in favor of the nomination and break the tie.
A letter of support will now be forwarded to the Michigan State Historic Preservation Board which is expected to vote on the nomination Sept. 23.
Wisconsin Approves Historic Designation for Culturally Significant Area Near the Proposed Back Forty Mine
Feb. 16, 2022 - As reported in the EagleHerald newspaper today, the Wisconsin State Historic Preservation Review Board has unanimously supported the nomination of a proposed historic district on the Wisconsin side of the Menominee River in an area that was occupied by the Menominee Indian Tribe before it was removed to a reservation in 1854.
The Review Board voted on Nov. 19, 2021, to support the nomination of the Sixty Islands location as a historic district in the National Register of Historic Places (NRHP).
A Zoom recording of the meeting can be viewed online. The Menominee Indian Tribe’s case in support of the nomination begins at timestamp 7:45 of the recording.
In the nomination, the area is referred to as Anaem Omot. It is also known locally as the Sixty Islands/Dog’s Belly.
The nomination is now in the hands of the Michigan State Historic Preservation Office, which must also review the initiative because a portion of the proposed historic district is in the state of Michigan. The final decision on listing of the district by the Keeper of the National Register of Historic Places is made by National Park Service in Washington, D.C.
A historic district nomination cannot move forward if a majority of affected property owners object. There was at least one property owner objection on the Wisconsin side, according to Kara O’Keeffe of the Wisconsin State Historical Society, but not enough to stall the nomination.
Feb. 16, 2022 - As reported in the EagleHerald newspaper today, the Wisconsin State Historic Preservation Review Board has unanimously supported the nomination of a proposed historic district on the Wisconsin side of the Menominee River in an area that was occupied by the Menominee Indian Tribe before it was removed to a reservation in 1854.
The Review Board voted on Nov. 19, 2021, to support the nomination of the Sixty Islands location as a historic district in the National Register of Historic Places (NRHP).
A Zoom recording of the meeting can be viewed online. The Menominee Indian Tribe’s case in support of the nomination begins at timestamp 7:45 of the recording.
In the nomination, the area is referred to as Anaem Omot. It is also known locally as the Sixty Islands/Dog’s Belly.
The nomination is now in the hands of the Michigan State Historic Preservation Office, which must also review the initiative because a portion of the proposed historic district is in the state of Michigan. The final decision on listing of the district by the Keeper of the National Register of Historic Places is made by National Park Service in Washington, D.C.
A historic district nomination cannot move forward if a majority of affected property owners object. There was at least one property owner objection on the Wisconsin side, according to Kara O’Keeffe of the Wisconsin State Historical Society, but not enough to stall the nomination.
Key Executive Leaves Gold Resource Corp., New Owner of the Proposed Back Forty Mine
Feb. 4, 2022 - The Vice President, Investor Relations and Corporate Affairs for Gold Resource Corp. has left the company.
Ann Wilkinson was one of four key executives at the firm. She resigned effective Jan. 31 after just over one year with the company.
No reason was given for her departure.
Allen Palmiere, president and CEO of Gold Resource, has taken over the investor relations role, according to an auto-generated response from Wilkinson’s Gold Resource email account.
“The interesting thing was the timing of her announcement,” said Al Gedicks, a mine opponent and executive secretary of the Wisconsin Resources Protection Council, and the takeover of her duties by Palmiere, “which tells me that it was an unexpected departure, because Gold Resource didn’t have time to hire a new investor relations specialist, and the job was diverted to someone who already had overwhelming responsibilities for the operation.”
Gold Resource stock has declined 46 percent year-over-year. The company has one operating mine, in the Mexican state of Oaxaca. It acquired Aquila Resources, Inc., and the Back Forty exploration site, at the end of 2021, for the stated purpose of transitioning from “a one-mine company to a two-mine company with jurisdictional diversification.”
A presence in the United States would insulate the company from potential disruptions in Mexico, which is considered to be a somewhat difficult jurisdiction for mining investors due to corruption, security concerns and other risks.
Those benefits, of course, would not be realized unless Gold Resource is successful in putting the Back Forty mine into operation.
Gold Resource declined to comment on this report.
Feb. 4, 2022 - The Vice President, Investor Relations and Corporate Affairs for Gold Resource Corp. has left the company.
Ann Wilkinson was one of four key executives at the firm. She resigned effective Jan. 31 after just over one year with the company.
No reason was given for her departure.
Allen Palmiere, president and CEO of Gold Resource, has taken over the investor relations role, according to an auto-generated response from Wilkinson’s Gold Resource email account.
“The interesting thing was the timing of her announcement,” said Al Gedicks, a mine opponent and executive secretary of the Wisconsin Resources Protection Council, and the takeover of her duties by Palmiere, “which tells me that it was an unexpected departure, because Gold Resource didn’t have time to hire a new investor relations specialist, and the job was diverted to someone who already had overwhelming responsibilities for the operation.”
Gold Resource stock has declined 46 percent year-over-year. The company has one operating mine, in the Mexican state of Oaxaca. It acquired Aquila Resources, Inc., and the Back Forty exploration site, at the end of 2021, for the stated purpose of transitioning from “a one-mine company to a two-mine company with jurisdictional diversification.”
A presence in the United States would insulate the company from potential disruptions in Mexico, which is considered to be a somewhat difficult jurisdiction for mining investors due to corruption, security concerns and other risks.
Those benefits, of course, would not be realized unless Gold Resource is successful in putting the Back Forty mine into operation.
Gold Resource declined to comment on this report.
State Approves New Mineral Leases for Back Forty Mine
Jan. 11, 2022 - The Michigan Dept. of Natural Resources has issued new mineral leases for almost 2,000 acres of state-owned land at the site of the proposed Back Forty mine.
The new leases were issued to Aquila Resources, Inc., despite widespread public opposition. The state received at least 165 comments expressing concerns about the proposed mine’s impact on the environment and on cultural sites important to the Menominee Indian Tribe.
Commenters also expressed concern about Aquila Resources’ allegedly questionable past business practices.
Aquila was recently purchased by Gold Resource, Inc., which plans to bring the mine into operation sometime in 2025.
Michigan mineral leases run for 10 years, and can be renewed for another 10 years by payment of a minimum royalty fee.
More information about Aquila’s lease application can be found on the DNR website.
https://www.michigan.gov/.../0,4570,7-350-79136_79239...
Jan. 11, 2022 - The Michigan Dept. of Natural Resources has issued new mineral leases for almost 2,000 acres of state-owned land at the site of the proposed Back Forty mine.
The new leases were issued to Aquila Resources, Inc., despite widespread public opposition. The state received at least 165 comments expressing concerns about the proposed mine’s impact on the environment and on cultural sites important to the Menominee Indian Tribe.
Commenters also expressed concern about Aquila Resources’ allegedly questionable past business practices.
Aquila was recently purchased by Gold Resource, Inc., which plans to bring the mine into operation sometime in 2025.
Michigan mineral leases run for 10 years, and can be renewed for another 10 years by payment of a minimum royalty fee.
More information about Aquila’s lease application can be found on the DNR website.
https://www.michigan.gov/.../0,4570,7-350-79136_79239...
New Back Forty Mine Owner May Downsize Proposed Open Pit
Dec. 30, 2021 - One or more relatively small surface pits and extensive underground mining are part of Gold Resource Corp.’s tentative plans for the Back Forty project west of Stephenson, Mich.
Gold Resource president and CEO Allen Palmiere revealed the company’s current thinking about the Back Forty project in an online presentation to potential investors.
Gold Resource acquired the former Back Forty project owner, Aquila Resources, in a $24 million deal that closed on Dec. 10.
Aquila’s original plan for the Back Forty project would have disturbed about 26 acres of wetlands, Palmiere said. “Our new plan is only going to disturb approximately one-third of one acre."
Aquila tried and failed to get a state permit to disrupt wetlands at the proposed mine site. The revised project plan would be easier to permit, and easier on the environment, Palmiere said.
Palmiere also said Gold Resource may dry-stack tailings from the Back Forty mill, instead of constructing a tailings basin, as Aquila had originally proposed. Dry-stack tailings are dewatered and can be deposited in piles without the need for a tailings dam. This is the system Gold Resource uses at its existing mine in Mexico.
Tailings dam failures, which can discharge large amounts of liquid tailings into the environment, are one of the primary hazards of minerals mining operations.
“Notwithstanding dry-stacking is more expensive, the mining industry is migrating to this practice as it is more environmentally friendly,” said Ann Wilkinson, Gold Resource’s Vice President of Investor Relations and Corporate Affairs, in an email.
An omnibus application for all required project permits could be submitted in the second half of 2022, according to the timeline presented by Palmiere, with operations to begin in mid- to late 2025.
Gold Resource bought Aquila Resources and its Back Forty project at a bargain price. The mine is worth at least $250 million, according to Aquila’s projections, and has significant expansion potential, Palmiere said, with extensive additional mineral deposits projected but not yet explored in and around the proposed mine site.
If those expanded deposits are confirmed, they could extend the life of the Back Forty for many years beyond its current 10-year life expectancy.
Gold Resource’s previous management spun off the company’s Nevada mining operations one year ago. That left it with a single producing mine, in the Mexican state of Oaxaca.
By adding the Back Forty to its portfolio, Gold Resource is once again a two-asset company with “geographic and political diversification,” Palmiere said. “We don’t have all of our eggs in one basket.”
“While Mexico has historically been a good jurisdiction for mining,” Palmiere said, “it isn’t always going to be the case, necessarily. We feel that it’s important for us to have a second operation in a different jurisdiction.”
The projected Back Forty throughput is 3,000 tons of ore per day, Palmiere said, about 1 1/2 times more than the production at Gold Resource’s Mexican mine.
Palmiere’s Dec. 1 presentation to the H.C. Wainwright Mining Conference can be viewed online at https://journey.ct.events/view/786ae00c-7153-4263-937c-b178daa76e85 (registration required).
Gold Resource Corp. commented on an earlier version of this story.
Dec. 30, 2021 - One or more relatively small surface pits and extensive underground mining are part of Gold Resource Corp.’s tentative plans for the Back Forty project west of Stephenson, Mich.
Gold Resource president and CEO Allen Palmiere revealed the company’s current thinking about the Back Forty project in an online presentation to potential investors.
Gold Resource acquired the former Back Forty project owner, Aquila Resources, in a $24 million deal that closed on Dec. 10.
Aquila’s original plan for the Back Forty project would have disturbed about 26 acres of wetlands, Palmiere said. “Our new plan is only going to disturb approximately one-third of one acre."
Aquila tried and failed to get a state permit to disrupt wetlands at the proposed mine site. The revised project plan would be easier to permit, and easier on the environment, Palmiere said.
Palmiere also said Gold Resource may dry-stack tailings from the Back Forty mill, instead of constructing a tailings basin, as Aquila had originally proposed. Dry-stack tailings are dewatered and can be deposited in piles without the need for a tailings dam. This is the system Gold Resource uses at its existing mine in Mexico.
Tailings dam failures, which can discharge large amounts of liquid tailings into the environment, are one of the primary hazards of minerals mining operations.
“Notwithstanding dry-stacking is more expensive, the mining industry is migrating to this practice as it is more environmentally friendly,” said Ann Wilkinson, Gold Resource’s Vice President of Investor Relations and Corporate Affairs, in an email.
An omnibus application for all required project permits could be submitted in the second half of 2022, according to the timeline presented by Palmiere, with operations to begin in mid- to late 2025.
Gold Resource bought Aquila Resources and its Back Forty project at a bargain price. The mine is worth at least $250 million, according to Aquila’s projections, and has significant expansion potential, Palmiere said, with extensive additional mineral deposits projected but not yet explored in and around the proposed mine site.
If those expanded deposits are confirmed, they could extend the life of the Back Forty for many years beyond its current 10-year life expectancy.
Gold Resource’s previous management spun off the company’s Nevada mining operations one year ago. That left it with a single producing mine, in the Mexican state of Oaxaca.
By adding the Back Forty to its portfolio, Gold Resource is once again a two-asset company with “geographic and political diversification,” Palmiere said. “We don’t have all of our eggs in one basket.”
“While Mexico has historically been a good jurisdiction for mining,” Palmiere said, “it isn’t always going to be the case, necessarily. We feel that it’s important for us to have a second operation in a different jurisdiction.”
The projected Back Forty throughput is 3,000 tons of ore per day, Palmiere said, about 1 1/2 times more than the production at Gold Resource’s Mexican mine.
Palmiere’s Dec. 1 presentation to the H.C. Wainwright Mining Conference can be viewed online at https://journey.ct.events/view/786ae00c-7153-4263-937c-b178daa76e85 (registration required).
Gold Resource Corp. commented on an earlier version of this story.
Back Forty Buyer Anticipates Mine Construction in 2024
Oct. 28, 2021 - Construction of the proposed Back Forty mine may start in a couple of years, if all necessary permits are received. That's according to Allen Palmiere, CEO, President and Director of Back Forty buyer Gold Resource Corp. (stock symbol GORO).
Palmiere made the claim in an Oct. 28 conference call with the investment community during which he discussed GORO's planned purchase of Aquila Resources, Inc., which has been promoting the Back Forty project for the past 20 years without success.
Earlier this year, an administrative law judge overturned Aquila’s permit to disrupt wetlands at the mine site because Aquila failed to submit the information needed for potential wetland impacts to be evaluated by the public and by the permitting agency, the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE). Palmiere characterized the reversal as a “technicality.”
Subsequently, Aquila abandoned all four of its Back Forty permits. That means GORO will start the planning and permitting process over from scratch, if it acquires Aquila Resources. That process will begin with a feasibility study now expected to be finished mid-2022, Palmiere said. Permit applications would follow.
Palmiere said that GORO expects to have all permits for the project in hand by the end of 2023 “at the latest,” with construction to begin early in 2024. However, he acknowledged that future legal challenges to the permit could delay that timeline.
Oct. 28, 2021 - Construction of the proposed Back Forty mine may start in a couple of years, if all necessary permits are received. That's according to Allen Palmiere, CEO, President and Director of Back Forty buyer Gold Resource Corp. (stock symbol GORO).
Palmiere made the claim in an Oct. 28 conference call with the investment community during which he discussed GORO's planned purchase of Aquila Resources, Inc., which has been promoting the Back Forty project for the past 20 years without success.
Earlier this year, an administrative law judge overturned Aquila’s permit to disrupt wetlands at the mine site because Aquila failed to submit the information needed for potential wetland impacts to be evaluated by the public and by the permitting agency, the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE). Palmiere characterized the reversal as a “technicality.”
Subsequently, Aquila abandoned all four of its Back Forty permits. That means GORO will start the planning and permitting process over from scratch, if it acquires Aquila Resources. That process will begin with a feasibility study now expected to be finished mid-2022, Palmiere said. Permit applications would follow.
Palmiere said that GORO expects to have all permits for the project in hand by the end of 2023 “at the latest,” with construction to begin early in 2024. However, he acknowledged that future legal challenges to the permit could delay that timeline.
Mine Operator Plans to Buy Aquila and Its Back Forty Project
Sept. 20, 2021 - Gold Resource Corp. (GRC) announced on Sept. 7 that it plans to take ownership of Aquila Resources, Inc. and its proposed Back Forty mine.
The deal, however, is not final. As of now, GRC and Aquila have agreed to negotiate a purchase of Aquila, but the transaction is not yet complete.
Gold Resource Corp. proposes to acquire all outstanding shares of Aquila for C$30.9 million worth of GRC stock. Current Aquila shareholders will own 14.9 percent of GRC if the deal goes through, according to a letter agreement between the companies dated Sept. 7.
Why Does GRC Want Aquila?
Gold Resource Corp. is at a disadvantage in the stock market because it has only one operating mine, in Mexico, which is considered to be a somewhat difficult jurisdiction for mining investors due to corruption, security concerns and other risks. The company's stock value would increase, according to the Sept. 7 letter agreement, if it is re-rated “from a one-mine company to a two-mine company with jurisdictional diversification.” It would also be in a better position to borrow money to set up the Back Forty mine and possibly expand its operations elsewhere.
Of course, Aquila is an asset only if GRC can get the proposed Back Forty mine up and running, despite widespread public opposition to the project.
GRC is Confident It Will Get the Permits It Needs for the Back Forty Mine
“There exists a perception of permitting risk around the [Back Forty] project,” said Allen Palmiere, GRC president and chief executive officer, during a Sept. 8 on-line discussion with investment analysts. “[However,] our due diligence gives us comfort that Michigan is a good jurisdiction for mining and that the permitting issues are all eminently resolvable.”
Aquila Resources has spent 17 years and over $100 million trying to develop the Back Forty mine. It received a mining permit from Michigan regulators in late 2016 and a wetlands permit in 2018 but abandoned both permits earlier this year in the face of persistent legal opposition from the Coalition to SAVE the Menominee River and the Menominee Indian Tribe of Wisconsin. The proposed Back Forty mine would be located on the Menominee River west of Stephenson, Michigan, where the Menominee Tribe lived for thousands of years before they were removed to a reservation in Wisconsin.
Palmiere downplayed public opposition to the mine, and Aquila’s past permitting difficulties, in his Sept. 8 conference call with investment analysts. He called the denial of Aquila’s wetlands permit “a very administrative matter.”
“The issue that arose was … the way the wetlands permit was worded, and it was viewed as being a conditional permit rather than an unconditional permit,” he said.
In truth, the permit was overturned by an administrative law judge primarily because Aquila failed to submit the minimum information needed for its permit application to be evaluated by the public, and by the permitting agency, the Michigan Dept. of Environment, Great Lakes and Energy (EGLE).
A Michigan court also sent Aquila’s amended mining permit back to that same administrative law judge for further review, based on new evidence that emerged after the judge originally upheld the revised permit.
In the end, Aquila gave up both permits on May 11, 2021, and went back to the drawing board to design a new project with a reduced environmental impact and, presumably, a greater chance of permitting success.
Glossing over local opposition to the Back Forty mine, Palmiere told analysts that Michigan is a favorable jurisdiction for mining projects.
“The Upper Peninsula [where the Back Forty mine would be located] is very supportive of mining,” he said. “It is an area that is looking for economic development, and resources development is pretty low-hanging fruit for them.”
Mine opponents, however, say they will continue to fight the Back Forty project.
“Although Aquila Resources has decided to take this opportunity to offer themselves to Gold Resources, this does not change the complexion of the threat to the Menominee River,” said Dale Burie of the Coalition to SAVE the Menominee River.
“Be assured, that this battle has gone on for 20 years and will continue to go on until these speculative mining organizations give up on ever getting close to the Menominee River.”
Gold Resource's exclusive right to acquire Aquila Resources expires on Oct. 22, unless the parties reach a final agreement, or terminate negotiations, before that date.
Gold Resource Corp. did not respond to a request for comment on this report.
Sept. 20, 2021 - Gold Resource Corp. (GRC) announced on Sept. 7 that it plans to take ownership of Aquila Resources, Inc. and its proposed Back Forty mine.
The deal, however, is not final. As of now, GRC and Aquila have agreed to negotiate a purchase of Aquila, but the transaction is not yet complete.
Gold Resource Corp. proposes to acquire all outstanding shares of Aquila for C$30.9 million worth of GRC stock. Current Aquila shareholders will own 14.9 percent of GRC if the deal goes through, according to a letter agreement between the companies dated Sept. 7.
Why Does GRC Want Aquila?
Gold Resource Corp. is at a disadvantage in the stock market because it has only one operating mine, in Mexico, which is considered to be a somewhat difficult jurisdiction for mining investors due to corruption, security concerns and other risks. The company's stock value would increase, according to the Sept. 7 letter agreement, if it is re-rated “from a one-mine company to a two-mine company with jurisdictional diversification.” It would also be in a better position to borrow money to set up the Back Forty mine and possibly expand its operations elsewhere.
Of course, Aquila is an asset only if GRC can get the proposed Back Forty mine up and running, despite widespread public opposition to the project.
GRC is Confident It Will Get the Permits It Needs for the Back Forty Mine
“There exists a perception of permitting risk around the [Back Forty] project,” said Allen Palmiere, GRC president and chief executive officer, during a Sept. 8 on-line discussion with investment analysts. “[However,] our due diligence gives us comfort that Michigan is a good jurisdiction for mining and that the permitting issues are all eminently resolvable.”
Aquila Resources has spent 17 years and over $100 million trying to develop the Back Forty mine. It received a mining permit from Michigan regulators in late 2016 and a wetlands permit in 2018 but abandoned both permits earlier this year in the face of persistent legal opposition from the Coalition to SAVE the Menominee River and the Menominee Indian Tribe of Wisconsin. The proposed Back Forty mine would be located on the Menominee River west of Stephenson, Michigan, where the Menominee Tribe lived for thousands of years before they were removed to a reservation in Wisconsin.
Palmiere downplayed public opposition to the mine, and Aquila’s past permitting difficulties, in his Sept. 8 conference call with investment analysts. He called the denial of Aquila’s wetlands permit “a very administrative matter.”
“The issue that arose was … the way the wetlands permit was worded, and it was viewed as being a conditional permit rather than an unconditional permit,” he said.
In truth, the permit was overturned by an administrative law judge primarily because Aquila failed to submit the minimum information needed for its permit application to be evaluated by the public, and by the permitting agency, the Michigan Dept. of Environment, Great Lakes and Energy (EGLE).
A Michigan court also sent Aquila’s amended mining permit back to that same administrative law judge for further review, based on new evidence that emerged after the judge originally upheld the revised permit.
In the end, Aquila gave up both permits on May 11, 2021, and went back to the drawing board to design a new project with a reduced environmental impact and, presumably, a greater chance of permitting success.
Glossing over local opposition to the Back Forty mine, Palmiere told analysts that Michigan is a favorable jurisdiction for mining projects.
“The Upper Peninsula [where the Back Forty mine would be located] is very supportive of mining,” he said. “It is an area that is looking for economic development, and resources development is pretty low-hanging fruit for them.”
Mine opponents, however, say they will continue to fight the Back Forty project.
“Although Aquila Resources has decided to take this opportunity to offer themselves to Gold Resources, this does not change the complexion of the threat to the Menominee River,” said Dale Burie of the Coalition to SAVE the Menominee River.
“Be assured, that this battle has gone on for 20 years and will continue to go on until these speculative mining organizations give up on ever getting close to the Menominee River.”
Gold Resource's exclusive right to acquire Aquila Resources expires on Oct. 22, unless the parties reach a final agreement, or terminate negotiations, before that date.
Gold Resource Corp. did not respond to a request for comment on this report.
Osisko Makes Big New Investment in Proposed Back Forty Mine
Aug. 16, 2021 - A subsidiary of Osisko Gold Royalties Ltd. has agreed to immediately release $2.4 million to support Aquila Resources’ Back Forty mine project in Menominee County, Michigan.
The announcement came today (Aug. 16) in a news release posted by Aquila to a Canadian regulatory database (sedar.com).
Earlier this year, Aquila abandoned its existing permits for the Back Forty mine, choosing instead to pursue a completely new project, starting with a design document and a feasibility study to demonstrate the project’s financial viability.
The feasibility study is expected to be completed by the end of the year, after which the company will need to apply for new permits from the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE).
“This agreement demonstrates Osisko Gold Royalty’s strong support for the Back Forty Project and enables Aquila to continue advancing the optimized feasibility study,” said Aquila President & CEO Guy Le Bel, in the news release. “I am pleased with the progress our team is making on the feasibility study, which will demonstrate reduced environmental impact and a longer mine life for the benefit of all stakeholders.”
The cash infusion comes at an opportune time for Aquila. The company reported just days ago that it had negative working capital of $2.1 million dollars as of June 30, 2021. “Negative working capital” means that a company’s liabilities exceed the assets it can convert to cash in the upcoming year.
The latest Osisko investment indicates that the company believes Aquila Resources can still complete the Back Forty project, despite repeated legal and regulatory setbacks.
Osisko has now invested $17.6 million in the Back Forty project, according to public documents and prior news releases from Aquila Resources. The money is an advance payment on future production at the mine and is tied to milestones that must be achieved by Aquila before the money is released. Osisko’s total commitment was $55 million when the deal was announced in November, 2017.
Aug. 16, 2021 - A subsidiary of Osisko Gold Royalties Ltd. has agreed to immediately release $2.4 million to support Aquila Resources’ Back Forty mine project in Menominee County, Michigan.
The announcement came today (Aug. 16) in a news release posted by Aquila to a Canadian regulatory database (sedar.com).
Earlier this year, Aquila abandoned its existing permits for the Back Forty mine, choosing instead to pursue a completely new project, starting with a design document and a feasibility study to demonstrate the project’s financial viability.
The feasibility study is expected to be completed by the end of the year, after which the company will need to apply for new permits from the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE).
“This agreement demonstrates Osisko Gold Royalty’s strong support for the Back Forty Project and enables Aquila to continue advancing the optimized feasibility study,” said Aquila President & CEO Guy Le Bel, in the news release. “I am pleased with the progress our team is making on the feasibility study, which will demonstrate reduced environmental impact and a longer mine life for the benefit of all stakeholders.”
The cash infusion comes at an opportune time for Aquila. The company reported just days ago that it had negative working capital of $2.1 million dollars as of June 30, 2021. “Negative working capital” means that a company’s liabilities exceed the assets it can convert to cash in the upcoming year.
The latest Osisko investment indicates that the company believes Aquila Resources can still complete the Back Forty project, despite repeated legal and regulatory setbacks.
Osisko has now invested $17.6 million in the Back Forty project, according to public documents and prior news releases from Aquila Resources. The money is an advance payment on future production at the mine and is tied to milestones that must be achieved by Aquila before the money is released. Osisko’s total commitment was $55 million when the deal was announced in November, 2017.
Aquila Abandons Dam Safety Permit Application
July 21, 2021 - Aquila Resources, Inc., has withdrawn its dam safety permit application for tailings and contact water impoundments at the proposed Back Forty mine west of Stephenson, Michigan.
The application was based on a project plan that Aquila has now abandoned in favor of a new design incorporating both underground and surface mining.
The company says a new design will be completed by the end of the year, with permit applications to follow.
The previously proposed contact water basin at the mine would have held up to 161 million gallons of water contaminated with mine waste, according to documents filed by Aquila Resources. Water collected in the basin would be run through a treatment plant before being discharged into the Menominee River.
The tailings impoundment was to have contained 6.4 million cubic yards of tailings and about the same volume of waste rock. Mine tailings are the waste left over after mineral ore is processed and are typically a mud-like material.
Aquila’s had proposed an “upstream” design for its tailings impoundment, with the embankment resting partly on waste rock, and partly on tailings.
That design was strongly opposed by mine critics.
“The upstream tailings dam design proposed by Aquila is the lowest-cost option but the most prone to failure,” Al Gedicks of the Wisconsin Resources Protection Council (WRPC) said in the organization’s December, 2020, newsletter (http://www.wrpc.net/newsletters/december-2020-newsletter/).
“Because of the demonstrated risk associated with upstream dam construction, an international group of 142 scientists representing 24 nations has urged that upstream dams must not be built at any new facilities.”
July 21, 2021 - Aquila Resources, Inc., has withdrawn its dam safety permit application for tailings and contact water impoundments at the proposed Back Forty mine west of Stephenson, Michigan.
The application was based on a project plan that Aquila has now abandoned in favor of a new design incorporating both underground and surface mining.
The company says a new design will be completed by the end of the year, with permit applications to follow.
The previously proposed contact water basin at the mine would have held up to 161 million gallons of water contaminated with mine waste, according to documents filed by Aquila Resources. Water collected in the basin would be run through a treatment plant before being discharged into the Menominee River.
The tailings impoundment was to have contained 6.4 million cubic yards of tailings and about the same volume of waste rock. Mine tailings are the waste left over after mineral ore is processed and are typically a mud-like material.
Aquila’s had proposed an “upstream” design for its tailings impoundment, with the embankment resting partly on waste rock, and partly on tailings.
That design was strongly opposed by mine critics.
“The upstream tailings dam design proposed by Aquila is the lowest-cost option but the most prone to failure,” Al Gedicks of the Wisconsin Resources Protection Council (WRPC) said in the organization’s December, 2020, newsletter (http://www.wrpc.net/newsletters/december-2020-newsletter/).
“Because of the demonstrated risk associated with upstream dam construction, an international group of 142 scientists representing 24 nations has urged that upstream dams must not be built at any new facilities.”
Green Light Metals is Potential Buyer of Aquila Resources’ Wisconsin Assets
UPDATE: Green Light Metals completed its purchase of Aquila's Bend and Reef sites on Oct. 4, 2021.
July 14, 2021 - Public documents reveal that a start-up enterprise called Green Light Metals, Inc., is the company that is seeking to buy Aquila’s Bend and Reef projects in northern Wisconsin.
Aquila announced on June 1 that it planned to sell the Wisconsin projects to an unspecified company for $7 million in cash and stock (Canadian dollars). The buyer pledged to pay a $1 million up-front deposit.
Documents filed with Canadian regulators reveal that the buyer, Green Light Metals, has apparently raised the $1 million deposit in a private sale of stock shares.
David Barrett "Barry" Hildred, former CEO of Aquila Resources and current member of its board of directors, recently secured a 50% ownership interest in Green Light Metals, which was then called 1246775 B.C. LTD.
Hildred acquired his 50% interest through a company called Red Roof Capital, Inc., for $45.
He later purchased an additional 500,000 common shares at 15 cents per share in the private sale that closed on June 30.
Other investors include Stephen V. Donohue of Foth Infrastructure & Environment, LLC, a company that has worked closely with Aquila in the past.
Bend and Reef are very early-stage mineral exploration projects in Taylor and Marathon Counties, respectively.
Aquila Resources did not respond to a request for comment on this report.
Sources: https://www.newsfilecorp.com/release/89574 and sedar.com.
UPDATE: Green Light Metals completed its purchase of Aquila's Bend and Reef sites on Oct. 4, 2021.
July 14, 2021 - Public documents reveal that a start-up enterprise called Green Light Metals, Inc., is the company that is seeking to buy Aquila’s Bend and Reef projects in northern Wisconsin.
Aquila announced on June 1 that it planned to sell the Wisconsin projects to an unspecified company for $7 million in cash and stock (Canadian dollars). The buyer pledged to pay a $1 million up-front deposit.
Documents filed with Canadian regulators reveal that the buyer, Green Light Metals, has apparently raised the $1 million deposit in a private sale of stock shares.
David Barrett "Barry" Hildred, former CEO of Aquila Resources and current member of its board of directors, recently secured a 50% ownership interest in Green Light Metals, which was then called 1246775 B.C. LTD.
Hildred acquired his 50% interest through a company called Red Roof Capital, Inc., for $45.
He later purchased an additional 500,000 common shares at 15 cents per share in the private sale that closed on June 30.
Other investors include Stephen V. Donohue of Foth Infrastructure & Environment, LLC, a company that has worked closely with Aquila in the past.
Bend and Reef are very early-stage mineral exploration projects in Taylor and Marathon Counties, respectively.
Aquila Resources did not respond to a request for comment on this report.
Sources: https://www.newsfilecorp.com/release/89574 and sedar.com.
Survey Ranks Michigan Near the Bottom in Attractiveness for New Mining Projects
June 28, 2020 - Industry professionals ranked the state of Michigan 68th out of 77 international mining jurisdictions in a 2020 survey conducted by the industry-friendly Fraser Institute.
The overall “investment attractiveness” ranking is based on minerals potential and a “policy perception” index of social and governmental factors that affect investment decisions, according to the Fraser report.
The institute calls the policy perception index “a ’report card’ to governments on the attractiveness of their mining policies.” Policy factors examined include uncertainty concerning environmental regulations, regulatory duplication, the legal system and taxation regime, uncertainty concerning protected areas and disputed land claims, infrastructure, and socioeconomic and community development conditions, the report said.
Michigan was ranked lowest of all U.S. jurisdictions for overall mining investment attractiveness, according to the report. Idaho, Wyoming, Nevada, Utah, Arizona, and New Mexico all scored higher.
Michigan ranked much higher just a few years ago. It was 25th out of 104 international jurisdictions in 2016.
The data are based on responses from 276 individuals who are active in the mining industry.
Read the full report here.
June 28, 2020 - Industry professionals ranked the state of Michigan 68th out of 77 international mining jurisdictions in a 2020 survey conducted by the industry-friendly Fraser Institute.
The overall “investment attractiveness” ranking is based on minerals potential and a “policy perception” index of social and governmental factors that affect investment decisions, according to the Fraser report.
The institute calls the policy perception index “a ’report card’ to governments on the attractiveness of their mining policies.” Policy factors examined include uncertainty concerning environmental regulations, regulatory duplication, the legal system and taxation regime, uncertainty concerning protected areas and disputed land claims, infrastructure, and socioeconomic and community development conditions, the report said.
Michigan was ranked lowest of all U.S. jurisdictions for overall mining investment attractiveness, according to the report. Idaho, Wyoming, Nevada, Utah, Arizona, and New Mexico all scored higher.
Michigan ranked much higher just a few years ago. It was 25th out of 104 international jurisdictions in 2016.
The data are based on responses from 276 individuals who are active in the mining industry.
Read the full report here.
Who’s “Buying” Aquila’s Wisconsin Properties? It’s a Mystery for Now
June 14, 2021 - Back Forty mine promoter Aquila Resources, Inc., announced on June 1 that it will sell its interest in the early-stage Bend and Reef projects to a private company called Newco.
The Bend and Reef projects are in north-central Wisconsin counties where Aquila has identified copper, gold and silver deposits that may be commercially valuable.
The June 1 deal is in the form of a non-binding letter of intent, according to the Aquila news release. Newco will pay $3 million (Canadian dollars) to Aquila, with $1 million to be paid immediately as an up-front deposit. Aquila will also receive $4 million in stock if Newco is approved for listing on a Canadian stock exchange (presumably under a different name) and its initial public offering is successful.
The announcement has raised some eyebrows.
“Newco” is a named commonly used for holding companies that exist only on paper, which are sometimes used to mask the identity of investors when they want to keep a transaction under wraps.
There are literally hundreds of companies called Newco in existence, so it’s impossible to know who’s putting up the money for the Wisconsin properties, which consist of mineral leases and exploration agreements.
It’s possible that a silent partner is throwing in $1 million to keep Aquila Resources afloat in the short term, according to one observer who closely follows the mining industry.
At last report, Aquila’s liabilities far exceeded its available assets – it had $1.9 million in negative working capital on March 31 and its spending has undoubtedly continued since then.
“This appears to be a way to get $1 million into Aquila without them having to get more money from [a current investor] – or going bankrupt,” said the observer, who also noted that $1 million in Canadian dollars ($820,000 US) won’t keep Aquila going very long at its current rate of spending.
Aquila has invested more than $100 million dollars on the proposed Back Forty mine, which would be located on the Menominee River west of Stephenson, Michigan. The company recently announced that it was abandoning its existing mining and wetlands permits, which had been challenged by mine opponents, and will submit new applications at the end of 2021 with a revised project plan.
June 14, 2021 - Back Forty mine promoter Aquila Resources, Inc., announced on June 1 that it will sell its interest in the early-stage Bend and Reef projects to a private company called Newco.
The Bend and Reef projects are in north-central Wisconsin counties where Aquila has identified copper, gold and silver deposits that may be commercially valuable.
The June 1 deal is in the form of a non-binding letter of intent, according to the Aquila news release. Newco will pay $3 million (Canadian dollars) to Aquila, with $1 million to be paid immediately as an up-front deposit. Aquila will also receive $4 million in stock if Newco is approved for listing on a Canadian stock exchange (presumably under a different name) and its initial public offering is successful.
The announcement has raised some eyebrows.
“Newco” is a named commonly used for holding companies that exist only on paper, which are sometimes used to mask the identity of investors when they want to keep a transaction under wraps.
There are literally hundreds of companies called Newco in existence, so it’s impossible to know who’s putting up the money for the Wisconsin properties, which consist of mineral leases and exploration agreements.
It’s possible that a silent partner is throwing in $1 million to keep Aquila Resources afloat in the short term, according to one observer who closely follows the mining industry.
At last report, Aquila’s liabilities far exceeded its available assets – it had $1.9 million in negative working capital on March 31 and its spending has undoubtedly continued since then.
“This appears to be a way to get $1 million into Aquila without them having to get more money from [a current investor] – or going bankrupt,” said the observer, who also noted that $1 million in Canadian dollars ($820,000 US) won’t keep Aquila going very long at its current rate of spending.
Aquila has invested more than $100 million dollars on the proposed Back Forty mine, which would be located on the Menominee River west of Stephenson, Michigan. The company recently announced that it was abandoning its existing mining and wetlands permits, which had been challenged by mine opponents, and will submit new applications at the end of 2021 with a revised project plan.
Aquila Gets $1 Million Cash Infusion with Sale of Wisconsin Mine Projects
June 1, 2021 - Back Forty mine promoter Aquila Resources, Inc., has announced a preliminary deal to sell its Bend and Reef mine properties to Newco, a start-up company.
Aquila stands to get a total of $3 million in cash and $4 million in Newco stock if the tentative deal is finalized, according to a news release dated June 1.
Of that, $1 million will be advanced immediately as a deposit, which Aquila would have to pay back if the deal falls through.
All these amounts are in Canadian dollars.
The source of the Newco cash is unclear, since the company has not yet been approved to sell stock on the Canadian market.
As of March 31, Aquila reported that it owed $1.9 million (US) more than it could pay with assets available at that time.
June 1, 2021 - Back Forty mine promoter Aquila Resources, Inc., has announced a preliminary deal to sell its Bend and Reef mine properties to Newco, a start-up company.
Aquila stands to get a total of $3 million in cash and $4 million in Newco stock if the tentative deal is finalized, according to a news release dated June 1.
Of that, $1 million will be advanced immediately as a deposit, which Aquila would have to pay back if the deal falls through.
All these amounts are in Canadian dollars.
The source of the Newco cash is unclear, since the company has not yet been approved to sell stock on the Canadian market.
As of March 31, Aquila reported that it owed $1.9 million (US) more than it could pay with assets available at that time.
Back Forty Removed from Bill Limiting Local Control of Mining
May 19, 2021 - Senate Bill 431, introduced on May 11, would prohibit counties and townships from regulating gravel pits that are expected to remove one million tons or more of aggregate over the life of the mine.
However, a provision that would exempt non-ferrous metallic mineral mines such as the proposed Back Forty project from local control has been stripped from the newest version of the bill.
As written, SB 431 retains existing statutory language that allows local units of government to prohibit a mining project if “very serious consequences would result.” The burden remains on the mine promoter to show that the project would not have “very serious” negative consequences on existing land uses, property values, and other health, safety and welfare interests of a local unit of government.
Lake Township, where the Back Forty mine would be located if it goes into operation, has enacted two ordinances that would put limits on the project, and possibly prohibit it altogether. Previous versions of the Senate bill would have removed the township’s ability to enforce those ordinances.
An earlier, more extensive version of SB 431 was passed out of committee but died when the 2020 legislative session ended.
May 19, 2021 - Senate Bill 431, introduced on May 11, would prohibit counties and townships from regulating gravel pits that are expected to remove one million tons or more of aggregate over the life of the mine.
However, a provision that would exempt non-ferrous metallic mineral mines such as the proposed Back Forty project from local control has been stripped from the newest version of the bill.
As written, SB 431 retains existing statutory language that allows local units of government to prohibit a mining project if “very serious consequences would result.” The burden remains on the mine promoter to show that the project would not have “very serious” negative consequences on existing land uses, property values, and other health, safety and welfare interests of a local unit of government.
Lake Township, where the Back Forty mine would be located if it goes into operation, has enacted two ordinances that would put limits on the project, and possibly prohibit it altogether. Previous versions of the Senate bill would have removed the township’s ability to enforce those ordinances.
An earlier, more extensive version of SB 431 was passed out of committee but died when the 2020 legislative session ended.
Aquila Abandons Mining and Wetland Permits
May 11, 2021 - Aquila Resources, Inc., announced today that it won’t continue to defend its previously issued mining and wetland permits for the Back Forty mine.
Instead, the company plans to develop a completely revised project plan, supplementing its proposed open pit with underground mining, and modifying its site design to avoid direct impacts on wetlands.
“We are committed to advancing the Back Forty Project with a collaborative approach that integrates feedback from the community,” said Aquila President and CEO Guy Le Bel. “The resulting mine will offer over a decade of net benefits to local and regional communities while being protective of the environment.”
Aquila’s two permits had been challenged by mine opponents in contested case hearings before Administrative Law Judge Daniel Pulter, who struck down the company’s wetland permit last January. The mining permit, which has already been amended once, was scheduled for a contested case hearing in the fall, but Aquila won’t pursue that permit now that its plans have changed.
Aquila hopes to complete a revised feasibility study for the Back Forty mine by the end of 2021, with new permit applications to follow. The applications would then undergo a lengthy review by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE), including a public hearing and open comment period.
Aquila has spent over $100 million dollars developing the Back Forty mine. It currently has a negative working capital position and needs additional funding to continue the planning process.
May 11, 2021 - Aquila Resources, Inc., announced today that it won’t continue to defend its previously issued mining and wetland permits for the Back Forty mine.
Instead, the company plans to develop a completely revised project plan, supplementing its proposed open pit with underground mining, and modifying its site design to avoid direct impacts on wetlands.
“We are committed to advancing the Back Forty Project with a collaborative approach that integrates feedback from the community,” said Aquila President and CEO Guy Le Bel. “The resulting mine will offer over a decade of net benefits to local and regional communities while being protective of the environment.”
Aquila’s two permits had been challenged by mine opponents in contested case hearings before Administrative Law Judge Daniel Pulter, who struck down the company’s wetland permit last January. The mining permit, which has already been amended once, was scheduled for a contested case hearing in the fall, but Aquila won’t pursue that permit now that its plans have changed.
Aquila hopes to complete a revised feasibility study for the Back Forty mine by the end of 2021, with new permit applications to follow. The applications would then undergo a lengthy review by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE), including a public hearing and open comment period.
Aquila has spent over $100 million dollars developing the Back Forty mine. It currently has a negative working capital position and needs additional funding to continue the planning process.
Aquila Resources Sinks Farther Into the Red
May 6, 2021 - Back Forty mine promoter Aquila Resources, Inc. reported almost $1.9 million in negative working capital as of March 31, an increase of $1.1 million from Dec. 31, 2020, according to the company's required financial reports, issued today.
Negative working capital means that means that the liabilities that must be paid within one year exceed the assets that can be converted to cash over the same period.
Aquila Resources' financial statements can be accessed online at sedar.com.
May 6, 2021 - Back Forty mine promoter Aquila Resources, Inc. reported almost $1.9 million in negative working capital as of March 31, an increase of $1.1 million from Dec. 31, 2020, according to the company's required financial reports, issued today.
Negative working capital means that means that the liabilities that must be paid within one year exceed the assets that can be converted to cash over the same period.
Aquila Resources' financial statements can be accessed online at sedar.com.
Another Setback for the Back Forty Mine
April 22, 2021 - A judge has reopened a contested case that challenged the original mining permit for the proposed Back Forty mine in Menominee County, Michigan.
That case culminated in May of 2019 with a victory for mine promoter Aquila Resources, Inc., when administrative law judge Daniel Pulter ruled that the mining permit was valid and properly issued by Michigan regulators.
Now, a circuit court judge, Wanda Stokes, has ruled that a mine opponent, the Menominee Indian Tribe of Wisconsin, should be allowed to enter new evidence that wasn’t allowed, or wasn’t available, during hearings on the mining permit that were held in 2018.
That evidence was developed during a separate contested case, this one challenging the wetland permit for the Back Forty project. It revealed, among other things, that staff of the Mich. Dept. of Environment, Great Lakes, and Energy (EGLE) had serious questions about Aquila’s claim, based on computer modeling, that the mine would have little or no impact on wetlands at the mine site.
The evidence, according to Judge Stokes, is relevant to the mining permit as well, and must be incorporated into a revised decision by Judge Pulter, which may or may not come out in Aquila’s favor.
At a minimum, Judge Stokes’ April 22 ruling means that Aquila’s mining permit, which the company has touted as a significant achievement, is now in question, and Aquila faces a long delay before the matter is resolved.
April 22, 2021 - A judge has reopened a contested case that challenged the original mining permit for the proposed Back Forty mine in Menominee County, Michigan.
That case culminated in May of 2019 with a victory for mine promoter Aquila Resources, Inc., when administrative law judge Daniel Pulter ruled that the mining permit was valid and properly issued by Michigan regulators.
Now, a circuit court judge, Wanda Stokes, has ruled that a mine opponent, the Menominee Indian Tribe of Wisconsin, should be allowed to enter new evidence that wasn’t allowed, or wasn’t available, during hearings on the mining permit that were held in 2018.
That evidence was developed during a separate contested case, this one challenging the wetland permit for the Back Forty project. It revealed, among other things, that staff of the Mich. Dept. of Environment, Great Lakes, and Energy (EGLE) had serious questions about Aquila’s claim, based on computer modeling, that the mine would have little or no impact on wetlands at the mine site.
The evidence, according to Judge Stokes, is relevant to the mining permit as well, and must be incorporated into a revised decision by Judge Pulter, which may or may not come out in Aquila’s favor.
At a minimum, Judge Stokes’ April 22 ruling means that Aquila’s mining permit, which the company has touted as a significant achievement, is now in question, and Aquila faces a long delay before the matter is resolved.
Is Aquila Broke? Not Exactly. Yet.
April 6, 2021 - Aquila Resources, Inc., had $1.8 million cash on hand but “negative working capital” of roughly $800,000 at the end of 2020, according to the company’s year-end Consolidated Financial Statements, and Management Discussion and Analysis, which can be accessed at www.sedar.com.
The reports indicate that the company has already incurred about $2.6 million in costs that will have to be paid sometime in 2021.
All of those bills aren’t necessarily due right now. So Aquila still has time to raise more cash to cover its current debts and continue operations into the future.
But the clock is ticking.
Aquila has spent, by its own account, more than $100 million since 2004 attempting to develop the Back Forty project. It needs roughly $250 million in capital investment to get the mine into operation. It has run into intense public opposition and faces continued legal and permitting challenges.
Is there someone out there willing to invest big bucks in Aquila and its proposed mine so that project development can continue in 2021 and beyond?
In late March, it looked like Aquila had put together a deal for additional financing, to the tune of more than $10 million. But that fell through, at least for now.
So Aquila urgently needs to secure a new funding deal if it hopes to continue the Back Forty project.
Any potential investor will have to consider:
1) On Jan. 4, 2021, an administrative law judge denied Aquila’s application for a state permit to excavate or disrupt wetlands on and around the mine site after a lengthy contested case hearing. Aquila has appealed the decision to a technical review panel which is not expected to issue a report until fall of this year.
2) Mine opponents have challenged Aquila’s modified state mining permit; a hearing on the contested case has been delayed until fall at Aquila’s request.
3) Aquila’s dam safety permit application for its tailings and contact water basins has been submitted but has not been accepted by state regulators, who may request changes before starting their review. Approval of the application, if it comes, is months away, and a legal challenge might follow.
4) Groundwater modeling, to determine the impact of the mine on wetlands at the project site, is not yet complete, despite years of effort by Aquila, and is crucial both to the wetlands permit and the dam safety permit application.
5) Aquila wants to put its mine right on top of River Road -- cutting the road into two disconnected segments. That would require approval of the Menominee County Road Commission. Aquila has floated the idea, and encountered opposition, but no formal request to close the road has been filed by the company.
6) Lake Township, where the Back Forty mine would be located, has local ordinances that regulate mining. Aquila has refused to submit its plans to the township for approval, arguing that the don’t apply to the Back Forty project. It might take a prolonged legal fight to resolve the dispute.
7) Most significantly, Aquila is developing a new feasibility study for the proposed project. Once that’s done, the company has indicated that it will submit revised permit applications to align existing permits with the feasibility study design, which includes both open-pit and underground mining. Revising existing permits means more delay – and possibly more legal challenges – that could drag on for years.
With all those hurdles to overcome, is the Back Forty still an attractive prospect for investors?
Time will tell.
Aquila Resources did not respond to a request for comment on this report.
April 6, 2021 - Aquila Resources, Inc., had $1.8 million cash on hand but “negative working capital” of roughly $800,000 at the end of 2020, according to the company’s year-end Consolidated Financial Statements, and Management Discussion and Analysis, which can be accessed at www.sedar.com.
The reports indicate that the company has already incurred about $2.6 million in costs that will have to be paid sometime in 2021.
All of those bills aren’t necessarily due right now. So Aquila still has time to raise more cash to cover its current debts and continue operations into the future.
But the clock is ticking.
Aquila has spent, by its own account, more than $100 million since 2004 attempting to develop the Back Forty project. It needs roughly $250 million in capital investment to get the mine into operation. It has run into intense public opposition and faces continued legal and permitting challenges.
Is there someone out there willing to invest big bucks in Aquila and its proposed mine so that project development can continue in 2021 and beyond?
In late March, it looked like Aquila had put together a deal for additional financing, to the tune of more than $10 million. But that fell through, at least for now.
So Aquila urgently needs to secure a new funding deal if it hopes to continue the Back Forty project.
Any potential investor will have to consider:
1) On Jan. 4, 2021, an administrative law judge denied Aquila’s application for a state permit to excavate or disrupt wetlands on and around the mine site after a lengthy contested case hearing. Aquila has appealed the decision to a technical review panel which is not expected to issue a report until fall of this year.
2) Mine opponents have challenged Aquila’s modified state mining permit; a hearing on the contested case has been delayed until fall at Aquila’s request.
3) Aquila’s dam safety permit application for its tailings and contact water basins has been submitted but has not been accepted by state regulators, who may request changes before starting their review. Approval of the application, if it comes, is months away, and a legal challenge might follow.
4) Groundwater modeling, to determine the impact of the mine on wetlands at the project site, is not yet complete, despite years of effort by Aquila, and is crucial both to the wetlands permit and the dam safety permit application.
5) Aquila wants to put its mine right on top of River Road -- cutting the road into two disconnected segments. That would require approval of the Menominee County Road Commission. Aquila has floated the idea, and encountered opposition, but no formal request to close the road has been filed by the company.
6) Lake Township, where the Back Forty mine would be located, has local ordinances that regulate mining. Aquila has refused to submit its plans to the township for approval, arguing that the don’t apply to the Back Forty project. It might take a prolonged legal fight to resolve the dispute.
7) Most significantly, Aquila is developing a new feasibility study for the proposed project. Once that’s done, the company has indicated that it will submit revised permit applications to align existing permits with the feasibility study design, which includes both open-pit and underground mining. Revising existing permits means more delay – and possibly more legal challenges – that could drag on for years.
With all those hurdles to overcome, is the Back Forty still an attractive prospect for investors?
Time will tell.
Aquila Resources did not respond to a request for comment on this report.
Aquila Stock Trades Halted as Funding Plan Falls Through
March 25, 2021 - Back Forty mine promoter Aquila Resources announced today that its plan to raise additional project funding has been withdrawn, one day after it was announced. Trading in Aquila stock was also suspended today “to ensure a fair and orderly market,” according to the Investment Industry Regulatory Organization of Canada (IROC).
Update (3/26/21): Trading in Aquila stock has resumed.
Aquila announced withdrawal of the funding plan “in light of current market conditions,” adding that “Aquila will work with its advisors to consider and evaluate various strategic alternatives to maximize shareholder value, including looking to realize value from its Wisconsin properties.”
Yesterday, Aquila announced that it would market new stock shares to the public with an estimated value of $10 million. The company also said it would offer shares to Orion Mine Finance and other potential investors in a private placement. Orion is Aquila’s largest shareholder and currently holds approximately 28.6% of the outstanding common shares, according to yesterday’s announcement.
Today’s reversal kills a plan that, according to Aquila would have funded “development activities at the Back Forty Project, including the completion of an optimized feasibility study and for permitting, environmental, and legal activities, and for general corporate purposes and working capital.”
March 25, 2021 - Back Forty mine promoter Aquila Resources announced today that its plan to raise additional project funding has been withdrawn, one day after it was announced. Trading in Aquila stock was also suspended today “to ensure a fair and orderly market,” according to the Investment Industry Regulatory Organization of Canada (IROC).
Update (3/26/21): Trading in Aquila stock has resumed.
Aquila announced withdrawal of the funding plan “in light of current market conditions,” adding that “Aquila will work with its advisors to consider and evaluate various strategic alternatives to maximize shareholder value, including looking to realize value from its Wisconsin properties.”
Yesterday, Aquila announced that it would market new stock shares to the public with an estimated value of $10 million. The company also said it would offer shares to Orion Mine Finance and other potential investors in a private placement. Orion is Aquila’s largest shareholder and currently holds approximately 28.6% of the outstanding common shares, according to yesterday’s announcement.
Today’s reversal kills a plan that, according to Aquila would have funded “development activities at the Back Forty Project, including the completion of an optimized feasibility study and for permitting, environmental, and legal activities, and for general corporate purposes and working capital.”
Osisko Releases $100,000 to Support Back Forty Mine
March 11, 2021 - A subsidiary of Osisko Gold Royalties Ltd announced today that it will immediately pay out $100,000 under its gold- and silver-streaming agreements with Aquila Resources, Inc.
The investment is an advance payment on future minerals production at the proposed Back Forty mine in Menominee County, Michigan.
Osisko will also take the lead on a revised feasibility study that will attempt to establish that the Back Forty project is a good investment. Aquila Resources needs an estimated $250 million to get the mine up and running.
March 11, 2021 - A subsidiary of Osisko Gold Royalties Ltd announced today that it will immediately pay out $100,000 under its gold- and silver-streaming agreements with Aquila Resources, Inc.
The investment is an advance payment on future minerals production at the proposed Back Forty mine in Menominee County, Michigan.
Osisko will also take the lead on a revised feasibility study that will attempt to establish that the Back Forty project is a good investment. Aquila Resources needs an estimated $250 million to get the mine up and running.
OPINION: Michigan Lawmakers Sling Mud at Administrative Law Judge
By Mark Doremus
Feb. 27, 2021 - In a Jan. 25 news release, Michigan State Sen. Ed McBroom (R-Vulcan) attacked Judge Daniel Pulter’s decision to deny a so-called “wetland” permit to Aquila Resources, Inc., for the proposed Back Forty mine. State Sen. Wayne Schmidt (R-Traverse City), and Reps. Greg Markkanen (R-Hancock), Beau LaFave (R-Iron Mountain) and Sara Cambensy (D-Marquette) joined in the statement.
Judge Pulter rejected the Back Forty permit on multiple grounds after two years of “contested case” hearings and legal arguments. The permit would have allowed Aquila to excavate or degrade protected wetlands at the Back Forty mine site on the Menominee River west of Stephenson, Mich.
The McBroom news release stated:
“This decision by one judge is based on an additional layer of expectations that themselves are based on unreasonable ‘what if’ scenarios raised by interest groups that have been against the proposed mine since day one. It is a huge disservice to U.P. residents and is exactly the type of nonsense that we are fed up with — decisions based on misinformed environmental rhetoric that seek to inhibit our land-based industries and way of life.”
My opinion: here the McBroom statement goes far beyond a critique of Judge Pulter’s decision. It’s a direct attack on his competence. It suggests that he can’t tell an “unreasonable ‘what if’ scenario” from a legitimate argument based on facts and law.
If you read Judge Pulter’s Jan. 4, 2021, decision and order (as I have), you’ll see that 1) he was very careful to base his rulings only on the express provisions of the relevant statutes (Parts 301 and 303 of the Michigan Natural Resources and Environmental Protection Act (NREPA) and 2) he thoroughly reviewed and addressed the evidence and legal arguments presented by all of the parties.
Indeed, the mine promoter, Aquila Resources Inc., was a party to the contested case that led to Judge Pulter’s decision, and was able to object to any evidence presented by mine opponents that was irrelevant or unsupported by competent authority. To suggest that Judge Pulter’s decision was based on “misinformed environmental rhetoric” is both inflammatory and flat-out wrong.
The lawmakers who participated in the McBroom news release have not accepted repeated invitations to discuss the matter on the record.
The McBroom statement also said:
“Lawmakers said experts with the Back Forty Mine have diligently worked to address specific and reasonable issues throughout the four-year-long wetlands permit review process with multiple revisions and considerations made.”
My opinion: the failure of Aquila Resources to put together a complete and coherent permit application was the primary reason for the lengthy review process and for Judge Pulter’s decision to deny the permit.
Judge Pulter concluded that:
1) Despite repeated agency requests, Aquila never provided reliable information about the potential impact of the proposed mine on regulated wetlands. As a result, the public didn’t have the information it needed to review and comment on the project, as required by law – and state regulators were wrong to declare it administratively complete.
2) Michigan law requires an applicant to provide all required information before a permit is issued, so that regulators can determine whether the likely environmental impacts are acceptable under state law. “A conditional permit that requires an applicant to provide evidence – after-the-fact – to satisfy permitting criteria is not permissible,” therefore “the permit issued in this case is invalid.”
3) Aquila Resources failed to show that its project is in the public interest because its benefits outweigh its likely negative effects. Because Aquila had failed to provide convincing evidence on several factors related to the public interest assessment, it was not entitled to a permit.
The McBroom statement said:
“The permit was ultimately approved by the Department of Environment, Great Lakes, and Energy in June 2018 after meticulous reviews and public hearings. Mining opponents then sought to challenge the permit, which is the basis for the judge’s Jan. 4 decision.”
My opinion: the wetland permit was approved by Heidi Grether, then-director of the Michigan Dept. of Environmental Quality, now the Dept. of Environment, Great Lakes and Energy (EGLE), over the objections of experts within the department who had worked diligently with Aquila Resources to help the company come up with a satisfactory wetland permit application (see the dozens of e-mails between agency staff and Aquila posted on the MiWaters website on June 4, 2018).
Toward the end of the review process, agency staff members wrote detailed “Findings of Fact and Conclusions of Law” explaining their recommendation that the permit be denied. That document is also available on MiWaters. Here is a summary of key points in the memo:
1) Aquila used a faulty groundwater model and failed to incorporate actual site conditions into its analysis of the potential impact of the mine on groundwater, surface water and wetlands.
2) The company failed to fully review possible alternatives to the project as proposed, including relocating the ore processing facility to higher ground, away from the Menominee River.
3) Groundwater drawdown and migration of contaminants off-site were more likely to occur than the company acknowledged.
Again quoting the McBroom statement:
“Through a rigorous process with EGLE, this permit was rightly approved, and we remain hopeful that the department will work with Aquila to address this wrongful rejection of the permit,” the lawmakers said. “It is not right for companies like this who work in good faith to comply with stringent and effective laws to then have extra and duplicative layers of requirements imposed or [sic] a judge revoking a properly issued permit over two and a half years after the permit was granted. It is unfair and untenable for businesses to have to deal with a moving goal post, which will drive away investment in the U.P. to the detriment of all.
My opinion: again, Judge Pulter applied the law as written to the facts of the case. If “duplicative layers of requirements” were imposed, they came straight out of Parts 301 and 303 of the Michigan NREPA. As a legislator, the burden is on Sen. McBroom and his colleagues to change the law if it’s unfair to the mining industry.
As for working with Aquila Resources to address “this wrongful rejection of the permit,” it is the company’s responsibility to come up with a complete and valid permit application. It’s not the agency’s job to do that. Aquila is free to re-submit its application at any time.
Finally, again quoting the statement from McBroom and his fellow lawmakers:
“We vow to work together in stressing the importance of this project and reasonable regulations overall, as one U.P., to ensure that one judge’s decision is not the policy position advanced in Michigan. Our communities want and support mining in the U.P. now as in the past generations.”
My opinion: It’s unclear what influence McBroom and his colleagues can have, short of trying to change the law. Aquila Resources has appealed Judge Pulter’s decision to the state Environmental Permit Review Commission, which will make a final ruling on the permit on behalf of the Dept. of Environment, Great Lakes and Energy (EGLE). The panel will meet for the first time on Wednesday, March 3, at 8:30 a.m. Eastern time.
By Mark Doremus
Feb. 27, 2021 - In a Jan. 25 news release, Michigan State Sen. Ed McBroom (R-Vulcan) attacked Judge Daniel Pulter’s decision to deny a so-called “wetland” permit to Aquila Resources, Inc., for the proposed Back Forty mine. State Sen. Wayne Schmidt (R-Traverse City), and Reps. Greg Markkanen (R-Hancock), Beau LaFave (R-Iron Mountain) and Sara Cambensy (D-Marquette) joined in the statement.
Judge Pulter rejected the Back Forty permit on multiple grounds after two years of “contested case” hearings and legal arguments. The permit would have allowed Aquila to excavate or degrade protected wetlands at the Back Forty mine site on the Menominee River west of Stephenson, Mich.
The McBroom news release stated:
“This decision by one judge is based on an additional layer of expectations that themselves are based on unreasonable ‘what if’ scenarios raised by interest groups that have been against the proposed mine since day one. It is a huge disservice to U.P. residents and is exactly the type of nonsense that we are fed up with — decisions based on misinformed environmental rhetoric that seek to inhibit our land-based industries and way of life.”
My opinion: here the McBroom statement goes far beyond a critique of Judge Pulter’s decision. It’s a direct attack on his competence. It suggests that he can’t tell an “unreasonable ‘what if’ scenario” from a legitimate argument based on facts and law.
If you read Judge Pulter’s Jan. 4, 2021, decision and order (as I have), you’ll see that 1) he was very careful to base his rulings only on the express provisions of the relevant statutes (Parts 301 and 303 of the Michigan Natural Resources and Environmental Protection Act (NREPA) and 2) he thoroughly reviewed and addressed the evidence and legal arguments presented by all of the parties.
Indeed, the mine promoter, Aquila Resources Inc., was a party to the contested case that led to Judge Pulter’s decision, and was able to object to any evidence presented by mine opponents that was irrelevant or unsupported by competent authority. To suggest that Judge Pulter’s decision was based on “misinformed environmental rhetoric” is both inflammatory and flat-out wrong.
The lawmakers who participated in the McBroom news release have not accepted repeated invitations to discuss the matter on the record.
The McBroom statement also said:
“Lawmakers said experts with the Back Forty Mine have diligently worked to address specific and reasonable issues throughout the four-year-long wetlands permit review process with multiple revisions and considerations made.”
My opinion: the failure of Aquila Resources to put together a complete and coherent permit application was the primary reason for the lengthy review process and for Judge Pulter’s decision to deny the permit.
Judge Pulter concluded that:
1) Despite repeated agency requests, Aquila never provided reliable information about the potential impact of the proposed mine on regulated wetlands. As a result, the public didn’t have the information it needed to review and comment on the project, as required by law – and state regulators were wrong to declare it administratively complete.
2) Michigan law requires an applicant to provide all required information before a permit is issued, so that regulators can determine whether the likely environmental impacts are acceptable under state law. “A conditional permit that requires an applicant to provide evidence – after-the-fact – to satisfy permitting criteria is not permissible,” therefore “the permit issued in this case is invalid.”
3) Aquila Resources failed to show that its project is in the public interest because its benefits outweigh its likely negative effects. Because Aquila had failed to provide convincing evidence on several factors related to the public interest assessment, it was not entitled to a permit.
The McBroom statement said:
“The permit was ultimately approved by the Department of Environment, Great Lakes, and Energy in June 2018 after meticulous reviews and public hearings. Mining opponents then sought to challenge the permit, which is the basis for the judge’s Jan. 4 decision.”
My opinion: the wetland permit was approved by Heidi Grether, then-director of the Michigan Dept. of Environmental Quality, now the Dept. of Environment, Great Lakes and Energy (EGLE), over the objections of experts within the department who had worked diligently with Aquila Resources to help the company come up with a satisfactory wetland permit application (see the dozens of e-mails between agency staff and Aquila posted on the MiWaters website on June 4, 2018).
Toward the end of the review process, agency staff members wrote detailed “Findings of Fact and Conclusions of Law” explaining their recommendation that the permit be denied. That document is also available on MiWaters. Here is a summary of key points in the memo:
1) Aquila used a faulty groundwater model and failed to incorporate actual site conditions into its analysis of the potential impact of the mine on groundwater, surface water and wetlands.
2) The company failed to fully review possible alternatives to the project as proposed, including relocating the ore processing facility to higher ground, away from the Menominee River.
3) Groundwater drawdown and migration of contaminants off-site were more likely to occur than the company acknowledged.
Again quoting the McBroom statement:
“Through a rigorous process with EGLE, this permit was rightly approved, and we remain hopeful that the department will work with Aquila to address this wrongful rejection of the permit,” the lawmakers said. “It is not right for companies like this who work in good faith to comply with stringent and effective laws to then have extra and duplicative layers of requirements imposed or [sic] a judge revoking a properly issued permit over two and a half years after the permit was granted. It is unfair and untenable for businesses to have to deal with a moving goal post, which will drive away investment in the U.P. to the detriment of all.
My opinion: again, Judge Pulter applied the law as written to the facts of the case. If “duplicative layers of requirements” were imposed, they came straight out of Parts 301 and 303 of the Michigan NREPA. As a legislator, the burden is on Sen. McBroom and his colleagues to change the law if it’s unfair to the mining industry.
As for working with Aquila Resources to address “this wrongful rejection of the permit,” it is the company’s responsibility to come up with a complete and valid permit application. It’s not the agency’s job to do that. Aquila is free to re-submit its application at any time.
Finally, again quoting the statement from McBroom and his fellow lawmakers:
“We vow to work together in stressing the importance of this project and reasonable regulations overall, as one U.P., to ensure that one judge’s decision is not the policy position advanced in Michigan. Our communities want and support mining in the U.P. now as in the past generations.”
My opinion: It’s unclear what influence McBroom and his colleagues can have, short of trying to change the law. Aquila Resources has appealed Judge Pulter’s decision to the state Environmental Permit Review Commission, which will make a final ruling on the permit on behalf of the Dept. of Environment, Great Lakes and Energy (EGLE). The panel will meet for the first time on Wednesday, March 3, at 8:30 a.m. Eastern time.
Aquila Resources Appeals Denial of Back Forty "Wetland" Permit
The decision to reject the Part 301 and Part 303 permits for the proposed Back Forty mine has been appealed to the Michigan Environmental Permit Review Commission.
Administrative Law Judge Daniel L. Pulter denied the permit on Jan. 4 after a lengthy contested case proceeding.
In its appeal, Aquila presents three questions:
1. Did the Tribunal err in concluding that the drawdown of groundwater underneath a wetland requires a permit under MCL 324.30304(d) even though the Michigan Court of Appeals has held the opposite and the plain language of the statute refers only to draining surface water?
2. Did the Tribunal err in concluding that Aquila failed to provide a reliable identification of wetland and stream impacts sufficient to render its application administratively complete?
3. Did the Tribunal err in concluding that Aquila’s estimate of potential indirect impacts using a range rather than a single number rendered the application administratively incomplete?
The Environmental Permit Review Commission is an advisory committee made up 15 people appointed by the governor. It was established in 2018 to provide expert review of state environmental permit decisions.
The decision to reject the Part 301 and Part 303 permits for the proposed Back Forty mine has been appealed to the Michigan Environmental Permit Review Commission.
Administrative Law Judge Daniel L. Pulter denied the permit on Jan. 4 after a lengthy contested case proceeding.
In its appeal, Aquila presents three questions:
1. Did the Tribunal err in concluding that the drawdown of groundwater underneath a wetland requires a permit under MCL 324.30304(d) even though the Michigan Court of Appeals has held the opposite and the plain language of the statute refers only to draining surface water?
2. Did the Tribunal err in concluding that Aquila failed to provide a reliable identification of wetland and stream impacts sufficient to render its application administratively complete?
3. Did the Tribunal err in concluding that Aquila’s estimate of potential indirect impacts using a range rather than a single number rendered the application administratively incomplete?
The Environmental Permit Review Commission is an advisory committee made up 15 people appointed by the governor. It was established in 2018 to provide expert review of state environmental permit decisions.
Analysis: Why the Back Forty “Wetland” Permit was Denied
By Mark Doremus
Administrative Law Judge Daniel L. Pulter denied Aquila Resources’ “wetland” permit for the proposed Back Forty mine in an exhaustive 76-page decision issued on Jan. 4, 2021.
The permit had two provisions, each based on a different part of the Michigan Natural Resources and Environmental Protection Act (NREPA). Under Part 303, it would have authorized Aquila to disrupt or remove protected wetlands at the mine site on the east bank of the Menominee River west of Stephenson, Michigan. Under Part 301, it would have allowed Aquila to install a pipe to discharge treated mine wastewater into the river. The permit was challenged by the Menominee Indian Tribe of Wisconsin, the Coalition to SAVE the Menominee River, and Tom Boerner, a who owns property just north of the mine site.
The “contested case” hearing before Judge Pulter was an internal review of a June 4, 2018 decision to issue the permit, which was made by the director of the Michigan Dept. of Environmental Quality, now the Dept. of Environment, Great Lakes, and Energy (EGLE). The review was conducted by the Michigan Office of Administrative Hearings and Rules, not by a court of law, and Pulter’s decision can be appealed to a technical review panel and then to a Michigan trial court.
Here are the key reasons why Judge Pulter denied the permit. In all cases, the failure of Aquila Resources to put together a complete and coherent permit application, despite working on it for almost 31 months, was at least partly to blame for the company’s inability to get the go-ahead for its project.
1. Aquila’s permit application was never administratively complete.
A permit application is administratively complete when it “contains sufficient information to be acted upon” by the reviewing agency and “provides adequate notice of the project to the public,” Pulter wrote in his Jan. 4 decision. After that, the actual permit review process, which includes a public comment period, can begin.
However, despite repeated agency requests, Aquila never provided reliable information about the potential impact of the proposed mine on regulated wetlands, Pulter concluded. As a result, the public didn’t have the information it needed to review and comment on the project, as required by law – and state regulators were wrong to declare it administratively complete.
Key to this finding was Aquila’s failure to properly evaluate the effect of pumping water out of the 750-foot deep open pit. Pumping, or “dewatering” as it is called, is necessary to remove surface- and groundwater that constantly flows into the 83-acre mine pit. This can affect how much water is available to surrounding wetlands. Without full disclosure of the potential impact of pit dewatering, Pulter concluded, state regulators should have rejected Aquila’s permit application.
The effect of the mine on surface- and groundwater continued to be an issue even after the permit review process began. In a report filed just before EGLE issued the wetland permit, the technical review team stated that Aquila still hadn’t provided the information needed to assess the impact of the mine on wetlands. The team recommended that the permit be denied.
Nevertheless, Heidi Grether, then the head of the agency, overruled her staff and signed the permit, with 28 pages of special permit conditions, all of which were supposed to be addressed before Aquila could begin actual mine construction.
2. State regulators were wrong to issue a permit with conditions that allowed Aquila to correct defects in its application after-the-fact.
In his Jan. 4 decision, Pulter concluded that Michigan law requires an applicant to provide all required information before a permit is issued, so that regulators can determine whether the likely environmental impacts are acceptable under Parts 301 (Inland Lakes and Streams) and 303 (Wetlands Protection) of the state’s Natural Resources and Environmental Protection Act. Pulter determined that the plain language Parts 301 and 303 “unambiguously” establish this requirement.
“A conditional permit that requires an applicant to provide evidence – after-the-fact – to satisfy permitting criteria is not permissible,” Pulter wrote in his decision, therefore “the permit issued in this case is invalid.”
However, in the contested case hearing before Judge Pulter, Aquila Resources had the opportunity to provide the missing evidence and cure the problems with its permit application.
It failed to do so.
3. Aquila Resources didn’t correct the defects in its Part 301 application during the hearing.
Part 301 (Inland Lakes and Streams) applies to the riprap and outflow pipe that Aquila planned to install at the mine site to discharge treated wastewater into the Menominee River. It requires a permit applicant to show that a project will not adversely affect the public’s right to use the Menominee River for recreation, navigation and other purposes (commonly referred to as the “public trust” in the river).
Judge Pulter determined that the information provided by Aquila was insufficient, even after hearing testimony was admitted, to allow him to issue a Part 301 permit. He wrote that Aquila’s incomplete application “left evidentiary shortcomings throughout the administrative process” that compelled him to deny the permit.
4. Aquila Resources didn’t repair the defects in its Part 303 application during the hearing to show that the Back Forty project was in the “public interest.”
Michigan’s wetland protection statute requires a permit applicant to show that a project is in the public interest because its benefits outweigh its likely negative effects.
Among other things, this requires the applicant to investigate alternative locations and methods to minimize the environmental impact of a project. Pulter determined that Aquila Resources rejected less-damaging alternatives without providing enough supporting facts and evidence.
One alternative that Aquila rejected was relocation of the Back Forty ore processing facility away from the company’s preferred site next to the mine pit to higher ground, farther away from the Menominee River and protected wetlands. The alternative location is on Michigan state land controlled by the Dept. of Natural Resources (DNR). Pulter determined that Aquila failed to show that it made a good-faith effort to explore this option with the DNR.
Aquila’s permit application failed other elements of the public interest test, as well, Pulter concluded, in part because Aquila simply failed to provide all of the required information. And, significantly for the Menominee Indian Tribe of Wisconsin, he determined that the Back Forty mine would probably have a negative impact on cultural and archeological sites of interest to the tribe.
Members of the tribe occupied the area on and around the proposed mine until they were removed to a reservation in Wisconsin under an 1854 treaty. Burial mounds and other evidence of the tribe’s long tenure on the banks of the Menominee River remain to this day. Tribal members still visit the area for cultural, spiritual and ceremonial reasons.
Concluding his public-interest analysis, Judge Pulter determined that the pros and cons of the Back Forty project were roughly in equal balance. However, because Aquila had failed to provide convincing evidence on several factors related to the public interest assessment, he decided that Aquila was not entitled to a permit.
Finally, Part 303 requires a determination that a project will not cause an unacceptable disruption to aquatic resources. Once again, Pulter concluded that Aquila had failed to provide enough information for the risk to be evaluated, so no permit could be issued.
While it defended the permit during the contested case hearing, an EGLE spokesman now says the agency supports Judge Pulter’s decision to deny the Back Forty permit application.
Aquila has 21 days from Jan. 4 to file an appeal.
By Mark Doremus
Administrative Law Judge Daniel L. Pulter denied Aquila Resources’ “wetland” permit for the proposed Back Forty mine in an exhaustive 76-page decision issued on Jan. 4, 2021.
The permit had two provisions, each based on a different part of the Michigan Natural Resources and Environmental Protection Act (NREPA). Under Part 303, it would have authorized Aquila to disrupt or remove protected wetlands at the mine site on the east bank of the Menominee River west of Stephenson, Michigan. Under Part 301, it would have allowed Aquila to install a pipe to discharge treated mine wastewater into the river. The permit was challenged by the Menominee Indian Tribe of Wisconsin, the Coalition to SAVE the Menominee River, and Tom Boerner, a who owns property just north of the mine site.
The “contested case” hearing before Judge Pulter was an internal review of a June 4, 2018 decision to issue the permit, which was made by the director of the Michigan Dept. of Environmental Quality, now the Dept. of Environment, Great Lakes, and Energy (EGLE). The review was conducted by the Michigan Office of Administrative Hearings and Rules, not by a court of law, and Pulter’s decision can be appealed to a technical review panel and then to a Michigan trial court.
Here are the key reasons why Judge Pulter denied the permit. In all cases, the failure of Aquila Resources to put together a complete and coherent permit application, despite working on it for almost 31 months, was at least partly to blame for the company’s inability to get the go-ahead for its project.
1. Aquila’s permit application was never administratively complete.
A permit application is administratively complete when it “contains sufficient information to be acted upon” by the reviewing agency and “provides adequate notice of the project to the public,” Pulter wrote in his Jan. 4 decision. After that, the actual permit review process, which includes a public comment period, can begin.
However, despite repeated agency requests, Aquila never provided reliable information about the potential impact of the proposed mine on regulated wetlands, Pulter concluded. As a result, the public didn’t have the information it needed to review and comment on the project, as required by law – and state regulators were wrong to declare it administratively complete.
Key to this finding was Aquila’s failure to properly evaluate the effect of pumping water out of the 750-foot deep open pit. Pumping, or “dewatering” as it is called, is necessary to remove surface- and groundwater that constantly flows into the 83-acre mine pit. This can affect how much water is available to surrounding wetlands. Without full disclosure of the potential impact of pit dewatering, Pulter concluded, state regulators should have rejected Aquila’s permit application.
The effect of the mine on surface- and groundwater continued to be an issue even after the permit review process began. In a report filed just before EGLE issued the wetland permit, the technical review team stated that Aquila still hadn’t provided the information needed to assess the impact of the mine on wetlands. The team recommended that the permit be denied.
Nevertheless, Heidi Grether, then the head of the agency, overruled her staff and signed the permit, with 28 pages of special permit conditions, all of which were supposed to be addressed before Aquila could begin actual mine construction.
2. State regulators were wrong to issue a permit with conditions that allowed Aquila to correct defects in its application after-the-fact.
In his Jan. 4 decision, Pulter concluded that Michigan law requires an applicant to provide all required information before a permit is issued, so that regulators can determine whether the likely environmental impacts are acceptable under Parts 301 (Inland Lakes and Streams) and 303 (Wetlands Protection) of the state’s Natural Resources and Environmental Protection Act. Pulter determined that the plain language Parts 301 and 303 “unambiguously” establish this requirement.
“A conditional permit that requires an applicant to provide evidence – after-the-fact – to satisfy permitting criteria is not permissible,” Pulter wrote in his decision, therefore “the permit issued in this case is invalid.”
However, in the contested case hearing before Judge Pulter, Aquila Resources had the opportunity to provide the missing evidence and cure the problems with its permit application.
It failed to do so.
3. Aquila Resources didn’t correct the defects in its Part 301 application during the hearing.
Part 301 (Inland Lakes and Streams) applies to the riprap and outflow pipe that Aquila planned to install at the mine site to discharge treated wastewater into the Menominee River. It requires a permit applicant to show that a project will not adversely affect the public’s right to use the Menominee River for recreation, navigation and other purposes (commonly referred to as the “public trust” in the river).
Judge Pulter determined that the information provided by Aquila was insufficient, even after hearing testimony was admitted, to allow him to issue a Part 301 permit. He wrote that Aquila’s incomplete application “left evidentiary shortcomings throughout the administrative process” that compelled him to deny the permit.
4. Aquila Resources didn’t repair the defects in its Part 303 application during the hearing to show that the Back Forty project was in the “public interest.”
Michigan’s wetland protection statute requires a permit applicant to show that a project is in the public interest because its benefits outweigh its likely negative effects.
Among other things, this requires the applicant to investigate alternative locations and methods to minimize the environmental impact of a project. Pulter determined that Aquila Resources rejected less-damaging alternatives without providing enough supporting facts and evidence.
One alternative that Aquila rejected was relocation of the Back Forty ore processing facility away from the company’s preferred site next to the mine pit to higher ground, farther away from the Menominee River and protected wetlands. The alternative location is on Michigan state land controlled by the Dept. of Natural Resources (DNR). Pulter determined that Aquila failed to show that it made a good-faith effort to explore this option with the DNR.
Aquila’s permit application failed other elements of the public interest test, as well, Pulter concluded, in part because Aquila simply failed to provide all of the required information. And, significantly for the Menominee Indian Tribe of Wisconsin, he determined that the Back Forty mine would probably have a negative impact on cultural and archeological sites of interest to the tribe.
Members of the tribe occupied the area on and around the proposed mine until they were removed to a reservation in Wisconsin under an 1854 treaty. Burial mounds and other evidence of the tribe’s long tenure on the banks of the Menominee River remain to this day. Tribal members still visit the area for cultural, spiritual and ceremonial reasons.
Concluding his public-interest analysis, Judge Pulter determined that the pros and cons of the Back Forty project were roughly in equal balance. However, because Aquila had failed to provide convincing evidence on several factors related to the public interest assessment, he decided that Aquila was not entitled to a permit.
Finally, Part 303 requires a determination that a project will not cause an unacceptable disruption to aquatic resources. Once again, Pulter concluded that Aquila had failed to provide enough information for the risk to be evaluated, so no permit could be issued.
While it defended the permit during the contested case hearing, an EGLE spokesman now says the agency supports Judge Pulter’s decision to deny the Back Forty permit application.
Aquila has 21 days from Jan. 4 to file an appeal.
State Agency Supports Decision to Deny Back Forty Permit
Jan. 7, 2021 - The Michigan Dept. of Environment, Great Lakes, and Energy (EGLE) agrees with the decision of Administrative Law Judge Daniel L. Pulter to deny a "wetland" permit for the proposed Back Forty mine in Menominee County, Michigan, according to a published report.
The agency sided with the mine developer, Aquila Resources Inc., when then-director Heidi Grether issued the permit over objections of her own staff. However, a spokesman for the agency now says Judge Pulter was right to invalidate the permit.
Jan. 7, 2021 - The Michigan Dept. of Environment, Great Lakes, and Energy (EGLE) agrees with the decision of Administrative Law Judge Daniel L. Pulter to deny a "wetland" permit for the proposed Back Forty mine in Menominee County, Michigan, according to a published report.
The agency sided with the mine developer, Aquila Resources Inc., when then-director Heidi Grether issued the permit over objections of her own staff. However, a spokesman for the agency now says Judge Pulter was right to invalidate the permit.
Bill to Limit Local Control of Mining Fails as Michigan Legislative Session Ends
Jan. 7, 2021 - A bill limiting the zoning authority of local governments over sand and gravel pits, and other forms of mining, has died in the Michigan state Senate.
While the bill’s focus was on aggregate mining, SB 431 would have also curtailed the ability of local governments to regulate metallic mineral mines like the proposed Back Forty project in Lake Township, Menominee County, Michigan.
The bill was sponsored by state Sen. Adam Hollier (D-Detroit). It passed a Senate committee but was not taken up by the full Senate before the 2019-20 legislative session expired.
Backers of the bill say they’ll try again in 2021.
News coverage of the bill, and the legislative debate, framed SB 431 in the context of downstate controversies over sand and gravel operations. However, a largely unnoticed provision at the end of the bill entirely prohibited local governments from exercising zoning authority over mines like the Back Forty.
Lake Township has passed two zoning ordinances that would regulate mines like the Back Forty. Those ordinances could have been invalidated if SB 431 had passed.
Jan. 7, 2021 - A bill limiting the zoning authority of local governments over sand and gravel pits, and other forms of mining, has died in the Michigan state Senate.
While the bill’s focus was on aggregate mining, SB 431 would have also curtailed the ability of local governments to regulate metallic mineral mines like the proposed Back Forty project in Lake Township, Menominee County, Michigan.
The bill was sponsored by state Sen. Adam Hollier (D-Detroit). It passed a Senate committee but was not taken up by the full Senate before the 2019-20 legislative session expired.
Backers of the bill say they’ll try again in 2021.
News coverage of the bill, and the legislative debate, framed SB 431 in the context of downstate controversies over sand and gravel operations. However, a largely unnoticed provision at the end of the bill entirely prohibited local governments from exercising zoning authority over mines like the Back Forty.
Lake Township has passed two zoning ordinances that would regulate mines like the Back Forty. Those ordinances could have been invalidated if SB 431 had passed.
Crucial Back Forty Mine Permit Overturned
Jan. 4, 2021 - Administrative law judge Daniel Pulter has rejected a wetland permit issued by the state of Michigan to Aquila Resources for its proposed Back Forty mine in Menominee County, Michigan.
The permit, if upheld, would have allowed Aquila to disrupt or destroy protected wetlands on and near the mine site on the east bank of the Menominee River west of Stephenson, Michigan.
However, Judge Pulter determined that the permit was improperly issued by the state Dept. of Environmental Quality (now called the Dept. of Environment, Great Lakes, and Energy (EGLE)).
In a decision issued today, Judge Pulter ruled that Aquila had not provided all the information necessary for EGLE to review and approve the permit. In particular, Pulter found that Aquila had not provided a complete assessment of mine alternatives that would be feasible and less damaging to the environment than the plan submitted by the company.
Pulter also found that Aquila’s modeling of mine impacts on surface- and groundwater was inadequate. He further held that, as a matter of law, it was improper for EGLE to issue a conditional wetland permit that allowed Aquila to correct deficiencies in its application after-the-fact.
Jan. 4, 2021 - Administrative law judge Daniel Pulter has rejected a wetland permit issued by the state of Michigan to Aquila Resources for its proposed Back Forty mine in Menominee County, Michigan.
The permit, if upheld, would have allowed Aquila to disrupt or destroy protected wetlands on and near the mine site on the east bank of the Menominee River west of Stephenson, Michigan.
However, Judge Pulter determined that the permit was improperly issued by the state Dept. of Environmental Quality (now called the Dept. of Environment, Great Lakes, and Energy (EGLE)).
In a decision issued today, Judge Pulter ruled that Aquila had not provided all the information necessary for EGLE to review and approve the permit. In particular, Pulter found that Aquila had not provided a complete assessment of mine alternatives that would be feasible and less damaging to the environment than the plan submitted by the company.
Pulter also found that Aquila’s modeling of mine impacts on surface- and groundwater was inadequate. He further held that, as a matter of law, it was improper for EGLE to issue a conditional wetland permit that allowed Aquila to correct deficiencies in its application after-the-fact.
Aquila Resources Seeks Dam Safety Approval for Back Forty Project
Dec. 24, 2020 - A dam safety permit application for tailings and contact water impoundments at the proposed Back Forty mine is under review by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE). The application was announced by mine promoter Aquila Resources, Inc., in November.
“With input from globally recognized engineering firms including Golder Associates Inc., Aquila is designing an operation that will protect the environment while providing a significant economic opportunity for the counties surrounding the Back Forty Project,” said Barry Hildred, President & CEO of Aquila, in a news release. “We look forward to supporting EGLE with their review of our application and expect the Dam Safety Permit to be issued in 2021.”
If the required permits are finalized and construction funding is secured, the mine would be located on the east bank of the Menominee River about 10 miles west of Stephenson, Michigan. Gold, zinc and other minerals would be mined and processed at the site.
The proposed contact water basin at the mine would hold up to 161 million gallons of water contaminated with mine waste, according to documents filed by Aquila Resources. Water collected in the basin would be run through a treatment plant before being discharged into the Menominee River.
The tailings impoundment would hold 6.4 million cubic yards of tailings and about the same volume of waste rock. Mine tailings are the waste left over after mineral ore is processed and are typically a mud-like material.
Aquila’s proposed tailings dam is an “upstream” design, with the embankment resting partly on waste rock, and partly on tailings.
“The upstream tailings dam design proposed by Aquila is the lowest-cost option but the most prone to failure,” said Al Gedicks of the Wisconsin Resources Protection Council (WRPC) in the organization’s December newsletter (http://www.wrpc.net/). “Because of the demonstrated risk associated with upstream dam construction, an international group of 142 scientists representing 24 nations has urged that upstream dams must not be built at any new facilities.”
Public opposition is key to defeating the Back Forty project, Gedicks said. He urged mine opponents to contact EGLE, and the governors of Michigan and Wisconsin, to express their concerns right away, and not wait for EGLE’s formal public comment period on Aquila’s dam safety permit application.
More information on how to voice your opinion on the Back Forty dam permit can be found in the online version of the December WRPC newsletter.
Dec. 24, 2020 - A dam safety permit application for tailings and contact water impoundments at the proposed Back Forty mine is under review by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE). The application was announced by mine promoter Aquila Resources, Inc., in November.
“With input from globally recognized engineering firms including Golder Associates Inc., Aquila is designing an operation that will protect the environment while providing a significant economic opportunity for the counties surrounding the Back Forty Project,” said Barry Hildred, President & CEO of Aquila, in a news release. “We look forward to supporting EGLE with their review of our application and expect the Dam Safety Permit to be issued in 2021.”
If the required permits are finalized and construction funding is secured, the mine would be located on the east bank of the Menominee River about 10 miles west of Stephenson, Michigan. Gold, zinc and other minerals would be mined and processed at the site.
The proposed contact water basin at the mine would hold up to 161 million gallons of water contaminated with mine waste, according to documents filed by Aquila Resources. Water collected in the basin would be run through a treatment plant before being discharged into the Menominee River.
The tailings impoundment would hold 6.4 million cubic yards of tailings and about the same volume of waste rock. Mine tailings are the waste left over after mineral ore is processed and are typically a mud-like material.
Aquila’s proposed tailings dam is an “upstream” design, with the embankment resting partly on waste rock, and partly on tailings.
“The upstream tailings dam design proposed by Aquila is the lowest-cost option but the most prone to failure,” said Al Gedicks of the Wisconsin Resources Protection Council (WRPC) in the organization’s December newsletter (http://www.wrpc.net/). “Because of the demonstrated risk associated with upstream dam construction, an international group of 142 scientists representing 24 nations has urged that upstream dams must not be built at any new facilities.”
Public opposition is key to defeating the Back Forty project, Gedicks said. He urged mine opponents to contact EGLE, and the governors of Michigan and Wisconsin, to express their concerns right away, and not wait for EGLE’s formal public comment period on Aquila’s dam safety permit application.
More information on how to voice your opinion on the Back Forty dam permit can be found in the online version of the December WRPC newsletter.
Michigan Senate Committee Passes Bill Limiting Local Control of Mining Operations
Sept. 23, 2020 - A state senate committee has passed a bill which would severely curtail the ability of local governments to regulate sand and gravel pits, and metallic mineral mines like the proposed Back Forty project in Lake Township, Menominee County, Michigan.
The township has two ordinances on the books that regulate the extraction of natural resources. The bill would invalid those ordinances and remove a potential roadblock to the Back Forty project next to the Menominee River west of Stephenson.
Under the bill, SB 431, townships could not prohibit a mine if the developer filed a 14-point plan describing the project. Townships would not have the power to review or approve the plan; filing would be enough to green-light a mine or pit.
According to the bill’s sponsor, Sen. Adam Hollier (D-Detroit), it is intended to create uniform, statewide permitting standards for sand and gravel mining. In a recent interview, Hollier said that he is not familiar with the proposed Back Forty mine and that it is not the focus of his legislation.
However, the bill as passed by the Transportation and Infrastructure Committee would apply to any form of natural resource extraction, including mining for gold, zinc and other minerals, which is the plan for the Back Forty.
The State Senate Transportation and Infrastructure Committee approved SB 431, 6-1.
Sept. 23, 2020 - A state senate committee has passed a bill which would severely curtail the ability of local governments to regulate sand and gravel pits, and metallic mineral mines like the proposed Back Forty project in Lake Township, Menominee County, Michigan.
The township has two ordinances on the books that regulate the extraction of natural resources. The bill would invalid those ordinances and remove a potential roadblock to the Back Forty project next to the Menominee River west of Stephenson.
Under the bill, SB 431, townships could not prohibit a mine if the developer filed a 14-point plan describing the project. Townships would not have the power to review or approve the plan; filing would be enough to green-light a mine or pit.
According to the bill’s sponsor, Sen. Adam Hollier (D-Detroit), it is intended to create uniform, statewide permitting standards for sand and gravel mining. In a recent interview, Hollier said that he is not familiar with the proposed Back Forty mine and that it is not the focus of his legislation.
However, the bill as passed by the Transportation and Infrastructure Committee would apply to any form of natural resource extraction, including mining for gold, zinc and other minerals, which is the plan for the Back Forty.
The State Senate Transportation and Infrastructure Committee approved SB 431, 6-1.
Aquila Struggles to Meet Wetland Permit Conditions
Aug. 24, 2020 - Before its wetland permit (WRP011785) can take effect, Aquila Resources must collect surface- and groundwater data over a continuous one-year period at the site of the proposed Back Forty mine. These baseline measurements will establish how water flows into, under and through wetlands at the mine site and will be used in a computer model to estimate the hydrological impact of the mine if it goes into operation.
On Feb. 28, 2020, Aquila sent the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE) report titled “Annual Report and Wetland Hydrology Monitoring” describing its water-level data collection activities.
In a reply email dated Aug. 8, 2020, EGLE stated that Aquila has so far failed to collect the groundwater, streamflow and other monitoring data for the baseline months described in the permit.
All test wells and monitoring equipment must be in place before data collection begins and must operate continuously. According to the EGLE email, Aquila’s data collection was piecemeal and incomplete.
This means that Aquila must collect more data before it can begin to model the potential impact of the mine on protected wetlands at the site. The data are also needed to model groundwater flows beneath two proposed impoundment dams at the mine, one for tailings and one for rainwater. Subsurface water flows can undermine a dam’s foundation and cause it to fail, so a safe dam design requires accurate groundwater modeling.
It’s not clear how the defects in Aquila’s data collection affect its timetable for getting the mine “shovel ready.”
Scott Dean, EGLE media spokesman, said in an Aug. 21 telephone interview that the agency needs more information from Aquila before it can determine how many months of data remain to be collected.
Aquila’s wetland permit was issued more than two years ago. It contains 27 pages of special conditions that the company must satisfy in order to build, operate and decommission the proposed Back Forty mine. Many of those conditions, including the wetlands-related data collection and computer modeling, must be met before mine construction can begin. The permit expires in June of 2023.
Aquila Resources did not respond to a request for comment on this report.
Aug. 24, 2020 - Before its wetland permit (WRP011785) can take effect, Aquila Resources must collect surface- and groundwater data over a continuous one-year period at the site of the proposed Back Forty mine. These baseline measurements will establish how water flows into, under and through wetlands at the mine site and will be used in a computer model to estimate the hydrological impact of the mine if it goes into operation.
On Feb. 28, 2020, Aquila sent the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE) report titled “Annual Report and Wetland Hydrology Monitoring” describing its water-level data collection activities.
In a reply email dated Aug. 8, 2020, EGLE stated that Aquila has so far failed to collect the groundwater, streamflow and other monitoring data for the baseline months described in the permit.
All test wells and monitoring equipment must be in place before data collection begins and must operate continuously. According to the EGLE email, Aquila’s data collection was piecemeal and incomplete.
This means that Aquila must collect more data before it can begin to model the potential impact of the mine on protected wetlands at the site. The data are also needed to model groundwater flows beneath two proposed impoundment dams at the mine, one for tailings and one for rainwater. Subsurface water flows can undermine a dam’s foundation and cause it to fail, so a safe dam design requires accurate groundwater modeling.
It’s not clear how the defects in Aquila’s data collection affect its timetable for getting the mine “shovel ready.”
Scott Dean, EGLE media spokesman, said in an Aug. 21 telephone interview that the agency needs more information from Aquila before it can determine how many months of data remain to be collected.
Aquila’s wetland permit was issued more than two years ago. It contains 27 pages of special conditions that the company must satisfy in order to build, operate and decommission the proposed Back Forty mine. Many of those conditions, including the wetlands-related data collection and computer modeling, must be met before mine construction can begin. The permit expires in June of 2023.
Aquila Resources did not respond to a request for comment on this report.
Aquila Expects to Mine Underground in Years 5-11 of the Back Forty Project
Aug. 7, 2020 - Aquila Resources, Inc., is ramping up its plans for extended underground mining at the proposed, but long-delayed, Back Forty mine.
According to an Aquila news release https://aquilaresources.com/release/…, an updated Preliminary Economic Assessment (PEA) for the project now expressly includes six years of underground mining after the open pit phase is complete.
So far, the company has not applied for the state permits it would need to operate an underground mine.
The Aquila news release also indicates that the company may turn to one or more unnamed outside contractors to mine and process gold, zinc, silver, copper and lead from the mine, instead of operating the facility itself.
Aquila recently announced that it would receive $2.5 million in additional funding from Osisko Gold Royalties, Ltd., to continue development of its proposed mine on the Menominee River west of Stephenson, Mich.
The funds are an advance payment on future gold production and buys time for Aquila to convince potential investors to provide the $250 million or more that would be needed to open the mine.
In the Aug. 5 news release, Aquila president and CEO Barry Hildred said that an expanded feasibility study for the mine would be completed in 2021, “as we advance the Project through the final stages of preconstruction activities.” A feasibility study is considered more reliable than a PEA, which has a higher degree of unknown risks. A decision to actually build the mine would almost certainly require a completed feasibility study.
Aquila will host a webcast to provide a corporate update and review the results of the PEA on Tuesday, August 11, 2020 at 12 p.m. Eastern Time. Registration is required; see the Aquila news release for details.
Aug. 7, 2020 - Aquila Resources, Inc., is ramping up its plans for extended underground mining at the proposed, but long-delayed, Back Forty mine.
According to an Aquila news release https://aquilaresources.com/release/…, an updated Preliminary Economic Assessment (PEA) for the project now expressly includes six years of underground mining after the open pit phase is complete.
So far, the company has not applied for the state permits it would need to operate an underground mine.
The Aquila news release also indicates that the company may turn to one or more unnamed outside contractors to mine and process gold, zinc, silver, copper and lead from the mine, instead of operating the facility itself.
Aquila recently announced that it would receive $2.5 million in additional funding from Osisko Gold Royalties, Ltd., to continue development of its proposed mine on the Menominee River west of Stephenson, Mich.
The funds are an advance payment on future gold production and buys time for Aquila to convince potential investors to provide the $250 million or more that would be needed to open the mine.
In the Aug. 5 news release, Aquila president and CEO Barry Hildred said that an expanded feasibility study for the mine would be completed in 2021, “as we advance the Project through the final stages of preconstruction activities.” A feasibility study is considered more reliable than a PEA, which has a higher degree of unknown risks. A decision to actually build the mine would almost certainly require a completed feasibility study.
Aquila will host a webcast to provide a corporate update and review the results of the PEA on Tuesday, August 11, 2020 at 12 p.m. Eastern Time. Registration is required; see the Aquila news release for details.
Senate Bill Would Overrule Local Controls on Back Forty Mine
July 1, 2020 -- Senate Bill 431, now in committee, would limit Lake Township's authority to enforce local zoning ordinances to mitigate the damaging impact of the proposed Back Forty mine.
Under the proposed bill, a local unit of government would not be able to prohibit a mining operation if 1) the mined resources were valuable and 2) the effects of the project did not substantially exceed the “ordinary impacts of customary mining operations.”
The proposed legislation would retain, but limit, the authority of local governments to regulate dust, noise, blasting and truck loading times at a gravel pit or mine. It would also make it much easier for companies like Aquila Resources to get permission to open a facility. The bill would require local governments to approve a project if the developer submitted a basic plan for construction, operation and site restoration. More detailed local requirements would be preempted by the statute.
According to a consulting firm that advises municipalities, "If passed, SB 431 would significantly hamper the ability of local governments to regulate mining operations."
A similar bill was introduced, and later withdrawn, by state Sen. Tom Casperson before he left office. That legislation was "strongly opposed" by the Michigan Township Association as a threat to local control over land use and development, according to the group's legislative liaison, Tom Frazier.
The sponsor of the new legislation, state Sen. Adam Hollier (D-Detroit) did not respond to email and telephone requests for comment on the bill. This report will be updated if the senator provides additional information on the intent and status of the bill.
Back Forty Mine Promoter Gets $2.5 Million Cash Infusion
June 18, 2020 -- Aquila Resources, Inc., announced today that it will receive $2.5 million in additional funding from Osisko Gold Royalties, Ltd., to continue development of the proposed Back Forty mine on the Menominee River west of Stephenson, Mich.
The funds are an advance payment on future gold production at the mine.
“This transaction provides Aquila with the certainty of funding necessary to enable us to continue to advance the Back Forty project towards construction,” said Barry Hildred, President and Chief Executive Officer of Aquila. “In addition to providing the Company with capital to continue building on recent positive permitting developments, the stream amendments also provide us with the flexibility to advance the Back Forty project on a schedule that reflects anticipated permitting, engineering, and financing timelines.”
Aquila says it has invested more than $95 million in the Back Forty mine to date. The project has been delayed for years by legal challenges.
Environmental Group Warns of Potential Dam Failure at Proposed Back Forty Mine
June 18, 2020 - The Coalition to SAVE the Menominee River, Inc., is calling on state regulators to prohibit Aquila Resources, Inc., from using an “upstream” design for the Back Forty tailings dam on the Menominee River west of Stephenson, Mich.
“In light of the recent dam failures and the well-documented threat of upstream dam failure for the proposed Back Forty tailings dam in an area of heavy rainfall, we are asking [the Michigan Dept. of Great Lakes, Environment and Energy (EGLE)) to exercise your authority to prohibit the upstream dam construction design for the proposed Back Forty tailings dam,” the Coalition wrote in a June 1 letter to the Michigan Department of Environment, Great Lakes and Energy (EGLE).
Upstream dams are the cheapest design option but also have a history of failures. Heavy rainfall was a contributing factor in 25 percent of global dam failures, according to a scientific report quoted in the Coalition letter.
Citing recent dam failures in lower Michigan due to extreme rainfall events, the Coalition wrote, “The Edenville and Sanford dams that failed were water-retention dams made of concrete and steel. In contrast, the upstream dam design proposed for the Back Forty tailings dam is made of crushed waste rock and overburden soil. If the more stable water-retention dams were unable to withstand a 500-year flood event, we have serious concerns that Aquila’s far less stable Back Forty tailings dam would be able to withstand a similar challenge.”
Aquila Resources did not respond to a request for comment on this report.
River Road Abandonment on Hold
March 9, 2020 - Aquila Resources has withdrawn its request to abandon part of River Road in Menominee County to make room for its proposed Back Forty open pit. Abandonment has to happen for the project to move forward. Aquila was scheduled to meet the County Road Commission March 24 to discuss the request but that meeting has now been canceled.
Here's the (verbatim) text of the message sent to public officials:
Good afternoon,
As you know, Aquila Resources Inc. (“Aquila”) had requested the Menominee County Road Commission abandon North River Road in conjunction with the future operation of the Back Forty Mine in Lake Township, Menominee County. The Commission scheduled a public hearing on the request for March 24, 2020. After making the request, Aquila and road commission staff discussed various aspects of the abandonment request. Based on these discussions, Aquila believes it is appropriate to further evaluate and confirm our mutual understanding concerning all issues associated with the abandonment. After such further evaluation, Aquila will revisit the request with the commission at the appropriate time.
Accordingly, Aquila is withdrawing the abandonment request.
July 1, 2020 -- Senate Bill 431, now in committee, would limit Lake Township's authority to enforce local zoning ordinances to mitigate the damaging impact of the proposed Back Forty mine.
Under the proposed bill, a local unit of government would not be able to prohibit a mining operation if 1) the mined resources were valuable and 2) the effects of the project did not substantially exceed the “ordinary impacts of customary mining operations.”
The proposed legislation would retain, but limit, the authority of local governments to regulate dust, noise, blasting and truck loading times at a gravel pit or mine. It would also make it much easier for companies like Aquila Resources to get permission to open a facility. The bill would require local governments to approve a project if the developer submitted a basic plan for construction, operation and site restoration. More detailed local requirements would be preempted by the statute.
According to a consulting firm that advises municipalities, "If passed, SB 431 would significantly hamper the ability of local governments to regulate mining operations."
A similar bill was introduced, and later withdrawn, by state Sen. Tom Casperson before he left office. That legislation was "strongly opposed" by the Michigan Township Association as a threat to local control over land use and development, according to the group's legislative liaison, Tom Frazier.
The sponsor of the new legislation, state Sen. Adam Hollier (D-Detroit) did not respond to email and telephone requests for comment on the bill. This report will be updated if the senator provides additional information on the intent and status of the bill.
Back Forty Mine Promoter Gets $2.5 Million Cash Infusion
June 18, 2020 -- Aquila Resources, Inc., announced today that it will receive $2.5 million in additional funding from Osisko Gold Royalties, Ltd., to continue development of the proposed Back Forty mine on the Menominee River west of Stephenson, Mich.
The funds are an advance payment on future gold production at the mine.
“This transaction provides Aquila with the certainty of funding necessary to enable us to continue to advance the Back Forty project towards construction,” said Barry Hildred, President and Chief Executive Officer of Aquila. “In addition to providing the Company with capital to continue building on recent positive permitting developments, the stream amendments also provide us with the flexibility to advance the Back Forty project on a schedule that reflects anticipated permitting, engineering, and financing timelines.”
Aquila says it has invested more than $95 million in the Back Forty mine to date. The project has been delayed for years by legal challenges.
Environmental Group Warns of Potential Dam Failure at Proposed Back Forty Mine
June 18, 2020 - The Coalition to SAVE the Menominee River, Inc., is calling on state regulators to prohibit Aquila Resources, Inc., from using an “upstream” design for the Back Forty tailings dam on the Menominee River west of Stephenson, Mich.
“In light of the recent dam failures and the well-documented threat of upstream dam failure for the proposed Back Forty tailings dam in an area of heavy rainfall, we are asking [the Michigan Dept. of Great Lakes, Environment and Energy (EGLE)) to exercise your authority to prohibit the upstream dam construction design for the proposed Back Forty tailings dam,” the Coalition wrote in a June 1 letter to the Michigan Department of Environment, Great Lakes and Energy (EGLE).
Upstream dams are the cheapest design option but also have a history of failures. Heavy rainfall was a contributing factor in 25 percent of global dam failures, according to a scientific report quoted in the Coalition letter.
Citing recent dam failures in lower Michigan due to extreme rainfall events, the Coalition wrote, “The Edenville and Sanford dams that failed were water-retention dams made of concrete and steel. In contrast, the upstream dam design proposed for the Back Forty tailings dam is made of crushed waste rock and overburden soil. If the more stable water-retention dams were unable to withstand a 500-year flood event, we have serious concerns that Aquila’s far less stable Back Forty tailings dam would be able to withstand a similar challenge.”
Aquila Resources did not respond to a request for comment on this report.
River Road Abandonment on Hold
March 9, 2020 - Aquila Resources has withdrawn its request to abandon part of River Road in Menominee County to make room for its proposed Back Forty open pit. Abandonment has to happen for the project to move forward. Aquila was scheduled to meet the County Road Commission March 24 to discuss the request but that meeting has now been canceled.
Here's the (verbatim) text of the message sent to public officials:
Good afternoon,
As you know, Aquila Resources Inc. (“Aquila”) had requested the Menominee County Road Commission abandon North River Road in conjunction with the future operation of the Back Forty Mine in Lake Township, Menominee County. The Commission scheduled a public hearing on the request for March 24, 2020. After making the request, Aquila and road commission staff discussed various aspects of the abandonment request. Based on these discussions, Aquila believes it is appropriate to further evaluate and confirm our mutual understanding concerning all issues associated with the abandonment. After such further evaluation, Aquila will revisit the request with the commission at the appropriate time.
Accordingly, Aquila is withdrawing the abandonment request.
Appeals Court Rejects Menominee Tribe's Federal Lawsuit
Jan. 27, 2020 - The 7th Circuit Court of Appeals has rebuffed the Menominee Indian Tribe of Wisconsin's federal lawsuit challenging the state of Michigan's authority over the Back Forty mine "dredge-and-fill" (wetlands) permit.
The Tribe argued that the delegation to the state by the EPA and the Army Corps of Engineers was unlawful because the Clean Water Act requires the federal government to handle permits affecting interstate waterways such as the Menominee River, where the mine is proposed to be located.
The Appeals Court failed to address that argument head-on. Instead, it rejected the Tribe's lawsuit on procedural grounds, despite the fact that, as the court acknowledged, the Tribe "ran into a legal labyrinth and regulatory misdirection" in its attempt to challenge the Back Forty wetlands permit.
"Had the federal agencies provided a meaningful response to the Tribe’s concerns, perhaps this suit could have been avoided," the court opinion stated.
The Tribe can still challenge the delegation of authority in state court, the appeals court noted, because state courts have the authority to hear lawsuits based on federal law.
Jan. 27, 2020 - The 7th Circuit Court of Appeals has rebuffed the Menominee Indian Tribe of Wisconsin's federal lawsuit challenging the state of Michigan's authority over the Back Forty mine "dredge-and-fill" (wetlands) permit.
The Tribe argued that the delegation to the state by the EPA and the Army Corps of Engineers was unlawful because the Clean Water Act requires the federal government to handle permits affecting interstate waterways such as the Menominee River, where the mine is proposed to be located.
The Appeals Court failed to address that argument head-on. Instead, it rejected the Tribe's lawsuit on procedural grounds, despite the fact that, as the court acknowledged, the Tribe "ran into a legal labyrinth and regulatory misdirection" in its attempt to challenge the Back Forty wetlands permit.
"Had the federal agencies provided a meaningful response to the Tribe’s concerns, perhaps this suit could have been avoided," the court opinion stated.
The Tribe can still challenge the delegation of authority in state court, the appeals court noted, because state courts have the authority to hear lawsuits based on federal law.
Aquila Resources Announces Receipt of Amended Mining and Air Permits for Back Forty Mine
Dec. 12, 2019 - Aquila Resources, Inc., now has final water discharge, air quality and mining permits to go along with the previously approved wetlands permit for the Back Forty mine.
The project still needs a dam safety permit. Aquila has withdrawn its permit application so it can incorporate more information about ground conditions underneath its proposed tailings and wastewater impoundments at the Back Forty site.
According to the the Michigan Dept. of Environment, Great Lakes and Energy (EGLE):
"Aquila is not authorized to begin construction of the mine and will not be able to proceed until all permits, including the dam safety permit have been approved by EGLE."
"Aquila is expected to resubmit a dam safety permit application in 2020, which will restart the permit review process from the beginning, including new opportunities for public review and comment."
Aquila's wetlands permit has been challenged in a contested case before a Michigan administrative law judge. According to Aquila, a decision is expected mid-2020.
Dec. 12, 2019 - Aquila Resources, Inc., now has final water discharge, air quality and mining permits to go along with the previously approved wetlands permit for the Back Forty mine.
The project still needs a dam safety permit. Aquila has withdrawn its permit application so it can incorporate more information about ground conditions underneath its proposed tailings and wastewater impoundments at the Back Forty site.
According to the the Michigan Dept. of Environment, Great Lakes and Energy (EGLE):
"Aquila is not authorized to begin construction of the mine and will not be able to proceed until all permits, including the dam safety permit have been approved by EGLE."
"Aquila is expected to resubmit a dam safety permit application in 2020, which will restart the permit review process from the beginning, including new opportunities for public review and comment."
Aquila's wetlands permit has been challenged in a contested case before a Michigan administrative law judge. According to Aquila, a decision is expected mid-2020.
Review Panel Upholds Original Back Forty Mining Permit
Nov. 26, 2019 - An environmental permit review panel has upheld the Back Forty mining permit issued to Aquila Resources, Inc. in December of 2016.
The permit was challenged in an administrative proceeding and was upheld by an administrative law judge in May of this year.
That ruling, in turn, was appealed to the review panel, which has now determined that the original mining permit was properly issued.
The 2016 permit, however, does not allow mine developer Aquila Resources to begin construction of the proposed mine on the Menominee River west of Stephenson, Michigan. An amendment to the permit has been submitted by Aquila and is under review by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE).
The mine project cannot go forward until a final decision is made by EGLE on the proposed amendment to the original mining permit.
Nov. 26, 2019 - An environmental permit review panel has upheld the Back Forty mining permit issued to Aquila Resources, Inc. in December of 2016.
The permit was challenged in an administrative proceeding and was upheld by an administrative law judge in May of this year.
That ruling, in turn, was appealed to the review panel, which has now determined that the original mining permit was properly issued.
The 2016 permit, however, does not allow mine developer Aquila Resources to begin construction of the proposed mine on the Menominee River west of Stephenson, Michigan. An amendment to the permit has been submitted by Aquila and is under review by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE).
The mine project cannot go forward until a final decision is made by EGLE on the proposed amendment to the original mining permit.
Mine Opponents Warn Investors Back Forty is in “Deep Trouble”
Nov. 6, 2019 - An open letter to Back Forty investor Orion Mine Finance Group, signed by representatives of 59 environmental, tribal, sportfishing and faith-based organizations, challenges public statements by mine exploration company Aquila Resources, Inc., and questions the viability of its proposed mine in Menominee County, Michigan.
“On May 6, 2019, Aquila announced that it has received final approval for the last state permit needed for the Back Forty zinc and gold mine project. This claim is completely inaccurate,” the letter said.
Only one of the permits required for the Back Forty mine has been finalized. That permit governs the discharge of waste water from the mine into the Menominee River. Four years after its initial permit application, Aquila Resources still does not have final mining, air quality and dam safety permits for the Back Forty project, and the wetlands permit for the project has 28 pages of conditions that must be met before it becomes effective.
The open letter to Orion quoted Adam Wygant of the Michigan Dept. of Environment, Great Lakes and Energy (EGLE) as saying it is “obviously not the case” that Aquila Resources has all the permits in place that it needs to open the Back Forty mine. “From the perspective of EGLE, there’s additional permits that are required,” Wygant said, according to the letter.
Aquila has asked EGLE for a delay until Dec. 31, 2019, for completion of its dam safety permit application. According to the open letter to Orion, EGLE has asked the company, among other things, to estimate that chances of a catastrophic tailings dam failure at the mine site, its likely consequences and the cost of a subsequent clean-up effort. If this and other outstanding issues are not resolved by Dec. 31, Aquila will have to file a new dam safety permit application, and the review process will start over again.
Aquila’s final wetlands permit application made changes to the project plan that forced the company to amend its previously approved mining and air quality permits. The company also failed to submit its dam safety permit application until a year ago.
“How much longer are you willing to continue your investment in a project that has misrepresented the status of mine permitting to both the public and those who have invested in this … project?” the open letter asked Orion. Delays such as those experienced by Aquila’s Back Forty mine, can reduce the return on investment until the project “ultimately becomes an unviable investment,” the letter said.
Orion Mine Finance Group has a 13.1 percent ownership interest in the Back Forty mine, according to the open letter.
A similar letter was sent to Orion by many of the same organizations on April 29, 2019.
Aquila Resources did not respond to a request for comment on this report.
Nov. 6, 2019 - An open letter to Back Forty investor Orion Mine Finance Group, signed by representatives of 59 environmental, tribal, sportfishing and faith-based organizations, challenges public statements by mine exploration company Aquila Resources, Inc., and questions the viability of its proposed mine in Menominee County, Michigan.
“On May 6, 2019, Aquila announced that it has received final approval for the last state permit needed for the Back Forty zinc and gold mine project. This claim is completely inaccurate,” the letter said.
Only one of the permits required for the Back Forty mine has been finalized. That permit governs the discharge of waste water from the mine into the Menominee River. Four years after its initial permit application, Aquila Resources still does not have final mining, air quality and dam safety permits for the Back Forty project, and the wetlands permit for the project has 28 pages of conditions that must be met before it becomes effective.
The open letter to Orion quoted Adam Wygant of the Michigan Dept. of Environment, Great Lakes and Energy (EGLE) as saying it is “obviously not the case” that Aquila Resources has all the permits in place that it needs to open the Back Forty mine. “From the perspective of EGLE, there’s additional permits that are required,” Wygant said, according to the letter.
Aquila has asked EGLE for a delay until Dec. 31, 2019, for completion of its dam safety permit application. According to the open letter to Orion, EGLE has asked the company, among other things, to estimate that chances of a catastrophic tailings dam failure at the mine site, its likely consequences and the cost of a subsequent clean-up effort. If this and other outstanding issues are not resolved by Dec. 31, Aquila will have to file a new dam safety permit application, and the review process will start over again.
Aquila’s final wetlands permit application made changes to the project plan that forced the company to amend its previously approved mining and air quality permits. The company also failed to submit its dam safety permit application until a year ago.
“How much longer are you willing to continue your investment in a project that has misrepresented the status of mine permitting to both the public and those who have invested in this … project?” the open letter asked Orion. Delays such as those experienced by Aquila’s Back Forty mine, can reduce the return on investment until the project “ultimately becomes an unviable investment,” the letter said.
Orion Mine Finance Group has a 13.1 percent ownership interest in the Back Forty mine, according to the open letter.
A similar letter was sent to Orion by many of the same organizations on April 29, 2019.
Aquila Resources did not respond to a request for comment on this report.
Aquila's Back Forty Mine Remains Mired in Multiple Legal Challenges
Sept. 7, 2019 - Two federal lawsuits and two contested case administrative proceedings have challenged Aquila Resources' proposed Back Forty mine on the Menominee River west of Stephenson, Michigan.
All of these matters are still being litigated.
The Menominee Indian Tribe of Wisconsin brought a federal lawsuit against the U.S. Environmental Protection Agency in January, 2018, demanding that the agency take over jurisdiction of the Back Forty permitting process because the Menominee River is an interstate waterway.
That suit was dismissed by the trial court but is on appeal. The case number is 1:18-cv-00108-WCG.
The Coalition to SAVE the Menominee River, Inc., filed a similar federal lawsuit in November of last year. That case is being heard by a federal district court in Green Bay, Wisconsin. The case number is 1:18-cv-01798-WCG.
The Menominee Tribe and a local property owner, Tom Boerner, also challenged the original Back Forty mining permit in a contested case before a Michigan administrative law judge. The judge upheld the mining permit. That decision is now under appeal to a state review panel, which is set to meet Sept. 30 in Lansing. The docket number is 17-005710.
More recently, the Back Forty wetland permit was challenged in a contested case initiated by the tribe, Boerner, and the Coalition. Testimony was taken in June and August. The hearing is scheduled to resume Oct. 22. The docket number is 18-013058.
Sept. 7, 2019 - Two federal lawsuits and two contested case administrative proceedings have challenged Aquila Resources' proposed Back Forty mine on the Menominee River west of Stephenson, Michigan.
All of these matters are still being litigated.
The Menominee Indian Tribe of Wisconsin brought a federal lawsuit against the U.S. Environmental Protection Agency in January, 2018, demanding that the agency take over jurisdiction of the Back Forty permitting process because the Menominee River is an interstate waterway.
That suit was dismissed by the trial court but is on appeal. The case number is 1:18-cv-00108-WCG.
The Coalition to SAVE the Menominee River, Inc., filed a similar federal lawsuit in November of last year. That case is being heard by a federal district court in Green Bay, Wisconsin. The case number is 1:18-cv-01798-WCG.
The Menominee Tribe and a local property owner, Tom Boerner, also challenged the original Back Forty mining permit in a contested case before a Michigan administrative law judge. The judge upheld the mining permit. That decision is now under appeal to a state review panel, which is set to meet Sept. 30 in Lansing. The docket number is 17-005710.
More recently, the Back Forty wetland permit was challenged in a contested case initiated by the tribe, Boerner, and the Coalition. Testimony was taken in June and August. The hearing is scheduled to resume Oct. 22. The docket number is 18-013058.
Bill to Limit Local Control of Mining Introduced by Downstate Legislator
Aug. 30, 2019 - A bill that would limit the ability of local units of government to regulate mining has been introduced by Sen. Adam Hollier (D-Detroit).
Hollier's bill, SB-431, contains language that is identical to a bill introduced, then withdrawn, by Sen. Tom Casperson (R-Escanaba) last year.
Both bills would prevent a local unit of government from blocking a project if the resources to be mined are valuable, and "very serious consequences would not result from the extraction of the natural resources."
Under both bills, a project would pass that test if the developer submitted a detailed plan for the proposed activity to the local unit of government.
Hollier denied that he had any discussions about his bill with Casperson, his successor Sen. Ed McBroom (R-Vulcan) or Aquila Resources, Inc., which is promoting a large scale open-pit mine west of Stephenson, Michigan, called the "Back Forty."
The 2018 Casperson bill was opposed by the Michigan Township Association as a threat to local control over land use and development.
Reached by telephone, Hollier said "local control for me has always been an excuse to say 'no' to something. Often, people use 'local control' when they can't make an argument that makes sense on the facts."
"If it's just 'local control,' that means the wealthy, the privileged. People who can say 'no' to something that they don't want and everything winds up in communities that can't say 'no.' That's what I see in my district and I don't think that's fair."
Hollier represents a majority-black district that includes Detroit and surrounding communities.
Aug. 30, 2019 - A bill that would limit the ability of local units of government to regulate mining has been introduced by Sen. Adam Hollier (D-Detroit).
Hollier's bill, SB-431, contains language that is identical to a bill introduced, then withdrawn, by Sen. Tom Casperson (R-Escanaba) last year.
Both bills would prevent a local unit of government from blocking a project if the resources to be mined are valuable, and "very serious consequences would not result from the extraction of the natural resources."
Under both bills, a project would pass that test if the developer submitted a detailed plan for the proposed activity to the local unit of government.
Hollier denied that he had any discussions about his bill with Casperson, his successor Sen. Ed McBroom (R-Vulcan) or Aquila Resources, Inc., which is promoting a large scale open-pit mine west of Stephenson, Michigan, called the "Back Forty."
The 2018 Casperson bill was opposed by the Michigan Township Association as a threat to local control over land use and development.
Reached by telephone, Hollier said "local control for me has always been an excuse to say 'no' to something. Often, people use 'local control' when they can't make an argument that makes sense on the facts."
"If it's just 'local control,' that means the wealthy, the privileged. People who can say 'no' to something that they don't want and everything winds up in communities that can't say 'no.' That's what I see in my district and I don't think that's fair."
Hollier represents a majority-black district that includes Detroit and surrounding communities.
Aquila Seeks Support for Back Forty Mine in Private Meetings with Public Officials
Aug. 23, 2019 - Mine developer Aquila Resources, Inc., has held at least two private, off-the-record meetings with local government officials, seeking support for its proposed Back Forty mine in Menominee County, Michigan.
Lake Township and Holmes Township have sent representatives to meetings with Aquila's "Capacity Building Team," which meets at the company's office in Stephenson, Michigan, according to sources familiar with the meetings.
The working group has developed a draft "Community Agreement" that, if accepted, would require local units of government "not to oppose the mine or take any action which would serve to unreasonably delay the construction of the mine."
In return, the company would make commitments still to be negotiated.
"Aquila is trying to trick townships and local governments into not opposing the mine," said Tom Boerner, who owns property next to the proposed mine site. "If Aquila thought they were winning they wouldn't be doing this." Boerner, and other parties, have challenged two state permits for the mine in "contested case" administrative proceedings and in federal court.
The draft "Community Agreement" was marked "Confidential," but has been widely circulated by sources who had access to the document. In it, Aquila states that it wants Menominee County, the city of Stephenson, Lake Township, Holmes Township, Daggett Township, the village of Daggett, and possibly others, to be parties to the contract.
Chantae Lessard, an Aquila representative, spoke about the proposed agreement on the record at the July 10 meeting of the Lake Township board of trustees. She stated that meetings of the company's Capacity Building Team are by invitation only and declined to identify which local units of government have participated, according to a source who attended the meeting.
Aquila Resources did not respond to requests for comment on this report.
UPDATE: In a phone conversation Aug. 24, Lake Township trustee Warren Suchovsky confirmed that he and township supervisor Robert Desjarlais have attended one meeting of Aquila Resources' "Capacity Building Team," which is developing a possible public-private agreement that would pave the way for the company's proposed Back Forty mine.
Suchovsky said that if Aquila meets the requirements of state law and local ordinances, the township can't stop the Back Forty mine from going forward, so now's the time to position the township to "get the best deal, if that's the right word," from the company.
Suchovsky said he wasn't involved in setting the terms of the Aug. 6 draft of Aquila's proposed "Community Agreement" which, if successfully negotiated, would require Aquila to provide certain incentives and concessions if local government officials agreed not to oppose or "unreasonably delay" construction of the Back Forty mine.
According to Suchovsky, the only firm offer Aquila has made so far is to provide the services of a grant writer, at Aquila's expense, to help local units of government develop funding proposals.
The draft term sheet for the proposed agreement, marked "Confidential," has been widely distributed by persons with access to the document.
END OF UPDATE
Aug. 23, 2019 - Mine developer Aquila Resources, Inc., has held at least two private, off-the-record meetings with local government officials, seeking support for its proposed Back Forty mine in Menominee County, Michigan.
Lake Township and Holmes Township have sent representatives to meetings with Aquila's "Capacity Building Team," which meets at the company's office in Stephenson, Michigan, according to sources familiar with the meetings.
The working group has developed a draft "Community Agreement" that, if accepted, would require local units of government "not to oppose the mine or take any action which would serve to unreasonably delay the construction of the mine."
In return, the company would make commitments still to be negotiated.
"Aquila is trying to trick townships and local governments into not opposing the mine," said Tom Boerner, who owns property next to the proposed mine site. "If Aquila thought they were winning they wouldn't be doing this." Boerner, and other parties, have challenged two state permits for the mine in "contested case" administrative proceedings and in federal court.
The draft "Community Agreement" was marked "Confidential," but has been widely circulated by sources who had access to the document. In it, Aquila states that it wants Menominee County, the city of Stephenson, Lake Township, Holmes Township, Daggett Township, the village of Daggett, and possibly others, to be parties to the contract.
Chantae Lessard, an Aquila representative, spoke about the proposed agreement on the record at the July 10 meeting of the Lake Township board of trustees. She stated that meetings of the company's Capacity Building Team are by invitation only and declined to identify which local units of government have participated, according to a source who attended the meeting.
Aquila Resources did not respond to requests for comment on this report.
UPDATE: In a phone conversation Aug. 24, Lake Township trustee Warren Suchovsky confirmed that he and township supervisor Robert Desjarlais have attended one meeting of Aquila Resources' "Capacity Building Team," which is developing a possible public-private agreement that would pave the way for the company's proposed Back Forty mine.
Suchovsky said that if Aquila meets the requirements of state law and local ordinances, the township can't stop the Back Forty mine from going forward, so now's the time to position the township to "get the best deal, if that's the right word," from the company.
Suchovsky said he wasn't involved in setting the terms of the Aug. 6 draft of Aquila's proposed "Community Agreement" which, if successfully negotiated, would require Aquila to provide certain incentives and concessions if local government officials agreed not to oppose or "unreasonably delay" construction of the Back Forty mine.
According to Suchovsky, the only firm offer Aquila has made so far is to provide the services of a grant writer, at Aquila's expense, to help local units of government develop funding proposals.
The draft term sheet for the proposed agreement, marked "Confidential," has been widely distributed by persons with access to the document.
END OF UPDATE
Aquila's Plan to Close River Road Would Deny Vital Services to Residents, Front 40 Environmental Group Says
June 28, 2019 - Aquila Resources, Inc. wants to close River Road where it intersects with the Back Forty mine site, according to documents submitted by the company.
The proposed Back Forty open pit would cut the road in two. Aquila's site plan labels River Road as a "dead end" at both the north and south boundaries of the proposed mine.
"Aquila has long stated they want to close River Road which would leave residents without access to emergency, medical, fire and police services," Ron Henriksen of the Forty 40 Environmental Group said at a June 25 hearing on the Back Forty project. "No replacement road access has been developed."
Aquila's latest plans also propose an eastern access road to the mine site that would run southwest from County Road 356 across state land to the mine.
"There is no Eastern Corridor for utility and transportation in existence," Henriksen said in remarks prepared for the June 25 hearing. "This would be a private company road."
The Michigan Dept. of Environment, Great Lakes and Energy held the June 25 hearing to get public input on two permit amendments and one new permit for the proposed Back Forty mine on the Menominee River west of Stephenson, Michigan.
The agency heard more than three hours of public comment during the meeting.
June 28, 2019 - Aquila Resources, Inc. wants to close River Road where it intersects with the Back Forty mine site, according to documents submitted by the company.
The proposed Back Forty open pit would cut the road in two. Aquila's site plan labels River Road as a "dead end" at both the north and south boundaries of the proposed mine.
"Aquila has long stated they want to close River Road which would leave residents without access to emergency, medical, fire and police services," Ron Henriksen of the Forty 40 Environmental Group said at a June 25 hearing on the Back Forty project. "No replacement road access has been developed."
Aquila's latest plans also propose an eastern access road to the mine site that would run southwest from County Road 356 across state land to the mine.
"There is no Eastern Corridor for utility and transportation in existence," Henriksen said in remarks prepared for the June 25 hearing. "This would be a private company road."
The Michigan Dept. of Environment, Great Lakes and Energy held the June 25 hearing to get public input on two permit amendments and one new permit for the proposed Back Forty mine on the Menominee River west of Stephenson, Michigan.
The agency heard more than three hours of public comment during the meeting.
Dozens Testify at Back Forty Public Hearing
June 26, 2019 - An estimated 300-325 people attended a June 25, 2019, public hearing on Aquila Resources' proposed Back Forty mining project at Stephenson High School.
A total of 59 people testified at the hearing, which was held by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE) to take public comment on three pending permits for the Back Forty project.
The tally of speakers was 13 for the mine and 46 against.
Amendments to the project's existing mining and air quality permits, and a new dam safety permit, are under review by EGLE. The amendments were necessary because the wetlands permit for the mine, which was issued on June 4, 2018, contained updated plans that conflicted with permits previously issued by EGLE.
The dam safety permit is a new matter not previously considered by EGLE. It covers the proposed Back Forty tailings impoundment and waste water holding ponds.
A transcript of the hearing testimony is available on the "Docs" page of this website.
June 26, 2019 - An estimated 300-325 people attended a June 25, 2019, public hearing on Aquila Resources' proposed Back Forty mining project at Stephenson High School.
A total of 59 people testified at the hearing, which was held by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE) to take public comment on three pending permits for the Back Forty project.
The tally of speakers was 13 for the mine and 46 against.
Amendments to the project's existing mining and air quality permits, and a new dam safety permit, are under review by EGLE. The amendments were necessary because the wetlands permit for the mine, which was issued on June 4, 2018, contained updated plans that conflicted with permits previously issued by EGLE.
The dam safety permit is a new matter not previously considered by EGLE. It covers the proposed Back Forty tailings impoundment and waste water holding ponds.
A transcript of the hearing testimony is available on the "Docs" page of this website.
"Upstream" Tailings Dams Can Be Safe, EGLE Engineer Says
June 24, 2019 - Tailings dams like the one proposed for the Back Forty mine can be built and operated safely, according to Michigan Dept. of Environment, Great Lakes and Energy dams specialist Lucas Trumble.
Trumble was responding to an audience question during an online information session about the mine that was held by EGLE on June 17.
Trumble is an engineer who is evaluating Aquila Resources' plans for two dams on the Back Forty site; one to impound tailings and the other for water that comes in contact with mine pollutants.
June 24, 2019 - Tailings dams like the one proposed for the Back Forty mine can be built and operated safely, according to Michigan Dept. of Environment, Great Lakes and Energy dams specialist Lucas Trumble.
Trumble was responding to an audience question during an online information session about the mine that was held by EGLE on June 17.
Trumble is an engineer who is evaluating Aquila Resources' plans for two dams on the Back Forty site; one to impound tailings and the other for water that comes in contact with mine pollutants.
"I wouldn't go so far as to say that all upstream dams are unsafe," Trumble said. "There are many examples throughout the country and the world, and even in Michigan, that are constructed in this fashion and are performing satisfactorily."
"But the upstream construction of a dam does present a series of geotechnical issues that have to be addressed," he added.
Tailings are finely ground material that is left after ore is crushed and processed in a mill. The Back Forty mine will generate 6.7 million cubic yards of tailings over an eight-year period.
In an upstream design, the walls that enclose the tailings partially rest on the tailings themselves. If the tailings become unstable, the dam itself can collapse.
That's apparently what happened at a mine in Brumadinho, Brazil, last January. A dam failure released about 3 billion gallons of sludgy mine waste, inundating areas downstream and killing 270 people, most of them mine workers.
Hildebrando Neto, Minas Gerais' deputy minister for environmental regulations, told the Reuters news agency soon after the disaster that the evidence suggests the dam failure was caused by liquefaction, whereby a solid material such as sand loses strength and stiffness and behaves more like a liquid.
The official cause of the dam failure is still under investigation.
"This is Brazil’s deadliest-ever mining accident," said Prof. Al Gedicks of the Wisconsin Resources Protection Council in a written statement prepared for tomorrow's public hearing on the proposed Back Forty mine. "The same design for storing mine waste is now being proposed for the Back Forty project."
Aquila Resources' permit applications state that the Back Forty open-pit mine will operate for eight years. However, the company has indicated that a second underground mining phase is possible. That would increase the volume of tailings and the size of the tailings dam.
"Tailings impoundments are frequently expanded through additional raises, which greatly increases the height of the dam walls and the total volume of waste rock and water contained within the structure," Gedicks said. "This habit of incremental raising greatly exacerbates the problem of instability, and has resulted in the catastrophic collapse of several tailings dams."
A hearing on the Back Forty dam permit application, and two other permit amendments, will be held tomorrow beginning at 5:30 p.m. in the Stephenson High School gymnasium.
"But the upstream construction of a dam does present a series of geotechnical issues that have to be addressed," he added.
Tailings are finely ground material that is left after ore is crushed and processed in a mill. The Back Forty mine will generate 6.7 million cubic yards of tailings over an eight-year period.
In an upstream design, the walls that enclose the tailings partially rest on the tailings themselves. If the tailings become unstable, the dam itself can collapse.
That's apparently what happened at a mine in Brumadinho, Brazil, last January. A dam failure released about 3 billion gallons of sludgy mine waste, inundating areas downstream and killing 270 people, most of them mine workers.
Hildebrando Neto, Minas Gerais' deputy minister for environmental regulations, told the Reuters news agency soon after the disaster that the evidence suggests the dam failure was caused by liquefaction, whereby a solid material such as sand loses strength and stiffness and behaves more like a liquid.
The official cause of the dam failure is still under investigation.
"This is Brazil’s deadliest-ever mining accident," said Prof. Al Gedicks of the Wisconsin Resources Protection Council in a written statement prepared for tomorrow's public hearing on the proposed Back Forty mine. "The same design for storing mine waste is now being proposed for the Back Forty project."
Aquila Resources' permit applications state that the Back Forty open-pit mine will operate for eight years. However, the company has indicated that a second underground mining phase is possible. That would increase the volume of tailings and the size of the tailings dam.
"Tailings impoundments are frequently expanded through additional raises, which greatly increases the height of the dam walls and the total volume of waste rock and water contained within the structure," Gedicks said. "This habit of incremental raising greatly exacerbates the problem of instability, and has resulted in the catastrophic collapse of several tailings dams."
A hearing on the Back Forty dam permit application, and two other permit amendments, will be held tomorrow beginning at 5:30 p.m. in the Stephenson High School gymnasium.
Aquila Resources Misleads on Mine Permits
June 19, 2019 - Aquila Resources, Inc., continues to claim that it has "all of the permits necessary to construct and operate the Back Forty Mine."
However, almost four years after its first permit application, the company still does not have final mining, air quality and dam safety permits for the Back Forty project.
Mining and air quality permits have been issued by Michigan regulators, but they do not match the project plan in Aquila's wetlands permit, which was the last permit to be granted.
So Aquila must amend the mining and air quality permits before it can begin mine operations. The amendments require approval of the Michigan Department of Environment, Great Lakes, and Energy (EGLE).
Aquila also needs a dam permit for its proposed tailings storage area, which will hold as much as 40 million gallons of water, according to company estimates, and for a separate storage basin for contaminated runoff water awaiting treatment.
All three permits will be the subject of a public hearing on June 25, starting at 5:30 p.m. in the Stephenson High School gymnasium.
UPDATE 6/21/19 - Aquila Resources did not respond to a request for comment on this article. However, the company repeated its claim that it has all required Back Forty mine permits in a Facebook post today.
June 19, 2019 - Aquila Resources, Inc., continues to claim that it has "all of the permits necessary to construct and operate the Back Forty Mine."
However, almost four years after its first permit application, the company still does not have final mining, air quality and dam safety permits for the Back Forty project.
Mining and air quality permits have been issued by Michigan regulators, but they do not match the project plan in Aquila's wetlands permit, which was the last permit to be granted.
So Aquila must amend the mining and air quality permits before it can begin mine operations. The amendments require approval of the Michigan Department of Environment, Great Lakes, and Energy (EGLE).
Aquila also needs a dam permit for its proposed tailings storage area, which will hold as much as 40 million gallons of water, according to company estimates, and for a separate storage basin for contaminated runoff water awaiting treatment.
All three permits will be the subject of a public hearing on June 25, starting at 5:30 p.m. in the Stephenson High School gymnasium.
UPDATE 6/21/19 - Aquila Resources did not respond to a request for comment on this article. However, the company repeated its claim that it has all required Back Forty mine permits in a Facebook post today.
New Commission Will Review Decision To Uphold Back Forty Mining Permit
June 6, 2019 - The Menominee Indian Tribe of Wisconsin has petitioned for reconsideration of a judge's decision to uphold Aquila Resources' Back Forty mining permit.
The mining permit is one of four that Aquila Resources needs to open and operate the Back Forty mine.
Last month, Administrative Law Judge Daniel Pulter approved the Back Forty mining permit, which was issued by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE) in December of 2016. Judge Pulter's decision came after a lengthy contested case hearing on a challenge to the permit that was filed by the Menominee Indian Tribe and Tom Boerner, who owns property next to the proposed Back Forty mine site.
The Environmental Permit Review Commission will assemble a three-person panel to examine the facts behind Judge Pulter's decision. This will be the first review conducted by the commission, which was created by state lawmakers last year.
The commission's decision will be final. This is a departure from past practice, in which the director of EGLE had the last word on contested cases.
Contested cases are administrative hearings within the executive branch of state government. If a party chooses to further appeal the permit decision, the matter would be heard in a state court.
June 6, 2019 - The Menominee Indian Tribe of Wisconsin has petitioned for reconsideration of a judge's decision to uphold Aquila Resources' Back Forty mining permit.
The mining permit is one of four that Aquila Resources needs to open and operate the Back Forty mine.
Last month, Administrative Law Judge Daniel Pulter approved the Back Forty mining permit, which was issued by the Michigan Dept. of Environment, Great Lakes, and Energy (EGLE) in December of 2016. Judge Pulter's decision came after a lengthy contested case hearing on a challenge to the permit that was filed by the Menominee Indian Tribe and Tom Boerner, who owns property next to the proposed Back Forty mine site.
The Environmental Permit Review Commission will assemble a three-person panel to examine the facts behind Judge Pulter's decision. This will be the first review conducted by the commission, which was created by state lawmakers last year.
The commission's decision will be final. This is a departure from past practice, in which the director of EGLE had the last word on contested cases.
Contested cases are administrative hearings within the executive branch of state government. If a party chooses to further appeal the permit decision, the matter would be heard in a state court.
Judge Upholds Coalition's Right to Contest Back Forty Wetlands Permit
May 18, 2019 - Administrative Law Judge Daniel Pulter has rejected a motion by Aquila Resources, Inc., to remove the Coalition to SAVE the Menominee River, Inc., from a contested case that challenges the legality of the wetlands permit for Aquila's proposed Back Forty mine.
The permit was issued almost a year ago by the Michigan Dept. of Environmental Quality, which is now called the Dept. of Environment, Great Lakes, and Energy (EGLE).
Aquila contested the Coalition's standing to participate in the case, but the Coalition demonstrated that several of its members would be directly affected by the mine if it went into operation. Therefore, Judge Pulter ruled that the Coalition had the right to participate in the contested case in order to protect their interests.
The decision was issued on May 14.
May 18, 2019 - Administrative Law Judge Daniel Pulter has rejected a motion by Aquila Resources, Inc., to remove the Coalition to SAVE the Menominee River, Inc., from a contested case that challenges the legality of the wetlands permit for Aquila's proposed Back Forty mine.
The permit was issued almost a year ago by the Michigan Dept. of Environmental Quality, which is now called the Dept. of Environment, Great Lakes, and Energy (EGLE).
Aquila contested the Coalition's standing to participate in the case, but the Coalition demonstrated that several of its members would be directly affected by the mine if it went into operation. Therefore, Judge Pulter ruled that the Coalition had the right to participate in the contested case in order to protect their interests.
The decision was issued on May 14.
Back Forty Mine Blasting Would Sound Like Thunderclap
May 8, 2019 - The noise from blasting at the proposed Back Forty mine site would top out at 140 decibels -- louder than a thunderclap -- next to the Menominee River, according to a court document released Friday.
Administrative Law Judge Daniel Pulter reported the noise finding in the Final Decision and Order he issued at the close of a contested case hearing on the legality of the Back Forty Mining Permit. That permit was issued by the State of Michigan in December of 2016.
A noise level of 140 decibels is loud enough to cause rapid and permanent hearing damage, according to the Centers for Disease Control.
Adverse impacts on the fish population would be minimized, Judge Pulter concluded, because fish would simply leave the area where mine blasting was occurring.
Aquila Resources, Inc., an exploration company, proposes to build the Back Forty open-pit mine on the Menominee River west of Stephenson, Michigan.
The mine site would cover 865 acres. The 83-acre open pit would be as close as 150 feet from the Menominee River.
Judge Pulter's description of noise levels is on page 62 of the Final Decision and Order he issued Friday, May 3, at the conclusion of the contested case brought by the Menominee Indian Tribe of Wisconsin and local property owner Tom Boerner.
A thunderclap is 120 decibels, according to several sources, including a Purdue University training document.
Aquila is now revising the 2016 Mining Permit to bring it up-to-date with current project plans. A public hearing on the permit revisions is expected later this year.
May 8, 2019 - The noise from blasting at the proposed Back Forty mine site would top out at 140 decibels -- louder than a thunderclap -- next to the Menominee River, according to a court document released Friday.
Administrative Law Judge Daniel Pulter reported the noise finding in the Final Decision and Order he issued at the close of a contested case hearing on the legality of the Back Forty Mining Permit. That permit was issued by the State of Michigan in December of 2016.
A noise level of 140 decibels is loud enough to cause rapid and permanent hearing damage, according to the Centers for Disease Control.
Adverse impacts on the fish population would be minimized, Judge Pulter concluded, because fish would simply leave the area where mine blasting was occurring.
Aquila Resources, Inc., an exploration company, proposes to build the Back Forty open-pit mine on the Menominee River west of Stephenson, Michigan.
The mine site would cover 865 acres. The 83-acre open pit would be as close as 150 feet from the Menominee River.
Judge Pulter's description of noise levels is on page 62 of the Final Decision and Order he issued Friday, May 3, at the conclusion of the contested case brought by the Menominee Indian Tribe of Wisconsin and local property owner Tom Boerner.
A thunderclap is 120 decibels, according to several sources, including a Purdue University training document.
Aquila is now revising the 2016 Mining Permit to bring it up-to-date with current project plans. A public hearing on the permit revisions is expected later this year.
Letter to Aquila Investor Group Gets Signatures from 35 Organizations
May 6, 2019 - An April 29 letter to the Orion Mine Finance Group that criticizes Aquila Resources' proposed Back Forty mine was endorsed by a wide variety of environmental, tribal, sport-fishing and faith-based organizations.
The letter, written by Prof. Al Gedicks of the Wisconsin Resources Protection Council, challenged Orion's 14-percent ownership of the Back Forty project.
"Your investors should take note of the financial risks of continued investment in such a project," the letter said.
The letter called Aquila's claim that it has received all the permits it needs for the project "inaccurate and highly misleading."
Aquila's 2016 mining permit was upheld on May 3 by a Michigan administrative law judge. However, the company has asked the state to revise the permit to accommodate recent changes to the project design.
That permit revision is under review and will be the subject of a public hearing later this year. An associated wetlands permit has been challenged by mine opponents at the state level and in federal court.
The letter also criticized Aquila's proposed "upstream" design for its planned Back Forty tailings impoundment.
Aquila's tailings impoundment, as currently designed, is not consistent with industry best practices for storing mine wastes, the letter claimed.
A storage facility with a similar design failed earlier this year at a mine in Brazil, the letter said, "releasing almost three billion gallons of sludgy mine waste" and killing more than 300 people.
"The list of organizations ... that have co-signed this letter attest to one of the most broad-based opposition movements ... in recent history," the letter concluded.
Among the organizations that signed the letter were the Wisconsin chapter of the Sierra Club, Wisconsin Conservation Voters, the River Alliance of Wisconsin, and WISDOM, a coalition of faith-based organizations with chapters in ten counties throughout Wisconsin.
May 6, 2019 - An April 29 letter to the Orion Mine Finance Group that criticizes Aquila Resources' proposed Back Forty mine was endorsed by a wide variety of environmental, tribal, sport-fishing and faith-based organizations.
The letter, written by Prof. Al Gedicks of the Wisconsin Resources Protection Council, challenged Orion's 14-percent ownership of the Back Forty project.
"Your investors should take note of the financial risks of continued investment in such a project," the letter said.
The letter called Aquila's claim that it has received all the permits it needs for the project "inaccurate and highly misleading."
Aquila's 2016 mining permit was upheld on May 3 by a Michigan administrative law judge. However, the company has asked the state to revise the permit to accommodate recent changes to the project design.
That permit revision is under review and will be the subject of a public hearing later this year. An associated wetlands permit has been challenged by mine opponents at the state level and in federal court.
The letter also criticized Aquila's proposed "upstream" design for its planned Back Forty tailings impoundment.
Aquila's tailings impoundment, as currently designed, is not consistent with industry best practices for storing mine wastes, the letter claimed.
A storage facility with a similar design failed earlier this year at a mine in Brazil, the letter said, "releasing almost three billion gallons of sludgy mine waste" and killing more than 300 people.
"The list of organizations ... that have co-signed this letter attest to one of the most broad-based opposition movements ... in recent history," the letter concluded.
Among the organizations that signed the letter were the Wisconsin chapter of the Sierra Club, Wisconsin Conservation Voters, the River Alliance of Wisconsin, and WISDOM, a coalition of faith-based organizations with chapters in ten counties throughout Wisconsin.
Aquila's Back Forty Mining Permit Upheld
May 3, 2019, updated May 6 - Administrative Law Judge Daniel Pulter has approved the Back Forty mining permit issued by the Michigan Dept. of Environmental Quality (MDEQ), with changes to address the Menominee Indian Tribe of Wisconsin's concerns about the protection of cultural and archeological features in and around the mine site.
The Tribe claimed that Aquila Resources, Inc., which plans to operate the Back Forty mine, failed to investigate and identify all Menominee burial mounds and garden sites near the mine. Judge Pulter ruled that Aquila's archeological surveys met the requirements for a mining permit under state law and, further, that the company had voluntarily agreed to protect cultural sites in and around the proposed mine.
However, Pulter added some provisions to the mining permit to further address tribal concerns. He concluded that the plan to handle unanticipated discoveries of cultural artifacts should be amended to ensure that the Tribe, and a qualified archeologist, are involved if previously unknown human remains or associated funerary objects are discovered during mine operations.
Pulter also had doubts about Aquila's computer modeling of accumulated pit contaminants after mine closure. He mandated accelerated flooding of the mine pit and ruled that the frequency and scope of groundwater monitoring around the mine should be expanded.
The Menominee Tribe was joined in its challenge of the Back Forty mining permit by Tom Boerner, who owns property immediately to the north of the proposed mine. The action was brought against MDEQ, which is now called the Michigan Department of Environment, Great Lakes and Energy, or "EGLE." Aquila Resources participated in the litigation as an intervenor.
"Aquila will continue its efforts with the State of Michigan and local communities to demonstrate our commitment to environmental responsibility and sustainable resource development that benefits all stakeholders," said Barry Hildred, President and CEO of Aquila, in a news release. "The Back Forty Mine will be a safe, disciplined operation that promotes and supports local community socio-economic development and is protective of the environment."
Still in play, and scheduled to begin hearings soon, are three additional administrative petitions challenging Aquila's wetlands permit, which was issued almost a year ago. The Menominee Indian Tribe of Wisconsin and the Coalition to SAVE the Menominee River, Inc., have also challenged the wetlands permit in federal court. A lower court's dismissal of the Tribe's lawsuit is under appeal.
May 3, 2019, updated May 6 - Administrative Law Judge Daniel Pulter has approved the Back Forty mining permit issued by the Michigan Dept. of Environmental Quality (MDEQ), with changes to address the Menominee Indian Tribe of Wisconsin's concerns about the protection of cultural and archeological features in and around the mine site.
The Tribe claimed that Aquila Resources, Inc., which plans to operate the Back Forty mine, failed to investigate and identify all Menominee burial mounds and garden sites near the mine. Judge Pulter ruled that Aquila's archeological surveys met the requirements for a mining permit under state law and, further, that the company had voluntarily agreed to protect cultural sites in and around the proposed mine.
However, Pulter added some provisions to the mining permit to further address tribal concerns. He concluded that the plan to handle unanticipated discoveries of cultural artifacts should be amended to ensure that the Tribe, and a qualified archeologist, are involved if previously unknown human remains or associated funerary objects are discovered during mine operations.
Pulter also had doubts about Aquila's computer modeling of accumulated pit contaminants after mine closure. He mandated accelerated flooding of the mine pit and ruled that the frequency and scope of groundwater monitoring around the mine should be expanded.
The Menominee Tribe was joined in its challenge of the Back Forty mining permit by Tom Boerner, who owns property immediately to the north of the proposed mine. The action was brought against MDEQ, which is now called the Michigan Department of Environment, Great Lakes and Energy, or "EGLE." Aquila Resources participated in the litigation as an intervenor.
"Aquila will continue its efforts with the State of Michigan and local communities to demonstrate our commitment to environmental responsibility and sustainable resource development that benefits all stakeholders," said Barry Hildred, President and CEO of Aquila, in a news release. "The Back Forty Mine will be a safe, disciplined operation that promotes and supports local community socio-economic development and is protective of the environment."
Still in play, and scheduled to begin hearings soon, are three additional administrative petitions challenging Aquila's wetlands permit, which was issued almost a year ago. The Menominee Indian Tribe of Wisconsin and the Coalition to SAVE the Menominee River, Inc., have also challenged the wetlands permit in federal court. A lower court's dismissal of the Tribe's lawsuit is under appeal.
MDEQ Plans Public Hearing on Back Forty Permits
Feb. 22, 2019 - The Michigan Department of Environmental Quality (MDEQ) has decided to hold a joint public hearing on three pending Back Forty mine permits.
In an email to mine developer Aquila Resources, an agency staffer indicated that a hearing on dam safety, mining and air quality permits for the mine will be held, "possibly later this spring."
Aquila recently applied for a dam safety permit, and has asked the MDEQ to amend its existing mining and air quality permits.
The hearing will allow members of the public to express their opinions about the Back Forty mine in a face-to-face meeting with agency representatives.
The MDEQ has already accepted written public comments. The comment period ended Feb. 18.
Feb. 22, 2019 - The Michigan Department of Environmental Quality (MDEQ) has decided to hold a joint public hearing on three pending Back Forty mine permits.
In an email to mine developer Aquila Resources, an agency staffer indicated that a hearing on dam safety, mining and air quality permits for the mine will be held, "possibly later this spring."
Aquila recently applied for a dam safety permit, and has asked the MDEQ to amend its existing mining and air quality permits.
The hearing will allow members of the public to express their opinions about the Back Forty mine in a face-to-face meeting with agency representatives.
The MDEQ has already accepted written public comments. The comment period ended Feb. 18.
Back Forty Tailings Facility "Not a Pond," Aquila Says; Critics Respond
Feb. 20, 2019 - (UPDATED) The failure of the Brumadinho tailings dam in Brazil has raised concerns that a similar disaster might happen at Aquila Resources' proposed Back Forty mine if it goes into operation.
However, the company says that the Back Forty tailings facility will be significantly different from the one at Brumadinho.
The Brumadinho tailings were a "wet, muddy slurry," Aquila Communications Manager Dan Blondeau wrote in a Feb. 7 email. "The Back Forty tailings facility is not a pond and will not store liquid tailings, it will be high density solids."
Tailings are the silt-like material that's left over after ore is crushed and valuable minerals are extracted. Standard practice is to pump tailings in liquid form into a pond like the one at Brumadinho.
However, at the Back Forty, tailings will be de-watered to the consistency of drywall mud before they're pumped to the on-site tailings management facility (TMF), Blondeau said in a Feb. 18 email exchange. A drainage system will collect water that drains out of the TMF, and standing water on top of the tailings will be pumped out, according to Blondeau. The water will be reused, or treated and released, he said.
Blondeau's characterization of the Back Forty tailings as "high density solids," was challenged by Dr. Al Gedicks of the Wisconsin Resources Protection Council, in a written statement (reprinted below).
Gedicks noted that tailings from the Back Forty processing plant will be 19 percent water when they are pumped into the TMF.
Industry best practice is for tailings to be thoroughly de-watered and stored in "dry stacks" with a lower moisture content, according to an expert review panel that investigated the 2014 Mt. Polley tailings dam failure in British Columbia, Canada.
"Using tailings with relatively high moisture content to save costs increases the risk that the tailings will liquefy and cause the tailings dam to fail," Gedicks said.
Not a Conventional "Upstream" Design?
The Back Forty project plan has been criticized for using an "upstream" design for the embankment that will contain the thickened tailings in the TMF.
"Upstream-type construction has proven itself to be the most vulnerable construction type to catastrophic failure," according to the Center for Science in Public Participation (CSP2), which recently reviewed Aquila's application for a revised Back Forty mining permit. "This is the type of construction that was employed at the recent tailings dam failure in Brazil."
However, the tailings management facility at the Back Forty is not a traditional upstream raised tailings design, Blondeau said. "Our facility was designed to mitigate the known risks of common upstream raised tailings facilities (and) uses tried, tested, and proven engineering methods."
Similar facilities are already in operation at the Malartic Mine and the MusselWhite Mine in Canada, and the Neves Corvo Mine in Portugal, according to Blondeau
"All of the recent catastrophic tailings dams that have failed were built with 'tried, tested, and proven engineering methods,' so that guarantee has a hollow ring," replied Dr. David Chambers of CSP2.
According to Blondeau, the entire perimeter of the Back Forty tailings facility will be constructed of waste rock, forming a sloped outer wall at least 108 feet thick. In contrast, traditional facilities use coarse tailings to construct their wall, which makes them prone to deterioration, he said.
"Blondeau's description of the tailings impoundment is misleading," Gedicks replied.
Tailings will support much of the embankment that surrounds Aquila's proposed TMF, Gedicks observed (see illustration). Even if the tailings are mostly solids, zones within the tailings may become saturated with water, making them unstable and possibly causing a dam failure, he said.
Feb. 20, 2019 - (UPDATED) The failure of the Brumadinho tailings dam in Brazil has raised concerns that a similar disaster might happen at Aquila Resources' proposed Back Forty mine if it goes into operation.
However, the company says that the Back Forty tailings facility will be significantly different from the one at Brumadinho.
The Brumadinho tailings were a "wet, muddy slurry," Aquila Communications Manager Dan Blondeau wrote in a Feb. 7 email. "The Back Forty tailings facility is not a pond and will not store liquid tailings, it will be high density solids."
Tailings are the silt-like material that's left over after ore is crushed and valuable minerals are extracted. Standard practice is to pump tailings in liquid form into a pond like the one at Brumadinho.
However, at the Back Forty, tailings will be de-watered to the consistency of drywall mud before they're pumped to the on-site tailings management facility (TMF), Blondeau said in a Feb. 18 email exchange. A drainage system will collect water that drains out of the TMF, and standing water on top of the tailings will be pumped out, according to Blondeau. The water will be reused, or treated and released, he said.
Blondeau's characterization of the Back Forty tailings as "high density solids," was challenged by Dr. Al Gedicks of the Wisconsin Resources Protection Council, in a written statement (reprinted below).
Gedicks noted that tailings from the Back Forty processing plant will be 19 percent water when they are pumped into the TMF.
Industry best practice is for tailings to be thoroughly de-watered and stored in "dry stacks" with a lower moisture content, according to an expert review panel that investigated the 2014 Mt. Polley tailings dam failure in British Columbia, Canada.
"Using tailings with relatively high moisture content to save costs increases the risk that the tailings will liquefy and cause the tailings dam to fail," Gedicks said.
Not a Conventional "Upstream" Design?
The Back Forty project plan has been criticized for using an "upstream" design for the embankment that will contain the thickened tailings in the TMF.
"Upstream-type construction has proven itself to be the most vulnerable construction type to catastrophic failure," according to the Center for Science in Public Participation (CSP2), which recently reviewed Aquila's application for a revised Back Forty mining permit. "This is the type of construction that was employed at the recent tailings dam failure in Brazil."
However, the tailings management facility at the Back Forty is not a traditional upstream raised tailings design, Blondeau said. "Our facility was designed to mitigate the known risks of common upstream raised tailings facilities (and) uses tried, tested, and proven engineering methods."
Similar facilities are already in operation at the Malartic Mine and the MusselWhite Mine in Canada, and the Neves Corvo Mine in Portugal, according to Blondeau
"All of the recent catastrophic tailings dams that have failed were built with 'tried, tested, and proven engineering methods,' so that guarantee has a hollow ring," replied Dr. David Chambers of CSP2.
According to Blondeau, the entire perimeter of the Back Forty tailings facility will be constructed of waste rock, forming a sloped outer wall at least 108 feet thick. In contrast, traditional facilities use coarse tailings to construct their wall, which makes them prone to deterioration, he said.
"Blondeau's description of the tailings impoundment is misleading," Gedicks replied.
Tailings will support much of the embankment that surrounds Aquila's proposed TMF, Gedicks observed (see illustration). Even if the tailings are mostly solids, zones within the tailings may become saturated with water, making them unstable and possibly causing a dam failure, he said.
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"If Aquila was truly concerned with minimizing 'the known risks of common upstream raised tailings facilities' they would have chosen the dry stack option," Gedicks said.
Aquila proposes to use waste rock from the mine to build the embankment around its TMF, Gedicks noted, "and the company admits that 75 percent of the waste rock is expected to be acid-generating." Aquila has acknowledged in its mining permit application that most of the mine rock will contain sulfides that can produce sulfuric acid when exposed to air and water. The U.S. Environmental Protection Agency (EPA) has determined that potentially acid-generating waste rock is not suitable for tailings embankment construction, Gedicks said, because it's not chemically stable. "The waste rock in the embankment can produce acid mine drainage," but it won't escape into the environment, Bondeau said. "The base liner system is underneath the perimeter wall and ditch. Thus the water that collects or runs off these features would go to a sump and be pumped away" for treatment or reuse. |
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Gedicks also challenged Aquila's plans to manage rain- and snowfall into the TMF, which will be open to the air while the Back Forty mine is in operation.
Aquila used 18-year-old storm data in its water management planning, Gedicks said, and doesn't account for more recent rain and snow events in the area where the mine would be located.
"A heavy downpour can rapidly increase the weight of the material inside the dam and liquefy relatively dry mine waste that can then spill out," Gedicks said, quoting James Kuipers, principal consulting engineer at Kuipers and Associates.
Blondeau promised that Aquila will watch the Back Forty impoundment closely as it rises to its maximum projected height of 138 feet.
"The performance of the facility will be monitored closely during construction, operations, and post-closure to ensure that the design intent is being satisfied, to confirm design assumptions, and to identify any design changes that may be required," Blondeau said.
"Monitoring is a regulatory requirement," Chambers replied. "But this is a structure that will stand in perpetuity, and the legacy of post-closure monitoring is not exemplary."
Aquila used 18-year-old storm data in its water management planning, Gedicks said, and doesn't account for more recent rain and snow events in the area where the mine would be located.
"A heavy downpour can rapidly increase the weight of the material inside the dam and liquefy relatively dry mine waste that can then spill out," Gedicks said, quoting James Kuipers, principal consulting engineer at Kuipers and Associates.
Blondeau promised that Aquila will watch the Back Forty impoundment closely as it rises to its maximum projected height of 138 feet.
"The performance of the facility will be monitored closely during construction, operations, and post-closure to ensure that the design intent is being satisfied, to confirm design assumptions, and to identify any design changes that may be required," Blondeau said.
"Monitoring is a regulatory requirement," Chambers replied. "But this is a structure that will stand in perpetuity, and the legacy of post-closure monitoring is not exemplary."
Response to Aquila’s Claim That a Brazilian-Type Tailings Dam Disaster Could Not Happen at the Proposed Back Forty Mine
by Al Gedicks
Wisconsin Resources Protection Council
Aquila’s Communications Manager Dan Blondeau has claimed that the tailings management facility at the Back Forty is not a traditional upstream raised tailings dam design and that it is “significantly different” from the failed Brumadinho tailings dam in Brazil. Blondeau says that “Our facility was designed to mitigate the known risks of common upstream raised tailings facilities.”
According to Blondeau, the entire perimeter of the Back Forty tailings facility will be constructed of waste rock, forming a sloped outer wall at least 108 feet thick. In contrast, traditional facilities use coarse tailings to construct their wall, which makes them prone to deterioration.
Blondeau’s description of the tailings impoundment is misleading
However, Blondeau’s description of the perimeter of the impoundment does not correspond to the Dam Safety Permit Application 2L and the tailings facility cross section in Figure 12 of the October 30, 2018 Golder report , Tailings Management Facility, Waste Rock Facilities, Ore Storage Areas and Overburden Stockpile: Permit Support Design, Back Forty Project, Michigan.
As Dr. Chambers has pointed out in his review of the Back Forty Mine Permit Amendment Application, “the tailings facility cross section is that of the upstream design; that is the tailings themselves form the support for a significant part of the impoundment. These tailings will nominally be dry after closure, but it is possible for lenses of saturated tailings to exist because the tailings are not mechanically compacted after placement. (Center for Science in Public Participation, February 11, 2019). Saturated tailings can generate high saturation of the embankment and a breach in the tailings dam.
The waste rock in the embankment can produce acid mine drainage
Blondeau says waste rock will be used to build the embankment around the tailings dam. However, in Aquila’s mine permit application, the company admits that 75% of the waste rock is expected to be potentially acid-generating. Dr. Chambers asks: how will Aquila ensure that the embankment itself does not contribute to acid and metal leaching?
According to the Environmental Protection Agency, construction materials to build the embankment “must be chemically stable, “so potentially acid-generating waste rock is not suitable for embankment construction, particularly in drainage systems” (see “Technical Report: Design and Evaluation of Tailings Dams, USEPA, Office of Solid Waste, Special Waste Branch, Washington, DC, August 1994. EPA530-R-94-038, p 23).
Blondeau’s description of tailings is misleading
Blondeau says that, unlike the Brumadinho, Brazil tailings, which he describes as “a wet, muddy slurry,” the Back Forty tailings “will be high density solids” and therefore less at risk of liquefaction, when seemingly solid material can abruptly become a murky liquid, flowing downhill.
However, as Dr. Chambers has noted in his review of the Aquila’s mine permit application, the tailings will only be dewatered to 81% solids. Aquila considers this feasible, although it does not consider dewatering to 86% to be feasible because “filtering and placement costs would be high” (Mining Permit Applications before 6.0). According to Chambers, “It does not seem that the expense of dewatering to an additional 5% would be that onerous. It may be more a matter of the cost of ‘placement’ – pumping 81% solid tailings versus trucking 86% dewatered tailings to the management facility. I would question whether 81% solids is pumpable, particularly in cold weather.”
Dr. Chambers recommended a comparison of the costs of a dry stack (86% dewatered) and the proposed 81% dewatering should be provided. He also recommended that examples should be provided that indicate tailings that are 81% solids can be pumped in cold climates.
Aquila’s philosophy throughout the entire permitting process is to construct a mine at the lowest cost possible. That is why Aquila has chosen the upstream design for its tailings dam construction. If Aquila was truly concerned with minimizing “the known risks of common upstream raised tailings facilities” they would have chosen the dry stack (86 % dewatered) option. If Aquila’s assumption about the feasibility of pumping 81% solid tailings in cold weather is mistaken, there is no guarantee that they wouldn’t choose a lower cost option to pump lower density tailings to avoid the added expense of trucking higher density tailings to the management facility.
Choosing low relative density of the tailings to save costs increases the risk for water mismanagement to generate high saturation of the embankment and subsequently creating liquefaction induced flow of the tailings.
“It is not clear from the Dam Safety Permit Application, MPAA, or the EIAA” says Dr. Chambers, “ why the cost savings gained with upstream impoundment construction is more important than the increased long-term risk to the public of impoundment failure.”
The higher cost, but safer downstream construction design was never considered by Aquila.
Blondeau’s assurance about “mitigating the known risks of upstream tailings facilities “ is not supported by the evidence in their dam safety permit application
According to the EPA, “Tailings embankments constructed using the upstream method generally have a low relative density with a high water saturation. This combination can result in liquefaction of the tailings embankment in the event of seismic activity…Therefore, upstream construction is not appropriate in areas with a potential for high seismic activity” (Technical Report: Design and Evaluation of Tailings Dams, USEPA, Office of Solid Waste, Special Waste Branch, Washington, DC, August 1994. EPA530-R-94-038, p 23).
Dr. Chambers has noted in his review of Aquila’s dam safety permit application that seismic analysis for tailings dams typically require both probabilistic and deterministic analyses to determine the largest ground motion that the structure could experience.
“Neither a probabilistic or deterministic analysis was done for the Back Forty project.”
Instead, Aquila’s subcontractor, Golder Associates, used U.S. Geological Survey seismic hazard maps not intended for tailings dams but are intended for engineers and planners who design buildings. By using inappropriate seismic hazard data, “the size of the seismic event the tailings facility could experience is being significantly underestimated.”
The use of this data and the lack of a probabilistic seismic analysis, “are viewed as unacceptable for tailings impoundment design in most regulatory jurisdictions.”
Aquila has seriously underestimated the risks of upstream dams from heavy rains
James Kuipers, principal consulting engineer at Kuipers and Associates LLC states that a heavy downpour can rapidly increase the weight of the material inside the dam and liquefy relatively dry mine waste that can then spill out, overwhelming and drowning people in its path. Kuipers is a consultant with the EPA and state governments on tailings dams (see Stephen Lee, “Brazil Dam Catastrophe Sounds Alarm for U.S. Waste Ponds, Bloomberg Environment and Energy Report, February 4, 2019).
In his review of Aquila’s Mining Permit Amendment Application, Stephen Hoffman, Senior Environmental Scientist with SHoffman Consulting LLC, notes that the tailings perimeter external sump and ditch were designed to meet a l00 year 24 hour event. “Such a design is not adequate to reflect current rainfall/snow events in the area.” Aquila minimizes the potential for external erosion of the tailings dam from the runoff of rainwater by using 18-year-old data on the severity of storms. This defies science and common sense. Heavy rain has been implicated in 25 percent of global and 35 percent of European tailings dam failures (see M. Rico et al, 2008. “Reported tailings dam failures: a review of the European incidents in the worldwide context,” Journal of Hazardous Materials, 152, pp. 846-852).
by Al Gedicks
Wisconsin Resources Protection Council
Aquila’s Communications Manager Dan Blondeau has claimed that the tailings management facility at the Back Forty is not a traditional upstream raised tailings dam design and that it is “significantly different” from the failed Brumadinho tailings dam in Brazil. Blondeau says that “Our facility was designed to mitigate the known risks of common upstream raised tailings facilities.”
According to Blondeau, the entire perimeter of the Back Forty tailings facility will be constructed of waste rock, forming a sloped outer wall at least 108 feet thick. In contrast, traditional facilities use coarse tailings to construct their wall, which makes them prone to deterioration.
Blondeau’s description of the tailings impoundment is misleading
However, Blondeau’s description of the perimeter of the impoundment does not correspond to the Dam Safety Permit Application 2L and the tailings facility cross section in Figure 12 of the October 30, 2018 Golder report , Tailings Management Facility, Waste Rock Facilities, Ore Storage Areas and Overburden Stockpile: Permit Support Design, Back Forty Project, Michigan.
As Dr. Chambers has pointed out in his review of the Back Forty Mine Permit Amendment Application, “the tailings facility cross section is that of the upstream design; that is the tailings themselves form the support for a significant part of the impoundment. These tailings will nominally be dry after closure, but it is possible for lenses of saturated tailings to exist because the tailings are not mechanically compacted after placement. (Center for Science in Public Participation, February 11, 2019). Saturated tailings can generate high saturation of the embankment and a breach in the tailings dam.
The waste rock in the embankment can produce acid mine drainage
Blondeau says waste rock will be used to build the embankment around the tailings dam. However, in Aquila’s mine permit application, the company admits that 75% of the waste rock is expected to be potentially acid-generating. Dr. Chambers asks: how will Aquila ensure that the embankment itself does not contribute to acid and metal leaching?
According to the Environmental Protection Agency, construction materials to build the embankment “must be chemically stable, “so potentially acid-generating waste rock is not suitable for embankment construction, particularly in drainage systems” (see “Technical Report: Design and Evaluation of Tailings Dams, USEPA, Office of Solid Waste, Special Waste Branch, Washington, DC, August 1994. EPA530-R-94-038, p 23).
Blondeau’s description of tailings is misleading
Blondeau says that, unlike the Brumadinho, Brazil tailings, which he describes as “a wet, muddy slurry,” the Back Forty tailings “will be high density solids” and therefore less at risk of liquefaction, when seemingly solid material can abruptly become a murky liquid, flowing downhill.
However, as Dr. Chambers has noted in his review of the Aquila’s mine permit application, the tailings will only be dewatered to 81% solids. Aquila considers this feasible, although it does not consider dewatering to 86% to be feasible because “filtering and placement costs would be high” (Mining Permit Applications before 6.0). According to Chambers, “It does not seem that the expense of dewatering to an additional 5% would be that onerous. It may be more a matter of the cost of ‘placement’ – pumping 81% solid tailings versus trucking 86% dewatered tailings to the management facility. I would question whether 81% solids is pumpable, particularly in cold weather.”
Dr. Chambers recommended a comparison of the costs of a dry stack (86% dewatered) and the proposed 81% dewatering should be provided. He also recommended that examples should be provided that indicate tailings that are 81% solids can be pumped in cold climates.
Aquila’s philosophy throughout the entire permitting process is to construct a mine at the lowest cost possible. That is why Aquila has chosen the upstream design for its tailings dam construction. If Aquila was truly concerned with minimizing “the known risks of common upstream raised tailings facilities” they would have chosen the dry stack (86 % dewatered) option. If Aquila’s assumption about the feasibility of pumping 81% solid tailings in cold weather is mistaken, there is no guarantee that they wouldn’t choose a lower cost option to pump lower density tailings to avoid the added expense of trucking higher density tailings to the management facility.
Choosing low relative density of the tailings to save costs increases the risk for water mismanagement to generate high saturation of the embankment and subsequently creating liquefaction induced flow of the tailings.
“It is not clear from the Dam Safety Permit Application, MPAA, or the EIAA” says Dr. Chambers, “ why the cost savings gained with upstream impoundment construction is more important than the increased long-term risk to the public of impoundment failure.”
The higher cost, but safer downstream construction design was never considered by Aquila.
Blondeau’s assurance about “mitigating the known risks of upstream tailings facilities “ is not supported by the evidence in their dam safety permit application
According to the EPA, “Tailings embankments constructed using the upstream method generally have a low relative density with a high water saturation. This combination can result in liquefaction of the tailings embankment in the event of seismic activity…Therefore, upstream construction is not appropriate in areas with a potential for high seismic activity” (Technical Report: Design and Evaluation of Tailings Dams, USEPA, Office of Solid Waste, Special Waste Branch, Washington, DC, August 1994. EPA530-R-94-038, p 23).
Dr. Chambers has noted in his review of Aquila’s dam safety permit application that seismic analysis for tailings dams typically require both probabilistic and deterministic analyses to determine the largest ground motion that the structure could experience.
“Neither a probabilistic or deterministic analysis was done for the Back Forty project.”
Instead, Aquila’s subcontractor, Golder Associates, used U.S. Geological Survey seismic hazard maps not intended for tailings dams but are intended for engineers and planners who design buildings. By using inappropriate seismic hazard data, “the size of the seismic event the tailings facility could experience is being significantly underestimated.”
The use of this data and the lack of a probabilistic seismic analysis, “are viewed as unacceptable for tailings impoundment design in most regulatory jurisdictions.”
Aquila has seriously underestimated the risks of upstream dams from heavy rains
James Kuipers, principal consulting engineer at Kuipers and Associates LLC states that a heavy downpour can rapidly increase the weight of the material inside the dam and liquefy relatively dry mine waste that can then spill out, overwhelming and drowning people in its path. Kuipers is a consultant with the EPA and state governments on tailings dams (see Stephen Lee, “Brazil Dam Catastrophe Sounds Alarm for U.S. Waste Ponds, Bloomberg Environment and Energy Report, February 4, 2019).
In his review of Aquila’s Mining Permit Amendment Application, Stephen Hoffman, Senior Environmental Scientist with SHoffman Consulting LLC, notes that the tailings perimeter external sump and ditch were designed to meet a l00 year 24 hour event. “Such a design is not adequate to reflect current rainfall/snow events in the area.” Aquila minimizes the potential for external erosion of the tailings dam from the runoff of rainwater by using 18-year-old data on the severity of storms. This defies science and common sense. Heavy rain has been implicated in 25 percent of global and 35 percent of European tailings dam failures (see M. Rico et al, 2008. “Reported tailings dam failures: a review of the European incidents in the worldwide context,” Journal of Hazardous Materials, 152, pp. 846-852).
Lawmakers Reinstate MDEQ Oversight Committees
Feb. 14, 2014 - The Republican-controlled Michigan legislature has killed Gov. Gretchen Whitmer's executive order that would have disbanded two industry-friendly environmental oversight committees.
As a result of the vote, the restored Environmental Rules Review Committee will once again be able to block rules proposed by the Michigan Department of Environmental Quality (DEQ). Similarly, the Environmental Permit Review Commission will have the authority to decide whether permits for projects such as the proposed Back Forty mine should be issued by the DEQ, and in what form -- even before a final DEQ decision has been made.
However, the governor retains the final authority to accept or reject the recommendations of the rules review committee. The head of the DEQ, who is appointed by the governor, has similar authority over decisions of the permit review commission.
The panels were created during the lame-duck session of the state Assembly and Senate, and signed into law by then-Gov. Rick Snyder, who appointed all the committee members before he left office at the end of last year. Then-state Sen. Tom Casperson (R-Escanaba) sponsored the legislation, which was supported by interest groups such as the Michigan Chamber of Commerce and the Michigan Farm Bureau.
McBroom (R-Vulcan) was elected last fall to replace Casperson, who was term-limited from seeking reelection and is now a top aide on McBroom's Senate staff.
During legislative debate, McBroom argued for reinstatement of the two oversight committees. In comments on the Senate floor, he said the DEQ is "out of control" and abuses its authority at the expense of local land-owners.
"Who is watching the watcher?" McBroom said. "Who's taking the complaints about a department that's abusing the people?"
McBroom's comments came at 63 minutes into the Feb. 14 Senate session and can be viewed on the Senate video feed. He was the only senator who spoke in favor of reinstating the two oversight committees.
Feb. 14, 2014 - The Republican-controlled Michigan legislature has killed Gov. Gretchen Whitmer's executive order that would have disbanded two industry-friendly environmental oversight committees.
As a result of the vote, the restored Environmental Rules Review Committee will once again be able to block rules proposed by the Michigan Department of Environmental Quality (DEQ). Similarly, the Environmental Permit Review Commission will have the authority to decide whether permits for projects such as the proposed Back Forty mine should be issued by the DEQ, and in what form -- even before a final DEQ decision has been made.
However, the governor retains the final authority to accept or reject the recommendations of the rules review committee. The head of the DEQ, who is appointed by the governor, has similar authority over decisions of the permit review commission.
The panels were created during the lame-duck session of the state Assembly and Senate, and signed into law by then-Gov. Rick Snyder, who appointed all the committee members before he left office at the end of last year. Then-state Sen. Tom Casperson (R-Escanaba) sponsored the legislation, which was supported by interest groups such as the Michigan Chamber of Commerce and the Michigan Farm Bureau.
McBroom (R-Vulcan) was elected last fall to replace Casperson, who was term-limited from seeking reelection and is now a top aide on McBroom's Senate staff.
During legislative debate, McBroom argued for reinstatement of the two oversight committees. In comments on the Senate floor, he said the DEQ is "out of control" and abuses its authority at the expense of local land-owners.
"Who is watching the watcher?" McBroom said. "Who's taking the complaints about a department that's abusing the people?"
McBroom's comments came at 63 minutes into the Feb. 14 Senate session and can be viewed on the Senate video feed. He was the only senator who spoke in favor of reinstating the two oversight committees.
Governor Won’t Allow Committees to Second-Guess Environmental Agency
Feb. 4, 2019 - Michigan Gov. Gretchen Whitmer has eliminated two committees that would have had the power to intervene in rule-making and permitting decisions by the newly-renamed Department of Environment, Great Lakes, and Energy, formerly the MDEQ.
The governor’s wide-ranging executive order, issued Feb. 4, abolished the environmental rules review committee and the environmental permit review commission that were established by the state legislature in last year’s lame-duck session.
Lawmakers gave the committees the authority to modify or reject draft environmental rules and agency permitting decisions. The bills that established the committees were sponsored by former state Sen. Tom Casperson (R-Escanaba), a mining advocate.
Environmental advocates say the committees were dominated by representatives from industry and the regulated community, all appointed by former Gov. Rick Snyder.
The provisions of Gov. Whitmer's executive order are subject to a 60 day legislative veto.
Feb. 4, 2019 - Michigan Gov. Gretchen Whitmer has eliminated two committees that would have had the power to intervene in rule-making and permitting decisions by the newly-renamed Department of Environment, Great Lakes, and Energy, formerly the MDEQ.
The governor’s wide-ranging executive order, issued Feb. 4, abolished the environmental rules review committee and the environmental permit review commission that were established by the state legislature in last year’s lame-duck session.
Lawmakers gave the committees the authority to modify or reject draft environmental rules and agency permitting decisions. The bills that established the committees were sponsored by former state Sen. Tom Casperson (R-Escanaba), a mining advocate.
Environmental advocates say the committees were dominated by representatives from industry and the regulated community, all appointed by former Gov. Rick Snyder.
The provisions of Gov. Whitmer's executive order are subject to a 60 day legislative veto.
Focus Group Findings Released
Jan. 24, 2019 - Economist Tawni Ferrarini of Lindenwood University has released an executive summary of results from her 2018 focus group research sponsored by Aquila Resources, Inc.
According to the report, study participants rated jobs and new tax revenue as the most important benefits of the Back Forty project. Aquila estimates that the mine would generate 240 permanent, direct jobs with an annual payroll of approximately $9.5 million. The company says it would pay over $20 million in taxes to federal, state, and local government in a typical year of mine operations.
Environmental risks and a lack of company transparency were the most important downsides of the project, in the view of study participants.
However, the study results should be taken with more than a few grains of salt.
Genuine public opinion surveys are based on a random sample of people in the study area. Theoretically, every person has an equal chance of being included in the study, so it's reasonable to think that the survey results are representative of the general population.
Professor Ferrarini's focus groups were made up of people who responded to invitations in newspapers or through word of mouth. Those who chose to participate in the study were a self-selected group that probably had different attitudes and characteristics than the local population as a whole. So there's no reason to assume that the study accurately measured public opinion about the mine.
In a telephone conversation, Prof. Ferrarini confirmed that the study was "just to get a conversation started. It wasn't intended to be a publishable piece" with scientifically reliable results.
The executive summary of the Aquila focus group study is available on Prof. Ferrarini's "Mining and Communities" blog.
Jan. 24, 2019 - Economist Tawni Ferrarini of Lindenwood University has released an executive summary of results from her 2018 focus group research sponsored by Aquila Resources, Inc.
According to the report, study participants rated jobs and new tax revenue as the most important benefits of the Back Forty project. Aquila estimates that the mine would generate 240 permanent, direct jobs with an annual payroll of approximately $9.5 million. The company says it would pay over $20 million in taxes to federal, state, and local government in a typical year of mine operations.
Environmental risks and a lack of company transparency were the most important downsides of the project, in the view of study participants.
However, the study results should be taken with more than a few grains of salt.
Genuine public opinion surveys are based on a random sample of people in the study area. Theoretically, every person has an equal chance of being included in the study, so it's reasonable to think that the survey results are representative of the general population.
Professor Ferrarini's focus groups were made up of people who responded to invitations in newspapers or through word of mouth. Those who chose to participate in the study were a self-selected group that probably had different attitudes and characteristics than the local population as a whole. So there's no reason to assume that the study accurately measured public opinion about the mine.
In a telephone conversation, Prof. Ferrarini confirmed that the study was "just to get a conversation started. It wasn't intended to be a publishable piece" with scientifically reliable results.
The executive summary of the Aquila focus group study is available on Prof. Ferrarini's "Mining and Communities" blog.
What Ever Happened to Aquila's Focus Group Report?
Jan. 7, 2019 - Almost six months ago, Aquila Resources promised that an "executive summary" of their focus group data would be made available "in the coming weeks."
It's never been released.
Supposedly, the focus groups, conducted last spring, brought together a representative sample of local residents to express their opinions about Aquila's proposed "Back Forty" mine.
Aquila and the study group author, Prof. Tawni Hunt-Ferrarini, have been contacted but they have not provided study results or a firm publication date.
Jan. 7, 2019 - Almost six months ago, Aquila Resources promised that an "executive summary" of their focus group data would be made available "in the coming weeks."
It's never been released.
Supposedly, the focus groups, conducted last spring, brought together a representative sample of local residents to express their opinions about Aquila's proposed "Back Forty" mine.
Aquila and the study group author, Prof. Tawni Hunt-Ferrarini, have been contacted but they have not provided study results or a firm publication date.
Aquila Needs Cash Infusion in 2019
Dec. 24, 2018 - At its current rate of spending, mine prospector Aquila Resources, Inc., has about a year to go before it runs out of money -- unless it gets additional funding from the investment community.
That's the bottom line of a review of Aquila's financial statements by a source who is a certified public accountant.
Aquila's financial reports indicate that, at the end of the third quarter of 2018, the company had about $11 million cash in hand, and it was spending about $14 million a year. The money has come from stockholder investments and advance payments on future production, called "streaming agreements."
Aquila is hoping to mine for gold, zinc, copper, silver and lead at its Back Forty mine site on the Menominee River west of Stephenson, Michigan. It has spent more than $90 million on the project so far. It will need to raise more money to continue planning, permitting and defending the project from legal challenges by mine opponents.
The company also estimates that it will need $294 million dollars in capital expenditures to build mining and processing facilities at the Back Forty site.
The most direct path to raising such a large amount of money is the sale of a majority interest in the company to a deep-pockets investor with mining experience. Aquila recently installed Jacques Perron on its board of directors. Perron is known for his expertise in the sale and acquisition of mining properties.
Currently, four investors have a significant ownership interest in Aquila Resources: Osisko Gold Royalties Ltd, Orion Mine Finance, Ruffer LLP and HudBay Minerals Inc. Together they own 53 percent of the company. Only Hudbay has experience as a mine operator.
In 2013, Hudbay backed out of an agreement to put the Back Forty project into operation. However, it remains a minority owner of Aquila Resources, Inc.
Aquila traded at 28 cents per share on June 4, 2018, the day it received its fourth and final permit for the Back Forty mine project. Since then, it has dropped 54 percent to 13 cents per share. Possible reasons are flat or declining commodities prices, a general lack of interest in mine financing and, perhaps, a lack of investor confidence in Aquila's ability to overcome regulatory and legal roadblocks to the Back Forty project.
Aquila Resources declined to comment on this report.
Dec. 24, 2018 - At its current rate of spending, mine prospector Aquila Resources, Inc., has about a year to go before it runs out of money -- unless it gets additional funding from the investment community.
That's the bottom line of a review of Aquila's financial statements by a source who is a certified public accountant.
Aquila's financial reports indicate that, at the end of the third quarter of 2018, the company had about $11 million cash in hand, and it was spending about $14 million a year. The money has come from stockholder investments and advance payments on future production, called "streaming agreements."
Aquila is hoping to mine for gold, zinc, copper, silver and lead at its Back Forty mine site on the Menominee River west of Stephenson, Michigan. It has spent more than $90 million on the project so far. It will need to raise more money to continue planning, permitting and defending the project from legal challenges by mine opponents.
The company also estimates that it will need $294 million dollars in capital expenditures to build mining and processing facilities at the Back Forty site.
The most direct path to raising such a large amount of money is the sale of a majority interest in the company to a deep-pockets investor with mining experience. Aquila recently installed Jacques Perron on its board of directors. Perron is known for his expertise in the sale and acquisition of mining properties.
Currently, four investors have a significant ownership interest in Aquila Resources: Osisko Gold Royalties Ltd, Orion Mine Finance, Ruffer LLP and HudBay Minerals Inc. Together they own 53 percent of the company. Only Hudbay has experience as a mine operator.
In 2013, Hudbay backed out of an agreement to put the Back Forty project into operation. However, it remains a minority owner of Aquila Resources, Inc.
Aquila traded at 28 cents per share on June 4, 2018, the day it received its fourth and final permit for the Back Forty mine project. Since then, it has dropped 54 percent to 13 cents per share. Possible reasons are flat or declining commodities prices, a general lack of interest in mine financing and, perhaps, a lack of investor confidence in Aquila's ability to overcome regulatory and legal roadblocks to the Back Forty project.
Aquila Resources declined to comment on this report.
Federal Judge Rejects Challenge to Back Forty Wetland Permit
Dec. 21, 2018 - On Dec. 19, U.S. District Court Judge William C. Griesbach dismissed the Menominee Indian Tribe's lawsuit challenging the state of Michigan's authority to issue a wetland permit for the proposed Back Forty mine in Menominee County, Michigan.
Under a 1984 agreement, the U.S. Environmental Protection Agency (EPA) gave the state of Michigan authority to issue wetland permits under the Clean Water Act.
The Menominee Indian Tribe challenged that delegation of authority on grounds that the Menominee River is an interstate waterway which is under the exclusive jurisdiction of the federal government.
Griesbach rejected that argument on procedural grounds. He held that sovereign immunity protects federal agencies from citizen lawsuits under the Clean Water Act, and that the delegation of permitting authority to the state of Michigan was not subject to review under the Administrative Procedures Act.
Griesbach also rejected the tribe's claim that the EPA abused its discretion when it withdrew its objections to the Back Forty wetland permit. Finally, he determined that the EPA had no duty to consult with the tribe under the National Historic Preservation Act (NHPA).
A challenge to the Back Forty wetland permit was filed by the Coalition to SAVE the Menominee River, Inc., in November. That case is still being litigated. In addition, two contested cases, with three different plaintiffs, are still under way at the state level.
Dec. 21, 2018 - On Dec. 19, U.S. District Court Judge William C. Griesbach dismissed the Menominee Indian Tribe's lawsuit challenging the state of Michigan's authority to issue a wetland permit for the proposed Back Forty mine in Menominee County, Michigan.
Under a 1984 agreement, the U.S. Environmental Protection Agency (EPA) gave the state of Michigan authority to issue wetland permits under the Clean Water Act.
The Menominee Indian Tribe challenged that delegation of authority on grounds that the Menominee River is an interstate waterway which is under the exclusive jurisdiction of the federal government.
Griesbach rejected that argument on procedural grounds. He held that sovereign immunity protects federal agencies from citizen lawsuits under the Clean Water Act, and that the delegation of permitting authority to the state of Michigan was not subject to review under the Administrative Procedures Act.
Griesbach also rejected the tribe's claim that the EPA abused its discretion when it withdrew its objections to the Back Forty wetland permit. Finally, he determined that the EPA had no duty to consult with the tribe under the National Historic Preservation Act (NHPA).
A challenge to the Back Forty wetland permit was filed by the Coalition to SAVE the Menominee River, Inc., in November. That case is still being litigated. In addition, two contested cases, with three different plaintiffs, are still under way at the state level.
Changes to Back Forty Mining Permit "Significant" According to Michigan Regulators
Dec. 12, 2018 - Proposed changes to the water treatment plan and site layout of Aquila Resources' Back Forty mine are "significant," according to Melanie Humphrey of the Michigan Department of Environmental Quality (MDEQ).
The changes were detailed in a mining permit amendment application filed by Aquila Resources last month. The company is seeking to modify the mining permit that it received from MDEQ almost two years ago.
The "significant" finding means that the Oil, Gas, and Minerals Division of the MDEQ will conduct a thorough review of the proposed changes to the Back Forty mine. The changes are necessary to reconcile differences between the mining permit and the the wetland permit that was issued to the company on June 4. The review process will include an opportunity for public comment.
An informational meeting on the proposed mining permit amendments will be scheduled, Humphrey said. A hearing on the changes is optional at the discretion of MDEQ.
Dec. 12, 2018 - Proposed changes to the water treatment plan and site layout of Aquila Resources' Back Forty mine are "significant," according to Melanie Humphrey of the Michigan Department of Environmental Quality (MDEQ).
The changes were detailed in a mining permit amendment application filed by Aquila Resources last month. The company is seeking to modify the mining permit that it received from MDEQ almost two years ago.
The "significant" finding means that the Oil, Gas, and Minerals Division of the MDEQ will conduct a thorough review of the proposed changes to the Back Forty mine. The changes are necessary to reconcile differences between the mining permit and the the wetland permit that was issued to the company on June 4. The review process will include an opportunity for public comment.
An informational meeting on the proposed mining permit amendments will be scheduled, Humphrey said. A hearing on the changes is optional at the discretion of MDEQ.
Casperson Drops Effort to Limit Local Authority Over Mines and Quarries
Dec. 5, 2018 - State Sen. Tom Casperson (R-Escanaba) withdrew SB-1210 from the Natural Resources Committee today. The bill, which was sponsored by Casperson, would have restricted the ability of local units of government to regulate quarries and mines like the proposed Back Forty project in Lake Township. Casperson dropped his effort to get the bill voted out of committee and into the full Senate after a parade of witnesses came forward to testify against the legislation, which was opposed by the Michigan Township Association and local government officials.
Lake Township claims the authority to regulate the proposed Back Forty mine under its Zoning Ordinance and its Mineral Extraction Ordinance. The Casperson bill would have allowed Back Forty developer Aquila Resources to circumvent those local rules.
Dec. 5, 2018 - State Sen. Tom Casperson (R-Escanaba) withdrew SB-1210 from the Natural Resources Committee today. The bill, which was sponsored by Casperson, would have restricted the ability of local units of government to regulate quarries and mines like the proposed Back Forty project in Lake Township. Casperson dropped his effort to get the bill voted out of committee and into the full Senate after a parade of witnesses came forward to testify against the legislation, which was opposed by the Michigan Township Association and local government officials.
Lake Township claims the authority to regulate the proposed Back Forty mine under its Zoning Ordinance and its Mineral Extraction Ordinance. The Casperson bill would have allowed Back Forty developer Aquila Resources to circumvent those local rules.
Casperson Bill Would Restrict Local Control Over Mining Projects
Nov. 30, 2018 - State Sen. Tom Casperson (R-Escanaba) has introduced a bill that would strictly limit the ability of local units of government to regulate sand and gravel pits, and mining operations such as the proposed Back Forty project in Lake Township.
The bill would reduce the authority of local governments by amending the Michigan Zoning Enabling Act. Lake Township has cited that statute as part of its legal justification for exerting control over Aquila Resources' proposed gold and zinc mine on River Road, due west of Stephenson, Michigan, in Menominee County.
Senate Bill 1210 and its companion House Bill 6530 would limit the authority of local governments to regulate dust, noise, ground vibration and truck loading times at a gravel pit or mine. It would also make it much easier for companies like Aquila Resources to get local permission to open a facility. The bill would require local governments to approve a project if the developer submitted a basic plan for construction, operation and site restoration. More detailed local requirements would be preempted by the statute.
The legislation is "strongly opposed" by the Michigan Township Association as a threat to local control over land use and development, according to the group's legislative liaison, Tom Frazier.
The Senate bill is in the Natural Resources Committee, which is chaired by Casperson. A hearing was held on Wednesday, but no action was taken. Frazier anticipates that the committee will take up the matter again next Tuesday. He said that the House Committee on Transportation and Infrastructure would probably hold a hearing on its version of the bill next Thursday.
Nov. 30, 2018 - State Sen. Tom Casperson (R-Escanaba) has introduced a bill that would strictly limit the ability of local units of government to regulate sand and gravel pits, and mining operations such as the proposed Back Forty project in Lake Township.
The bill would reduce the authority of local governments by amending the Michigan Zoning Enabling Act. Lake Township has cited that statute as part of its legal justification for exerting control over Aquila Resources' proposed gold and zinc mine on River Road, due west of Stephenson, Michigan, in Menominee County.
Senate Bill 1210 and its companion House Bill 6530 would limit the authority of local governments to regulate dust, noise, ground vibration and truck loading times at a gravel pit or mine. It would also make it much easier for companies like Aquila Resources to get local permission to open a facility. The bill would require local governments to approve a project if the developer submitted a basic plan for construction, operation and site restoration. More detailed local requirements would be preempted by the statute.
The legislation is "strongly opposed" by the Michigan Township Association as a threat to local control over land use and development, according to the group's legislative liaison, Tom Frazier.
The Senate bill is in the Natural Resources Committee, which is chaired by Casperson. A hearing was held on Wednesday, but no action was taken. Frazier anticipates that the committee will take up the matter again next Tuesday. He said that the House Committee on Transportation and Infrastructure would probably hold a hearing on its version of the bill next Thursday.
Aquila Resources Neck Deep in Back Forty Litigation
Nov. 18, 2018 - The legal challenges against Aquila Resources' Back Forty mine project just keep piling up.
The Coalition to SAVE the Menominee River, Inc., filed a lawsuit against the mine in federal court on Nov. 13, 2018, claiming that the federal government mishandled the project's wetland permit. A similar lawsuit was filed on Jan. 22, 2018, by the Menominee Indian Tribe of Wisconsin.
Meanwhile, two challenges to the Back Forty mining permit are wrapping up, with decisions pending, and three challenges to the project's wetland permit are just getting started. These "contested cases" have been assigned to Administrative Law Judge Daniel Pulter in the Michigan Department of Licensing and Regulatory Affairs.
The petitions to contest the Back Forty mining permit were filed by Thomas Boerner, who owns land adjacent to the mine site, and by the Menominee Tribe.
Boerner claims that the Michigan Department of Environmental Quality (MDEQ) should not have issued the Back Forty mining permit because Aquila's application was incomplete and inaccurate, did not address planned underground mining activities, and did not establish that its mining plans would protect the environment from serious harm.
Boerner’s challenge to the Back Forty mining permit was combined with a second petition filed by the Menominee Tribe. Like Boerner, the tribe claims that Aquila's permit application was incomplete and did not adequately address potential negative impacts of the proposed Back Forty mine. The tribe also claims that Aquila's inventory of Menominee cultural resources at the mine site is inadequate, and so is its plan for preserving archeological resources that may be discovered unexpectedly during mine operations.
While Judge Pulter evaluates those arguments, he must also deal with three new complaints filed last summer.
In one petition, the Menominee Tribe claims it was unlawful for MDEQ Director Heidi Grether to issue a wetland permit over the objections of her own review team, which found that Aquila's project plan was incomplete and did not adequately protect the public interest in waterways and other natural resources at the mine site.
Similarly, the Coalition to SAVE the Menominee River argues that it was unlawful for the MDEQ to rely on a long list of permit conditions to address fundamental shortcomings in Aquila's permit application. The Coalition also claims that the Menominee River is an interstate waterway, which means that the wetland permit should have been handled by the federal government, not by the state of Michigan. If the Coalition prevails on that claim, the wetland permit would be void and the Aquila would have to start over with the U.S. Environmental Protection Agency and the Army Corps of Engineers.
Like the Menominee Tribe, petitioner Boerner argues that it was wrong for the MDEQ director to issue the wetland permit over the objections of her staff. He also argues that operations at the Back Forty mine would unlawfully pollute the environment and impair his property values and quality of life as a landowner adjacent to the mine site.
Along with its petitions for review at the state level, the Menominee Tribe has gone to federal court to challenge the delegation of the Back Forty wetland permit. The tribe argues that, under the Clean Water Act, only federal agencies can issue the permit for a project on the Menominee River because it is an interstate waterway.
Finally, and most recently, the Coalition to SAVE the Menominee River has filed its own lawsuit in federal court. Like the Menominee Tribe, it claims that, under the Clean Water Act, only federal agencies, not the state of Michigan, have the power to issue the Back Forty wetland permit. The Coalition also argues that the EPA was wrong to withdraw its objections to the permit because they were never fully addressed by the mining company. Instead, then EPA allowed the state of Michigan to issue a permit with many conditions to be resolved at a later date.
Nov. 18, 2018 - The legal challenges against Aquila Resources' Back Forty mine project just keep piling up.
The Coalition to SAVE the Menominee River, Inc., filed a lawsuit against the mine in federal court on Nov. 13, 2018, claiming that the federal government mishandled the project's wetland permit. A similar lawsuit was filed on Jan. 22, 2018, by the Menominee Indian Tribe of Wisconsin.
Meanwhile, two challenges to the Back Forty mining permit are wrapping up, with decisions pending, and three challenges to the project's wetland permit are just getting started. These "contested cases" have been assigned to Administrative Law Judge Daniel Pulter in the Michigan Department of Licensing and Regulatory Affairs.
The petitions to contest the Back Forty mining permit were filed by Thomas Boerner, who owns land adjacent to the mine site, and by the Menominee Tribe.
Boerner claims that the Michigan Department of Environmental Quality (MDEQ) should not have issued the Back Forty mining permit because Aquila's application was incomplete and inaccurate, did not address planned underground mining activities, and did not establish that its mining plans would protect the environment from serious harm.
Boerner’s challenge to the Back Forty mining permit was combined with a second petition filed by the Menominee Tribe. Like Boerner, the tribe claims that Aquila's permit application was incomplete and did not adequately address potential negative impacts of the proposed Back Forty mine. The tribe also claims that Aquila's inventory of Menominee cultural resources at the mine site is inadequate, and so is its plan for preserving archeological resources that may be discovered unexpectedly during mine operations.
While Judge Pulter evaluates those arguments, he must also deal with three new complaints filed last summer.
In one petition, the Menominee Tribe claims it was unlawful for MDEQ Director Heidi Grether to issue a wetland permit over the objections of her own review team, which found that Aquila's project plan was incomplete and did not adequately protect the public interest in waterways and other natural resources at the mine site.
Similarly, the Coalition to SAVE the Menominee River argues that it was unlawful for the MDEQ to rely on a long list of permit conditions to address fundamental shortcomings in Aquila's permit application. The Coalition also claims that the Menominee River is an interstate waterway, which means that the wetland permit should have been handled by the federal government, not by the state of Michigan. If the Coalition prevails on that claim, the wetland permit would be void and the Aquila would have to start over with the U.S. Environmental Protection Agency and the Army Corps of Engineers.
Like the Menominee Tribe, petitioner Boerner argues that it was wrong for the MDEQ director to issue the wetland permit over the objections of her staff. He also argues that operations at the Back Forty mine would unlawfully pollute the environment and impair his property values and quality of life as a landowner adjacent to the mine site.
Along with its petitions for review at the state level, the Menominee Tribe has gone to federal court to challenge the delegation of the Back Forty wetland permit. The tribe argues that, under the Clean Water Act, only federal agencies can issue the permit for a project on the Menominee River because it is an interstate waterway.
Finally, and most recently, the Coalition to SAVE the Menominee River has filed its own lawsuit in federal court. Like the Menominee Tribe, it claims that, under the Clean Water Act, only federal agencies, not the state of Michigan, have the power to issue the Back Forty wetland permit. The Coalition also argues that the EPA was wrong to withdraw its objections to the permit because they were never fully addressed by the mining company. Instead, then EPA allowed the state of Michigan to issue a permit with many conditions to be resolved at a later date.
Why Has Aquila's Stock Price Plummeted?
Nov. 7, 2018 - (Revised) Aquila Resources' stock price has dropped to a 52-week low, despite the fact that state regulators have green-lighted its Back Forty mine west of Stephenson, Michigan.
The stock price has declined 57 percent, to 12 cents a share, since June 4, 2018, when Aquila received its fourth and final state permit for the project.
What's going on?
The first place to look for an answer is the price of gold and zinc, experts say. Those two minerals make up 82 percent of the Back Forty's anticipated metals production.
The price of gold is down 10 percent from its 52-week high. So, gold mining companies aren't feeling an urgent need to seek new supplies, said investment analyst Dave Forest of Pierce Points (piercepoints.com).
Meanwhile, zinc is down 29 percent from its 52-week high.
The zinc price decline is driven by concerns about a tariff-driven trade war, and a general cooling off of the Chinese economy, which drives much of the market for global minerals, according to Forest and Prof. Gary Campbell, a mining economist with Michigan Technological University in Houghton, Mich.
There is also a general lack of interest in the mining industry among investors, Forest said.
"Financing of mining projects is not a hot area right now," Forest said. "There are not as many deals being done as there were five or six years ago."
Aquila says it needs at least $263 million to open the Back Forty, on top of the $90 million it has already spent on planning and permitting. It is looking for a partner with deep pockets to capitalize the open-pit mine and mill.
So far, no one has committed big money to get the project into the construction phase.
The lack of an immediate development deal isn't fatal for the Back Forty project, Forest said. However, it may have disappointed investors who were hoping the project would move forward as soon as the final permit was issued, and that in turn may have affected the stock price.
Finally, investors may be reacting to the many roadblocks that face the Back Forty project, even though all the permits for the mine have now been issued.
Two administrative challenges to the project have been grinding through the hearings process for almost two years. Both target Aquila's Back Forty mining permit. Final arguments for those contested cases are being drafted now, and administrative law judge Daniel Pulter could issue a decision before the end of the year.
As those proceedings wind down, however, three additional contested case petitions have been filed on Aquila's recently-issued wetland permit. The Menominee Indian Tribe of Wisconsin has also challenged the wetland permit in federal court.
And, despite the company's claims, its permit applications aren't completely done yet. The site plan in the mining permit must be amended so it matches the layout in the wetland permit. And the wetland permit came with 28 pages of conditions that must be met before the Back Forty gets a final go-ahead from state regulators.
There's more. Aquila wants to cut a county road that passes through the mine site, but it hasn't submitted a proposal yet. And Lake Township, where the Back Forty would be located, has implemented zoning-related ordinances that must be addressed at some point, either by negotiations or in a court battle.
These unresolved issues create uncertainty about the prospects for the Back Forty mine. That may be driving investors away from Aquila Resources toward other, more promising investment opportunities.
Aquila Resources did not respond to repeated requests for comment on this report, and has not issued any public statement about its declining stock price.
Nov. 7, 2018 - (Revised) Aquila Resources' stock price has dropped to a 52-week low, despite the fact that state regulators have green-lighted its Back Forty mine west of Stephenson, Michigan.
The stock price has declined 57 percent, to 12 cents a share, since June 4, 2018, when Aquila received its fourth and final state permit for the project.
What's going on?
The first place to look for an answer is the price of gold and zinc, experts say. Those two minerals make up 82 percent of the Back Forty's anticipated metals production.
The price of gold is down 10 percent from its 52-week high. So, gold mining companies aren't feeling an urgent need to seek new supplies, said investment analyst Dave Forest of Pierce Points (piercepoints.com).
Meanwhile, zinc is down 29 percent from its 52-week high.
The zinc price decline is driven by concerns about a tariff-driven trade war, and a general cooling off of the Chinese economy, which drives much of the market for global minerals, according to Forest and Prof. Gary Campbell, a mining economist with Michigan Technological University in Houghton, Mich.
There is also a general lack of interest in the mining industry among investors, Forest said.
"Financing of mining projects is not a hot area right now," Forest said. "There are not as many deals being done as there were five or six years ago."
Aquila says it needs at least $263 million to open the Back Forty, on top of the $90 million it has already spent on planning and permitting. It is looking for a partner with deep pockets to capitalize the open-pit mine and mill.
So far, no one has committed big money to get the project into the construction phase.
The lack of an immediate development deal isn't fatal for the Back Forty project, Forest said. However, it may have disappointed investors who were hoping the project would move forward as soon as the final permit was issued, and that in turn may have affected the stock price.
Finally, investors may be reacting to the many roadblocks that face the Back Forty project, even though all the permits for the mine have now been issued.
Two administrative challenges to the project have been grinding through the hearings process for almost two years. Both target Aquila's Back Forty mining permit. Final arguments for those contested cases are being drafted now, and administrative law judge Daniel Pulter could issue a decision before the end of the year.
As those proceedings wind down, however, three additional contested case petitions have been filed on Aquila's recently-issued wetland permit. The Menominee Indian Tribe of Wisconsin has also challenged the wetland permit in federal court.
And, despite the company's claims, its permit applications aren't completely done yet. The site plan in the mining permit must be amended so it matches the layout in the wetland permit. And the wetland permit came with 28 pages of conditions that must be met before the Back Forty gets a final go-ahead from state regulators.
There's more. Aquila wants to cut a county road that passes through the mine site, but it hasn't submitted a proposal yet. And Lake Township, where the Back Forty would be located, has implemented zoning-related ordinances that must be addressed at some point, either by negotiations or in a court battle.
These unresolved issues create uncertainty about the prospects for the Back Forty mine. That may be driving investors away from Aquila Resources toward other, more promising investment opportunities.
Aquila Resources did not respond to repeated requests for comment on this report, and has not issued any public statement about its declining stock price.
Agency Declines Invitation to Discuss Back Forty Permit
Oct. 16, 2018 - The agency that issued a wetlands permit for the proposed Back Forty mine has refused to appear before the Menominee City Council to answer questions about the project.
The invitation to appear was sent to the Water Resources Division of the Michigan Department of Environmental Quality by city manager Tony Graff. He shared the response from division assistant director Kimberly Fish with the council at its Monday, Oct. 15, meeting.
In her e-mail reply to Graff, Fish said her staff was not available because of other commitments, and she challenged the city council’s motives for asking her staff to attend a council meeting.
“I’m wondering if the city council really has questions about the permit, or if they are just trying to provide another venue for the public to express their views about the project,” she said.
Fish said additional public comment “is no longer relevant” to her agency because the wetlands permit for the mine has been issued and the public comment period has closed.
Fish referred council member Frank Pohlmann, who has questioned the mining project, to the MDEQ website for further information about why the wetlands permit was issued. However, she also offered to respond to "specific questions" from the council about the permit.
Pohlmann said after the council meeting that he intended to follow up on that offer.
Oct. 16, 2018 - The agency that issued a wetlands permit for the proposed Back Forty mine has refused to appear before the Menominee City Council to answer questions about the project.
The invitation to appear was sent to the Water Resources Division of the Michigan Department of Environmental Quality by city manager Tony Graff. He shared the response from division assistant director Kimberly Fish with the council at its Monday, Oct. 15, meeting.
In her e-mail reply to Graff, Fish said her staff was not available because of other commitments, and she challenged the city council’s motives for asking her staff to attend a council meeting.
“I’m wondering if the city council really has questions about the permit, or if they are just trying to provide another venue for the public to express their views about the project,” she said.
Fish said additional public comment “is no longer relevant” to her agency because the wetlands permit for the mine has been issued and the public comment period has closed.
Fish referred council member Frank Pohlmann, who has questioned the mining project, to the MDEQ website for further information about why the wetlands permit was issued. However, she also offered to respond to "specific questions" from the council about the permit.
Pohlmann said after the council meeting that he intended to follow up on that offer.
Comment: Aquila Letter Misleads in Many Ways
Oct. 14, 2018 - A letter from Aquila Resources’ Chantae Lessard that was published in the Oct. 12 edition of the Eagle Herald newspaper leaves out or distorts key facts to argue that Lake Township officials have enacted “illegal” ordinances to “prevent the project from moving forward.”
Let’s correct the record.
Ms. Lessard begins her letter by selectively quoting Part 632, Nonferrous Metallic Mineral Mining, of the Natural Resources and Environmental Protection Act (NREPA), presumably to support her claim that Lake Township’s mining regulations are unlawful. While it is true that the statute puts limits on local regulation of mines like the Back Forty, it also expressly allows regulations that do not “duplicate, contradict, or conflict” with the statute (MI Comp L § 324.63203(4)).
Oct. 14, 2018 - A letter from Aquila Resources’ Chantae Lessard that was published in the Oct. 12 edition of the Eagle Herald newspaper leaves out or distorts key facts to argue that Lake Township officials have enacted “illegal” ordinances to “prevent the project from moving forward.”
Let’s correct the record.
Ms. Lessard begins her letter by selectively quoting Part 632, Nonferrous Metallic Mineral Mining, of the Natural Resources and Environmental Protection Act (NREPA), presumably to support her claim that Lake Township’s mining regulations are unlawful. While it is true that the statute puts limits on local regulation of mines like the Back Forty, it also expressly allows regulations that do not “duplicate, contradict, or conflict” with the statute (MI Comp L § 324.63203(4)).
Furthermore – and this is key – Lake Township does not rely exclusively on Part 632 for its power to regulate mining activities. It also relies on its zoning authority and on its overarching duty to protect the public under the laws of the State of Michigan. This is all documented in the Lake Township Zoning Ordinance, Chapter 14, Special Land Uses, in the township’s Mineral Extraction Ordinance, and in two reports I’ve published here (“Lake Township Updates Zoning Regulations for Mines” and “Lake Township Clarifies Authority Over Mining Operations").
Ms. Lessard goes on to complain that Lake Township has enacted a resolution that prevents officials from communicating with Aquila Resources. What the resolution actually says is that business with the township shall be conducted in public, on the record and with a quorum of township officials in attendance, not in private meetings between an outside entity and individual town officials (Lake Township Resolution No. 071217A). In other words, in Lake Township the public’s business is to be conducted in public, not in secret, back-room conversations.
Ms. Lessard also states that Lake Township “has turned us away when we have tried to work collaboratively with them to address their concerns” about the Back Forty project. In truth, under the town’s zoning ordinance, if Aquila submits a letter of request, and puts money in escrow to cover the township’s costs, the zoning staff will meet with Aquila and explain, on the record and in detail, what the township is looking for from the company. So far Aquila has chosen not to engage with Lake Township in these first steps toward an official review of its proposed mining project.
Finally, in her letter, Ms. Lessard attacks Lake Township officials for “actively opposing” the mine, “making up their own rules based on personal opinion” and violating their “moral obligation” to work with the company in good faith. In fact, the town board has not taken a position on the mine, pro or con. Instead, it has passed laws to protect the township from the potential negative impacts of a huge industrial project. That’s what elected public officials are “morally obligated” to do – regardless of what their personal opinions may be.
Lake Township Updates Zoning Standards for Mines
Sept. 15, 2018 - Proposed amendments to Lake Township zoning regulations would refine the standards for reviewing a commercial extraction operation as a special land use. The revisions to Chapter 14 of the township Zoning Ordinance would also document the legal justification for the use of zoning to exert local control over mines such as the proposed Back Forty project on River Road, due west of Stephenson, Michigan, in Menominee County.
The township’s planning commission will hold a public hearing on the revised special land use zoning ordinance amendments on Sept. 18, 2018. Following the public hearing, the planning commission will review the comments submitted and make a recommendation to the Township Board for action.
The ordinance, as proposed, contains a new section that explains the legal authority for the town’s zoning regulations. It cites case law, the Michigan Zoning Enabling Act, and the state constitution to assert that zoning is a unique local function that is protected from encroachment by other laws.
The added language in the zoning ordinance, seems to conflict with the stated position of Back Forty mine developer Aquila Resources, Inc. The company indicated in its 2016 mining permit application that “the only applicable local approval for the project may be a county building construction permit,” apparently taking the position that Part 632 of the Natural Resources and Environmental Protection Act pre-empts Lake Township regulations.
In the revised ordinance language, the township expressly adopts the state standard for approving or rejecting a proposed mineral extraction project.
Under that rule, the test is whether “very serious consequences” would occur if a mine or other, similar, project was allowed to operate in the township.
The township would use an analysis of multiple factors to make the final decision on a Chapter 14 Special Land Use application prior to approval for a project. As a Michigan court recognized in Silva v. Ada Township, a 1982 case, there is a public benefit in extracting and using natural resources, especially if no cost-effective alternative exists. Alternatively, the court also recognized that, in some cases, the negative impact of a project may outweigh the positives. In the proposed ordinance revision, Lake Township describes the factors to be considered, as follows:
The revised Chapter 14 also describes application requirements for approval of a mine-related special land usel. The applicant would need to provide an environmental impact statement, including a soils analysis for health hazards such as blastomycosis, a description of truck routes and traffic volumes, a ground- and surface-water analysis, including an assessment of possible impacts on private wells, and a full accounting of the applicant’s past record of compliance with environmental rules.
The applicant would also need to provide a complete description of the proposed project, including a site plan showing structures, parking and signage, security fencing, proposed berms and landscaping, access routes, overburden piles and many other details, such as hours of operation, traffic flows, blasting, and hazardous materials handling and storage. The applicant would be required to have full vehicle wash facilities from day one of construction, would need to file an economic impact study, a site rehabilitation plan, a spill response plan, an emergency management plan, and proof of insurance. It would also need to provide a bond or security deposit sufficient to cover potential road repairs and site rehabilitation not covered by state law.
In addition to mining operations, the zoning regulations apply to commercial extraction and processing of topsoil, stone, rock, sand, gravel, lime and other resources when done a very large quantities.
A copy of the proposed revised ordinance may be reviewed at the MSU extension office on Highway 41 in Stephenson.
In regard to the Sept. 18 hearing, the township has emphasized that the event is a time for the public to speak (up to three minutes) about the hearting topic only, which in this case is the amended language in the Zoning Ordinance - Chapt. 14, Special Land Uses - Commercial Extraction. The hearing is not about the proposed Back Forty mine. The topic being addressed is the new expanded and more explanatory language that is proposed to be added to the Lake Township Zoning Ordinance.
Lake Township Clarifies Authority Over Mining Operations
Sept. 14, 2018 - Lake Township has amended its local Mineral Extraction Ordinance that governs projects such as the proposed Back Forty open pit mine on River Road, due west of Stephenson, Michigan, in Menominee County.
The revised Mineral Extraction Ordinance was adopted unanimously by the township board on August 8. The changes were the result of a routine review of ordinances. Language was added to clarify the township’s legal authority to regulate metallic sulfide mining of metals such as gold, silver, zinc, nickel, copper and lead.
In the Mineral Extraction Ordinance, the township contends that the Michigan nonferrous mineral mining law, Part 632 of the Natural Resources and Environmental Protection Act, is primarily intended to prevent acid mine drainage, which is a unique hazard of mines such as the proposed Back Forty.
The ordinance acknowledges that suspension of mine operations, control of acid mine drainage, and the regulation of certain on-site mine activities are the sole responsibility of the Michigan Department of Environmental Quality (MDEQ). However, the ordinance also states that a large number of other factors are outside the scope of MI DEQ authority, and are left to local units of government to regulate independently, or in cooperation with the MDEQ.
This sets up a potential conflict with Back Forty mine developer Aquila Resources, Inc. The company stated in its 2016 mining permit application that “the only applicable local approval for the project may be a county building construction permit,” apparently taking the position that Part 632 of the Natural Resources and Environmental Protection Act pre-empts Lake Township zoning regulations.
In the Mineral Extraction Ordinance, the township asserts independent authority to regulate fencing, road traffic, hours of operation and blasting, noise limits and dust control measures that do not involve the use of chemicals. It also claims the right to monitor water quality (which is in Part 623), conduct site inspections and charge fees for mining projects. It further asserts the right, subject to review by the MDEQ, to regulate setbacks, vibration and light emissions, dust control that involves the use of chemicals, and physical mine pit hazards. Additionally, the township claims joint authority over environmental and wetlands protection, and the right to require an environmental impact assessment of mine impacts not specifically addressed by the state statute. Finally, it claims the right to require financial assurances to pay for local mining impacts not covered by state law.
The Mineral Extraction Ordinance is predicated on the fact that the applicant has already received from the township the special land use approval which takes place through the township's zoning review process and has been granted the approval to operate a commercial mining operation.
Why State Experts Said “No” to Back Forty Wetlands Permit
Aug. 17, 2018 – Michigan Department of Environmental Quality staff members concluded that Aquila Resources’ application for a Back Forty mine wetlands permit was incomplete and inaccurate in a 47-page report to their boss, MDEQ Director Heidi Grether, on April 30, 2018. Despite that highly critical report, Grether overruled her staff and issued the wetlands permit to Aquila, an exploration company that has never developed a mine.
Here are the key findings from the MDEQ staff review of the permit application, which would authorize Aquila to fill or disrupt wetlands on the Back Forty mine site.
1. Under Part 301, Inland Lakes and Streams, of the Michigan Natural Resources and Environmental Protection Act, Aquila Resources was required to show that its mine would not damage navigable rivers and streams, or otherwise harm the environment, in violation of the public trust. Aquila also needed to show that no reasonable, less damaging alternatives to its project plan exist that would reduce the mine’s environmental impact. According to the MDEQ staff, Aquila failed both tests.
The Back Forty mine pit would be a 750-foot hole in the ground. It would have to be continuously pumped to keep it dry – miners call this “dewatering.” The pumping would lower the groundwater table and create a “drawdown envelope” where subsurface water drains into the mine. As part of its permit application, Aquila Resources was required to estimate groundwater drawdown and produce a “water budget” – an accounting of all the water that would flow into and out of the project area. Aquila used computer models to generate this information.
However, the MDEQ staff took issue with the company’s modeling efforts.
According to the April 30 staff report, Aquila used a faulty groundwater model and failed to incorporate actual site conditions into its analysis. As a result, the staff concluded that the company’s computer models probably underestimated the impact of the mine on groundwater, surface water and wetlands, assuming a seven-year life of mine.
Furthermore, the staff found that groundwater drawdown would occur on adjacent properties outside the Back Forty project boundaries – and that the impact area would expand if the mine operated for 16 years, as Aquila has proposed in communications with potential investors.
Aquila also incorrectly prepared its water budget and did not provide enough information for MDEQ staffers to determine how the Back Forty project would affect wetlands, even though the staff made repeated efforts to help the company come up with an accurate estimate. According to the report, MDEQ Wetland Mitigation Specialist Mike Pennington even provided Aquila with a sample analysis of wetlands impacts, to show the company what kind of modeling MDEQ was looking for. Instead, according to Pennington, Aquila continued to submit computer models that were based on incorrect assumptions. “The model is not well calibrated and may underestimate the amount [of] drawdown that is likely to occur under operating conditions of the mine,” Pennington concluded.
The staff also found that, despite the company’s assurances, acid mine wastes and toxic metals would probably migrate into groundwater and surface water after the mine was closed and the pit was backfilled.
Eric Chatterson, MDEQ Geology Specialist, observed that fractured bedrock in the pit walls would allow contaminants to flow underground and possibly reach residential wells downgrade from the mine site. Chatterson stated that Aquila had failed to provide an in-depth analysis of possible leakage from the backfilled pit, making it impossible to fully assess the risk of water contamination from the mine.
Chatterson also challenged Aquila’s plan to use limestone (which is mostly calcium carbonate) to neutralize the acidity of materials used to backfill the pit at the close of mine operations.
“The amount of carbonate required would be enormous,” Chatterson wrote, adding that Aquila had not documented the logistics and reliability of bringing that much buffering material to the mine site.
In conclusion, the staff report found “There is a high likelihood” that contaminants “will be observed in the groundwater that discharges into the Menominee River and the Shakey River.”
2. Under Part 303, Wetlands Protection, of the Michigan Natural Resources and Environmental Protection Act, Aquila was required to show it would minimize harm to wetlands on and around the project site, that the Back Forty project was in the public interest and that no less damaging alternatives exist that would reduce the mine’s environmental impact. The MDEQ staff found that Aquila’s permit application did not meet those requirements.
Simply put, a project is in the “public interest” if its benefits outweigh its negative impacts. The MDEQ staff concluded that the Back Forty mine, as proposed by Aquila Resources, failed this test.
On the positive side of the balance sheet, the staff considered Aquila’s claim that the Back Forty mine would create jobs, enhance economic development and generate tax revenue. On the negative side, the staff found overwhelming public opposition to the project. It noted that 14 public resolutions have been passed against the mine. It also observed that 3,418 comments were submitted as part of the wetlands permit review process, and virtually all of them (3,381) expressed opposition to the mine.
There were other negative factors in the mix: Aquila underestimated impacts to wetlands because it made a variety of mistakes in its computer modeling and failed to show that mine contaminants would not leach into ground- and surface waters, the mine would have a negative impact on fish and wildlife habitats, and on the scenic value of the Menominee River, and it would impinge on Menominee Indian ancestral sites of great cultural value to the tribe.
After weighing these pros and cons, the MDEQ staff concluded that the mine “is not demonstrated to be in the public interest.”
The staff reviewers also found fault with the company’s claim that there is no “reasonable and prudent” alternative to the mine as proposed. In particular, the staff concluded that the company failed to justify its claim that moving its ore processing plant to higher ground, away from the Menominee River, was not economically feasible, despite repeated efforts by MDEQ staff to encourage the company to do a full evaluation of the upland alternative. The first request was made in January of 2017, and it was repeated on March 8 and 19, 2018, according to MDEQ Environmental Quality Specialist Kristi Wilson. In response, Aquila claimed that it would be too costly to transport the ore to a processing plant farther away from the mine pit and the river. Wilson’s review suggests that the costs were overstated and that the company made no serious effort to evaluate the upland site for its ore processing facility.
Despite the evidence provided and the conclusions reached by her staff, MDEQ director Heidi Grether elected to award the wetlands permit, with a long list of conditions that Aquila Resources must satisfy before the permit actually takes effect.
Grether’s office was asked to explain her decision to overrule her staff and issue the wetlands permit, and responded with a written statement defending her actions.
“The key driver of the MDEQ’s issuance of this permit was the U.S. Environmental Protection Agency and Aquila Resources’ resolution of objections previously raised by the U.S. EPA,” the statement said. “That resolution created a permitting roadmap that the MDEQ followed to develop a permit that ensures Michigan’s wetlands and waterways will be protected.”
Michigan is one of two states that has delegated authority from the EPA to issue wetlands permits, and the federal agency participates in the permit review process. Grether’s statement seems to suggest that the EPA gave her the go-ahead to issue the Back Forty wetlands permit.
Ron Henriksen, of the Front 40 Environmental Fight accused Grether of using the EPA to “take the heat off her decision to grant the permit.”
“The only problem is that the State of Michigan has requirements for a Wetland Permit and Aquila did not do the necessary work to be granted a permit,” Henriksen said. “Director Grether still has not given an answer to why she reversed the recommendation of her Water Resource Division.”
“Director Grether‘s statement fails to acknowledge the unresolved objections to the permit’s issuance — outlined by DEQ staff who best understood the application, and its inadequacies,” added Kathleen Heideman of the Mining Action Group of the Upper Peninsula Environmental Coalition. “Grether never familiarized herself with the details of the Back Forty Wetland Permit application, and did not participate in the agency’s review.”
A Michigan Freedom of Information Act request has been filed for communications between Grether and other state officials concerning the decision. This might help further explain why Grether issued the permit. To date, the MDEQ has not provided those documents.
The wetlands permit for the Back Forty mine has now been challenged by three separate contested case petitions filed by local landowner Tom Boerner, the Menominee Indian Tribe of Wisconsin and the Coalition to SAVE the Menominee River, Inc.
In a related dispute, the Menominee Indian Tribe has filed a lawsuit in federal court that challenges the MDEQ’s authority to issue a wetlands permit in the first place. The tribe contends that the Menominee River, adjacent to the mine site, is an interstate waterway and, therefore, the Clean Water Act forbids the U.S. Environmental Protection Agency from delegating a wetlands permit review to a state agency.
Aquila Resources did not respond to a request for comment on this report.
Profit Estimates Down Slightly in Latest Back Forty Report
Aug. 8, 2018 - Mine developer Aquila Resources has completed its long-awaited Feasibility Study for the Back Forty project and it estimates slightly lower profits than the company has touted for the past four years.
The mine developer is a Canadian company, but all figures here are in U.S. Dollars.
According to the latest estimates, the open-pit phase of the Back Forty mine would produce $208 million in after-tax profits. That's down 1.3 percent from the $210.8 million dollar estimate provided by the mine developer as late as March 31, 2018. The anticipated after-tax return on investment declined almost 12 percent, from 32 to 28.2 percent.
The earlier, higher profit estimate came in a Preliminary Economic Analysis of the Back Forty project that was released in September of 2014. The new estimates were derived from the just-completed Feasibility Study, which is a more accurate picture of the mine's economic potential.
Despite an aggressive exploratory drilling program, the latest estimate of "proven and probable" mineral reserves is lower than previously reported. The current estimate is 11.7 million tonnes (a metric measure), down 22.5 percent from the 15.1 million tonnes in earlier company statements.
The capital cost of the project rose 12.5 percent over previous estimates, from $261.4 million to $294 million.
Aquila Resources provided the new profit, cost and resource estimates in a news release. It promised that the compete Feasibility Study would be available to the public not later than mid-September, 2018.
The company did not respond to a request for comment on this report.
Governor Signs Pro-Mining Bills
July 1, 2018 - Michigan Gov. Rick Snyder has signed five pro-mining bills sponsored by State Sen. Tom Casperson (R-Escanaba).
Senate Bill 652 sets up an appointed committee that can block rules proposed by the Michigan Department of Environmental Quality (DEQ).
Senate Bill 653 allows a permit applicant to go over the heads of DEQ staff and instead ask an appointed committee to decide whether a regulatory permit should be issued, and in what form -- even before a final DEQ decision has been made. Opponents of a permit have no right of appeal to the committee and cannot participate in the review process.
Senate Bill 654 establishes an appointed board to advise the governor on environmental issues.
Senate Bill 839 allows a mining operator to modify surface or underground facilities, under certain conditions, without getting an amended mining permit.
Senate Bill 840 allows mine operators, and others, to modify a waste treatment facility without obtaining a permit if the facility was previously approved by the state.
Senate Bills 652, 653 and 654 were signed by the governor on June 28. The other two bills were signed on May 23.
City Council Rejects Anti-Mine Resolution
June 19, 2018 - Opponents of a proposed open-pit mine on the Menominee River north of Green Bay, Wisconsin, were disappointed – and outraged – last night when the Menominee City Council failed to endorse a resolution opposing the mine.
The council voted 6-3 against the resolution, which is similar to one passed by the Menominee County Board last year. Numerous elected bodies on the Wisconsin side of the Menominee River have passed similar resolutions.
The council chambers were packed with a crowd wearing blue “Stop the Mine” T-shirts. Many stood up to urge the council to pass the resolution against the mine, which would be located about 150 feet from a pristine stretch of the Menominee River in Lake Township, northwest of the city of Menominee.
No one spoke in favor of the Back Forty project.
After the council vote, mine opponents returned to the microphone to denounce the six who voted to reject the resolution. Cries of “recall, recall” were heard as a succession of speakers told the council it had failed in its duty to represent the majority of city residents who oppose the mine.
Dale Burie, of the Coalition to SAVE the Menominee River, announced that the group will soon file a lawsuit challenging the state of Michigan’s decision to allow the mine to go into operation. The state issued the fourth and final permit for the mine earlier this month. The Menominee Indian Tribe of Wisconsin has already filed a lawsuit asking a federal court to overturn the project’s state mining permit. The tribe, and landowner Tom Boerner, have also challenged the permit in cases filed with a Michigan appeals panel.
DEQ Head Issues Wetlands Permit Over Staff Objections
June 4 - The director of the Michigan Department of Environmental Quality (DEQ), C. Heidi Grether, has awarded Aquila Resources a permit to fill or disrupt wetlands at the Back Forty mine and mill site. Gether's decision overrode the recommendation of DEQ staff that the permit should be denied.
Agency reviewers gave Grether a 47-page report arguing that the permit application should be rejected because the company had failed to correctly model the impact of mine dewatering on wetlands around the site, and had not shown that its mining plan was the least environmentally damaging alternative.
Mine opponents immediately cried foul when the permit was issued.
"I think it's illegal that they received a permit that was so clearly in violation of the Clean Water Act," said Kathleen Heideman of the Mining Action Group of the Upper Peninsula Environmental Coalition. "It says you're supposed to meet all these requirements in the application process, not in the permit. The final permit was just a bunch of half answers and promises."
In issuing the permit, "what (Grether) did was stick a knife in the back of all the hard-working people of the Water Resource Division who just did their jobs," and concluded that the permit should be denied, said Ron Henriksen of the Front Forty environmental group. "I don't know if it's political or whatever, but she should answer to the public on why she did what she did."
Grether's office did not immediately return a request for comment on the permit decision.
Ms. Lessard goes on to complain that Lake Township has enacted a resolution that prevents officials from communicating with Aquila Resources. What the resolution actually says is that business with the township shall be conducted in public, on the record and with a quorum of township officials in attendance, not in private meetings between an outside entity and individual town officials (Lake Township Resolution No. 071217A). In other words, in Lake Township the public’s business is to be conducted in public, not in secret, back-room conversations.
Ms. Lessard also states that Lake Township “has turned us away when we have tried to work collaboratively with them to address their concerns” about the Back Forty project. In truth, under the town’s zoning ordinance, if Aquila submits a letter of request, and puts money in escrow to cover the township’s costs, the zoning staff will meet with Aquila and explain, on the record and in detail, what the township is looking for from the company. So far Aquila has chosen not to engage with Lake Township in these first steps toward an official review of its proposed mining project.
Finally, in her letter, Ms. Lessard attacks Lake Township officials for “actively opposing” the mine, “making up their own rules based on personal opinion” and violating their “moral obligation” to work with the company in good faith. In fact, the town board has not taken a position on the mine, pro or con. Instead, it has passed laws to protect the township from the potential negative impacts of a huge industrial project. That’s what elected public officials are “morally obligated” to do – regardless of what their personal opinions may be.
Lake Township Updates Zoning Standards for Mines
Sept. 15, 2018 - Proposed amendments to Lake Township zoning regulations would refine the standards for reviewing a commercial extraction operation as a special land use. The revisions to Chapter 14 of the township Zoning Ordinance would also document the legal justification for the use of zoning to exert local control over mines such as the proposed Back Forty project on River Road, due west of Stephenson, Michigan, in Menominee County.
The township’s planning commission will hold a public hearing on the revised special land use zoning ordinance amendments on Sept. 18, 2018. Following the public hearing, the planning commission will review the comments submitted and make a recommendation to the Township Board for action.
The ordinance, as proposed, contains a new section that explains the legal authority for the town’s zoning regulations. It cites case law, the Michigan Zoning Enabling Act, and the state constitution to assert that zoning is a unique local function that is protected from encroachment by other laws.
The added language in the zoning ordinance, seems to conflict with the stated position of Back Forty mine developer Aquila Resources, Inc. The company indicated in its 2016 mining permit application that “the only applicable local approval for the project may be a county building construction permit,” apparently taking the position that Part 632 of the Natural Resources and Environmental Protection Act pre-empts Lake Township regulations.
In the revised ordinance language, the township expressly adopts the state standard for approving or rejecting a proposed mineral extraction project.
Under that rule, the test is whether “very serious consequences” would occur if a mine or other, similar, project was allowed to operate in the township.
The township would use an analysis of multiple factors to make the final decision on a Chapter 14 Special Land Use application prior to approval for a project. As a Michigan court recognized in Silva v. Ada Township, a 1982 case, there is a public benefit in extracting and using natural resources, especially if no cost-effective alternative exists. Alternatively, the court also recognized that, in some cases, the negative impact of a project may outweigh the positives. In the proposed ordinance revision, Lake Township describes the factors to be considered, as follows:
- What is the impact on existing land uses?
- How would local property values be affected?
- Would the project create a hazard to pedestrians and vehicles?
- Is the project consistent with the town’s master plan?
- Would it negatively affect economic development, quality of life or the character of the community?
- Would it limit the use and enjoyment of other nearby properties?
- Would it impose an undue burden on public services, infrastructure or facilities?
- Would it endanger the township’s environmental quality?
- Are there alternative supplies of the natural resources to be extracted from the mine?
The revised Chapter 14 also describes application requirements for approval of a mine-related special land usel. The applicant would need to provide an environmental impact statement, including a soils analysis for health hazards such as blastomycosis, a description of truck routes and traffic volumes, a ground- and surface-water analysis, including an assessment of possible impacts on private wells, and a full accounting of the applicant’s past record of compliance with environmental rules.
The applicant would also need to provide a complete description of the proposed project, including a site plan showing structures, parking and signage, security fencing, proposed berms and landscaping, access routes, overburden piles and many other details, such as hours of operation, traffic flows, blasting, and hazardous materials handling and storage. The applicant would be required to have full vehicle wash facilities from day one of construction, would need to file an economic impact study, a site rehabilitation plan, a spill response plan, an emergency management plan, and proof of insurance. It would also need to provide a bond or security deposit sufficient to cover potential road repairs and site rehabilitation not covered by state law.
In addition to mining operations, the zoning regulations apply to commercial extraction and processing of topsoil, stone, rock, sand, gravel, lime and other resources when done a very large quantities.
A copy of the proposed revised ordinance may be reviewed at the MSU extension office on Highway 41 in Stephenson.
In regard to the Sept. 18 hearing, the township has emphasized that the event is a time for the public to speak (up to three minutes) about the hearting topic only, which in this case is the amended language in the Zoning Ordinance - Chapt. 14, Special Land Uses - Commercial Extraction. The hearing is not about the proposed Back Forty mine. The topic being addressed is the new expanded and more explanatory language that is proposed to be added to the Lake Township Zoning Ordinance.
Lake Township Clarifies Authority Over Mining Operations
Sept. 14, 2018 - Lake Township has amended its local Mineral Extraction Ordinance that governs projects such as the proposed Back Forty open pit mine on River Road, due west of Stephenson, Michigan, in Menominee County.
The revised Mineral Extraction Ordinance was adopted unanimously by the township board on August 8. The changes were the result of a routine review of ordinances. Language was added to clarify the township’s legal authority to regulate metallic sulfide mining of metals such as gold, silver, zinc, nickel, copper and lead.
In the Mineral Extraction Ordinance, the township contends that the Michigan nonferrous mineral mining law, Part 632 of the Natural Resources and Environmental Protection Act, is primarily intended to prevent acid mine drainage, which is a unique hazard of mines such as the proposed Back Forty.
The ordinance acknowledges that suspension of mine operations, control of acid mine drainage, and the regulation of certain on-site mine activities are the sole responsibility of the Michigan Department of Environmental Quality (MDEQ). However, the ordinance also states that a large number of other factors are outside the scope of MI DEQ authority, and are left to local units of government to regulate independently, or in cooperation with the MDEQ.
This sets up a potential conflict with Back Forty mine developer Aquila Resources, Inc. The company stated in its 2016 mining permit application that “the only applicable local approval for the project may be a county building construction permit,” apparently taking the position that Part 632 of the Natural Resources and Environmental Protection Act pre-empts Lake Township zoning regulations.
In the Mineral Extraction Ordinance, the township asserts independent authority to regulate fencing, road traffic, hours of operation and blasting, noise limits and dust control measures that do not involve the use of chemicals. It also claims the right to monitor water quality (which is in Part 623), conduct site inspections and charge fees for mining projects. It further asserts the right, subject to review by the MDEQ, to regulate setbacks, vibration and light emissions, dust control that involves the use of chemicals, and physical mine pit hazards. Additionally, the township claims joint authority over environmental and wetlands protection, and the right to require an environmental impact assessment of mine impacts not specifically addressed by the state statute. Finally, it claims the right to require financial assurances to pay for local mining impacts not covered by state law.
The Mineral Extraction Ordinance is predicated on the fact that the applicant has already received from the township the special land use approval which takes place through the township's zoning review process and has been granted the approval to operate a commercial mining operation.
Why State Experts Said “No” to Back Forty Wetlands Permit
Aug. 17, 2018 – Michigan Department of Environmental Quality staff members concluded that Aquila Resources’ application for a Back Forty mine wetlands permit was incomplete and inaccurate in a 47-page report to their boss, MDEQ Director Heidi Grether, on April 30, 2018. Despite that highly critical report, Grether overruled her staff and issued the wetlands permit to Aquila, an exploration company that has never developed a mine.
Here are the key findings from the MDEQ staff review of the permit application, which would authorize Aquila to fill or disrupt wetlands on the Back Forty mine site.
1. Under Part 301, Inland Lakes and Streams, of the Michigan Natural Resources and Environmental Protection Act, Aquila Resources was required to show that its mine would not damage navigable rivers and streams, or otherwise harm the environment, in violation of the public trust. Aquila also needed to show that no reasonable, less damaging alternatives to its project plan exist that would reduce the mine’s environmental impact. According to the MDEQ staff, Aquila failed both tests.
The Back Forty mine pit would be a 750-foot hole in the ground. It would have to be continuously pumped to keep it dry – miners call this “dewatering.” The pumping would lower the groundwater table and create a “drawdown envelope” where subsurface water drains into the mine. As part of its permit application, Aquila Resources was required to estimate groundwater drawdown and produce a “water budget” – an accounting of all the water that would flow into and out of the project area. Aquila used computer models to generate this information.
However, the MDEQ staff took issue with the company’s modeling efforts.
According to the April 30 staff report, Aquila used a faulty groundwater model and failed to incorporate actual site conditions into its analysis. As a result, the staff concluded that the company’s computer models probably underestimated the impact of the mine on groundwater, surface water and wetlands, assuming a seven-year life of mine.
Furthermore, the staff found that groundwater drawdown would occur on adjacent properties outside the Back Forty project boundaries – and that the impact area would expand if the mine operated for 16 years, as Aquila has proposed in communications with potential investors.
Aquila also incorrectly prepared its water budget and did not provide enough information for MDEQ staffers to determine how the Back Forty project would affect wetlands, even though the staff made repeated efforts to help the company come up with an accurate estimate. According to the report, MDEQ Wetland Mitigation Specialist Mike Pennington even provided Aquila with a sample analysis of wetlands impacts, to show the company what kind of modeling MDEQ was looking for. Instead, according to Pennington, Aquila continued to submit computer models that were based on incorrect assumptions. “The model is not well calibrated and may underestimate the amount [of] drawdown that is likely to occur under operating conditions of the mine,” Pennington concluded.
The staff also found that, despite the company’s assurances, acid mine wastes and toxic metals would probably migrate into groundwater and surface water after the mine was closed and the pit was backfilled.
Eric Chatterson, MDEQ Geology Specialist, observed that fractured bedrock in the pit walls would allow contaminants to flow underground and possibly reach residential wells downgrade from the mine site. Chatterson stated that Aquila had failed to provide an in-depth analysis of possible leakage from the backfilled pit, making it impossible to fully assess the risk of water contamination from the mine.
Chatterson also challenged Aquila’s plan to use limestone (which is mostly calcium carbonate) to neutralize the acidity of materials used to backfill the pit at the close of mine operations.
“The amount of carbonate required would be enormous,” Chatterson wrote, adding that Aquila had not documented the logistics and reliability of bringing that much buffering material to the mine site.
In conclusion, the staff report found “There is a high likelihood” that contaminants “will be observed in the groundwater that discharges into the Menominee River and the Shakey River.”
2. Under Part 303, Wetlands Protection, of the Michigan Natural Resources and Environmental Protection Act, Aquila was required to show it would minimize harm to wetlands on and around the project site, that the Back Forty project was in the public interest and that no less damaging alternatives exist that would reduce the mine’s environmental impact. The MDEQ staff found that Aquila’s permit application did not meet those requirements.
Simply put, a project is in the “public interest” if its benefits outweigh its negative impacts. The MDEQ staff concluded that the Back Forty mine, as proposed by Aquila Resources, failed this test.
On the positive side of the balance sheet, the staff considered Aquila’s claim that the Back Forty mine would create jobs, enhance economic development and generate tax revenue. On the negative side, the staff found overwhelming public opposition to the project. It noted that 14 public resolutions have been passed against the mine. It also observed that 3,418 comments were submitted as part of the wetlands permit review process, and virtually all of them (3,381) expressed opposition to the mine.
There were other negative factors in the mix: Aquila underestimated impacts to wetlands because it made a variety of mistakes in its computer modeling and failed to show that mine contaminants would not leach into ground- and surface waters, the mine would have a negative impact on fish and wildlife habitats, and on the scenic value of the Menominee River, and it would impinge on Menominee Indian ancestral sites of great cultural value to the tribe.
After weighing these pros and cons, the MDEQ staff concluded that the mine “is not demonstrated to be in the public interest.”
The staff reviewers also found fault with the company’s claim that there is no “reasonable and prudent” alternative to the mine as proposed. In particular, the staff concluded that the company failed to justify its claim that moving its ore processing plant to higher ground, away from the Menominee River, was not economically feasible, despite repeated efforts by MDEQ staff to encourage the company to do a full evaluation of the upland alternative. The first request was made in January of 2017, and it was repeated on March 8 and 19, 2018, according to MDEQ Environmental Quality Specialist Kristi Wilson. In response, Aquila claimed that it would be too costly to transport the ore to a processing plant farther away from the mine pit and the river. Wilson’s review suggests that the costs were overstated and that the company made no serious effort to evaluate the upland site for its ore processing facility.
Despite the evidence provided and the conclusions reached by her staff, MDEQ director Heidi Grether elected to award the wetlands permit, with a long list of conditions that Aquila Resources must satisfy before the permit actually takes effect.
Grether’s office was asked to explain her decision to overrule her staff and issue the wetlands permit, and responded with a written statement defending her actions.
“The key driver of the MDEQ’s issuance of this permit was the U.S. Environmental Protection Agency and Aquila Resources’ resolution of objections previously raised by the U.S. EPA,” the statement said. “That resolution created a permitting roadmap that the MDEQ followed to develop a permit that ensures Michigan’s wetlands and waterways will be protected.”
Michigan is one of two states that has delegated authority from the EPA to issue wetlands permits, and the federal agency participates in the permit review process. Grether’s statement seems to suggest that the EPA gave her the go-ahead to issue the Back Forty wetlands permit.
Ron Henriksen, of the Front 40 Environmental Fight accused Grether of using the EPA to “take the heat off her decision to grant the permit.”
“The only problem is that the State of Michigan has requirements for a Wetland Permit and Aquila did not do the necessary work to be granted a permit,” Henriksen said. “Director Grether still has not given an answer to why she reversed the recommendation of her Water Resource Division.”
“Director Grether‘s statement fails to acknowledge the unresolved objections to the permit’s issuance — outlined by DEQ staff who best understood the application, and its inadequacies,” added Kathleen Heideman of the Mining Action Group of the Upper Peninsula Environmental Coalition. “Grether never familiarized herself with the details of the Back Forty Wetland Permit application, and did not participate in the agency’s review.”
A Michigan Freedom of Information Act request has been filed for communications between Grether and other state officials concerning the decision. This might help further explain why Grether issued the permit. To date, the MDEQ has not provided those documents.
The wetlands permit for the Back Forty mine has now been challenged by three separate contested case petitions filed by local landowner Tom Boerner, the Menominee Indian Tribe of Wisconsin and the Coalition to SAVE the Menominee River, Inc.
In a related dispute, the Menominee Indian Tribe has filed a lawsuit in federal court that challenges the MDEQ’s authority to issue a wetlands permit in the first place. The tribe contends that the Menominee River, adjacent to the mine site, is an interstate waterway and, therefore, the Clean Water Act forbids the U.S. Environmental Protection Agency from delegating a wetlands permit review to a state agency.
Aquila Resources did not respond to a request for comment on this report.
Profit Estimates Down Slightly in Latest Back Forty Report
Aug. 8, 2018 - Mine developer Aquila Resources has completed its long-awaited Feasibility Study for the Back Forty project and it estimates slightly lower profits than the company has touted for the past four years.
The mine developer is a Canadian company, but all figures here are in U.S. Dollars.
According to the latest estimates, the open-pit phase of the Back Forty mine would produce $208 million in after-tax profits. That's down 1.3 percent from the $210.8 million dollar estimate provided by the mine developer as late as March 31, 2018. The anticipated after-tax return on investment declined almost 12 percent, from 32 to 28.2 percent.
The earlier, higher profit estimate came in a Preliminary Economic Analysis of the Back Forty project that was released in September of 2014. The new estimates were derived from the just-completed Feasibility Study, which is a more accurate picture of the mine's economic potential.
Despite an aggressive exploratory drilling program, the latest estimate of "proven and probable" mineral reserves is lower than previously reported. The current estimate is 11.7 million tonnes (a metric measure), down 22.5 percent from the 15.1 million tonnes in earlier company statements.
The capital cost of the project rose 12.5 percent over previous estimates, from $261.4 million to $294 million.
Aquila Resources provided the new profit, cost and resource estimates in a news release. It promised that the compete Feasibility Study would be available to the public not later than mid-September, 2018.
The company did not respond to a request for comment on this report.
Governor Signs Pro-Mining Bills
July 1, 2018 - Michigan Gov. Rick Snyder has signed five pro-mining bills sponsored by State Sen. Tom Casperson (R-Escanaba).
Senate Bill 652 sets up an appointed committee that can block rules proposed by the Michigan Department of Environmental Quality (DEQ).
Senate Bill 653 allows a permit applicant to go over the heads of DEQ staff and instead ask an appointed committee to decide whether a regulatory permit should be issued, and in what form -- even before a final DEQ decision has been made. Opponents of a permit have no right of appeal to the committee and cannot participate in the review process.
Senate Bill 654 establishes an appointed board to advise the governor on environmental issues.
Senate Bill 839 allows a mining operator to modify surface or underground facilities, under certain conditions, without getting an amended mining permit.
Senate Bill 840 allows mine operators, and others, to modify a waste treatment facility without obtaining a permit if the facility was previously approved by the state.
Senate Bills 652, 653 and 654 were signed by the governor on June 28. The other two bills were signed on May 23.
City Council Rejects Anti-Mine Resolution
June 19, 2018 - Opponents of a proposed open-pit mine on the Menominee River north of Green Bay, Wisconsin, were disappointed – and outraged – last night when the Menominee City Council failed to endorse a resolution opposing the mine.
The council voted 6-3 against the resolution, which is similar to one passed by the Menominee County Board last year. Numerous elected bodies on the Wisconsin side of the Menominee River have passed similar resolutions.
The council chambers were packed with a crowd wearing blue “Stop the Mine” T-shirts. Many stood up to urge the council to pass the resolution against the mine, which would be located about 150 feet from a pristine stretch of the Menominee River in Lake Township, northwest of the city of Menominee.
No one spoke in favor of the Back Forty project.
After the council vote, mine opponents returned to the microphone to denounce the six who voted to reject the resolution. Cries of “recall, recall” were heard as a succession of speakers told the council it had failed in its duty to represent the majority of city residents who oppose the mine.
Dale Burie, of the Coalition to SAVE the Menominee River, announced that the group will soon file a lawsuit challenging the state of Michigan’s decision to allow the mine to go into operation. The state issued the fourth and final permit for the mine earlier this month. The Menominee Indian Tribe of Wisconsin has already filed a lawsuit asking a federal court to overturn the project’s state mining permit. The tribe, and landowner Tom Boerner, have also challenged the permit in cases filed with a Michigan appeals panel.
DEQ Head Issues Wetlands Permit Over Staff Objections
June 4 - The director of the Michigan Department of Environmental Quality (DEQ), C. Heidi Grether, has awarded Aquila Resources a permit to fill or disrupt wetlands at the Back Forty mine and mill site. Gether's decision overrode the recommendation of DEQ staff that the permit should be denied.
Agency reviewers gave Grether a 47-page report arguing that the permit application should be rejected because the company had failed to correctly model the impact of mine dewatering on wetlands around the site, and had not shown that its mining plan was the least environmentally damaging alternative.
Mine opponents immediately cried foul when the permit was issued.
"I think it's illegal that they received a permit that was so clearly in violation of the Clean Water Act," said Kathleen Heideman of the Mining Action Group of the Upper Peninsula Environmental Coalition. "It says you're supposed to meet all these requirements in the application process, not in the permit. The final permit was just a bunch of half answers and promises."
In issuing the permit, "what (Grether) did was stick a knife in the back of all the hard-working people of the Water Resource Division who just did their jobs," and concluded that the permit should be denied, said Ron Henriksen of the Front Forty environmental group. "I don't know if it's political or whatever, but she should answer to the public on why she did what she did."
Grether's office did not immediately return a request for comment on the permit decision.
EPA Greenlights Back Forty with Added Permit Conditions
May 4, 2018 - The U.S. Environmental Protection Agency (EPA) has informed the Michigan Department of Environmental Quality (MDEQ) that some agency objections to the proposed Back Forty mine have been resolved, and the rest can be addressed with additional permit conditions.
The EPA, jointly with two other federal agencies, had objected to Aquila Resources’ Back Forty wetlands permit in a March 8 letter. Among the deficiencies cited by the EPA on behalf of the reviewing agencies:
- Differences between the site plan in the wetlands permit application and the plan in Aquila’s permit to mine, issued previously by MDEQ.
- Failure to consider the impact of future underground mining at the Back Forty site.
- Failure to address a possible breach of the mine pit by flood waters, and the impact of heavy rains on pit integrity and water quality.
- Lack of a complete explanation of how Aquila will protect water quality and prevent leaching of toxic compounds into the Menomonee River.
- Failure to demonstrate that it is impractical to locate certain mine facilities farther away from the river than shown in the permit application.
- Concerns that the distant wetlands Aquila is offering to preserve in order to mitigate on-site impacts do not meet the legal requirements for mitigation.
In its letter to MDEQ, the EPA indicated that it is satisfied with the wetlands permit site plan, provided that the mine permit is updated to match. Other minor agency objections have also been resolved.
The EPA letter indicated that other objections in the March 8 letter are conditionally resolved, provided that MDEQ adds further requirements to the wetlands permit. These concerns include:
- Potential water quality impacts.
- Impacts related to possible underground mining.
- Secondary wetlands impacts.
- Mine pit integrity.
- Wetlands mitigation and dust control.
“Aquila has reviewed the proposed permit conditions and is confident that the conditions can be readily met,” the company said in a press release.
The EPA must review the new permit conditions before the MDEQ issues a wetlands permit for the Back Forty project. The deadline for addressing federal agency concerns is June 8.
Opponents of Back Forty Mine Will Soon Get Their Day(s) in Court
April 6, 2018 - Administrative law judge Daniel L. Pulter has set hearing dates for two challenges to Aquila Resources’ mining permit for the proposed Back Forty project in rural Menominee County, Michigan.
The hearing is scheduled to run for two weeks starting April 23, and then resume for three more weeks starting June 4. The proceedings will be in Lansing, except for a site visit to the proposed Back Forty location.
The challenges to the mining permit were filed by Thomas Boerner, who owns land adjacent to the mine site, and the Menominee Indian Tribe of Wisconsin.
At the hearing in Lansing, Judge Pulter will consider six of Boerner’s arguments against the mining permit:
Boerner’s challenge to the Back Forty mining permit will be heard jointly with a second action filed by the Menominee Tribe. Judge Pulter will consider four of the tribe’s arguments against the mining permit:
The burden will be on Boerner and the tribe to prove their claims. Their challenges were brought against the MDEQ Office of Oil, Gas and Minerals for alleged errors in granting the mining permit, but Aquila has been allowed to intervene and participate in the hearing.
This report was based on the following documents obtained from the Michigan Administrative Hearing System:
April 6, 2018 - Administrative law judge Daniel L. Pulter has set hearing dates for two challenges to Aquila Resources’ mining permit for the proposed Back Forty project in rural Menominee County, Michigan.
The hearing is scheduled to run for two weeks starting April 23, and then resume for three more weeks starting June 4. The proceedings will be in Lansing, except for a site visit to the proposed Back Forty location.
The challenges to the mining permit were filed by Thomas Boerner, who owns land adjacent to the mine site, and the Menominee Indian Tribe of Wisconsin.
At the hearing in Lansing, Judge Pulter will consider six of Boerner’s arguments against the mining permit:
- That the Office of Oil, Gas and Minerals (OOGM) of the Michigan Department of Environmental Quality (MDEQ) did not provide sufficient evidence that Aquila Resources was entitled to a mining permit.
- That OOGM did not follow proper procedure in issuing the permit.
- That information supplied by Aquila in support of the permit application was inaccurate or incomplete.
- That Aquila did not include underground mining in its permit application, even though it has publicly stated its intent to continue mining underground after the open pit is exhausted.
- That Aquila’s environmental protection plan is inadequate.
- That Aquila has failed to establish that its mining plans will minimize actual or potential negative impacts on air water, or other natural resources.
Boerner’s challenge to the Back Forty mining permit will be heard jointly with a second action filed by the Menominee Tribe. Judge Pulter will consider four of the tribe’s arguments against the mining permit:
- That Aquila did not provide complete information about the Back Forty’s potential impact on the tribe's cultural, historical or archeological sites in and around the mine.
- That Aquila does not have an adequate plan for preserving archeological resources that are unexpectedly discovered during mine operations.
- That OOGM was wrong in determining that Aquila’s mining permit application was administratively complete and ready for final action.
- That Aquila’s emergency planning did not adequately address the potential release of toxic or acid-forming materials, unplanned subsidence, and natural risks such as flooding.
The burden will be on Boerner and the tribe to prove their claims. Their challenges were brought against the MDEQ Office of Oil, Gas and Minerals for alleged errors in granting the mining permit, but Aquila has been allowed to intervene and participate in the hearing.
This report was based on the following documents obtained from the Michigan Administrative Hearing System:
- Order on the Motions for Summary Disposition Against Petitioner Tom Boerner, Nov. 20, 2017.
- Order on the Motions for Summary Disposition Against Petitioner Menominee Indian Tribe of Wisconsin, Nov. 20, 2017.
- Scheduling Order, Docket No. 17-005710, Dec. 18, 2017.
Feds Critical of Back Forty Wetlands Permit Application
March 8, 2018 - Three federal agencies have found deficiencies in the Aquila Resources’ wetlands permit application for the proposed Back Forty mine.
The U.S. Environmental Protection Agency, the Fish and Wildlife Service, and the Army Corps of Engineers were critical of several aspects of the permit application.
In a letter to the Michigan Department of Environmental Quality (MDEQ), the EPA stated that Aquila’s mine proposal does not comply with the Clean Water Act, “and EPA objects to the issuance of a permit for this project as proposed.”
Among the deficiencies cited by the EPA on behalf of the reviewing agencies:
- The site plan in the wetlands permit application is incomplete and is not consistent with the plan in Aquila’s permit to mine, issued previously by MDEQ.
- The impact of future underground mining at the Back Forty site has not been incorporated into the wetlands permit application.
- The potential for a breach of the mine pit by flood waters, and the impact of heavy rains on pit integrity and water quality, have not been adequately addressed.
- The application does not fully explain how Aquila will protect water quality and prevent leaching of toxic compounds into the Menomonee River.
- Aquila has not made the case that it’s impractical to locate certain mine facilities farther away from the river than shown in the permit application.
- It’s not clear that the distant wetlands Aquila is offering to preserve in order to mitigate on-site impacts meet the legal requirements for mitigation.
In its letter, the EPA recommended that Aquila should:
- Provide a more complete analysis of the wetlands impact of the Back Forty project.
- Fully describe water quality monitoring and management techniques “sufficient to demonstrate avoidance and minimization of impacts to aquatic resources and prevention of contamination and unanticipated discharges.”
- Demonstrate that it will fully protect water quality throughout the life of the mine and after it closes.
- Provide evidence of Menominee River bank stability and pit integrity.
- Prove that the current mining plan is the least environmentally damaging practical alternative, with more analysis of off-site alternatives for waste rock storage.
- Demonstrate that the plan to offset the mine’s wetlands impacts by preserving a similar area off-site meets the requirements of federal law.
Excerpts from the joint agency analysis of the Back Forty wetlands permit:
“A ... concern is that the application may not identify all work associated with the project, which is necessary to adequately assess impacts to aquatic resources and consider alternatives. … Activities associated with the mine not listed in the application include:
- future underground mining,
- a power plant (substation) planned east of the mine,
- contact water management features, and
- any road realignments/widening required because of the proposed project (although EPA understands there is no plan to relocate River Road).”
“The federal agencies have continuing concerns regarding the stability of the Menominee River bank. Comparing the Part 632 Permit approval and the current application, we note that the average width of the land between the pit and the ordinary high water mark and 100-year floodplain has decreased, resulting in siting the proposed cut-off wall closer to the river. The closer proximity of the pit to the Menominee River bank further increases the risk of impacting the Menominee River and downstream waters because there is less margin for error simply because rivers are dynamic and flow can be unpredictable due to precipitation, snowmelt, and ice.
The U.S. Fish and Wildlife Service (FWS), in its February 27, 2018 letter to EPA, notes that an increased frequency of heavy rain events has been documented in the United States (Walsh et al. 2014) and should be considered in all project design plans. For example, FWS states that on July 12, 2016, 8 to 12 inches of rain fell in a matter of hours across northern Wisconsin, causing widespread flooding.
Therefore, EPA recommends that MDEQ consider the increased frequency of heavy rain events, as described by FWS, in evaluating the application. Specifically, MDEQ should require an erosion potential evaluation for the Menominee River bank that is sufficient to demonstrate that the integrity of the mine pit wall and cut-off wall would not be compromised by a greater-than 100-year flood or erosion of the land between the River and the cut-off-wall.”
“The (Army Corps of Engineers) noted in its comments that the proposed work may affect water quality in the Menominee River during the life of the mine and after its closure, and that the application failed to address the potential water quality impacts of constant drawdown from and restricted release to the Menominee River. Specifically, the application estimates seepage rates at 32,500 - 125,500 gallons per day from the Menominee River to the mine pit, during the life of the mine. EPA agrees this concern must be addressed. The applicant should also address potential water quality impacts from mine seepage to the river post-closure, once pumping and water treatment cease. If there is a possibility that untreated flows could enter the river via the outfall, we recommend the applicant consider the removal of the outfall at mine closure.”
EPA is concerned with the accuracy of the applicant's estimate that 17.2 acres of wetlands would be impacted by changes in hydrology. … The Corps' letter states that some of these wetlands contain streams and off-site surface connections to the Menominee River and Shakey Rivers … . Additional documentation, and potentially additional well and soil data, are needed to demonstrate that pit dewatering will not also lower the water table within these wetlands.
The application does not address secondary impacts to wetlands, streams, and the Menominee River other than those due to dewatering. Additional secondary impacts may include, for example, fugitive dust or stormwater impacts.
MDEQ has identified discrepancies between the groundwater contours determined by the MODFLOW model (used to estimate wetlands impacts), the projected contours presented in the Wetlands Application, and the measured contours. … Answers to these technical questions are necessary for the agencies to assess and quantify wetland impacts.
“Although the (feasible and prudent) alternatives analysis includes a conceptual alternative that would place the ore processing and tailings disposal off-site, the applicant does not identify or evaluate any specific potential locations. Aquila eliminated Alternative B (off-site ore processing and tailings disposal) as not being economically viable primarily due to transportation costs, but it is not clear how that was determined without consideration of a specific site, as a nearby alternative would reduce that cost. Several other alternatives were eliminated due to economic feasibility, but the application lacks sufficient documentation to demonstrate that alternatives are not practicable due to the asserted costs. The applicant needs to provide a complete alternatives analysis, including its rationale for its decision to eliminate alternatives as not being practicable.”
“The FWS (wetlands application review) letter describes the agency's extensive involvement in restoration efforts for lake sturgeon in the Menominee River, which include providing fish passage for sturgeon upriver and downriver around existing dams. These efforts to ensure the health and continued recovery of the species and the river that supports them have been a high priority of FWS, involving many projects and state, tribal and local partners have been involved to ensure longterm success of the species. The goals and objectives for these efforts span a 50-year timeframe and management will be ongoing beyond meeting these goals.
Any development in the watershed that could potentially harm the water quality of the Menominee River and thus reduce the viability and success of sturgeon reproduction, growth, survival or health is a concern.
FWS echoes EPA's and the Corps' general concerns that MDEQ ensure the measures and adaptive management plans to prevent contamination or unanticipated discharge from the proposed project are sustainable, long-term, and are fully sufficient to impede contamination from occurring.
“Previous archaeological surveys identified cultural resources in the project area. The applicant has not provided sufficient information to support the assertion that the proposed project would likely not impact potentially eligible or eligible resources. Historical and cultural resources should be addressed for the entire expanded project site.”
No Boom, But No Bust, 20 Years After Flambeau Mine
Jan. 4, 2018 - Years ago, supporters of Rio Tinto’s Flambeau mine near Ladysmith, Wis., claimed it would boost Rusk County’s long-term economic prospects. Today, supporters of the proposed Back Forty mine say the Flambeau proves that mining can be an economic game-changer for the host community.
Let's look at the facts.
Two decades after the mine closed in 1997, Rusk County remains a sparsely populated rural county in northwest Wisconsin that suffers from relatively low incomes, high unemployment and a declining population.
But local officials argue that, without the economic development that came with the Flambeau mine, things might be even worse in Rusk County.
“Ladysmith's current economic health isn't good,” said Al Christianson, long-time Ladysmith city administrator in an e-mail, “nor is it in most of northern Wisconsin. In Ladysmith's case that has everything to do with the Great Recession and really nothing to do the Flambeau mine.”
Twenty-six percent of the jobs in Rusk County are in the manufacturing sector, according to the ten-county Northwest Regional Planning Commission (NWRPC). That sector has been plagued by job losses over the past ten years, especially in the woodworking industry. The county’s two largest employers are Weathershield Windows & Doors and Jeld-wen Windows and Doors. Both were hard-hit by the U.S. housing market collapse of 2008-2009.
However, the construction of new industrial space, paid for with tax and grant revenue from the Flambeau mine, may have buffered Rusk County from the most severe effects of the recession by helping it keep existing businesses while the same companies’ plants in other communities were shut down.
The Flambeau mine operated from 1993-1997. At its height, it produced an average of 60-70 good-paying, full-time jobs, and $11.4 million in tax revenue and grants to Rusk County, the city of Ladysmith and the town of Grant, where the mine was located, according to the NWRPC. Most of that local revenue was used for development projects that were intended to create a more robust, stable and sustainable economy in the area, and avoid the “boom and bust” cycle that has historically affected mining host communities. The key initiative was the construction of industrial buildings.
Results were mixed. Some of the buildings that were constructed with mine revenues are empty today. But others are occupied by companies that might have left the area during the 2008-09 recession if modern, efficient manufacturing space had not been available, according to Andy Albarado of the Rusk County economic development office.
“Most businesses reduced employment here during the recession,” Albarado said, “but they never talked about shutting down. They shut plants down in other places that were older, where the cost of doing business was higher. So when the economy turned around our employment came back relatively quickly.”
Among others, Rockwell Automation, with 350 employees, and Weathershield, with about 500 workers, occupy newer buildings that were paid for with mining revenue, Albarado said.
Jan. 4, 2018 - Years ago, supporters of Rio Tinto’s Flambeau mine near Ladysmith, Wis., claimed it would boost Rusk County’s long-term economic prospects. Today, supporters of the proposed Back Forty mine say the Flambeau proves that mining can be an economic game-changer for the host community.
Let's look at the facts.
Two decades after the mine closed in 1997, Rusk County remains a sparsely populated rural county in northwest Wisconsin that suffers from relatively low incomes, high unemployment and a declining population.
But local officials argue that, without the economic development that came with the Flambeau mine, things might be even worse in Rusk County.
“Ladysmith's current economic health isn't good,” said Al Christianson, long-time Ladysmith city administrator in an e-mail, “nor is it in most of northern Wisconsin. In Ladysmith's case that has everything to do with the Great Recession and really nothing to do the Flambeau mine.”
Twenty-six percent of the jobs in Rusk County are in the manufacturing sector, according to the ten-county Northwest Regional Planning Commission (NWRPC). That sector has been plagued by job losses over the past ten years, especially in the woodworking industry. The county’s two largest employers are Weathershield Windows & Doors and Jeld-wen Windows and Doors. Both were hard-hit by the U.S. housing market collapse of 2008-2009.
However, the construction of new industrial space, paid for with tax and grant revenue from the Flambeau mine, may have buffered Rusk County from the most severe effects of the recession by helping it keep existing businesses while the same companies’ plants in other communities were shut down.
The Flambeau mine operated from 1993-1997. At its height, it produced an average of 60-70 good-paying, full-time jobs, and $11.4 million in tax revenue and grants to Rusk County, the city of Ladysmith and the town of Grant, where the mine was located, according to the NWRPC. Most of that local revenue was used for development projects that were intended to create a more robust, stable and sustainable economy in the area, and avoid the “boom and bust” cycle that has historically affected mining host communities. The key initiative was the construction of industrial buildings.
Results were mixed. Some of the buildings that were constructed with mine revenues are empty today. But others are occupied by companies that might have left the area during the 2008-09 recession if modern, efficient manufacturing space had not been available, according to Andy Albarado of the Rusk County economic development office.
“Most businesses reduced employment here during the recession,” Albarado said, “but they never talked about shutting down. They shut plants down in other places that were older, where the cost of doing business was higher. So when the economy turned around our employment came back relatively quickly.”
Among others, Rockwell Automation, with 350 employees, and Weathershield, with about 500 workers, occupy newer buildings that were paid for with mining revenue, Albarado said.