With silver at nearly $20 an ounce, Idaho’s Silver Valley shines brightly again
Ray Chapman ended his History of Idaho’s Silver Valley on an intriguing note. “Most geologists … believe that there remains as much mineral undiscovered in the small section of north Idaho as has been mined thus far.”
There is now a rediscovered optimism in the Silver Valley, based on the revival of exploration and mining in the region, which is in turn based on near-record silver prices. In 2000, silver averaged $4.95 an ounce. Now it is flirting with $20, the same price it reached in 2008, before the credit crisis hit. (Silver hit a high of $49.45 in 1980, but this was pure speculation—the attempt by the eccentric Hunt brothers of Texas to corner the market, which ended in tears and bankruptcy.)
The storied history of Silver Valley is rich in tears and tragedy—in mining disasters and union violence—but it is also rich in employment and community prosperity. It was Silver Valley that put Idaho on the map and added a 43rd star to the Stars and Stripes (in 1890).
The first Idaho gold was discovered in 1860, the same year the Mullan Road, a 624-mile wagon route from Fort Benton, Montana, to Fort Walla Walla, Washington, was completed, opening the Rockies. There was a gold rush in 1883, but it soon became clear that silver was the precious metal most abounding in what is now Shoshone County. In 1885, Noah Kellogg, for whom the town is named, filed a lode claim which became the basis of Bunker Hill. By 2000, over a billion ounces of silver had been taken from the Valley, which rivals Bolivia’s Potosi district as the greatest producer in history.
Geologist Lisa Hardy came to the Silver Valley in 1989, nine years after the Hunt brothers’ dream became the nightmare of “Silver Thursday,” when silver collapsed and the Silver Valley was devastated. “I came to work at Bunker Hill, which was then primarily a lead-zinc mine,” she recounts. “They shut down in 1991. I then worked for Hecla, including a short period at the Lucky Friday, a mine that’s still operating. And then I worked at Sunshine Mine for about seven years, until they shut down in 2001. She jokes, “I shut down a lot of mines.”
Once a mine is closed, Hardy explains, it is costly to start again. “Typically,” she says, “the mines are allowed to flood, so the water has to be pumped out. And there must be rehabilitation of the shafts. A working mine is always undergoing maintenance. So, obviously, if you let a mine sit for a number of years, you have a maintenance backlog.”
And an environmental reclamation backlog as well. There is no question that Silver Valley was despoiled with the debris of lead and zinc mining. (It has produced 3 million tons of zinc and 8 million tons of lead.) As Ron Garitone, former mayor of Wallace, Idaho, once put it, “We dumped everything in the creek. We called it lead creek. You would put your arm in, and it would come out milky white.”
But times have changed. Mine tailings are no longer dumped in the waters, and the smelters no longer fill the air with poisonous particulates. The Silver Valley has been cleaned up. The people of the Silver Valley now embrace ecologically sound practices. As Kellogg lawyer James McMillan said at a recent EPA hearing, “The scientists got their environmental science degree from someplace like Berkeley and they drive their Prius to the back hills of Idaho and here are a bunch of miners, and they want to do what they think is best for us.”
The people here in the valley are welcoming to any new mining activityGeologist Lisa Hardy
Lisa Hardy sums up: “The Silver Valley has had continuous production, so we have a trained workforce and a community that has never gotten away from mining. The people here in the valley are welcoming to any new mining activity.” Since 2008, she has been the chief geologist of the historic Crescent Mine, which has produced 25 million ounces of silver and sits between Bunker Hill, which produced 161 million ounces and Sunshine, which produced 328 million. Crescent is owned by SNS Silver, and operated by United Mining Group, which has an option to buy up to 80% of the property. Crescent has NI 43-101 indicated resources of 6.1 million ounces of silver, consisting of 324,000 tons grading 18.7 ounces per ton and 4.1 million ounces inferred, consisting of 211,000 tons grading 19.5 opt.
Other companies currently operating in the region are Hecla, New Bunker Hill, New Jersey Mining, Sterling Mining and U.S. Silver. But perhaps the biggest event in the Silver Valley revival is the arrival of Dr. Thomas Kaplan, asset manager, philanthropist and ecologist. Kaplan told the Wall Street Journal in May, “The only asset I have confidence in is gold.” It would appear, however, that he has confidence in silver as well, because a month earlier his Silver Opportunity Partners bought the Sunshine Mine.
A 2007 NI 43-101 disclosure reported that Sunshine has indicated and inferred silver resources of 31.5 million ounces and 231.5 ounces, respectively. Bringing Sunshine back into production would take deep pockets, but Kaplan has them—he controls $2 billion in assets.
Lisa Hardy concludes, “I believe in silver too, and I don’t know if the price is going to double or triple, but it is going to stay high enough to sustain the current level of exploration and possibly see some new properties opened up.”