Brief by Allen Best
Mining – May 2008 – Colorado Central Magazine
It was two steps forward, then two steps back for a potential molybdenum mine at Crested Butte. Kobex Resources Ltd. of Vancouver, B.C, has withdrawn its plans to develop an ore body in the community’s backyard.
A press release issued by the company said that “regulatory and legal uncertainties” posed by several layers of government had become “too great to justify the necessary time and major predevelopment expenditure that are required to advance this property.”
Property owner U.S. Energy Corp., which had partnered with Kobex, said much the same thing. “Mining is not an easy thing, and exploration of mineral projects is not for the weak of heart,” said Keith Larsen, chief executive officer of the company. He also told the Crested Butte News that Kobex may have “underestimated what they saw as the issues.”
A stock analyst, John Kaiser, of Kaiser Bottom Fish Online, several weeks ago predicted that Kobex would cut its losses at Lucky Jack, as the mine has been named.
The issue is money. Kobex had already spent $8 million on rehabilitating an existing mine at the site, located on nearby Mount Emmons, which overlooks the town. That left $15 million of the company’s investment capital, and it would have required another $14 million to bore a mile-long drift into the mountain, to better gauge the value of the ore.
Crested Butte town officials have been fine-tuning their regulations governing impacts to its watershed, which would include the mine. The primary jurisdiction, Gunnison County, was similarly at work on revised regulations.
Two grassroots community groups, High Country Citizens Alliance and the Red Lady Coalition, were girding for a battle. Lately, they had been offered the free high-powered aid of a legal lobbying firm, DLA Piper, which has an office in Washington D.C. led by several former high-ranking congressmen.
With Kobex gone, there seems to be a sigh of relief in Crested Butte. But it’s muted.
“The old adage is that as long as there is an ore body in the ground that hasn’t been protected, they’ll be back,” Roger Flynn, an attorney with the Western Mining Action Project, told Mountain Town News.
With that advice in mind, community activists are continuing to talk about buying the mining rights from U.S. Energy. The company has said the ore body is worth $100 million, reported Bob Salter, minerals specialist from the High Country Citizens Alliance.
Although Crested Butte is steadily getting more well-heeled, with the average sales price of homes last year hitting $850,000, raising that much money would be a challenge for the community of 3,000 people. Still, Telluride is only marginally larger and wealthier, and it came up with $60 million to buy open space, so such fund-raising is not totally out of the question.
