Atlanta Gold Says Mine Won’t Use Cyanide

The Canadian company planning a gold mine 60 miles east of Boise is dropping plans to use cyanide to leach gold and silver from rock and says it will reduce the mine’s surface size 95 percent by switching largely to underground mining.

Atlanta Gold Corp. said it will build a mill to process the ore instead of using cyanide processing, which some Treasure Valley residents feared might leak arsenic, cyanide and other toxins into the Boise River. The company said it would replace its proposed open pit with a smaller open pit combined with an underground mine.

Atlanta Gold has notified the U.S. Forest Service that it is withdrawing its plan for operations. The company told the agency that it would limit mining to privately patented lands in the historic mining area, and not Forest Service lands as previously proposed.

"They are developing a new, smaller footprint for their proposed mining operation," Frank Guzman, the acting supervisor for the Boise National Forest, said in a statement. "It is unclear what role, if any, the Forest Service will have in the company’s new plan."

That raises a question about how much environmental oversight there would be. The Boise River is a source of drinking water for Boise.

Environmentalists criticized the announcement.

"This is at least the third major change in the operations plan for Atlanta Gold, and none of those plans has addressed the fundamental problem that major mining operations in headwaters of the Boise put the river and the entire Treasure Valley at risk," said John Robison, of the Idaho Conservation League, in statement Friday.

The Forest Service had been developing an environmental impact statement for the original proposal, but officials said Friday they will stop that process.

The new plan comes as gold is trading about $910 an ounce, compared with $400 when Atlanta Gold first proposed two open pits in early 2004.

In a news release, the company said its revised plan would eliminate major permitting hurdles. Calls for comment weren’t returned Friday.

The company’s initial plan was to spend more than $40 million to extract more than 100,000 ounces of gold over seven to 10 years from a tributary of the Boise River, about two miles south of Atlanta. Its news release said it now expects to produce 270,000 tons of ore a year, yielding 43,000 ounces of gold.

The company now says construction of a milling plant using a "gravity-flotation" milling process would start in 2008.

Liz Paul, with Idaho Rivers United, said such a process usually involves something as simple as using "panning" that allows gold, which is heavier than surrounding rock, to sink into a collection container. Finer gold particles attached to sulfite probably would have to be milled off site, she said.

But she said without more details from the company, it is not clear what chemicals might be used in the process, or whether long-term plans might again include the use of cyanide.

Paul said there are other questions about the new plan, including how big the open pit would be and how much would still be on public land.

Boise Mayor Dave Bieter and the Boise City Council oppose the project. A spokesman said Bieter hasn’t changed his position.

"The mayor is pleased that the cyanide issue is off the table," spokesman Michael Zuzel said. "But the mayor and the council had a lot of other concerns not related to cyanide."

Accidents could threaten the river, he said. The initial plan called for trucking thousands of gallons of diesel fuel to the remote site using substandard roads next to the river.

The financial health of the company has also been in question. Atlanta Gold’s stock, which trades on the Toronto Stock Exchange under the symbol "ATG," has dropped steadily over the last year. It has traded as high as $1.80 a share, but closed on Friday at 55 cents a share.

In May, the company raised $3.3 million in a stock offering, but its latest statement, for the quarter that ended Sept. 30, reported a loss of nearly $740,000. The company told shareholders its liabilities surpassed its assets by more than $1 million.

Ken Dey: 672-6757

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