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Mining Company Seeks to Extract Gold, Platinum, Silver Near Flagstaff, Ariz.

September 20, 2005

Sep. 21–The volcanic cinders around the San Francisco Peaks have always held gold, platinum and silver.

And since the 1980s, a succession of companies have set up shop in the rocks around Flagstaff, promising investors they would use special technology to leach precious metals from the cinders thrown down on roads for traction.

It has never been profitable, according to the Arizona Corporation Commission, the state mining department and a Nevada securities investigator.

Now another company near Sheep Hill east of Flagstaff says it has found a way to turn a profit extracting gold, platinum and silver from volcanic remnants.

Its vice president was an officer in one of the companies that 20 years ago promised the same thing.

But this time, says Agra-Technologies Vice President Richard Campbell, the results will be different.

“There’s always been a bone of contention with cinders and whether people could get precious metals out of them … there are new technologies in the last seven to eight years,” Campbell said. “We’re producing metals — precious metals — platinum, gold, and silver.” The evidence, he said, is in the precious metals they’ve recovered that are sitting on company president William Pierson’s desk.

“The proof is whether or not we can get it out on a commercially economical basis, and it looks like we can,” Campbell said.

Campbell, of the Valley, was the vice president of a company named Mariah International, according to Daily Sun articles from 1993 and his own acknowledgment. In 1993, Campbell said Mariah had recovered 8.3 ounces of gold from 114 tons of cinders. He asked investors for $3.5 million to build a mill 22 miles east of Flagstaff.

Mariah is named in a Department of Mines report called “Arizona Mining Scams and Unassayable Ore Projects of the Late 20th Century. ” Another company, Pantel Mineral, sued Richard and Sondra Campbell in 1994, accusing them and other Mariah International directors of securities fraud. The case was settled out of court.

Mariah was also known as M.G. Natural Resources, which went by three other names, including Xenolix Technologies, Inc., the Arizona Corporation Commission said in 2001.

The Arizona Corporation Commission ordered Xenolix to offer refunds to all 100 investors who’d put $1.7 million into Xenolix, saying the company claimed to have a patented technology for extracting gold and other precious metals from the company’s volcanic cinders and misled investors about its ability to economically produce precious metals from the cinders.

The state of Utah revoked Xenolix’s stock.

John Nelson, a criminal investigator for the Nevada Secretary of State’s securities division, said his office investigated other companies 15 years ago that said they were mining gold from the cinders of Sheep Hill and other nearby cinder cones.

“We actually did some gold and platinum samples and there just was not anything there… there’s one to two parts per billion of gold and platinum. It’s just not (economically) feasibly recoverable,” Nelson said.

“It’s 10 to 100 times not enough to do massive heap leaching.” In other words, the flecks of precious metals in the mountains of cinder are too few and too small to cover the costs of obtaining them.

“There’s no known technology … for extracting precious minerals from basically a waste product,” Arizona Corporation Commission spokeswoman Heather Murphy said.

That’s doubly the case for platinum.

“As primary ore, platinum has never been mined in Arizona; its only production has come from trace amounts recovered in the final stages of refining copper ores… the geologic environment of Arizona, diverse as it is, does not encourage the search for platinum-group metals,” according to the “Mining Scams” report.

Agra-Technologies operates far out on Leupp Road, across the street from Star School, with a business office at 5800 N. Dodge Avenue. The Leupp Road plant has been there less than a year, he said.

Despite Campbell’s description of his company’s interest in producing precious metals, Agra-Technologies is primarily interested in agriculture, said Chief Financial Officer William Baker. It is grinding up volcanic cinders to make soil additives that farmers and gardeners can use to improve their soil.

Star School Director Mark Sorensen said he was leery of the Agra-Technologies facility across the street until his new neighbors told him they were producing special soils and soil enrichment products, which he welcomed.

Star School is solar-powered, has a greenhouse, and is almost environmentally self-sustaining. Sorensen hoped to install a well this fall.

When Agra-Technologies had a small spill from a 10,000-gallon tank labeled “hydrochloric acid,” no one ever notified Sorensen.

The spill was perhaps 20 or 30 gallons of 30 percent hydrochloric acid, according to what the plant operators told the Arizona Department of Environmental Quality.

The person who notified ADEQ said it was much larger.

“There wasn’t any risk of any kind of off-site release or threat to groundwater,” ADEQ director Steve Owens said.

ADEQ sent out hazardous materials specialists to inspect, but they did not test the potable water at a pumping station less than 200 feet away used by local homeowners and other water haulers. The water comes from a well more than 1,200 feet deep.

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Copyright (c) 2005, The Arizona Daily Sun, Flagstaff

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