Historic Overview

The Leadville Mill History

Leadville Mining and Milling, Inc. constructed the Mill in 1989 to process ore from the Hopemore Mine located 8 miles east of the Mill. The mine and mill commenced production in 1989 and operated sporadically for approximately 5 years. A building permit was obtained in December 1987 and certificates of occupancy were issued for the crusher building on October 5, 1990 and the mill building on November 9, 1990.

Overall, the mill operated less than 1,000 hours and produced about 1,000 tons of tailings. These historic tailings are currently stored on the northwest corner of the Mill property. There are also gold-bearing material stockpiles on the property. The tailings and stockpile material will be the first to be processed once production commences at the Mill.

The existing Mill facility includes:

Mill Building — The mill building contains the fine ore bin, reagent storage area, ball mill circuit, flotation circuit, concentrate thickener, laboratory, mill office, safety/training/change room, concentrate storage room, and restroom.
Crushing Building — The crushing building contains the run-of-mine grizzly, primary, and secondary crushers. It is connected to the mill building via an enclosed conveyor crossover bridge.
Tailings Storage Facility — The TSF was redesigned to meet 2008 CDRMS performance standards and physical conditions in existence at that time. The consequent development of homes proximate to the TSF, as well as updated regulations, have necessitated the re-design of the TSF. This work is currently underway.
Other Facilities — These include (or will include):

- electric utility line

- sewage lift station

- upper and lower gravel mill access roads

- fire water storage tank or fire hydrant

- 4-strand animal-friendly fence

Ownership and Permit History

In 1990, Leadville Mining and Milling, Inc., the original owner and developer of the Leadville Mill, was issued permit “M1990-057 Hopemore Shaft” (the Operating Permit), by the Colorado Department of Reclamation, Mining & Safety (CDRMS). This permit, covered the Hopemore Mine (the Mine) located on Breece Hill, East of Leadville as well as the Mill. Note that although the permit is referred to as a Mining Permit, mineral processing (not mining), will be conducted on this property.

In 2008, the Mill (then known as the Stringtown Mill) was purchased by Constructive Investments (CI). The Mine was purchased around the same time by Robert Calder, aka Lockland, LLC (Lockland).

At the time of purchase, the Operating Permit was classified as Active Status. CI’s original intent was to develop and operate the mill to process ore from a mine in Boulder County owned by now-defunct Calais Resources, Inc. (Calais). The Mill was to be operated by Union Milling Company (UMC), wholly-owned by CI.

On or about March 2009, CDRMS completed its review and notified CI and Lockland that in order to maintain an Active permit, the Mine and Mill were compelled to demonstrate a reasonable plan for near-term production and treatment of ores. This was not possible, as the Hopemore Mine (Lockland) was not ready for near-term production.

However, it was in CI’s, Lockland’s, and Calais’ interest for the Operating Permit to remain Active. Calais also needed to demonstrate a reasonable near-term production plan to keep its permit Active. It was therefore proposed that M1990-057 be tied to Calais’ Active mine permit in Boulder County.

The proposal was accepted by CDRMS, and Calais assumed the Permit Succession of Operators (SOO) Approval Rev. SO-2 on 6 April 2009.

By early 2013 it became clear that the relationship between Calais and CI was no longer of benefit to the parties due to depressed gold prices and a subsequent inability to obtain financing. The parties mutually agreed to sever their relationship and on 3 May 2013, CDRMS approved Calais’ SOO and Union Milling Company LLC (UMC’s operating company), assumed reclamation liability of the Mill.

During the time the Mill remained on care and maintenance (from 2013 to 2020), CI considered various options to develop this asset. During this time, CI modified the permit to allow for processing materials from multiple sources (known as “toll” or “custom” milling) and also developed its environmental remediation-based business plan, whereby historic mine dumps could be economically reclaimed to the benefit of the environment and the local community.

However, the current Operating Permit only allows the processing of materials using flotation technology. This technology is not compatible with processing the dump material, and must therefore be reconfigured to have the ability to remediate the existing waste dumps. This also requires that the Operating Permit be updated.

CJK Milling Company, LLC (CJK) saw the economic and environmental benefit of this plan, and on 03 April 2020 purchased the Mill from CI. All Mill assets, including land structures and equipment, are now 100% owned by CJK Milling Company, LLC. UMC still holds the Operating Permit, which will be transferred to CJK once it has been updated.

Local Mining History

Leadville and its economy are historically tied to the mining industry. Leadville’s origins lie in a gold rush to California Gulch in the 1860's, and by 1873, Slabville, the community that would become Leadville, had taken shape. As miners rushed to the area, Leadville boomed, and by the 1880's it was the second largest city in Colorado with 30,000 residents. The area was rich in minerals, especially gold, silver, lead, copper, and zinc. The district is credited with producing over 2.9 million ounces of gold, 240 million ounces of silver, 1 million tons of lead, 785,000 tons of zinc, and 53,000 tons of copper.

Entrepreneurs also accumulated fortunes through providing services and equipment for miners. Names familiar nationally such as Meyer Guggenheim, Marshall Field, Charles Boettcher, Horace Tabor, and Charles H. Dow, all have historic ties to Leadville.

By the end of the 19th century, mining activities depleted significant amounts of initial gold, silver, and based metal ores exploitable by the technology of the day. However, another metal, molybdenum, an element used to strengthen steel, was discovered in the area, which brought Leadville back into a boom cycle in the 20th century.

With the onset of World War II, and the acceleration of military production, molybdenum mining increased. This, together with the construction of Camp Hale, provided Leadville with a mid-century economic revival. However, the military's decision to dismantle Camp Hale during the postwar period adversely affected the town and left the Climax Molybdenum Mine as the major employer and anchor of the town's economy and the county's tax base.

The Climax Mine rose to prominence, employing 3,000 people and producing 75% of the world's molybdenum.

By the late 1970s, a series of circumstances converged: the price of molybdenum dropped, foreign competition increased, and Phelps Dodge (Climax’s owner at the time) opened Henderson Mine, a new, more efficient operation, near Berthoud Pass. (Note that in 2006, Phelps Dodge was acquired by Freeport McMoran, stock symbol: FCX.)

These circumstances resulted in the closing of Climax in the early 1980s, and remained active under “care and maintenance” for many years. In 2011, after a significant refurbishment program, Freeport McMoran re-opened Climax. The mine currently operates at a rate of about 30,000st/day.

California Gulch EPA Superfund

In charting its new direction, Leadville first had to overcome a major hurdle. The many years of mining left behind substantial contamination of the soil and water. California Gulch, where Leadville mining had begun, polluted the upper reaches of the Arkansas River, and the Environmental Protection Agency (EPA) declared Leadville and a twenty square-mile zone around the town a Superfund site. Tremendous progress has been made on the multimillion-dollar cleanup project during the twenty years since the designation.

The town is now 98% cleaned up and the Superfund designation has expired. On July 1, 2008, Colorado and federal agencies reached a $138.5 million settlement with Newmont Mining and ASARCO for cleanup and damages at the California Gulch Superfund site in Leadville.

Ore Deposits

The principal ore deposits of Leadville occur in the Blue Limestone and are at, or near, its contact with the overlying bodies of porphyry. The ores consist mainly of carbonate of lead, chloride of silver and argentiferous galena, in a gangue of silica and clay, with oxides of iron and manganese and some barite. These materials are mainly of secondary origin, and result from the alteration by surface waters of metallic sulfides.

The study of these deposits has shown:

Deposits were originally deposited as sulfides, and probably as a mixture, in varying proportions, of galena, and pyrite;
Deposits were deposited from aqueous solutions;
The process of deposition was a metasomatic interchanging between the materials brought in by the solutions and those forming the country rocks, consequently, they do not fill pre-existing cavities;
Ore currents from which they were deposited did not come directly from below, but were more probably descending currents; and
Currents probably derived the material of which the ore deposits are formed mainly from the porphyry bodies which occur at horizons above the Blue Limestone.

Historic mining of these deposits resulted in waste material dumps near the operating mine shafts. These dumps are prevalent and can be seen East of Leadville, and throughout historic mining districts throughout the Western United States.