For more than two years, the rise of Romarco Minerals (TSX:R) has been nothing less than remarkable. As late as October, 2008 shares of the Toronto based company could be had for a dime. The promise of the company’s pending Haile gold project in South Carolina, however, has meant a steady rise to recent highs near the three dollar mark, and helped the junior graduate to the TSX last November.
The Haile gold mine is a historic property in Lancaster County, South Carolina, that was actually one of the first operating gold mines in the United States, dating its history back to 1827. Over the centuries, the mine has been in and out of production. It was actually once a target of General Sherman in the Civil War, and was used to mine pyrite during World War One. The rise and fall of the Haile Mines’ profitability reads like a history of modern mining methods. The golden age of the mine actually began seven decades after its discovery, when German engineer Adolph Thies developed a process called the “Thies Barrel Chlorination Process” to extract gold from low-grade ore.
Recently, Romarco minerals learned that modern mining techniques may determine whether or not the colorful history of the Haile mine has a future. Romarco suffered its first real setback since taking on the project when, in a March 25th letter the US Environmental Protection Agency recommended that federal regulators deny a wetlands permit required to move the project forward. Romarco is currently waiting on two permits; a state mining permit and the federal 404 wetlands permit which is overseen by the U.S. Army Corps of Engineers (USACE), an agency of more 36,000 civilian and military personnel that is charged with coastal protection in the US. While the state mining permit closed its comments in February with what the company described as “few comments received” the wetlands permits is another matter entirely.
In his letter to the USACE, James Giattina, a regional water protection division chief with the EPA say the Romarco revival of Haile “has the potential to have a significant level of direct impacts to a wide variety of natural and human resources.” The EPA did leave the door somewhat open, noting that a formal environmental assessment could satisfy its concerns.
Romarco Chief Operating Officer Jim Arnold says that concerns based on past mining operations can’t be applied to Romarco because the company uses safer and more modern technology to ensure little environmental impact. The company says that diluted cyanide solution will be contained in steel tanks with the appropriate secondary containment designed to contain, at a minimum 110% of the largest tank. It will then encapsulate the project by placing a lining under and over any potentially acid generating waste stockpiles. Romarco will also install seepage collection and detection systems to treat drain down. Arnold told The State that Romarco’s Haile mine “is going to be the showcase mine in South Carolina and the world.”
And Keith Tunnel, an official with the Lancaster County Economic Development, says the mining won’t occur on pristine wetlands, but on property that “has been mined at least five times since the 1830s.”
While USACE spokesperson Sara Corbett says there is no timetable to grant the wetlands permit, investors bullish on Romarco no doubt believe the potential reward for waiting is great. In February, an independent feasibility study estimated that Haile will be one of the “lowest operating cost and highest-grade open-pit gold mines in the industry” and that Haile contains two million ounces of gold. The report went on to say, “Significant upside potential exists within and surrounding the Haile mineralized system, which continues to remain open in all directions and at depth.”
At press time, shares of Romarco were $1.85 up a penny on volume of more than 6.1 million shares.