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Owners of gold mine above Nederland warn town officials to stop defaming it for water quality violations

Colorado could set water violation fines and new regulations for a revived gold mine, but developers claim they are victims of $500 million in libel by town officials – “We will not go quietly.”

Boulder Creek is seen on Monday, August 23, 2021, in Boulder. The 31.4-mile-long creek stretches from the Rocky Mountains to east of Boulder. (Olivia Sun, The Colorado Sun)
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Owners of the Cross and Caribou mine above Nederland have warned town officials to stop disparaging the longtime gold operation for water quality violations or face $500 million in slander damages.

The mine owners’ claims of disparagement by Nederland come as state reclamation officials hold a hearing Wednesday to decide fines and cleanup steps for water quality violations at the mine a few miles above the Boulder County town. 

Cross and Caribou’s owners are furious at what they call Mayor Kris Larsen and town board members’ efforts to “whip up opposition” to long-term expansion plans for the Cross and Caribou, which was issued a cease and desist order by state mine reclamation officials over heavy metals leaking in mine discharge water.

TODAY’S UNDERWRITER

A five-page letter from mine attorneys, obtained by The Colorado Sun under an open record request, demanded that town officials themselves “cease and desist” from alleged defamation against Grand Island Resources. Much of the letter refers to posters put up around Boulder County saying the local “watershed is being poisoned,” among other anonymous charges. 

Nederland Town Administrator Miranda Fisher said in an email statement, “Town did not develop nor did we have anything to do with this attached ‘Libelous Nederland Poster,’” the term the mine attorneys used to label it in their letter to the town.

Larsen said Tuesday he and other members of the Nederland town board would not be commenting on the mine’s letter, after consulting with attorneys and staff. It’s unclear which parts of mine operations the town has jurisdiction over, lying outside the town limits. The mine’s letter says Mayor Larsen requested a meeting with mine representatives in November, and that they spent an hour walking through the mine’s history and efforts to fix the water issues. 

Renewed mine operations face a series of new hurdles since the Colorado Department of Public Health and Environment’s Water Quality Division first issued a cease and desist order in the fall because of an alleged series of heavy metal violations in samples from a discharge into Coon Track Creek, 4.5 miles from Nederland. 

  • Grand Island Resources will argue the level of fines at a hearing Wednesday in front of the Department of Natural Resources’ Mined Land Reclamation Board. The company will provide a status update on promised development of water cleanup equipment. 
  • Boulder City Government asked the state to preserve cease and desist orders on any mining activity at the Nederland mine until more water sampling rules are in place, cleanup systems are certified and operating, a stormwater plan is developed, and new long-term financial guarantees are in place.  
  • An environmental group, Save the Colorado, has asked the state to place the mine in a higher category of review, a “designated mining operation,” that would require more environmental assurances and acknowledges the mine could disturb dangerous heavy metals. 

TODAY’S UNDERWRITER

The state’s current water quality review stems from a series of failed tests of the discharge water. The mine’s letter says any discharges from the mine do not go into the watershed that feeds into Nederland’s drinking water intakes, and that there’s no connection between those drainages. The various watersheds do collect in Barker Reservoir and beyond, which gives the City of Boulder an interest in the water quality of its sources. 

The state’s cease and desist order said mine owners failed to make some required pollutant reports in March and April. When the state looked deeper, it found pollutant violations in those months, but also many more alleged violations before and after, spanning a period from December 2020 through August. 

In April, for example, Cross/Caribou self-reported copper traces of 50 micrograms per liter of water, when the state standard is a daily maximum of 20. In January, the mine reported lead of 10 micrograms per liter, when the state 30-day average limit was 3.8. The state’s order charges the mine with violating the Colorado Water Quality Control Act. The notice of violations and cease and desist order in early November said the state is continuing to investigate and may have “additional enforcement actions.”

Water quality officials ordered the owners to build a new containment and cleanup system, and threatened to impose fines of up to $54,833 per day for each of multiple violations for the toxic metals and for failing to report test results.

Ed Byrne, attorney for the mine owners, said in the warning letter to the town that since 2019, owners have spent more than $6 million shoring up the Idaho Tunnel, mine cleanup and water treatment systems. Town officials say the company wants to restart gold mining operations and build an ore processing facility on the site, rather than sending rock on dozens of trucks a day across county roads. 

The mine owners said they believe it’s important for Nederland residents to know the alleged water quality violations never went above drinking water standards, only aquatic life standards, and that the mine is in a different drainage than Nederland’s drinking water system.

The alleged defamation by town officials threatens to harm the mine and the half-million dollar monthly payroll the mine contributes to the community, with employees and contractors shoring up mine facilities and working on water treatment, Byrne’s letter said. Despite offers of a personal tour and extensive collaboration with mining and geology programs at the Colorado School of Mines and the University of Colorado, the company claims, “the mayor chose to pick a fight with us. We are here to promise you that we will not go quietly.”     


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