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Enforcement

Case Summary: Settlement Clears Way for Purchase and Cleanup of Mine Tailing Site in Colorado

In September 2017, Caldera Mineral Resources (Caldera) signed an Administrative Settlement Agreement and Order on Consent (ASAOC) with the U.S. Environmental Protection Agency (EPA) and purchased the Camp Bird Mine in Colorado. The settlement facilitates the sale of the Camp Bird Mine and provides for several million dollars of work at the site. Currently, EPA is negotiating removal cleanup work with Caldera Mineral Resources, Inc., the purchaser of the Camp Bird Mine out of a bankruptcy estate. Prior to the bankruptcy, Caldera leased the Camp Bird Mine in September 2012.

EPA is working closely with state counterparts, including the Colorado Division of Reclamation, Mining and Safety (CDRMS) and the Colorado Department of Public Health and Environment (CDPHE). This case promotes redevelopment by enabling a mining company to mine the Camp Bird Mine for the first time since the late 1980s, while protecting human health and the environment.

Work will be conducted in two phases: Caldera is performing Phase 1 as an EPA Time-Critical Removal Action under the direction of a Federal On-Scene Coordinator and is addressing erosion and erosion potential at the historic tailings. Caldera can elect to perform Phase 2 under the direction of CDRMS through modification of the existing mining permit and will address erosion and erosion potential at the modern tailings. If Caldera does not elect to perform Phase 2 under the direction of CDRMS, Caldera will perform Phase 2 under the direction of a Federal On-Scene Coordinator.

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Information about Caldera Mineral Resources

Caldera Mineral Resources is a corporation based in Silverton, Colorado. Caldera is committed to becoming a regional leader in discovery, extraction and processing of precious, critical and strategic metals, as well as responsible stewardship.  

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Information about the Camp Bird Mine

The Camp Bird Mine is a famous gold mine located near Ouray, Colorado. Mining activities began at the Camp Bird Mine in 1877 when the first claims were staked. Silver was discovered the following year. The Camp Bird Mine produced about 1.5 million troy ounces of gold and 4 million troy ounces of silver from 1896 to 1990. Miners deposited large quantities of tailings in cells that border Sneffels, Imogene and Canyon Creeks, which ultimately combine and flow downstream to Ouray.

The Site contains three very large tailings piles that are being actively eroded by three different streams (Sneffels Creek and Imogene Creek enter the Site and combine in the middle of the tailings to form Canyon Creek). All three tailings piles are also susceptible to flood events, increased runoff and failure of the existing slopes.

Uncovered mine waste deposits are actively eroding into Canyon Creek, which, in turn, are loading significant amounts of heavy metals into the stream system. Concentrations of copper, zinc and lead in the mine waste deposits at the site are at levels toxic to aquatic life. An uncontrolled release of hazardous substances threatens the creek’s benthic invertebrate community and could post a threat to fish. There is a potential that the erosion may dramatically increase due to increased runoff, streamflow, or the mass failure of existing slopes.

More information about the Camp Bird Mine is available from the On-Scene Coordinator site page at https://response.epa.gov/site/site_profile.aspx?site_id=9930.

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Background Information On Bankruptcy Proceedings

Camp Bird Colorado, Inc. (CBCI) acquired the mine in 1958 and owned and operated the mine for over 50 years. CBCI applied for and obtained a mining permit from the predecessors of DRMS in 1982. CBCI undertook reclamation of the tailings cell located on the north side of Sneffels and Canyon Creeks, placing cover materials on the top and slopes of the tailings piles. In 2014, CBCI along with its parent corporation, Federal Resources Corporation, filed for reorganization under Chapter 11 of the Bankruptcy Code. The Chapter 11 bankruptcy was converted to a Chapter 7 bankruptcy in March 2016. In late 2016, Caldera expressed an interest in acquiring the mine from the CBCI bankruptcy estate in settlement of its claims against CBCI.

Prior to CBCI’s bankruptcy filing, Caldera acquired rights in the Camp Bird Mine under lease agreements that included purchase options. In the bankruptcy proceeding, Caldera asserted substantial secured claims against the bankruptcy estate. The Chapter 7 bankruptcy trustee, Caldera, and the EPA negotiated several settlements, including the settlement relating to the Camp Bird Mine. The Chapter 7 trustee sought approval from the Bankruptcy Court to enter into these settlements, including the settlement for the cleanup of the Camp Bird property, and the sale of the property to Caldera. EPA and the Trustee signed the ASAOC before the August 1 bankruptcy hearing to illustrate to the court both parties’ commitment to clean up the property.

On August 8, 2017, the Bankruptcy Court approved the settlement and transfer of the Camp Bird property to Caldera. On September 1, 2017, the bankruptcy trustee transferred the mine property to Caldera, free and clear of liens pursuant Bankruptcy Code section 363.

Also on September 1, 2017, Caldera ratified the Trustee’s obligations under the settlement and began performing necessary cleanup work. Caldera also placed $1.2 million in a trust for the site.

Contact Information

For more information, contact

Kayleen Castelli
Attorney
Legal Enforcement Program
U.S. Environmental Protection Agency
Region 8
1595 Wynkoop Street
Denver, CO 80202-1129
(303) 312-6174
castelli.kayleen@epa.gov

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