The Montana Department of Environmental Quality is reviewing an application for an operating permit for a gold mine at a historic mining site 15 miles south of Butte.

If approved, the mine could begin operating by the end of this year.

The proposed mine is a joint venture between Timberline Resources Corp. and Highland Mining at a site that was first mined in the 19th century. The proposed project is located within the headwaters of three separate watersheds, Fish Creek, Moose Creek, and Basin Creek.

Gold was first discovered in the area at Fish Creek in 1866, according to a news release from the state. The area was mined into the 1870s, but after the easiest deposits were processed it was dormant for over 50 years.

In the 1930s and 40s, the Butte Highlands Mining Co. operated an underground mine until the site was shut down during World War II because of war-time regulations. Operations began again in 1947, but activity was sporadic until the 1980s and 1990s, when the site was heavily explored by such companies as ASARCO and Placer Mining. Over 170 drill holes were dug into Nevin Hill during this time.

Timberline Resources Corp., of Coeur d’Alene, Idaho, acquired the property in 2007 and began exploratory mining in 2009.

The DEQ held a public meeting on March 21 and is accepting comments about the mine as it prepares its Environmental Impact Statement. County officials and U.S. Forest Service personnel were among the 30 attendees at the meeting, according to the DEQ.

The plan calls for the ore to be shipped directly from the mine without processing it first. The mine is on private land, but the proposed road will run through Forest Service land, so the government will prepare its own environmental report.

According to the DEQ’s Montana Environmental Policy Act Coordinator Jeffrey Herrick, the mine will have a small footprint of about an acre, and Herrick said the mine could begin operating this year.

Another comment period will be established after the EIS is published.

In a press release, Timberline CEO Paul Dircksen said DEQ has scheduled the review to be completed and the permit to be issued by August. He also said the operation could begin by the end of the year.

“We are encouraged and optimistic that Timberline is on track to participate in cash flow resulting from gold production from the Butte Highlands Gold Project beginning this year.”

The mine project has an initial target production of 400 tons per day for the first four years.

— Reporter Francis Davis can be reached at francis.davis@mtstandard.com

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