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Cleanup costs climb at Beal Mountain as DEQ drops “bad actor” case against former Pegasus Gold executive

Cleanup costs climb at Beal Mountain as DEQ drops “bad actor” case against former Pegasus Gold executive

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Doug Butori irrigates his ranch from German Gulch Creek, which has its headwaters at the base of the defunct Beal Mountain Mine near Anaconda.

The mine, closed over 20 years ago, still poses a threat to the water he relies on.

During a tour of the site with U.S. Forest Service personnel and members of the project’s technical working group Tuesday, Butori stood beside the mine’s leach pad, where cyanide once poured over ore to reveal gold, and summed up its legacy.

"You see horror stories like this, and the other mines that Pegasus had. I don’t think Pegasus did this state any good at all,” Butori said.

The open-pit cyanide heap leach mine stopped operating in 1997. A year later, Pegasus Gold Corporation went bankrupt, leaving behind inadequate reclamation bonds at its various Montana mines, costing taxpayers over 100 million since.

Beal Mountain Mine

The Beal Mountain Mine, once owned by Pegasus Gold Corporation, is now the site of an ongoing cleanup that's cost almost $25 million. The $6.2 million reclamation bond Pegasus left after its 1998 bankruptcy is long gone. German Gulch Creek flows from its base into Silver Bow Creek and the Clark Fork River, and those streams are still at risk of pollution from the mine.     

In 2003, the Forest Service entered into a settlement agreement with the Clark Fork Coalition conservation group to resolve a Clean Water Act lawsuit, thereby taking on responsibility to address the threat of a hazardous substance release at Beal Mountain.

The dike holding back the worst contaminants shows signs of geotechnical instability, and a failure would cause a devastating deluge into German Gulch, Silver Bow Creek and the Clark Fork River.

“If this thing ever breached, and that concentration went down the crick, it would hit me first, but it would hit all the way down," Butori said. “And all the cleanup would be for nothing.”

Selenium continues to drain into the creek from the mine, toxic to trout at low doses. Water is treated to prevent exceedances, but they still occur.

Pegasus would never get away with it today, Butori said. The mining method was banned in Montana by citizen initiative in 1998, and the law is now stricter on reclamation bonds.

Pegasus got away with plenty.

The Montana Department of Environmental Quality on Wednesday dropped its “bad actor” lawsuit to remove Hecla Mining Company’s president, Phillips Baker Jr., from Montana mining projects.

Baker was a top executive for Pegasus when it declared bankruptcy on the Zortman-Landusky gold mine on the edge of the Fort Belknap Indian Reservation, as well as operations at Beal Mountain and Basin Creek.

The Montana Legislature passed the Metal Mine Reclamation Act in 1989 and expanded it in 2001 after the Pegasus bankruptcy to prevent mining executives who haven’t reimbursed the state for past cleanup efforts from receiving new mining permits.

In a press release Wednesday, the DEQ said bad actors cannot leave Montanans to foot their bills, yet the case wasn’t pursued due to “complex procedural hurdles that complicate the case and potentially risk DEQ’s ultimate goal of preventing bad actors from operating in Montana.”

The suit was filed when Steve Bullock was still governor. DEQ attorney Sarah Clerget wrote that the election of Gov. Greg Gianforte and appointment of a new DEQ director prompted “a very careful look at the entire record of the case.”

Hecla, under Baker’s leadership, continues to move forward on two controversial copper and silver mines in the Cabinet Mountains near Libby and Noxon, which both Gianforte and U.S. Sen. Steve Daines have pushed for development.

The decision to withdraw the suit drew outrage from environmental groups and impacted Native American tribes. In a press release Wednesday, DEQ Director Chris Dorrington said new legislation is a better avenue to go after bad actors and outstanding cleanup funds.

“Changing the law is the best way to ensure it is clearer and easier to go after bad actors in the future,” Dorrington said.

It isn’t clear and easy now.

The DEQ this month ordered the company that currently owns the Montana Tunnels mine in Jefferson City, site of another former Pegasus operation, to pay the $16.8 million bond owed and start reclamation. If the company walks away and another mining company fails to step in, the DEQ gets stuck with the cleanup, $16.8 million short.

Meanwhile, the Pegasus legacy is on full display at Beal Mountain, where the U.S. Forest Service, with guidance from the various conservation groups and government agencies of the working group, is fighting with taxpayers’ dollars to stop a mountain of contaminants from rushing downstream.


Pegasus paid $6.2 million for the Beal Mountain cleanup, which has so far cost nearly $25 million. The state has paid $3 million and the Forest Service over $14 million.

The Forest Service estimated the cost of final closure at $40 million in 2010, but that’s based on a plan which would likely fail to eliminate water treatment. Water treatment currently costs $350,000 per year and that cost is projected to increase with time.

The Forest Service is instead working on a new plan, which the agency hopes will prevent perpetual water treatment.

Sonny Thornborrow, project lead for the Forest Service, said the paramount risk is a major slope failure and contaminant release into the streams.

He said he’s optimistic that horizontal drilling, a method fine-tuned by mining companies, could be used to drain groundwater before it hits the most contaminated area, thereby taking weight off the unstable slope and ultimately reducing the amount of contaminated water to be treated.

Thornborrow said he believed it could be done — and that it needed to.

A company under Forest Service contract is drilling on a project at Hyalite Canyon south of Bozeman. Market research and 20 years of groundwater study around the Beal Mountain leach pad suggest something similar would work at Beal, he said.

Though it’s still in the planning stage, Thornborrow said the drilling project could start as early as 2023.

That would require more annual funding, however. The forest service vies for annual appropriations from Congress, and has so far received between $500,000 and $1.3 million a year.

Thornborrow ventured to speculate on the cost of the two- or three-year drilling project required.

“I think we would be looking at a few million dollars. So we're in the millions of dollars, not the tens of millions. So all things considered, that's probably within the realm of possibilities for a site like Beal," he said.

The next step is to form a precise plan, said Bob Wintergerst, the Forest Service’s regional environmental engineer for the project.

"We've been fortunate we've continued to get funding, but you need to have the model to say, ‘We are ready to take that big step and we need the big dollars.’ Because if you get big dollars, and you can't spend them then you basically failed," Wintergerst said.

It’s not to say they just hand those big dollars out. There are a lot of dead ends for Beal.

Great American Outdoors Act funds don’t necessarily fit, Wintergerst said, because the mine site is closed to the public.

He said he doubts Beal’s a fit for funds from the gigantic bipartisan infrastructure bill currently being debated either.

“It would be nice to say, okay, we need funding for legacy mines, and we need proper enforcement for current regulations that do the job of making sure they have enough money in their bonds to cover that,” he said. “But that’s out of my wheelhouse altogether.”

Instead, federal agencies compete for limited resources.

“Can the EPA step in? Yeah, but they’re in the same boat as we are. And the BLM. We’re all federal agencies, and a lot of the time funding is not there. Because if you look at the number of historic abandoned mines in Montana, it’s in the tens of thousands,” he said.

On Wednesday, a proposal advanced through the U.S. Senate’s Energy and Natural Resource Committee for a $3 billion grant program to reclaim abandoned hard-rock mines. Sen. Martin Heinrich (D-N.M.) wrote the bipartisan proposal with support from Daines.

The proposal has the support of environmental groups, including Trout Unlimited and Earthworks, both represented on Beal’s working group, as well as the National Mining Association industry group.

Bonnie Gestring, northwest program director for Earthworks and a member of the Beal Mountain working group, said the legislation would appropriate more federal funds to abandoned mines, but stopped short of generating funds from the mining industry.

“Ultimately, we’d like to see legislation passed that generates a dedicated source of revenue to fund abandoned mine cleanup based on a royalty or reclamation fee on hardrock mining, similar to the coal program. Currently the hardrock mining industry does not pay a royalty for the minerals that are removed from federal lands,” she said.

Legislators have submitted proposals to do so over the years, but they haven’t passed.

Beal Mountain Mine tour

Sonny Thornborrow on Tuesday describes the work so far and the work still to come at the Beal Mountain Mine site near Anaconda. Thornborrow, the project lead for the U.S. Forest Service, and the project's technical working group representing conservation groups and government agencies are working to clean up the mess left behind by Pegasus Gold Corporation.    

Up on Beal Mountain, Thornborrow told the group he worries about the early spring melt before the roads are clear, when groundwater’s at the highest and the water treatment pumps are off. His team may have to think about plowing the roads to get in earlier, he said.

Pegasus ran the mine year-round.

“If you have enough people and equipment you can do it,” Thornborrow said. “It’s a lot different for a company versus us trying to plow in here every year. It’s a lot for us to take on.”

“Then you’ve got to worry about freezing, too,” Butori said of water treatment.

“Nothing up here’s easy,” Thornborrow responded, and the working group laughed.

Later, Butori reconsidered the issue.

“It’s nothing money can't fix," he said.

Fish eggs and earthquakes

At Beal the primary contaminant of concern is selenium. It’s getting into German Gulch, which feeds Silver Bow Creek and the Upper Clark Fork River.

The cleanup of the Clark Fork watershed is a separate, ongoing, roughly $1 billion investment, said Andrew Gorder, legal director for the Clark Fork Coalition conservation group.

The Atlantic Richfield Company, which owned the copper mining operations in Butte and Anaconda that polluted the watershed, is paying for much of the cleanup in Superfund settlements.

A contaminant release from Beal would further jeopardize a struggling ecosystem where trout and even osprey populations are declining.

Trevor Selch, water pollution biologist for Montana Fish, Wildlife and Parks, on the tour said German Gulch is the only known source of pure strain westslope cutthroat trout for Silver Bow Creek.

Selenium accumulates in fish eggs.

“They'll hatch normally, but when they start feeding off that selenium rich yolk sac is when you can see entire year classes wiped out," he said.

Pegasus built a pipeline to keep contaminants from the mine pit out of German Gulch. The Forest Service since rebuilt the system, but a buried valve broke in 2019 and water has since entered the creek during high flows.

Selenium exceedances occurred in German Gulch previously, but improved before the valve broken. For fish, the standard used for chronic concern is five micrograms per liter, and levels reached seven micrograms in June last year.

The valve will be repaired this year, Thornborrow said.

The Environmental Protection Agency set a lower national standard, 3.1 micrograms for rivers, but it isn’t yet used statewide in Montana.

The state and EPA approved the lower standard for the Kootenai River in northwest Montana, and a 0.8 microgram standard for the Koocanusa Reservoir that feeds it, because selenium from Canadian company Teck Resources Ltd.’s coal mines are killing the fish.

The trace amount of selenium now entering German Gulch is a real concern, but a major release of the leach pad at the containment dike would be catastrophic.

Thornborrow prioritized geotechnical research of the pit’s highwall when he took over the project in 2019.

On Tuesday, he showed the working group why. One after another they stepped over a foot-high rift where the hillside is slowly creeping apart.

“That can go on like that for a long time. But when we're under maximum stress — high groundwater early in the spring, and no dewatering — if you get an earthquake on top of that, that's when you're going to have a failure of one of these parts,” Thornborrow said.

It could happen directly along the fault where they stood, or in the weak clay layers nearby, he said.

“If one of those things fails, it causes the trigger in all the other parts of that slope, and that's when you get major movement,” Thornborrow said.

Significant movement hasn’t been observed in 20 or 30 years, Thornborrow said, but contractors started using light detection and ranging scans, or LIDAR, to map the area more precisely in the last couple years.

Understanding stability at the site will be key going forward with the new plan, Thornborrow said.

Then and now

John Fitzpatrick, the director of community and governmental affairs for Pegasus at the time, stood at the Beal Mountain pit in 1990.

“This may be the only mine in the world where the reclamation process began before the mining was finished,” he said.

On behalf of Pegasus, Fitzpatrick received a prestigious award of excellence from the Forest Service the year prior, in recognition of the company’s “commitment to developing an environmentally sound gold mine operation at the Beal Mountain Project.”

When the Forest Service took the project over from the bankruptcy trustee, the agency had to quickly build the reverse osmosis treatment system they use now. During construction, heavily contaminated water rose under the leach pad, hovering just below the critical level that would release it into German Gulch.

“We flipped the switch on just in the nick of time,” Thornborrow said.

Beal’s cleanup has been a long haul since, full of quick fixes, funding grabs, narrow misses, and occasional selenium exceedances.

The Forest Service inherited the building that houses the water treatment plant from the bankruptcy, and it’s a doozy. It becomes infested with mold and was struck by lightning. It’s a nightmare to clean the membranes from the tanks at the start of winter each year, when water leaks and freezes on the ground.

“This is just like a skating rink right here. And then some of that water is heated to help the cleaning process, so when you put that heated water in this cold steel box it's just condensation everywhere — it's pretty miserable,” Thornborrow said.

The situation will be rectified soon, he said. It was finally budgeted for.

A walk across Beal Mountain

Members of the technical working group for the Beal Mountain Mine site follow Sonny Thornborrow, project lead for the U.S. Forest Service, while he discusses geotechnical instability at the site Tuesday.

The horizontal drilling solution is not a certainty. The concept is yet unproven on site, and members among the working group, including Gestring, are yet to rule out the possibility of a partial or full removal of a large waste rock area — an expensive undertaking.

But they’re all in it together. Gestring commended the Forest Service on the job it has done so far. After all, the working group, local landowners and the agency are united in solving problems that affect everyone in the vast Upper Clark Fork watershed.

They’re among the few to see the problems up close, they’re making progress, but they’re not out of the woods yet.

“Ignorance is bliss,” Butori said. “There are plenty of people, if they saw what was happening, they would be very upset. The bottom line comes down to money. The bond put in place was not anywhere near enough to reclaim any of this stuff.”

And while the former Pegasus executive continues to permit mines in Montana, the bankrupt company is nowhere to be found at Beal Mountain.


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