Controversial oil, gas lease in Fremont County advances

  Tracy Harmon 

Pueblo Chieftain

Posted Nov 19, 2018 at 1:23 PM   

CANON CITY — Residents are invited to comment on a preliminary environmental assessment as the U.S. Bureau of Land Management moves ahead with a controversial oil and gas drilling lease on a parcel of public land southwest of here.

Concern about the potential oil and gas drilling impact on popular trails in the area has been voiced by Canon City Council, Fremont Adventure Recreation and Colorado Mountain Club. Residents of Canon City also have voiced concerns about impact on private property values in the area.

The proposed oil and gas lease sale involves 602 acres of public land located just off Temple Canyon Road southwest of Canon City and is bordered by the Dawson Ranch subdivision.

A 97-page preliminary environmental assessment indicates the parcels main uses are recreation and mining. Currently, four recreational trails run through the proposed site and Zephyr Minerals has an active notice for exploration of gold claims in the area.

The parcels were nominated anonymously for the March 2019 lease sale even though there have not been historic or active oil or gas wells in the area. Despite that, leases can be issued regardless of the potential, BLM Field Manager Keith Berger told The Pueblo Chieftain last month.

The preliminary environmental assessment indicated “the parcels in Fremont County are considered (to have) low to no development potential.”

The document is available online for review and comment at:¤tPageId=170350.

 The document also can be seen at the Royal Gorge Field Office, 3028 E. Main St.

The deadline to comment is Dec. 14. Comments received from the public will be reviewed and incorporated into the assessment.

Gas Well Fire in Greene County PA, 11 Feb. 2014, Pittsburgh Post-Gazette

Gas Well Fire in Greene County PA, 11 Feb. 2014, Pittsburgh Post-Gazette

Zephyr Minerals proposes a gold mine south of Canon City

CANON CITY — As Dawson Ranch neighbors pore over old mine access road proposal, they are growing concerned the mine will be much bigger than initially planned.

The U.S. Bureau of Land Management is seeking public comment on its environmental assessment for a proposed road that would allow access to Zephyr Minerals' proposed gold mine off of Temple Canyon Road about 4 miles southwest of here. Zephyr Minerals is conducting exploratory drilling to gauge whether it would be feasible to get permission to start an underground gold mine in the area west of Dawson Ranch, a neighborhood of more than 400 homes.

The access road request documents an issue between the mine owners and Randy and Jeanie Keller, who own the private property where an existing access road crosses.

"Keller is opposed to the proposed action of a new road crossing BLM public land a few hundred yards west of the road across his parcel," the BLM report says. "He has stated that Zephyr is avoiding doing business with him by proposing the new access road."

Zephyr, in a right-of-way application, indicates that "(Keller) will not allow sufficient improvement to the existing road to create safe travel conditions," according to the BLM assessment.

The Kellers and some residents of Dawson Ranch are concerned the proposed number of ore trucks that would be traveling the winding dirt Temple Canyon Road has increased from what they were told at a recent homeowners association meeting. According to the proposal, the access road would be used-year round with anticipated daily traffic of 75 employees, ancillary mine vendors and up to 20 ore trucks per day at maximum production.

"We don't know what's going to happen at this time," said Loren Komperdo, president and CEO of the Canada-based company. "At the end of the day, it is going to be a very small operation with probably three or four trucks a day.

"When we ask the BLM for an access road and list 20 trucks per day, that's the worst-case scenario. We don't want to say three or four trucks a day and then one day there are 10," he explained.

Residents are also concerned about new maps on the company's website which show they have staked new claims east of the proposed mine site in an area 700 yards from Dawson Ranch homes. The area is also home to numerous recreational trails used by bicyclists and hikers on BLM land.

"These claims represent a huge area, not just the very small project they are touting to the public," said Jeanie Keller.

"We have to stake it, and just because we stake the area on the surface does not mean we will be mining on the surface," Komperdo responded. "The only noise they will hear will be the drilling for exploratory purposes so we can look at what is underground."

According to the BLM report, the proposed action to construct the access road on Temple Canyon Road will not directly affect recreational users in the area.

"The indirect effects would come from the increased use of the road after the mine goes into operation. The remote experience offered to tourists on the jeep tours and bicyclists would be changed with the extra traffic and type of vehicles encountered along the road.

"This could introduce a safety hazard as well as the changing the experience" for recreational users, according to the report. "While the use of the right-of-way has an effect on the recreation setting, the decision to open the mine on private land is not a BLM decision."

If access is approved by BLM officials, Zephyr Minerals will initiate the mine permitting process with the Colorado Division of Reclamation, Mining and Safety. Before the mine could be developed, the company would go through a separate public notification process and public comment period required by the state.

At, mine opponents list concerns that include fears the mine would lower home values. Komperdo said the mine likely would be good for Dawson Ranch property values.

"We are going to employ 75 people who are going to be making $60,000 to $100,000 a year, and they are going to want to live in Dawson Ranch," he said.

This summer, the company has been drilling 15 exploratory holes to determine the extent of the gold in the area.

"We have four holes left to do and should be done within the next 10 days," said Komperdo. "One set of results is out and we are waiting on assays. The results for the next five (drill sites) are coming out around the first of September."

Those who wish to see the assay results can visit the company's website at Residents can also visit the website to register for updates.

The BLM draft environmental assessment, map and instructions to submit comments are available at Deadline for public comment is Tuesday.


More gold mining worries residents 


   A gold mining company conducting exploratory drilling on Dawson Peak has raised concern about future mining plans among residents in the nearby Dawson Ranch neighborhood.

Zephyr Minerals, a Halifax, Nova Scotia, Canada-based gold mining company started exploratory drilling in 2012 and recently moved two drills on site with the goal of continuing exploratory drilling this year. The proposed mine site is on Dawson Peak, 5 miles southwest of Canon City off of Temple Canyon Road.

   So far, the samples have produce gold that is nearly three times higher grade than the Cripple Creek and Victor Gold Mine product. The site has a potential to produce an estimated 1 million ounces of gold, said Will Felderhof, executive chairman of Zephyr. 

Zephyr hopes to apply for necessary state and county permits by the end of the year or early next year and could go into production by the end of 2019 or early 2020 if "there are no glitches, Felderhof said. "This is our third drill campaign and we hope to get up to 200,000 ounces, which would enable us to raise additional funds to mine. We have to raise a bunch of capitol -- $35 million -- for an underground mine and the processing facility," said Will Felderhof, executive chairman of Zephyr.

   Gary Peterson, a concerned resident of Dawson Ranch, said the proposed mine will impact the neighboring Dawson Ranch community, which has about 420 homes and an estimated 1,000 residents. He has concerns about the impact an open pit mine would have on property values and the environment as well as noise and dust disturbances.

"I took a news release from the Zephyr website dated Nov. 7, 2016, which talked about a new preliminary open pit mine plan. They have talked to their investors about the potential for both open pit and underground mining but open pit is far more economical than underground mining," Peterson explained.

   "I've got some problems with this thing; they are looking at a site that is 2.7 miles wide," Peterson said. Felderhof said the company originally planned an open pit mine, but the gold vein is "350 feet below the surface, so it is never going to be an open pit mine. That is not cost-effective because the deposit dips into the mountain and there would be too much waste material to make money. "There will be no open cut; it's not going to happen," Felderhof explained. 

   "This is on the hills behind us. Their good words are one thing, but what they have written is quite different. "They are changing, morphing and what they put out with public relations is to fit the questions coming at them," Peterson argued.

   Felderhof said the company plans to develop a high-grade, low-cost underground mine that will not contain mercury, arsenic or uranium and would not involve a cyanide-extraction process. "The beauty of this is all we do is drive a ramp underground and we only take out the ore and do everything possible to mitigate and take out waste material. It would have a very small footprint with a processing facility and a dry stack of clean sand.

   Peterson said the north facing processing plant is "geared for expansion" and will be facing Canon City. "It has an absolutely huge tailings area and it's going to be ugly," Peterson said. Felderhof said the current proposal is to extract 25,000 ounces of gold a year, but he would like to see a production of more than 40,000 ounces a year. "That is a $20 million to $40 million economic impact to the local economy and 75-100 high-paying jobs," Felderhof said.

Peterson said he believes a gold mine would be a detriment to tourism because it is "going to be a mess and a defacement of the scenery." He also has concerns about traffic on the Temple Canyon Road, which is a winding, dirt road that many people use to access mountain biking and hiking trails in the area.

   "There will be some trucks going out each week to take out the concentrate, but that will only be a couple truckloads a week," Felderhof said. "How are they going to get 100 people up there?" Peterson questioned. "Maybe the county will help straighten it (road) out and fix it up a little. They could support fixing it up for a lot of nice economic activity and high-paying jobs," Felderhof said. "I understand that the Dawson Ranch community is largely retirees and they want peace and quiet. I get that. We want to be respectful and low-profile. We will do our best to listen to their concerns and hope to do everything we can to mitigate them," Felderhof said. He said residents likely will see only periodic drill turns until the mine is underground. He said crushing could be limited to daytime hours, plus fences and trees could help prevent a view of the mine.

   "From what I see, they will come in, mine gold in the most economic way possible and then they can leave and go back to Nova Scotia. I don't want this in my backyard and I don't think anybody up here does," Peterson said.

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