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Thursday, May 31, 2012

The Homestake Gold Mine of South Dakota

The open pit portion of the Homestake Gold Mine in Lead, South Dakota.  This is only a small part of the mine because it extends into the earth for thousands of feet making it at one time the deepest mine in the western hemisphere.
Photo by Rachel Harris

This mine traces its origins all the way back to 1876 when it was discovered by Fred and Moses Manuel, Alex Engh, and Hark Harney in April, during the Black Hills Gold Rush.  The following year it was sold to a trio of gold entrepreneurs, George Hearst, Lloyd Tevis and James Ben Ali Haggin who bought the mine from the group that discovered it for the sum of $70,000.  In October 1877 George Hearst appeared at the scene of the mine where he took active control.  All the mining equipment used at the mine had to be hauled in by oxcart from the nearest railhead in Sidney, Nebraska.  Even though the mine had a remote location by July 1878 the 80-stamp mill started to crush the ore from the mine.

The mine is located in a domal uplift that is about 100 kilometers long and 60 kilometers wide straddling the border of South Dakota and Wyoming.  The Black Hills were uplifted during the Laramide orogeny that occurred between 60 and 65 million years ago, and are an outlier of the Rocky Mountains.  The rocks exposed in this range are from 2.7 billion years old to 60 million years old.  The core of the mine is composed of Precambrian phyllite, cummingtonite schist and granite with the Black Hills surrounded by younger sedimentary rocks.  Most of the gold deposits are associated with a Precambrian banded iron formation.

Hearst and his partners sold shares in the Homestake Mine and had it listed on the New York Stock Exchange in 1879 where it is too this day as one of the longest-listed stocks on the exchange.  The stock that has been listed the longest is Con Edison, whose original name was New York Gas Light whose listing dates back to 1824.

Under their control the mine’s holdings were increased sometimes by fair means or if that didn’t work by foul means.  They bought out some of the adjacent claims, but weren’t adverse about using the courts to obtain others.  There is even evidence that one man was murdered by one of the group’s men because he refused to sell his claim to them.  The case was dropped when all the witnesses to the murder vanished.  Hearst bought out the newspaper in Deadwood to sway public opinion his way, with the editor of the opposing newspaper was beaten up while walking down a Deadwood street.  Hearst himself realized that he could be murdered and asked his partners to take care of his family if he was; in the end though it was Hearst that walked away smiling, still alive and very rich.

Although the gold ore mined at Homestake was always low grade averaging less then an ounce per ton it existed in vast quantities.  During its lifetime the mine produced 39.8 million ounces of gold along with 9 million ounces of silver.  The mine is the only one in the Lead mining district was the second largest producer of gold in the United States.  The largest producer of gold is the Carlin Trend in Nevada.

At the end of 2001 production at the Homestake ceased for several reasons including low gold prices, poor ore quality combined with high operating costs.  There had been a merger with Barrick Gold Corporation and Homestake Mining Company in mid-2001.  They agreed to keep the mine dewatered while negotiations for its further use continued with DUSEL, but progress along these lines continued at a snails pace.  As negotiations dragged on it was costing Barrick $250,000 for maintaining the pumps and ventilation system so on June 10, 2003 Barrick threw the switch and closed the mine completely.

After being closed for six years researchers at Berkeley announced that the Homestake Mine would be used as a research facility causing it be reopened for the study of neutrinos and dark matter particles.


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