Chromite Mining contracts split county leaders

Mar. 23, 2010
Oregon Resources Corp. wants to mine on Coos County forest lands, but commissioners are at odds over whether the county should pay for its own drilling samples beforehand.
Commissioner Bob Main advocates hiring a consulting service, PBS Engineering and Environmental, to do preliminary drilling for about $80,000. But commissioners Kevin Stufflebean and Nikki Whitty rejected that idea last week, in fear it would be a waste of money.
'We need to see if we can't come to an agreement outside of spending $80,000," Whitty said.
The county remains in negotiations with Oregon Resources for an exploration agreement, which would let the company do its own test drilling on county land. Main, despite being outvoted last week, still argues the county should find out what it has before entering into any agreements.
'It wouldn't be prudent to lease the ground if we don't know what we are leasing out, especially when this is known to be a gold-bearing region," Main said.
Oregon Resources wants permission to explore and possibly mine chromite on 6,000 acres of county-owned forest in the Beaver Hill area between Charleston and Bandon.
But Main contends the property may hold precious metals along with the chromite. In a recent e-mail, he described the Oregon Resources proposal as 'a possible rip off of county minerals," which might be worth hundreds of millions of dollars.
Oregon Resources doesn't deny the presence of gold. But the company says it's in such small quantities it wouldn't be worth extracting. The mining company says it is interested in minerals such as chromite, garnet and zircon. Any gold would stay in the soil, to be redeposited in the ground after the targeted minerals are extracted, the company says.
Furthermore, the land-use lease would include royalties for any mined minerals, including gold.
If hired, PBS would drill approximately 60 holes and 1,400 feet in concentrated areas. The main objective would be to find out what types and percentages of minerals the soil contains.
To drill deeper than 50 feet, however, the company would have to obtain an Oregon Department of Geology and Mineral Industries permit, which takes at least 30 days. PBS did not intend to go that deep or seek permits. It planned to do the drilling in April.
'If you're not drilling over 50 feet and getting a permit, you're probably not going to get any data worthwhile," Joseph Drew, director of geology for Oregon Resources, told commissioners.
Oregon Resources has already sampled 9,000 feet of core near Beaver Hill, delving 60 to 100 feet into the ground, Drew said. He doesn't think PBS's assessment will be thorough enough to provide an accurate portrayal of the area's mineral content.
'As taxpayers you're throwing your money away," Dan Smith, Oregon Resources chief operating officer, told the commissioners last week.
If the county and Oregon Resources reach an agreement, the Portland-based firm has said it will share its core drilling samples with the county.
'If they find what they are looking for and there happens to be precious metals that are of a quantity to mine, then the leases will cover how much the county will be paid," Stufflebean wrote in an e-mail.
Main said Oregon Resources has offered to pay the county a 3 percent royalty for minerals mined on county land. All three commissioners say they don't want to forfeit profitable timber if minerals are not found.
'I agree we need jobs, but we don't need to give away a valuable resource when the county is in desperate need of revenue," Main said.