Proves mine management just as important as ore grade

Domestic Mine article by Harold Hough

The Comstock Lode – the name has a powerful attraction in the annals of American History. It is the largest silver deposit in the history of the world; producing about 200 million ounces of silver and helping to finance the North during the Civil War. It was also the starting point for many famous Americans like Mark Twain, George Hearst (the founder of the famed Hearst family fortune) and Albert Michelson, the American physicist who determined the speed of light and won the first scientific Nobel Prize for the US.

The heyday of the deposit was short, however. It was discovered in 1859 and mining began to peter out in the mid 1870s after the US went onto a full gold standard – an event that many called the “Crime of 1873.”

However, it wasn’t the demise of the US silver standard that killed Comstock mining. Nor was it bad ore grades. It was mismanaged to death. One bad management practice was the push to mine the highest grade ore instead of focusing on best mining practices. The result was that mines delved deeper into the lode, where water and heat made mining expensive, while ignoring lower grade deposits. Another was the failure to bring new technology to the area, where it could lower the cost of mining. While silver mines were struggling to make a profit on the Comstock with old refining methods in the 1880s, the cyanide process had been discovered – a process that was revolutionizing gold mining in South Africa while the Comstock was dying.

The final bad management problem was lack of consolidation. There were over 400 mines and 234 mills working the Comstock and nearby deposits. This prevented economies of scale and prevented new, capital intensive technology from reenergizing the mining district. “They couldn’t get consolidation for critical mass,” Comstock Mining President Corrado De Gasperis explains. He feels that once the really high grade ore was gone, they couldn’t economically continue.

New Mine – New Management Techniques

150 years after its heyday, Comstock Mining is successfully mining the Comstock Lode. For the past three years, they have been open pit mining and they are getting ready to open a high grade underground operation.

Their success hasn’t been due to luck. Unlike many previous failed attempts to revitalize the Comstock in the last century, Comstock Mining has addressed the management problems that plagued the original miners. They have also focused on savings – unlike the legendary extravagance of early Comstock mine owners.

The first change is that the company has managed to consolidate nearly all of the historical claims. They currently hold over 10 square miles of claims in this historic mining district. This allows them to focus on mining the best deposits and gives them more exploration possibilities. And, given the enormous size of the Comstock, they have the potential for finding and producing much more silver. In fact, they have only drilled about one mile of their property and their drilling has averaged about 600 feet, although the miners of the 19th century mined as deep as 3,500 feet. Comstock Mining has also brought in newer extraction technology, including Merrill Crowe heap leaching, which is much like the cyanide extraction technology that was available to Comstock miners, but ignored. Although the silver grade has declined, thanks to higher recovery rates, they have poured 116,000 ounces of silver in the first 6 months of 2015.

Comstock Mining has also focused on better reserve management. Unlike their predecessors, they have focused these last three years on surface mining of lower grade ore. They are now going underground to tap the large higher grade deposits that previous miners ignored. They expect up to 90% recover rates. Given the massive size of the deposit and how little modern exploration has been done on the Comstock, the chances are that this historical mining district is headed into a new era – one that promises to be as long as its first one. Comstock Mining President Corrado De Gasperis definitely feels that there is much more to mine in the future. He said, “We believe the old timers got a lot, but they certainly didn’t get all of it.”