Refining the mine

GOLD HILL - It's lonely out here for Plum Mining.

The processing plant at American Flat stands among the relics of Storey County's historic mining: the weathered wood pachuca tanks and the graffiti-marred cement mill that once processed ore from the underground ribbon of precious minerals known as the Comstock Lode.

On most days at Plum Mining, front loaders scoop up rocks for crushing, and a giant drill bores into the bottom of the mine's Billy the Kid Pit.

On a Friday afternoon, the site was as quiet as one of the ghost mills; even the wind was in a hurry to get out. The gusts were strong enough to rip a hard hat right off a visitor's head. Most of the heavy work is done from Monday to Thursday.

Mine operators Steve Armstrong and Chris Dobko, both of Carson City, were processing what will soon become gold. They raked what looks like bits of coal back and forth on a long pan that sits near the floor. This material will go into the furnace, and out will come doré, a combination of gold and silver.

"The way gold prices keep increasing, the job really has a lot of stability," said Armstrong, who makes about $21 an hour.

Wages are high in Nevada mining (starting at $14 an hour) because operators want to catch new bodies to replace those who are retiring. Young college grads have been more attracted to the big cities for sexier civil or electrical engineering jobs.

Big gold money is in little cities.

In 2005, Plum Mining processed 5,715 ounces of gold and 26,488 ounces of silver using cyanide leaching. That's more than double the amount of gold and silver than it produced in 2004.

The 15 mine workers and six contracted mine employees uncovered $2.5 million in gold and $193,000 in silver, based on the amount reported multiplied by the average price of gold and silver last year.

Though that's fairly small compared to other precious metal mines, it's significant for Storey County, said Alan Coyner, administrator of the Nevada Division of Minerals. (Coeur Rochester in Pershing County, the state's largest producer of silver, mined 5.7 million ounces in 2005.)

"They're operating near a tourist attraction town, so it's significant that they have to operate near an area of development," he said. "Most mines operate very much in the middle of no where."

Plum Mining is small but it's history, dramatic.

In the last two years, Plum's parent company has seen a series of flip-flops in its corporate leadership, an attempted coup d'état over the board of directors, and months of prolonged and costly litigation.

"It was hard on the employees because we were not sure during the height of the litigation who would be in charge the next day," said general manager Scott Jolcover.

Jolcover left in February 2004 because of differences he had with former president/CEO Steve Parent. He returned in April 2005 at the request of president/CEO Rob Faber.

"The litigation has been costly to the company," Jolcover said. "And it's finally coming to an end. The original charges of fraud and racketeering against Parent will be heard Oct. 26 in Arizona State Court."

He called Faber's style of management as more conservative than Parent, whom he diplomatically described as having strengths that are "promotional and visionary."

GoldSpring Inc., a publicly traded company (OTCBB:GSPG), is still $15 million in debt, which the board hopes to change by getting the authorization from shareholders to do a reverse stock split. Shareholders will also vote soon on whether they want to make GoldSpring a Nevada corporation.

The future appears lustrous to Jolcover, even standing inside the Billy the Kid Pit, about 80 feet down from the crest. Beneath Jolcover is another 40 feet that can be mined.

Plum Mining managers expect another three years of production from the only operating gold and silver mine on the Comstock. Jolcover said they could have another five more after that if a $500,000 exploration project is successful. And with the Comstock, you never know.

The top state mining official said someone could come along and tap the Comstock once again.

"We won't see the return of the glory days of the Comstock unless someone locates a new, significant underground ore body," Coyner said.

• Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.

Show me the money -- past and present

Will the Comstock ever produce what it did in its heyday?

"The historic mining district produced the Bill Gates of its time," said Alan Coyner, administrator of the Nevada Division of Minerals. "I don't think we'll see that level of production and wealth creation on the Comstock again, unless someone finds a new, significant underground mine."

The big money was extracted in the 1880s as late as 1894. A silver revival hit in the 1930s and early '40s, when the old American Flat mill was built.

Could the Comstock support more mining?

"I have heard of a couple other people starting exploration programs on the Comstock," Coyner said. "One is talking about going back to the Overman Pit and taking samples."

A portion of the old mining pit was filled last year so the new rails of the Virginia & Truckee Railway could pass over it. Miners could dig underground away from this fill and avoid the tracks, he said.

"I don't think the old-timers got all the ore. I don't think that's right to say because there is potential for underground mining - not significant open-pit because of the growth of Virginia City and the historic nature of Virginia City, and that would impede additional mining there."

Cyanide leaching would make mining the low-grade rocks left in the Comstock economically viable.

How does Plum Mining get its ore?

From the Comstock Lode. The mineral-rich deposit runs north to south from Virginia City to Gold Hill. It dips into the ground and horse tails at the Billy the Kid Pit, where Plum Mining gets its ore. The Comstock traces along a fault line that divides into a lot of small faults, which is why the area can be mined by an open pit.

"That doesn't happen everywhere," Coyner said. "It only happens in small areas, which is why I think there will only be underground mining elsewhere because there isn't many more places for open-pit left."