Denton-Rawhide open pit eyed as waste dump

Vancouver — The Denton-Rawhide joint venture hopes to generate millions in tipping fees through a new deal that could see its open pit near Fallon, Nev., being used as a municipal waste dump.

Joint-venture partners Pacific Rim Mining (PMU-T) of Vancouver and Rio Tinto (RTP-N) subsidiary Kennecott Rawhide Mining struck the deal with privately owned Nevada Resource Recovery Group (NRRG). NRRG has paid the joint venture US$500,000 up front for the property, and must pay another US$1 million when the deal is closed, which is expected before Oct. 31, 2006.

The property purchase-and-sale agreement is still subject to some important provisions. The project needs the approval of the state of Nevada before the site can be used as a waste dump. In addition, the Rawhide joint venture needs to buy up several parcels of federal land in the proposed landfill site, and NRRG needs to secure municipal waste contracts.

The Rawhide joint venture wants to continue its heap-leaching operation from existing pads and will be responsible for any liabilities associated with mining on the property. By the same token, all obligations and liabilities related to the effects of the landfill will be borne by NRRG.

The agreement also allows Pacific Rim to restart mining on adjacent properties not covered by the land deal.

NRRG can buy out future tipping fees based on a net present value estimated at US$29 million for Pacific Rim’s share of the fees. Pacific Rim believes the tipping fees could be worth US$103.6 million over the next 40 years or so.

The company wants to use any cash flow from the landfill project to finance its El Dorado project in El Salvador.