Complaints have been filed against Pegasus Gold (TSE) and subsidiary Zortman Mining for allegedly violating the U.S. Clean Water Act at the Zortman-Landusky gold mine in Montana.
The complaints were lodged by the U.S. Department of Justice (DOJ), the Environmental Protection Agency (EPA) and native American tribes of the Fort Belknap reservation.
Pegasus notes that there are no material differences between the joint DOJ-EPA complaint and the previously disclosed complaint filed in August of 1993 by the state of Montana.
The complaint filed by the tribes includes all the federal and state claims, and introduces several additional ones, under the Clean Water Act and Superfund statute, that the company believes are without merit.
Pegasus had been involved in negotiations with the state of Montana (in which the EPA participated), but those talks broke off a few weeks ago after the state of Montana issued an ultimatum to the effect that its proposed penalty be accepted.
The amount of the penalty was not disclosed, but Pegasus describes it as “exorbitant”. Both Pegasus and the EPA have requested further negotiations.
Pegasus is in the midst of receiving permits for the Zortman Extension, a project that is expected to add another 61 million tons of proven and probable reserves grading 0.02 oz. gold per ton to the existing operation.
While the federal suit has no bearing on the Zortman Extension, the company anticipates the suit will cause some delays on the project.
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