SNS Silver (SNS-V) could soon be the operator of the troubled Sunshine silver mine in the Coeur d’Alene mining district in Idaho, which was just abandoned by Sterling Silver (SRLM-O) on Feb. 24 due to financial woes.
Sterling returned control of the mine to the owner, Sunshine Precious Metals Inc. and vacated the property because it couldn’t fund care and maintenance costs.
Sunshine Precious Metals has quickly passed on security and care and maintenance responsibilities at the mine site to SNS Silver, which hopes to take on the Sunshine project. President and CEO, David Greenway, expects to finalize the deal soon.
“SNS’ negotiations have been solely with the owners of the property and we hope to reach a formal agreement by the end of the week,” Greenway said in a statement.
The Sunshine mine has been out of operation for several weeks. Sterling CEO, John Ryan, times have been difficult for the last four to five months.
“By the end of this month, the company was faced with losing electrical power service, having its commercial insurance cancelled, and simply having no remaining funds to pay even the smallest of crews to provide the basic security and maintenance of the site,” Ryan said in a Feb. 23 statement.
Sterling is also in the process of negotiating a settlement for violating the Clean Water Act. The company violated its permit 185 times between April 2007 and November 2008, by exceeding its discharge limits. In most cases there was too much manganese in the water, a problem related to pumping at the mine.
That problem was fixed recently, but that wasn’t the end of Sterling’s problems. On Oct. 9, 2008, the company’s tailings line broke and a significant amount of tailings spilled into Big Creek, near Kellogg, Idaho.
A tragic accident in 1972 resulted in the death of 91 people at the mine (under a different operator).
SNS Silver is also exploring around the Crescent silver mine near Kellogg, Idaho.
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