As we reported at the end of December, Gold Rush star Todd Hoffman and his company, 316 Mining, LLC., were facing some pretty hefty fines after they allegedly cleared land beyond the boundaries of their “Fairplay Placer Mine” claim in Colorado. The Colorado Division of Reclamation, Mining and Safety has since issued its findings in the matter, and things do not look good for the mine owner!
It’s important to note that neither Todd Hoffman nor 316 Mining, LLC. actually own the claim in question — it is owned by High Speed Mining, LLC. (It is unclear whether or not High Speed Mining was aware that Todd and his crew were conducting mining activities beyond the boundaries of the claim.)
In case you missed our previous post, an investigator hired by the Colorado Division of Reclamation, Mining and Safety (CDRMS) determined that “2.4 acres outside of the approved permit boundary” had been affected and a hearing was set for January 25.
Here is a satellite photo of the claim and the area affected outside of the claim boundary:
At the hearing, a representative for High Speed Mining admitted that the boundary was breached, but they claimed that it was only 1.7 acres. He also admitted that the company “did not hire a professional land surveyor to stake the permit boundary” when determining how much acreage, and the Board stuck with the initial 2.4 acres determined by their professional investigator.
As a result of the claim owner’s admission of guilt, the Board found High Speed Mining guilty of “engaging in mining operations without first obtaining a reclamation permit.” The law stated that violators are to be fined no less than $1,000 a day, or more than $5,000 a day, for each day during which a violation occurs — which in this case was 35 days. The Board went with the minimum fine of $35,000, plus $567.00 to cover the cost of the investigation.
However, High Speed Mining can avoid all but $5,567.00 if they submit an application to convert the existing 110c permit to a 112 Hard Rock reclamation permit within 60 days. But don’t think they have dodged a huge bullet, because we spoke with someone with connections to the mining industry who tells us that converting to a Hard Rock permit could cost upwards of $50,000!
Here is the full ruling from the Colorado Division of Reclamation, Mining and Safety issued on February 9:
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER IN THE MATTER OF A POSSIBLE VIOLATION BY HIGH SPEED MINING, LLC, CEASE AND DESIST ORDER, CORRECTIVE ACTIONS, AND CIVIL PENALTIES FOR MINING WITHOUT A RECLAMATION PERMIT, File No. *-****-***
THIS MATTER came before the Mined Land Reclamation Board (“Board”) on January 25, 2017 in Denver, Colorado to consider possible violations by High Speed Mining, LLC (“Operator”), cease and desist order, corrective action, and civil penalties for mining without a permit, File No. *-****-***. Michael Cunningham and Wally Erickson appeared on behalf of the Division of Reclamation, Mining and Safety (“Division”). [Redacted] and [Redacted] appeared on behalf of Operator.
The Board, having considered the parties’ presentations and having been otherwise fully informed of the facts in the matter, hereby enters the following:
FINDINGS OF FACT
1. Operator holds a 110c reclamation permit for an 8-acre gravel and gold mining operation located in Section 33, Township 9 South, Range 77 West, 6″ Principal Meridian, Park County The site is known as the Katuska Pit. The Operator owns the land on which the site is located.
2. On December 1, 2016, the Division received a written complaint alleging that the Operator mined outside the approved permit boundary.
3. The Division conducted an inspection of the site on December 5, 2016. During the inspection, the Division observed, among other things, several settling ponds located beyond the south boundary of the permit area, recently constructed in an area what had been forested. Also located beyond the south boundary, the Division observed that timber had been cleared for equipment storage areas and construction of a new concrete pad. The Division estimated that 10.3 acres of land was disturbed, approximately 2.4 acres of which are outside the permit boundary. The Division provided a copy of the December 5, 2016 inspection report to the Operator on December 5, 2016.
4. On December 21, 2016, the Division mailed the Operator a signed copy of the Reason to Believe a Violation Exists letter. The Division’s letter provided notice regarding the alleged violations and information about the January 25, 2017 hearing.
5. The mining plan for permit number *-****-*** states dial the affected lands would be limited to areas which were historically disturbed and free of vegetation, with no removal of timber.
6. On January 11, 2016, the Division received a letter from [Redacted] of Greg Lewicki and Associates on behalf of the Operator, stating: “High Speed Mining acknowledges that some activity has taken place south of the southern permit boundary of the current permit. This is the only area of outside the permit disturbance that has taken place on site, as shown on the attached site map. It is roughly 1.7 acres.”
7. At the hearing, [Redacted] testified that the Operator admits that land outside the permit boundary was disturbed, but disputes the amount of land disturbed beyond the permit boundary. The Operator testified that the amount of disturbed land is not more than 1.7 acres. The Operator testified that it did not hire a professional land surveyor to stake the permit boundary.
8. The Division testified at the hearing that the southern boundary represented on a photograph from the Operator is too far south of the actual line, which accounts for the Operator’s belief that only 1.7 acres has been disturbed
9. The Division testified that it spent ten hours on this matter, at the cost of S56.64 an hour, incurring costs of $567.00 in the investigation of the violation.
CONCLUSIONS OF LAW
10. The Board has Jurisdiction over this matter pursuant to the Colorado Mined Land Reclamation Act for the Extraction of Construction Materials, Article 32.5 of Title 34, C.R.S. (2016).
11. Section 34-32.5-109(1), C.R.S provides that “before engaging in a new operation, an operator shall first obtain from the board or office a reclamation permit.” By disturbing 2.4 acres of land beyond the approved permit boundary, the Operator engaged in a new operation without first obtaining a permit, in violation of section 34-32.5-109(1), C.B.S.
12. Pursuant to section 34-32.5-123(1), C.Ft.S., the Board may issue a cease and desist order when it finds that an operator has failed to obtain a valid permit.
13. The Board may impose a civil penalty of not less than $1,000 per day or more than $5,000 per day for each day during which a violation occurs. C.R.S. § 34-32.S-123(2) (2016). Here, the Board may impose a penalty based on thirty-five (35) days of violation (from the December 21, 2016 Reason to Believe letter to the January 25, 2017 hearing) at $1,000 to $5,000 per day for a civil penalty of S35,000 to $175,000.
17. In addition to the civil penalty authorized by §34-32.5-123(2), the Board is authorized to impose an additional civil penalty in an amount not less than the amount necessary to cover costs incurred by the Division in investigating the alleged violation. § 34-32.5-123(4), C.R.S. Here, the Board spent ten hours investigating the alleged violation at the rate of $56.64 per hour, for a total of $567.00.
Based on the foregoing findings of fact and conclusions of law, the Board hereby finds High Speed Mining, LLC in violation of section 34-32.5-109(1), C.R.S. for engaging in a mining operation without first obtaining a reclamation permit.
High Speed Mining, LLC shall CEASE AND DESIST any further mining activities on the affected land, except those activities approved by the Division in writing, necessary to comply with the conditions of this Order, prevent damage to the off-site areas, or protect health and safety until such time that the Operator complies with the corrective action described herein.
The Board imposes against High Speed Mining, LLC the following CORRECTIVE ACTION: the Operator shall, within sixty days of the effective date of this Order, submit an application to convert the existing 110c permit to a 112 Hard Rock reclamation permit. The Board imposes a CIVIL PENALTY of S35,000.00 pursuant to section 34-32.5-123(2), C.R.S. and a CIVIL PENALTY of $567.00 pursuant to section 34-32.5-123(4), C.R.S. for investigation costs incurred by the Division for a total civil penalty of $35,567.00. All but $5,567.00 of the total assessed civil penalty is suspended if the Operator complies with the corrective action in the time specified The portion of the civil penalty not suspended, $5,567.00, shall be due and payable within thirty days of the effective date of this Order. Failure to submit the unsuspended portion of the full civil penalty by the date specified above shall result in immediate submittal of such unsuspended penalties to State collections.