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  • Renée C. Byer /

    Operations have been suspended at a gold mining site near Sutter Creek in Amador County, where Sutter Gold Mining Inc. says more than $1 million in improvements are necessary. Water removal and better ventilation equipment are among the needed changes at the Mother Lode site, the Canada-based company says.

  • Renee C. Byer /

    James Smith, Mine Superintendent, makes his way into the mine wearing a head lamp, safety goggles, vest, and other safety requirements.

Gold mining operations temporarily suspended in Amador County

Published: Wednesday, Mar. 5, 2014 - 11:00 pm
Last Modified: Thursday, Jul. 10, 2014 - 12:25 pm

The highly publicized return of industrial-scale gold mining in Northern California’s Mother Lode region has hit another snag.

Citing problems with milling processes, Sutter Gold Mining Inc. has temporarily suspended operations at its Lincoln Mine Project near Sutter Creek in Amador County.

Two years ago, Canada-based Sutter Gold touted the Lincoln project as the first commercial underground gold mine operation in California’s historic Mother Lode region in more than 50 years. Officials said the site could yield up to 680,000 ounces of gold.

However, over the past year, the project has experienced management changes, concerns over the declining price of gold and equipment problems at the mine.

Now, Sutter Gold projects about $1.2 million is needed to remove water, move equipment, improve ventilation systems and install other necessary equipment.

The company said about 1,000 tons of stockpiled ore has been processed through the mill, short of the planned processing goal of 3,500 tons.

“It is unfortunate that despite our best efforts we could not overcome the design and installation issues that resulted in the failure to achieve our objective of processing all our stockpiles and completing the mill commissioning. There is no sense operating the mill and incurring additional costs until we have addressed the issues we know preclude efficient commercial processing,” said Rick Winters, interim president and CEO.

The company did not speculate on when operations might resume.

In July last year, Sutter Gold announced that President and CEO Leanne Baker was being replaced on an interim basis by Winters, president of RMB Resources Inc., a merchant banking division of the FirstRand Group of South Africa, a major funding source of the project. In addition, Sutter Gold eliminated a third of its workforce, leaving about 15 people staffing the Lincoln Mine site.

At that time, Sutter Gold said its moves were “in response to recent gold market volatility and uncertainty in financing markets.” After peaking at nearly $1,900 an ounce in September 2011, gold slipped to around $1,200 an ounce last summer. (Gold closed Wednesday at $1,340.30 an ounce on the New York Mercantile Exchange in New York.)

Then, in December, Sutter Gold announced that it had restructured its debt, reducing interest expenses by securing a conventional loan totaling $40 million from RMB Australia Holdings Limited. Sutter said then that work at the Amador mill “was hampered by poor design elements, inappropriate equipment selection and improper installations.”

Call The Bee’s Mark Glover, (916) 321-1184.

Read more articles by Mark Glover

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