State writes off costs from mine restoration

Nevada's Board of Examiners voted Tuesday to write off $76,867 from the cost of repairing environmental damages at the Olinghouse Mine near Fallon.

Leo Drozdoff of the Division of Environmental Protection said Alta Gold, which operated the mine, and Frontier Insurance, which backed the bond guaranteeing cleanup at the site, are both out of business.

The cleanup cost more than $177,000 from the Interim Fluid Management Fund but Drozdoff said they were able to get only about $100,000 from Frontier Insurance before the company exhausted its financial resources. He said the Attorney General's Office agrees the debt is uncollectible and should be written off.

The fluids the state had to clean up were from the mine's heap leaching operation - which uses cyanide to precipitate gold particles out of the ore but leaves behind cyanide in the process.

He said the good news is that fund is generated by fees charged mining companies so the cost didn't come out of the state treasury and that the environmental work is complete so the mine site isn't a danger.