Yellowstone mine swap is in a very deep pit


Another deadline passed for the New World Mine swap and the only thing traded was blame and doubt.

The Crown Butte mining company turned down the government's offer of $65 million in cash on April 12 in exchange for its proposed gold mine just outside Yellowstone National Park, saying it doubted that the government could keep its end of the bargain (HCN, 3/17/97).

At the same time, new information cast doubts on the mining company's ability to deliver. Crown Butte, according to recent press reports, doesn't actually own much of the surface or mineral rights it planned to transfer to the government. Between 30 and 60 percent of its bargaining chip is in the tight grasp of an 80-something retired schoolteacher, Margaret Reeb of Livingston, Mont.

Reeb, from a pioneer mining family, bought much of the historic mining district after World War II. Land was cheap then because the high-grade ore was mined out, but Reeb was willing to wait until technology was developed to extract an estimated 1.5 million ounces of low-grade gold. Now that the technology is here, she tells people she wants to mine gold.

"The word negotiate will not apply," says Reeb's friend David Rovig, president of the Montana Mining Association. "Everybody seems to think that this lovely old gal is just sitting out there dangling a hook, waiting for the highest offer ... She loves the land more than the so-called saviors of the land. It's hers. There seems to be nobody else involved in this thing who understands that some things aren't for sale."

Rovig, founder of Crown Butte Mines, resigned from its board when he heard about the land swap. Now he's furious at the deal-makers for not consulting Margaret Reeb. "When you've got three people signing a contract that's got another person's name on it, all three parties are equally to blame," he says.

Environmentalists, some of whom sound exhausted by the struggle to prevent the mine, don't read such duplicity into the situation. Mike Clark, head of the Greater Yellowstone Coalition, says that Crown Butte, now owned by Battle Mountain Gold, made it clear from the beginning of negotiations that it would work things out with Reeb alone. Its inability to do so is just one of the many loose ends plaguing this deal, he says.

While the company admits that Reeb never gave it any indication she would sell, mine officials draw attention instead to the government's payoff. Crown Butte says it accepts the offer in theory but won't sign a deal until Congress guarantees the allocation of $65 million from royalties on federal mineral leases in Montana.

"Basically, they punted," says Doug Honnold of the Sierra Club Legal Defense Fund. "The company wants to go forward holding hands with key members of Congress."

If Congress can't agree on an appropriation, and if Reeb doesn't have a change of heart, it could be back to the bargaining table for the conservationists, the government and the mining company.

For more information, contact Crown Butte Mines, Inc., at New World Project, 2501 Catlin St., Suite 201, Missoula, MT 59801 (406/721-8419) or the Greater Yellowstone Coalition at P.O. Box 1874, Bozeman, MT 59771 (406/586-1393).

Heather Abel covers mining issues for High Country News.

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