TORONTO – Top officials of Toronto-based miner Romarco Minerals Inc. (TSX:R) are “disappointed” that U.S. regulators ordered an environmental impact study on the company’s flagship Haile gold project in South Carolina, but say they but also see “positives” in the decision.
“While we’re disappointed there is going to be a delay to our startup schedule by an additional 12 months, the EIS decision does actually represent some good things for the company and for the shareholders,” CEO Diane Garrett said in a conference call with analysts on Monday.
Among other things, completing an EIS now eliminates the future possibility of a challenge to an EA decision,” Garrett said, nothing that such challenges have resulted in lengthy litigation to projects elsewhere in the United States in the past.
Jim Arnold, chief operating officer of the development stage gold miner, agreed that the delay was a disappointment.
“But I would be less than honest if I didn’t fess up that there’s some big advantages that we also have with this extra time,” Arnold told the analysts.
“First of all, most importantly, is exploration,” Arnold said. “Haile has still an enormous amount of potential. We’ve got quite a bit of resources that we’ve got to convert to reserves. We have a lot of drilling that we need to do … (and) we’re still having significant success in drilling.”
The U.S. Army Corps of Engineers on Friday ordered a more extensive review of the environmental impact on wetlands near the proposed gold mine in Lancaster County, northeast of the town of Kershaw.
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The proposed gold mine in north-central South Carolina is part of a broader gold belt that stretches across several southeastern U.S. states. The project is estimated to contain 3.1 million ounces of gold resource – 1.7 million in the measured category and 1.4 million indicated.
Garrett said the corps has commented on the likelihood of future expansion at Haile as current reserves are exhausted and “that the mining operations will expand beyond the current permit boundary.”
“The EIS will provide the hard look at the project that, while causing a delay right now in the near term will, over the long-term, create the thorough review that shareholders can take comfort in knowing that future uncertainty has been removed,” she said.
Garrett also saw as a “positive” the fact that the EIS process provides for an independent engineering firm to review the data. Romarco will have input into the selection process, although the corps makes the final decision.
Garrett said she was confident in the company’s estimate of no more than an additional year’s delay, saying the corps has been reliable in its timeline so far.
“The beauty of Haile, and the reason we feel from what we know now that the schedule of an additional 12 months delay is manageable, is that there is an enormous amount to baseline data” already available and completed by Romarco and going back years.
“Due to this large volume of baseline data, environmental studies and engineering design work, we’re far ahead of where most companies would be in beginning an EIS,” she said.
Romarco said it has invested more than $4 million in environmental studies on the Haile development and is confident the project will have minimal environmental impact and will meet or surpass current regulations.
Garrett said Monday that the company has allocated only about $2 million in additional funds for the EIS, most for legal, filing and consultant fees “since there is an understanding that there is not a lot more information the company could provide beyond what it already has.”
On the Toronto stock exchange, Romarco shares were down 14 cents, or 8.54 per cent, at $1.51 Monday morning.
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