Minneapolis geologists' plans to explore for gold in Black Hills raising environmental concerns

A Minneapolis prospecting company is facing hurdles in its gold exploration plans for South Dakota's Black Hills, as the federal government moves to withdraw a swath of land there from mineral exploration and residents voice concerns about environmental contamination.

F3 Gold's leaders have spent years studying the geology of the Black Hills and developing new approaches in looking for gold underground. The company's Jenny Gulch Gold Exploration Project received a "finding of no significant impact" last summer from the U.S. Forest Service after an environmental assessment.

But now the Forest Service is asking U.S. Secretary of the Interior Deb Haaland to remove 20,574 acres of the Pactola Reservoir and Rapid Creek Watershed from new mining claims and issuance of new mining leases for 20 years, stalling F3 Gold's project there.

Federal officials said they are responding to concerns about the potential effects of mining on the environment and municipal water supply. They said the request segregates those lands for up to two years so they can do a scientific analysis and get public feedback.

Meanwhile, F3 Gold's second proposal, the Newark Exploratory Drilling Project, drew several hundred people in opposition at a Forest Service meeting this winter in Custer, S.D.

The company has emphasized that it is only exploring for gold and that its proposals do not involve mining, noting that most exploration doesn't end with mining. Environmentalists aren't buying it.

"There's only one reason to explore for gold and that's the hope to mine it," said Lilias Jarding, executive director of the Black Hills Clean Water Alliance.

In a statement, F3 Gold CEO Rob Bergmann said that most opponents misunderstand the differences between exploration and mining. The federal government's withdrawal of public lands from mineral exploration, he said, sends the wrong message to "global competitors in the race for strategic minerals ... If the federal government is serious about developing domestic supplies of key minerals and metals it needs to allow exploration of public lands in mineral-rich areas like the Black Hills."

At a jammed Rapid City meeting last week about withdrawal of the public lands, only two people spoke against it, Jarding said. The Forest Service plans to hold a virtual meeting on May 11 to take public comments on the withdrawal request.

Mining law unchanged

F3 Gold has the right to explore its mineral claims under the General Mining Act of 1872, approved under President Ulysses Grant, which states that federal lands are free and open to mineral exploration and development.

But critics argue the law is too permissive and lacks environmental safeguards. Efforts to overhaul it ramped up last year, when the White House invited more than 20 stakeholders to discuss what it described as "the need for reforms and improvements" in the development of domestic hard rock minerals.

One opponent of such changes in the law is U.S. Rep. Pete Stauber, a Republican who represents northeastern Minnesota and chairs the House Subcommittee on Energy and Mineral Resources.

In a hearing last May on a bill to overhaul the 1872 act, Stauber said the proposed reforms would make mining all but impossible in the U.S. and push mining abroad, where child workers are exploited. He complained the legislation would lengthen permitting timelines and charge gold miners royalties they currently don't have to pay.

"Why would any company want to invest in American resources under such a hostile scheme put in place?" he asked.

Stauber has criticized mineral withdrawals on other federal lands, such as the federal government did last year in the area of the proposed Twin Metals mine near Ely, Minn.

"These sorts of land restrictions from the anti-mining Biden Administration hamstring domestic development of minerals we need for national defense, energy technology, and everyday life," he told the Star Tribune in a statement.

Nick Tilsen, an Oglala Lakota citizen in Rapid City, S.D., thinks change is needed. His tribe signed a federal treaty in 1868 guaranteeing them the Black Hills. But the U.S. government seized that region back after gold was discovered there a few years later, a move the Supreme Court later ruled illegal.

"The number one reason why mining is out of control on public lands in America today, including the public lands in the Black Hills, is because the 1872 mining law has not been amended," said Tilsen, president and CEO of the NDN Collective, an organization dedicated to building Indigenous influence.

Opposition to plans

Bergmann and Brian Lentz launched F3 Gold in 2016. The former Winona State University classmates first teamed up in 2010 to form Big Rock Exploration, an international consulting firm based in northeast Minneapolis.

F3 Gold submitted its Jenny Gulch plan in late 2018 to Black Hills National Forest officials, seeking to conduct diamond-core drilling at 47 drill pads over six acres near Silver City, S.D. The company says the project would run a year, from drilling to reclamation, and use municipal water rather than ground or surface water for drilling, leaving no trace.

But the City Council of Rapid City passed a resolution in 2020 opposing the project, saying it could lead to toxins in Rapid Creek. Last August, the council passed another resolution opposing the Forest Service's finding of no significant impact for the Jenny Gulch project and said it posed a risk to the local watershed, water supply and the area's tourist economy.

According to Bergmann, F3 Gold designed and updated the project with water safety in mind, saying the science shows mineral exploration is a low-impact activity. But in mid-March, Forest Service officials applied for the mineral withdrawal. They said in an email that they're now postponing a final decision on the Jenny Gulch project until the environmental study and withdrawal process is completed.

F3 Gold also submitted a plan for its Newark project last summer, proposing 39 drill pads on a total of 4 ¹⁄₂ acres. Several hundred people came to the Custer meeting in February to decry the Newark plan — many more than expected, according to several participants.

"There were both Lakota and non-Indian people there, and those two groups are generally quite separate from each other in western south Dakota," Jarding said. "Yet in this case, everybody was on the same page. Everybody opposed the project."

Leaders of the nearby Pine Ridge Indian Reservation say the projects would continue the violations of 19th-century treaties that guaranteed the Black Hills to Indigenous people. And the gold exploration plans also have raised concern among some in the outdoor recreation industry.

Hans Stephenson, who owns a fly-fishing shop in Rapid City, is worried about how such proposals would affect water and fish. He thinks the law lacks checks and balances.

"Until we change and reform some of that 1872 mining act," said Stephenson, "we may be kind of limited in what we can actually accomplish as the public facing these mining claims and exploration."