Flap Over Neighboring Gold Mine

IN the Beartooth Mountains of south-central Montana, nearly 10,000 feet above sea level, Fisher Creek Valley seems the essence of serenity and natural beauty. But this home for moose, grizzly bears, mountain goats, and many other species of wildlife has become the place where Western tradition and modern environmental sensibilities are about to collide.

Plans have been drawn for a mining project here, and after years of regulatory and political jockeying, state and federal agencies soon will issue a draft environmental impact statement.

This is a place where miners dug and blasted for gold off and on for nearly a century. Some of the old equipment still can be seen lying around the valley and up the side of Henderson Mountain. But the mine is also less than three miles from Yellowstone National Park and surrounded by the Absaroka-Beartooth Wilderness area.

Crown Butte Mines Inc. (a Montana-based corporation owned mostly by Canadian companies) holds mineral rights on a combination of private and Gallatin National Forest lands here. Over the past eight years, the company has spent $32 million in hopes of recovering what Crown Butte president Joseph Baylis expects is $550 million in gold beneath Henderson Mountain.

In all, Mr. Baylis says, the company expects to spend $200 an ounce to recover gold now selling at upward of $400 an ounce for an overall annual return on investment of 15 percent over the 10 to 15 year life of the project.

Some 1,200 to 1,800 tons of ore would be dug from inside Henderson Mountain each day, then conveyed to a nearby mill where gold (as well as some silver and copper) would be separated by gravity and flotation. About half the mine tailings (crushed rock) would be mixed with cement and put back into the mine holes.

The rest of the tailings would be mixed with water and piped to a plastic-lined dump site that eventually will cover 72 acres and be some nine to 10 stories high. When the mining operation is complete, the impoundment area would be covered with rock and soil and revegetated -- not only to restore the landscape but also to control acid generation, which occurs when mine tailings are exposed to oxygen.

A new power line also would have to be run about 65 miles from Cody, Wyo., to what's being called the ''New World Mine.'' And temporary housing will be built for 175 miners.

Company officials stress that the mining is to be done underground and that no cyanide will be used. (Cyanide is used to separate gold from ore in open-pit mines around the West.) And they claim that the tailings impoundment will be state-of-the-art.

''This is environmentally benign as far as most mines go,'' says Crown Butte geologist Dan Stanley, who's worked on mines from Alaska to Peru. ''We're only going to disturb about 200 acres of land in a greater Yellowstone ecosystem that is 22 million acres, and when we're done we're going to restore it the best that we can.''

But the history of environmental degradation from mining in the West -- and especially the proximity to Yellowstone -- has brought out a battalion of opponents.

They're worried about impacts on wildlife habitat and especially water quality. Fisher Creek flows into the Clark's Fork of the Yellowstone River, which is protected by the federal government. Nearby Soda Butte Creek flows directly into the park via the Lamar and Yellowstone Rivers.

''The bottom line is, it's in our upper watershed,'' says Mary Hektner, a Park Service biologist at Yellowstone.

Noting the history of earthquakes and geothermal activity hereabouts, park superintendent Mike Finley describes Yellowstone as ''one of the most active seismic areas in the United States outside of the San Andreas fault ... not the kind of place where you put a nuclear-power plant, a school, or a mining operation that really requires stability.''

Because his state is downstream from any potential water-quality impact, Wyoming Gov. Jim Geringer (R) has expressed concern as well. Others note the harsh alpine climate -- 300 to 500 inches of snow and fewer than 30 frost-free days a year, plus several nearby avalanche chutes -- as a reason to be concerned about the security of the tailings impoundment.

The company pledges to finance a bond that would take care of any trouble after the mine operation is shut down. But that hasn't satisfied opponents. ''The fear is that they get the gold, and Wyoming gets the shaft,'' says Bob Eakey of the Greater Yellowstone Coalition, an environmental group.

These days, Crown Butte's Mr. Baylis complains that ''the regulatory process is being hijacked'' for political reasons.

''We wouldn't have proposed this project if we had thought it would harm Yellowstone Park or the Yellowstone ecosystem,'' he says.