Miners laid off as activities are suspended at Pan Mine Project

Midway Gold suspended mining activities at their Pan mine site on Friday and announced a reduction in the mining projects workforce. On Monday, Midway Gold announced that the company would be filing for bankruptcy to “implement restructuring.” Shortly after the announcement, Midway disclosed that the company would suspend their stocks from trading and that the mining company would “commence procedings” to delist their common stocks from the New York Stock Exchange.

These developments come just 18 months after the Pan Mine project broke ground 50 miles outside of Ely. A press release put out by Midway Gold an unexpected lack of gold as the reason behind the mining activities being suspended.

“We continue to leach ore that has previously been placed on the first lift of the heap leach pad at Pan, however, the rate of recovery of gold has continued to fall short of expectations,” the release stated.

The Ely Times sought further comment as to the number of jobs that have been lost as a result of the low “rate of recovery” and received informationshortly before press deadline by a source that worked for a contracting company that could speak on the behalf of Midway Gold. The source, who asked to remain anonymous, said that 10 full-time positions and three student internships were lost from the Pan project. The source said that Midway Gold currently doesn’t know whether the Pan Mine will reopen in the future. Additionally, the source said that more layoffs could have happened through Ledcor CMI Inc, a contract mining company that provided extra workforce at the Pan Project. When reached for clarification, Ledcor had “no comment.”

City of Ely Mayor Melody Van Camp said that she spoke with one miner who was laid off from the Pan Project as a result of the workforce reduction. Van Camp said that the miner, who preferred his name was not revealed, said that he estimated around 30 people were laid off in total.

“When I spoke to him, he said that there were about eight people left there,” the mayor said.

Van Camp said that she is concerned how the mine’s layoffs will affect the county and the local economy, as the miner she spoke to will have to move out of Ely to relocate his family.

“The county can’t afford something like this. I just hope those people that lost their jobs can find their footing and hopefully stay here in Ely but this is a sad thing all around,” the mayor concluded.

White Pine County’s Director for Community and Economic Development Jim Garza wasn’t as concerned about the impact Pan’s layoffs would have on the county as a whole. Garza said that some displaced miners should be able to be hired by one of the other mining operations and remain in the county.

“The good thing about White Pine is that you have three other main mining operations. So there is a transition of people going from one to another to another, it is almost like musical chairs,” Garza said. “I think Midway has great ambitions of being a prominent mining operation here. Everybody has issues and until you actually drill and leach the ore, you don’t really know what you’ve actually got.”

Midway Gold staff line up for a photo during better times for the ground breaking of the Pan Mine Project in January 2014. (Courtesy photo)

Midway Gold staff line up for a photo during better times for the ground breaking of the Pan Mine Project in January 2014. (Courtesy photo)

The project makes sense, I’m sure they are just having to revamp their business model, so that is expected.”

Garza said that city and county residents who have seen mine’s close in the past should not equate the Pan Project’s layoffs with those older times, which led to devasting effects on the local economy. The Economic Development Director pointed to the fact that the mines are no longer the largest employer in the county like they used to be; the government is. In addition, Garza said that shortfalls in expectations are much different than plummeting prices of commodities, which led to nearly half of the mining workforce to be laid off in the 1980’s.

“Like most of mining, the industry is volatile, but I also think that it will come back around,” Garza continued.

In the mean time however, Garza said that the suspended mining activities at the mine will hurt the incoming revenues the county receives from the mine. The impact is not expected to greatly effect the recently submitted county budget for the year, as the budget cuts made were already made to absorb the local mining drop in revenues.

According to a press release from Midway Gold about their filing for Chapter 11 Bankruptcy on Monday, Midway Gold “intends to restructure its business by attempting to sell non-core assets and resolving various challenges relating to Midway’s main asset, the Pan Mine Project.”  The release did not specify if the bankruptcy filing of the suspended activities at the Pan Mine would effect their exploration into Midway’s planned Gold Rock project. Garza indicated that he felt that Gold Rock Mine project, originally expected to operate as a “sister project” to the Pan Mine, would not be affected. Midway Gold’s official website www.midwaygold.com still lists the the Gold Rock project under its current projects, though the site states “exploration is ongoing.” The last update noted on the website for the project came in May of 2014, when a resource estimate was completed. A permit was obtained for Gold Rock in 2013.