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$90 million settlement reached to pay for mine cleanup near Silverton

Deal helps resolve liability issues around 2015 Gold King Mine spill
The Environmental Protection Agency and other federal agencies, the state of Colorado and the owners of the Sunnyside Mine announced Friday they have agreed to a $90 million settlement to pay for the ongoing cleanup at the Bonita Peak Mining District Superfund site. (Durango Herald file)

A $90 million settlement between the federal government, Colorado and the owners of the Sunnyside Mine will pay for additional cleanup at the Bonita Peak Mining District Superfund site after years of litigation.

The Environmental Protection Agency, Justice Department, Department of the Interior, Department Agriculture and state of Colorado announced Friday they have reached a settlement with Sunnyside Gold Corp. and its parent company Kinross Gold Corp. to fund remediation in the Bonita Peak Mining District near Silverton.

In the case of an old-fashioned standoff, the federal government will drop its claims against Sunnyside Gold Corp. and Canadian mining company Kinross Gold Corp. and the two companies will drop their claims against the federal government after the settlement.

Sunnyside Gold Corp. will pay $40.95 million to the federal government and the EPA and another $4.05 million to Colorado, while the United States will contribute $45 million to the cleanup of mining contamination in the area.

“Today’s settlement holds these companies accountable for their past mining operations at the site,” Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division said in a news release. “This settlement demonstrates the Justice Department’s and cleanup agencies’ continuing efforts, together with our state partners, to ensure that Superfund sites are investigated and remediated.”

The agreement marks the end of Sunnyside Gold Corp.’s remediation work in the Bonita Peak Mining District. The EPA previously ordered the company to undertake a costly investigation of groundwater in the area in March 2018.

The state of Colorado has also released Sunnyside from its reclamation permit obligations, which require the company to clean up its past mining operations and meet the conditions of a reclamation plan approved by the Colorado Department of Reclamation, Mining and Safety, a branch of the state’s Department of Natural Resources.

In addition, the settlement limits the future liability of both Sunnyside Gold Corp. and its parent company.

“SGC is pleased to see its resources put toward further improving water quality rather than protracted litigation with the federal government, a time-consuming, expensive and resource-intensive process,” a news release from Gina Myers, director of Sunnyside Gold Corp.’s reclamation operations, said.

The settlement was made as a matter of practicality with no admission of wrongdoing or liability, Myers said in an email to The Durango Herald.

Myers noted the federal government’s matching $45 million was a result of the federal government’s own liability for the Gold King Mine spill and damage to the surrounding area.

“Today’s agreement also recognizes the federal government’s responsibility for its role in causing environmental contamination within the Bonita Peak Mining District,” the release from Myers and Sunnyside Gold Corp. said.

The parties negotiated the settlement in the fourth quarter of 2021, but have been finalizing the necessary documentation and approvals.

Litigation between the groups has been ongoing for years since the 2015 Gold King Mine spill released an estimated 3 million gallons of toxic waste into the Animas River.

The Colorado and the federal governments have argued that Sunnyside Gold Corp. is partly at fault and responsible for funding remediation in the Bonita Peak Mining District after placing bulkheads in the 1990s to prevent the drainage of contaminated water.

In legal filings, the state has said the bulkheads backed up waste in surrounding mines, including the Gold King Mine, which was released when EPA contractors accidentally caused a blowout.


Sen. Michael Bennet and the Bonita Peak Mining District Community Advisory Group, which was formed in the wake of the EPA declaring the area a Superfund site in 2016, welcomed the settlement.

“I am pleased to see this agreement reached in our work to clean up the Animas River Watershed,” Bennet said in a news release. “This proposed settlement will enable us to focus resources toward cleaning up the mining contamination that has long degraded water quality in the Animas River basin and protect the health and environment of surrounding Colorado communities.”

The $90 million will go directly to further cleanup, including the stabilizing of mine sites and reducing unplanned waste releases, according to an EPA news release.

The EPA has already spent more than $75 million to remediate the site.

The Bonita Peak Mining District Community Advisory Group is working to define water-quality targets and other environmental standards that will need to be met for the area to be considered decontaminated. Those targets will help guide the work of the EPA.


“We have a long, long ways to go to meet our water-quality goals and objectives, and what this does is ensure that there is adequate funding to accomplish those goals, or at least move us in the direction of having adequate funding,” said Ty Churchwell, mining coordinator for Trout Unlimited and vice chairman of the community advisory group.

He said a full cleanup of the site will likely take at least another decade. He pointed to similar Superfund sites near Leadville and Idaho Springs that each took about two decades.

The settlement is a step in that direction.

“It’s just going to help us get to the ultimate goal, which is recovering the watershed from acid mine drainage and the historic water quality impacts that have plagued us here for 140 years,” Churchwell said.


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