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Owner of mine to pay $1.6 million in settlement for Gold King blowout

Money will go toward restoration projects in areas damaged by spill
A $1.6 million settlement agreement was made between the Sunnyside Gold Corp. and the Colorado Natural Resources Trustees regarding the 2015 Gold King Mine blowout. (Jerry McBride/Durango Herald file)

A $1.6 million settlement agreement with Sunnyside Gold Corp. was approved by the Colorado Natural Resources Trustees to resolve the company’s liability for damaged natural resources at the Bonita Peak Mining District Superfund Site where the 2015 Gold King Mine blowout occurred.

Colorado Natural Resources Trustees include state Attorney General Phil Weiser, Executive Director of the Colorado Department of Natural Resources Jill Hunsaker Ryan and the Executive Director of Colorado Department of Public Health and Environment Dan Gibbs.

The settlement will allow trustees to fund restoration projects in natural areas damaged by the spill and other releases of hazardous substances within the Superfund site.

Trustees will now begin to consult with regional stakeholders, including local governments and nonprofit groups, solicit proposals and allocate the money for environmental restoration and property acquisition projects.

“The settlement announced today is a step in the right direction to address the damage suffered in Southwest Colorado and the Four Corners region in the wake of the Gold King Mine disaster and other degradation of our natural resources,” Weiser said in a news release. “The trustees look forward to partnering with the local community on how to invest the funds.”

The work reflects the mandate of the trustees to take necessary actions to address when Colorado’s natural resources are injured or destroyed.

In an email to The Durango Herald, Gina Myers, director of reclamation operations for Sunnyside Gold Corp., said the settlement agreement was reached as a matter of practicality, with no admission of liability or wrongdoing.

The settlement agreement resolves the trustees’ claims that Sunnyside caused or contributed to releases of acidic, metals-laden mine wastewater into the Upper Animas River watershed. Sunnyside operated the Sunnyside Mine from 1986 until 1991.

Sunnyside and previous mine operators used the Sunnyside Mine’s main access portal, the American Tunnel, to transport ore as well as for mine drainage. It was alleged by the trustees that the placement of bulkheads by Sunnyside in the American Tunnel caused releases that contributed to the degradation of the Animas River watershed and injured natural resources in the area.

“We are committed to protecting the outdoor environment that Colorado residents cherish so much,” said Hunsaker Ryan in a news release. “Part of that commitment is to facilitate restoration after releases occur. This settlement will give the trustees and our stakeholders the tools necessary to start providing natural resource improvements to this beautiful area.”

Beginning in 2014, the Environmental Protection Agency performed reclamation work that focused on removing a blockage in an adit at the Gold King Mine. On Aug. 4, 2015, acidic pressurized water began leaking from the mine tunnel during an excavation of the blockage. The flow quickly increased in volume until it erupted on Aug. 5, 2015.

“SGC never owned or operated the Gold King mine and was not at fault for the August 2015 EPA-caused spill,” Myers said in an email to the Herald. “We are pleased to resolve this matter and to see funds going toward further efforts to improve water quality rather than protracted potential litigation.”

The release cascaded into the North Fork of Cement Creek and into the Animas River, turning the river a mustard-yellow. From there, it made its way into the San Juan River, which travels through New Mexico, the Navajo Nation and merges with the Colorado River at Lake Powell.

The settlement agreement will be filed with the U.S. District Court in Denver. Once filed with the court, the agreement will go through a 30-day public comment process.

After the close of the comment period, Sunnyside Gold Corp. and the trustees will present all comments received to the court. The court will ultimately decide whether to approve the settlement.

“The trustees look forward to infusing funds into the local economy through community endorsed reclamation projects that improve watersheds and address legacy mining impacts,” Gibbs said in a news release.


An earlier version of this story misspelled Gina Myers’ last name.

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