Sunday, June 27, 2004
By DAVID BAMBERGER On the Economy
Gold was discovered in the Cripple Creek area on the west side of Pikes Peak in 1890. Gold mining has played an important role in the Colorado economy on and off over the past 100 years.
By the end of the 1800s, gold production in the Cripple Creek area accounted for about two-thirds of the gold produced in Colorado and almost one-fourth of the gold produced in the United States.
The early 1920s saw gold production fall off dramatically. For the next 40 or so years activity continued to decline and then stopped completely in 1961. Mining activity started up again in the early 1990s and by the mid-1990s activity was in full swing.
The Cresson mine, located about halfway between Cripple Creek and Victor in Teller County, was reopened in 1994. Operations include a surface mine, crushing facility, leaching facility and a gold-recovery facility.
The operation processes about 58 million tons of rock, including 20 million tons of ore and 38 million tons of overburden (rock without any gold ore) per year. The mine meets all local, state and federal environmental permitting requirements.
The Cresson mine is the largest gold-mining operation in Colorado.
Over the past 10 years, gold production from the Cresson has topped 2 million ounces. At today’s price of about $380 an ounce, that’s $760 million in value.
The mine has continued fulltime production since it was opened despite major swings in the price of gold, ranging from a low of about $250 per ounce in 1997 to a high of a little more than $400 per ounce in 2003.
The Cripple Creek & Victor Gold Mining Co. (CC&V), a joint venture of Golden Cycle Gold Corp. and AngloGold (Colorado) Corp., own the mine.
AngloGold is the majority owner and the operating manager.
AngloGold (Colorado) is a division of AngloGold Ashanti, a global gold producer, with headquarters in South Africa and 25 operations in 11 countries. The company employs more than 60,000 people worldwide.
In February my firm completed an analysis of the Cresson mine’s economic impact. We found that the mine plays an important role in the county’s, region’s and state’s economies.
The mine employs 320 in Teller County with an average annual wage, plus benefits, of $63,740. CC&V also spent $5.4 million on professional and contract services in 2003 supporting 100 additional jobs in Teller County.
The mine’s operations have an expansive effect on the economies of Teller County, the Pikes Peak region (El Paso, Teller, and Fremont counties) and the state of Colorado.
In 2003, total direct and indirect employment from the mine’s operations resulted in 780 jobs with payroll earnings totaling $30.6 million in Teller County. It was responsible for 1,340 jobs and had payroll earnings totaling $51.6 million in the Pikes Peak region. For the state, it supported 1,850 jobs with payroll earnings of $69.7 million.
CC&V pays various taxes to local and state governments, including property taxes, net proceeds taxes, sales taxes, severance taxes and income taxes.
The mine’s operations resulted in total tax payments of close to $2 million in 2003, not including income taxes paid to the state.
The Cresson mining operations will continue to be a major economic engine for a number of years.
Current plans call for the Cresson’s mining operations to continue through 2012, gold ore processing through 2015 and reclamation until 2020.
Gold mining in the Cripple Creek/Victor area helped fuel economic growth in Teller County, the Pikes Peak region and the state of Colorado more than a century ago.
Now, gold mining is once again a staple of growth even in the face of fluctuating gold prices.
David Bamberger owns David Bamberger & Associates, a local firm specializing in consulting and economic research. Reach him at davebamberger@aol.com.
The weekly Adviser column offers advice for the business community. It rotates among a group of local experts and business leaders.