When U.S. Sen. W.A. Clark first planned a smelter in Clarkdale to make way for open-pit mining in Jerome, he had no idea that successors would speculate on the worth of waste products long after his death.
Who would ever want a slag pile?
Nearly 100 years later, the long dormant smelter and the train distribution hub will allow for the remaining 20-million ton slag pile along the Verde River to produce further riches, if the dreams of new miners come true.
Searchlight Minerals Corp. (SMC) announced last week that it has become the sole owner of the former holdings of Verde River Iron Company (VRIC) and Transylvania International (TI) in a merger filed with the Securities and Exchange Commission. Nevada-based Transylvania had long owned the massive slag pile and a total of 800 acres of Clarkdale's industrial and commercial property.
SMC has agreed to pay $10 million and assign 16 million shares of SMC stock to VRIC. SMC agrees to pay VRIC $30,000 each month until 90 days after receipt of a bankable feasibility study or 10 years after the merger agreement. VRIC would be paid $6.4 million on the project funding date and would be paid 2.5 percent of the net smelter returns. Finally, VRIC would be paid $3.5 million as a priority distribution of cash flow.
In addition to 200 acres beneath the slag and the smelter property, 600 acres of vacant Transylvania land in Clarkdale as well as the brownstone Commercial Building on Main Street transfer to SMC as part of the merger.
It's a lot of money for a molten rock pile.
New attention is being paid to Clarkdale because of technological advances. Technology will allow that unsightly slag waste to be reduced to reap the value of the remaining minerals.
Searchlight officials say the smelting process in Clarkdale never reached high enough temperatures to fully-extract all of the rich minerals from the slag. During the period from 1915 until the mine closed in 1952, the mining focused exclusively on copper.
Test drillings, initiated by Verde River Iron Co., based in Stockton, Calif., show the slag contains rich deposits of gold, silver, zinc and some remaining copper. In addition, the slag contains non-precious minerals called "ferro-silicates."
The bulk of the slag pile, about 90 percent, would be formed into briquettes to be sold as a raw material for cement manufacturers among other things. The company believes those sales alone will cover cost of the reclamation estimated at about $50 per ton.
Large grinders reportedly can now deal with the tough abrasive material.
A complex leaching system would remove the precious metals, in a process described as "environmentally benign."
It is called a zero-discharge plant with all materials being 100-percent recycled and no toxic waste left behind.
The project has gotten the approval from the Department of Environmental Quality. The Town of Clarkdale has agreed to allow the plant to use discharged treated wastewater as part of the process.
It has been estimated the 20 million-ton slag pile will produce 4 million ounces of gold. Each ton of material will cost.
Ian McNeil, CEO of the Searchlight says, "The Clarkdale slag is quite unique. There are a lot of slag piles around but none are quite as rich. It has exceptional grades of materials."
McNeil says the beauty of working with a slag pile is that the nasty smelting process has already been completed and the materials are in "homogeneous ore deposits" rather having to chase an elusive vein as in traditional mining.
In addition to developing a feasibility study, the next step, according to the CEO, is to construct a test module "to show that the process works at a commercial level. Full production would be reached in 2008."
The company is already working with an architect to remodel an existing smelter operation building. The Town of Clarkdale has granted a use permit to handle 2,000 tons per day. If successful, that would give the slag pile a life expectancy of 28 years.
Sherry Bailey, Clarkdale community development director, says Searchlight has gotten building permits to outfit Building Two at the smelter site to accommodate the demonstration project. The building is the former laboratory.
Originally, the firm intended to develop a demonstration model on 50 tons per day. Now, that model has been increased to 250 tons per day using the same building with about 10 to 15 employees. The full production is projected for 2,000 tons per day.
Once in full production, all of the existing smelter buildings and some newly constructed buildings would be needed.
If the project proceeds according to plans, the reclamation operation would hire 100 people. "Mining, however, has quite a multiplier factor," says McNeil of the economic value to the community.