Bodie Consolidated Mining Company.

Administrative History

The Bodie Consolidated Mining Company (BCMC) was created in 1988 as a wholly owned subsidiary of Galactic Resources Ltd. (GRL) of Vancouver, Canada, to perform mining exploration activities near the Bodie State Historic Park in Mono County, California. Much of BCMC's management was conducted through Galactic Services Inc. (GSI) of Reno, Nevada (also a subsidiary of Galactic Resources) while day-to-day operations were managed at the project site in Bodie.

The creation of the BCMC sprang from Galactic Resources' acquisition of property near the Bodie State Historic Park from Homestake Mining Company in 1988. This property included public Bureau of Land Management (BLM) lands, and land leased from individuals who held mining claims in the area. Homestake had been conducting exploratory drilling activities in the area periodically in the 1970s and mid 1980s. In 1986, Homestake had conducted an internal Environmental Reconnaissance Report on its Bodie holdings, which concluded that the area contained vast reserves of gold and that a mining operation would encounter only minor opposition. Homestake offered the property for sale the next year, telling prospective buyers that gold could be extracted by open pit mining methods. In early 1988, Galactic Resources began evaluating Homestake's Bodie property for purchase.

Galactic's initial evaluations of the site were not uniformly positive. An internal memo called it a "high risk prospect" in April 1988. Nevertheless, the company agreed to acquire Homestake's mining rights in the area in May 1988. Homestake and Galactic Resources entered into a "strategic agreement" in which Galactic purchased Homestake's entire interest in the Bodie Mining District, amounting to over 47 square miles. This transaction was worth approximately $39,500,000.

Galactic Resources Ltd. was run by Robert Friedland, a man with a somewhat obscure past who founded the company in the early 1980s and made a name for himself in financial circles for his "innovative" financing of mining operations. Galactic's mining properties included the Summitville Mine in Colorado, Ivanhoe Mine in Nevada, Ridgeway Mine in South Carolina, and mines in Asia and South America. In the late 1980s, Galactic Resources was one of the top 25 gold mining companies in North America.

From the start, BCMC was a very small operation that relied heavily on contractors to complete most of its functions, including drilling, assaying, and reclamation, as well as surveying, data gathering, lobbying, and public relations. At various times its formal staff was comprised only of two to three employees, and it relied heavily on management and legal staff from Galactic Services in Reno, and administrative staff at Galactic Resources in Vancouver. The original manager for the Bodie project was William B. Williams of Galactic Services, who remained in Reno. Chief Geologist Mark Whitehead, with assistant chief geologist Gordon Gumble, set up a mobile office on the ridge near the Bodie State Historic Park. They also hired three "rig geologists" and a local labor crew. GSI lawyer Kirk Williams served as "landman" and legal counsel for the project. BCMC's initial move into the Bodie area did not spark controversy, although the company did receive some local press coverage. Newspapers reported that the company was doing low-level exploration, and that any mine development was likely three to five years away. In August 1988, BCMC filed an Application for a Director's Review with Mono County for permission to continue Homestake's mining exploratory activities. The Directors Review did not have as many requirements as a formal "use permit," nor was it subject to the same level of public review or comment. BCMC's application noted that less than five acres would be disturbed and that BCMC planned to drill 50 holes on BLM lands and 85 holes on "fee" lands. No appeals were made to the application and Mono County approved it within a month. BCMC began drilling in fall of 1988.

Although in all public statements Galactic and BCMC insisted that the company did not have specific plans for the Bodie property and that its activities were merely exploratory, internally, Galactic staff discussed the likelihood of an open-pit mine at least as early as September 1988. The company also recognized the need for a "permit strategy" early on to assure that it would be able to pursue its goals and counter any opposition. The permit strategy was based on the assumption that the Bodie site had at least ten million tons of ore reserves, that one million could be extracted per year with open pit mining, and that the ore would be processed with cyanide, a method used by most modern mining operations. The company hired a permit strategy consultant, who informed Galactic that the most sensitive issue was the proximity of an active mining area to Bodie State Historic Park, but that a "well-conceived plan" would mean that renewal of mining in the area "could meet with a positive reaction."

Galactic also recognized in 1988 that an Environmental Impact Report (EIR) would be required for mining activities, and possibly for exploratory drilling, and sought to control the eventual outcome of such a report. An EIR would be prepared by a contractor hired by the "lead agency" for the project (in this case Mono County) but the contractor would likely rely on technical information provided by BCMC. BCMC soon hired Western Cultural Resource Management (WCRM) of Denver to begin archeological and historical research (GSI also hired a Reno-based manager, Penny McPherson, for that project) as well as other contractors to perform "baseline" environmental studies. Galactic's permit strategy consultant felt that "by controlling the baseline information that the EIR-EIS consultant has to review, Galactic Services will thus specify the scope and extent of the study." ("Permit Requirements and Strategies,"1988, Folder 6.0, Box 10.)

However, Galactic's hope that BCMC's activities would raise only limited concern and its belief that it could control the permitting process to its advantage soon gave way to another reality. By 1989 the project had become a highly charged political issue that would eventually involve Mono County, the California Department of Parks and Recreation, the National Park Service, the Bureau of Land Management, the California State Legislature, and the US Congress, as well as the public and various advocacy organizations.

In early 1989, public and media attention began to turn toward BCMC's activities in Bodie. Using Galactic's promotional materials, and statements by BCMC, GSI, and GRL staff, newspapers began reporting that Galactic planned an open pit mine, and that it believed that a substantial amount of gold would be found. Editorials appeared suggesting that the ridge behind the Bodie town site would be destroyed, noise and dust would ruin the quiet atmosphere, blasting would harm or destroy the town's buildings, and cyanide would endanger the local environment. Mono County began to receive letters of protest, and environmental organizations and the California State Park Rangers Association (CSPRA) began to express concern over the project. CSPRA formed an organization called "Save Bodie!" to raise public awareness of the project.

BCMC and Galactic staff soon recognized they needed to project a positive image of their activities in order to offset negative press. The company hired public relations firm Hill and Knowlton. Hill and Knowlton published the "Bodie Bulletin," a pamphlet extolling the project and suggesting that mining would revive Mono County's economy. The Bulletin also argued that the family that had sold the town site to the State, the Cains, always wanted mining to resume. Galactic Services also organized the Mono County Mining Committee to promote mining as a boon to the local economy.

By mid 1989, increasing public scrutiny of BCMC's activities had turned the project into a political issue. In May 1989, California Congressman Richard Lehman (D-San Jose) urged the National Park Service to survey the boundaries of the Bodie National Historic Landmark. The NPS, which had become alarmed by the resumption of active mining exploration in the area, soon embarked on this boundary survey. The NPS issued a memo that suggested that the Bodie NHL should incorporate the "total picture," including landscape features in the surrounding area. This stand alarmed Galactic and its public relations consultants, who argued that the company should "go public to challenge the rarified ‘Ghost Town' premise being developed by the National Park Service" and argue that mining would enhance the Bodie experience. The California DPR also issued a media packet in summer of 1989 expressing concern over the effects of a mining project on aesthetic, historical, and physical dangers to Bodie State Historic Park, although the agency did not take an official position on the project.

While criticism of the project mounted, there was support for BCMC's activities as well. Mono County, and especially four of five members of its Board of Supervisors, was positively disposed toward BCMC's presence in the area. The Supervisors expressed their displeasure at various measures designed to stop mining in Bodie, and passed resolutions declaring that mining was beneficial to the county economy. Mono County told Congressman Lehman that it intended to protect the town of Bodie but "at the same time, protect the rights of our citizens to propose uses for their lands."

In the meantime, Chief Geologist Whitehead and his staff supervised crews of laborers and geologists as they drilled over 100 sample holes on the property between 1988 and 1990. They also oversaw the work of various contractors gathering environmental and cultural resource and archeological data. However, as public pressure mounted, an increasing amount of their time was also spent monitoring media coverage of its activities and of critics, giving tours to politicians and the media, writing editorials and letters, and reporting to Galactic on the state of the project and of public relations. In early 1990, NPS completed its research on the NHL boundary, which concluded that it should include Galactic land. Other political challenges to the Bodie project appeared that year. In March the chairman of California State Senate's Natural Resources and Wildlife Committee, Dan McCorquodale, introduced a resolution to urge the Bureau of Land Management to prevent mining on federal lands adjacent to Bodie State Historic Park. Senate Joint Resolution 60 (SJR 60) directed the BLM to consider withdrawing public lands within the Bodie Mining District from mineral land classification to "protect and perpetuate" its national resources. The appearance of SJR 60 angered the Mono County Board of Supervisors and BCMC, although SJR 60 had no actual legal power to limit mining in the area. Mono County Supervisors complained that it infringed on their power to decide land use planning issues in Mono.

When BCMC submitted a second Application for a Director's Review in May of 1990 to continue its drilling activities, the company faced a very different political climate. Mono County issued a public notice soliciting comments on the Director's Review, and received many letters that demanded some kind of public hearing over BCMC's permits for drilling. These letters came from citizens, and state and federal agencies. At this point, Mono County had to admit that the project was "controversial." Mono County decided a use permit would be required and issued its decision in August. In late September BCMC submitted an application for a use permit for a "significantly expanded mineral exploration program."

The Mono County Planning Department also decided that an EIR was required for it to comply with the California Environmental Quality Act (CEQA) and suggested that BCMC fund an EIR, which would be open to public scrutiny. This EIR would cover the exploratory drilling program only. BCMC, which had assumed that such a report would be necessary, agreed. Mono County issued a Notice of Preparation (NOP) for the EIR. Many public responses to the NOP criticized the fact that the contractor assigned to prepare the EIR (Beak Consultants, Inc.) would rely on data provided by BCMC. The original EIR was on a very tight schedule, with drafts due within weeks of the selection of the EIR contractor. This schedule suggested to some critics that either BCMC or Mono County sought to conduct an EIR in name only, with no time for Beak to do independent analysis. However, the EIR was delayed repeatedly, in part due to delays in submitting technical reports, and in part due to public controversy. The Draft EIR did not appear until late November of 1992, almost two years late.

In the meantime, both internal and external forces had transformed the Bodie project. The NPS draft nomination for Bodie Historic District Boundary Enlargement appeared in late 1991, with an expanded boundary encompassing almost 3000 acres. In the same year, the Bureau of Land Management also released its Bishop Area Resource Management Plan (which included Bodie). The plan called for the area to be designated an Area of Critical Environmental Concern. Under this designation, BCMC would have to submit a Plan of Operations to the BLM.

Political pressure was also coming from the federal legislative level. In March 1992, Richard Lehman and George Miller co-sponsored the Bodie Protection Act of 1992 (HR 4370) which would have withdrawn 6000 acres of public lands in the "Bodie Bowl" from mineral entry, required an expedited review of the validity of all recorded claims and the voiding of any invalid claims, and prohibited further mineral patenting of federal land in the area (except in grandfathered cases). HR 4370 failed in the Senate. However, the bill was reintroduced the next year as the Bodie Protection Act of 1993 (HR 240). By 1993, the political climate had shifted, and Mono County and the Pete Wilson administration supported the bill. Although this bill eventually failed as well, another Bodie Protection Bill introduced in 1994 did pass.

Meanwhile, BCMC was experiencing internal pressures. The general decline in the price of gold damaged the financial standing of Galactic Resources, which had less money to devote to the Bodie project after 1989. The cordial relationship that BCMC enjoyed with its cultural resource contractor, Western Cultural Resource Management, also deteriorated.

However, it was issues related to Galactic Resource's Summitville mine in Colorado that brought the Bodie project to an unexpected conclusion. The Summitville Mine had long been a problem for Colorado and Galactic. The mine had opened in 1986, and serious environmental problems soon appeared. Periodic cyanide spills were occurring, wiping out aquatic life on a 17-mile stretch of the Alamosa River. Summitville was allowed to continue its operations for a while despite these problems, but operations were finally suspended in 1991. In July 1992, Galactic and Colorado agreed that the company would complete remediation and reclamation of the site by the end of November and that the company would raise its bond with the State to over seven million dollars, with refunds during different phases of work. In late fall, the state refunded 1/3 of the bond despite continuing environmental problems and despite estimates that the site clean up could cost Colorado up to 20-70 million dollars. Yet in 1992 Galactic announced that it would have to sell nearly all its assets, including the Bodie property, to cover costs at Summitville. Galactic's initial asking price for the Bodie property was 35 million dollars.

The California Department of Parks and Recreation, which had been long concerned with the fact that Bodie State Historic Park was surrounded by mining claims, took interest when Galactic announced it was disposing of holdings. However, Galactic's reduced asking price of 12 million dollars in October 1992 was more than the DPR was able to spend. CEO Peter Guest of Galactic (Robert Friedland had left the company at the end of 1990) told the DPR that if it did not buy the property, Galactic would market it to other mining companies. However, Galactic could not find a buyer. The Summitville Mine filed for bankruptcy in December of 1992, and the EPA's Superfund took control of the site. The Summitville Mine eventually brought down Galactic Resources, which also declared bankruptcy in January 1993. Control of the company's few remaining assets, including the Bodie property, passed to the control of a trustee. BCMC ceased operations soon after, and the property was eventually sold to the DPR in 1997 for $5,004,000.

Chronology

Pre-1850: The Bodie area is inhabited by Mono Paiute Indians.

1859: The Bodie district is "discovered"by gold prospectors W. S. Body and E.S. Taylor. Body dies the following winter in a snowstorm.

1860: A small group of miners begins working claims and organizes the mining district in July, honoring Body by naming it after him. The name is gradually standardized to "Bodie" in the next few years.

1860s: The town of Bodie grows slowly. The Bodie Bluff Consolidated Mining Company (later the Empire Company) brings miners to Bodie and by 1864 a permanent mining community is established.

1875-1877: The discovery of a rich vein of gold ore begins the "Bodie Rush."

1877-1882: The Bodie district reaches its peak production. In its heyday, Bodie has a population of over 6,000 residents, and possibly more than 10,000.

1883-1890: Mines begin shutting down and Bodie experiences a steady decline. By 1890, only two mines are in operation.

1890s: Bodie resident and property owner J.S. Cain introduces cyanide mining and electricity, sparking a small revival of mining in Bodie. This revival consists mostly of reworking of old mine tailings and low-grade ore dumps. Only a few hundred residents of Bodie remain.

1910-1920: Bodie's population drops from 500 to less than 100. By the 1920s, Bodie has become known as a "Ghost Town" and attracts tourists.

1928-1932: The Treadwell-Yukon Company (with the Homestake Mining company as a silent partner) undertakes an extensive exploration program, sampling all accessible mine workings in the Bodie Bluff and Silver Hill areas. The company processes about 400,000 tons of discarded ore and mined quartz.

1935: The National Sites Act creates the National Historic Landmark System. J.S. Cain, the primary property owner in the Bodie area, leases his mining property to the Roseklip Mines Company and moves to San Francisco.

1935-1942: The Roseklip Mines Company erects a cyanide plant and mines 55,000 tons of material.

1942-1945: World War II interrupts mining in Bodie.

1946: The Klipstein-Rosecrans Mill is destroyed by fire, mining is halted, and the town is all but abandoned. Bodie becomes a popular tourist destination.

1946-1962: The Cain family employs a guard to watch over the town of Bodie, and begins negotiations with the State of California to purchase the town site for conversion to a state park in the mid 1950s. The Cains do not offer all of the surrounding land for sale to the state, retaining mining rights and leasing the land to various prospectors.

1958: The National Park Service completes a Historic Sites Survey Form outlining the nationally significant characteristics of the Bodie Historic District. The NPS does not give the landmark a clear boundary, but suggests that the setting and isolation are important qualities of the ghost town.

1961: The Bodie Historic District is designated a National Historic Landmark on July 4 as part of the "Mining Frontier" theme.

1962: The purchase of the Bodie town site is completed, and the town and some surrounding land (324 acres total) is designated a State Historic Park.

1966: The town of Bodie is named to the National Register of Historic Places.

1968-1969: The ASARCO mining company performs samples on some of the underground workings around Bodie, drilling approximately 39 holes.

1972-1974: The Phelps-Dodge Mining Company works in the Bodie area, performing underground sampling, and drilling 10 holes in the northern part of the district.

1976: Homestake Mining Company conducts a somewhat intensive exploration program in the Bodie district for the next two years, drilling at least 63 holes.

1978: The California Department of Parks and Recreation releases the Bodie State Historic Park Resource Management Plan, General Development Plan, and Environmental Impact Report, which reaffirm that Bodie State Historic Park will be preserved in a state of "arrested decay." The General Development Plan's land use recommendations argue against open pit mining as a resolution to land use conflicts arising from mining interests in the area.

1983: Homestake farms out its Bodie property to the NERCO minerals company, which performs a limited reevaluation of the potential ore to be found in the Bodie District.

1985-1986: Homestake increases its operations in Bodie once again, drilling 11 "reverse circulation" holes, creating a detailed geologic map and performing metallurgical testing. Homestake Mining also performs an internal "Environmental Reconnaissance Report" on the area, and collects baseline data for a future Environmental Impact Report. The company offers the property for sale soon after.

May 1988: Homestake and Galactic Resources Ltd. of Vancouver, Canada enter a "strategic agreement" in which Galactic purchases Homestake's entire interest in the Bodie Mining District. This transaction is worth approximately $39,500,000.

Summer 1988: Bodie Consolidated Mining Company (BCMC), a wholly owned subsidiary of Galactic Resources, is created.

August 1988: BCMC applies for a "Director's Review" from Mono County for an extension of the permit for exploratory drilling. BCMC begins exploratory drilling at the Bodie site.

September 1988: BCMC's application for a Director's Review is approved and the permit is extended. BCMC hires Western Cultural Resource Management of Denver to begin archeological and historical research in preparation for an eventual EIR.

June 1989: The National Park Service begins an update and upgrade to the National Historic Landmark documentation in Bodie in response to the new exploratory drilling. The NPS seeks to secure a more expansive definition of the Historic Landmark District that includes the surrounding landscape, including land controlled by BCMC.

1989: Galactic Services Inc. of Reno (another subsidiary of Galactic Resources and the entity responsible for most management functions of BCMC) organizes the Mono County Mining Committee to promote mining as part of Mono County's revised General Plan.

June 1989: BCMC temporarily suspends drilling activities at Bodie, resuming a few months later.

March 1990: California Senate Joint Resolution 60 is passed, directing the BLM to consider withdrawing public lands within the Bodie Mining District from mineral land classification.

May 1990: BCMC's application for another Directors' Review to extend its drilling permit sparks controversy. Mono County recognizes that the project is controversial, and concludes that BCMC should apply for a "Use Permit" and that an Environmental Impact Report would be required for its drilling program. BCMC agrees to the EIR.

September 1990: Mono County releases a "Notice of Preparation" (NOP) for BCMC's EIR, and distributes it for comment. A contract is signed for Beak Associates to create the EIR for BCMC's exploratory activities. The original due date for the administrative draft of the EIR is set at October 1, 1990, with the Draft EIR due December 1, 1990, and the Final EIR due February 15, 1991.

October 1990: Public meetings are held in Mono County regarding the NOP. Mono County begins receiving hundreds of letters regarding the NOP.

March 1991: Mono County announces that subsequent issues raised by the public have lengthened the time needed for preparation of the EIR, and pushes the due dates for each version of the EIR back approximately 6 months.

June 1991: Mono county officially suspends the time period for the EIR due to "unanticipated and unreasonable delays" in submittal of technical reports by BCMC.

August 1991: WCRM completes its work for BCMC, noting that it felt that BCMC staff put pressure on WCRM personnel to modify their conclusions. BCMC responds that any changes suggested reflected merely the poor quality of the WCRM reports.

September 1991: BLM issues its final resource management plan for the Bishop area, which includes Bodie. The plan calls for the area to be designated an Area of Critical Environmental Concern, which is intended to protect historic values in the area. Under this designation, BCMC would have to submit a Plan of Operations to the BLM. BCMC files a protest. The plan is also criticized for not going far enough to protect Bodie, as it does not recommend the withdrawal of land from mineral development. The BLM initiates a review of all objections to the plan that extends into late 1992.

March 1992: H.R. 4370, the Bodie Protection Act of 1992 is introduced in the US House of Representatives by California Congressman Richard Lehman.

May 1992: Mark Whitehead, BCMC's Project Manager appears before the Interior Mining Subcommittee of Congress to oppose HR 4370.

1991-1992: Closure and cleanup of its Summitville, Colorado mine creates financial hardship for Galactic Resources. It announces that it will sell the Bodie property to pay for cyanide cleanup operations in Summitville as part of its reclamation agreement with the state of Colorado.

October 1992: California Department of Parks and Recreation begins discussions with Galactic Resources to acquire its Bodie property.

November 1992: Mono County completes the Draft EIR and a Notice of Completion is filed, making the EIR available for the public for review through the end of December.

December 1992: The Summitville Consolidated Mining Company declares bankruptcy and leaves its cyanide gold mine in Colorado.

January 1993: Galactic Resources Ltd. files for bankruptcy in Canada.

March 1993: HR 240, The Bodie Protection Act of 1993 is introduced in Congress, with support from the Save Bodie organization, Mono County, and California Governor Pete Wilson, but does not pass. Meanwhile, BCMC leaves the Bodie region.

April 1993: The Bureau of Land Management's Bishop Resource Management Plan is adopted.

October 1994: The Bodie Protection Act of 1994 passes Congress. This act withdraws 6135 acres of federal lands from mineral location and entry under US mining laws. It also allows additional non-federal lands to be withdrawn under the law if first acquired by BLM.

1993-1996: DPR personnel recommend that the DPR pursue acquisition of the Bodie property and seek funding sources for purchase from the Galactic trustee. The DPR begins negotiations with the trustee, attorney Robert Rusko of Peat, Marwick, Thorne of Vancouver. The asking price for the property drops gradually from 12 million to about 5 million US dollars.

1997: The State of California buys BCMC's land, property and records for $5,004,000. The land purchase includes 517 acres of land around the Bodie State Historic Park.

September 1997: The Bodie State Historic Park is re-dedicated.

From the guide to the Bodie Consolidated Mining Company collection, 1901-1993, (bulk 1988-1993), (California. Department of Parks and Recreation.)