Canadian firm wants to buy Bunker Hill Mine for $30 million

Toronto-based company has nonbinding letter of intent

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There’s talk once again of reopening the storied Bunker Hill Mine in the Silver Valley.

A Canadian company says it wants to buy the long-closed mine in Kellogg, Idaho, with an eye toward restarting production there, just a mile west of the ski slopes of Silver Mountain. The 132-year-old mine primarily was a lead and zinc producer but also turned out silver.

Toronto-based Liberty Silver Corp., which began as an over-the-counter penny stock in the U.S., said it has entered into a nonbinding letter of intent to pay Placer Mining Corp. $30 million for Bunker Hill. Placer Mining has owned Bunker Hill since 1991.

Liberty’s CEO, Howard M. Crosby, was a founder and director of U.S. Silver Corp., which bought the Galena silver mine in Silverton, Idaho, from Coeur d’Alene Mines in 2006. Crosby also was involved in a company developing a titanium project in Chile. He could not be reached for comment Thursday.

Bunker Hill produced nearly 38 million tons of ore between 1885 and 1981.

The mine and smelter first closed in 1981 after the owners, Gulf Resources Corp., went bankrupt. About 2,200 workers lost their jobs and thousands of pensioners saw their benefits cut.

Cleanup has been focus

Over the years various entities have tried to get Bunker Hill going again. An ambitious group of miners kick-started the mine in 1989, employing more than 200 workers briefly before running into credit troubles and going bankrupt in 1991. In 1996, a Spokane upstart, Royal Silver Mines Inc., announced plans to spend $40 million developing the historic mine. That effort fizzled as well.

For the past 30 years the mine’s legacy has been one of environmental cleanup.

Bunker Hill’s smelting stacks belched much of the pollution that created the federal Superfund cleanup site that swallowed Kellogg. A treatment plant built near the mine worked to reduce zinc and other heavy metals from the mine that reached the South Fork of the Coeur d’Alene River as well as contaminated groundwater. Zinc is particularly toxic to fish.

In a news release, Liberty Silver said, “All of the cleanup of the old smelter, zinc plant, and associated sites has now been completed,” leaving the mine “poised for further development and an eventual return to production.”

The U.S. Environmental Protection Agency, which oversees the Coeur d’Alene Basin superfund project, declined to comment.