The State Engineering’s Hearing on New Mexico Copper Corporation’s (NMCC’s) application to transfer leased water rights to their wells in Caballo for use at Copper Flat Mine will begin August 7th and continue through the whole month. I will be reporting on the Hearing for The Citizen, but it may interest readers to know the history of the mine. [Disclaimer: as a director of PAWA, the Percha-Animas Watershed Association, I am a litigant in the Hearing, so I will be a biased reporter.]
Largely, the mine was the idea of George Lotspeich, who as a geology student in the 50s came to Hillsboro because of recent geology reports from the Socorro mining institute. The mining district around Copper Flat had been heavily mined for gold between the 30s and WWII, and there had been tunneling for small amounts of copper, but recent test drills had shown the presence of low-grade copper ore in the old volcano core between Black Peak and Animas Peak in sufficient concentration to be valuable in future markets if and when higher concentration ore became depleted. Besides buying property in Hillsboro (where the Saturday market and music gathering takes place), George put together numerous claims at Copper Flat with the intention of open pit copper mining.
By the late 1960s, George had sold his portion of Copper Flat to the mining company Inspiration which added other properties at the site to create Copper Flat Mine as an open pit operation. Inspiration drilled two new wells on site and found that even with the older gold mining wells there was insufficient water for large pit mining. In 1974, Inspiration leased the mine to Quintana, a Texas oil exploration company. Quintana drilled the present production wells some 12 miles east of Copper Flat on BLM land. Quintana then formed a coalition called Copper Flat Partnership to mine Copper Flat.
Delayed by low copper prices, the Partnership finally constructed Copper Flat Mine in 1980 financed by a Canadian bank (at 20% interest). The mine operated for less than 4 months in 1982 (enough to work out the equipment and satisfy the bank that the mine was real) and closed due to the continued depression of copper prices and the enormous debt interest. The Partnership gave the mine to the bank and abandoned the project. The bank failed to market the operative mine and dismantled it. The equipment was sold in 1986 to an international company mining a site in Papua, New Guinea, which also had to shut down a few years later due to having caused the largest ecological disaster in copper mining history.
In 1987, the Partnership returned the lease of Copper Flat to Inspiration, which promptly sold the mine to George Lotspeich, who just as promptly transferred it successively in one day to two other companies he owned and finally in 1991 to Gold Express. Gold Express failed to permit the mine and in 1994 sold it to Alta Gold. Alta Gold succeeded in having its environmental impact study accepted by the BLM, but it was unable to capitalize on it because of a mine failure in another of its properties. Alta Gold went bankrupt in 1999, whereupon George Lotspeich bought the property again from the bankruptcy court, and 11 years later sold Copper Flat Mine to Themac Resources, a Canadian company formed by an Australian owner, the Maloney family, expressly to operate Copper Flat Mine.
New Mexico Copper Corporation is the local incorporation belonging entirely to Themac Resources. If you ignore all the incorporations done for reasons of taxes and financial responsibility, etc., this mine belongs to the Maloney family through its investment company Tulla Resources, which is the entity applying for the transfer of water rights that PAWA and others are protesting. If you follow the incorporations, New Mexico Copper Corporation is indebted to Tulla Resources for hundreds of millions of dollars.
As for the mine, it has been operated for less than 4 months during almost 50 years of trying. In the 50s the drill cores tests predicted that the ore would average out at 0.35% copper, which then was below profitable mining with the available processing technology. The Partnership in 1982 produced 0.4% ore — and to get that it had to tunnel to a rich pocket of ore — and the whole operation turned out not to be profitable. NMCC is predicting an average ore of 0.3% copper (ore less than 0.8% copper is considered low-grade), so even with new processing technology, mining here is economically risky and requires much more labor and water.
It is disgusting to say the least watching ‘get-rich-quick’ schemes appear and disappear in Southern New Mexico (and elsewhere)! Water rights are blithely transferred from some remote place with water to other places that might or might not quickly produce profit regardless of whether there is sufficient water for local use or not, whether there is a REAL chance at an economical lodestar waiting at the bottom of one hole or another or, maybe the next one!! This is a hold-over from romantic tales of the ’49ers’ over a century and a half ago that ripped apart every mountain or gulch that held the promise of instant gratification in the mountain west!! The native people then failed to see the ‘romance’ and lived to pay the consequences. Guess what, folks! WE are the “NATIVE PEOPLE” NOW!! You’d think we’d learned something from history – NOT!! Guard your water, folks, it’s your LIFE!!! Literally!!!
Thank you, Mr. Yeh for this comprehensive history of the site’s ownership. Hopefully, the water rights will not be granted the site. The prospect of potential soil, water, and air pollution is enough for regulators and crass boosters to error on the side of caution.
You’re doing such a service for all of us by keeping the public up-to-date…..past & future. The one thing that I’d like to mention is that (from my own research) George Lotspeich ~with his quick shell game tactics of selling here today and to another tomorrow….or was it 3 sales in one day ? ….in any case, George managed to sell the ‘mine’ with no water rights. That was a surprise for the new owner (s) ….time after time. What a guy ! It was something of a surprise to George, too, when he found out someone else owned the water rights when he bought the mine.