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IRON ORE waits to be unloaded from improper railcars June 4. The unloading process began June 7.
The pits are now owned by CML Metals, a new company based out of Hurricane. CML (named for the Comstock/Mountain Lion mine) is primarily owned by Luxor Capital Partners, LP, a New York-based company, but its president and CEO is Dale Gilbert, also of Gilbert Development.
Gilbert Development was contracted to do all the mining from 1985 to 1996, when the facility was owned by U.S. Steel and Geneva Steel. After nearly 15 years, the company will be mining it again.
Gilbert said he feels very positive about the future of the mining operations. He and others at Gilbert Development are very knowledgeable and experienced with the mines, and in addition to their work in the ’80s and ’90s they were heavily involved in getting it all set up with the previous owner, Palladon Ventures.
There have been a lot of upgrades to the mine and everything has been made current to the newest Mine Safety Health Administration regulations, Gilbert said. A lot of pre-stripping has been done in the Comstock pit to expose the ore.
Since March 2009, when operations ceased and the equipment was pulled from the mines, 114 railcars have been sitting on the property full of iron ore. Gilbert said they are not the type of cars needed to ship the ore and they began unloading them last week. They expect to be loading the correct cars and shipping within the next few weeks.
In addition to the ore that was in the railcars there is more ore waiting to be loaded. Total, there is about 160,000 tons of ore stockpiled and ready to ship, Gilbert said. They expect to send two or three trains a week out of the facility through the end of the year.
In addition to shipping the ore that is already stockpiled, mining operations are expected to begin within the next couple months, once all the equipment is back in place. All necessary equipment is in Gilbert Development’s control and none needs to be purchased.
The contracts are all in place for the ore to be taken to the Port of Richmond, near the San Francisco Bay area in California. From there it will be shipped to China, Gilbert said.
The company’s ore will be sent overseas for now, and for the next couple years at least, but they plan to complete construction of a concentrate plant in about two years. Engineering work is currently underway for the plant.
A concentrate plant will convert the mid- to low-grade iron ore to a high grade ore. Having this capability will give the operation more security and open up more markets for the ore, Gilbert said.
At least until then, shipping it to China makes sense. Though it may seem like a very long distance to send it, the market in China is currently very strong and that makes it cost effective.
“We’re in a world market that we’re dealing with now,” he said.
The ore being shipped is referred to as “run of mine” ore. The ore mined from the pit can range drastically in grade. The materials of an acceptable grade are crushed down and blended together for shipment. They are shipped in this raw, blended state.
Anything that is too low quality is set aside to be used when the concentrate plant is built.
Gilbert said the work at the mines may seem to the public to move slowly, but he wants to make sure things are done right and a long-term operation is built. Initially they will be doing very little hiring, and are hoping to start by bringing back some of the local people who were laid off. It is important to them to “do right by the community,” he said.
However, they have some ambitious plans for the future and several options they are looking at, even beyond the concentrate plant, he said. He could not disclose specifics at this time, though.
CML is an aggressive company that is very invested in the mines and is dedicated to making them successful, Gilbert said.
“We are not in this halfway,” he said.
He said he feels confident with Luxor as CML’s primary owner.
“We certainly have a strong owner with Luxor,” he said.
They have a great attitude about moving the project forward, he added.
Your article is appreciated, Ms. Langston, and I hope to read more of them about this CML/Luxor/Palladon project in the near future. With the rate of ore shipment as you state, the ore stockpile should be exhausted in just a couple of months so hiring will hopefully start soon.
Luxor with the help of screw ups from Cutler the Ceo of Palladon and Gilbert the former CEO of Palladon(now the man in charge of CML)took the mine from Palladon share holders leaving them with 21.74% of CML. This is after Luxor was paid $60 million for their 50% back in 2008. Luxor was paid $40 million and gave Palladon a loan for the other $20 million that was up in 2010 and the loan could be extended after 2010 which Palladon management screwed up and Luxor took the mine for the money owed.
This is the news release from Palladon
After due deliberation, on March 15, 2010, the Board of Directors voted unanimously to consent to the March 15, 2010, Satisfaction and Settlement Agreement ("the equitization"), whereby Luxor would realize on its security interest and convert its $40.55 million of indebtedness into a 78.26% interest in Palladon Iron Corporation, and Palladon Ventures Ltd. would retain a 21.74% interest in Palladon Iron Corporation.
Well we know what happened in 2008 and the iron ore price where cut in half. Thats why the $20 million could not be paid back by the deadline of 2010. So in September of 2009 Mr. Culter who took over from Mr. Foot who supposedly resigned in March of 2009 from Palladon decided to cancel the contract with CKI of China. Then in Jan 2010 Mr. Gilbert was made CEO of Palladon which in my mind was a big conflict of interest, and then Mr. Gilbert comes out with this statement March 3rd(Our highest priority is to repay or restructure the Luxor debt in a way that maximizes value for Palladon shareholders) And then on March 16 2010 78.3% of the mine was taken away from Palladon share holders and given to Luxor. And on April 6 2010 Mr. Gilbert left Palladon to work for CML and was replaced by Mr. Cutler again. There is were I think the conflict of interest was made.
So now Luxor is trying to make the iron mine look good for the highest bidders from China with news articles like this. Luxor is an off shore hedge fund running out of New York. Do you really think that they are interested in mining iron ore.