The proposed Beartrack-Arnett mine in Lemhi County could add $1.2 billion to Idaho’s gross domestic product over an estimated seven years of production. This is one of the results of an economic impact study announced on Feb. 8 by Revival Gold Inc., a Canadian company in the exploration and pre-production steps of opening a mine 32 miles north of Salmon.
The company aims to start mining activities by reopening the former Beartrack Mine, which still holds the record as the largest gold producer in Idaho to date. Once production is established, the firm will expand operations to include the nearby Arnett mineralization.
Beartrack was closed by its former mining operator, Meridian Beartrack, in 2000 with known resources still in the ground. The closure was due to economic conditions when the price of gold dropped below $300. Most of the roads and other capital infrastructure is still in place at the site. The company believes the property may produce 72,000 ounces of gold annually.
For the economic impact study, Revival Gold hired Associate Clinical Professor of Economics Steven Peterson at the University of Idaho. Peterson has over two decades of experience in assessing economic impacts in Idaho, including studies on the Sandpoint Festival, the University of Idaho athletics program, and the Port of Lewiston.
“I’ve done at least 200 economic studies in and around Idaho,” Peterson told the Idaho Business Review. “The mining industry is interesting because it brings well-paying jobs to economically-challenged rural economies. The benefits of mining projects aren’t just local: they spread throughout the state.” The statewide effect includes increased state tax revenues and increased commerce.
Using the data from Revival Gold’s NI 42-101 Preliminary Economic Assessment, Peterson found that the mine would add $1.2 million to Idaho’s GDP over its eight-year life: one year of construction and site preparation and seven years of production. The mine would create 858 full-time jobs including direct employment of 267 personnel at the site. It would create an additional 506 full-time jobs during construction, for a total of 1, 364 jobs during the first year. Once construction was finished, the number of jobs created varies between 700 and 900 annually.
During the eight-year lifetime of the mine, Peterson calculated that the Beartrack-Arnett project would add $87 million in state tax revenues and $121 million in federal tax revenues. He calculated the average annual contribution to Idaho’s GDP at $152 million.
“This study confirms the broad extent of potential economic prosperity a successful restart of the Beartrack-Arnett project offers Lemhi County, the state of Idaho, and the nation,” remarked Revival Gold CEO Hugh Agro in a statement. “The project could have a substantial positive impact on employment, skills development and overall economic activity and would bring a much-needed economic boost directly and indirectly to hundreds of families and local businesses in Idaho. Beartrack-Arnett has the potential to support a peak of more than 1,300 high wage full-time jobs representing almost $100 million a year in total compensation largely in a region that suffers from higher unemployment than the Idaho state average.”
Revival Gold anticipates that a pre-feasibility study will be complete by the end of 2022. The firm estimates that the project will require an initial capital investment of $100 million. Including sustaining capital and other expenditures, the company estimated total cumulative gross capital investment will be $207 million.
Revival Gold estimates that Beartrack-Arnett would generate an after-tax net present value at a 5% discount rate of $88 million and an after-tax internal rate of return of 25% if gold is priced at $1,550 per ounce, increasing to $211 million and 49% for gold at $1,950 per ounce. These values are from the firm’s NI 42-101 Preliminary Economic Assessment, a forward-looking statement required by the Canadian government which is similar to a investment prospectus in the United States.
Revival Gold is headquartered in Toronto. Its stock is traded on the Canadian TSX Ventures exchange.