AP Enterprise: CA Mine Dispute Recalls Wild Past

Published February 8, 2012 8:36AM (EST)

PLACERVILLE, Calif. (AP) — California's Gold Rush was more than a century-and-a-half ago, but its Wild West spirit lives on in a dispute between government agencies and a landowner in the Sierra Nevada foothills that some officials describe as one of the most egregious cases of illegal mining they have ever encountered.

The dispute between local and state officials and the owner of the Big Cut Mine is coming to a head after a bureaucratic stalemate that has dragged on for three years, with the county district attorney filing 14 charges, including four felonies, and the state leveling fines approaching $900,000.

Authorities say the land owner has refused to comply with cease-and-desist orders, pay any fines or even to submit to an arrest warrant. He became a fugitive last week after failing to turn himself in as promised.

"What we don't see very often is a flagrant, a total disregard of the law," said Stephen Testa, executive officer of the State Mining and Geology Board. "This is an order of magnitude larger than what you would typically see. This is a full-blown surface-mining operation."

Land owner Joseph Hardesty contends that he has a historic right to operate the Big Cut Mine, which is on nearly 150 acres he bought seven years ago as the price of gold began to rise. Gold now hovers around $1,700 an ounce, an increase of about 470 percent from its price a decade ago. The run-up has prompted a feverish rush to tap former gold fields and rivers throughout the West, from established mining companies to weekend gold-panners.

In California alone, gold reported from small claims and the state's few commercial mines has increased more than six times as prices have spiked, from 30,155 ounces reported in 2006 to 198,946 ounces in 2010, the last complete year available.

Hardesty, his wife, Yvette, and his partner, Rick Churches, brought in bulldozers and other heavy equipment to cut into a steep ridge that has a history of gold mining activity. Locked gates covered with "no trespassing" signs block entrance to the property.

An Associated Press reporter and photographer were unable to gain access to the site during a recent attempt to visit, but surveyed the land from a forested ridge a few hundred yards away. From that vantage point, hillsides that had been scoured away were clearly visible.

The property is in a region of Northern California thick with gold mining history, partway between the state capital and Lake Tahoe.

Nearby Placerville — named after a type of gold mining — was once known as "Hangtown" for its rough handling of claim jumpers. The town is the seat of El Dorado County — "El Dorado" being the Spanish name for a legendary golden city — and is nine miles south of where gold was discovered. Placerville grew up along the main stage coach route between San Francisco, Sacramento and the Comstock Lode silver mines in Nevada, a route that today is Highway 50, a conduit for campers and skiers.

The Big Cut Mine is only about a mile-and-a-half outside Placerville, now a popular tourist destination, but seems like a world away. It can be reached only after driving narrow, winding roads over country that is thickly forested with few people.

Court filings hint at the land's past, saying it is reported to be the site of a rich vein of gold called "the Deep Blue Lead."

Joseph Hardesty's attorney, William Brewer of San Diego, denied that his client is mining gold and insists he wants to operate a sand and gravel business to complement another he owns in Sacramento County.

"He's not a crook, he's not a cheat, he's not doing anything illegal or immoral," Brewer said. "He's trying to do what he can to make a living."

Local and state inspectors tell a different story.

Last spring, they said they found gold on what is known as a "shaker table," a device used to separate the metal, which is heavy, from sand and gravel.

They had entered the property on a warrant after the owners would not allow government agents on their land. Officials said Hardesty blocked the access road with his truck until deputies threatened him with arrest.

They returned on Jan. 24 to find at least 30 acres stripped bare, four drainage ponds and a gravel bed the size of a football field, 60 feet deep in some places.

Bruce Person, a county transportation department engineer who helped inspect the property, said a previous owner found that a dry, ancient riverbed on the property could produce between 1 ounce and 3 ounces of gold for every ton of material removed.

"If they've moved hundreds of thousands of tons of material, the potential is for hundreds of thousands of ounces of gold," Person said. "The potential is they're becoming millionaires. They have not reported a dime of earnings."

State and local authorities contacted for this story say they believe the Big Cut operation is so profitable that Hardesty can afford to ignore the laws governing mining.

"He can make more than we can fine him," said Jim Wassner, a senior code enforcement officer who has led El Dorado County's investigation. "The amount of gold they can pull out of there is astronomical."

The State Mining and Geology Board, a division of the California Department of Conservation, voted in mid-January to fine Hardesty a total of $850,000 in administrative penalties for operating without a permit and polluting a nearby creek. The penalty climbs by $15,000 each day he continues to operate.

Late last month, the El Dorado County District Attorney's office charged Hardesty with 14 criminal violations, including four felonies, for mining and grading without permits, working despite stop orders, releasing sediment into Weber Creek, violating zoning laws and using hazardous materials without proper permits.

He is considered a fugitive in the case, but a prosecutor said he is negotiating to turn himself in.

Hardesty already was on probation after pleading no contest last year to a misdemeanor charge of storing unpermitted hazardous waste in Sacramento County. He now faces allegations that he violated his probation by continuing to operate at both the Sacramento and El Dorado locations.

Joe Hardesty is the only one charged in both cases.

He filed a reclamation plan for the El Dorado County property in 2009 and has put up a total of $188,000 in bonds, beginning in 2007. Brewer, the lawyer, contends that gives Hardesty the legal right to mine while his own lawsuit against the state mining board and other government agencies is pending. Those lawsuits, filed last year in state and federal court, allege that his rights are being violated.

The mining board subsequently ruled that the bond and reclamation plan were not enough to allow mining to begin again. In 2010, the board ruled that all legal mining had ceased on the property before the state's permitting law took effect 35 years ago.

"He's not a renegade," Brewer said of his client. "He simply wants to work, and the agencies are telling him he can't, no matter what he does."

Hardesty and his wife did not return telephone messages.

Some of those who live near the property say they are sympathetic to a certain amount of mining activity. After all, the area has a rich history and clings to its Gold Rush tradition.

Neighbor Sandra Thein hopes Hardesty strikes it rich, if only because it would increase her property's value. She has lived nearby for 22 years but plans to sell soon and expects that a nearby gold strike would raise her asking price.

Other neighbors are fighting the mining operation, said real estate agent Aaron Bate, who is trying to sell another neighboring property.

"They don't want the traffic and the noise and the dynamite," he said.

Thomas East, of nearby Diamond Springs, said he has found plenty of gold flakes and nuggets weighing up to an ounce in Weber Creek, downstream from the Big Cut Mine.

"They won't let anybody mine it because the California Gold Rush could start again. All the people up here are paranoid about it," East said, standing by the creek outside the mine's locked entrance gate.

Brewer said his client wishes the rumors of immense riches being unearthed at the Big Cut Mine were true.

"Basically, the government is at the point of bankrupting Joe," the attorney said. "At this point, Joe doesn't have much to lose. It would be great if he could find $1 million up there."

By Salon Staff

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