The wastewater flowing from Caribou Mine was diminishing every year, and Tom Hendricks, long-time mine operator and president of Grand Island Resources LLC (GIR), knew what that meant. The dilapidated Idaho Tunnel, running under Caribou Road just outside of Nederland, needed to be excavated and shored up to unobstruct the groundwater flow.
At the time, GIR was in the process of updating the infrastructure of Caribou Mine and Cross Mine, both located five miles northwest of Nederland. GIR, with Hendricks at the helm, contracted a mine servicing company to clear the tunnel and fix the groundwater discharge problems. According to a timeline provided by GIR, the contractor made a critical mistake: in mid-December, they started using heaters to warm the rock for easier extraction. Overnight, the ground weakened catastrophically and the tunnel collapsed.
As a result, outside of the mine, the tailings pipe that discharges Caribou mine’s wastewater into settling ponds slowed from a trickle to a drip.
That was the moment when problems between the Town of Nederland and GIR began. When the tunnel collapsed and Caribou’s discharge was cut off, the quality of water flowing from Cross and Caribou’s tailings ponds into Coon Creek Track changed. Then, in November of 2021, the Colorado Department of Health and Environment (CDPHE) issued GIR a cease and desist order citing 11 water-quality violations at the mine—and tensions between GIR and the Town of Nederland started spiraling out of control.
Deb D’Andrea lives on Caribou Road a few miles down from the mines and next to Beaver Creek, into which Coon Creek Track directly feeds. “[GIR] is looking to expand,” she says. “I’m concerned about what that means.”
“I hope [GIR is] very open with the residents of Nederland about what’s going on and shares the [water treatment] data,” says Kristopher Larsen, Nederland’s mayor, referencing a new water treatment system GIR recetly finished installing. “Whatever is happening up there, people are going to make assumptions.”
Small towns are rumor mills, Larsen says. And this situation has already generated a lot of rumors. So many that in January, GIR threatened Mayor Larsen and the Town of Nederland’s Board of Trustees with a half-billion dollar ($500,000,000) slander and libel lawsuit. Which, understandably, freaked out the entire town.
In a February 2022 letter to the editor of Nederland’s The Mountain-Ear, GIR’s current president, Daniel Takami, addressed those rumors: “There has never been a valid reason in the 50-year modern history of the mine for someone in Nederland or Boulder to fear for their health due to mine water management. Instead, discussion of the mine’s violations is being driven by individuals who are spreading misinformation about the real and potential harm.”
But that’s getting ahead of the story.
Following the collapse of Idaho Tunnel in December 2019, an unexpected and tragic twist complicated matters. On Jan. 6, 2020, Tom Hendricks, the beloved local who had operated Caribou and Cross mines since the ’70s—“Miner Tom”—died, leaving the Town of Nederland to contend directly with GIR.
“Everyone in our town pretty much knew Tom Hendricks. He was a staple of our community for decades,” Larsen says. “He was very open with working with the mining museum here in town, working with the miners and the heritage days that we had for many years, giving tours of his mine to students.”
Hendricks was something of a local celebrity. When he acquired claims for Cross and Caribou mines in the 1970s, they were already over 100 years old, though they’d sat unused since 1905. With a pick-ax and headlamp, Hendricks restarted the mines himself and in the following decades, his reputation for environmentally responsible hard-rock mining became legendary around the area. Hendricks’ mantra hung over the entrance to Caribou Mine: “Mining with respect for the environment.”
The Hendricks Mining Company (HMC) began to build safe and environmentally cautious mining operations at the two mines in 1974. But 43 years later, as HMC’s equipment and systems became outdated and obsolete, GIR stepped into the picture. Sometime in 2017, the company approached Hendricks with a proposition to help him continue operations and subsequently appointed him as its first president.
But who is Grand Island Resources LLC? Where did it come from? And what does it do?
No one really seems to know the answer to that first question—not even Ed Byrne, GIR’s lawyer, who declined to be quoted directly, but provided Boulder Weekly with some background information.
As to where GIR came from, it was first registered as a foreign LLC in May of 2017 in Wyoming (however, the company’s listed address is 4415 Caribou Road, P.O. Box 3395 Nederland). Today, five years after registering as an LLC, GIR still has no website. No public description of what it does as a company or what its mission is exists online. And no one BW spoke with knew how GIR had come into contact with Tom Hendricks in the first place.
What we do know is that after appointing Hendricks as president, GIR got to work revamping Caribou and Cross mines’ aging infrastructure. The company brought in significant resources including modern equipment, lots of capital and a vision to turn the small-time mining operation into something much larger and better supported.
“Grand Island Resources worked with Hendricks until his passing in January 2020 to transition to be the new operator,” Takami, who took over as GIR president after Hendricks, wrote in his February 2022 letter to the editor in The Mountain-Ear. “Hendricks knew we were committed to carrying on his legacy of responsible mining with the utmost respect for Boulder County’s land, water and people.”
As Byrne explains, GIR’s mission addresses a perplexing environmental problem: it’s often hard (or impossible) to find the responsible parties behind many of the inactive mining sites containing toxic tailings waste, scattered across U.S. public lands. There also isn’t enough Superfund money for the EPA to effectively identify and clean up all of those legacy sites on their own.
GIR’s whole model will circumvent that hurdle. Using private capital to buy fallow and/or declining mines on public land, the company updates and improves infrastructure, extracts remaining resources from waste rock already present on-site, processes materials in on-site ore mills, and ultimately fills the mines with a leftover rock slurry and seals them up forever.
As such, GIR’s plan for Cross and Caribou mines requires expansion. GIR aims to build a new ore processing facility at the mines, a septic system and a road connecting the two nearby mining sites, according to Byrne. That will take several years to complete and will require transporting construction trucks and equipment to the mine sites. Residents are concerned about the traffic that will create in Nederland and how the operation will affect the normally quiet neighborhood along Caribou Road. Nevertheless, GIR already has the permit to build the ore-processing facility and plans to proceed (more on that later).
Cross and Caribou mines are essentially GIR’s pilot projects, according to Byrne. The company was testing its model and wasn’t yet ready to go public, he says; which is why GIR still doesn’t have a presence online. But when the Idaho Tunnel collapsed, threatening Caribou Road, the company jumped into emergency mode to repair damages and mitigate future danger.
Then Miner Tom died, and GIR’s liaison (and local connection) to Nederland was gone.
GIR pressed forward: pumping resources into Idaho Tunnel’s rehabilitation and fixing Caribou Mine’s water discharge pipelines. As documents provided by GIR explain, Hendricks had succeeded in meeting water quality standards without the need for extra treatment by blending the discharge from Caribou and Cross mines.
It was the discharge water from Cross Mine that posed the problem. Normally, Cross’ discharge water was diluted in the settling ponds by Caribou’s much cleaner discharge water. After filtering through the treatment ponds, the water would then be released into Coon Creek Track—a drainage almost entirely fed by the mines. GIR says by spring of 2020 they were aware that Cross’ water was violating state discharge standards. And according to a timeline the company provided, it was GIR that contacted and got CDPHE and the Division of Reclamation, Mining and Safety (DRMS) involved.
Six months later, in October 2021, GIR received the cease and desist from the CDPHE, which was followed in early November by a “notice of violation” from the Water Quality Control Division. More than 400 tests conducted by GIR over a 20-month period had showed 11 aquatic life water quality violations. For each of the multiple violations, and for failing to report the test results, CDPHE threatened GIR with fines adding up to $54,833 per day, according to the Colorado Sun. (Though Takami wrote in one of his op-eds to The Mountain-Ear that the state only ended up fining GIR $5,000.)
“A notice of violation is one of the most serious actions we take, and I think this shows that we really are committed to protecting the resource up there,” Kelly Morgan, a CDPHE environmental protection specialist, told the Colorado Sun in a Nov. 30, 2021 article on GIR’s cease and desist. “This is a big deal to us.”
GIR responded to the CDPHE’s order, explaining that they’d already been working to resolve the issue and “replace the last 50 years of antiquated and obsolete water purification methods and treatments.” At the time, GIR was finishing the installation of a brand new state-of-the-art $150,000 water treatment system to replace the outdated one.
Deb D’Andrea read the Sun’s article, as well as Trish Zorino’s article that broke the story in Colorado Newsline and the news surprised her. She says it was the first that she and many other residents had heard about any such water-quality violations happening in their backyard. It took people off guard, she says.
“I don’t know anything about mining, so reading the cease and desist and the newspaper articles, it was just like, ‘Holy crap.’” D’Andrea says. “We were sort of like, ‘Well, why didn’t anybody reach out and let us know as people who live along the creek?’”
As a community, Nederland is very environmentally conscious. This past summer the Board of Trustees passed Nederland’s “Rights of Nature for Middle Boulder Creek” policy, declaring that the creek itself has rights that need protecting. So, naturally, when the residents of Nederland learned that the mine above their town was violating state water quality standards, there was a sense of nervousness from some, outrage from others.
By December 2021, the very private resource extraction company suddenly had a giant spotlight on it. The rumor mill, as described by Mayor Larsen, went into overdrive: speculation started swirling. Concerns about the town’s drinking water were aired. Fliers making radical (and patently false) accusations against GIR were posted around Nederland, and even in Boulder. Confusion mounted, and with it, tension between the mine and the Town grew.
“[Residents] came to us asking, ‘Hey, what’s going on? We want to know the history of it. We want to know what the current violations mean and what the next steps are,’” Larsen says. “It’s a huge regret I have, on my part, that I never took [Hendricks’ offer] to tour the mine with him, because he was a huge part of our community. And, you know, he passed away and then Grand Island Resources took over the mine and its operations.”
The Town’s Board of Trustees contacted the Boulder County Commissioners and the county planning office, requesting an explanation for the situation and subsequently organizing a “public information session” for Jan. 25, 2022.
“It was just us facilitating a chance for residents of the area to talk to the County,” Larsen says. However, in the wake of so much speculation and rumor, GIR was unhappy about being left out of the meeting. “That’s what prompted the letter.”
Dated Jan. 9, 2022, the letter Larsen references was from Byrne (representing GIR) and addressed to Larsen and Nederland’s Board of Trustees.
“We have become increasingly concerned by the tone of the rhetoric and the false and misleading statements being made by members of the Board of Trustees of the Town of Nederland,” the letter states. “If successful, this quickly organized and orchestrated campaign, which constitutes actionable corporate disparagement, libel and slander, could result in damages in excess of Five Hundred Million Dollars ($500,000,000.00).”
When D’Andrea learned about the demand letter and the threat of a half-billion dollar lawsuit, she was shocked again.
“Being so litigious doesn’t make you look like a good neighbor,” D’Andrea says. “When the violations first started they should have let people know, versus letting us find out about it in a newspaper article. That would have set a different tone.”
She and other residents say they felt as though the letter was meant to scare people into silence. And in a sense, it has. Things went noticeably quiet surrounding this story following that letter—in Nederland at least.
In Boulder, word had spread about GIR’s aquatic life water quality violations. Coon Creek Track doesn’t flow into Nederland’s water storage, but it does drain into Barker Reservoir, from which Boulder gets 30% of its drinking water. So, on Jan. 14, the City of Boulder sent a letter to the CDPHE and the DRMS urging them to uphold their cease and desist order and deny GIR’s application for expansion permits, citing “significant violations of GIR’s discharge permit (CO0032751), a pattern of lack of transparency, and GIR’s failure to communicate critical issues.”
In May 2020, for example, mine effluent cadmium levels exceeded the allowable limit under GIR’s permit by 223% and lead levels exceeded the limit by 176%, the letter alleges. “Such violations are of particular concern in ephemeral streams such as Coon Track Creek where ine discharge can comprise 100% of the streamflow at certain times of year.”
Those are significant exceedances by almost any standard. But Ed Byrne says context is critical here: Those changes are measured in parts-per-billion, he points out. Yes, cadmium and lead exceeded permitted limits by 223% and 176% respectively—but even that difference is so small it’s still not of concern to humans according to state standards for drinking water. Too, these 400 tests were conducted over 20 months with only 11 exceeding aquatic life standards. Which, Byrne explains, are much stricter than standards for drinking water.
“Let’s be perfectly clear:” Takami wrote in his Mountain-Ear letter. “No Colorado drinking water, livestock water, or agricultural irrigation standards for compounds in water were ever exceeded in our surface water discharge.”
Meghan Wilson, the City of Boulder’s water quality and environmental services manager, acknowledges that—but says the City won’t be letting its guard down.
“We have not been able to discern any changes in water quality and Barker Reservoir as a result of these violations. However, we are concerned about it because [GIR has] violated their permit multiple times,” Wilson says. “So our letter [to CDPHE] really is a precaution and we remain concerned.”
Back in Nederland, on Jan. 25 when the town held its public information session, Takami and several other GIR representatives were in attendance. After the County explained the situation from its perspective, Takami was given a chance to speak. He declined to answer questions, but did address the community, repeating much of what he had already written in published letters.
Following that public information session, Larsen says he hasn’t had any direct contact with Takami or anyone from GIR. Takami’s most recent letter to the editor of The Mountain-Ear was published Feb. 3, 2022, which was the last public statement made by the company or anyone associated with it as of this writing.
“Recent tests of our new water treatment system indicate we are now in full compliance with the very stringent aquatic life water quality standards. The Division of Reclamation, Mining and Safety (DRMS) has determined Grand Island Resources has made ‘good faith efforts’ to put a new treatment system in place and resolve any issues,” Takami writes in the letter.
Thus far, Takami says GIR has spent $4.1 million and 20,000 man hours fixing the Idaho Tunnel collapse and subsequent water discharge violations.
“We’ve seen the effects of what happens if mines are just abandoned and left,” Larsen says. If a company like GIR can update mines like Caribou and Cross, fund clean-up operations and provide better services than what the EPA is currently offering, it would not only be an enormous benefit to the community, but for the entire state and even the nation.
“I think that would be incredible,” Larsen says. “I am looking forward to seeing the data [from their new water treatment system], though.”
CORRECTIONS: A previous version of this article misspelled Tom Hendricks’ last name as “Hendrix” and left out the hyphen in the Mountain-Ear. The previous version also stated that the Colorado Sun broke the story, when it was actually Colorado Newsline. We apologize for these mistakes and have corrected the online version.