NEDERLAND - "Mining is not a get-rich-quick scheme anymore. Those days are over,” Tom Hendricks said in a Boulder Daily Camera article from October 9, 1977. “But with hard, dedicated work, you can operate one [mine] as an on-going business."

At that time the Cross Mine's average yield was about six or seven ounces of silver and one-quarter ounce gold in one ton of rock, with the lead, zinc, and copper percentages being in the pounds-per-ton.

Hendricks, at that time still in his twenties, was practically a one-man operation when he was interviewed about his endeavors in the Caribou and Cross Mines. His recently formed Hendricks Mining Company had just hired its first employee one year prior.

"Considering our initial investment, the milling costs and the mining costs, we have to mine $80 per ton [per day] of rock to break even. Anything above that, we make a profit,” Hendricks said then. 

Cross Mine was said to have just two veins when Hendricks started out, with about 5,000 ounces of gold and 200,000 ounces of silver ready to be mined. By 2002, the mine had produced half a million ounces of gold and 20 million ounces of silver through core drilling, geologic mapping, and underground working. 

The Hendricks Mining Company maneuvered through the 1970s, preparing and mapping their claims, and then, at the turn of the decade, everything changed.

New era of prosperity

“Gold prices started moving up because President Nixon signed the Gold Ownership Act so American citizens could buy, sell, and trade gold,” Hendricks said in an interview with Anne Dyni in 2002 for the Boulder County Parks and Open Space and the Maria Rogers Oral History Program.

“All of a sudden, gold and silver sky-rocketed in the fall of 1979, and I started adding more people on. We increased production, and lo and behold, gold hit $800 an ounce in January of 1980.”

“The price of silver zoomed up from like $3 to $50 an ounce,” fourth-generation Nederland miner Jim Smith told The Mountain-Ear. “There was work everywhere. It was the perfect time to be in the trade because, if you didn’t like the ground conditions of the mine or you didn’t like your boss, you could go to the bar, find the crew from the other mine, maybe arm wrestle, maybe drink with them, and go to work the next day.”

Smith chuckled. “In one year I had 14 W-2s and I never had any time off; I was always working.” 

It was at that time that Hendricks went into business with Ken Good, an oil man, and together they saw a period of productivity combined with small bursts of drought. 

“My partner called me up and he said, ‘Tom, I’m broke,’” Hendricks said, detailing how business ran back then.

“He had $55 million when I met him, and he lost something like $70 million in the oil shale deal when [Exxon] pulled out. So he said ‘You’re going to have to take the whole thing back over, pay your crew up, close her down.’ So I did, and then I went back into production myself with just two people.

“It was kind of a boom and bust cycle. I’ve been through that now for 31 years, where it’s been just like this. Big rewards briefly and then huge debt, but still holding onto it.”

“By the time Tom paid his royalties for all the different claims, paid his contract miners, paid for the mill, it was a wash,” Smith said, reflecting on his experience of having known and worked for Hendricks throughout his career. “And that’s the best that mine ever did, was break even.” 

Environmental mining

In regard to Hendricks’ legacy, it isn’t about how lucrative his mines were, but his dedication to environmental responsibility, and his commitment to Nederland, that have made him so revered in the hearts and minds of the community.

"Even though you have environmental restrictions, you can still work within them and produce,” Hendricks said. 

Part of his legacy includes volunteering on various boards, including the Historic Preservation Advisory Board, Mountain County Advisory Board, and Abandoned Mine Land Task Force for the State of Colorado, where he would make great strides in defending the environment and the integrity of his industry by restructuring state regulations. 

“Tom was a shining light environmentally, but he also had the best mine water in Colorado because it’s not acidic, it’s not basic, it doesn’t carry hardly any minerals, just a tiny bit of zinc,” Smith detailed, noting how Hendricks worked with the state in helping to alter their parameters for regulating all mines.

“It’s impossible to meet those standards anywhere because you can treat it down to drinking water standards,” Smith opined.

He thought that Hendricks’ insight “cut the throats” of local industrialists to appease environmentalists; he detailed how such regulations helped to produce “outlaw miners” operating in the area. 

Hendricks also supported Boulder County Parks and Open Space by selling them land and defunct claims, including Caribou Flats and the Red Signe Gold Mine, to help preserve historic sites from encroaching development. 

“Environmental laws and permitting laws and all the things that go on today are so complicated and so costly and almost insurmountable for the small miner that it’s made it almost impossible for people to open a mine today,” Hendricks explained.

“And then if you look at some of our historic mining areas, like Gold Hill and Jamestown and Nederland, Eldora, you’ve had this influx, this urbanization of the mountains and people are moving up here to have their little slice of heaven.

“They commute to Boulder and they want all the amenities. But the last thing they want in their backyard is a mine. 

“What we’ve tried to do up here at Caribou is build what we call our own ecological buffer zone. We’ve tried to acquire all the property around us so that our nearest neighbor is about four miles away.”

Transition

Following the short success of the 1980s gold boom, after working to consolidate the Caribou District throughout the 1990s, Hendricks merged with Calais Resources Inc., a Canadian company with several claims, including some in Nevada and in Panama, which Hendricks also helped to consolidate.

In 1999, Hendricks was appointed as Calais’ President and CEO. 

“This morning I was in the mine cleaning the tracks up. I was working on an international finance deal in Switzerland at noon. I hauled the trash down at 1:30; I had shareholders calling from around the world, and this afternoon I’ve got a mechanical thing to fix here. So, that’s my typical day,” Hendricks said.

Then, in June of 2012, Calais Resources Inc. was ordered by the Securities and Exchange Commission (SEC) to revoke all of its classes of registered securities due to violating Section 13(a) of the Securities Exchange Act of 1934 for failing to file certain quarterly and annual reports for a period greater than six years. 

According to the SEC’s official proceeding, “Calais initially registered its securities as a ‘foreign private issuer’ and filed annual reports on Form 20-F prepared in accordance with Canadian generally accepted accounting principles.

“In August 2003, after a financing that resulted in U.S. residents owning more than 50% of Calais's outstanding voting securities, Calais ceased to qualify as a ‘foreign private issuer’ and became obligated to file its annual reports on Form 10-K.”

GIR enters

In May of 2017, Grand Island Resources (GIR) was first registered in Wyoming, and in that same year acquired the Caribou and Cross Mines. In similar fashion to former owners Calais Resources Inc., GIR appointed Hendricks as their President. 

GIR’s reported business model involved using private capital to buy “fallow and/or declining mines on public land” and to improve their infrastructure.

With the implementation of modern mining technology, resources would be extracted from on-site waste rock, materials would be processed in on-site ore mills, and the mines would be refilled with a leftover rock slurry before being sealed completely. 

At that time, an expansion was stated as being required for the mines. The updates would include a new ore processing facility, a septic system, and a road to connect the two mines.

The Caribou and Cross Mines were to be GIR’s “pilot project,” to serve as a template for their future business operations. 

But in December, 2019, the Idaho Tunnel collapsed, which caused mining operations to cease and endangered the stability of Caribou Road. On January 6, 2020, the trusted representative and liaison between Nederland and the mines, Tom Hendricks, passed away. 

GIR’s problems

“GIR has already spent $4.1 million dollars and nearly 20,000 man-hours directly on repairing the Idaho Tunnel, improving its water systems, and preventing the collapse of Caribou Road,” GIR attorney Edward Byrne wrote in a 2022 letter to the Nederland Mayor, Town Manager, and Board of Trustees.

“Since 2019, GIR has spent a total of $6.2 million dollars and 47,210 man hours on the Idaho Tunnel, general clean-up of the Caribou and Cross mines, repairs to other infrastructure, and other water treatment facility improvements.”

But while GIR focused on repairing Caribou Mine’s water discharge pipelines, discharge from the Cross Mine—normally filtered through settling ponds before being released into Coon Creek Track, which flows into North Beaver Creek—was found in violation of state discharge standards.

“Word started trickling out and some of the first people to notice were residents in the Caribou Valley because they’re the ones who are downstream from it,” former mayor and current trustee Kristopher Larsen told The Mountain-Ear.

“We started hearing rumors and then the story broke that opened everyone’s eyes to it. At that point our first concern was the impact on our drinking water.” 

On September 21, 2021, the Division of Reclamation, Mining, and Safety (DRMS) was notified by the Water Quality Control Division (WQCD) of GIR’s non-compliance for zinc, cadmium, lead, copper, and silver exceedances.

And on October 1, 2021, DRMS sent GIR a “Reason to Believe a Violation Exists and Notice of Board Hearing” letter.

The letter informed GIR that they were being reviewed for a “failure to minimize disturbances to the prevailing hydrologic balance of the affected land and of the surrounding area and to the quantity or quality of water in surface and groundwater systems both during and after the mining operation and during reclamation.”

Larsen went on to explain how it was clear that the retention pond connecting to Nederland’s drinking water was not affected. However, that did little to quell concerns about the potential risks to the City of Boulder’s drinking water. 

“We were concerned because of their impact on that creek running through town, so we started asking questions, and the rumors got crazy very quickly.”

Larsen detailed how propaganda began to be distributed anonymously throughout Nederland and Boulder, in the form of posters brandishing the inescapable words “They’re polluting your drinking water.”  

“That was around the time that the lawsuit threats came out,” Larsen said.

On January 9, 2022, Byrne sent his letter threatening the Town of Nederland with a lawsuit, claiming that Nederland officials were spouting rhetoric harmful to GIR, including claims that water from valley wells was unsafe to drink, food grown in gardens irrigated from North Beaver Creek was unsafe to eat, that the City of Boulder’s drinking water was unsafe to drink, and that GIR was actively mining gold with harmful extraction methods.

“They were concerned about the misinformation that they thought the Town Board was perpetuating, so they treated us with the $500 million lawsuit,” Larsen explained. “And it was a threat not directed towards the Town, but against trustees.”

Official action

Though the DRMS had stated on February 17, 2022, that their preliminary determination is that the Cross Mine met the definition of a Designated Mining Operation (DMO), a cease and desist order was issued.

It went into effect on February 18, 2022, for Violation MV-2021-017, which involved several pollutant violations from December 2020 to August 2021 involving excessive and toxic traces of copper and lead found in the watershed.

The order was also imposed due to GIR failing to submit pollutant reports in March and April of 2021.

A DMO refers to a “mining operation at which designated chemicals used in metallurgical processing are present on-site,” and also covers toxic or acid-forming materials, acid mine drainage, and uranium development or extraction.

DMO status requires the mines to operate under more regulations and oversight.

GIR’s mission, to make the Caribou and Cross Mines their “pilot project,” continued, for on January 18, 2023, the Mined Land Reclamation Board found GIR to be compliant with required hydrologic monitoring and certain corrective actions, including submitting quarterly reports, and lifted the cease and desist order.

On February 6, 2025, GIR submitted their new application for DMO status to continue their operations and expansion of the Caribou and Cross Mines, a prospect that has reignited the community’s questions, concerns, and fears.