HOULTON, Maine — If you were to go offroading near Katahdin Lodge on Aroostook Scenic Highway Route 11, you may come across Pickett Mountain, a small peak located roughly 25 miles from Baxter State Park that is surrounded by several lakes and ponds populated with brook trout that make the area ideal for some quiet fishing.
But this remote, serene area near the Penobscot-Aroostook county line is likely to be the center of an environmental battle as Maine’s recently enacted mining law — considered to be among the toughest in the nation — is tested for the first time.
The company proposing to build the mine is Wolfden Resources, a Canadian venture based in Thunder Bay, Ontario. Wolfden has done test borings in the Pickett Mountain area and speculates there are deposits of valuable metals such as copper and zinc worth extracting, but the land has to be rezoned from general management to a planned development area in order for the company to mine it.
Maine Land Use Planning Commission accepted Wolfden’s petition to rezone 528 acres near Pickett Mountain as complete for processing on July 27. The LUPC is reviewing the petition, which will be followed by a public hearing process before the commission makes a final decision on the rezoning.
Wolfden is what’s known as a junior mining company, which operates on little to no revenue, and instead relies on funding from equity groups, according to Natural Resources Canada, the country’s federal department for natural resources and energy. Junior mining companies also tend to only focus on higher-risk, early mineral exploration, rather than actual mineral production, which is usually left to a different, senior company.
While Wolfden owns several other properties in the Canadian provinces of Manitoba and New Brunswick — and has done drilling in those areas — it has never actually extracted any mineral material from any of those properties.
Ron Little, CEO of Wolfden Resources, acknowledged that Wolfden is a high-risk, high-reward type of company. He compared it to startup companies in Silicon Valley — a bunch of small companies that try to strike it rich, or get bought out by larger companies.
“It’s like investing in early-stage tech,” Little said. “It’s all research, no cash flow.”
The world of junior mining companies can sometimes be messy and financially shaky. Wolfden was founded by Ewan S. Downie, who served as president and CEO from 1995 to 2007, when the company was acquired by Zinifex Limited, an Australian mining company. Zinifex in turn merged with fellow Australian company Oxiana to form OZ Minerals. In 2009, the New York Times reported that OZ was $900 million in debt.
The new incarnation of Wolfden, founded in 2012 after Downie reacquired the name, also has questionable financial issues. In 2013, it said that its property at Clarence Stream in New Brunswick, home to gold and diamond deposits, was the company’s “flagship project”. But in 2016, the Clarence Stream project was sold to Galway Metals for the price of $3.3 million in Canadian dollars, before any material was extracted from the property.
Wolfden’s most recently available quarterly financial statements, from September 2019, show the company incurring a net loss of $1.4 million, and accumulating a deficit of $32 million. It also shows that for its USA subsidiary, which oversees the Pickett Mountain project, Wolfden’s operating activities were at a loss of $580,000 for the last six months prior to the September 2019 statement. As of Friday Oct. 16, Wolfden was traded on the Canadian TSX Venture Exchange for around 20 cents a share.
Tom Gallo, an analyst who follows Wolfden Resources for the Vancouver-based financial services firm Canaccord Genuity, said that despite the risks, the Pickett Mountain project has good prospects and could provide jobs for a labor force that is recovering from the loss of paper mills in the area.
“The project is good from a mineral perspective. It’s minimally disruptive, very quietly done,” Gallo said. “There is a skilled labor force in Patten, and people there are looking for jobs.”
But operating such a high-risk venture is likely to prove difficult in Maine, which in 2017 enacted some of the toughest environmental regulations in the United States regarding mining. That bill, LD 820, puts several conditions on preserving environmental protection, such as forbidding placement of mines on state-owned or designated lands, as well as preventing mines from being built on or under rivers, streams or brooks. The environmental regulations came following a controversial 2012 law that permitted open-pit metal mining in the state. Wolfden so far has managed to meet LD 820’s criteria by owning the property outright.
Crucially for Wolfden, LD 820 also amended permit approval conditions so that discharge of wastewater can only cause a limited amount of contamination to groundwater within the mining area, and cannot cause any contamination to any groundwater outside the area.
Environmental groups and activists who are opposed to the mine, such as the Natural Resources Council of Maine, say that Wolfden has been unable to prove it is capable of limiting such contamination, which threatens the nearby environment and many of the brook trout that inhabit the area.
Bill Bridgeo, who was born and raised in Aroostook County and has a lifelong passion for fishing, often frequents Pleasant and Mud Lakes, two bodies of water located in proximity to Pickett Mountain, near the proposed Wolfden mine. He also is an experienced city manager in Maine, having served in Calais for six years in the 1980s, and in Augusta for the last 22 years.
Experienced in both zoning processes and the nature surrounding the Pickett Mountain area, Bridgeo said the project is untenable.
“I’ve been a city manager for 40 years, and I certainly understand planning processes,” Bridgeo said. “And I certainly have always been a strong proponent of good, quality economic development. But I believe both of those processes, in order to have integrity, have to be transparent and all of the facts need to be on the table.”
Wolfden’s lawyers have also tried to circumvent the LUPC from examining several factors of the petition, such as financial viability, waste disposal and environmental impact. The LUPC ardently rejected the move, with several concerned citizens and environmental groups voicing concerns in public comments made to the commission.
“I think they’re playing us Mainers for fools,” Bridgeo said. “And I just find that offensive.”
Once LUPC finishes its review of the proposal, the project will be open to public hearings that will allow Wolfden representatives as well as opponents of the mine to testify and address the commission. Afterward, the LUPC will make a final decision regarding the rezoning.
If approved, Wolfden will then be reviewed by the Department of Environmental Protection for the permitting stage. The DEP will decide whether to grant the permit that would allow the mining to occur.