The Montana Department of Environmental Quality has levied a $516,567 fine for alleged illegal mining activity at the former Zortman-Landusky Mining District, which is in the midst of long-term reclamation efforts to mitigate acid mine drainage.

The penalty is accompanied by an order directing property owner Luke Ployhar and Owen Voigt, a mining consultant employed by Ployhar, to stop all mining exploration activities until appropriate licenses have been obtained, complete with a bond to cover the costs of future reclamation. It also directs Ployhar, Voigt, and their respective companies, Blue Arc, LLC and Legacy Mining, LLC, to submit a reclamation plan for land that was disturbed at eight sites within the mining district, which was mined extensively in the 1980s and 1990s before Pegasus Gold Corporation’s 1998 bankruptcy.

“The disturbances created by Respondents damaged reclamation work that had been completed at the Zortman Mine. The backfilling and capping were compromised by the mining activity undertaken at the site, with vegetation removed, soil removed, capping material removed, and no corresponding salvage of the topsoil or protective steps to address water impacts,” according to DEQ’s order.

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The Fort Belknap Indian Community and environmental groups engaged in mining issues praised DEQ for levying the penalty.

“The Aaniiih and Nakoda Tribes thank the DEQ for upholding the law and issuing a penalty that is commensurate with the egregious violation committed,” Fort Belknap Indian Community President Jeffrey Stiffarm said in an emailed release. “We will continue to protect our precious water and sacred sites in this area of the reservation. This is exactly why we have been fighting over the years for the return of the Grinnell Notch to us.”

The Grinnell Notch is a 30,000-acre tract of land that was included within the initial boundary of the Fort Belknap Reservation before the Assiniboine and Gros Ventre Tribes were pressured to cede it back to the federal government following the early-1890s discovery of gold in the Little Rocky Mountains.

“The devastation at Zortman-Landusky from previous mining activity is unforgivable. The Little Rockies and the Zortman-Landusky area should be off limits to any more mining,” Montana Environmental Information Center staff attorney Derf Johnson said in the release.

According to the order, DEQ used drone footage and satellite imagery this spring to ascertain the extent of the alleged mining activities. They noted that about a half-acre near the Zortman water treatment plant was disturbed to a depth of up to 23 feet. 

The DEQ argues in the order that those activities represent violations of the state’s Metal Mine Reclamation Act and compromise ongoing efforts to reclaim the site. The mine site and nearby areas are expected to require treatment in perpetuity, and DEQ estimates $80-$85 million has been spent on the effort to date. Though the now-shuttered Zortman and Landusky mines are not located on the Fort Belknap Reservation, the reservation is located just north of them. Multiple streams running into the southern end of the reservation have been contaminated with cyanide and acid mine drainage from the mines.

Ployhar, owner of Blue Arc LLC, argues that the activities being conducted on the property he purchased two decades ago in the aftermath of Pegasus’ bankruptcy are not mining. He told Montana Free Press that none of the earth that has been moved at the eight sites in question has been shipped away for sampling or processing, and said any earth-moving that has occurred at the site, which includes 1,000 acres of non-contiguous property, is not mining.

Ployhar said he is exploring the property’s recreational potential, and that some of the mine tunnels on the site haven’t been adequately secured with doorways, making them susceptible to dangerous freeze-thaw cycles. 

“We’ve cleared out tunnels on the north side, and they’re saying this is a violation,” he said.

Ployhar has not paid the penalty and his lawyers are talking with DEQ lawyers about the order, he said. He described the order and penalty as “absurd,” retaliative, and potentially grounds for a takings claim against the state. He also said he hopes the parties can begin conversations anew and has offered to be more transparent about his designs for the property, including the location of future building sites.

Ployhar said there are still gold deposits on the property that he’d like to mine, but that the disturbed sites in question aren’t located near those deposits.

“The recreational potential of that mountain is really the gold mine, in the big picture,” he said, adding that north-central Montana needs the kind of economic development the property could generate. In addition to mining, he said, he would like to develop the property with amenities like campgrounds, short-term cabin rentals, hunting opportunities for big game animals like bighorn sheep, an ATV trail system, and tours of some of the mine’s old infrastructure.

According to the DEQ order, Blue Arc indicated to DEQ in an April email that the company was not exploring the property’s mining potential, but was developing several campground sites.

Bonnie Gestring, the NorthWest Program Director of Earthworks, a national environmental group that works to protect communities from adverse impacts associated with mineral and energy development, said Ployhar’s claim that he’s working on a campground on the site of the old mine is “laughable,” given that he’s applied for permits to mine the property or conduct exploratory mining operations there on three occasions. None of those permits were issued, though one made it through the application process before stalling when Ployhar failed to produce a bond for any reclamation activity required to remediate the site post-mining.

Ployhar also holds 10 mining claims on adjacent Bureau of Land Management property, which he obtained last October when there was a two-day lapse in protections geared at preventing the agency from issuing new mining claims on federal land near the old mine sites. The issuance of those claims prompted calls for an investigation into the lapse of protections.

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Amanda Eggert studied print journalism at the University of Montana. Prior to becoming a full-time journalist, Amanda spent four years working with the Forest Service as a wildland firefighter. After leaving the Forest Service in 2014, Amanda worked for Outside magazine as an editorial fellow before joining Outlaw Partners’ staff to lead coverage for Explore Big Sky newspaper and contribute writing and editing to Explore Yellowstone and Mountain Outlaw magazines. Prior to joining Montana Free Press’ staff in 2021 Amanda was a freelance writer, researcher and interviewer. In addition to writing...