Background

Recent accounts of a release of solutions containing cyanide at a gold mining-related facility in northern Romania have prompted inquiries of The Gold Institute as to the facts of the situation.

To date, much of the information coming out of Eastern Europe is incomplete and at times conflicting. Pending an investigation by their experts, the facility?s owners have provided few details. The United Nations Environment Program and the European Union Environment Commission have dispatched scientists and other officials to the area. The following are the facts as we understand them to date:

· The Baia Mare Tailings Retreatment project is owned by Aurul S.A., a joint venture between the Australian company Esmeralda Exploration, Ltd., which has a 50% stake in the project, and the Romanian State company Remin, which has a 45% interest, with private Romanian investors comprising the remaining 5%. The operation started production in April, 1999.

· The Baia Mare Tailings Retreatment project recovers gold from tailings (residues from previous metal mining and processing out in the district), using sodium or potassium cyanide to dissolve the remaining gold from the tailings.

· According to reports, on January 30, 2000, a holding facility that contains process solutions containing cyanide, either in tailings or in some other medium, was compromised in some way and a release occurred. Most accounts point to weather—heavy rains and/or heavy snow and ice—as a contributing factor.

· The released material entered the Tisza River, which flows into the Danube.

· The European Environment Agency has reported that, based on its own research, 100,000 cubic meters of solution that escaped from Baia Mare contained 126 mg/l (parts per million) cyanide.

· Serbian news agencies report that cyanide concentrations are down to World Health Organization safe levels at the Danube River at Belgrade.

Unfortunately, we have no details about the design of the Baia Mare facility, nor are we familiar with Romanian or European laws that might regulate such facilities.

Management of Cyanide at U.S. Gold Mines

The use of cyanide and cyanide-bearing solutions at precious metal mining operations is comprehensively regulated by U.S. federal and state environmental laws pertaining to air and water quality, waste management and land use. In addition, the Mine Safety and Health Administration (MSHA) sets employee exposure limits, and mine personnel are thoroughly trained to manage cyanide solutions safely. Other safety measures include:

· Cyanide, in the form of sodium or potassium cyanide, is typically diluted with water to low concentrations - typically 0.01% to 0.05% cyanide - before it is used at U.S. mines.

· All tanks pipes, ponds and other areas that contain cyanide solutions are required by law to have appropriately designed and engineered containment facilities. This means that if there is any problem, there is a back-up system to contain the materials.

· As a condition of their operating permits, most U.S. gold mines provide for the efficient destruction of free cyanide in consumed materials to a level designated as safe.

· Monitoring of work areas where cyanide is received, used, or managed is routinely conducted to ensure safe working conditions.

· All transporters and users of cyanide must have federally approved Material Safety Data Sheets (MSDS) immediately available to instruct emergency personnel in the event of an accident.

· Cyanide in mine operations is destroyed quickly, when required, using several commonly available chemicals kept at mines.

In the many decades of its use in the U.S., there have been no work-related fatalities due to cyanide use and there have been no reports of off-site human health impacts. The industry does take remedial action to divert migratory birds from processing ponds containing cyanide solutions.

Basic Information About Cyanide

Cyanide is one of the very few chemical reagents that will dissolve gold in water, using only oxygen from the air as an oxidizing agent. Other chemicals must be used in much-higher concentrations with much-stronger oxidizing agents, such as chlorine, nitric acid, or hypochloride. As a result, they become more dangerous to handle than cyanide, which has been safely used in precious metal extraction since 1887. Cyanide also is used in the manufacture of nylon, plastics and pharmaceuticals.