Mining requires deep digging.

Planning a mine requires deep pockets.  And patience.

If construction of the Idaho Cobalt Project starts in October or November as its backer hopes, the company will have spent nearly eight years securing permits, not counting exploration that began in 1993.

Publicly traded Formation Capital Corp., Vancouver, B.C., plans the mine about 45 miles west of Salmon.  The company received a Draft Environmental Impact Statement from the U.S. Forest Service in late February.

“To get here, we had $14 million into this process, just the permitting effort,” Formation Capital Chairman and CEO Mari-Ann Green said in an interview in Boise.  The Forest Service is yet to issue a final go-ahead decision.

The company hired its own scientists.  It also paid for scientists to conduct specialty projects on behalf of the Forest Service, so that they could compare results with those from scientists that worked for Formation Capital, Green said.

Spending on scientists and consultants can cost $1,000 a day per person, she said.  Costs and timetables increase when the experts reach differing conclusions, and when findings on behalf of multiple state and federal agencies, and outside consultants, must be reconciled, she said.

Specialists evaluated samples from about 30 locations to determine the best site for the mine from business and environmental standpoints, Green said.  Formation has had to address water quality in the upper Salmon River system, local drinking water impacts and public access to roads, she said.

Permitting a mine takes a long time, and is getting more complex and time-consuming in the U.S. and elsewhere in the world, Green said.

“Mines, unfortunately, are where you find them, where the resource is,” she said.

In the U.S., one factor is the National Environmental Policy Act, Green said.  The law is general, so each national forest and agency can apply it a bit differently, she said.

Nevertheless, she’s pleased with how the process has gone so far, she said.  “We think mining and taking care of the environment can co-exist,” Green said.

About eight permits, dealing with issues ranging from water quality to construction and mining specifics, are required, she said.  The Forest Service is the lead agency.

Formation Capital in January 2001 filed a “mine plan of operation” detailing where facilities would be built, and where material would come in, go out and be stored.  The plan was approved in May 2001.

The company spent the summer of 2000 conducting its own feasibility audit of the site.  Green said the company conducted 18 studies, involving different science disciplines and types of measurements, starting that year.  Formation Capital initiated water-quality baseline studies when it started exploratory drilling in 1995.

Formation Capital received its Preliminary Draft Environmental Impact Statement at the end of 2005.  Green said that process took longer than anticipated because of the post-9/11 lull in the resource sector, and because the company put the permitting process on hold for about a year while it bought and retrofitted the Big Creek metals refinery in the north Idaho panhandle.

“It’s not a matter of taking advantage of high prices,” Green said.  Prices will cycle up and down during the considerable period of time required to find a site, plan a mine and obtain permits, she said.

It took several years just to find the desired mining area in east central Idaho’s 30-mile “cobalt belt” and the ideal mining site there, she said.  Formation Capital took soil samples and grid-mapped the area by where cobalt is available in sizable and accessible quantities, she said.

“Now, with the Draft EIS, agencies are telling the public they are inclined to let us mine, and this is the last public comment (period),” Green said.

The 60-day comment period is scheduled to end April 23, but it could be extended by another 30 days depending on comments received, she said.

Formation Capital expects the Forest Service to issue a final Environmental Impact Statement, and record of decision filed in the Federal Register, in late July, Green said.  The record of decision is subject to a 45-day appeal period, and possibly an additional 45-day period to study and resolve issues brought forth on appeal, she said.

Construction of the mine would take 12 to 14 months, she said.  The company would employ 150 in Lemhi County in addition to 39 in northern Idaho.

Formation Capital expects to spend $80 to $100 million combined on the Idaho Cobalt Project and the Big Creek refinery retrofit, Green said.

A report in the Challis Messenger newspaper said Formation Capital has spent a total of $30 million on the project including permitting and exploration.

Green said it will cost $8 to $10 a pound to mine, mill and process the material.  Cobalt has risen recently to about $30 a pound.

Annual cash flow discounted for interest, depreciation and taxes is estimated at $30 million a year for 10 years assuming a cobalt price of $13.80 a pound and about $47 million assuming a price of $19.40 a pound, according to a Formation Capital projection.  Cobalt is used to make strong, lightweight alloys.  Formation Capital also would extract copper and gold from the Lemhi County site.