Silver dream goes bust: Ouray mine faces lawsuits for $10M in unpaid bills

Liz Teitz
The Colorado Sun
Ouray Silver Mines Inc. hoped to reopen the historic Revenue-Virginius Mine, which lays claim to one of the richest lodes of silver in the world. The mine was expected to provide dozens of jobs as it provided silver for use in photovoltaic batteries for solar power systems, parts for wind-power turbines, and as a germicide in hospitals.
Ouray Silver Mines/Courtesy photo

OURAY — The court-appointed receiver for the Revenue Mine is searching for potential buyers, as Ouray Silver Mines, Inc., which aimed to resume production before shutting down last year, is facing multiple lawsuits over more than $10 million in allegedly unpaid bills.

According to a report filed with the Ouray County District Court this month by Alliance Management, LLC, the mine is now in a state of “care and maintenance,” and the company has just eight employees. Both are in stark contrast to plans for the facility in 2021, when the company aimed to be starting up production and hired almost 200 employees, most of whom were laid off late last year and early this year. At the time, the company cited rockfall and structural issues, which forced them to stop their efforts to ramp up production.

District Court Judge Cory Jackson appointed Alliance as the receiver in July in response to a request from Mercuria Energy Group, which is the primary financial backer of the mine. Ouray Silver Mines defaulted on a $28 million loan from Mercuria, which then asked the court to appoint a receiver in order to protect the mine’s assets.

A letter from OSMI to the state’s Division of Reclamation, Mining and Safety said the mine “ran into financial difficulties in late 2021,” resulting in layoffs and then receivership. Poppy Staub, who was the company’s vice president of environmental affairs, wrote, “As a result, OSMI lacks the financing available to commence development of the ore or complete construction of the mill at this time.” The letter said the company planned to put the operation into “temporary cessation,” a status that can be in place for up to five years, through 2027. During that time, the company must maintain environmental sampling and compliance with its permits. Staub is no longer working for the company.


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