56 



lion, in fact, was spent in the northern hills and the Rapid City 

 area. 



Small business is the backbone of our economy, and many small 

 businesses depend on the mining industry for their survival. The 

 mining industry, of course, must compete with the market forces 

 that exist in the free economy, and we're willing to do that. But we 

 can be driven out of business by several things. We can be over- 

 taxed, we can be overregulated, or we can be locked out of the op- 

 portunities to explore and develop America's vast natural re- 

 sources. 



We at Homestake will continue to contribute significant good 

 faith effort to resolve natural resource conflicts. But unreasonable 

 mining law reform is an example which prohibits — which may pro- 

 hibit access and secure tenure on public lands or efforts to lock up 

 resources by the use of wilderness which does not strictly meet the 

 federal criteria or manipulation of the forest plan to restrict the 

 use of public lands to something that will not just cost miners and 

 loggers, it will cost the taxpayers and will cost the small busines- 

 speople of the country. 



Thank you. 



[The prepared statement of Mr. Mann follows:] 



Prepared Statement of Larry A. Mann 



The Homestake Mine in Lead, SD is the oldest continuously operated gold mine in 

 the world. The geologic structure known as the "Homestake Formation" has been 

 mined since 1876, 13 years before South Dakota was granted Statehood. Homestake 

 operates almost exclusively on private land. Approximately 650 acres are occupied 

 by surface facilities which support underground operations, 651 acres are permitted 

 for disturbance in connection with the Open Cut surface mine, and roughly 80,000 

 acres are comprised of timberlands, agricultural property, and other non-mining 

 lands. 



Recently, the cost of producing an ounce of gold exceeded the market price. Be- 

 tween April 1991 and early 1993, Homestake Mining Company operated at a loss. 

 Management strategies for profitability required that efforts be focused on control- 

 ling fixed and variable costs, improving ore grade, eliminating unprofitable produc- 

 tion and fully utilizing both an experienced workforce and a complex physical plant. 

 Efforts to address these issues have been successful, and as gold prices increased 

 during the second quarter of 1993, Homestake returned to profitability. 



The future of the Homestake Mine depends largely upon the ability to accomplish 

 several objectives. Among these are: 



Implementing a mine plan which will sustain long-term profitability at low 

 gold prices. 



Replacing ore reserves. 



The replacement of ore reserves is essential to continued production. As produc- 

 tion of gold from an aging mine becomes more difficult, the replacement of econom- 

 ic reserves becomes more critical. Thus, exploration for future reserves is a high pri- 

 ority. Exploration is a high risk business which requires a large capital commitment 

 with no assurance of success. Exploration activities are conducted using geologic in- 

 formation. Gold mineralization occurs erratically and a substantial portion of future 

 discovery potential exists on federal lands. In order to insure a prosperous future for 

 gold mining in the Black Hills, access with secure tenure on public lands is impera- 

 tive. 



Several recent public land issues are of significant concern to Homestake manage- 

 ment and represent potential threats to the future of mining in South Dakota. All 

 of these concerns are related to the ongoing debate over the use of public lands. 



The first of these issues is reform of the 1872 Mining Law. Mining law reform is 

 inevitable, and as you know, the U.S. mining industry has participated in good faith 

 efforts to resolve public land conflicts. The result of those efforts is the Craig bill, S. 

 775. The Craig bill addresses each of the issues raised by mining critics and still 



