Gold loses some of its glitter in Virginia City

In 1859, the discovery of the Comstock Lode -- the largest body of precious metals ever found on earth -- turned this hilly slice of terrain into one of the West's most infamous boom towns.

Today, some 100 years after the Comstock was abandoned, leading behind a wealth of history but only a handful of wealthy men, mining has returned to Virginia City.

However, it is a homecoming that has received a mixed reception among many of the 1,000 residents in three small communities here -- all that remains of the town that once stretched for seven miles and teemed with 30,000 people.

These communities are concerned that large-scale corporate mining, expecially open-pit mining, may seriously damage both their semirural way of life and the tourism on which they depend for income. Added to that dilemma is what many observers see as a head-on clash between mining and the preservation of Nevada's only federal historic district.

The renewed interest in the Comstock Lode has been kindled by skyrocketing gold and silver prices and vastly improved mining technology. Despite initial capital investments involving millions of dollars, these factors have enabled mining firms to turn a profit on a ton of rock that may hold only 0.12 ounces of gold and 4 ounces of silver.

In Nevada alone, 13 silver and gold mines are expected to begin production in the early 1980s, making the Silver State the nation's No. 1 gold producer as well as a substantial silver supplier once again. In the Comstock region -- where an estimated $1 billion in gold and silver was extracted between 1860 and 1890 -- some half-dozen mining companies are exploring old claims. Although estimates vary, it is generally believed that 50 to 80 percent of the lode's wealth was left behind after the first rush.

For the most part, such renewed activity has caused little, if any, controversy. Some rural areas, in fact, have welcomed mining companies as new sources of tax revenues and employment.

Even in Virginia City, residents have not objected to the exploration of some 800 miles of tunnels directly underneath the town -- mainly because the work is below ground where it can't be seen. The United Mining Corporation, which is doing the exploring, has predicted its operations may involve at least 10 million tons of ore and last as long as 50 years.

But what has raised the ire of Comstock region residents is houston International Minerals Corporation (Himco), which is running a 21-acre open-pit mining operation in the nearby town of Gold hill.

Virginia City residents fear that mining in the gaping hole would inhibit the tourist business. Some 1 million visitors come to this area annually. The open-pit operation brought loud complaints from local citizens, particularly when it became clear the Himco intended to expand its operations across a strip of the Comstock highway, gobbling up the land on whch a handful of old houses stood.

That hue and cry, fueled by what even himco officials admit was a poor public relations effort by the company, was defused recently when Himco officials agreed, among other things, to set up a $1 million fund for historic preservation and improvement of the community.

But John Schafer, a local merchant who helped lead the early fight against Himco, warns that the feud may not be over.

A member of the Comstock Historic District Commission, which oversees the 14, 000-acre historic district, he points out that a basic conflict has yet to be resolved between mining interests, which are protected by the Federal Mining Act of 1872, and the interests of a historic preservation district also protected by federal legislation.

The conflict, he says, could go unresolved for years and may even involve a court battle.

Meanwhile, in the Lyon County community of Silver City, just four miles away, residents concerned over Himco's plans to eventually expand its operations to that area have sought stricter local controls on mining.

A Himco spokesman hired to help improve the company's public relations says he expects that straightforward communications with the town's 175 residents will ease any problems.

But many members of the community remain suspicious of a company that they charge with unsafe operations. Already, the Lyon County Commissioners have passed for a special use permit and allows the commissioners to place restrictions on mining activities. That ordinance, which has not yet been used, may also face a court challenge by mining companies, which traditionally have enjoyed widespread privileges in this state.

In addition, there is a move afoot to revise at least partially the state's eminent domain law, which now gives mining companies the right to condemn private property for their own use.

"Mining's come home now, but mining's not what it was," says Roseanne DeCristoforo, a local free-lance writer who has been active in the controversy.

"Americans are going to have to stop and establish some sense of what's going to happen with mining and the West," she says.