PIERRE, S.D. (KELO) — A state panel is deciding whether too much selenium in a creek at an old gold mine that Wharf Resources has been reclaiming should prevent the company from additional mining within its main site in Lawrence County.

The South Dakota Department of Agriculture and Natural Resources doesn’t view the selenium as a barrier. Secretary Hunter Roberts has recommended conditional approval of Wharf’s application to work 48 more acres at its operation next to Terry Peak.

Several members of the state Board of Minerals and Environment however asked about the situation Thursday, during the first day of the contested case hearing on Wharf’s application for its proposed Boston Expansion. The hearing resumes Friday morning.

Roberta Hudson from the state Minerals, Mining and Superfund Program told the board on Thursday that selenium in excess of the state surface-water quality standard was found during June 2021 in the east branch of False Bottom Creek.

Wharf had been depositing rock there for years, as part of reclaiming a tailings area left behind after the Bald Mountain mine shut down in the early 1950s.

A South Dakota law passed in 1982 specifically says the board can deny a permit if an operator “is currently found to be in violation of the provisions of this chapter with respect to any mining operation in this state.”

Hudson said the department issued a warning letter to Wharf on November 14, 2021, regarding the selenium level. She said the type of selenium that had been found most in the water was a more-toxic version known as selenate that builds up in tissue, such as in fish, and stays there.

One of the steps the department subsequently directed Wharf to take was reporting monthly on the progress of the company’s effort to find a solution. The department’s current plan calls for Wharf to have a treatment option under construction in 2024 and operable in 2025.

Wharf’s environmental manager Matt Zietlow told the board that the company has several consultants looking for possible fixes. Zietlow said it was “unknown” whether Wharf might have caused the problem when the company began adding rock to the old tailings site in 2014.

Board member Bob Morris of Belle Fourche asked whether Wharf had received a notice of violation regarding the selenium level in False Bottom Creek. Zietlow said no.

“2025 is what we’ve agreed to for meeting those surface water standards,” Zietlow said. Referring to the Bald Mountain situation and the Boston Expansion plan, he added, “These are truly two separate activities.”

The consultants haven’t found any other water-quality impairments, Zietlow told the board. He said the mine itself was in compliance.

According to Hudson, the department issued 10 notices of violation to Wharf during the past 40 years. The most recent was in 2008, she said.

The Boston Expansion would add two to three more years to the life of the mine, which would keep it open through approximately 2030. Wharf is South Dakota’s last large-scale gold mine. Zietlow said it generated an average of about $6 million in severance taxes to state government during the past five years.