The staining is probably iron and manganese plus other things but apparently nothing toxic or commercially valuable, except for the heat. Starting with hot water cuts the cost of producing steam considerably.
So there was a small cavern under your friends property? Is that common around where he is? With 3,000 gpm it seems that he could do a whole lot of fish farming, starting with trout and then running the water to warmer water species, and maybe ending up with crawfish.
Not a cavern but not terribly unusual for wells to collapse and create what are known as blueholes. They end up being ponds that go down to the collapsed layer and can be up to 60 feet deep I've been told. Very cold water as you would expect and can support trout.
There was and is considerable fish farming, both cold and warm water species, around Boise due to an abundance of both cold and hot artesian flow there. A fish farmer is also raising alligators near Boise, and the Bureau of Reclamation raises alligators in southern CO. In the early '80s, there were a number of exploration wells on the Wind River Reservation in WY that were producing a large volume of artesian flow that was just going down the river. Looked like a great place for some fish farms to me.
As you probably know Idaho is the top trout producer in the United States. Supposed to be an aquifer in the area the volume of Lake Erie. Yeah isn't amazing they use heated water too?
