Kensington owners buy Mexico mine

Posted: Tuesday, January 22, 2008

A recent purchase of a Mexico silver mine could make Kensington Mine's parent corporation the largest primary silver producer in the world.

Idaho-based Coeur d'Alene Mines Corp. completed a merger in December 2007 with Palmarejo Silver and Gold Corp. of Canada and Bolnisi Gold NL of Australia. Stockholders voted 88 percent approval of the purchases.

Coeur d'Alene Mines is the parent company of Coeur Alaska, which owns the Kensington gold mine, about 45 miles northwest of downtown Juneau.

Coeur also is building a mine, the San Bartolome Silver Project, in Bolivia. The mine is scheduled to start producing silver in early 2008. The company also has mining interests in Argentina, Australia and Chile.

The addition to the company came just after Coeur's Rochester Mine in Nevada shut down in August 2007. Rochester accounted for about 40 percent of Coeur's silver production last year, according to its third-quarter report.

The Palmarejo Project, in Mexico, is under construction. It primarily will produce silver, with gold as a byproduct. Coeur plans to start production in early 2009, according to its annual statement. The company expects to produce 10.4 million ounces of silver and 115,000 ounces of gold there annually - bringing its total expected production to nearly 29 million ounces of silver per year.

Coeur produced 9.4 million ounces of silver and 85,000 ounces of gold from October 2007 to September 2006.

Last week one analyst, Brad Humphrey from CIBC World Markets, upgraded Coeur d'Alene's stock from "Perform" to "Outperform" - even as the overall stock market was tanking, and even as silver and gold prices fell.

Corporate changes haven't affected subsidiary Coeur Alaska's local directive, though.

"We're working to get this going as quickly as we can," said Tony Ebersole, spokesman for Coeur Alaska.

Coeur Alaska was forced to delay construction on the Kensington Mine last year after environmental groups sued for a new tailings plan. The company will submit permits to the U.S. Forest Service "very soon," Ebersole said, for a new plan that has received initial support from environmentalists. Coeur hopes to start mining this year.

The price of gold hit an all-time high of $914 per ounce on Jan. 8. By late Monday it had dipped to $858 in international markets.

• Contact Kate Golden at 523-2276 or Related Searches

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