Kensington may hold more gold

Coeur officials say richer ore body may extend mine's life by another five years

Posted: Tuesday, June 29, 2004

Coeur d'Alene Mines Corp. says its Kensington property 45 miles northeast of Juneau may contain more gold than previously thought, which could extend the proposed mine's life by 50 percent.

The announcement means the mine might be in production for 15 years, rather than the 10 years previously projected, said a Coeur spokesman, Tony Ebersole. The company expects to begin production in 2006.

The Idaho-based company's Kensington mine plan is based on 1 million ounces of proven or probable gold reserves. The company announced Monday that updated feasibility work has defined higher-grade portions of "mineralized material" surrounding the main ore body.

"It's something we think can be brought into that 'proven and probable' category at some point in time," Ebersole said.

Current reserves for the Kensington project measure 4.2 million tons at .25 ounce per ton for an estimated 100,000 ounces of production per year for 10 years.

The higher-grade mineralized material surrounding the main ore body measures an estimated 2.4 million tons measuring .3 ounce per ton, according to a company statement.

The U.S. Environmental Protection Agency, the U.S. Army Corps of Engineers and the state of Alaska have issued draft permits for the project, which are out for public comment now.

Environmentalists have charged the mine plan could violate the federal Clean Water Act and have questioned the process of agencies issuing draft permits without a mine operating plan.

Buck Lindekugel, conservation director for the Southeast Alaska Conservation Council, said the project has a variety of proposed alternatives for disposing of rock waste, including damming a lake.

If the project proceeds, the mine is projected to employ 300 workers during construction, with payroll and benefits of $16 million, and 200 workers during operation.

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