Executives with Coeur d'Alene Mines Corp., in Juneau to celebrate the opening of the $400 million Kensington Gold Mine, may not be telling the full story of the mine.
But the discrepancy between what the company is saying officially, and the hints some in the know are dropping may be very good for Juneau.
Coeur officials, including CEO Dennis Wheeler, say the mine has an expected life of 12 and a half years, and that they expect to take out about 125,000 ounces of gold per year during that time.
With gold recently rising above $1,300 an ounce, and with an expected production cost of $490 an ounce, the mine is expected to provide an immediate benefit to Coeur's bottom line.
"It will be a very strong financial operation for us," Wheeler confirmed, in an interview with the Empire.
Kensington is located in the historic Juneau Gold Belt, home to legendary mines such as the Alaska-Juneau and the Treadwell, on which the city was built.
With Kensington now open, Coeur is now focusing on other nearby mining prospects, some of which could extend the mine's life significantly.
Coeur hasn't yet told Wall Street what they've found, and company spokesman Tony Ebersole said Securities and Exchange Commission rules bar it providing inside information that doesn't go to everyone at the same time.
"We can't say more because of the SEC, which tells us what we can say," Ebersole said.
That company has told Wall Street two new veins of gold have been discovered near Kensington, but they are not yet well enough defined to be included in Kensington's proven reserves.
The company has reported that one of those veins, called the "Horrible" system, is showing promise about 650 meters west of Kensington.
This week, Wheeler hinted that the drilling there had found significant gold.
"We've already started our exploration program and I can tell you that we've very encouraging early results on a structure we call the 'Horrible' vein," he said.
Coeur has known of the existence of Horrible since the early 1990s, but only just recently began doing exploratory drilling there.
That quartz-gold vein has had some great indications, Wheeler said.
"We've had some one or two ounce intercepts, per ton, on that vein," Wheeler said. Kensington is currently producing ore at an average of 0.27 ounces per ton.
The additional drilling will show just how large the Horrible Vein is.
South of Kensington, another vein, the Kimberly Vein, is also slated for exploratory drilling. Coeur's SEC reports say it plans to spend $2 million drilling there this year.
Mill manager Tom Henderson, also a Coeur vice-president, said the mine was already operating at close to optimal level, and new discoveries would not result in significant production increases.
"It would be more of an extension of the mine life," he said, suggesting 20 or 25 years.
"We're hopeful it will add to the life of Kensington," was all Wheeler would say.
Later, Henderson mentioned the mine's life as "the next several decades."
Kensington, Henderson, said, would be able to provide family supporting jobs in Juneau for "this generation and generations to come."
The estimate of a 25-year mine life, at current gold prices, would suggest a likely $2 billion in additional gold reserves at Kensington. That's more than Coeur's market capitalization of $1.78 billion, or the total of all the company's stock.
Wheeler declined to be more specific, but did refer to a "bright golden future," for Kensington.
"I think we are going to be here for a very long time with a positive future and a stable mine," he said.
Contact Pat Forgey at 523-2250 or firstname.lastname@example.org.
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