Mining: Mines forge ahead with new construction

Coeur Alaska, developer of the Kensington Mine, is planning to start construction in March

Posted: Thursday, December 30, 2004

Not long ago, mining in and around Juneau was in a serious slump.

Now Juneau is faced with the possibility that it will soon host not one, but two large hard-rock mines.

In the coming year, the Greens Creek Mine on Admiralty Island and the proposed Kensington gold mine at Berners Bay plan to forge ahead with new construction.

The Kensington Mine, 45 miles north of downtown Juneau, faces some hurdles. It still lacks the essential state and federal permits. It's attracting criticism from both federal regulators and Juneau environmentalists for its potential affect on aquatic life in the Berners Bay watershed.

But Coeur Alaska, the developer of the Kensington project, is forecasting a March construction start. The company hopes to ship its first gold concentrate in mid-summer 2006 and operate for 10 years.

The company is now engaged in a search for two specialists to head up its geological and environmental work, said Coeur Alaska project manager Tim Arnold. The construction effort will be headed up by parent company Coeur d'Alene Corp. senior vice president for projects Al Wilder.

In the near future, Coeur Alaska plans to hire some clerical workers, environmental officers and staff for its Comet Beach camp. "If we are in full-scale construction by the summer, we're going to be employing upwards of 300 people," Arnold said.

Much of the construction will blast forth underground. "We have to drive a drift through the mountain on both sides," said Arnold. "The rest of (the work) is getting the mining area ready," he said.

Workers will build a processing mill, administrative building and laboratory at the historic Jualin Mine property.

While workers drill through the mountain, Coeur Alaska will learn a lot about the mineral potential of the Jualin property and fill in missing bits of information about the Kensington ore body, Arnold said.

"There will be some exploration on the Jualin side but right now we've got a lot of hope to increase the ounces (in the Kensington)," Arnold said.

While the Kensington labors to begin operations, the multi-metal Greens Creek Mine on Admiralty Island, 18 miles south of Juneau, will continue to increase in size.

The company is entering the second year of its multimillion-dollar project to expand the footprint of its mine tailings stack at Hawk Inlet.

The Greens Creek Mine also is investing in new equipment to improve metals recovery at its processing facility, plant manager Rich Heig said.

The company, which produces silver, zinc, gold and lead, is optimistic about 2005 metal prices.

"We've had a good year for prices in 2004 - higher than previous years. We hope that they sustain higher than they were two years ago, when all of the industry was struggling," Heig said.

Greens Creek spent about $4 million for mineral exploration on its property in 2004, with mixed results. The venture plans to spend about the same amount in 2005.

Heig said 2004's exploration results weren't "as successful as we liked to see on the surface" but uncovered some underground targets for further exploration in 2005.

"We're looking for additional ore reserves to extend the life of the operation," Heig said.

• Elizabeth Bluemink can be reached at elizabeth.bluemink@ juneauempire.com.

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