Coeur d'Alene Mines has completed a plan to develop the Kensington gold project 45 miles north of Juneau at a smaller scale, and now anticipates receiving final permits for the project in late spring or early summer.
That could allow a start of construction in late 2004, company officials said. It would be the second major mining project to go into construction during 2004. Near Delta, east of Fairbanks, Teck Pogo Inc. is poised to begin work on a $250 million underground gold mine later this spring.
In a Dec. 29 press release, Coeur said it has developed a revised plan to build the mine for $75 million, or half of a previous estimate of $150 million.
Rick Richins, Coeur's manager for the project, told the Resource Development Council in late November construction would employ about 325 workers, and would take about 14 months to complete. If permits are received in the second quarter of 2004 and Coeur's board gives the go-ahead this summer, construction could begin in the last half of 2004, Richins told the RDC. That schedule would allow the mine to go into operation in late 2005.
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The scaled-down project would start up with about 100 production workers, Richins said, but the workforce would increase to about 225 as production ramps up. The company's payroll would be about $16 million, and the spinoff economic effect of Coeur's direct employment would create another 180 indirect jobs in the local economy, he said.
Kensington has an estimated 1.8 million ounces of proven and probable gold reserves, with an additional 1.4 million ounces of gold resources that could be ultimately developed, Coeur said in its Dec. 29 press release.
Kensington is an old underground mine on the north side of Berner's Bay north of Juneau which produced gold in the early 1900s.
Coeur proposes to redevelop the mine, using tunnels rebuilt for exploration and developing new tunnels.
The company has been working on Kensington for about 20 years and has invested about $150 million in the project in exploration, environmental studies and permitting work.
An initial project proposal envisioned a mine producing 4,000 tons per day of ore with a plan to store tailings in a large onshore storage facility. The plan was approved and permitted by state and federal agencies but when gold prices fell in the 1990s Coeur found the project to be uneconomic.
A revised development plan scrapped the onshore tailings disposal facility and substituted a proposal to dispose of tailings in a 20-acre lake near the mine. Another change was to have employees live in nearby Juneau and commute to work, instead of having a large camp for worker accommodations at the mine.
Those savings plus other changes lowered the capital costs for the mine. The recent upswing in gold prices has also helped the project, and has also helped make Coeur financially strong enough to do the project once permits are received, Richins said.
