Coeur completes study at Kensington

In a bid to improve the economics of the Kensington gold project in the Alaskan Panhandle, Coeur d’Alene Mines (CDE-N) has completed an optimization study that is expected to reduce production costs by as much as US$100 per oz.

Independent consultants conducted the extensive study with a view to designing a mine that would meet high environmental standards and be economically viable in an environment of low gold prices. Because of the proposed changes to the operating plan, the company must apply for modifications to its previously obtained construction permits. It also plans to inform local communities of the four main changes, which include a new tailings management system, an on-site gold recovery plant, the relocation of some facilities and an increase in mill throughput to 4,600 tons per day.

Coeur proposes to dispose of some of the mine tailings on the seafloor in Lynn Canal, which is adjacent to the mine site, situated north of Juneau. “Underwater tailings placement has been used safely and successfully at other mine sites around the world,” says Rick Richins, Coeur’s vice-president of environmental services. “We conducted extensive studies that have demonstrated that the characteristics of Lynn Canal make it an ideal location for the placement of the sand-like tailings. Studies also confirm that Kensington tailings are inert, and are in fact quite similar to natural sediments already found on the sea floor.”

The plan also proposes that Coeur process its gold on site, using cyanidation, rather than flotation. There will no marine discharge of water used in processing; instead, the water will be recycled. Tailings from the gold recovery process will not be discharged into the ocean but, rather, will be mixed with cement and placed underground as backfill. Because the mine is in a coastal region with high snowfall and mountainous terrain, some of the facilities will be installed underground, thereby reducing ground disturbance. Under the proposal, cash costs would fall to US$195 per oz. from the previously estimated US$280 per oz., while capital costs for the underground operation would be reduced slightly to US$192 million.

A production decision will not be made until these and other modifications are approved and financing is arranged. The operation is expected to produce an average of 200,000 oz. gold annually. Proven and probable reserves are estimated at 1.9 million oz. within 13.9 million tons grading 0.136 oz. gold per ton.