Coeur, environmental groups propose Kensington plan (November 26, 2007)

Vancouver — After having its tailings permits revoked at its Kensington gold project in southeastern Alaska earlier this year, Coeur d’Alene Mines (CDM-T, CDE-N) sat down with its former adversaries and has worked out a potentially acceptable tailings site plan to present to the U.S. Forest Service.

Along with the Southeast Alaska Conservation Council, the Juneau Group of the Sierra Club and Lynn Canal Conservation, Coeur will propose use of a site near Comet Beach to hold tailings from the Kensington mine.

Although the site is almost the same as the previous proposal, plans will now table a paste technology for the tailings instead of dry stacking.

The conservation groups see much less potential environmental impact with the new plan, which, if approved, would not see Lower Slate Lake used for any tailings storage or disposal.

Earlier this year, an appeals court ruling effectively revoked permits that allowed Coeur to use the lake as a tailings facility at Kensington. Coeur along with the Department of Justice (representing the U.S. Forest Service), U.S. Army Corps of Engineers, the State of Alaska and the native corporation Goldbelt, challenged the ruling, but lost.

Coeur has completed all non-tailings related construction at the mine, located about 72 km north of Juneau, including the mill, surface facilities and an almost 4-km underground tunnel connecting the Kensington and Jualin properties.

The operation is expected to produce up to 150,000 oz. gold annually in its initial years at an estimated cash cost of about US$310 per oz. gold. The company tables a probable reserve base of 1.35 million contained ounces (4 million tonnes at 10.6 grams gold per tonne) plus further indicated and inferred resources of 3.9 million tonnes at 7 grams gold (866,000 contained ounces). The project has an estimated 10- to 15-year mine life.

As one the world’s largest primary silver producers, Coeur churned out 13.6 million oz. silver and 116,000 oz. gold in 2006. Production comes from its Rochester mine in Nevada, Cerro Bayo in Chile, Martha in Argentina, and the Endeavour and Broken Hill mines in Australia.

On the development front, aside from Kensington, Coeur is moving its San Bartolome silver project in Bolivia towards production in 2008.

The company traded recently around $3.90 per share, and posts a 52-week trading range of $3.20-6.30.