Company announces new plans for Kensington Mine

JUNEAU (AP) -- Coeur Alaska says a new design for the Kensington gold mine will eliminate the need for underwater disposal of tailings in Lynn Canal and onsite cyanide processing of ore.

Under its latest design, Coeur would construct a facility to dump tailings using a lake on the east side of Lions Head Mountain, 45 miles northwest of downtown Juneau.

The company also plans an all-weather port at Slate Creek Cove, on Berners Bay, that would eliminate the need for onsite cyanide processing, as concentrate could be shipped out immediately, said Coeur public relations representatives Rick Richins and Margaret Dowling.

The port at Slate Creek Cove is an alternative to Comet Beach port on the Lynn Canal side of the mountain, which would have been idle at times due to high waves.

Coeur's new plan also calls for more selective mining that would cut the rate of extraction in half, from 4,600 tons per day to 2,000-2,500 tons. That would decrease the amount of accumulated tailings and involve lower volumes of water and chemicals in processing, Richins told the Juneau Empire.

Coeur has not given up on underwater disposal of tailings, Richins said. But the corporation's filing of a new plan of operation with the U.S. Forest Service next month will include the new tailings-management option as well, he said.

That option eliminates avalanche concerns, affects fewer wetlands, eliminates major stream diversions, requires a smaller dam and minimizes issues associated with final closure of the mine, Richins said.

Water quality concerns have threatened to kill the project. Environmentalists and fishing groups oppose underwater tailings disposal in Lynn Canal and onsite use of cyanide.

Environmentalists briefed by Coeur responded cautiously to the new approach.

Tim June, a Haines fisherman and member of Lynn Canal Conservation, said the company has made periodic design changes over the last five years and the latest plan was painted in very broad strokes.

The new Kensington design is intended to be economical with gold prices in the range of $290 to $310 an ounce, Richins said. The original Coeur plan assumed a gold price of $400.

Coeur officials say they have identified more than 2 million ounces of gold in reserves at Kensington.