July 7, 2005
Kensington - Leading Coeur's Growth in Gold
Coeur d' Alene Mines Corporation (NYSE:CDE / TSX:CDM) is the world's largest primary silver producer and a growing, low-cost gold producer. In 2004, the Company produced 14.1 million ounces of silver and 129,000 ounces of gold at a cash operating cost of approximately $3.65 per ounce of silver.
Coeur has two of the largest silver mines in the U.S.; two expanding low-cost mines in southern Chile and Argentina; and two advanced development projects, in Bolivia and Alaska. Coeur also owns large land positions around its two South American mines, where major exploration is ongoing in 2005.
Coeur's next leap in gold production is Kensington in Alaska, where projected annual production levels of 100,000 ounces represent a 77% increase over 2004 levels. Current proven and probable reserves at the property, located 45 miles north of Juneau, measure 1.1 million ounces.
In 2005, Coeur will embark on a drilling program to convert 300,000 to 400,000 ounces of gold currently reported as mineral resources to reserves, which would significantly increase the initial mine life from the current level of ten years. This involves additional in-fill drilling to delineate higher-grade sections of the deposit that might be mined in the earlier years of the operation. This 2005 program is expected to cost approximately $2.6 million.
Kensington, Alaska - A Coeur Gold Project
Once in production, currently estimated for 2006, the Kensington mine is expected to produce approximately 100,000 ounces of gold annually at a per ounce cash cost projected at approximately $220. Direct construction cost is estimated at approximately $91.5 million
Permitting nears full completion, with a major milestone reached through the final Record of Decision ("ROD") for the Final Supplemental Environmental Impact Statement ("FSEIS") issued by the U.S. Forest Service. The Forest Service ROD supports the Company's preferred operating and development plan. The ROD is also supported by the Army Corps of Engineers, the State of Alaska and the City and Borough of Juneau. Coeur is expecting to obtain all required construction permits in the first half of 2005. This could lead to a construction decision in the first half of 2005. Construction is planned to take eighteen months, with commercial production expected in 2006.
Previously, one FEIS and one FSEIS have been prepared for the project, with favorable Records of Decision. Over 900 studies involving environmental, feasibility, socioeconomics and related project design have been completed, at a cost of over $25 million. Coeur is eager to move forward with construction of the project during 2005. Coeur is working closely with Governor Murkowski and the Alaska Delegation to accomplish this objective.
The major issues left to be resolved are the mine's potential effects in Berners Bay, said Carl Shrader, a habitat biologist for the Alaska Department of Natural Resources.
In contrast to the lively debate over Slate Lakes and the mine's proposed permits, scientific surveys in Berners Bay continued quietly throughout 2003.
In March, scientists at the National Marine Fisheries Service's Auke Bay lab began collecting samples of petroleum compounds in an effort to establish a baseline for pollution in the bay. They also monitored kelp and eel grass throughout Berners Bay.