Echo Bay develops historic gold producer

Like most projects being explored or developed in the Juneau gold belt of southeast Alaska, the Kensington gold project has historical roots going back before the turn of the century. At that time prospectors began searching the Berners Bay area for more of the gold that was making men fortunes in Juneau.

But Kensington never came into its own in those early pioneer days. It yielded recoveries of less than 70% from the stamp mill process, in contrast to other mines in the district where gold ores were free-milling.

Today, two major companies are proposing to develop a 4,000-ton-per-day mine after having spent about US$50 million to acquire, explore and develop the project. The mine would produce 200,000 oz. gold annually through the use of modern mining and milling techniques. Current estimated cash production costs are under US$225 per oz.

About 45 miles north of Juneau, Kensington is operated and 50% owned by a unit of Echo Bay Mines (TSE), with an Alaskan subsidiary of Coeur d’Alene Mines (AMEX) holding the remaining interest. At last report, minable reserves stood at 12.5 million tons averaging 0.15 oz. gold (diluted) contained within a mesothermal gold-quartz vein-type deposit.

The Kensington property, complete with a 70-person work camp on an old mining town site, is on the shore of a navigable fjord which allows access by boat or plane. It can be reached by helicopter from Juneau in about 30 minutes.

During a recent property visit, The Northern Miner travelled with other visitors up a 3-mile road built by the joint venture from tidewater to a new portal at the 800-ft. level elevation (previous exploration was from an adit much higher up the mountain).

The new access adit was excavated for a distance of 5,185 ft. and intersected the main Kensington zone 650 ft. deeper than the deepest previous exploration drill holes. It was a bit of a gamble at the time, and geologists on site still recall the excitement when the zone was hit at the 5,000-ft. mark for 100 ft. along the adit.

The main Kensington vein system is a wide zone (50-400 ft.) comprised of several complex vein sets. It has a steep-to-moderate dip, and has been traced for about 1,600 ft. of strike and for 2,800 ft. vertically. Mineralization is open to depth.

The stockwork vein system feathers out rather distinctly into the hangingwall and footwall and within alteration assemblages associated with the deposit.

Gold occurs as the telluride mineral calaverite, and in small amounts of native gold. Both species occur as grains along pyrite crystal boundaries, so the deposit was one where old-timers didn’t have to worry too much about being fooled by “fool’s gold.” The presence of pyrite and vein density are considered the best indications of good gold values at Kensington.

Except for rare chalcopyrite, pyrite is the exclusive sulphide mineral, comprising 0.5-4% of the rock mass. The average gold to silver ratio is 9-to-0, and the Kensington system is not enriched in lead, zinc, arsenic or antimony.

Acid mine generation won’t be a problem, and one would be hard pressed to find a deposit better suited to ocean disposal of tailings. Even though a deep (1,000-ft.) fjord is nearby, current environmental regulations are such that this option can’t be considered. Instead, a tailings disposal site has been selected in a small valley.

The Kensington project contains numerous other smaller, “mother-lode-type” veins that are considered to have good economic potential. A number of these were intersected while driving the 800-ft.-level adit before the Kensington zone was reached, and the most significant of these has the unfortunate name tag of “Horrible.”

By the end of 1990, Echo Bay’s drilling on the Kensington and Horrible deposits is reported to have totalled 175,946 ft. in 348 holes. Extensive underground workings were also developed, and a bulk sample was taken for metallurgical test work.

The Kensington zone averages about 50 ft. wide, and ground conditions are considered good. That makes the deposit amenable to low-cost bulk mining methods. The primary method will be a form of long-hole open stoping. The current plan is to mine several open stopes under stable ground conditions, followed by mass blasting of rib and sill pillars in the central portion of the deposit.

The project’s power requirements will be generated on site by LPG-fired combustion turbines. The current mill design incorporates a crushing and grinding circuit with a SAG and ball mill, a column flotation circuit with a regrind mill, and a carbon-in-leach gold recovery circuit. Because some of the smaller veins on the property have free gold, space will be included for a future gravity circuit.

Echo Bay also operates its 85% owned A-J gold project, a former producer near Juneau. This proposed 22,500-ton-per-day gold mining operation is targeted to produce 367,000 oz. gold annually through low-cost bulk mining methods. A-J has proven and probable reserves last reported at 63.6 million tons averaging 0.052 oz. gold and 42.1 million tons of possible reserves averaging 0.051 oz. gold per ton.

Both projects are moving into their final permitting stages. It is expected permits could in hand for Kensington this year, and in hand for A-J later this year or early next year.

In the meantime, activity at Kensington will be aimed at completing an environmental impact statement (EIS) and moving permit applications through the governmental review process. Echo Bay expects the draft EIS for Kensington will be published by mid-1991.