Echo Bay granted Alaskan permit

Clearing its first major hurdle in Alaska, Echo Bay Mines (TSE) has received a permit from the city of Juneau to proceed with development of the A-J mine, Chairman Robert Calman told shareholders at the annual meeting.

But if a group called “Alaskans for Juneau” has its way, Echo Bay’s bid to become a major operator in the state will go no further. The group is appealing the permits for both A-J and Echo Bay’s Kensington project, 45 miles north of Juneau.

“These two projects have created more controversy in our town of 26,000 people than has anything in recent history,” issues co-ordinator Laurie Ferguson Craig said in an open letter to shareholders that was presented at the meeting. “Both projects face years of potential litigation before they will be able to operate.”

Ferguson is a member of Alaskans for Juneau, which was represented by proxy-holder Michelle Kanter, a member of Toronto-based Earthroots. The group is concerned that development at A-J, as proposed, will cut off the town’s main source of drinking water and destroy a salmon-spawning site in lower Sheep Creek.

But Calman said the company has held more than 100 public meetings since beginning work on the A-J project eight years ago and has done its best to address community concerns. To reduce noise pollution, the company plans to build its mill underground.

“What we’re seeing illustrated today is the continued frustration mining companies have in trying to open mines,” Calman said.

Under a revised feasibility study, the US$270-million A-J mine is expected to produce about 335,000 oz. gold per year initially. Average cash production cost: less than US$200 per oz.

In the midst of a 6-million-share offering, Echo Bay was limited in what it could discuss at the meeting and did not elaborate further on the project. But in an interview after the meeting, Vice-president of Corporate Affairs Paddy Broughton said Echo Bay will find it much easier to acquire state and federal permits for A-J now that Juneau has given its seal of approval. In the first quarter, Echo Bay lost $2.2 million on revenue of $83.8 million.