Echo Bay pins hopes on Alaskan growth

Denver-based Echo Bay Mines (TSE) has cited three objectives — exploration, acquisition and development of its two major Alaskan projects — as being key to corporate growth.

The two Alaskan properties include the wholly owned Alaska-Juneau (or A-J) and the half-owned Kensington project, a joint venture with Coeur d’Alene Mines (NYSE).

Both projects have experienced strong opposition from anti-development groups. Nevertheless, the major expects to receive the remaining state and federal permits this year for A-J, even though one such group has filed a lawsuit attempting to block the issuance of the federal “fill” permit from the U.S. Army Corps of Engineers.

Echo Bay expected the lawsuit, remarking that it makes an already slow process even slower.

A-J will include a 22,500-ton-per-day underground mine and an underground mill with a projected output of 335,000 oz. per year.

The capital cost is estimated at US$270 million, with a further US$40 million required for expansion to 30,000 tons per day.

Anti-development groups are also gunning for the Kensington project, with one group filing a lawsuit challenging the Kensington Major Mine Permit, which has already been approved.

Echo Bay and Coeur d’Alene believe the suit is totally without merit but note that a resolution could take several months if not longer.

A project feasibility on Kensington, completed in 1992, estimates the capital cost of a 4,000-ton-per-day milling operation and underground mine at US$180-190 million.

Output is projected at 200,000 oz. per year.

While the permits are being sorted out, the joint venture is evaluating the property’s geological data to identify targets for developing additional reserves.