The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
CDE:NYSE
Chairman: Robert Mellor
President & CEO: Mitchell Krebs
VP, Exploration: Hans Rasmussen
An incentive program that allocates exploration funds based on success has paid dividends for Coeur Mining Inc. and the Kensington gold mine in Southeast Alaska.
As a result of this success-driven strategy, the exploration team at Kensington was doled US$9.1 million to expand upon the high-grade gold discoveries made on the property in 2014.
As a return on its investment, Coeur Mining was rewarded with a new mine plan that will produce more gold at lower costs over the coming years.
"Our recent success identifying high-grade mineralization near existing Kensington infrastructure has added higher-margin production to our mine plan and significantly improved the expected economics of the mine," Coeur Mining President and CEO Mitchell Krebs explained.
The 12,400-acre Kensington property is divided into two blocks - Kensington and Jualin - that reflect two historical mines that trace their roots back to the turn of the 20th Century.
At the end of 2014, the main Kensington deposit had 3.24 million tons of proven and probable reserves averaging 0.181 ounces per short ton (584,000 oz) gold.
Recent exploration, however, has discovered a deposit on the Jualin side of the property that bests the historic average and is set to change the production profile of the Kensington Mine.
At the end of 2014, the Vein 4 deposit at Jualin had 289,000 tons of inferred resource averaging 0.619 oz/t (179,000 oz) gold, around triple the grades currently being mined at Kensington.
If all goes according to a new mine plan released early in 2015, mining will begin at Jualin in mid-2017.
During 2018, the first full year of production after Jualin comes online, gold production at Kensington is expected to reach 149,000 oz. Development of a decline to Jualin began in July.
If recent drilling is any indication, Jualin and the other zones at Kensington will likely continue to deliver high-grade gold to the mill beyond the new mine plan.
The inferred resource at Jualin is found in an area known as Vein 4.
Recent drilling from the surface have intersected this vein over an area that extends roughly 1,000 feet from the current deposit, pointing to the potential to expand the high-grade gold found there.
Highlights from the holes drilled beyond the inferred resource include: 4.3 feet of 2.69 oz/t gold and 2.6 feet of 1.83 oz/t in hole JU14-X045; 1.3 feet of 1.33 oz/t gold in hole JU15-X002; and 4.4 feet of 0.56 oz/t gold in JU15-X006.
Beyond expanding Vein 4, Coeur said veins 1, 2, 3, and 5 at Jualin have the potential to increase the size of the overall zone and bring additional high-margin production into the mine plan.
Drilling on the Kensington side of the mine also is finding additional relatively high-grade gold.
Highlights from recent exploration drilling at the Raven deposit include: 5.4 feet of 0.71 oz/t gold in R14-1042-261-X03; 2.8 feet of 1.85 oz/t gold in R14-1042-261-X04; and 4.2 feet of 1.14 oz/t gold in R14-1042-261-X05.
Highlights from recent exploration drilling at Zone 10 area of Kensington Main include: 1.8 feet of 1.03 oz/t gold, 2.2 feet of 0.94 oz/t gold and 2.2 feet of 1.26 oz/t gold in hole K14-0520-095-X07; and 2.2 feet of 4.3 oz/t gold in hole K14-1170-110-X08.
While Coeur only budgeted about US$2.2 million for exploration at Kensington in 2015, the company said it plans to invest roughly US$9.1 million in 44,000 feet of underground drilling focused on expanding and upgrading high-grade resources at the mine over the next two years.
Cash and short-term deposits: US$205.9 million (June 30, 2015)
Working capital: US$366.3 million (June 30, 2015)
Market capitalization: US$450 million (Sept. 17, 2015)
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