North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Kensington General Manager Tim Arnold has at last been able to update his presentation to report on real construction. Until now the talk was all about planned timelines, but with all the permits in the bag for Coeur d'Alene's gold project near Juneau, things are happening. Since work began in late June, logging on the mill and camp sites has been completed, the widening of the main access road is well under way and the temporary dock facility has been installed.

"I'm not actually a construction guy," Arnold told the Resource Development Council for Alaska at an Anchorage breakfast Sept. 1. "My forte is operating mines, that's what I do the best and that's what I love doing." Nevertheless, he has learned a great deal in his 18 months in Alaska, overseeing the final stages of the permitting process and ensuring that the mine is built the way he wants it built, Arnold added.

Development tunnel next

The next tasks are to drive 8,000 feet of development tunnel - the Jualin tunnel - from both sides of Lion's Head Mountain, meeting in the middle, as well as building the permanent dock facility, the mill and the tailings impoundment.

"I've been in mining 25 years and I've worked in a lot of different places," Arnold said. "I've never worked in a place that I thought was so well thought-through, that has utilized everything they can to try and ... the tailings that we have, you can sprinkle it on your cornflakes... it's very, very benign material." The only toxic material will be the pyrite, which attaches itself to the gold and will be shipped out in the concentrate.

Although Arnold hasn't been in Alaska for long and still doesn't consider himself an Alaskan, his involvement with Kensington dates back to 1989 when, as a young engineer, he was the first person to do an outside feasibility study on the project. Since then Idaho-based Coeur has spent around $150 million on Kensington, including $25 million on 900 environmental studies. The company recently produced a new financial estimate that envisages $105 million as the capital cost of the mine and an operating cost of approximately $250 per ounce.

The mine is expected to produce 100,000 ounces of gold annually for at least 10 years, with the hope that current resources and the mine life will be expanded by the ongoing exploration program. Coeur is spending $3.5 million on exploration this year.

Arnold: 'hiring like crazy'

The pace has been hectic since the permits came in. "We are hiring like crazy," Arnold said. So far 76 people have been employed on the project, 66 of whom are from Alaska, including 38 from Juneau and 14 Alaska Natives. When operations begin in January 2007, Arnold hopes to have a core of six to eight experienced underground miners, probably from outside Alaska, who will help to train new workers. There will be 225 jobs in mining operations, plus approximately 500 more jobs indirectly associated with the mine.

The average wage at Kensington will be $67,000 per person, so total annual wage payments will come to $15-$18 million, according to Arnold, who expects employee turnover to be only 10-15 people per year. Kensington will pay around $1.4 million in property tax annually.

Underground mining isn't for everyone, Arnold admitted, but to encourage more locals to work at Kensington there will be training coordinated with the University of Alaska, the Delta Mine Training Center and the Tlingit-Haida Central Council.

The minimum requirements for working underground include 40 hours of Mine Safety and Health Administration training, followed by another 40-80 hours learning various skills. "Mines are very specific. You really do have to hit the boat every morning, on time, you are not allowed to be late three times a month; it doesn't work, things like that," Arnold said. "So we train them how to be good employees, we're going to train them on a lot of aspects, it's hard work. You need that fire in the belt to be able to work in a mine."

Suit filed against Corps

After Arnold's talk, on Sept. 12, environmentalists attempted to set up a roadblock for Kensington by filing suit against the U.S. Army Corps of Engineers for allegedly violating the Clean Water Act. The Sierra Club, Lynn Canal Conservation and the Southeast Alaska Conservation Council argue that the Corps' permit issued to Coeur should not have categorized mine waste as benign fill material.