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

Though owners of the Greens Creek Mine on Admiralty Island 18 miles south of Juneau say the underground operation ore grades have begun declining after some 15 years of production, they estimate the mine will produce commercial quantities of gold, silver, lead and zinc for at least another decade.

"We have 7.6 million tons of reserves left … and it gives us 10 more years of production," said Mike Satre, mine technical superintendent at Kennecott Greens Creek Mining Co.

Greens Creek Mine is a joint venture between Kennecott and Hecla Mining Co. Operator and 70.3 percent owner Kennecott is a subsidiary of mining giant Rio Tinto plc.

Satre, a featured speaker at the Alaska Miners Convention in early-November, outlined changes under way at Greens Creek aimed at improving the efficiency of mine operations with the help of new software systems for mine planning, scheduling and production tracking.

Explorers, meanwhile, will continue to seek more tonnage and better grades of ore to replenish the mine's reserves, in part to offset the impact of declining grades, Satre said.

Higher metals prices offset higher costs

Greens Creek, so far, has produced 1.36 million ounces of gold, nearly 2 million ounces of silver, 400,000 tons of lead and almost 1 million tons of zinc, Satre said.

In the third quarter which ended Sept. 30, Hecla said its 29.7 percent share of Greens Creek production was 679,884 ounces of silver, which cost an average of negative $7.42 per ounce, reflecting a 148 percent improvement over the same period in 2006. The company said higher zinc, lead and gold prices earned enough byproduct credits at the primarily silver mine to more than offset increased costs from higher diesel prices and the use of contract labor to compensate for a shortage of qualified miners.

In the first nine months of 2007, Greens Creek provided $30.6 million in gross profit for Hecla's account. In September, Greens Creek set a record for the largest monthly ore concentrate shipment in its history, the result of unusual timing between mining and shipping schedules, the company said.