JUNEAU, Alaska, Dec. 17, 1998 (PRIMEZONE) -- Coeur Alaska announces the results of an extensive optimization study of the permitted Kensington Mine plan. Changes recommended by Coeur's independent consultants will result in a new Kensington Mine plan that is environmentally superior and economically valuable. Coeur Alaska previously received all major permits necessary to build the Kensington Mine Project in the spring of 1998. However, low gold prices caused the company to pursue changing the permitted plan.
According to Dennis Wheeler, Chief Executive Officer of Coeur d'Alene Mines (Coeur Alaska's parent company) (NYSE: CDE), "Coeur's goal in conducting the optimization study was to improve the project's economics so that it could be built and operated successfully with the gold prices currently forecasted. With the changes proposed, we significantly improve environmental protections and expect cost savings of about $100 per/ounce of gold produced. These considerable cost savings substantially strengthen the economic viability of the project. We believe the new changes will also make our project environmentally superior."
After carefully exploring options that meet Coeur's strict environmental standards, Coeur Alaska's consultants recommended four key changes: A new tailings management system, on-site gold recovery, facility relocation, and increased mill production.
The new tailings management system involves placing a portion of the Kensington tailings on the ocean floor via an engineered system. According to Rick Richins, Vice President of Environmental Services and Governmental Affairs, "underwater tailings placement, or UTP, is a process that has been used safely and successfully at other mine sites around the world. UTP is specifically identified in EPA's mining policy as an alternative tailings management technique to investigate, which Coeur will participate in, in partnership with the state, local tribes, and other stakeholders. We have conducted extensive studies that have demonstrated that the characteristics of Lynn Canal make it an ideal location for the placement of the sand-like tailings. Studies also confirm that Kensington tailings are inert, and in fact quite similar to natural sediment already found on the sea floor in Lynn Canal." Coeur and its team of scientists have begun an extensive research program to supplement these initial studies and to further demonstrate the suitability of UTP for the Kensington Project.
Coeur Alaska also proposes to process gold on-site in a contained system that uses cyanide to separate gold from the mined rock. The system will recycle and reuse process waters with no marine discharge. All of the tailings produced will be treated, mixed with cement, and placed underground in areas previously mined. No tailings produced in the gold recovery process will enter the UTP system. Ken Collison, Vice President/General Manager of Coeur Alaska, notes that "all major metal mines operating in Alaska safely use cyanide solutions in their daily operations. The gold recovery system we propose confines solutions in a double contained, covered, and secured system that is not exposed to the environment. Coeur will use carefully planned transportation, handling, storage, and monitoring systems to ensure high standards of environmental protection and worker safety."
Additional changes include locating some facilities underground and increasing mine production. These changes reduce capital and operating costs and improve the project by reducing ground disturbance and visual impacts.
To make the changes proposed, Coeur will apply for the necessary permit modifications and propose a site-specific amendment to EPA regulations that will allow Kensington to use UTP technology.
In addition, Coeur will conduct informal presentations to explain the proposed changes to the community. Mr. Richins states, "our community participation program will be as extensive as it has been in the past. We will be explaining the details of our proposed changes to the public, as well as the scientific research results that will illustrate the benefits of UTP."
The Kensington Mine is expected to employ approximately 345 people during a two-year construction phase and 250 during operations with about 135 indirect jobs resulting in Southeast Alaska. Average income for mine workers will be about $58,000 including overtime and benefits. The Kensington is anticipated to produce an average of 200,000 ounces of gold annually. Current proven and probable reserves are about two million ounces.
This document contains numerous forward-looking statements relating to the Company's silver and gold mining business. The United States Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. Operating, exploration, and financial data, and other statements in this document are based on information the company believes reasonable, but involve significant uncertainties as to future gold and silver prices, costs, ore grades, estimation of gold and silver reserves, mining and processing conditions, changes that could result from the company's future acquisition of new mining properties or businesses, the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions), regulatory and permitting matters, and risks inherent in the ownership and operation of, or investment in, mining properties or businesses in foreign countries. Actual results and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.