Kensington gears up for 2005 construction start: Coeur d'Alene Mines Corp. is awaiting regulatory approval to start construction work, and expects gold production in 2006.

• Author: Liles, Patricia

Coeur d'Alene Mines Corp. has spent 15 years working on plans to develop the Kensington gold deposit, located 45 miles northeast of Juneau and a few miles inland of Lynn Canal, as an underground, hard-rock gold mine.

Despite numerous years of exploration and development work on site, a recent increase in gold prices, previous regulatory approval for construction of a gold mine, and a July 2003 memorandum of understanding with regulatory agencies outlining a schedule for permitting work, Coeur is still waiting to receive final authorizations to begin construction in 2005.

More patience from the developer may be required, as the conclusion date for Kensington's regulatory approval process remains uncertain. That's due to the potential for appeals of the recently concluded Supplemental Environmental Impact Statement (SEIS) and an ongoing "biological opinion" study being conducted by the National Marine Fisheries Service.

Those two issues affect issuance of Kensington's permits, according to Jeff DeFreest, minerals program manager for the U.S. Forest Service, which is serving as the lead agency for the Kensington regulatory review. DeFreest could not provide an anticipated date for final permits to be issued, despite his agency's Record of Decision allowing for a mine operation with detailed modifications to reduce environmental impact, released last December.

A CONTROVERSIAL DEVELOPMENT

Part of the uncertainty lies in potential appeals of the Forest Service's decision to allow development of the Kensington gold mine. The agency has until March 24 to respond to appeals filed by the Feb. 7 deadline, which occurred as ABM was going to press. Within that timeframe, local managers will "attempt to make an informal appeal resolution," DeFreest said, while at the same time, preparing information to send the case up to the next level within the agency.

One group opposed to the project, the Southeast Alaska Conservation Council, announced in a letter to the Forest Service its plans to file a lawsuit under the Endangered Species Act, contesting the agency's environmental decision, according to David Cox, co-project manager of the Kensington permitting team.

Such a legal challenge from SACC would come after the agency's appeal process runs its course, he said. "I would expect them to appeal (the Record of Decision) as well."

Another issue that has delayed Kensington's formal approval and permit issuance is a new requirement of completion of a "formal...