Low silver prices plague Greens Creek.

• Author: Ripley, Kate
• Position: Greens Creek Mine on Admiralty Island, Southeast Alaska - Special Section: Mining's Rough Ride

Being the largest silver mine in North America is a prestigious ranking, but officials at the Greens Creek Mine on Admiralty Island in Southeast Alaska find themselves striving more than ever to cut costs, improve productivity and product quality under the spector of a 17-year low in silver prices.

Mine officials this spring announced the project has five times as much ore as originally projected. But that might not translate into positive, profit-making news unless silver prices improve. Because of the added ore reserves, as well as the fact that some waste-disposal sites were used up more quickly than initially figured, mine officials and the U.S. Forest Service are searching for additional sites to dump waste rock.

The present waste-rock disposal sites will last only about another four months, Forest Service officials say. According to mine officials, it's crucial waste-rock sites before the year is over.

When the mine opened in February 1989, the Forest Service's environmental impact statement for the project said the time had at least 3.5 million tons of ore. Based on that figure, the mine was expected to produce for 17 years. The reserve estimates later was upgraded to 4.7 million tons of ore - further stretching the life of the mine.

This spring, however, mine officials told the Forest Service that an additional 14 million tons ore were discovered. Greens Creek managers also announced that they were going to study the feasibility of expanding the project. If Greens Creek officials decide to mine the additional reserves, the Forest Service would have to reopen its environmental impact statement process.

Mine officials say there are not prepared to discuss expansion at this time. Greens Creek manager Cliff Davis says the mine has been quiet about the discovery, because the reserves only are considered useful ore given the right metal prices.

But the price of silver per ounce, though better than earlier this year, is not likely to rally anytime soon, metal analysts say. Warren Myers, vice president of capital markets for Merrill Lynch & Co. in New York, says the price of silver earlier this year had almost "fallen off the edge of a cliff."

Silver's peak price in 1990 was $5.53 an ounce, while silver has averaged about a dollar less than that so far in 1991. Greens Creek, however, has the advantage of financially strong mining companies as partners in the Admiralty Island project, Myers notes.

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