Curtailed Kensington production to pick up for the rest of year
A six-month planned reduction in mining activity at the Kensington Gold Mine near Juneau should lead to lower operating costs. That’s according to Coeur d’Alene Mines Corporation officials, who held an investor conference call today (Monday) to announce first quarter financial results.
Kensington temporarily curtailed mining and milling activity last November in order to complete several underground and surface projects. The mine recently resumed full production two months ahead of schedule.
During the first four months of 2012, Kensington produced 7,444 ounces of gold at a cost of about $2,700 per ounce. Coeur President and CEO Mitchell Krebs expects the mine’s production costs to average $1,150 to $1,250 an ounce over the entire year.
“Obviously what that means is that by the fourth quarter we’ll see costs on the low end of that average, given where we were in the first quarter,” says Krebs. “So, we’ll be seeing costs as we end the year in the $900 range to pull that average down.”
Kensington is expected to produce as much as 86,000 ounces of gold this year. The two-year-old mine contributed $10.4-million in metal sales to Coeur’s first quarter bottom line, but spent nearly $11-million on infrastructure. That included completion of an underground paste backfill plant, an electrical upgrade, a new warehouse, and a new 200-bed dormitory.
Krebs says Coeur’s silver and gold Palmarejo Mine in Mexico remains its largest producer. The company also has operations in Bolivia, Argentina, Australia, and Nevada. Company-wide, metal sales were up and operating costs were down during the first quarter of the year.