Coeur d’Alene Mines Corp., primarily a silver producer for most of its history, boosted its gold production substantially Thursday when it bought out its development partner in a large Alaska gold project.
Denver-based Echo Bay Mines accepted Coeur d’Alene Mines’ $32.5 million offer for Echo’s half of the Kensington gold project. After recouping the cost of buying the other half, Coeur d’Alene Mines will pay Echo Bay Mines a scaled royalty on 1 million ounces of future production.
The announcement came the same day the company reported first-quarter 1995 earnings. Coeur lost $3.2 million last quarter, or 20 cents a share, compared with a loss of $2.6 million, or 17 cents a share, in the first quarter of 1994.
Low metals prices were to blame for the losses, said Tony Ebersole, head of investor relations for the company. The company got $4.70 for each ounce of silver produced last quarter compared with $5.28 for the same period in 1994.
The Kensington purchase puts the company in control of nearly 2 million ounces of gold reserves and elevates Coeur d’Alene Mines to a new level as a gold producer, said Ebersole.
The Kensington property, located near Juneau, continues its permitting process and could be constructed and running in two years after final permitting. The output could be as much as 200,000 ounces a year for a company that produced about 37,000 ounces of gold last quarter.
The new Kensington ounces increase Coeur’s total ore reserves by 25 percent, said Dennis Wheeler, chairman and chief executive.
Higher silver prices have the company pondering whether to reopen its two silver mines, the Coeur and the Galena, in Idaho’s Silver Valley.
Silver Valley Resources, the joint venture between Coeur d’Alene Mines and Asarco Inc., controls the two properties. The company’s 1996 projections for gold and silver production include contributions from those mines.