Mine gives up permits pursuit
Company grapples with tailings disposal
The price of Coeur d’Alene Mines Corp. stock closed slightly higher at $1.78 per share Thursday, a day after a JPMorgan analyst downgraded the silver and gold miner’s stock.
The downgrade to “neutral” from “overweight” came after the company announced Tuesday that it had abandoned its pursuit of permits for an alternative tailings disposal plan for the proposed Kensington gold mine near Juneau, Alaska. The mine – with an estimated 1.4 million ounces of gold – accounts for 23 percent of the company’s net assets, according to the analyst’s estimate.
Coeur d’Alene Mines instead will pursue its original plan to dispose of the tailings by dumping them into a natural lake on the Tongass National Forest. Tailings are waste rock left over after metals are extracted from ore.
The plan for putting tailings into Lower Slate Lake triggered a lawsuit by three environmental groups: Southeast Alaska Conservation Council, the Sierra Club and Lynn Canal Conservation Inc.
The groups said the Clean Water Act prohibits the dumping of tailings into natural lakes, rivers and streams.
The 9th Circuit Court of Appeals agreed, saying the tailings would smother the fish in the lake, and tailings’ toxicity could have lasting impacts on water quality. Coeur Alaska and the state of Alaska filed a joint appeal. The matter is pending in the U.S. Supreme Court, with a decision expected next year.
“We have eight or more analysts covering us. None of the others issued any notes related to the news,” Tony Ebersole, the company’s spokesman, said Thursday afternoon.
The U.S. Supreme Court’s decision to hear the case is significant, Ebersole said. If the court rules in Coeur d’Alene Mines’ favor, Kensington could begin operations in late 2009.
Company officials said a permit for the alternative tailings disposal was taking too long.
Coeur d’Alene Mines, with the backing of environmental groups, proposed mixing the tailings with cement to form a paste and depositing the paste near Alaska’s Lynn Canal.
The alternative paste tailings plan was submitted to federal agencies in January. Permits were expected before the end of this year. However, the Environmental Protection Agency wants the company to evaluate another alternative, according to Coeur d’Alene Mines.
Company officials feared months more of delays, prompting the firm to halt the alternative permit process.
Russell Heath, executive director of the Southeast Alaska Conservation Council, said his group reviewed the EPA documents and found nothing that would call for another alternative to be explored.
Coeur d’Alene Mines Corp. is the Idaho-based parent of Coeur Alaska.