Coeur dAlene Mines Corp., of Coeur dAlene, says it has reached a major milestone in its 10-year quest to obtain permits to mine gold at its Kensington property near Juneau, Alaskaa project that could boost the companys annual gold production by 150 percent and its revenues by more than $60 million.


The milestone is in the form of a memorandum of understanding, signed by state and federal agencies, that establishes a schedule under which Coeur dAlene Mines would receive all the necessary permits for the Kensington project by the end of January.


After permits are in hand, Coeur will conduct an updated feasibility study, and, assuming the results from it are positive, construction of the mine would commence soon after, says Tony Ebersole, spokesman for Coeur dAlene Mines. Construction itself would take about two years, so the earliest mining could start at Kensington would be 2006, he says.


Coeur dAlene Mines says it will cost about $150 million to get production under way at the Kensington mine, although Ebersole says that (cost) could come down.


Annual gold production there is projected to be 175,000 troy ounces, with an average cash operating cost of about $200 an ounce, the company says. This year, Coeur expects to produce 112,000 ounces of gold, down slightly from 117,000 ounces last year. Currently, gold is selling for about $360 an ounce.


The Kensington mine is estimated to contain 3.2 million troy ounces of gold in reserves and resources. Much of the property remains unexplored, however, and Coeur has said in the past that the company believes Kensington has considerable upside potential.


Alaska Gov. Frank Murkowski said in a prepared statement that he helped bring about the creation of the recent memorandum of understanding because of Kensingtons potential economic importance to his state. Coeur says the Kensington mine is expected to create several hundred jobs, which Murkowski characterized as high-paying jobs in the natural-resource sector.