DATE: September 18, 2000

TO: Planning Commission

FROM: Teri Camery, Planner
Community Development Department

FILE NO.: USE2000-00063- Conditional Use

PROPOSAL: Extension of the existing Large Mine permit, MIN-M96-01, for the development and operation of the Kensington Gold Mine.

GENERAL INFORMATION

Applicant: Coeur Alaska, Inc.

Property Owner: Coeur Alaska, Inc.

  • Location: Approximately 45 miles north of Juneau and 35 miles south of Haines, on the west side of the Kakuhan Range adjacent to Lynn Canal.

    Legal Description: Various patented and unpatented mining claims mainly within Townships 34 and 35 South, Range 62 East, Copper River Meridian.

    • Parcel Code Number: 3-M00-0-BB0-004-0

  • Site Size: Estimated total disturbed area: approximately 269 acres; total project area by applicant: 8,750 acres.

    • Zoning: RR, Rural Reserve

    Utilities: Private Well and On-Site Sewer System

    Access: Lynn Canal to private marine terminal; by air to private helipad

    Existing Land Use: Generally undeveloped with some mine exploratory activity

    Surrounding Land Use: North - undeveloped

    South - undeveloped

    East - undeveloped

    West - undeveloped


    PROJECT DESCRIPTION

    The applicant requests an extension of the existing Large Mine permit, MIN-M96-01, for the development and operation of the Kensington Gold Mine.

    BACKGROUND

    The original Kensington mining permit, MIN-M96-01, was granted on November 4, 1997 and renewed for an 18 month period in April 1999, as per USE99-00019. The current permit expires on October 13, 2000. Two 18 month renewals are allowed according to CBJ Land Use Code 49.15.250. This application is the second request for renewal.

    In its September 8, 2000 letter of application for permit extension Coeur explains:

  • "The currently permitted mine configuration was submitted at a time when gold prices had been averaging about $400 an ounce. Unfortunately, by the time the project was permitted in 1997, the price had fallen to below $300 an ounce and has remained in that range ever since (see attached figure).

    In the last several years, Coeur engineers have explored a number of design modifications that might allow Coeur to build and operate the mine despite the continuing depression in world gold prices. One promising modification given serious consideration by Coeur was submarine tailings disposal in Lynn Canal. This configuration would have required a petition to the U.S. Environmental Protection Agency (EPA) to amend existing New Source Performance Standards. After extensive analysis and discussions with Coeur, EPA concluded that, despite the potential environmental advantages of submarine tailings disposal, Headquarters’ staff was reluctant to advocate such a change. These discussions consumed much of the period allowed by the permit extension.

    Rather than pursue the issue of submarine tailings disposal, Coeur immediately began exploring other possible modifications that would allow construction and operation of the mine. AS you know, Coeur engineers have now prepared a series of possible project modifications that would include disposal of tailings at Slate Lake, and a daily commute across Berners Bay. The new tailings disposal option was supported in concept by EPA Headquarters’ staff.

    The new tailings disposal system would not require EPA rulemaking to change new source standards. Coeur does, however, require assurances from the EPA that the proposed design will be deemed consistent with EPA policy (Wilcher Memorandum) for tailings disposal. Souer is confident that such assurances will be forthcoming shortly.

    Couer has submitted an amended Plan of Operations to the United States Forest Service, which includes Slate Lake tailings disposal. Once confirmation is received by the EPA, the Forest Service will commence the public scoping process. At the same time Coeur will submit applications for amendments to its other federal and state permits. Coeur anticipates that the project revisions will be deemed substantial enough to require preparation of a Supplemental Environmental Impact Statement (SEIS).

    Since the Planning Commission may not begin deliberations on any Large Mine Permit until a draft SEIS is available to the public, and since the project plans are still undergoing minor modifications, Coeur is not submitting a request for amendment of the Large Mine Permit at this time. The purpose of the requested extension simply is to preserve the status quo pending confirmation of EPA policy with respect to tailings disposal and finalization of project revisions and all applicable permit application modifications."

    •

    ANALYSIS

    CBJ '49.15.250 provides the requirements for Development Permit Extensions, and is discussed below:

  • The application for this permit extension was received on September 8, 2000, over 30 days prior to the expiration date of the Large Mine permit.
    •
  • The applicant has submitted a letter stating that while Coeur has not begun construction under the Large Mine permit, the company has examined a number of cost savings measures which might enable Coeur to open the Kensington Mine despite the continuing depression in world gold prices. While these cost measures are evaluated, Coeur wishes to preserve the present Large Mine permit.
    •
  • This is the second extension requested for this permit.
  • The Community Development Department has provided notice to adjacent property owners. A general notice was printed in the Juneau Empire on September 15, 2000. Additionally, a two public notice signs were posted by the applicant.
    •

    FINDINGS

    Per CBJ '49.15.250, Development Permit Extension, the director makes the following findings on the criteria for granting the requested allowable use extension:

  • 1. Was the application for the requested Large Mine permit extension complete and received on time?
  • Yes. We find the application contains the information necessary to conduct a full review of the proposed permit extension. The application submittal by the applicant, including the appropriate fees, substantially conforms to the requirements of CBJ code, Chapters 49.15 and 49.35. The application for this extension application was received over 30 days prior to the permit expiration date.
    •

    2. Has the applicant submitted justification for the permit extension?

  • Yes. As discussed in the analysis above, the applicant has submitted a justification for the permit extension.
    •

    3. Is the extension within the allowable number of permit extensions?

  • Yes. This is the second permit extension application for Coeur's Large Mine permit, MIN-M96-01.
    •

    4. Have notices of the extension request been mailed to adjacent property owners at least ten days prior to the hearing and has a general notice been printed in a newspaper of general circulation at least two days prior to the hearing?

  • Yes. Notice of the extension request was provided to adjacent property owners, and a general notice of the hearing was published on September 15, 2000, more than ten days prior to the hearing.
    •

    • RECOMMENDATION

    We recommend that the Planning Commission adopt the director's findings and grant the requested permit extension. The permit would allow an 18-month extension of Large Mine Permit MIN-M96-01 to construct and operate the Kensington Gold project according to the project description, reclamation plan, and plan of operations described in the original mine permit Notice of Decision dated November 6, 1997.