Coeur Alaska reported its Kensington Mine produced around 125,000 ounces of gold in 2020. And its most recent report suggests it’s on track for a similar yield this year. At current prices that’s around $225 million worth each year.

“Gold prices have been excellent,” said Coeur Alaska’s General Manager Mark Kiessling in Juneau in a recent interview. “They came up quite a bit in 2019 and 2020. They’ve come down a little bit and 2021. But it’s still been very promising.”

The mine is on a patchwork of leased private land and Tongass National Forest in an area between Juneau and Haines east of Lynn Canal.

It’s one of the region’s largest private sector employers with around 360 employees.

But in order to stay open through 2033, the mine needs to expand its footprint. 

“We’re looking forward to continuing to to be partners in the community and continue to provide employment for Southeast Alaska for the for the near future,” Kiessling said.

Future of mine depends on storage space

The mine produces gold concentrate, so all that leftover rock has to go somewhere. And the mining company says it’ll be out of space in a few years.

The way Kensington disposes its mine waste makes it somewhat unique in this country. Thanks to a favorable decision in 2009 by the U.S. Supreme Court, the Chicago-based mine company was allowed to convert a natural lake into a tailings pond, which has run into challenges.

There’s an 88-foot dam in place now to hold back about 4 million tons of liquid mine waste that contains heavy metals from the ore. This tailing treatment facility, formerly known as Lower Slate Lake, lies upstream from Berners Bay which makes conservationists — and some federal regulators — nervous should it ever fail.

NOAA Fisheries scientist Sean Eagan has helped outline the agency’s concerns to the Forest Service.

“When you raise the dam by 36 feet, and add another 4 million cubic yards of material, the chance of that dam failing increases,” Eagan said in an interview, “and should it increase, the tailings will spill out more broadly into Berners Bay.”

Forest Service OKs nearly doubling tailings pond

The U.S. Forest Service has reviewed and tentatively green-lit the mine’s expansion. That would increase the tailing treatment facility’s capacity to 8.5 million tons of mine waste.

It’s working through the environmental review to get its permits. Federal law required the Forest Service to consult with NOAA Fisheries scientists. 

Senior Forest Service officials in Alaska and Washington D.C. declined to answer questions or make anyone available for an interview request.

“The agency works closely with the state and other federal agencies with regulatory authority to ensure that measures are in place and followed to protect water quality, other resources, and nearby aquatic habitats,” the agency wrote to CoastAlaska. “When mineral extraction is proposed, the plan of operations is reviewed to ensure the protection of communities and natural resources. The plan of operations must include steps taken to protect water quality and aquatic habitats by minimizing erosion and preventing tailings or waste from contaminating water bodies or other areas.”

NOAA Fisheries’ role is advisory. But it’s asked the Forest Service to consider alternatives. It says Kensington should instead filter out the water from its tailings so they’d be stored in a more solid form.

Feds urge Kensington to consider ‘dry stacking’ tailings

NOAA Fisheries scientist Molly Zaleski says filtered tailings are already being done in the region’s other major mine on Admiralty Island.

“That’s something that we already have at Greens Creek Mine. So we knew that that’s something that can be done in Southeast Alaska,” she said.

Kensington’s engineers and consultants looked into it but the company says it’s not feasible.

“Just because it works at one operation and one area in Southeast Alaska doesn’t mean it’s going to work in another,” Kiessling said. He says there’s the high rainfall on Lynn Canal could make it a “muddy, soupy mess.”

“The whole concept behind filtered tailings is you remove the water from the tailings, and that allows you to stack it up,” he continued. “And if you add the water back in and precipitation, it makes it almost impossible to stack it up.”

It’s not a direction the Forest Service is pushing for either. That was laid out in its July record of decision which gave provisional approval to raising the dam to a total height of 124-feet — easily the largest tailings dam in Southeast Alaska.

The Forest Service’s own analysis has suggested that whether Kensington’s mine waste is liquid or solid it presents an equal danger: which it characterized as “very low risk.”

Tailings dam would have ‘indefinite service life’ after mine’s closure

The Alaska Department of Natural Resources has been broadly supportive of the expansion.

But Alaska’s head dam safety engineer found fault with some of the Forest Service reasoning when it assessed relative risks.

“Effectively stating that the dam safety and geotechnical stability of all alternatives are essentially the same and all are subjectively considered as ‘very low risk’ prevents an effective and defensible comparison,” wrote Charlie Cobb, Alaska’s dam safety engineer in more than 80 pages of technical comments submitted on behalf of state permitting agencies.

“The failure mechanisms on those structures would be different. So the probabilities of those failures would be different,” Cobb said in an interview. “And the consequences of those failures would be different. So rather than being subjective about it, it would be better at least if they had some relative comparison that said, one might be higher or lower, or the consequences might be different.”

But any final dam would have to be approved and inspected by the state’s dam safety office. And Cobb says as long as the dam is built to standard, raising its height shouldn’t increase its risk of failing. 

No immediate threat to ecosystem

To be clear, none of the federal agencies are suggesting Kensington Mine’s dam is an immediate threat to Lynn Canal. 

“We do not feel that this dam is likely to fail in the next 10 years while the mine is operating,” said Eagan, the NOAA scientist. “We’re not even suggesting the next 20 years or 30 years. It’s more a process of the dam will be there for a very, very long time.”

Cobb says a dam’s service life depends on its maintenance and care. 

“It’s not that you can’t design for something for a very long time frame,” he added. “But you do have to provide for the resources necessary to inspect and monitor that dam and do maintenance on it for an indefinite period of time.”

The expansion plan has generated a lot of interest: more than 400 comment letters from Alaskans and organizations expressing a mixture of support as an economic engine or as an ecological threat. 

A formal objection period expires August 23. But barring a major challenge the Forest Service’s decision becomes binding and Kensington will be able to expand its operations and stay in business through at least 2033.

An old airstrip and work camp are being used in the effort to develop mineral deposits at Icy Cape. The Alaska Mental Health Trust Land Office owns the land and mineral rights and is overseeing exploration. (Photo courtesy Alaska Mental Health Trust Land Office)

Developers are optimistic about the potential for a beach-sand-mining operation in northern Southeast Alaska.

The Alaska Mental Health Trust Land Office claims good results from its second season of exploring Icy Cape, on the Gulf of Alaska between Yakutat and Cordova.

When mountains erode, they shed tiny particles of rock. They’re washed into streams to be deposited in lakes, deltas or the ocean.

In the Gulf of Alaska, strong waves toss them back on shore to help form beaches.

When those mountains contain veins of rare minerals, those sediments may have enough value to be worth mining.

That’s what’s happening at Icy Cape, where crews are drilling into the beach to see what – and how much — is there.

“There is gold, there’s zircon, there’s garnet, there’s epidote, there’s some platinum,” said Wyn Menefee, acting executive director of the land office of the Alaska Mental Health Trust Authority.

Its Icy Cape property includes about 25 miles of beach, plus forested uplands as wide as 2.5 miles. Those forests cover layers of sand and could be developed.

It’s an isolated area, about 75 miles west-northwest of Yakutat and nearly twice that distance east-southeast of Cordova.

“Right now, we’re in the exploration phase, which is determining what the resource is now, the lay of it … and we’re not at the point of identifying how we’re actually going to mine it,” he said.

About a year ago, the trust’s board allocated $2 million toward the project.

Officials said the new source of income could surpass all of its other efforts, bringing in hundreds of millions of dollars annually.

A work crew of about 16 spent last summer drilling cores from the sands, which stretch as far as 100 feet below the surface in some areas. Menefee said those samples are being analyzed.

The results have caught the attention of potential investors.

“We already have international companies that are interested in the project. They’ve already been visiting the site. They’ve already been trying to check out the resource and trying to see what quality it is,” he said. “This is a continual process.”

Land trust officials will discuss their plans for mining Icy Cape at meetings in two nearby communities.

The first is 6:30 p.m. Nov. 1 at Yakutat High School. The second is 6:30 p.m. Nov. 2 at the Cordova Center.

Gold and platinum’s value is obvious.

The other minerals have industrial uses as sand-sized particles.

The Trust Land Office manages its property to support mental health services for Alaskans.

It usually does that by leasing property or selling resources, such as timber, for others to harvest or extract.

But in this case, the agency is putting its own money into exploration and – possibly – development.

“We could potentially lease it out to an entity. We could lease it out to multiple entities. We could potentially go into a joint venture with entities,” he said. “There’s a lot of options that could be on the table.”

Menefee said further exploration is needed to determine whether there’s enough value to develop.

He expects that to take several more years.

The Alaska Mental Health Trust Land Office is developing its property at Icy Cape, which runs from the beach to the mountains. Logging will begin next year and and a mining project is in the exploration phase. (Photo courtesy Alaska Mental Health Trust Land Office)

Menefee said it will be a placer-mining operation, which sifts through material near the surface, which would impact the environment less than mining into bedrock. It will also take advantage of existing roads, left over from earlier development.

But the potential project still raises concerns, especially about salmon habitat.

“Virtually every river and creek within the proposed area is listed on the anadromous streams catalog,” said Guy Archibald, staff scientist for the Southeast Alaska Conservation Council.

He worries, because a dozen streams and rivers flow through the land that could be mined. Like most nearby waterways, they’re short and their mouths are sometimes protected by sandbars or spits.

Archibald said they’re susceptible to the gulf’s frequent heavy winds and waves.

“I’m just concerned if they start removing these barrier sands, basically strip-mining them, that it’s going to expose the foot of these rivers to massive erosion during the winter storms and create a barrier to fish passage,” he said.

The Mental Health Trust Land Office plans to harvest more than minerals from the site.

It’s sold roughly 50 million board feet of timber to Sealaska Corp., Southeast’s regional Native corporation.

Menefee said he expects Sealaska to begin logging next year.

The property is within the boundaries of the Yakutat Borough. Officials there did not respond to requests for comment by deadline.

A somewhat similar proposal was made by an out-of-state company for mining beach sands in and near Yakutat about six years ago. That effort ended after initial mineral values could not be confirmed.

Editor’s note: KTOO’s building sits on land leased from the Alaska Mental Health Trust Authority. KTOO has also applied for and received occasional grants for special reporting projects from the authority.

Part of the beach at Icy Cape is seen from the water Aug. 8, 2008. The Alaska Mental Health Trust Authority Lands Office says beach sands contain gold and garnet, which has industrial uses. (Photo by Sam Beebe/Creative Commons)

The Alaska Mental Health Trust Authority is advancing plans to mine Gulf of Alaska beach sands about 75 miles northwest of Yakutat.

The trust’s board allocated $2 million last month to create a new entity to begin developing the project on land it owns at Icy Cape.

Preliminary exploration and analysis found promising concentrations of gold, as well as garnet and other heavy minerals.

Trust Land Office Executive Director John Morrison told trustees about the project’s value at a November meeting.

“This has an exceptional potential for the trust to generate revenue from its land base, and in fact has one of the greatest potentials to generate revenue of any of the trust’s assets,” he said.

The trust land office manages its property to support mental health services for Alaskans. It usually does that by leasing property or selling resources, such as timber, for others to harvest or extract.

In this case, the trust plans to take a more direct role.

At the mid-November meeting, Morrison said the new entity would explore and develop the property through joint ventures.

“What we are proposing here is to take what we are calling phase 3, which would be a further definition of the potential resource base and the marketing efforts involved in attracting the attention to bring this resource base to market,” he said.

Garnets found in the beach sands, which stretch inland, have industrial applications. They’re used as abrasives or for filtering water.

If investors are found, then developers would need numerous government permits before moving forward. The property is within the Yakutat Borough. Manager Jon Erickson said he had not yet been consulted about the project.

A somewhat similar proposal was made by an out-of-state company for mining beach sands near Yakutat about six years ago. That effort ended after initial mineral values could not be confirmed.

Conservation and fisheries groups objected to that development, saying it could hurt salmon and other marine life.