The Kensington mine and flotation mill is located about 45 miles (72 km) northwest of the city of Juneau, capital of the State of Alaska. Coeur Alaska, Inc., a wholly-owned subsidiary of the Company, controls two, contiguous land blocks covering the mine and mill - the Kensington and Jualin blocks. The Kensington block consists of 51 federal, patented lode and mill-site claims covering approximately 766 acres and 294 federal, unpatented lode claims. The adjacent Jualin Property, under a lease agreement with Hyak Mining Company, consists of 23 federal, patented lode and mill-site claims, 438 federal, unpatented lode claims and one unpatented mill-site claim, and 15 State of Alaska mining claims.
The Kensington ore deposit consists of multiple mesothermal, quartz, carbonate and pyrite vein swarms and discrete quartz-pyrite veins hosted in the Cretaceous-aged Jualin Diorite. Gold occurs as native grains in quartz veins and associated with pyrite and various gold-telluride-minerals. Both shear-hosted and extensional quartz vein arrays are common at Kensington and form roughly north-south trending zones that dip steeply east though individual vein sets within the zones that can dip at low angles, sub-parallel to the broader zones.
To date, gold mineralization at Kensington has been defined by drilling from over 2,050 feet (625 meters) elevation to well below sea level and remains open for expansion in most directions. All of Kensington’s current mineral resources and reserves occur on the patented claims in the Kensington block.
During 2012, the Company spent $7.1 million on exploration at Kensington, completing 143,796 feet (43,829 meters) of core drilling mostly devoted to in-fill drilling of Block K and the Raven veins. Additional drilling focused on other targets such as Kensington South, the Ann Trend, Elmira and the historic Jualin mine. The Company plans for an additional underground drilling program in 2013 on Zone 10, Zone 50, Zone 30, Kensington South, Elmira vein, and Ann. Continued surface drilling is planned at Jualin and several other targets on the property. The total 2013 Kensington exploration program is expected to be $8.6 million.
Increased definition drilling to $3.9 million in 2012 improved model reconciliation to production and has improved the Company's overall understanding of the Kensington deposit. This has enabled the Company to develop a more reliable and accurate mine plan, and improve exploration targeting, which is expected to subsequently add to the reserve and resource base.
Drilling results at the Raven vein, located approximately 2,000 feet (600 meters) from the main underground workings at Kensington, identified initial proven and probable reserves of 50,400 ounces contained within 151,000 tons, at an average gold grade of 0.33 opt, 51% higher than the overall average reserve grade at Kensington.