KENAI — The privately owned Diamond Gold Corp. is proposing a gold extraction mill on the eastern Kenai Peninsula expected to add a boost to the local economy.
Ed Ellis, the company's president, said the proposed Sable Crown Gold Mill near Seward would start processing 40 tons of gold-quartz ore per day this summer before reaching full capacity at 100 tons per day, The Peninsula Clarion reported.
The project calls for ore to be supplied by smaller mines near Seward and the Port Wells area of Prince William Sound.
"Standing alone, the mines are too small to support the infrastructure of a mill," Ellis said. "However, they could sell their ore to a custom mill. Then it becomes very economic for these small mines."
Ellis, who began mining in the 1970s, said he believes the value of gold — about $1,200 per ounce — is high enough to make the Sable Crown mill a viable project. He said the mill will be able to acquire ore on its own in addition to buying from the smaller mines.
"Some of the miners will want to do their own mining because they're independent, and that's great," Ellis said. "With some of them we'll go in and lease it, and we'll work it ourselves. Then I have prospects I found 40 years ago that I know are good, and we'll be mining those ourselves. Some we'll lease, some we'll just purchase the ore delivered to the mill, and some we'll mine ourselves."
The project has already attracted interest from Seward-area mine owner, David Moore, who says he plans to lease his Primrose mine to Diamond Gold.
"I, as one of the owners, am interested beyond a doubt," Moore said of the proposed mill.
Ellis said the mill would be built on private land and operational for 10 to 15 years. The mill will use a system for processing gold-quartz ore that will have a low environmental impact, he said.
According to Diamond Gold's website, the mill will provide up to 25 jobs with a $2.5 million payroll.
"It's still a small operation compared to the giant mines in the Interior of Alaska, but it's going to be a very good little project," Ellis said.