
Company Website:
http://www.coeur.com
CHICAGO -- (Business Wire)
Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today
announced initial reserve and updated resource estimates, based on
drilling results received through October, for its Silvertip
silver-zinc-lead mine (“Silvertip”) located in northern British
Columbia. The Company also provided a reserve-based mine plan and
economic analysis underpinned by these estimates. A technical report in
support of the information described herein and prepared in accordance
with National Instrument 43-101 (“NI 43-101”) will be filed on SEDAR at www.sedar.com
within 45 days of this release.
“We are pleased with the successful conversion of a large portion of the
resource to an initial reserve and related mine plan at Silvertip,” said
Mitchell J. Krebs, Coeur’s President and Chief Executive Officer. “We
look forward to continuing our exploration efforts to expand the size of
this prospective, high-grade deposit and further extend the mine life.
In the near-term, we remain focused on optimizing the processing plant
as well as achieving a sustainable level of mining and processing
activities, which is reflected in this initial mine plan. We have made
substantial progress over the past fourteen months since acquiring
Silvertip and will carry that momentum into 2019. Silvertip has enhanced
our geographic and political risk profile and is expected to be a
long-term source of high-margin cash flow. We remain excited about its
potential and its evolution into one of the Company’s cornerstone
assets.”
Summary Highlights
-
Initial proven and probable reserve of 1.6 million tonnes (1.8 million
tons), including 48.2 million silver equivalent (“AgEq”)1
contained ounces at an average AgEq1 grade of 930 grams per
tonne (“g/t”) (27.13 ounces per ton (“oz/t”))
-
Approximately 15.0 million ounces of silver, 292.7 million pounds
of zinc and 198.7 million pounds of lead
-
14% increase in companywide AgEq1 reserves2
and 13% increase in companywide AgEq1 reserve grade2
-
Approximately 58% of resource tonnage converted to reserves3
-
Additional 1.2 million tonnes (1.3 million tons) of measured and
indicated resources and 0.5 million tonnes (0.6 million tons) of
inferred resources, conveying potential for further resource growth
and mine life extensions
-
Approximately 18% increase in total resource4 since
Coeur acquired the asset in October 2017
-
Measured and indicated resource of approximately 28.4 million
AgEqOz1 at an average grade of 752 g/t (21.94 oz/t)
-
Inferred resource of approximately 14.7 million AgEqOz1
at an average grade of 867 g/t (25.28 oz/t)
-
Initial mine life of 4.5 years based on proven and probable reserves,
representing approximately 49% of the total estimated resource4
-
Production rate of approximately 1,000 mtpd (1,100 tpd)
-
Approximately 24% of reserve-based mine plan utilizes long hole
stope mining
-
Expected average annual production of approximately 8.2 million
AgEqOz1, including 2.9 million ounces of silver, 45
million pounds of zinc and 37 million pounds of lead
-
Total capital costs of $44 million to support the continued
acceleration of underground development activity and mill upgrades
-
Initial pre-tax cash flow of $164 million
-
Initial pre-tax NAV5% of $147 million
Life of Mine Economic Analysis and Assumptions
|
|
|
|
|
Operational Overview |
|
|
|
|
Total Ore Production
|
|
M tonnes
|
|
1.6
|
Initial Mine Life
| |
Years
| |
4.5
|
Production Rate
| |
mtpd
| |
1,000
|
Average Annual Production |
Silver Equivalent
| |
M oz AgEq
| |
8.2
|
Silver
| |
M oz Ag
| |
2.9
|
Zinc
| |
M lbs Zn
| |
45
|
Lead
| |
M lbs Pb
| |
37
|
Average Head Grade |
Silver Equivalent
| |
g/t AgEq
| |
930
|
Silver
| |
g/t Ag
| |
289
|
Zinc
| |
% Zn
| |
8.2%
|
Lead
| |
% Pb
| |
5.6%
|
Average Metallurgical Recoveries |
Silver
| |
%
| |
88%
|
Zinc
| |
%
| |
90%
|
Lead
|
|
%
|
|
92%
|
|
|
|
|
|
Economic Overview |
| |
| |
Metal Prices | | | | |
Silver
| |
$/oz
| |
$17.00
|
Zinc
| |
$/lb
| |
$1.25
|
Lead
| |
$/lb
| |
$1.00
|
Economics |
|
|
|
|
Gross Revenue
| |
$M
| |
$504
|
Operating Cash Flow
| |
$M
| |
$224
|
Capital Expenditures
| |
$M
| |
$44
|
Pre-Tax Net Cash Flow
| |
$M
| |
$164
|
Pre-Tax NPV (5%)
| |
$M
| |
$147
|
After-Tax NPV (5%)
|
|
$M
|
|
$125
|
|
|
|
|
|
Cost Assumptions |
|
|
|
|
Average Operating Costs |
Mining costs
|
|
$/tonne
|
|
$68.77
|
Processing costs
| |
$/tonne
| |
$58.20
|
G&A
| |
$/tonne
| |
$46.52
|
Cash Costs5 | |
$/oz AgEq
| |
$10.96
|
AISC5 |
|
$/oz AgEq
|
|
$12.58
|
Notes to Life of Mine Economic Analysis and Assumptions: |
a.
|
|
A technical report prepared in accordance with NI 43-101 will be
filed on SEDAR at www.sedar.com
within 45 days of this release.
|
b.
| |
Rounding of tons and ounces, as required by reporting guidelines,
may result in apparent differences between tons, grade, and
contained metal content.
|
c.
| |
After-Tax NPV (5%) based on Provincial Mining Tax of 13% and
Canadian Income Tax of 27% (Canadian rate of 15% and British
Columbia rate of 12%). Provincial Mining Tax is tax deductible in
calculating income tax expense. Analysis assumes usage of Coeur’s
net operating losses.
|
| |
|
Background and Recent Developments
The Company acquired Silvertip in October 2017 for initial consideration
of $200 million. Additional consideration up to $50 million is payable
contingent upon achieving specific future permitting and exploration
milestones at Silvertip.
The first milestone payment of $25 million is contingent upon the
receipt of a permit expansion allowing for a sustained mining and
milling rate of 1,000 mtpd (1,100 tpd) on a year-round basis. The
Company has been working closely with regulators and remains on track to
receive approval of the permit amendment application in early 2019. The
Company will make the $25 million payment (75% cash / 25% stock) within
fifteen business days of receiving approval. The second milestone
payment of up to $25 million is contingent upon the amount of resource
tonnes added as of December 31, 2019, with $5 million payable for a
total resource of at least 2.5 million tonnes and $5 million for each
additional increment of 0.3 million tonnes up to 3.7 million tonnes.
Coeur commenced mining and processing activities at Silvertip in March
2018 and declared commercial production on September 1, 2018. The
Company completed its initial drilling program in July 2018 and
commenced a second phase drilling program focused on resource conversion
and expansion drilling. Year-to-date6, the Company has
invested approximately $11 million in exploration at Silvertip,
including $8 million on capitalized infill drilling and $3 million on
expensed resource growth and greenfields drilling.
The Company remains focused on improving process plant performance,
underground rehabilitation and development as well as completing several
key surface infrastructure projects, including the 220-person camp
facility. Construction of the camp facility is on schedule and budget,
with completion expected at the end of January 2019. Coeur also recently
completed the scheduled upgrades to Silvertip’s water treatment plant
and is currently treating water at its permitted capacity. The Company
continues to target mill projects that address safety, production and
efficiency improvements.
Mineral Reserve and Resource Estimates
|
|
|
|
|
|
| |
|
Grades
|
| |
Tonnage
| |
Silver
|
|
Zinc
|
|
Lead
|
|
Silver Equivalent1 |
Category
|
|
(tonnes)
|
|
(short tons)
|
|
(g/t)
|
|
(oz/t)
|
|
(%)
|
|
(%)
|
|
(g/t)
|
|
(oz/t)
|
Proven Reserves
| |
246,274
|
|
271,470
| |
376
|
|
10.97
| |
10.0%
| |
7.7%
| |
1,190
|
|
34.70
|
Probable Reserves
|
|
1,364,575
|
|
1,504,185
|
|
274
|
|
7.99
|
|
7.9%
|
|
5.2%
|
|
884
|
|
25.79
|
Proven and Probable Reserves
|
| 1,610,849 |
| 1,775,655 |
| 289 |
| 8.43 |
| 8.2% |
| 5.6% |
| 930 |
| 27.13 |
Measured Resources
| |
102,000
| |
112,436
| |
380
| |
11.09
| |
10.0%
| |
8.1%
| |
1,119
| |
32.64
|
Indicated Resources
|
|
1,074,000
|
|
1,183,881
|
|
208
|
|
6.06
|
|
8.5%
|
|
3.7%
|
|
718
|
|
20.94
|
Measured and Indicated Resources
|
| 1,176,000 |
| 1,296,317 |
| 223 |
| 6.50 |
| 8.6% |
| 4.1% |
| 752 |
| 21.94 |
Inferred Resources
|
| 529,000 |
| 583,122 |
| 271 |
| 7.91 |
| 9.3% |
| 5.0% |
| 867 |
| 25.28 |
|
|
|
|
|
Contained Metal
|
| |
Silver
|
|
Zinc
|
|
Lead
|
Category |
|
(ounces)
|
|
(pounds)
|
|
(pounds)
|
Proven Reserves
| |
2,980,000
| |
54,179,000
| |
41,703,000
|
Probable Reserves
|
|
11,999,000
|
|
238,527,000
|
|
156,952,000
|
Proven and Probable Reserves |
| 14,978,000 |
| 292,706,000 |
| 198,655,000 |
Measured Resources
| |
1,248,000
| |
22,580,000
| |
18,188,000
|
Indicated Resources
|
|
7,172,000
|
|
199,902,000
|
|
87,759,000
|
Measured and Indicated Resources |
| 8,419,000 |
| 222,482,000 |
| 105,948,000 |
Inferred Resources |
| 4,612,000 |
| 108,621,000 |
| 58,594,000 |
Notes to Mineral Reserves and Mineral Resources: |
a.
|
|
Mineral Reserves were estimated by Rodrigo Simidu, P.Eng. and Talha
Khan, P.Eng., as of November 1, 2018.
|
b.
| |
Mineral Resources were estimated by Scott Jimmerson as of November
1, 2018.
|
c.
| |
Assumed metal prices for Mineral Reserves were $17.00/oz silver,
$1.25/lb zinc and $1.00/lb lead.
|
d.
| |
Assumed metal prices for Mineral Resources were $20.00/oz silver,
$1.30/lb zinc and $1.05/lb lead.
|
e.
| |
Mineral Reserves are reported at a cut-off grade of Net Smelter
Return (“NSR”) $160/tonne. Mineral Resources are in addition to
Mineral Reserves, depleted, and at a cut-off grade of NSR
$130/tonne. NSR = Tonnes x Grade x Metal Prices x Metallurgical
Recoveries – Royalties – TCRCs – Transport Costs.
|
f.
| |
A technical report prepared in accordance with NI 43-101 will be
filed on http://www.sedar.com within 45 days.
|
g.
| |
Mineral resources are in addition to mineral reserves and do not
have demonstrated economic viability. Inferred Mineral Resources are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
considered for estimation of Mineral Reserves.
|
h.
| |
An Inferred Mineral Resource has a lower level of confidence than
that applied to an Indicated Mineral Resource and must not be
converted to a Mineral Reserve. It is reasonably expected that some
of the Inferred Mineral Resources could be upgraded to Indicated
Mineral Resources with continued exploration.
|
i.
| |
Rounding of tonnes, tons, average grades, and contained metal may
result in apparent discrepancies with total rounded tonnes, tons,
average grades, and total contained metal.
|
About Coeur
Coeur Mining, Inc. is a well-diversified, growing precious metals
producer with five mines in North America. Coeur produces from its
wholly-owned operations: the Palmarejo silver-gold complex in Mexico,
the Silvertip silver-zinc-lead mine in British Columbia, the Rochester
silver-gold mine in Nevada, the Wharf gold mine in South Dakota, and the
Kensington gold mine in Alaska. In addition, the Company has interests
in several precious metals exploration projects throughout North America.
Cautionary Statements
This news release contains forward-looking statements within the meaning
of securities legislation in the United States and Canada, including
statements regarding long-term growth, processing, throughput, margin,
mine life, asset value, capital expenditures, exploration efforts,
potential quantity and/or grade of minerals, the estimation of mineral
reserves and resources, anticipated operating results such as
production, cost and cash flow levels, underground rehabilitation and
development, infrastructure projects, and contingent payments. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause Coeur's actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. Such factors include, among others. the
risks and hazards inherent in the mining business (including risks
inherent in developing large-scale mining projects, environmental
hazards, industrial accidents, weather or geologically related
conditions), changes in the market prices of gold, silver, lead and zinc
and a sustained lower price environment, the uncertainties inherent in
Coeur's production, exploratory and developmental activities, including
risks relating to permitting and regulatory delays, ground conditions,
grade variability, any future labor disputes or work stoppages, the
uncertainties inherent in the estimation of mineral reserves and
resources, changes that could result from Coeur's future acquisition of
new mining properties or businesses, the loss of any third-party smelter
to which Coeur markets its material, the effects of environmental and
other governmental regulations, the risks inherent in the ownership or
operation of or investment in mining properties or businesses in foreign
countries, Coeur's ability to raise additional financing necessary to
conduct its business, make payments or refinance its debt, as well as
other uncertainties and risk factors set out in filings made from time
to time with the United States Securities and Exchange Commission, and
the Canadian securities regulators, including, without limitation,
Coeur's most recent reports on Form 10-K and Form 10-Q. Actual results,
developments and timetables could vary significantly from the estimates
presented. Readers are cautioned not to put undue reliance on
forward-looking statements. Coeur disclaims any intent or obligation to
update publicly such forward-looking statements, whether as a result of
new information, future events or otherwise. Additionally, Coeur
undertakes no obligation to comment on analyses, expectations or
statements made by third parties in respect of Coeur, its financial or
operating results or its securities.
Christopher Pascoe, Coeur's Director, Technical Services and a qualified
person under NI 43‐101, reviewed and approved the scientific and
technical information concerning Coeur's mineral projects in this news
release. Mineral resources are in addition to mineral reserves and do
not have demonstrated economic viability. Inferred mineral resources are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be considered
for estimation of mineral reserves, and there is no certainty that the
inferred mineral resources will be realized. A description of the key
assumptions, parameters and methods used to estimate mineral reserves
and resources, as well as data verification procedures and a general
discussion of the extent to which the estimates may be affected by any
known environmental, permitting, legal, title, taxation,
socio‐political, marketing or other relevant factors, will be included
in the technical report for Silvertip that will be filed on SEDAR at www.sedar.com
within 45 days of this release and is consistent with technical reports
for each of Coeur's properties as filed on SEDAR at www.sedar.com.
Cautionary Note to U.S. Investors ‐ The United States Securities and
Exchange Commission permits U.S. mining companies, in their filings with
the SEC, to disclose only those mineral deposits that a company can
economically and legally extract or produce. We may use certain terms in
public disclosures, such as "measured," "indicated," "inferred” and
“resources," that are recognized by Canadian regulations, but that SEC
guidelines generally prohibit U.S. registered companies from including
in their filings with the SEC. U.S. investors are urged to consider
closely the disclosure in our Form 10‐K which may be secured from us, or
from the SEC's website at http://www.sec.gov.
Notes to Press Release: |
1.
|
|
For purposes of silver equivalence with respect to the technical
report and the associated life of mine economic analysis and
assumptions, metal prices of $17.00/oz silver, $1.25/lb zinc and
$1.00/lb lead were used.
|
2.
| |
Increase relative to Companywide reserves of approximately 342
million AgEqOz and reserve grade of 1.06 oz/t as of December 31,
2017, which assumed metal prices $1,250/oz gold and $17.50/oz
silver. Figures exclude San Bartolomé (discontinued operations).
|
3.
| |
Inclusive of reserves and measured and indicated resources.
|
4.
| |
Total resource tonnage, inclusive of reserves. Please see
acquisition announcement press release, dated September 11, 2017,
for additional details on prior mineral resource estimates.
|
5.
| |
Cash costs and AISC are non-GAAP measures. We supplement the
reporting of our financial information determined under United
States generally accepted accounting principles (U.S. GAAP) with
certain non-U.S. GAAP financial measures, including cash costs and
AISC. We believe that these adjusted measures provide meaningful
information to assist management, investors and analysts in
understanding our financial results and assessing our prospects for
future performance. We believe these adjusted financial measures are
important indicators of our recurring operations because they
exclude items that may not be indicative of, or are unrelated to our
core operating results, and provide a better baseline for analyzing
trends in our underlying businesses. We believe cash costs and AISC
are important measures in assessing the Company's overall financial
performance. For additional explanation regarding our use of
non-U.S. GAAP financial measures, please refer to our Form 10-K for
the year ended December 31, 2017 and our quarterly report on Form
10-Q for the quarter ended September 30, 2018.
|
6.
| |
Through September 30, 2018.
|
Conversion Table |
1 short ton
|
|
=
|
|
0.907185 metric tons
|
1 troy ounce
|
|
=
|
|
31.10348 grams
|

View source version on businesswire.com: https://www.businesswire.com/news/home/20181227005158/en/
Contacts:
For Additional Information
Coeur Mining, Inc.
104 S.
Michigan Avenue, Suite 900
Chicago, Illinois 60603
Attention:
Paul DePartout, Director, Investor Relations
Phone: (312) 489-5800
www.coeur.com
Source: Coeur Mining, Inc.
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