Coeur Files Technical Report for Palmarejo Complex


Seven-Year Mine Life with Average Annual Production of Nearly 12 million AgEq Ounces

Unit Costs 13% Lower than Last Filed Technical Report

CHICAGO, Nov. 02, 2015 (GLOBE NEWSWIRE) -- Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE:CDE) announced that it has filed a National Instrument 43-101 technical report for its Palmarejo silver-gold mining complex in Mexico. The report dated November 2, 2015 may be obtained on www.sedar.com.

Mitchell J. Krebs, Coeur’s President and Chief Executive Officer, said, “The technical report reflects a robust, high-margin mine plan at current metal prices showing substantial improvements in production, mine life, grades, recoveries, costs, and cash flow compared to the last technical report for Palmarejo filed eight months ago. This enhanced plan demonstrates Palmarejo’s transition to ‘quality over quantity’ production and highlights the importance of the Independencia Este deposit, which was added through the acquisition of Paramount Gold and Silver Corp. in April. This adjacent ore body carries a silver equivalent1 reserve grade 17% higher than Guadalupe and is not subject to the Franco-Nevada obligation impacting other areas at Palmarejo, which is scheduled to be reduced to significantly lower levels beginning next September.”

The mine plan in the technical report reflects annual production of approximately 5.9 million ounces of silver and 94,000 ounces of gold over a seven-year mine life. Pre-tax net cash flow of $305 million represents a four-fold increase from the $75 million of pre-tax net cash flow in the last technical report filed for Palmarejo.

Since year-end 2013, Palmarejo’s silver equivalent1 reserves have increased approximately 17% and the silver equivalent1 grade has increased 39% despite using significantly lower metal prices and incorporating mine depletion. The mine plan reflected in the Palmarejo technical report is based on 88.7 million silver equivalent1 ounces of reserves and assumes silver and gold prices of $15.50 per ounce and $1,150 per ounce, respectively, for the next two years followed by longer-term prices of $17.50 per ounce for silver and $1,250 per ounce for gold. Importantly, the mine plan does not include 52.1 million silver equivalent1 ounces of measured and indicated resources and 16.6 million silver equivalent1 ounces of inferred resources which carry a silver equivalent1 grade 7% higher than the reserves. The Company intends to work to further extend the mine life through delineation of these resources and based on the continued drilling success we are having at Guadalupe, at Independencia, and on other nearby targets.


  Life of Mine Economic Analysis 
 Silver Price$15.50 (Sept 2015-2017), $17.50 (2018-2022)
 Gold Price$1,150 (Sept 2015-2017), $1,250 (2018-2022)
 Gross Revenue ($mil)       $1,454      
 Operating Cash Flow ($mil)       $537      
 Capital Expenditures – Guadalupe ($mil)       $76      
 Capital Expenditures – Independencia ($mil)       $81      
 Silver Recovery Rate (2017-2022)        87%     
 Gold Recovery Rate (2017-2022)        90%     
 Pre-Tax Net Cash Flow ($mil)       $305      
 Pre-Tax NPV (10% discount rate) ($mil)       $191      


  Production Schedule
 $ millions2016201720182019202020212022Total
 Ore Tons Milled (000s)1,0431,4821,4871,6511,6401,3064579,444
 Silver Grade (oz/t)4.454.414.895.585.295.163.824.90
 Gold Grade (oz/t)0.0800.0750.0810.0920.0670.0670.0530.075
 Silver Production (oz in 000s)3,9575,6806,3278,0167,5465,8611,51740,137
 Gold Production (oz in 000s)72.699.6108.6137.099.578.721.7633.7

Note: Total includes Sept-Dec 2015.

Operating Cost Assumptions
 November 2015
Technical Report
February 2015
Technical Report
% Change
Ore tons mined (000s) 9,444  6,611  43%
UG mining cost/ton$43.0 $44.8  (4%)
Processing cost/ton$26.4 $27.4  (4%)
Smelting & refining cost/ton$2.1 $1.4  50%
G&A/ton$13.5 $20.3  (33%)
Total operating costs/ton$97.1 $111.4  (13%)


Palmarejo Mineral Reserves and Resources by Area
  Grade (oz/t) Ounces
 Short Tons    SilverGold SilverGold
Underground Reserves:      
Guadalupe5,005,000    4.49    0.071     22,456,000    353,000
Independencia Oeste946,000    5.16    0.096     4,882,000    91,000
Independencia Este3,259,000    5.53    0.078     18,026,000    255,000
Palmarejo  64,000    4.50    0.063     288,000    4,000
Open-Pit Reserves:      
Palmarejo170,000    3.58    0.029     609,000    5,000
Total Proven and Probable Reserves9,444,000    4.90    0.075     46,262,000    707,000
Underground M&I Resources:      
Guadalupe5,592,000    4.46    0.064     24,952,000    360,000
Independencia Oeste283,000    3.86    0.060     1,091,000    17,000
Independencia Este421,000    4.81    0.055     2,026,000    23,000
Total Measured and Indicated Resources6,297,000    4.46    0.064     28,069,000    400,000
Underground Inferred Resources:      
Guadalupe479,000    4.97    0.104     2,381,000    50,000
Independencia Oeste169,000    3.69    0.071     624,000    12,000
Independencia Este1,011,000    4.94    0.081     4,993,000    82,000
Total Inferred Resources1,658,000    4.82    0.087     7,998,000    144,000


Note: Effective August 31, 2015. Assumed metal prices for Mineral Reserves were $15.50 per ounce of silver and $1,150 per ounce of gold for the open pit, Rosario, and lower 76 underground deposits at Palmarejo, and $17.50 per ounce of silver and $1,250 per ounce of gold for Guadalupe and Independencia deposits at Palmarejo. Guadalupe and Independencia reserves also evaluated using $15.50 per ounce of silver and $1,150 per ounce of gold to determine economic viability.  It was determined that substantially all current reserves are economically viable at these lower price assumptions.  Assumed metal prices for Mineral Resources were $19.00 per ounce of silver and $1,275 per ounce of gold. See notes in the Appendix for additional information on mineral reserves and resources.

About Coeur

Coeur Mining is the largest U.S.-based silver producer and a significant gold producer with five precious metals mines in the Americas employing approximately 2,100 people. Coeur produces from its wholly owned operations: the Palmarejo silver-gold mine in Mexico, the San Bartolomé silver mine in Bolivia, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska, and the Wharf gold mine in South Dakota. The Company also has a non-operating interest in the Endeavor mine in Australia in addition to royalties on the Cerro Bayo mine in Chile, the El Gallo complex in Mexico, the Zaruma mine in Ecuador, and the Correnso mine in New Zealand. In addition, the Company has two silver-gold exploration projects - the La Preciosa project in Mexico and the Joaquin project in Argentina. The Company also conducts ongoing exploration activities in Alaska, Argentina, Bolivia, Mexico, and Nevada. The Company owns strategic investment positions in several silver and gold development companies with projects in North and South America.

Cautionary Statement

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding mine life, mining rates, future drilling activity, production, costs, cash flow, margins, and grade. 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 and silver 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 (including those involving third parties), the uncertainties inherent in the estimation of gold and silver ore reserves, changes that could result from Coeur's future acquisition of new mining properties or businesses, reliance on third parties to operate certain mines where Coeur owns silver production and reserves and the absence of control over mining operations in which Coeur or its subsidiaries hold royalty or streaming interests and risks related to these mining operations including results of mining and exploration activities, environmental, economic and political risks of the jurisdiction in which the mining operations are located, the loss of any third-party smelter to which Coeur markets silver and gold, 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 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.

Dana Willis, Coeur’s Director, Resource Geology and a qualified person under Canadian National Instrument 43-101, supervised the preparation of 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. For 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, Canadian investors should refer to the relevant NI 43-101 Technical Report on file 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 www.sec.gov.

Notes:

  1. Silver equivalence assumes 60:1 silver to gold ratio as follows:
Gold OuncesxRatio+Silver Ounces=Silver Equivalent
Ounces
/Short Tons=Silver Equivalent Grade (Oz/Ton)
255,000 60 18,026,000 33,326,000 3,259,000 10.23
353,000 60 22,456,000 43,636,000 5,005,000 8.72
569,000 60 41,653,000 75,793,000 11,235,000 6.75
707,000 60 46,262,000 88,682,000 9,444,000 9.39
499,000 60 28,647,000 58,587,000 6,581,000 8.90


APPENDIX

Total Coeur Proven and Probable Reserves

  Grade (Oz/Ton)  Ounces 
 Short TonsSilverGoldSilverGold 
Proven Reserves      
Rochester89,077,000 0.56 0.004  49,786,000 346,000 
San Bartolomé1,206,000 2.73   3,287,000  
Kensington417,000  0.187  — 78,000 
Endeavor1,323,000 1.82   2,411,000  
Palmarejo802,000 6.29 0.077  5,048,000 62,000 
La Preciosa18,830,000 3.16 0.006  59,534,000 111,000 
Wharf14,802,000  0.032  — 469,000 
Total Proven Reserves126,457,000 0.95  0.008   120,066,000 
1,066,000 
Probable Reserves       
Rochester56,158,000 0.54 0.003  30,418,000 172,000 
San Bartolomé13,337,000 3.20   42,724,000  
Kensington2,986,000  0.185   551,000 
Endeavor1,102,000 2.24   2,469,000  
Palmarejo8,641,000 4.77 0.075  41,214,000 645,000 
La Preciosa21,851,000 2.71 0.004  59,196,000 91,000 
Wharf14,301,000  0.022   312,000 
Total Probable Reserves118,376,000 1.49  0.015   176,021,000 1,771,000 
Proven and Probable Reserves       
Rochester145,235,000 0.55 0.004  80,204,000 518,000 
San Bartolomé14,543,000 3.16   46,011,000  
Kensington3,403,000  0.185   629,000 
Endeavor2,425,000 2.01   4,880,000  
Palmarejo9,444,000 4.90 0.075  46,262,000 707,000 
La Preciosa40,681,000 2.92 0.005  118,730,000 202,000 
Wharf29,103,000  0.027   781,000 
Total Proven and Probable Reserves244,834,000 1.21  0.012   296,087,000 2,837,000 


Total Coeur Measured and Indicated Resources (Excluding Proven and Probable Reserves)

   Grade (Oz/Ton)  Ounces 
  Short TonsSilverGoldSilverGold 
Measured Resources       
Rochester 72,228,000 0.45 0.003 32,565,000 218,000 
Martha       
San Bartolomé       
Kensington 181,000  0.260   47,000 
Endeavor 7,716,000 2.28   17,625,000  
Palmarejo 135,000 4.82 0.052  651,000 7,000 
Joaquin 4,709,000 5.30 0.003  24,966,000 15,000 
La Preciosa 2,305,000 1.40 0.003  3,216,000 7,000 
Wharf 700,000  0.029   20,000 
Total Measured Resources87,974,000   0.900.004 79,023,000 
314,000 
Indicated Resources        
Rochester 100,973,000 0.42 0.003  42,476,000 273,000 
Martha 57,000 13.60 0.018  775,000 1,000 
San Bartolomé 7,033,000 1.91   13,445,000  
Kensington 1,385,000  0.242   335,000 
Endeavor 5,181,000 2.39   12,375,000  
Palmarejo 6,162,000 4.45 0.064  27,418,000 393,000 
Joaquin 6,842,000 4.25 0.004  29,110,000 25,000 
Lejano 631,000 3.09 0.011  1,952,000 7,000 
La Preciosa 4,808,000 1.74 0.004  8,389,000 17,000 
Wharf 5,769,000  0.025   145,000 
Total Indicated Resources138,841,000   0.980.009 135,940,000 
1,196,000 
Measured and Indicated Resources        
Rochester 173,201,000 0.43 0.003  75,041,000 491,000 
Martha 57,000 13.60 0.018  775,000 1,000 
San Bartolomé 7,033,000 1.91   13,445,000  
Kensington 1,566,000  0.244   382,000 
Endeavor 12,897,000 2.33   30,000,000  
Palmarejo 6,297,000 4.46 0.064  28,069,000 400,000 
Joaquin 11,551,000 4.68 0.003  54,076,000 40,000 
Lejano 631,000 3.09 0.011  1,952,000 7,000 
La Preciosa 7,114,000 1.63 0.003  11,605,000 24,000 
Wharf 6,469,000  0.026   165,000 
Total Measured and Indicated Resources226,816,000   0.950.007 214,963,000 1,510,000 


Total Coeur Inferred Resources

  Grade (Oz/Ton)  Ounces  
 Short TonsSilverGoldSilverGold 
Inferred Resources      
Rochester96,039,000 0.42 0.003 40,789,000 263,000  
Martha204,000 4.75 0.005  969,000 1,000  
San Bartolomé66,000 1.68   111,000   
Kensington1,622,000  0.351   570,000  
Endeavor661,000 3.18   2,103,000   
Palmarejo1,658,000 4.82 0.087  7,998,000 144,000  
Joaquin720,000 3.99 0.003  2,873,000 2,000  
Lejano702,000 2.81 0.010  1,972,000 7,000  
La Preciosa1,344,000 1.98 0.004  2,657,000 5,000  
Wharf4,488,000  0.030   134,000  
Total Inferred Resources107,504,000 0.550.010 59,472,000 1,126,000 


Notes to the above mineral reserves and resources:

  1. Effective December 31, 2014, except (a) Palmarejo, effective August 31, 2015, (b) Wharf, effective June 1, 2015, and (c) Endeavor, effective June 30, 2014.
  2. Assumed metal prices for Mineral Reserves were $19.00 per ounce of silver and $1,275 per ounce of gold, except (a) the open pit, Rosario, and lower 76 underground deposits at Palmarejo at $15.50 per ounce of silver and $1,150 per ounce of gold, (b) Guadalupe and Independencia deposits at Palmarejo at $17.50 per ounce of silver and $1,250 per ounce of gold, and (c) Endeavor at $2,200 per metric ton of lead, $2,400 per metric ton of zinc, and $20.00 per ounce of silver. Guadalupe and Independencia reserves also evaluated using $15.50 per ounce of silver and $1,150 per ounce of gold to determine economic viability. It was determined that substantially all current reserves are economically viable at these lower price assumptions.
  3. Assumed metal prices for estimated Mineral Resources were $22.00 per ounce of silver and $1,350 per ounce of gold, except (a) the Independencia and Guadalupe deposits at Palmarejo at $19.00 per ounce of silver and $1,275 per ounce of gold, and (b) Endeavor at $2,200 per metric ton of lead, $2,400 per metric ton of zinc and $20.00 per ounce of silver.
  4. Palmarejo Mineral Reserves and Mineral Resources aggregate the Mineral Reserves and Mineral Resources of the Palmarejo, Guadalupe, and Independencia deposits. There are no Mineral Reserves and Mineral Resources for La Patria. There are no Mineral Resources for the Palmarejo deposit.
  5. 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. The preliminary economic assessment for the re-scoped mine plan at Kensington is preliminary in nature and includes Inferred Mineral Resources, and does not have as high a level of certainty as a plan that was based solely on proven and probable reserves and there is no certainty that the results from the preliminary economic assessment will be realized.
  6. Rounding of tons and ounces, as required by reporting guidelines, may result in apparent differences between tons, grade, and contained metal content.
  7. For details on the estimation of mineral resources and reserves, including the key assumptions, parameters and methods used to estimate the Mineral Resources and Mineral Reserves, Canadian investors should refer to the NI 43-101 Technical Reports for Coeur's properties on file at www.sedar.com.

Conversion Table
1 short ton=0.907185 metric tons
1 troy ounce=31.10348 grams

 


            

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