Estimated NAV5% more than doubles from
potential impact of new technology and re-scoped mine plan
Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today
released a re-scoped mine plan and preliminary economic assessment
(“PEA”) for its Rochester silver-gold mine in Nevada. The PEA,
which will be included in a NI 43-101 Technical Report expected to
be filed on March 5, 2018, incorporates the positive economic
impact expected from the potential addition of a high pressure
grinding roll (“HPGR”) to Rochester’s crushing circuit in early
2019 at an estimated cost of approximately $20 million. In
addition, the PEA reflects lower projected capital expenditures
related to the planned construction of a larger scale, more
efficient crusher expected to include a second HPGR unit, beginning
in 2020.
The introduction of HPGR technology has the potential to
increase Rochester’s silver recoveries from 61% over 20 years to
70% in just over two years, significantly improving the mine’s
economics. The re-scoped mine plan incorporates inferred material
in the open pit, thereby reducing Rochester’s strip ratio by more
than half from 0.8:1 to less than 0.4:1. Coeur plans to finalize
engineering of the potential HPGR addition in the coming months and
complete infill drilling over the next three years with the goal of
upgrading this inferred material to reserves.
The PEA reflects the following improvements compared to
Rochester’s current NI 43-101 Technical Report filed in early
2017:
- More than doubling Rochester’s NAV5%
from $280 million to $609 million
- 122% increase in total pre-tax life of
mine cash flows from $431 million to $955 million
- Marked increase in anticipated pre-tax
cash flow margin from 19% to 31%
- Further extension of Rochester’s mine
life out to 2038
“The implementation of this technology should be a game-changer
for Rochester’s costs, margins, cash flows, mine life and net asset
value,” said Mitchell J. Krebs, Coeur’s President and Chief
Executive Officer. “In 2017, Rochester’s costs per silver
equivalent1 ounce were $13.08. During the initial ten years after
adding this HPGR technology, costs are expected to decline by over
20% to less than $10.00 per silver equivalent1 ounce, and average
annual pre-tax cash flow is expected to be $48 million. As a
result, we believe this investment and this technology can generate
high returns and unlock significant value for our
stockholders.”
Comparison of the 2017 Technical Report
and 2018 PEA Life of Mine (“LOM”) Economic Analyses
February 2017Technical
Report
February 2018PEA
Estimated Mine Life 2031
2038 PROVEN & PROBABLE RESERVES
Mineralized material tons tons (000s) 244,804
-
Mineralized material gold grade oz/t 0.003
- Mineralized
material silver grade oz/t 0.46
-
MEASURED & INDICATED RESOURCES Mineralized material tons
tons (000s) - 277,151 Mineralized material gold grade oz/t - 0.003
Mineralized material silver grade oz/t - 0.44
INFERRED RESOURCES Mineralized material tons tons (000s) -
74,632 Mineralized material gold grade oz/t - 0.002 Mineralized
material silver grade oz/t - 0.38
METALLURGICAL RECOVERIES Metallurgical recovery gold % 92%
92% Metallurgical recovery silver % 61% 70%
REVENUE Gold price (2018 - LOM) $/oz $1,250 $1,250 Silver
price (2018 - LOM) $/oz $17.50 $17.50 Gross revenue $M
$2,225 $3,129
OPERATING COSTS Mining $M ($549)
($602) Crushing/Processing $M ($613) ($904) General and
administrative $M ($135) ($174) Smelting and refining $M ($20)
($29) Corporate management fee $M ($35) ($45) Net proceeds tax $M
($43) ($69) Royalties $M $0 $0 Total operating cost $M ($1,394)
($1,823) Cost per silver equivalent ounce1 (71.4:1) $/oz $10.97
$10.20 Cost per silver equivalent ounce1 (60:1) $/oz
$11.79 $10.85
CASH FLOW Operating cash flow $M $831
$1,306 Capital expenditures $M ($387) ($351) Royalties and other
$M ($12) $0
Total pre-tax cash flow
$M $431 $955 Average
annual pre-tax cash flow $M $33
$48 Project pre-tax NPV (5% discount rate)
$M $280 $609 Notes to the
above economic analyses: a. February 2018 PEA is effective
February 26, 2018 and the February 2017 Technical Report is
effective December 31, 2016. b. Assumed metals prices for estimated
February 2018 Mineral Resources were $20.00 per ounce of silver and
$1,400 per ounce of gold. Assumed metal prices for estimated 2016
year-end Mineral Reserves were $17.50 per ounce of silver and
$1,250 per ounce of gold and for estimated year-end Mineral
Resources were $19.00 per ounce of silver and $1,275 per ounce of
gold. c. Mineral Resources are in addition to Mineral Reserves and
do not have demonstrated economic viability. Inferred Mineral
Resources are considered too speculative geologically to have the
economic considerations applied to them that would enable them to
be considered for estimation of Mineral Reserves, and there is no
certainty that the Inferred Mineral Resources will be realized. d.
Rounding of tons and ounces, as required by reporting guidelines,
may result in apparent differences between tons, grade, and
contained metal content. e. For details on the estimation of
mineral reserves, mineral resources, and inferred mineral
resources, including the key assumptions, parameters and methods
used to estimate the Mineral Reserves, Mineral Resources, and
Inferred Mineral Resources, Canadian investors should refer to the
2017 NI 43-101 Technical Report on file at www.sedar.com as well as
the 2018 Technical Report, including the PEA, expected to be filed
March 5, 2018. f. The Mineral Reserves silver equivalent cut-off
grade equals 0.49 oz/t and the gold multiplier equals 109. The gold
multiplying factor for silver equivalent is based on: [($Price Au -
$Refining Au) / ($Price Ag - $Refining Ag)] x [(%Recovery Au) /
(%Recovery Ag)]. The Mineral Resources cut-off grade equals 0.40
oz/t and the gold multiplier equals 103. g. Rounding of short tons,
grades, and troy ounces, as required by reporting guidelines, may
result in apparent differences between tons, grades, and contained
metal contents. h. Mineral Reserves are contained within the
Measured and Indicated pit designs, or in stockpiles are supported
by a plan featuring variable throughput rates, stockpiling and
cut-off optimization. The PEA plan is contained within the
Measured, Indicated and Inferred pit design and has a different
mining sequence, variable production rate and an alternative
cut-off grade as described in footnotes b, e & f.
The PEA for the re-scoped mine plan is preliminary in nature and
includes inferred mineral resources, and does not have as high a
level of certainty as a plan based solely on proven and probable
reserves. 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 results from the
preliminary economic assessment will be realized should the Company
decide to proceed with the re-scoped mine plan. This decision has
not yet been made. Coeur expects to continue evaluating and
optimizing the HPGR option and expects to make a development
decision in early 2019.
About Coeur
Coeur Mining, Inc. is a well-diversified, growing precious
metals producer with six mines in the Americas employing
approximately 2,300 people. Coeur’s wholly-owned continuing
operations include the Palmarejo silver-gold complex in Mexico, the
Silvertip silver-zinc-lead mine in British Columbia, the Rochester
silver-gold mine in Nevada, the Kensington gold mine in Alaska, and
the Wharf gold mine in South Dakota. The sale of the Company’s San
Bartolomé silver mine in Bolivia is expected to be completed in
early 2018. In addition, the Company owns the La Preciosa project
in Mexico, a silver-gold exploration stage project. Coeur conducts
exploration activities in 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 the anticipated installation of high
pressure grinding roll units and planned construction of a larger
scale, more efficient crusher as well as anticipated capital
expenditures, recoveries, strip ratios, costs, revenues, asset
values, margins, cash flows, value creation and mine life. 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 risk that the anticipated installation of high
pressure grinding roll units does not occur and the anticipated
benefits thereof are not attained on a timely basis or at all, the
risk that planned drilling programs may be curtailed or canceled
due to budget constraints or other reasons, the risk that
anticipated cost reductions are not attained, 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, the uncertainties inherent in the estimation of gold and
silver reserves, 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 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 report on Form 10-K. 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 Canadian National Instrument 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. 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
Technical Report for Rochester expected to be filed March 5, 2018
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 1. For purposes of silver equivalence, metals prices
of $17.50 per ounce silver and $1,250 per ounce gold were used,
except where noted as silver equivalence assuming a 60:1
silver-to-gold ratio.
Conversion Table
1 short ton = 0.907185 metric tons 1 troy ounce
= 31.10348 grams
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180226005455/en/
Coeur Mining, Inc.Courtney Lynn, Vice President, Investor
Relations and TreasurerPhone: (312) 489-5800www.coeur.com
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