Coeur Mining, Inc. (“Coeur” or the “Company”)
(NYSE: CDE) is pleased to announce that it has entered into a
definitive agreement (the “Agreement”) to acquire a property
package adjacent to its Rochester operation consisting of the
Lincoln Hill Project, Wilco Project, Gold Ridge Property and other
nearby claims (collectively, the “Projects”) from Alio Gold
Inc. (“Alio”) (TSX, NYSE AMERICAN: ALO). Under the terms of
the agreement, Coeur will pay total consideration of $19 million in
the form of its common stock for the Projects.
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The Projects are adjacent to Coeur’s Rochester open-pit, heap
leach mine in northern Nevada, providing significant operational
synergies. The principal asset is the Lincoln Hill Project, which
is a high-grade, open-pit gold-silver development project located
approximately four miles west of Rochester. Lincoln Hill has a
historical measured and indicated resource totaling 364,000 ounces
of gold and 10.2 million ounces of silver contained in 32.3 million
tons (29.3 million metric tonnes) of mineralized material, as well
as an additional 255,000 ounces of gold and 8.2 million ounces of
silver in inferred resources1.
The Wilco Project is a gold-silver exploration project that
covers approximately 8,900 acres (approximately 3,600 hectares)
with a historical measured and indicated resource of 1.3 million
ounces of gold and 12.0 million ounces of silver contained in 125.8
million tons (114.1 million metric tonnes) of mineralized material.
The Wilco Project also has an additional 541,000 ounces of gold and
6.1 million ounces of silver in inferred resources1.
In total, subject to closing, the Projects will more than double
Coeur’s land position at Rochester from roughly 16,300 acres
(approximately 6,600 hectares) to over 40,300 acres (approximately
16,300 hectares).
Strategic Rationale
- Consistent with Company’s strategy of
growing its production and cash flow with the addition of low-risk,
high-quality and high-return assets
- Ability to leverage Coeur’s existing
infrastructure, workforce and expertise at its Rochester mine,
which the Company has operated for over 30 years. With the
completion of the planned crusher expansion and Stage VI leach pad
expected in 2021 at Rochester, along with additional permitting,
Lincoln Hill is expected to become a source of higher-grade,
low-cost production capable of bolstering future cash flow and
further extending Rochester’s mine life
- Lincoln Hill gold average resource
grade is more than four-times higher than Rochester’s current
grade1
- Property package offers significant
low-risk, low-cost exploration potential
“The acquisition of this property package from Alio represents a
unique opportunity to bolster our Rochester operation in a manner
that satisfies all our acquisition criteria,” said Mitchell J.
Krebs, President and Chief Executive Officer of Coeur. “The Lincoln
Hill Project provides higher-grade ounces located near Rochester’s
infrastructure, which should allow us to generate high returns,
higher margins and strong cash flow with little incremental
capital. The Wilco and Gold Ridge projects provide additional
exploration upside. By consolidating this land position, we look
forward to conducting regional exploration in an area with known
mineralization that has received little attention
historically.”
Transaction Summary
Closing of the acquisition is anticipated in the fourth quarter
of 2018, subject to customary regulatory approvals and other
conditions. Transfer of the Wilco Project to Coeur is subject to a
30-day right of first refusal in favor of a third party.
Under terms of the Agreement, total consideration will be $19.0
million, paid in the form of Coeur common stock (the
“Shares”), upon closing of the acquisition. The number of
Coeur shares to be issued will be calculated based on a
volume-weighted average stock price for the five (5) trading day
period ending on the third trading day preceding the closing. Coeur
anticipates that the issuance of the Shares will be exempt from the
registration requirements under the Securities Act of 1933, as
amended, pursuant to Section 4(a)(2) thereof. Pursuant to the
Agreement, Coeur is required to file with the Securities and
Exchange Commission a registration statement on Form S-3 or a
supplement to its existing registration statement on Form S-3 (the
“Registration Statement”) to cover resales of the Shares after the
closing of the acquisition.
Coeur’s legal advisors are Perkins Coie LLP and Gibson, Dunn
& Crutcher LLP. Alio’s legal advisors are Erwin Thompson
Faillers, and Blake, Cassels & Graydon LLP.
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 expectations regarding the acquisition of the Projects
and the expected benefits thereof, operations at the Rochester mine
and exploration efforts. 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 benefits of the transaction are not achieved on a
timely basis or at all, 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, silver, lead and zinc 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 production, 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 or 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 Canadian National Instrument 43-101,
approved the scientific and technical information in this news
release. In addition to information provided herein, 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 Reports for each of Coeur's properties as filed on SEDAR
at www.sedar.com.
Notes
1. For additional information regarding historical resources for
the Projects, please refer to resource tables in this news
release.
Lincoln Hill Resource Estimates
Lincoln Hill Measured & Indicated
Resources (Metric Measurement)
Measured Indicated Cutoff Grade Tonnes
Grade
(g/t) Ounces (x 1,000) Tonnes
Grade (g/t) Ounces (x
1,000) AuEq (g/t) (x 1,000)
Gold Silver Gold
Silver (x 1,000) Gold
Silver Gold
Silver Oxide 0.10 3,805 0.42 11.01 51 1,347 19,673
0.37 9.35 234 5,914 Sulfide 0.20 406 0.50
18.81 7 246 5,427 0.41
15.71 72 2,741
Total
4,211 0.43 11.76
58 1,592 25,100
0.38 10.73 306
8,655
Lincoln Hill Inferred Resources (Metric
Measurement)
Inferred Cutoff
Grade Tonnes
Grade (g/t) Ounces (x
1,000) AuEq (g/t) (x 1,000)
Gold Silver Gold
Silver Oxide 0.10 8,802 0.26 7.87 74 2,227
Sulfide 0.20 12,020 0.47 15.36
182 5,936
Total 20,822
0.38 12.19 255
8,163
Notes to Mineral Resource Estimates
Coeur is not treating these historical estimates as current
and has not completed sufficient work to classify the historical
estimate as current mineral resources for Coeur’s purposes. Coeur's
qualified person will review and verify the scientific and
technical information, as well as complete the other work necessary
for purposes of classifying current mineral resources and/or
preparing a 43-101 technical report, including validation of data
quality, resource model accuracy, and costs used in resource
cutoffs.
1. Source: May 21, 2014 Preliminary Economic Assessment
Technical Report – Rye Patch Gold Corp., Lincoln Hill Property,
Pershing County, Nevada.
2. Mineral resources are reported at a gold equivalent grade
based on a $1,350 per ounce gold selling price and a $22 per ounce
silver selling price. Assumes a gold cutoff grade of 0.01 grams per
tonne for oxide and 0.2 grams per tonne for sulfide.
Wilco Project Resource Estimates
Wilco Project Measured & Indicated
Resources (Metric Measurement)
Measured Indicated Cutoff Grade Tonnes
Grade
(g/t) Ounces (x 1,000) Tonnes
Grade (g/t) Ounces (x
1,000) AuEq (g/t) (x 1,000)
Gold Silver Gold
Silver (x 1,000) Gold
Silver Gold
Silver Oxide 0.10 16,944 0.36 3.11 198 1,693 55,563
0.27 2.05 478 3,659 Sulfide 0.20 8,171 0.50
5.26 130 1,382 33,465 0.44
4.88 471 5,252
Total
25,115 0.41 3.81
328 3,076 89,028
0.33 3.11 950
8,911
Wilco Project Inferred Resources
(Metric Measurement)
Inferred Cutoff
Grade Tonnes
Grade (g/t) Ounces (x
1,000) AuEq (g/t) (x 1,000)
Gold Silver Gold
Silver Section Line Variable 17,189 0.47 5.28
258 2,917 Colado Variable 35,410 0.25
2.80 284 3,184
Total
52,599 0.32 3.61
541 6,100
Notes to Mineral Resource Estimates
Coeur is not treating these historical estimates as current
and has not completed sufficient work to classify the historical
estimate as current mineral resources for Coeur’s purposes. Coeur's
qualified person will review and verify the scientific and
technical information, as well as complete the other work necessary
for purposes of classifying current mineral resources and/or
potentially preparing a 43-101 technical report, including
validation of data quality, resource model accuracy, and costs used
in resource cutoffs.
1. Source: June 27, 2012 Technical Report – Rye Patch Gold
Corp., Wilco Project, Pershing County, Nevada.
2. Mineral resources are reported at a gold equivalent grade
based on a $1,200 per ounce gold selling price and a $20 per ounce
silver selling price. Assumes a gold cutoff grade of 0.01 grams per
tonne for oxide and 0.2 grams per tonne for sulfide.
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Coeur Mining, Inc.Paul DePartout, Director, Investor
RelationsPhone: (312) 489-5800www.coeur.com
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