Coeur Acquires Silver at Broken Hill Mine From Perilya LTD.
September 08 2005 - 6:00PM
PR Newswire (US)
Accretive Transaction Expected to Boost Company's Annual Silver
Production by 17% COEUR D'ALENE, Idaho, Sept. 8
/PRNewswire-FirstCall/ -- Coeur d'Alene Mines Corporation
(NYSE:CDENYSE:TSX:NYSE:CDM), the world's largest primary silver
producer, announced today that its wholly owned Australian
subsidiary has agreed to acquire the silver reserves and production
at the Broken Hill Mine in Australia, which is owned and operated
by Perilya Broken Hill Limited, a wholly owned subsidiary of
Perilya Limited (ASX:PEM). Coeur will pay Perilya US$36.0 million
in cash under the terms of the transaction. The company will
finance the consideration with what it deems to be the most
attractive alternative, which may include available cash, capital
raised through the issuance of additional securities, or some
combination of the two. The transaction is expected to provide
Coeur with an additional 2.3 million ounces of average annual
silver production at an estimated cash cost of approximately
US$2.75 per ounce and 15.0 million ounces of silver contained in
proven and probable reserves. This addition to Coeur's silver
production profile represents a 17 percent increase in its
currently expected 2005 production of 13.5 million ounces of
silver. In combination with Coeur's recently completed acquisition
of silver production from the Endeavor mine, the Perilya
transaction also serves to increase Coeur's estimated annual silver
production in Australia to 3.6 million ounces. "We are excited
about this transaction for a number of reasons," said Dennis
Wheeler, Coeur's Chairman, President, and Chief Executive Officer.
"First and foremost, we expect it will be accretive to the
company's per-share financial and operating results including cash
flow per share, earnings per share, production per share, and
reserves per share. In addition, the transaction represents another
key step in the ongoing transformation of Coeur's asset base to
lower-cost, longer life silver assets that generate substantial
cash flow for the company. This transaction, along with our other
growth initiatives, will enhance our position as the world's
leading primary silver producer. Further -- and as was the case
with our Endeavor transaction -- we do not assume operational
responsibility for the mine. That responsibility remains with the
top-quality management team at Perilya, leaving our staff free to
continue focusing on our current operations and growth
opportunities." Located in New South Wales, Australia, the Broken
Hill Mine is a zinc/lead/silver ore body that has produced
approximately 500 million ounces of silver since its beginnings in
1885, making it one of the most prolific silver producing regions
in the world. The transaction is capped at approximately 24.5
million contained ounces (or 17.2 million payable ounces) of silver
to be mined by Perilya at Broken Hill on Coeur's behalf, providing
Coeur with approximately 10 million ounces of upside to the reserve
base at Broken Hill, representing a 63 percent increase over the
current silver reserve levels at the mine. Mineral Reserves Short
Tons Silver Grade Contained Silver (000s) (oz/ton) Ounces(000s)
Proven Reserves 8,521 1.31 11,134 - Silver Probable Reserves -
Silver 2,998 1.28 3,822 Total Proven and Probable 11,519 1.30
14.955 Mineral Reserves Short Tons Silver Grade Contained Silver
(000s) (oz/ton) Ounces(000s) Measured - Silver 5,655 1.84 10,407
Indicated - Silver 1,742 1.72 3,002 Total Measured and Indicated
7,396 1.81 13,409 Inferred - Silver 3,428 2.17 7,429 Categories of
mineral reserves and resources are per Canadian National Instrument
43-101. Mineral reserves and resources are effective March 31,
2005. Mineral reserves based on a combined cut-off grade of 7% lead
plus zinc. Silver content of the mineral reserves and resources is
tabulated as a by-product. Mineral reserves are not materially
affected by any known environmental, permitting, legal, title,
taxation, socio-political, marketing, or other relevant issues.
Mineral resources are in addition to reserves. (Rounding
differences may occur.) Donald J. Birak, Coeur's Senior Vice
President of Exploration, and Donald Earnest, P.Geo., an
Independent Consultant to Coeur, are the qualified persons, per
Canadian National Instrument 43-101, responsible for preparation of
the scientific and technical information in this press release. Mr.
Birak and Mr. Earnest have reviewed the available data and
procedures and believe the calculation of reserves and resources
was conducted in a professional and competent manner. This press
release shall not constitute an offer to sell or the solicitation
of any offer to buy the any securities of Coeur d'Alene Mines
Corporation, nor shall there be any sale of such securities in any
jurisdiction in which such an offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction. Cautionary Statement This
document contains numerous forward-looking statements within the
meaning of securities legislation in the United States and Canada
relating to the Company's silver and gold mining business. Such
statements are subject to numerous assumptions and uncertainties,
many of which are outside the Company's control. Operating,
exploration and financial data, and other statements in this
document are based on information the Company believes reasonable,
but involve significant uncertainties as to future gold and silver
prices, costs, ore grades, estimation of gold and silver reserves,
mining and processing conditions, currency exchange rates, and the
completion and/or updating of mining feasibility studies, changes
that could result from the Company's future acquisition of new
mining properties or businesses, the risks and hazards inherent in
the mining business (including environmental hazards, industrial
accidents, weather or geologically related conditions), regulatory
and permitting matters, risks inherent in the ownership and
operation of, or investment in, mining properties or businesses in
foreign countries, as well as other uncertainties and risk factors
set out in the Company's filings from time to time with the SEC and
the Ontario Securities Commission, including, without limitation,
the Company's reports on Form 10-K and Form 10-Q. Actual results
and timetables could vary significantly from the estimates
presented. Readers are cautioned not to put undue reliance on
forward-looking statements. The Company disclaims any intent or
obligation to update publicly these forward-looking statements,
whether as a result of new information, future events or otherwise.
Contact: Scott Lamb, Investor Relations VP, Investor Relations
Coeur d'Alene Mines Corporation 208-665-0777 DATASOURCE: Coeur
d'Alene Mines Corporation CONTACT: Scott Lamb, VP, Investor
Relations of Coeur d'Alene Mines Corporation, +1-208-665-0777 Web
site: http://www.coeur.com/
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