Coeur Provides Update on Nevada Unpatented Mining Claims Dispute
August 14 2012 - 8:55AM
Business Wire
Coeur d’Alene Mines Corporation (NYSE:CDE) (TSX:CDM) today
provided an update on recent activities related to a legal dispute
between its subsidiary, Coeur Rochester, Inc. and Rye Patch Gold US
Inc. and its publicly-traded Canadian parent corporation, Rye Patch
Gold Corp. The legal dispute stems from competing asserted
interests in certain unpatented mining claims covering federal
lands near Coeur’s Rochester mining operations following Coeur
Rochester’s inadvertent failure to pay 2011 annual mining claim
maintenance fees.
In late December 2011, the Nevada State District Court enjoined
Rye Patch Gold US Inc. from entering certain active mine areas at
the Rochester operations pending the outcome of a trial scheduled
for November 2012. Although Coeur cannot predict the outcome of the
trial, it believes its claims are superior to those staked by Rye
Patch.
Earlier this year, Rye Patch filed a motion for a preliminary
injunction to prevent Coeur Rochester from entering the disputed
claims. A hearing on the motion was held in late June before the
Special Master, retired U.S. District Judge David W. Hagen, who was
appointed by the Court to assist in addressing certain pre-trial
matters. In a report dated August 6, 2012, the Special Master
issued a recommendation that the Court deny Rye Patch’s motion on
the grounds that Rye Patch did not demonstrate a likelihood of
success on the merits of the case and did not show that it would
suffer irreparable harm if a preliminary injunction were not
granted. The Special Master’s report noted that Rye Patch has not
demonstrated that it has made a discovery of valuable minerals on
any of the disputed claims, which is a critical issue in the
case.
In addition, on August 9, 2012, the Court entered orders
adopting a number of recommendations made by the Special Master
regarding several pending motions, including denying Rye Patch's
motion to dismiss Rye Patch Gold Corp., the publicly-traded parent
company of Rye Patch Gold US Inc., as a party to the litigation.
Rye Patch Gold Corp. must now answer Coeur Rochester’s complaint
and respond to discovery requests. The Court also entered an order
denying Rye Patch’s motion to revoke the appointment of the Special
Master.
Following a $27 million expansion in 2011 to further extend
Rochester’s mine life, the operation is expected to produce 2.6-2.9
million silver ounces and 30,000-35,000 gold ounces in 2012.
Rochester has been in operation for over 26 years and currently
employs approximately 225 people. As of December 31, 2011,
Rochester contained proven and probable reserves of 29.6 million
ounces of silver and 247,000 ounces of gold within 47.3 million
tons at average grades of 0.59 ounce of silver per ton and 0.005
ounce of gold per ton. Based on a detailed review, the Company is
confident that none of these reserves are located on the disputed
claims.
Cautionary Statement
This news release contains forward-looking statements within the
meaning of securities legislation in the United States and Canada,
including statements regarding expected production levels. Such
statements are subject to numerous assumptions and uncertainties,
many of which are outside the control of Coeur, and are based on
information that Coeur believes is reasonable, but involve
significant uncertainties affecting the business of Coeur,
including, but not limited to, future gold and silver prices,
costs, ore grades, estimation of gold and silver reserves, mining
and processing conditions, construction delays and related
disruptions in production, disputed mineral claims, risks and
hazards inherent in the mining business (including environmental
hazards, industrial accidents, weather and geologically related
conditions), permitting and regulatory matters (including
penalties, fines, sanctions, and shutdowns), 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,
in the "Risk Factors" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections of Coeur's
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.
Donald J. Birak, Coeur's Senior Vice President of Exploration
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. 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, please see the 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.
About Coeur
Coeur d’Alene Mines Corporation is the largest U.S.-based
primary silver producer and a growing gold producer. The Company
built and commenced production from three wholly-owned, long-lived
mines between 2008 and 2010: the San Bartolomé silver mine in
Bolivia, the Palmarejo silver-gold mine in Mexico and the
Kensington gold mine in Alaska. Further production has commenced
from a new heap leach pad at Coeur's long-time Rochester
silver-gold mine in Nevada. The Company also owns and operates the
Martha silver-gold mine in Argentina and owns a non-operating
interest in a silver-base metal mine in Australia. Coeur conducts
ongoing exploration activities near and within its operating
properties in Argentina, Mexico, Alaska, Nevada and Bolivia. In
addition, Coeur owns strategic minority shareholdings in seven
silver and gold development companies in North and South
America.
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