Coeur d'Alene Mines Corporation (NYSE:CDE)(TSX:CDM)
produced 3.8 million ounces of silver and 60,775 ounces of gold in
the fourth quarter of 2012 and 18.0 million ounces of silver and an
all-time high 226,491 ounces of gold for the full year 2012. On an
unaudited basis, Coeur expects 2012 metal sales to total $890 -
$900 million and has provided other key financial highlights in
Table 2 below.
Table 1: Fourth Quarter and 2012
Production
(silver ouncesin
thousands)
4Q 2012 4Q 2011
QuarterVariance
2012 2011
YearVariance
Silver Gold
Silver Gold Silver Gold
Silver Gold Silver
Gold Silver Gold
Palmarejo
1,555 19,998 2,690 34,108
(42 %) (41 %)
8,236
106,038 9,042 125,071 (9
%) (15 %)
San Bartolomé 1,343 — 1,997 —
(33 %) n.a.
5,930 — 7,501 — (21 %) n.a.
Rochester 828 12,060 374 1,993 121 % 505 %
2,802 38,071 1,392 6,276 101 % 507 %
Martha
— — 130 144 n.a. n.a.
323 257 530 615
(39 %) (58 %)
Kensington — 28,717 — 13,299
n.a. 116 %
— 82,125 — 88,420 n.a. (7 %)
Endeavor 106 — 112
— (5 %) n.a.
734 — 613 —
20 % n.a.
Total 3,832
60,775 5,303 49,544 (28 %) 23 %
18,025 226,491
19,078 220,382 (6 %) 3 %
Table 2: Key Unaudited 2012E Financial
Highlights
(millions, except average realized prices)
4Q 2012E 4Q 2011A
2012E 2011A Avg. realized price per
ounce - silver $32.52/oz $30.87/oz
$30.92/oz $35.15/oz
Avg. realized
price per ounce - gold $1,709/oz $1,674/oz $1,665/oz $1,558/oz
Sales of metal $202 - $207 $247 $890 - $900 $1,021
Production costs applicable to sales $105 - $115 $109 $450 -
$460 $420
Administrative & general expenses $8 - $10 $9
$34 - $37 $31
Exploration expenses $5 - $7 $8 $26 - $28 $19
Pre-development, care, maintenance and other $(1) - $3 $2 $5
- $10 $19
Capital expenditures $20 - $25 $40 $110 - $120
$120
Fourth Quarter 2012 and Full Year 2012 Production
2012 gold production of 226,491 ounces exceeded Company guidance
due to strong fourth quarter performance from its Rochester silver
and gold operation in Nevada and its Kensington gold mine in
Alaska. 2012 silver production of 18.0 million ounces reflects
significant production growth at Rochester, which was offset by
lower grade ore in the second half of the year at its Palmarejo
silver and gold mine in Mexico and its San Bartolomé silver
operation in Bolivia.
During the fourth quarter of 2012, Palmarejo produced 1.6
million ounces of silver and 19,998 ounces of gold compared with
1.8 million ounces of silver and 23,702 ounces of gold in the third
quarter of 2012. Underground operations at Palmarejo resumed normal
mining rates late in the fourth quarter from both the 108 and 76
zones according to plan after experiencing temporary unfavorable
ground conditions in the upper level of the 76 zone during
September of 2012. Silver grades from open pit operations are
expected to increase throughout 2013 as mining transitions to the
new phase of the pit.
2013 Guidance
Coeur estimates that it will produce 18.0 - 19.5 million ounces
of silver in 2013 while gold production is expected to increase
significantly in 2013 compared to 2012 to 250,000 - 265,000 ounces
due to higher production levels at the Company's Kensington and
Rochester operations.
2013 cash operating costs1 after by-product credit (assuming the
current gold price level of approximately $1,650 per ounce), are
expected to be $8.00 - $9.00 per silver ounce. Kensington's 2013
cash operating costs1 are expected to decline significantly to $900
- $950 per gold ounce. Higher silver and gold production and
corresponding lower cash operating costs per ounce of silver and
gold are expected in the second half of 2013 compared to the first
half of the year.
Table 3: 2013 Production
Outlook
(silver ounces
inthousands)
Country Silver
Gold Palmarejo Mexico
7,700-8,300 98,000-105,000
San
Bartolomé Bolivia 5,300-5,700
— Rochester
Nevada, USA 4,500-4,900 44,000-46,000
Endeavor
Australia 500-600
— Kensington
Alaska, USA — 108,000-114,000
Total 18,000-19,500
250,000-265,000
The Company expects Palmarejo to produce 7.7 - 8.3 million
ounces of silver and 98,000 - 105,000 ounces of gold in 2013, with
30% - 40% of the estimated full year mill throughput of
approximately 2.2 million tons derived from underground mining and
the remainder from the open pit. Approximately 60% of the
underground ore tons mined are expected to come from the 76 Clavo
zone, including the lower area, which has been expanded at depth
from definition drilling completed in 2012, and the remainder from
the 108 Clavo zone.
Rochester Expansion
The Company plans a significant expansion of its Rochester
operation in 2013. As a result, silver production at Rochester is
expected to increase to 4.5 - 4.9 million ounces in 2013 compared
to 2.8 million ounces in 2012. 2013 gold production is expected to
increase to 44,000 - 46,000 ounces compared to 38,071 ounces in
2012.
The Company estimates 2013 capital expenditures for Rochester to
be $30 - $35 million to expand production. The Company is investing
approximately $4 million during 2013 to expand the capacity of the
primary crusher from nine million tons to the currently permitted
rate of 14 million tons annually. In addition, subject to receipt
of final permitting, the Company expects to nearly double the
mine's remaining heap leach capacity on existing pads during 2013
to approximately 67 million tons at an estimated capital cost of
approximately $15 million. This increased capacity is necessary to
accommodate higher production rates of ore coming from historic
stockpiles.
The Company also is pursuing an additional estimated $10 million
expansion, which is expected to provide 40 million tons of
additional pad capacity beginning in 2016, to further extend the
mine life and increase production rates from historic stockpiles.
Permitting and engineering work for this additional expansion will
continue during 2013.
These planned expansions represent high return investment
opportunities and the Company believes they will not require any
resolution to the existing claims dispute. Following the
implementation of the expansion opportunities described above, the
Company plans to pursue other longer-term expansion opportunities
at Rochester that are focused on mining and processing of the
existing mineralized material, which totaled 251.5 million short
tons in measured and indicated resources and 40.5 million short
tons in inferred resources as of December 31, 20112.
The Company expects to report audited financial results and
complete operational results for the fourth quarter and full year
on or about Thursday, February 21, 2013.
About Coeur
Coeur d'Alene Mines Corporation is the largest U.S.-based
primary silver producer and a growing gold producer. The Company
has four precious metals mines in the Americas generating strong
production, sales and cash flow in continued robust metals markets.
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 and the
Kensington gold mine in Alaska. The Company also owns a
non-operating interest in a low-cost mine in Australia, and
conducts ongoing exploration activities in Mexico, Argentina,
Nevada, Alaska and Bolivia. Additional information can be accessed
through the Company's website at www.coeur.com.
Cautionary Statement
This news release contains forward-looking statements within the
meaning of securities legislation in the United States and Canada,
including statements regarding anticipated Rochester expansion,
improvements in the Palmarejo operations, operating results,
production levels and operating costs. 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 permits necessary for the planned Rochester expansion may
not be obtained, the risks and hazards inherent in the mining
business (including environmental hazards, industrial accidents,
weather or geologically related conditions), changes in the market
prices of gold and silver, the uncertainties inherent in Coeur's
production, exploratory and developmental activities, including
risks relating to permitting and regulatory delays and disputed
mining claims, ground conditions, grade variability, any future
labor disputes or work stoppages, 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, 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 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.
Current mineralized material estimates include disputed and
undisputed claims at Rochester. While the Company believes it holds
a superior position in the ongoing claim dispute, the Company
believes an adverse legal outcome would cause it to modify
mineralized material estimates. 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.
Non-U.S. GAAP Measures
We supplement the reporting of our financial information
determined under United States generally accepted accounting
principles (U.S. GAAP) with certain non-U.S. GAAP financial
measures, including cash operating costs. We believe that these
adjusted measures provide meaningful information to assist
management, investors and analysts in understanding our financial
results and assessing our prospects for future performance. We
believe these adjusted financial measures are important indicators
of our recurring operations because they exclude items that may not
be indicative of, or are unrelated to our core operating results,
and provide a better baseline for analyzing trends in our
underlying businesses. We believe cash operating costs is an
important measure in assessing the Company's overall financial
performance.
1. Cash operating costs per ounce is a
non-GAAP measure. In the Company's quarerly and year-end reporting,
the Company provides a reconciliation of cash operating costs to
production costs, the most comparable GAAP measure.
2. See detail of measured and indicated
resources and inferred resources in the table in the Appendix.
APPENDIX
Table 4: Mineral
Reserves and Resources for the Rochester Mine, December 31,
2011
Short Tons(000)
Grade(Oz/Ton)
Contained Ounces
Silver Gold
Silver(000)
Gold
Proven & Probable Reserves
Proven 31,532 0.59 0.006 18,681 178,800
Probable
15,747 0.69 0.004 10,892
68,200
Total Proven & Probable Reserves
47,280 0.63 0.005
29,573 247,000 Measured &
Indicated Resources Measured 131,085 0.46 0.004 60,586
500,500
Indicated 120,387 0.43
0.003 51,762 366,300
Total Measured &
Indicated Resources 251,472
0.45 0.003 112,349
866,800 Total Inferred Resources 40,543
0.58 0.003
23,619 122,400
Notes:
1. Metal prices used for Mineral Reserves were $23 per ounce
of silver and $1,220 per ounce of gold. 2. Mineral Resources are in
addition to Mineral Reserves and have not demonstrated economic
viability. 3. Current Mineral Resources were inclusive of disputed
and undisputed claims at Rochester. While the Company believes it
holds a superior position in the ongoing claim dispute, the Company
believes an adverse legal outcome would cause it to modify Mineral
Resources. 4. Rounding of short tons and troy ounces, as required
by reporting guidelines may result in apparent differences between
tons, grade and contained metal content. 5. For details on the
estimation of Mineral Resources and Reserves for Rochester, please
refer to the Technical Report on file at www.sedar.com.
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