Coeur Mining, Inc. (the “Company” or “Coeur”) (NYSE: CDE) (TSX:
CDM) announced today it has settled the outstanding claims dispute
at its Rochester silver and gold mine in Nevada with Rye Patch Gold
US Inc. and Rye Patch Gold Corp. (“Rye Patch”) for $10 million in
cash plus a 3.4% net smelter royalty (“NSR”) covering 39.4 million
silver equivalent ounces of net metal sales. In exchange, Rye Patch
will transfer its mining claims involved in the dispute to Coeur
Rochester, Inc., a wholly-owned subsidiary of Coeur. The settlement
transactions are expected to close by June 28, 2013, and are not
subject to any significant external closing conditions.
This NSR is payable from Rochester production and sales
beginning January 1, 2014 and is expected to be completed in
approximately four years. There is no minimum payment obligation
under the NSR.
As part of the settlement, Coeur also granted Rye Patch the
option to acquire Coeur’s Blue Bird patented, federal mining claim,
which is situated two miles west of Rochester and is adjacent to
Rye Patch’s Lincoln Hill exploration property. This claim is about
19.5 acres in size and is not strategic to the Company’s Rochester
operation. Rye Patch has until 10 days after closing to exercise
the option to acquire Blue Bird.
“Although we remain confident in our legal position, we believe
our stockholders are best served by achieving a commercial solution
to this ongoing litigation,” stated Mitchell J. Krebs, Coeur’s
President and Chief Executive Officer. “Rochester has the potential
to once again become one of the world’s great silver and gold
operations. It’s unfortunate that this claims dispute arose in late
2011, but we’re pleased to have it behind us so we can focus on
realizing the full potential of this asset.”
The Company expects to announce its plans to further expand
Rochester production rates and anticipates providing an updated
silver and gold reserve estimate later in 2013.
As of December 31, 2012, Rochester’s proven and probable
reserves totaled 79.9 million tons containing approximately 44.9
million ounces of silver and 308,000 ounces of gold. In addition to
these reserves, Rochester reported year-end measured and indicated
resources of 264.3 million tons containing 120.7 million ounces of
silver and 865,000 ounces of gold. Inferred resources totaled an
additional 45.6 million tons containing 27.2 million ounces of
silver and 123,000 ounces of gold. (Please refer to the Appendix
Table for related grades for mineral reserves and resources.)
In addition to these in-situ reserves and resources, Coeur
estimates approximately 150 million tons of stockpile material at
Rochester. These stockpiles represent historic waste rock generated
over the past 26 years of mining activity at Rochester. Due to
substantially higher silver and gold prices today compared to when
the stockpile material was initially mined, Coeur believes the
stockpiles represent an excellent, low-cost opportunity to add to
the Company’s reserves. Accordingly, Coeur commenced drilling and
sampling in 2012 to quantify this potential and this program
continues in 2013. As of December 31, 2012, 34.2 million tons of
Rochester’s proven and probable reserves, 3.3 million tons of
measured and indicated resources and 5.6 million tons of inferred
resources were derived from stockpile material. To date, drilling
has taken place on just two of six historic stockpiles.
Rochester produced 2.8 million ounces of silver and 38,066
ounces of gold in 2012 at average cash operating costs of $9.62 per
silver ounce.
About Coeur
Coeur Mining, Inc. 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. 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 has a
non-operating interest in the Endeavor mine in Australia. In
addition, the Company has two silver-gold feasibility stage
projects – the La Preciosa project in Mexico and the Joaquin
project in Argentina. The Company also conducts ongoing exploration
activities in Mexico, Argentina, Nevada, Alaska and Bolivia. The
Company owns strategic investment positions in eight silver and
gold development companies with projects in North and South
America.
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 operating results,
production levels, mineral reserve growth, exploration results, and
planned expansions. 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, 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,
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.
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.
APPENDIX Table 1: Rochester Mineral
Reserves and Resources at Year-End 2012
Mineral Reserves - Year-end 2012
Short
Tons
Ave Grade
(oz/ton)
Contained Ozs
(000)
(000)
Ag
Au
Ag
Au
Rochester deposit in-situ Proven and Probable 45,733
0.60 0.005 27,262 227 Rochester area stockpile Proven and Probable
34,190 0.52 0.002 17,634 81
Total Proven and Probable
in-situ 79,923 0.56 0.004 44,896
308 Mineral Resources (Exclusive of Mineral
Reserves) - Year-end 2012
Short
Tons
Ave Grade
(oz/ton)
Contained Ozs
(000)
(000)
Ag
Au
Ag
Au
Rochester deposit in-situ Measured and Indicated 220,187 0.44 0.003
97,070 762 Inferred 31,507 0.64 0.003 20,288 88 Nevada Packard
deposit in-situ Measured and Indicated 40,773 0.53 0.002 21,510 96
Inferred 8,569 0.45 0.003 3,836 23 Rochester area stockpile
Measured and Indicated 3,323 0.64 0.002 2,137 7 Inferred 5,567 0.55
0.002 3,077 12
Total Mineral Resources Measured and
Indicated 264,283 0.46 0.003
120,717 865 Inferred
45,643 0.60 0.003
27,201 123
Footnotes to the Mineral Reserves and Resources Table: 1.
Metal prices used for mineral reserves were $27.50 per ounce
of silver and $1,450 per ounce of gold. 2. Metal prices used for
mineral resources were $33.00 per ounce of silver and $1,700 per
ounce of gold. 3. Mineral resources are in addition to mineral
reserves and have not demonstrated economic viability. 4. Rounding
of tons and ounces, as required by reporting guidelines, may result
in apparent differences between tons, grade and contained metal
content.
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