Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today
announced initial reserve and updated resource estimates, based on
drilling results received through October, for its Silvertip
silver-zinc-lead mine (“Silvertip”) located in northern British
Columbia. The Company also provided a reserve-based mine plan and
economic analysis underpinned by these estimates. A technical
report in support of the information described herein and prepared
in accordance with National Instrument 43-101 (“NI 43-101”) will be
filed on SEDAR at www.sedar.com within 45 days of this release.
“We are pleased with the successful conversion of a large
portion of the resource to an initial reserve and related mine plan
at Silvertip,” said Mitchell J. Krebs, Coeur’s President and Chief
Executive Officer. “We look forward to continuing our exploration
efforts to expand the size of this prospective, high-grade deposit
and further extend the mine life. In the near-term, we remain
focused on optimizing the processing plant as well as achieving a
sustainable level of mining and processing activities, which is
reflected in this initial mine plan. We have made substantial
progress over the past fourteen months since acquiring Silvertip
and will carry that momentum into 2019. Silvertip has enhanced our
geographic and political risk profile and is expected to be a
long-term source of high-margin cash flow. We remain excited about
its potential and its evolution into one of the Company’s
cornerstone assets.”
Summary Highlights
- Initial proven and probable reserve of
1.6 million tonnes (1.8 million tons), including 48.2 million
silver equivalent (“AgEq”)1 contained ounces at an average AgEq1
grade of 930 grams per tonne (“g/t”) (27.13 ounces per ton
(“oz/t”))
- Approximately 15.0 million ounces of
silver, 292.7 million pounds of zinc and 198.7 million pounds of
lead
- 14% increase in companywide AgEq1
reserves2 and 13% increase in companywide AgEq1 reserve grade2
- Approximately 58% of resource tonnage
converted to reserves3
- Additional 1.2 million tonnes (1.3
million tons) of measured and indicated resources and 0.5 million
tonnes (0.6 million tons) of inferred resources, conveying
potential for further resource growth and mine life extensions
- Approximately 18% increase in total
resource4 since Coeur acquired the asset in October 2017
- Measured and indicated resource of
approximately 28.4 million AgEqOz1 at an average grade of 752 g/t
(21.94 oz/t)
- Inferred resource of approximately 14.7
million AgEqOz1 at an average grade of 867 g/t (25.28 oz/t)
- Initial mine life of 4.5 years based on
proven and probable reserves, representing approximately 49% of the
total estimated resource4
- Production rate of approximately 1,000
mtpd (1,100 tpd)
- Approximately 24% of reserve-based mine
plan utilizes long hole stope mining
- Expected average annual production of
approximately 8.2 million AgEqOz1, including 2.9 million ounces of
silver, 45 million pounds of zinc and 37 million pounds of
lead
- Total capital costs of $44 million to
support the continued acceleration of underground development
activity and mill upgrades
- Initial pre-tax cash flow of $164
million
- Initial pre-tax NAV5% of $147
million
Life of Mine Economic Analysis and Assumptions
Operational Overview
Total Ore Production M tonnes
1.6 Initial Mine Life Years 4.5 Production Rate mtpd 1,000
Average Annual Production Silver Equivalent M oz AgEq 8.2
Silver M oz Ag 2.9 Zinc M lbs Zn 45 Lead M lbs Pb 37
Average
Head Grade Silver Equivalent g/t AgEq 930 Silver g/t Ag 289
Zinc % Zn 8.2% Lead % Pb 5.6%
Average Metallurgical
Recoveries Silver % 88% Zinc % 90% Lead % 92%
Economic Overview
Metal Prices Silver $/oz $17.00 Zinc $/lb $1.25 Lead
$/lb $1.00
Economics Gross
Revenue $M $504 Operating Cash Flow $M $224 Capital Expenditures $M
$44 Pre-Tax Net Cash Flow $M $164 Pre-Tax NPV (5%) $M $147
After-Tax NPV (5%) $M $125
Cost Assumptions
Average Operating Costs Mining costs $/tonne
$68.77 Processing costs $/tonne $58.20 G&A $/tonne $46.52
Cash Costs5 $/oz AgEq $10.96
AISC5
$/oz AgEq $12.58
Notes to Life of Mine Economic Analysis
and Assumptions:
a.
A technical report prepared in accordance
with NI 43-101 will be filed on SEDAR at www.sedar.com within 45
days of this release.
b. Rounding of tons and ounces, as required by reporting
guidelines, may result in apparent differences between tons, grade,
and contained metal content. c. After-Tax NPV (5%) based on
Provincial Mining Tax of 13% and Canadian Income Tax of 27%
(Canadian rate of 15% and British Columbia rate of 12%). Provincial
Mining Tax is tax deductible in calculating income tax expense.
Analysis assumes usage of Coeur’s net operating losses.
Background and Recent Developments
The Company acquired Silvertip in October 2017 for initial
consideration of $200 million. Additional consideration up to $50
million is payable contingent upon achieving specific future
permitting and exploration milestones at Silvertip.
The first milestone payment of $25 million is contingent upon
the receipt of a permit expansion allowing for a sustained mining
and milling rate of 1,000 mtpd (1,100 tpd) on a year-round basis.
The Company has been working closely with regulators and remains on
track to receive approval of the permit amendment application in
early 2019. The Company will make the $25 million payment (75% cash
/ 25% stock) within fifteen business days of receiving approval.
The second milestone payment of up to $25 million is contingent
upon the amount of resource tonnes added as of December 31, 2019,
with $5 million payable for a total resource of at least 2.5
million tonnes and $5 million for each additional increment of 0.3
million tonnes up to 3.7 million tonnes.
Coeur commenced mining and processing activities at Silvertip in
March 2018 and declared commercial production on September 1, 2018.
The Company completed its initial drilling program in July 2018 and
commenced a second phase drilling program focused on resource
conversion and expansion drilling. Year-to-date6, the Company has
invested approximately $11 million in exploration at Silvertip,
including $8 million on capitalized infill drilling and $3 million
on expensed resource growth and greenfields drilling.
The Company remains focused on improving process plant
performance, underground rehabilitation and development as well as
completing several key surface infrastructure projects, including
the 220-person camp facility. Construction of the camp facility is
on schedule and budget, with completion expected at the end of
January 2019. Coeur also recently completed the scheduled upgrades
to Silvertip’s water treatment plant and is currently treating
water at its permitted capacity. The Company continues to target
mill projects that address safety, production and efficiency
improvements.
Mineral Reserve and Resource Estimates
Grades Tonnage
Silver Zinc Lead Silver Equivalent1 Category
(tonnes) (short tons) (g/t) (oz/t)
(%) (%) (g/t) (oz/t) Proven Reserves
246,274 271,470 376 10.97 10.0% 7.7% 1,190
34.70 Probable Reserves 1,364,575 1,504,185
274 7.99 7.9% 5.2% 884 25.79
Proven and Probable Reserves
1,610,849
1,775,655 289 8.43
8.2% 5.6% 930
27.13 Measured Resources 102,000 112,436 380 11.09 10.0%
8.1% 1,119 32.64 Indicated Resources 1,074,000
1,183,881 208 6.06 8.5% 3.7% 718
20.94 Measured and Indicated Resources
1,176,000 1,296,317 223
6.50 8.6% 4.1% 752
21.94 Inferred Resources
529,000
583,122 271 7.91
9.3% 5.0% 867
25.28 Contained Metal Silver
Zinc Lead
Category (ounces)
(pounds) (pounds) Proven Reserves 2,980,000 54,179,000
41,703,000 Probable Reserves 11,999,000 238,527,000
156,952,000
Proven and Probable Reserves
14,978,000 292,706,000
198,655,000 Measured Resources 1,248,000 22,580,000
18,188,000 Indicated Resources 7,172,000 199,902,000
87,759,000
Measured and Indicated Resources
8,419,000 222,482,000
105,948,000 Inferred Resources
4,612,000 108,621,000 58,594,000
Notes to Mineral Reserves and Mineral
Resources:
a. Mineral Reserves were estimated by Rodrigo Simidu, P.Eng.
and Talha Khan, P.Eng., as of November 1, 2018. b. Mineral
Resources were estimated by Scott Jimmerson as of November 1, 2018.
c. Assumed metal prices for Mineral Reserves were $17.00/oz silver,
$1.25/lb zinc and $1.00/lb lead. d. Assumed metal prices for
Mineral Resources were $20.00/oz silver, $1.30/lb zinc and $1.05/lb
lead. e. Mineral Reserves are reported at a cut-off grade of Net
Smelter Return (“NSR”) $160/tonne. Mineral Resources are in
addition to Mineral Reserves, depleted, and at a cut-off grade of
NSR $130/tonne. NSR = Tonnes x Grade x Metal Prices x Metallurgical
Recoveries – Royalties – TCRCs – Transport Costs. f. A technical
report prepared in accordance with NI 43-101 will be filed on
http://www.sedar.com within 45 days. g. Mineral resources are in
addition to mineral reserves and do not have demonstrated economic
viability. Inferred Mineral Resources are considered too
speculative geologically to have the economic considerations
applied to them that would enable them to be considered for
estimation of Mineral Reserves. h. An Inferred Mineral Resource has
a lower level of confidence than that applied to an Indicated
Mineral Resource and must not be converted to a Mineral Reserve. It
is reasonably expected that some of the Inferred Mineral Resources
could be upgraded to Indicated Mineral Resources with continued
exploration. i. Rounding of tonnes, tons, average grades, and
contained metal may result in apparent discrepancies with total
rounded tonnes, tons, average grades, and total contained metal.
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 statements regarding long-term growth, processing,
throughput, margin, mine life, asset value, capital expenditures,
exploration efforts, potential quantity and/or grade of minerals,
the estimation of mineral reserves and resources, anticipated
operating results such as production, cost and cash flow levels,
underground rehabilitation and development, infrastructure
projects, and contingent payments. 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 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, silver, lead and zinc 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
mineral 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
material, 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.
Christopher Pascoe, Coeur's Director, Technical Services and a
qualified person under NI 43‐101, reviewed and approved the
scientific and technical information concerning Coeur's mineral
projects in this news release. Mineral resources are in addition to
mineral reserves and do not have demonstrated economic viability.
Inferred mineral resources are considered too speculative
geologically to have the economic considerations applied to them
that would enable them to be considered for estimation of mineral
reserves, and there is no certainty that the inferred mineral
resources will be realized. 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, will be
included in the technical report for Silvertip that will be filed
on SEDAR at www.sedar.com within 45 days of this release and is
consistent with 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.
Notes to Press Release:
1. For purposes of silver equivalence with respect to the
technical report and the associated life of mine economic analysis
and assumptions, metal prices of $17.00/oz silver, $1.25/lb zinc
and $1.00/lb lead were used. 2. Increase relative to Companywide
reserves of approximately 342 million AgEqOz and reserve grade of
1.06 oz/t as of December 31, 2017, which assumed metal prices
$1,250/oz gold and $17.50/oz silver. Figures exclude San Bartolomé
(discontinued operations). 3. Inclusive of reserves and measured
and indicated resources. 4. Total resource tonnage, inclusive of
reserves. Please see acquisition announcement press release, dated
September 11, 2017, for additional details on prior mineral
resource estimates. 5. Cash costs and AISC are non-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
costs and AISC. 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 costs and AISC are important measures in assessing the
Company's overall financial performance. For additional explanation
regarding our use of non-U.S. GAAP financial measures, please refer
to our Form 10-K for the year ended December 31, 2017 and our
quarterly report on Form 10-Q for the quarter ended September 30,
2018. 6. Through September 30, 2018.
Conversion Table
1 short ton = 0.907185 metric tons 1 troy ounce
= 31.10348 grams
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version on businesswire.com: https://www.businesswire.com/news/home/20181227005158/en/
For Additional InformationCoeur Mining, Inc.104 S.
Michigan Avenue, Suite 900Chicago, Illinois 60603Attention: Paul
DePartout, Director, Investor RelationsPhone: (312)
489-5800www.coeur.com
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