Significantly higher reserves and larger-scale
expansion project expected to reposition Rochester as the Company’s
cornerstone asset, representing a fundamental step-change for
Coeur
Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today
announced details of the expansion of its Rochester silver-gold
mine in Nevada, reflecting significant reserve growth and the
benefits of a larger-scale expansion project. An updated National
Instrument 43-101 Technical Report will be filed on SEDAR at
www.sedar.com before the close of business today.
Summary highlights include:
- After-tax NAV5% of $634 million and an expected internal rate
of return of 31% based solely on proven and probable mineral
reserves
- 18-year, reserve-based mine life through 2038 with
opportunities for extension with continued drilling
- Expected average annual free cash flow of $104 million for
initial ten years post-expansion
- 58% and 65% year-over-year increase in silver and gold
reserves, respectively1
- More than doubling of planned annual crusher throughput
capacity from roughly 14 million tons to over 28 million tons
post-expansion
- Average annual silver and gold production expected to total
over 8.0 million ounces and approximately 80,000 ounces,
respectively, for the initial ten years post-expansion
- Improvement in silver recoveries from 61% over 20 years to
approximately 68% in two years through use of high-pressure
grinding roll (“HPGR”) technology
- $397 million of planned construction capital (2021-2023),
including $42 million in contingencies and $31 million in
engineering, procurement and project management contracting
“The expansion of Rochester represents the Company’s single
largest organic growth opportunity,” said Mitchell J. Krebs,
Coeur’s President and Chief Executive Officer. “The combination of
significant reserve growth, the scope of the expansion project to
leverage economies of scale and the benefit of higher and faster
silver recoveries from HPGR technology is expected to generate an
internal rate of return of over 30%. Importantly, the project is
supported by a technically sound foundation with robust economics
that helps drive an anticipated step-change in Coeur’s cash flow
profile, which we believe will fundamentally reposition the Company
and unlock meaningful long-term value for our stockholders. We are
all excited about the future of Rochester and look forward to
showcasing this pivotal expansion project with you during our
virtual investor day tomorrow.”
Rochester’s planned expansion under Plan of Operations Amendment
(“POA 11”) includes the construction of a new leach pad, a crushing
facility equipped with two HPGR units, a Merrill-Crowe process
plant, and related infrastructure to support the extension of
Rochester’s mine life. The Company plans to fund the project with a
combination of cash on hand, internally generated cash flow from
its four operating mines and existing debt capacity.
Coeur commenced early-stage earthworks and began establishing
infrastructure for POA 11 in early August 2020. Major construction
is expected to begin in 2021 and be largely completed by late 2022.
The project remains on schedule with no changes to key elements of
the timeline (highlighted below).
Expected Start Date
Target Completion Date
Leach Pad (Incl. Ancillary Facilities)
2H 2020 ✓
Mid-2022
Merrill-Crowe Process Plant
1H 2021
YE 2022
Crushing Circuit
1H 2021
YE 2022
Supporting Infrastructure
2H 2020
Mid-2022
In addition to the expansion of the main Rochester deposit, the
technical report also outlines the planned build out of the
adjacent Nevada Packard deposit located southwest of the Rochester
mine. The development of Nevada Packard is scheduled to break
ground in 2029 and includes plans for a new leach pad, crushing
facility, Merrill-Crowe process plant, mobile equipment and
supporting infrastructure, which is expected to cost approximately
$49 million in construction capital. Production from Nevada Packard
is scheduled to commence in 2030, leading to the placement of
approximately 32 million tons over the deposit’s six-year expected
mine life.
The reserve-based mine plan in the technical report does not
include any material from other deposits owned by Coeur, including
the property package adjacent to Rochester that the Company
acquired in late 2018 for approximately $19 million. These
near-mine deposits have the potential to extend and/or expand
mining operations at Rochester in the medium to long term. Recent
target generation in the district highlighted priorities for future
drilling north of East Rochester and East Packard as well as around
the Lincoln Hill, Gold Ridge and Independence Hill zones located
immediately west of Rochester.
Mineral Reserve and Resource Estimates
Grade Contained Gold Silver Gold Silver Short tons (oz/t) (oz/t)
(oz) (oz)
PROVEN RESERVES Rochester
366,799,000
0.003
0.40
969,000
146,405,000
Nevada Packard
30,068,000
0.003
0.54
78,000
16,240,000
Total
396,867,000
0.003
0.41
1,047,000
162,645,000
PROBABLE RESERVES Rochester
60,606,000
0.003
0.36
169,000
21,858,000
Nevada Packard
1,948,000
0.002
0.52
3,000
1,005,000
Total
62,553,000
0.003
0.37
172,000
22,863,000
PROVEN AND PROBABLE RESERVES Rochester
427,405,000
0.003
0.40
1,138,000
168,263,000
Nevada Packard
32,016,000
0.003
0.54
81,000
17,245,000
Total
459,420,000
0.003
0.40
1,219,000
185,508,000
Grade Contained Gold Silver Gold Silver Short tons
(oz/t) (oz/t) (oz) (oz)
MEASURED RESOURCES Rochester
225,887,000
0.002
0.24
364,000
53,271,000
Nevada Packard
18,534,000
0.002
0.32
33,000
5,923,000
Total
244,421,000
0.002
0.24
397,000
59,194,000
INDICATED RESOURCES Rochester
55,472,000
0.002
0.25
98,000
13,613,000
Nevada Packard
2,025,000
0.002
0.30
4,000
602,000
Total
57,497,000
0.002
0.25
102,000
14,215,000
MEASURED AND INDICATED RESOURCES Rochester
281,360,000
0.002
0.24
463,000
66,884,000
Nevada Packard
20,559,000
0.002
0.32
37,000
6,525,000
Total
301,919,000
0.002
0.24
500,000
73,409,000
Grade Contained Gold Silver Gold Silver Short tons
(oz/t) (oz/t) (oz) (oz)
INFERRED RESOURCES Rochester
221,115,000
0.002
0.27
397,000
59,643,000
Nevada Packard
4,935,000
0.002
0.41
11,000
2,027,000
Total
226,050,000
0.002
0.27
408,000
61,670,000
Notes to above Mineral Reserves and Mineral Resources
(effective December 16, 2020):
- Assumed metals prices for estimated Mineral Reserves was $1,400
per ounce of gold and $17.00 per ounce of silver.
- Assumed metals prices for estimated Mineral Resources was
$1,600 per ounce of gold and $20.00 per ounce of silver.
- Mineral Reserves based on a MMTS 2020 Ultimate Pit designs with
no loss due to dilution.
- Mineral Reserves are contained within MMTS 2020 Ultimate Pit
designs targeting approximately 459 million tons of proven and
probable reserves (in situ or in stockpiles) and are supported by a
mine plan featuring variable throughput rates, stockpiling, haulage
and a cut-off optimization. The mine plan designs incorporate
variable open pit slope angles over the pit life approximately
averaging 43°, variable metallurgical recoveries depending on
deposit location and material processed, including gold oxide
recovery of 92%, gold sulfide recovery of 60%, silver oxide
recovery of 70% and sulfide recovery of 60% for the Rochester
deposit and gold oxide recovery of 92% and silver oxide recovery of
61% with no sulfide recovery for the Nevada Packard deposit.
- The NSR cut-off for Mineral Reserves equals $2.55/ton for oxide
and $2.65/ton for sulfide for the Rochester deposit and $3.70/ton
for the Nevada Packard deposit.
- Mineral Resources that are not Mineral Reserves 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.
- Mineral Resources for Rochester within confining pit shell use
the following parameters: oxide recovery of 92% for gold and 70%
for silver, and sulfide recovery of 60% for gold and 60% for silver
with an NSR cutoff grade of $2.55/ton oxide and $2.65/ton
sulfide.
- Mineral Resources for Nevada Packard within confining pit shell
use the following parameters: oxide recovery of 92% for gold and
61% for silver, with an NSR cutoff grade of $3.70/ton.
- Rounding of short tons, grades, and troy ounces, as required by
reporting guidelines, may result in apparent differences between
tons, grades, and contained metal contents.
- U.S. Investors are cautioned that the term “Mineral Resource”
is not defined or recognized by the U.S. Securities and Exchange
Commission.
- The qualified person for the Mineral Reserve estimate is Robert
Gray, P.Eng., an independent Consulting Engineer. The qualified
person for the Mineral Resource estimate is Matthew Bradford,
RM-SME, a Coeur Mining, Inc employee.
Comparison of the 2018 and 2020 Technical Reports’ Life of
Mine Economic Analyses
2018
2020
Technical Report
Technical Report
ESTIMATED MINE LIFE
2033
2038
PROVEN & PROBABLE RESERVES
Tons
(000s)
273,427
459,420
Gold grade
oz/t
0.003
0.003
Silver grade
oz/t
0.43
0.40
METALLURGICAL RECOVERIES
Rochester leach recovery - gold
%
92%
95%
Rochester leach recovery - silver
%
61%
69%
Nevada Packard leach recovery - gold
%
-
89%
Nevada Packard leach recovery - silver
%
-
54%
PRODUCTION
Gold production
K oz
758
1,140
Silver production
K oz
76,082
128,062
REVENUE
Average gold price
$/oz
$1,250
$1,544
Average silver price
$/oz
$17.50
$19.45
Gross revenue
$M
$2,279
$4,252
OPERATING COSTS
Mining
$M
($585)
($1,008)
Crushing/processing
$M
($708)
($969)
General and administrative
$M
($144)
($272)
Smelting and refining
$M
($20)
($37)
Royalties
$M
-
-
Total operating cost
$M
($1,457)
($2,286)
Interest, tax and working capital
$M
($75)
($56)
Cost per gold ounce (co-product)
$/oz
$747
$830
Cost per silver ounce (co-product)
$/oz
$11.71
$10.46
Mining
$/ton mined
$1.23
$1.39
Crushing/processing
$/ton placed
$2.59
$2.11
General and administrative
$/ton placed
$0.58
$0.59
Total operating cost (incl. smelting and refining)
$/ton placed
$5.46
$4.98
CASH FLOW
Operating cash flow
$M
$747
$1,910
Capital expenditures
$M
($339)
($659)
Reclamation
$M
-
($157)
Total free cash flow
$M
$408
$1,094
Project NPV (5% discount rate)
$M
$275
$634
Notes to the above economic analyses:
- Source: 2020 Technical Report effective December 16, 2020. Note
that there were minor differences in the manner of presentation of
Operating Costs in the 2018 Technical Report (including different
line items); however, there were no meaningful changes to overall
cost estimates. The presentation of Operating Costs has been
updated in the 2020 Technical Report for comparative purposes. For
additional information, please refer to the 2018 Technical Report
and the 2020 Technical Report for Rochester available at
www.sedar.com.
- Mineral Reserves are contained within the Measured and
Indicated pit designs, or in stockpiles are supported by a plan
featuring variable throughput rates, stockpiling and cut-off
optimization.
- Rounding of tons and ounces, as required by reporting
guidelines, may result in apparent differences between tons, grade,
and contained metal content.
- Details on the estimation of Mineral Reserves, including the
key assumptions, parameters and methods used to estimate the
Mineral Reserves are contained in the footnotes in the prior
section of this release and in the applicable technical reports
available at www.sedar.com.
About Coeur
Coeur Mining, Inc. is a U.S.-based, well-diversified, growing
precious metals producer with five wholly-owned operations: the
Palmarejo gold-silver complex in Mexico, the Rochester silver-gold
mine in Nevada, the Kensington gold mine in Alaska, the Wharf gold
mine in South Dakota, and the Silvertip silver-zinc-lead mine in
British Columbia. 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 future plans and expectations
regarding the Rochester Mine. 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 the
expectations and financial and operational results contained in the
Rochester Technical Report are not achieved on a timely basis or at
all, 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, zinc and lead 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 (including the impact of
government shutdowns), ground conditions, grade variability, any
future labor disputes or work stoppages, the uncertainties inherent
in the estimation of mineral 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 its production, the potential effects of the COVID-19
pandemic, including impacts to the availability of our workforce,
continued access to financing sources, government orders that may
require temporary suspension of operations at one or more of our
sites and effects on our suppliers or the refiners and smelters to
whom the Company markets its production, 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 report on Form 10-K. 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 Canadian National Instrument 43‐101,
reviewed and approved the scientific and technical information
concerning the Rochester mine included 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. 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, Canadian investors should see the technical
reports for the Rochester mine 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
- Year-over-year comparisons relative to Coeur’s year-end 2019
Mineral Reserves. For more information on Coeur’s year-end 2019
Mineral Reserves, please refer to the following link:
https://www.coeur.com/_resources/news/nr_20200218.pdf.
Conversion Table
1 short ton
=
0.907185 metric tons
1 troy ounce
=
31.10348 grams
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201216005054/en/
Coeur Mining, Inc. Attention: Paul DePartout, Director, Investor
Relations Phone: (312) 489-5800 www.coeur.com
Coeur Mining (NYSE:CDE)
Historical Stock Chart
From May 2024 to Jun 2024
Coeur Mining (NYSE:CDE)
Historical Stock Chart
From Jun 2023 to Jun 2024