News: $CDE – Coeur Files Technical Report for Palmarejo Complex

Seven-Year Mine Life with Average Annual Production of Nearly 12 million AgEq Ounces

Unit Costs 13% Lower than Last Filed Technical Report

CHICAGO, Nov. 02, 2015 (GLOBE NEWSWIRE) — Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE:CDE) announced that it has filed a National Instrument 43-101 technical report for its Palmarejo silver-gold mining complex in Mexico. The report dated November 2, 2015 may be obtained on www.sedar.com.

Mitchell J. Krebs, Coeur’s President and Chief Executive Officer, said, “The technical report reflects a robust, high-margin mine plan at current metal prices showing substantial improvements in production, mine life, grades, recoveries, costs, and cash flow compared to the last technical report for Palmarejo filed eight months ago. This enhanced plan demonstrates Palmarejo’s transition to ‘quality over quantity’ production and highlights the importance of the Independencia Este deposit, which was added through the acquisition of Paramount Gold and Silver Corp. in April. This adjacent ore body carries a silver equivalent1 reserve grade 17% higher than Guadalupe and is not subject to the Franco-Nevada obligation impacting other areas at Palmarejo, which is scheduled to be reduced to significantly lower levels beginning next September.”

The mine plan in the technical report reflects annual production of approximately 5.9 million ounces of silver and 94,000 ounces of gold over a seven-year mine life. Pre-tax net cash flow of $305 million represents a four-fold increase from the $75 million of pre-tax net cash flow in the last technical report filed for Palmarejo.

Since year-end 2013, Palmarejo’s silver equivalent1 reserves have increased approximately 17% and the silver equivalent1 grade has increased 39% despite using significantly lower metal prices and incorporating mine depletion. The mine plan reflected in the Palmarejo technical report is based on 88.7 million silver equivalent1 ounces of reserves and assumes silver and gold prices of $15.50 per ounce and $1,150 per ounce, respectively, for the next two years followed by longer-term prices of $17.50 per ounce for silver and $1,250 per ounce for gold. Importantly, the mine plan does not include 52.1 million silver equivalent1 ounces of measured and indicated resources and 16.6 million silver equivalent1 ounces of inferred resources which carry a silver equivalent1 grade 7% higher than the reserves. The Company intends to work to further extend the mine life through delineation of these resources and based on the continued drilling success we are having at Guadalupe, at Independencia, and on other nearby targets.

  Life of Mine Economic Analysis  
  Silver Price $15.50 (Sept 2015-2017), $17.50 (2018-2022)
  Gold Price $1,150 (Sept 2015-2017), $1,250 (2018-2022)
  Gross Revenue ($mil)               $ 1,454            
  Operating Cash Flow ($mil)               $ 537            
  Capital Expenditures – Guadalupe ($mil)               $ 76            
  Capital Expenditures – Independencia ($mil)               $ 81            
  Silver Recovery Rate (2017-2022)                 87 %          
  Gold Recovery Rate (2017-2022)                 90 %          
  Pre-Tax Net Cash Flow ($mil)               $ 305            
  Pre-Tax NPV (10% discount rate) ($mil)               $ 191            

  Production Schedule
  $ millions 2016 2017 2018 2019 2020 2021 2022 Total
  Ore Tons Milled (000s) 1,043 1,482 1,487 1,651 1,640 1,306 457 9,444
  Silver Grade (oz/t) 4.45 4.41 4.89 5.58 5.29 5.16 3.82 4.90
  Gold Grade (oz/t) 0.080 0.075 0.081 0.092 0.067 0.067 0.053 0.075
  Silver Production (oz in 000s) 3,957 5,680 6,327 8,016 7,546 5,861 1,517 40,137
  Gold Production (oz in 000s) 72.6 99.6 108.6 137.0 99.5 78.7 21.7 633.7

Note: Total includes Sept-Dec 2015.

Operating Cost Assumptions
  November 2015
Technical Report
February 2015
Technical Report
% Change
Ore tons mined (000s)   9,444     6,611     43 %
UG mining cost/ton $ 43.0   $ 44.8     (4 %)
Processing cost/ton $ 26.4   $ 27.4     (4 %)
Smelting & refining cost/ton $ 2.1   $ 1.4     50 %
G&A/ton $ 13.5   $ 20.3     (33 %)
Total operating costs/ton $ 97.1   $ 111.4     (13 %)

Palmarejo Mineral Reserves and Resources by Area
    Grade (oz/t)   Ounces
  Short Tons     Silver Gold   Silver Gold
Underground Reserves:            
Guadalupe 5,005,000     4.49     0.071       22,456,000     353,000
Independencia Oeste 946,000     5.16     0.096       4,882,000     91,000
Independencia Este 3,259,000     5.53     0.078       18,026,000     255,000
Palmarejo   64,000     4.50     0.063       288,000     4,000
Open-Pit Reserves:            
Palmarejo 170,000     3.58     0.029       609,000     5,000
Total Proven and Probable Reserves 9,444,000     4.90     0.075       46,262,000     707,000
Underground M&I Resources:            
Guadalupe 5,592,000     4.46     0.064       24,952,000     360,000
Independencia Oeste 283,000     3.86     0.060       1,091,000     17,000
Independencia Este 421,000     4.81     0.055       2,026,000     23,000
Total Measured and Indicated Resources 6,297,000     4.46     0.064       28,069,000     400,000
Underground Inferred Resources:            
Guadalupe 479,000     4.97     0.104       2,381,000     50,000
Independencia Oeste 169,000     3.69     0.071       624,000     12,000
Independencia Este 1,011,000     4.94     0.081       4,993,000     82,000
Total Inferred Resources 1,658,000     4.82     0.087       7,998,000     144,000

Note: Effective August 31, 2015. Assumed metal prices for Mineral Reserves were $15.50 per ounce of silver and $1,150 per ounce of gold for the open pit, Rosario, and lower 76 underground deposits at Palmarejo, and $17.50 per ounce of silver and $1,250 per ounce of gold for Guadalupe and Independencia deposits at Palmarejo. Guadalupe and Independencia reserves also evaluated using $15.50 per ounce of silver and $1,150 per ounce of gold to determine economic viability.  It was determined that substantially all current reserves are economically viable at these lower price assumptions.  Assumed metal prices for Mineral Resources were $19.00 per ounce of silver and $1,275 per ounce of gold. See notes in the Appendix for additional information on mineral reserves and resources.

About Coeur

Coeur Mining is the largest U.S.-based silver producer and a significant gold producer with five precious metals mines in the Americas employing approximately 2,100 people. 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, the Kensington gold mine in Alaska, and the Wharf gold mine in South Dakota. The Company also has a non-operating interest in the Endeavor mine in Australia in addition to royalties on the Cerro Bayo mine in Chile, the El Gallo complex in Mexico, the Zaruma mine in Ecuador, and the Correnso mine in New Zealand. In addition, the Company has two silver-gold exploration projects – the La Preciosa project in Mexico and the Joaquin project in Argentina. The Company also conducts ongoing exploration activities in Alaska, Argentina, Bolivia, Mexico, and Nevada. The Company owns strategic investment positions in several 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 mine life, mining rates, future drilling activity, production, costs, cash flow, margins, and grade. 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 and silver 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 (including those involving third parties), 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 and the absence of control over mining operations in which Coeur or its subsidiaries hold royalty or streaming interests and risks related to these mining operations including results of mining and exploration activities, environmental, economic and political risks of the jurisdiction in which the mining operations are located, 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 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.

Dana Willis, Coeur’s Director, Resource Geology 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. 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 refer to the relevant NI 43-101 Technical Report on file 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 www.sec.gov.

Notes:

  1. Silver equivalence assumes 60:1 silver to gold ratio as follows:
Gold Ounces x Ratio + Silver Ounces = Silver Equivalent
Ounces
/ Short Tons = Silver Equivalent Grade (Oz/Ton)
255,000   60   18,026,000   33,326,000   3,259,000   10.23
353,000   60   22,456,000   43,636,000   5,005,000   8.72
569,000   60   41,653,000   75,793,000   11,235,000   6.75
707,000   60   46,262,000   88,682,000   9,444,000   9.39
499,000   60   28,647,000   58,587,000   6,581,000   8.90


APPENDIX

Total Coeur Proven and Probable Reserves

    Grade (Oz/Ton)     Ounces  
  Short Tons Silver Gold Silver Gold  
Proven Reserves            
Rochester 89,077,000   0.56   0.004     49,786,000  346,000  
San Bartolomé 1,206,000   2.73       3,287,000   
Kensington 417,000     0.187     —  78,000  
Endeavor 1,323,000   1.82       2,411,000   
Palmarejo 802,000   6.29   0.077     5,048,000  62,000  
La Preciosa 18,830,000   3.16   0.006     59,534,000  111,000  
Wharf 14,802,000     0.032     —  469,000  
Total Proven Reserves 126,457,000   0.95   0.008     120,066,000 
1,066,000  
Probable Reserves              
Rochester 56,158,000   0.54   0.003     30,418,000   172,000  
San Bartolomé 13,337,000   3.20       42,724,000    
Kensington 2,986,000     0.185       551,000  
Endeavor 1,102,000   2.24       2,469,000    
Palmarejo 8,641,000   4.77   0.075     41,214,000   645,000  
La Preciosa 21,851,000   2.71   0.004     59,196,000   91,000  
Wharf 14,301,000     0.022       312,000  
Total Probable Reserves 118,376,000   1.49   0.015     176,021,000   1,771,000  
Proven and Probable Reserves              
Rochester 145,235,000   0.55   0.004     80,204,000   518,000  
San Bartolomé 14,543,000   3.16       46,011,000    
Kensington 3,403,000     0.185       629,000  
Endeavor 2,425,000   2.01       4,880,000    
Palmarejo 9,444,000   4.90   0.075     46,262,000   707,000  
La Preciosa 40,681,000   2.92   0.005     118,730,000   202,000  
Wharf 29,103,000     0.027       781,000  
Total Proven and Probable Reserves 244,834,000   1.21   0.012     296,087,000   2,837,000  


Total Coeur Measured and Indicated Resources (Excluding Proven and Probable Reserves)

      Grade (Oz/Ton)     Ounces  
    Short Tons Silver Gold Silver Gold  
Measured Resources              
Rochester   72,228,000   0.45   0.003   32,565,000   218,000  
Martha              
San Bartolomé              
Kensington   181,000     0.260       47,000  
Endeavor   7,716,000   2.28       17,625,000    
Palmarejo   135,000   4.82   0.052     651,000   7,000  
Joaquin   4,709,000   5.30   0.003     24,966,000   15,000  
La Preciosa   2,305,000   1.40   0.003     3,216,000   7,000  
Wharf   700,000     0.029       20,000  
Total Measured Resources 87,974,000     0.90 0.004   79,023,000 
314,000  
Indicated Resources                
Rochester   100,973,000   0.42   0.003     42,476,000   273,000  
Martha   57,000   13.60   0.018     775,000   1,000  
San Bartolomé   7,033,000   1.91       13,445,000    
Kensington   1,385,000     0.242       335,000  
Endeavor   5,181,000   2.39       12,375,000    
Palmarejo   6,162,000   4.45   0.064     27,418,000   393,000  
Joaquin   6,842,000   4.25   0.004     29,110,000   25,000  
Lejano   631,000   3.09   0.011     1,952,000   7,000  
La Preciosa   4,808,000   1.74   0.004     8,389,000   17,000  
Wharf   5,769,000     0.025       145,000  
Total Indicated Resources 138,841,000     0.98 0.009   135,940,000 
1,196,000  
Measured and Indicated Resources                
Rochester   173,201,000   0.43   0.003     75,041,000   491,000  
Martha   57,000   13.60   0.018     775,000   1,000  
San Bartolomé   7,033,000   1.91       13,445,000    
Kensington   1,566,000     0.244       382,000  
Endeavor   12,897,000   2.33       30,000,000    
Palmarejo   6,297,000   4.46   0.064     28,069,000   400,000  
Joaquin   11,551,000   4.68   0.003     54,076,000   40,000  
Lejano   631,000   3.09   0.011     1,952,000   7,000  
La Preciosa   7,114,000   1.63   0.003     11,605,000   24,000  
Wharf   6,469,000     0.026       165,000  
Total Measured and Indicated Resources 226,816,000     0.95 0.007   214,963,000  1,510,000  


Total Coeur Inferred Resources

    Grade (Oz/Ton)     Ounces    
  Short Tons Silver Gold Silver Gold  
Inferred Resources            
Rochester 96,039,000   0.42   0.003   40,789,000   263,000    
Martha 204,000   4.75   0.005     969,000   1,000    
San Bartolomé 66,000   1.68       111,000      
Kensington 1,622,000     0.351       570,000    
Endeavor 661,000   3.18       2,103,000      
Palmarejo 1,658,000   4.82   0.087     7,998,000   144,000    
Joaquin 720,000   3.99   0.003     2,873,000   2,000    
Lejano 702,000   2.81   0.010     1,972,000   7,000    
La Preciosa 1,344,000   1.98   0.004     2,657,000   5,000    
Wharf 4,488,000     0.030       134,000    
Total Inferred Resources 107,504,000   0.55 0.010   59,472,000  1,126,000  

Notes to the above mineral reserves and resources:

  1. Effective December 31, 2014, except (a) Palmarejo, effective August 31, 2015, (b) Wharf, effective June 1, 2015, and (c) Endeavor, effective June 30, 2014.
  2. Assumed metal prices for Mineral Reserves were $19.00 per ounce of silver and $1,275 per ounce of gold, except (a) the open pit, Rosario, and lower 76 underground deposits at Palmarejo at $15.50 per ounce of silver and $1,150 per ounce of gold, (b) Guadalupe and Independencia deposits at Palmarejo at $17.50 per ounce of silver and $1,250 per ounce of gold, and (c) Endeavor at $2,200 per metric ton of lead, $2,400 per metric ton of zinc, and $20.00 per ounce of silver. Guadalupe and Independencia reserves also evaluated using $15.50 per ounce of silver and $1,150 per ounce of gold to determine economic viability. It was determined that substantially all current reserves are economically viable at these lower price assumptions.
  3. Assumed metal prices for estimated Mineral Resources were $22.00 per ounce of silver and $1,350 per ounce of gold, except (a) the Independencia and Guadalupe deposits at Palmarejo at $19.00 per ounce of silver and $1,275 per ounce of gold, and (b) Endeavor at $2,200 per metric ton of lead, $2,400 per metric ton of zinc and $20.00 per ounce of silver.
  4. Palmarejo Mineral Reserves and Mineral Resources aggregate the Mineral Reserves and Mineral Resources of the Palmarejo, Guadalupe, and Independencia deposits. There are no Mineral Reserves and Mineral Resources for La Patria. There are no Mineral Resources for the Palmarejo deposit.
  5. 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. The preliminary economic assessment for the re-scoped mine plan at Kensington is preliminary in nature and includes Inferred Mineral Resources, and does not have as high a level of certainty as a plan that was based solely on proven and probable reserves and there is no certainty that the results from the preliminary economic assessment will be realized.
  6. Rounding of tons and ounces, as required by reporting guidelines, may result in apparent differences between tons, grade, and contained metal content.
  7. For details on the estimation of mineral resources and reserves, including the key assumptions, parameters and methods used to estimate the Mineral Resources and Mineral Reserves, Canadian investors should refer to the NI 43-101 Technical Reports for Coeur’s properties on file at www.sedar.com.
Conversion Table
1 short ton = 0.907185 metric tons
1 troy ounce = 31.10348 grams

 

CONTACT: Bridget Freas, Director, Investor Relations
(312) 489-5819
www.coeur.com