Coeur Declares Commercial Production at its New Silvertip Operation; Updates Companywide Full-Year Production Guidance
Coeur Mining Inc. (“Coeur” or the “Company”) (NYSE: CDE) is pleased to announce that it declared commercial production effective September 1, 2018 at its new high-grade Silvertip silver-zinc-lead mine (“Silvertip”) located in northern British Columbia.
“The commencement of commercial production at Silvertip is a significant milestone,” said Mitchell J. Krebs, Coeur’s President and Chief Executive Officer. “We completed the acquisition of Silvertip in October 2017 and commenced production in March after successfully commissioning the mill. Since then, our team has been focused on optimizing plant performance and on upgrading the mine’s infrastructure. We continue to be excited about the impact Silvertip is expected to have on our production, margins and cash flow beginning next year.
“Optimization efforts at Silvertip will continue over the next several quarters, with processing rates on-track to average 750 tonnes per day ("mtpd”) by year-end and reach 1,000 mtpd in early 2019. We remain on-track to publish an initial NI 43-101 Technical Report in the fourth quarter and expect to receive approval of the permit amendment application to operate at 1,000 mtpd around year-end.”
During August, processing rates averaged approximately 450 mtpd, up from approximately 350 mtpd during July and approximately 250 mtpd during June. Processing rates regularly ranged between 500 to 650 mtpd during August and exceeded 800 mtpd late in the month. During the same time, plant availability improved to 80%, up from 75% in July and 65% in June.
Through July, the Company has invested a total of $51.3 million in Silvertip ($5.8 million expensed and $45.5 million capitalized), including $29.8 million of capitalized operating expenses, $8.0 million of capitalized resource infill drilling and $2.1 million of expensed resource expansion drilling. Near-term priorities for the Company include the construction of improved camp facilities, acceleration of underground development activity and the introduction of long hole stope mining to selected areas. As of August 31, 2018, Silvertip had 250 employees.
Updated Companywide Production Guidance
In July, the Company increased its full-year production guidance from 36.0 – 39.4 million silver equivalent ounces (“AgEqOz”)3 to 37.3 - 40.5 million AgEqOz3 due to strong first half performance at its Palmarejo operation in Mexico.
Based on stronger than expected performance at its Rochester mine in Nevada and on improved visibility of Silvertip’s production now that commercial production has been achieved, Coeur is revising its full-year Companywide production guidance to 36.1 - 39.5 million AgEqOz3.
Overview of 2018 Guidance Update
| Original Guidance | |||||||||||||||
| Silver | Gold | Zinc | Lead | Silver Equivalent2 | |||||||||||
| (K oz) | (oz) | (K lbs) | (K lbs) | (K oz) | |||||||||||
| Palmarejo | 7,500 - 7,900 | 115,000 - 120,000 | — | — | 14,400 - 15,100 | ||||||||||
| Rochester | 4,200 - 4,700 | 45,000 - 50,000 | — | — | 6,900 - 7,700 | ||||||||||
| Kensington | — | 115,000 - 120,000 | — | — | 6,900 - 7,200 | ||||||||||
| Wharf | — | 85,000 - 90,000 | — | — | 5,100 - 5,400 | ||||||||||
| Silvertip | 1,500 - 2,000 | — | 23,000 - 28,000 | 23,000 - 28,000 | 4,030 - 5,080 | ||||||||||
| Total | 13,200 - 14,600 | 360,000 - 380,000 | 23,000 - 28,000 | 23,000 - 28,000 | 37,330 - 40,480 | ||||||||||
| Current Guidance | |||||||||||||||
| Silver | Gold | Zinc | Lead | Silver Equivalent2 | |||||||||||
| (K oz) | (oz) | (K lbs) | (K lbs) | (K oz) | |||||||||||
| Palmarejo | 7,500 - 7,900 | 115,000 - 120,000 | — | — | 14,400 - 15,100 | ||||||||||
| Rochester | 4,800 - 5,200 | 48,000 - 52,000 | — | — | 7,680 – 8,320 | ||||||||||
| Kensington | — | 115,000 - 120,000 | — | — | 6,900 - 7,200 | ||||||||||
| Wharf | — | 85,000 - 90,000 | — | — | 5,100 - 5,400 | ||||||||||
| Silvertip | 700 - 1,200 | — | 13,000 - 23,000 | 11,000 - 18,000 | 2,030 - 3,480 | ||||||||||
| Total | 13,000 - 14,300 | 363,000 - 382,000 | 13,000 - 23,000 | 11,000 - 18,000 | 36,110 - 39,500 | ||||||||||
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 development and production at Silvertip, exploration expenditures, mining volume, timing for publication of a technical report and production guidance for Silvertip and Rochester. 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 anticipated resource conversion and upgrade are not attained, the risk that planned drilling programs may be curtailed or canceled due to budget constraints or other reasons, 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 gold and silver 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 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 or 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 Canadian National Instrument 43-101, approved 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, Canadian investors should refer to the Technical Reports for each of Coeur's properties as filed on SEDAR at www.sedar.com.
Notes
- Through July 31, 2018.
- Based on the mid-point of the AgEqOz guidance ranges.
- Figures include pre-commercial concentrate production at Silvertip. Silver and gold equivalence assumes a 60:1 silver-to-gold ratio. Silver and zinc equivalence assumes a 0.06:1 silver-to-zinc ratio. Silver and lead equivalence assumes a 0.05:1 silver-to-lead ratio.
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Contact
Coeur Mining Inc.
Paul DePartout, Director, Investor Relations
(312) 489-5800
www.coeur.com
