New mine, drills add to Coeur's silver

North of 60 Mining News – February 9, 2018

 

Last updated 9/24/2020 at 6:32pm

Photo courtesy of The Redpath Group

After roughly two years of underground development, crews reached the high-grade Jualin gold deposit at Kensington in the third quarter of last year.

Coeur Mining Inc. Feb. 6 reported healthy increases to its precious metals reserves and resources thanks to the exploration and acquisition programs it carried out in 2017.

"During 2017, we successfully repositioned and strengthened the company on multiple fronts. We upgraded our portfolio and pipeline of assets to reflect a North American focus with the acquisition of the high-grade Silvertip mine in Canada, our announced divestiture of our highest cost mine in Bolivia and the sales of nine non-core assets," said Coeur Mining CEO Mitchell Krebs.

"We expect to sustain an elevated level of exploration investment in 2018 given the success our expanded programs are generating," he added.

The Chicago-based miner went into 2018 with 335.8 million silver-equivalent ounces in proven and probable reserves, a 10 percent increase from the beginning of 2017. The silver-equivalent reserves accounts for the value of both the silver and gold at its five operating mines – Palmarejo (Mexico), Rochester (Nevada), Kensington (Alaska), Wharf (South Dakota), and San Bartolomé (Bolivia).

The Kensington Mine posted modest reserve growth during 2017. This Southeast Alaska mine went into 2018 with 2.67 million tons of proven and probable reserves averaging 0.195 ounces per ton (520,000 oz) gold, a 5 percent increase from the beginning of 2017.

Coeur invested $8.6 million on exploration at Kensington last year, a $5.1 million increase compared to 2016. This work focused on upgrading and expanding the resources in Jualin deposit as well as the expansion of higher-grade areas, such as Raven, which is expected to remain a supplemental source of higher-grade material throughout 2018.

Following two years of underground development, Coeur began mining the high-grade Jualin deposit at Kensington during the third quarter – mining of development ore from this deposit continued through the balance of 2017.

Jualin production is expected to accelerate throughout 2018 as the company dewaters the mine area to facilitate more efficient drilling, development, and mining activities.

"It's taken us longer than planned to start accelerating mining activities due to the amount of water we've encountered," said Krebs. "That said, we're mining development ore out of Jualin now and expect to reach commercial production levels later in the year."

An initial reserve estimate at Jualin is expected to be included in Kensington's updated technical report anticipated late in the first quarter of 2018.

Coeur expects the Kensington Mine to produce 115,000 - 120,000 oz of gold this year.

The company's projected capital expenditures at the Southeast Alaska operation are expected to total $35 million to $40 million.

Coeur enjoyed significant increases to its resource base in 2017, thanks in large part to the acquisition of the Silvertip Mine in northern British Columbia.

Going into 2018, the company had 385.7 million oz silver-equivalent in the measured and indicated resources category, a 42 percent increase; plus 171 silver-equivalent oz in the inferred resource category, an increase of 45 percent.

These expanded resources reflect the high-grade mineralization brought into Coeur's portfolio through the acquisition of Silvertip. This northern B.C. mine has 73.3 million silver-equivalent oz in measured and 14.1 million silver-equivalent oz of indicated resources, about 8 percent of the companywide total.

An aggressive campaign of both surface and underground exploration drilling began at Silvertip during the fourth quarter and Coeur is targeting an initial reserve estimate for its newest high-grade silver mine later this year.

In the meantime, Coeur expects production to begin at Silvertip by the end of March and anticipates its newest mine will produce between 4 million and 5 million silver-equivalent oz this year.

"At Kensington, exploration efforts will target expansion of Kensington Main and Raven, and at Silvertip, drilling will focus on infill and expansion priorities to support our near- and medium-term mine planning efforts," Krebs said.

–SHANE LASLEY

 

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