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ME2018: Coeur Mining Inc.

 

Last updated 11/1/2018 at 9:23am

High grade gold exploration and development Southeast Alaska

The Redpath Group

Coeur Mining reached Jualin with underground development late in 2017 and plans to ramp up production at this high-grade gold deposit through the end of 2018.

A combination of exploration and acquisition substantially boosted Coeur Mining Inc.'s precious metals reserves and resources in 2018.

The Chicago-based miner entered the year 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 is a prime example of the company's success in expanding reserves with drilling.

Kensington entered 2018 with 2.67 million tons of proven and probable reserves averaging 0.195 ounces per ton (520,000 oz) gold. While this was only a 5 percent increase from the beginning of 2017, more gold was on its way.

In April, the company updated the Kensington reserves to 2.96 million tons averaging 0.21 oz/t (620,700 oz) gold, which includes a maiden reserve estimate for the Jualin deposit of 74,100 oz gold in 157,600 tons of ore averaging 0.47 oz/t gold.

Following two years of underground development, Coeur began mining at the Jualin deposit in late 2017. The amount of water encountered, however, has hampered production from this high-grade deposit. Dewatering efforts are expected to facilitate the ramp up of production through year's end.

The company anticipates mining 100 short tons per day from Jualin in 2019 and more than 180 tpd in 2020.

In addition to reserves, Kensington has 2.74 million tons of measured and indicated resources, averaging 0.26 oz/t (712,600 oz) gold; and 1.39 million tons of inferred resource averaging 0.22 oz/t (304,800 oz) gold.

This roughly 1 million oz of gold in resources and the numerous other targets Coeur's exploration team identified on the property indicate significant potential for extending the life of Kensington beyond 2020.

Drilling this year at Kensington tested the Seward vein, which outcrops on surface roughly 1,900 feet above the Kensington Mine access ramp. In July, Coeur reported that two holes drilled from the ramp level have cut the mineralized structure, providing a solid "planar" target for future drilling from surface.

The company also reported encouraging results from drilling the lower and upper portions of the Raven structure in the Kensington Mine.

A drill campaign targeting the Elmira zone, located above Kensington Main, began in early July. Historic drilling at Elmira predates NI 43-101 standards and infill holes are necessary to declare resources in the zone. Along with this new zone, the nearby Johnson Vein will be tested and potentially drilled later in 2018.

On the acquisitions front, Coeur paid US$200 million to acquire the Silvertip project in northern British Columbia and agreed to pay up to another US$50 million if certain permitting and resource expansion milestones are met at the high-grade silver operation.

For this investment, Coeur gains a newly built mine with 2.35 million metric tons of indicated resource averaging 352 g/t silver, 9.4 percent zinc and 6.7 percent lead; plus 460,000 metric tons of inferred resource averaging 343 g/t silver, 9.8 percent zinc and 6.2 percent lead.

With six rigs turning, Coeur had completed 44,500 meters of drilling at Silvertip by mid-year. The company said the mineralization tapped during this US$9.2 million program was wider and higher grade than expected.

Given the success of this initial program, Coeur has launched a US$4 million second phase of drilling, which is focused on expanding resources and testing prospective targets across the 93,000-acre (37,650 hectare) land package at Silvertip.

Production at Silvertip got underway in March and Coeur anticipates producing 1.5 million to 2 million oz of silver and 23 million to 28 million lb each of zinc and lead in 2018 at this turnkey mine, which is located about 150 miles east of Kensington.

Silvertip is Coeur's first mine in Canada and is expected to become an important asset for the precious metals, which is continuing to shift its focus north.

"Combined with our recent exit from Bolivia and the release of Rochester's (Nevada) noteworthy preliminary economic assessment, we believe commencement of production at Silvertip further demonstrates the growing strength of Coeur's North America-focused portfolio," Krebs said.

Coeur also owns roughly 9.9 percent in Rockhaven Resources Ltd., a junior exploring the Klaza gold-silver project in southern Yukon Territory. Situated about 225 miles north of Kensington, Klaza hosts 9.42 million metric tons of inferred resource grading 4.48 g/t (1.36 million oz) gold, 89.02 g/t (26.96 million oz) silver, 0.75 percent (155.4 million lb) lead and 0.95 percent (197.8 million lb) zinc.

-SHANE LASLEY

Coeur Mining Inc. - NYSE: CDE

Chairman: Robert Mellor

President and CEO: Mitchell Krebs

VP, Exploration: Hans Rasmussen

104 S. Michigan Ave., Ste. 900, Chicago, IL 60603

Tel: 312-489-5800

 

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