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By Shane Lasley
Mining News 

Coeur gold reserves down, silver rises

Miner idles Silvertip to expand resources, mill at BC mine


Last updated 2/21/2020 at 4:06am

Silvertip silver zinc lead mine in northern British Columbia temporarily closed

Coeur Mining Silvertip

Exploration at Coeur Mining's Silvertip Mine during 2019 significantly expanded the silver, zinc and lead resources at this northern British Columbia operation.

Coeur Mining Inc. Feb. 19 reported expansion of silver reserves during 2019 but a slight drop in gold reserves. Zinc and lead reserves were relatively consistent as infill drilling replaced depletion at the company's Silvertip Mine in northern British Columbia.

Going into 2019, Coeur's five mines – Silvertip, Kensington (Alaska), Palmarejo (Mexico), Rochester (Nevada) and Wharf (South Dakota) – had 309.5 million tons of proven and probable reserves averaging 0.008 ounces per ton (2.56 million oz) gold, 0.59 oz/t (182.9 million oz) silver, 8.26% (295.4 million pounds) zinc and 5.42% (196.4 million lb) lead.

Coeur also reported solid growth in measured and indicated gold and silver resources.

The company's measured and indicated gold and silver resources increased 8% and 7%, respectively, year-over-year. This growth was driven by meaningful additions from Rochester, Kensington and Wharf.

"We launched several resource expansion drilling campaigns in 2019 in the pursuit of potential mine life extensions and high-return organic growth opportunities. Our efforts were successful on multiple fronts, as demonstrated by the increase in both our inferred resources and in our measured and indicated resources," said Coeur Mining President and CEO Mitchell Krebs.

Mixed bag at Kensington

Gold reserves at the Kensington Mine shrunk significantly last year but exploration drilling increased measured and indicated resources by 14% and more than doubled the inferred resource there, including the addition of a maiden resource for the Elmira vein.

Going into 2020, Kensington has 1.68 million tons of proven and probable reserves averaging 0.218 oz/t (366,000 oz) gold; compared to 2.59 million tons of proven and probable reserves averaging 0.213 oz/t (552,000 oz) gold a year earlier.

In addition to reserves, Coeur's Southeast Alaska gold mine hosts 3.23 million metric tons of measured and indicated resources averaging 0.236 oz/t (762,000 oz) gold; and 1.56 million metric tons of inferred resources averaging 0.229 oz/t (358,000 oz) gold.

Idling Silvertip

Silvertip accounts for 15 million oz of the silver, and all the zinc and lead, in Coeur's reserves. The company, however, has decided to temporarily suspend mining and milling at the northern B.C. mine due to weak markets for the base metals and processing facility-related challenges.

"The decision to temporarily suspend operating activities at Silvertip, which represented approximately 6% of the company's 2019 revenue, was driven by our goal of maximizing the long-term value of the operation," said Krebs. "While we have been successful in executing key projects and improving mill availability, the further deterioration in the zinc and lead markets – particularly for spot concentrate treatment charges – represents significant headwinds to our ability to generate positive cash flow."

Going into 2020, Silvertip hosts 1.8 million tons of proven and probable reserves averaging 8.26 oz/t (14.98 million oz) silver, 8.3% (295.4 million pounds) zinc and 5.4% (196.5 million lb) lead; compared to 1.6 million tons of proven and probable reserves averaging 8.43 oz/t (14.91 million oz) silver, 8.2% (291.2 million lb) zinc and 5.6% (197.5 million lb) lead at the onset of 2019.

In addition to reserves, Silvertip hosts 1.7 million tons of measured and indicated resources averaging 6.75 oz/t (11.6 million oz) silver, 8.9% (305 million lb) zinc and 4.2% (143.9 million lb) lead; and 976,000 tons of inferred resource averaging 8.4 oz/t (8.2 million oz) silver, 9.3% (182.2 million lb) zinc and 5.4% (105.3 million lb) lead.

This marks a roughly 40% increase in measured and indicated resources at the northern B.C. mine; and a 78% increase in the silver, 68% increase in zinc and 80% increase in lead in the inferred category, compared to the onset of 2019.

Coeur said the strong additions to resources reflect the positive results of expansion drilling last year, which targeted areas east of the underground mine complex, including Discovery, a zone that is open in multiple directions

During 2020, the company plans to focus on exploration aimed at potentially further expanding the resource at Silvertip, as well as pursue a mill expansion to improve the asset's cost structure and its ability to deliver sustainable cash flow.

“Although, we are hitting pause at Silvertip, we are not taking our foot off the gas. We believe the best way to maximize the value of the operation is to accelerate our investment in exploration to extend the mine life and expand the mill to achieve the benefits of scale,” said Krebs.

The Coeur Mining CEO said the company does not anticipates restarting Silvertip until late in 2021, depending on the results from exploration and new feasibility study, as well as prevailing market conditions.

Success-based exploration

Though Silvertip experienced growing pains on the processing side during 2019, the exploration there was a success.

"During 2019, we were able to grow Silvertip's inferred resources by over 70% and its measured and indicated resources by nearly 40%," Krebs reiterated.

Coeur attributes its effective resource expansion at Silvertip, Kensington and other projects to its success-based exploration strategy.

"Our results at Kensington, Silvertip, and Sterling and Crown were particularly encouraging, and represent future growth opportunities for the company," said Krebs. "We also were able to make solid progress on our reserves, despite lower overall investment levels in our infill programs in 2019."

The Coeur Mining CEO said the company is stepping up its exploration efforts this year.

"As we transition our focus to our 2020 exploration priorities, we look forward to generating meaningful results from a higher level of exploration investment compared to 2019," he said. "Our main objectives are to further expand the resource base at our existing operations, with specific emphasis on resource growth at Sterling, Crown and Silvertip; and to pursue additional new discoveries at Palmarejo and Kensington to further extend their mine lives. Our ability to achieve these objectives will be an important catalyst to driving long-term value at Coeur."

Author Bio

Shane Lasley, Publisher

Over his more than 11 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

Email: [email protected]
Phone: (907) 726-1095


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