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Coeur Reports Strong Second Quarter Financial And Operating Results; Provides Positive Update To 2012 Guidance

Joaquin

A total of 3,450 meters (11,319 feet) of drilling was completed at the Joaquin joint venture property, located approximately 70 kilometers (43 miles) north of the Company's Martha mine, to complete infill drilling at the La Negra and La Morocha deposits and test new targets on the property. Data from this drilling, and drilling completed in the second half of 2011, were used to update the 2011 resource estimates at La Negra and La Morocha.

As a result, the August 2012 mineral estimate for Joaquin (shown in table 4 below) reflects a 102% increase in contained silver ounces and an 18% increase in contained gold ounces in measured and indicated resources compared to the May 2011 mineral estimate. The estimated silver and gold ounces contained in inferred resources were reduced from May 2011 levels as material was upgraded from the inferred category to measured and indicated categories. The August 2012 resource estimate used metal prices of $30 per silver ounce and $1,500 per gold ounce compared with $20 per silver ounce and $1,300 per gold ounce in May 2011.

The new mineral resource estimate incorporates results from 123 new core drill holes (16,707 meters) designed to upgrade inferred mineral resources in the May 2011 estimate to measured and indicated levels. In addition to the new drilling, results from 43 drill holes (6,231 meters) were received after the model was completed and are expected to be incorporated into the next update in early 2013.

Table 4: Joaquin Project Mineral Resources (100% Basis)

                 
August 2012 1,2,3,4   Classification   Tonnes (000s)   Average Grade (grams/tonne)   Contained Ounces
      Gold   Silver   Gold   Silver (000)

 

Measured

  1,800   0.10   95.8   6,000   5,600
Indicated   11,900   0.10   89.2   36,600   34,100
Measured & Indicated   13,700   0.10   90.1   42,600   39,700
    Inferred   8,300   0.07   118.3   19,800   31,700
May 2011 3,4,5,6,7 Classification Tonnes (000s) Average Grade (grams/tonne)   Contained Ounces
      Gold   Silver   Gold   Silver (000)
Measured          
Indicated  

7,200

  0.16   85   36,200   19,700
Measured & Indicated   7,200   0.16   85   36,200   19,700
    Inferred   13,800   0.10   108.1   43,600   48,000

1.

 

Metal prices used were $30 per silver ounce and $1,500 per gold ounce.

2.

Oxide mineral resources estimated using a cutoff grade of 25 grams per tonne silver and sulfide mineral resources with a cutoff grade of 37 grams per tonne silver within Whittle®-estimated, surface mine, scoping level parameters.

3.

Mineral resources estimated by the consulting firm of NCL Ingeniería y Construcción Ltda. in Santiago, Chile.

4.

Mineral resources that are not mineral reserves have not demonstrated economic viability.

5.

Metal prices used were $20 per silver ounce and $1,300 per gold ounce.

6.

Oxide mineral resources estimated using a cutoff grade of 33 grams per tonne silver equivalent and sulfide mineral resources with a cutoff grade of 51.9 grams per tonne silver equivalent within Whittle®-estimated, surface mine, scoping level parameters.

7.

Silver equivalent = gold grade in grams per tonne times 65 + silver grade in grams per tonne.

 

2012 Outlook

The Company expects to achieve the high-end of its production guidance for 2012 of 18.5 - 20.0 million ounces of silver and 210,000- 230,000 ounces of gold, and the low-end of its cash operating costs 1 guidance for 2012 of $6.50 - $7.50 per silver ounce. Kensington's cash operating costs 1 for the full year 2012 are expected to be unchanged at $1,150 - $1,250 per gold ounce.

Table 5: 2012 Production Outlook

(silver ounces in thousands)   Country   Silver   Gold
Palmarejo   Mexico   8,500-9,000   98,000-108,000
San Bartolomé Bolivia 6,300-6,700
Rochester Nevada, USA 2,600-2,900 30,000-35,000
Martha Argentina 700-900 400-500
Endeavor Australia 400-500
Kensington   Alaska, USA     82,600-86,500
Total       18,500-20,000   210,000-230,000
 

1. EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations.

Conference Call Information

Coeur will hold a conference call to discuss the Company's second quarter 2012 results at 1 p.m. Eastern time on August 7, 2012.

Dial-In Numbers:   (877) 464-2820 (US and Canada)
(660) 422-4718 (International)
Conference ID:

133 212 42

The conference call and presentation will also be webcast on the Company's website www.coeur.com. A replay of the call will be available through August 14, 2012.

Replay number:   (855) 859-2056 (US and Canada)
International replay: (404) 537-3406 (International)
Conference ID:

133 212 42

 

Cautionary Statement

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding anticipated operating results, production levels, operating costs, and expectations with respect to its Martha mine. 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, any failure or delay in obtaining required governmental approvals, the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions), changes in the market prices of gold and silver, the uncertainties inherent in Coeur's production, exploratory and developmental activities, including risks relating to permitting and regulatory delays and disputed mining claims, any future labor disputes or work stoppages, 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, 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 reports on Form 10-K and Form 10-Q and Exhibit 99.2 to Coeur's Current Report on Form 8-K filed June 25, 2012. 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. Current mineralized material estimates include disputed and undisputed claims at Rochester. While the Company believes it holds a superior position in the ongoing claim dispute, the Company believes an adverse legal outcome would cause it to modify mineralized material estimates. 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.

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