Coeur Mining, Inc. (the “Company” or “Coeur”)
(NYSE: CDE) (TSX: CDM) announced today it has settled the outstanding claims dispute at its Rochester silver and gold mine in Nevada with Rye Patch Gold US Inc. and Rye Patch Gold Corp. (“Rye Patch”) for $10 million in cash plus a 3.4% net smelter royalty (“NSR”) covering 39.4 million silver equivalent ounces of net metal sales. In exchange, Rye Patch will transfer its mining claims involved in the dispute to Coeur Rochester, Inc., a wholly-owned subsidiary of Coeur. The settlement transactions are expected to close by June 28, 2013, and are not subject to any significant external closing conditions.
This NSR is payable from Rochester production and sales beginning January 1, 2014 and is expected to be completed in approximately four years. There is no minimum payment obligation under the NSR.
As part of the settlement, Coeur also granted Rye Patch the option to acquire Coeur’s Blue Bird patented, federal mining claim, which is situated two miles west of Rochester and is adjacent to Rye Patch’s Lincoln Hill exploration property. This claim is about 19.5 acres in size and is not strategic to the Company’s Rochester operation. Rye Patch has until 10 days after closing to exercise the option to acquire Blue Bird.
“Although we remain confident in our legal position, we believe our stockholders are best served by achieving a commercial solution to this ongoing litigation,” stated Mitchell J. Krebs, Coeur’s President and Chief Executive Officer. “Rochester has the potential to once again become one of the world’s great silver and gold operations. It’s unfortunate that this claims dispute arose in late 2011, but we’re pleased to have it behind us so we can focus on realizing the full potential of this asset.”
The Company expects to announce its plans to further expand Rochester production rates and anticipates providing an updated silver and gold reserve estimate later in 2013.