Coeur Mining, Inc. (the “Company” or “Coeur”) (NYSE: CDE, TSX: CDM) announced results from a Preliminary Economic Assessment (PEA) for its wholly-owned La Preciosa silver-gold project located in Durango state, Mexico. The PEA indicates an initial estimated mine life of 17 years recovering an estimated 134.5 million ounces of silver and generating a 17% after-tax internal rate of return (IRR) using price assumptions of $25 per silver ounce and $1,500 per gold ounce.
Over the first 14 years of production, La Preciosa is expected to produce an average 9.1 million ounces of silver per year at anticipated average cash operating costs 1 of $13.86 per silver ounce, and is expected to average approximately $93 million in operating cash flow 1 per year. At forecast production rates, La Preciosa would be one of the top 10 primary silver mines in the world. The references herein are in U.S. dollars and U.S. customary units.
Table 1: PEA (Base Case) Highlights and Assumptions
|Silver/gold price assumptions||$25/$1,500|
|Initial capital expenditures||$348 million|
|Estimated initial mine life||17 years|
|Average daily processing rate||~11,000 tons per day|
|Years 1-14 average grade||2.65 ounces silver per ton|
|Total silver ounces recovered (% of current resource)||73% of 184 million ounces|
|Years 1-14 average annual silver production||9.1 million ounces|
|Years 1-14 average annual cash operating cost per ounce 1||$13.86|
|Years 1-14 average annual operating cash flow 1||$93 million|
|After-tax NPV (5% discount)||$314 million|
Mitchell J. Krebs, Coeur's President and Chief Executive Officer, said, “The results of this initial PEA demonstrate the viability of the La Preciosa open pit project at higher silver and gold prices and provide a solid foundation from which we believe we will enhance the project's economics over time. Subject to Board authorization, the Company intends to proceed with a feasibility study, which is expected to be completed in mid-2014. Upon completion of the feasibility study, the Company and its Board will evaluate the economics of the project, assess the silver market and determine whether to proceed with construction.”