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Coeur's La Preciosa Project PEA Indicates 17-Year Initial Mine Life; Average Annual Silver Production Of 9.1 Million Ounces Over The First 14 Years

Stocks in this article: CDE CDM

Mr. Krebs commented, “Over the next 12 months, we will pursue an exploration and infill drilling program focused on expanding the deposit, upgrading inferred mineral resources and drilling on several of the smaller veins and mineralized intercepts which fall within the designed pits to increase confidence levels, evaluate mineability and determine whether they can be incorporated into future mine plans.

“La Preciosa is located in mining-friendly Mexico, just 45 minutes from the city of Durango, with many local mines and a readily available workforce. It has easy access to power and transportation and we believe we now have the water supply necessary to support future mining activities.”

La Preciosa PEA Highlights and Assumptions

  • Measured and indicated resources of 57.2 million tons containing 146.2 million silver ounces and 277,700 gold ounces, and inferred resources of 19.5 million tons containing 37.7 million silver ounces and 60,300 gold ounces at June 26, 2013. (Please refer to the Appendix Table for related grades for the updated mineral resource estimate.)
  • Expected average recovery rates of 86% for silver and 82% for gold at a throughput rate of 11,023 tons per day (10,000 tonnes per day) for average annual production of 9.1 million silver ounces and 15,100 gold ounces over the initial 14 years of mine life.
  • Coeur's open pit mine plan estimates production of 59.1 million tons at average grades of 2.40 ounces of silver per ton and 0.004 ounce of gold per ton. The project envisions surface mine operation for the first 14 years and continued operation of the processing plant from stockpiled lower-grade ore for the final three years.
  • Capital expenditures are estimated to be $347.9 million for commercial start-up and an additional $84.2 million of sustaining capital over the initial estimated 17-year mine life.
  • After-tax IRR of 17% and a NPV of $314 million at a base case using a 5% discount rate, $25 per ounce silver price and $1,500 per ounce gold price, represents a payback period of 5.3 years.
  • Located in a mining-friendly jurisdiction with infrastructure in place, including anticipated access to power and transportation and available water supply.

The La Preciosa PEA demonstrates leverage to a rising silver price as shown in the Economic Sensitivity Analysis below.

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