Coeur d’Alene Mines Corporation announced that it is pursuing an expansion of mining operations at its Rochester silver and gold mine in Nevada. This planned expansion is expected to add an average of 2.9 million ounces of incremental annual silver production and 30,000 ounces of further gold production through 2017.
The Bureau of Land Management supports a third-party prepared Environmental Assessment for the proposed expansion, the completion of which could lead to initiation of production in 2011. The Company has completed an internal scoping study showing the expansion to have a $34 million net present value based on a $16.00 per ounce silver price, a $950 per ounce gold price, and a 10% discount rate. A new leach pad would be constructed during 2010 with an estimated cost of approximately $28 million, leading to annual average estimated net cash flows of approximately $20 million. This cash flow and production is incremental to the ounces and cash flow currently being generated by ongoing residual leaching activities, which the Company expects will continue through 2014.
As of December 31, 2008, Rochester contained measured and indicated resources of 61.8 million ounces of silver and 531,000 ounces of gold. Since beginning operations in 1986, the mine has produced over 125 million ounces of silver and 1.4 million ounces of gold and has contributed over $23 million in annual payroll and nearly $13 million in annual state and local tax revenues. The planned expansion would add approximately 200 jobs to this historic silver and gold mine. In addition, the mine recently received two top awards by both the Nevada Mining Association and the Mine Safety and Health Administration for safe operations.