Coeur Announces Results of La Preciosa Feasibility Study; Mine Construction Deferred

July 30, 2014Share on google_plusone_share

Chicago, Illinois – July 30, 2014 – Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) announced results from a feasibility study on the La Preciosa silver-gold project located in Durango state, Mexico and announced the Company’s decision to defer construction activities at this time.

Mitchell J. Krebs, Coeur’s President and Chief Executive Officer, said, “Our team was able to improve the economics of La Preciosa by an estimated $180 million since completing a Preliminary Economic Assessment (“PEA”) in June of last year. However, a 29% decline in silver prices since announcing the acquisition of Orko Silver in February 2013 and higher taxes on precious metals mines in Mexico have led the Company to conclude that now is not the optimal time to proceed with construction of La Preciosa.

“We consider La Preciosa to be one of the best silver projects in North America and I am confident it will become a cornerstone mine for Coeur at some point in the future. The proposed mine would be Coeur’s largest source of silver production and would lower the Company’s overall cost structure. Our decision to not proceed at this time was based on our disciplined capital deployment philosophy and our commitment to retaining a flexible, liquid balance sheet. The feasibility study demonstrates a very attractive project at higher silver and gold prices. Deferring construction enables us to maintain the project’s leverage to better macro conditions and provides time to pursue limited drilling and metallurgical work to further improve the expected project economics.”

Highlights of the Feasibility Study:

• 10% internal rate of return (“IRR”) based on silver and gold prices of $22 and $1,350 per ounce, respectively
• Declared initial proven and probable mineral reserves of 126 million silver ounces and 209 thousand gold ounces increases Companywide silver and gold reserves by 50% and 10%, respectively
• Once in production, La Preciosa would be the world’s sixth largest primary silver mine1 with average annual silver production of over ten million ounces
• 12% decrease in projected initial capital expenditures compared to the PEA to $307 million
• 10% decline in expected costs applicable to sales per silver equivalent ounce2 versus the PEA to $14.37
• 5% increase in overall silver grade compared to the PEA
• Feasibility work completed on time and under budget

1. Based on 2013 production published by The Silver Institute.
2. Non-GAAP measure. Silver equivalence assumes 60:1 ratio.

Select 2014 Feasibility Study Metrics versus July 2013 PEA

Note: the scope of the PEA includes inferred mineral resources at La Preciosa whereas the feasibility study does not.

1. Non-GAAP measure. Silver equivalence assumes 60:1 ratio.

Economic Sensitivity Analysis

Coeur plans to continue limited activity at La Preciosa, including a $1.5 million exploration program with an emphasis on potential high-grade resource conversion, metallurgical optimization testwork, and testwork on a potential heap leach scenario for lower-grade material. This additional optimization work is expected to be completed by in the first half of 2015. The expected annual holding cost of deferring mine construction is less than $2 million.

On July 2, 2014, Coeur acquired a pre-existing 3% NSR on La Preciosa for $12.0 million.

Detailed results of the feasibility study will be included in a Canadian National Instrument 43-101 compliant Technical Report that will be filed on SEDAR within 45 days.

La Preciosa Mineral Reserves and Resources

Mineral reserves and resources effective July 29, 2014 using metal prices of $22 per silver ounce and $1,350 per gold ounce for reserves and $25 per silver ounce and $1,400 per gold ounce for resources. For details on the estimation of mineral resources and reserves for La Preciosa, please refer to the new Technical Report for the La Preciosa feasibility study to be filed within 45 days on www.sedar.com. Mineral resources are in addition to mineral reserves and do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be considered for estimation of mineral reserves, and there is no certainty that the inferred mineral resources will be realized.