Coeur Announces Details of Rochester Expansion in Updated Technical Report
Coeur Mining announced the expansion of its Rochester silver-gold mine in Nevada, which promises significant reserve growth. The updated report shows an after-tax NAV5% of $634 million and an internal rate of return of 31%. The mine life is extended to 18 years, with average annual free cash flow of $104 million for the first decade post-expansion. Silver and gold reserves are projected to increase by 58% and 65%, respectively. Construction is underway, with major completion expected by late 2022.
- After-tax NAV5% of $634 million.
- Expected internal rate of return of 31%.
- 18-year mine life through 2038 with potential extensions.
- Average annual free cash flow projected at $104 million for the first ten years post-expansion.
- 58% and 65% increases in silver and gold reserves, respectively.
- Planned crusher throughput capacity to more than double post-expansion.
- Silver recoveries projected to improve from 61% to approx. 68%.
- None.
Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today announced details of the expansion of its Rochester silver-gold mine in Nevada, reflecting significant reserve growth and the benefits of a larger-scale expansion project. An updated National Instrument 43-101 Technical Report will be filed on SEDAR at www.sedar.com before the close of business today.
Summary highlights include:
-
After-tax NAV
5% of$634 million and an expected internal rate of return of31% based solely on proven and probable mineral reserves - 18-year, reserve-based mine life through 2038 with opportunities for extension with continued drilling
-
Expected average annual free cash flow of
$104 million for initial ten years post-expansion -
58% and65% year-over-year increase in silver and gold reserves, respectively1 - More than doubling of planned annual crusher throughput capacity from roughly 14 million tons to over 28 million tons post-expansion
- Average annual silver and gold production expected to total over 8.0 million ounces and approximately 80,000 ounces, respectively, for the initial ten years post-expansion
-
Improvement in silver recoveries from
61% over 20 years to approximately68% in two years through use of high-pressure grinding roll (“HPGR”) technology -
$397 million of planned construction capital (2021-2023), including$42 million in contingencies and$31 million in engineering, procurement and project management contracting
“The expansion of Rochester represents the Company’s single largest organic growth opportunity,” said Mitchell J. Krebs, Coeur’s President and Chief Executive Officer. “The combination of significant reserve growth, the scope of the expansion project to leverage economies of scale and the benefit of higher and faster silver recoveries from HPGR technology is expected to generate an internal rate of return of over
Rochester’s planned expansion under Plan of Operations Amendment (“POA 11”) includes the construction of a new leach pad, a crushing facility equipped with two HPGR units, a Merrill-Crowe process plant, and related infrastructure to support the extension of Rochester’s mine life. The Company plans to fund the project with a combination of cash on hand, internally generated cash flow from its four operating mines and existing debt capacity.
Coeur commenced early-stage earthworks and began establishing infrastructure for POA 11 in early August 2020. Major construction is expected to begin in 2021 and be largely completed by late 2022. The project remains on schedule with no changes to key elements of the timeline (highlighted below).
|
Expected Start Date |
|
Target Completion Date |
|
Leach Pad (Incl. Ancillary Facilities) |
2H 2020 ✓ |
|
Mid-2022 |
|
Merrill-Crowe Process Plant |
1H 2021 |
|
YE 2022 |
|
Crushing Circuit |
1H 2021 |
|
YE 2022 |
|
Supporting Infrastructure |
2H 2020 |
|
Mid-2022 |
In addition to the expansion of the main Rochester deposit, the technical report also outlines the planned build out of the adjacent Nevada Packard deposit located southwest of the Rochester mine. The development of Nevada Packard is scheduled to break ground in 2029 and includes plans for a new leach pad, crushing facility, Merrill-Crowe process plant, mobile equipment and supporting infrastructure, which is expected to cost approximately
The reserve-based mine plan in the technical report does not include any material from other deposits owned by Coeur, including the property package adjacent to Rochester that the Company acquired in late 2018 for approximately
Mineral Reserve and Resource Estimates
| Grade | Contained | |||||||||
| Gold | Silver | Gold | Silver | |||||||
| Short tons | (oz/t) | (oz/t) | (oz) | (oz) | ||||||
| PROVEN RESERVES | ||||||||||
| Rochester | 366,799,000 |
0.003 |
0.40 |
969,000 |
146,405,000 |
|||||
| Nevada Packard | 30,068,000 |
0.003 |
0.54 |
78,000 |
16,240,000 |
|||||
| Total | 396,867,000 |
0.003 |
0.41 |
1,047,000 |
162,645,000 |
|||||
| PROBABLE RESERVES | ||||||||||
| Rochester | 60,606,000 |
0.003 |
0.36 |
169,000 |
21,858,000 |
|||||
| Nevada Packard | 1,948,000 |
0.002 |
0.52 |
3,000 |
1,005,000 |
|||||
| Total | 62,553,000 |
0.003 |
0.37 |
172,000 |
22,863,000 |
|||||
| PROVEN AND PROBABLE RESERVES | ||||||||||
| Rochester | 427,405,000 |
0.003 |
0.40 |
1,138,000 |
168,263,000 |
|||||
| Nevada Packard | 32,016,000 |
0.003 |
0.54 |
81,000 |
17,245,000 |
|||||
| Total | 459,420,000 |
0.003 |
0.40 |
1,219,000 |
185,508,000 |
|||||
| Grade | Contained | |||||||||
| Gold | Silver | Gold | Silver | |||||||
| Short tons | (oz/t) | (oz/t) | (oz) | (oz) | ||||||
| MEASURED RESOURCES | ||||||||||
| Rochester | 225,887,000 |
0.002 |
0.24 |
364,000 |
53,271,000 |
|||||
| Nevada Packard | 18,534,000 |
0.002 |
0.32 |
33,000 |
5,923,000 |
|||||
| Total | 244,421,000 |
0.002 |
0.24 |
397,000 |
59,194,000 |
|||||
| INDICATED RESOURCES | ||||||||||
| Rochester | 55,472,000 |
0.002 |
0.25 |
98,000 |
13,613,000 |
|||||
| Nevada Packard | 2,025,000 |
0.002 |
0.30 |
4,000 |
602,000 |
|||||
| Total | 57,497,000 |
0.002 |
0.25 |
102,000 |
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FAQ
What are the key highlights from Coeur Mining's Rochester mine expansion?
Coeur's Rochester mine expansion includes an after-tax NAV of $634 million, a 31% internal rate of return, and a mine life extending to 2038.
When is the major construction for Coeur Mining's Rochester project expected to complete?
Major construction is expected to be largely completed by late 2022.
What are the expected production levels post-expansion at Rochester?
Post-expansion, average annual production is expected to exceed 8 million ounces of silver and approximately 80,000 ounces of gold.
What technology will improve silver recoveries at Rochester?
The use of high-pressure grinding roll (HPGR) technology is expected to enhance silver recoveries from 61% to approximately 68%.
What is the projected average annual free cash flow from the Rochester mine?
The expected average annual free cash flow is $104 million for the first ten years after expansion.
Coeur Mng Inc
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