Coeur Mining has released a re-scoped mine plan and PEA for its Rochester silver-gold mine in Nevada. The PEA, which will be included in a NI 43-101 Technical Report expected to be filed on March 5, 2018, incorporates the positive economic impact expected from the potential addition of a high pressure grinding roll (HPGR) to Rochester’s crushing circuit in early 2019 at an estimated cost of approximately $20 million. In addition, the PEA reflects lower projected capital expenditures related to the planned construction of a larger scale, more efficient crusher expected to include a second HPGR unit, beginning in 2020.
The introduction of HPGR technology has the potential to increase Rochester’s silver recoveries from 61% over 20 years to 70% in just over two years, significantly improving the mine’s economics. The re-scoped mine plan incorporates inferred material in the open pit, thereby reducing Rochester’s strip ratio by more than half from 0.8:1 to less than 0.4:1. Coeur plans to finalize engineering of the potential HPGR addition in the coming months and complete infill drilling over the next three years with the goal of upgrading this inferred material to reserves.
The PEA reflects the following improvements compared to Rochester’s current NI 43-101 Technical Report filed in early 2017:
• More than doubling Rochester’s NAV5% from $280 million to $609 million
• 122% increase in total pre-tax life of mine cash flows from $431 million to $955 million
• Marked increase in anticipated pre-tax cash flow margin from 19% to 31%
• Further extension of Rochester’s mine life out to 2038
“The implementation of this technology should be a game-changer for Rochester’s costs, margins, cash flows, mine life and net asset value,” said Mitchell J. Krebs, Coeur’s President and Chief Executive Officer. “In 2017, Rochester’s costs per silver equivalent ounce were $13.08. During the initial ten years after adding this HPGR technology, costs are expected to decline by over 20% to less than $10.00 per silver equivalent ounce, and average annual pre-tax cash flow is expected to be $48 million. As a result, we believe this investment and this technology can generate high returns and unlock significant value for our stockholders.”