Coeur d’Alene 2009 silver, gold production surge as Bolivia, Mexico mines come on line

Coeur d’Alene 2009 production jumps on new mines

COEUR D’ALENE, Idaho — Silver miner and gold producer Coeur d’Alene Mines Corp. said Thursday it produced 47 percent more silver in 2009 and gold production rose 56 percent as new mines in Bolivia and Mexico began operations.

Coeur d’ Alene produced 17.7 million ounces of silver, compared with 12 million in 2008. Gold production hit 72,112 ounces, up from 46,115 ounces in 2008.

The mining company ended 2009 with a record 269.2 million ounces of silver mineral reserves, up 16 percent year-over-year. Gold reserves grew 26 percent to 2.9 million ounces.

Coeur reported a larger loss for 2009 due to hefty charges related to changes in metals prices. It posted a loss of $31.9 million, or 44 cents per share, compared with a loss of $600,000, or 1 cent per share in 2008. Metal sales from continuing operations surged 76 percent to $300.6 million as a result of a full year of production at its San Bartolome mine in Bolivia and a partial year of production from its Palmarejo silver and gold mine in Mexico.

The company realized average prices of $14.83 and $1,003 per ounce of silver and gold, respectively, during 2009.

Coeur’s San Bartolome silver mine produced 7.5 million ounces of silver at an average cash operating cost of $7.80 per ounce. That compares with 2008 production of 2.9 million ounces at an average cash operating cost of $8.22 per ounce.

The company said it expects production at its Kensington gold mine in Alaska to start in the third quarter of this year. Construction had been blocked at the mine until the U.S. Supreme Court reversed a lower court decision in June.

“As we look ahead we expect another strong year of silver production and we anticipate doubling our gold production, thanks to the first full year of production at Palmarejo and the expected third-quarter startup at Kensington,” said CEO Dennis E. Wheeler in a statement.

Coeur plans to spend about $17.9 million in 2010 on exploration. It’s targeting $9.2 million for Mexico and $3.3 million for the Joaquin project in Argentina, and has earmarked $2 million for Kensington.

The company expects 2010 production to reach 7.9 million ounces of silver and 109,000 ounces of gold at Palmarejo, and plans to invest about $55 million in capital there. Coeur expects to spend $80 million to complete construction at Kensington, from which it expects an estimated 40,000 ounces of gold production this year.

Coeur said it continues to pursue options for its Martha and Cerro Bayo mines located in southern Argentina and southern Chile, respectively, to complete its transition from small mines to newer, larger operations.

Shares of the Idaho company rose 47 cents, or 3.4 percent, to $14.48 in afternoon trading.