Coeur d’Alene buys Martha

A deal with Yamana Resources (YRI-T) will see Coeur d’Alene Mines (CDE-N) acquire the high-grade Martha underground silver mine on the Bacon property in the southern Patagonia region of Argentina.

In return for US$2.5 million in cash, the company will acquire a 100% interest in Minera Polimet, Yamana’s Argentine subsidiary, which owns the Martha mine and other silver exploration properties. Yamana will use the cash to pay off debt owed to Northgate Exploration (NGX-T).

Coeur also subscribes for 10 million Yamana shares at US$600,000 and will fund Yamana for $100,000 during the due-diligence period of the deal.

Martha is 430 km east of Coeur d’Alene’s Cerro Bayo mine and is part of the regionally extensive Veta Martha fissure vein system.

Resources are pegged at 4,993 tonnes averaging 14,700 grams silver-equivalent per tonne, or 2.1 million contained ounces. About 600,000 oz. are contained in pillars and may not be immediately minable.

Sixteen holes drilled last September confirmed existing resources in one zone and added new resources in another. At Zone 1 West, drilling confirmed a resource of 440 tonnes averaging 27,600 grams silver-equivalent. Farther to the west, outside the resource area, drilling returned 0.5 metre grading 25,500 grams silver per tonne and 0.5 metre running 13,300 grams silver. Seven additional holes have extended Zone 3 East by 20 metres to the east and to a depth of 30 metres.

Says Coeur d’Alene President Dennis Wheeler: “This transaction will expand our exciting Cerro Bayo operation by adding over 2.5 million ounces of silver production in 2002 at extremely low cash costs.”

Once the deal is approved, Coeur will begin shipping Martha’s stockpiled ore to the Cerro Bayo mine site in southern Chile, where processing will take place.

Cerro Bayo is scheduled for a May startup, with 2002 production forecast at 82,000 gold-equivalent ounces at a cash cost of less than US$150 per oz. At last count, reserves stood at 530,000 tonnes averaging 6.2 grams gold and 333 grams silver per tonne, with an additional resource of 530,000 tonnes grading 2.7 grams gold and 171 grams silver.

With added feed from Martha, Cerro Bayo’s 2002 production is expected to climb by 50% to 123,000 gold equivalent ounces, and cash costs are expected to drop.