Coeur buying Aussie mine silver output

Vancouver – Coeur d’Alene Mines (CDE-N) is buying the silver production and reserves of the Endeavor zinc-lead-silver mine located near Cobar in central New South Wales, Australia.

The company will pay US$38.5 million to Aussie-listed CBH Resources for by-product silver output from the mine and rights to proven and probable reserves of 11 million tonnes grading 68.6 grams silver per tonne (over 24 million contained oz.).

Coeur will give CBH Resources US$15.4 million upon closing and the remainder upon demonstration of successful operations at the recently installed paste back-fill plant. The 450,000-cubic-metre per year plant provides back-fill for existing and future stopes and allows complete extraction of ore reserves.

Implementation of the paste back-fill technique is expected to more than double mine-life at the underground operation, to 8.5 years, plus enhances production by providing greater stope availability.

The Endeavor mine, in production since 1983, will remain owned by CBH Resources who will also continue as operator. Coeur will pay CBH an operating cost contribution of at least US$1.00 for each oz. of payable silver, indexed to silver prices, plus US$0.25 for each new oz. added to proven and probable reserves.

In 2004, the mine processed 1.2 million tonnes of ore averaging 7.8% zinc, 4.7% lead and 51 grams silver, yielding almost 74,000 tonnes of zinc (163 million pounds), 38,400 tonnes of lead (85 million pounds) and 950,000 oz. silver.

Anticipated Endeavor production of 1.3 million oz. silver annually will boost Coeur’s total output by more than 9%, based on 2004 figures, and total reserves will increase by 12%. The company’s total 2004 production was 14.1 million oz. of silver and 129,000 oz. gold.

Coeur, the world’s largest primary silver producer, operates mines in Argentina, Chile and in the U.S. The company is also building the San Bartolome mine in Bolivia, scheduled to come on-stream in 2006 producing over 8 million oz. of silver annually, and the Kensington gold project in Alaska where construction is slated to commence in mid-2005.