Coeur d’Alene reduces losses (March 04, 2002)

Vancouver — Debt restructuring helped Coeur d’Alene Mines (CDE-N) trim its losses in 2001.

The Idaho-based company posted a loss of US$3.1 million (or US7 per share) for the year, compared with a loss of US$50 million (US$1.41 per share) for 2000.

Driving the improved performance was the early retirement of US$59.1 million in debt, resulting in a one-time gain of US$48.2 million. Since late 1998, the company has been repurchasing its convertible debentures at a discount to their original value. Offsetting the gain was a US$6.1-million writedown of the Kensington property in Alaska and a US$2.3-million charge for mine closure costs in Chile.

“In the past year, Coeur has made substantial progress in reaching its three most important long-term objectives,” says President Dennis Wheeler. “First, we have reduced cash costs for silver at our existing operations to below our target of four dollars [U.S.] per oz.; second, we are successfully developing a new generation of mining projects in both Chile and Bolivia that we expect will greatly enhance future cash flows at current market prices; and finally, we have continued our strong commitment to restructuring our balance sheet and further reducing our long-term debt.”

Coeur d’Alene produced 10.9 million oz. silver in 2001, down from 11.7 million oz. recorded in the corresponding period in the previous year. Cash costs came in at US$3.93 per oz., down from the US$4.09 per oz. tallied in 2000.

Most of the silver came from the Rochester open-pit mine in northern Nevada, which contributed 6.3 million oz., as well as 78,201 oz. gold in 2001, compared with 6.7 million oz. and 75,886 oz., respectively, in 2000. Cash costs fell by 6% to US$3.65 per oz. silver-equivalent.

Silver production at the Silver Valley operation in northern Idaho increased to 4.5 million oz. from the 4.1 million oz. tallied in 2000. Total cash costs rose to US$4.62 per oz. from US$4.59 per oz. Difficult ground conditions at the mine are cited for the cost increase. Coeur d’Alene doubled its stake in Silver Valley to 100% in September 1999.

Coeur d’Alene is moving ahead with development of the Cerro Bayo discovery, 9 miles east of the Fachinal mill in southern Chile. The company expects the operation to add 82,000 gold-equivalent ounces per a year. Initial production is slated for May 2002.

Meanwhile, Coeur d’Alene expects to have a final feasibility study in hand on the San Bartolome project in Bolivia by mid-year. Originally slated for completion in the first quarter, the study has been extended as the company studies the potential of treating tin as a byproduct. At last count, the property hosted a resource of 41.1 million tons grading 2.97 oz. silver per ton.