Coeur d’Alene Mines (CDE-N, CDM-T) is selling back its 100% interest in the silver produced from the iconic Broken Hill zinc-lead-zilver mine in New South Wales, Australia, to mine owner and operator Perilya (PEM-A) for US$55 million in cash.
It’s been a shrewd investment for Coeur: it originally bought the interest from Perilya in September 2005 for US$36.9 million, and since then has received more than 6.1 million oz. of payable silver from the mine.
Coeur’s annual profits from the silver stream have amounted to: US$3.6 million (partial 2005), US$14.3 million (2006), US$14.2 million (2007), US$13.3 million (2008), and US$3.2 million (Q1 2009).
“By selling its interest, Coeur will further strengthen its balance sheet and enhance its liquidity. Proceeds of the sale will contribute to our growth initiatives, including construction of the final tailings facility at the Kensington gold mine in Alaska,” said Coeur president and CEO Dennis Wheeler in a statement.
With this deal set to close at the end of the month, Coeur expects to realize a gain on the sale of assets in the third quarter of about US$23.2 million, net of income taxes.
Perilya bought the Broken Hill mine from Pasminco in May 2002. The mine, which opened in 1885, has produced more than 200 million tonnes of ore and spawned the “Big Australian” Broken Hill Proprietary in 1885, now known as BHP Billiton.
China’s Shenzhen Zhongjin Lingnan Nonfemet Co. acquired 50.1% of Perilya in February 2009 by investing A$45.4 million in the Aussie miner.
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