Lower than expected Kensington gold

Coeur Mining Inc. Jan. 8 reported that its Kensington Mine produced 115,094 ounces of gold in 2017, falling short of the 120,000 to 125,000 oz the company anticipated from the Southeast Alaska operation. Coeur said lower-than-expected grades throughout the first nine months of the year was the primary reason Kensington fell short of the company's gold production guidance.

During the fourth quarter, the Kensington Mine produced 34,932 oz of gold, 27 percent more gold than was produced in the third quarter and the highest quarterly production in four years.

The Kensington property hosts two historical mines that date back to the dawn of the 20th Century –Kensington and Jualin.

So far, Coeur has focused on mining ore from the Kensington area. Going into 2017 this area hosted 497,000 oz gold in 2.62 million metric tons of reserves averaging 0.19 oz/t.

The increased production during the final three months of 2017 was primarily due to the processing of higher-grade ore from the Raven zone at Kensington. This ore helped push the average grade processed at Kensington to 0.22 oz per ton, a 29 percent increase over the 0.17 oz/t processed during the third quarter.

Raven is expected to remain a supplemental source of higher-grade material throughout 2018.

Coeur began digging towards Jualin in mid-2015 and began hauling out higher grade ore from there in the third quarter of 2017.

Mining of development ore continued at Jualin during the fourth quarter. The company expects production from Jualin to accelerate throughout 2018 as the company dewaters the mine area to facilitate more efficient drilling, development and mining.

Coeur expects Kensington to produce 115,000 to 120,000 oz of gold in 2018.

Coeur's five operations in the United States, Mexico and Bolivia produced 16.4 million oz of silver and 383,444 oz of gold in 2017.

In December, the company announced plans to divest the San Bartolomé Mine in Bolivia through the sale of its Bolivian subsidiary to Argentum Investments.

The Chicago-based miner, however, has plans to ramp up operations at Silvertip, a newly acquired high-grade silver mine in northwestern British Columbia.

In 2018, Coeur expects to produce 12.8 million to 14.4 million oz of silver, 355,000 to 375,000 oz of gold, and 23 million to 28 million pounds of combined zinc and lead.

–SHANE LASLEY