Coeur reports silver reserve growth, again

Coeur Mining Inc. Feb. 20 announced that it has successfully grown its companywide reserve base for the fourth consecutive year, largely driven by the initial reserve declaration for its Silvertip Mine in northern British Columbia.

Going into 2019, Coeur's five mines – Silvertip, Kensington (Alaska), Palmarejo (Mexico), Rochester (Nevada) and Wharf (South Dakota) – had 289.5 million metric tons of proven and probable reserves averaging 0.01 ounces per ton (2.8 million ounces) gold, 0.059 oz/t (171.3 million oz) silver, 8.23 percent (291.2 million pounds) zinc and 5.58 percent (197.5 million lb) lead.

This marks the fourth straight year of reserve growth for Coeur.

"Our 2018 drilling campaign delivered another year of reserve and resource growth. Reserves reflected the initial high-grade reserve declaration at Silvertip and higher average grades for both gold and silver," said Coeur Mining President and CEO Mitchell Krebs. "Total measured and indicated as well as inferred resources also increased meaningfully compared to the prior year."

Bolstered by Silvertip

Silvertip accounts for 14.9 million oz of the silver, and all of the zinc and lead, in Coeur's reserves.

According to a maiden reserve estimate completed at the end of 2018, Silvertip hosts 1.6 million tons of proven and probable reserves averaging 289 grams per metric ton (14.98 million oz) silver, 8.2 percent (292.71 million pounds) zinc and 5.6 percent (198.66 million lb) lead.

In addition to boosting the quantity of metals, inclusion of these reserves also contributed to a 15.6 percent increase in companywide silver reserve grade, as the silver reserve grade at Silvertip is more than fifteen-times higher than the combined grade of the company's other silver reserves.

This is also enough ore to feed a 1,000-metric-ton-per-day mill at the Silvertip Mine for about 4.5 years.

Over that initial span, the Silvertip Mine is expected to average around 2.9 million oz of silver, 45 million lb of zinc and 37 million lb lead, per year.

In addition to reserves, Silvertip hosts 1.3 million tons of measured and indicated resources averaging 6.47 oz/t (8.4 million oz) silver, 8.6 percent (221.62 million lb) zinc and 4.07 (105.19 million lb) lead; and 583,000 tons of inferred resource averaging 7.91 g/t (4.6 million oz) silver, 9.3 percent (108.62 million lb) zinc and 5.02 percent (58.59 million lb) lead.

Higher grades boost Kensington

At Kensington, reserve tonnages shrunk slightly over the past year. However, thanks to higher grade reserves from the Jualin deposit being included this year, this lower quantity of ore contains more gold.

Going into 2019, Kensington has 2.59 million tons of proven and probable reserves averaging 0.213 oz/t (552,000 oz) gold, compared to 2.67 million tons of proven and probable reserves averaging 0.195 oz/t (520,000 oz) gold a year earlier.

This ore is contained in two historic mine areas that date back to the dawn of the 20th Century –Kensington and Jualin.

The roughly 9 percent increase in reserve grade at this Southeast Alaska operation is largely attributed to bringing the Jualin deposit into the reserves.

The maiden reserve estimate for Jualin, reported by Coeur last year, outlined 157,600 tons of ore averaging 0.47 oz/t (74,100 oz) gold.

Supplementing mill feed with this higher grade ore is expected to increase Kensington gold output over the coming years.

The company anticipates mining 100 tons per day from Jualin in 2019 and more than 180 tons per day in 2020.

Organic growth potential

In addition to growing reserves, Coeur expanded the amount of precious metals contained in measured and indicated resources over the last year.

The amount of gold in Coeur's companywide measured and indicated resources jumped 26 percent to 2.4 million oz and silver increased 2 percent to 228.7 million oz.

Coeur's acquisitions of strategic assets in Nevada assets also drove considerable increase in inferred resources. Going into 2019, the company had 2.7 million oz of gold in the inferred resource category, more than double compared to a year ago, and 135.6 million oz of silver, 39 percent higher than the prior year.

The recently acquired Sterling gold project, which includes the Crown Block – Lincoln Hill and Wilco projects – contributed roughly 1.5 million oz of gold and 11.5 million oz of silver to the companywide inferred resources.

"These improvements reflected our steadfast commitment to high-return, near-mine exploration and opportunistic acquisitions that can bolster our future growth pipeline and enhance the overall quality of our asset base," said Krebs. "We prioritized resource conversion drilling to support an initial reserve and mine plan at Silvertip, continued to expand resources and discover new structures at Palmarejo, Rochester and Kensington, and commenced exploration programs at the Sterling Mine and Crown Block after closing the Northern Empire acquisition at the beginning of the fourth quarter."

The Coeur Mining CEO said the company will continue to allocate its exploration spending based on the success of the programs being carried out at and around its mines in British Columbia, Mexico, Alaska, Nevada, and South Dakota.

"As we look ahead in 2019, we remain excited about our portfolio's organic growth potential, especially at Silvertip, Palmarejo, Kensington and Sterling," he added. "Although we successfully bolstered our development pipeline through the acquisition of two highly-prospective land packages in Nevada, our exploration strategy remains unchanged. We'll continue to pursue near-mine targets and allocate capital based on our disciplined, success-based exploration framework. Success in recent years has proven the merits of this approach and we look forward to building on them."

–SHANE LASLEY