Kensington down, Silvertip up during Q1

Coeur Mining Inc. April 11 reported a dip in gold production at its Kensington Mine in Southeast Alaska and an increase in silver, zinc and lead production at the Silvertip Mine in northern British Columbia.

Kensington produced 29,973 ounces of gold during the first quarter of this year, which is down 15 percent from the 35,335 oz recovered at the Southeast Alaska mine during the previous quarter but up 15 percent from the 26,064 oz produced during the first three months of 2018.

Roughly 10 percent of the first quarter production came from Jualin, a higher-grade deposit that reached commercial production in December.

"Our Kensington mine continues to see the benefit of higher grades from the Jualin deposit," said Coeur Mining President and CEO Mitchell Krebs.

Going into 2019, Kensington (including Jualin) had 2.59 million tons of proven and probable reserves averaging 0.213 oz per ton (552,000 oz) gold.

In comparison, Jualin alone hosted 157,600 tons of ore averaging 0.47 oz/t (74,100 oz) gold, according to a maiden reserve calculation completed last year.

During the three months of this year, mining activities at Jualin shifted focus from ore development to full production. As a result, Jualin ore being fed to the mill is expected to increase over the remaining quarters of 2019.

"(H)igher mining and processing rates from the higher-grade Jualin deposit are expected to boost second half production at Kensington," Krebs said.

Coeur continues to anticipate that the Kensington Mine will produce between 117,000 and 130,000 oz of gold this year.

While gold production at Kensington pulled back a bit, metals output at the Silvertip Mine near the B.C.-Yukon border rocketed during the first quarter of this year.

Since acquiring Silvertip late in 2017 Coeur has been steadily ramping up operations at its newest mine, reaching commercial production on Sept. 1.

During the first three months of 2019, Silvertip produced 239,000 oz of silver, a 68 percent jump over the 142,000 oz produced during the final three months of last year.

Silvertip also produced 3.7 million pounds of zinc, up 21 percent compared to the previous quarter and 3.1 million lb of lead, a sharp 86 percent rise over the previous three months.

The increased metals output at Silvertip was driven by higher tons milled, which was up 60 percent quarter-over-quarter.

Mill throughput topped 1,100 metric tons per day intermittently in March and averaged approximately 765 metric tons per day, excluding two days of scheduled maintenance.

Coeur is anticipating the receipt of permits that will allow it to operate the mill at 1,100 metric tons per day on a regular basis sometime later this month.

In addition to higher mill throughput, the company said average head grades, recovery rates and concentrate grades are expected to continue trending higher as mill availability improves and newly-mined higher-grade material is processed.

Coeur forecasts the Silvertip Mine to produce 1.5 million to 2.5 million oz of silver, 25 million to 40 million lb of zinc and 20 million to 35 million lb of lead this year.

The Chicago-based miner's five operations – Kensington, Silvertip, Palmarejo (Mexico), Rochester (Nevada) and Wharf (South Dakota) – produced 2.5 million oz of silver, 78,336 oz of gold, 3.7 million lb of zinc and 3.1 million lb of lead during the first quarter of 2019.

–SHANE LASLEY