Coeur dAlene Mines Corp. says it will increase its mining activity in Idahos Silver Valley if exploration currently under way there yields positive results.
The Coeur dAlene-based company said in its third-quarter earnings release that it has initiated a long-term plan designed to increase reserves and production in its Silver Valley operations. Those operations encompass 16.5 square miles and include the operating Galena silver mine, the Coeur mine, which has been idle and on standby since 1998, and the Caladay exploration property.
Tony Ebersole, spokesman for Coeur dAlene Mines, says the first step in the expansion plan is to complete exploratory drilling, which the company started in August and expects to continue through the end of this year.
The key is identifying new reserves first, and gradually bringing those into production, Ebersole says.
Coeur dAlene Mines expects annual silver production from its Silver Valley operations to hit a record 7 million troy ounces by 2006, at an average cash cost of less than $4 per ounce. Last year, the Galena produced 5.3 million ounces of silver at an average cash cost of $4.25 per ounce.
At the higher production level, the size of Coeur dAlene Mines work force in the Silver Valley also should rise, to more than 200 employees, from 167 now, Ebersole says.
As part of this expansion plan, theres potential for identifying 53 million additional silver ounces in the companys Silver Valley operations, he says. The plan here is to identify enough reserves to start ramping up production.
Exploratory drilling is taking place close to current mining shafts, making it possible to bring new veins into production at a relatively low cost, Ebersole says.
Expansion of mining operations could include reopening the Coeur mine, or starting production at the Caladay property, he says.
Although Coeur dAlene Mines, like other American mining companies, has benefited greatly in recent years from low-cost mining operations in Central and South America, Ebersole says the company believes the Silver Valley still holds promise.
The companys Silver Valley operations have produced 160 million ounces of silver since 1955, and, This company believes the long-term future out there is really good, he says.
Separately, Coeur dAlene Mines says it raised $76 million in a common-stock offering in the third quarter and reduced its debt load, putting the company in its strongest financial position in close to a decade.
The companys improved financial picture prompted Standard & Poors last month to upgrade its general corporate outlook on Coeur dAlene Mines to positive, from negative, and to reaffirm the companys CCC corporate-credit and subordinated-debt ratings.
Coeur dAlene Mines also announced earlier this week that it had secured an option to buy a Mexican mining company, Minera Real de Cosala S.A. de C.V., which operates the La Verde mine north of Mazatlan. Under that agreement, Coeur will start a sampling and drilling program there in the coming months. If the purchase is completed, the La Verde property would be Coeur dAlene Mines first operation in Mexico. The company has a development property in Bolivia and an operating mine in Chile.
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