HPGR At Rochester Mine To Benefit Operational Results
CHICAGO, IL - Coeur Mining, Inc. reported that production is on-track to achieve full-year guidance ranges. Full-year financial and operational results expected to benefit from higher second half production driven by the anticipated impact of high-pressure grinding roll (HPGR) technology at the Rochester Mine in Nevada, higher recovery rates and production levels at Palmarejo in Mexico, and improved plant performance and higher grades at Silvertip in British Columbia.
Installation of HPGR unit at Rochester on-track despite unseasonably high snowfall levels, commissioning of the HPGR unit remains on-budget and on-schedule. Commissioning activities now underway and impact on silver recovery rates expected to be seen beginning mid-year. Improved results at Silvertip with continued focus on achieving positive cash flow although slower than originally expected, results at Silvertip improved quarter-over-quarter. March 2019 represented the strongest month of performance since acquisition with revenues more than doubling in the first quarter. Current areas of focus include (i) sustaining consistent levels of mill availability to allow for recovery rate optimization, (ii) accelerating underground development rates to enhance mining flexibility and access to higher grade ore, and (iii) workforce training and retention initiatives.
At the Kensington, in Alaska, the company is now shifting focus at Jualin from development activities to production - Mining activities at Jualin transitioned from development to production during the first quarter, with the high-grade deposit contributing approximately 10% of Kensington’s production at an average grade of 0.41 ounces per ton (“oz/t”). Jualin is expected to account for approximately 20% of Kensington’s total production in 2019. Higher mining rates from Jualin are expected to contribute to higher production levels and lower unit costs throughout the remainder of 2019.
Continued commitment to success-based exploration program following last year’s strong reserve and resource increases, 2019 drilling programs commenced by investing a total of $6.6 million in resource expansion and conversion drilling targeting Palmarejo and Kensington as well as the new Sterling and Crown deposits. The Company is reaffirming full-year 2019 production guidance of 334,000 - 372,000 ounces of gold, 12.2 - 14.7 million ounces of silver, 25 - 40 million pounds of zinc and 20 - 35 million pounds of lead. In addition, full-year cost guidance is being reaffirmed. First quarter 2019 financial results, including revenue of $154.9 million, adjusted EBITDA of $26.1 million and cash flow from operating activities of $(11.8) million. Prior to changes in working capital, cash flow from operating activities totaled $21.5 million. Including a non-cash write down of $15.4 million taken in the quarter, the Company reported GAAP net loss from continuing operations of $24.9 million, or $0.12 per share. On an adjusted basis1, the Company reported a net loss of $23.0 million, or $0.11 per share.
Coeur’s exploration activities during the first quarter focused on resource expansion and infill drilling at Palmarejo and Kensington as well as the Sterling and Crown projects, which were acquired in October 2018 as part of the acquisition of Northern Empire. The drill programs at Rochester and Silvertip are scheduled to resume in the second quarter. During the first quarter, the Company completed 27,724 feet of resource expansion drilling, a decrease of approximately 36% quarter-over-quarter. During the quarter, Coeur also completed 62,402 feet of resource infill drilling, an increase of approximately 72% quarter-over-quarter. Total feet drilled during the first quarter was approximately 13% higher compared to the prior period, reflecting Coeur’s continued commitment to its success-based exploration program.
At the Palmarejo, up to seven surface and underground core rigs were active during the first quarter. Drilling activities were focused on the La Nacion, Guadalupe, Los Bancos, Zapata and Valentina veins. Expansion drilling delineated a potential new zone of silver-gold mineralization at Valentina, which is located 5,250 feet (1,600 meters) west of Guadalupe. Similarly, expansion drilling has extended the Zapata vein northwest towards Valentina, such that there is a 2,950-foot (900-meter) gap where no drilling exists between the two drill stations. The Company plans to utilize two drills to focus on expansion drilling to explore this zone in the second quarter. Infill drilling during the quarter focused on the La Nacion and Guadalupe veins. Three underground core drill rigs were active at the Kensington Main Zone 30, Lower Raven and Elmira. Exploration efforts in these zones were focused on capitalized resource infill drilling. The Sterling and Crown exploration properties located in southern Nevada, one reverse circulation rig was active during the first quarter. Exploration activities were initially focused on both infill and expansion drilling at the Sterling property. In March, the rig was moved to focus on expansion drilling at the South Daisy resource, which is contained in the Crown Block. Surface exploration mapping and sampling at the Crown Block has resulted in two new drill targets. As a result of this newly sampled area, new drill pads are being permitted for testing in the second quarter. Drilling is planned to continue with one rig focused on the Daisy and SNA deposits in the Crown Block until the third quarter. Coeur expects to add additional rigs at the Crown Block later in the year.
The company’s address is 104 S. Michigan Avenue, Suite 900, Chicago, IL 60603, (312) 489-5800, www.coeur.com.