Ore Being Crushed And Stack On New Leach Pad At Rochester Mine 

COEUR D'ALENE, ID - Coeur d'Alene Mines reported that ore is now being crushed and stacked on the new leach pad at the Rochester Mine in Nevada, which will lead to increased silver and gold production in the fourth quarter.

Metal sales were $14.4 million and capital expenditures totaled $4.2 million. Operating cash flow was negative because of costs related to pre-stripping activities for the expansion. These costs are expensed during the period in which they are incurred rather than capitalized.

Over 200 million tons of additional mineral resources are located in the existing pit walls and represent a further significant growth opportunity.

Drilling shifted from ore control to exploration in the second quarter. A total of 6,809 meters (22,346 feet) of reverse circulation drilling was completed in the second quarter at the LM target, northwest of the mine and at the Nevada Packard area.

The company is anticipating full-year production of 19.5 million - 20.5 million ounces of silver and 240,000 - 250,000 ounces of gold. Higher production levels are expected in the fourth quarter from Rochester, San Bartolom and Martha.

Kensington is expected to slightly increase its gold production during the second half compared to the first six months of 2011, resulting in lower cash operating costs per gold ounce.

Expecting full-year net metal sales of approximately $1.0 billion and operating cash flow in excess of $500.0 million based on price assumptions of $35.09 per ounce of silver and $1,426 per ounce of gold (first half 2011 average spot prices).

The expecting capital expenditures for 2011 to total $130 million-$140 million. A total of $42 million of which was spent during the first six months of the year. Projected capital expenditures are higher than the previous estimate of $120 million due to additional capital projects at Kensington that are expected to enhance productivity and reduce costs. Forecasting average full-year cash operating costs of approximately $5.75 per ounce of silver and approximately $850 per ounce of gold at Kensington. Couer is also increasing second half exploration expenditures by 67% to approximately $14.0 million to accelerate drilling activities at Palmarejo, Rochester and Joaquin due to ongoing positive results.

"Our second quarter performance reflects record high production and record low costs per ounce at Palmarejo, another consistent quarter at San Bartolom, and steady progress at Kensington," said Mitchell J. Krebs, President and Chief Executive Officer. "Overall, we feel comfortable that full-year 2011 silver production will reach 19.5 million to 20.5 million ounces and gold production will be 240,000 to 250,000 ounces."

"As we continue focusing on operational consistency at our new, large mines, we are also pursuing new internal and external growth initiatives that will create value for shareholders. Our Rochester silver and gold mine in Nevada is one such opportunity. We have now resumed active mining and expect to generate additional silver and gold ounces in the fourth quarter from a newly constructed leach pad. Rochester offers opportunity for further high-return growth beyond this initial expansion, which we are actively pursuing," Krebs said. The company's address is 505 Front Ave. Coeur d'AleneID 83814.