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Coeur to wrap up Palmarejo feasibility in June (published 28 April 2008):

Idaho-based Coeur d'Alene Mines (NYSE: CDE, TSX: CDM, ASX: CXC) aims to complete a feasibility study in June for its Palmarejo silver-gold project in Mexico's Chihuahua state, company CFO Mitchell Krebs told BNamericas.

The feasibility study will include the first proven and probable reserves estimate for the Palmarejo deposit, Krebs said, though the Guadalupe and La Patria deposits will continue to have resources but will not be included in the reserves.

Palmarejo's measured and indicated resources stand at 88.7Moz silver and 1Moz gold, with additional inferred resources of 61.4Moz silver and 700,000oz gold.

The current mine plan foresees a commercial production rate of 4,500t/d throughput, with annual output of nearly 10.4Moz silver and 115,000oz gold at cash costs, net of gold byproduct, of negative US$0.41/oz silver.

Prior to Coeur d'Alene's acquisition of the Palmarejo project, processing equipment with a capacity of 6,000t/d, which includes ball mills and sag mills, were purchased, Krebs said.

"So we will have about 1,500t/d of excess capacity that we will hopefully take up with added production from the other nearby deposits, like Guadalupe and La Patria. Hopefully, although not immediately, but in the first couple of years of production, we can bump production from 4,500t/d up to 6,000t/d."

The nearby deposits are located some 5-7km away from where the processing facilities will be.

According to Krebs, Palmarejo will be in commercial production at the 4,500t/d rate by this time next year, with 2,500t/d coming from the open pit and 2,000t/d coming from underground.

Capital expenditures to get Palmarejo into commercial production are estimated at US$225mn, he added.

Capital spending will be "significant" next year considering the amount of underground development to be carried out in 2009, Krebs said.

Coeur, which also runs the Cerro Bayo gold-silver mine in Chile, Martha mine in Argentina, San Bartolomé in Bolivia and has production from US and Australian operations, expects to produce 16Moz of silver and 68,000oz gold this year.