Precious Metals


The new preliminary economic assessment, released this week, more than doubles Rochester’s net asset value from $280 million to $609 million.

Coeur Mining (NYSE:CDE) released a re-scoped mine plan and preliminary economic assessment (PEA) for its Rochester silver-gold mine this week.

The PEA improves on a NI 43-101 technical report filed in early 2017 by more than doubling Rochester’s net asset value (NAV) from $280 million to $609 million.

The report also increases pre-tax life-of-mine cash flow by 122 percent, putting it at $955 million. In addition, it raises the anticipated pre-tax cash flow margin from 19 percent to 31 percent and extends Rochester’s mine life out to 2038.

The company plans to add a high-pressure grinding roll (HPGR) to Rochester’s crushing circuit in 2019, which company CEO Mitchell J. Krebs said should be a “game-changer” for the mine’s “costs, margins, cash flows, mine life and NAV.”

Coeur notes that the PEA also includes the planned construction of second HPGR unit in 2020. The addition of the HPGR technology is estimated to cost about $20 million, but is expected to improve Rochester’s silver recoveries from 61 percent over 20 years to 70 percent in a little over two years.

Krebs added that in the initial 10 years after adding the HPGR technology, Rochester’s costs per silver equivalent ounce are expected to decrease from $13.08 to less than $10, with average pre-tax cash flow expected to be $48 million.

“As a result, we believe this investment and this technology can generate high returns and unlock significant value for our stockholders,” he said.

The PEA also incorporates material from the open pit, which reduces Rochester’s strip ratio by more than half, from 0.8:1 to less than 0.4:1.

The company said the PEA will be included in a NI 43-101 technical report that is expected to be filed on March 5, 2018. The firm expects to make a decision regarding whether or not to proceed with the re-scoped mine plan in early 2019.

On Tuesday (February 27), shares of Coeur Mining closed almost neutral in New York at US$8.04. Its share price has been trending up since the beginning of the year, up 7.2 percent year-to-date.

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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.


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