Coeur Mining added 25.4 million silver oz and 376,000 gold oz to the proven and probable reserves at its Palmarejo mine in Mexico, representing 89% and 76% increases, respectively, compared to year-end 2014.
Palmarejo's reserves now total 54 million silver oz and 876,000 gold oz. Included in these reserves are 20.1 million silver oz and 278,000 gold oz at the newly acquired deposit previously named Don Ese by Paramount Gold and Silver Corp. (now called Independencia Este), which is the continuation of Coeur's recently discovered Independencia deposit (Independencia Oeste).
“Closing the acquisition of Paramount has further enabled Palmarejo’s transition to a high-grade, high-margin underground operation and is an important milestone in Coeur’s strategic repositioning,” said Mitch Krebs, Coeur President and CEO. “These new Independencia reserves represent a 12% increase to our company-wide silver equivalent reserves and boost our overall silver equivalent reserve grade by 10%. Importantly, ore mined from Independencia Este is not subject to any non-government royalty or streaming obligation, which will further boost Palmarejo’s margins and cash flow. With the Independencia deposit as a second source of high-grade silver and gold to supplement the rising production rates from the Guadalupe deposit, we anticipate Palmarejo will become our lowest cost and largest mine, contributing approximately half of Coeur’s $190-$200 million of expected free cash flow in 2017.”
Palmarejo now has an expected mine life of around seven years of high-grade underground mining based on these reserves. Coeur expects to further extend the mine life based on the significant amount of mineralization contained in the resource categories and based on the continued drilling success it’s having at Guadalupe, at Independencia, and on targets located between these two growing deposits.