Engineering & Mining Journal

OCT 2017

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REGIONAL NEWS - U.S. & CANADA 8 E&MJ; • OCTOBER 2017 www.e-mj.com Coeur Acquires Silvertip Mine in British Columbia Coeur Mining will acquire privately owned JDS Silver Holdings Ltd. and its whol- ly-owned subsidiary, JDS Silver Inc., which owns the high-grade silver-zinc- lead Silvertip mine located in northern British Columbia, Canada, adding a sixth producing mine to Coeur's North Ameri- can-focused platform. Under the terms of the agreement, Coeur will pay an initial consideration of $200 million, consisting of $146.5 million in cash, $38.5 million of Coeur shares (approximately 4.3 million new shares) and will assume $15 million in existing debt. Additional potential pay- ments of up to $50 million are contingent upon achieving specific future permitting and exploration milestones at Silvertip. Silvertip is one of the industry's new- est and highest-grade silver-zinc-lead mines with a silver-equivalent indicated resource grade of 1,166 grams per met- ric ton (g/mt), comprised of 352 g/mt of silver, 9.4% zinc, and 6.7% lead, and a silver-equivalent inferred resource grade of 1,155 g/mt, comprised of 343 g/mt of silver, 9.8% zinc, and 6.2% lead. Lo- cated just below the Yukon border, the operation sits within a highly prospec- tive 93,000-acre (37,650 hectares) land package. Silvertip commenced produc- tion during the fourth quarter of 2016. Upon expected completion of the transaction in late October, Coeur intends to invest $25 million to $35 million in surface infrastructure, accelerated under- ground development and drilling and mill optimization over a six-month period, and recommence commercial production by the end of the first quarter of 2018. Once an anticipated daily average mining rate of 1,000 mt per day (mt/d) is achieved, Coeur expects Silvertip to produce an av- erage of approximately 10 million silver equivalent ounces (oz) annually consist- ing of approximately 3 million oz of silver, 45-50 million lb of zinc, and 40-45 mil- lion lb of lead over an estimated 7.5-year initial mine life. The mine's all-in sustain- ing costs (AISC) are expected to average approximately $10.50/oz to $11.50/oz on a silver equivalent basis. A significant investment has already been made at Silvertip, including a newly installed processing facility, dry stack tail- ings facility, a 26-km access road, more than 4 km of underground development, 86,000 m of drilling, two bulk sample programs, and 20 years of environmental baseline data. For minimal incremental capital, Coeur anticipates optimizing sev- eral aspects of this new operation before recommencing production. "The Silvertip acquisition represents a unique opportunity to significantly en- hance our portfolio of operations," said Mitchell J. Krebs, president and CEO, Coeur Mining. "We look forward to working with the government of British Columbia and partnering with the Kaska Nation and members of the British Columbia and Yu- kon Indigenous communities." The additional production should in- crease Coeur's overall production to 38 million oz to 41 million oz silver equivalent. Pure Gold PEA Advances the Madsen Gold Project Pure Gold Mining has reported the results of a positive preliminary economic as- sessment (PEA) of its high-grade Madsen gold project in the Red Lake mining dis- trict of Ontario. The PEA is based on an updated resource estimate and describes a robust 14-year underground mining op- eration with highly attractive economics at base-case metal prices. Mineralized material to be mined over the course of the mine life totals 2.99 mil- lion mt at an average diluted head grade of 10.3 grams per metric tons (mt) of gold. At a mill recovery of 92%, recovered gold is estimated at about 911,500 ounces (oz). The Madsen gold project is being de- veloped on a previously mined proper- ty. The existing Madsen portal and ramp will be further developed from its current access to 150 meters (m) below surface down to a total depth of 1,430 m. Access development will utilize widened and reha- bilitated existing workings where possible. Average annual gold production in years three through nine is estimated at about 75,500 oz/y, with peak annual production of approximately 85,000 oz. Life-of-mine operating cash costs plus sustaining costs are estimated at $714/oz of gold recovered. Preproduction capital cost is estimated at C$50.9 million, in - cluding a 15% contingency. The payback period is estimated at 2.8 years. The Madsen gold project PEA is based on underground mining utilizing existing mining, milling and tailings management infrastructure. The existing Madsen portal and ramp are approximately 1 km from the existing mill. Underground mining and haulage are anticipated to be performed by a contract mining company using its own equipment, operating 365 days per year. The Silvertip mine in British Columbia (above) has a new processing plant and a dry-stack tailings facility.

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