The stock market reacted positively to the release of Coeur Mining’s third quarter report Monday — the mining company’s stocks rose nearly a dollar a share in trading.
The Kensington Mine is an underground gold mine and consists of the Kensington and adjacent Jualin properties, located on the east side of the Lynn Canal about 45 miles north-northwest of Juneau. Part of Coeur d’Alene Mines Corp. and its subsidiaries, Kensington commenced commercial production in July 2010.
Coeur saw increased metal sales in its third quarter this year, according to its Security and Exchange Commission third quarter report. Continuing operations increased to $343.6 million in the third quarter of 2011, up by 189.8 percent from third quarter 2010. Third quarter sales bring the year-to-date total metal sales to more than $774 million.
Coeur benefited from a substantial increase in average metal prices from 2010 to 2011. Silver cost $38.96 for the three months that ended Sept. 30, 2011. Gold was $1,702 per ounce. This compares to third quarter 2010 numbers of $19.01 per ounce for silver and $1,227 per ounce for gold.
Sales of Kensington metals increased from $8.52 million in the three months that ended Sept. 30, 2010 to $44.185 million in the same period in 2011. Kensington’s nine-month metal sales ending Sept. 30 of this year topped $118 million.
Kensington played a large role in Coeur’s gold sales.
“The Company’s total gold production in the third quarter of 2011 increased 9,538 ounces, or 20.1 percent, to 57,052 ounces, as compared to 47,514 ounces in the comparable period in 2010,” according to Coeur’s third quarter release.” The increase was primarily driven by the Kensington mine, which operated at full capacity during the third quarter of 2011,”
The Kensington Mine sells precious metal concentrates, typically under long-term contracts, to smelters in China and Germany.
The company spent $38.1 million on capital expenditures in the third quarter of 2011, which is slightly higher than the same time period last year. Capital expenditures totaled $22 million for Kensington’s paste backfill plant.
During the third quarter of 2011, Coeur completed more than 130,000 feet of new core and reverse circulation drilling in its global exploration. During the quarter the company increased its exploration budget to over $23.5 million.
Exploration at Kensington consisted of just more than 3,300 feet of core drilling in the quarter, nearly all of which was devoted to the Raven vein zone, located approximately 2,250 feet due west of the Kensington ore body. Late in the quarter initial drilling commenced on a new target termed Kensington South.
• Contact reporter Russell Stigall at 523-2276 or at email@example.com.