Strong production and exploration from Kensington mine can only buffer its parent company, Coeur d’Alene Mines Corporation, from unexpected extra costs at mines in Mexico and Bolivia.
In a press conference Tuesday, Coeur management said they were not impressed with the corporation’s third quarter performance.
Coeur’s Palmarejo mine in Mexico hit unstable ground in a high yield section during a transition to open pit operation in the third quarter. The company plans to shore up the high yield area before it resumes excavation there, company officials said.
The San Bartolomé silver mine in Bolivia lost production due to a power outage.
Coeur’s production and sales of gold and silver dropped off from the second quarter of 2012.
Coeur d'Alene said Kensington and Rochester in Nevada, both increased performance.
"Our Rochester silver and gold mine in Nevada and our Kensington gold mine in Alaska continued to accelerate production rates during the quarter,” said Mitchell Krebs, Coeur president and CEO.
To date, Kensington has produced more than 54,000 ounces of gold and sales have totaled $36.5 million. Third quarter production increased 13 percent over Q2.
Kensington’s operating costs per ounce of gold dropped by 4 percent from the second quarter of 2012. Currently at $1,298, Coeur said it expects to reduce costs further to $950 per ounce in 2013. Kensington spent the last year improving efficiencies at the mine.
Production at Kensington could remain steady for many years as exploration at the site may have uncovered a large deposit. Using two drills, Kensington has discovered mineralization grading up to 1.72 ounces per short ton.
“Encouraging results were obtained from Kensington South and Elmira,” according to Coeur’s financial release.
Coeur expects a steady near term future.
"As we look ahead to 2013, we expect silver and gold production to be consistent with 2011 and 2012 levels," Krebs said.
For more information visit www.coeur.com.
• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.
Comments (2)
Add comment$950 per ounce
Five years ago gold was selling for $800 per oz. Ten years ago it was $300.
Current prices are a major aberration. This bubble's bound to pop. What happens to Kensington when it does? Are they going to stay open when gold is selling for half of their production costs?
No...
They would obviously not spend $1,000 per ounce if they were only selling it for $450/oz. BECAUSE of the high gold prices they are able to spend more an ounce on many things such as exploration, upgrades, the capital investment mentioned in the article top obtain a lower ROI that is expensive initially but saves them money in future years, etc.
With gold being expensive now is the time these things are being done.