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Operating costs increase, production decreases at Coeur's Kensington Mine

Posted: September 10, 2013 - 10:08pm  |  Updated: September 10, 2013 - 11:03pm

The Kensington Mine produced 23,162 ounces of gold during its second quarter of 2013, according to Coeur Mining’s most recent report. Production at Kensington Mine was down 8 percent from the first quarter. Gold production company-wide at Couer was up by 7 percent with 60,757 ounces. Cash operating costs per ounce at Kensington were $1,115, up from $1,055 in the first quarter.

Additional cost reductions at the mine will include a reduction in contract services and lower underground backfill costs as a result of lower prices on backfill material.

Capital expenditures at Kensington Mine totaled $7.4 million in the second quarter out of $27.2 million spent company-wide. Sales at the mine totaled $30.9 million out of $204.5 million company-wide. Cash flow from operating activities at the mine totaled $7.6 million out of $63.3 million company-wide.

Exploration continued at the mine during the second quarter with help from three drill rigs. Surface drilling began on the Jualin area, which the report says has the potential to be a higher grade than current reserves. Exploratory drilling has shown new gold mineralization more than 200 feet past the south limits of the current reserve.

“We expect production from Kensington to increase and unit costs to decrease significantly during the second half of the year due to higher grades,” the report said.

Net loss for Couer Mining in the second quarter was $35 million and net income was $12.3 million. Adjusted earnings were $34.6 million.

“Our second quarter operating performance improved significantly compared to this year’s first quarter and last year’s fourth quarter … The Kensington gold mine in Alaska is now demonstrating its ability to operate more,” Coeur’s President and Chief Executive Officer Mitchell J. Krebs said in the report.

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