Coeur sets silver production record

Coeur d'Alene Mines Corp., owner of the Kensington mine north of Juneau, announced a second-quarter silver production record Thursday of 4.3 million ounces.

That's a 74 percent increase compared to last year's second quarter, and was driven by silver production from the company's two new mines, the San Bartolomé silver mine in Bolivia and the Palmarejo silver and gold mine in Mexico.

The two new mines combined produced 58 percent of the company's silver production during the second quarter.

Coeur continues to fortify its balance sheet, said Chairman, President and CEO Dennis E. Wheeler.

The company's cash position now stands at $80 million, and total debt was reduced by more than $150 million, or 37 percent, since the beginning of the year.

Wheeler said the recent U.S. Supreme Court decision and dissolution of the previous tailings permit injunction clears the way for the only remaining item left to be constructed at Kensington - the tailings facility - and for production to begin in the second half of 2010.

The company is waiting for the U.S. Army Corps of Engineers to complete a 15-day public comment period, after which it is expected to reinstate the permit.

The Environmental Protection Agency asked for additional review, but the Corps has not said what it will do.

The mine will average about 120,000 ounces of annual gold production over a 12.5-year life, the company said in a statement.

Cash operating costs are expected to average $475 per ounce, and construction and other capital costs to bring the mine into production are expected to cost about $70 million, the company said.

Construction contracts have been awarded and the construction management team has been hired, the company said. Construction activities will be focused on completing the tailings facility this year, for a second-half 2010 startup.

Coeur announced on July 16 that it agreed to sell back to Perilya Limited its interest in the silver contained at the Broken Hill mine in Australia for $55 million in cash.

Coeur originally purchased the interest from Perilya in September 2005 for $36.9 million, and has received more than 6.1 million ounces of payable silver from the Broken Hill mine.