Coeur approves San Bartolom build

Shares in Coeur d’Alene Mines (CDE-N) were US17, or more than 4%, higher at US$4.25 in early afternoon trading in New York on Dec. 15, after the company approved the construction of a US$135-million mine at its San Bartolom silver project, near Potosi, Bolivia

The world’s largest primary silver producer says it expects the mine to boost its silver production by more than 40% beginning in 2006. Coeur expects to produce some 13.7 million oz. of silver at US$3.41 apiece in all of 2004.

During each its first five years of operation, San Bartolom is expected to produce some 8 million oz. of silver at cash operating costs of around US$3.50 per oz. In all, the mine should run for around 15 years.

A recently completed final feasibility study boosted San Bar Bartolom’s previous capital estimate by US$35 million to US$135 million, owing to increased costs for fuel, concrete, steel and labour. Operating cash flow is projected at around US$20 million per year.

The project is home to reserves totalling 35.3 million tons running 3.5 oz. silver per ton, for 123 million contained ounces. The reserves are contained in the Huacajchi, Diablo, and Santa Rita surface gravel deposits. The gravels can be hauled directly to processing plants.

Construction of the open pit facility is expected to last around 18 months, and will employ about 500 people; during operation, full-time staff will number about 370.

San Bartolom will enjoy exemptions from import duties and value added taxes on imported construction capital thanks to recently finalized Bolivian tax benefits for new investments in mining projects in the region. The Vice Ministries of Mining, Environment and Sustainable Development granted the project its two final environmental permits earlier this summer.

Coeur says it will also establish the Fundespo foundation aimed at helping local industries, including silversmithing and tourism.