Coeur completes acquisition of Silver Valley

Coeur d’Alene Mines (CDE-N) has completed its acquisition of Silver Valley Resources and other assets from Asarco (AR-N) in a deal valued at US$33.4 million.

The Idaho-based company granted Asarco 7.1 million shares for the half of Silver Valley it did not already own, plus the San Bartolome silver project in the Brazilian department of Potosi.

Coeur also received 1.5 million shares and 500,000 share purchase warrants in Pan American Silver (PAA-T), and a 20% net profits royalty in that company’s Quiruvilca silver mine in Peru.

With 100% ownership of Silver Valley, which operates the Galena and Coeur mines in North Idaho’s prolific Coeur d’Alene district, the company increases its production by 1.8 million oz. silver annually and adds 16.2 million oz. in reserves and 6 million oz. in resources.

Coeur also expects to lower cash costs with increased production from the Galena mine. Further exploration will be carried out later.

In Bolivia, Coeur hopes to augment the resource at San Bartolome. The property currently contains, within four of the seven known deposits, 35 million tons grading 3.1 oz. per ton, equivalent to about 110 million oz. silver. Early metallurgical tests indicate the mineralization is amenable to heap leaching.

As a result of the transaction, Asarco holds a 19.3% interest in the company, and Coeur, in turn, holds a 5% stake in Pan American.

In other news, Coeur received a US$31.5-million settlement from Cyprus Amax Minerals (CYM-N), resolving a lawsuit over the Golden Cross gold mine in New Zealand.

Coeur sought damages arising from ground movement and instability. In the second quarter of 1996, the company wrote down US$53 million of its 80% interest in the mine. Coeur expects to gain US$19 million as a result of the settlement.