Coeur ramp cuts high grade at Cerro Bayo (January 28, 2002)

Coeur d’Alene Mines (CDE-N) has cut new high-grade gold and silver mineralization at its Cerro Bayo property in southern Chile.

During construction of the upper access ramp, the Idaho-based company cut a 11.5-ft. section of the Celia vein structure averaging 1.08 gold-equivalent ounces per ton. The zone was encountered about 245 ft. below the surface.

The vein structure is not exposed on surface in the area and has never been drill tested. It runs roughly parallel to the Luz Eliana and Lucero vein structures about 525 ft. to the east and is up to 13 ft. wide. Drifting some 25 ft. southward along the vein has encountered consistent and continuous high-grade mineralization. The company hopes the Celia vein will add additional high-grade gold and silver ounces to proven and probable reserves.

Coeur’s CEO Dennis Wheeler said in a prepared statement, “The Cerro Bayo development program remains on schedule for a May startup. Production in 2002 is forecasted to be 60,000 gold equivalent ounces at a cash cost less than US$150 per ounce. The latest discovery confirms the promise of the Cerro Bayo district and our decision to develop the property for Coeur and its shareholders.”

Coeur is currently cutting a drill station in preparation for a drill program. The company says the new zone could stretch for more than 2,000 ft. before it reaches the Cerro Bayo dome.

Mineralization at Cerro Bayo is hosted by a series of parallel to sub-parallel vein systems. So far, the combined Cerro Bayo zone has been outlined over 8,200 ft. along strike and up to 3,300 ft. in width. At last count, the property held reserves of 582,000 tons averaging 0.18 oz. gold and 9.7 oz. silver, and resources of 585,000 tons grading 0.08 oz gold and 5 oz. silver.

Coeur plans a further 25,000 ft. of exploration drilling during the first half of 2002. So far, less than 15% of the property has been evaluated. There are 12 known mineralized veins and vein systems identified immediately around the Lucero vein.

Based on current proven and probable reserves, Coeur expects Carro Bayo’s annual production to climb to 80,000 gold equivalent ounces in 2003.

During November and December, Coeur drilled an additional 27 holes totalling 10,250 ft. along the extensions of the previously delineated reserves and resources. The company expects the drilling to add significant reserves and resources, particularly at the Luz Eliana vein.

The Cerro Bayo project is expected to breath new life into the nearby Fachinal mill, which Coeur closed in late 2000 with cash operating costs hitting US$447 per oz. gold-equivalent in the fourth quarter.