Coeur trims exploration costs

Although the price of silver is north of US$5 per oz., Coeur d’Alene Mines (CDE-N) has decided to cut exploration and administrative expenses to the tune of US$6.5 million per year.

The Idaho-based company will trim its exploration budget by US$2 million per year, largely by suspending a regional gold program in Chile. For the remainder of the year, exploration at Coeur’s existing mine sites is expected to total US$4 million.

At the Fachinal silver-gold mine and the Petorca gold mine in Chile, the company will spend only enough on exploration to maintain current production levels.

Meanwhile, at the Kensington gold project in Alaska, Coeur intends to continue its efforts to reduce capital and operating costs. By the end of 1998, Coeur had lowered estimated cash operating costs to US$195 per oz. and capital costs to US$192 million. At full production, Kensington is expected to contribute more than 200,000 oz. annually over a mine life of 10 years.

Overall, the company has reduced its staff by 8.8%, with many of the cuts occurrng at the Golden Cross mine in New Zealand, where reclamation is ahead of schedule.

At the end of the first quarter, Coeur has US$149 million in working capital. For the year, production is expected to exceed 10 million oz. silver, on par with last year’s total of 10.7 million oz. However, gold production is projected to fall to 155,000 oz., down from 210,000 oz. in 1998.