Coeur sees Bolivia mine confirmation

Dennis Wheeler, president and chief executive of Coeur d'Alene Mines Corporation, speaks at the Reuters Global Mining and Steel Summit in New York, March 9, 2010. REUTERS/Brendan McDermid

Reuters) – Coeur d’Alene Mines Corp (CDE.N) will receive government confirmation next week about new mining area at its San Bartolome silver mine in Bolivia, the company’s chief executive said on Tuesday.

Shares of Idaho-based Coeur, the biggest U.S.-based primary silver producer, spiked to a six-week high after the news.

Coeur CEO Dennis Wheeler told the Reuters Global Mining and Steel Summit in New York that operating costs should fall after the Bolivian government recognized the company’s existing mining rights at the mine.

“I am expecting next week that we have a new area open for mining based on our visit yesterday with the government for the next three years or so,” Wheeler said.

“They have given approval yesterday, and we are waiting for further confirmation that this area is appropriate for mining.”

Wheeler said the Bolivian government had imposed a resolution on the Cerro Rico mountain limiting mining above 4,400 meters (13,000 feet).

Upon receiving confirmation, the company will be able to mine richer silver ore found at the higher altitude area of San Bartolome.

The government has been undertaking a study to see whether mining is damaging the mountains, as thousands of individuals unaffiliated with any organizations have been using explosives to mine, Wheeler said.

“They wanted to take a look at what was going on in the mountain,” he said. “The main issue there is that there are literally thousands of individual miners there,” he said.

Coeur d’Alene uses only surface mining methods at its San Bartolome operation, he said.

In February, Coeur said San Bartolome produces 7.5 million ounces of silver at an average cash cost of $7.80 per ounce in 2009, its first full year of operation.

“We should see definitely lower cost per ounce” after the confirmation, Wheeler said. He did not give an estimate on what the new cost per ounce would be.

Coeur d’Alene shares jumped as much as 24 cents to hit $16.11 per share, the loftiest since January 25. Coeur had been trading lower prior to the news.

The company’s stock, however, ended nearly unchanged, down 1 cent at $15.86 on Tuesday.

Source: Reuters

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