-- HIGHLIGHTS -- COEUR D'ALENE, Idaho, May 8 /PRNewswire-FirstCall/
-- Coeur d'Alene Mines Corporation (NYSE: CDE; TSX: CDM) today
reported all-time record quarterly net income of $14.3 million, or
$0.05 per diluted share, for the first quarter of 2006, compared to
a net loss of $1.1 million, or $0.00 per diluted share, for the
year-ago period. Metal sales for the first quarter of 2006 were
$44.9 million, a 39 percent increase compared to metal sales of
$32.2 million in the year-ago period. In commenting on the
company's performance relative to the year-ago quarter, Dennis E.
Wheeler, Chairman, President and Chief Executive Officer, said,
"The company reported superlative income due largely to a 31
percent increase in silver production from continuing operations, a
reduction in our cash cost per ounce of silver to below $4.00 for
continuing operations, an 8 percent decline in our corporate
overhead expenses, and higher realized prices for silver and gold."
Wheeler added, "The groundwork we have done over the past two years
specifically to improve operating efficiency and add low-cost
production has prepared the company to benefit from the current
strong market conditions. In particular, operations at the
Rochester and Martha mines improved significantly
quarter-over-quarter. And while Cerro Bayo got off to a slow start
in the first quarter, we expect results to improve markedly as
mining returns to higher-grade areas there for the balance of the
year. We expect to see a continuation of strong performance
improvement trends over the course of 2006." Highlights by
Individual Property -- Cerro Bayo (Chile) -- Silver and gold
production were below the levels of the year-ago period because the
mine concentrated on lower-grade veins during the quarter. The
lower volumes and the associated reduction in the gold by-product
credit -- along with inflationary cost increases for energy -- were
largely responsible for the increase in silver cash cost per ounce.
Cerro Bayo's mine plan calls for work to be focused on higher-grade
areas for the balance of 2006 and for production to return to
historical levels. -- Martha (Argentina) -- Silver and gold
production both increased approximately 42% due to higher ore
grades and tons milled. Cash costs per ounce of silver declined,
due to the higher production. -- Rochester (Nevada) -- Silver
production was up modestly compared to that of the year-ago period,
while gold production increased 15%. Cash cost per ounce declined
by 31% as compared to that of the year-ago period. -- Endeavor
(Australia) -- Silver production more than doubled from the level
of the fourth quarter of 2005 as the mine continued its steady
recovery from an uncontrolled rock fall in October 2005 that
limited mining activity and affected cash cost per ounce during the
fourth quarter. At a silver cash cost per ounce of $2.13, Endeavor
was the lowest-cost mine in Coeur's system during the first quarter
of 2006. (Year-ago comparisons for Endeavor are not meaningful
because the mineral interest was acquired in the second quarter of
2005.) -- Broken Hill (Australia) -- Silver production was 557,311
ounces in the first quarter of 2006, with a cash cost per ounce of
$2.89. (Year-ago comparisons for Broken Hill are not meaningful
because the mineral interest was acquired in the third quarter of
2005.) Balance Sheet and Capital Investment Highlights The company
had $374.3 million in cash and short-term investments as of March
31, 2006. Capital spending during the first quarter of 2006 totaled
$27.8 million, most of which was spent on the Kensington (Alaska)
gold project and the San Bartolome (Bolivia) silver project as
summarized below. -- At Kensington, capital investment totaled
$23.8 million during the quarter as the company continued with an
aggressive construction schedule. The company is aiming to complete
the project and start producing gold toward the end of 2007. To
date, the company has completed extensive underground work to
prepare the mine for operation. Above-ground, Coeur has built a
camp for construction workers, installed a water treatment plant, a
temporary dock, and completed much of the grading and site
preparation for the construction of the mill. In coming months,
most of the work will focus on construction of a tailings
impoundment dam and construction of the mill. -- At San Bartolome,
capital investment totaled $1.9 million during the quarter. The
company is aiming to complete the project and begin producing
silver toward the end of 2007. In advance of anticipated resumption
of full-scale construction in approximately July 2006, the company
has focused on construction of access roads to and around the site,
rough cut grading of the mill site, preparation of an ore stockpile
area, movement of some ore to stockpile and the construction of a
fence around the perimeter of the plant site area. Exploration
Highlights Exploration activity was concentrated at the company's
Cerro Bayo, Martha and Kensington properties, where Coeur already
has sizable mineral resources and mineral reserves within large,
prospective land packages and where, at Cerro Bayo and Martha,
mineral reserves and resources have increased for three consecutive
years. At Cerro Bayo, exploration in the area of the new Cascada
vein discovered new mineralization 250 meters to the north in a
potential extension. Initial drilling returned values of 6.26
silver ounces per ton and 0.29 gold ounces per ton over 7.7 feet of
core (4 feet true width), and 44.2 silver ounces per ton and 1.92
gold ounces per ton over 11 feet of core (7.5 feet true width).
Follow-up drilling is underway on these encouraging high-grade
results. At Martha, approximately 30,500 feet of drilling was
accomplished during the first quarter to expand reserves and
discover new mineralization. Results obtained from drilling R4
Deep, Francisca, and Catalina continues to expand the strike and
depth of the mineralization in those veins, which were discovered
in 2004. Drilling will continue throughout the year on these and
other targets in the Martha mining district. The company
recommenced an underground core drilling program at Kensington in a
continuation of the program conducted in the second half of 2005.
The program is designed to expand mineral reserves through
conversion of portions of the project's large, additional mineral
resource consisting of indicated mineral resource of 617,000 tons
grading 0.436 ounces per ton of gold and inferred resources of 2.5
million tons grading 0.234 ounces per ton of gold. Approximately
4,600 feet were drilled in this program during the quarter.
Discontinued Operation As previously announced, Coeur has signed an
agreement to sell 100% of its shares in Coeur Silver Valley (CSV)
to U.S. Silver Corporation for $15 million. The company expects the
sale to close by June 1, 2006. For financial reporting purposes,
results of Coeur Silver Valley are reported as discontinued
operations. Coeur d'Alene Mines Corporation is one of the world's
leading primary silver producers and has a strong presence in gold.
The Company has mining interests in Alaska, Argentina, Australia,
Bolivia, Chile, Nevada, and Idaho. Conference Call Information
Coeur d'Alene Mines Corporation will hold a conference call to
discuss the Company's first quarter 2006 results at 1 p.m. Eastern
time on May 8, 2006. To listen live via telephone, call (877)
502-9276 (US and Canada) or (913) 981-5591 (International). The
conference call and presentation will also be web cast on the
Company's web site http://www.coeur.com/. A replay of the call will
be available through May 14, 2006. The replay dial-in numbers are
(888) 203-112 (US and Canada) and (719) 457-0820 (International)
and the access code is 8182471. Cautionary Statement Company press
releases may contain numerous forward-looking statements within the
meaning of securities legislation in the United States and Canada
relating to the Company's silver and gold mining business. Such
statements are subject to numerous assumptions and uncertainties,
many of which are outside the Company's control. Operating,
exploration and financial data, and other statements in this
document are based on information the Company believes reasonable,
but involve significant uncertainties as to future gold and silver
prices, costs, ore grades, estimation of gold and silver reserves,
mining and processing conditions, currency exchange rates, and the
completion and/or updating of mining feasibility studies, changes
that could result from the Company's future acquisition of new
mining properties or businesses, the risks and hazards inherent in
the mining business (including environmental hazards, industrial
accidents, weather or geologically related conditions), regulatory
and permitting matters, risks inherent in the ownership and
operation of, or investment in, mining properties or businesses in
foreign countries, as well as other uncertainties and risk factors
set out in the Company's filings from time to time with the SEC and
the Ontario Securities Commission, including, without limitation,
the Company's reports on Form 10-K and Form 10-Q. Actual results
and timetables could vary significantly from the estimates
presented. Readers are cautioned not to put undue reliance on
forward-looking statements. The Company disclaims any intent or
obligation to update publicly such forward-looking statements,
whether as a result of new information, future events or otherwise.
Cautionary Note to U.S. Investors -- The United States Securities
and Exchange Commission permits U.S. mining companies, in their
filings with the SEC, to disclose only those mineral deposits that
a company can economically and legally extract or produce. We use
certain terms in this press release such as "measured,"
"indicated," "inferred" and "resources" that the SEC guidelines
strictly prohibit U.S. registered companies from including in their
filings with the SEC. U.S. Investors are urged to consider closely
the disclosure in our Form 10-K, File No. 1-8641 which may be
secured from us, or from the SEC's website at:
http://sec.gov/edgar.shtml. Donald J. Birak, Coeur's Senior Vice
President of Exploration, is the qualified person responsible for
the preparation of the scientific and technical information in this
document. Mr. Birak has reviewed the available data and procedures
and believes the collection of exploration data and calculation of
mineral reserves reported in this document was conducted in a
professional and competent manner. Contact: Scott Lamb 208-665-0777
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS) COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES (Unaudited)
Three Months ended March 31, 2006 2005 REVENUES Sales of metal
$44,854 $32,235 COSTS AND EXPENSES Production costs applicable to
sales 20,099 17,342 Depreciation and depletion 6,318 4,149
Administrative and general 5,090 5,549 Exploration 1,968 2,709
Pre-development -- 2,369 Litigation settlement -- 1,600 Total cost
and expenses 33,475 33,718 OTHER INCOME AND EXPENSE Interest and
other income 2,521 1,948 Interest expense, net of capitalized
interest (521) (570) Total other income and expense 2,000 1,378
Income (loss) from continuing operations before income taxes 13,379
(105) Income tax benefit (provision) 347 (679) INCOME (LOSS) FROM
CONTINUING OPERATIONS 13,726 (784) Income (loss) from discontinued
operations, net of income taxes 612 (361) NET INCOME (LOSS) 14,338
(1,145) Other comprehensive income (loss) 4 (1) COMPREHENSIVE
INCOME (LOSS) $14,342 $(1,146) BASIC AND DILUTED INCOME (LOSS) PER
SHARE Basic income (loss) per share: Income (loss) from continuing
operations $0.06 $(0.00) Income (loss) from discontinued operations
-- -- Net income (loss) $0.06 $(0.00) Diluted income (loss) per
share: Income (loss) from continuing operations $0.05 $(0.00)
Income (loss) from discontinued operations -- -- Net income (loss)
$0.05 $(0.00) Weighted average number of shares of common stock
Basic 252,485 239,985 Diluted 277,383 239,985 Operating Statistics
From Continuing Operations The following table presents information
by mine and consolidated sales information for the three-month
periods ended March 31, 2006 and 2005: Three Months Ended March 31,
2006 2005 Rochester Tons processed 2,531,900 2,358,413 Ore grade/Ag
oz 0.67 0.91 Ore grade/Au oz 0.014 0.010 Recovery/Ag oz (A) 67.4%
52.8% Recovery/Au oz (A) 46.5% 62.2% Silver production ounces
1,148,363 1,135,997 Gold production ounces 16,117 13,992 Cash
cost/oz $4.32 $6.30 Total cost/oz $7.61 $8.53 Cerro Bayo Tons
milled 100,275 98,584 Ore grade/Ag oz 5.54 7.05 Ore grade/Au oz
.095 .162 Recovery/Ag oz 92.9% 94.9% Recovery/Au oz 92.2% 92.8%
Silver production ounces 515,822 659,293 Gold production ounces
8,794 14,868 Cash cost/oz (B) $3.46 $(0.15) Total cost/oz $5.94
$1.78 Martha Mine Tons milled 8,849 7,837 Ore grade/Ag oz 65.86
50.99 Ore grade/Au oz .082 .065 Recovery/Ag oz 93.3% 94.9%
Recovery/Au oz 92.3% 92.7% Silver production ounces 543,486 379,060
Gold production ounces 670 471 Cash cost/oz $4.93 $5.07 Total
cost/oz $5.37 $5.51 Endeavor (C) Tons milled 103,003 -- Ore
grade/Ag oz 1.30 -- Recovery/Ag oz 62.9% -- Silver production
ounces 84,280 -- Cash cost/oz $2.13 -- Total cost/oz $3.43 --
Broken Hill (C) Tons milled 527,096 -- Ore grade/Ag oz 1.46 --
Recovery/Ag oz 72.3% -- Silver production ounces 557,311 -- Cash
cost/oz $2.89 -- Total cost/oz $5.64 -- CONSOLIDATED PRODUCTION
TOTALS Silver ounces 2,849,262 2,174,350 Gold ounces 25,581 29,331
Cash cost per oz/silver $3.94 $4.13 Total cost/oz $6.37 $5.95
CONSOLIDATED SALES TOTALS Silver ounces sold 2,877,890 2,653,097
Gold ounces sold 25,734 35,184 Realized price per silver ounce
$10.36 $6.82 Realized price per gold ounce $588 $424 (A) The leach
cycle at Rochester requires 5 to 10 years to recover gold and
silver contained in the ore. The Company estimates the ultimate
recovery to be approximately 61.5% for silver and 93% for gold. As
a result, current recovery may vary significantly from ultimate
recovery. See Critical Accounting Policies and Estimates -- Ore on
Leach Pad. (B) The negative cash cost per ounce of silver is the
result of the gold by-product credit as a reduction of operating
costs. (C) The Company acquired its interests in the Endeavor and
Broken Hill mines in May 2005 and September 2005, respectively.
Operating Statistics From Discontinued Operation The following
table presents information for Coeur Silver Valley which has been
classified as held for sale and reported as discontinued
operations: Three Months Ended March 31, 2006 2005 Silver
Valley/Galena Tons milled 32,652 37,458 Ore grade/Silver oz 15.91%
19.50 Recovery/Silver oz 96.2% 97.2% Silver production ounces
499,647 710,296 Cash cost/oz $9.24 $6.73 Total cost/oz $10.43 $7.45
Gold production 122 92 "Cash Costs per Ounce" are calculated by
dividing the cash costs computed for each of the Company's mining
properties for a specified period by the amount of gold ounces or
silver ounces produced by that property during that same period.
Management uses cash costs per ounce as a key indicator of the
profitability of each of its mining properties. Gold and silver are
sold and priced in the world financial markets on a US dollar per
ounce basis. "Cash Costs" are costs directly related to the
physical activities of producing silver and gold, and include
mining, processing and other plant costs, third-party refining and
smelting costs, marketing expense, on-site general and
administrative costs, royalties, in-mine drilling expenditures that
are related to production and other direct costs. Sales of
by-product metals are deducted from the above in computing cash
costs. Cash costs exclude depreciation, depletion and amortization,
corporate general and administrative expense, exploration,
interest, and pre-feasibility costs and accruals for mine
reclamation. Cash costs are calculated and presented using the
"Gold Institute Production Cost Standard" applied consistently for
all periods presented. Total cash costs per ounce is a non-GAAP
measurement and investors are cautioned not to place undue reliance
on it and are urged to read all GAAP accounting disclosures
presented in the consolidated financial statements and accompanying
footnotes. In addition, see the reconciliation of "cash costs" to
production costs under "Costs and Expenses" set forth below: The
following tables present a reconciliation between non-GAAP cash
costs per ounce to GAAP production costs applicable to sales
reported in the Statement of Operations: Three Months Ended March
31, 2006 (In thousands except ounces and per ounce costs) Cerro
Broken Rochester Bayo Martha Endeavor Hill Total _________ _______
_______ ______ _______ _________ Production of Silver (ounces)
1,148,363 515,822 543,486 84,280 557,311 2,849,262 Cash Costs per
ounce $4.32 $3.46 $4.93 $2.13 $2.89 $3.94 Total Cash Costs $4,965
$1,783 $2,681 $179 $1,609 $11,217 Add/Subtract: Third Party
Smelting Costs -- (770) (312) (103) (572) (1,757) By-Product Credit
8,941 4,873 371 -- -- 14,185 Other Adjustments 739 -- -- -- -- 739
Change in Inventory (2,893) (1,352) (63) (48) 71 (4,285) Production
costs applicable to sales $11,752 $4,534 $2,677 $28 $1,108 $20,099
Three Months Ended March 31, 2005 (In thousands except ounces and
per ounce costs) Cerro Broken Rochester Bayo Martha Endeavor Hill
Total _________ _______ _______ ______ _______ _________ Production
of Silver (ounces) 1,135,997 659,293 379,060 -- -- 2,174,350 Cash
Costs per ounce $6.30 $(0.15) $5.07 -- -- $4.13 Total Cash Costs
(000's) $7,153 $(98) $1,921 -- -- $8,976 Add/Subtract: Third Party
Smelting Costs -- (719) (197) -- -- (916) By-Product Credit 5,991
6,348 201 -- -- 12,540 Other Adjustment (100) -- -- -- -- (100)
Change in Inventory (3,557) 674 (275) -- -- (3,158) Production
costs applicable to sales $9,487 $6,205 $1,650 -- -- $17,342 The
following tables present a reconciliation between non-GAAP cash
costs per ounce to GAAP production costs applicable to sales
reported in Discontinued Operations (see Note D): Three Months
Ended March 31, (In thousands except ounces and per ounce costs)
Coeur Silver Valley/Galena 2006 2005 _______ _______ Production of
Silver (ounces) 499,647 710,296 Cash Costs per ounce $9.24 $6.73
Total Cash Costs (000's) $4,615 $4,782 Add/Subtract: Third Party
Smelting Costs (869) (1,124) By-Product Credit 796 938 Change in
Inventory (282) (697) Production costs applicable to sales $4,260
$3,899 COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 2006
2005 ASSETS (In Thousands) CURRENT ASSETS Cash and cash equivalents
$347,651 $214,616 Short-term investments 26,690 25,726 Receivables
23,038 27,986 Ore on leach pad 27,743 25,394 Metal and other
inventories 12,986 12,807 Deferred tax assets 2,678 2,255 Prepaid
expenses and other 6,388 4,707 Assets of operations held for sale
(Note D) 15,877 14,828 463,051 328,319 PROPERTY, PLANT AND
EQUIPMENT Property, plant and equipment 109,049 105,107 Less
accumulated depreciation (59,852) (57,929) 49,197 47,178 MINING
PROPERTIES Operational mining properties 122,650 121,441 Less
accumulated depletion (107,794) (105,486) 14,856 15,955 Mineral
interests 72,201 72,201 Less accumulated depletion (3,860) (2,218)
68,341 69,983 Non-producing and development properties 89,886
72,488 173,083 158,426 OTHER ASSETS Ore on leach pad, non-current
portion 31,316 29,254 Restricted cash and cash equivalents 17,041
16,943 Debt issuance costs, net 5,378 5,454 Deferred tax assets
2,837 923 Other 7,666 8,319 64,238 60,893 Total assets $749,569
$594,816 COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 2006
2005 (In thousands except share data) LIABILITIES AND SHAREHOLDERS'
EQUITY CURRENT LIABILITIES Accounts payable $ 12,426 $ 17,189 Other
current liabilities 6,604 6,274 Accrued interest payable 469 1,031
Accrued salaries and wages 4,864 7,840 Current taxes payable 1,716
66 Liabilities of operations held for sale (Note D) 12,816 12,908
38,895 45,308 LONG-TERM LIABILITIES 1 1/4% Convertible Senior Notes
due January 2024 180,000 180,000 Reclamation and mine closure
24,301 24,082 Other long-term liabilities 4,286 3,873 208,587
207,955 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common
Stock, par value $1.00 per share; authorized 500,000,000 shares,
issued 278,869,045 and 250,961,353 shares in 2006 and 2005
(1,059,211 shares held in treasury) 278,869 250,961 Additional
paid-in capital 775,611 656,977 Accumulated deficit (537,369)
(551,357) Shares held in treasury (13,190) (13,190) Accumulated
other comprehensive loss (1,834) (1,838) 502,087 341,553 TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY $749,569 $594,816 COEUR
D'ALENE MINES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF CASH FLOWS Three Months Ended March 31, 2006 and 2005
(Unaudited) Three Months Ended March 31, 2006 2005 (In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $14,338
$(1,145) Add (deduct) non-cash items: Depreciation and depletion
6,318 4,149 Deferred taxes (2,073) 679 Unrealized gain on embedded
derivative, net (1,559) (391) Share based compensation 625 400
Other charges 502 410 Changes in Operating Assets and Liabilities:
Receivables 4,830 (1,316) Prepaid and other current assets 336 882
Inventories (4,590) (3,256) Accounts payable and accrued
liabilities (918) (2,332) Discontinued operations (645) (577) Cash
provided by (used in) operating activities 17,164 (2,497) CASH
FLOWS FROM INVESTING ACTIVITIES: Purchases of short-term
investments (11,381) (10,546) Proceeds from sales of short-term
investments 10,316 6,015 Capital expenditures (27,806) (3,499)
Other (241) (29) Discontinued operations (497) (632) CASH USED IN
INVESTING ACTIVITIES (29,609) (8,691) CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from issuance of common stock 154,560 --
Payment of public offering costs (8,388) -- Common stock
repurchased (739) (569) Other 47 (80) CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES: 145,480 (649) INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 133,035 (11,837) Cash and cash equivalents at
beginning of period 214,616 273,068 Cash and cash equivalents at
end of period $347,651 $261,231 DATASOURCE: Coeur d'Alene Mines
Corporation CONTACT: Scott Lamb of Coeur d'Alene Mines Corporation,
+1-208-665-0777 Web site: http://www.coeur.com/
Copyright
