Coeur d’Alene Mines, Bolnisi Gold and Palmarejo Silver to Merge

Coeur d’Alene Mines Corp., Bolnisi Gold NL and Palmarejo Silver and Gold Corp. announced during early May that they have entered into agreements, which have been approved unanimously by their respective boards of directors, as well as a special committee of independent directors of the Palmarejo board of directors, to merge creating the world’s leading primary silver producer.

The agreement calls for Coeur to acquire all of the shares of Bolnisi, and all of the shares of Palmarejo not owned by Bolnisi, in a transaction valued at approximately $1.1 billion. Bolnisi shareholders will receive 0.682 Coeur shares for each Bolnisi share they own (or, at the election of the Bolnisi shareholder, CHESS Depositary Interests representing Coeur shares), and Palmarejo shareholders will receive 2.715 Coeur shares for each Palmarejo share they own. It is anticipated that this will result in Coeur issuing a total of approximately 271.3 million new shares. In addition, Bolnisi and Palmarejo shareholders will receive a nominal cash payment equal to A$0.004 (US$0.003) per Bolnisi share and C$0.004 (US $0.003) per Palmarejo share.

Bolnisi and Palmarejo currently own 100% of the Palmarejo project, located in the state of Chihuahua, Mexico.

Upon completion of the transaction and following commencement of production at the Palmarejo Project, Coeur claims it will be positioned as the world’s leading primary silver producer in terms of silver production and silver resources. Based on Palmarejo mineral resource estimates and all the metallurgical and mining studies completed to date, Palmarejo is constructing a 2-millionmt/ y processing plant capable of producing 12 million oz of silver and 110,000 oz of gold annually, which Coeur expects would nearly double its current production levels.

As a result of this transaction, Coeur said it expects to produce approximately 32 million silver oz and approximately 290,000 gold oz in 2009; own a mineral resource base of over 364 million oz of measured and indicated silver mineral resources (inclusive of silver mineral reserves) and 96.6 million oz of inferred silver mineral resources and 3.4 million oz of measured and indicated gold mineral resources and 0.95 million oz of gold inferred mineral resources.

On July 3, Coeur reported that it had completed its due diligence under the terms of the merger agreement with Bolnisi and that the companies expected to complete the transaction in the fourth quarter of 2007.

A project development committee responsible for daily management of construction at Palmarejo consisting of professional staff from Coeur, Bolnisi and Palmarejo has been established. While the initial focus will be to develop the Rosario deposit using open-pit mining methods, the project development committee was expected to complete a prefeasibility study by the end of August which will include a combined open-pit and underground mine development scenario.

Coeur said that based on a recently completed scoping study and optimization work for this combined open-pit and underground mine development, the total estimated capital costs to bring Palmarejo into production, including prestripping, underground development, mining fleet, power line, ongoing permitting, owner’s costs and contingency, are approximately $200 million, and initial production from open-pit mining is expected in the fourth quarter of 2008. Coeur anticipates that its operating costs will be below $2/oz of silver (after byproduct credits).