Coeur Acquiring Projects, Land Adjacent to Rochester

Coeur’s Rochester mine is located in Pershing County, Nevada, adjacent to a property package owned by Alio Gold
that includes the Lincoln Hill project.
Coeur Mining has entered into a definitive agreement with Alio Gold to acquire a property package adjacent to Coeur’s Rochester mine in west-central Nevada. The acquisition includes Alio’s Lincoln Hill and Wilco projects, its Gold Ridge property, and other nearby claims. Coeur will pay for the acquisition through issuance of $19 million of its common stock.

Coeur anticipates that the acquired projects will have significant operational synergies with the open-pit, heap-leach Rochester operation. The principal asset is the Lincoln Hill project, which is a high-grade, open-pit, gold-silver development project located approximately four miles west of Rochester. Lincoln Hill has historical measured and indicated resources totaling 364,000 ounces (oz) of gold and 10.2 million oz of silver in 29.3 million metric tons (mt) of mineralized material, plus 255,000 oz of gold and 8.2 million oz of silver in inferred resources.

The Wilco project is a gold-silver exploration project that covers approximately 8,900 acres, with historical measured and indicated resources of 1.3 million oz of gold and 12 million oz of silver in 114.1 million mt of mineralized material, plus 541,000 oz of gold and 6.1 million oz of silver in inferred resources. In total, subject to closing, the projects will more than double Coeur’s land position at Rochester from roughly 16,300 acres to more than 40,300 acres.

The acquisition is in line with Coeur’s strategy of growing its production and cash flow with the addition of low-risk, high-quality, high-return assets that can be leveraged to its existing infrastructure, workforce and expertise at the Rochester mine. With the completion of a planned crusher expansion and Stage VI leach pad expected in 2021, along with additional permitting, Lincoln Hill is expected to become a source of higher-grade, low-cost production capable of bolstering future cash flow and further extending Rochester mine life.

The average gold resource grade at Lincoln Hill is more than four times higher than Rochester’s current grade. “The acquisition of this property package from Alio represents a unique opportunity to bolster our Rochester operation in a manner that satisfies all our acquisition criteria,” Coeur President and CEO Mitchell J. Krebs said. “The Lincoln Hill project provides higher-grade ounces located near Rochester’s infrastructure, which should allow us to generate high returns, higher margins, and strong cash flow with little incremental capital. The Wilco and Gold Ridge projects provide additional exploration upside.

“By consolidating this land position, we look forward to conducting regional exploration in an area with known mineralization that has received little attention historically.” Coeur expects the transaction to close during the fourth quarter of 2018. Transfer of the Wilco project to Coeur is subject to a 30-day right of first refusal in favor of a third party.

As featured in Womp 2018 Vol 11 -