UPDATE 1 - Coeur d'Alene idles Chile silver/gold mine
(Adds details of maintenance, cost estimates, stock down)
NEW YORK, April 8 (Reuters) - Coeur d'Alene Mines Corp (CDE.N) said on Tuesday it would halt operations at its Cerro Bayo mine in Chile for six weeks for maintenance, trimming output by 180,000 ounces of silver and 4,000 ounces of gold.
The work on the mine will upgrade its electrical infrastructure and is part of the company's plan to address cost issues and production at Cerro Bayo, Coeur said.
The idling comes at a time when gold and silver are selling at sky-high prices. Gold was trading in London on Tuesday at around $920 per ounce and silver at just under $18 per ounce.
In its statement, Coeur d'Alene said it recently implemented a recovery plan at Cerro Bayo in southern Chile to address the higher costs and lower production rates at the mine in 2007.
Key components of the plan include increased underground mine development to provide more operational flexibility, reducing the size of the workforce, improving worker training, organizational restructuring and a cost improvement program.
The temporary suspension of mining operations is to allow the improvements of the electrical distribution systems for both the surface and underground facilities, the company said.
Already, Coeur said, it has lowered cash costs of silver by 34 percent from last year, to $5.14 per ounce through the end of February.
There has been a 50-percent increase in the average silver grade and a 20-percent increase in the average gold grade this year through February compared to full year 2007.
Previously, the company had projected 2008 production at Cerro Bayo would be approximately 2.5 million ounces of silver and 40,000 ounces of gold. It now anticipates these targets to be reduced by approximately 180,000 ounces of silver and 4,000 ounces of gold.
Production and costs at Cerro Bayo are expected to significantly improve over 2007, it said, particularly during the third and fourth quarters. Cash costs for 2008 are expected to be approximately $3.14 per ounce of silver - 62 percent lower than 2007 cash costs.
As of Dec. 31, 2007, Cerro Bayo contained an estimated 7.2 million ounces of proven and probable silver mineral reserves and 112,000 ounces of proven and probable gold reserves.