(Adds details of maintenance, cost estimates, stock down)
NEW YORK, April 8 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
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.
Coeur d'Alene stock fell 14 cents, or 3.6 percent, to $3.79
on the New York Stock Exchange in morning trading.
(Additional reporting by Matt Daily; Editing by Derek Caney)