This report presents the December 31, 2017 mineral resource and reserve estimates, capital and operating cost estimates, and financial estimate for the Wharf Operation.
Report context
This technical report was prepared for Coeur Mining, Inc. and is dated February 7, 2018, with an effective date of December 31, 2017. The Wharf Operation is an open pit heap leach gold mine located in the Black Hills of western South Dakota, approximately 3.5 miles southwest of Lead, South Dakota. The property comprises two contiguous groups , the Wharf Group and the Golden Reward Group , owned or controlled by wholly-owned subsidiaries of Coeur. The mine has been in continuous operation since 1983 and is expected to continue at similar capacity through 2025. The purpose of this report is to update the mineral resource and mineral reserve estimates, capital and operating cost estimates, and the financial estimate for the Wharf Operation.
Processing route
Crushing
Ore is crushed prior to placement on heap leach pads. The report includes a crusher flow diagram (Figure 17-1) but does not provide detailed specifications of the crushing circuit or equipment.
Heap Leach
The Wharf Operation uses a conventional heap leach recovery method. Five heap leach pads are in operation, all of which are load/offload pads. The report includes a process flow diagram (Figure 17-2) but does not provide detailed design parameters for the heap leach system. Ore is placed on the pads and leached with cyanide solution to recover gold.
ADR Process Facility
An adsorption-desorption-recovery (ADR) plant processes the pregnant leach solution. The report includes a neutralization and denitrification flow diagram (Figure 17-3) but does not provide detailed process parameters or equipment specifications for the ADR facility.
Water Treatment Facilities
Water treatment facilities are in operation at the site, including the Ross Valley Treatment Plant and Clean Water Treatment Plant. The report references these facilities but does not provide detailed design or performance data.
Process Facility Performance
The report states that process facility performance data are available but does not provide specific performance metrics in the processing sections.
Key reported parameters
| Parameter | Value | Basis |
|---|---|---|
| Gold price for resource estimation | $1,400 per ounce | Design (corporate guidance) |
| Gold price for reserve estimation | $1,250 per ounce | Design (corporate guidance) |
| Cutoff grade for reserves | 0.012 opt Au | Design |
| Metallurgical recovery (LOM average) | 79.3% | Design |
| Metallurgical recovery (five-year annual average) | 80% | Design |
| Expected vs. actual recovery | Reported in Table 13-2 | Testwork/historical |
| 2017 actual production | 4,125,000 tons at 0.025 opt Au | Historical operating data |
| 2017 actual gold production | 101,262 ounces | Historical operating data |
| 2017 actual operating cost | $68.82 million | Historical operating data |
| 2017 actual revenue | $125.9 million | Historical operating data |
| 2017 actual net cash flow | $48.23 million | Historical operating data |
| LOM capital expenditures (2018-2025) | $20.7 million | Design |
| LOM total material moved | 220,510,000 tons | Design |
| LOM placed ore | 34,688,000 tons at 0.025 opt Au | Design |
| LOM produced gold | 702,000 ounces | Design |
| LOM total operating cost | $561 million | Design |
| LOM total pre-tax cash flow | $284 million | Design |
| LOM after-tax NPV (10% discount) | $161 million | Design |
| Measured mineral resource | 2,150,000 tons at 0.025 opt Au (54,500 oz) | Resource estimate |
| Indicated mineral resource | 5,550,000 tons at 0.022 opt Au (122,000 oz) | Resource estimate |
| Inferred mineral resource | 1,050,000 tons at 0.025 opt Au (26,700 oz) | Resource estimate |
| Proven mineral reserve | 18,130,000 tons at 0.027 opt Au (483,200 oz) | Reserve estimate |
| Probable mineral reserve | 16,570,000 tons at 0.023 opt Au (386,000 oz) | Reserve estimate |
| Average annual precipitation | 30.5 inches | Historical |
| Average annual snowfall | 199 inches | Historical |
| Temperature range | 16°F to 71°F | Historical |
| Elevation range within permit boundary | 5,630 to 6,630 feet | Site data |
Project website: https://www.coeur.com/operations-projects/wharf-sd/default.aspx
Technical qualifications
The mineral resource estimation and methodology are summarized for the Wharf deposit model only. The Golden Reward deposit was mined out in 2017. Mineral resources are reported exclusive of mineral reserves. Mineral resources do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be considered for estimation of mineral reserves, and there is no certainty that the inferred mineral resources will be realized.
Resource estimates are limited to material above the 5,920-foot elevation and are exclusive of Precambrian lithologies. The confining pit resource uses the December 31, 2017 month-end topography and lowest mined-out surfaces to define the current surface and fill material. As defined by NI 43-101, the confining pit is not based on explicit economics but defines a boundary for continuous mineralization with suitable grades and with a reasonable expectation that an engineered plan will produce an economic plan.
Only blocks classified as measured and indicated are included in the reserves. Measured and indicated mineral resources within the economic pits having a cutoff above 0.012 opt Au are considered as reserves.
Capital and operating cost estimates are based on 30 years of operations. A 10-20% contingency has been added to select capital projects where project elements have not been fully defined.
There are no known significant environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other factors that could materially affect the resource estimate.
Source: Technical Report for the Wharf Operation, NI 43-101 Technical Report, effective date December 31, 2017, report date February 7, 2018, Sections 1, 2, 4, 5, 6, 7, 13, 14, 15, 16, 17, 18, 21, 22.
