Coeur president and CEO Mitchell Krebs said this week a US$4 million extension of the previous million exploration program at Silvertip would focus exclusively on resource growth and probing prospective new targets on the 37,650 hectare property. The company had budgeted US$10 million for 30,000m of core drilling but got 44,500m completed for only a $9.2 million initial spend.
Results from the initial 44,500m drilling campaign - infill and resource extension - included high-grade silver, zinc and lead intersections over sizeable widths that would feed into ongoing mine planning work and add to the understanding of new targets.
Coeur expects to post a maiden reserve estimate and update its resource model for an updated technical report due later this year.
"Results from exploration at Silvertip during the first half of 2018 have demonstrated both the quality of the known resource and the strong potential for significant mine life extensions," Krebs said.
"Drilling targeted three zones with a particular emphasis on upgrading resources to reserves in the Central Zone, where results also confirmed the continuity of mineralization in zones previously thought to be discrete.
"At the Silver Creek and Discovery zones, both close to existing underground infrastructure, drilling has successfully delineated and expanded the resource through the identification of newly discovered mineralized zones and feeder structures."
Coeur said drilling had confirmed the continuity and suggested greater mineralized thicknesses in the Central Zone, near existing underground infrastructure. The zone is said to remain open to the north, south and at depth. Initial modelling had portrayed the zone as discontinuous, with discrete pods of manto-style mineralization, due to insufficient drilling data.
Drilling on the Silver Creek Zone delineated "multiple stacked manto horizons and previously unknown vertical feeders".
Coeur has had up to six diamond core drill rigs active at the site since it acquired it late last year in a US$250 million deal with private equity group Denham Capital.
Existing measured, indicate and inferred resources at Silvertip reportedly host a combined 31.5 million ounces of silver.
Coeur, the biggest US-based primary silver miner, is working on resource expansion at its sites in Mexico, Canada and the US and had up to 18 drill rigs working in the June quarter for a total spend of $16 million in the period.
The company produces from the Palmarejo silver-gold operation in Mexico, Silvertip the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska, and the Wharf gold mine in South Dakota.
It reported this week June quarter revenues of $170 million (up 14% year-on-year) on 14% higher yoy production of 8.8Moz of silver-equivalent at $14.65/oz Ag-eq AISC. Palmarejo's 40% yoy production rise in the quarter to 4.1Moz Ag-eq was the highlight for the period, which saw Coeur post 52% higher yoy EBITDA of $48.4 million.
"Led by our Palmarejo operation, we delivered strong financial and operating performance in the second quarter, which has resulted in an increase to our companywide full-year production guidance ranges and a reduction to our companywide full-year cost guidance ranges," said Krebs.
Coeur is targeting 2018 output of 37.3-40.5Moz Ag-eq.
"We anticipate Silvertip will achieve commercial production levels in the third quarter and begin to contribute high-margin production and cash flow," Krebs said.
"Our higher level of investment in near-mine exploration continues to generate excellent results with important new discoveries at Palmarejo and Kensington and successful resource identification and expansion at Silvertip and Rochester."
