-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TGpU+4eHD7daxSTQ3aGJIqLUfNnYGFnvtJhiFmfyxJCxOKz9/JsnJahAcskGBf8s L0W1KlzhH7iPKUmUG5vGmQ== 0000897069-06-002399.txt : 20061113 0000897069-06-002399.hdr.sgml : 20061113 20061113172447 ACCESSION NUMBER: 0000897069-06-002399 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20061106 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061113 DATE AS OF CHANGE: 20061113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COEUR D ALENE MINES CORP CENTRAL INDEX KEY: 0000215466 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 820109423 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08641 FILM NUMBER: 061210206 BUSINESS ADDRESS: STREET 1: 400 COEUR D ALENE MINES BLDG STREET 2: 505 FRONT AVE CITY: COEUR D ALENE STATE: ID ZIP: 83814 BUSINESS PHONE: 2086673511 MAIL ADDRESS: STREET 1: 400 COEUR D ALENE MINES BLDG STREET 2: 505 FRONT AVE CITY: COEUR D STATE: ID ZIP: 83814 8-K 1 sks378a.htm 11/6/06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the
Securities and Exchange Act of 1934

Date of Report (Date of earliest event reported): November 6, 2006

COEUR D’ALENE MINES CORPORATION
(Exact name of Registrant as specified in its charter)

Idaho 1-8641 84-0109423
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification No.)

PO Box I,  
505 Front Avenue,  
Coeur d'Alene, Idaho 83814
(Address of Principal Executive Office) (Zip Code)

Registrant’s telephone number, including area code: (208) 667-3511

                                      Not Applicable                                      
(Former name or former address, if changed since last report)




Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[__]     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[__]     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[__]     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[__]     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02 Results of Operations and Financial Condition.

        On November 6, 2006, the Registrant issued a press release announcing its financial results for the quarter ended September 30, 2006. A copy of the Registrant’s press release is attached as Exhibit 99 to this Current Report.

Item 9.01 Financial Statements and Exhibits.

(d)     Exhibits.

The following exhibit is furnished herewith:

        Exhibit 99 Press Release issued by the Registrant on November 6, 2006.

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  COEUR D'ALENE MINES CORPORATION
  (Registrant)
   
Dated: November 10, 2006 By: /s/ James A. Sabala
      James A. Sabala
      Executive Vice President and Chief Financial Officer

2

EX-99 2 sks378b.htm


Contact: Scott Lamb 208-665-0777

COEUR REPORTS SHARPLY IMPROVED RESULTS FOR THIRD QUARTER OF 2006 

HIGHLIGHTS —  

  Quarterly net income of $18.4 million, or $0.06 per diluted share

  Quarterly cash provided by operations of $20.8 million

  38% increase in silver mineral reserves at Endeavor mine

  $3.10 silver cash production cost/oz

  3.3 million ounces of silver production

  Almost 30,000 ounces of gold production

  Recent commencement of construction of tailings facility at San Bartolome

COEUR D’ALENE, Idaho – November 6, 2006 – Coeur d’Alene Mines Corporation (NYSE:CDE, TSX:CDM) today reported net income of $18.4 million, or $0.06 per diluted share, for the third quarter of 2006, compared to net income of $3.5 million, or $0.01 per diluted share, for the year-ago period.  Cash provided by operations was $20.8 million, compared to $3.9 million of cash provided by operations in the year-ago quarter.

For the first nine months of 2006, the company reported net income of $65.3 million, or $0.23 per diluted share, compared to net income of $0.6 million, or $0.00 per diluted share, for the same period of 2005. Results for the first nine months of 2006 include a pre-tax gain of $11.1 million from the strategic sale of Coeur Silver Valley (CSV), as well as $2.0 million of income from CSV operations at the Galena mine.

Metal  sales in the third quarter of 2006 increased 29 percent to $50.6 million from $39.3 million in the year-ago quarter.   Metal sales for the first nine months of 2006 increased 42 percent to $149.5 million from $105.0 million in the year-ago period.

In commenting on the company’s performance, Dennis E. Wheeler, Chairman, President and Chief Executive Officer, said, “Four of our five mines showed sequential-quarter increases in silver and gold production in the third quarter of 2006, which is consistent with our expectation for higher production levels in the second half of the year. The strong earnings in the third quarter of 2006 relative to the year-ago period were attributable largely to higher realized prices for silver and gold in combination with a decline in production costs applicable to sales and lower administrative expense.”

Wheeler added, “We are entering an exciting period in which we expect to begin realizing the benefits of previous investment in exploration, particularly at Cerro Bayo and Martha. At Cerro Bayo, for example, we recently began development in the first of two relatively new high-grade vein systems. At Martha, we have acquired two new properties near the mine – and have signed a letter of intent on two additional properties – all of which show great potential for production of high-grade ore. In addition, the recently announced reserve increases at Endeavor and Broken Hill in Australia bode well for the long-term production profiles of each of these mines.”

Third Quarter 2006 Results (November 6, 2006) Page 1 of 14

Wheeler said, “We remain bullish on precious metals markets. A continuation of recent price levels and demand trends will enable Coeur to maintain very healthy earnings and cash flows.”

Coeur currently expects 2006 silver production to be approximately 14 million ounces, including production from discontinued operations at CSV, with a full-year consolidated silver cash cost per ounce of approximately $3.25. The company expects full-year gold production to be approximately 120,000 ounces.

Highlights by Individual Property

Rochester (Nevada)  Following the heavy precipitation experienced in the first half of 2006, silver production was up 22 percent in the third quarter as compared to the second quarter of 2006 in accordance with the previously forecasted trend of improving solution grade. Gold production also rebounded strongly during the third quarter as compared to the second quarter of 2006. Silver cash cost per ounce was 56 percent below that of the second quarter of 2006 due mainly to an increased gold by-product credit and improved recoveries for silver and gold. Silver cash cost per ounce declined by 69 percent relative to the year-ago quarter because higher gold prices resulted in an increased by-product credit. Silver production was below the level of the year-ago quarter due to the heavy precipitation experienced earlier this year.

Cerro Bayo (Chile) – Silver and gold production were below year-ago levels due primarily to lower grades. Lower silver and gold production caused the cash cost per ounce of silver produced in the third quarter to be higher than the cost in the year-ago period. Under its 2006 mine plan, Cerro Bayo has been making a transition from narrow, lower-grade veins to newly developed, wider and higher-grade veins as the year progresses. Specifically, since the recent discovery of two new vein systems, the Marcela Sur and Cascada systems, Cerro Bayo has made relatively quick progress to put the veins into production. In October, Cerro Bayo began development of the Cascada system, which is expected to make a meaningful contribution to production in the fourth quarter of 2006 and beyond. Marcela Sur production is expected to commence in early 2007. Drilling is ongoing at both vein systems to expand and define the new high-grade silver and gold mineralization in these areas (see “Exploration” below).

 Martha (Argentina) – Silver production increased 42 percent relative to the year-ago period due to a 53 percent increase in silver grade. Production also increased in the third quarter of 2006 relative to the preceding quarter due to an increase in tons milled. The higher production volumes, combined with increased gold by-product credits, helped reduce silver cash cost per ounce relative to both the year-ago period and the second quarter of 2006.

Endeavor (Australia) As compared to the results for the second quarter of 2006, silver production was up 69 percent as Endeavor continues to recover from an October 2005 rock fall. The company expects Endeavor to return to a more typical run rate sometime during the fourth quarter. Endeavor reported a 38 percent increase in proven and probable silver mineral reserves to 32.3 million ounces from 23.3 million ounces in the prior year.

Broken Hill (Australia) – As compared to the results for the second quarter of 2006, silver production was up 11 percent. Comparison to the year-ago period is not meaningful because Coeur acquired its interest during the third quarter of 2005. During the year, Broken Hill has reported a 20 percent increase in proven and probable silver mineral reserves to 18 million ounces from 15 million ounces in the prior year.

Balance Sheet and Capital Investment Highlights 

The company had $365.2 million in cash and short-term investments as of September 30, 2006.  Capital expenditures during the third quarter of 2006 totaled $49.0 million, most of which was spent on the Kensington (Alaska) gold project.

At Kensington, capital expenditures totaled $41.9 million during the quarter as the company continued with an aggressive construction schedule.  The company is aiming to complete the project and start producing gold near the end of 2007. Recent activity has focused on completion of the mill and crusher buildings. Kensington is expected to produce 100,000 ounces of gold annually.

Third Quarter 2006 Results (November 6, 2006) Page 2 of 14

At San Bartolome, engineering and procurement activities are ongoing and, as recently announced, the company has commenced construction of the tailings facility. Capital expenditures totaled $4.1 million during the quarter.  The company is aiming to complete construction activities near the end of 2007. San Bartolome is expected to produce about 8 million ounces of silver annually.

Exploration

The company invested $2.6 million in exploration activity in the third quarter of 2006. Highlights of exploration activity are presented below.

Argentina — The company signed a letter of intent with Mirasol Resources Ltd to explore the Sascha and Joaquin silver-gold projects in the Santa Cruz province of Argentina. This agreement comes on the heels of the company’s acquisition in the second quarter of 2006 of two new silver-gold exploration properties in the province where Coeur’s Martha mine is located.

Cerro Bayo – Drilling is ongoing at the Cascada and Marcela vein systems to expand and define the new high-grade silver and gold mineralization in these areas. Recent Cascada drilling has targeted the north high-grade ore shoot that was discovered with exploratory drilling earlier this year. This recent drilling has returned values up to 124 grams of gold per tonne and 1,926 grams of silver per tonne (3.6 troy ounces of gold and 56.2 silver ounces per short ton).

Kensington – The company has an ongoing program to build upon Kensington’s existing base of 1 million ounces of probable gold mineral reserves and its resource base of 269,000 indicated gold mineral ounces and 584,000 inferred gold mineral ounces. The company completed more than 4,600 feet of core drilling during the third quarter, bringing the year-to-date total to more than 32,000 feet. Surface drilling on the adjacent Jualin property began in the third quarter and totaled 4,200 feet.

Tanzania – The company completed a rotary air blast drill program on one of its concessions in the Lake Victoria Goldfields District of northern Tanzania, where the company holds licenses covering approximately 731 square kilometers. Drilling defined numerous gold anomalies, the largest of which is 1.6 kilometers long by 0.4 kilometers wide. During the quarter, drilling totaled approximately 43,000 feet.  

Coeur d’Alene Mines Corporation is one of the world’s leading primary silver producers and has a strong presence in gold.  The company has mining interests in Alaska, Argentina, Australia, Bolivia, Chile, and Nevada. 

Conference Call Information

Coeur d’Alene Mines Corporation will hold a conference call to discuss the company’s third quarter 2006 results at 1 p.m. Eastern time on November 6, 2006. To listen live via telephone, call (877) 704-5378 (US and Canada) or (913) 312-1292 (International). The conference call and presentation will also be web cast on the company’s web site www.coeur.com.  A replay of the call will be available through November 13, 2006.  The replay dial-in numbers are (888) 203-1112 (US and Canada) and (719) 457-0820 (International) and the access code is 5043185.

Cautionary Statement

Company press releases may contain numerous forward-looking statements within the meaning of securities legislation in the United States and Canada relating to the company’s silver and gold mining business. Such statements are subject to numerous assumptions and uncertainties, many of which are outside the company’s control.  Operating, exploration and financial data, and other statements in this document are based on information the company believes reasonable, but involve significant uncertainties as to future gold and silver prices, costs, ore grades, estimation of gold and silver reserves, mining and processing conditions, construction schedules, currency exchange rates, and the completion and/or updating of mining feasibility studies, changes that could result from the company’s future acquisition of new mining properties or businesses, the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions), regulatory and permitting matters, risks inherent in the ownership and operation of, or investment in, mining properties or businesses in foreign countries, as well as other uncertainties and risk factors set out in the company’s filings from time to time with the SEC and the Ontario Securities Commission, including, without limitation, the company’s reports on Form 10-K and Form 10-Q.  Actual results and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. The company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. 

Third Quarter 2006 Results (November 6, 2006) Page 3 of 14

The definitions of proven and probable mineral reserves and resources under Canadian National Instrument 43-101 are substantially identical to the definitions of such reserves under Guide 7 of the SEC’s Securities Act Industry Guides. Mineral resources are in addition to mineral reserves and have not demonstrated economic viability.

Donald J. Birak, Coeur’s Senior Vice President of Exploration, is the qualified person responsible for the preparation of the scientific and technical information in this document. Mr. Birak has reviewed the available data and procedures and believes the collection of exploration data and calculation of mineral reserves reported in this document was conducted in a professional and competent manner. For a description of the key assumptions, parameters and methods used to estimate the Kensington, Endeavor and Broken Hill mineral reserves and resources, as well as a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors, please see the Kensington Gold Project Technical Report dated April 20, 2006, the Endeavor Mine Technical Report dated May 5, 2005, and the Broken Hill Mine Technical Report dated October 7, 2005 and filed on SEDAR at www.sedar.com.

Metallurgical recovery factor of 54% should be applied to the silver reserve ounces.

Endeavor Mineral Reserves
June 30, 2006 Short Tons
(000s)
Silver Grade
Ounces/ton
Silver Ounces
Contained (000s)
Proven      9,700    1.60    15,560  
Probable    11,684    1.43    16,699  
    
   
   
 
Total    21,385    1.51    32,259  

Mineral Reserves at June 30, 2006:

  Metal prices: $10.00/ounce silver and $2.95/pound of copper
$0.907/pound of zinc and $0.34/pound of lead

  Cut-off grade: 4.3% zinc equivalent (equates to $41.20 gross revenue per ore block)

  Metallurgical recovery factor of 54% should be applied to the silver reserve ounces.

Year-end 2005      
Proven      5,512    1.58    8,682  
Probable    6,614    2.22    14,662  
    
   
   
 
Total    12,125    1.93    23,344  

Third Quarter 2006 Results (November 6, 2006) Page 4 of 14

Broken Hill Mineral Reserves
June 30, 2006 Short Tons
(000s)
Silver Grade
Ounces/ton
Silver Ounces
Contained (000s)
Proven      10,064    1.46    14,647  
Probable    2,843    1.18    3,368  
    
   
   
 
Total    12,907    1.40    18,015  

Mineral Reserves at June 30, 2006:

  Metal prices: $10.12/ounce silver
$0.907/pound of zinc and $0.408/pound of lead

  Cut-off grade: 8% combined lead and zinc for the North Mine.
7% combined lead and zinc for all other deposits.

  Metallurgical recovery factor of 74% should be applied to the silver reserve ounces.

Year-end 2005      
Proven      8,522    1.31    11,134  
Probable    2,998    1.27    3,822  
    
   
   
 
Total    11,520    1.30    14,956  


Third Quarter 2006 Results (November 6, 2006) Page 5 of 14

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)


Three Months
Ended September 30,
Nine Months
Ended September 30,
2006
2005
2006
2005
REVENUES (In thousands except per share data)
Sales of metal     $ 50,606   $ 39,281   $ 149,501   $ 105,020  
                  
COSTS AND EXPENSES                  
Production costs applicable to sales    21,915    24,448    63,602    60,602  
Depreciation and depletion    6,536    4,344    19,843    12,866  
Administrative and general    4,045    4,326    13,662    15,031  
Exploration    2,572    2,525    6,474    8,130  
Pre-development    --    (35 )  --    6,051  
Litigation settlements    874    --    1,343    1,600  




      Total costs and expenses    35,942    35,608    104,924    104,280  
                  
OTHER INCOME AND EXPENSE                  
Interest and other income    5,619    2,067    12,933    5,351  
Interest expense, net of capitalized interest    (232 )  (737 )  (1,120 )  (1,869 )




      Total other income and expense    5,387    1,330    11,813    3,482  
                  
Income from continuing operations before income taxes    20,051    5,003    56,390    4,222  
Income tax provision    (1,673 )  (281 )  (4,155 )  (813 )




INCOME FROM CONTINUING OPERATIONS    18,378    4,722    52,235    3,409  
Income (loss) from discontinued operations, net of income taxes    --    (1,269 )  1,969    (2,802 )
Gain (loss) on sale of net assets of discontinued operations    (27 )  --    11,132    --  




NET INCOME    18,351    3,453    65,336    607  
Other comprehensive income    420    134    2,161    255  




COMPREHENSIVE INCOME   $ 18,771   $ 3,587   $ 67,497   $ 862  




BASIC AND DILUTED INCOME (LOSS) PER SHARE                  
Basic income per share:                  
Income from continuing operations   $ 0.07   $ 0.02   $ 0.19   $ 0.01  
Income (loss) from discontinued operations    --    (0.01 )  0.05    (0.01 )




Net income   $ 0.07   $ 0.01   $ 0.24   $ 0.00  




Diluted income per share:                  
Income from continuing operations   $ 0.06   $ 0.02   $ 0.18   $ 0.01  
Income (loss) from discontinued operations    --    (0.01 )  0.05    (0.01 )




Net income   $ 0.06   $ 0.01   $ 0.23   $ 0.00  




Weighted average number of shares of common stock                  
   Basic    277,543    241,683    269,259    240,572  
   Diluted    302,172    266,161    293,975    241,345  

Third Quarter 2006 Results (November 6, 2006) Page 6 of 14

Operating Statistics From Continuing Operations

        The following table presents information by mine and consolidated sales information for the three- and nine-month periods ended September 30, 2006 and 2005:

Three Months Ended September 30, Nine Months Ended September 30,
2006
2005
2006
2005
Rochester                    
    Tons processed    2,648,263    2,131,844    7,917,710    6,783,878  
    Ore grade/Ag oz    0.83    0.94    0.75    0.98  
    Ore grade/Au oz    0.01    0.01    0.01    0.01  
    Recovery/Ag oz (A)    63.9 %  84.9 %  62.0 %  60.9 %
    Recovery/Au oz (A)    93.0 %  97.5 %  68.1 %  74.2 %
    Silver production ounces    1,403,302    1,708,950    3,704,960    4,053,531  
    Gold production ounces    21,583    21,436    55,965    49,840  
    Cash cost/oz   $ 1.14   $ 3.64   $ 2.58   $ 5.56  
    Total cost/oz   $ 4.02   $ 5.07   $ 5.68   $ 7.49  
Cerro Bayo                  
    Tons milled    105,945    103,213    321,581    294,463  
    Ore grade/Ag oz    4.04    7.63    5.64    7.49  
    Ore grade/Au oz    .075    .176    0.088    0.171  
    Recovery/Ag oz    94.9 %  94.3 %  94.4 %  94.9 %
    Recovery/Au oz    92.0 %  92.0 %  92.1 %  92.7 %
    Silver production ounces    405,586    742,825    1,711,153    2,093,964  
    Gold production ounces    7,325    16,744    26,054    46,711  
    Cash cost/oz   $ 8.33   $ 0.37   $ 3.86   $ 0.33  
    Total cost/oz   $ 11.25   $ 1.86   $ 6.20   $ 1.97  
Martha Mine                  
    Tons milled    9,101    9,966    24,767    26,719  
    Ore grade/Ag oz    92.82    60.64    84.56    61.21  
    Ore grade/Au oz    0.123    0.079    0.111    0.078  
    Recovery/Ag oz    95.5 %  94.3 %  94.7 %  95.1 %
    Recovery/Au oz    91.9 %  92.0 %  91.9 %  92.9 %
    Silver production ounces    806,384    569,873    1,982,884    1,555,054  
    Gold production ounces    1,026    726    2,535    1,933  
    Cash cost/oz   $ 4.01   $ 4.24   $ 4.51   $ 4.52  
    Total cost/oz   $ 4.39   $ 4.62   $ 4.94   $ 4.91  
Endeavor (B)                  
    Tons milled    218,997    299,311    440,776    377,637  
    Ore grade/Ag oz    0.94    1.48    1.07    1.48  
    Recovery/Ag oz    66.1 %  49.8 %  63.9 %  50.0 %
    Silver production ounces    136,849    220,613    302,019    279,078  
    Cash cost/oz   $ 2.52   $ 1.95   $ 2.48   $ 1.94  
    Total cost/oz   $ 3.39   $ 3.19   $ 3.59   $ 3.18  
Broken Hill (B)                  
    Tons milled    614,620    98,281    1,721,512    98,281  
    Ore grade/Ag oz    1.27    1.16    1.33    1.16  
    Recovery/Ag oz    75.1 %  73.1 %  73.3 %  73.1 %
    Silver production ounces    587,360    83,010    1,672,713    83,010  
    Cash cost/oz   $ 3.05   $ 2.69   $ 3.07   $ 2.69  
    Total cost/oz   $ 5.01   $ 4.62   $ 5.54   $ 4.62  
CONSOLIDATED PRODUCTION TOTALS                  
    Silver ounces    3,339,481    3,325,271    9,373,729    8,064,637  
    Gold ounces    29,934    38,906    84,554    98,484  
    Cash cost per oz/silver   $ 3.10   $ 2.87   $ 3.31   $ 3.85  
    Total cost/oz   $ 5.14   $ 4.14   $ 5.53   $ 5.38  
CONSOLIDATED SALES TOTALS (C)                  
    Silver ounces sold    3,020,351    3,154,544    9,148,095    8,688,786  
    Gold ounces sold    26,595    38,303    81,486    107,516  
    Realized price per silver ounce   $ 11.55   $ 7.29   $ 11.73   $ 7.13  
    Realized price per gold ounce   $ 634   $ 452   $ 625   $ 436  


Third Quarter 2006 Results (November 6, 2006) Page 7 of 14

(A)  

The leach cycle at Rochester requires 5 to 10 years to recover gold and silver contained in the ore. The Company estimates the ultimate recovery to be approximately 61.5% for silver and 93% for gold. However, ultimate recoveries will not be known until leaching operations cease which is currently estimated for 2011. Current recovery may vary significantly from ultimate recovery. See Critical Accounting Policies and Estimates – Ore on Leach Pad.


(B)  

The Company acquired its interests in the Endeavor and Broken Hill mines in May 2005 and September 2005, respectively.


(C)  

Units sold at realized metal prices will not match reported metal sales due primarily to the effects of embedded derivatives in the Company’s previously priced sales contracts.


“Cash Costs per Ounce” are calculated by dividing the cash costs computed for each of the Company’s mining properties for a specified period by the amount of gold ounces or silver ounces produced by that property during that same period. Management uses cash costs per ounce as a key indicator of the profitability of each of its mining properties. Gold and silver are sold and priced in the world financial markets on a US dollar per ounce basis.

“Cash Costs” are costs directly related to the physical activities of producing silver and gold, and include mining, processing and other plant costs, third-party refining and smelting costs, marketing expense, on-site general and administrative costs, royalties, in-mine drilling expenditures that are related to production and other direct costs. Sales of by-product metals are deducted from the above in computing cash costs. Cash costs exclude depreciation, depletion and amortization, corporate general and administrative expense, exploration, interest, and pre-feasibility costs and accruals for mine reclamation. Cash costs are calculated and presented using the “Gold Institute Production Cost Standard” applied consistently for all periods presented.

Total cash costs per ounce is a non-GAAP measurement and investors are cautioned not to place undue reliance on it and are urged to read all GAAP accounting disclosures presented in the consolidated financial statements and accompanying footnotes. In addition, see the reconciliation of “cash costs” to production costs under “Reconciliation of Non-GAAP Cash Costs to GAAP Production Costs” set forth below.

Operating Statistics From Discontinued Operation

        The following table presents information for Coeur Silver Valley which was sold on June 1, 2006:


Three Months
Ended September 30,
Nine Months
Ended September 30,
2006
2005
2006 (1)
2005
Silver Valley/Galena                    
    Tons milled    --    28,498    52,876    101,889  
    Ore grade/Silver oz    --    16.62    15.15    17.46  
    Recovery/Silver oz    --    97.1 %  96.0 %  97.2 %
    Silver production ounces    --    459,805    768,674    1,729,801  
    Cash cost/oz    --   $ 8.39   $ 9.75   $ 7.60  
    Total cost/oz    --   $ 9.47   $ 10.64   $ 8.47  
    Gold production    --    60    180    205  

(1) Amounts represent five months ended May 31, 2006.

Reconciliation of Non-GAAP Cash Costs to GAAP Production Costs

        The tables below present reconciliations between non-GAAP cash costs per ounce to production costs applicable to sales including depreciation, depletion and amortization (GAAP).

        Total cash costs include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, on-site general and administrative costs, royalties and mining production taxes, net of by-product revenues earned from all metals other than the primary metal produced at each unit. Total cash costs are a performance measure and provide management and investors with an indication of net cash flow, after consideration of the realized price received for production sold. Management also uses this measurement for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective. “Total cash costs per ounce” is a measure developed by precious metals companies in an effort to provide a comparable standard, however, there can be no assurance that our reporting of this non-GAAP measure is similar to that reported by other mining companies.

Third Quarter 2006 Results (November 6, 2006) Page 8 of 14

        Production costs applicable to sales including depreciation, depletion and amortization, is the most comparable financial measure calculated in accordance with GAAP to total cash costs. The sum of the production costs applicable to sales and depreciation, depletion and amortization for our mines as set forth in the tables below is included in our Consolidated Statement of Operations and Comprehensive Loss.


THREE MONTHS ENDED SEPTEMBER 30, 2006
(In thousands except ounces and per ounce costs)
Rochester
Cerro Bayo
Martha
Endeavor (1)
Broken Hill (1)
Total
Production of Silver (ounces)      1,403,302    405,586    806,384    136,849    587,360    3,339,481  
Cash Costs per ounce   $ 1.14   $ 8.33   $ 4.01   $ 2.52   $ 3.05   $ 3.10  






Total Cash Costs (Non-GAAP)   $ 1,598   $ 3,380   $ 3,230   $ 346   $ 1,791   $ 10,345  
Add/Subtract:                          
Third party smelting costs    --    (672 )  (552 )  (224 )  (666 )  (2,114 )
By-Product credit (2)    13,423    4,542    630    --    --    18,595  
Other adjustments    383    --    --    --    --    383  
Change in inventory    (4,635 )  (546 )  --    (35 )  (78 )  (5,294 )
Depreciation, depletion and                          
   amortization    4,037    1,184    313    119    1,152    6,805  






Production costs applicable to                          
   sales, including depreciation,                          
   depletion and amortization (GAAP)   $ 14,806   $ 7,888   $ 3,621   $ 206   $ 2,199   $ 28,720  






THREE MONTHS ENDED SEPTEMBER 30, 2005
(In thousands except ounces and per ounce costs)
Rochester
Cerro Bayo
Martha
Endeavor (1)
Broken Hill (1)
Total
Production of Silver (ounces)    1,708,950    742,825    569,873    220,613    83,010    3,325,271  
Cash Costs per ounce   $ 3.64   $ 0.37   $ 4.24   $ 1.95   $ 2.69   $ 2.87  






Total Cash Costs (Non- GAAP)   $ 6,217   $ 273   $ 2,415   $ 430   $ 224   $ 9,559  
Add/Subtract:                          
Third party smelting costs    --    (861 )  (312 )  (235 )  (70 )  (1,478 )
By-Product credit (2)    9,476    7,350    320    --    --    17,146  
Other Adjustment    (55 )  10    174    --    --    129  
Change in inventory    (3,326 )  2,005    410    3    --    (908 )
Depreciation, depletion and                          
amortization    2,437    1,109    219    274    160    4,199  






Production costs applicable to                          
   sales, including depreciation,                          
   depletion and amortization (GAAP)   $ 14,749   $ 9,886   $ 3,226   $ 472   $ 314   $ 28,647  








Third Quarter 2006 Results (November 6, 2006) Page 9 of 14

NINE MONTHS ENDED SEPTEMBER 30, 2006
(In thousands except ounces and per ounce costs)
Rochester
Cerro Bayo
Martha
Endeavor (1)
Broken Hill (1)
Total
Production of Silver (ounces)      3,704,960    1,711,153    1,982,884    302,019    1,672,713    9,373,729  
Cash Costs per ounce   $ 2.58   $ 3.86   $ 4.51   $ 2.48   $ 3.07   $ 3.31  






Total Cash Costs (Non-GAAP)   $ 9,570   $ 6,602   $ 8,939   $ 750   $ 5,127   $ 30,988  
Add/Subtract:                          
Third party smelting costs    --    (2,464 )  (1,333 )  (481 )  (2,000 )  (6,278 )
By-product Credit (2)    33,899    15,713    1,523    --    --    51,135  
Other adjustments    1,320    --    --    --    --    1,320  
Change in inventory    (11,657 )  (2,142 )  --    (89 )  325    (13,563 )
Depreciation, depletion and                          
    amortization    11,491    4,004    853    334    4,137    20,819  






Production costs applicable to                          
    sales, including depreciation,                          
    depletion and amortization (GAAP)   $ 44,623   $ 21,713   $ 9,982   $ 514   $ 7,589   $ 84,421  






NINE MONTHS ENDED SEPTEMBER 30, 2005
(In thousands except ounces and per ounce costs)
Rochester
Cerro Bayo
Martha
Endeavor (1)
Broken Hill (1)
Total
Production of Silver (ounces)    4,053,531    2,093,964    1,555,054    279,078    83,010    8,064,637  
Cash Costs per ounce   $ 5.56   $ 0.33   $ 4.52   $ 1.94   $ 2.69   $ 3.85  






Total Cash Costs (Non- GAAP)   $ 22,536   $ 691   $ 7,030   $ 541   $ 224   $ 31,022  
Add/Subtract:                          
Third party smelting costs    --    (2,099 )  (811 )  (292 )  (70 )  (3,272 )
By-Product credit (2)    21,637    20,150    834    --    --    42,621  
Other adjustment    (256 )  --    --    --    --    (256 )
Change in inventory    (15,124 )  5,271    376    (36 )  --    (9,513 )
Depreciation, depletion and                          
    amortization    7,805    3,431    600    346    160    12,342  






Production costs applicable to                          
    sales, including depreciation,                          
    depletion and amortization (GAAP)   $ 36,598   $ 27,444   $ 8,029   $ 559   $ 314   $ 72,944  








Third Quarter 2006 Results (November 6, 2006) Page 10 of 14

The following tables present a reconciliation between non-GAAP cash costs per ounce to GAAP production costs applicable to sales reported in Discontinued Operations (see Note D):

Coeur Silver Valley/Galena THREE MONTHS
ENDED SEPTEMBER 30,
NINE MONTHS
ENDED SEPTEMBER 30,
2006 (3)
2005
2006 (3)
2005
(In thousands except ounces and per ounce costs)
Production of Silver (ounces)      --    459,805    768,674    1,729,801  
Cash Costs per ounce    --   $ 8.39   $ 9.75   $ 7.60  




Total Cash Costs (Non-GAAP)    --   $ 3,859   $ 7,498   $ 13,149  
Add/Subtract:                  
Third party smelting costs    --    (662 )  (1,464 )  (2,620 )
By-Product credit (2)    --    596    1,473    2,223  
Change in inventory    --    3    726    (321 )
Depreciation, depletion and                  
amortization    --    493    681    1,506  




Production costs applicable to                  
    sales, including depreciation,                  
    depletion and amortization (GAAP)    --   $ 4,289   $ 8,914   $ 13,937  




(1)  

The Company’s share of silver production at Endeavor and Broken Hill commenced in May 2005 and September 2005, respectively.


(2)  

By-product credits are based upon production units and the period’s average metal price for the purposes of reporting cash costs per ounce.


(3)  

Amounts represent five months ended May 31, 2006.


Third Quarter 2006 Results (November 6, 2006) Page 11 of 14

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

ASSETS September 30,
2006

December 31,
2005

(In Thousands)
CURRENT ASSETS            
    Cash and cash equivalents   $ 354,051   $ 214,616  
    Short-term investments    11,180    25,726  
    Receivables    27,207    27,986  
    Ore on leach pad    28,205    25,394  
    Metal and other inventories    17,143    12,807  
    Deferred tax assets    5,442    2,255  
    Prepaid expenses and other    5,803    4,707  
    Assets of discontinued operations held for sale (Note D)    --    14,828  


    449,031    328,319  
          
PROPERTY, PLANT AND EQUIPMENT          
    Property, plant and equipment    119,467    105,107  
    Less accumulated depreciation    (61,805 )  (57,929 )


     57,662    47,178  
          
MINING PROPERTIES          
    Operational mining properties    126,862    121,441  
    Less accumulated depletion    (113,513 )  (105,486 )


     13,349    15,955  
          
    Mineral interests    72,201    72,201  
    Less accumulated depletion    (6,688 )  (2,218 )


     65,513    69,983  
          
    Non-producing and development properties    160,053    72,488  


     238,915    158,426  
          
OTHER ASSETS          
    Ore on leach pad, non-current portion    36,396    29,254  
    Restricted cash and cash equivalents    19,863    16,943  
    Debt issuance costs, net    5,227    5,454  
    Deferred tax assets    1,890    923  
    Other    7,754    8,319  


    71,130    60,893  


        TOTAL ASSETS   $ 816,738   $ 594,816  



Third Quarter 2006 Results (November 6, 2006) Page 12 of 14

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

September 30,
2006

December 31,
2005

(In thousands except
share data)
LIABILITIES AND SHAREHOLDERS' EQUITY            
          
CURRENT LIABILITIES          
    Accounts payable   $ 25,312   $ 17,189  
    Other current liabilities    12,652    6,274  
    Accrued interest payable    469    1,031  
    Accrued salaries and wages    6,405    7,840  
    Current taxes payable    7,477    66  
    Liabilities of discontinued operations held for sale (Note D)    --    12,908  


    52,315    45,308  
LONG-TERM LIABILITIES          
    11/4% Convertible Senior Notes due January 2024    180,000    180,000  
    Reclamation and mine closure    24,459    24,082  
    Other long-term liabilities    3,022    3,873  


    207,481    207,955  
COMMITMENTS AND CONTINGENCIES          
          
SHAREHOLDERS' EQUITY          
    Common Stock, par value $1.00 per share; authorized 500,000,000          
        shares, issued 279,063,659 and 250,961,353 shares in 2006 and          
        2005 (1,059,211 shares held in treasury)    279,064    250,961  
    Additional paid-in capital    777,117    656,977  
    Accumulated deficit    (486,372 )  (551,357 )
    Shares held in treasury    (13,190 )  (13,190 )
    Accumulated other comprehensive income (loss)    323    (1,838 )


    556,942    341,553  


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 816,738   $ 594,816  




Third Quarter 2006 Results (November 6, 2006) Page 13 of 14

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


Three Months
Ended September 30,
Nine Months
Ended September 30,
2006
2005
2006
2005
(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:                    
Net income   $ 18,351   $ 3,453   $ 65,336   $ 607  
Add (deduct) non-cash items:                  
    Depreciation and depletion    6,536    4,344    19,843    12,866  
    Deferred taxes    (816 )  (175 )  (3,947 )  (55 )
    Unrealized loss on embedded derivative, net    (954 )  (389 )  2,247    (353 )
    Share based compensation    655    313    1,819    887  
    Other charges    (268 )  346    253    1,350  
Changes in Operating Assets and Liabilities:                  
    Receivables    282    (463 )  1,092    (13,334 )
    Prepaid and other current assets    (846 )  (371 )  (1,872 )  (1,093 )
    Inventories    (5,345 )  (1,086 )  (14,290 )  (10,278 )
    Accounts payable and accrued liabilities    3,196    (1,978 )  10,832    386  
    Discontinued operations    27    (127 )  (11,308 )  1,242  




CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES    20,818    3,867    70,005    (7,775 )
                  
CASH FLOWS FROM INVESTING ACTIVITIES:                  
    Capital expenditures    (49,021 )  (57,305 )  (102,505 )  (82,693 )
    Purchases of short-term investments    (7,558 )  (11,502 )  (17,441 )  (34,419 )
    Proceeds from sales of short-term investments    15,465    13,019    29,081    35,207  
    Other    25    (53 )  (409 )  (20 )
    Discontinued operations    1,081    (981 )  15,446    (2,346 )




CASH USED IN INVESTING ACTIVITIES    (40,008 )  (56,822 )  (75,828 )  (84,271 )
                  
CASH FLOWS FROM FINANCING ACTIVITIES:                  
    Retirement of long-term debt    (377 )  (147 )  (1,066 )  (208 )
    Proceeds from issuance of common stock    --    35,949    154,560    35,397  
    Payment of public offering costs    59    --    (8,329 )  --  
    Other    167    (65 )  93    (160 )




CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES    (151 )  35,737    145,258    35,029  




INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS    (19,341 )  (17,218 )  139,435    (57,017 )
                  
    Cash and cash equivalents at beginning of period    373,392    233,269    214,616    273,079  




    Cash and cash equivalents at end of period   $ 354,051   $ 216,051   $ 354,051   $ 216,062  






Third Quarter 2006 Results (November 6, 2006) Page 14 of 14
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