Rochester Expansion
The Company plans a significant expansion of its Rochester operation in 2013. As a result, silver production at Rochester is expected to increase to 4.5 - 4.9 million ounces in 2013 compared to 2.8 million ounces in 2012. 2013 gold production is expected to increase to 44,000 - 46,000 ounces compared to 38,071 ounces in 2012.
The Company estimates 2013 capital expenditures for Rochester to be $30 - $35 million to expand production. The Company is investing approximately $4 million during 2013 to expand the capacity of the primary crusher from nine million tons to the currently permitted rate of 14 million tons annually. In addition, subject to receipt of final permitting, the Company expects to nearly double the mine's remaining heap leach capacity on existing pads during 2013 to approximately 67 million tons at an estimated capital cost of approximately $15 million. This increased capacity is necessary to accommodate higher production rates of ore coming from historic stockpiles.
The Company also is pursuing an additional estimated $10 million expansion, which is expected to provide 40 million tons of additional pad capacity beginning in 2016, to further extend the mine life and increase production rates from historic stockpiles. Permitting and engineering work for this additional expansion will continue during 2013.
These planned expansions represent high return investment opportunities and the Company believes they will not require any resolution to the existing claims dispute. Following the implementation of the expansion opportunities described above, the Company plans to pursue other longer-term expansion opportunities at Rochester that are focused on mining and processing of the existing mineralized material, which totaled 251.5 million short tons in measured and indicated resources and 40.5 million short tons in inferred resources as of December 31, 20112.
The Company expects to report audited financial results and complete operational results for the fourth quarter and full year on or about Thursday, February 21, 2013
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