Coeur d'Alene Mines Corp (CDE)

[rayrohn]

Coeur Reports Record Results for First Quarter of 2006
Monday May 8, 9:00 am ET
-- HIGHLIGHTS --
- Record net income of $14.3 million, or $0.05 per diluted share
- 31% increase in silver production from continuing operations quarter-over-quarter
- Cash cost/ounce of silver at $3.94 for continuing operations
- 8% decline in corporate G&A quarter-over-quarter
- Gold production of 25,581 ounces
- Record quarterly operating cash flow of $17.2 million
- Encouraging results from exploration at Cerro Bayo


COEUR D'ALENE, Idaho, May 8 /PRNewswire-FirstCall/ -- Coeur d'Alene Mines Corporation (NYSE: CDE - News; TSX: CDM - News) today reported all-time record quarterly net income of $14.3 million, or $0.05 per diluted share, for the first quarter of 2006, compared to a net loss of $1.1 million, or $0.00 per diluted share, for the year-ago period.
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Metal sales for the first quarter of 2006 were $44.9 million, a 39 percent increase compared to metal sales of $32.2 million in the year-ago period.

In commenting on the company's performance relative to the year-ago quarter, Dennis E. Wheeler, Chairman, President and Chief Executive Officer, said, "The company reported superlative income due largely to a 31 percent increase in silver production from continuing operations, a reduction in our cash cost per ounce of silver to below $4.00 for continuing operations, an 8 percent decline in our corporate overhead expenses, and higher realized prices for silver and gold."

Wheeler added, "The groundwork we have done over the past two years specifically to improve operating efficiency and add low-cost production has prepared the company to benefit from the current strong market conditions. In particular, operations at the Rochester and Martha mines improved significantly quarter-over-quarter. And while Cerro Bayo got off to a slow start in the first quarter, we expect results to improve markedly as mining returns to higher-grade areas there for the balance of the year. We expect to see a continuation of strong performance improvement trends over the course of 2006."


Highlights by Individual Property

-- Cerro Bayo (Chile) -- Silver and gold production were below the levels
of the year-ago period because the mine concentrated on lower-grade
veins during the quarter. The lower volumes and the associated
reduction in the gold by-product credit -- along with inflationary cost
increases for energy -- were largely responsible for the increase in
silver cash cost per ounce. Cerro Bayo's mine plan calls for work to
be focused on higher-grade areas for the balance of 2006 and for
production to return to historical levels.
-- Martha (Argentina) -- Silver and gold production both increased
approximately 42% due to higher ore grades and tons milled. Cash costs
per ounce of silver declined, due to the higher production.
-- Rochester (Nevada) -- Silver production was up modestly compared to
that of the year-ago period, while gold production increased 15%.
Cash cost per ounce declined by 31% as compared to that of the year-ago
period.
-- Endeavor (Australia) -- Silver production more than doubled from the
level of the fourth quarter of 2005 as the mine continued its steady
recovery from an uncontrolled rock fall in October 2005 that limited
mining activity and affected cash cost per ounce during the fourth
quarter. At a silver cash cost per ounce of $2.13, Endeavor was the
lowest-cost mine in Coeur's system during the first quarter of 2006.
(Year-ago comparisons for Endeavor are not meaningful because the
mineral interest was acquired in the second quarter of 2005.)
-- Broken Hill (Australia) -- Silver production was 557,311 ounces in the
first quarter of 2006, with a cash cost per ounce of $2.89. (Year-ago
comparisons for Broken Hill are not meaningful because the mineral
interest was acquired in the third quarter of 2005.)

Balance Sheet and Capital Investment Highlights
The company had $374.3 million in cash and short-term investments as of March 31, 2006. Capital spending during the first quarter of 2006 totaled $27.8 million, most of which was spent on the Kensington (Alaska) gold project and the San Bartolome (Bolivia) silver project as summarized below.


-- At Kensington, capital investment totaled $23.8 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 toward the end of 2007. To date, the company has
completed extensive underground work to prepare the mine for operation.
Above-ground, Coeur has built a camp for construction workers,
installed a water treatment plant, a temporary dock, and completed much
of the grading and site preparation for the construction of the mill.
In coming months, most of the work will focus on construction of a
tailings impoundment dam and construction of the mill.
-- At San Bartolome, capital investment totaled $1.9 million during the
quarter. The company is aiming to complete the project and begin
producing silver toward the end of 2007. In advance of anticipated
resumption of full-scale construction in approximately July 2006, the
company has focused on construction of access roads to and around the
site, rough cut grading of the mill site, preparation of an ore
stockpile area, movement of some ore to stockpile and the construction
of a fence around the perimeter of the plant site area.

Exploration Highlights
Exploration activity was concentrated at the company's Cerro Bayo, Martha and Kensington properties, where Coeur already has sizable mineral resources and mineral reserves within large, prospective land packages and where, at Cerro Bayo and Martha, mineral reserves and resources have increased for three consecutive years.

At Cerro Bayo, exploration in the area of the new Cascada vein discovered new mineralization 250 meters to the north in a potential extension. Initial drilling returned values of 6.26 silver ounces per ton and 0.29 gold ounces per ton over 7.7 feet of core (4 feet true width), and 44.2 silver ounces per ton and 1.92 gold ounces per ton over 11 feet of core (7.5 feet true width). Follow-up drilling is underway on these encouraging high-grade results.

At Martha, approximately 30,500 feet of drilling was accomplished during the first quarter to expand reserves and discover new mineralization. Results obtained from drilling R4 Deep, Francisca, and Catalina continues to expand the strike and depth of the mineralization in those veins, which were discovered in 2004. Drilling will continue throughout the year on these and other targets in the Martha mining district.

The company recommenced an underground core drilling program at Kensington in a continuation of the program conducted in the second half of 2005. The program is designed to expand mineral reserves through conversion of portions of the project's large, additional mineral resource consisting of indicated mineral resource of 617,000 tons grading 0.436 ounces per ton of gold and inferred resources of 2.5 million tons grading 0.234 ounces per ton of gold. Approximately 4,600 feet were drilled in this program during the quarter.

Discontinued Operation

As previously announced, Coeur has signed an agreement to sell 100% of its shares in Coeur Silver Valley (CSV) to U.S. Silver Corporation for $15 million. The company expects the sale to close by June 1, 2006. For financial reporting purposes, results of Coeur Silver Valley are reported as discontinued operations.

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, Nevada, and Idaho.

Conference Call Information

Coeur d'Alene Mines Corporation will hold a conference call to discuss the Company's first quarter 2006 results at 1 p.m. Eastern time on May 8, 2006. To listen live via telephone, call [phone] (US and Canada) or [phone] (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 May 14, 2006. The replay dial-in numbers are (888) 203-112 (US and Canada) and [phone] (International) and the access code is 8182471