The company also noted that steel tank erection work at the lower plant site was well advanced and concrete foundation work at the upper plant site for the crushing plant had commenced. However, site work by the leach tank erection subcontractors was temporarily suspended in June 2007 due to safety and quality concerns. These issues were being addressed by the main contractor to enable work to restart at the necessary level of safety and quality performance.

Cumulative purchase order commitments and capital expenditure on the project totaled approximately $54.8 million at the end of June 2007 (excluding mining equipment). Additional orders placed during the quarter included those for the EPCM (Equipment, Procurement and Construction Management) contract, shipping, mill installation and various pumps and equipment.

Tenders for the pipe work, electrical and mechanical installation had been reviewed and were expected to be awarded soon.

Palmarejo said Mine Design Associates, Reno, Nevada, USA, had completed most elements of the mining study. Additional support work including a follow-up geotechnical review was completed during June. Proposals for contract mining were received and are being reviewed with mine planning work in conjunction with work being performed by Coeur d’Alene Mines Corp. and its consultants.

The company, through its Mexican subsidiary Planet Gold SA de CV, entered into a $30.6-million finance lease agreement with Caterpillar Credito, S.A. de C.V., a Mexican subsidiary of Caterpillar, for the supply of all mining equipment and the mobile fleet required for the Palmarejo project. The Caterpillar finance lease represents 95% of the total cost of equipment and extends for a period of five years. The company said it has paid the 5% balance of the capital cost of the equipment and delivery of some of the main components of the mining fleet, including some of the five out of 11 haul trucks, two shovels, bulldozers and drills, occurred during June.

Following the announcement on May 3, 2007, of a proposed transaction between Palmarejo, Coeur d’Alene Mines and Bolnisi Gold NL, Coeur completed its due diligence under the terms of the merger implementation agreement with Bolnisi. The companies expected to begin mailing information to Bolnisi, Palmarejo and Coeur shareholders in September. All three companies’ shareholder meetings are expected to be held in October. Assuming timely completion of the required regulatory processes and receipt of the required shareholder and court approvals, the companies expect the transaction to be completed in the fourth quarter of 2007.