Key components of this plan include increased underground mine development to provide more operational flexibility, reducing the size of the workforce, improving the training of the workforce using new, more efficient mining methods, an organizational restructuring, and a cost improvement program. The temporary suspension of mining operations is to allow the improvements of the contractor-installed electrical distribution systems for both the surface and underground facilities to be undertaken to further improve operational reliability and performance. These steps, according to the company, will also significantly improve worker safety at the mine.

Previously, the company had projected that production at Cerro Bayo during 2008 would be approximately 2.5 million oz of silver and 40,000 oz of gold—47% and 8% increases over 2007 levels, respectively. The company now anticipates these production targets to be reduced by approximately 180,000 oz of silver and approximately 4,000 oz of gold due to the temporary suspension of mining activities. Production and costs at Cerro Bayo, said Coeur, are expected to show significant improvement over 2007, particularly during the third and fourth quarters of this year. Cash costs for 2008 are still expected to be approximately $3.14/oz of silver, 62% lower than 2007 cash costs. As of December 31, 2007, Cerro Bayo contained an estimated 7.2 million oz of proven and probable silver mineral reserves and 112,000 oz of proven and probable gold reserves. Silver mineral reserves increased 18% from December 31, 2006, levels. In addition to these reserves, Cerro Bayo contains an estimated 10.2 million additional ounces of measured and indicated silver mineral resources, 180,000 oz of measured and indicated gold mineral resources, 16.3 million oz of inferred silver mineral resources and 217,000 oz of inferred gold mineral resources.

Active exploration activities will continue at the mine during the upgrade work, with continued focus on the five new vein systems discovered in the second half of 2007 near the Cerro Bayo mill facility to expand the known mineralization and define new mineral reserves.

Coeur also announced in April that commissioning of the new San Bartolomé silver mine in Bolivia was well under way, and it expected the first doré to be poured before month’s end. According to the company, the mine’s crushing circuit was fully operational and an initial stockpile of crushed ore was being generated. The facility has been connected to the Bolivian national power grid, allowing the final commissioning of the grinding, leaching and silver recovery circuits. Full plant capacity is anticipated to be reached by August.

Silver production from the mine during 2008 is expected to reach more than 6 million oz, with operating cash costs— once the plant reaches full capacity— through the end of the year expected to be $4.10/oz silver (excluding royalties and production taxes of $2.03/oz). Coeur predicts more than 10 million oz of silver production during the first 12 months of fullscale operations. Reserves are reported to contain 153 million oz of silver, with another 34.2 million oz contained in additional indicated mineral resources. Estimated mine life is 14 years.