Coeur said production continues to ramp up at San Bartolomé, and operating costs have remained high due to startuprelated issues, but Coeur anticipates that costs will decline as production levels increase. San Bartolomé produced about 730,000 oz of silver through mid-October, with September production totaling nearly 390,000 oz. The mine was expected to produce nearly 700,000 oz in October and approximately 3.2 million oz by year-end 2008. Full production capacity is expected to be reached in the fourth quarter of 2008, and full-year production in 2009 is forecast at 9 million oz of silver.

At the Palmarejo open-pit/underground project, capital spending during 2008 had totaled about $140 million, with increasing expenditures expected through the remainder of the year as construction activities accelerate. Initial production is scheduled for the first quarter of 2009, and production is expected to total 5.1 million oz of silver and 67,000 oz of gold in concentrates by year-end 2009. During its first full calendar year of production in 2010, Palmarejo is scheduled to produce 7.4 million oz of silver and 92,000 oz of gold.

Installation of the Palmarejo crusher, SAG mill, and ball mills was scheduled for completion in December 2008. Tank construction was expected to be completed in November, the on-site power station was progressing, and construction of a water supply pipeline to site was under way. Construction had also begun on the tailings dam facilities.

Underground, primary development was ahead of schedule to connect the two main portals in mid-November, with approximately 500 m remaining before breakthrough. On surface, approximately 1.5 million mt of material was being moved per month. Grade control drilling in the open-pit had commenced. Run-ofmine pad development was underway to accommodate stockpiling of ore, which was expected to begin in late November.

At Cerro Bayo, Coeur intersected a new vein structure, named Delia, located near the existing processing facilities. The company said the vein is open on strike and at depth, with an estimated length of about 1 km. Exploration drilling also continues to intersect numerous, narrow, very-highgrade veins in the Coigues Este area.

Mining at Cerro Bayo is transitioning away from the Marcela and Cascada veins and into the Dagny and Fabiola veins located at Coigues Este in an effort to reduce costs. The two new mine areas are expected to be the mine’s primary sources of production throughout 2009 and 2010. During the transition, particularly during the third quarter of 2008, costs have been high, but they are expected to decline as tonnages from Dagny and Fabiola increase late in the fourth quarter of 2008 and into 2009.