Offering Nets Coeur $140 Million

From For the record (Wednesday, March 13, 1996): Coeur d’Alene Mines Corp.’s annual dividend for its new preferred stock is $1.49 annually, paid in quarterly increments. A story in Tuesday’s Spokesman-Review reported otherwise.

Joining other local mining companies in raising cash this year, Coeur d’Alene Mines Corp. has completed a stock offering worth $140 million to the growing company.

Coeur raised the money Friday by selling mandatory adjustable redeemable convertible securities, a type of convertible preferred stock that automatically converts into common stock four years after being sold.

After losing money for every year this decade, Coeur turned a small profit in 1995 and continues to expand rapidly.

Coeur will use the cash to pay for the construction of the Kensington gold mine in Alaska, which will elevate Coeur - primarily a silver producer - into the ranks of larger gold-mining companies.

The company should decide whether to go ahead with Kensington this summer, and after two years of construction, the mine could produce 200,000 ounces of gold for Coeur. The company produced 168,000 ounces of gold last year, the most it has ever unearthed.

Spokane’s Pegasus Gold Corp. raised $69.5 million in January to pay for expansion of its mines. Coeur d’Alene-based Hecla Mining Co. raised about $22 million in January to pay for new projects.

Coeur will pay a dividend of $1.49 for each share per quarter. The company may sell up to $19.4 million more of the MARCs in the event the underwriters exercise an over-allotment option.

Coeur’s offering went well, and reflects the financial market’s interest in gold plays, said Tony Ebersole of the investor relations department at Coeur.

“I think our sale is a sign of support for the gold stocks,” he said. The offering ranks as one of the largest for a North American mining company this year, he said.

Other mining companies haven’t been as impressed with Coeur’s expansion plans. An Australian competitor of Coeur’s in a bidding war for another mining company there cited the offering as a factor that could possibly increase Coeur’s debt, since the company would have to pay dividends on the shares. Ebersole said the offering adds equity to Coeur, and not debt.

The competing bidder, Sons of Gwalia of West Perth, Australia, will send its offer for Gasgoyne Gold Mines NL of Western Australia on March 18.

Coeur’s offer will go out the same day.

, DataTimes