Coeur d'Alene Mines announces the acquisition of a 19.9% option interest in Gasgoyne Gold Mines NL and takeover offer.

SYDNEY, Australia--(BUSINESS WIRE)--Dec. 20, 1995--Coeur d'Alene Mines Corp. (NYSE:CDE) announces it has entered into an option agreement to acquire a 19.9% interest in Australian gold producer, Gasgoyne Gold Mines NL (ASX: GGM), and intends to make a takeover offer for all the issued shares in Gasgoyne.

Coeur has acquired an option from Ioma Pty Ltd., Gasgoyne's major shareholder, over approximately 10.6 million Gasgoyne shares, representing 19.9% of Gasgoyne's issued capital, at a price equivalent to A$2.35 per Gasgoyne share. Ioma is a private investment company controlled by Phil Crabb (chief executive officer of Gasgoyne), Rick Crabb (director of Gasgoyne) and other Crabb family members.

Coeur is offering 7 (seven) Coeur common shares and A$60.00 cash for every 100 Gasgoyne shares. Based on the weighted average Coeur share price over the last three months of US$18 1/2 and an A$/US$ exchange rate of 0.74, Coeur's offer equates to A$2.35 per Gasgoyne share. The total value of the offer, on a fully diluted basis, is approximately A$135 million (US$100 million). If Coeur were to acquire 100% of Gasgoyne, it would issue approximately 4 million new common shares, representing an increase of approximately 19% in its outstanding common stock, and pay A$35 million (US$26 million) in cash.

The takeover offer will be conditional on various conditions including:

(i) Coeur becoming entitled to at least 50.1% of the issued shares of Gasgoyne;

(ii) approval from Australia's Foreign Investment Review Board for Coeur to acquire up to 100% of Gasgoyne's issued shares;

(iii) no takeover offer by another party being made for Gasgoyne and becoming unconditional during the offer period;

(iv) no prescribed occurrence (as defined under the Australian Corporations Law) occurring or being threatened with respect to Gasgoyne or any of its subsidiaries; and

(v) no material adverse change in Gasgoyne's financial position, prospects or business, including any material downgrading of the prospects of any of Gasgoyne's major projects.

Gasgoyne is an Australian based gold producer with exploration projects located in Western Australia and Indonesia. For the year ended June 30, 1995, Gasgoyne reported attributable gold production of 55,306 ounces and a pre-tax profit of A$13.4 million (US$9.9 million).

Gasgoyne's major assets are a 50% interest in the Yilgarn Star joint venture at Marvel Loch, located south of Southern Cross, approximately 370 km east of Perth, Western Australia, and a 45% interest in the Awak Mas project, located in the south Sulawesi province of Indonesia.

Gasgoyne's partners in the Yilgarn Star gold mine are Orion Resources NL (the operator), with a 45% interest, and Gemini Mining Pty Ltd, with a 5% interest. For the year ended June 30, 1995, open pit gold production at the Yilgarn Star mine increased by 54% to 110,612 ounces. The mine is now recognized as the twelfth largest gold producer in Australia and one of the most efficient low cost producers, with 1994/95 cash costs averaging A$268.50 per ounce (US$199 per ounce). The open pit was completed to a depth of 130 metres in September 1995 having produced some 375,000 ounces, compared to the initial feasibility study of 206,000 ounces. As at Sept. 30, 1995, progress on the decline development and associated works for the Yilgarn Star underground was ahead of schedule by 111%, with 49,997 tonnes of underground ore having been milled at a grade of 5.76 grams per tonne. Gull underground production is expected by late 1996.

Total open pit and underground resources (including reserves) at Yilgarn Star at Sept. 30, 1995, were 6.85 million tonnes at 5.92 grams per tonne, containing 1,302,060 ounces of gold.

In addition, Gasgoyne is the 50% owner of the Southern Star gold exploration project, adjacent to the Yilgarn Star mine. During the quarter ended Sept. 30, 1995, resource drilling continued and has been successful in delineating an additional total estimated resource of approximately 1.16 million tonnes at a grade of 4.3 grams per tonne, containing 160,923 ounces of gold.

Gasgoyne's other major asset is a 45% interest in the Awak Mas gold project in Indonesia. Gasgoyne's joint venture partners at Awak Mas are Lone Star Exploration NL (45%) and BT Asminco Bara Utama, a private Indonesian company (10%). Over 14,000 metres of reverse circulation and diamond drilling has been completed to June 30, 1995, and evaluation drilling is continuing to the existing mineral resources of 13.4 million tonnes at 1.8 grams per tonne of gold (approximately 775,000 ounces). The feasibility study is expected to be completed early in 1996.

Gasgoyne's other Western Australian interests include gold exploration projects at Laverton and Norseman in the eastern goldfields province.

Gasgoyne's combined equity gold resource base, including Yilgarn Star and Awak Mas, was 1,183,592 contained ounces at Sept. 30, 1995, of which 357,605 ounces are in the reserves category.

Coeur views its investment in Gasgoyne and subsequent offer as the first step in creating a major competitive gold company in the Australasian region. Coeur has already established a significant base in the region through its 80% interest in the Golden Cross gold mine, located in the North Island of New Zealand. Coeur believes that its international experience in developing and operating mines outside of North America (for example, Golden Cross in New Zealand and Fachinal and El Bronce in Chile), together with the Australian experience and exploration success of the Gasgoyne management team, will result in the creation of a significant Australasian gold company.

In making the announcement, Dennis Wheeler, chairman, president and chief executive officer of Coeur, said: "Gasgoyne will bring to Coeur an experienced management team to enable Coeur to build a precious metals business in Australia, and a base for further development in the Australasian region. Coeur regards Gasgoyne's management team very favorably, having a track record of successful exploration and company management." Phil Crabb, a proven Western Australian explorationist, played a pivotal role in the discovery and development of Yilgarn Star.

Phil Crabb, chief executive officer of Gasgoyne, said: "The combination of Gasgoyne's attractive portfolio of assets and management team together with Coeur's project development and mine operating expertise and financial strength will position Gasgoyne to become a major precious metals group in Australasia, one of the most exciting gold regions in the world."

Coeur is a global producer of precious metals with headquarters in Idaho and producing properties in the United States, Chile and New Zealand. In 1995 it expects to produce a record 163,000 ounces of gold and 6.6 million ounces of silver, extending its growth as a producer of gold while maintaining its position as one of the leading North American silver producers. Coeur is recognized for its environmental leadership.

Coeur has maintained consistent growth in its reserve base and is an industry leader in terms of the reserve value underlying its common stock. Company reserves as of Jan. 1, 1995, adjusted to reflect Coeur's current project ownership interest, totaled 3.7 million ounces of gold and 131 million ounces of silver.

Coeur's common stock is traded on the New York Stock Exchange and the company has a market value of equity of approximately US$372 million (A$503).

Coeur intends to apply for listing of its common shares on the Australian Stock Exchange.

CONTACT: Anthony R. Ebersole, 208/667-3511, x155