Coeur d'Alene Mines increases ownership in Gasgoyne Gold Mines Ltd. and Yilgarn Star Mine, creates Australian subsidiary.

COEUR D'ALENE, Idaho--(BUSINESS WIRE)--May 7, 1997--As part of its ongoing business expansion in Australia, Coeur d'Alene Mines Corporation (NYSE: CDE) today announced it has increased its ownership of Gasgoyne Gold Mines Ltd., and has created a new Australian subsidiary, Coeur Australia, Ltd. With today's agreement, Coeur and Sons of Gwalia Ltd. now each own 50 percent of Gasgoyne.

Gasgoyne holds a 50 percent interest in the Yilgarn Star Mine, a 135,000 ounce plus per year gold producer, as well as in the Navoria and Southern Star mining properties. Cash operating costs at Yilgarn Star last year were $218 per ounce. On an annualized basis, Coeur's share of Yilgarn Star production will represent 25 percent, or approximately 34,000 ounces. Yilgarn Star has in place a forward sales program for 405,000 ounces of future production at average realized prices of $472 per ounce.

"Our goal entering Australia last year was to create our own corporate entity there and establish a long-term presence," said Dennis E. Wheeler, Chairman, President and Chief Executive Officer of Coeur. "Today's announcement is a further confirmation of this strategy, and gives us a platform to continue to grow our business in this strong mining country."

Coeur gained its initial interest in Gasgoyne a year ago, and in a privatization earlier this year, Coeur and Sons of Gwalia became sole owners of Gasgoyne. In the current agreement, Coeur purchased for $18 million an additional 13.8 percent interest, or 7,820,907 shares of Gasgoyne, from Sons of Gwalia, to equalize their interests in Gasgoyne.

Gasgoyne also holds a 45 percent interest in the Awak Mas Gold project in Indonesia and has entered into an agreement to sell its Awak Mas interest to Lone Star Exploration NL. Under terms of the agreement, Gasgoyne will receive $15 million, plus 10 million shares of Lone Star, and a royalty of $10 per ounce on all gold produced from Awak Mas in excess of two million ounces. The cash consideration is guaranteed by South African mining company JCI Ltd. and Kimberly Diamond Co.

The agreement with Lone Star is subject to the Government of Indonesia granting an extension until October 2000 of the construction period within the existing Awak Mas contract of work.

Coeur d'Alene Mines is an international gold and silver producer with operations in North America, Chile, New Zealand and Australia.

CONTACT: Coeur d'Alene Mines Corp.

Anthony R. Ebersole, 208/667-3511