Production

Rochester

Rochester is a silver and gold surface mine located in Pershing County, Nevada, which is located approximately 25 road miles northeast of the town of Lovelock. As planned, we completed mining of the existing ore reserves in August of last year. While mining operations ceased, we expect metal production to continue until approximately 2011 as a result of residual leaching of silver and gold contained in the heaps.

 Production at the Rochester Mine during 2007 was approximately 4.6 million ounces of silver and 50,400 ounces of gold, compared to 5.1 million ounces of silver and 71,900 ounces of gold during 2006. Cash costs per ounce of silver decreased by $1.28 to $1.52 per ounce in 2007, compared to $2.80 per ounce in 2006. The reduction in production of silver and gold and the decline in cash costs are a direct result of the cessation of mining activities. During 2008, we expect Rochester to produce approximately 1.3 million ounces of silver and 24,500 ounces of gold at relatively low cash costs. 

During 2007, we conducted an exploration program to identify new silver- and gold-bearing structures on our large land holdings. This program defined several areas of interest and we announced the discovery of new silver, gold and base metal mineralization during the fourth quarter. 

We are currently pursuing the sale of the Rochester Mine and expect this process to be completed by the end of the second quarter of this year. The proceeds from this sale will be redeployed to our newer, larger projects.

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