Coeur d'Alene to favor exploration over buyouts

By Michael Erman

NEW YORK (Reuters) - Coeur d'Alene Mines Corp. (CDE.N: Quote, Profile, Research, Stock Buzz), which is in the process of buying two miners to become the world's largest primary silver producer, is now more likely to grow through exploration, Chief Executive Dennis Wheeler said on Tuesday.

"If you have a strong exploration arm, and I think we do at Coeur, its clearly less expensive to develop your own resource and reserve base," than to acquire, Wheeler said, speaking at the Reuters Global Mining and Steel Summit in New York.

The company is particularly keen on exploring in the Americas as well as in Tanzania, he said.

With a well focused exploration team, he said a company can develop silver resources at 50 cents to $1 an ounce -- well below acquisition prices.

Wheeler said Coeur d'Alene is "always interested in the right (acquisition) opportunities, but you have to pay full price. In today's world, people know how assets ought to be valued."

Coeur d'Alene announced plans to buy Bolnisi Gold NL BSG.AX and Palmarejo Silver and Gold Corp. PJO.V in a deal worth $1.1 billion.

Wheeler said that there are currently only a handful of silver mining assets that might be of interest to Coeur d'Alene.

Still, he believes the silver industry as a whole is ready for more consolidation.

"Companies have to get larger in order to remain efficient," Wheeler said.

For summit blog: summitnotebook.reuters.com/)