Hello, and welcome to our 2022 Investor Day. Thank you for taking the time today to join us. I'll quickly show our cautionary language slides before we show a brief intro video, and then I'll come back after the video to kick things off.
Coeur Mining is one of America's largest precious metals producers. We are guided by a culture forged over 94 years. Our commitment to pursuing a higher standard drives our ability to deliver value and growth for our team members, our community partners, and our stockholders. Responsibly mining precious metals from our low-risk North American jurisdictions, we are continuously advancing our delivery of the raw materials essential for a low-carbon future. This translates into our ability to deliver stockholder value and long-term growth through operational excellence, long life assets, and environmental, social, and governance leadership. Nothing exemplifies this like our Rochester expansion project.
What began as a gold mine in the 1860s and seemingly ended as a ghost town in the 1940s, Rochester is now poised for an active and long future under Coeur Mining. Our expansion and transformation of Rochester, scheduled for completion in mid-2023, is expected to drive an unparalleled step change in Coeur's overall production profile and cash flow generation. Our mining and exploration activities at Palmarejo, Kensington, Wharf, and Silvertip round out our very solid foundation for growth. In fact, over the past five years, we have embarked on one of the industry's most ambitious exploration programs, investing nearly a quarter billion dollars in exploration that continues to result in new discoveries and longer mine lives.
Of course, our pursuit of a higher standard extends to the safety and well-being of our employees, our service to the communities in which we operate, and our contribution to our nation's ability to produce vital infrastructure, support manufacturing, advance green technology, and aid in defense and energy supply chains. We are Coeur Mining. We pursue a higher standard with a winning combination of technical expertise, dedicated professionals, and stable high-return assets. We are stronger than ever and well-positioned for long-term prospective growth.
Joining me here today are several members of our management team shown here on the agenda. After me, you'll briefly hear from Jeane Hull, our newest Board Member, where she'll share her perspectives since joining the Board earlier this year. After the presentations, we'll hold a Q&A session. You can submit questions at any time, then wee'll cover them during the Q&A.
Today's Investor Day comes at a critical juncture for the company. We're on the cusp of emerging from a period of heavy investment and expect to begin seeing the impact of these investments with higher production levels, lower costs, sustainable free cash flow, lower debt levels, and longer mine lives. The team and I hope you'll come away from today with a greater clarity of our strategy, our direction, and our priorities, and some concrete reasons why our company is unique among our peers and within the sector. Hopefully, a greater knowledge and appreciation of some of the key catalysts we're focused on delivering. I'll start with a quick company overview. We're a 95-year-old U.S. mining company with 5 wholly owned North American assets, 3 of them located here in the United States, and we're quickly approaching a major inflection point that we expect will dramatically reposition the business.
These assets possess a significant and diversified reserve and production base, shown over to the right, are located on large prospective land positions totaling over 800 square kilometers. They're all located near communities with whom we maintain strong relationships and share a deep and mutual commitment for safety, sustainability, and long-term success. We've been listed on the New York Stock Exchange for nearly 25 years, our shares offer investors excellent exposure to precious metals, silver in particular, and high levels of trading liquidity for a company our size. Underpinning everything we do is our mission to pursue a higher standard by protecting our people, places, and planet, by developing solid plans, resources, and our human capital that is essential to achieving our potential, and by delivering growth and results that can create long-term value.
Our strategy is designed to transition the company into America's premier growing provider of precious and critical metals. We believe this strategy sets us apart from our peers for the following reasons. First, we operate multiple assets in mining-friendly locations. Nearly 2/3 of our revenue is derived from our 3 U.S. operations. There isn't another company in our sector that offers that much stable U.S. exposure from that many assets. While 2/3 of our revenue comes from the United States, 100% comes from North America, which helps mitigate the growing geopolitical and resource nationalism risks facing our industry and investors around the world. Having multiple operations in these mining-friendly jurisdictions mitigates operational, technical, and concentration risks that this sector and many companies pose for investors. Second, we are poised to begin delivering the benefits of our recent investments, which is expected to generate near-term sector-leading growth.
Contrary to many other companies in our sector, we've been reinvesting in the business over the last three to five years with the goal of delivering sector-leading growth underpinned by longer mine lives and higher expected returns. While this focus on long-term value creation and investment seems to have been out of favor in recent years, we believe it will prove to be the right approach. Our exploration investments, totaling nearly $300 million since 2016, have led to peer-leading reserve and resource growth and much longer overall mine lives. Our expansion investments, primarily at our Rochester silver and gold open pit heap leach operation in Northern Nevada, sets us apart in terms of expected near-term production and cash flow growth. Third, we offer investors exposure to a unique metals mix.
Our silver exposure is growing once again, which provides investors with a unique opportunity to participate in this growth and in the rapidly evolving global demand outlook for silver. Finally, these attributes are all supported by a foundation of strong culture and governance led by an extremely talented and aligned team. We're continually investing in our culture, in our people and their development, and in our ESG practices to create a true modern mining company and a place where people are proud to work and are able to contribute to the company's success. Emilie and Casey will go a bit deeper into these aspects of our business later on. Our hope is that you'll come away from today seeing a compelling investment case for Coeur. We're unique as a US company with a US-centric production base, and we offer investors sector-leading near-term expected growth driven by higher silver production.
The Rochester expansion is the primary source of that near-term growth, and it's nearing its completion. The impact of this expansion on the company cannot be overstated. At the planned approximately 30 million ton per year mining and stacking rate, Rochester is estimated to become one of the largest open pit heap leach operations anywhere. You'll see several photos and videos today, and they don't do it justice in terms of the size and magnitude of this expansion. Both silver and gold production at Rochester are expected to begin sharply increasing next year as we make the transition over to the newly expanded facilities during the second half of the year. Overall, Rochester's production levels are expected to average approximately 8 million ounces of silver and 76,000 ounces of gold annually post-expansion, well over double recent levels.
With the benefits of the larger scale operation and completion of the expansion, Rochester's free cash flow is expected to flip to the positive and provide a strong source of long-term cash flow for the company. With numerous opportunities to add to Rochester's mine life and grade profile, we're excited about the future of this key asset. In the medium term, our Kensington underground gold mine in Alaska, currently our shortest mine life operation, represents a key source of potential growth for the company. AMIfe will go into detail about why we're optimistic about the potential to extend Kensington's mine life and boost its future cash flow. Longer term, Silvertip remains a potentially game-changing catalyst for the company that will continue advancing but on a slower path. We believe this slower approach provides several advantages.
Near term, it will allow us to focus on the successful completion and ramp up of the Rochester expansion. It will also give us time to generate multiple years of positive free cash flow to help us de-lever the balance sheet. It will provide the time necessary to better understand Silvertip's geology, which should help us continue expanding the high-grade resource to support a future expansion and restart. It will give us time to consider our alternatives for how best to advance Silvertip, including potential partnerships. AMIfe will summarize the resource growth we've experienced to date and walk you through why we're optimistic that this growth trajectory can continue. Also, Mick will provide a summary of the work we've completed this year, analyzing a potential expansion and restart of Silvertip, which has helped to validate the potential of this asset.
The highlights are that we envision Silvertip being a 2,250-3,250 ton per day operation, requiring somewhere in the vicinity of $500 million-$700 million of total project capital. At those mining and processing rates, and with Silvertip's high grades, an expanded operation could potentially generate silver production levels equal to our other silver producing mines and propel the company into the realm of the world's largest silver producing companies. Finally, the case for Coeur reflects an overall lower risk profile for investors by remaining in pro-mining North American jurisdictions where we have long-standing relationships and where we carry on and continually enhance our ESG priorities and responsibilities.
I'd like to now share the video from Jeane that I mentioned before turning the call over to Mick. By way of background, Jeane has had a long and successful operational leadership career in the mining industry with great organizations, including Rio Tinto and Peabody. She brings a wealth of large mine operations, technical and EHS experience to Coeur, and we're very fortunate to have her on our board. She previously served on the Pretium board before the acquisition by Newcrest, and currently sits on three other public company boards. She's also a part-time professor at her alma mater, the South Dakota School of Mines and Technology.
Hi, I'm Jeane Hull. I've been asked to talk about my decision to join the Coeur board and some of the experiences I've had as a new board member. First of all, I'm very pleased to be able to talk to you today in this manner and talk about my experience and the excitement that I have for the company, for Coeur. When Coeur approached me, I was very flattered. Coeur is a very highly regarded company and of course, one of the first things I always do when I'm approached by a company is I do my own due diligence. The place that I start is looking at what is the public face of the company? What are they saying to their shareholders, to their stakeholders? The place I go and start is typically the company's website.
When you look at Coeur, we espouse that we pursue a higher standard. That is what our North Star is. As you start to look at how do we take the strategy and build that around what our North Star is, and what are the things that are evidence that we're achieving that, I think Coeur does an outstanding job of that. When we think about the strategy for Coeur, which is to be one of the premier precious metals companies in the Americas, our strategy is closely aligned with helping us achieve that. It is to protect both the people, planet and places where we operate, to develop the resources that we need for our modern society, and to produce and deliver those in a way that is consistent with the values that we have held in the organization.
I felt very closely aligned with the purpose and the mission and the strategy that the organization has set for itself. As part of the onboarding process, once I decided to join the organization, I was very pleased to see and have the opportunity to meet so many great leaders in the organization and to tour three of our key operations, Rochester, Kensington and Wharf. What was amazing to me was to see the alignment of the organization around the strategy and also the collaboration that the organization has across the sites and with the people who reside in the operations and also within the corporate functions.
When you think about a mining organization, number one, having a clear strategy is one thing, but really where the rubber meets the road is how are you able to operationalize that and deliver it, and who are the people that you have leading the organization? Having the opportunity to see a number of the Coeur facilities and mines, and meet with so many of the people in the organization, it was so heartwarming to see the spark in their eye, but also to listen to the strategies that they have and what they're doing and how their work aligns with the Coeur strategy. When you have everybody pulling in a common direction, you can accomplish amazing and phenomenal things.
I think that that to me is one of the things that excites me about Coeur is that collaborative nature and also the alignment of the people in the organization around the strategy and delivering the strategy. I think we've got just an amazing talent within the organization, and when you think about mining organizations and mining companies, the first thing you think about is what is the resource that they have and how are they able to extract the most value out of that. I think when you look at our exploration team and understanding our orebody knowledge and how we integrate that into our mine planning functions, I think that we are top-notch, under the leadership of AMIfe and her team, I think we are poised to deliver amazing things.
The second part is, you know, when you look at a mining organization and this was very evident when I was out doing my onboarding, is a focus on operational excellence and operational delivery. Our talent across those operational leadership functions is phenomenal. I think the other piece that is, we have people in the organizations that are experts in key areas, whether it's maintenance or business improvement or mine planning, and the collaboration that we see across the sites has been phenomenal. I think that that shows the strength of an organization. The third part of that is what are the values of the organization and how do they underpin what we're, what our strategies are.
As I toured the mine sites, I saw clear alignment around what the people, how they go about their work and what are the values that they hold and how closely aligned they were with the Coeur values. From that perspective, I took away that, Number 1, we have a strong strategy. Number 2, we have strong leadership in the organization that is focused on delivering that strategy.
We have a very collegial organization, but one that's underpinned by very strong values around ESG, health safety, our communities, and we also are very focused on how do we deliver the best value for our shareholders and the stakeholders in the areas that we operate. In conclusion, I'm so excited to be a part of such a phenomenal team, and be a part of the Coeur organization and being a part of the journey to these next level of success that we'll achieve in the coming years.
Good morning, everyone, or good afternoon or good evening, depending on where you're dialing in from today. It's great to have the chance to talk about our business and present some key facts about the exciting future for Coeur Mining. It really is a pivotal time in the history of this company. I'd like to start with a portfolio overview and take a look at our four operating assets. We have a blend of open pit and underground mines. We have two open pit mines, one in Rochester, Nevada, and another in Wharf, South Dakota. We have two underground mines, one in Palmarejo, Chihuahua, Mexico, and the other one in Alaska, our Kensington mine. We have about 2,000 employees internally, and we have a few hundred contractors and support staff, running the operations, logistics, administration for the sites overall.
We have a pretty good balance of revenue contribution from each of the sites, and I'm pleased to say overall that across the portfolio on a consolidated basis, we're still forecast to meet both production and cost guidance for 2022. Tom will talk a little bit about the 3-year outlook in more detail later, it's a good point to look at that, Coeur is expecting to produce about 1 million ounces of gold and about 40 million ounces of silver over that 3-year period from 2023 to 2025. If we move on to our operational framework and the commitment we have to safety. I have a lot of passion in this space, and I think it's really important to the foundation of a business, and it's what makes Coeur Mining great.
Some key themes in our operational framework, which is supported by what we call a Management Operating System or MOS, are our general safety program, including the field level risk assessment, leadership in the field, and then the hazard recognition, reporting and rectification. We have a couple of other parts of that framework around safety. Critical risk management. That's largely based on the International Council on Mining and Metals standards, but we take that a little bit further, particularly around the leadership model and ask the question of all of our leaders, "Do you really care?" Then we translate that into execution and risk reduction in the field.
We have a PSM program or Process Safety Management program, and that's all about that structured program of asset management, leadership, engineering, and operating discipline to basically keep the product in the pipe and to make sure that the assets and the environment behave the way we expect them to. That allows us to understand the limits of both our people and our equipment, and then to maximize the benefits from that to push for more production and for lower costs. We have a program that I like to call the Zero Zero Zero/Twenty-Twenty program. What that's about, it's all about achieving zero injury, zero reportable environmental incidents, and zero new health and wellness cases arising. The sites are really progressing well in this space.
You'll see the graphs at the bottom of the slide. This is showing you our comparison of Coeur Mining compared to the MSHA stats that are submitted for all the other U.S. companies. You'll see a divergence in those statistics. Coeur Mining is really heading fast towards zero. The industry is certainly improving, but it's nice to see that Coeur Mining is ahead of that curve. The other part of that Zero Zero Zero/Twenty-Twenty program is about the operating discipline that those risk mitigation and risk management programs provide, and then driving that into how we produce 20% more and reduce cost by 20%. This is our overall mantra for operations. The program's going really well. If I talk in a little bit more detail about the Process Safety Management or PSM program and the critical risk management programs.
Critical risk management is a fairly typical program in the mining industry. Recognizing all of those potential mechanisms that could cause some kind of fatality in our business. Vehicle interactions, confined spaces, working at height, geotechnical risk and rock fall. These are all very typical failure mechanisms in the industry, we have good controls and a program in place for that. Particularly the leadership model that supports that helps us drive efficiencies both in productivity and costs. That's about understanding what those controls should be and then getting leaders to go out in the field and check those controls are valid. While they're out in the field, then they can see how well we're producing, how are the team feeling, are we being efficient, are we being productive, what opportunities do we have to improve this business?
That's gonna feed a little bit into our business improvement program that I'll talk about in a second. If I cover Process Safety Management, that's really not a traditional program that is embedded in mining overall. If you look at the elements of Process Safety Management, like management of change, alarm management, you look at layers of protection, you look at shutdown systems, and then particularly, Process Safety Management drives you to look at where scenarios could occur that are low frequency but potentially high consequence scenarios. They could impact someone, hurt someone, could impact the environment, or could disrupt or stop production.
That disciplined program of Process Safety Management and putting that into a structured program for implementation really helps us get a high visibility system of all of the risks in our business, and then to have controls in place and to drive those controls to ensure that we maximize value. If I move on to the business improvement and project delivery mechanism, this has been a great program for Coeur Mining. We started it many years ago, but it's been accelerating a little bit more as we introduced a few simple tools. It's based on a Lean Six Sigma type approach, and we use what they call the DMAIC cycle for implementing projects, and that's define, measure, analyze, improve, and control.
Then we add a V to the end of that a little bit later after any project is complete, where we verify that the savings or the benefits that we got from those projects are sustainable over time. It's a great collaboration between operations and finance. Any savings that we get through that BI program, we have our finance team verify that to make sure that the business case was valid and that it did actually deliver the benefits that we expected. We look at how that works, we generate a big portfolio of potential opportunities, then we filter those with various mechanisms to look for the highest value potential. Then we drive those projects across each of the sites.
If we find that there's a particularly significant value proposition, then we may introduce what we call a Kaizen event, where we get all of the critical subject matter experts wrapped around that project, and then we put that together quickly and drive that improvement in a fast way. We also use this methodology, in fact, to drive our GHG program. We look at the energy footprint across our operations, and then we run projects to build up towards that commitment that we made to reduce net intensity by the end of 2024. That program is going very well, and it's a very synergistic program with both cost reductions, productivity improvements, and energy footprint. If I move on to the specific business improvement project profiles for the sites, what you're gonna see is a big distribution of different types of projects.
Overall, for 2022, we decided to set a pretty stretching goal of saving $25 million across the year for all of the sites. We distributed that fairly evenly across the four operating sites. What we found is, we're tracking well ahead of that, actually. I'm pleased to say that Kensington has already locked in between $5 million-$8 million of improvements. Wharf, between $6 million-$9 million of improvements. CRI, $7 million-$9 million of improvements. Palmarejo has done a spectacular job this year with productivity improvements and will end up somewhere between $10 million-$20 million of savings, depending on how Palmarejo finishes the year out. It's been a fantastic effort by the team to control the inflationary impacts that we've seen on the business this year.
You'll see a blend of pure productivity improvements, you'll see some techniques for driving efficiencies through mining, and you'll see some asset management improvements and maintenance improvements that are helping to run the equipment more reliably. This is contributing to that part of the Zero Zero Zero/Twenty-Twenty program to increase productivity and to drive costs out of the business. Okay, let's take a look at the Rochester expansion update. As you can see on the slide, the team are doing a fantastic job at meeting all of the key milestones for 2022. The project's about 69% complete, and the team expect to wrap up that mechanical completion around the middle of the year, next year. We'll run pre-commissioning, commissioning, and ramp up through the second half of the year and up to the end of 2023.
The schedule came under a lot of pressure at the end of last year when we decided to implement pre-screens into the flow sheet. The team have done a fantastic job at working out how to integrate that into the schedule and procure and set and execute that part of the project, in line with the original P85 schedule. I'm really pleased to say that we're still on track to complete this great project on time. It was essential to implement the pre-screens after the learnings that we got from pad four and the existing X-pit crusher, around the management of fines.
The pre-screen that we implemented in the X-pit has certainly added value already in helping us control that and drive productivity while maximizing the recovery from the ore that we have at Rochester. We expect that to continue and drive value in the new Limerick crushing system heap leach pad and Merrill-Crowe. On this project, our partners, TIC Kiewit are the main contractor now on site. We have a little under 500 contractors on site completing the construction. One of the critical pieces of that is all around risk management, planning and execution.
We make sure that each and every one of the contractors that comes to site goes through the same critical risk management training that our employees go through, so that they can identify the risks, they can then put controls in place, or they have the right to stop the job while we help them control those risks. There's nothing more important than keeping everybody safe. I'm really pleased to say that the project has actually achieved 1.2 million hours without a lost-time injury, and has gone now 2 years without a lost-time injury on the project. It's a great achievement, both for the contractors that already worked on the site, TIC and Kiewit, and the Coeur management and project team. It's a fantastic outcome, and there's certainly nothing more important than that.
The capital spend profile, as you can see on the slide, continues to reduce quarter-over-quarter as we move through 2023, and we finish off this project. Let's take a look at some of the pictures for the project. I think it's good to point out on the aerial view of the Rochester expansion, if we run from the top to the bottom, you can see on the right, the crusher corridor and then the new 300 million tons Stage 6 leach pad. Down in the middle of the picture, you see on the left, the administration and project management block, and then the Merrill-Crowe plant in the middle, and the contingency ponds and the process equipment on the right.
Down in the foreground, you see the electrical substation, which is now already completely built and is energized. The leach pad that you see, Stage 6, is complete. Now we're just waiting and get ready to load that with ore for its first irrigation cycle. In the early part of next year, we'll load the ore on there, and that'll be in preparation for completing the Merrill-Crowe construction in the early part of quarter two. If we take a look more specifically at the crusher corridor, first in the background, you'll see in the top left, that's the current operating pad, leach pad number four.
we're using that really as a full, scale test pad so that we can fully understand the Rochester ore body, how it behaves as we run it through that three-stage crushing system, because we designed and then optimized that existing X-pit crushing system to match as far as possible the new Limerick crushing system that we're putting in now. We do have a jaw crusher instead of a gyratory crusher, but we have MP1000 for the secondary, and then we have HPGR for the tertiary. Those tests that we've done on pad four have really given us a lot of experience and helped us de-risk both the start-up and then the operational performance of Limerick and Stage 6 when we get it up and running.
When you look at the crusher corridor from the top right all the way down to the bottom left, you'll see the three-stage crushing format. The great thing about this new format is that it actually is broken up at each stage with a stockpile. That gives us a lot of flexibility. The fact that it's not interconnected at every stage of the three-stage crushing system means that if we have any disruption at any one of the stages or the feed to the primary, then the rest of the crushing system can continue to run. That'll help us to improve availability and utilization of that crushing system, and certainly reliability in delivering plants. If we take a look at the set of pictures on the additional construction photos, you'll see that the tertiary crushers, the HPGRs, are already set.
The secondary crushers are already set. The team are now working around the periphery of that to put in all of the infrastructure to ensure that those assets work well. I'm really pleased to see that all that major equipment is already set. Pretty much across the whole project, we're out of the ground, which is great because that risk is being removed from the project, and now we're progressing very well with the mechanical construction across the piece. The Merrill-Crowe plant, the building is in place. All of the major equipment is set, and the walls are on and the roof is on.
That's a fantastic achievement ahead of winter so that we don't get any weather disruptions at the end of this year and at the start of next year, while we complete that construction of the Merrill-Crowe ready for that early April completion and then start for the commissioning and ramp-up of that plant. Okay, let's take a look at a flyover of the site. We run a drone on a regular basis across the project site and would like to show you some footage of what that looks like so you can see a pretty up-to-date version of the site as it stands today.
My name is Cody Sutherland, Coeur's Vice President, US Operations. Welcome to Rochester 2.0. This video was produced on November 10, 2022 when Rochester's POA 11 expansion project was 61% complete. The Rochester Mine is located 26 miles east of Lovelock, Nevada in the heart of America's Silver State. In operation for more than 35 years, Rochester has forged strong ties to local communities, building positive relationships with the surrounding area that have spanned generations. Now, in the midst of the company's largest expansion effort in history, the operation is well-positioned to remain a long-lived engine of economic growth and prosperity in northern Nevada and transformative cornerstone asset in Coeur's portfolio. Following completion and ramp up, Rochester is expected to be one of North America's largest open pit heap leach operations and the world's largest primary silver open pit heap leach operation.
The mine's enhanced silver production profile coincides with growing global demand due to the numerous and growing end uses of the world's most versatile metal. The expanded operation will consist of the Stage 6 heap leach pad, Merrill-Crowe processing plant, and a new 3-stage crushing circuit featuring pre-screens as well as related infrastructure to support this significantly larger silver gold operation. I'm proud to report that in August 2022, the POA 11 construction project surpassed two years and more than one million man-hours without a lost time incident. Construction is currently at peak levels of activity with over 450 employees and contractors at site. You're looking east at a wide shot of the finished pad 6 with the Merrill-Crowe process plant and process contingency ponds in the foreground. The completed earthworks for the crushing system can be seen in the upper right.
The current stage four heap leach pad is located just over the ridge in the background. A closer look at the Merrill-Crowe plant highlights the progress being made towards its scheduled completion in the first half of 2023. Exterior cladding of the main Merrill-Crowe building is nearing completion, allowing for interior equipment to be set up as well as construction of electrical and instrumentation systems under cover for the remainder of the winter. 1 of the 2 deaerator towers for the project can be seen here, and both towers have been set in place. Here's a closer look at the completed power distribution center and electrical substation for the Merrill-Crowe plant, as well as other process and administrative installations in the area. The first phase of the Stage 6 leach pad was completed in the third quarter of 2022.
Initial loading of 4 million-6 million tons of ore is expected in the first quarter of 2023 to allow commencement of leaching and solution introduction to the Merrill-Crowe plant. With permitted capacity of 300 million tons, Stage 6 has been engineered with sufficient capacity for the life of the mine. Just above the temporary concrete batch plant and water storage pond is the footprint of the overall crushing system. Starting from the top right of the screen. Concrete foundation work is complete in the primary crusher pocket. This will support a Metso Superior™ MKIII gyratory crusher with the capacity to crush more than 88,000 tons of material per day. The overall structure height will be more than 100 feet with a Hilfiker wall for added stability.
The power distribution center for the primary crusher can be seen to the left of the crusher pocket. Rough set of the primary crusher is on track for completion in the second quarter of 2023. The primary dump pocket is sized to accommodate 2 200 ton haul trucks dumping into the crusher simultaneously. Efficiency upgrades and economies of scale like these drive the strong economics of this expansion. Conveyors will transport primary crushed material to the coarse ore stockpile vault and reclaim area. A key feature of the crushing system is decoupling each stage with a large stockpile, which provides surge capacity in the event of interruptions to any other part of the circuit. Rough set of both Metso MP1000 secondary crushers was completed in the second quarter of 2022. The two cone crushers are each topped by double deck vibrating screens and apron feeders.
With structural steel mostly complete, electrical and piping work is well underway. The yellow structural steel to the left is part of the conveyor system that will send material to a secondary stockpile for feed to the pre-screen circuit. This vantage point provides a sense of the sheer scale of the crushing circuit. The distance from the primary crusher pocket to the extreme right to the final product stockpile to the left is approximately one mile. The large structure in the foreground is the tertiary crusher, including the lime tower to the left of the structure. Downstream of the secondary crushers, you can see the foundation work is now progressing for the pre-screen assembly. This added scope enhancement to the crushing system provides further flexibility to process variable ore types by optimizing the particle size distribution and minimizing fines production.
The crushing system with the pre-screen addition has a design throughput of approximately 32 million tons. The tertiary circuit consists of 2 thyssenkrupp polycom High Pressure Grinding Rolls. Upon deconstruction of Rochester's X-pit crusher in the 1st quarter of 2024, the existing HPGR will be disassembled, and its parts will serve as critical spare parts for these 2 new units. Rochester's existing MP1000 secondary crusher will serve a similar purpose for the POA 11 secondary crushers. Reaching the end of the crushing system, ore is stacked in the final product stockpile. This will deliver material to the truck loadout, which is the yellow steel structure shown here. The crusher substation and fuel island, located adjacent to the loadout, are also under construction.
The crusher substation is nearing completion and will be ready for energization in early 2023, along with crusher power distribution centers. Construction of the Rochester POA 11 expansion project remains on track for completion in mid-2023, with commercial production starting in late 2023. The future of Rochester as a world-class silver-gold mine is rapidly coming into focus.
Okay, great. Now let's do a Silvertip update. During 2022, we decided to reset that project a little bit and to conduct an order of magnitude study. We actually ran that in 2 parallel paths. We began at the start of the year with an assessment that Kiewit helped us on, and it was part of this 2 parallel paths. Kiewit took a look at first to see whether there was some kind of turnkey engineering, construction, and commissioning solution to build a new plant and to look at the various throughput levels to really try and verify what that capital cost might look like, and specifically the schedule that we might be on if we decide to construct in that way.
That part of the study gave us that good basis for capital and really gave us some verification that the original work that we had done around the capital construction costs for Silvertip were very close. The second path it looked at some similar aspects, then took into account the different technologies that we have in the market and looked at whether there might be a smaller footprint or a more efficient modular way to build the plant that would help us drive capital costs down, drive operating costs down, shorten the schedule for execution or construction. Overall, that second path has been very productive.
We, we looked at varying potential throughputs from 1,000 tonnes per hour that we have a permit to run at today, to up to 4,500 tonnes per hour. What we found was that in that range of capital that we saw the Kiewit work and previous show us that range of $500 million-$700 million, the sweet spot was really in between that 2,250-3,250 tonnes per day throughput level that really matched up with the resource and reserve projections that we have for Silvertip currently. That provided the best value generation scenario and really set up for a successful order of magnitude study.
It also showed us that, with a little bit of sensitivity and some improvements, some small improvements around operating costs, some small improvements around capital cost, there really are a lot of high-value potential scenarios that we could execute for Silvertip to give us that longer-term growth. If we take a look at the current path forward for Silvertip, now that we've gotten to the end of that order of magnitude study, and we'll wrap that up through the end of the year and report out on that early next year, it clearly shows that Silvertip presents a great opportunity for continued growth for Coeur Mining in the future. It's clear that we have to first complete the Rochester expansion.
For a period post-construction, we'll have to focus on production and efficiency at all of the sites and settle into a profile of positive free cash flow going forward. Based on that, we don't expect to spend a significant amount of capital in the next 3 to 4 years at Silvertip on construction particularly. We'll continue to study the opportunity. We'll continue to do some of the prerequisites, completing some of the essential environmental baseline work, and engaging local stakeholders to ensure that we're well set up when we're ready to press go on this project, that we know everything we need to know before we press go. With that, we'll continue to push on with exploration at the site. It's super exciting.
AMIfe will talk about the exploration for Silvertip a little bit later, but that growing resource, and further improvements in the project economics, are looking great. It's an exciting time for Coeur Mining, and I'm proud to talk about the great work that the teams are doing, no more so than being best in class in safety. Cheers.
Starting off, I have some key summary and takeaway messages that I hope will become clear over the remainder of this presentation. Today, I hope to illustrate Coeur's sustained commitment to organic growth, our recent success in this area, and our short to long-term vision, both for maintaining long mine lives at our operations and for creating a very robust growth portfolio. We will focus on two key projects today, Kensington and Silvertip. At Kensington, we are focused on rapid growth of the life of mine beyond 2030, with an aggressive 4-year exploration program already underway. We are very excited by the geology and prospectivity at Silvertip and are making significant steps forward in our understanding of the system there. For reasons we will discuss in more detail during this talk, we are confident we can rapidly expand the resource and reserve base to enable a decision on the project.
More on both of these later. Let's first look in more detail at the exploration investment that Coeur is committed to. Moving to the next slide, showing the impacts of Coeur's exploration. Over the last five years, we have invested $238 million in exploration, this resulted in significant reserve and resource growth. Half a million ounces of net gold and 85 million ounces of net silver were added to reserves. 2 million ounces of net gold and 113 million ounces of net silver were added to M&I resources, 2 million ounces of net gold and 32 million ounces of net silver were added to inferred resources. The image shown here is called the Exploration or Resource Triangle. This is a simple visual and easy-to-understand management tool with several purposes.
First, it presents a snapshot of the target situation on any particular project or in any region. Secondly, it assists management to rapidly identify strengths and weaknesses in the portfolio. Thirdly, it assists with budget allocation to maintain a balanced portfolio. Essentially, it can be thought of as an upside-down funnel where targets enter at the base as early-stage prospects based on soil anomalies, geophysical anomalies, mapping, old workings, et cetera. With time investment and increased geologic understanding, they move up the triangle as our confidence in them increases and the risk associated with them decreases. We aim to keep the numbers and distribution of targets in the pipeline such that a triangular shape is maintained. We can clearly see the effects of the last five years of exploration expenditure on here.
There are many more targets in the top 3 levels of the Exploration Triangle, some of which have already added to life of mine and some of which have the potential to increase both life of mine and M&I resources. In addition to this bolstering of the top of the Exploration Triangle, many new targets were generated at the base. The focus over the coming years will therefore be to strengthen the central levels of the Exploration Triangle in order to keep feeding new resources into the life of mine and generating and maintaining a healthy pipeline. Moving now to some key long-term objectives. On this slide, we look in a little bit more detail at the focus for exploration over the next 3 to 5 years.
We will talk a lot about Kensington and Silvertip today. I will give a high-level overview of the plans for Palmarejo and Rochester at this point. We plan to take a multi-pronged approach at Palmarejo. Firstly, continue to add to life of mine. Secondly, build the inferred pipeline to allow increased optionality in the mine plan. Thirdly, district-scale prospectivity review with target ranking of earlier-stage projects with particular focus on areas not burdened by the gold stream. At Rochester, we will focus on reinvigorating our understanding of the big picture geology and controls to mineralization in this large land package. Aims here will be to, first, assess opportunities for higher grades, both gold and silver, to again provide optionality for the life of mine. Second, to build a very robust pipeline to feed the higher throughput needs of Rochester post POA 11.
Let's now continue with a video presentation for our Kensington Mine.
Our Kensington mine is 100% owned by Coeur Alaska and is located approximately 48 miles northwest of Juneau, Alaska. The property sits within the Berners Bay mining district at the northern edge of the Juneau Gold Belt, a 120-mile long and 10-mile wide structural zone hosting several major gold producers. In this view, we are looking north at the Lions Head Mountain. Mine infrastructure and the Johnson Creek are seen in the foreground. Over 1 million ounces of gold have been produced since Kensington began production in 2010. The Kensington mine is currently producing from 3 major deposits, Kensington, Raven, and Jualin, hosted in Cretaceous diorite. Over the last few years, significant exploration efforts have been underway at Kensington, and in 2022, Coeur made major jumps forward in understanding the system and remaining prospectivity at this mine.
This has led to the planning of an aggressive 4-year exploration program aimed at increasing the life of mine beyond 2030. This program started in the second half of 2022. Recent developments and understanding, successful exploration results, and future exploration planning will form the basis of our presentation today. The geology at Kensington Mine comprises mesothermal orogenic gold-bearing quartz veins. There are two distinct types. Firstly, shear vein, hosted by discrete north to northwest trending and steeply east to northeast dipping shear zones. Veins of this style include Jualin, Elmira, and Comet. Secondly, vein networks comprised of extension vein arrays, sheeted extension veins, and stacked in echelon shear veins. This mineralization style forms the bulk of the main Kensington deposit and the Eureka area. Moving now to the underground workings and drilling in more detail.
We see the underground infrastructure on the two main deposits, Kensington and Jualin, in relation to the Lions Head Mountain. Looking now at exploration progress over the last 5 years, we can see significant growth in the resource shapes from year to year. This is especially prominent at Elmira. That was just an exploration target in 2018, but is now a well-established deposit, contributing 190,000 ounces to the life of mine. We also see significant future potential here as we expand to the south. Looking forward to the next 3 to 4 years of near mine exploration, there will be significant focus on extending existing ore bodies to the south. This plan commenced in 2022, and recent drill results, such as those shown here, show continuity of the zones and are hugely encouraging. Kensington Deposit is comprised of a number of zones.
Zone 30 A and B, zone 41, zone 10, and zone 12 and 12 A, 3 of which have been added since 2018 and have contributed to resource growth quite significantly. In addition, a recent technical review at district and deposit scales has increased our understanding on the controls to mineralization, with implications for exploration, targeting, and resource growth. Key outcomes from this work are, in shear vein systems, steeply plunging shoots of higher-grade mineralization are controlled by changes in strike of the host shear zone. This work has already generated several new high-value shoot targets in systems such as Raven, Elmira, and others, and we plan to test these in 2023. In extensional vein dominant systems such as Kensington, preliminary structural analysis suggests that the changes in the dip of the subhorizontal shear veins controls the formation of gently plunging shoots of high-grade mineralization.
Validating this conceptual model will generate additional high-value near mine targets with the potential to increase operational flexibility and our resource inventory. The recent results shown here illustrate the success we had in 2022 in extending all the zones of Kensington to the south and down dip. We have infilled the gap between zones 12 and 30 and have shown them to be continuous ore zones. We have traced zone 30 B an additional 300 feet to the south this year, with the most southernly intercept to date running over 4.6 ounces per ton. Elmira was a historic resource that was first drilled back in the '80s and '90s, not explored again until 2018 when improving economics brought it back onto the priority list.
As in other shear vein systems in the project, Elmira had a component of dextral strike-slip at the time of mineralization. There is clear potential for several high-grade plunging shoots controlled by changes in strike of the host shear zone, which have generated several new targets at depth. Strike extensions to the host structure have been identified and remain open for drill testing going forward. Our new understanding of the structural controls to mineralization is instrumental in identifying the next generation of high-value targets that provide blending optionality at the mill and resource growth across the district. Elmira deposit has a parallel deposit in the hanging wall called Johnson. Looking at the results shown here, we can see that both are extending to the south. This immediate exploration plan is aimed at doubling the strike length.
These focused exploration programs at Kensington, Elmira, and Johnson are designed to rapidly extend mine life beyond 2030 and add significantly to the NAV at this mine. This is only one part of our multi-pronged exploration approach. Concurrent with this work, we are continuing to systematically explore the highest priority regional targets located in these proven structural corridors. We have more than 35 known targets, many of which have similar geological settings to the currently known deposits. This scout program commenced this year and will continue every summer season, and we are confident will provide an exploration pipeline well beyond 2030 and extend mine life here for the long term.
Moving on to Silvertip. Here we have a drone image that very nicely shows the location of the main targets we will talk about in this presentation. At the center of this north-looking image, we can see Silvertip Mountain, beneath which is the bulk of the currently defined resource, including Silver Creek, Discovery Zone, and Southern Silver Zone. Camp Creek is slightly to the west. To the south and slightly east, we have Saddle Zone and Tour Ridge, targets from which we believe we could see significant resource growth in the near term. I'll also draw your attention to the mag low shown in the black circle, as we will speak about this later on too. Looking now at Silvertip location and geological setting. On this slide, the key geological points to note are the extensive distributions of the main target sequences.
The McDame Limestone shown here in blue, and the Lower Dolostone unit shown here in bluey green. The lightly intrusive centers are denoted by the pink circular features. Moving on to the next slide that shows the Silvertip and grade comparisons. These charts show how Silvertip grades compare to other silver lead zinc CRD deposits in the world. This data was taken from S&P Capital IQ in September and excludes any deposits with copper or gold as primary commodities. It also relates only to M&I resources. Across the metals, Silvertip ranks very highly relative to the global peer group, but silver grades are particularly noteworthy, coming in second only to La Platosa, Saltillo in Mexico. The very high grades at Silvertip, along with the large prospective land package, makes us confident about growing the resource and reserve base quickly and efficiently. Moving on to look at Silvertip resource growth.
Since acquiring the project in 2017, we have systematically grown resources on an annual basis. Let's now look at this growth in more detail in this video.
We will now look at this resource growth in more detail in this video. Here we have an aerial view of the Silvertip site, showing the old mine site, mine camp, and tailings facility. We will look at plan and cross-section views simultaneously throughout this video. The reasons for this is that we are exploring for two styles of mineralization here, gently dipping manto horizons that are intersected best by surface drilling and sub-vertical chimneys or feeder structures that are best explored via underground sub-horizontal drilling. Resource shapes at the time of acquisition in 2017 are shown in blue, along with historic drilling. At this time, all mineralization was manto style, with no chimneys yet defined, and the total resource was 2.8 million tons. Historic exploration had mainly been conducted via surface drilling and close to existing infrastructure.
In 2018, we continued with surface drilling and focused mainly on confirming the existing resource and upgrading inferred resources to indicated. Some expansion drilling was undertaken to the south and west of Discovery Zone, and by year-end, we had increased the resource to 3.3 million tons. Once existing mineralization had been confirmed and upgraded, 2019 saw exploration focus shift to expansion drilling, mostly around Discovery Zone. Historically, drilling had only aimed to intersect the manto horizons at the upper contact of the McDame Limestone and overlying Earn Formation sediments. In 2019, however, drilling depths increased through the full limestone package, allowing discovery of stacked manto horizons. This was a significant step forward in our understanding of the mineralizing system and allowed another 600,000 tons to be added to the resource.
2020 can be considered a breakthrough year for the project, as 1 million tons were added to the resource base and a number of important discoveries were made. Firstly, the Camp Creek Zone was discovered to the southwest of previously known mineralization. This zone is associated with a large regional fault that is believed to be a major feeder structure. Secondly, scout drilling at both Tour Ridge and Saddle Zone, located 1 kilometer to the south and north respectively, intersected significant manto style mineralization and shows the system remains open in both directions. Overall, the known strike length of mineralization increased by 200% to 4 kilometers. Expansion of Discovery Zone also continued apace. 2021 marked the start of underground development, mainly to allow exploration of chimney structures. The sub-vertical chimney nature of the Southern Silver Zone was clearly outlined. Its strike length was doubled.
The down dip extent grew significantly, and our understanding of the system greatly improved. In addition, the Discovery Zone manto horizon continued to be extended to the north via surface drilling. Scout drilling in the Saddle Zone, located between Silvertip and Tour Ridge, was very successful, with all holes intersecting mineralization. We are very encouraged by the structure, the style, and the depths of mineralization intersected here, as they are good indications that we have multiple chimneys and multiple manto horizons in the area. These results allowed us to infer that mineralization continued southwards from Silvertip through Saddle Zone to Tour Ridge. Further supporting evidence for this theory came from the SkyTEM geophysics flown in 2021 that outlined a continuous geophysical anomaly from Silvertip all the way south to Tour Ridge.
Furthermore, in late 2021, surface winter drilling intersected a new zone, Camp Creek West, that showed the highest grade drill intercepts to date. In total, 1.8 million tons was added to the resource in 2021, the largest growth in one year to date, bringing the total resource to 6.3 million tons. In 2022, the major push was expansion and infill of the Southern Silver and Discovery Zones from the underground ramp. This expansion drilling confirmed that mineralization structures continued much deeper than previously known, extending through the full column of carbonate rocks and into underlying sandstone. Underground scout drilling also proved the existence of new chimney structures beneath Discovery Zone and south of the exploration ramp. Further expansion of the mineralized footprint was also achieved by surface scout drilling at Tour Ridge.
Although assay results are pending for these holes, we have visually confirmed massive sulfide mineralization that extends the strike length another 600 meters to the south.
Moving on to the next slide. As referred to in the video, 2022 exploration focused mainly on the Southern Silver Zone and discovery zones, and a number of key advances were made in our knowledge of the system. We aim to solidify this understanding through completion of comprehensive geology models in the first half of 2023. Here we see a long section of the Southern Silver Zone. Current evidence indicates that this is likely to be a major chimney structure in this part of the system. Mineralization has been intersected over a vertical depth of 500 meters and a strike length of almost 1,800 meters. We intersected mineralization not just in the McDame Limestone, but also in the underlying dolostone and sandstone units.
This further increases the amount of stratigraphic column that is amenable to mineralization, and therefore opens up significantly more opportunity for stacked mantos and multiple chimneys. Southern Silver Zone is associated with intrusive porphyritic dikes and strikes directly towards the mag low seen on the first photograph that is a potential intrusive source for the Silvertip deposit. Looking forward now to the near term exploration plans that would enable Coeur to make a decision to proceed on the project. We are confident that we have visibility on how to build a sufficient reserve base. South of the already defined resource area, there is an established 2-kilometer long mineralized trend through Saddle Zone to Tour Ridge. Drilling in 2020 and 2021 successfully intersected manto-style mineralization along the length of this trend, and we see a continuous geophysical anomaly similar to that seen over Silvertip.
In addition, drilling one kilometer north of Silvertip at Keda Zone also intersected mineralization, and this again sits on a very strong geophysical anomaly. We expect that future surface and underground drill programs over this additional three kilometers of strike length will effectively define the existing manto horizons and discover new feeder structures. Let's now look briefly at the geologic model for CRD systems. Carbonate replacement deposit systems have an intrusive porphyry as the mineralizing source and are often associated with skarn mineralization too. Porphyry skarn CRD systems occur in three dimensions. Mineralizing hydrothermal fluids travel upwards and outwards in a somewhat radial manner from the porphyry source, creating a hub-and-spoke type distribution of mineralized zones. Chimneys are sub-vertical zones of mineralization, usually associated with structures, and mantos are the result of fluid flow laterally along carbonate stratigraphy.
Locating the porphyry provides significant resource upside potential as mantos and chimneys typically become thicker and more structurally predictable closer to the source. The left-hand diagram shows the portion of the overall CRD system that we think has been explored at Silvertip to date. The resources currently defined are therefore likely to sit on one spoke of what is potentially a much larger system. With this CRD model in mind, we recently completed a district-scale integrated interpretation using geology, geochemistry, geophysics, structure, and alteration. This identified regional controls to CRD system formation and put Silvertip into geologic context. This work also generated many new near mine and regional targets, where we see multiple additional opportunities to support a long life for this asset. To wrap up, I want to reiterate Coeur's commitment to organic growth.
Investment over the last 5 years has provided meaningful additions to reserves and resources. We plan to continue this trend in the future, along with a focus on building an industry-leading growth pipeline. Given recent excellent results and improvements in understanding at Kensington, our belief in this asset continues to strengthen. We believe that mining here will continue well beyond 2030. A key contributor to our long-term growth strategy is Silvertip, an asset that is, in our view, in the early stages of its exploration history. With that, I will hand over to Emily.
Thanks, AMIfe. I'm Emilie Schouten, and as the head of HR, I'm honored to take just a few minutes to provide an overview of the differentiating culture we've created here at Coeur and how we're positioning our workforce for the future. As Mitch highlighted on the very first slide today, a critical key to the success of our strategy is developing a team to deliver and protect our future value. As indicated by our most recent employee survey, Coeur is a culture founded on our best-in-class ESG practices. Safety and ethics are repeatedly at the forefront of the values that define our culture. Because of those values, our employees have scored us 10% higher than other companies on being highly engaged and proud to work for Coeur Mining.
Reporting on gender, race, and the average age of our employees are important metrics to track our overall diversity efforts. That's only a portion of DEI. As seen in the list of recognitions here, our efforts specific to inclusion in creating an equitable and inclusive workforce are differentiating us in and outside of the industry. More specifically, our team is tackling tough discussions about bullying, bystander intervention, and overall mental wellness to ensure each and every one of our employees, regardless of age, gender, or race, feel respected and included when they step into one of our sites. This is not an initiative. This is who we are at Coeur. As we turn to this next slide, the graphic captures many of the dynamics at play when assessing the increasingly complex labor market and how we balance our workforce planning.
As an element of our license to operate in any jurisdiction, the partnership with our local communities and therefore providing training and job opportunities is crucial. 60% of our workforce today are local hires. In many of those local jurisdictions, we are committed to investing in training and hiring of our local, indigenous, and native populations. While the mining graduates decrease year over year and the industry is aging, we are proud to keep partnering and hiring from those key universities to maintain our average age at 40 years old since 2018. By providing internships and scholarships while emphasizing female and ethnic diversity of those hires, we provided a 50% diverse pipeline of new talent to our future workforce. In addition to all those factors, the question of how has the great resignation affected Coeur is often asked of me.
I would say in general, one company's struggle has been our gain. While the turnover has remained relatively flat pre-pandemic at 18%, our time to backfill those that have left us has been significantly quicker. Meaning, as folks have left another job, we've been able to hire them within 32 days of having our job open. This is less than half the time it took us pre-pandemic. What is concerning is the lack of tradespeople available in our industry. Unlike that short turnaround for other jobs, it can take us over 90 to even 100 days to find an electrician or a mechanic. Because of this shortage, we are investing in local trade school programs, providing apprenticeship opportunities, and even creating returnships for retiring tradespeople to work part-time just so we don't lose their technical talent.
Finally, of the additive labor costs we've seen in the last year, our primary investment has been into our business improvement and projects teams. This mirrors our current focus and strategy for the development of our future at Coeur. As we look to the future, there are three key elements that map our people's path forward. First, continued strategic investment in the key areas that will provide growth for our profile are in business improvement, exploration, and projects, while of course streamlining efficiencies of our operational teams and prioritizing safety over production. Second, we're extremely proud of the unique development opportunities we have provided to over 150 frontline supervisors through our year-long training program called IMPACT. We've successfully piloted our new Advanced IMPACT training for managers and directors to better equip them as business leaders at Coeur.
Investment in these programs is investment in our culture and a goal to retain our best and brightest asset of all, our people. Lastly, looking differently at how we work, who works in our roles, and how we staff our positions, either remotely or with more creative solutions like automation, will provide further opportunity to hire a broader, more diverse workforce for our future. Meanwhile, through Coeur's culture of safety, ethics, and continued development, we are able to differentiate ourselves as an employer of choice. Now I'd like to turn it over to Tom.
Thanks, Emily. Hello, everyone. Today's format presents a great opportunity to walk through our plan to finance our growth strategy as we pursue our goal of becoming America's premier growing provider of precious and critical metals. I'll take a few minutes to walk through a few key topics, including our capital allocation framework, the inflationary cost pressures we continue to experience, and an update on how we are proactively managing the balance sheet so that we have the financial firepower to get across the POA11 finish line. I will close with what we believe the payoff looks like following the completion of the POA11 expansion, a 15% and 51% increase in gold and silver production respectively at lower cash costs, followed by a significant period of de-levering on the back of strong free cash flow.
Beginning with capital allocation, slide 51 discusses the lens under which we look at capital allocation. We put our money where our mouths are as an executive team by having a significant portion of our long-term compensation tied to return on invested capital, which helps drive strong alignment with our stockholders. Standout items in our strategy from this slide include our POA11 expansion, which despite the increased capital we recently announced, remains a robust investment based on a proven and probable reserves-only mine plan, and our continued investment in exploration. This strategy differentiator has been a prudent allocation of capital as we have been able to meaningfully extend mine lives at the majority of our assets in the past five years, other than Kensington.
As discussed throughout the presentations today, we're particularly excited about the long term at Kensington and plan to allocate a modest amount of additional capital to Kensington during the next 4 years as we aim to extend mine life and increase head grades. Slide 52 includes additional details on the continued inflationary pressures that we face. As a company, we consume between 16 million-18 million gallons of diesel annually and between 20 million-22 million pounds of cyanide. It is easy to see the financial impact of the 45% and 41% increases, respectively, in these two key input costs. We saw some signs of moderation during the second half of 2022, we remain concerned in the short run that inflation has not yet been tamed.
Slides 53 and 54 provide further detail on the balance sheet and how we intend to fund the remaining POA11 expansion, as well as the modest additional investment at Kensington to extend and increase the overall grade pro-profile of the mine. A couple of key observations here. Through the end of November 2022, we'd committed $602 million, incurred $476 million, and paid $441 million of the expected POA11 capital, leaving approximately $210 million-$230 million to be spent. Q4 2022 and Q1 2023 are expected to be the heaviest remaining CapEx quarters as we remain on the P85 schedule as outlined by Mick. As of the end of the third quarter, total potential adjusted liquidity was $492 million, leaving us well-positioned to fund the remaining POA11 capital.
A few items I'd like to highlight about our liquidity include we have gold hedge protection on 112,500 ounces of 2023 gold production with a forward price of just under $2,000 per ounce. We amended the terms of our revolving credit facility with our supportive bank syndicate to provide additional debt covenant flexibility should lower metals prices and higher inflationary conditions persist in the short term. Finally, we have already completed the $50 million ATM program that we announced during our Q3 earnings call. Slide 55 shows our three-year outlook. What is the payoff? Slide 55 highlights a three-year projected 15% and 51% growth in gold and silver production, respectively, driven primarily by the successful completion of the POA11 expansion at Rochester.
This production growth, coupled with an expected 17% and 23% decrease in gold and silver CAS, respectively, over the next 3 years, positions Coeur for significant margin growth. As Mitch stated, we plan to begin delevering the balance sheet post the ramp-up of the POA 11 expansion. This delevering will set us on the path to achieving our long-term total debt and net debt leverage ratios, and depending on metals prices, a return of capital to our stockholders. It is important to note we expect our development capital expenditures to drop off significantly after 2023, with only Palmarejo and Kensington slated for additional development capital. At Palmarejo, we would like to develop the Hidalgo deposit on a faster timeline than is currently contemplated by the technical report.
As previously mentioned at Kensington, we believe there is a significant opportunity to extend mine life and increase the head grades with some additional underground development and exploration investment. Another key piece of the financial puzzle will be our level of investment at Silvertip. We intend to reduce spending at Silvertip during 2023, including taking our foot off the exploration gas pedal during the first half of the year as we complete the POA11 expansion, while AMIfe and her team complete an overall look at the geology model at Silvertip. I would like to leave you with a few closing comments before turning it over to Casey. We have actively managed our balance sheet to provide the flexibility to deliver on our strategy during a challenging economic and geopolitical backdrop.
We are confident that we have the resources to deliver POA11 and look forward to keeping everyone up to date on our progress. I'd like to thank our various financial partners, including our bank syndicate, our gold and silver customers, our insurers, and our surety providers who have been solidly behind our strategy and great partners. Your continued support is another sign that the future remains bright for Coeur. Over to you, Casey.
Hi, I'm Casey Nault, General Counsel and Chief ESG Officer. I'll provide an overview of Coeur's leadership in ESG. This slide demonstrates that since 2018, ESG at Coeur has evolved to be broader in scope, integral to overall strategy, and embedded in our culture. Our ESG strategy is to be a leader among peers, aligned with our culture and purpose statement, and our focus on building long-term value. To call out a few areas I believe set us apart as a leader, one, ESG governance. We have strong support from Mitch and our entire board of directors. We also have formed an internal ESG committee with senior-level representatives from across the business and a cross-functional climate working group leading and overseeing climate strategy and initiatives. Second, Mick talked about health and safety, which is a key part of ESG.
When COVID struck, we led the industry in our COVID response, keeping employees and communities safe and maintaining a social license to operate. Third, climate. We've set an ambitious greenhouse gas net intensity reduction goal to reduce 35% by the end of 2024, and 20% of our 2022 executive performance share award is tied to achieving this goal. We believe we're the only company in our sector to have tied a material portion of executive compensation to achieving a greenhouse gas reduction goal. We completed a scenario analysis on a company-wide basis in 2021, and in 2022, completed scenario analyses at each site. We also completed an energy diagnostic at each site to identify emissions reduction opportunities. On the government relations side, we advocate for grid extensions and clean line power to our remote sites. Fourth, DE&I and human capital management.
Emily talked about our focus on inclusion and not just diverse hiring. Our IMPACT and Advanced IMPACT training programs also set us apart as a leader in human capital management. This slide of re-recent ESG accomplishments has a lot on the page. I'll just highlight a couple of themes. One, Coeur's leaders are also leaders of ESG organizations. Mitch was named the first chair of the National Mining Association's ESG task force, reflecting Coeur's leadership in this area. Corey Hikel, Director of ESG, serves on the GRI Mining and Metals Standards Working Group. The second theme is third-party recognition. We have an A rating from MSCI. Since 2018, ISS has given us a number one governance rating, which we believe is particularly noteworthy because governance continues to be cited as the most important factor among ESG-focused investors.
On the next slide, what matters to Coeur, this shows the results of our last materiality assessment, which was a double materiality assessment covering both impact by Coeur and impact to Coeur of external factors. This assessment was expanded to include third-party stakeholders, including investors and community leaders. It's a dynamic list. The new items added include biodiversity and local hire and supply. The next slide shows our 2022 ESG goals and targets. One we achieved already when we were fortunate enough to have Jeane Hull join us, is to increase gender diversity on the board, which is now 30% female and 50% diverse overall. The material items from the last slide inform these goals and targets, and I would note that there is strong alignment between our ESG goals and our incentive compensation plans.
I mentioned the executive performance share award tied to our greenhouse gas reduction goal. The other environmental and safety goals reflected on this slide are included in our 2022 annual incentive plan. The next slide shows that precious metals are core to everyday life. As a company and an industry, a key aspect of our ESG value proposition is how critical our products are to achieving society's goals for decarbonization, health, and technology. Forecasts show a large and growing supply shortfall for critical minerals. You can't make a solar panel or an electric vehicle without silver or a range of medical devices without gold. If you accept that the world needs a lot more of these metals, you also want them produced responsibly in countries with the highest environmental, health, and safety, and corporate responsibility standards. In closing, ESG is integral to our culture.
Like Emily said, it's who we are. We're proud of our ESG leadership and will continue to push ourselves to pursue a higher standard. Now I'll pass it back to Mitch.
Thanks, Casey. Just to wrap up quickly before we open it up for questions, I hope you've come away with a better appreciation for the caliber and alignment of our team and for each of these key messages shown here on this slide. Obviously, the team has been very busy, and they're doing an incredible job. I hope a main takeaway for you is that Rochester is a real game changer for us and remains our top priority for all the right reasons. It's a tremendous asset, a great project, and has a lot of value and growth still to incorporate over time. At the same time, this company's future isn't solely about Rochester. There is no shortage of organic growth opportunities throughout the company, and we've tried to highlight just a couple of them for you today.
Finally, I hope we've helped to open your eyes to what this repositioned company can look like as the team accomplishes the priorities we've laid out today. The future of Coeur Mining hasn't come quickly, and it certainly hasn't come easily, but it's right around the corner, and we think it's very bright. With sector-leading growth starting next year, a larger production base with the majority of revenues derived from silver, significantly lower costs, reduced debt levels, and strong and sustainable free cash flow from a collection of longer life assets. We think we're on an exciting path that can unlock a lot of value for our stockholders in a variety of ways in the near term, medium term, and long term, creating America's premier growing provider of precious and critical metals. Hopefully, today's presentation has made you feel the same way.
On behalf of the entire team, I wanna thank you for participating in our 2022 Investor Day. Now let's go ahead and turn to the Q&A. Okay, we have an operator here with us named Abby who will help us with the Q&A. There are two ways to ask questions. One is going through the queue with Abby's help and asking your question that way, or, like many of you have done already, it looks like, you can type it into the chat text box here on the webinar platform. While the
While the t he traditional Q&A, Q gets going. Why don't I start with some of the questions that have been submitted via text, and we can work through those first. I'll read them out and if I can answer them, I will. Otherwise, I'll ask someone else on the team to chime in. First one I've got here from John Allen, "What does a $100 increase in the price of gold add to our earnings and cash, free cash flow?" There's a simple answer and then a more nuanced answer. You know, in the near term, we obviously have a decent amount of gold hedges in place, which would limit that exposure.
In a way, we've already captured some of that upside with the attractive pricing on those gold hedges. We also have some of the gold that comes from, it's produced at Palmarejo is subject to the Franco-Nevada gold stream, so there's a cap on that on those ounces. Everything else, if there's, you know, 300,000 ounces of gold production, say, every $100 is about a $30 million benefit to the free cash flow of the company. Tom, do you wanna chime in and maybe you could also extend that over to the silver side as well?
Yeah, no, perfect, Mitch. $30 million. We might pay a little bit of tax on that because, us, we do pay tax in Mexico, but that's a great number on a go-forward basis. Similarly on a silver perspective, if you just plucked at $10 million, a $2 million, or $2 increase in the price of silver, it would be $20 million. gives a flavor for the upside as we hope the metals prices increase in the future and give you a sense of how much additional cash flow you'd be looking at.
Okay. Thanks, Tom. Hopefully that answered that question. I'll keep moving here. Does the IRR, this is Ryan Thompson from BMO. Does the IRR on the the scope of Silvertip meet hurdle rate requirements at the $500 million-$700 million CapEx range? Thanks, Ryan. I'd say that, you know, at an order of magnitude study level, where we are right now, you know, there's a pretty wide range of returns. If you especially focus on the priorities around resource growth, you know, obviously trying to optimize that capital number, optimizing OpEx, you know, that range very much does include returns, you know, in excess of any kind of internal hurdle rate.
That's the challenge/opportunity as we think about, you know, where do we focus our efforts over the next few years at Silvertip. Hopefully that answers that question. Thomas asked about Southern Nevada. We've mentioned in the past that we would ultimately have an operation in that part of the state. Is that still our view given the divestment in Crown and Sterling? I'd say the answer there is, look, the. You never wanna get emotional or attached to an asset.
We had an opportunity to monetize our Southern Nevada holdings for what we consider to be a full and fair price that gave us a good return and also allowed us to further bolster the balance sheet to prioritize, you know, deploying that, those proceeds into near-term growth, like the Rochester expansion and some other, nearer term, growth opportunities. You know, for now, we're out of Southern Nevada, and we're very much focused on Northern Nevada and on our other assets and what they provide as far as additional, growth opportunities. You know, Nevada's a terrific jurisdiction, but we're not currently focused on adding anything new, in the southern part of the state, and certainly not anything new in terms of development stage.
We've got plenty of organic growth in the business already. Okay, I'll keep moving here. Initial expectations, Mark Reichman. Hi, Mark. Initial expectations regarding the permitting process, including the environmental assessment for Silvertip. Mick, I'll ask you to help me on that. I think, you know, the traditional kind of thinking there is that if we started some of the baseline EA work this year, that we're looking at 4, 5, 6 years for a full EA, which, you know, kinda gives us the time to continue to grow the resource as well as continue to do the study work that needs to be done while we continue down that EA path. Mick, is there anything there that you'd like to add?
Yeah. The order of magnitude study and the two paths that we followed, really verified that, there's a great potential project here. During 2023, when we're focused on the POA 11 execution and completion of that project, we'll really just do the basics carrying on with that EA work and ensure that we can maintain that optionality around the schedule and then target really to start and complete that, PFS work in 2024. Overall, yes, a good go-forward project, and we'll carry on with the work.
Thanks, Mick. An additional question from Mark on Silvertip is criteria for a construction decision. Whether it's reserves, permitting, financing, et cetera. I'd say, Mark, it's all of those things. It's really is there an economic case that's compelling and can win the competition for capital down the road. You know, we, I think, repeated a couple of times during our prepared comments about the slower pace, the priority around Rochester expansion, generating free cash flow, reducing debt, and as we continue to, you know, advance Silvertip over a longer period of time.
What I'd like to think is that this PFS that Mick just mentioned, when that's wrapped up, we'll be looking at an attractive project, one that we could then consider some alternatives around potential partnering, whether that's a strategic partner, a financial partner, just to address the kind of balance sheet strain, risk of a project of that size. It is important to. You know, that's a separate decision. First and foremost is you need an economically attractive project and then you can pursue kind of the structuring and the how you go from there.
Hopefully a PFS can show us a credible path with attractive returns and the kind of project that would warrant further capital. Mick or Tom, anything you'd wanna add to my answer to that?
Yeah. From a, from a spend profile perspective, you know, typically you're spending less than 1% of the overall project capital on that, on this next phase of the, of the development. It's not really gonna be a big burden until we really see that the project economics support a go forward path, and then we'll build out that budget. Overall, I think we're on the right track.
Okay, thanks. We're on a roll with Mark writing questions on Silvertip. Can you provide a little more detail regarding what the $500 million-$700 million CapEx estimate includes? Great question. Mick, why don't you go ahead and answer that?
Yeah. That's an all-encompassing capital estimate at the order of magnitude level. That's everything from the plant, the process plant itself, to the infrastructure and the equipment, building out the main underground and preparing that ready for operations. It's an end-to-end estimate at this stage.
Okay. Thanks, Mick. Oh, one last from Mark. We'll go to, we'll get in a couple of the people that are in the queue. One last question from Mark on the $15 million-$30 million of development capital. What does that include? I'll take a stab at that, and then Tom, Mick, you can chime in. That's really two other pieces. One is growth capital to accelerate the development at the Hidalgo deposit at the northwest end of Independencia down at Palmarejo. That's a source of growth there that we're, we'll be investing some incremental capital to get set up to become another source of production there at Palmarejo.
The second piece, sort of a similar theme, but at Kensington, it's the capital to fund this accelerated development and drilling program that Aoife mentioned, and that was talked about in that video to achieve the kind of mine life extensions that we are optimistic that we can deliver. Those are the two other pieces of development capital. Tom, Mick, did I have that about right, or did I leave anything out?
Yeah. Perfect, Mitch. Again, what we tried to do there was highlight to the extent that people are updating their models, back to the technical reports. We just tried to highlight the incremental capital that we've now decided to allocate, related to those two items you just mentioned.
Okay. I'll come back to more of the text questions in a second. Brian MacArthur from Raymond James is I know in the queue. Brian, let's go to you and answer any questions you have, we can come back and knock off some of these other questions in the text function.
Pardon me. This is Abby, the operator. Just as a reminder, if you are connected to the webcast and also dialed in on the phone to ask questions, please make sure your webcast is muted before asking your questions so we do not cause any feedback. We will take our first question from Brian MacArthur with Raymond James. Your line is live.
Hi. Good morning. Can you hear me?
Yeah. Hi, Brian.
Hi, Mitch. How are you today?
Okay, thanks.
I have three different questions. First, just following up on Silvertip, question A, in that $500 million-$700 million, it sounds to me it's a new plant, everything's new. Are we using any of the infrastructure? My second question on Silvertip, Tom talked about cutting back spending in the near term, but what's the ongoing carrying costs? I think it was about $20 million this year or something. Is that what we should assume going forward just for power, camp and everything?
Yeah. Okay. Silvertip, question A. Mick, do you wanna talk about any existing infrastructure being used, or is it all new?
Absolutely it's a brand new plant. If you remember when we reported out earlier this year and at the end of last year, we did some pre-work, so we have a foundation. We have an area where we can put that plant. Of course, we have an existing underground portal. We are exploring from underground. We have a ramp, and we have some of that infrastructure that's already established there, which helps us both from a cost perspective, but also from an efficiency perspective in getting up the ramp and getting that project moving forward.
Tailings. Mick, there's a tailings impoundment. I know that would need to be expanded, Cam.
Yep. Agreed. Apologies earlier, I did use tons per hour reference on the size of the plant, and it's actually tons per day. You know, when we look at that existing license at 1,000 tons per day, really that sweet spot for the options that we've looked at in order of magnitude are between that 2,250-3,250 spot. We would need a slightly larger footprint for the tailings and some of the infrastructure to be developed. That $500 million-$700 million includes that.
Okay. Brian's second question on Silvertip was care and maintenance, and I think I saw that also in the text questions. Tom, do you wanna cover that? I think Brian threw out a $20 million number, which is pretty close.
Really close. We are taking a really hard look, as you might suspect, you know, given, you know, the timeline of what we're thinking about, and this Silvertip really returns to more of an exploration camp. We're gonna require underground development, et cetera, et cetera. You know, Brian, you're not too far off. I would say we are challenging that. We'll have more to say when we come out with our 2023 budget. For now, I think, maintaining that 20 is a comfortable number.
Thanks, Tom. Brian, did you have another question?
Yeah, two other quick questions.
Please
I know the focus has been on Silvertip and Kensington and Rochester for good reason. You did mention Hidalgo. Can you just remind me at Palmarejo as we go forward, how much of the mining is coming on Franco land? Does it still stay at that 30%-40% level or as we go forward over the next number of years, does it get more and more onto 100% owned land?
That's the goal. Of course, it takes time and some capital to develop those other future ore sources, and then, of course, you're getting further away from the processing plant as well. Of course, you'd have more margin over there as well, not being subject to the stream. Tom, Mick, do you wanna address the, in the near term, next few years, I think that 30-ish % number is still about right. Is that the case?
Yep. Yep, that's correct. Hidalgo is inside the AMI area and actually trending back towards the Palmarejo operating plant. Potentially more efficient go forward as we develop that asset. As you heard, we're putting some development dollars against that to really give us some more optionality for work fronts at Palmarejo. That asset is squarely inside the AMI. The balance, as you said, Mitch, it'll continue for this next couple of years around about where it is today.
Yeah.
It's easy, it's easy.
No, go ahead, Tom. Go ahead.
Sorry. The only thing I'd add is we are really allocating our capital different, our exploration dollars differently, right? It's just, you know, it makes sense to try and move as many ounces out of the AMI or producing more ounces outside the AMI. It's not rocket science. We're absolutely allocating our capital differently.
It's not like we're starting from scratch off to the east, right, at Palmarejo. It's easy to forget, in 20, I think, 15, we acquired Paramount Gold and Silver, which was kind of our next door neighbor immediately to the east. At the time, the priority of that acquisition was to extend the southeastern end of Independencia, which was on their land. That has been a, you know, a good addition over the years. Paramount, their whole story was really about resources off further to the east, which we continue to have sitting there, and we frankly haven't done much over there at all just because we've been focused on the nearer and medium term there at Palmarejo, basically at Guadalupe and Independencia.
You know, we're getting out there now with an eight-year mine life or so we're able to pick our heads up a little bit and start looking over there to the east and those deposits that are sitting there and as Tom mentioned, allocating capital, you know, a bit incremental at first, but starting to focus a bit more over there to the east. You know, there's a lot to follow up on there, and so we're enthusiastic about that as part of the kinda medium and longer term down at Palmarejo.
Great. Thanks. That gives me a lot of color that's what I was looking for. My final question, just switching. I think, Tom, you mentioned you said you completed the $50 million ATM, and I may have heard that wrong, but if you did, can you tell us roughly how many shares you issued under that?
Yeah. We did complete it. I think there was an 8-K, was there not, filed last night or this morning that would have the exact share number. I don't have that off.
14.8 million shares at an average price, Brian, of $3.39.
Thank you very much. I'll give up the line for somebody else. Thank you very much.
Thanks. Thanks, Brian. That was one of the questions in the chat about the ATM. Another one that I wanted to get back to, Mark Reichman had asked about cash flows, free cash flow expectations, post-expansion at Rochester. Of course, metals price dependent. I know we've over the last year or two, you know, we've talked about anything from $70 million, $80 million, $90 million, $100 million of free cash flow on average annually, kind of depending on where prices sit. The question is, are we able to update our expectations regarding the life of mine free cash flow and NPV based on current cost expectations and an updated commodity price deck? Tom, do you want to take a stab at that, or Mick?
Sure. Again, you know, the great news about having just recently issued all our technical reports is, you know, we've got a pretty strong marker there. You know, over the long term, things have not changed. We have provided a sneak preview of what we think our consolidated costs are gonna look like in 23. Again, as we've mentioned on the call, we remain concerned about inflationary pressures in the short term. In the deck, we highlight a couple of items that are the most variable for us in terms of diesel and cyanide. The mathematicians who are building up their models will see that we've included higher diesel and cyanide prices in 23.
Thus far, we're, you know, fingers crossed that we do start to see those back off. Other than that, over the long run, we do expect, you know, commodities like diesel and cyanide to return to the long-term prices. Accordingly, those previous free cash flow numbers stand.
Thanks, Tom. Just on Rochester, there was a question here. Do we expect any cold weather impact on the heap, on the pad at Rochester, over the winter, fourth quarter in 2023, first quarter of 2024? If so, do we expect that to ease going forward for each winter season as more tons get stacked out on the new Stage 6 leach pad? Mick, do you wanna handle that?
Yeah, for sure. Obviously we have an existing pad 4, heap leach pad. We're very used to the weather cycles in Nevada, and we run 12 months, 365. We don't stop. Of course, when we have a big snow event, we have to just slow down a little bit and clear the snow and make sure that everyone's safe while we carry on with operations. The expectation is that we're well planned and well tuned up ready for those winter cycles, go forward in the next couple of years.
One aspect around de-risking that for the back end of 2023 is we actually start putting the first lifts of material ore onto Stage 6 in the early part, the spring, the early Q1 and then spring of 2023, ready for the pre-commissioning and commissioning of the heap leach, the Merrill-Crowe, and then the crushing plant later in the year. That'll help us as well to ensure that we have all of that material already on the pad, pre-winter next year.
Thanks, Mick. Abby, do you wanna give a reminder to dial in and hit 1 if there are any other questions?
Yes. Thank you. As a reminder, if you would like to ask a question over the phone lines, press star 1 on your telephone keypad. We will pause for just a moment.
While we're doing that, team, is there anything else that, is there anything that I've missed here as far as questions on the, on the chat, or have we hit 'em all?
I think so.
I think we did.
It looks like Michael Dudas is on the, on the call line, Mitch, but I don't know whether he's got a question.
Okay.
Mr. Dudas, if you would like to ask a question, press star one.
No pressure, Mike. Didn't mean to put you on the spot to ask something if you don't have anything right now. I think we've exhausted all the questions. I just wanna make sure we had given everybody enough time to either dial in or type them in. I think we've done that. Let's go ahead and wrap it up. I just wanna say thank you to everybody who has. You've all taken some time out of your day to participate in our Investor Day and for all the good questions. I also wanna take the time to just thank the team here. You know, a lot goes into these investor days and an incredible amount of time and effort. Thank you to the team here.
I thought everybody did a wonderful job, and I know it's been a heavy lift here recently. I think we'll go ahead then and wrap up with a happy holidays to everybody and look forward to talking to you early in 2023. Thanks again for joining.