Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of our financial statements with a narrative from the perspective of management on our financial condition, results of operations, liquidity and other factors that may affect our future results. We believe it is important to read our MD&A in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2008, as well as other publicly available information.
This report contains numerous forward-looking statements relating to the Company's gold and silver mining business, including estimated production data, expected operating schedules, expected capital costs and other operating data and permit and other regulatory approvals. Such forward-looking statements are identified by the use of words such as "believes," "intends," "expects," "hopes," "may," "should," "plan," "projected," "contemplates," "anticipates" or similar words. Actual production, operating schedules, results of operations, ore reserve and resource estimates and other projections and estimates could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ materially from those projected in the forward-looking statements include (i) the risk factors set forth below under Item 1A, (ii) the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions), (iii) changes in the market prices of gold and silver, (iv) the uncertainties inherent in the Company's production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, (v) any future labor disputes or work stoppages, (vi) the uncertainties inherent in the estimation of gold and silver ore reserves,
(vii) changes that could result from the Company's future acquisition of new mining properties or businesses, (viii) reliance on third parties to operate certain mines where the Company owns silver production and reserves, (ix) the loss of any third-party smelter to which the Company markets silver and gold,
(x) the effects of environmental and other governmental regulations, (xi) the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, (xii) the worldwide economic downturn and difficult conditions in the global capital and credit markets, and
(xiii) the Company's ability to raise additional financing necessary to conduct its business, make payments or refinance its debt. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise. MD&A includes references to total operating cash costs and cash costs per ounce of silver produced both on an individual mine basis and on a consolidated basis. Total cash operating costs per ounce and cash costs per ounce are measurements that management uses to monitor and evaluate the performance of its mining operations and is not a measurement calculated under GAAP. A reconciliation of total operating cash costs and cash costs per ounce to production expenses, which is calculated under GAAP, is also provided in the section titled "Operating Statistics" herein and should be referred to when reading the total cash costs per ounce measurement. General
The Company is a large primary silver producer with significant gold assets located in North America and is engaged, through its subsidiaries, in the operation and ownership, development and exploration of silver and gold mining properties and companies located primarily within South America (Chile, Argentina and Bolivia), Mexico (Chihuahua), the United States (Nevada and Alaska) and Australia (New South Wales). Coeur is an Idaho corporation incorporated in 1928.

The Company's business strategy is to discover, acquire, develop and operate low-cost silver and gold operations that will produce long-term cash flow, provide opportunities for growth through continued exploration, and generate superior and sustainable returns for shareholders.
The results of the Company's operations are significantly affected by the market prices of silver and gold, which may fluctuate widely and are affected by many factors beyond the Company's control, including interest rates, expectations regarding inflation, currency values, governmental decisions regarding the disposal of precious metals stockpiles, global and regional political and economic conditions and other factors.
The average price of silver (Handy & Harman) and gold (London Final) for the nine months ended September 30, 2009 was $13.73 and $930.60 per ounce, respectively. The market price of silver and gold on November 3, 2009 was $15.97 per ounce and $1,061 per ounce, respectively.
In addition to the matters discussed above with respect to the key factors of the Company's business strategy, the most important matters management considers in evaluating the Company's financial condition and results of operations include:
• Coeur owns 100% of Coeur Mexicana S.A. de C.V., which operates the underground and surface Palmarejo silver and gold mine in Mexico. The Palmarejo mine poured its first silver/gold doré on March 30, 2009 and began shipping doré on April 16, 2009. The Company also controls other exploration-stage properties in northern Mexico. On January 21, 2009, the Company entered into a gold production royalty transaction with Franco-Nevada Corporation under which Franco-Nevada purchased a royalty covering 50% of the life of mine gold to be produced by Coeur from its Palmarejo silver and gold mine in Mexico. The royalty is payable when the market price per ounce of gold is greater than $400.00. The Company's total silver production increased by 1.9 million ounces in the nine months ended September 30, 2009 as a result of production contributed from the Palmarejo mine.

• Coeur owns, either directly or indirectly, 100% of Empresa Minera Manquiri S.A., a Bolivian company that controls the mining rights for the San Bartolomé mine, which is a surface silver mine in Bolivia where commercial production commenced June 2008. The Company's total silver production increased by 5.4 million ounces in the nine months ended September 30, 2009 as a result of production contributed from the San Bartolomé mine.

• The Company owns 100% of the Kensington property, located north of Juneau, Alaska, which is an advanced development-stage underground gold property. An updated feasibility study was completed for the property during 2004 and construction activities commenced in 2005. A lawsuit was filed in 2005 in Federal Court challenging a permit necessary for construction of a tailings facility. During 2008, the Company completed all surface facility construction activities not impacted by the legal challenge. On June 22, 2009, the U.S. Supreme Court reversed the Ninth Circuit Court of Appeals decision that invalidated the previously issued U.S. Army Corps of Engineers
Section 404 permit for the tailings facility for the Kensington gold mine. On August 14, 2009, the U.S. Army Corps of Engineers re-activated the Company's 404 permit clearing the way for construction at the tailing facility to continue. Construction activities have recommenced at the Kensington mine and production is expected to begin in the second half of 2010.

• Coeur owns, either directly or indirectly, 100% of the capital stock of Coeur Argentina S.R.L., which owns and operates the underground high-grade silver Martha mine located in Santa Cruz, Argentina. Mining operations commenced at the Martha mine in June 2002. In 2007, the Company built a stand-alone mill to process ore from the Martha mine which previously was transported to its Cerro Bayo mine for processing. The Company carries on an active exploration program at its Martha mine and on its other land in Santa Cruz, which totals over 560 square miles.

• The Rochester mine is a silver and gold surface mining operation located in northwestern Nevada that has been 100% owned and operated by the Company since 1986. The active mining of ore at the Rochester mine was completed during 2007; however, silver and gold production is currently expected to continue through 2014 as a result of continuing heap leaching operations. The Company is conducting a scoping study for an expansion of mining operations at its Rochester mine which may add an average of 2.9 million ounces of incremental annual silver production and 30,000 ounces of further gold production through 2017. The Company expects to complete the scoping study during the fourth quarter of 2009.

• In May 2005, the Company acquired, for $44.0 million, all of the silver production and reserves (up to 20.0 million payable ounces) contained at the Endeavor mine in Australia, which is owned and operated by Cobar Operations Pty. Limited, a wholly-owned subsidiary of CBH Resources Ltd. ("CBH"). The Endeavor mine is an underground zinc, lead and silver mine located in New South Wales, Australia, which has been in production since 1983.

• Coeur owns 100% of the Cerro Bayo mine in southern Chile, which comprises a high-grade gold and silver underground mine and processing facilities. The Cerro Bayo deposit was discovered during 2000. Initial mining operations commenced in late 2001 and processing started in April 2002. The Company carries on an active exploration program on its 176 square mile property package in southern Chile. During the fourth quarter of 2008, the Company temporarily suspended operations at Cerro Bayo in order to conserve existing reserves and focus on exploration and development of new discoveries and existing veins. The temporary suspension resulted in decreased silver and gold sales in the first nine months of 2009.

• Effective July 1, 2009, the Company sold to Perilya Broken Hill Ltd. its 100% interest in silver contained at the Broken Hill mine for $55.0 million in cash.

Coeur also has interests in other properties that are subject to silver or gold exploration activities upon which no minable ore reserves have yet been delineated.
Operating Highlights and Statistics
South American Operations
San Bartolomé Mine
Silver production for the third quarter of 2009 was 2.1 million ounces of silver compared to 706,538 ounces of silver in the third quarter of 2008. Total operating costs per ounce during the third quarter of 2009 were $7.63 and total cash costs per ounce, including royalties and taxes, were $11.17 compared to cash operating costs per ounce of $13.35 and total cash costs per ounce of $15.66 during the third quarter of 2008. The increased production and the decreased total cash costs per ounce occurred primarily because the mine was placed into service in June 2008 and was in the start-up phase of production during the second and third quarters of 2008. The San Bartolomé mine and plant facilities are now fully operational.
Silver production for the nine months ended September 30, 2009 was 6.1 million ounces of silver as compared to 728,394 ounces of silver in the nine months ended September 30, 2008. Cash operating costs per ounce in the nine months ended September 30, 2009 were $7.24 and total cash costs per ounce were $9.98 compared to $13.32 and $15.59 respectively, in the nine months ending September 30, 2008. The increase in production and decrease in cash costs per ounce was due to the mine operating for the entire nine months ended September 30, 2009 as compared to the same period in 2008 when the mine was placed into service in June 2008.

The Bolivian government adopted a new constitution in early 2009 that strengthened state control over key economic sectors such as mining. We cannot assure you that our operations at the San Bartolomé mine in Bolivia will not be affected in the current political environment in Bolivia. On October 14, 2009, the state-owned mining organization, COMIBOL, announced by resolution that it was temporarily suspending mining activities above the elevation of 4,400 meters above sea level while stability studies of Cerro Rico mountain are undertaken. The Company holds rights to mine above this elevation under valid contracts backed by Supreme Decree with COMIBOL as well as contracts with local mining cooperatives who hold their rights through COMIBOL. The Company has told COMIBOL that it will temporarily adjust its mine plan to confine its activities to the ore deposits below 4,400 meters above sea level. The mine plan adjustment may reduce fourth quarter production by as much as 500,000 ounces of silver. The Company is also reviewing its mine plan and may modify its manpower and operations schedule to minimize any financial impact of this potential production shortfall. Cerro Rico mountain is a historic mining site that is the subject of centuries of unregulated underground mining by numerous groups and individuals. The Company does not use explosives in its surface-only mining activities and is sensitive to the preservation of the mountain under its contracts with the state-owned mining entity and the local cooperatives, which are supported by Supreme Decree. It is uncertain at this time how long the temporary suspension will remain in place. Martha Mine
Silver production increased 44% to 1.2 million ounces in the third quarter of 2009 compared to 816,495 ounces in the third quarter of 2008. The increase in silver production was primarily due to an increase of 12,491 tons milled partially offset by a decrease of 21.8% in silver grades. Total cash operating costs per ounce in the third quarter of 2009 were $5.54 and total cash costs per ounce, including royalties and taxes, were $6.02 as compared to $5.89 and $6.73, respectively, during the third quarter of 2008. The decrease in total cash cost per ounce was primarily due to an increase in silver production attributable to a 78.3% increase in tons milled in the third quarter of 2009 compared to the third quarter of 2008.
Silver production was 2.7 million ounces in the nine months ended September 30, 2009 compared to 2.1 million in the nine months ended September 30, 2008. The 29% increase in silver production was primarily due to a 118.8% increase in tons milled as a result of increased processing of ore stockpiles in the nine months ended September 30, 2009.
Cash operating costs per ounce during the first nine months of 2009 were $6.22 compared to $6.75 in the first nine months of 2008. Total cash cost per ounce was $6.68 compared to $7.57 in the same period of 2008. The decrease in total cash costs per ounce was attributed to the increase in silver ounces produced as compared to the same period in 2008 due to a significant increase in tons milled.
Cerro Bayo Mine
On October 31, 2008, the Company announced a temporary suspension of operating activities at the Cerro Bayo mine due primarily to higher operating costs. There was no production at the mine during the three and nine months ended September 30, 2009 as compared to 254,638 silver ounces and 2,973 gold ounces produced during the third quarter of 2008 and 1.0 million ounces of silver and 19,695 ounces of gold produced during the first nine months of 2008. The Company is focused on exploring its holdings and developing a new mine plan and increasing ore reserves in an effort to resume operations in 2010.

North American Operations
Palmarejo Mine
The Palmarejo mine commenced commercial production on April 20, 2009. Silver production during the third quarter of 2009 was 1.3 million ounces and 24,289 ounces of gold. Cash operating costs per ounce during the third quarter were $8.76 and total cash costs were $8.76.
Silver production was 1.9 million ounces and gold production was 34,019 ounces for the nine months ended September 30, 2009. Cash operating costs per ounce for the nine months ended September 30, 2009 were $12.13 and total cash costs were $12.13.
The Company anticipates the Palmarejo mine will continue to ramp-up its production rate and achieve full capacity during the fourth quarter of 2009. Rochester Mine
Silver production was 528,037 ounces and gold production was 3,097 ounces during the third quarter of 2009 compared to 795,351 ounces of silver and 4,983 ounces of gold in the third quarter of 2008. Production was lower due to decreased ounces recovered from the ore on leach pad. Total cash operating costs per ounce in the third quarter of 2009 were $2.77 and total cash costs per ounce, including production taxes, were $3.67 in the third quarter of 2009 as compared to cash operating costs per ounce of $(0.05) and total cash costs per ounce of $0.72 in the third quarter of 2008. The increase in total cash cost per ounce was primarily due to lower by-product credits from gold production as compared to the third quarter of 2008.
Silver produced at the Rochester Mine in the nine months ended September 30, 2009, was 1.5 million ounces and gold production was 9,146 ounces, compared to 2.4 million ounces of silver and 16,895 ounces of gold in the nine months ended September 30, 2008. Cash operating costs per ounce were $2.69 and total cash costs, which includes production taxes were $3.32, compared to $(1.30) and $(0.46) respectively in the nine months ended September 30, 2008. The increase in cash costs per ounce was due to lower by-product credits from gold production as compared to the nine months ended September 30, 2008.
Mining and crushing operations ended at Rochester in August 2007 once ore reserves were fully mined. Currently, the Company is conducting residual leaching and anticipates these activities to continue through 2014. The Company is conducting a scoping study for an expansion of mining operations which may add an average of 2.9 million ounces of incremental annual silver production and 30,000 ounces of further gold production through 2017. The Company expects to complete the scoping study during the fourth quarter of 2009. Australia Operations
Endeavor Mine
Silver production at the Endeavor mine in the third quarter of 2009 was 102,972 ounces of silver compared to 226,180 ounces of silver in the third quarter of 2008. The decrease in silver production was primarily due to a 56.4% decrease in tons milled partially offset by a 20.5% increase in ore grades as compared to the third quarter of 2008. Total cash costs per ounce of silver produced were $7.09 in the third quarter of 2009 compared to $2.53 in the third quarter of 2008. The increase in total cash cost per ounce was primarily due to lower silver production and the price participation component terms of the transaction which were not in effect during the third quarter of 2008. Under the terms of the price participation component, CDE Australia Pty. Ltd, pays an additional operating cost contribution of 50% of the amount by which the silver price exceeds $7.00 per ounce.
Silver production in the nine months ended September 30, 2009 was 367,492 ounces compared to 683,470 ounces in the same period in 2008. Total cash costs per ounce were $5.96 in the nine months ended September 30, 2009 compared to $2.49 during the same period in 2008. The increase in cash cost per ounce was due to the lower silver production and the price participation component terms of the transaction.

As of September 30, 2009, CDE Australia had recovered approximately 47.5% of the transaction consideration consisting of 2.4 million payable ounces, or 12.2%, of the 20.0 million maximum payable silver ounces to which CDE Australia is entitled under the terms of the silver sale and purchase agreement. No assurances can be made that the mine will achieve its 20.0 million payable silver ounce cap to which CDE Australia is entitled under the terms of the silver sale and purchase agreement.
Broken Hill Mine
On July 15, 2009, the Company entered into a Deed of Termination to terminate the Silver Sale Agreement, dated September 8, 2005, between the Company, Perilya Broken Hill Ltd. ("PBH") and CDE Australia Pty, Ltd. ("CDEA"). Pursuant to the terms of the Silver Sale Agreement, CDEA agreed to buy, and PBH agreed to sell, the silver contained in ore to be mined at the Broken Hill mine for $36.9 million. Under the terms of the Deed of Termination, the parties agreed to terminate the Silver Sale Agreement, effective July 1, 2009, in exchange for a payment of $55.0 million from PBH to CDEA. In accordance with the terms of the Deed of Termination, the termination of the Silver Sale Agreement closed on July 30, 2009, and CDEA has no further entitlement to purchase silver product from the Broken Hill mine. PBH has all rights and title to, and all interests in, the silver production and reserves at the Broken Hill mine effective July 1, 2009.
There was no production during the third quarter of 2009. Production during the three months ended September 30, 2008 was 312,425 ounces.
Silver production in the nine months ended September 30, 2009 was 841,855 ounces compared to 1.1 million ounces in the nine months ended September 30, 2008. The decrease in silver production was due to the sale of the Company's interest in the silver production from the Broken Hill mineral interests on July 30, 2009. Total cash costs per ounce of silver were $3.40 in the nine months ended September 30, 2009 compared to $3.60 in the nine months ended September 30, 2008.
Operating Statistics From Continuing Operations The following table presents information by mine and consolidated sales information for the three and nine month periods ended September 30, 2009 and 2008:

                                                     Three Months Ended September 30,                  Nine Months Ended September 30,
                                                        2009                    2008                     2009                    2008
Palmarejo(A)
Tons milled                                               410,137                      -                   695,232                      -
Ore grade/Ag oz                                              4.24                      -                      4.08                      -
Ore grade/Au oz                                             0.062                      -                     0.055                      -
Recovery/Ag oz                                               73.4 %                    -                      65.7 %                    -
Recovery/Au oz                                               94.3 %                    -                      88.9 %                    -
Silver production ounces                                1,275,904                      -                 1,863,620                      -
Gold production ounces                                     24,289                      -                    34,019                      -
Cash operating costs/oz                          $           8.76                      -          $          12.13                      -
Cash cost/oz                                     $           8.76                      -          $          12.13                      -
Total cost/oz                                    $          24.41                      -          $          29.48                      -
San Bartolomé
Tons milled                                               431,218                160,678                 1,147,935                177,756
Ore grade/Ag oz                                              5.36                   7.54                      6.05                   6.82
Recovery/Ag oz                                               91.3 %                 58.3 %                    88.5 %                 60.1 %
Silver production ounces                                2,111,313                706,538                 6,141,223                728,394
Cash operating costs/oz                          $           7.63          $       13.35          $           7.24          $       13.32
Cash cost/oz                                     $          11.17          $       15.66          $           9.98          $       15.59
Total cost/oz                                    $          13.63          $       18.20          $          12.45          $       18.13
Martha Mine
Tons milled                                                28,431                 15,940                    83,344                 38,087

                                     Three Months Ended September 30,                Nine Months Ended September 30,
                                      2009                     2008                     2009                   2008
Ore grade/Ag oz                           42.56                    54.40                    34.30                57.35
Ore grade/Au oz                           0.059                    0.072                    0.046                0.072
Recovery/Ag oz                             97.4 %                   94.2 %                   94.2 %               95.3 %
Recovery/Au oz                             93.0 %                   89.0 %                   87.9 %               91.2 %
Silver production ounces              1,178,088                  816,495                2,693,993            2,081,573
Gold production ounces                    1,569                    1,028                    3,376                2,497
Cash operating costs/oz         $          5.54          $          5.89          $          6.22          $      6.75
Cash cost/oz                    $          6.02          $          6.73          $          6.68          $      7.57
Total cost/oz                   $          7.48          $          8.27          $          8.19          $      9.39
Rochester(B)
Silver production ounces                528,037                  795,351                1,541,441            2,374,698
Gold production ounces                    3,097                    4,983                    9,146               16,895
Cash operating costs/oz         $          2.77          $         (0.05 )        $          2.69          $     (1.30 )
Cash cost/oz                    $          3.67          $          0.72          $          3.32          $     (0.46 )
Total cost/oz                   $          4.58          $          1.47          $          4.29          $      0.33
Endeavor
Tons milled                             130,319                  298,601                  428,162              827,755
Ore grade/Ag oz                            1.76                     1.46                     1.59                 1.50
Recovery/Ag oz                             45.0 %                   51.8 %                   54.1 %               54.9 %
Silver production ounces                102,973                  226,180                  367,492              683,470
Cash operating costs/oz         $          7.09          $          2.53          $          5.96          $      2.49
Cash cost/oz                    $          7.09          $          2.53          $          5.96          $      2.49
Total cost/oz                   $          9.66          $          4.94          $          8.53          $      4.72
Cerro Bayo
Tons milled                                   -                   50,253                                       208,837
. . .