COEUR D'ALENE, Idaho, March 9, 1999 (PRIMEZONE) -- Coeur d'Alene Mines Corporation (NYSE:CDE) announced today it has entered into an agreement to settle a class action lawsuit originally filed against the company and two of its officers in July 1997. The proposed settlement has been submitted to the Federal Court in Denver and is subject to various conditions, including approval by the Court.
The lawsuit was filed in the Federal Court in Denver on behalf of a class of purchasers of Coeur's publicly traded debt and equity securities between January 9, 1995 and July 11, 1996. Plaintiffs alleged that defendants had violated the federal securities laws by failing to make proper and timely disclosures to the market regarding the start-up problems Coeur d'Alene encountered at the Fachinal Mine in Chile and the land movement problem it experienced at the Golden Cross Mine in New Zealand.
Pursuant to the terms of the proposed settlement, all of the plaintiffs' claims will be released and dismissed with prejudice. In return, Coeur has agreed to cause $7 million to be paid into a settlement fund. This amount, and substantially all of Coeur d'Alene's costs of defending the litigation, will be covered by Coeur d'Alene's directors' and officers' insurance policy.
In addition, Coeur d'Alene has agreed to contribute to the settlement fund 50% of any net recovery it might obtain, up to a maximum of $6 million, in the lawsuit Coeur d'Alene filed in 1996 against Cyprus Amax Minerals Company, the company from which Coeur d'Alene purchased its interest in the Golden Cross Mine in 1993. In that suit, Coeur d'Alene alleges that Cyprus Amax failed to disclose, at the time of the sale, its knowledge of the land movement problem at the mine. Before Coeur d'Alene need make any such contribution to the settlement fund, however, its recovery from Cyprus Amax must first pay back all costs, expenses and reasonable attorneys' fees incurred by Coeur d'Alene in prosecuting its claim. The next $8 million of any recovery shall also be retained by Coeur d'Alene as a reserve against the asserted (and disputed) subrogation claim of one of its property insurers (barring a settlement of such claim for less than $8 million). Coeur d'Alene and plaintiffs will then split any additional recovery until plaintiffs receive $6 million, with Coeur d'Alene retaining all amounts thereafter. Coeur d'Alene maximum contribution based on the Cyprus Amax lawsuit will thus be $6 million, and the source of such funds will be a recovery from Cyprus Amax in a greater amount.
It is a further condition of the settlement that a related derivative action also be dismissed with prejudice.