Company Name: Coeur dAlene Mines Corp.
Public Availability Date:  Mar. 04, 1994

INQUIRY LETTER

FREEDMAN, LEVY, KROLL & SIMONDS
WASHINGTON SQUARE - 1050 CONNECTICUT AVE., N.W.
WASHINGTON. D.C. 20036-5366
TELEPHONE(202) 457-5100

December 30, 1994

Office of Chief Counsel
Division of Corporation Finance
Securities and Exchange Commission
Mail Stop 3-3
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Coeur dAlene Mines Corporation

Ladies and Gentlemen:

We are writing as counsel for Coeur dAlene Mines Corporation, an Idaho corporation (the "Company"), in connection with the proposed settlement (the "Settlement") of Kassover v. Coeur dAlene Mines Corporation, et al. (the "Lawsuit"), a class-action instituted against the Company and others in 1990 and pending before the U.S. District Court for the District of Idaho (the "Court"). The Settlement, which is subject to approval by the Court, calls for the issuance by the Company of shares (the "Shares") of the Companys common stock, par value $1.00 per share (the "Common Stock"), in exchange for the claims of the members of the plaintiff class (the "Claimants"). It is anticipated that a portion of the Shares will be issued to counsel for the Claimants (the "Class Counsel") in payment of its legal fee. The Shares will be issued by the Company to the Claimants and Class Counsel when the claim process following effectiveness of the Settlement (the "Effective Date") is completed.

We respectfully request the written advice of the staff of the Division of Corporation Finance (the "Staff") that the Staff concurs with our opinions that (i) the Company may issue the Shares in exchange for the claims of the Claimants without registration under the Securities Act of 1933 (the "Act") in reliance upon the exemption from registration provided under Section 3(a)(10) thereof; (ii) the Shares as so issued will not be deemed to be "restricted securities" within the meaning of Rule 144(a)(3) under the Act; and (iii) the Shares as so issued will be freely transferable by the Claimants and Class Counsel, except that if any such transferee is deemed to be an "affiliate" of the Company within the meaning of Rule 144(a)(1) under the Act, any public sale of Shares by such person without registration under the Act will be required to comply with the provisions of Rule 144 except for that rules holding period requirement.

Background

The Lawsuit

The Lawsuit was originally filed in November 1990 and amended in March 1991 and April 1993 and alleges violations of the federal securities laws and common law primarily in connection with the Companys public offering of Common Stock in September 1990 (the "1990 Public Offering"). The Lawsuit seeks compensatory damages in an unspecified amount and rescission. On November 12, 1993, on which date the Lawsuit remained in the pre-trial discovery stage, the Board of Directors of the Company approved the terms of the proposed Settlement and trial counsel for the Company and the other defendants and counsel for the plaintiff Claimants entered into a memorandum of understanding documenting the key terms of the proposed Settlement and calling for the preparation and execution of a Stipulation of Settlement relating thereto.

The Company continues to deny any liability or wrongdoing relating to the Lawsuit. However, the Company desires to settle the Lawsuit on the terms described below in order to avoid further expense, inconvenience, distraction and delay, to finally dispose of the Litigation and to avoid the risks and uncertainties inherent in complex litigation.

The Proposed Settlement

Class Counsel and counsel for the defendants in the Lawsuit entered into a Stipulation of Settlement (the "Stipulation") as of December 21, 1993. A copy of the Stipulation is attached for the Staffs information. The Stipulation has been filed with the Court and the Settlement contemplated thereby is subject to Court approval following notice to the Claimants and a "fairness" hearing as prescribed by Rule 23(e) of the Federal Rules of Civil Procedure (the "FRCP") and Section 3(a)(10) of the Act. In addition, effectuation of the Settlement also is subject to the entry of a judgment by the Court approving the Settlement embodied in the Stipulation and such judgment becoming a final judgment no longer subject to appellate review. The date on which such judgment becomes a final judgment no longer subject to appellate review is hereinafter referred to as the "Effective Date."

The Stipulation provides, in part, the following:

1. The Company must pay $1,875,000 in cash (the "Cash") to an interest-bearing escrow account jointly held by trial counsel for the Company and Class Counsel for the Claimants. (Such payment was made on November 22, 1993, which was ten days following the date on which the Companys Board of Directors approved the proposed terms of the Settlement.) The Cash will be held in such escrow until the Effective Date, on which date such amount will be transferred to an escrow account in the sole custody of Class Counsel for distribution to Claimants in accordance with the Courts final order.

2. The Company will issue the Shares of Common Stock in accordance with the Courts final order when the claim process following the Effective Date is completed. The Shares will have a market value of $4,000,000 based on the average daily closing price of the Common Stock on the New York Stock Exchange for the five business days preceding the date on which the fairness hearing (the "Hearing") conducted by the Court relating to the Settlement is held (the "Hearing Date").

3. Prior to the Hearing, notice of the Settlement and proof of claim forms will be sent to the Claimants notifying them of the terms of the Settlement and of their opportunity to object thereto upon proper motion and objection. The members of the plaintiff class will have the right to be excluded from the Settlement.

4. The Court will be advised in connection with the Hearing that if the Settlement called for by the Stipulation is approved by the Court, the Shares will be issued without registration under the Act in reliance upon an exemption available as a result of such Court approval. The Claimants will be afforded the opportunity to object to the Settlement.

5. The Courts final judgment upon its approval of the Settlement will release all claims that have been or could have been asserted by any Claimant against any of the defendants and various others arising out of the 1990 Public Offering or other allegations made in the Lawsuit.

6. The Settlement contemplated by the Stipulation will not be binding upon the parties until the judgment of the Court approving the Settlement and dismissing the Lawsuit with prejudice has become final. Such finality will occur when the time to appeal such judgment has expired or, in the event an appeal is taken, such judgment has been affirmed and/or is no longer subject to review.

7. The defendants in the Lawsuit agree not to oppose or object to the application to the Court of counsel to the Claimants seeking attorneys fees, which fees will not exceed 1/3rd of the total value of the Settlement (i.e., 1/3rd of the Cash and 1/3rd of the Shares), plus reimbursement of expenses incurred.

Based on the $21.75 per share closing sale price of the Common Stock on the New York Stock Exchange on December 20, 1993, the date prior to the submission of this no-action letter request, 183,908 Shares of Common Stock would be issued by the Company pursuant to the Settlement. The Company presently has a total of 15,335,849 shares of Common Stock outstanding. Based on such recent market value and number of shares outstanding, the Company expects that the Shares upon issuance would constitute less than 1.2% of the Companys then outstanding shares of Common Stock. The Companys outstanding shares of Common Stock are, and the Shares to be issued in the Settlement will be, listed on the New York Stock Exchange.

We have been advised by the Company that none of its current directors or officers is a Claimant in the Lawsuit. Furthermore, the Company does not believe that any present holder of 5% or more of the Companys outstanding shares of Common Stock is a Claimant in the Lawsuit.

Discussion

Issuance of Shares of Common Stock in the Settlement

Section 3(a)(10) of the Act provides an exemption from registration under the Act for "any security which is issued in exchange for one or more bona fide outstanding . . . claims . . . where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and conditions at which all persons to whom it is proposed to issue securities in such exchange shall have the right to appear, by any court . . ."

It is well established that Section 3(a)(10) is available with respect to the issuance and distribution of securities pursuant to the settlement of a class action lawsuit which has been approved by a court as fair and reasonable after a hearing of which all members of the class have been given notice, provided that (i) every person entitled to receive such securities has received notice of the hearing; (ii) such persons have the opportunity to be heard at the hearing; (iii) the court has been advised prior to the hearing that if the settlement is approved by the court, the securities issued and distributed pursuant thereto will not be required to be registered under the act by virtue of the courts approval; and (iv) the court approves the terms and conditions of the settlement as fair, reasonable and adequate. Medical Imaging Centers of America, Inc., (March 12, 1993); L.A. Gear, Inc., (November 16, 1992); Newbridge Networks Corporation (July 13, 1992); Windmere Corporation (May 20, 1992); Riverbend International Corporation (March 30, 1990); and Cavanagh Communities Corporation (July 22, 1987).

The circumstances surrounding the issuance of the Shares of Common Stock in connection with the Settlement of the Lawsuit will satisfy all the above requirements. Pursuant to Rule 23(e) of the FRCP, the Court will hold the Hearing to determine whether the Settlement is fair, reasonable and adequate. The Claimants will receive notice of and have the right to appear and be heard at the Hearing. The Court will be informed that its approval of the proposed Settlement will result in the availability of the Section 3(a)(10) exemption from registration under the Act for the issuance and distribution of the Shares. Finally, pursuant to Rule 23(e), in order for the Settlement to become effective and binding, the Court must find that the terms and conditions of the Settlement are fair, reasonable and adequate and in the best interest of all those who will be affected by it.

Based on the foregoing, and in the event that the Court approval necessary for the proposed Settlement to become effective is received, it is our opinion that the issuance of the Shares by the Company in connection with the proposed Settlement as described above will be exempt from registration under the Act pursuant to Section 3(a)(10).

Resale of Common Stock issued in the Settlement

The Staff has taken the position in numerous no-action letters that securities issued without registration in reliance upon Section 3(a)(10) are not deemed to be "restricted securities" within the meaning of Rule 144(a)(3) under the Act. Medical Imaging Centers of America, Inc. (March 12, 1993); L.A. Gear, Inc. (November 16, 1992); Newbridge Networks Corporation (July 13, 1992); Riverbend International Corporation (March 30, 1990); and Cavanagh Communities Corporation (July 22, 1987). Accordingly, persons to whom Shares are issued in the Settlement who are not deemed to be "affiliates" of the Company within the meaning of Rule 144(a)(3) may publicly resell such Shares without registration in reliance upon Section 4(1) of the Act. Furthermore, any persons to whom Shares are issued in the Settlement who are deemed to be "affiliates" of the Company within the meaning of Rule 144(a)(3) may publicly resell such Shares so long as they comply with all of the provisions under Rule 144 except for that rules holding period requirement.

In view of the fact that none of the persons to whom Shares will be issued in connection with the Settlement are officers or directors of the Company, and in view of our expectation that no holder of as much as 5% of the Companys shares of Common Stock will receive Shares and that, indeed, the Shares, when issued, will constitute less than 1.2% of the Companys then outstanding shares of Common Stock, we expect to be of the opinion that none of such persons will be deemed to be an "affiliate" of the Company. We understand that, as set forth in Release No. 33-6253 (October 28, 1980), the Staff does not provide advice with regard to the determination of "underwriter" status, "affiliate" status or the availability of the exemption from registration under Section 4(1) of the Act. Accordingly, we do not request the Staff to express a position with respect to any "affiliate" status determination.

Request for No-Action Letter

We respectfully request the concurrence of the Staff with our opinions that (i) the Company may issue the Shares as described above in exchange for the claims of the Claimants without registration under the Act in reliance upon the exemption from registration provided by Section 3(a)(10) thereof; (ii) the Shares as so issued will not be deemed to be "restricted securities" within the meaning of Rule 144(a)(3) under the Act; and (iii) the Shares as so issued will be freely transferable by the persons to whom such Shares are issued in the Settlement, except that if any such person is deemed to be an "affiliate" of the Company within the meaning of Rule 144(a)(1) under the Act, any sale of such Shares by such person without registration under the Act will be required to comply with the provisions of Rule 144 except for that rules holding period requirement.

Please call the undersigned at 457-5103 or Walter Freedman of this firm at 457-5101 in the event you have any questions or desire any further information with respect to this matter. We respectfully request that the Staff respond to this letter as soon as possible so that we will be in a position to advise the Court of this matter at the Hearing which is expected to occur in early March 1994.

In accordance with Release No. 33-6269, seven additional copies of this letter are enclosed.

Very truly yours,

Arthur H. Bill

Enclosure-Stipulation of Settlement

STAFF REPLY LETTER

March 4, 1994

RESPONSE OF THE OFFICE OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE

Re: Coeur dAlene Mines Corporation (the "Company")

Incoming letter dated December 30, 1993

Based on the facts presented in your letter and contingent upon approval of the Settlement by the Court, the Division will not recommend any enforcement action to the Commission if the Company, in reliance upon your opinion as counsel that registration is not required, issues shares of the Companys Common Stock (the "Settlement Stock") in connection with the settlement of the class action pending against the Company, as described in your letter, without registration under the Securities Act of 1933. Recipients of Settlement Stock who are not affiliates of the Company may resell such Settlement Stock for their own accounts without regard to Rule 144. Recipients of such Settlement Stock who are affiliates of the Company may resell pursuant to Rule 144. Because the shares of Settlement Stock will not be restricted securities, the holding period requirement of Rule 144(d) is inapplicable.

Because these positions are based on the representations made to the Division in your letter, it should be noted that any different facts or conditions might require another conclusion. Further, this response only represents the Divisions position on enforcement action and does not purport to express any legal conclusion on the questions presented.

Sincerely,

Martin P. Dunn

Deputy Chief Counselp