Coeur Mining Reports Outstanding First Quarter, But Liquidity Issue Likely To Rise

Coeur Mining (CDE) reported 1Q15 revenue of $153 million. It missed consensus estimates by $2.55 million. The company reported net loss of $24.4 million, or $0.24 per share, in 1Q15. This was better than a net loss of $37.5 million, or $0.37 per share, in 4Q14. As a result, it beats the estimates by $0.03 per share. Coeur Mining credited the improved earnings to the decline in AISC (all-in sustaining costs) by 8% from the fourth quarter.

In an earnings release, Coeur’s president and CEO, Mitchell J. Krebs, said that “Falling oil prices and a weakening Mexican peso bode well for further cost improvement, as fuel represents approximately 7% of our total operating costs and about 50% of Palmarejo’s costs are denominated in pesos.”

Guidance for full-year 2015
For full-year 2015, Coeur Mining’s production guidance remains at 14.8–16 million silver ounces and 294,000–323,000 gold ounces. The AISC guidance per silver equivalent ounce will remain at $17.50–$18.50.

M&A activity
During 1Q15, Coeur Mining completed the acquisition of the Wharf gold mine from Goldcorp (GG). It’s expected to produce 74,000–78,000 gold ounces for the rest of 2015. Meanwhile, the acquisition of Paramount Gold and Silver surged the company-wide reserves by 12%.

Now, Coeur Mining’s Palmarejo reserves total 54 million silver ounces and 876,000 gold ounces. Newmont Mining (NEM) has the second-largest gold reserves in the world totaling 82.2 million ounces. Hecla Mining (HL) had the highest silver reserves in the company’s history at the end of 2014—totaling 173 million ounces. It had gold reserves of 4 million ounces.

Investors can gain exposure to the precious metals industry through gold-backed ETFs like the Market Vectors Gold Miners Index (GDX). Coeur, Newmont, and Hecla account for 9% of GDX’s holdings.

About

Donna Hendrix, MS in Financial Analysis, is investment analyst and focuses Services, Technology and Healthcare sectors. Prior joining Equities Mogul, Donna Hendrix worked with Goldman Sachs Research. If you have a great story idea for Donna Hendrix, you can write at [donna.hendrix@equitiesmogul.com ].

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