Coeur Mining Posts Profit In First Quarter
The company listed both net income and adjusted income of $0.7 million, or zero cents per share. In the year-ago quarter, net income was $18.3 million, or 10 cents, while adjusted income was $6.8 million, or 4 cents.
Revenue fell to $163.3 million from $185.6 in the same period a year ago, as the tally in the first quarter of 2017 included elevated sales of inventory carried over from the previous year, Coeur said.
The average realized price for an ounce of gold rose to $1,268 from $1,149 in the first quarter of 2017, while the average silver price fell to $16.70 from $17.49. The company, which previously released its production results, said silver-equivalent output increased 4% year-over-year to 8.3 million silver-equivalent ounces mainly due to a 31% increase in silver production at Palmarejo, partially offset by a 14% decrease in gold production at Wharf.
Officials said Coeur achieved several milestones during the first quarter, including the start of production slightly ahead of schedule at the Silvertip mine and announcing the results of a re-scoped mine plan and preliminary economic assessment for its Rochester mine in Nevada. The PEA reflects plans to add high-pressure grinding roll technology to Rochester's crushing circuit, potentially improving silver recovery curves. The company also completed the sale of its Bolivian subsidiary and the San Bartolomé mine.
“Combined with the successful start-up at our new Silvertip mine in British Columbia and our announced plans to install new HPGR technology at our Rochester mine in Nevada, which is expected to more than double the mine's net asset value, we are entering the second quarter with strong momentum,” said Mitchell J. Krebs, president and chief executive officer.
"Lower production and higher costs companywide during the quarter were in line with our previously disclosed expectations due to the normalization of production levels at Rochester and lower planned grades and production at Wharf and Kensington.”
Krebs said Coeur’s production and free cash flows should rise as Silvertip ramps up and development capital expenditures decrease.
Coeur also announced highlights of an NI 43-101 technical report for its Kensington gold mine in Alaska. The data shows a 25% increase in proven and probable reserves to 620,700 ounces and a 10% increase in average reserve grade to 0.21 ounces per ton, or 7.2 grams per tonne, compared to year-end 2016 reserves, Coeur said. This includes an initial reserve estimate for the high-grade Jualin deposit of 74,100 contained ounces of gold.
The company said it foresees a 13% increase in expected average annual production to approximately 130,000 ounces of gold from 2019 through 2021, compared to 2017. Mining costs per ounce should fall, and this will extend the mine life, Coeur said.