Coeur Mining Reverses To Profit In First Quarter
Coeur Mining, Inc. (NYSE: CDE) reversed to a profit in the first quarter, compared to the same period a year ago, as metals production and silver prices rose and the company recorded a lower interest expenses.
The company listed net income of $18.7 million, or 10 cents per share, a turnaround from a loss of $20.4 million, or 14 cents, in the same period a year ago.
Excluding special items, adjusted earnings were $7 million, or 4 cents per share, compared to a loss of $10.5 million, or 6 cents, in the year-ago period.
Coeur reported $206.1 million in revenue, an increase of 39% year-on-year. Quarterly cash flow from operating activities was $55.3 million, a year-on-year increase of $48.7 million. The latter was helped by a $7.5 million year-on-year decline in interest expenses after what the company termed “balance-sheet improvements.”
Silver and gold output was 3.9 million ounces and 88,218 ounces, respectively. This resulted in 9.2 million silver-equivalent ounces, which was a year-on-year increase of 14%. Coeur also said much of the increased revenue was the result of a reduction in metals inventory.
Meanwhile, the average realized silver price rose to $17.61 an ounce from $15.16, while the average gold price eased to $1,149 from $1,178. The average realized gold price reflects the sale of 19,300 ounces to Franco-Nevada at $800 per ounce.
"Rising production levels at our Palmarejo mine and higher metal sales more than offset the impact of record rainfall at our Rochester mine in Nevada and persistent drought conditions at our San Bartolomé mine in Bolivia,” said Mitchell J. Krebs, president and chief executive officer. “Companywide costs also continued to trend lower, with first-quarter metrics coming in well below full-year guidance. Combined with considerable interest savings from recent balance-sheet improvements, we reported significantly higher earnings and cash flows compared to the same period last year.”
Krebs also reported that expansion initiatives at the Palmarejo, Rochester and Kensington mines remain on schedule and on budget.
“At Palmarejo, we are on track to achieve 50% production increases this year from higher-grade underground operations,” he said. “At Rochester, we are completing the last element of a multi-year expansion effort to position the mine for strong and sustainable cash flow. At Kensington, we expect higher-grade ore from the Jualin deposit to boost production and further reduce unit costs starting late this year.”
Coeur said 2017 production guidance was unchanged. The company anticipates 38.12 million to 41.22 million silver-equivalent ounces this year.
During the quarter, Coeur completed the sale of the Joaquin project for $27.4 million, realizing a gain of $21.1 million while retaining a 2% net-smelter-return royalty on the project.