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Coeur Mining cuts 2Q losses with solid U.S. production

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(Kitco News) - Despite operation setbacks due to the COVID-19 pandemic Coeur Mining reported better than expected earnings for the second quarter.

Wednesday, the company reported a net loss from continuing operations of $1.2 million, or $0.01 per share. Market analysts were expecting to see a loss of 4 cents per share.

The company said that its revenue in the second quarter totaled $154.2 million compared to $173.2 million reported in the second quarter of 2019. The temporary suspension primarily drove the drop in revenue at Palmarejo, the company said.

The Palmarejo mine was shut down for 45 days in the second quarter after the Mexican government initiated strict lockdown measures to stop the spread of the COVID-19 pandemic.

Looking at production, the company said that it produced 78,229 ounces of gold and 1.6 million ounces of silver during the second quarter, selling 77,933 ounces of gold and 1.6 million ounces of silver.

“Like most companies, our second-quarter results were negatively impacted by COVID-19. Most notably at Palmarejo, our strongest performing asset in the first quarter, operations were temporarily suspended due to a decree from the Federal government of Mexico. However, with Palmarejo now back in production, our three U.S. operations hitting their strides and the tailwind of higher gold and silver prices, we are anticipating a strong second half of 2020 and expect to continue this momentum into 2021,” said Mitchell Krebs, president and chief executive 0fficer at Coeur.

The company said that cash and cash equivalents totaled $70.9 million at June 30, 34% higher than at the end of the first quarter of 2020. The company said it also repaid $90.0 million of its senior secured revolving credit facility (“RCF”) using cash on hand. The company still had a $60.0 million balance at the end of the second quarter.

Although COVID-19 government lockdowns impacted the Coeur’s Mexican operations, the company said that it saw strong production at its other mines.

“Kensington’s gold production remained strong during the second quarter, helping to generate $27.8 million2 in operating cash flow and $23.9 million2 of free cash flow,” the company said. “Gold production at Wharf increased 60% quarter-over-quarter, leading to $19.1 million and $18.8 million in operating and free cash flow.”

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