Coeur Mining’s Turnaround Is Here to Stay

Coeur Mining has been in turnaround mode over the past few months and the company’s comeback got a nice shot in the arm after its second-quarter results. That’s because Coeur was able to demonstrate an improvement in its balance sheet and also reaffirmed its guidance, indicating that the company’s turnaround is all set to continue in the coming quarters.

Let’s take a closer look at Coeur and see if investors should expect more upside from Coeur stock in the coming days.

The Things to Like About Coeur Mining

At first glance, Coeur’s quarterly results were not all that great. Revenue fell 4.6% year over year to $162.1 million and the adjusted net loss came in at $0.11 per share as compared to a profit of $0.01 per share in the prior-year period.

However, Coeur reported that it was able to reduce its total debt to the tune of 19% during the quarter by repaying $82 million of its outstanding debt. What’s more, the company displayed an improvement in its production profile sequentially.

Coeur’s gold production during the second quarter came in at 86,584 ounces as compared to 78,336 ounces in the first quarter. Silver ounces produced also increased to 3.1 million ounces from 2.5 million ounces a year ago.

Now, the gold and silver production numbers for the quarter were lower than the year-ago period’s output of 94,000 ounces of gold and 3.2 million ounces of silver. But the sequential growth in these metrics is a positive takeaway for investors.

Coeur attributes the higher production to an 18% bump in the mill throughput. Moreover, the company was able to access high-grade secondary slopes that aided the production growth.

More Improvement Is in the Cards

Coeur has been taking a slew of measures to boost production. It has commissioned an enhanced crushing circuit at the Rochester mine, and the company expects this to help improve silver recoveries and lower costs simultaneously.

In June this year, Coeur struck a purchase option agreement with Barrick Gold for the Richmond Hill project that lies adjacent to the former’s Wharf mine in the state of South Dakota. Coeur has taken this step in a bid to extend the life of the Wharf mine by using the infrastructure already present at Barrick’s project.

In all, Coeur is coming off a decent quarter wherein it made the right operational moves and it could keep getting better in the coming quarters. This should please investors as the average realized price of gold for Coeur in the second quarter was $1,277 an ounce, while that of silver was $14.75 an ounce.

The spot price of gold at present is at over $1,500 an ounce, while that of silver stands at more than $18 an ounce. So the higher prices and the gradual increase in Coeur’s production should lead to an improvement in its financial performance as well, which is why investors should keep faith in the stock.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Harsh Singh Chauhan
Harsh Singh Chauhan has a wealth of experience evaluating publicly-traded companies across several verticals, including technology, oil and gas, retail, and consumer goods. His financial writing has been published across platforms such as The Motley Fool, TheStreet, and Seeking Alpha. Harsh's philosophy is to find great businesses for the long run based on company fundamentals and industry prospects. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.

Leave a Reply

Notify of