Hamlet Capital

Coeur Mining And La Preciosa: Right Mine, Wrong Time

At first glance, Coeur Mining's (NYSE:CDE) acquisition of Orko Silver and its La Preciosa project appears to be a major boost to its growth profile. With measured and indicated resources of 146 million ounces of silver and 277 thousand ounces of gold, La Preciosa represents one of the larger unmined primary silver deposits on the planet. Its accessibility, regional infrastructure and the availability of local miners and engineers make it a world-class prospect. However, the viability of the La Preciosa project depends on big assumptions.

When Coeur first announced its proposal to acquire Orko, silver was bid at $31 per ounce. Two months later, when Coeur completed the acquisition, silver had slid to $23.50. Today, silver is around...

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