Update: Coeur Mining Has Almost Reached The Upper Part Of Its 2014 Production Guidance
- Coeur Mining announces a total silver-equivalent production of 32.2 million ounces, almost meeting the upper part of its production guidance.
- No real surprises here, but it's good to see the gold production came in above expectations, with Kensington being the main outperformer.
- The investment thesis will have to be updated, but I'm waiting for the cost guidance.
- Coeur Mining is coughing up $105M to buy a producing gold mine in South Dakota.
- While surprising, this is a good move as the new mine will definitely be free cash flow positive.
- My investment thesis could definitely change after this deal as the Wharf mine has an AISC of less than $900/oz, which is excellent.
Coeur Mining To Buy Wharf Mine From Goldcorp - Why I Like The Deal
- Coeur Mining just announced it will purchase the Wharf mine in South Dakota from Goldcorp for $105 million.
- The Wharf mine currently produces 85,000 to 90,000 ounces of gold annually at all-in costs of $800-$875 per ounce; it is an open-pit, heap leach mine.
- The move is expected to increase Coeur's 2015 EBITDA by over 30% and boost free cash flow, and will increase Coeur's gold reserves by 560,000 ounces of gold.
- I think it's a smart move by Coeur as the company continues to acquire undervalued assets while the price of gold remains at depressed levels.
Update: The New Don Ese Results Make Paramount An Even More Attractive Target For Coeur
- Paramount finds more high-grade silver near Coeur’s Guadalupe mine, strengthening Coeur’s strategy to buy the asset.
- This isn’t very surprising but the current size and strike length of Dana does surprise me.
- The updated investment thesis doesn’t change, and there’s an arbitrage opportunity as Paramount trades below Coeur’s offer.
Spin-Off To Unlock Value: Coeur Mining, Inc. To Acquire Paramount Gold And Silver Corp.
- The spin-off will unlock value to shareholders.
- The regulatory approvals can take a long time. We can cash in before the transaction is consummated.
- The merger makes a lot of sense (a lot of cost synergies).
Update: Coeur Mining Receives Maiden Resource Estimate For Independencia
- Coeur Mining has released a maiden resource estimate at Independencia, finding 9M ounces silver and 161,000 ounces of gold.
- This is pretty good news, and the average grade is definitely economical.
- The investment thesis won’t be impacted just yet, but that could change if more high-grade silver ounces could be added.
Coeur Mining To Buy Paramount Gold And Silver - Was It A Good Deal?
- Coeur Mining will buy Paramount Gold and Silver, as was previously rumored by Reuters.
- The all-stock transaction is valued at $146 million, and Paramount will spin-out its Nevada assets, as previously expected; Coeur will provide $10 million in cash to SpinCo.
- The deal is valued at $.90 per Paramount share, which is a premium of 19.8% to Paramount's share price.
- I love the deal for both companies.
A Coeur Takeover Of Paramount Makes Sense For Both Companies
- Coeur Mining is in "advanced negotiations" to acquire Paramount Gold and Silver.
- This acquisition would make a lot of sense for both companies.
- I think Paramount presents a better deal here as a takeover would most likely come at a premium to the current share price.
- Coeur Mining was – as expected – free cash flow negative in the third quarter and I’m not expecting an improvement in Q4.
- Nothing unexpected, and I’m happy the company is reducing its G&A expenses and keeps on exploring.
- The investment thesis doesn’t change. Coeur is a bet on the gold and silver price, but isn’t profitable at the current precious metals prices.
Coeur Mining: Evaluating The Possibility Of A Buyback
- Coeur Mining is the worst performing stock among silver miners.
- The company's cost structure means that Coeur Mining will be unable to make money in the current gold and silver price environment.
- Yet, extremely low levels of Coeur Mining's shares present an opportunity for a buyback, which could be a huge upside catalyst.
Update: Coeur Finds High-Grade Mineralization And Reports Production Results
- Coeur announces excellent production results and exploration results.
- This wasn’t unexpected, as productionwise Coeur is excellently managed, and its bad performance is solely due to the declining gold and silver price.
- The investment thesis fully (and only) depends on the achieved silver price.
- Coeur's stock is down 64.61% from its 52-week high price and up less than 1.0% from its 52-week low price.
- For current investors, La Preciosa mine 'cost' has now been reduced by $119.7 due to Coeur's stock price decline.
- At this week's conferences, will Coeur management elaborate on their current buyback plans?
- Coeur's conservative hedge program will serve it well during current depressed metal prices.
- Coeur (NYSE:CDE) is adopting option strategies in case there is more downside movement in Silver. This seems a defensive move and worries investors.
- La Preciosa in Mexico is still lying idle. It has huge reserves and as of yet the $413 million investment has not bore fruit.
- There is a steaming agreement at the Palmarejo mine. We will potentially see more streaming agreements if the price of Silver doesn't rebound from these levels.
Coeur Mining's Assets Are Worth Far More Than Its Current Market Cap
- Coeur Mining's stock price is way oversold.
- The company has had some problems in the last year, but its assets are worth a lot more than its current market cap.
- The shares should be trading at a minimum of 30% higher given the value of the assets that it owns.
- Coeur Mining reports a net loss as its amortization expenses are still high.
- A net loss wasn’t unexpected at all, as the company hasn’t been able to show a quarterly profit in more than a year now.
- The free cash flow is also decreasing, making me switch from bullish to neutral at this moment.
Coeur Mining: A Bargain Play On Higher Silver Prices
- CDE's recent losses are mostly on paper, and it trades far below its asset value.
- CDE's growing gold production is an excellent hedge against low silver prices.
- CDE's balance sheet portends a major surge in stock prices when silver prices recover.
- Silver mining companies offer big leverage to a rising price of silver and should be considered by silver bulls.
- Investors should look for low-cost producers in politically stable mining jurisdictions.
- Great Panther Silver, Endeavor Silver and Coeur Mines are three of my favorite silver miners to play a rally.
Coeur Mining: A Brief Look At Its Plans For The Guadalupe Underground Mine
- Coeur Mining recently announced its plan to complete the development and initiate production at the Guadalupe underground mine by 2015.
- Initial production at Guadalupe is expected by the end of the first quarter of 2015. Mining rates are expected to average 1,300 tons/day in 2015 and 1,500 tons/day by 2018.
- If Coeur Mining can keep costs related to the project down, there's a very good chance both cash flows and long-term revenues could flourish over the next several years.
Thu, Jan. 15, 9:16 AM
Thu, Jan. 15, 7:59 AM
- Coeur Mining (NYSE:CDE) +3.5% premarket after announcing Q4 production of 4.3M oz. of silver and 64.5K oz. of gold, and forecasting 2015 production of 14.8M-16M oz. of silver and 284K-313K oz. of gold., or 31.8M-34.8M silver equiv. oz., up to an 8% Y/Y increase.
- CDE says FY 2014 production totaled 17.2M silver oz., in-line with company guidance of 17M-18M oz., and nearly 250K gold oz., above guidance of 229K-244K oz.; full-year silver equiv. production totaled 32.2M oz., at the high end of CDE's guidance of 30.7M-32.7M oz.
Mon, Jan. 12, 6:35 PM
- Coeur Mining (NYSE:CDE) agrees to acquire the Wharf gold mine in South Dakota from Goldcorp (NYSE:GG) for $105M, which CDE says provides quality, immediate growth and adds a stable, established source of production and cash flow to its existing portfolio.
- CDE expects Wharf to produce 85K-90K oz. of gold in 2015 at an all-in sustaining cost of $800-$875/oz. and increase its 2015 EBITDA by more than 30%.
Mon, Jan. 5, 5:30 PM
- Early-year pain for stocks has meant gain for gold, as February gold rose 1.5% today to settle at $1,203.90/oz., its best level in three weeks, as concerns about political upheaval in Greece and falling crude prices sparked a flight from risky assets; silver added $0.46 to $16.23.
- Rising gold prices also lifted shares of miner stocks, sending the Market Vectors Gold Miners ETF (NYSEARCA:GDX) +2.6% while the Market Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ) +4.3%.
- Gainers included IAG +7.4%, HL +3.1%, GOLD +2.4%, KGC +1.7%, NG +8.4%, EGO +4.7%, EXK +4.8%, RGLD +2.4%, CDE +2.6%, FNV +5.3%, SLW +1%, PAAS +3.3%, AG +6.1%, SVM +2.9%.
- Of course, two days of gains in 2015 hardly make up for two years of declines, and Barron’s Michael Kahn is among observers suggesting that investors wait for clearer signs of progress before making a move.
Dec. 29, 2014, 5:42 PM
Dec. 26, 2014, 3:34 PM
- Spurred by hopes China's efforts to relax lending rules are a sign that broader (inflation-boosting) stimulus efforts are on tap, gold and silver prices are rallying, and taking the shares of miners up with them. COMEX gold is up 1.8% to $1,194.50/oz., and COMEX silver is up 2.5% to $16.11/oz. GLD +1.7%. SLV +2.2%.
- Gold stocks: AUY +3%. GG +4.6%. AGI +4.1%. ABX +3.4%. KGC +3.7%. GFI +3.7%.
- Silver stocks: SLW +2.3%. SSRI +6.9%. PAAS +1.9%. AG +3.6%. CDE +4.1%. HL +4.2%. SVM +6.8%. EXK +5.4%. TAHO +5.3%.
- Like many other commodities names, the group was hit hard a month ago when crude prices plunged in response to OPEC's decision to leave oil production unchanged.
- ETFs: AGQ, IAU, USLV, SIVR, SGOL, ZSL, UGL, DGP, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, OUNZ, DGL, DBS, DGZ, DGLD, AGOL, TBAR, USV, UBG, GLDE, BAR, GYEN, GEUR, BARS, GGBP
Dec. 17, 2014, 7:45 AM
- Coeur Mining (NYSE:CDE) agrees to acquire Paramount Gold and Silver (NYSEMKT:PZG) for $146M in stock, as it expands its mining footprint in Mexico.
- As part of the deal, PZG will spin off its non-Mexican assets into a stand-alone publicly listed company, of which CDE will own a 4.9% stake.
- PZG's San Miguel mining project neighbors CDE's Palmarejo silver-gold mine in northern Mexico, and the merger enables Palmarejo to continue as one of the largest and highest grade silver and gold mines in the world.
- PZG +21.8% premarket.
Dec. 15, 2014, 5:37 PM
Dec. 1, 2014, 4:45 PM
- Gold futures surged 3.6% to reclaim the $1,200 level for the first time since late October, sparked in part by the downgrade of Japan’s sovereign debt rating and a retreat in the dollar, as well as India easing its import restrictions and some short covering.
- Gold had sold off initially amid news that Swiss voters rejected a referendum to force the Swiss National Bank to hold 20% of its reserves in gold, slumping to overnight lows near $1,140/oz. before rallying to settle at $1,218.
- As a result, gold miners were among the strongest sectors, with the Market Vectors Gold Miners ETF (NYSEARCA:GDX) finishing 7.7% higher; investors also may have reacted to takeover speculation, as weekend reports said Paramount Gold (NYSEMKT:PZG) was is in talks to be acquired by Coeur Mining (NYSE:CDE).
- Among the top precious metals miners: ABX +4.3%, AEM +6.9%, AU +9.1%, GG +8.2%, GFI +9.2%, SLW +7.2%, NEM +6.8%, AGI +7.7%, IAG +11.3%, AUY +7.4%, KGC +8.5%, NGD +13.7%, GOLD +6.4%, RGLD +7%.
- Other ETFs: NUGT, DUST, SIL, GLDX, SLVP, RING, SGDM, PSAU
Dec. 1, 2014, 8:12 AM
- Coeur Mining (NYSE:CDE) is in advanced talks to acquire Paramount Gold and Silver (NYSEMKT:PZG), Reuters reports, as the biggest U.S. producer of silver seeks to expand its mining footprint in Mexico.
- As part of the deal, PZG plans to spin off its non-Mexican assets into a stand-alone publicly listed company, in which CDE would hold a 4.9% stake, according to the report.
- PZG's San Miguel mining project neighbors CDE's Palmarejo silver-gold mine in northern Mexico, and a deal would enable Palmarejo to continue as one of the largest and highest grade silver and gold mines in the world for at least another seven years.
- PZG +4.5% premarket, CDE -0.2%.
Nov. 28, 2014, 1:21 PM
- Already hit hard over the last two years by declining prices, gold and silver miners saw more pain today as commodity stocks in general got hammered thanks to OPEC's decision not to slash crude production.
- Decliners: ABX -8%. GG -6.1%. AUY -9.8%. KGC -8.2%. GFI -9.9%. SLW -7%. NEM -5.8%. AGI -6.9%. PAAS -9%. AG -15.4%. SSRI -11.6%. CDE -11.4%. HL -8.8%. TAHO -7.8%.
- Previous: Precious metals slide alongside oil; Swiss vote ahead
Nov. 20, 2014, 3:13 PM
- Given the uncertain and volatile outlook for the dollar and thus gold prices, J.P. Morgan's commodities team suggests three "conservative" pair trades it expects to be profitable in a neutral or weaker metal price environment.
- The firm recommends buying Newmont Mining (NYSE:NEM) and selling Barrick Gold (NYSE:ABX), “driven by the idea that the deal where Barrick buys Newmont could be back."
- Buy Agnico Eagle Mines (NYSE:AEM) and sell New Gold (NYSEMKT:NGD), as JPM sees underground mines as more resilient than open pits, and AEM has fallen more sharply than deserved.
- Also, JPM likes buying Silver Wheaton (NYSE:SLW) and selling Coeur Mining (NYSE:CDE), as it believes royalty/streaming companies will be more robust in times of weak metals prices than pure-play miners.
Nov. 5, 2014, 5:36 PM
Nov. 4, 2014, 5:35 PM
- ABTL, ACAS, ACLS, ALNY, ALSK, ANDE, AR, AREX, ASH, ATO, ATSG, AVG, AWK, BALT, BCOR, BIOS, BKD, BREW, BWC, CBS, CDE, CF, CLR, CODI, CPE, CSOD, CTL, CVG, CXO, DATA, DEPO, DK, DPM, DRYS, DVR, DYN, ECOL, ECYT, EFC, ENS, ENSG, ETE, ETP, EXAR, EXXI, FMI, FNV, G, GNW, GPOR, GSM, HOLX, HTCH, IL, INWK, IO, JCOM, KGC, KW, LBTYA, LHCG, LPSN, MBI, MCHX, MCP, MDR, MDWD, MED, MHLD, MIDD, MRIN, MTDR, MTRX, MUSA, MWE, NDLS, NLY, NVAX, NWSA, OILT, ORA, ORIG, OSUR, PAA, PLNR, PMT, PODD, POWR, PPO, PRGN, PRU, PTC, QCOM, QEP, QUAD, RGP, RNDY, RUTH, SB, SBY, SCTY, SD, SKUL, SLF, SSNI, SSRI, STMP, SUSP, SWIR, SWM, SXL, SYMC, SZYM, TCAP, TEAR, TEG, TERP, THOR, TNGO, TPC, TRAK, TROX, TRUE, TS, TSLA, TSRO, TTEC, TXTR, UHAL, VVUS, WBMD, WFM, WMC, WMGI, WR, WTI, WWWW, XPO, Z
Oct. 22, 2014, 3:53 PM
- Coeur Mining (CDE -14.1%) plunges after BMO Capital downgrades shares to Underperform from Market Perform and slashes its stock target price to $4 from $9.50, pointing out signs of "strained" valuation.
- The downgrade comes as BMO describes its view that silver will continue to underperform gold over the next 12 months, and that silver miners "will need to look increasingly toward grade as a mechanism to reduce unit costs at the expense of reserve life."
Oct. 6, 2014, 2:45 PM
- Gold prices bounce off 15-month lows to reclaim $1,200/oz. as the dollar rally pauses, helping strengthen shares of precious metals miners: AU +4.4%, GFI +3%, IAG +1.9%, BTG +3%, GG +2.2%, NGD +1.5%, KGC +1.6%, AGI +1.6%, RGLD +1%, SLW +2.1%.
- Sterne Agee analysts Michael Dudas and Satyadeep Jain foresee gold and silver prices trending higher, with gold averaging $1,400/oz. in 2015 and $1,450 in 2016 and silver averaging $19 next year and $21 in 2016, as “global demand remains firm, liquidity remains ample and the dollar appears overbought.”
- With investor sentiment still skeptical, Sterne thinks any supportive macro news flow could provide fuel for a rally; the firm rate Newmont Mining (NEM +1.5%), Agnico-Eagle Mines (AEM +2.4%), Coeur Mining (CDE +1.3%) and Gold Resource (GORO +0.2%) as Buys, with Barrick Gold (ABX +0.5%), Hecla Mining (HL +4.3%) and Pan American Silver (PAAS +1.5%) rated Neutral.
- ETFs: GLD, SLV, AGQ, IAU, USLV, SIVR, SGOL, ZSL, UGL, DGP, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, DGL, DBS, DGZ, OUNZ, DGLD, AGOL, DBP, TBAR, USV, UBG, JJP, GLDE, BAR, GYEN, GEUR, RGRP, BARS, GGBP, BLNG
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