Entering text into the input field will update the search result below

Coeur Mining: Due Diligence Is A Serious Matter

Mar. 02, 2020 9:56 AM ETCoeur Mining, Inc. (CDE) Stock65 Comments
Fun Trading profile picture
Fun Trading


  • The company reported a net loss of $270.96 million or $1.23 per share, including non-cash write-downs of $277.7 million. Mainly $250.8 million impairment for the Silvertip mine.
  • Coeur Mining produced 94,716 Au Oz of gold and 3.176 million ounces of silver during the fourth quarter. Average realized gold and silver prices for the quarter are $1,342 per Au Oz.
  • CDE should be used mostly as a short-term trading tool.
  • Looking for a helping hand in the market? Members of The Gold And Oil Corner get exclusive ideas and guidance to navigate any climate. Get started today »

Image: Palmarejo gold and silver complex in Mexico Source: Coeur Mining

Investment Thesis

Chicago-based Coeur Mining (NYSE:CDE) fits perfectly with the profile of a North American gold/silver producer with a gold sale representing ~75% and a silver sale of ~25% of the total production in the fourth quarter of 2019.

The company operates only four North American mines after the recent decision on Silvertip. Palmarejo and Kensington mines are leading producers, whereas the Silvertip mine continues to be a problematic ramp-up phase and will be closed until 2021.

Mitchell J. Krebs, president, and the chief executive officer said:

The decision to temporarily suspend operating activities at Silvertip, which represented approximately 6% of the company’s 2019 revenue, was driven by our goal of maximizing the long-term value of the operation,

The investment thesis for this particular gold/silver miner is correlated primarily to the gold and silver price. The company was turning attractive again after retracing, but the recent decision about Silvertip needs to be assessed seriously. A dual strategy with a small long-term investment built on active short-term trading seems the most appropriate.

Below are the historical data for both primary gold mines.

As a reminder, Coeur Mining closed a significant deal with Alio Gold (ALO) for the acquisition of the Lincoln Hill Project and other mineral assets. These assets are adjacent to the Rochester mine.

The company produces and sells lead and zinc as by-product metals. Below is the most recent presentation from the third quarter of 2019.

Source: CDE Presentation

Note: On September 25, 2019, Coeur Mining indicated that it sold "2,811,000 common shares of Metalla at an average price of C$1.09 per share between April 25, 2019, and September 24, 2019, for approximately C$3.1 million." "Coeur now owns 20,965,241 common shares of Metalla or approximately 15.9%

Join my "Gold and Oil Corner" today, and discuss ideas and strategies freely in my private chat room. Click here to subscribe now.

You will have access to 57+ stocks at your fingertips with my exclusive Fun Trading's stock tracker. Do not be alone and enjoy an honest exchange with a veteran trader with more than thirty years of experience.

"It's not only moving that creates new starting points. Sometimes all it takes is a subtle shift in perspective," Kristin Armstrong.

Fun Trading has been writing since 2014, and you will have total access to his 1,865 articles and counting.

This article was written by

Fun Trading profile picture
Fun Trading is a retired engineer and independent investor. In addition to writing on investing in all aspects of gold, oil, and gas, he runs his own portfolio..

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I trade short term CDE but do not intend to keep a long term position at the moment.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (65)

@Fun Trading

I still like the first sentence in your Conclusion section of this article.

At one point today, with the futures price of gold up slightly and silver down hard, again, CDE was up 28%. I had several other miners that were up over 20%.

Things miner-wise are starting to look more normal. I still think the miners are starting to reflect the physical demand for gold and silver rather than the Comex futures and London fix prices.
Fun Trading profile picture

I have been puzzled with the recent gold moves and the relationship between gold bullion and gold miners. Since late yesterday, the relationship is getting back to normal. However, for how long?
What I see is that governments are trying to cope with the coronavirus but I believe the response has bee too slow and the effect on the economy will have long-lasting effects. Gold miners seem a good place to invest in this case.
@Fun Trading

I think the gold price moves inversely to the strength of the USD and other country's currencies. Not always in a straight line short term. It is sometimes hard to see that relationship in the US, because the "official" gold and silver prices are based on the COMEX futures. However, on a long term chart, the relationship is evident.

Gold has done well during stock market crashes and financial crises. Mining stocks have done exceptionally well during the same, regardless of whether inflation or deflation was involved.


As I post this message, CDE is up 33.65%. Novo Resourses is up 19.82%. Seems we are back to "normal," at least for a couple of days.
Fun Trading profile picture

Thank you for the link, it is kind of you.

Best regards,
Little, Einstein profile picture
These ETFs are really weird and dangerous
Fun Trading profile picture

CDE is now below its long term support. Unbelievable...
It's been a while since I followed $CDE did they invest in Oil?.. jk.. Any concerns with $CDE's short term debt management?. Sorry haven't read the entire article been busy putting out Oil fires..
Fun Trading profile picture

The gold sector suffered a huge selloff recently and it makes no sense. If you want to get some pretty good deal you should start accumulating in this sector. Not only CDE but dozen others...
It is shocking that CDE has been cut in half from the $8.29 52 week high in December, during a two month period of increasing gold and silver commodity prices. Clearly, CDE is a broken company with poor management and the stock valuation reflects this sad reality. I will keep trying to make money with short term trades, but it seems like trying to catch a falling knife. If gold spikes and it pulls CDE back up to the $8 range, I will sell all I have and say good riddance.
Fun Trading profile picture

Yes, it is quite surprising, the rally in gold miners is very selective. CDE has disappointed and it is paying the price.
gohabsgo70 profile picture
I mentioned to you I believe that your strategy would fail in the end as the company is a loser. What is more shocking is that it went to 8! not that it came back down.
I sold at 6.50 avg and watched in disbelief that it went above 8.
Fun Trading profile picture

The whole market seems slowly crashing hard. I am afraid it is the beginning not the end. KSA was the trigger in my opinion.
I wonder if CDE would not seek to reorient itself on money in the perspective of the much higher price often mentioned.
CDE has the following two mines:
- Rochester: which will produce 4.75 million ounces of silver in 2020 and has reserves of 117.4 million
- Precisoa which has an annual production potential of almost more than 9M for proven and probable reserves of 135M ounces of silver.With CAS estimated at less than $ 14, imagine what the price of silver of $ 50 ?
On the other hand, Silvertip would find interest!
Considering their lifetimes, one might think that the main potential of CDE is in Rochester and La Precisosa if the price of silver increases. Wouldn't the possible sale of Kensington be part of the development of these three silver mines?
Fun Trading profile picture

The strategy is not clear. But, with such POG the company has time to come up with a good plan.
chasingpriceaction profile picture
This can go a bit lower if it wants, yet buying at the lower support levels minimize the risk of knife catching: www.tradingview.com/...
@Fun Trading

Excellent article. Thanks for writing it.

I liked the first sentence of your Conclusion; I agree totally with that sentence. However, I also agree that CDE must be traded; it is not a simple buy and hold.

CDE was my best performer in early 2016; a 900% gain in six months. I did not sell at the exact high, but I got close.
Fun Trading profile picture

Glad you had a great profit with CDE.
@Fun Trading

I was a little disappointed in the Silvertip mine. I thought it would be a minor problem.

However, mining is a tough business. Most of the companies I have traded over the years had at least one problem. Look at Barrick. Even AEM, which I thought was one of the better miners.

In spite of how much exploration drilling they do, sometimes a mine simply runs out of economical ore veins. Mines flood. Workers go on strike or get killed in accidents. Underground mine shafts become unstable (Lucky Friday mine). Etc.
Fun Trading profile picture

Well said... Getting gold from the ground is difficult. The issue I see with silvertip is that they must have known it for a long time but cannot seem to admit their mistake.
If the pros loose money trading why would amateurs do any better? Seems like buy and hold has much better odds. jmho
Fun Trading profile picture

It is up to you. The end game is to make a good profit from your investment.
adriano321 profile picture
CDE is by management, of management and for management...while the board neglects its basic duty of oversight and accountability.
Fun Trading profile picture

This silvertip miscalculation is quite a big deal for shareholders. We will see what will happen.
I don't know if the Silvertip drama will haunt mangement. The CEO will receive 3 millions bonus, delivering BS year after year. Life is good.
Fun Trading profile picture

And the stock is jumping almost 13% today... win win
don't see any news to justify the rally today...perhaps just way oversold...I don't like a stock that looses money
There were 18 recent Form 4's that went through (all different people) I just picked one at random...

THOMPSON J KENNETH - a lowly director
02/24/2020 17,578 price paid $0

These shares were issued to the reporting person pursuant to the 2018 Long-Term Incentive Plan as a portion of the reporting person's retainer fee.

someone's making money...

I'd have to see the gap fill at 3.72 to even be interested in trading it.
This board is a totally mess they just deserve nothig less than to be fired
Fun Trading profile picture

Investors should focus on trading... You can make a good profit with CDE, the rest secondary.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About CDE

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on CDE

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.