How Coeur Mining’s Production Panned Out in 3Q16



Coeur Mining’s 3Q16 production

Coeur Mining’s (CDE) 3Q16 silver and gold productions were slightly higher than market expectations. The company produced 3.5 million ounces of silver and 84,871 ounces of gold. Volumes were helped by strong operating performances from its Palmarejo mine.

The company upgraded its 2016 operating production guidance from 33.8 million–36.8 million silver equivalent ounces (or SEO) to 34.4 million–37.0 million SEO. As its Palmarejo mine transitions into higher-grade, higher-margin underground operations, production is expected to accelerate going forward.

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Mine-by-mine production

The Palmarejo Complex is Coeur Mining’s silver and gold mine in Mexico. In 3Q16, Palmarejo produced 933,000 ounces of silver and 16,608 ounces of gold. This production was above expectations since Guadalupe achieved 2,300 tons per day (or tpd) compared to the target mining rate of 2,200 tpd.

The company also mentioned that due to the installation of a new Merrill-Crowe processing circuit in 3Q16, recovery rates and grades should increase in 4Q16.

Coeur increased its 2016 production guidance from 3.9 million–4.4 million silver ounces to 4.1 million–4.6 million silver ounces.

Coeur delivered slightly weaker volumes at Rochester, Nevada, due to a longer-than-expected recovery time from the Stage III leach pad. The company said that as crushing rates and tons increase, production is expected to accelerate throughout the year.

At its Kensington, Alaska, operations, mill downtime at the end of 3Q16 due to a blocked tailings line led to an 18% fall in production quarter-over-quarter. The company mentioned that the development of a fall in the high-grade Jualin deposit is progressing well with initial production expected in the second half of 2017.

Peer production

Coeur’s peers (SIL), including Pan American Silver (PAAS), Hecla Mining (HL), Silver Standard Resources (SSRI), and Newmont Mining (NEM), are also trying to increase their productions at the lowest possible costs.

In the rest of this series, we’ll see how that could impact Coeur’s revenues and earnings going forward. But first, let’s look at analysts’ recommendations for Coeur Mining.


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