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Why Coeur Analysts Expect Strong Revenue Growth in 2017

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Coeur Mining’s 4Q16 revenues

Analysts’ revenue projections are a proxy for a mining company’s volumes sold multiplied by its prices received. Wall Street analysts covering Coeur Mining (CDE) are projecting sales of $187.0 million for 4Q16. That implies a revenue change of 6.0% quarter-over-quarter and a 14.0% growth year-over-year (or YoY). Coeur’s actual revenues rose 8.0% YoY in 3Q16.

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Coeur’s annual revenues

For 2016, Wall Street analysts covering Coeur Mining are projecting sales of $697.0 million, which implies a rise in revenue of 8.0% YoY. Analysts are most likely betting on higher realized prices to drive Coeur’s higher revenues. Its guided production implies a flat production growth over 2015.

Revenue estimates for 2017 and 2018 are $847.0 million and $891.0 million, respectively. These figures imply a YoY growth of 22.0% and 5.0%, respectively. Coeur’s actual revenues fell 2.0% YoY in 2015 due to lower average realized prices for gold and silver.

On an annual basis, Coeur expects its silver production to fall 5.0% YoY. It expects gold production to rise 1.7% YoY, which would mean almost flat growth in silver equivalent production in 2016. The company’s expectation has been calculated based on the midpoint of its latest annual guidance.

Other silver and gold miners (SIL) (GDXJ) such as Pan American Silver (PAAS), Silver Wheaton (SLW), Hecla Mining (HL), and Silver Standard Resources (SSRI) will also get the benefit of higher precious metal prices in 2016. However, investors should note that a big part of the gain was erased after September 2016.

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