What Silver Miners Expect for Production in 2017



Higher guidance for 2017

Hecla Mining (HL) recorded strong silver production growth of 9% and gold production growth of 5% YoY (year-over-year) in 4Q16. For fiscal 2017, the company has guided for silver production of 46.5 million–49.4 million ounces of silver equivalent, which implies YoY growth of 4%. This guidance is due to higher expected metal prices, and strong performance from its mines.

Tahoe Resources (TAHO) reported production of 4.8 million ounces of silver and 119,900 ounces of gold in 4Q16. Its total silver production in 2016 was 21.3 million ounces, slightly higher than its guided range of 18 million–21 million ounces. For 2017, the company has guided for 18 million–21 million ounces of silver and 375,000-425,000 ounces of gold. This guidance was lower than expected.

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In 4Q16, Coeur Mining’s (CDE) silver and gold production levels were slightly lower than market expectations. The company produced 3.9 million ounces of silver and ~102,500 ounces of gold. In 2017, Coeur expects production of 16.4 million–18.0 million ounces of silver and 362,000–387,000 ounces of gold. This expectation implies a silver equivalent production of 38.1 million–41.2 million ounces. At the midpoint of this guidance range, the expected production growth is 9.0% YoY.

Strong operating performance

In 4Q16, Pan American Silver’s (PAAS) silver production was 6.3 million ounces, compared with 6.8 million ounces in 4Q15. This fall reflects lower anticipated production at Alamo Dorado, with the mine reaching the end of its productive life. In 2016, Pan American Silver had silver production of 25.4 million ounces, compared with 26.1 million ounces in 2015. Its guidance for 2017 is 24.5 million–26 million ounces of silver and 155,000-165,000 ounces of gold.

Downbeat guidance

First Majestic Silver (AG) reported silver production of 2.8 million ounces in 4Q16. This is a decline of 9% quarter-over-quarter. The weaker performance was due to a 9% decline in the average grade of silver during the quarter. Its silver production for 2016 was 11.9 million ounces. The company expects silver production of 11.1 million–12.4 million ounces in 2017.

While looking at near-term production growth is important, it’s even more important to look at producers’ medium-to-long-term production growth. This growth impacts companies’ mergers and acquisitions, exploration spending, and capital expenditure decisions. In the next part of this series, we’ll look at silver miners’ medium-to-long-term production growth.


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