Tahoe Resources Inc

Silver companies try to maintain an optimal level of debt-to-equity to lower their costs of capital and maintain an optimum level of risk-reward for shareholders.

Market sentiment for Coeur Mining Coeur Mining (CDE) is a high-cost producer compared with peers (RING) (SIL). While it has initiated several measures to bring down its costs in the last few years, they remain high. Higher costs make CDE more leveraged to gold and silver prices than other low-cost producers such as Barrick Gold (ABX) […]

The performances of precious metal miners with substantial exposure to silver have been disappointing in 2017. As a group, they’ve returned just 0.9% YTD.

CDE stock has risen 2.6% year-to-date. However, during the same period, silver prices gained 4.7% and the Global X Silver Miners ETF (SIL) rose 5.5%.

Precious metals miners with substantial exposure to silver are usually classified as silver miners.

Gold production is an important metric for gold miners, because miners generally try to increase gold production in order to reduce costs amid low prices.

For investors considering silver stocks due to their leveraged exposure to silver prices, the higher the company’s revenues derived from silver, the better.

Right now, of the nine Wall Street analysts covering CDE stock, according to Thomson Reuters, 78% recommend a “buy,” while 22% recommend a “hold.”

After the Guatemalan government’s decision to suspend Tahoe Resources’ (TAHO) license, the company saw several downgrades.

Tahoe Resources (TAHO) stock has lost 44.1% of its value year-to-date until the end of September.

Coeur Mining (CDE) has a net debt-to-forward-EBITDA ratio of 0.40x, which seems comfortable. Hecla Mining’s (HL) ratio is slightly higher at 1.3x.

Commodity exposure In the previous part of this series, we looked at miners’ geographic exposure, which is important to consider due to the geopolitical risks some jurisdictions face. It’s equally important to consider their revenue compositions in terms of commodity exposure. ­ Contribution from silver Silver companies are rarely pure-play miners. For investors considering silver […]

Silver miners (SIL) are usually a levered play on gold. Notably, silver has outperformed gold year-to-date.

Future gold production growth is important because the gold market is forward-looking, making future gold production a key driver of gold miners’ revenue.

Goldcorp has the strongest balance sheet in its peer group. Goldcorp’s liquidity is also comfortable at $3.2 billion, including $940 million in cash and cash equivalents.