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Coeur posts Q3 profit as soaring metal prices offset cost increases
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7th November 2011
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TORONTO (miningweekly.com) – Idaho-based Coeur d'Alene Mines on Monday said it made a $31.1-million net profit in the quarter ended September 30, compared with a $22.6-million loss the previous year, helped by higher metal prices, and a 13% increase in silver production.

Adjusted earnings for the three months came in at $93.8-million, which was a significant improvement on the $4.5-million loss for the same period a year ago.

Coeur produced 4.9-million ounces of gold in the quarter, while gold output totalled 57 052 oz – a 20% rise on the number for the third quarter last year.

Net metal sales of $343.6-million were 190% higher than last year's third quarter, and a company record.

The TSX- and NYSE-listed company said it was on track to produce around 19.5-million ounces of silver for the year, but it cut gold production guidance to 220 000 oz from the previous forecast of 240 000 oz to 250 000 oz.

Coeur, which is the biggest primary silver producer in the US, ended the September quarter with $208-million in the bank, and said it was “evaluating potential alternatives for returning capital to shareholders”.

“As we continue generating significant free cash flow and achieve consistent performance from our operations, we believe we will be well positioned to invest in high-return internal and external growth opportunities while also returning capital to our shareholders,” CEO Mitchell Krebs said in a statement.

Cash operating costs rose 55% to around $7/oz of silver during the quarter, a 55% increase on the year-ago period. Coeur said the increase was mainly because of short-term production cost hikes at its Mexican, Bolivian and US mines, but that this would ease in the fourth quarter.

Higher power, diesel and labour costs also had an effect.

Shares in Coeur rose 7% by 14:29 on the TSX to reach C$29.87 apiece.
 

Edited by: Creamer Media Reporter

 

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