Coeur Mining: Palmarejo 3Q Output Declines; Guidance Reiterated
(Kitco News) - CoeurMining, Inc. (NYSE: CDE) late Tuesday reported that a number of factors hurt silverproduction at the Palmarejo Mine in Mexico, although officials reiteratedpreviously revised company-wide guidance for full-year 2018.
Thecompany listed third-quarter consolidated production of 2.9 million ounces ofsilver, 88,833 ounces of gold, 2.2 million pounds of zinc and 1.2 millionpounds of lead. This amounted to 8.5 million silver-equivalent ounces, assuminga 60:1 gold-silver ratio, or 10.4 million ounces based on average spot pricesduring the third quarter.
TheJuly-September production was down from the same period a year ago, when silverand gold production came in at 4 million ounces and 93,293 ounces,respectively, according to Coeur’s earnings report for the third quarter of2017. However, the company also has one less mine following the sale of SanBartolome in Bolivia, which produced nearly 1 million silver ounces in theyear-ago period.
Thecompany reiterated its Sept. 4 guidance of 36.1 million to 39.5 millionsilver-equivalent ounces. This was 44 million to 48 million ounces based onaverage spot prices during the third quarter. The guidance consisted of 13million to 14.3 million silver ounces, 363,000 to 382,000 gold ounces, 13million to 23 million pounds of zinc and 11 million to 18 million pounds of lead.
BMOCapital Markets described the July-September production as below its expectations.“Although (previously restated) guidance wasreiterated, Q4 production will need to be strong across the portfolio in orderto achieve targets,” BMO said. Nevertheless, BMO also said Coeur is positionedto deliver a “significantly stronger” fourth quarter and full-year 2019 as thenew Silvertip operation in British Columbia continues to ramp up.
July-Septembersilver output at Palmarejo fell to 1.5 million ounces from 1.9 million in theyear-ago period, while gold production slipped to 27,885 from 28,948. Theoutput was down from 2.1 million silver ounces and 33,702 gold ounces in thesecond quarter.
Coeursaid Palmarejo production was impacted by the temporary suspension of mining dueto fatalities during the quarter, supply-chain disruptions from local roadblockades that temporarily interrupted the delivery of certain miningconsumables, and a weather-related interruption that impacted the processing plant.The company also cited a “modest decline” in silver and gold grades.
Goldoutput at the Wharf Mine in South Dakota eased to 19,437 ounces in the thirdquarter from 25,849 in the year-ago period and 22,507 in the second quarter.Coeur blamed the decline on “unplanned weather-related downtime and timing ofleach pad recoveries.”
Meanwhile,output at the Rochester Mine in Nevada rose. The company reported 1.3 millionsilver ounces and 14,702 gold ounces, up from 1.1 million and 10,955,respectively, in the third quarter of 2017. The July-September output was alsoup from 1.1 million silver ounces and 12,273 gold ounces in the second quarter.
Atthe Kensington mine in Alaska, gold output of 26,809 ounces in the third quarterwas down from 27,541 in the year-ago period but up from 25,570 in the secondquarter.
Meanwhile,at Coeur’s new Silvertip operation, silver output was 131,000 ounces, zincoutput was 1.8 million pounds and lead output was 1.6 million. Commercial productionwas achieved on Sept. 1, although there was some mill downtime for repairs.
By Allen Sykora
For Kitco News
Follow @AllenSykora
asykora@kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.