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Coeur dAlene Mines Corp. Reports Operating Results (10-Q)

August 09, 2010 | About:
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10qk

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Coeur dAlene Mines Corp. (CDE) filed Quarterly Report for the period ended 2010-06-30.

Coeur Dalene Mines Corp. has a market cap of $1.44 billion; its shares were traded at around $16.32 with a P/E ratio of 90.67 and P/S ratio of 4.78. CDE is in the portfolios of David Dreman of Dreman Value Management, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Sales of metal increased $33.1 million, or 48.9%, to $101.0 million in the second quarter of 2010, compared to $67.9 million in the second quarter of 2009, primarily due to the significant rise in gold production from the Palmarejo mine and from substantially higher average realized silver and gold prices. Similarly, sales of metal increased $78.1 million for the first six months of 2010 to $189.3 million, as compared to $111.2 million in the comparable period of 2009. The Companys average realized silver and gold prices during the second quarter were $18.56 per ounce and $1,176 per ounce, respectively, representing increases of 35.4% and 25.6% over last years second quarter. Silver production contributed 72.6% of the Companys total metal sales during the second quarter, compared to 83.8% during the second quarter of 2009.

The Company reported operating income of $1.9 million and $1.0 million for the three months and six months, respectively, ended June 30, 2010. However, the Company reported a net loss of $50.7 million, or $(0.57) per share, for the three months ended June 30, 2010 and a net loss of $58.8 million, or $(0.69) per share, for the six months ended June 30, 2010. The net losses reflect $42.5 million and $46.8 million, respectively, of fair value adjustments, which were driven primarily by higher gold prices related to the Franco-Nevada royalty obligation and warrant, the Mitsubishi gold lease facility, put and call options and forward foreign exchange contracts.

In comparison, the Company had operating losses of $8.8 million and $8.5 million during the three months and six months, respectively, ended June 30, 2009. However, the Company reported net income of $11.6 million, or $0.17 per share, for the three months ended June 30, 2009 and $17.7 million, or $0.27 per share, for the six months ended June 30, 2009. The net income reflects $22.7 million and $38.4 million, respectively, of gains on debt extinguishments. The operating losses reported in the

Silver production for the second quarter of 2010 was 1.9 million ounces of silver or 79.2% higher than the first quarter of 2010 and was comparable to production during the second quarter of 2009. Total cash operating costs per ounce during the second quarter of 2010 were $7.78 and total cash costs per ounce, including royalties and taxes, were $8.32, compared to $9.98 and $10.84 respectively, in the first quarter of 2010 and $7.37 and $10.64, respectively, during the second quarter of 2009. The significant increase in production and decline in costs compared to the first quarter of 2010 was due to process handling improvements and the resumed mining of higher grade material located in the Huacajchi deposit which was confirmed to be excluded from the October 2009 resolution restricting mining above the 4,400 meter level of the Cerro Rico Mountain.

Production was 533,093 ounces of silver and 2,616 ounces of gold during the second quarter of 2010 compared to 543,543 ounces of silver and 3,231 ounces of gold in the second quarter of 2009. Production was lower due to continued leach down of the ore on leach pad along with the lack of incremental ore production. Total cash operating costs per ounce in the second quarter of 2010 were $2.44 and total cash costs per ounce, including production taxes, were $2.93 in the second quarter of 2010 as compared to total cash operating costs per ounce of $2.50 and total cash costs per ounce of $2.96 in the

Production at the Rochester mine in the six months ended June 30, 2010, was 1.1 million ounces of silver and 5,306 ounces of gold, compared to 1.0 million ounces of silver and 6,049 ounces of gold in the six months ended June 30, 2009. Cash operating costs per ounce were $2.06 and total cash cost which include production taxes were $2.64, compared to $2.64 and $3.14, respectively, in the six months ending June 30, 2009. The decrease in cash costs per ounce was primarily due to an increase in by-product credits related to increases in gold prices as compared to the six months ended June 30, 2009.

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