CXC 0.00% $27.25 coeur d'alene mines corporation.

quarterly report

  1. 2,119 Posts.
    lightbulb Created with Sketch. 290
    Not bad at all. Shold get a re-rating if/when the December quarterly is released. San Bartolome will produce around 600K oz in October so that should ensure the mine is cash flow positive. Noting that CDE's market cap is US$345M and they have US$120M cash on hand I suspect come June next year with a successful ramp up of Palmarejo the share price should be multiples of today's price. Throw in a favourable supreme court decision on Kensington next March as well you could easily see this stock a ten bagger from current levels!

    Coeur Reports Third Quarter Results Reflecting Continued Ramp-up at San Bartolome: Major Progress Continues at Palmarejo

    Growth Strategy Remains On-Track

    COEUR D'ALENE, Idaho, Oct 31, 2008 (BUSINESS WIRE) -- --Company Undertakes Initiatives to Strengthen Balance Sheet & Reduce Costs

    Coeur d'Alene Mines Corporation (NYSE:CDE)

    (TSX:CDM) (ASX:CXC):


    * Operational: 25% increase in quarterly silver production to 3.1 million ounces compared to second quarter
    * San Bartolome plant performance reaching design capacity levels; expected October silver production of nearly 600,000 ounces represents approximately 55% increase over September; operation remains on target for nearly 3.2 million ounces of silver production this year and 9 million ounces in 2009
    * Construction of major Palmarejo silver/gold project in Mexico remains on-budget and on-schedule for March 2009 start-up; expected to become Coeur's largest silver producer and cash flow generator with 5.1 million ounces of silver production and 67,000 ounces of gold production in its first partial year of production
    * Martha third quarter silver production up 32% and cash costs per ounce down 30% compared to last quarter
    * Rochester mine life extended again, providing substantial additional cash flow through 2014
    * Production temporarily suspended at Cerro Bayo in order to conserve existing reserves and focus on exploration and development of new discoveries and existing veins. Objective is to re-commence production at lower costs and higher production rates in 2010

    * Financial: Balance sheet bolstered to enable execution of growth strategy: Cash, equivalents and short-term investments now stand at nearly $120 million pro forma from recent financing
    * Company streamlines organization to reduce non-operating costs by $10 million, or approximately 40%, annually
    * Third quarter net loss of $3.6 million and year-to-date net loss of $4.3 million include $6.9 million and $23.3 million of pre-development costs and non-cash mark-to-market adjustments related to metal sales yet to be finalized with smelters, respectively

    Coeur d'Alene Mines Corporation (NYSE:CDE) (TSX:CDM) (ASX:CXC) today announced sales of metal for the first nine months of 2008 of $147.1 million, down from $155.4 million in the first nine months of 2007. The Company's net loss of $4.3 million during the first nine months of 2008 includes $23.3 million of pre-development costs and non-cash mark-to-market adjustments related to metal sales yet to be finalized with smelters.

    The Company's cash costs remained competitive during the first nine months of 2008 despite facing inflationary pressures for many key inputs including diesel, labor and power. Cash costs averaged $4.99 per ounce of silver year-to-date, an increase of only $0.55 per ounce over the first nine months of last year.

    Silver production during the first nine months of 2008 was nearly 8.0 million ounces, down 4.3% from the first nine months of last year. These lower revenue and production results are primarily due to the transition from mining to processing-only activities at the Company's Rochester mine in Nevada that took place in August of last year.

    The Company posted strong production gains during the third quarter with production of 3.1 million ounces -- up 25% from the second quarter and 15% higher than last year's third quarter. This is largely a reflection of the silver production contribution from the Company's San Bartolome mine.

    Third quarter metal sales were $39.8 million, down from $50.0 million in the second quarter due to lower silver and gold prices. The Company's third quarter net loss of $3.6 million includes $6.9 million of pre-development costs and non-cash mark-to-market adjustments related to metal sales yet to be finalized with smelters.

    Consolidated cash costs per silver ounce during the third quarter averaged $7.65, which reflected start-up related costs at San Bartolome during the quarter as it continued to ramp up to full capacity. Costs at San Bartolome have already declined as the processing facility now reaches full capacity in the current quarter. Also contributing to higher operating costs was the Company's Cerro Bayo mine in Southern Chile, where the Company has temporarily suspended mining operations in order to preserve the mine's current mineral reserves and resources while developing an upgraded, low-cost, three-year mine plan that incorporates new mineral reserves from recent discoveries.

    Dennis E. Wheeler, Chairman, President and Chief Executive Officer, commented, "Despite the challenging market conditions that are impacting our entire industry, Coeur is successfully executing its growth strategy, which remains focused on its three major assets: San Bartolome, Palmarejo, and Kensington. The Company bolstered its balance sheet in challenging capital markets to insure it has sufficient capital to achieve its growth plans. Finally, the Company has taken aggressive steps to streamline its organization in order to reduce non-operating expenses by 40% annually."

    Execution of Growth Strategy

    -- At San Bartolome -- the world's largest pure silver mine - production continues to increase each month and the mill is now beginning to reach its design capacity of 4,500 tonnes per day. As the processing plant continues to ramp up, October silver production is expected to increase 55% from September levels to approximately 600,000 ounces. San Bartolome is still expected to produce approximately 3.2 million ounces this year and 9 million ounces in 2009.

    * -- At Palmarejo -- the world's largest new silver project under construction - development continued on budget and on schedule with production anticipated to begin as planned in the first quarter of 2009. Total capital expenditures for 2008 are expected to be approximately $180 million with approximately $106 million ($89 million of capital expenditures and $17.2 million of pre-development costs) having been spent through the end of September. Highlights of recent progress at site include:
    * Crushing area expected to be completed in first week of December
    * Mechanical work on the SAG and ball mills is well advanced, with shells set into place and motors and gearboxes installed. Mechanical completion is scheduled for December with electrical completion in January 2009.
    * Installation of the generator pads and setting of all the generators is complete. The main transformer has been set.
    * All water supply and tailings dam work is on-schedule for 1st quarter 2009 start-up
    * 380 meters remain until breakthrough is achieved between the North and South portals
    * Open pit mining rates continue to average 50,000 tonnes per day
    * Coeur's exploration program at Palmarejo is focused on geotechnical and infill drilling in the Palmarejo deposit as well as expanding and upgrading the mineral resources at the nearby Guadalupe deposit. 2008 results from the new Guadalupe deposit will be incorporated into existing proven and probable reserves at Palmarejo when the Company reports year-end results.
    * The performance of the new stand-alone mill at Martha led to improved results in the third quarter, with cash costs declining over 30% to $6.73 per ounce and silver production increasing over 32% to 816,495 ounces compared to the second quarter. The Company expects these higher production levels and lower costs to continue throughout the fourth quarter and for Martha to achieve full-year silver production of over 3.0 million ounces.
    * Rochester's mine life has been extended by three years from 2011 to 2014. The Company now expects an additional 5.4 million ounces of silver to be generated during these three additional years of operation at extremely low costs. During the third quarter, Rochester produced 795,351 ounces of silver and 4,983 ounces of gold at a cash cost of $0.72 per ounce. For the full-year, Coeur anticipates Rochester producing 3.0 million ounces of silver at cash costs below those achieved in the third quarter.
    * Giving effect to the Company's decision to temporarily suspend mining operations at Cerro Bayo, Coeur expects 2008 production to reach approximately 12.5 million ounces.

    * Execution of Financial Plan Provides Sufficient Capital to Execute Growth Plan Taking into account the net proceeds from the recently announced sale of $50 million of senior secured floating rate convertible notes, Coeur's cash, equivalents and short-term investments stood at approximately $120 million as of September 30, 2008. The Company has also sold to the purchaser a warrant to purchase up to an additional $25 million aggregate principal amount of these notes, which is expected to be generated early in the first quarter of 2009.
    * Coeur is also executing a comprehensive, non-dilutive funding plan designed to insure the Company has sufficient financial flexibility to execute its growth plans including:
    * Executing sale/leaseback transactions on certain mining equipment that are expected to generate $20-$25 million of cash proceeds to the Company during the fourth quarter.
    * Expanding lines of credit by Coeur's Bolivian subsidiary, Empressa Minera Manquiri, in order to fund the mine's remaining capital expenditures.
    * Coeur expects fourth quarter capital expenditures to be approximately $80 million at Palmarejo and nearly $20 million at San Bartolome.

    * Reduction in Operating and Non-Operating Costs Coeur has streamlined its organization in order to reduce companywide costs by $10 million, or approximately 40%, annually.
    * Another example of Coeur's cash conservation efforts is the 60% reduction in expenses at the Kensington gold project in Alaska as the Company awaits a decision by the Supreme Court in the first half of next year on the previously permitted tailings facility. The workforce was reduced by half and several consulting and third party services were eliminated. Additionally, the Company's Santiago office staff has been reduced 60% and its LaPaz office was reduced 25%.
    * The Company has placed mining activities at its Cerro Bayo mine on standby, with an immediate focus on expanding and upgrading the mine's mineral reserves and resources and developing a three-year, sustainable mine plan with lower costs and higher production rates. The Company believes it is in the best interests of the Company's shareholders to preserve the valuable mineral reserves and resources at Cerro Bayo and not continue selling the silver and gold production at a loss.
    * Ongoing drilling initiatives continue on the Dagny and Fabiola vein systems, and continue to return excellent results at a new vein system -- Delia -- located approximately 500 meters from the ore processing facilities.
    * Delia is open on strike and at depth with an estimated length of approximately one kilometer, with attractive widths and grades being intercepted in the initial drilling. A recent drill intercept (core hole FCH-353) cut the Delia vein with 3.34 drill meters (2.97m true width) of 12.19 gold g/t and 419 silver g/t.
    * In addition, the Company's exploration efforts continue to intersect numerous, narrow, very high-grade veins in the nearby Coigues Este area.
arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.