Coeur Mining: Rochester Expansion Nearing Completion (NYSE:CDE)

Half I – Introduction

Chicago-based Coeur Mining (NYSE:CDE) launched its fourth-quarter and full-year 2022 outcomes on February 22, 2023.

Observe: I’ve adopted CDE quarterly since April 2019. This new article is a quarterly replace of my article printed on December 13, 2022.

1 – 4Q22 and Full-year outcomes snapshot

Coeur Mining’s quarterly income was $210.12 million, representing a rise of 1.1% year-over-year. Gold and silver gross sales represented 75.0% and 25.0% of quarterly income. Internet earnings was $49.09 million, or $0.19 per diluted share, in comparison with a lack of $10.76 million, or $0.05 per share, final yr.

Gold manufacturing elevated at Palmarejo, Kensington, and Rochester this quarter. Whole manufacturing was 87,727 Au ounces and a pair of,471K Ag ounces. Steel gross sales for the quarter totaled 88,189 Au ounces and a pair of.5 million ounces of silver.

For the full-year 2022, the corporate mentioned in the press launch:

Coeur generated $786 million in income throughout 2022, in comparison with $833 million in 2021. Full-year gold and silver manufacturing totaled 330,346 and 9.8 million ounces, respectively, in comparison with 348,529 ounces of gold and 10.1 million ounces of silver in 2021. Steel gross sales in 2022 included 329,968 and 9.8 million ounces of gold and silver, respectively. Common realized gold and silver costs for the yr had been $1,736 and $21.77 per ounce, respectively, in comparison with $1,652 and $25.06 per ounce in 2021.

Under indicated are the 4Q22 and FY22 highlights from the corporate’s presentation:

CEO Mitch Krebs mentioned within the convention name:

The fourth quarter was Coeur’s strongest quarter of the yr, which helped to realize our general full yr manufacturing steering for the third consecutive yr, positively not a straightforward process final yr with such unprecedented volatility. Rochester was the principle driver to our strong end final yr.

2 – Inventory Efficiency

CDE sank considerably on a one-year foundation and has underperformed the iShares Silver Belief ETF (SLV), the VanEck Vectors Gold Miners ETF (GDX), and Fortuna Silver Mines (FSM) whereas doing higher than Pan American Silver (PAAS). It has been a poor performer in my portfolio’s gold and silver miners. The inventory is down 28%.

3 – Gold And Silver Manufacturing In 4Q22

Robust performances at Rochester, Kensington, and Wharf mines this quarter.

3.1 – Palmarejo mine. Strong quarter

Manufacturing throughout 4Q22 profited from elevated mill throughput and a better common gold grade, offset partially by a decrease common silver grade. The fourth quarter’s gold and silver manufacturing totaled 25,935 Au ouncesand 1.489 Moz, respectively, in comparison with 24,807 Au Ozand 1.612 Ag Moz within the prior interval.

3.2 – Kensington mine. A greater manufacturing this quarter

Gold manufacturing elevated within the fourth quarter to 30,335 ounces in comparison with 28,214 ounces within the prior interval and 33,516 ounces within the fourth quarter of 2021. The corporate mentioned:

Increased manufacturing in the course of the fourth quarter was pushed by a rise in mill throughput – a report excessive quarter – because of efficiencies on the mill, in addition to improved common gold recoveries in comparison with the prior interval

3.3 Rochester mine. Good efficiency

The corporate mentioned:

Silver and gold manufacturing elevated 31% and 32% within the fourth quarter, respectively, to 973,000 Ag Ozand 11,589 Au Ozin comparison with 744,880 and eight,761 ounces within the prior interval and 757,000 and 6,864 ounces within the fourth quarter of 2021… Elevated manufacturing in the course of the quarter was primarily pushed by timing of higher-grade materials positioned on the leach pad in the course of the prior interval on account of deliberate mine sequencing.

3.4 – Coeur Mining metallic manufacturing

Gold and silver gross sales had been 75% and 25% of quarterly income. Coeur Mining produced 87,727 Au ounces of gold (however bought 88,189 Au Oz) and a pair of.471 million Ag ounces (bought 2.5 Ag Moz) in the course of the fourth quarter.

Common realized gold and silver costs for the quarter had been $1,787 and $21.14 per ounce, respectively, in comparison with $1,652 and $23.17 per ounce within the prior yr interval.

Under is the manufacturing per mine:

Half II – Coeur Mining: Financials in 4Q22 – The Uncooked Numbers

Click on to enlarge

Information Supply: Firm launch

Evaluation: Revenues, Free Money Circulation, Debt, And Manufacturing Particulars

1 – Revenues and developments – Revenues had been $210.12 million in 4Q22

The corporate reported a internet earnings of $49.09 million, or $0.19 per diluted share, in contrast with a lack of $0.05 per share a yr in the past.

2 – Free money move was a lack of $84.58 million in 4Q22

Observe: Generic free money move is money from operations minus CapEx

Coeur Mining’s free money move for the fourth quarter of 2022 was a lack of $84.58 million, and the trailing 12-month free money move was a lack of $326.74 million.

The corporate’s CapEx in 4Q22 was $113.09 million, and money move from operations was a lack of $28.52 million. The corporate’s CapEx is a matter and runs too excessive for consolation.

This recurring free money move loss since 1Q21 is kind of regarding. Nevertheless, The Rochester Growth appears to be the principle purpose for the loss and needs to be resolved by H2 2023. The corporate mentioned within the press launch:

Capital expenditures elevated 17% quarter-over-quarter to $113 million, bringing the full-year complete to $352 million and inside Coeur’s 2022 steering vary of $330 – $395 million. Expenditures associated to the enlargement challenge at Rochester totaled $89 million and $229 million in the course of the fourth quarter and full yr, respectively, in comparison with $68 million within the third quarter and $148 million in 2021. Sustaining and growth capital expenditures accounted for roughly 18% and 82%, respectively, of Coeur’s complete capital funding in the course of the quarter.

These considerations turn into much less vital with the current bullish run skilled in gold and silver costs.

3 – Obtainable capital, internet debt, liquidity, and hedges

Whole debt was $515.9 million, and internet debt was $422.4 million. Money, money available, and marketable securities had been all the way down to $93.50 million.

Whole potential Liquidity is now $504 million (together with $100 million ATM).

For monetary ratios and Steel gross sales hedges, please see beneath:

The one concern as a shareholder is that the corporate established a $100 million ATM program, a dilution potential.

CFO Tom Whelan mentioned within the convention name:

The important thing components of our financing technique embody we lately monetized our remaining place in Victoria Gold for $40 million, a revolving credit score facility, which has $280 million of capability. Our hedging program designed to supply draw back commodity value danger safety throughout this era of capital depth. We head into 2023 with roughly 180,000 ounces of gold hedged at $1,961 per ounce and three.2 million ounces of silver hedge at $24.55 per ounce, and we put a brand new ATM in place for gross potential proceeds of as much as $100 million.

4 – 2023 outlook

In 2023, gold manufacturing is predicted to be between 320K-370K oz, whereas silver manufacturing is between 10 And 12 Moz.

Technical Evaluation And Commentary

CDE types an ascending channel sample with resistance at $3.45 and assist at $3.05. RSI is now 61 and is near displaying an overbought scenario.

Ascending channel patterns are short-term bullish transferring greater inside an ascending channel, however these patterns usually kind inside longer-term downtrends as continuation patterns.

The buying and selling technique is to promote about 40%-50% of your place LIFO and hold a core long-term place for a better goal again of round $5.50 to $6.

I counsel taking income LIFO between $3.45 and $3.55 with attainable greater resistance at $3.85 and ready patiently for a retracement between $3.10 and $2.90 with decrease assist at $2.75 to build up once more.

CDE is very correlated to gold and silver costs that are fluctuating wildly now because of the Fed’s motion towards rampant inflation.

Gold and silver recovered from their current lows in October 2022. Nevertheless, whereas the gold value is performing nicely and remains to be at $1,958 per ounce in the present day, the silver value remains to be down about 10% YoY.

Thus, be cautious and watch the gold and silver costs like a hawk.

Warning: The TA chart should be up to date regularly to be related. It’s what I’m doing in my inventory tracker. The chart above has a attainable validity of a few week. Bear in mind, the TA chart is a instrument solely that can assist you undertake the best technique. It’s not a strategy to foresee the longer term. Nobody and nothing can.