Coeur Mining's Q3 2024 Earnings: A Silver Lining for Investors
Friday, Nov 8, 2024 1:42 am ET
Coeur Mining, Inc. (NYSE: CDE) recently reported its third-quarter 2024 earnings, showcasing a robust operational and financial performance that bodes well for the company's future. With double-digit production increases, cost reductions, and higher metals prices, Coeur has positioned itself as a leading player in the global silver market. Let's delve into the key highlights and implications of these earnings for investors.
**Strong Production Increases and Cost Reductions**
Coeur's strategic expansion of the Rochester operation has significantly contributed to its production and cost efficiency. The recently expanded Rochester silver and gold operation placed approximately 7.1 million tons under leach during the third quarter, leading to production of 1.2 million ounces of silver and 9,690 ounces of gold, representing quarter-over-quarter increases of 19% and 21%, respectively. This expansion has enabled Coeur to reaffirm its full-year Rochester production guidance ranges and expects approximately 7.0 - 8.0 million tons to be placed under leach in the fourth quarter.
The increased throughput and production have led to a 21% increase in gold production and a 15% increase in silver production, totaling 94,993 and 3.0 million ounces of gold and silver, respectively. Additionally, costs applicable to sales per gold and silver ounce both declined 12% compared to the prior quarter, leading to margins more than double the prior period.
**Acquisition of SilverCrest: A Game Changer**
Coeur's acquisition of SilverCrest Metals Inc. in Q3 2024 has significantly enhanced its production and cost profile. The all-stock transaction, valued at approximately $1.7 billion, brought SilverCrest's high-grade, low-cost Las Chispas operation into Coeur's portfolio. This acquisition is expected to materially enhance Coeur's cost and cash flow profile and immediately accelerate its balance sheet de-leveraging initiative. The Las Chispas operation is anticipated to contribute to Coeur's silver production, further solidifying its position as a leading global silver company.
**Financial Performance and Outlook**
Coeur's robust quarterly financial performance was driven by higher production and metals prices. Revenue of $313 million and adjusted EBITDA of $126 million increased 41% and 140% quarter-over-quarter, respectively. Operating cash flow totaled $111 million and free cash flow reached $69 million during the quarter, their highest levels in over a decade. Net income was $49 million, and Adjusted EBITDA over the last twelve months ("LTM") increased 2.5x to $287 million compared to a year ago.
In conclusion, Coeur Mining's Q3 2024 earnings call has demonstrated the company's strong operational performance and strategic growth initiatives. With a focus on expanding its Rochester operation and acquiring high-quality assets like SilverCrest, Coeur is well-positioned to capitalize on the growing demand for silver and generate significant value for shareholders. As the company continues to execute on its strategic plan, investors can expect a bright future ahead.