Coeur confident on silver price
Coeur CEO Dennis Wheeler reckons silver prices this year will rise above current levels but was not at the moment predicting new record prices for the metal.
NEW YORK (Reuters) -
Silver miner Coeur D'Alene (CDE.N: Quote) expects prices of the precious metal to rise above current levels, but they are likely to remain shy of the record levels touched in March 2008, Chief Executive Officer Dennis Wheeler said on Tuesday.
"I wouldn't sit here and forecast new highs for you. But I certainly feel quite comfortable talking about silver in a $16 to $18 range," Wheeler told the Reuters Global Mining and Steel Summit in New York.
Spot silver fell to $12.55 an ounce in midday New York trade, down from Monday's close of $12.92 an ounce.
Silver prices, which touched record levels of over $20 an ounce in March 2008, collapsed in the latter half of 2008 due to the global economic downturn. However, prices have seen a bit of a rebound in 2009 briefly falling below the $9 mark in November 2008.
Wheeler said he expects the company to post positive net cash flow this year of about $100 million based on Tuesday's silver prices.
Coeur, which does not hedge its silver production, has recently begun production at its San Bartolome mine in Bolivia and its Palmarejo mine in Mexico is expected to begin production later this month.
The mining company also operates underground mines in southern Chile and Argentina and one surface mine in Nevada.
Wheeler said silver demand has slowed, but on a long term basis silver demand has consistently outstripped supply.
"There are not very many silver mines coming into production. In fact, we have brought the two largest new silver mines into production over the last nine months -- San Bartolome in Bolivia and near the end of this month Palmarejo in Mexico."
These two projects are expected to add about 19 million ounces of new silver supply annually. Silver is widely used in jewelry, electronics, and medical and industrial applications.
Coeur plans to invest about $18 million in exploration during 2009 with the majority of this amount earmarked for expansion of mineral resources and reserves near its existing operations in Mexico, Argentina and Chile.
Coeur's shares closed up 8.6 percent at 63 cents a share on the New York Stock Exchange.
(Reporting by Euan Rocha and Steve James)
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