Coeur reports 74% increase in silver production and profit return
Coeur d'Alene Mines CEO Dennis Wheeler said the company's two new larges mines in Bolivia and Mexico are having a significant impact on the company's production and cash flow.
Posted: Friday , 07 Aug 2009
RENO, NV -
Production from new mines San Bartolome and Palmarejo resulted in record second quarter silver production of 4.3 million ounces for Coeur d'Alene Mines, an increase of 74% over the same quarter a year ago.
During a conference call Thursday to discuss financial results, Dennis Wheeler, Coeur president and CEO, said only one last step remains before the company could begin construction on the tailings facility that will allow the Kensington gold mine to begin operations next year.
"The U.S. Army Corp of Engineers must only issue a letter to Coeur saying that our right to resume activity at the site has been reinstated upon dissolution of the injunction [by the 9th Circuit Court of Appeals]," Wheeler said. "The Corps has already had a 15-day notice period for comments for the lifting of the suspension which ended this past Monday, and we're confident that this will be a speedy process."
"So we're pleased with where we are," Wheeler said, adding "at this point, the Corps of Engineers has basically an administrative function left to issue the letter that just says resume at Kensington."
Coeur SVP of North American Operations, K. Leon Hardy, told analysts Coeur has already bid several key construction contracts and "have mobilized our own construction management time. We are poised to focus on the construction of the Lower Slate Lake tailings facility during the remainder of the year, and we'll turn toward operational ramp up activities early next year so we can achieve the target startup dates."
For the second quarter of this year, Coeur reported a net income of $15.8 million or 17-cents per share compared to a loss of $6.4 million or negative 10-cents per share for the second-quarter 2008. Coeur reported a net income of $17.7 million or 27-cents per share for the six months of this year, up from a loss of $656,000 (negative 1-cent/sh) for the first half of last year.
Coeur reduced its debt by $150 million or 37%. The company realized $23.1million of gains on debt extinguishments during the second quarter of this year. Loss on derivatives during the second quarter was $4.6 million.
The company also reported an income tax benefit of $3.7 million for the second quarter.
For the first six months of this year Coeur reported a total silver production of 8,255,048 ounces compared to 4,869,286 ounces reported during the first half of 2008. Cash costs per ounce for the first half of this year were $8.18/oz, up from the cash cost of $3.29/oz reported for the first six months of 2008.
The company also produced 17,586 ounces of gold during the first half of the year, down from 30,102 ounces in the same period of 2008.