Shares of Coeur Mining, Inc. CDE have gained 72.1% in the past year compared with the non-ferrous mining industry’s 49.1% growth. The Zacks Basic Materials sector has slipped 11.7%, while the S&P 500 has risen 26.3% in the same timeframe.
CDE Stock’s YTD Performance Against Industry, Sector & S&P 500
Zacks Investment Research
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Factors That Have Driven CDE Stock This Year
CDE’s Announcement to Acquire SilverCrest Metals
In October, Coeur Mining signed a definitive agreement to acquire all issued and outstanding shares of SilverCrest Metals Inc. SILV. The transaction is expected to create a leading global silver company, with 2025 silver production of 21 million ounces.
After completion, Coeur Mining investors and SilverCrest shareholders will own 63% and 37% of the combined firm, respectively. The acquisition will bring SilverCrest's high-grade, low-cost Las Chispas underground mine in Sonora, Mexico, into Coeur Mining's portfolio, improving its cost and margin profile. The combined company will generate approximately $700 million of EBITDA and $350 million of free cash flow in 2025.
The buyout will position Coeur Mining as a significant global silver company, with around 56% of revenues coming from the United States-based operations and 40% from silver. In addition to its peer-leading silver output, the combined business is expected to generate 432,000 ounces of gold by 2025.
SilverCrest's debt-free balance sheet, with $122 million in treasury assets, and strong cash flow are expected to accelerate Coeur Mining's debt reduction, resulting in a 40% immediate decrease in the latter’s leverage ratio upon closing.
The newly expanded Rochester silver and gold mine in Nevada achieved commercial production in March this year. It placed approximately 7.1 million tons under leach during the third quarter of 2024 leading to a production of 1.2 million ounces of silver and 9,690 ounces of gold, representing quarter-over-quarter increases of 19% and 21%, respectively. It is on track to achieve its full-year production targets of 4.8-6.6 million ounces of silver and 37,000-50,000 ounces of gold. It can potentially be one of the world’s largest open-pit heap leach operations.
Silvertip Expected to be a Key Growth Driver for CDE
CDE recently provided initial results of its 2024 exploration program at its wholly-owned Silvertip polymetallic critical minerals exploration project in northern British Columbia. This was the most extensive surface program completed by Coeur Mining since acquiring the property in 2017.
Silvertip’s three-pronged 2024 exploration strategy successfully expanded known areas of mineralization, doubled the strike length of the Southern Silver Zone to more than 2,000 meters and identified three new high-priority targets. Coeur Mining anticipates continued exploration success in 2025 as it seeks to expand the size and enhance knowledge of this world-class deposit. Silvertip has the potential to become a key catalyst of growth for the company.
CDE Delivers Upbeat YTD Results for 2024
Coeur Mining sold 255,261 gold ounces and 8.2 million silver ounces in the first nine-month period ended Sept.30, 2024, which represented 18% and 15% year-over-year increase respectively. This was attributed to increased gold and silver grades and higher recoveries at Palmarejo, higher mill throughput and grades at Kensington and increased tons placed, grade and timing of recoveries at Wharf. Additionally, Rochester produced higher gold and silver ounces following the successful commissioning and ramp-up of the new three-stage crusher and increased production from the new leach pad.
Revenues increased 34% year over year to $749 million in the first nine-month period ended Sept.30, 2024. This was attributed to the higher gold and silver ounces sold, and a 16% and 11% increase in average realized gold and silver prices, respectively. Gold and silver represented 71% and 29% of CDE’s total revenues for the period.
Adjusted earnings per share for the nine-month period ended Sept. 30, 2024, were six cents against an adjusted net loss of 22 per share in the year-ago comparable period.
Coeur Mining’s Efforts to Lower Debt Levels
During the third quarter of 2024, CDE reduced its outstanding revolving credit facility balance by $50 million to $225 million. As of Sept. 30, 2024, the company had total liquidity of $222 million, including $77 million of cash and a net debt to EBITDA ratio below 2.0x for the first time in three years.
CDE’s Upbeat Production Guidance for 2024
Based on strong year-to-date production, CDE expects gold production to be in the range of 310,000-350,000 ounces in 2024 and silver production to be in the band of 10.7-13.3 million ounces.
Coeur Mining’s Zacks Rank & Stocks to Consider
Coeur Mining currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS and CF Industries Inc. CF. CRS sports a Zacks Rank #1 (Strong Buy) at present and CF carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.1%. The Zacks Consensus Estimate for CRS’ fiscal 2025 earnings is pegged at $6.61 per share. Its shares have skyrocketed 162.7% year to date.
CF Industries has an average trailing four-quarter earnings surprise of 10.3%. The Zacks Consensus Estimate for CF’s 2024 earnings is pegged at $6.32 per share. CF’s shares have gained 20.6% year to date.
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