shares Core Mining Company CDE gained 72.1% last year compared to the non-ferrous mining industry’s growth of 49.1%. The Zacks Basic Materials sector is down 11.7%, while the S&P 500 is up 26.3% in the same time frame.
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In October, Coeur Mining signed a definitive agreement to acquire all of the issued and outstanding shares of Coeur Mining Silvercrest Metals Company Self. The deal is expected to create a leading global silver company, with silver production in 2025 reaching 21 million ounces.
After completion, Coeur Mining investors and SilverCrest shareholders will own 63% and 37% of the combined company, respectively. The acquisition will bring SilverCrest’s high-grade, low-cost Las Chispas mine in Sonora, Mexico into Coeur Mining’s portfolio, improving cost and margin. The combined company will generate approximately $700 million of EBITDA and $350 million of free cash flow in 2025.
The acquisition will position Coeur Mining as an important global silver player, with approximately 56% of its revenue coming from U.S.-based operations and 40% from silver. In addition to its leading silver production, the combined business is expected to produce 432,000 ounces of gold by 2025.
SilverCrest’s debt-free balance sheet, $122 million in treasury assets, and strong cash flow are expected to accelerate Coeur Mining’s debt reduction, resulting in an immediate 40% reduction in the latter’s leverage ratio upon closing.
The newly expanded Rochester silver and gold mine in Nevada achieved commercial production in March of this year. It placed approximately 7.1 million tonnes under leaching during the third quarter of 2024, resulting in production of 1.2 million ounces of silver and 9,690 ounces of gold, representing quarterly increases of 19% and 21%, respectively. It is on track to meet full-year production targets of 4.8 to 6.6 million ounces of silver and 37,000 to 50,000 ounces of gold. It is likely one of the largest open-pit leaching operations in the world.
CDE recently presented preliminary results from the 2024 exploration program at Silvertip’s wholly-owned multi-metallic biomineral exploration project in northern British Columbia. This was the most comprehensive surface program completed by Coeur Mining since it acquired the property in 2017.
Silvertip’s 2024 three-pronged exploration strategy has succeeded in expanding known areas of mineralization, doubling the strike length in the Southern Silver Zone to more than 2,000 meters and identifying three new high-priority targets. Coeur Mining expects 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 major growth catalyst for the company.
Coeur Mining sold 255,261 gold ounces and 8.2 million silver ounces in the first nine-month period ending September 30, 2024, representing increases of 18% and 15% year-over-year, respectively. This is due to increased gold and silver grades, higher recoveries at Palmarego, higher mill productivity and grades at Kensington, increased tons placed, and the grade and timing of recoveries at the Wharf. Additionally, Rochester produced a greater number of ounces of gold and silver following the successful commissioning and ramp-up of the new three-stage crusher and increased production from the new filter pad.
Revenue rose 34% year-over-year to $749 million in the first nine-month period ending September 30, 2024. This was driven by higher gold and silver ounces sold, and a 16% and 11% increase in average gold and silver realized. Prices respectively. Gold and silver represented 71% and 29% of CDE’s total revenues for this period.
Adjusted earnings per share for the nine-month period ending September 30, 2024, were six cents versus an adjusted net loss of 22 cents per share in the comparable period last year.
During the third quarter of 2024, CDE reduced the balance of its outstanding revolving credit facility by $50 million to $225 million. As of September 30, 2024, the company had total liquidity of $222 million, including $77 million in cash, and a net debt-to-EBITDA ratio below 2.0x for the first time in three years.
Based on strong year-to-date production, CDE expects gold production to be between 310,000 and 350,000 ounces in 2024, and silver production to be between 10.7 and 13.3 million ounces.
Coeur Mining currently carries a Zacks Rank #3 (Hold).
Some better rated stocks from the basic materials space are Najjar Technology Company CRS and CF Industries Company coalition forces. CRS has a Zacks Rank of #1 (Strong Buy) at present and CF carries a Zacks Rank of #2 (Buy).
You can see The complete list of today’s Zacks #1 Rank stocks is here.
Carpenter Technology has an average Q4 earnings surprise of 14.1%. The Zacks Consensus Estimate for CRS’s fiscal 2025 earnings is set at $6.61 per share. Its shares are up 162.7% year to date.
CF Industries posted an average trailing Q4 earnings of 10.3%. The Zacks Consensus Estimate for CF’s 2024 earnings is set at $6.32 per share. CF shares are up 20.6% year to date.
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