Wednesday July 27, 2016 18:21
(Kitco News) - Coeur Mining, Inc. (NYSE: CDE) reversed to a profit in the second quarter as silver-equivalent production and prices of precious metals rose at a time when the company was cutting costs.
Net income was $14.5 million, or 9 cents per share, compared to a net loss of $16.7 million, or 12 cents, in the second quarter of 2015. Adjusted net income was $17.3 million, or 11 cents per share, compared to a net loss of $18.1 million, or 13 cents, in the year-ago period.
Adjusted net income for the second quarter primarily excludes foreign-exchange losses, fair value adjustments to royalty obligations, and gains on sales of non-core assets. Second-quarter cash flow from operating activities was $45.9 million, compared to $36.9 million in the second quarter of 2015.
Second-quarter revenue rose 9% year-on-year to $182 million. This was helped by average realized silver and gold prices of $17.38 and $1,255, respectively, up from $16.23 and $1,179.
Also, silver production was 4 million ounces in the April-June period, up from 3.4 million in the first quarter but down from 4.3 million in the same period a year ago. Gold output rose to 92,727 ounces from 78,072 in the first quarter and 80,855 in the year-ago period. Silver-equivalent output climbed to 9.6 million ounces from 8.1 million in the first quarter and 9.1 million a year ago.
Adjusted all-in sustaining costs per realized silver-equivalent ounce fell to $13.27 from $14.81 in the same quarter of 2015.
"Along with our strong operating and financial performance, we achieved two significant milestones subsequent to quarter-end -- the satisfaction of the minimum ounce obligation on Palmarejo's Franco-Nevada royalty and the repayment of the $100 million term loan,” said Mitchell Krebs, president and chief executive officer. “The transition to the improved Franco-Nevada terms represents a watershed event, positioning Palmarejo to be a significant contributor to free cash flow going forward. Combined with the debt repayment and the commensurate reduction to interest expense, our operations are poised to generate significant free cash flow in the second half of 2016.”
Full-year 2016 production and cost guidance were unchanged. Coeur is projecting 2016 silver-equivalent production of 33.83 million to 36.82 million ounces.