Coeur Mining NYSE: CDE expects a sharp increase in fourth-quarter production to bring full-year output near the low end of its guidance ranges, after weather disruptions and equipment downtime weighed on its third-quarter results.
Chairman, President and CEO Mitchell Krebs said the company still expects record full-year adjusted EBITDA exceeding $2 billion and free cash flow above $1.3 billion, assuming current metals prices. He also projected another record year in 2027, supported primarily by full-year contributions from the New Afton and Rainy River operations acquired through the New Gold transaction.
Third-quarter gold production rose 45% from a year earlier, while revenue increased 77%, adjusted EBITDA climbed nearly 70% and free cash flow rose 27%, CFO Tom Whelan said. The gains reflected the addition of the Canadian operations beginning in late March.
Fourth-quarter targets depend on production rebound
Krebs acknowledged that the fourth quarter needs to be substantially stronger than the first three quarters. TD Cowen analyst Wayne Lam and CIBC analyst Cosmos Chiu pressed executives on the production outlook, with Chiu estimating that the annual guidance implied quarter-over-quarter increases of 29% in gold and 36% in silver production.
Krebs identified New Afton, Rochester, Palmarejo, Kensington and Wharf as important contributors to the expected improvement. At New Afton, he said higher sustained mining and milling rates and a modest increase in grades should support output. The company expects better grades at Palmarejo and Kensington, while higher crushing rates and ounces already placed on the leach pad should help Wharf.
“It’s a portfolio approach,” Krebs said. “It’s not like any one mine is delivering this big step up.” He said the company began the fourth quarter on plan.
At Rochester, the company is monitoring slower-than-expected silver recovery from leach pads. COO Mick Routledge said faster recovery rates are important to meeting the operation’s full-year silver production guidance. Executives said the mine is blending higher-grade sulfide material with other ore to manage recoveries.
Weather and equipment disruptions
New Afton’s main underground conveyor belt failed in late August, constraining ore supply to the mill and forcing reduced mining and processing rates, Routledge said. The belt was repaired by mid-September, and the operation subsequently achieved and sustained its target mining rate of 16,000 tons per day. Krebs said the company reached that rate by the end of October, consistent with its earlier target.
At Rainy River, heavy rainfall slowed open-pit mining and led the operation to process more low-grade stockpiles, reducing production and raising costs. Underground mining rates increased 50% to approximately 3,400 tons per day during the quarter, Routledge said. The operation has reached its 5,000-ton-per-day target for short periods, but additional development and infrastructure work is planned to sustain that level toward the second half of 2027.
Rain also disrupted deliveries of materials needed for backfilling at Palmarejo, limiting access to higher-grade areas. Krebs said wet weather at both Palmarejo and Rainy River had subsided during October.
Other sites provided some offsets. Rochester processed a record 6.8 million metric tonnes through all three crushing stages, while Wharf’s gold production increased 28% from the second quarter as its rebuilt and expanded crusher circuit ramped up.
Cash flow, costs and shareholder returns
Coeur reported third-quarter adjusted EBITDA of $448 million and net income of approximately $109 million, or $0.11 per share. Operating cash flow was approximately $386 million, down 25% from the prior quarter, reflecting lower prices and $50 million in working-capital adjustments tied to the timing of interest expenses and annual insurance premiums.
Capital expenditures were $145 million, leaving approximately $240 million in free cash flow. The company repurchased $111 million of shares during the quarter, or 46% of free cash flow, bringing repurchases since mid-May to more than $230 million. Cash stood at approximately $1.2 billion, and total liquidity exceeded $2.1 billion.
Whelan said a noncash purchase-price accounting adjustment primarily related to acquired Rainy River stockpiles had increased reported costs, but its impact was substantially complete. He also cited inflation across labor, consumables and contractors. Diesel prices were 32% above plan, adding approximately $30 million to direct costs, although the company expects the overall annual impact to be less than 2% of total direct costs.
Coeur expects full-year adjusted costs applicable to sales near the upper end of guidance, while cash taxes, capital spending, amortization, exploration and general and administrative expenses are trending toward the low ends of their ranges. The company also expects to receive $70 million in the fourth quarter from an insurance claim related to last year’s fire at Wharf.
Asked about further acquisitions, Krebs said management’s priority is to integrate and operate its expanded portfolio. While Coeur will continue to monitor opportunities, he said it is not currently looking to change the portfolio’s composition.
About Coeur Mining (NYSE:CDE)
Coeur Mining, Inc is a precious metals mining company headquartered in Chicago, Illinois. The company explores for, develops, and operates mines that produce gold and silver, with its activities focused primarily in North America.
Coeur's operating portfolio includes the Rochester gold and silver mine in Nevada, the Wharf gold mine in South Dakota, the Kensington gold mine in Alaska, and the Las Chispas silver and gold operation in Sonora, Mexico. The company also maintains exploration and development interests in additional mineral properties.
Founded in 1928, Coeur Mining has grown through the development and acquisition of precious metals assets.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider Coeur Mining, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Coeur Mining wasn't on the list.
While Coeur Mining currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
A strong long-term portfolio starts with companies that can survive recessions, inflation, changing consumer habits, and shifting market leadership.
This report names seven blue-chip stocks across technology, retail, consumer staples, healthcare, networking, sporting goods, and utilities that offer investors a mix of stability, income, growth, and staying power.
Get This Free Report
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
