Coeur d'Alene Mines Corp. (NYSE:CDE) got crushed again, losing $50.7 million, or $0.57 a share in their last quarter, in contrast to generating a profit of $11.6 million, or $0.17 a share during the same period in 2009.
This was especially disappointing considering analysts had been looking for the company to break even in the quarter, and they weren't even in the ballpark.
The net loss of $50.7 million was in connection to the $75 million investment in their Palmarejo Mine. A fair-value adjustment of $42.5 million concerning the minimum of 400,000 ounces in future gold royalties Coeur d'Alene is obligated for was the major detriment in costs for the quarter. That's in relationship to a royalty agreement with Franco-Nevada.
Payments for royalties caused cash costs of production to soar 4 percent above the cash operating cost of $8.06 an ounce.
The company produced 4.2 million ounces of silver in the second quarter, and 23,134 ounces of gold. That was above last year's silver production of 3.9 million ounces and 13,795 ounces of gold.
Production guidance remains in place, with an estimated 17.3 million ounces of silver and 170,000 ounces of gold still on track.
Market expectations for a number of gold and silver miners has resulted in disappointments, and the higher prices brought with it higher expectations.
Similar to Coeur d'Alene Mines, miners like Jaguar Mining (NYSE:JAG), and Northgate Minerals (AMEX:NXG) also struggled based on costs, which even record prices of gold and higher silver prices weren't able to overcome.
No comments:
Post a Comment