Coeur Mining, Inc. (CDE) Bundle
Understanding Coeur Mining, Inc. (CDE) Revenue Streams
Understanding Coeur Mining, Inc.’s Revenue Streams
The primary revenue sources for Coeur Mining, Inc. are derived from the sale of gold and silver. In 2024, gold sales accounted for 71% of total revenue, while silver sales made up 29%.
Revenue Breakdown by Segment
For the nine months ended September 30, 2024, the breakdown of metal sales is as follows:
| Segment | Gold Sales ($ in thousands) | Silver Sales ($ in thousands) | Total Metal Sales ($ in thousands) |
|---|---|---|---|
| Palmarejo | 529,626 | 218,936 | 748,562 |
| Rochester | 173,3 million | 128,815 | 559,116 |
| Kensington | 111,136 | 193 | 559,116 |
| Wharf | 124,522 | 4,293 | 128,815 |
Year-over-Year Revenue Growth Rate
Coeur Mining, Inc. reported a total revenue increase of $189.4 million, or 34%, in the first nine months of 2024 compared to the same period in 2023. This growth was fueled by:
- An 18% increase in gold ounces sold.
- A 15% increase in silver ounces sold.
- A 16% rise in average realized gold prices.
- An 11% rise in average realized silver prices.
Contribution of Different Business Segments to Overall Revenue
In the first nine months of 2024, Coeur Mining’s revenue contribution highlights the performance of its segments:
| Segment | Gold Ounces Sold | Silver Ounces Sold | Revenue Contribution ($ in thousands) |
|---|---|---|---|
| Palmarejo | 86,430 | 5,199,839 | 232,323 |
| Rochester | 23,521 | 2,818,930 | 173,3 million |
| Kensington | 69,522 | — | 111,136 |
| Wharf | 75,788 | 178,894 | 124,522 |
Analysis of Significant Changes in Revenue Streams
Notable changes in revenue streams include:
- The successful ramp-up of production at Rochester, which resulted in an increase in gold production by 21% and silver production by 19%.
- The commissioning of a new three-stage crusher at Rochester, leading to higher recoveries and throughput.
- Increased exploration expenses of $22.9 million, or 115%, attributed to drilling activities across various sites.
Overall, the strong performance in both gold and silver production, alongside favorable market conditions, has positioned Coeur Mining, Inc. for continued revenue growth in 2024.
A Deep Dive into Coeur Mining, Inc. (CDE) Profitability
Profitability Metrics
In evaluating the financial health of the company, profitability metrics such as gross profit, operating profit, and net profit margins are critical. For the third quarter of 2024, the company reported a consolidated revenue of $313.5 million and a net income of $48.7 million, resulting in a net income margin of approximately 15.5%.
Over the nine months ended September 30, 2024, the company achieved a total revenue of $748.6 million and a net income of $21.0 million, translating to a net profit margin of about 2.8%.
Trends in Profitability Over Time
Comparing the third quarter of 2024 to the same quarter in 2023, the company experienced a significant turnaround from a net loss of $78.1 million. The adjusted net income for the third quarter of 2024 stood at $47.2 million, highlighting a substantial improvement in profitability.
Comparison of Profitability Ratios with Industry Averages
The company’s adjusted EBITDA for the third quarter of 2024 was reported at $126.0 million, which is a remarkable increase of 140% compared to the previous quarter. When compared to industry averages, the company is performing well, with an EBITDA margin of approximately 40.2% in Q3 2024 against the industry average of 30%.
Analysis of Operational Efficiency
Operational efficiency is reflected in the costs applicable to sales (CAS) per ounce. For the third quarter of 2024, the CAS for gold was $828 per ounce, while for silver it was $12.75 per ounce. This represents a decrease from the previous quarter's CAS of $1,012 and $15.32 for gold and silver, respectively, indicating improved cost management.
| Metric | Q3 2024 | Q2 2024 | Q3 2023 |
|---|---|---|---|
| Revenue | $313.5 million | $222.0 million | $222.0 million |
| Net Income | $48.7 million | $1.4 million | ($78.1 million) |
| Net Profit Margin | 15.5% | 0.6% | (35.2%) |
| Adjusted EBITDA | $126.0 million | $52.4 million | $78.0 million |
| EBITDA Margin | 40.2% | 23.6% | 35.0% |
| CAS per Gold Ounce | $828 | $1,012 | $950 |
| CAS per Silver Ounce | $12.75 | $15.32 | $15.01 |
The trends in profitability metrics indicate a strong recovery and operational efficiency improvements, particularly in cost management, which are essential for attracting investor confidence.
Debt vs. Equity: How Coeur Mining, Inc. (CDE) Finances Its Growth
Debt vs. Equity Structure
As of September 30, 2024, the company reported total debt of $605.2 million, a decrease from $629.3 million in the previous quarter. This total includes finance leases and is net of debt issuance costs and premiums received.
The long-term debt consists primarily of a revolving credit facility (RCF) and senior notes. The RCF balance was reduced by $50 million during the third quarter of 2024, bringing the total outstanding balance to $225 million. The company has a net debt to EBITDA ratio below 2.0x for the first time in three years.
In terms of equity financing, the company raised $23.7 million from the sale of 7.7 million shares of its common stock in a private placement during the nine months ended September 30, 2024. This equity funding is part of the company's strategy to balance its capital structure while reducing reliance on debt financing.
Debt-to-Equity Ratio
The debt-to-equity ratio is a critical metric for assessing financial leverage. The company’s total equity as of September 30, 2024, was reported at approximately $1.1 billion, leading to a debt-to-equity ratio of approximately 0.55. This ratio is favorable compared to the industry average, which typically ranges between 0.6 and 1.0 for mining companies.
Recent Debt Issuances and Refinancing Activity
Recent refinancing activities include an amendment to the RCF in February 2024, which extended the term by approximately two years and increased the facility limit from $390 million to $400 million. The company has also been proactive in managing its debt through strategic repurchases, having exchanged $5.9 million of 2029 Senior Notes for 1.8 million shares of common stock.
Balancing Debt Financing and Equity Funding
The company has emphasized a balanced approach to financing its growth. This involves utilizing debt financing to leverage its capital while also engaging in equity offerings to maintain sufficient liquidity and reduce overall leverage. The debt reduction initiative is part of a broader strategy to enhance the company’s financial health and operational flexibility moving forward.
| Metric | Value |
|---|---|
| Total Debt | $605.2 million |
| Long-term Debt | $225 million (RCF) |
| Debt-to-Equity Ratio | 0.55 |
| Total Equity | $1.1 billion |
| Recent Equity Raised | $23.7 million |
| Net Debt to EBITDA Ratio | Below 2.0x |
Assessing Coeur Mining, Inc. (CDE) Liquidity
Assessing Coeur Mining, Inc. Liquidity
Current Ratio: As of September 30, 2024, the current ratio stands at 1.67, indicating a strong liquidity position where current assets significantly exceed current liabilities.
Quick Ratio: The quick ratio is reported at 1.12, demonstrating that even without inventory, the company has sufficient liquid assets to cover its short-term obligations.
Working Capital Trends
Working capital as of September 30, 2024, is approximately $200 million, reflecting a positive trend compared to $150 million in the previous year. This increase is attributed to improved cash flow from operations and effective management of current liabilities.
Cash Flow Statements Overview
Operating Cash Flow: For the nine months ended September 30, 2024, cash provided by operating activities was $110.4 million, a significant increase from $2.0 million in the same period of 2023. This increase is driven by higher production volumes and improved metal prices.
Investing Cash Flow: Net cash used in investing activities was $145.7 million for the nine months ended September 30, 2024, down from $217.1 million in 2023, primarily due to reduced capital expenditures related to expansion projects.
Financing Cash Flow: The net cash used in financing activities for the nine months ended September 30, 2024, was $51.2 million, compared to $206.5 million in 2023, reflecting a decrease in reliance on external financing.
Potential Liquidity Concerns or Strengths
The company currently has $78.7 million in cash and cash equivalents and $145.4 million available under its revolving credit facility (RCF), providing a total liquidity of approximately $222 million. This strong liquidity position allows for flexibility in funding operations and capital projects.
| Financial Metric | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Current Ratio | 1.67 | 1.50 |
| Quick Ratio | 1.12 | 0.95 |
| Working Capital | $200 million | $150 million |
| Operating Cash Flow | $110.4 million | $2.0 million |
| Investing Cash Flow | ($145.7 million) | ($217.1 million) |
| Financing Cash Flow | ($51.2 million) | ($206.5 million) |
| Cash and Cash Equivalents | $78.7 million | $54.9 million |
| Available under RCF | $145.4 million | $100 million |
Is Coeur Mining, Inc. (CDE) Overvalued or Undervalued?
Valuation Analysis
To evaluate the financial health of Coeur Mining, Inc., we will analyze key valuation metrics, stock price trends, dividend yields, and analyst consensus as of 2024.
Is Coeur Mining, Inc. Overvalued or Undervalued?
Price-to-Earnings (P/E) Ratio
The current P/E ratio stands at 42.14, calculated from a net income of $21.0 million and a diluted share count of 420 million. This indicates that investors are willing to pay $42.14 for every dollar of earnings.
Price-to-Book (P/B) Ratio
The P/B ratio is currently 1.83. With total equity reported at $400 million and total shares outstanding at 220 million, this suggests a market capitalization of $732 million.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is calculated as 6.65, based on an enterprise value of $1.3 billion and EBITDA of $197.9 million for the last twelve months.
Stock Price Trends
The stock price has shown significant volatility over the past 12 months, with a price range of $2.50 to $5.50. Currently, the stock trades at $4.50, reflecting a 10% increase over the last quarter.
Dividend Yield and Payout Ratios
Coeur Mining does not currently pay a dividend, thus the dividend yield is 0%. The company retains earnings to fund growth and exploration activities.
Analyst Consensus
Analysts have a consensus rating of Hold for the stock, with 65% recommending to hold, 25% suggesting to buy, and 10% advising to sell.
| Metric | Value |
|---|---|
| P/E Ratio | 42.14 |
| P/B Ratio | 1.83 |
| EV/EBITDA Ratio | 6.65 |
| Stock Price (Current) | $4.50 |
| 12-Month Price Range | $2.50 - $5.50 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Overall, the valuation analysis indicates that Coeur Mining, Inc. is currently valued at a premium based on its P/E and EV/EBITDA ratios, while the stock price reflects a positive trend. The lack of dividends suggests a focus on growth and investment in operations.
Key Risks Facing Coeur Mining, Inc. (CDE)
Key Risks Facing Coeur Mining, Inc.
Coeur Mining, Inc. faces various internal and external risks that can significantly impact its financial health. These risks include volatile market conditions, regulatory changes, and operational challenges.
Market and Industry Competition
The mining industry is highly competitive, with several companies vying for market share in gold and silver production. Price fluctuations for precious metals can affect revenue. For instance, the average realized price per gold ounce was $2,309 in Q3 2024 compared to $2,003 in Q2 2024, indicating significant price volatility.
Regulatory Changes
Coeur Mining operates in multiple jurisdictions, including the U.S., Mexico, and Canada. Changes in mining regulations, environmental laws, and taxation policies can pose risks. The effective tax rate for the nine months ended September 30, 2024, was 70.0%. Compliance with these regulations may increase operational costs and impact profitability.
Operational Risks
Operational risks include challenges in production efficiency, equipment failures, and labor disputes. The company reported a 21% increase in gold production and a 19% increase in silver production in Q3 2024, driven by higher grades and recovery rates. However, any operational hiccups could derail these gains.
Financial Risks
As of September 30, 2024, Coeur Mining had total debt of $605.2 million. High debt levels can limit financial flexibility and increase vulnerability to interest rate hikes or economic downturns. The company reported a net debt to EBITDA ratio below 2.0x for the first time in three years, indicating improved leverage.
Strategic Risks
The recent announcement of an acquisition of SilverCrest Metals Inc. for approximately $1.7 billion raises strategic risks associated with integration and execution. Successful implementation is crucial to enhance the company's cost and cash flow profile.
Mitigation Strategies
To mitigate these risks, Coeur Mining has undertaken several initiatives:
- Reducing outstanding debt, with a $50 million repayment in Q3 2024.
- Maintaining liquidity of $222 million, including $78 million in cash.
- Reaffirming production guidance amid strong operational performance.
| Risk Factor | Description | Impact | Mitigation Strategy |
|---|---|---|---|
| Market Volatility | Fluctuating prices for gold and silver | Revenue variability | Hedging strategies |
| Regulatory Changes | Changes in mining laws and tax policies | Increased operational costs | Compliance programs |
| Operational Challenges | Production inefficiencies and labor disputes | Reduced output | Investment in technology and training |
| High Debt Levels | Total debt of $605.2 million | Financial flexibility | Debt reduction initiatives |
| Strategic Acquisitions | Acquisition of SilverCrest Metals | Integration risks | Careful due diligence and integration planning |
Future Growth Prospects for Coeur Mining, Inc. (CDE)
Future Growth Prospects for Coeur Mining, Inc.
Analysis of Key Growth Drivers
Coeur Mining, Inc. is strategically positioned for growth through various initiatives, including product innovations, market expansions, and acquisitions. The recent acquisition of SilverCrest Metals Inc. is a significant step in enhancing its market presence. This all-stock transaction, valued at approximately $1.7 billion, is expected to close in the first quarter of 2025.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, Coeur reported total revenue of $748.6 million, reflecting a 34% increase compared to the same period in 2023. This growth is driven by a combination of an 18% increase in gold ounces sold and a 15% increase in silver ounces sold. Analysts estimate that the company's revenue will continue to grow, with projected earnings per share reaching $0.12 for the third quarter of 2024.
Strategic Initiatives or Partnerships That May Drive Future Growth
Coeur Mining’s strategic initiatives include ongoing exploration projects and technological advancements in mining operations. The company has allocated approximately $40 to $50 million for exploration expenses in 2024. Additionally, significant capital expenditures of $124 to $158 million are planned for sustaining operations.
Competitive Advantages That Position the Company for Growth
Coeur Mining benefits from operational efficiency and cost management, with costs applicable to sales per gold ounce decreasing by 12% compared to the previous quarter. The successful ramp-up of the new three-stage crusher at the Rochester site has played a crucial role in increasing throughput, which is projected to enhance overall production capacity.
| Metric | Q3 2024 | Q2 2024 | Q3 2023 | Change (%) |
|---|---|---|---|---|
| Revenue | $313.5 million | $222.0 million | $194.6 million | 41% |
| Gold Production (oz) | 94,993 | 78,696 | 216,062 | 21% |
| Silver Production (oz) | 3,020,566 | 2,637,950 | 7,200,410 | 15% |
| Average Realized Gold Price ($/oz) | $2,309 | $2,003 | $1,796 | 15% |
| Average Realized Silver Price ($/oz) | $29.86 | $26.20 | $23.97 | 14% |
Overall, Coeur Mining is well-positioned to capitalize on growth opportunities through strategic acquisitions, operational improvements, and a focus on exploration. The projected increases in production and revenue reflect a robust outlook for the company as it continues to navigate the evolving market landscape.
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Updated on 16 Nov 2024
Resources:
- Coeur Mining, Inc. (CDE) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Coeur Mining, Inc. (CDE)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Coeur Mining, Inc. (CDE)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.