Coeur Mining Inc. reported adjusted net income of $13.9 million, or 6 cents per share, for the first quarter of 2021, up from a $900,000 loss in the 2020 quarter, and the company reported the expansion at its Rochester silver mine near Lovelock was 20% complete.
Coeur’s president and chief executive officer, Mitchell Krebs, called the start of major construction on the Rochester expansion “an important milestone,” and he said “the project remains on track and is expected to be largely completed by late next year, helping to drive an anticipated step change in production and cash flow.”
The expansion project at the mine in Pershing County includes a new Merrill-Crowe processing plant, new crusher facility with two high-pressure grinding roll units, and a new leach pad.
Company-wide net income from continuing operations was $2.1 million, or 1 cent per share, up from an $11.9 million loss, or a loss of 5 cents, in the first quarter of 2020.
The adjusted net income earnings of 6 cents per share did not meet the Zacks forecast of 7 cents.
Revenue for the Chicago-based Coeur totaled $202.1 million, up from $173.2 million in the 2020 quarter, and the company’s averaged realized gold price was $1,664 per ounce. The average realized price for silver was $26.19 per ounce.
Production for the first quarter totaled 85,225 ounces of gold and 2.4 million ounces of silver, and the company reaffirmed that full-year production at all its operations is expected to be 322,500 to 367,500 ounces of gold and 9.7 million to 12.2 million ounces of silver.
Rochester production in the first quarter included 6,094 ounces of gold and 774,000 ounces of silver, up from 687,000 silver ounces and 5,936 gold ounces in the first quarter of 2020. Rochester produced a little over 1 million ounces of silver in the fourth quarter of last year, however.
Michael Routledge, Coeur’s senior vice president and chief operating officer, said in an earnings call that “we anticipated a slower start to the year, which is broadly in line with our results for the quarter. Gold is a bit ahead while silver has some catching up to do.”
Rochester production in the first quarter included 6,094 ounces of gold and 774,000 ounces of silver, up from 687,000 silver ounces and 5,936 gold ounces in the first quarter of 2020.
Adjusted cost of applicable sales for silver production at Rochester was $19.07 per ounce and for gold, $1,300 per ounce, according to the earnings report.
Production at the Kensington underground gold mine in Alaska totaled 30,681 ounces in the first quarter, down from 32,022 ounces in the 2020 quarter, and the Wharf Mine in South Dakota produced 19,035 ounces of gold in the 2021 quarter, up 15,541 ounces in the 2020 quarter.
Production at Palmarejo in Mexico totaled 28,065 ounces of gold and 1.6 million ounces of silver, compared with 31,578 gold ounces and 1.8 million silver ounces in the first quarter of last year.
“On the exploration front, we are seeing early encouraging results as we execute on the largest drilling campaign in company history,” Krebs said in the earnings report.
Coeur reported its exploration investment was roughly $14.9 million in the first quarter of this year, including for 250,500 feet of drilling, and the company stated that the increase in exploration actively was largely driven by a ramp up of drilling at Silvertip in British Columbia and Crown in southern Nevada.
Coeur’s Sterling and Crown gold exploration properties near Beatty cover 35,500 acres.
Coeur had up to five drill rigs active at the Crown property in the first quarter, and the company stated that for the remainder of this year, it plans to continue the same pace of resource expansion drilling within the 300 acres that were recently permitted for disturbance at Crown.
Coeur stated that it also is expecting to receive an amended disturbance permit to begin expanding the C-Horst area to the south, while also beginning exploration in the second quarter at Sterling.
Kreb said in the earnings call that exploration also is being “advanced across the rest of our portfolio.”
Coeur had one rig drilling in the northern portion of East Rochester, as well as North Rochester and East Packard in the first quarter, and the company believes there is significant potential for resource growth both north and south of East Rochester and at North Rochester.
Plans call for ramping up exploration at Rochester this year, according to Coeur.
COVID-19 mitigation and response efforts cost $3 million in the first quarter of this year, down from $5 million in the fourth quarter of last year, and Coeur stated the costs are primarily due to employee-related expenses at Palamarejo and Kensington.
At Kensington, a fly-in, fly-out operation, workers who faced two-week quarantines earlier now have a three-day quarantine, and those vaccinated do not have to be in quarantine.
In addition to releasing its earnings report on April 28, Coeur also released its 2020 Responsibility Report that highlights the company’s increased focus on transparency about its environmental, social and governance (ESG) programs and initiatives.
“As our 2020 Responsibility Report shows, we have a steadfast commitment to pursue a higher standard when it comes to ESG. We are proud of our efforts to integrate ESG principals into every facet of our business of supplying metals that are critical to modern society, from solar panels to cell phones,” Krebs said.