The Rochester silver mine excelled among Coeur Mining Co.’s producing assets this for the third quarter, but overall, the company reported a loss because of a dip in metal prices and one-time events that affected results at two operations.
“Third quarter results were impacted by weak metals prices and temporarily lower production at our Palmarejo [Mexico] and Wharf [South Dakota] mines due to one-time events,” said Mitchell J. Krebs, Coeur president and CEO. “Our Rochester operation was the standout performer with strong production growth and further cost reductions.”
Coeur Mining lost $53 million from continuing operations, the company announced Oct. 31, resulting in an adjusted loss of $19.7 million or 11 cents per share. Affecting results were lower silver and gold prices, down 11 and 7 percent respectively, and lower production levels at Palmarejo due to fatalities and a road blockade; and at Wharf due to wet weather.
Coeur reported revenue of $148.8 million, a 12 percent decrease.
At Rochester, silver production increased 17 percent compared to last quarter and 25 percent compared to last year. The mine placed 4.06 tons of ore for a total of 1.3 million ounces of silver at an average grade of 0.52 ounces per ton. Rochester also produced 14,702 ounces of gold at an average grade of 0.004 ounces per ton. The silver production increase was because of strong leaching performance.
The installation of a high pressure grinding roll is expected to be completed in the first quarter of 2019, further improving metal recoveries. Because the smaller crusher has been decommissioned, production is expected to decrease in the fourth quarter.
Also in Nevada, the company made progress on two strategic acquisitions this past quarter: Coeur Mining completed the acquisition of Northern Empire Resources Corp. in Southern Nevada including the Sterling Gold Project, and announced an agreement to acquire Alio Gold Inc. assets next to Rochester in the fourth quarter of 2018 for $19 million in Coeur common stock.
The Alio assets “are adjacent to Rochester and will allow us to leverage our existing infrastructure to generate strong returns and future free cash flow from higher-grade, low-cost production,” Krebs said.
If approved, the Alio acquisition would more than double Coeur’s land position at Rochester, adding the Lincoln Hill, Wilco and Gold Ridge projects.
In Canada, Coeur declared commercial production Sept. 1 at its Silvertip mine. Throughput is expected to average 1,100 tons per day by the first quarter of 2019.
Coeur also operates the Kensington mine in Alaska.