Gold prices steady ahead of Fed decision; weekly weakness noted
On Tuesday, Raymond (NSE:RYMD) James analyst Brian MacArthur increased the price target on Coeur Mining Inc (NYSE:CDE) to $8.50, up from the previous $8.25, while maintaining an Outperform rating on the shares. The adjustment reflects updated forecasts for first-quarter prices and the recent acquisition of SilverCrest, which is expected to bring several accounting changes and impact Coeur Mining’s financials. InvestingPro data shows the company has been profitable over the last twelve months, with analysts expecting both sales and net income growth this year. For deeper insights into Coeur Mining’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, which provides detailed analysis of this mining company’s fundamentals.
According to MacArthur, the closing of the SilverCrest acquisition in mid-February will result in various accounting adjustments for Coeur Mining. The first quarter will include partial production from the acquired Las Chispas operation, but also closing adjustments and cash flow impacts. Additionally, Coeur Mining is set to make its Mexican tax payments during the first quarter, covering its Palmarejo and Las Chispas operations, as well as year-end bonuses. InvestingPro analysis indicates the company’s short-term obligations currently exceed liquid assets, though the stock has shown strong returns over the last month and five years.
Looking forward to 2025, the analyst anticipates an increase in Coeur Mining’s production due to the full inclusion of Las Chispas and the ramp-up at the Rochester operation. The company has forecasted production for 2025 to be between 380,000 to 440,000 ounces of gold and 16.7 to 20.3 million ounces of silver. While the stock is currently trading at a high earnings multiple, InvestingPro analysis suggests it’s trading at a low P/E ratio relative to near-term earnings growth, with additional ProTips available to subscribers. This projection includes nearly a full year from Las Chispas, contributing 42.4 to 52.5 thousand ounces of gold and 4.25 to 5.25 million ounces of silver, and the first full year of production from the expanded Rochester operation.
The cost of sales (CAS) at Las Chispas is expected to range between $850 to $950 per ounce for gold and $9.25 to $10.25 per ounce for silver. The Rochester operation is forecast to produce 7 to 8.3 million ounces of silver and 60 to 75 thousand ounces of gold, with CAS of $1,250 to $1,450 per ounce for gold and $14.50 to $16.50 for silver. Coeur Mining also provided CAS estimates for its Palmarejo operation at $950 to $1,150 per ounce of gold and $17.00 to $18.00 per ounce of silver, while the Kensington operation CAS is expected to be $1,700 to $1,900 per ounce of gold, and the Wharf operation $1,250 to $1,350 per ounce of gold. Capital expenditures for the year are forecasted to be between $187 million to $225 million.
In other recent news, Coeur Mining, Inc. has been active with several significant developments. The company resolved a legal dispute with Maverix Metals by issuing 595,267 shares valued at $3.75 million, as part of a settlement agreement related to royalty terms on the Kensington mine property. This settlement aims to eliminate litigation uncertainties and allow Coeur Mining to concentrate on its operations. Additionally, TD Cowen initiated coverage on Coeur Mining with a Buy rating and a $7 price target, citing potential production growth and robust free cash flow driven by the Rochester mine ramp-up and the SilverCrest acquisition.
Moody’s Ratings upgraded Coeur Mining’s corporate family rating to B2 from B3, influenced by governance considerations and the company’s expanded scale following the SilverCrest acquisition. This upgrade reflects Coeur’s return to positive free cash flow and a favorable gold and silver price environment. BMO Capital Markets resumed coverage of Coeur Mining with an Outperform rating and a $9 price target, highlighting the Las Chispas mine’s contribution to significant production increases.
Furthermore, Coeur Mining released a technical report for its Las Chispas Mine, providing investors with detailed information on the mine’s prospects. This disclosure is part of Coeur’s ongoing commitment to transparency and operational insights. These developments mark a period of strategic advancement and financial strengthening for Coeur Mining, as the company continues to focus on growth and efficiency.
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