I have decided to forego a quarterly forecast for Q3. It's just one of those quarters in which there can't be anything in the numbers to get excited about. Silver ounces produced were mediocre, so ounces sold will be the same. Average selling prices per ounce, due to the weak metals prices, will also be mediocre. Total production expenses will be in line with previous quarters, operating cash flow will be positive. Capex will be about the same as the prior 2-3 quarters. The loss on derivatives will be about $25 million. In effect, there's no reason to believe Coeur will have a great quarter. Likewise, there's no reason to anticipate any significant bad news, other than the possibility of a reduction in Q4 guidance. Given that the stock is already depressed, it will most likely move up after earnings because of positive cash flow (showing they can produce good cash profits in spite of mediocre production and weak metals prices) and holding production guidance the same for full year 2013.
As always, feel free to challenge my opinions, assumptions and estimates.
SirRocky, Agree that some...ANY...improvement might move the price per share up, due to oversold status. It's the reason I haven't sold the small amount I still hold.
I'm concerned about the FUTURE for some miners (and to some degree, the effect on Coeur) of the proposed mining tax, which is so steep it may cause some tiny miners to leave Mexico, since they state they will not even be able to make a profit.
Since Coeur has multiple mines, and the price of precious metals will rise even faster if fewer are mining, it may actually be an ultimate benefit IF the royalty passes through all the hoops of their political system and is not repealed.
If miners leave in droves, it will be negative for the worker and the little guy in Mexico, and ultimately for their overall economy. My personal expectation is some sort of compromise. Extremely heavy taxation always ends up hurting everyone, including the poor and the middle class (as it will here with Obamacare trllions, with decreasing coverage and extremely high deductibles).
On balance, I personally believe CDE is worth an 'add' at these levels (10's, 11's, 12's), so long as silver continues its recovery, due to US and international mining exposure, and also eventual improvement, in my opinion, in the price of silver and gold.
Seasonal upmoves with wedding season in India and other seasonal reasons for buying precious metals, tho we know India has placed a tariff on gold.
May or may not add, personally, but I have not sold.
FXE is now resting at about the 50ma on pullback. Miners (and even gold, silver) do not scrupulously follow any one currency, but I think it's possible a bounce in euro will accompany a bounce in immensely oversold miners.
IF the political winds in Mexico change, then all miners with an exposure to Mexico (including CDE), may possibly get a boost...some more than others.
Meanwhile, I'm cautious. Cautiously optimistic for an eventual bounce. Peace Gratitude Strategies Agape ~
thanks rocky-there are quarters when mediocre is okay this is one-rochestor crusher repair held production back but had record sept and on track to make guidance-rocky outside royalty in the area of tax change that is bothersome is the change of timing on exploration deduction-could you elaborate as this will effect palmarejo where we spent a considerable amt on exploration and the future preciosa-