PRECIOUS METALS

Fatalities, blockade and weather impact Coeur production

Coeur Mining (NYSE: CDE) has reported mixed production results for the third quarter, with commercial production starting at its Silvertip mine but Palmarejo experiencing a number of setbacks.

Staff reporter
Palmarejo was temporarily suspended last month after two fatalities

Palmarejo was temporarily suspended last month after two fatalities

The newly-expanded company, which has just acquired Nevada gold explorer Northern Empire Resources, produced 8.5 million silver-equivalent ounces from its five operations in North America and Mexico, slightly below the previous quarter's 8.8Moz AgEq.
 
Nevertheless, Coeur is maintaining its revised full-year production guidance, which was changed last month following Silvertip's start-up and a stronger performance at Rochester to 36.1-39.5Moz AgEq.

Guidance had previously been increased to 37.3-40.5Moz AgEq in July due to a strong first half at Palmarejo in Mexico.

However the operation's silver-equivalent production of 3.2Moz for the third quarter was 21% lower than the previous period.

Coeur said production was impacted by the temporary suspension of mining activities after two fatalities, supply chain disruptions from local road blockades and a "weather-related interruption" that impacted the process plant.

It is maintaining the mine's full-year guidance of 14.4-15.1Moz AgEq.

Coeur reported the deaths in mid-September of two underground production drillers who fell into a void after a ground collapse.

Elsewhere, Rochester in Nevada's production rose 17% to 2.2Moz AgEq due primarily to leaching activities on the periphery of the Stage III pad that had not been processed previously, Coeur said.

Weather also impacted Wharf at South Dakota, with gold production down 14% quarter-on-quarter to 19,646oz, while gold output at Kensington in Alaska rose 5% to 26,809oz.

Coeur is expecting improved throughput in the fourth quarter at Silvertip, which produced 286,000oz AgEq in the September quarter.

Coeur shares have slid from above the $9 mark 12 months ago, dropping a further 4.3% yesterday to close at $5.34, capitalising it just over $1 billion.

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