Imagine the crowds in Beijing chanting in unison: "How low can you go?"
While limbo likely won't become an Olympic event, metal mining companies seem to be training already on Wall Street. As investors wonder how low they can go, one silver producer deserves a spot on the podium.
When I first recommended Coeur d'Alene Mines
It's important to note that Coeur d'Alene isn't the only limbo contestant among the silver miners. Shares of Hecla Mining
Exacerbating the plummeting spot price for silver, Coeur posted a $5.4 million loss in last week's earnings release. Results suffered from setbacks and delays in bringing the San Bartolome mine in Bolivia into production, and predevelopment costs from the Palmarejo project in Mexico. Originally slated to add 6 million ounces of silver production in 2008, San Bartolome will now chip in only 3.2 million ounces.
Outlook and valuation
Slated to commence production in March 2009, Palmarejo is expected to be one of the top five silver mines in the world. A feasibility study completed last quarter added 29% to the company's total silver reserves and 51% to the gold tally. After aiming to produce 13 million ounces of silver in 2008, Coeur expects 85% production growth to reach 24 million ounces in 2009.
As downtrodden as the shares are right now -- and further hiccups are not out of the question -- I see a chance to own a potentially world-class silver mine at a dirt cheap price. I believe that opportunities abound in silver here, including companies like Pan American Silver