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Whether you're 18 or 81, graduation day is cause for celebration.
Resurgent silver miner Coeur d'Alene Mines (NYSE: CDE ) is the valedictorian of this year's silver mining class. Well on its way to targeted production of 20 million ounces in 2009, the company has transformed itself from a questionable concern into a premier silver producer virtually overnight ... though to shareholders it seemed an eternity.
Coeur d'Alene's explosive 74% growth in production for the second quarter, yielding 4.3 million ounces, achieved a company record, dating back to 1928. A 46% increase in revenue to $73.2 million sufficed for another record. Along with the net earnings of $11.6 million, the results delighted analysts, while vindicating this Fool's long-held assertion that Coeur d'Alene would carve out one of the more dramatic reversals of fortune within the ongoing secular bull market for precious metals.
The journey to achieve commercial production at San Bartolome and Palmarejo almost simultaneously was fraught with gut-wrenching potholes, carrying shares to a split-adjusted low of $3.60 last November. Development delays and liquidity concerns combined with a monster silver correction to carry the company to the brink. What doesn't kill you, though, makes you stronger ... and Coeur d'Alene is looking rather Herculean. Paralleling 118-year-old Hecla Mining (NYSE: HL ) , the company reduced its debt burden by $150 million, or 37%, during the first half of 2009.
More precious than gold
Silver prices continue to show strength, hovering well above $14 per ounce, and Coeur d'Alene CEO Dennis Wheeler remains "bullish on the excellent upside for precious metal prices." In addition to unprecedented investment demand, Wheeler points to fresh industrial demand of 200 million ounces annually, related to the market for handheld devices. Considering those dual price pushes, with the inevitable pull of an anomalous ratio with the price of gold, the outlook for silver is golden.
As if quickly approaching the production levels of Silver Wheaton (NYSE: SLW ) and Pan American Silver (Nasdaq: PAAS ) were insufficient cause for celebration, the U.S. Supreme Court recently removed a longstanding obstacle to development of the company's Kensington gold mine in Alaska, now due to begin production after mid-2010. At 120,000 ounces per year, Kensington's production won't have Goldcorp (NYSE: GG ) or Newmont Mining (NYSE: NEM ) shaking in their boots, but it will elevate total gold production for Coeur d'Alene to about the range of a small intermediate gold miner like New Gold (AMEX: NGD ) .
However you slice it, it's a downright impressive performance from an 81-year-old.
- The brutal silver correction of 2008.
- The correction's silver lining.
- Gold's not too shabby, either.