To borrow a phrase from fishing folk: this is why they call it mining, and not producing. Mining for metals is an unforgiving challenge, but miners chase their quarry like fishermen in pursuit of the perfect haul.
Coeur d'Alene Mines (NYSE: CDE ) turned in the kind of quarter that could inspire sea shanties. The miner once again topped its own record for quarterly revenue, reeling in $89.8 million for a 146% increase over prior-year levels. Silver production increased 86% to 5.2 million ounces -- alongside a 222% surge in gold volumes -- as the Palmarejo mine in Mexico continued to ramp up toward design capacity. Palmarejo's silver output increased an incredible 117% sequentially over strong second-quarter production.
Meanwhile, the biggest catch of Coeur's season is the 40% expansion of Palmarejo's mineral wealth, achieved through exploration of the nearby Guadalupe deposit. The upgrade brings proven and probable reserves to 88.6 million ounces of silver and 1.1 million ounces of gold, and substantially enhances life-of-mine cash flow expectations. At $8.76 per ounce, costs remain high, but by 2010 each ounce of silver could cost as little as $1.50 to mine as annual production reaches 9 million ounces. Each deck hand will receive ... oh wait, wrong show. This is the shiniest catch.
What's the catch?
Celebrations for fishermen are short-lived, as thoughts quickly return to all that can potentially go wrong. Precious metal investors are similarly aware that operational snags like those reported by Kinross Gold (NYSE: KGC ) and Agnico-Eagle Mines (NYSE: AEM ) can strike at any time. The Bolivian government's move to cease mining on that portion of San Bartolome that lies above 4,400 meters of elevation -- reportedly relating to stability concerns in underground works mined by other parties -- forced the company to reduce fourth quarter production guidance by 500,000 silver ounces.
Also, while rival Hecla Mining (NYSE: HL ) turned in a profitable quarter on the strength of very low cash costs of $0.85 per ounce, Coeur recorded a $17.3 million loss as the company works through royalties and lease agreements initiated during the company's darkest hour.
The shiniest catch in silver?
Despite the San Bartolome glitch and quarterly loss, I consider Coeur d'Alene Mines a serious silver standout. Hecla has the upper hand in operating costs, Pan American Silver (Nasdaq: PAAS ) boasts a pending acquisition, and Silvercorp Metals' (NYSE: SVM ) just moved to the illustrious big board. The competition is fierce, but I view Silver Wheaton (NYSE: SLW ) as the undisputed star of the silver screen. Which silver producer do you consider the shiniest catch? Please vote in our Motley Poll and share your views in the comments section below. You won't hurt my feelings ... I own them all.