Coeur Launches on the Gold and Silver Rocket

Gold and silver stocks have been burning up the big boards lately, and the fire has finally spread to longstanding underperformer Coeur d'Alene Mines (NYSE: CDE  ) .

Coeur's shares exploded as much as 15% higher Monday, after the miner posted solid fourth-quarter operating data boosted by this unrelenting bull market for both precious metals. Coeur's sales flew 75% higher, while cash flow rocketed 186% to reach $99.4 million for the period.

Keeping consolidated 2010 cash costs under control at $7.07 per ounce of silver, during a transitional year that saw the launch of Coeur's Kensington gold mine in Alaska, the miner is well-positioned to enjoy a further 59% expansion of gold output, to 250,000 ounces during 2011 (from 157,000 ounces in 2010). Silver volumes are seen rising 19%, to 20 million ounces.

At a moment when rival Hecla Mines (NYSE: HL  ) has exhibited some vulnerability stemming from environmental liabilities for historical mining operations, the long-awaited delivery of Coeur's multimine growth spurt has hit its stride at an opportune moment indeed. The field of U.S.-listed primary silver miners is relatively miniscule, with names like Pan American Silver (Nasdaq: PAAS  ) and Silver Standard Resources (Nasdaq: SSRI  ) rounding out a short list of the larger operators in the group. If Coeur d'Alene Mines can outmaneuver Hecla Mining going forward for the next wave of long-term silver production growth, the company has a chance to emerge as a dominant player.

With one Deutsche Bank analyst placing a $54 price target on the stock last month, some of that potential strategic growth momentum may be gaining recognition. Of course, gold and silver price forecasts also work their way into bullish outlooks for stocks like Coeur, and CEO Dennis Wheeler remains "bullish on both metals given continued robust investment and monetary demand for both silver and gold, along with growing industrial demand." Goldcorp (NYSE: GG  ) CEO Chuck Jeannes agrees: "We expect a strong precious metals market to remain in 2011 and beyond, driven by central bank buying, growing physical demand in developing economies around the globe and gold’s continued re-emergence as an essential asset class for investment portfolios."

Of significant interest to Fools who tracked the exciting story regarding Paramount Gold's (AMEX: PZG  ) discovery of high-grade gold and silver intercepts within the Don Ese vein of its San Miguel property, Coeur d'Alene Mines claimed in its earnings report that Paramount crossed over onto Coeur's neighboring mineral concessions while conducting its exploration drilling. Coeur announced its intention to address the matter "aggressively" in order to "defend its property rights."

If this and other dramatic turns of events in the never-boring silver mining industry pique your Foolish curiosity, be sure to add these stocks to your free, personalized watchlist and follow all the precious news to come.

Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Coeur d'Alene Mines, Goldcorp, Hecla Mining, Pan American Silver, Paramount Gold, and Silver Standard Resources. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a colloidal disclosure policy.


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  • Report this Comment On March 04, 2011, at 10:49 AM, jesusfreakinco wrote:

    Long and strong CDE... Finally coming out of hibernation.

  • Report this Comment On March 04, 2011, at 10:58 AM, rfaramir wrote:

    Any idea why this article doesn't show on the CDE ticker page?

    The last news article for CDE on that page is your blog entry of 1/28/11 'J.P. Morgan: "Gold is Money. Everything Else is Credit."'

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