Market participants have taken a hard stance on Coeur d'Alene Mines (NYSE:CDE) and Silver Standard Resources (NASDAQ:SSRI) in the second quarter, sending their shares lower while most other silver stocks remained relatively stable. While these companies were under pressure, especially in May, the stories behind the two companies differ greatly. For Coeur d'Alene Mines, it's all about costs. For Silver Standard Resources, it's about its move into gold.

Recent rise in silver price improves Coeur d'Alene Mines' position
With all-in sustaining costs of $19.12 per ounce in the first quarter, Coeur d'Alene Mines is on the right end of the cost curve. Thus, the company is sensitive to silver price downside. However, silver prices seem to be holding near the $19 per ounce level, and that bodes well for the company.

In the absence of a worst-case scenario, investors could focus on the fact that the company is cheap enough to buy. A solid cash position and low debt provide additional optimism on the company's outlook. Given the current range of silver prices, Coeur d'Alene Mines shares will continue to be volatile, but business prospects look solid.

Is Silver Standard Resources being excessively punished for Marigold's performance?
This year, Silver Standard Resources bought Marigold mine from Goldcorp (NYSE:GG) and Barrick Gold (NYSE:GOLD) in a move to diversify into gold in a safe jurisdiction. Prior to this transaction, the company had only one producing mine in Argentina. Recent news highlighted the fragile state of Argentina's economy. A U.S. court ruled that Argentina must pay back $1.3 billion to creditors who did not choose to restructure the country's debt when Argentina defaulted back in 2001.

Following this ruling, Argentinian president Cristina Kirshner stated that the country will continue to make payments to holders of restructured debt, but will not pay to those who did not agree to restructuring. Once again, this stance increased fears that another default could be around the corner.

Notably, Coeur d'Alene Mines has several growth projects in Argentina. Pan American Silver (NASDAQ:PAAS) is also present in the country. However, Pan American Silver's projects are hurt by the ban on open pit mining rather than by raging inflation and economic instability. This year, Pan American Silver expressed hopes that the country will finally lift this ban, allowing its projects to proceed.

In light of Argentinian problems, Silver Standard Resources' decision to diversify from the country looks rational. The problem is that Marigold mine was a high-cost mine, and that's why Goldcorp and Barrick Gold were eager to sell it. Marigold was off to a slow start under Silver Standard Resources' management, and the company expected that production levels would be low in the second and third quarters of this year. Thus, the second-quarter update on Marigold will be of the biggest interest for investors.

Bottom line
Coeur d'Alene Mines shares have already managed to recover some of its second-quarter losses, but more upside is ahead should silver prices remain at current levels. Excessive optimism over the Marigold purchase caused a roller-coaster for Silver Standard Resources' shares, but it's the company's cost performance on Marigold that will be crucial for its valuation. The inability to push Marigold costs down in the current price environment could lead to further downside.