What: Shares of Coeur Mining (CDE 7.09%) ended January down a hair under 11%. But it was a roller coaster of a ride for the precious metals miner, which started the month with a steep decline, falling roughly 30% before starting to recover around the middle of the month. So, as painful as a one-month drop of 11% sounds, it was much better than it could have been.

So what: Coeur's all-in sustaining cost per silver equivalent ounce (which puts the cost of mining gold and silver on equal footing) is expected to be between $16.50 and $17 an ounce in 2015. Silver has recently been trading hands at around $14.25 an ounce. I'm sure you see the problem, Coeur is bleeding red ink, and unless silver prices move higher, that's not going to change.

So the steep price decline in Coeur shares in the early part of January was a reflection of the less-than-positive outlook for the miner. That changed, however, around the middle of the month when the price of silver started to edge higher along with gold and, not coincidentally, fear in the broader market. With higher prices, Coeur's shares recovered some of their losses. Indeed, most of the precious metals patch rallied -- giant Barrick Gold (GOLD -0.25%), for example, rose an astounding 34% in January.

Now what: Coeur's share price recovery from a steep early-month decline is nice and all, but costs will remain a big issue for the miner. Sure, a precious metals rally will make life easier, but Coeur really needs to work more efficiently if it wants to be reliably profitable. On that score, the company reported on Jan. 11 that 2016 production would range between down 5% to up around 3.5% in 2016. Essentially, Coeur is planning on treading water this year. But that makes complete sense since expanding when your mines can't cover their costs isn't a great business model.

So if you're interested in Coeur, watch the miner's costs. To that end, its costs were over $19 a silver equivalent ounce at the end of 2014, so it's making strides. But it needs to keep showing progress on that front before investors are likely to be impressed with its long-term prospects. Yes, a precious metals rally makes costs less of an issue, but it doesn't solve the long-term problem that a high cost structure poses.