Gediminas Jasionis

Coeur d'Alene Mines Corporation (NYSE: CDE) annouces a start of another mine exploitation

by Gediminas Jasionis March 31, 2009
coeur.jpgCoeur d'Alene Mines Corporation (NYSE: CDE) stock price opened slightly higher on Tuesday as the company announced they have started exploitation of a new mine in northern Mexico. The Palmarejo mine is currently fully owned by the company. Coeur d'Alene already stressed that this is one of the largest gold/silver mines in the world. The first load of ore was extracted on Saturday, last week.

Coeur seems to have ythe potential for some improvement in the future if this mine is exploited to its fullest. Their silver production might increase up to 66% this year and reach 20 million ounces according to the company's expectations.

The company had some trouble with profitability during 2008. Their latest report however has shown that Coeur came back to being profitable, though revenues are still down compared to the same period of 2007. The new mine should give a noticeable boost to the company's revenues, thus driving the company towards sustained profitability.

Currently they also have Kensington gold property under development so this might not be the final improvement in their operations. But the development of a new mine is costly and the company seems to be slowly getting short on cash. According to the latest statement the company has around $27 million in cash and cash equivalents. Although it looks adequate for the moment, it might prove to be a rather fragile amount if the company incurs any further losses. We will probably see them trying to increase that amount from external sources at some point.


The company's stock price has been advancing along with the market for the past couple weeks. Still, it cannot be a sign that this gold stock is getting out of trouble just yet. Until their operations prove to return profit, the share price is likely to simple follow the market movement.


Press release on the matter

The company's latest SEC filing

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