Before we get into Coeur Mining Inc (NYSE:CDE), we would like to draw your attention on Bullfrog Gold Corp (OTCMKTS:BFGC). The recent increase in trading volume on BFGC suggest increased interest from traders and investors. Read more HERE. BFGC currently tops our list of Solid Gold Mining Stock of 2016 and early bird investors could be awarded with solid gains towards the end of the 2016.
Coeur Mining Inc (NYSE:CDE) intends to spend significantly more money on exploration activities this year than it did last year. The company also upgraded its production target for this year. The developments offer a clue into the management’s thinking of the future of gold prices. Though gold rallied to a 30-year high in 1Q2016 and is still up about 18% so far this year, recent weeks have been characterized by a reversal in gold rally, sparking a selloff in gold miner stocks. Fears over the U.S. Federal Reserve raising lending rates before the end of this year worries gold traders as the appeal of the yellow metal will diminish when interest rates increase. However, Coeur’s exploration and production plans seem to be sending a signal to investors that this is not the time to abandon gold as another rally could be in the offing.
Coeur intends to funnel between $30 and $34 million in exploration activities in 2016, indicating an increase of 82% over the amount the company invested in exploration last year. The company said that about 85% of its exploration budget allocation will go into exploring opportunities near its existing mines, especially the Kensington, Palmarejo and Rochester mines in Mexico, Alaska and Nevada, respectively. The exploration plan shows that Coeur is focusing on tapping new resources near its existing infrastructure. Besides the potential of increasing output, if the exploration activities near existing mines are successful, Coeur could significantly reduce unit costs of the gold and silver it mines, thus boosting margins and cash flow.
Coeur now expects to produce between 34.4 and 37 million silver equivalent ounces (SEO) in 2016. The company previously guided for production of between 33.8 and 36.8 million SEO. Coeur produced 84.871 ounces of gold and 3.5 million ounces of silver in 3Q, equivalent to 8.6 million SEO. Though 3Q production exceeded expectations, it was weaker than 9.6 million SEO produced in 2Q. Coeur posted EPS of $0.11 on revenue of $182 million. EPS beat by $0.09 and revenue beat by $8.08 million and rose 9.5% YoY. Coeur stock has more than tripped this year, rising 345% YTD. The stock was up 2.9% to $11.04 in the last session.