Can Coeur Mining Inc (NYSE:CDE) Meet Its Production Targets for 2017?

Coeur Mining Inc (NYSE:CDE) has set its sight on producing 16.4 to 18 million ounces of silver in 2017. The company produced 14.8 million ounces of silver in 2016, and 15.9 million ounces of the metal in 2015.

For gold, the company targets production between 362,000 and 387,000 ounces of gold in 2017. That would be up from 358,170 ounces of gold produced in 2016.

Cash shortage could complicate the picture

However, Coeur Mining Inc (NYSE:CDE)’s 2017 production targets are threatened by cash shortage risk. The company concluded 2016 with cash and equivalents of $162.2 million, down from more than $200 million in the prior year. Debt at the end of the year was $210.9 million.

However, the debt decreased sharply from a year ago when the company’s balance sheet reflected more than $490 million of long-term debt. If the company uses the existing cash to repay its debt, the remaining net debt would be $48.7 million. At that level, net debt-to-EBITDA ratio works out to 2.

While the debt load may be threatening, the ratio suggests lenders would still be willing to advance loans to the company to fund operations if a need for such funding arises.

As such, Coeur Mining Inc (NYSE:CDE) still has room to meet its production targets for 2017 even if organic cash flow isn’t adequate to fund projects or expand them.

Annual and quarterly performance

Coeur Mining Inc (NYSE:CDE) posted 4Q16 adjusted EPS of $0.01, down 96% from the prior quarter, but up 103.2% year-over-year. However, the EPS still came short of the consensus estimate of $0.11.

Falling prices of silver and gold impacted the topline and led the company to the EPS decline and miss in 4Q16. The price of silver per ounce fell 8.8%, while the price of gold declined 12.4% per troy ounce.

Revenue of $159.2 million for the quarter retreated 10% from the prior quarter. Sales of silver accounted for 33% of the company’s revenue, while sales of gold contributed 67% of revenue. The company’s silver production was 3.9 million ounces in 4Q16, while gold production was 102,500 troy ounces.

For the year, adjusted EPS was $0.29 cents, falling 136.3% from a year earlier despite revenue of $665.8 million for the year growing 3% from the prior year.

Stock movements

Shares of Coeur Mining Inc (NYSE:CDE) have declined less than 3% so far in 2017, and are up nearly 150% over the last 12 months.

2/17/2017
Ticker Symbol CDE
Last Price a/o, 4:02PM EST  $                         8.88
Average Volume (mlns) 4.15
Market Cap (blns)  $                   1.65
Sales (mlns) $665.80
Shares Outstanding (mlns) 186.15
Share Float (mlns) 178.72
Shortable Yes
Optionable Yes
Inside Ownership 1.20%
Short Float 2.50%
Short Interest Ratio 1.08
Quarterly Return -7.21%
YTD Return -2.31%
Year Return

149.44%