Coeur Mining Focusing On Internal, External Growth – CEO

Coeur Mining Inc. (TSX: CDM)(NYSE: CDE) is focused on growing the company’s assets through exploration and internal development, but is also keeping their ear to the ground for mergers and acquisitions.

During Coeur’s fourth-quarter and full-year results conference call, Mitchell Krebs, president and chief executive officer of Coeur Mining, said that company growth is a main focus, and looking internally for that growth is a smart investment.

“When you look at where producing silver companies trade, between $5 and $10 per silver equivalent ounce, it really does highlight the fact that we need to keep allocating money to exploration around our existing mines, where we have existing infrastructure and resources, because that’s a great return on those dollars,” Krebs said.

Krebs didn’t stop there though, as he said the company is open to looking at other ways to grow the company.

“One is through internal development of our existing projects, and our main development project is La Preciosa in Mexico, we got that last year when we acquired Orko Silver,” he said. “The feasibility study is still moving ahead, we’re targeting mid-year this year and we are seeing some opportunities to improve the economics compared to the PEA, despite the headwinds of higher taxes in Mexico and the lower price environment.

“We also established core capital last year (with) the acquisition of a company called Global Royalty,” he continued. “That, although a small contributor to the overall business right now, is an attractive component to the business with the higher margins, less volatility that comes along with those streams and royalties, and we see opportunities to further grow that business. We think that being able to grow core capital is good for the company.”

The possibility of further M&A is also a possibility, as Krebs sees value in the sector.

“We are actively looking at acquisition opportunities, we see some good value out there,” Krebs said. “It’s important for us to look at our existing portfolio though, and really prioritize opportunities based on the impact that they have on our business.

“We’re looking at current producing, current cash-flowing opportunities where we can add another operating leg to the table which would provide us with some additional diversification, reduce our costs, increase our margins and hopefully further improve our geopolitical risk profile.”

Impairment Charge Weighs On Coeur’s 4Q, Full-Year Earnings

The company reported a net loss of $581.5 million, or $5.77 per share, in the fourth quarter compared with net loss of $46.3 million, or 46 cents per share, in the third quarter. The company’s full-year 2013 net loss totaled $650.6 million, or $6.65 per share compared to profit of $48.7 million, or 54 cents per share in 2012.

Coeur absorbed a $772.8 million impairment charge on their Palmarejo and Kensington mines, an $18.9 million negative fair value adjustment, and a $194.9 million deferred tax benefit. The company was also tagged with a $81.9 million related to the company's position to be permanently reinvested in Mexico. The deferred tax benefits were partially offset by an $80.3 million deferred tax expense related to new Mexican tax legislation, the company said.

Adjusted earnings totaled $25.1 million, or 25 cents per share, in the fourth quarter, compared to $23.4 million, or 23 cents per share, in the third quarter.

Fourth quarter production was up with silver totaling 4.3 million ounces, a 3% increase, and 80,780 ounces of gold, a 27% increase from the third quarter.

Full-year 2013 silver production was 6% lower year-on-year at 17.0 million ounces while full-year gold production reached a record 262,217 ounces, up 16% from 2012.

Year-end silver proven and probable reserves increased 15.9% to 255.4 million ounces and year-end gold proven and probable reserves increased 12.3% to 2.2 million ounces

The company expects production in 2014 to be between 17 million and 18.2 million silver ounces and 220,000 - 238,000 gold ounces.