Record Highs and Optimism
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Coeur Mining (NYSE:CDE) soared to its highest level in nearly two years, showing an impressive 8.2% increase in Tuesday’s trading session. The surge followed the announcement of the successful achievement of commercial production at its expanded Rochester silver and gold mine in Nevada.
Operational Milestones
The completion of the new three-stage crushing circuit and truck load-out facility on March 7 marked a significant milestone for the Rochester mine. The crushing circuit has been running at an average throughput of nearly 70,000 tons per day, leading to the official declaration of commercial production by the end of Q1.
Future Outlook
Coeur Mining remains on track for the ramp-up to full design capacity, targeting 88,000 tons per day or approximately 32 million tons per year by the first half of 2024. Once operating at maximum capacity, throughput levels are projected to increase 2.5 times compared to historical levels. This enhancement will position Rochester as one of the largest open-pit heap leach operations globally, driving substantial cash flow growth for the company.
Analyst Insights
Roth MKM analyst Joe Reagor initiated coverage of Coeur Mining (CDE) with a Buy rating and a price target of $5.40. Reagor is optimistic about the company’s prospects, stating that Coeur Mining is approaching the end of a period of heightened capital expenditure and is poised for significant growth in production and cash flow.
Reagor acknowledges that Coeur’s investment in the Rochester project had previously impacted its valuation. However, with the completion of the expansion and the ongoing ramp-up, he foresees substantial production and free cash flow growth in the years ahead.
