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Stocks in this article: SIL SLW

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Coeur D'Alene Mines (CDE) represents 4.69% of SIL, or 640,253 shares worth $17.5 million.

Company Profile

Coeur D'Alene Mines has explosive potential as a gold and silver producer. For 2010, the company is expecting production from its silver mine San Bartolome; its newest operation, the Palmarejo silver and gold mine; and its pure gold mine Kensington.

The company is hoping to produce 17.3 million ounces of silver and 170,000 of gold at cash costs of $4 and $490, respectively. Its Kensington gold mine in Alaska recently came into production making the company 50:50 in terms of gold and silver.

China National Gold, China's largest gold producer, bought half of the concentrates at Kensington. The mine should produce 50,000 ounces of gold in 2010 and average 125,000 ounces of annual gold production over a 12.5-year mine life.

Income Statement

In the third quarter, the first in which all three of Coeur's mines were producing, the company reported a net loss of $22.63 million, or 26 cents a share. CEO Dennis Wheeler says despite gangbuster sales Coeur can report a loss due to reporting requirements and mark-to-market adjustments with regard to a royalty the company has with Franco Nevada.

Coeur produced 4.3 million ounces of silver and 47,514 ounces of gold, a 2.3% and 105% increase, respectively, from a year earlier.

Coeur saw record sales of $118.6 million. The company sold silver at $18.87 an ounce and gold for $1,229 an ounce.

Balance Sheet

As of the third quarter, Coeur had $32.8 million in cash, cash equivalents and short-term investments. Total debt sunk 14% from the same period a year earlier and currently stands at $214.47 million.

TheStreet Ratings has a hold rating on the stock and says Coeur has deteriorating cash flow and that financial problems might develop in the near term.

Analyst Ratings

Coeur currently has five buy ratings, four holds and one sell on its stock with an average price target of $29.90. Shares are trading at a forward-looking P/E ratio of 13.32, well below the industry average. Shares returned 53.82% in 2010.

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