NEW YORK ( TheStreet ) -- Mitch Krebs, the newly minted chief executive officer of Coeur d'Alene Mines (CDE), is looking to bring some shine back to the silver miner -- and he has his work cut out for him.
Krebs was named president and CEO in July, taking the reins of a 60/40 silver and gold miner whose shares have, so far, failed to ride the breakout in silver prices higher and have returned little to investors. Despite its struggles, analysts believe Coeur could now be a buy.
Coeur has suffered from recent missteps. The company missed second quarter estimates and finds itself in the midst of a painful growing phase. The company has three primary mines in production: San Bartolome in Bolvia -- reportedly immune from recent nationalization talks -- Palmarejo in Mexico and Kensington in Alaska. The miner has proven and probable gold reserves of 2.5 million ounces and 227 million ounces of silver. Despite making 43 cents a share in the second quarter on net income of $38.6 million, the stock has seen little love from the market.
While gold and silver prices are up 33% and 40%, respectively for 2011, shares of Coeur are down 1.75%. It's not alone in this respect. The Global X Silver Miners (SIL) is flat for the year while heavy weights in the industry like Barrick Gold (ABX) and Kinross Gold (KGC) are down 0.72% and 6.14%, respectively.
One reason these mining stocks have lagged their underlying commodity is that investors are piling into gold and silver ETFs as a safer way to invest in the metals. To entice investors, gold and silver mining companies are forced to sweeten the pot by expanding their growth profiles, sometimes at the expense of high grade metal and low cash costs, and by raising their dividend. In fact, Newmont Mining (NEM) instituted the first dividend tied to the gold price earlier this year while other companies are just increasing their payout. The move has caught Krebs' attention. "2012 is a year where this company will be looking very hard at putting some sort of dividend policy into place," he said.
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