Gold futures were down 1.21% to $1,180.80 an ounce at 10:59 a.m., while silver was down 2.15% to $15.80 an ounce, according to CNBC.
Coeur announced earlier this month that it would acquire Paramount Gold & Silver (PZG) in an all-stock transaction valued at approximately $146 million.
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Immediately prior to the deal's completion, Paramount will spin off a separate, publicly-traded company expected to be called Paramount Nevada Gold Corp. to its existing stockholders. This subsidiary would own the Sleeper Gold Project and other assets in Nevada.
As part of the deal, Coeur will give $10 million in cash to the spin-off and receive a 4.9% common share interest.
Separately, TheStreet Ratings team rates COEUR MINING INC as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate COEUR MINING INC (CDE) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, COEUR MINING INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for COEUR MINING INC is currently lower than what is desirable, coming in at 26.34%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 2.02% significantly trails the industry average.
- CDE's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 50.78%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- CDE, with its decline in revenue, underperformed when compared the industry average of 3.5%. Since the same quarter one year prior, revenues fell by 14.9%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- COEUR MINING INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, COEUR MINING INC swung to a loss, reporting -$6.44 versus $0.54 in the prior year. This year, the market expects an improvement in earnings (-$1.09 versus -$6.44).
- You can view the full analysis from the report here: CDE Ratings Report