Coeur could miss 2013 silver output guidance - Dundee Capital
Dundee Capital Markets analysts counsel that most silver mining production results will either meet guidance or decline slightly.
mineweb.com
Author: Dorothy Kosich
Posted: Friday , 10 Jan 2014
RENO (MINEWEB) -
Dundee Capital Markets predicted silver equivalent production growth of greater than 10% this year from First Majestic, Fortuna Silver, Silver Wheaton and Silver Crest.
However, in a sector outlook document published Thursday, Dundee Capital Markets analysts Chris Lichtenheldt and Scott Morrison warned that for the rest of their coverage universe 2014 production is expected "to be roughly flat or decline slightly.”
“Generally we are expecting most [silver] companies to report 2013 production results in-line with guidance; however, we forecast Coeur Mining could miss its 2013 silver production guidance,” they advised.
“During the first 9M of 2013, the company’s Rochester mine produced 2.1Mozs of silver, leaving 1.6Mozs to produce in Q4 at the low-end of guidance at that mine,” the analysts observed. “We expect the company to miss guidance at Rochester and therefore we forecast full-year 2013 silver production of 17.7Moz versus the guided range of 18.0-19Moz.” Dundee rated Coeur Mining as “Sell” with a target of Cdn$9.
Dundee also predicted quarter-on-quarter production growth for Fortuna Silver due to completion of the expansion at the San Jose operation. Other key Q4 issues to watch include total ore processed, average silver grade, and average recovery, the analysts suggested. Dundee rated Fortuna as a “Buy” with a target price of C$5.25.
The analysts were “Neutral” on Pan American Silver with a target of C$12.50. “The company has a strong quarter of Q3, with 6.7Mozs of silver, up from 6.2Moz in Q2. We are looking for further gains in Q4 with forecast silver production of 6.8Mozs.”
Dundee was also “Neutral” on Silver Standard with a target of C$9. “Within Q3 results, silver production guidance was lowered to 8Moz from the previous range of 8.3-8.5Mozs,” said the analysts. Therefore we do not expect any production surprises within Q4 results.” Other key items in Q4 results include silver production, silver grade and silver recovery, they noted.
First Majestic was rated a “Buy” with a target of C$13 by the analysts. “The company recently provided 2014 production guidance for Del Toro and lowered the outlook beyond 2014. We will be looking to see how Del Toro is performing and for additional commentary regarding future growth and capital spending.” Fourth-quarter items
SilverCrest was rated a “Buy” with a C$2.25 target by Dundee. “The open pit is nearing completion and we expect gold and silver grades to increase,” said the analysts. “Based on this, we expect the company to meet 2013 production guidance. More importantly, we will be looking for an update regarding the mill ramp-up and underground development as the company expands during 2014.”
Specific items to look for in SilverCrest’s Q4 results include gold grade, silver grade and tonnes stacked, Dundee advised. |
