CDE

Coeur is a gold and silver miner with operations in the US, Canada, and Mexico, and it's one of the few names on our list that has nothing to do with AI. It just went through the biggest change in its history, buying New Gold for roughly $6.9 billion and adding two Canadian mines. The first full quarter with those assets produced record revenue of $1.09 billion, up 126% from a year ago, record gold production, and record free cash flow of $387.5 million. Cash on hand jumped to $1.1 billion, about ten times what it was a year earlier. The company started paying a dividend and has been buying back stock. The quarter wasn't clean, though. Adjusted earnings came in at $0.12 per share against roughly $0.22–0.26 expected — a miss of more than half. Some of that was an accounting charge tied to how the acquisition was booked, which isn't real money. The rest was operational: ore grades came in below plan at three mines, the two new Canadian assets are ramping slower than hoped, there were contractor problems underground at Rainy River, and diesel costs are climbing. Management cut its full-year free cash flow forecast from over $2 billion to about $1.5 billion. That's a meaningful walk-back, and Coeur has now missed estimates in three of the last four quarters. Since we first looked at this in August the stock has run from around $15 to above $22 and then faded back to roughly $19, following precious metal prices down over the past two weeks. The 52-week range is $13.55 to $27.77, so this is a volatile name in both directions. What we like is that the volatility comes from gold and silver rather than from hyperscaler capex — it's a genuinely different driver than almost everything else we track, and gross margins above 40% with low debt give it room to absorb commodity swings. What gives us pause is that the whole plan assumes $4,000 gold and $60 silver holding up, and at least one valuation model puts fair value near $12 against a stock at $19. That gap is really a disagreement about metal prices, not about Coeur. The number we'd watch is whether the Canadian mines hit their ramp targets by the fourth quarter — that's what determines if the $1.5 billion cash flow figure survives. (written with the help of Claude)