What to Watch for as Silver Miners Release Financials

It’s about a month into 2015′s second quarter, and as market watchers well know that means silver companies will soon start releasing their financial results for Q1. 

To prepare for the coming onslaught of releases, Dundee Capital Markets released on Monday an earnings preview tear sheet on the silver companies it’s covering. Those are Coeur Mining (NYSE:CDE), Endeavour Silver (TSX:EDR,NYSE:EXK), First Majestic Silver (TSX:FR,NYSE:AG), Fortuna Silver (TSX:FVI,NYSE:FSM), SilverCrest Mines (TSX:SVL,NYSEMKT:SVLC) and Tahoe Resources (TSX:THO,NYSE:TAHO).

Here’s a quick look at what the firm had to say about the overall trends it expects and what it sees coming from each company specifically.

Trends

Dundee states that as most of the companies on its list have already released preliminary production results, their financial results should emphasize “costs and balance sheet strength.”

More specifically, the firm sees the companies detailing how they will reposition themselves for a silver price of $16 per ounce. It’s basing that idea on the fact that the silver price stayed fairly unchanged during Q1 from the previous quarter, averaging US$16.72.

“We believe focus will continue to surround ongoing efforts to create sustainable operations at current silver prices as well as updates on development projects. Managements’ commentary regarding further cost control and potential changes to mine plans will be key,” Dundee states.

Finally, Dundee anticipates that the companies it covers will release ramp-up updates.

What to watch for

• Coeur Mining — Among other things, Dundee expects to see Coeur update on the underground ramp up at Guadalupe and permitting at Rochester. It’s calling for a silver equivalent cost per ounce of $17.62 and a gold cost per ounce sold of $767. 

• Endeavour Silver — Endeavour should provide an update on the ramp up at El Cubo, as well as on its PEA for Terronera, formerly known as San Sebastian. Dundee anticipates by-product total cash costs of $9.03 per ounce.

• First Majestic Silver — Dundee sees First Majestic commenting on La Encantada underground development and grades, and is forecasting consolidated cash costs of $7.94 per ounce.

• Fortuna Silver — The firm expects Fortuna to have made progress on moving its San Jose expansion to 3,000 tonnes per day. It’s calling for consolidated cash costs of $3.81 per ounce.

• SilverCrest Mines — Dundee states that there could be volatility in SilverCrest’s results “given capitalization of underground development.” The firm anticipates cash costs of $10.31 per ounce of silver equivalent.

• Tahoe Resources — Finally, Tahoe should update on an employee jailed due to 2012 water allegations, according to Dundee. It’s looking for by-product costs of $6.83 per ounce, and as Tahoe hasn’t released preliminary production results, Dundee is also calling for output of 4.7 million ounces of silver.

Investors focused in the silver space will no doubt be keeping an eye out for results from those companies moving forward. It will be interesting to see if the news they release ultimately lines up with Dundee’s predictions.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.