Coeur d’Alene profits with low prices

Even with the relatively low price of gold and silver during 1989, Coeur d’Alene Mines (AMEX) maintained a profit for the nine months ended Sept. 31.

Net income for the nine months was US$5 million or US50 cents per share on revenues of US$56.6 million, compared with a profit of US$11.6 million on revenues of US$63.9 million for the previous period. Cash flow for the recent 9-month period was US$9 million.

The reason for the drop in profitability can primarily be traced to the drop in precious metal prices. The average price of gold during the third quar ter was US$367.31 per oz. versus US$427.45 per oz. during the 1988 period. Silver prices were substantially lower, dropping from an average price of US$6.74 per oz. to US$5.18 per oz. over the period.

Profits from gold and silver production are about equal, with further income coming from the company’s large cash position. Gold production for the period was 67,607 oz. while silver production totalled 4.07 million oz.

Coeur d’Alene has about US$90 million in working capital, US$63 million in long-term debt (US$50 million of which are 6% convertible debentures), and 11 million shares outstanding. The company’s shares trade at the US$24 level.