(Reuters) - Coeur d‘Alene Mines Corp’s (CDE.N) quarterly profit beat Wall Street estimates on Tuesday as increased gold production at its Alaska mine compensated for a sharp drop in the price of silver.
The company said it expected to achieve its production targets for the year, and its shares rose 4 percent to $18.14 on the New York Stock Exchange.
Second-quarter net earnings fell to $23.0 million, or 26 cents per share, from $38.6 million, or 43 cents per share, a year earlier, Idaho-based Coeur said.
But excluding certain items, the profit was 31 cents per share. On that basis, it beat the analysts’ average estimate of 20 cents, according to Thomson Reuters I/B/E/S.
Revenue rose to $254.4 million from $231.1 million, said Coeur, which operates mines in Bolivia, Mexico and the United States. Silver production increased to 4.9 million ounces from 4.8 million ounces, and gold output rose to 63,047 ounces from 60,656 ounces.
In the second quarter, the price of silver fell almost 15 percent to $27.44 per ounce, according to Thomson Reuters data. Coeur said its average realized price for silver was $29.28 in the period -- down 25 percent from $39.11 a year earlier.
But the company sold more gold -- 59,579 ounces compared with 49,930 ounces a year earlier -- while the average price rose to $1,610 per ounce from $1,504. Also, Coeur’s Kensington gold mine in Alaska was at full production after being shuttered for technical reasons earlier this year.
Chief Executive Officer Mitchell Krebs attributed the strong results to a nearly tripling of gold production at Kensington, while operating costs were nearly halved as the mine returned to full production.
“We also saw higher silver and gold production levels and substantially lower costs at our Rochester mine in Nevada as a result of an expansion that took place in 2011,” Krebs said.
The company’s Palmarejo silver and gold mine in Mexico and San Bartolomé silver mine in Bolivia both delivered consistent results, Krebs said.
“Despite industrywide cost pressures,” he said, the company was able to lower costs by improving efficiency.
The company said it expected to achieve the high end of its 2012 production targets of 18.5 million to 20.0 million ounces of silver and 210,000 to 230,000 ounces of gold.
Also on Tuesday, Coeur said it would acquire 1.85 million shares of Canada’s Huldra Silver Inc HDA.V for C$1.08 each.
Coeur and its affiliates previously held 1.905 million shares and warrants to acquire an additional 1.905 million. After the acquisition, Coeur will own and control 3,756,852 shares, representing about 8.8 percent of Huldra stock.
Reporting by Steve James in New York; Editing by Lisa Von Ahn