Mitch Krebs: How Coeur Mining Manages Metal Volatility #preciousmetals #silverinvesting #silverprice

Key Concepts:

• Silver Crest Acquisition
• Los Chief Silver and Gold Mine (Mexico)
• Silver Production Proportion
• Meaningful Silver Producer
• Investor Exposure to Silver
• Silver Volatility
• Gold Stability
• Optimal Silver-to-Gold Mix (20-50%)

Silver Crest Acquisition and its Impact on Silver Production

The recent acquisition of Silver Crest, finalized in February, has significantly contributed to the company's silver production. This acquisition brought the Los Chief Silver and Gold Mine in Mexico into the company's portfolio. As a direct result, the proportion of silver within the company's overall business has increased.

Defining "Meaningful Silver Producer" and Investor Expectations

The company aims to consistently be a "meaningful silver producer," a characteristic that investors specifically look to them for. While there isn't a rigidly defined fixed percentage for what constitutes "meaningful," the speaker suggests that "more than 20%" is likely the lower bound.

Balancing Silver Volatility with Gold Stability

A key consideration in the company's production strategy is the inherent volatility of silver. The speaker notes that silver prices can fluctuate significantly, by as much as 20%, which can make business operations challenging. To mitigate this, the company values the inclusion of gold, which is perceived as a more stable metal. This stability provides a beneficial counterbalance to silver's price swings.

Optimal Silver-to-Gold Mix

The company's strategic goal is to maintain a balanced mix of silver and gold production. The ideal range for silver's proportion of the overall business is considered to be "somewhere between kind of that 20 and 50." This range is believed to offer the best combination of investor exposure to silver while managing the risks associated with its price volatility.

Synthesis/Conclusion

The Silver Crest acquisition has enhanced the company's silver production, aligning with investor expectations for silver exposure. The company strategically aims to be a meaningful silver producer, likely above 20%, but balances this with the stability offered by gold. The optimal production mix is targeted within the 20-50% range for silver, acknowledging silver's volatility and gold's relative stability.