Coeur Mining, Inc. (CDE) stock intrinsic value fair value estimate & owner earnings analysis

Coeur Mining is a mid-sized gold and silver producer with seven operating mines: Palmarejo (Chihuahua, Mexico), Las Chispas (Sonora, Mexico, acquired with SilverCrest in 2025), Rochester (Nevada), Kensington (Alaska), Wharf (South Dakota), and, since the New Gold acquisition closed on March 20, 2026, Rainy River (Ontario) and New Afton (British Columbia, gold and copper). Coeur does not set the price of what it sells. Its earnings are mostly the gap between metal prices and a large, slow-moving cost base of mining, processing and the capital spending needed to keep the mines going. What the business has actually earned. We measure owner earnings as operating cash flow, less working-capital swings, stock compensation and the capital spending needed to sustain production. We treated all capital spending as a cost of staying in business, including the underground development that replaces depleting ore, with one exception: the 2021-2023 Rochester expansion (a new crusher and leach pad), which was clearly a one-time capacity investment. On that basis owner earnings per share were: 2016 $0.23, 2017 -$0.01, 2018 -$0.19, 2019 $0.12, 2020 $0.23, 2021 -$0.20, 2022 -$0.30, 2023 -$0.27, 2024 -$0.08, 2025 $0.86. For a decade, at gold prices of roughly $1,250-$2,400, the old Coeur roughly broke even for its owners. 2025 was the first year of real cash generation, driven by realized prices of $3,184 gold and $40.01 silver plus the Las Chispas mine. Write-downs and impairments (notably $251 million on Silvertip in 2019) are added back because they are sunk costs. The repeated pattern of buying assets and later writing them down is carried in the bear case instead. Why the history cannot be the anchor. The company today is a different and much larger business. Shares outstanding went from about 400 million at the end of 2024 to 1,028.5 million at June 30, 2026, after the SilverCrest and New Gold deals were paid for in stock. The only full year since the change (2025) sits at the top of a price cycle. So we built the earnings level from the current mine portfolio and its actual 2026 cost base, then priced it at stated metal prices. In the second quarter of 2026 Coeur produced 163,490 oz gold, 4.4 million oz silver and 11.4 million lb copper, realized $4,140 gold, $71.18 silver and $6.11 copper, and generated $513 million of operating cash flow against $126 million of capital spending. That quarter implies the combined business needs about $1.9 billion of annual revenue just to cover its operating costs, overhead and roughly $560 million of yearly capital spending (the midpoint of the $520-605 million guided for 2026). Above that level it keeps about 64 cents of each extra revenue dollar after royalties and taxes. Each sustained $500/oz change in gold is worth about $0.20 per share per year. What has gone wrong recently. Management cut 2026 guidance from 680,000-815,000 oz gold to 630,000-750,000 oz and copper from 50-65 million lb to 40-50 million lb. Before the merger, New Gold had projected 435,000-490,000 oz of gold for 2026 from Rainy River and New Afton. On the second-quarter run rate those two mines are producing roughly 310,000 oz. We give no credit to the old projections. We also note mine-life limits disclosed for the acquired assets: Rainy River's open pit was scheduled to finish in 2028, with the mill running at full capacity until 2029, and New Afton's stated life runs to 2031. Base case ($6.01 per share). Production holds near today's run rate (660,000 oz gold, 19 million oz silver, 50 million lb copper) for three years. It then steps down as the Rainy River open pit, Las Chispas and New Afton reserves deplete, falling to 75% of today's output by year 8. After year 10 it declines about 5% a year through year 30. That later decline gives partial credit for the reserve replacement Coeur has demonstrated for 15-40 years at Palmarejo, Kensington, Rochester and Wharf. Year one earns today's realized prices. Prices then return over two years to 2025's realized levels ($3,184 gold, $40 silver, $4.50 copper), which the business has already operated at for a full year, and stay there in nominal terms with costs also held flat. Business cash flow runs about $1.58 billion in year one, $1.18 billion in year two and about $760 million in year three. The business is worth about $6.45 billion. It owes $705 million of notes and leases, adjusted up about $11 million because the 6.875% 2032 notes cost more than the 5.125% 2029 notes save, plus $424 million of mine-closure obligations, which come due as the mines close in every case. Cash beyond operating needs is about $900 million. That leaves equity of about $6.21 billion, or $6.01 per share on 1,034 million diluted shares. Bear case ($0.77 per share). Precious metals repeat the 2011-2015 collapse, when gold fell about 45% and silver about 70% from their peaks, and Coeur reported more than $1.5 billion of losses in 2014-2015 alone. From today's prices that means a trough of about $2,300 gold, $21 silver and $3.40 copper for three years, with costs easing only 5%. Prices then partly recover to $2,700 gold and $30 silver. Production sits at the low end of the cut guidance and shrinks to 65% by year 7 as exploration is cut and depleting mines are not replaced. Management's record of stock-funded acquisitions at cycle highs, followed by write-downs, is charged as one more $300 million loss. In the trough, business cash flow falls to about $120 million a year, still above the roughly $43 million of annual interest. Mines that stop paying are closed after about year 11. The business is worth about $1.03 billion, owes a net $238 million after its surplus cash, and leaves about $794 million, or $0.77 per share. The balance sheet would survive this: the $291 million of 2029 notes can be repaid from cash and the $1 billion credit line is undrawn. Shareholders would simply own a business that earns very little. Bull case ($16.61 per share). Today's prices hold for three years and then settle halfway back to 2025 levels ($3,662 gold, $55.60 silver, $5.31 copper). Production runs at the top of revised guidance (720,000 oz gold, 21 million oz silver). The already-built New Afton C-Zone block cave ramps copper to 85 million lb, still below the 95-115 million lb New Gold once projected. Mine lives are extended at the pace of the past decade. The business is worth about $17.4 billion; less $238 million of net obligations, that is $16.61 per share. Margin-of-safety price. We are not confident in any single earnings level. The same mines earn about $1.50 per share at today's prices, about $0.74 at 2025's prices and almost nothing at 2015-style prices, and metal prices have never stayed at records for long. The worst plausible outcome is a multi-year precious-metals bust while the New Gold integration keeps disappointing and management makes another large share-funded acquisition. The company has net cash before closure costs and no large debt maturity until 2029, so lenders could not force a bad outcome. But the shareholders' claim on value above the bear case rests almost entirely on metal prices. The things we are most likely to be wrong about are how long prices stay high, how fast Rainy River and New Afton deplete, and whether the integration problems behind the guidance cuts are temporary. If all three go the wrong way, the shares are worth about the bear case. Shareholders receive only a token $0.02 semi-annual dividend over the holding period, so any return has to come from the business's own cash build. The margin-of-safety price is $2.75. At that price the business would generate cash equal to that price in under four years at the 2025 metal prices it has already demonstrated, and in about two years at today's prices. The implied 20% annual return then holds unless prices fall to 2015-style levels and stay there. Change since our previous estimate. Our previous figures were prepared on a different basis and are not comparable. Since then the New Gold acquisition has closed, the second quarter delivered record cash flow, the balance sheet moved to net cash, and production guidance was cut.