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Coeur Mining Inc (CDE), Endeavour Silver Corp. (CAN) (EXK): Consider This Silver Miner That Trades at a Discount to Book

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Precious metals have been under pressure this year, and silver is not an exception. The weakness of the global economy and uncertainty about Chinese growth have sent silver from $30 at the beginning of the year to under $20 in July. Since then, prices have shown more positive signs. The silver mining stocks have been punished even more than the metal itself. Now that the price environment has seen some changes, is it time to look at silver stocks?

Coeur Mining Inc (NYSE:CDE)

Battling costs
As the price of silver has dropped, miners have looked for ways to cut their expenditures. Coeur Mining Inc (NYSE:CDE) d’Alene cut its cash operating costs by $19 million in the first half of this year, though the move didn’t help the company to report a second-quarter profit as lower silver prices outweighed cost-cutting initiatives.

The company stated that it has reduced second-half exploration budget by 17%. In addition, Coeur Mining Inc (NYSE:CDE) d’Alene reduced its second-half capital expenditure plan by 18% in a move the miner out of the red.

On the operational side, things were good in the second quarter. The company’s biggest mine, Palmarejo, which is situated in Mexico, delivered a 24% increase in silver production in comparison with the previous quarter. Overall, Coeur Mining Inc (NYSE:CDE) d’Alene saw a 21% increase in silver production and a 7% increase in gold production.

Other miners with primary assets in Mexico have also made moves to battle costs. Endeavour Silver Corp. (CAN) (NYSE:EXK)  made decisive layoffs in the second quarter, firing 176 people. The company has stated that it plans similar actions in the third quarter. Endeavour Silver Corp. (CAN) (NYSE:EXK)’s El Cubo mine is operating at a loss, and the company plans to turn things on this mine.

Endeavour Silver Corp. (CAN) (NYSE:EXK) has stated that it would have to close the mine for care and maintenance if it does not see an improvement in its performance. However, the company has stated that in July all three Endeavour Silver Corp. (CAN) (NYSE:EXK)’s mines contributed to cash flow. This means the layoffs are working.

First Majestic Silver Corp (NYSE:AG)  recently reported record production of over 3.2 million ounces of silver equivalent. The company expects a 5%-10% reduction in the cash cost per ounce in the second half of the year. In an interesting way to battle the fall of the silver prices, the company has suspended the sale of 700,000 ounces of silver in the second quarter. This helped the company sell its silver for no less than $22.80 an ounce.
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