TORONTO (miningweekly.com) – US-based silver producer Coeur d’Alene Mines had posted lower profit during the third quarter owing to rising production costs, which were mainly the result of production issues at the company’s Palmajero mine, in Mexico.

The increased cash operating costs per silver ounce reflected higher mining costs associated with additional underground support measures, higher maintenance costs, and waste haulage costs in the openpit at Palmarejo, as well as lower mill production rates during the quarter at San Bartolomé, in Bolivia, owing to power interruptions. Operating costs at Palmarejo rose five times, to $3.75/oz of silver.

The consolidated cash operating costs during the quarter were $9.05/oz of silver, compared with $7.57/oz in the comparable period.

Coeur d’Alene reported a net loss of $15.8-million or 18c a share, compared with a profit of $23-million or 26c a share, a year earlier. The company’s adjusted earnings, which excluded one-off items, totalled $25.8-million or 29c a share, down 72% when compared with the $93.8-million or $1.05 a share the company earned a year earlier. Analysts, on average, had expected a profit of 43c a share on sales of $246.03-million.

The company posted a 33% year-on-year decline in revenue at $230.6-million.

The company had also stopped operations at the Martha underground silver mine, in Argentina, and had started reclamation in September.

Coeur said it had recorded 4.5-million ounces in silver sales, a 27% decline compared with a year earlier, while gold sales declined by 12% year-on-year to 59 156 oz. Silver contributed to 59% of the company’s total sales, compared with 68% a year earlier.

The realised price for silver had declined by 21% to $30.09/oz when compared with that of the third quarter in 2011, while the realized price for gold had declined 2% year-on-year to $1 654/oz, compared with $1 681/oz.

“The company’s third quarter was negatively impacted by lower production and higher unit costs at the Palmarejo mine, in Mexico, which were due to unfavourable underground conditions encountered during September and a transition in openpit production. Openpit production has been accelerated to partially offset the impact, which has led to higher unit costs and lower overall grades,” Coeur president and CEO Mitchell Krebs said.

The company expected full-year silver production to total 18.5-million to 19-million ounces, a narrower outlook for silver than previously expected, and 215 000 oz to 225 000 oz of gold. Cash operating costs were expected to be about $7.50/oz of silver.

Coeur said it expected cash operating costs at Kensington to average about $1 350/oz of gold for the year.

“As we look ahead to 2013, we expect silver and gold production to be consistent with 2011 and 2012 levels,” Krebs said.

Coeur’s New York-listed shares traded $23.78 apiece on Tuesday, having shed 21.72% of its value. The company’s stock had gained more than 80% in value since August.