Tahoe shares rise on the back of record H1 revenue, cash flow per share

VANCOUVER (miningweekly.com) – TSX- and NYSE-listed midtier precious metals producer Tahoe Resources has reported record revenues and cash flow per share for the six months ended June 30, sending its NYSE-listed stock up 9% on Wednesday to a new 52-week high.

The Vancouver-headquartered company, with operations in Guatemala, Peru and Canada, doubled half-year silver production to 11.4-million ounces and lifted gold output by 52% over the first half of 2015 to 167 168 oz. The La Arena mine, in Peru, poured its one-millionth ounce of gold in May, the company advised.

This improved performance resulted in record revenues of $360.4-million in the six months to June, a 58% improvement compared with the first half of 2015.

Tahoe noted record cash flow provided by operating activities before changes in working capital of $185.3-million, or $0.69 a share, in the period.

The company's adjusted earnings of $57.9-million, or $0.19 a share, in the second quarter ended June, beat Wall Street analyst expectations of $0.14 a share.

Net earnings totalled $16.7-million, or $0.05 a share, in the second quarter, and $54.6-million, or $0.20 a share, for the first half of the year.

As at June 30, Tahoe held $151.7-million in cash on hand.

During the second quarter, Tahoe achieved a number of transformative milestones, including the acquisition of Lake Shore Gold through a transaction worth about C$945-million; achieving commercial production for the Phase 1 operation at the Shahuindo gold mine, in Peru; and advancing Phase 2 development at Shahuindo.

Tahoe had also started work on a new shaft project at the Bell Creek mine, in Timmins, Ontario, designed to increase output and significantly extend mine life. Tahoe also acquired a 2% net smelter return royalty related to production at Bell Creek and signed a letter of intent to acquire the 30% of the Whitney project that Tahoe did not already own. The Whitney project covered nearly 9 km² of prospective property located about 4 km from the Bell Creek mill, in Timmins, the company advised.

BETTER GUIDANCE
Based on operating results during the first six months of 2016, and expectations for the second half of the year, Tahoe expects to hit the top end of its 2016 guidance for silver output of 18-million to 21-million ounces of silver in concentrates. The company's estimated full-year gold output remains unchanged at 370 000 oz to 430 000 oz.

Tahoe said silver all-in sustaining costs (AISC) were now expected to range between $8/oz and $9/oz, down from between $10/oz and $11/oz previously. Gold AISC were expected to remain constant at between $950/oz and $1 000/oz.

The company expects full-year production of 18-million to 21-million ounces of silver, and 370 000 oz to 430 000 oz of gold for 2016.

Meanwhile, Tahoe also announced that, effective August 16, it had appointed Ron Clayton as president and CEO and Elizabeth McGregor as VP and CFO.

The company’s NYSE-quoted stock hit a new 52-week high on Wednesday at $16.99 apiece.