A high-conviction precious metals re-rating story

In this feature, we break down the investment thesis in Coeur and what we’re watching as key catalysts unfold.
Charlie Lanchester

Hearts & Minds Investments

The HM1 (ASX: HM1) portfolio is constructed from the highest-conviction ideas of a select group of fund managers. I recently sat down with Jeremy Bond of Terra Capital — one of our Conference Managers — to unpack his thesis on Coeur Mining, a US-based precious metals producer undergoing a significant transformation. Jeremy originally presented this idea at the 2024 Sohn Hearts & Minds Conference, which you can watch here.

Coeur Mining, Inc. (NYSE: CDE) is a US-based precious metals producer focused on the exploration, development, and operation of gold and silver mines across North America. Its core assets include the Rochester silver-gold mine in Nevada, Kensington gold mine in Alaska, Wharf gold mine in South Dakota, and Palmarejo silver-gold mine in Mexico.

Coeur produces over 300,000 ounces of gold and around 12–15 million ounces of silver annually and is currently in the midst of a major transformation, centred on a multi-year expansion of the Rochester mine. This is expected to significantly increase silver output and lower costs, positioning Coeur as one of the few scalable silver producers in stable jurisdictions.

Company overview

Coeur Mining provides access to precious metals production in politically stable jurisdictions, with potential for operational and valuation upside.

In a sector often dominated by either low-grade legacy miners or high-risk emerging market exposure, Coeur offers a unique middle ground: US-centric production, rising output, and improving cost discipline. Its value lies in its ability to become a more reliable, scaled North American precious metals producer – particularly in silver, where global supply is increasingly constrained.

Over the past two years, Coeur has improved operational transparency, modernised key assets, and recommitted to financial discipline – all of which have started to shift the narrative from survival to growth.‍

Our investment thesis:

  • Operational turnaround: Coeur’s multi-year investment cycle is now bearing fruit – especially at the Rochester mine in Nevada, where a major expansion is expected to double silver production and materially lower costs
  • High leverage to precious metals: With a relatively high-cost base (for now), Coeur offers strong torque to rising silver and gold prices – meaning small increases in spot prices can significantly improve cash flow
  • Stable jurisdictions: All core operations are in the US (Nevada, Alaska, South Dakota) and Mexico, offering geopolitical safety at a time when many competitors are exposed to higher-risk regions
  • Potential valuation re-rating: Trading well below NAV and relative to peers, Coeur has upside potential if execution continues improving and silver sentiment strengthens.

‍‍The key risks to this thesis include:

  • Delays or cost overruns at the Rochester ramp-up
  • Prolonged weakness in silver or gold prices
  • A return to dilutive capital raises or undisciplined spending

Recent performance

Over the past month, Coeur Mining’s share price has surged more than 60%, driven by a combination of macro tailwinds and company-specific catalysts that are beginning to align after years of underperformance.

Source: Google
Source: Google

On the macro front, silver prices have broken out, rallying above US$30/oz for the first time in over a decade. As one of the more silver-leveraged producers in North America, Coeur is naturally positioned to benefit — particularly as much of its production comes from Nevada (Rochester) and Mexico, with minimal geopolitical risk. The market is clearly beginning to reprice silver’s role in both industrial decarbonisation and as a hedge against fiscal instability.

On the company level, sentiment has shifted sharply in response to operational progress at the Rochester mine, which is now in the early stages of its long-awaited ramp-up. For years, Coeur has been criticised for high costs and heavy capex — but the turnaround is taking shape. Recent quarterly results showing positive free cash flow and a reduction in all-in sustaining cost (AISC) guidance have added credibility to the story.

Finally, there’s a broader re-rating happening across the silver mining complex, with investors rotating into precious metals equities as a hedge against macro risk and declining real yields. Coeur, long one of the more discounted names in the space, is catching up — fast.

Disclosure: At the time of writing, HM1 (ASX: HM1) holds a position in Coeur Mining.


........
This material has been prepared by Hearts & Minds Investments. HM1 is not responsible for the content of linked websites or content prepared by third party. The inclusion of these links and third-party content does not in any way imply any form of endorsement by HM1 of the products or services provided by persons or organisations who are responsible for the linked websites and third-party content. This information is for general information only and does not consider the objectives, financial situation or needs of any person. Before making an investment decision, you should read the relevant disclosure document (if appropriate) and seek professional advice to determine whether the investment and information is suitable for you.

2 stocks mentioned

Charlie Lanchester
Chief Investment Officer
Hearts & Minds Investments

Charlie is the CIO of Hearts and Minds Investments (ASX: HM1), a listed investment company that invests in a high-conviction global equities portfolio, while supporting Australian medical research through donations made in lieu of traditional...

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment