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CHICAGO–(BUSINESS WIRE)–Coeur Mining, Inc. (the “Company” or “Coeur”) (NYSE: CDE) reported first quarter 2016 revenue of $148.4 million, adjusted EBITDA1 of $34.6 million, adjusted net loss1 of $0.04 per share, and cash flow from operating activities of $6.6 million2. The Company sold 3.5 million ounces of silver and 79,091 ounces of gold and during the quarter.

Adjusted all-in sustaining costs per realized silver equivalent ounce1 of $13.73 dropped 14% compared to the same quarter last year (9% decline assuming a constant 60:1 ratio). Adjusted costs applicable to sales per realized silver equivalent ounceof $11.08 declined 14% compared with the first quarter last year (12% decline assuming a constant 60:1 ratio). Adjusted costs applicable to sales per gold equivalent ounce1 of $721 declined 10% compared to the first quarter last year.

Highlights

  • Silver production was 3.4 million ounces and gold production was 78,072 ounces, or 8.1 million silver equivalent ounces1, as previously announced on April 7, 2016
  • Silver sales were 3.5 million ounces and gold sales were 79,091 ounces, or 8.3 million silver equivalent ounces1
  • Adjusted all-in sustaining costs were $13.73 per realized silver equivalent ounce1. Using a 60:1 equivalence, adjusted all-in sustaining costs were $16.05 per silver equivalent ounce1
  • Adjusted costs applicable to sales were $11.08 per realized silver equivalent ounce1. Using a 60:1 equivalence, adjusted costs applicable to sales per silver equivalent ounce1 were $12.05
  • Adjusted costs applicable to sales per gold equivalent ounce1 were $721
  • Adjusted EBITDA1 was $34.6 million, a 16% increase from the fourth quarter 2015
  • Capital expenditures totaled $22.2 million, driven by development of the Jualin deposit at Kensington and the Guadalupe and Independencia underground deposits at Palmarejo
  • Cash and equivalents of $173.4 million at March 31, 2016
  • Expected total consideration of $24.8 million from sales of non-core assets

"I am pleased with our strong cost performance in the first quarter, which is tracking at the low-end of cost guidance set at the beginning of the year," said Mitchell J. Krebs, Coeur's President and Chief Executive Officer. "These sustained lower operating costs, combined with the positive momentum we have seen in silver and gold prices so far this year, have led to a 16% increase in adjusted EBITDA1 to $34.6 million.

"We have made significant progress repositioning our assets through industry-leading cost reductions, operational efficiency improvements, and the focus on higher-quality, higher-margin silver and gold ounces, which is reflected in this quarter's results. As underground production rates continue to accelerate at the Guadalupe and Independencia deposits at Palmarejo, ore placement rates at Rochester increase, development of higher-grade mineralization at Kensington progresses, and with the first full-year of contribution from the Wharf mine which we acquired last year, we are well-positioned to generate strong free cash flow later this year."

 

Financial Highlights (Unaudited)

                               

(Amounts in millions, except per share amounts, gold
ounces produced & sold, and per-ounce metrics)

    1Q 2016     4Q 2015     3Q 2015     2Q 2015     1Q 2015
Revenue     $ 148.4       $ 164.2       $ 162.6       $ 166.3       $ 153.0  
Costs Applicable to Sales     $ 101.6       $ 125.3       $ 120.2       $ 119.1       $ 115.1  
General and Administrative Expenses     $ 8.3       $ 8.8       $ 6.7       $ 8.5       $ 8.8  
Adjusted EBITDA1     $ 34.6       $ 29.8       $ 31.4       $ 34.7       $ 23.7  
Net Income (Loss)     $ (20.4 )     $ (303.0 )     $ (14.2 )     $ (16.7 )     $ (33.3 )
Net Income (Loss) Per Share     $ (0.14 )     $ (2.28 )     $ (0.11 )     $ (0.12 )     $ (0.32 )
Adjusted Net Income (Loss)1     $ (6.6 )     $ (38.6 )     $ (21.8 )     $ (14.5 )     $ (19.2 )
Adjusted Net Income (Loss)1 Per Share     $ (0.04 )     $ (0.27 )     $ (0.16 )     $ (0.11 )     $ (0.19 )
Weighted Average Shares     150.2       145.0       135.5       135.0       102.6  
Cash Flow From Operating Activities     $ 6.6       $ 44.4       $ 36.2       $ 36.9       $ (3.4 )
Capital Expenditures     $ 22.2       $ 30.0       $ 23.9       $ 23.7       $ 17.6  
Cash, Equivalents & Short-Term Investments     $ 173.4       $ 200.7       $ 205.7       $ 205.9       $ 179.6  
Total Debt3     $ 511.1       $ 490.4       $ 546.0       $ 547.7       $ 513.5  
Average Realized Price Per Ounce – Silver     $ 15.16       $ 14.27       $ 14.66       $ 16.23       $ 16.77  
Average Realized Price Per Ounce – Gold     $ 1,178       $ 1,093       $ 1,116       $ 1,179       $ 1,204  
Silver Ounces Produced     3.4       4.0       3.8       4.3       3.8  
Gold Ounces Produced     78,072       91,551       85,769       80,855       69,734  
Silver Equivalent Ounces Produced1     8.1       9.5       9.0       9.1       8.0  
Silver Ounces Sold     3.5       4.4       4.0       4.0       4.1  
Gold Ounces Sold     79,091       92,032       91,118       84,312       68,420  
Silver Equivalent Ounces Sold1     8.3       9.9       9.5     9.1     8.2
Silver Equivalent Ounces Sold (Realized)1     9.7       11.3       10.9       10.1       9.0  
Adjusted Costs Applicable to Sales per AgEq Ounce1     $ 12.05       $ 12.65       $ 12.07       $ 12.56       $ 13.71  
Adjusted Costs Applicable to Sales per Realized AgEq Ounce1     $ 11.08       $ 11.71       $ 11.00       $ 11.75       $ 12.90  
Adjusted Costs Applicable to Sales per AuEq Ounce1     $ 721       $ 663       $ 783       $ 816       $ 797  
Adjusted All-in Sustaining Costs per AgEq Ounce1     $ 16.05       $ 15.66       $ 15.17       $ 16.60       $ 17.66  
Adjusted All-in Sustaining Costs per Realized AgEq Ounce 1     $ 13.73       $ 13.55       $ 13.14       $ 14.81       $ 16.05  
                                                   

Financial Results

The Company realized average silver and gold prices of $15.16 and $1,178 during the first quarter, which were 6% and 8% higher, respectively, compared with the fourth quarter and 10% and 2% lower, respectively, compared to last year's first quarter.

First quarter revenue decreased 10% compared with the fourth quarter and 3% compared with the first quarter 2015 to $148.4 million, primarily due to fewer silver and gold ounces sold from Palmarejo as a result of reduced mining rates as the operation transitions from predominantly open pit mining to entirely higher-grade underground mining. Production began from the Independencia deposit in late January and mining rates are expected to climb during each remaining quarter of the year. Silver contributed 36% of metal sales and gold contributed 64% during the first quarter.

First quarter general and administrative expenses were $8.3 million, 6% lower compared to the first and fourth quarters last year. First quarter capital expenditures of $22.2 million were 26% lower compared to the fourth quarter and 26% higher than the first quarter last year due to development of the Jualin deposit at Kensington and development of the Guadalupe and Independencia deposits at Palmarejo. First quarter exploration expense totaled $1.7 million for discovery of new silver and gold mineralization, which was flat compared to the fourth quarter and 59% lower than the first quarter 2015.

First quarter adjusted EBITDA1 was $34.6 million, a 16% increase compared to the fourth quarter, primarily due to lower operating costs and higher metal prices, and up 46% compared to the first quarter last year as a result of lower costs and the addition of the Wharf mine. At March 31, 2016, LTM adjusted EBITDA1 totaled $126.5 million, an 8% increase from year-end 2015 and a 58% increase from the same period last year.

Adjusted net loss1 was $6.6 million, or $0.04 per share, in the first quarter, compared to an adjusted net loss1 of $38.6 million, or $0.27 per share, in the fourth quarter and $19.2 million, or $0.19 per share, in the first quarter 2015. The first quarter adjusted net loss primarily excludes fair value adjustments to royalty obligations, a $3.9 million reduction in carrying value of the Endeavor silver stream and El Gallo royalty, and stock-based compensation. First quarter cash flow from operating activities was $6.6 million, lower than the fourth quarter 2015 as a result of lower metal sales and a $16.6 million increase in working capital, primarily due to payment of accrued interest and an increase in ore inventory on the leach pad at Rochester.

Operations

Highlights of first quarter 2016 results for each of the Company's operating segments are provided below.

 

Palmarejo, Mexico

                               
(Dollars in millions, except per ounce amounts)     1Q 2016     4Q 2015     3Q 2015     2Q 2015     1Q 2015
Underground Operations:                              
Tons mined     215,642     189,383     190,399     172,730     149,150
Average silver grade (oz/t)     4.21     3.96     4.11     3.90     4.34
Average gold grade (oz/t)     0.07     0.06     0.10     0.09     0.07
Surface Operations:                              
Tons mined     35,211     102,018     247,071     257,862     281,481
Average silver grade (oz/t)     4.18     3.86     3.56     3.47     3.79
Average gold grade (oz/t)     0.04     0.03     0.03     0.03     0.04
Processing:                              
Total tons milled     246,533     301,274     427,635     435,841     451,918
Average recovery rate – Ag     89.1%     95.4%     87.9%     78.5%     78.7%
Average recovery rate – Au     92.1%     88.8%     84.7%     76.2%     73.9%
Silver ounces produced (000's)     933     1,126     1,422     1,247     1,354
Gold ounces produced     14,668     14,326     22,974     18,127     15,495
Silver equivalent ounces produced1 (000's)     1,813     1,985     2,800     2,335     2,284
Silver ounces sold (000's)     928     1,465     1,425     1,228     1,330
Gold ounces sold     12,899     18,719     25,000     15,706     13,793
Silver equivalent ounces sold1 (000's)     1,702     2,588     2,925     2,170     2,158
Silver equivalent ounces sold1 (realized) (000's)     1,930     2,840     3,325     2,374     2,323
Revenues     $29.8     $41.6     $49.2     $38.9     $39.4
Costs applicable to sales     $21.0     $39.8     $34.1     $30.1     $34.5
Adjusted costs applicable to sales per AgEq ounce1     $11.54     $13.48     $11.40     $13.21     $14.56
Adjusted costs applicable to sales per realized AgEq ounce 1     $10.18     $12.04     $10.01     $12.07     $13.52
Exploration expense     $0.8     $0.5     $1.1     $1.8     $1.1
Cash flow from operating activities     $3.4     $20.3     $22.9     $9.7     $(0.2)
Sustaining capital expenditures     $6.6     $(1.4)     $1.1     $2.7     $3.1
Development capital expenditures     $2.2     $7.0     $9.4     $8.0     $6.1
Total capital expenditures     $8.8     $5.6     $10.5     $10.7     $9.2
Free cash flow (before royalties)     $(5.4)     $14.7     $12.4     $(1.0)     $(9.4)
Royalties paid     $9.1     $8.8     $10.2     $9.8     $10.4
Free cash flow4     $(14.5)     $5.9     $2.2     $(10.8)     $(19.8)
  • Production was in-line with expectations as the transition to lower-tonnage, higher-grade, higher-margin underground operations from two ore sources – Guadalupe and Independencia – remains on-track
  • First quarter adjusted costs applicable to sales per realized silver equivalent ounce1 were $10.18, a 15% decline from the fourth quarter as a result of fewer waste tons mined and lower processing costs. Using a 60:1 equivalence, adjusted costs applicable to sales per silver equivalent ounce1 were $11.54
  • Recent modifications to the processing plant have significantly improved recovery rates. First quarter recovery rates were 89.1% for silver and 92.1% for gold compared to 78.7% and 73.9%, respectively, during last year's first quarter
  • With active open pit mining operations to be completed in the second quarter 2016, underground production levels are expected to increase throughout the year as mining rates from Independencia accelerate to 1,000 tons per day by year-end 2016. By mid-2017, the Company expects daily underground mining rates to reach a combined 4,000 tons per day from the higher-grade, higher-margin Guadalupe and Independencia deposits
  • In 2016, Palmarejo is expected to produce 3.9 – 4.4 million ounces of silver and 67,000 – 72,000 ounces of gold at costs applicable to sales per silver equivalent ounce1 of $12.50 – $13.50 (based on a 60:1 equivalence)
 

Rochester, Nevada

                               
(Dollars in millions, except per ounce amounts)     1Q 2016     4Q 2015     3Q 2015     2Q 2015     1Q 2015
Ore tons placed     4,374,459     4,411,590     4,128,868     3,859,965     4,013,879
Average silver grade (oz/t)     0.64     0.60     0.59     0.61     0.74
Average gold grade (oz/t)     0.004     0.003     0.003     0.003     0.004
Silver ounces produced (000's)     929     1,107     1,086     1,294     1,144
Gold ounces produced     10,460     11,564     10,892     16,411     13,721
Silver equivalent ounces produced1 (000's)     1,557     1,800     1,740     2,279     1,967
Silver ounces sold (000's)     1,079     1,125     1,304     1,120     1,351
Gold ounces sold     11,672     11,587     13,537     15,085     17,754
Silver equivalent ounces sold1 (000's)     1,779     1,821     2,116     2,025     2,416
Silver equivalent ounces sold1 (realized) (000's)     1,986     2,004     2,333     2,221     2,629
Revenues     $30.0     $29.0     $34.6     $36.3     $44.0
Costs applicable to sales     $22.5     $22.8     $25.4     $24.4     $31.4
Adjusted costs applicable to sales per AgEq ounce1     $12.61     $12.37     $12.01     $12.01     $12.95
Adjusted costs applicable to sales per realized AgEq ounce 1     $11.29     $11.19     $10.89     $10.94     $11.91
Exploration expense     $0.1     $0.1     $—     $0.5     $0.7
Cash flow from operating activities     $2.1     $0.4     $6.5     $8.8     $16.4
Sustaining capital expenditures     $2.5     $5.3     $1.8     $2.4     $0.8
Development capital expenditures     $0.8     $5.5     $3.5     $3.5     $2.5
Total capital expenditures     $3.3     $10.8     $5.3     $5.9     $3.3
Free cash flow4     $(1.2)     $(10.4)     $1.2     $2.9     $13.1
  • Silver equivalent production1 was 14% lower than the prior quarter due to poor weather and timing of recoveries from the Stage III leach pad. Production levels increased significantly in March as expected and are anticipated to continue to climb throughout the year
  • First quarter adjusted costs applicable to sales per realized silver equivalent ounce1 were $11.29. Using a 60:1 equivalence, adjusted costs applicable to sales per silver equivalent ounce1 were $12.61
  • Approval for POA 10, which will allow for the expansion of the Stage IV leach pad and construction of new Stage V leach pad, is expected in the second quarter 2016
  • In 2016, Rochester is expected to produce 4.8 – 5.3 million ounces of silver and 48,000 – 55,000 ounces of gold at costs applicable to sales per silver equivalent ounce1 of $11.25 – $12.25 (based on a 60:1 equivalence)
 

Kensington, Alaska

                               
(Dollars in millions, except per ounce amounts)     1Q 2016     4Q 2015     3Q 2015     2Q 2015     1Q 2015
Tons milled     159,360     159,666     165,198     170,649     164,951
Average gold grade (oz/t)     0.21     0.22     0.19     0.18     0.24
Average recovery rate     95.8%     96.0%     93.9%     94.9%     94.8%
Gold ounces produced     31,974     33,713     28,799     29,845     33,909
Gold ounces sold     31,648     29,989     28,084     36,607     36,873
Revenues     $35.7     $31.7     $30.5     $42.5     $44.0
Costs applicable to sales     $24.4     $23.7     $25.0     $27.5     $29.4
Adjusted costs applicable to sales per gold ounce1     $761     $777     $842     $745     $797
Exploration expense     $—     $0.3     $0.2     $0.4     $1.7
Cash flow from operating activities     $13.7     $4.5     $8.9     $12.0     $12.3
Sustaining capital expenditures     $4.4     $5.5     $1.0     $4.2     $4.1
Development capital expenditures     $3.7     $4.0     $4.5     $0.5     $—
Total capital expenditures     $8.1     $9.5     $5.5     $4.7     $4.1
Free cash flow4     $5.6     $(5.0)     $3.4     $7.3     $8.2
  • Consistent production and costs achieved in the first quarter with 31,974 gold ounces produced at adjusted costs applicable to sales per gold ounce1 of $761
  • Development of the high-grade Jualin deposit is progressing and is over one-third complete
  • In 2016, Kensington is expected to produce 115,000 – 125,000 ounces of gold at costs applicable to sales per gold ounce1 of $825 – $875
 

Wharf, South Dakota

                               
(Dollars in millions, except per ounce amounts)     1Q 2016     4Q 2015     3Q 2015     2Q 2015     1Q 2015
Ore tons placed     974,663     1,147,130     1,149,744     887,409     415,996
Average silver grade (oz/t)     0.30     0.21     0.21     0.30    
Average gold grade (oz/t)     0.031     0.032     0.035     0.025     0.020
Average plant recovery rate – Au     96.6%     97.3%     92.8%     76.7%     85.9%
Silver ounces produced (000's)     13     18     19     19    
Gold ounces produced     20,970     31,947     23,104     16,472     6,609
Gold equivalent ounces produced1     21,186     32,231     23,427     16,794     6,609
Silver ounces sold (000's)     15     17     19     13    
Gold ounces sold     22,872     31,202     24,815     17,131    
Gold equivalent ounces sold1     23,122     31,485     25,132     17,348    
Revenues     $27.9     $35.7     $28.0     $20.4     $—
Costs applicable to sales     $15.5     $17.8     $17.8     $16.6     $—
Adjusted costs applicable to sales per gold equivalent ounce1     $667     $556     $716     $970     $—
Exploration expense     $—     $0.1     $—     $—     $—
Cash flow from operating activities     $9.7     $18.1     $12.9     $8.2     $(7.2)
Sustaining capital expenditures     $1.4     $1.2     $0.7     $1.2     $0.1
Development capital expenditures     $—     $—     $—     $—     $—
Total capital expenditures     $1.4     $1.2     $0.7     $1.2     $0.1
Free cash flow4     $8.3     $16.9     $12.2     $7.0     $(7.3)
  • Lower production compared to prior quarter as expected due to timing of recoveries from the current leach pad. Higher production is expected during remainder of 2016
  • Adjusted costs applicable to sales per gold equivalent ounce1 were $667 in the first quarter. Process plant efficiencies have led to significantly higher plant recovery rates since Coeur acquired the operation in February 2015, which have positively impacted unit costs
  • In 2016, Wharf is expected to produce 90,000 – 95,000 ounces of gold at costs applicable to sales per gold equivalent ounce1 of $650 – $750
 

San Bartolomé, Bolivia

                               
(Dollars in millions, except per ounce amounts)     1Q 2016     4Q 2015     3Q 2015     2Q 2015     1Q 2015
Tons milled     407,806     475,695     373,201     457,232     406,951
Average silver grade (oz/t)     3.64     3.84     3.76     3.73     3.65
Average recovery rate     93.1%     84.9%     84.0%     87.6%     81.6%
Silver ounces produced (000's)     1,382     1,550     1,178     1,495     1,213
Silver ounces sold (000's)     1,384     1,564     1,202     1,439     1,290
Revenues     $21.3     $22.4     $17.4     $23.4     $21.5
Costs applicable to sales     $17.5     $20.0     $17.5     $19.2     $19.1

Adjusted costs applicable to sales per silver ounce1

    $12.56     $12.48     $14.41     $13.26     $14.47
Exploration expense     $—     $—     $0.1     $—     $—
Cash flow from operating activities     $5.5     $10.0     $5.7     $5.4     $5.0
Sustaining capital expenditures     $0.5     $2.5     $1.8     $1.0     $0.9
Development capital expenditures     $—     $—     $—     $—     $—
Total capital expenditures     $0.5     $2.5     $1.8     $1.0     $0.9
Free cash flow4     $5.0     $7.5     $3.9     $4.4     $4.1
  • Adjusted costs applicable to sales per silver ounce1 were $12.56 in the first quarter, consistent with the prior quarter and down 13% compared the to the same quarter last year as a result of the recent increase in lower-cost, higher-grade, third-party ore purchases
  • Approximately one-third of first quarter silver production was derived from higher-grade, third-party ore purchases. Coeur expects the proportion to remain between 25 – 30% during the remainder of 2016
  • Average recovery rate increased from 84.9% in the fourth quarter to 93.1% in the first quarter, partially as a result of process improvements, including the recently implemented oxygen injection system in the agitated leach circuit
  • In 2016, San Bartolomé is expected to produce 5.8 – 6.1 million ounces of silver at costs applicable to sales per silver ounce1 of $13.50 – $14.25

 

Coeur Capital

                               
(Dollars in millions, except per ounce amounts)     1Q 2016     4Q 2015     3Q 2015     2Q 2015     1Q 2015
Tons milled     86,863     198,927     191,913     191,175     185,299
Average silver grade (oz/t)     3.17     2.05     1.39     2.35     1.69
Average recovery rate     41.9%     42.1%     45.4%     45.4%     42.4%
Silver ounces produced (000's)     115     171     121     204     133
Silver ounces sold (000's)     123     193     95     209     118
Metal sales     $1.9     $2.4     $1.3     $3.1     $1.9
Royalty revenue     $1.8     $1.5     $1.6     $1.8     $2.0
Costs applicable to sales (Endeavor silver stream)     $1.0     $1.0     $0.5     $1.4     $0.6
Costs applicable to sales per silver equivalent ounce1     $5.35     $5.50     $4.99     $6.46     $5.37
Cash flow from operating activities     $0.8     $0.8     $3.1     $2.1     $2.2
Free cash flow4     $0.8     $0.8     $3.1     $2.1     $2.2
  • There are now three cash-flowing royalties and streams, one non-cash-flowing royalty, and several investments in junior mining companies held in Coeur Capital or its affiliates
  • Coeur Capital's largest source of cash flow is the silver stream on the Endeavor mine in New South Wales, Australia in which the Company owns 100% of the silver up to a total of 20.0 million payable ounces. At March 31, 2016, the Company has received 6.2 million ounces
  • Silver production received from the stream on the Endeavor mine declined following a decision by the operator to significantly cut production due to lower lead and zinc prices

Exploration

First quarter exploration expense totaled $1.7 million. Coeur's exploration program used 3 drill rigs during the first quarter, including one drill at each of Palmarejo, Kensington, and Rochester. This work resulted in completion of over 12,579 feet (3,834 meters) of combined core and reverse circulation drilling. Drilling programs gained momentum toward the end of the quarter, with the second and third quarters expected to be the most active for exploration drilling.

Exploration expense is expected to total $11 – $13 million in 2016, with an additional $11 – $13 million of capital allocated to resource conversion. Exploration continues to be driven by the focus on the discovery of high-grade deposits located near existing operations, with the near-term focus on:

  • Expanding resources in the Guadalupe-Independencia corridor, including deeper areas of the Guadalupe and Independencia deposits and the recently identified Los Bancos and Nación veins, as well as drilling at the nearby La Bavisa vein
  • Infill and expansion drilling of the higher-grade East Rochester deposit, which is expected to be the focus of a revised economic analysis in 2016
  • Underground infill and expansion drilling of the high-grade Jualin deposit at Kensington, as well as four zones within the Kensington Main deposit, proximal to current mining activities

Non-Core Asset Sales

On March 31, 2016, Coeur sold its 2.0% net smelter returns "NSR" royalty on the Cerro Bayo mine to the operator, Mandalay Resources Corporation, for total consideration valued at approximately $5.7 million on the closing date, consisting of $4.0 million in cash and 2.5 million Mandalay shares

On April 19, 2016, Coeur closed the sale of its 2.5% NSR royalty on the La Cigarra project to Kootenay Silver Inc. for total consideration valued at approximately $3.6 million on the closing date, consisting of $500,000 in cash and 9.6 million Kootenay shares.

On April 19, 2016, Coeur sold its tiered NSR royalty on the El Gallo mine to the operator, a subsidiary of McEwen Mining Inc., for total consideration of approximately $6.3 million, including $1 million in contingent consideration payable in mid-2018.

Coeur also entered into a definitive agreement to sell its Martha assets in Argentina to Hunt Mining Corp. for total cash consideration of $3.0 million, including $1.5 million at the time of closing and $1.5 million on the one-year anniversary of the closing. The transaction is expected to close in the second quarter of 2016.

Coeur has reached principal terms to sell its interest in the royalty on the Correnso mine for expected consideration of $5.5 million (on a 100% basis after completing the buyout of Coeur's joint venture partner in New Zealand), plus a contingent payment of $700,000 payable in 2017 tied to resource conversion. The transaction is subject to negotiation and execution of definitive agreements and is expected to close in the second quarter 2016.

Full-Year 2016 Outlook

Coeur's 2016 guidance is shown below. Companywide production and cost guidance is unchanged from the original guidance provided on February 10, 2016. Following a decision by the operator of the Endeavor mine to significantly curtail production due to lower lead and zinc prices, Coeur revised the production outlook from the Endeavor silver stream lower but expects to increase production at Palmarejo, Rochester, and San Bartolomé for the remainder of 2016, leaving total silver and silver equivalent production guidance unchanged from the February 10, 2016 guidance.

 

2016 Production Outlook

                   
(silver and silver equivalent ounces in thousands)     Silver     Gold     Silver Equivalent1
Palmarejo     3,875 – 4,400     67,000 – 72,000     7,895 – 8,720
Rochester     4,750 – 5,250     48,000 – 55,000     7,630 – 8,550
San Bartolomé     5,750 – 6,050         5,750 – 6,050
Endeavor     175 – 200         175 – 200
Kensington         115,000 – 125,000     6,900 – 7,500
Wharf     80 – 100     90,000 – 95,000     5,480 – 5,800
Total     14,630 – 16,000     320,000 – 347,000     33,830 – 36,820
                   

2016 Cost Outlook

             
(dollars in millions, except per ounce amounts)     2016 Guidance     2015 Result
Costs Applicable to Sales per Silver Equivalent Ounce1 – Palmarejo     $12.50 – $13.50     $13.03
Costs Applicable to Sales per Silver Equivalent Ounce1 – Rochester     $11.25 – $12.25     $12.36
Costs Applicable to Sales per Silver Ounce1 – San Bartolomé     $13.50 – $14.25     $13.63
Costs Applicable to Sales per Gold Ounce1 – Kensington     $825 – $875     $798
Costs Applicable to Sales per Gold Equivalent Ounce1 – Wharf     $650 – $750     $706
Capital Expenditures     $90 – $100     $95.2
General and Administrative Expenses     $28 – $32     $32.8
Exploration Expense     $11 – $13     $11.6
All-in Sustaining Costs per Silver Equivalent Ounce1     $16.00 – $17.25     $16.16
             

Conference Call Information

Coeur will report its full operational and financial results for first quarter 2016 on April 27, 2016 after the New York Stock Exchange closes for trading. There will be a conference call on April 28, 2016 at 11:00 a.m. Eastern time.

Dial-In Numbers:     (855) 560-2581 (US)
      (855) 669-9657 (Canada)
      (412) 542-4166 (International)
       
Conference ID:     Coeur Mining
 
A replay of the call will be available through May 13, 2016.
       
Replay numbers:     (877) 344-7529 (US)
      (855) 669-9658 (Canada)
      (412) 317-0088 (International)
       
Conference ID:     100 83 340
       

About Coeur

Coeur Mining is the largest U.S.-based silver producer and a significant gold producer with five precious metals mines in the Americas employing approximately 2,000 people. Coeur produces from its wholly owned operations: the Palmarejo silver-gold complex in Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska, the Wharf gold mine in South Dakota, and the San Bartolomé silver mine in Bolivia. The Company also has a non-operating interest in the Endeavor mine in Australia in addition to royalties on the Zaruma mine in Ecuador and the Correnso mine in New Zealand. In addition, the Company has two silver-gold exploration projects – the La Preciosa project in Mexico and the Joaquin project in Argentina. The Company also conducts ongoing exploration activities in Alaska, Argentina, Bolivia, Mexico, and Nevada. The Company owns strategic investment positions in several silver and gold development companies with projects in North and South America.

Cautionary Statement

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding anticipated cash flow, production, costs, capital expenditures, expenses, mining rates, recovery rates, development activity at Palmarejo and Kensington, permitting and expansion projects at Rochester, ore purchases at San Bartolomé, and exploration efforts. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Coeur's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the risk that anticipated production, cost and expense levels are not attained, the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), changes in the market prices of gold and silver and a sustained lower price environment, the uncertainties inherent in Coeur's production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, ground conditions, grade variability, any future labor disputes or work stoppages (including those involving third parties), the uncertainties inherent in the estimation of gold and silver reserves and resources, changes that could result from Coeur's future acquisition of new mining properties or businesses, the absence of control over and reliance on third parties to operate mining operations in which Coeur or its subsidiaries hold royalty or streaming interests and risks related to these mining operations including results of mining and exploration activities, environmental, economic and political risks of the jurisdiction in which the mining operations are located, the loss of access to any third-party smelter to which Coeur markets silver and gold, the effects of environmental and other governmental regulations, the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, Coeur's ability to raise additional financing necessary to conduct its business, make payments or refinance its debt, as well as other uncertainties and risk factors set out in filings made from time to time with the United States Securities and Exchange Commission, and the Canadian securities regulators, including, without limitation, Coeur's most recent reports on Forms 10-K and 10-Q. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Coeur disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Coeur undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Coeur, its financial or operating results or its securities.

Dana Willis, Coeur's Director, Resource Geology and a qualified person under Canadian National Instrument 43-101, supervised the preparation of the scientific and technical information concerning Coeur's mineral projects in this news release. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors, Canadian investors should refer to the Technical Reports for each of Coeur's properties as filed on SEDAR at www.sedar.com.

Non-U.S. GAAP Measures

We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non-U.S. GAAP financial measures, including adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce, all-in sustaining costs, and adjusted all-in sustaining costs. We believe that these adjusted measures provide meaningful information to assist management, investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring operations because they exclude items that may not be indicative of, or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. We believe adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce, all-in sustaining costs, and adjusted all-in sustaining costs are important measures in assessing the Company's overall financial performance.

Notes

1. Adjusted EBITDA, adjusted net income (loss), all-in sustaining costs, adjusted all-in sustaining costs, costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce), and adjusted costs applicable to sales per silver equivalent ounce are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. For purposes of silver and gold equivalence, a 60:1 silver to gold ratio is assumed except where noted as average realized prices.

2. Operating cash flow is after a $16.6 million increase in working capital.

3. Includes capital leases. Net of debt issuance costs and premium received.

4. Free cash flow is defined as cash flow from operating activities less capital expenditures and royalty payments.

 

Contacts

Coeur Mining, Inc.
Rebecca Hussey, Manager, Investor Relations
(312) 489-5827
www.coeur.com

Original Article: http://www.businesswire.com/news/home/20160427006709/en/Coeur-Reports-Quarter-2016-Results

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