Location

Full-Year Production and Cost Guidance Reaffirmed

CHICAGO — Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported second quarter 2019 financial results, including revenue of $162.1 million, adjusted EBITDA1 of $30.6 million and cash flow from operating activities of $26.4 million. Including a non-cash write down of $11.9 million taken in the quarter, the Company reported GAAP net loss from continuing operations of $36.8 million, or $0.18 per share. On an adjusted basis1, the Company reported a net loss of $23.0 million, or $0.11 per share.

The Company is reaffirming full-year 2019 production guidance of 334,000 – 372,000 ounces of gold, 12.2 – 14.7 million ounces of silver, 25 – 40 million pounds of zinc and 20 – 35 million pounds of lead. In addition, full-year cost guidance is being reaffirmed.


Key Highlights

  • Solid operational and financial performance at Palmarejo – Palmarejo’s gold and silver production increased 22% and 36% quarter-over-quarter, respectively. Higher production was driven by increased mill throughput and improved recovery rates. Second quarter adjusted costs applicable to sales (“CAS”)1 for gold and silver on a co-product basis were $741 and $9.17 per ounce, respectively, and remained within full-year guidance ranges of $650 – $750 per ounce of gold and $9.00 – $10.00 per ounce of silver
  • Rochester now processing ore through high-pressure grinding roll (“HPGR”) unit – Coeur has successfully commissioned the enhanced crushing circuit, including the HPGR unit, and has recommenced full mining and processing activities. Preliminary metallurgical test work from newly crushed and placed material indicate results in-line with expectations. The new crushing circuit is expected to improve silver recoveries and help reduce operating costs during the remainder of the year
  • Kensington benefiting from the high-grade Jualin deposit – Kensington’s gold production in the second quarter increased by 14% compared to the prior period. Jualin accounted for approximately 17% of Kensington’s production during the quarter, helping to reduce adjusted CAS1 15% quarter-over-quarter to $842 per ounce. Increased production from Jualin is expected to contribute to higher production levels and lower unit costs for the remainder of 2019
  • Strongest quarter of operational performance at Silvertip – Second quarter results at Silvertip represented the best period of operational performance since acquisition. Despite lower mill throughput, silver, zinc and lead production increased 44%, 43% and 62%, respectively, compared to the prior quarter, driven by significantly higher feed grades and improved recovery rates. The Company continues to execute key projects targeting mill availability, which are anticipated to drive improved results during the remainder of 2019
  • 19% reduction in total debt2 in the second quarter – Coeur repaid $82.0 million of outstanding indebtedness, leading to a 19% quarter-over-quarter reduction in total debt2. At June 30, 2019, the Company had $53.0 million drawn under its $250.0 million senior secured revolving credit facility, approximately 61% lower compared to the prior period
  • Strategic option agreement with subsidiaries of Barrick Gold Corporation (“Barrick”) – In June 2019, Coeur entered into a purchase option agreement (the “Option Agreement”) with Barrick for the Richmond Hill Project (the “Project”), which is located adjacent to Coeur’s Wharf mine in South Dakota. The option to acquire the Project provides a potential opportunity for Coeur to leverage existing infrastructure to further expand Wharf’s footprint and extend its mine life

“We made solid operational and financial progress on multiple fronts during the second quarter and are well positioned to deliver on our key initiatives in the second half of 2019,” said Mitchell J. Krebs, President and Chief Executive Officer. “In addition to prudent cost management, improved operational results helped drive adjusted EBITDA1 17% higher and general and administrative expenses 18% lower quarter-over-quarter. We continued to make solid progress on our top two 2019 initiatives by beginning to feed material through the HPGR unit at Rochester and demonstrating meaningful progress at Silvertip. We also successfully repaid $82.0 million of outstanding indebtedness under our revolving credit facility and continued to invest in our success-based exploration program, with encouraging near-mine resource expansion drill results at Kensington and Silvertip.”

Financial and Operating Highlights (Unaudited)

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

2Q 2019

1Q 2019

4Q 2018

3Q 2018

2Q 2018

Gold Sales

$

110.3

 

$

106.8

 

$

96.3

 

$

103.0

 

$

117.2

 

Silver Sales

$

45.0

 

$

40.1

 

$

44.6

 

$

43.0

 

$

52.8

 

Zinc Sales

$

2.6

 

$

5.6

 

$

1.9

 

$

1.7

 

$

 

Lead Sales

$

4.2

 

$

2.4

 

$

1.0

 

$

1.0

 

$

 

Consolidated Revenue

$

162.1

 

$

154.9

 

$

143.8

 

$

148.8

 

$

170.0

 

Costs Applicable to Sales

$

131.9

 

$

131.7

 

$

116.6

 

$

116.9

 

$

108.2

 

General and Administrative Expenses

$

7.8

 

$

9.5

 

$

7.1

 

$

7.7

 

$

7.7

 

Net Income (Loss)

$

(36.8

)

$

(24.9

)

$

0.4

 

$

(53.0

)

$

2.9

 

Net Income (Loss) Per Share

$

(0.18

)

$

(0.12

)

$

0.00

 

$

(0.29

)

$

0.02

 

Adjusted Net Income (Loss)1

$

(23.0

)

$

(23.0

)

$

16.1

 

$

(19.7

)

$

1.1

 

Adjusted Net Income (Loss)Per Share

$

(0.11

)

$

(0.11

)

$

0.08

 

$

(0.11

)

$

0.01

 

Weighted Average Shares Outstanding

207.8

 

202.4

 

199.5

 

185.2

 

187.5

 

EBITDA1

$

7.7

 

$

14.8

 

$

7.9

 

$

(12.3

)

$

42.1

 

Adjusted EBITDA1

$

30.6

 

$

26.1

 

$

36.2

 

$

24.7

 

$

48.4

 

Cash Flow from Operating Activities

$

26.4

 

$

(15.8

)

$

0.1

 

$

5.8

 

$

(1.3

)

Capital Expenditures

$

20.7

 

$

27.4

 

$

17.8

 

$

39.5

 

$

41.2

 

Free Cash Flow1

$

5.7

 

$

(43.3

)

$

(17.7

)

$

(33.7

)

$

(42.5

)

Cash, Equivalents & Short-Term Investments

$

37.9

 

$

69.0

 

$

115.1

 

$

104.7

 

$

123.5

 

Total Debt2

$

370.0

 

$

456.8

 

$

458.8

 

$

429.2

 

$

419.7

 

Average Realized Price Per Ounce – Gold

$

1,277

 

$

1,251

 

$

1,214

 

$

1,150

 

$

1,241

 

Average Realized Price Per Ounce – Silver

$

14.75

 

$

15.22

 

$

14.59

 

$

14.68

 

$

16.48

 

Average Realized Price Per Pound – Zinc

$

0.49

 

$

1.19

 

$

0.83

 

$

0.93

 

$

 

Average Realized Price Per Pound – Lead

$

0.82

 

$

0.86

 

$

0.80

 

$

0.90

 

$

 

Gold Ounces Produced

86,584

 

78,336

 

92,546

 

87,539

 

94,052

 

Silver Ounces Produced

3.1

 

2.5

 

3.5

 

2.9

 

3.2

 

Zinc Pounds Produced

5.3

 

3.7

 

3.1

 

1.1

 

 

Lead Pounds Produced

5.0

 

3.1

 

1.7

 

0.4

 

 

Gold Ounces Sold

86,385

 

85,326

 

79,291

 

89,609

 

94,455

 

Silver Ounces Sold

3.0

 

2.6

 

3.1

 

2.9

 

3.2

 

Zinc Pounds Sold

5.3

 

4.7

 

2.6

 

1.8

 

 

Lead Pounds Sold

5.2

 

2.7

 

1.4

 

1.2

 

 

Financial Results

Second quarter revenue increased 5% to $162.1 million compared to $154.9 million in the first quarter of 2019. The Company sold 86,385 ounces of gold and 3.0 million ounces of silver during the quarter, representing increases of 1% and 16%, respectively, compared to the prior period. Zinc and lead sales totaled 5.3 million and 5.2 million pounds during the second quarter, 13% and 93% increases, respectively, quarter-over-quarter.

Average realized gold price increased 2% quarter-over-quarter to $1,277 per ounce, while average realized silver price decreased 3% over the same period to $14.75 per ounce. The average realized gold price during the quarter reflects the sale of 6,190 ounces of gold at a price of $800 per ounce pursuant to Palmarejo’s gold stream agreement. Average realized zinc price, net of treatment and refining charges, during the quarter was $0.49 per pound or 59% lower compared to the prior quarter largely driven by provisional pricing adjustments on spot zinc sales. Average realized lead price, net of treatment and refining charges, during the quarter was $0.82 per pound or 5% lower compared to the prior period.

Gold and silver sales accounted for 68% and 28% of second quarter revenue, respectively, while zinc and lead sales contributed approximately 2% each. The Company’s U.S. operations accounted for approximately 56% of second quarter revenue, down from approximately 59% in the first quarter primarily due to increased sales from Palmarejo, which totaled $59.3 million.

Costs applicable to sales were relatively flat quarter-over-quarter, totaling $131.9 million during the second quarter. Second quarter general and administrative expenses of $7.8 million were 18% lower quarter-over-quarter, reflecting the Company’s proactive cost management.

Quarterly exploration expense was $5.7 million, or 54% higher quarter-over-quarter, reflecting Coeur’s continued commitment to its success-based exploration program. During the quarter, exploration activities were focused on resource expansion and infill drilling at Palmarejo and Kensington as well as resource expansion drilling at Silvertip and the Sterling and Crown exploration properties in southern Nevada. See page 12 for further details.

During the second quarter, the Company recorded an income tax benefit of $5.5 million, largely attributable to lower taxable earnings during the quarter. Cash income and mining taxes paid during the quarter totaled $17.2 million, partially offset by $6.1 million of value-added tax refunds and includes $9.3 million of previously disclosed cash taxes incurred in connection with Coeur’s acquisition of Northern Empire Resources Corp. which allows the Company to utilize its U.S. net operating loss carryforwards against future income generated from the Sterling and Crown exploration properties.

Operating cash flow of $26.4 million in the second quarter reflects improved profitability from Palmarejo, Rochester and Kensington as well as proceeds from a $25.0 million prepayment, which more than offset unfavorable changes in other working capital items during the quarter.

Second quarter capital expenditures totaled $20.7 million, compared to $27.4 million in the first quarter. Lower capital expenditures were driven primarily by reduced expenditures at Kensington, Rochester and Palmarejo, partially offset by higher investment at Silvertip. Sustaining and development capital expenditures accounted for approximately 75% and 25%, respectively, of the Company’s total capital expenditures in the second quarter.

Second Quarter Debt Reduction Initiatives

During the second quarter, Coeur completed its previously announced $50.0 million at-the-market common stock offering program, raising net proceeds (after sales commissions) of $48.9 million.

The Company also amended an existing sales arrangement with a metal sales counterparty covering a portion of its gold concentrate from the Kensington mine in consideration for a $25.0 million prepayment. Pursuant to U.S. GAAP, Coeur recorded the $25.0 million as deferred revenue which is presented in accrued liabilities on the Company’s balance sheet. Under the terms of the prepayment, Coeur maintains its exposure to the price of gold and expects to recognize the full value of the accrued liability by the end of 2019.

Together with cash and cash equivalents, proceeds from these transactions were used to help repay $82.0 million of outstanding indebtedness under the Company’s $250.0 million senior secured revolving credit facility during the second quarter.

On August 6, 2019, the Company amended its credit agreement with respect to its senior secured revolving credit facility to provide the Company with additional financial flexibility under its consolidated interest coverage ratio as of June 30, 2019.

Richmond Hill Project Option Agreement

In June 2019, Coeur entered into the Option Agreement with Barrick that provides the Company an exclusive option to acquire the Richmond Hill Project, which is located approximately four miles from its Wharf mine in South Dakota. The Project is a past producing gold operation with a total land package of approximately 2,340 acres.

Under the terms of the Option Agreement, Coeur may acquire 100% of the Project in consideration for:

  • 2% – 3% net smelter returns royalty to Barrick on encumbered and unencumbered land, respectively, at the Project
  • Assumption of the Project’s reclamation obligation, currently understood to have a value of approximately $21 million

There are no minimum spending requirements under the terms of the Option Agreement, and Coeur’s exclusive option to acquire 100% of the Project expires in September 2021.

Operations

Second quarter 2019 highlights for each of the Company’s operations are provided below.

Palmarejo, Mexico

(Dollars in millions, except per ounce amounts)

2Q 2019

1Q 2019

4Q 2018

3Q 2018

2Q 2018

Tons milled

447,727

378,987

378,389

300,116

344,073

Average gold grade (oz/t)

0.07

0.07

0.08

0.10

0.11

Average silver grade (oz/t)

4.74

4.64

5.96

6.26

6.86

Average recovery rate – Au

87.7%

83.4%

97.6%

88.8%

89.9%

Average recovery rate – Ag

81.8%

72.8%

84.0%

82.2%

87.5%

Gold ounces produced

28,246

23,205

31,239

27,885

33,702

Silver ounces produced (000’s)

1,735

1,278

1,893

1,544

2,066

Gold ounces sold

28,027

27,394

23,667

29,830

31,207

Silver ounces sold (000’s)

1,709

1,405

1,534

1,572

2,092

Average realized price per gold ounce

$1,210

$1,154

$1,148

$1,082

$1,162

Average realized price per silver ounce

$14.86

$15.39

$14.57

$14.75

$16.49

Metal sales

$59.3

$53.2

$49.6

$55.5

$70.7

Costs applicable to sales

$36.5

$33.2

$27.1

$31.6

$30.3

Adjusted CASper AuOz1

$741

$713

$624

$615

$497

Adjusted CASper AgOz1

$9.17

$9.66

$7.92

$8.39

$7.05

Exploration expense

$1.1

$1.0

$0.1

$3.2

$3.2

Cash flow from operating activities

$15.6

$5.9

$13.3

$8.6

$1.3

Sustaining capital expenditures (excludes capital lease payments)

$5.0

$6.0

$3.6

$2.0

$9.5

Development capital expenditures

$2.6

$2.7

$2.3

$2.7

$—

Total capital expenditures

$7.6

$8.7

$5.9

$4.7

$9.5

Free cash flow1

$8.0

$(2.8)

$7.4

$3.9

$(8.2)

  • Second quarter gold and silver production increased 22% and 36%, respectively, to 28,246 and 1.7 million ounces compared to the prior quarter. Year-over-year, gold and silver production decreased approximately 16%
  • Higher production during the quarter was primarily driven by an 18% increase in mill throughput as well as improved access to higher-grade secondary stopes with better recoveries due to the maintenance and expansion of the cemented rockfill plant, which was completed in the prior quarter
  • Second quarter adjusted CAS1 for gold on a co-product basis increased 4% to $741 per ounce, while adjusted CAS1 for silver on a co-product basis decreased 5% to $9.17 per ounce compared to the first quarter. Adjusted CAS1 reflect comparatively higher silver sales quarter-over-quarter and remained within full-year guidance ranges
  • Free cash flowof $8.0 million during the second quarter was driven by higher operating cash flow from increased metal sales as well as slightly lower capital expenditures. Capital expenditures during the quarter were focused on mine development and infrastructure projects
  • Production began at the La Nación deposit, located between the Independencia and Guadalupe underground mines, shortly after the end of the second quarter. Production at La Nación is anticipated to continue ramping up during the third quarter as infrastructure projects are completed, adding approximately 400 tons per day of additional mill feed
  • Commissioning of a new thickener was completed on budget and on schedule earlier this month. The project is expected to increase metallurgical recoveries for both gold and silver by approximately 2% and has an estimated one-year payback
  • Full-year 2019 production guidance remains unchanged at 95,000 – 105,000 ounces of gold and 6.5 – 7.2 million ounces of silver
  • Guidance for CAS and capital expenditures also remains unchanged. CAS are expected to be $650 – $750 per gold ounce and $9.00 – $10.00 per silver ounce. Capital expenditures are expected to be approximately $40 – $45 million

Rochester, Nevada

(Dollars in millions, except per ounce amounts)

2Q 2019

 

1Q 2019

 

4Q 2018

 

3Q 2018

 

2Q 2018

Ore tons placed

2,786,287

 

2,667,559

 

3,674,566

 

4,061,082

 

4,083,028

Average silver grade (oz/t)

0.45

 

0.46

 

0.46

 

0.52

 

0.53

Average gold grade (oz/t)

0.003

 

0.003

 

0.004

 

0.004

 

0.004

Silver ounces produced (000’s)

971

 

960

 

1,466

 

1,290

 

1,125

Gold ounces produced

8,609

 

8,256

 

15,926

 

14,702

 

12,273

Silver ounces sold (000’s)

962

 

1,000

 

1,391

 

1,248

 

1,097

Gold ounces sold

8,642

 

8,511

 

15,339

 

14,257

 

12,030

Average realized price per silver ounce

$14.83

 

$15.31

 

$14.53

 

$14.70

 

$16.47

Average realized price per gold ounce

$1,295

 

$1,299

 

$1,234

 

$1,204

 

$1,297

Metal sales

$25.5

 

$26.4

 

$39.1

 

$35.5

 

$33.7

Costs applicable to sales

$24.7

 

$22.5

 

$29.4

 

$27.5

 

$24.5

Adjusted CASper AgOz1

$13.19

 

$12.83

 

$10.79

 

$11.35

 

$11.89

Adjusted CASper AuOz1

$1,153

 

$1,092

 

$917

 

$929

 

$936

Exploration expense

$0.1

 

$0.1

 

$—

 

$0.1

 

$0.2

Cash flow from operating activities

$1.6

 

$(1.0)

 

$17.9

 

$5.7

 

$6.0

Sustaining capital expenditures (excludes capital lease payments)

$0.4

 

$1.8

 

$7.1

 

$2.7

 

$0.4

Development capital expenditures

$2.4

 

$2.8

 

$(4.1)

 

$0.9

 

$0.3

Total capital expenditures

$2.8

 

$4.6

 

$3.0

 

$3.6

 

$0.7

Free cash flow1

$(1.2)

 

$(5.6)

 

$14.9

 

$2.1

 

$5.3

  • Silver production remained relatively flat quarter-over-quarter at approximately 1.0 million ounces, while gold production increased 4% to 8,609 ounces. Year-over-year, silver and gold production decreased 14% and 30%, respectively
  • Higher gold production was driven by the timing of leach pad recoveries as well as improved weather conditions. Tons placed also increased in the second quarter due to the stacking of additional run-of-mine material, despite the idling of the X-Pit crusher during May and June for commissioning of the new crusher configuration
  • Second quarter adjusted CAS1 for silver and gold on a co-product basis increased 3% and 6% to $13.19 and $1,153 per ounce, respectively, quarter-over-quarter. These increases were primarily related to the stacking of additional run-of-mine material and maintenance on the process plant during the quarter
  • Ore is currently being processed by the new three-stage crushing circuit, including the HPGR unit, despite a three week setback related to a failed crusher at the end of the second quarter. Expectations for crushing rates, silver recoveries and capital requirements for the new crushing circuit remain in-line with prior estimates. Results during the second half of the year are expected to continue improving with the integration of the new crushing circuit and the placement of additional run-of-mine material on the Stage IV leach pad
  • Free cash flow1 of $(1.2) million was driven by capital expenditures exceeding operating cash flow. Capital expenditures during the quarter were focused on the new crushing circuit as well as further development of the Stage IV leach pad
  • The Company is maintaining full-year 2019 production guidance of 4.2 – 5.0 million ounces of silver and 40,000 – 50,000 ounces of gold. CAS in 2019 are also unchanged and expected to be $12.50 – $13.50 per silver ounce and $1,000 – $1,100 per gold ounce
  • The Company is maintaining its guidance for capital expenditures, which are expected to be approximately $17 – $20 million, including approximately $12 – $15 million associated with the new crushing circuit

Kensington, Alaska

(Dollars in millions, except per ounce amounts)

2Q 2019

1Q 2019

4Q 2018

3Q 2018

2Q 2018

Tons milled

160,510

164,332

149,998

163,603

168,751

Average gold grade (oz/t)

0.23

0.20

0.21

0.17

0.16

Average recovery rate

93.0%

90.2%

91.1%

90.4%

92.6%

Gold ounces produced

34,049

29,973

28,421

25,515

25,570

Gold ounces sold

34,415

31,335

24,979

25,648

28,165

Average realized price per gold ounce, gross

$1,332

$1,301

$1,267

$1,195

$1,305

Treatment and refining charges per gold ounce

$20

$15

$21

$34

$36

Average realized price per gold ounce, net

$1,312

$1,286

$1,246

$1,161

$1,269

Metal sales

$45.2

$40.3

$31.1

$29.8

$35.7

Costs applicable to sales

$29.1

$32.2

$21.4

$28.2

$34.2

Adjusted CAS per AuOz1

$842

$990

$843

$1,091

$1,196

Exploration expense

$2.0

$0.5

$1.3

$1.6

$1.4

Cash flow from operating activities

$41.4

$6.2

$7.9

$(0.4)

$3.2

Sustaining capital expenditures (excludes capital lease payments)

$4.9

$9.4

$9.8

$9.7

$9.2

Development capital expenditures

$—

$—

$0.8

$2.3

$1.5

Total capital expenditures

$4.9

$9.4

$10.6

$12.0

$10.7

Free cash flow1

$36.5

$(3.2)

$(2.7)

$(12.4)

$(7.5)

  • Commercial production at Jualin was declared on December 1, 2018. The figures shown in the table above exclude pre-commercial production. Additionally, second quarter operating cash flow and free cash flow1 figures in the table above include the proceeds from the $25.0 million prepayment. Excluding the prepayment, second quarter operating cash flow and free cash flow1 were $16.4 million and $11.5 million, respectively
  • Gold production during the second quarter increased 14% to 34,049 ounces compared to the prior quarter. Year-over-year gold production increased 33%. Average gold grade was approximately 15% higher quarter-over-quarter and 44% higher year-over-year driven by additional ore feed from the high-grade Jualin deposit
  • Adjusted CAS1 decreased 15% quarter-over-quarter to $842 per ounce. The strong cost performance was driven by the processing of higher-grade ore
  • Jualin accounted for approximately 17% of Kensington’s second quarter production, compared to approximately 10% in the prior quarter. For the full year, Jualin is expected to account for approximately 20% of Kensington’s total production
  • Capital expenditures during the quarter were largely focused on ongoing underground development
  • Full-year 2019 production guidance is unchanged at 117,000 – 130,000 ounces of gold
  • Full-year CAS and capital expenditures are also unchanged. CAS are expected to be $950 – $1,050 per ounce; capital expenditures are expected to be $20 – $25 million

Wharf, South Dakota

(Dollars in millions, except per ounce amounts)

2Q 2019

 

1Q 2019

 

4Q 2018

 

3Q 2018

 

2Q 2018

Ore tons placed

919,435

 

1,090,510

 

1,644,168

 

1,127,391

 

1,075,820

Average gold grade (oz/t)

0.023

 

0.020

 

0.020

 

0.023

 

0.023

Gold ounces produced

15,680

 

16,902

 

16,960

 

19,437

 

22,507

Silver ounces produced (000’s)

12

 

13

 

13

 

13

 

13

Gold ounces sold

15,301

 

18,086

 

15,306

 

19,874

 

23,053

Silver ounces sold (000’s)

12

 

14

 

11

 

12

 

14

Average realized price per gold ounce

$1,311

 

$1,317

 

$1,247

 

$1,198

 

$1,285

Metal sales

$20.2

 

$24.0

 

$19.3

 

$24.0

 

$29.8

Costs applicable to sales

$15.5

 

$17.4

 

$14.6

 

$18.0

 

$19.3

Adjusted CAS per AuOz1

$1,002

 

$949

 

$939

 

$895

 

$822

Exploration expense

$—

 

$—

 

$—

 

$0.1

 

$—

Cash flow from operating activities

$0.5

 

$4.2

 

$(1.9)

 

$3.7

 

$11.5

Sustaining capital expenditures (excludes capital lease payments)

$0.2

 

$0.4

 

$0.7

 

$1.2

 

$1.2

Development capital expenditures

$—

 

$—

 

$—

 

$—

 

$—

Total capital expenditures

$0.2

 

$0.4

 

$0.7

 

$1.2

 

$1.2

Free cash flow1

$0.3

 

$3.8

 

$(2.6)

 

$2.5

 

$10.3

  • Gold production in the second quarter declined 7% quarter-over-quarter and 30% year-over-year to 15,680 ounces
  • Lower production was largely driven by inclement weather, which diluted leach pad solutions, as well as lower crusher throughput during the quarter. The Company has engaged a third-party contractor to crush an additional 300,000 tons of ore primarily during the third quarter to supplement operating activities
  • Adjusted CAS1 on a by-product basis increased 6% quarter-over-quarter to $1,002 per ounce, primarily as a result of lower production during the second quarter
  • Free cash flow1 of $0.3 million was primarily driven by lower operating cash flow and partially offset by lower capital expenditures
  • Production is anticipated to increase for the remainder of 2019 due to the placement of higher-grade ore late in the second quarter, which is expected to continue during the third and fourth quarters
  • The Company is maintaining full-year 2019 production guidance of 82,000 – 87,000 ounces of gold
  • Coeur is also maintaining its full-year 2019 guidance for CAS and capital expenditures. CAS are expected to be $850 – $950 per ounce and capital expenditures are expected to be approximately $3 – $5 million

Silvertip, British Columbia

(Dollars in millions, except per ounce and per pound amounts)

2Q 2019

1Q 2019

4Q 2018

3Q 2018

2Q 2018

Tons milled

59,689

62,051

38,802

10,652

Average silver grade (oz/t)

7.48

5.50

6.06

6.66

Average zinc grade (%)

7.5%

5.90%

5.80%

8.0%

—%

Average lead grade (%)

5.4%

3.7%

3.9%

4.3%

—%

Average recovery rate – Ag

77.0%

69.9%

60.5%

56.3%

—%

Average recovery rate – Zn

59.1%

50.5%

69.1%

64.5%

—%

Average recovery rate – Pb

77.3%

66.8%

54.7%

45.1%

—%

Silver ounces produced (000’s)

344

239

142

40

Zinc pounds produced (000’s)

5,322

3,719

3,082

1,099

Lead pounds produced (000’s)

4,980

3,077

1,659

413

Silver ounces sold (000’s)

365

215

124

99

Zinc pounds sold (000’s)

5,303

4,723

2,604

1,772

Lead pounds sold (000’s)

5,186

2,748

1,419

1,230

Average realized price per silver ounce, gross

$15.18

$14.98

$15.54

$14.62

$—

Treatment and refining charges per silver ounce

$1.18

$1.24

$1.38

$3.34

$—

Average realized price per silver ounce, net

$14.00

$13.74

$14.16

$11.28

$—

Average realized price per zinc pound, gross

$0.83

$1.50

$1.07

$1.20

$—

Treatment and refining charges per zinc pound

$0.34

$0.31

$0.24

$0.27

$—

Average realized price per zinc pound, net

$0.49

$1.19

$0.83

$0.93

$—

Average realized price per lead pound, gross

$0.87

$0.92

$0.87

$0.97

$—

Treatment and refining charges per lead pound

$0.05

$0.06

$0.07

$0.07

$—

Average realized price per lead pound, net

$0.82

$0.86

$0.80

$0.90

$—

Metal sales

$11.9

$10.9

$4.8

$4.1

$—

Costs applicable to sales

$26.2

$26.4

$24.1

$11.5

$—

Adjusted CASper AgOz1

$13.31

$13.73

$17.68

$9.86

$—

Adjusted CASper ZnLb1

$1.02

$1.18

$0.95

$0.64

$—

Adjusted CASper PbLb1

$0.77

$0.88

$1.02

$0.55

$—

Exploration expense

$0.7

$0.1

$0.3

$2.3

$0.1

Cash flow from operating activities

$(11.6)

$(13.9)

$(34.1)

$(6.8)

$—

Sustaining capital expenditures (excludes capital lease payments)

$5.0

$4.1

$8.2

$0.4

$—

Development capital expenditures

$—

$—

$(10.8)

$17.5

$19.0

Total capital expenditures

$5.0

$4.1

$(2.6)

$17.9

$19.0

Free cash flow1

$(16.6)

$(18.0)

$(31.5)

$(24.7)

$(19.0)

  • Silvertip achieved commercial production on September 1, 2018. The figures shown in the table above exclude pre-commercial production
  • Second quarter silver, zinc and lead production increased 44%, 43% and 62%, respectively, compared to the prior quarter, to 0.3 million ounces of silver, 5.3 million pounds of zinc and 5.0 million pounds of lead
  • Despite a 4% quarter-over-quarter decrease in mill throughput, increased production was driven by significantly higher feed grades and recovery rates across all metals
  • Second quarter adjusted CAS1 on a co-product basis were $13.31 per silver ounce, $1.02 per payable zinc pound and $0.77 per payable lead pound, compared to $13.73, $1.18 and $0.88, respectively, in the prior quarter
  • Free cash flow1 of $(16.6) million was primarily driven by improved operating cash flow quarter-over-quarter, partially offset by higher capital expenditures
  • The Company continues to execute key projects targeting mill availability, which are expected to drive further operational improvements throughout the remainder of the year. Recovery rates continue to trend upward, with recoveries averaging approximately 81%, 63% and 82% for silver, zinc and lead, respectively, during June
  • The permit amendment application to operate at a year-round mining and milling rate of 1,100 tons (1,000 metric tonnes) per day is expected to be received during the third quarter, which is later than originally expected, but does not have an impact on planned operations
  • Full-year 2019 production guidance is unchanged at 1.5 – 2.5 million ounces of silver, 25 – 40 million pounds of zinc and 20 – 35 million pounds of lead
  • Full-year 2019 guidance ranges for CAS and capital expenditures are also unchanged. CAS are expected to be $14.00 – $16.00 per ounce of silver, $1.00 – $1.25 per pound of zinc and $0.85 – $1.05 per pound of lead; capital expenditures are expected to total $20 – $25 million

Exploration

During the second quarter, the Company drilled 151,153 feet (46,072 meters) at a total cost of $6.8 million ($5.7 million expensed and $1.1 million capitalized), compared to 90,126 feet (27,470 meters) at a total cost of $6.6 million ($3.7 million expensed and $2.9 million capitalized) in the first quarter. Total feet drilled during the second quarter was approximately 68% higher compared to the prior period, reflecting Coeur’s continued commitment to its success-based exploration program as well as a renewed focus on expansion drilling at Silvertip and the Sterling and Crown exploration properties. The 2019 drill programs at Rochester and Wharf are scheduled to begin in the third quarter.

At Silvertip, two surface core drill rigs began expansion drilling in the northern and central Discovery Zone, with encouraging results thus far. Highlights include3: holes DSC19-Pad4-002 (26.0 feet of 13.76 oz/ton silver, 19.1% zinc, and 8.4% lead) and DSC19-Pad4-004 (25.9 feet of 4.93 oz/ton silver, 12.6% zinc and 3.1% lead). Also, hole DSC19-Pad1-003 intercepted two significant intercepts (14.8 feet of 15.52 oz/ton silver, 16.5% zinc and 10.6% lead and 3.6 feet of 2.88 oz/ton silver, 21.4% zinc and 3.0% lead) demonstrating more evidence for stacked manto horizons at depth within the Discovery Zone3. Given its success through the second quarter, the remainder of the 2019 exploration program will continue to focus on expansion drilling in the Discovery Zone, north, east and south of the 2018 resource.

At Kensington, three underground core drill rigs were primarily focused on resource expansion drilling with an emphasis on Lower Raven and Elmira. Results from the expansion drilling at Elmira continue to be encouraging. One surface rig began drilling in late June on the Comet Vein, which lies directly above the Kensington access tunnel. Limited infill drilling during the quarter was completed at the Elmira and Raven veins.

At the Sterling and Crown exploration properties, located in southern Nevada, one reverse circulation rig was active during the second quarter. The rig was focused on expansion drilling at the South Daisy resource, which is contained in the Crown Block. Concurrent geologic mapping and sampling at the Crown Block has resulted in two new drill targets located within the northern Daisy area with no prior exploration drilling, both of which will require amended permits prior to drilling. The Crown Block exploration drilling and surface mapping are expected to continue through the third quarter, with one rig focused on the Daisy and SNA resources. Coeur expects to add an additional rig, initially at the Sterling Mine, and move it to the northern portion of Crown Block later in the year.

At Palmarejo, up to ten surface and underground core rigs were active during the second quarter. Infill drilling focused on La Nación as well as veins northwest and northeast of the Guadalupe mine with encouraging results particularly at La Nación and Northwest Guadalupe. Expansion drilling focused on extending mineralization northwest from the Guadalupe mine and north of the Independencia mine. The Company plans to continue expansion drilling at the North Independencia and the Northwest Guadalupe zones during the third quarter, as well as adding a third rig focused on expanding the inferred resource at Independencia East, located approximately 1,970 feet (600 meters) east of the current Independencia mine.

At the La Preciosa project, located in Durango, Mexico, a new geological model of the La Gloria-Abundancia vein structures has highlighted potential opportunities for a higher-grade, lower tonnage resource. The Company expects to continue working during the second half of the year to extend the review to the deeper, but larger Martha structure.

The Company also engaged in greenfield exploration during the quarter, funding drilling at Evrim Resources Corp.’s El Sarape Project, located in Sonora, Mexico. Following the completion of a ten drillhole program, Coeur elected to discontinue its option agreement for the exploration and development of the El Sarape Project.

2019 Production Guidance

 

Gold

Silver

Zinc

Lead

 

(oz)

(K oz)

(K lbs)

(K lbs)

Palmarejo

95,000 – 105,000

6,500 – 7,200

Rochester

40,000 – 50,000

4,200 – 5,000

Kensington

117,000 – 130,000

Wharf

82,000 – 87,000

Silvertip

1,500 – 2,500

25,000 – 40,000

20,000 – 35,000

Total

334,000 – 372,000

12,200 – 14,700

25,000 – 40,000

20,000 – 35,000

2019 Costs Applicable to Sales Guidance

 

Gold

Silver

Zinc

Lead

 

($/oz)

($/oz)

($/lb)

($/lb)

Palmarejo (co-product)

$650 – $750

$9.00 – $10.00

Rochester (co-product)

$1,000 – $1,100

$12.50 – $13.50

Kensington

$950 – $1,050

Wharf (by-product)

$850 – $950

Silvertip (co-product)

$14.00 – $16.00

$1.00 – $1.25

$0.85 – $1.05

2019 Capital, Exploration and G&A Guidance

    

($M)

Capital Expenditures, Sustaining

   

$70 – $80

Capital Expenditures, Development

   

$30 – $40

Exploration, Expensed

   

$18 – $22

Exploration, Capitalized

   

$8 – $12

General & Administrative Expenses

   

$32 – $36

Note: The Company’s guidance figures assume $1,275/oz gold, $15.50/oz silver, $1.15/lb zinc and $0.95/lb lead as well as CAD of 1.30 and MXN of 20.00.

Financial Results and Conference Call

Coeur will host a conference call to discuss its second quarter financial results on August 8, 2019 at 11:00 a.m. Eastern Time.

   

Dial-In Numbers:

   

(855) 560-2581 (U.S.)

       

(855) 669-9657 (Canada)

       

(412) 542-4166 (International)

   

Conference ID:

   

Coeur Mining

Hosting the call will be Mitchell J. Krebs, President and Chief Executive Officer of Coeur, who will be joined by Thomas S. Whelan, Senior Vice President and Chief Financial Officer, Terry F. D. Smith, Senior Vice President of Operations, Hans J. Rasmussen, Senior Vice President of Exploration, and other members of management. A replay of the call will be available through August 22, 2019.

   

Replay numbers:

   

(877) 344-7529 (U.S.)

       

(855) 669-9658 (Canada)

       

(412) 317-0088 (International)

   

Conference ID:

   

101 32 149

About Coeur

Coeur Mining, Inc. is a U.S.-based, well-diversified, growing precious metals producer with five wholly-owned operations: the Palmarejo gold-silver 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 Silvertip silver-zinc-lead mine in British Columbia. In addition, the Company has interests in several precious metals exploration projects throughout North America.

Cautionary Statements

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding anticipated production, costs, capital expenditures, recovery rates, exploration expenditures, expenses, cash flow, expectations regarding Silvertip, including but not limited to timing of receipt of permits, grades, exploration and development efforts, the impact of commissioning of the new crushing circuit at Rochester, potential impact of the Richmond Hill Project on Wharf and operations at Palmarejo, Rochester, Wharf, Kensington and Silvertip. 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 Silvertip will not obtain necessary permits on the expected timeline or at all, the risk that the commissioning of the new crushing circuit at Rochester will not occur on a timely basis or the anticipated benefits thereof will not be achieved, the risk that the Richmond Hill Project will not be feasible, 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, silver, zinc and lead 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 (including the impact of government shutdowns), ground conditions, grade variability, any future labor disputes or work stoppages, the uncertainties inherent in the estimation of mineral reserves, changes that could result from Coeur’s future acquisition of new mining properties or businesses, the loss of any third-party smelter to which Coeur markets its production, 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 Form 10-K and Form 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.

Christopher Pascoe, Coeur’s Director, Technical Services and a qualified person under Canadian National Instrument 43-101, approved 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 EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted net income (loss) and adjusted costs applicable to sales per ounce (gold and silver) or pound (zinc or lead). 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 EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted net income (loss) and adjusted costs applicable to sales per ounce (gold and silver) and pound (zinc and lead) are important measures in assessing the Company’s overall financial performance. For additional explanation regarding our use of non-U.S. GAAP financial measures, please refer to our Form 10-K for the year ended December 31, 2018.

Notes

  1. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and adjusted costs applicable to sales per ounce (gold and silver) or pound (lead and zinc) are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Free cash flow is defined as cash flow from operating activities less capital expenditures and gold production royalty payments. Please see table in Appendix for the calculation of consolidated free cash flow.
  2. Includes capital leases. Net of debt issuance costs and premium received.
  3. For a complete table of all of Silvertip’s 2019 drill results, please refer to the following link: http://www.coeur.com/_resources/pdfs/2019-08-07Silvertip-Expansion-Drill-Results.pdf.

Average Spot Prices

 

2Q 2019

1Q 2019

4Q 2018

3Q 2018

2Q 2018

Average Silver Spot Price Per Ounce

$

14.88

 

$

15.57

 

$

14.54

 

$

15.02

 

$

16.53

 

Average Gold Spot Price Per Ounce

$

1,309

 

$

1,304

 

$

1,226

 

$

1,213

 

$

1,306

 

Average Zinc Spot Price Per Pound

$

1.25

 

$

1.23

 

$

1.19

 

$

1.15

 

$

1.41

 

Average Lead Spot Price Per Pound

$

0.85

 

$

0.92

 

$

0.89

 

$

0.95

 

$

1.08

 

COEUR MINING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

    
 

June 30, 2019 (unaudited)

 

December 31, 2018

ASSETS

In thousands, except share data

CURRENT ASSETS

   

Cash and cash equivalents

$

37,907

  

$

115,081

 

Receivables

38,495

  

29,744

 

Inventory

59,048

  

66,279

 

Ore on leach pads

72,310

  

75,122

 

Prepaid expenses and other

12,066

  

11,393

 
 

219,826

  

297,619

 

NON-CURRENT ASSETS

   

Property, plant and equipment, net

298,926

  

298,451

 

Mining properties, net

945,839

  

971,567

 

Ore on leach pads

76,910

  

66,964

 

Restricted assets

8,730

  

12,133

 

Equity and debt securities

19,457

  

17,806

 

Receivables

31,871

  

31,151

 

Other

75,671

  

16,809

 

TOTAL ASSETS

$

1,677,230

  

$

1,712,500

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

   

CURRENT LIABILITIES

   

Accounts payable

$

65,676

  

$

47,210

 

Accrued liabilities and other

116,187

  

82,619

 

Debt

21,772

  

24,937

 

Reclamation

6,552

  

6,552

 
 

210,187

  

161,318

 

NON-CURRENT LIABILITIES

   

Debt

348,205

  

433,889

 

Reclamation

133,127

  

128,994

 

Deferred tax liabilities

61,653

  

79,070

 

Other long-term liabilities

77,612

  

56,717

 
 

620,597

  

698,670

 

COMMITMENTS AND CONTINGENCIES

   

STOCKHOLDERS’ EQUITY

   

Common stock, par value $0.01 per share; authorized 300,000,000 shares, 221,858,660 issued and outstanding at June 30, 2019 and 203,310,443 at December 31, 2018

2,219

  

2,033

 

Additional paid-in capital

3,492,736

  

3,443,082

 

Accumulated other comprehensive income (loss)

  

(59

)

Accumulated deficit

(2,648,509

)

 

(2,592,544

)

 

846,446

  

852,512

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

1,677,230

  

$

1,712,500

 

COEUR MINING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

    
 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

 

In thousands, except share data

Revenue

$

162,123

  

$

169,987

  

$

316,993

  

$

333,254

 

COSTS AND EXPENSES

       

Costs applicable to sales(1)

131,948

  

108,246

  

263,598

  

207,586

 

Amortization

43,204

  

29,459

  

85,080

  

60,236

 

General and administrative

7,750

  

7,650

  

17,224

  

16,454

 

Exploration

5,719

  

6,429

  

9,433

  

13,112

 

Pre-development, reclamation, and other

4,334

  

3,620

  

8,768

  

7,845

 

Total costs and expenses

192,955

  

155,404

  

384,103

  

305,233

 

OTHER INCOME (EXPENSE), NET

       

Fair value adjustments, net

(5,296

)

 

(2,462

)

 

3,824

  

2,192

 

Interest expense, net of capitalized interest

(6,825

)

 

(6,018

)

 

(13,279

)

 

(11,983

)

Other, net

643

  

544

  

703

  

1,057

 

Total other income (expense), net

(11,478

)

 

(7,936

)

 

(8,752

)

 

(8,734

)

Income (loss) before income and mining taxes

(42,310

)

 

6,647

  

(75,862

)

 

19,287

 

Income and mining tax (expense) benefit

5,546

  

(3,717

)

 

14,204

  

(15,666

)

Income (loss) from continuing operations

$

(36,764

)

 

$

2,930

  

$

(61,658

)

 

$

3,621

 

Income (loss) from discontinued operations

  

  

5,693

  

550

 

NET INCOME (LOSS)

$

(36,764

)

 

$

2,930

  

$

(55,965

)

 

$

4,171

 

OTHER COMPREHENSIVE INCOME (LOSS), net of tax:

       

Unrealized gain (loss) on debt and equity securities

  

(87

)

 

59

  

(365

)

Other comprehensive income (loss)

  

(87

)

 

59

  

(365

)

COMPREHENSIVE INCOME (LOSS)

$

(36,764

)

 

$

2,843

  

$

(55,906

)

 

$

3,806

 
        

NET INCOME (LOSS) PER SHARE

       

Basic income (loss) per share:

       

Net income (loss) from continuing operations

$

(0.18

)

 

$

0.02

  

$

(0.30

)

 

$

0.02

 

Net income (loss) from discontinued operations

0.00

  

0.00

  

0.03

  

0.00

 

Basic(2)

$

(0.18

)

 

$

0.02

  

$

(0.27

)

 

$

0.02

 

Diluted income (loss) per share:

       

Net income (loss) from continuing operations

$

(0.18

)

 

$

0.02

  

$

(0.30

)

 

$

0.02

 

Net income (loss) from discontinued operations

0.00

  

0.00

  

0.03

  

0.00

 

Diluted(2)

$

(0.18

)

 

$

0.02

  

$

(0.27

)

 

$

0.02

 
                

(1) Excludes amortization.

(2) Due to rounding, the sum of net income per share from continuing operations and discontinued operations may not equal net income per share.

COEUR MINING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

    
 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2019

 

2018

 

2019

 

2018

 

In thousands

CASH FLOWS FROM OPERATING ACTIVITIES:

       

Net income (loss)

$

(36,764

)

 

$

2,930

  

$

(55,965

)

 

$

4,171

 

(Income) loss from discontinued operations

  

  

(5,693

)

 

(550

)

Adjustments:

       

Amortization

43,204

  

29,459

  

85,080

  

60,236

 

Accretion

3,007

  

3,886

  

5,950

  

7,204

 

Deferred taxes

(9,158

)

 

(1,265

)

 

(17,417

)

 

(811

)

Fair value adjustments, net

5,296

  

2,462

  

(3,824

)

 

(2,192

)

Stock-based compensation

1,987

  

1,850

  

4,210

  

4,636

 

Inventory write-downs

11,872

  

  

27,319

  

 

Other

4,731

  

2,174

  

5,981

  

2,242

 

Changes in operating assets and liabilities:

       

Receivables

(7,624

)

 

(8,888

)

 

(17,359

)

 

(10,579

)

Prepaid expenses and other current assets

(834

)

 

8,126

  

(3,518

)

 

2,491

 

Inventory and ore on leach pads

(14,391

)

 

(2,766

)

 

(33,212

)

 

(11,474

)

Accounts payable and accrued liabilities

25,109

  

(39,262

)

 

19,037

  

(41,127

)

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES OF CONTINUING OPERATIONS

26,435

  

(1,294

)

 

10,589

  

14,247

 

CASH USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS

  

  

  

(2,690

)

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

26,435

  

(1,294

)

 

10,589

  

11,557

 

CASH FLOWS FROM INVESTING ACTIVITIES:

       

Capital expenditures

(20,749

)

 

(41,165

)

 

(48,187

)

 

(83,510

)

Proceeds from the sale of assets

57

  

96

  

904

  

156

 

Purchase of investments

  

(39

)

 

  

(400

)

Sale of investments

1,102

  

11,141

  

1,102

  

12,760

 

Proceeds from notes receivable

2,000

  

  

7,168

  

 

Other

277

  

(33

)

 

2,018

  

(98

)

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES OF CONTINUING OPERATIONS

(17,313

)

 

(30,000

)

 

(36,995

)

 

(71,092

)

CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS

  

  

  

(28,470

)

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES

(17,313

)

 

(30,000

)

 

(36,995

)

 

(99,562

)

CASH FLOWS FROM FINANCING ACTIVITIES:

       

Issuance of common stock

48,887

  

  

48,887

  

 

Issuance of notes and bank borrowings, net of issuance costs

  

  

15,000

  

15,000

 

Payments on debt, finance leases, and associated costs

(90,812

)

 

(4,373

)

 

(113,273

)

 

(22,822

)

Other

  

(233

)

 

(3,259

)

 

(4,839

)

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES OF CONTINUING OPERATIONS

(41,925

)

 

(4,606

)

 

(52,645

)

 

(12,661

)

CASH USED IN FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS

  

  

  

(22

)

CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

(41,925

)

 

(4,606

)

 

(52,645

)

 

(12,683

)

Effect of exchange rate changes on cash and cash equivalents

56

  

(175

)

 

257

  

382

 

INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(32,747

)

 

(36,075

)

 

(78,794

)

 

(100,306

)

Less net cash used in discontinued operations(1)

  

  

  

(32,930

)

 

(32,747

)

 

(36,075

)

 

(78,794

)

 

(67,376

)

Cash, cash equivalents and restricted cash at beginning of period

72,022

  

172,101

  

118,069

  

203,402

 

Cash, cash equivalents and restricted cash at end of period

$

39,275

  

$

136,026

  

$

39,275

  

$

136,026

 
                

(1) Less net cash used in discontinued operations includes the following cash transactions: net subsidiary payments to parent company of $1,748, during the six months ended June 30, 2018.

Adjusted EBITDA Reconciliation

            

(Dollars in thousands except per share amounts)

LTM 2Q 2019

 

2Q 2019

 

1Q 2019

 

4Q 2018

 

3Q 2018

 

2Q 2018

Net income (loss)

$

(108,541

)

 

$

(36,764

)

 

$

(19,201

)

 

$

468

  

$

(53,044

)

 

$

2,930

 

(Income) loss from discontinued operations, net of tax

(5,693

)

 

  

(5,693

)

 

  

  

 

Interest expense, net of capitalized interest

25,660

  

6,825

  

6,454

  

6,563

  

5,818

  

6,018

 

Income tax provision (benefit)

(46,650

)

 

(5,546

)

 

(8,658

)

 

(36,231

)

 

3,785

  

3,717

 

Amortization

153,317

  

43,204

  

41,876

  

37,053

  

31,184

  

29,459

 

EBITDA

18,093

  

7,719

  

14,778

  

7,853

  

(12,257

)

 

42,124

 

Fair value adjustments, net

(5,270

)

 

5,296

  

(9,120

)

 

(731

)

 

(715

)

 

2,462

 

Foreign exchange (gain) loss

6,223

  

468

  

665

  

1,986

  

3,104

  

3,309

 

(Gain) loss on sale of assets and securities

346

  

72

  

(52

)

 

298

  

28

  

(586

)

Mexico inflation adjustment

  

  

  

  

  

(1,939

)

Transaction costs

5

  

  

  

(1,044

)

 

1,049

  

 

Interest income on notes receivables

(1,153

)

 

(18

)

 

(180

)

 

(327

)

 

(628

)

 

(573

)

Manquiri sale consideration write-down

18,599

  

  

  

  

18,599

  

 

Silvertip start-up write-down

54,039

  

11,872

  

15,447

  

17,974

  

8,746

  

 

Rochester In-Pit crusher write-down

3,441

  

  

  

  

3,441

  

 

Receivable write-down

6,536

    

  

6,536

  

  

 

Asset retirement obligation accretion

11,580

  

3,007

  

2,943

  

2,747

  

2,883

  

2,817

 

Inventory adjustments and write-downs

3,856

  

2,193

  

1,623

  

858

  

421

  

817

 

Adjusted EBITDA

$

116,295

  

$

30,609

  

$

26,104

  

$

36,150

  

$

24,671

  

$

48,431

 

Revenue

$

609,643

  

$

162,123

  

$

154,870

  

143,855

  

$

148,795

  

$

169,987

 

Adjusted EBITDA Margin

19

%

 

19

%

 

17

%

 

25

%

 

17

%

 

28

%

Adjusted Net Income (Loss) Reconciliation

          

(Dollars in thousands except per share amounts)

2Q 2019

 

1Q 2019

 

4Q 2018

 

3Q 2018

 

2Q 2018

Net income (loss)

$

(36,764

)

 

$

(19,201

)

 

$

468

  

$

(53,044

)

 

$

2,930

 

Income loss from discontinued operations, net of tax

  

(5,693

)

 

  

  

 

Fair value adjustments, net

5,296

  

(9,120

)

 

(731

)

 

(715

)

 

2,462

 

(Gain) loss on sale of assets and securities

72

  

(52

)

 

326

  

  

(586

)

Gain on repurchase of Rochester royalty

  

  

(28

)

 

28

  

 

Mexico inflation adjustment

  

  

  

  

(1,939

)

Transaction costs

  

  

(1,044

)

 

1,049

  

 

Interest income on notes receivables

(18

)

 

(180

)

 

(327

)

 

(628

)

 

(573

)

Manquiri sale consideration write-down

  

  

  

18,599

  

 

Silvertip start-up write-down

11,872

  

15,447

  

17,974

  

8,746

  

 

Rochester In-Pit crusher write-down

  

  

  

3,441

  

 

Receivable write-down

  

  

6,536

  

  

 

Foreign exchange loss (gain)

889

  

1,256

  

(530

)

 

6,062

  

(1,233

)

Tax effect of adjustments(1)

(4,332

)

 

(5,415

)

 

(6,559

)

 

(3,191

)

 

 

Adjusted net income (loss)

$

(22,985

)

 

$

(22,958

)

 

$

16,085

  

$

(19,653

)

 

$

1,061

 
          

Adjusted net income (loss) per share – Basic

$

(0.11

)

 

$

(0.11

)

 

$

0.08

  

$

(0.11

)

 

$

0.01

 

Adjusted net income (loss) per share – Diluted

$

(0.11

)

 

$

(0.11

)

 

$

0.08

  

$

(0.11

)

 

$

0.01

 

Consolidated Free Cash Flow Reconciliation

          

(Dollars in thousands)

2Q 2019

 

1Q 2019

 

4Q 2018

 

3Q 2018

 

2Q 2018

Cash flow from continuing operations

$

26,435

  

$

(15,846

)

 

$

72

  

$

5,789

  

$

(1,294

)

Capital expenditures from continuing operations

20,749

  

27,438

  

17,805

  

39,472

  

41,165

 

Free cash flow

5,686

  

(43,284

)

 

(17,733

)

 

(33,683

)

 

(42,459

)

Reconciliation of Costs Applicable to Sales

for Three Months Ended June 30, 2019

            

In thousands except per ounce or per pound amounts

Palmarejo

 

Rochester

 

Kensington

 

Wharf

 

Silvertip

 

Total

Costs applicable to sales, including amortization (U.S. GAAP)

$

50,708

  

$

28,656

  

$

41,670

  

$

17,691

  

$

36,038

  

$

174,763

 

Amortization

(14,212

)

 

(3,963

)

 

(12,537

)

 

(2,225

)

 

(9,878

)

 

(42,815

)

Costs applicable to sales

$

36,496

  

$

24,693

  

$

29,133

  

$

15,466

  

$

26,160

  

$

131,948

 

Inventory Adjustments

(39

)

 

(2,045

)

 

(156

)

 

48

  

(11,872

)

 

(14,064

)

By-product credit

  

  

  

(188

)

 

  

(188

)

Adjusted costs applicable to sales

$

36,457

  

$

22,648

  

$

28,977

  

$

15,326

  

$

14,288

  

$

117,696

 
            

Metal Sales

           

Gold ounces

28,027

  

8,642

  

34,415

  

15,301

  

  

86,385

 

Silver ounces

1,709,406

  

961,634

    

12,364

  

364,961

  

3,048,365

 

Zinc pounds

        

5,302,508

  

5,302,508

 

Lead pounds

        

5,185,634

  

5,185,634

 
            

Revenue Split

           

Gold

57

%

 

44

%

 

100

%

 

100

%

    

Silver

43

%

 

56

%

     

34

%

  

Zinc

        

38

%

  

Lead

        

28

%

  
            

Adjusted costs applicable to sales

           

Gold ($/oz)

$

741

  

$

1,153

  

$

842

  

$

1,002

     

Silver ($/oz)

$

9.17

  

$

13.19

      

$

13.31

   

Zinc ($/lb)

        

$

1.02

   

Lead ($/lb)

        

$

0.77

   

Reconciliation of Costs Applicable to Sales

for Three Months Ended March 31, 2019

            

In thousands except per ounce or per pound amounts

Palmarejo

 

Rochester

 

Kensington

 

Wharf

 

Silvertip

 

Total

Costs applicable to sales, including amortization (U.S. GAAP)

$

47,772

  

$

26,491

  

$

43,902

  

$

20,073

  

$

34,811

  

$

173,049

 

Amortization

(14,528

)

 

(4,037

)

 

(11,727

)

 

(2,681

)

 

(8,426

)

 

(41,399

)

Costs applicable to sales

$

33,244

  

$

22,454

  

$

32,175

  

$

17,392

  

$

26,385

  

$

131,650

 

Inventory Adjustments

(141

)

 

(323

)

 

(1,164

)

 

(5

)

 

(15,447

)

 

(17,080

)

By-product credit

  

  

  

(217

)

 

  

(217

)

Adjusted costs applicable to sales

$

33,103

  

$

22,131

  

$

31,011

  

$

17,170

  

$

10,938

  

$

114,353

 
            

Metal Sales

           

Gold ounces

27,394

  

8,511

  

31,335

  

18,086

    

85,326

 

Silver ounces

1,405,409

  

1,000,453

  

  

14,052

  

215,101

  

2,635,015

 

Zinc pounds

        

4,723,069

  

4,723,069

 

Lead pounds

        

2,747,847

  

2,747,847

 
            

Revenue Split

           

Gold

59

%

 

42

%

 

100

%

 

100

%

    

Silver

41

%

 

58

%

     

27

%

  

Zinc

        

51

%

  

Lead

        

22

%

  
            

Adjusted costs applicable to sales

           

Gold ($/oz)

$

713

  

$

1,092

  

$

990

  

$

949

     

Silver ($/oz)

$

9.66

  

$

12.83

      

$

13.73

   

Zinc ($/lb)

        

$

1.18

   

Lead ($/lb)

        

$

0.88

   

Reconciliation of Costs Applicable to Sales

for Three Months Ended December 31, 2018

            

In thousands except per ounce or per pound amounts

Palmarejo

 

Rochester

 

Kensington

 

Wharf

 

Silvertip

 

Total

Costs applicable to sales, including amortization (U.S. GAAP)

$

42,119

  

$

35,365

  

$

30,703

  

$

16,839

  

$

28,246

  

$

153,272

 

Amortization

(14,992

)

 

(5,992

)

 

(9,437

)

 

(2,184

)

 

(4,161

)

 

(36,766

)

Costs applicable to sales

$

27,127

  

$

29,373

  

$

21,266

  

$

14,655

  

$

24,085

  

$

116,506

 

Inventory Adjustments

(205

)

 

(312

)

 

(220

)

 

(121

)

 

(17,974

)

 

(18,832

)

By-product credit

  

  

  

(166

)

 

  

(166

)

Adjusted costs applicable to sales

$

26,922

  

$

29,061

  

$

21,046

  

$

14,368

  

$

6,111

  

$

97,508

 
            

Metal Sales

           

Gold ounces

23,667

  

15,338

  

24,979

  

15,306

    

79,290

 

Silver ounces

1,534,595

  

1,389,916

  

  

10,932

  

124,144

  

3,059,587

 

Zinc pounds

        

2,603,972

  

2,603,972

 

Lead pounds

        

1,418,653

  

1,418,653

 
            

Revenue Split

           

Gold

55

%

 

48

%

 

100

%

 

100

%

    

Silver

45

%

 

52

%

     

36

%

  

Zinc

        

40

%

  

Lead

        

24

%

  
            

Adjusted costs applicable to sales

           

Gold ($/oz)

$

624

  

$

917

  

$

843

  

$

939

     

Silver ($/oz)

$

7.92

  

$

10.79

      

$

17.68

   

Zinc ($/lb)

        

$

0.95

   

Lead ($/lb)

        

$

1.02

   

Reconciliation of Costs Applicable to Sales

for Three Months Ended September 30, 2018

            

In thousands except per ounce or per pound amounts

Palmarejo

 

Rochester

 

Kensington

 

Wharf

 

Silvertip

 

Total

Costs applicable to sales, including amortization (U.S. GAAP)

$

46,349

  

$

32,842

  

$

35,153

  

$

20,856

  

$

12,609

  

$

147,809

 

Amortization

(14,795

)

 

(5,294

)

 

(6,912

)

 

(2,878

)

 

(1,073

)

 

(30,952

)

Costs applicable to sales

$

31,554

  

$

27,548

  

$

28,241

  

$

17,978

  

$

11,536

  

$

116,857

 

Inventory Adjustments

(16

)

 

(136

)

 

(265

)

 

(4

)

 

(8,746

)

 

(9,167

)

By-product credit

  

  

  

(177

)

 

  

(177

)

Adjusted costs applicable to sales

$

31,538

  

$

27,412

  

$

27,976

  

$

17,797

  

$

2,790

  

$

107,513

 
            

Metal Sales

           

Gold ounces

29,831

  

14,257

  

25,648

  

19,874

    

89,610

 

Silver ounces

1,572,093

  

1,248,163

  

  

12,426

  

98,831

  

2,931,513

 

Zinc pounds

        

1,772,023

  

1,772,023

 

Lead pounds

        

1,230,266

  

1,230,266

 
            

Revenue Split

           

Gold

58

%

 

48

%

 

100

%

 

100

%

    

Silver

42

%

 

52

%

     

35

%

  

Zinc

        

41

%

  

Lead

        

24

%

  
            

Adjusted costs applicable to sales

           

Gold ($/oz)

$

615

  

$

929

  

$

1,091

  

$

895

     

Silver ($/oz)

$

8.39

  

$

11.35

      

$

9.86

   

Zinc ($/lb)

        

$

0.64

   

Lead ($/lb)

        

$

0.55

   

Reconciliation of Costs Applicable to Sales

for Three Months Ended June 30, 2018

            

In thousands except per ounce or per pound amounts

Palmarejo

 

Rochester

 

Kensington

 

Wharf

 

Silvertip

 

Total

Costs applicable to sales, including amortization (U.S. GAAP)

$

44,944

  

$

29,243

  

$

40,668

  

$

22,611

  

$

  

$

137,466

 

Amortization

(14,633

)

 

(4,793

)

 

(6,441

)

 

(3,353

)

 

  

(29,220

)

Costs applicable to sales

$

30,311

  

$

24,450

  

$

34,227

  

$

19,258

  

$

  

$

108,246

 

Inventory Adjustments

(41

)

 

(144

)

 

(551

)

 

(81

)

 

  

(817

)

By-product credit

  

  

  

(220

)

 

  

(220

)

Adjusted costs applicable to sales

$

30,270

  

$

24,306

  

$

33,676

  

$

18,957

  

$

  

$

107,209

 
            

Metal Sales

           

Gold ounces

31,207

  

12,031

  

28,165

  

23,053

    

94,456

 

Silver ounces

2,091,788

  

1,097,272

  

  

13,744

  

  

3,202,804

 

Zinc pounds

        

  

 

Lead pounds

        

  

 
            

Revenue Split

           

Gold

51

%

 

46

%

 

100

%

 

100

%

    

Silver

49

%

 

54

%

     

%

  

Zinc

        

%

  

Lead

        

%

  
            

Adjusted costs applicable to sales

           

Gold ($/oz)

$

497

  

$

936

  

$

1,196

  

$

822

     

Silver ($/oz)

$

7.05

  

$

11.89

      

$

   

Zinc ($/lb)

        

$

   

Lead ($/lb)

        

$

   

Reconciliation of Costs Applicable to Sales for 2019 Guidance

             

In thousands except per ounce amounts

 

Palmarejo

 

Rochester

 

Kensington

 

Wharf

 

Silvertip

 

Total

Costs applicable to sales, including amortization (U.S. GAAP)

 

$

196,310

  

$

131,918

  

$

154,285

  

$

90,299

  

$

156,417

  

$

729,229

 

Amortization

 

62,808

  

21,606

  

36,909

  

11,583

  

57,177

  

190,083

 

Costs applicable to sales

 

$

133,502

  

$

110,312

  

$

117,376

  

$

78,716

  

$

99,240

  

$

539,146

 

By-product credit

 

  

  

  

(1,167

)

 

  

(1,167

)

Adjusted costs applicable to sales

 

$

133,502

  

$

110,312

  

$

117,376

  

$

77,549

  

$

99,240

  

$

537,979

 
             

Metal Sales

            

Gold ounces

 

100,000

  

45,000

  

121,000

  

85,500

     

Silver ounces

 

6,850,000

  

4,800,000

    

75,000

  

2,100,000

   

Zinc pounds

         

35,000,000

   

Lead pounds

         

28,500,000

   
             

Revenue Split

            

Gold

 

52%

 

43%

 

100%

 

100%

 

  

Silver

 

48%

 

57%

 

 

 

32%

  

Zinc

 

 

 

 

 

40%

  

Lead

 

 

 

 

 

28%

  
             

Costs applicable to sales per ounce

            

Gold ($/oz)

 

$650 – $750

 

$1,000 – $1,100

 

$950 – $1,050

 

$850 – $950

 

  

Silver ($/oz)

 

$9.00 – $10.00

 

$12.50 – $13.50

 

 

 

$14.00 – $16.00

  

Zinc ($/lb)

 

 

 

 

 

$1.00 – $1.25

  

Lead ($/lb)

 

 

 

 

 

$0.85 – $1.05

  

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Contacts

Coeur Mining, Inc. 
104 S. Michigan Avenue, Suite 900 
Chicago, IL 60603 
Attention: Paul DePartout, Director, Investor Relations 
Phone: (312) 489-5800 
www.coeur.com

 

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Maza Drilling is a Mexican company established in 2007 in Mazatlán, Sinaloa. Our Canadian founder, Mr. Guy de Launiere, has over 20 years of international experience managing diverse drilling operations. Maza Drilling strives to compete at the highest levels in terms of recovery, effectiveness, efficiency, and affordability at every project while keeping at the forefront of technology to meet our customer’s needs in this demanding market.