Location

Reaffirms Full-Year Companywide Production and Cost Guidance

CHICAGO–(BUSINESS WIRE)–Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported third quarter 2018 financial results, including revenue of $148.8 million, adjusted EBITDA1 of $24.7 million and cash flow from operating activities of $5.8 million. Including $30.8 million of non-cash write downs, the Company reported a GAAP net loss from continuing operations of $53.0 million, or $0.29 per share. On an adjusted basis1, the Company reported a net loss of $19.7 million or $0.11 per share.

Third quarter results were impacted by 11% and 7% lower average realized silver and gold prices, respectively, and by lower production levels at its Palmarejo and Wharf operations due to one-time events. The $30.8 million of non-cash write-downs reflect (i) a modification in the deferred consideration received for the sale of the Company’s Bolivian subsidiary earlier this year, which included a $15 million cash payment to Coeur in the quarter, (ii) the decommissioning of a crusher at Rochester prior to the end of its estimated useful life as part of the operation’s transition to high pressure grinding roll (“HPGR”) crushing technology to enhance silver recovery rates, and (iii) an inventory adjustment relating to concentrate at Silvertip.

Highlights

  • Lower all-in sustaining costs (“AISC”) – AISC of $14.45 and $14.50 per average spot silver equivalent ounce1 for the third quarter and year-to-date, respectively, were below the Company’s full-year 2018 AISC guidance range of $14.75 – $15.25 per average spot silver equivalent ounce1
  • Strong Rochester performance – Silver equivalent1 production increased 17% quarter-over-quarter and 26% year-over-year. Adjusted costs applicable to sales (“CAS”) per average spot silver equivalent ounce1 declined 4% quarter-over-quarter and 8% year-over-year to $11.42
  • Temporarily lower production and higher unit costs at Palmarejo and Wharf – Palmarejo’s results impacted by 17 days of unplanned downtime due to previously-reported fatalities and a nearby road blockade. Operations have since returned to normalized levels. Wharf’s results were affected by weather-related events. Mining and crushing rates have since increased, leading to higher expected fourth quarter production
  • Commercial production achieved at Silvertip mine as ramp-up continues – Commercial production declared on September 1, 2018. Ongoing process plant repairs and improvements are leading to higher availability and throughput. October results reflected materially improved plant performance. Throughput expected to average 830 tons per day (“tpd”) (750 metric tonnes per day (“mtpd”)) by year-end and 1,100 tpd (1,000 mtpd) by end of first quarter 2019
  • Two strategic acquisitions expected to further enhance portfolio quality – Completed acquisition of Northern Empire Resources Corp. (“Northern Empire”), which controls a 143 km2 (approximately 35,000 acres) land position in southern Nevada including the high-grade Sterling Gold Project and three nearby deposits known as the Crown Block. Also announced agreement to acquire assets from Alio Gold Inc. (“Alio Gold”) located next to Rochester including the Lincoln Hill Project, which provides significant operational synergies
  • Strong liquidity and enhanced balance sheet strength – Cash and cash equivalents of $104.7 million at September 30, 2018. Expanded revolving credit facility capacity to provide additional balance sheet flexibility
  • Reaffirming full-year production and cost guidance

“Third quarter results were impacted by weak metals prices and temporarily lower production at our Palmarejo and Wharf mines due to one-time events. Our Rochester operation was the standout performer with strong production growth and further cost reductions. In addition, the team at Rochester has commenced work on the installation of the first HPGR crusher, which is expected to boost silver recoveries and further reduce costs starting next year,” said Mitchell J. Krebs, Coeur’s President and Chief Executive Officer. “Importantly, we remain on-track to achieve full-year production and cost guidance due to strong expected fourth quarter performance at each of our operations, which we experienced during the month of October.”

“Silvertip reached an important milestone by achieving commercial production on September 1st. Throughput rates continue to steadily climb toward the year-end goal of 750 mtpd. Lower than planned mill availability limited production rates and concentrate sales during the quarter as we address remaining maintenance priorities in the processing facility. However, the plant set records for availability and throughput in October as the team establishes a more stable and consistent operating environment.”

“We have further enhanced the quality of our growth pipeline with two recent acquisitions of high-quality, low-risk projects that complement our existing asset base. We announced and have now completed the acquisition of Northern Empire, which bolsters both our near- and long-term development pipelines with high-quality, Nevada-based gold assets. We also announced the acquisition of the Lincoln Hill project and other assets from Alio Gold, which is expected to close in the fourth quarter. These assets are adjacent to Rochester and will allow us to leverage our existing infrastructure to generate strong returns and future free cash flow from higher-grade, low-cost production.”

 

Financial and Operating Highlights (Unaudited)

 

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

 

   3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Revenue   $148.8  $170.0  $163.3  $214.6  $159.9 
Costs Applicable to Sales   $116.9  $108.2  $99.3  $122.0  $101.6 
General and Administrative Expenses   $7.7  $7.7  $8.8  $9.2  $7.3 
Net Income (Loss)   $(53.0) $2.9  $0.7  $14.3  $(11.7)
Net Income (Loss) Per Share   $(0.29) $0.02  $0.00  $0.08  $(0.07)
Adjusted Net Income (Loss)1   $(19.7) $1.1  $0.7  $14.1  $(15.3)
Adjusted Net Income (Loss)Per Share   $(0.11) $0.01  $0.00  $0.08  $(0.09)
Weighted Average Shares Outstanding   $185.2  $187.5  $187.6  $187.0  $179.3 
EBITDA1   $(12.3) $42.1  $49.4  $69.6  $38.6 
Adjusted EBITDA1   $24.7  $48.4  $49.5  $77.0  $40.2 
Cash Flow from Operating Activities   $5.8  $(1.3) $15.5  $91.8  $37.3 
Capital Expenditures   $39.5  $41.2  $42.3  $47.1  $29.0 
Free Cash Flow1   $(33.7) $(42.5) $(26.8) $44.8  $8.3 
Cash, Equivalents & Short-Term Investments   $104.7  $123.5  $159.6  $192.0  $195.7 
Total Debt2   $429.2  $419.7  $414.0  $411.3  $288.7 
Average Realized Price Per Ounce – Silver   $14.68  $16.48  $16.70  $16.57  $16.86 
Average Realized Price Per Ounce – Gold   $1,150  $1,241  $1,268  $1,224  $1,240 
Average Realized Price Per Pound – Zinc   $0.94  $  $  $  $ 
Average Realized Price Per Pound – Lead   $0.85  $  $  $  $ 
Silver Ounces Produced   2.9  3.2  3.2  3.7  3.0 
Gold Ounces Produced   87,539  94,052  85,383  118,756  93,293 
Zinc Pounds Produced   1.1         
Lead Pounds Produced   0.4         
Silver Equivalent Ounces Produced1   8.2  8.8  8.3  10.8  8.6 
Silver Equivalent Ounces Produced (Average Spot)1   10.1  10.6  9.9  12.8  10.1 
Silver Ounces Sold   2.9  3.2  3.2  3.8  2.9 
Gold Ounces Sold   89,609  94,455  87,153  123,564  89,972 
Zinc Pounds Sold   1.8         
Lead Pounds Sold   1.2         
Silver Equivalent Ounces Sold1   8.5  8.9  8.4  11.1  8.3 
Silver Equivalent Ounces Sold (Average Spot)1   10.4  10.7  10.1  13.2  9.7 
Adjusted CAS per AgEqOz1   $10.77  $9.44  $9.69  $9.43  $11.05 
Adjusted CAS per Average Spot AgEqOz1   $9.22  $8.26  $8.48  $8.35  $9.90 
Adjusted CAS per AuEqOz1   $1,005  $1,028  $955  $800  $843 
Adjusted AISC per AgEqOz1   $17.70  $17.62  $17.20  $14.45  $17.35 
Adjusted AISC per Average Spot AgEqOz1   $14.45  $14.65  $14.33  $12.26  $14.79 
 

Financial Results

Revenue for the third quarter was $148.8 million, 12% lower compared to the second quarter due to lower metal sales and lower average realized silver and gold prices, which declined 11% and 7%, respectively, quarter-over-quarter. Gold sales contributed 69% of revenue during the third quarter and silver sales contributed 29%. The Company’s U.S. operations accounted for approximately 60% of third quarter revenue, comparable to the first half of the year and to last year’s third quarter.

Average realized gold prices during the third quarter were impacted by the sale of 10,610 gold ounces at a price of $800 per ounce pursuant to Palmarejo’s gold stream agreement.

Costs applicable to sales were $116.9 million for the quarter, 8% and 15% higher quarter-over-quarter and year-over-year, respectively. The increase was primarily attributable to the inclusion of Silvertip in the Company’s third quarter results beginning September 1st, which increased costs applicable to sales by $11.5 million.

General and administrative expenses were $7.7 million, flat quarter-over-quarter, while third quarter interest expense totaled $5.8 million, also flat compared to the second quarter.

Third quarter capital expenditures of $39.5 million declined 4% quarter-over-quarter primarily due to lower sustaining capital expenditures. Development capital expenditures increased partially due to continued investment at Silvertip. Capital expenditures at Silvertip accounted for $17.9 million (including $7.8 million of pre-commercial capital expenditures), or 45%, of total companywide capital expenditures. Year-over-year, capital expenditures increased 36% primarily as a result of expenditures at the Silvertip mine.

Modifications to Deferred Consideration from Manquiri Sale

As described below, Coeur’s third quarter results reflect the non-cash impact of a modification to the terms of the deferred consideration received when it sold its Bolivian subsidiary that operates the San Bartolomé mine (“Manquiri”) earlier this year. The modifications described below provided the Company with significant upfront consideration while providing the new owners of Manquiri additional financial flexibility to offset the impact of lower silver prices on the San Bartolomé operation.

  • $15.0 million was paid in cash to the Company and was received on September 25, 2018;
  • The aggregate note receivable was reduced from $28.5 million to $25.0 million, with $10.0 million remaining after the upfront $15.0 million cash payment described above, which is scheduled to be repaid by September 30, 2019;
  • Quarterly payments in respect of the 2.0% net smelter returns royalty (“NSR”) were temporarily suspended until October 15, 2019; and
  • Coeur agreed to forgo rights to any value added tax (“VAT”) refunds collected or received by Manquiri

Based on these modifications, the Company recorded an $18.6 million non-cash write-down comprised of $13.1 million related to the VAT refunds, $3.6 million related to the reduced note receivable and $1.9 million related to the deferral of NSR payments.

Enhancements to the Company’s Senior Secured Revolving Credit Facility

On October 29, 2018, the Company amended the terms of its senior secured revolving credit facility (the “Facility”) to:

  • Increase the aggregate size from $200 million to $250 million
  • Extend the maturity date from September 2021 to October 2022

The Company established the Facility in September 2017 to partially fund its acquisition of Silvertip and provide additional flexibility to manage its near- to medium-term operating and growth priorities. As of September 30, 2018, the Company has approximately $172.7 million of liquidity, including $104.7 million of cash and cash equivalents and $68.0 million of availability under the Facility. The additional Facility capacity is intended to bolster the Company’s liquidity, including with respect to the anticipated HPGR investments at Rochester in 2020 and 2021.

Operations

Highlights of third quarter 2018 results for each of the Company’s operations are provided below.

 

Palmarejo, Mexico

 
(Dollars in millions, except per ounce amounts)   3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Tons milled   300,116 344,073 359,893 389,524 413,086
Average silver grade (oz/t)   6.26 6.86 6.88 6.92 5.53
Average gold grade (oz/t)   0.10 0.11 0.10 0.10 0.08
Average recovery rate – Ag   82.2% 87.5% 81.4% 87.0% 83.6%
Average recovery rate – Au   88.8% 89.9% 80.4% 92.0% 83.1%
Silver ounces produced (000’s)   1,544 2,066 2,013 2,346 1,908
Gold ounces produced   27,885 33,702 29,896 37,537 28,948
Silver equivalent ounces produced(000’s)   3,217 4,088 3,807 4,600 3,644
Silver equivalent ounces produced1 (average spot) (000’s)   3,796 4,728 4,382 5,209 4,104
Silver ounces sold (000’s)   1,572 2,092 2,031 2,343 1,794
Gold ounces sold   29,830 31,207 30,888 38,953 26,554
Silver equivalent ounces sold(000’s)   3,362 3,964 3,884 4,681 3,387
Silver equivalent ounces sold1 (average spot) (000’s)   3,981 4,557 4,479 5,331 3,809
Average realized price per silver ounce   $14.75 $16.49 $16.73 $16.57 $16.83
Average realized price per gold ounce   $1,082 $1,162 $1,168 $1,139 $1,148
Metal sales   $55.5 $70.7 $70.0 $83.2 $60.7
Costs applicable to sales   $31.6 $30.3 $31.1 $36.0 $33.3
Adjusted CAS per AgEqOz1   $9.39 $7.64 $8.01 $7.54 $9.76
Adjusted CAS per average spot AgEqOz1   $7.93 $6.64 $6.94 $6.64 $8.68
Exploration expense   $3.2 $3.2 $4.0 $2.7 $4.5
Cash flow from operating activities   $8.6 $1.3 $27.3 $52.1 $18.5
Sustaining capital expenditures (excludes capital lease payments)   $2.0 $9.5 $9.3 $4.9 $6.5
Development capital expenditures   $2.7 $— $— $2.1 $(1.0)
Total capital expenditures   $4.7 $9.5 $9.3 $7.0 $5.5
Free cash flow1   $3.9 $(8.2) $18.0 $45.1 $13.0
 
  • Third quarter silver equivalent1 production declined 21% quarter-over-quarter and 12% year-over-year to 3.2 million ounces (3.8 million ounces based on average spot prices during the third quarter) primarily due to (i) the temporary suspension of mining activities relating to fatalities that occurred during the quarter, (ii) supply chain disruptions stemming from a local road blockade that temporarily interrupted the delivery of certain mining consumables, and (iii) a weather-related interruption that impacted the process plant. Mining rates have since returned to steady-state levels
  • The modest decline in silver and gold grades was due to the mining of lower grade stopes, primarily at Independencia East. Gold grades are expected to decline while silver grades are expected to be flat in the fourth quarter; however, mining rates are anticipated to return to steady-state levels, offsetting the impact of the lower expected gold grades
  • Adjusted CAS of $7.93 per average spot AgEqOz1 were 19% higher quarter-over-quarter and 9% lower year-over-year. The quarterly increase was largely due to lower production, though continued to track below full-year 2018 guidance of $8.00 – $8.50 per average spot AgEqOz1. The year-over-year decline was the result of higher gold and silver grades, as well as lower mining and processing costs
  • Development towards the La Nación deposit, located between Guadalupe and Independencia, remains on-schedule. Production from the deposit is expected to commence in the second half of 2019, providing anticipated additional high-quality mill feed to supplement existing ore sources
  • Free cash flow1 of $3.9 million increased $12.1 million compared to the prior quarter, which had been impacted by $17 million of cash income and mining taxes associated with 2017 earnings. The increase, however, was offset by lower metal sales and higher costs. Total cash income and mining tax payments in Mexico this year are expected to be $40 – $45 million (with approximately $39 million incurred year-to-date through the end of September)
  • The Company is maintaining Palmarejo’s full-year 2018 production guidance of 7.5 – 7.9 million ounces of silver and 115,000 – 120,000 ounces of gold, or 14.4 – 15.1 million silver equivalent1 ounces (16.8 – 17.6 million ounces based on average spot prices during the third quarter). It is also maintaining cost guidance of $8.00 – $8.50 on a spot equivalent basis and $9.00 – $9.50 on a 60:1 silver equivalent basis. In July, the Company increased Palmarejo’s full-year production guidance and reduced its full-year cost guidance following strong performance during the first half of the year
 

Rochester, Nevada

 
(Dollars in millions, except per ounce amounts)   3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Ore tons placed   4,061,082 4,083,028 4,351,131 4,171,451 4,262,011
Average silver grade (oz/t)   0.52 0.53 0.54 0.50 0.53
Average gold grade (oz/t)   0.004 0.004 0.003 0.003 0.004
Silver ounces produced (000’s)   1,290 1,125 1,157 1,361 1,070
Gold ounces produced   14,702 12,273 11,487 18,995 10,955
Silver equivalent ounces produced(000’s)   2,172 1,861 1,846 2,500 1,727
Silver equivalent ounces produced1 (average spot) (000’s)   2,477 2,095 2,067 2,808 1,901
Silver ounces sold (000’s)   1,248 1,097 1,119 1,457 1,050
Gold ounces sold   14,257 12,030 11,163 20,002 10,390
Silver equivalent ounces sold(000’s)   2,104 1,819 1,789 2,658 1,674
Silver equivalent ounces sold1 (average spot) (000’s)   2,400 2,048 2,004 2,969 1,839
Average realized price per silver ounce   $14.70 $16.47 $16.66 $16.58 $16.89
Average realized price per gold ounce   $1,204 $1,297 $1,331 $1,279 $1,291
Metal sales   $35.5 $33.7 $33.5 $49.7 $31.2
Costs applicable to sales   $27.5 $24.5 $24.3 $34.0 $23.3
Adjusted CAS per AgEqOz1   $13.04 $13.36 $13.33 $12.77 $13.69
Adjusted CAS per average spot AgEqOz1   $11.42 $11.87 $11.89 $11.37 $12.46
Exploration expense   $0.1 $0.2 $— $0.5 $0.5
Cash flow from operating activities   $5.7 $6.0 $3.4 $26.1 $1.6
Sustaining capital expenditures (excludes capital lease payments)   $2.7 $0.4 $0.5 $0.9 $0.5
Development capital expenditures   $0.9 $0.3 $2.1 $5.9 $9.2
Total capital expenditures   $3.6 $0.7 $2.6 $6.8 $9.7
Free cash flow1   $2.1 $5.3 $0.8 $19.3 $(8.1)
 
  • Silver equivalent1 production during the period increased 17% quarter-over-quarter to 2.2 million ounces (2.5 million ounces based on average spot prices during the third quarter) and was driven primarily by strong performance from the Stage III leach pad and continued steady performance of the Stage IV leach pad. These trends are expected to continue throughout the fourth quarter
  • Installation of the initial HPGR unit remains on schedule for the first quarter of 2019 with silver recoveries expected to improve beginning as early as the second quarter of 2019. Decommissioning of the mine’s smaller, 15,000 tpd in-pit crusher has been completed and is expected to result in fewer tons crushed as well as lower operating expenses in the fourth quarter
  • Third quarter adjusted CAS per average spot AgEqOz1 of $11.42 were 4% lower compared to the prior quarter and 8% lower year-over-year, and remained below the full-year 2018 guidance range of $12.00 – $12.50
  • Free cash flow1 for the third quarter decreased from $5.3 million during the prior quarter to $2.1 million primarily as a result of lower average realized silver and gold prices and higher capital expenditures
  • The Company is maintaining full-year 2018 production guidance of 4.8 – 5.2 million ounces of silver and 48,000 – 52,000 ounces of gold, or 7.7 – 8.3 million silver equivalent1 ounces (8.7 – 9.4 million ounces based on average spot prices during the third quarter). The Company is also maintaining cost guidance of CAS per AgEqOz1 of $12.00 – $12.50 on a spot equivalent basis and $13.25 – $13.75 on a 60:1 silver equivalent basis
 

Wharf, South Dakota

 
(Dollars in millions, except per ounce amounts)   3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Ore tons placed   1,127,391 1,075,820 1,076,395 1,124,785 1,150,308
Average gold grade (oz/t)   0.023 0.023 0.022 0.029 0.029
Gold ounces produced   19,437 22,507 17,936 27,292 25,849
Silver ounces produced (000’s)   13 13 12 16 15
Gold equivalent ounces produced1   19,646 22,729 18,133 27,560 26,096
Gold ounces sold   19,874 23,053 17,339 28,975 23,855
Silver ounces sold (000’s)   12 14 11 16 14
Gold equivalent ounces sold1   20,081 23,282 17,522 29,256 24,085
Average realized price per gold ounce   $1,198 $1,285 $1,341 $1,278 $1,304
Metal sales   $24.0 $29.8 $23.4 $37.3 $31.3
Costs applicable to sales   $18.0 $19.3 $15.3 $19.9 $17.3
Adjusted CAS per AuEqOz1   $895 $824 $870 $682 $719
Exploration expense   $0.1 $— $— $0.1 $0.2
Cash flow from operating activities   $3.7 $11.5 $(1.4) $17.2 $15.0
Sustaining capital expenditures (excludes capital lease payments)   $1.2 $1.2 $0.3 $1.6 $1.8
Development capital expenditures   $— $— $— $1.7 $1.3
Total capital expenditures   $1.2 $1.2 $0.3 $3.3 $3.1
Free cash flow1   $2.5 $10.3 $(1.7) $13.9 $11.9
 
  • Gold production declined 14% quarter-over-quarter to 19,646 ounces partially due to weather-related events, including the impact of abnormally high levels of rainfall on leach pad recoveries. Mining and crushing rates during the fourth quarter are expected to increase while average gold grade is expected to remain relatively constant
  • Adjusted CAS per AuEqOz1 of $895 were 9% and 24% higher quarter-over-quarter and year-over-year, respectively, due to lower production levels and remain within the full-year 2018 guidance range of $850 – $900
  • Wharf generated $2.5 million of free cash flow1 during the quarter. The decline relative to the prior quarter was a result of lower production, timing of leaching cycles and weaker metal prices
  • Since acquiring the operation in February 2015 for $99 million, Wharf has generated $138.3 million of free cash flow1
  • The Company is maintaining Wharf’s full-year production and cost guidance of 85,000 – 90,000 ounces of gold at CAS per AuEqOz1 of $850 – $900
 

Kensington, Alaska

 
(Dollars in millions, except per ounce amounts)   3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Tons milled   163,603 168,751 158,706 167,631 172,038
Average gold grade (oz/t)   0.17 0.16 0.17 0.22 0.17
Average recovery rate   90.4% 92.6% 94.0% 92.8% 94.1%
Gold ounces produced   25,515 25,570 26,064 34,932 27,541
Gold ounces sold   25,648 28,165 27,763 35,634 29,173
Average realized price per gold ounce   $1,161 $1,269 $1,307 $1,244 $1,255
Metal sales   $29.8 $35.7 $36.3 $44.3 $36.6
Costs applicable to sales   $28.2 $34.2 $28.6 $32.0 $27.7
Adjusted CAS per AuOz1   $1,091 $1,195 $1,010 $896 $946
Exploration expense   $1.6 $1.4 $1.6 $2.8 $3.0
Cash flow from operating activities   $(0.4) $3.2 $4.6 $16.8 $9.3
Sustaining capital expenditures (excludes capital lease payments)   $9.7 $9.2 $8.5 $8.0 $6.5
Development capital expenditures   $2.3 $1.5 $2.9 $4.0 $3.6
Total capital expenditures   $12.0 $10.7 $11.4 $12.0 $10.1
Free cash flow1   $(12.4) $(7.5) $(6.8) $4.8 $(0.8)
 
  • Third quarter gold production, inclusive of pre-commercial production from Jualin, was 26,809 ounces. Excluding pre-commercial production, Kensington produced 25,515 ounces of gold, comparable to the prior quarter
  • The Company mined approximately 4,400 tons of development ore at Jualin late in the third quarter, which yielded pre-commercial production of nearly 2,100 ounces of gold at a grade of 0.48 ounces per ton (“oz/t”). Mining rates at Jualin are expected to climb throughout the fourth quarter, leading to higher overall production levels
  • Adjusted CAS per AuOz1 of $1,091 improved 9% quarter-over-quarter primarily due to lower drilling and labor costs. Higher grades are anticipated in the fourth quarter, which is expected to increase production and drive lower unit costs
  • Negative free cash flow1 of $12.4 million resulted from a lower average realized gold price, higher operating costs and slightly higher capital expenditures
  • The Company is maintaining Kensington’s full-year production and cost guidance of 115,000 – 120,000 gold ounces at CAS per AuOz1 of $900 – $9504
 

Silvertip, British Columbia

 
(Dollars in millions, except per ounce and per pound amounts)   3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Tons milled   10,652    
Average silver grade (oz/t)   6.66    
Average zinc grade (%)   8.0% —% —% —% —%
Average lead grade (%)   4.3% —% —% —% —%
Average recovery rate – Ag   56.3% —% —% —% —%
Average recovery rate – Zn   64.5% —% —% —% —%
Average recovery rate – Pb   45.1% —% —% —% —%
Silver ounces produced (000’s)   40    
Zinc pounds produced (000’s)   1,099    
Lead pounds produced (000’s)   413    
Silver equivalent ounces produced1 (000’s)   127    
Silver equivalent ounces produced1 (average spot) (000’s)   153   

 

Silver ounces sold (000’s)   99    
Zinc pounds sold (000’s)   1,772    
Lead pounds sold (000’s)   1,230    
Silver equivalent ounces sold1 (000’s)   267    
Silver equivalent ounces sold1 (average spot) (000’s)   267    
Average realized price per silver ounce   $13.46 $— $— $— $—
Average realized price per zinc pound   $0.94 $— $— $— $—
Average realized price per lead pound   $0.85 $— $— $— $—
Metal sales   $4.1 $— $— $— $—
Costs applicable to sales   $11.5 $— $— $— $—
Adjusted CAS per AgEqOz1   $10.46 $— $— $— $—
Adjusted CAS per average spot AgEqOz1   $8.69 $— $— $— $—
Exploration expense   $2.3 $0.1 $— $— $—
Cash flow from operating activities   $(6.8) $— $— $— $—
Sustaining capital expenditures (excludes capital lease payments)   $0.4 $— $— $— $—
Development capital expenditures   $17.5 $19.0 $18.6 $— $—
Total capital expenditures   $17.9 $19.0 $18.6 $— $—
Free cash flow1   $(24.7) $(19.0) $(18.6) $— $—
 
  • Silvertip achieved commercial production on September 1, 2018. The operating and financial metrics above reflect only commercial production
  • Mill downtime required to complete repairs on the paste plant and grinding circuit impacted throughput during the quarter, which averaged approximately 434 tpd (approximately 394 mtpd)
  • Operating activities remain focused on improving process plant performance, underground rehabilitation and development, and completing several key surface infrastructure projects, including the water treatment plant and a 220-person camp facility
  • Processing rates, mill availability, recovery rates and concentrate grades all continue to climb from month-to-month with October setting monthly records across all key metrics. These trends are expected to continue throughout the fourth quarter and processing rates are anticipated to reach an average of approximately 830 tpd (750 mtpd) by year-end
  • Coeur expects to file an initial NI 43-101 Technical Report in the fourth quarter and receive approval for the permit amendment application to operate at 1,100 tpd (1,000 mtpd) on a year-round basis in early 2019
  • The Company is maintaining full-year 2018 production guidance of 0.7 – 1.2 million ounces of silver, 13.0 – 23.0 million pounds of zinc and 11.0 – 18.0 million pounds of lead, or 2.0 – 3.5 million silver equivalent1 ounces (2.4 – 4.1 million ounces based on average spot prices during the third quarter) at CAS per AgEqOz1 and spot AgEqOz1 of $15.00 – $15.50 and $12.00 – $12.50, respectively4

Exploration

Coeur maintained its pace of exploration during the quarter, though activity steadily tapered in September. Up to 14 drill rigs were active at the Company’s operations and exploration projects, including six at Palmarejo, two at Kensington and six at Silvertip. Near-mine drilling accounted for approximately 80% of the Company’s total exploration investment during the quarter.

Expensed resource expansion drilling increased 28% quarter-over-quarter to $8.2 million and remained focused on identifying and expanding resources at the Company’s operating mines.

Following a second quarter high of $9.6 million, capitalized resource infill drilling declined to $2.3 million during the quarter. This decrease was mostly driven by early completion of Silvertip’s initial drill program, which totaled 146,000 feet (44,500 meters) compared to a budgeted program of approximately 100,000 feet (30,000 meters). Results from this program are expected to support an updated resource model and maiden reserve estimate, which the Company anticipates including in an NI 43-101 compliant Technical Report planned to be filed in the fourth quarter.

At Palmarejo, between one and three rigs completed drilling on the Zapata inferred resource as well as the recently-discovered Madero and Rampa veins (all located immediately west of Guadalupe). Limited drilling also continued in the Independencia North area. Up to three rigs focused on capitalized, resource conversion drilling at Independencia and Guadalupe. Resource expansion drilling was completed by the end of the quarter; however, infill drilling will continue until year end at Guadalupe focusing on the Las Animas area located immediately southeast of Guadalupe.

At Kensington, the drill campaign continued with infill drilling on the Upper Kensington Zone 30 resource, as well on resource expansion on the new Seward Vein, Ophir Vein and Elmira Vein. Elmira is now accessible from the upper, newly refurbished 2050 zone. Surface sampling and mapping were completed during the quarter on district targets.

At Rochester, infill drilling continued at a similar pace with one reverse circulation drill rig operating throughout the quarter. Results continued to indicate significant intercepts in the main Rochester Pit and, to the southwest, in the Sunflower area.

A single reverse circulation rig at Wharf completed infill drilling in the Portland Ridge area and drilled five exploration holes at the Bald Mountain target located east of the mine.

As part of Coeur’s greenfield exploration program, one diamond core rig actively drilled throughout the quarter at the La Morita Project located in northern Chihuahua, Mexico. In addition, surface sampling and mapping were initiated at the El Sarape project located in Sonora in which the Company has an earn-in option with Evrim Resources. The Company plans to commence drilling at the Tonopah district in southern Nevada during the fourth quarter and accelerate its exploration activities at the newly acquired Sterling mine, where one reverse circulation rig is currently drilling.

2018 Production Outlook

Coeur’s 2018 production guidance was revised on September 4, 2018 to reflect improved visibility of Silvertip’s production following the commencement of commercial production as well as stronger than expected performance at Rochester during the first half of the year.

 
    Silver
(K oz)
 Gold
(oz)
 Zinc
(K lbs)
 Lead
(K lbs)
 Silver Equivalent1
(K oz)
Palmarejo   7,500 – 7,900 115,000 – 120,000   14,400 – 15,100
Rochester   4,800 – 5,200 48,000 – 52,000   7,680 – 8,320
Kensington    115,000 – 120,000   6,900 – 7,200
Wharf    85,000 – 90,000   5,100 – 5,400
Silvertip   700 – 1,200  13,000 – 23,000 11,000 – 18,000 2,030 – 3,480
Total   13,000 – 14,300 363,000 – 382,000 13,000 – 23,000 11,000 – 18,000 36,110 – 39,500
 

Guidance Based on Third Quarter Average Spot Prices

 
    Silver
(K oz)
 Gold
(oz)
 Zinc
(K lbs)
 Lead
(K lbs)
 Silver Equivalent1
(K oz)
Palmarejo   7,500 – 7,900 115,000 – 120,000   16,787 – 17,591
Rochester   4,800 – 5,200 48,000 – 52,000   8,676 – 9,399
Kensington    115,000 – 120,000   9,287 – 9,691
Wharf    85,000 – 90,000   6,865 – 7,268
Silvertip   700 – 1,200  13,000 – 23,000 11,000 – 18,000 2,391 – 4,099
Total   13,000 – 14,300 363,000 – 382,000 13,000 – 23,000 11,000 – 18,000 44,007 – 48,049
 

2018 Cost Outlook

The Company’s cost guidance was reduced on July 25, 2018 to account for strong first half cost performance at Palmarejo, timing of commercial production at Silvertip and accelerated investment in near-mine exploration. Unit cost guidance on a spot equivalent basis remains based on silver-to-gold, -zinc and -lead equivalence ratios of 75:1, 0.09:1 and 0.07:1, respectively.

 
    Original Guidance (if changed) Current Guidance
(dollars in millions, except per ounce amounts)   60:1 Spot 60:1 Spot
CAS per AgEqOz1 – Palmarejo   $10.50 – $11.00 $9.25 -$9.75 $9.00 – $9.50 $8.00 – $8.50
CAS per AgEqOz1 – Rochester       $13.25 – $13.75 $12.00 – $12.50
CAS per AuOz1 – Kensington     $900 – $950
CAS per AuEqOz1 – Wharf     $850 – $900
CAS per AgEqOz1 – Silvertip       $15.00 – $15.50 $12.00 – $12.50
Capital Expenditures   $120 – $140 $130 – $150
General and Administrative Expenses     $32 – $34
Exploration Expense   $20 – $25 $25 – $30
AISC per AgEqOz1 from continuing operations   $17.50 – $18.00 $15.00 – $15.50 $17.25 – $17.75 $14.75 – $15.25
 

Financial Results and Conference Call

Coeur will host a conference call to discuss its third quarter 2018 financial results on November 1, 2018 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 Peter C. Mitchell, Senior Vice President and Chief Financial Officer, Frank L. Hanagarne, Jr., Senior Vice President and Chief Operating Officer, Terry F. D. Smith, Vice President of North American Operations, Hans Rasmussen, Senior Vice President of Exploration, and other members of management. A replay of the call will be available through November 15, 2018.

 
Replay numbers:   (877) 344-7529 (U.S.)
    (855) 669-9658 (Canada)
    (412) 317-0088 (International)
     
Conference ID:   101 23 688
 

The Company anticipates reporting its fourth quarter 2018 financial results on February 13, 2019 after the New York Stock Exchange closes for trading and holding a conference call on February 14, 2019 at 11:00 a.m. Eastern Time.

About Coeur

Coeur Mining, Inc. is a well-diversified, growing precious metals producer with five mines in North America. Coeur produces from its wholly-owned operations: the Palmarejo silver-gold complex in Mexico, the Silvertip silver-zinc-lead mine in British Columbia, the Rochester silver-gold mine in Nevada, the Wharf gold mine in South Dakota, and the Kensington gold mine in Alaska. 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 the anticipated benefits of acquisitions, anticipated production, costs, expenses, cash flow, expectations regarding Silvertip, including but not limited to, receipt of permits and completion of a technical report, grades, exploration and development efforts, sales of gold under the Palmarejo gold stream agreement, the timing and impact of installation of HPGR units at Rochester, operations at Palmarejo, Rochester, Wharf, Kensington and Silvertip, expected free cash flow, returns, grades, mining rates, crushing rates and taxes. 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 the Lincoln Hill (and related assets) acquisition does not close on a timely basis or at all, the risk that anticipated benefits of acquisitions are not realized, the risk that expectations regarding Silvertip obtaining necessary permits and filing a technical report do not occur on a timely basis or at all, the risk that HPGR units will not be installed at Rochester on a timely basis or the anticipated benefits thereof will not be achieved, the risk that anticipated production, cost, expense, and free cash flow 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, ground conditions, grade variability, any future labor disputes or work stoppages, the uncertainties inherent in the estimation of gold and silver 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, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver ounce (or per gold 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 EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver ounce (or per gold ounce), all-in sustaining costs, and adjusted all-in sustaining costs 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, 2017.

Notes

1. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver ounce (or per gold ounce), all-in sustaining costs, and adjusted all-in sustaining costs 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. Silver equivalence assumes silver-to-gold, -lead and -zinc ratios of 60:1, 0.05:1 and 0.06:1, respectively, except where noted as average spot prices. Please see the table below for average applicable spot prices and corresponding ratios. Unit cost guidance on a spot equivalent basis assumes silver-to-gold, -zinc and -lead equivalence ratios of 75:1, 0.09:1 and 0.07:1, respectively.

2. On February 28, 2018, Coeur divested the San Bartolomé mine through the sale of its 100%-owned Bolivian subsidiary. As a result, San Bartolomé is excluded from consolidated operating statistics for all periods presented unless otherwise noted.

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

4. Full-year 2018 production guidance for Kensington and Silvertip include pre-commercial production.

 

Average Spot Prices

 
    3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Average Silver Spot Price Per Ounce   $15.02 $16.53 $16.77 $16.73 $16.84
Average Gold Spot Price Per Ounce   $1,213 $1,306 $1,329 $1,275 $1,278
Average Silver to Gold Spot Equivalence   81:1 79:1 79:1 76:1 76:1
Average Zinc Spot Price Per Pound   $1.15 $1.41 $1.55 $1.47 $1.06
Average Silver to Zinc Spot Equivalence   0.08:1 0.09:1 0.09:1 0.09:1 0.06:1
Average Lead Spot Price Per Pound   $0.95 $1.08 $1.14 $1.13 $1.06
Average Silver to Lead Spot Equivalence   0.06:1 0.07:1 0.07:1 0.07:1 0.06:1
 
 

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

 
    

Three months ended
September 30,

 

Nine months ended
September 30,

    2018 2017 2018 2017
    In thousands, except share data
Revenue   $148,795  $159,920  $482,049  $495,014 
COSTS AND EXPENSES          
Costs applicable to sales(1)   116,857  101,559  324,443  318,278 
Amortization   31,184  32,400  91,420  101,827 
General and administrative   7,729  7,345  24,183  24,495 
Exploration   8,157  9,791  21,269  22,856 
Pre-development, reclamation, and other   8,121  5,030  15,966  12,952 
Total costs and expenses   172,048  156,125  477,281  480,408 
OTHER INCOME (EXPENSE), NET          
Loss on debt extinguishment         (9,342)
Fair value adjustments, net   715    2,907  (864)
Interest expense, net of capitalized interest   (5,818) (3,595) (17,801) (10,918)
Other, net   (20,903) 2,361  (19,846) 27,134 
Total other income (expense), net   (26,006) (1,234) (34,740) 6,010 
Income (loss) before income and mining taxes   (49,259) 2,561  (29,972) 20,616 
Income and mining tax (expense) benefit   (3,785) (14,289) (19,451) (24,040)
Income (loss) from continuing operations   $(53,044) $(11,728) $(49,423) $(3,424)
Income (loss) from discontinued operations     (4,924) 550  (5,520)
NET INCOME (LOSS)   $(53,044) $(16,652) $(48,873) $(8,944)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:          
Unrealized gain (loss) on debt and equity securities   192  1,066  (173) (1,134)
Reclassification adjustments for impairment of equity securities         426 
Reclassification adjustments for realized (gain) loss on sale of equity securities     32    1,300 
Other comprehensive income (loss)   192  1,098  (173) 592 
COMPREHENSIVE INCOME (LOSS)   $(52,852) $(15,554) $(49,046) $(8,352)
           
NET INCOME (LOSS) PER SHARE          
Basic income (loss) per share:          
Net income (loss) from continuing operations   $(0.29) $(0.07) $(0.27) $(0.02)
Net income (loss) from discontinued operations   0.00  (0.03) 0.00  (0.03)
Basic(2)   $(0.29) $(0.09) $(0.26) $(0.05)
Diluted income (loss) per share:          
Net income (loss) from continuing operations   $(0.29) $(0.07) $(0.27) $(0.02)
Net income (loss) from discontinued operations   0.00  (0.03) 0.00  (0.03)
Diluted(2)   $(0.29) $(0.09) $(0.26) $(0.05)
 

(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
September 30,

 

Nine months ended
September 30,

    2018 2017 2018 2017
    In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:          
Net income (loss)   $(53,044) $(16,652) $(48,873) $(8,944)
(Income) loss from discontinued operations     4,924  (550) 5,520 
Adjustments:          
Amortization   31,184  32,400  91,420  101,827 
Accretion   3,117  2,402  10,321  6,954 
Deferred taxes   (3,276) 2,504  (4,087) 1,452 
Loss on debt extinguishment         9,342 
Fair value adjustments, net   (715)   (2,907) 864 
Stock-based compensation   1,942  2,585  6,578  8,127 
Gain on sale of the Joaquin project         (21,138)
Write-downs   30,787    30,787   
Other   2,938  (3,013) 5,180  (8,330)
Changes in operating assets and liabilities:          
Receivables   (5,930) 6,289  (16,509) 9,754 
Prepaid expenses and other current assets   1,377  (1,332) 3,868  (2,177)
Inventory and ore on leach pads   (8,156) (2,282) (19,630) 8,080 
Accounts payable and accrued liabilities   5,565  9,484  (35,562) (5,982)
CASH PROVIDED BY OPERATING ACTIVITIES OF CONTINUING OPERATIONS   5,789  37,309  20,036  105,349 
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS     (7,877) (2,690) 8,633 
CASH PROVIDED BY OPERATING ACTIVITIES   5,789  29,432  17,346  113,982 
CASH FLOWS FROM INVESTING ACTIVITIES:          
Capital expenditures   (39,472) (28,982) (122,982) (89,680)
Proceeds from the sale of assets   393  1,016  549  16,471 
Purchase of investments   (15) (3,595) (415) (13,559)
Sale of investments   (78) 403  12,682  11,321 
Proceeds from notes receivable   15,000    15,000   
Other   64  (4,319) (34) (4,385)
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES OF CONTINUING OPERATIONS   (24,108) (35,477) (95,200) (79,832)
CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS     (412) (28,470) (1,175)
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES   (24,108) (35,889) (123,670) (81,007)
CASH FLOWS FROM FINANCING ACTIVITIES:          
Issuance of notes and bank borrowings, net of issuance costs   25,000  (2,257) 40,000  242,701 
Payments on debt, capital leases, and associated costs   (25,533) (3,323) (48,355) (195,439)
Other   (77) (6) (4,916) (3,726)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES OF CONTINUING OPERATIONS   (610) (5,586) (13,271) 43,536 
CASH USED IN FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS     (21) (22) (62)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   (610) (5,607) (13,293) 43,474 
Effect of exchange rate changes on cash and cash equivalents   183  (222) 565  662 
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH   (18,746) (12,286) (119,052) 77,111 
Less net cash provided by (used in) discontinued operations(1)     (8,491) (32,930) (3,302)
    (18,746) (3,795) (86,122) 80,413 
Cash, cash equivalents and restricted cash at beginning of period   136,026  210,809  203,402  126,601 
Cash, cash equivalents and restricted cash at end of period   $117,280  $207,014  $117,280  $207,014 
 

(1) Less net cash provided by (used in) discontinued operations includes the following cash transactions: net subsidiary payments to parent company of $181 for the three months ended September 30, 2017 and $1,748 and $10,698 during the nine months ended September 30, 2018 and 2017, respectively.

 
 

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

 
    

September 30, 2018
(unaudited)

 December 31, 2017
ASSETS   In thousands, except share data
CURRENT ASSETS      
Cash and cash equivalents   $104,746  $192,032 
Receivables   30,480  19,069 
Inventory   62,569  58,230 
Ore on leach pads   77,515  73,752 
Prepaid expenses and other   12,167  15,053 
Assets held for sale     91,421 
    287,477  449,557 
NON-CURRENT ASSETS      
Property, plant and equipment, net   285,871  254,737 
Mining properties, net   865,043  829,569 
Ore on leach pads   67,420  65,393 
Restricted assets   21,361  20,847 
Equity and debt securities   24,232  34,837 
Receivables   28,035  28,750 
Other   18,938  17,485 
TOTAL ASSETS   $1,598,377  $1,701,175 
LIABILITIES AND STOCKHOLDERS’ EQUITY      
CURRENT LIABILITIES      
Accounts payable   $55,132  $48,592 
Accrued liabilities and other   65,400  94,930 
Debt   22,696  30,753 
Reclamation   3,777  3,777 
Liabilities held for sale     50,677 
    147,005  228,729 
NON-CURRENT LIABILITIES      
Debt   406,494  380,569 
Reclamation   122,977  117,055 
Deferred tax liabilities   98,891  105,148 
Other long-term liabilities   55,227  54,697 
    683,589  657,469 
STOCKHOLDERS’ EQUITY      
Common stock, par value $0.01 per share; authorized 300,000,000 shares, 187,026,334 issued and outstanding at September 30, 2018 and 185,637,724 at December 31, 2017   1,870  1,856 
Additional paid-in capital   3,359,183  3,357,345 
Accumulated other comprehensive income (loss)   (258) 2,519 
Accumulated deficit   (2,593,012) (2,546,743)
    767,783  814,977 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $1,598,377  $1,701,175 
 
 

Adjusted EBITDA Reconciliation

 
(Dollars in thousands except per share amounts)   

LTM 3Q
2018

 3Q 2018 2Q 2018 1Q 2018 4Q 2017 

LTM 3Q
2017

 3Q 2017
Net income (loss)   $(41,248) $(53,044) $2,930  $1,241  $7,625  $(17,250) $(16,652)
(Income) loss from discontinued operations, net of tax   6,174      (550) 6,724  3,498  4,924 
Interest expense, net of capitalized interest   23,323  5,818  6,018  5,965  5,522  17,769  3,595 
Income tax provision (benefit)   24,408  3,785  3,717  11,949  4,957  23,545  14,289 
Amortization   136,142  31,184  29,459  30,777  44,722  130,453  32,400 
EBITDA   148,799  (12,257) 42,124  49,382  69,550  158,015  38,556 
Fair value adjustments, net   (2,907) (715) 2,462  (4,654)   (790)  
Impairment of equity and debt securities             1,109   
Foreign exchange (gain) loss   7,755  3,104  3,309  670  672  1,642  39 
Gain on sale of Joaquin project             (21,138)  
(Gain) loss on sale of assets and securities   182  28  (586) 241  499  (159) (2,051)
Gain on repurchase of Rochester royalty             (2,332)  
Loss on debt extinguishment             20,667   
Mexico inflation adjustment   (1,939)   (1,939)        
Transaction costs   3,987  1,049      2,938  820  819 
Interest income on notes receivables   (1,449) (628) (573) (248)      
Manquiri sale consideration write-down   18,599  18,599           
Silvertip start-up write-down   8,746  8,746           
Rochester In-Pit crusher write-down   3,441  3,441           
Asset retirement obligation accretion   10,844  2,883  2,817  2,669  2,475  8,368  2,223 
Inventory adjustments and write-downs   2,359  421  817  1,126  885  5,891  659 
Adjusted EBITDA   $198,417  $24,671  $48,431  $49,186  $77,019  $172,093  $40,245 
Revenue   $696,634  $148,795  $169,987  $163,267  $214,585  $634,218  $159,920 
Adjusted EBITDA Margin   28% 17% 28% 30% 36% 27% 25%
 
 

Adjusted Net Income (Loss) Reconciliation

 
(Dollars in thousands except per share amounts)   3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Net income (loss)   $(53,044) $2,930  $1,241  $7,625  $(16,652)
(Income) loss from discontinued operations, net of tax       (550) 6,724  4,924 
Fair value adjustments, net   (715) 2,462  (4,654)    
Impairment of equity and debt securities            
(Gain) loss on sale of assets and securities     (586) 241  499  (2,051)
Gain on repurchase of Rochester royalty   28         
(Gain) loss on debt extinguishment            
Mexico inflation adjustment     (1,939)      
Transaction costs   1,049      2,938  819 
Interest income on notes receivables   (628) (573) (248)    
Manquiri sale consideration write-down   18,599         
Silvertip start-up write-down   8,746         
Rochester In-Pit crusher write-down   3,441         
Foreign exchange loss (gain)   6,062  (1,233) 4,312  (3,643) (1,392)
Tax effect of adjustments(1)   (3,191)       (990)
Adjusted net income (loss)   $(19,653) $1,061  $342  $14,143  $(15,342)
             
Adjusted net income (loss) per share – Basic   $(0.11) $0.01  $0.00  $0.08  $(0.09)
Adjusted net income (loss) per share – Diluted   $(0.11) $0.01  $0.00  $0.08  $(0.09)
 
 

Consolidated Free Cash Flow Reconciliation

 
(Dollars in thousands)   3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Cash flow from continuing operations   $5,789  $(1,294) $15,541  $91,811  $37,309
Capital expenditures from continuing operations   39,472  41,165  42,345  47,054  28,982
Free cash flow   (33,683) (42,459) (26,804) 44,757  8,327
 
 

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
for Nine Months Ended September 30, 2018

 
    Silver Gold Total
In thousands except per ounce amounts   Palmarejo Rochester Silvertip Total Kensington Wharf Total 
Costs applicable to sales, including amortization (U.S. GAAP)   $138,712  $91,222  $12,608  $242,542  $111,168  $61,434  $172,602  $415,144 
Amortization   45,752  14,918  1,073  61,743  20,070  8,888  28,958  90,701 
Costs applicable to sales   $92,960  $76,304  $11,535  $180,799  $91,098  $52,546  $143,644  $324,443 
Silver equivalent ounces sold   11,210,084  5,711,663  266,666  17,188,413        25,736,073 
Gold equivalent ounces sold           81,576  60,885  142,461   
Costs applicable to sales per ounce   $8.29  $13.36  $43.26  $10.52  $1,117  $863  $1,008  $12.61 
Inventory adjustments     (0.13) (32.80) (0.56) (6) (3) (5) (0.40)
Adjusted costs applicable to sales per ounce   $8.29  $13.23  $10.46  $9.96  $1,111  $860  $1,003  $12.21 
                   
Costs applicable to sales per average spot ounce   $7.14  $11.84  $33.49  $9.13        $10.42 
Inventory adjustments     (0.12) (25.39) (0.48)       (0.33)
Adjusted costs applicable to sales per average spot ounce   $7.14  $11.72  $8.10  $8.65        $10.09 
           
Costs applicable to sales         $324,443 
Treatment and refining costs         3,792 
Sustaining capital         71,196 
General and administrative         24,183 
Exploration         21,269 
Reclamation         13,744 
Project/pre-development costs         3,075 
All-in sustaining costs         $461,702 
Silver equivalent ounces sold         17,188,413 
Kensington and Wharf silver equivalent ounces sold         8,547,660 
Consolidated silver equivalent ounces sold         25,736,073 
All-in sustaining costs per silver equivalent ounce         $17.94 
Inventory adjustments         $(0.40)
Adjusted all-in sustaining costs per silver equivalent ounce         $17.54 
           
Consolidated silver equivalent ounces sold (average spot)         31,132,974 
All-in sustaining costs per average spot silver equivalent ounce         $14.83 
Inventory adjustments         $(0.33)
Adjusted all-in sustaining costs per average spot silver equivalent ounce         $14.50 
 
 

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended September 30, 2018

 
    Silver Gold Total
In thousands except per ounce amounts   Palmarejo Rochester Silvertip Total Kensington Wharf Total 
Costs applicable to sales, including amortization (U.S. GAAP)   $46,348  $32,842  $12,608  $91,798  $35,153  $20,857  $56,010  $147,808 
Amortization   14,794  5,294  1,073  21,161  6,912  2,878  9,790  30,951 
Costs applicable to sales   $31,554  $27,548  $11,535  $70,637  $28,241  $17,979  $46,220  $116,857 
Silver equivalent ounces sold   3,361,893  2,103,584  266,666  5,732,143        8,475,883 
Gold equivalent ounces sold           25,648  20,081  45,729   
Costs applicable to sales per ounce   $9.39  $13.10  $43.26  $12.32  $1,101  $895  $1,011  $13.79 
Inventory adjustments     (0.06) (32.80) (1.55) (10)   (6) (1.08)
Adjusted costs applicable to sales per ounce   $9.39  $13.04  $10.46  $10.77  $1,091  $895  $1,005  $12.71 
                   
Costs applicable to sales per average spot ounce   $7.93  $11.48  $36.69  $10.55        $11.25 
Inventory adjustments     (0.06) (28.00) (1.33)       (0.88)
Adjusted costs applicable to sales per average spot ounce   $7.93  $11.42  $8.69  $9.22        $10.37 
           
Costs applicable to sales         $116,857 
Treatment and refining costs         1,551 
Sustaining capital         19,236 
General and administrative         7,729 
Exploration         8,157 
Reclamation         4,545 
Project/pre-development costs         1,137 
All-in sustaining costs         $159,212 
Silver equivalent ounces sold         5,732,143 
Kensington and Wharf silver equivalent ounces sold         2,743,740 
Consolidated silver equivalent ounces sold         8,475,883 
All-in sustaining costs per silver equivalent ounce         $18.78 
Inventory adjustments         $(1.08)
Adjusted all-in sustaining costs per silver equivalent ounce         $17.70 
           
Consolidated silver equivalent ounces sold (average spot)         10,385,649 
All-in sustaining costs per average spot silver equivalent ounce         $15.33 
Inventory adjustments         $(0.88)
Adjusted all-in sustaining costs per average spot silver equivalent ounce         $14.45 
 
 

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended June 30, 2018

 
    Silver Gold Total
In thousands except per ounce amounts   Palmarejo Rochester Total Kensington Wharf Total 
Costs applicable to sales, including amortization (U.S. GAAP)   $44,943  $29,244  $74,187  $40,668  $22,611  $63,279  $137,466 
Amortization   14,633  4,793  19,426  6,441  3,353  9,794  29,220 
Costs applicable to sales   $30,310  $24,451  $54,761  $34,227  $19,258  $53,485  $108,246 
Silver equivalent ounces sold   3,964,208  1,819,072  5,783,280        8,870,100 
Gold equivalent ounces sold         28,165  23,282  51,447   
Costs applicable to sales per ounce   $7.65  $13.44  $9.47  $1,215  $827  $1,040  $12.20 
Inventory adjustments   (0.01) (0.08) (0.03) (20) (3) (12) (0.09)
Adjusted costs applicable to sales per ounce   $7.64  $13.36  $9.44  $1,195  $824  $1,028  $12.11 
                 
Costs applicable to sales per average spot ounce   $6.65  $11.94  $8.29        $10.15 
Inventory adjustments   (0.01) (0.07) (0.03)       (0.08)
Adjusted costs applicable to sales per average spot ounce   $6.64  $11.87  $8.26        $10.07 
         
Costs applicable to sales       $108,246 
Treatment and refining costs       1,046 
Sustaining capital       28,571 
General and administrative       7,650 
Exploration       6,429 
Reclamation       4,667 
Project/pre-development costs       517 
All-in sustaining costs       $157,126 
Silver equivalent ounces sold       5,783,280 
Kensington and Wharf silver equivalent ounces sold       3,086,820 
Consolidated silver equivalent ounces sold       8,870,100 
All-in sustaining costs per silver equivalent ounce       $17.71 
Inventory adjustments       $(0.09)
Adjusted all-in sustaining costs per silver equivalent ounce       $17.62 
         
Consolidated silver equivalent ounces sold (average spot)       10,667,255 
All-in sustaining costs per average spot silver equivalent ounce       $14.73 
Inventory adjustments       $(0.08)
Adjusted all-in sustaining costs per average spot silver equivalent ounce       $14.65 
 
 

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended March 31, 2018

 
    Silver Gold Total
In thousands except per ounce amounts   Palmarejo Rochester Total Kensington Wharf Total 
Costs applicable to sales, including amortization (U.S. GAAP)   $47,421  $29,136  $76,557  $35,347  $17,966  $53,313  $129,870 
Amortization   16,325  4,831  21,156  6,717  2,657  9,374  30,530 
Costs applicable to sales   $31,096  $24,305  $55,401  $28,630  $15,309  $43,939  $99,340 
Silver equivalent ounces sold   3,883,983  1,789,007  5,672,990        8,390,090 
Gold equivalent ounces sold         27,763  17,522  45,285   
Costs applicable to sales per ounce   $8.01  $13.59  $9.77  $1,031  $874  $970  $11.84 
Inventory adjustments     (0.26) (0.08) (21) (4) (15) (0.13)
Adjusted costs applicable to sales per ounce   $8.01  $13.33  $9.69  $1,010  $870  $955  $11.71 
                 
Costs applicable to sales per average spot ounce   $6.94  $12.13  $8.55        $9.87 
Inventory adjustments     (0.24) (0.07)       (0.11)
Adjusted costs applicable to sales per average spot ounce   $6.94  $11.89  $8.48        $9.76 
                 
Costs applicable to sales       $99,340 
Treatment and refining costs       1,195 
Sustaining capital       23,389 
General and administrative       8,804 
Exploration       6,683 
Reclamation       4,532 
Project/pre-development costs       1,421 
All-in sustaining costs       $145,364 
Silver equivalent ounces sold       5,672,990 
Kensington and Wharf silver equivalent ounces sold       2,717,100 
Consolidated silver equivalent ounces sold       8,390,090 
All-in sustaining costs per silver equivalent ounce       $17.33 
Inventory adjustments       $(0.13)
Adjusted all-in sustaining costs per silver equivalent ounce       $17.20 
         
Consolidated silver equivalent ounces sold (average spot)       10,066,759 
All-in sustaining costs per average spot silver equivalent ounce       $14.44 
Inventory adjustments       $(0.11)
Adjusted all-in sustaining costs per average spot silver equivalent ounce       $14.33 
 
 

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended December 31, 2017

 
    Silver Gold Total
In thousands except per ounce amounts   Palmarejo Rochester Endeavor Total Kensington Wharf Total 
Costs applicable to sales, including amortization (U.S. GAAP)   $58,775  $41,006  $  $99,781  $42,640  $24,033  $66,673  $166,454 
Amortization   22,749  6,960    29,709  10,633  4,129  14,762  44,471 
Costs applicable to sales   $36,026  $34,046  $  $70,072  $32,007  $19,904  $51,911  $121,983 
Silver equivalent ounces sold   4,680,802  2,657,975    7,338,777        11,232,057 
Gold equivalent ounces sold           35,633  29,255  64,888   
Costs applicable to sales per ounce   $7.70  $12.81  $  $9.55  $898  $680  $800  $10.86 
Inventory adjustments   (0.16) (0.04)   (0.12) (2) 2    (0.08)
Adjusted costs applicable to sales per ounce   $7.54  $12.77  $  $9.43  $896  $682  $800  $10.78 
                   
Costs applicable to sales per average spot ounce   $6.78  $11.41    $8.45        $9.21 
Inventory adjustments   (0.14) (0.04)   (0.10)       (0.07)
Adjusted costs applicable to sales per average spot ounce   $6.64  $11.37    $8.35        $9.14 
           
Costs applicable to sales         $121,983 
Treatment and refining costs         1,600 
Sustaining capital         18,520 
General and administrative         9,120 
Exploration         7,455 
Reclamation         4,075 
Project/pre-development costs         578 
All-in sustaining costs         $163,331 
Silver equivalent ounces sold         7,338,777 
Kensington and Wharf silver equivalent ounces sold         3,893,280 
Consolidated silver equivalent ounces sold         11,232,057 
All-in sustaining costs per silver equivalent ounce         $14.53 
Inventory adjustments         $(0.08)
Adjusted all-in sustaining costs per silver equivalent ounce         $14.45 
           
Consolidated silver equivalent ounces sold (average spot)         13,246,634 
All-in sustaining costs per average spot silver equivalent ounce         $12.33 
Inventory adjustments         $(0.07)
Adjusted all-in sustaining costs per average spot silver equivalent ounce         $12.26 
 
 

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended September 30, 2017

 
    Silver Gold Total
In thousands except per ounce amounts   Palmarejo Rochester Endeavor Total Kensington Wharf Total 
Costs applicable to sales, including amortization (U.S. GAAP)   $49,669  $27,866  $59  $77,594  $35,522  $20,553  $56,075  $133,669 
Amortization   16,414  4,591  20  21,025  7,864  3,223  11,087  32,112 
Costs applicable to sales   $33,255  $23,275  $39  $56,569  $27,658  $17,330  $44,988  $101,557 
Silver equivalent ounces sold   3,386,963  1,673,704  8,027  5,068,694        8,264,174 
Gold equivalent ounces sold           29,173  24,085  53,258   
Costs applicable to sales per ounce   $9.82  $13.91  $4.86  $11.16  $948  $720  $845  $12.29 
Inventory adjustments   (0.06) (0.22)   (0.11) (2) (1) (2) (0.08)
Adjusted costs applicable to sales per ounce   $9.76  $13.69  $4.86  $11.05  $946  $719  $843  $12.21 
                   
Costs applicable to sales per average spot ounce   $8.73  $12.66    $10.00        $10.47 
Inventory adjustments   (0.05) (0.20)   (0.10)       (0.07)
Adjusted costs applicable to sales per average spot ounce   $8.68  $12.46    $9.90        $10.40 
           
Costs applicable to sales         $101,557 
Treatment and refining costs         1,408 
Sustaining capital         18,126 
General and administrative         7,345 
Exploration         9,791 
Reclamation         3,915 
Project/pre-development costs         1,979 
All-in sustaining costs         $144,121 
Silver equivalent ounces sold         5,068,694 
Kensington and Wharf silver equivalent ounces sold         3,195,480 
Consolidated silver equivalent ounces sold         8,264,174 
All-in sustaining costs per silver equivalent ounce         $17.43 
Inventory adjustments         $(0.08)
Adjusted all-in sustaining costs per silver equivalent ounce         $17.35 
           
Consolidated silver equivalent ounces sold (average spot)         9,698,587 
All-in sustaining costs per average spot silver equivalent ounce         $14.86 
Inventory adjustments         $(0.07)
Adjusted all-in sustaining costs per average spot silver equivalent ounce         $14.79 
 
 

Reconciliation of All-in Sustaining Costs per 60:1 Silver Equivalent Ounce
for 2018 Guidance

 
    Silver Gold  
In thousands except per ounce amounts   Palmarejo Rochester Silvertip Total Silver Kensington Wharf Total Gold 

Total
Combined

Costs applicable to sales, including amortization (U.S. GAAP)   $200,000  $116,300  $55,600  $371,900  $146,100  $89,700  $235,800  $607,700
Amortization   65,000  18,900  14,000  97,900  40,400  12,100  52,500  150,400
Costs applicable to sales   $135,000  $97,400  $41,600  $274,000  $105,700  $77,600  $183,300  $457,300
Silver equivalent ounces sold   14,800,000  7,300,000  2,700,000  24,800,000        37,100,000
Gold equivalent ounces sold           117,500  87,500  205,000   
Costs applicable to sales per ounce   $9.00 – $9.50 $13.25 – $13.75 $15.00 – $15.50   $900 – $950 $850 – $900    
           
Costs applicable to sales         $457,300
Treatment and refining costs         9,000
Sustaining capital, including capital lease payments         105,000
General and administrative         33,000
Exploration         26,000
Reclamation         15,700
Project/pre-development costs         2,900
All-in sustaining costs         $648,900
Silver equivalent ounces sold         24,800,000
Kensington and Wharf silver equivalent ounces sold         12,300,000
Consolidated silver equivalent ounces sold         37,100,000
All-in sustaining costs per silver equivalent ounce         $17.25 – $17.75
 
 
 
 

Reconciliation of All-in Sustaining Costs per Spot Silver Equivalent Ounce
for 2018 Guidance

 
    Silver Gold  
In thousands except per ounce amounts   Palmarejo Rochester Silvertip Total Silver Kensington Wharf Total Gold 

Total
Combined

Costs applicable to sales, including amortization (U.S. GAAP)   $200,000  $116,300  $55,600  $371,900  $146,100  $89,700  $235,800  $607,700
Amortization   65,000  18,900  14,000  97,900  40,400  12,100  52,500  150,400
Costs applicable to sales   $135,000  $97,400  $41,600  $274,000  $105,700  $77,600  $183,300  $457,300
Silver equivalent ounces sold   16,400,000  8,012,500  3,350,000  27,762,500        43,137,500
Gold equivalent ounces sold           117,500  87,500  205,000   
Costs applicable to sales per ounce   $8.00 – $8.50 $12.00 – $12.50 $12.00 – $12.50   $900 – $950 $850 – $900    
           
Costs applicable to sales         $457,300
Treatment and refining costs         9,000
Sustaining capital, including capital lease payments         105,000
General and administrative         33,000
Exploration         26,000
Reclamation         15,700
Project/pre-development costs         2,900
All-in sustaining costs         $648,900
Silver equivalent ounces sold         27,762,500
Kensington and Wharf silver equivalent ounces sold         15,375,000
Consolidated silver equivalent ounces sold         43,137,500
All-in sustaining costs per silver equivalent ounce         $14.75 – $15.25
 
 
 

 

Contacts

Coeur Mining, Inc.
Paul DePartout, 312-489-5800
Director, Investor Relations
www.coeur.com

 

Original Article: https://www.businesswire.com/news/home/20181031005856/en/

 

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