Coeur Mining, Inc. (“Coeur” or the "Company") (NYSE: CDE) today
reported companywide all-in sustaining costs (AISC) per average
spot silver equivalent1 ounce (AgEqOz) of $15.18 for third quarter
2017, 4% lower quarter-over-quarter and driven by a 7% increase in
silver equivalent1 production. These improvements over the prior
quarter were primarily due to 25% higher silver equivalent1
production and a 14% decline in adjusted costs applicable to sales
per average spot AgEqOz1 from Palmarejo and 21% higher gold
production from Wharf.
Third quarter revenue of 176.0 million was up 1%
quarter-over-quarter, cash flow from operating activities was
unchanged at $29.4 million, while adjusted EBITDA1 increased 18% to
$39.5 million. Third quarter net loss of $16.7 million, or $0.09
per share, was impacted by higher income and mining tax expense
mostly due to non-cash increases in deferred tax estimates,
increased exploration expense driven by ongoing success from
drilling programs at the Palmarejo and Kensington mines, and higher
costs at the San Bartolomé mine due to continued drought conditions
and reduced third-party ore purchases during the quarter.
Highlights
- Higher quarterly silver
equivalent1 production - Third quarter silver and
gold production were 4.0 million ounces and 93,293 ounces,
respectively, or 9.5 million AgEqOz1, representing an increase of
7% quarter-over-quarter and 10% year-over-year. Higher companywide
production was driven primarily by Palmarejo, where higher mining
rates and silver grades delivered 25% quarter-over-quarter and 89%
year-over-year increases in AgEqOz1 production. At Wharf, mining at
the higher-grade Golden Reward deposit during the quarter drove a
21% increase in its gold production
- Lower third quarter costs per
ounce - Third quarter companywide AISC and adjusted AISC per
average spot AgEqOz1 of $15.30 and $15.18, respectively, were 4%
and 3% lower quarter-over-quarter primarily due to lower unit costs
at Palmarejo, partially offset by higher unit costs at San
Bartolomé as well as increased sustaining capital expenditures and
exploration expense
- Major milestones achieved at key
capital projects - At Palmarejo, Rochester, and Kensington,
important milestones were achieved in key capital projects during
the quarter. Following a multi-year development and ramp-up period,
the targeted mining rate of 4,500 tons per day was achieved one
quarter ahead of schedule at Palmarejo. At Rochester, the new Stage
IV leach pad expansion was successfully commissioned on-schedule
after three years of permitting and ten months of construction. At
Kensington, development ore was mined and stockpiled from the
high-grade Jualin deposit after two years of underground
development activities
- Acquisition of high-grade Silvertip
mine announced - Announced acquisition of newly-constructed
Silvertip silver-zinc-lead operation located in British Columbia on
September 11, 2017, which closed on October 17, 2017. Underground
drilling and development activities are now underway and mill
commissioning is proceeding on-schedule. Production is expected to
begin during the first quarter of 2018 and average approximately
ten million AgEqOz1 per year at an average AISC per AgEqOz1 of
$10.50 - $11.50, generating average annual EBITDA1 of $70 million
over its initial 7.5-year mine life
- Modifications to full-year
guidance - Full-year production guidance was revised on October
5, 2017 for San Bartolomé to reflect the impact of ongoing drought
conditions in the Potosí region of Bolivia. San Bartolomé's cost
guidance has been increased as a result. The Company has also
increased cost guidance for Rochester due to higher processing
costs induced by the residual effects of record rainfall earlier in
the year and at Kensington to reflect higher year-to-date unit
costs driven by lower-than-expected gold grades. Companywide AISC
guidance has been revised accordingly while full-year capital
expenditure guidance has been increased to reflect anticipated
investments in the newly-acquired Silvertip mine. Finally,
full-year exploration expense guidance has been raised to reflect
the higher investment levels at Palmarejo and Kensington and to
incorporate anticipated exploration expense at Silvertip during the
fourth quarter.
"During the third quarter, the Company delivered higher
production and cash flow, lower costs, and realized key objectives
at several major, multi-year growth projects," said Mitchell J.
Krebs, Coeur's President and Chief Executive Officer. "Palmarejo
and Wharf were the strongest performers during the quarter,
delivering strong production growth and generating combined free
cash flow of nearly $25 million.
"We announced and recently completed the acquisition of the
high-grade Silvertip mine in British Columbia for US$200 million of
upfront consideration, which we expect will meaningfully grow our
production and cash flow beginning next year. Our team is applying
the same approach to Silvertip that has been successful at our
existing operations and with recent acquisitions such as Wharf to
position our newest mine for long-term success.
"Our third quarter results were negatively impacted by higher
costs at San Bartolomé, lower-than-expected gold grades at
Kensington, and significantly higher income and mining tax expense
mostly attributable to changes in deferred tax estimates. Given San
Bartolomé's high costs and short mine life, we are evaluating
several alternatives for this operation. In the meantime, we
reduced San Bartolomé’s workforce by 23%, which resulted in a
one-time severance expense of $2.2 million during the quarter and
is expected to yield significant savings going forward. Although
Kensington’s grades have been lower than expected, we anticipate
significantly higher grades in the fourth quarter as mining
activities accelerate in the higher-grade Raven and Jualin
zones.
"Importantly, we are maintaining our significantly higher level
of exploration investment, especially in near-mine drilling
programs at Palmarejo and Kensington, due to the ongoing success of
these programs and the lack of drilling these assets have received
historically."
Financial and Operating Highlights
(Unaudited)
(Amounts in millions, except per share amounts, gold
ounces produced & sold, and per-ounce metrics) 3Q
2017 2Q 2017 1Q 2017 4Q
2016 3Q 2016 Revenue $ 176.0
$ 173.4 $ 206.1 $ 159.2 $ 176.2
Costs Applicable to Sales
$ 118.9 $ 125.6 $ 132.7 $ 102.0 $ 105.4
General
and Administrative Expenses $ 7.4 $ 7.0 $ 10.1 $
6.6 $ 7.1
Net Income (Loss) $ (16.7 ) $
(11.0 ) $ 18.7 $ (8.3 ) $ 69.6
Net Income (Loss) Per Share
$ (0.09 ) $ (0.06 ) $ 0.10 $ (0.03 ) $ 0.42
Adjusted Net Income (Loss)1 $ (18.4
) $ (2.5 ) $ 7.0 $ 2.8 $ 38.6
Adjusted Net Income
(Loss)1 Per Share $ (0.10 )
$ (0.01 ) $ 0.04 $ 0.01 $ 0.23
Weighted Average Shares
Outstanding 179.3 179.2 183.1 178.6 165.8
EBITDA1 $ 35.0 $ 23.6 $ 73.4 $ 27.4 $
50.9
Adjusted EBITDA1 $ 39.5 $ 33.4 $
56.6 $ 44.0 $ 62.7
Cash Flow from Operating Activities
$ 29.4 $ 29.3 $ 55.3 $ 25.5 $ 47.8
Capital
Expenditures $ 29.5 $ 37.5 $ 24.0 $ 29.9 $ 25.6
Free Cash Flow1 $ — $ (8.2 ) $ 31.3 $
(4.5 ) $ 14.6
Cash, Equivalents & Short-Term Investments
$ 236.2 $ 250.0 $ 210.0 $ 162.2 $ 222.5
Total
Debt2 $ 288.9 $ 284.8 $ 219.1 $ 210.9 $
401.7
Average Realized Price Per Ounce – Silver $
16.86 $ 16.98 $ 17.61 $ 16.64 $ 19.61
Average Realized
Price Per Ounce – Gold $ 1,240 $ 1,206 $ 1,149 $
1,170 $ 1,317
Silver Ounces Produced 4.0 4.0 3.9 3.9
3.5
Gold Ounces Produced 93,293 82,819 88,218 102,500
84,871
Silver Equivalent Ounces Produced1 9.5
8.9 9.2 10.0 8.6
Silver Ounces Sold 3.8 4.1 4.5 3.4
3.4
Gold Ounces Sold 89,972 86,194 110,874 87,108
83,389
Silver Equivalent Ounces Sold1 9.2 9.3
11.1 8.6 8.4
Silver Equivalent Ounces Sold (Average
Spot)1 10.6 10.4 12.2 9.6 9.1
Adjusted CAS per
AgEqOz1 $ 12.08 $ 12.91 $ 11.38 $ 12.05 $
12.10
Adjusted CAS per Average Spot AgEqOz1 $
11.01 $ 12.00 $ 10.63 $ 11.34 $ 11.64
Adjusted CAS per
AuEqOz1 $ 843 $ 860 $ 791 $ 676 $ 712
Adjusted AISC per AgEqOz1 $ 17.54 $
17.64 $ 15.02 $ 16.13 $ 16.46
Adjusted AISC per Average Spot
AgEqOz1 $ 15.18 $ 15.73 $ 13.66 $
14.52 $ 15.23
Financial Results
Third quarter revenue of 176.0 million was up 1%
quarter-over-quarter. Silver sales contributed 37% of third quarter
revenue and gold sales contributed 63%. The Company's U.S.
operations generated 55% of the quarter's revenue. Average realized
silver and gold prices were $16.86 and $1,240 per ounce,
respectively, representing a decrease of 1% and an increase of 3%
quarter-over-quarter. The average realized gold price reflects the
sale of 9,400 ounces to Franco-Nevada at a price of $800 per ounce
under the gold stream at Palmarejo.
Costs applicable to sales were $118.9 million for the quarter,
decreasing 5% quarter-over-quarter due primarily to lower unit
costs at Palmarejo, partially offset by higher unit costs at San
Bartolomé. General and administrative expenses were $7.4 million,
$0.4 million higher than in the second quarter and largely
attributable to higher professional service costs. Interest
expense, net of capitalized interest, decreased 56% to $3.6 million
compared to $8.1 million in the third quarter of 2016 due to lower
debt levels and a lower interest rate on the Company's senior
notes, which were refinanced in the second quarter of 2017.
Pre-development, reclamation, and other expenses increased
quarter-over-quarter and year-over-year to $8.0 million due to the
ongoing evaluation of the at La Preciosa project, acquisition costs
related to the Silvertip acquisition, and the one-time severance
expenses at San Bartolomé of $2.2 million as a result of a 23%
reduction in the workforce during the quarter.
The Company's income and mining tax expense increased to $14.2
million driven mostly by non-cash increases in deferred tax
estimates.
During the quarter, the Company established a four-year $200
million revolving credit facility (the "Facility"). Subsequent to
the quarter-end, the Company drew $100 million under the Facility
to partially fund the acquisition of the Silvertip mine at a rate
of 3.5%, which was based on the one-month LIBOR rate plus a margin
of 2.25%.
At quarter-end, cash and cash equivalents totaled $236.2
million, and 181.4 million common shares were issued and
outstanding. After giving effect to the closing of the acquisition
of the Silvertip mine, the Company would have had a pro forma cash
balance of approximately $180 million. In addition, 4.2 million new
shares were issued in connection with the Silvertip closing,
representing a 2.3% increase in common shares on an undiluted basis
and bringing total shares outstanding to 185.6 million.
Operations
Highlights of third quarter 2017 results for each of the
Company's operating segments are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce amounts) 3Q
2017 2Q 2017 1Q 2017 4Q
2016 3Q 2016 Tons milled 413,086
335,428 360,383 287,569 274,644
Average silver grade (oz/t)
5.53 4.98 4.91 4.95 3.98
Average gold grade (oz/t)
0.08 0.08 0.09 0.09 0.08
Average recovery rate – Ag
83.6% 87.3% 86.5% 89.1% 85.5%
Average recovery rate –
Au 83.1% 91.1% 93.7% 90.4% 77.7%
Silver ounces
produced (000's) 1,908 1,457 1,531 1,269 933
Gold
ounces produced 28,948 24,292 30,792 23,906 16,608
Silver equivalent ounces produced1 (000's)
3,644 2,914 3,378 2,703 1,930
Silver ounces sold
(000's) 1,794 1,484 1,965 937 778
Gold ounces
sold 26,554 25,191 41,045 15,558 11,410
Silver
equivalent ounces sold1 (000's) 3,387
2,996 4,427 1,872 1,462
Silver equivalent ounces
sold1 (average spot) (000's) 3,809 3,324
4,837 2,042 1,555
Metal sales $60.7 $53.2 $77.7 $32.5
$30.7
Costs applicable to sales $33.3 $33.9 $43.0
$20.9 $16.0
Adjusted CAS per AgEqOz1
$9.76 $11.21 $9.68 $11.01 $10.70
Adjusted CAS per average
spot AgEqOz1 $8.68 $10.11 $8.87 $10.11 $10.05
Exploration expense $4.5 $3.1 $1.6 $2.4 $1.3
Cash
flow from operating activities $18.5 $18.8 $50.5 $(1.7)
$13.7
Sustaining capital expenditures (excludes capital lease
payments) $6.5 $6.1 $5.0 $3.9 $6.7
Development
capital expenditures $(1.0) $5.1 $1.2
$4.2 $3.3
Total capital expenditures
$5.5 $11.2 $6.2 $8.1 $10.0
Free cash flow (before
royalties) $13.0 $7.6 $44.3 $(9.8) $3.7
Gold
production royalty payments $— $— $—
$— $7.6
Free cash flow1 $13.0
$7.6 $44.3 $(9.8) $(3.9)
- Silver equivalent1 production increased
25% quarter-over-quarter and 89% year-over-year to 3.6 million,
driven by higher mining rates and silver grades. Average mining
rates during the quarter reached the year-end target of 4,500 tons
per day ahead of schedule due to higher-than-budgeted mining rates
at Independencia during the quarter. Mining rates in the fourth
quarter are expected to remain comparable to third quarter
levels
- Average silver grade increased 11%
quarter-over-quarter and 39% year-over-year as a result of mining
higher grade stopes in the Independencia deposit that became
accessible following the installation of additional ground support
during the second quarter of 2017
- Third quarter adjusted CAS per average
spot AgEqOz1 of $8.68 were 14% lower both quarter-over-quarter and
year-over-year, bringing year-to-date adjusted CAS per average spot
AgEqOz1 to $9.13
- Lower quarter-over-quarter recovery
rates were driven primarily by an increase in mill inventory at
quarter-end, which is expected to normalize in the fourth
quarter
- Near-mine exploration activity was
expanded due to encouraging drilling results and the identification
of several new structures, which contributed to increased
exploration expense of $4.5 million
- Quarterly free cash flow1 was $13.0
million, bringing year-to-date free cash flow1 to $64.9
million
- Full-year guidance remains unchanged
with production expected to be 6.5 - 7.0 million ounces of silver
and 110,000 - 120,000 ounces of gold, or 13.1 -14.2 million
AgEqOz1, at CAS per AgEqOz1 of $10.00 - $10.50 on a 60:1 silver
equivalent basis and $9.00 - $9.50 on a spot price equivalent
basis
Rochester, Nevada
(Dollars in millions, except per ounce amounts) 3Q
2017 2Q 2017 1Q 2017 4Q
2016 3Q 2016 Ore tons placed
4,262,011 4,493,100 3,513,708 3,878,487 4,901,039
Average
silver grade (oz/t) 0.53 0.53 0.58 0.57 0.54
Average
gold grade (oz/t) 0.004 0.003 0.002 0.002 0.003
Silver ounces produced (000's) 1,070 1,156 1,127
1,277 1,161
Gold ounces produced 10,955 10,745 10,356
14,231 12,120
Silver equivalent ounces produced1
(000's) 1,727 1,801 1,749 2,131 1,888
Silver
ounces sold (000's) 1,050 1,135 1,289 1,205 1,163
Gold ounces sold 10,390 10,658 13,592 12,988 11,751
Silver equivalent ounces sold1 (000's)
1,674 1,774 2,104 1,984 1,868
Silver equivalent ounces
sold1 (average spot) (000's) 1,839 1,913
2,240 2,128 1,963
Metal sales $31.2 $32.8 $39.0 $36.2
$37.9
Costs applicable to sales $23.3 $24.2 $26.4
$23.7 $21.8
Adjusted CAS per AgEqOz1
$13.69 $13.54 $12.57 $11.99 $11.56
Adjusted CAS per
average spot AgEqOz1 $12.46 $12.56 $11.81 $11.16
$11.02
Exploration expense $0.5 $0.3 $0.1 $0.4 $0.1
Cash flow from operating activities $1.6 $(1.1) $5.7
$7.6 $9.5
Sustaining capital expenditures (excludes capital
lease payments) $0.5 $1.1 $0.2 $1.5 $1.2
Development
capital expenditures $9.2 $12.7 $10.4
$4.3 $2.2
Total capital expenditures
$9.7 $13.8 $10.6 $5.8 $3.4
Free cash flow1
$(8.1) $(14.9) $(4.9) $1.8 $6.1
- Silver equivalent1 production decreased
4% quarter-over-quarter and 9% year-over-year to 1.7 million ounces
due to lower tons placed resulting from crusher downtime related to
planned annual maintenance, integration of the crusher into the
Stage IV system, and a brief power disruption caused by a nearby
wildfire
- Leaching off the newly-expanded Stage
IV leach pad, which began in mid-September, is expected to drive
higher fourth quarter production. Gold production is expected to
additionally benefit from the placement of higher gold grade ore
during the third quarter
- Adjusted CAS per average spot AgEqOz1
were relatively flat quarter-over-quarter and up 13% year-over-year
at $12.46, bringing year-to-date adjusted CAS per average spot
AgEqOz1 to $12.24. Increased year-over-year unit costs resulted
from lower production levels, higher waste tons mined to access
higher-grade ore, and higher blasting, cyanide and hauling
expenses
- Negative quarterly free cash flow1 of
$8.1 million was largely attributable to fewer ounces sold as well
as a temporary increase in inventory on the new Stage IV leach pad.
Higher production and lower capital expenditures are expected to
drive positive free cash flow1 in the fourth quarter
- Production guidance for the full year
remains unchanged at 4.2 - 4.7 million ounces of silver and 47,000
- 52,000 ounces of gold, or 7.0 - 7.8 million AgEqOz1. The Company
is revising its cost guidance from CAS per AgEqOz1 of $11.50 -
$12.00 to $12.50 - $13.00 on a 60:1 silver equivalent basis and
from $10.50 - $11.00 to $11.50 - $12.00 on a spot price equivalent
basis
Kensington, Alaska
(Dollars in millions, except per ounce amounts) 3Q
2017 2Q 2017 1Q 2017 4Q
2016 3Q 2016 Tons milled 172,038
163,163 165,895 163,410 140,322
Average gold grade (oz/t)
0.17 0.17 0.17 0.22 0.20
Average recovery rate
94.1% 93.2% 94.0% 94.4% 94.8%
Gold ounces produced
27,541 26,424 26,197 33,688 26,459
Gold ounces sold
29,173 29,031 32,144 28,864 30,998
Metal sales
$36.6 $35.6 $38.0 $34.2 $40.2
Costs applicable to
sales $27.7 $28.0 $28.4 $23.0 $26.7
Adjusted CAS per
AuOz1 $946 $952 $884 $801 $859
Exploration
expense $3.0 $2.0 $0.8 $1.3 $1.2
Cash flow from
operating activities $9.3 $7.0 $4.5 $11.4 $18.0
Sustaining capital expenditures (excludes capital lease
payments) $6.5 $3.7 $2.5 $8.9 $5.2
Development
capital expenditures $3.6 $4.9 $3.0
$3.7 $3.4
Total capital expenditures $10.1
$8.6 $5.5 $12.6 $8.6
Free cash flow1 $(0.8)
$(1.6) $(1.0) $(1.2) $9.4
- Third quarter gold production of 27,541
ounces was 4% higher both quarter-over-quarter and year-over-year
due to higher mill throughput. Higher anticipated grades are
expected to drive strong production in the fourth quarter
- Initial development ore was mined at
Jualin during the quarter, marking an important milestone following
two years of underground development
- Adjusted CAS per AuOz1 decreased 1%
quarter-over-quarter and increased 10% year-over-year to $946,
bringing year-to-date adjusted CAS per AuOz1 to $928. Higher
anticipated grades and production in the fourth quarter are
expected to result in lower unit costs for the full-year
- Increased investment in exploration of
50% quarter-over-quarter and 150% year-over-year was due to ongoing
positive results from Jualin and a focus on accelerating
exploration activities in higher-grade areas of the Raven and
Kensington Main deposits
- Higher capital expenditures related to
the continued development of Jualin and the replacement of
Kensington's diesel generators resulted in negative third quarter
free cash flow1 of $0.8 million. The new diesel generators are
expected to deliver annual fuel savings of $1.5 million
- Production guidance for the full year
remains unchanged at 120,000 - 125,000 ounces of gold. Kensington's
cost guidance has been revised higher from CAS per AuOz1 of $800 -
$850 to $850 - $900
Wharf, South Dakota
(Dollars in millions, except per ounce amounts) 3Q
2017 2Q 2017 1Q 2017 4Q
2016 3Q 2016 Ore tons placed
1,150,308 993,167 1,292,181 1,178,803 1,199,008
Average
silver grade (oz/t) 0.21 0.19 0.22 0.29 0.24
Average
gold grade (oz/t) 0.029 0.024 0.027 0.027 0.033
Gold
ounces produced 25,849 21,358 20,873 30,675 29,684
Silver ounces produced (000's) 15 13 20 32 25
Gold
equivalent ounces produced1 26,096 21,568 21,207
31,202 30,106
Silver ounces sold (000's) 14 11 33 30
17
Gold ounces sold 23,855 21,314 24,093 29,698
29,230
Gold equivalent ounces sold1 24,085
21,495 24,636 30,204 29,508
Metal sales $31.3 $27.0
$30.3 $35.5 $39.3
Costs applicable to sales $17.3
$15.8 $16.3 $16.9 $19.7
Adjusted CAS per AuEqOz1
$719 $737 $670 $556 $559
Exploration expense
$0.2 $— $— $— $—
Cash flow from operating activities
$15.0 $8.8 $8.6 $15.4 $21.1
Sustaining capital
expenditures (excludes capital lease payments) $1.8 $1.5
$0.9 $1.3 $0.6
Development capital expenditures $1.3
$— $— $— $—
Total capital
expenditures $3.1 $1.5 $0.9 $1.3 $0.6
Free cash
flow1 $11.9 $7.3 $7.7 $14.1 $20.5
- Gold production increased 21%
quarter-over-quarter and decreased 13% year-over-year to 25,849
ounces, primarily driven by mining from the higher-grade Golden
Reward deposit, which was mined for an abbreviated season and is
now complete
- Tons placed during the quarter were 16%
higher than in the second quarter, with tons placed for the full
year on track to reach 4.5 million, up from 4.3 million in 2016 and
3.6 million in 2015
- Adjusted CAS per AuEqOz1 were down 2%
quarter-over-quarter and up 29% year-over-year at $719, bringing
year-to-date adjusted CAS per AuEqOz1 to $708. Higher
year-over-year costs were mostly driven by lower grades compared to
the same period one year ago
- During the quarter, Wharf generated
$11.9 million of free cash flow1, bringing year-to-date free cash
flow1 to $26.9 million and cumulative free cash flow1 since Wharf's
acquisition in February 2015 for $99 million to $113.3 million
- Full-year production and cost guidance
remain unchanged from improvements made to production and cost
guidance in July, with gold production of 90,000 - 95,000 ounces
and CAS per AuEqOz1 of $700 - $750 expected for 2017
San Bartolomé, Bolivia
(Dollars in millions, except per ounce amounts) 3Q
2017 2Q 2017 1Q 2017 4Q
2016 3Q 2016 Tons milled 365,554
417,784 384,267 368,131 450,409
Average silver grade (oz/t)
3.01 3.31 3.49 3.96 3.43
Average recovery rate
87.0% 92.8% 90.7% 86.3% 88.7%
Silver ounces produced
(000's) 957 1,285 1,215 1,259 1,370
Silver ounces
sold (000's) 951 1,398 1,148 1,218 1,391
Metal
sales $16.0 $23.8 $20.6 $19.9 $27.5
Costs applicable
to sales $17.4 $23.4 $18.2 $17.3 $20.8
Adjusted CAS
per AgOz1 $17.58 $15.96 $15.88 $13.97 $14.40
Exploration expense $— $— $— $— $—
Cash flow from
operating activities $(7.9) $5.2 $11.3 $4.1 $8.6
Sustaining capital expenditures (excludes capital lease
payments) $0.5 $0.4 $0.4 $1.8 $3.0
Development
capital expenditures $— $— $— $—
$—
Total capital expenditures $0.5 $0.4 $0.4
$1.8 $3.0
Free cash flow1 $(8.4) $4.8 $10.9
$2.3 $5.6
- Third quarter production declined 26%
quarter-over-quarter and 30% year-over-year to 1.0 million silver
ounces, primarily due to persistent drought conditions in the
Potosí region of Bolivia and lower third-party ore purchases
- Adjusted CAS per silver ounce (AgOz)1
rose 10% quarter-over-quarter and 22% year-over-year to $17.58 due
to lower grades and mill throughput
- Among the cost-saving measures
undertaken, the Company reduced the mine's workforce by 23% and
subsequently incurred one-time employee severance expenses of $2.2
million, which contributed to a negative free cash outflow1 of $8.4
million for the quarter. The workforce reduction is expected to
result in annual labor cost savings of approximately $3.8
million
- On October 5, 2017, full-year
production guidance was lowered to 4.50 - 4.75 million ounces of
silver from 5.0 - 5.4 million ounces due to ongoing processing
challenges related to persistent drought conditions. Cost guidance
is accordingly increased from CAS per AgOz1 of $15.75 - $16.25 to
$16.50 - $17.00
Exploration
Coeur further expanded its success-based exploration program
during the third quarter based on encouraging drill results from
its near-mine exploration efforts. In particular, drilling activity
at Palmarejo and Kensington were significantly expanded with
quarter-over-quarter increases in exploration expense of 45% and
50%, respectively. Companywide exploration expense totaled $9.8
million, 26% higher than the prior quarter and more than double the
same period in 2016. Capitalized exploration also increased from
$2.9 million in the second quarter to $5.1 million in the third
quarter.
The Company had approximately 20 drill rigs active in July and
August and 16 in September, including as many as nine drill rigs at
Palmarejo and five at Kensington. This compares to twelve active
drill rigs during the third quarter of 2016. Total feet drilled
during the quarter increased 37% compared to the same period last
year.
Exploration efforts at Palmarejo constituted over 40% of total
drilling activity during the quarter with a focus on resource
expansion at the Nación-Dana deposit, which is located between the
Guadalupe and Independencia deposits. Drilling activity also
targeted resource conversion and expansion at the Guadalupe and
Independencia deposits, resource expansion at the La Bavisa vein
located northeast of Independencia, and definition of five
newly-discovered veins east and west of the Guadalupe deposit.
Drilling at Kensington accounted for over 20% of total feet
drilled during the quarter with a focus on both resource conversion
and expansion of the Jualin deposit as well as resource conversion
at Raven.
At Silvertip, a drill plan totaling approximately 100,000 meters
has been initiated with a focus on underground development drilling
and resource conversion and expansion. Results of this drill
program will be included in an updated technical report expected in
the second half of 2018.
Full-Year 2017 Outlook
Coeur's 2017 production guidance remains unchanged from the
revised guidance published October 5, 2017. Revised cost guidance
is shown in the table below.
2017 Production Outlook
(silver and silver equivalent ounces in thousands)
Silver Gold Silver
Equivalent1 Palmarejo 6,500 - 7,000
110,000 - 120,000 13,100 - 14,200
Rochester 4,200 -
4,700 47,000 - 52,000 7,020 - 7,820
San Bartolomé 4,500 -
4,750 — 4,500 - 4,750
Endeavor 107 — 107
Kensington —
120,000 - 125,000 7,200 - 7,500
Wharf — 90,000
- 95,000 5,400 - 5,700
Total 15,307 - 16,557
367,000 - 392,000 37,327 - 40,077
2017 Cost Outlook
Original Guidance (if changed) Current
Guidance (dollars in millions, except per ounce amounts)
60:1 70:1 Spot 60:1
70:1 Spot CAS per AgEqOz1 –
Palmarejo $10.00 - $10.50 $9.00 - $9.50
CAS
per AgEqOz1 – Rochester $11.50 - $12.00 $10.50 -
$11.00 $12.50 - $13.00 $11.50 - $12.00
CAS per AgOz1
– San Bartolomé $14.00 - $14.50 $16.50 - $17.00
CAS per
AuOz1 – Kensington $800 - $850 $850 - $900
CAS
per AuEqOz1 – Wharf $775 - $825 $700 - $750
Capital Expenditures $115 - $135 $120 - $140
General and
Administrative Expenses $28 - $32
Exploration Expense
$23 - $25 $32 - $36
AISC per AgEqOz1 $15.75 - $16.25
$14.25 - $14.75 $16.25 - $16.75 $14.75-$15.25
Financial Results and Conference Call
There will be a conference call on Coeur's financial results for
third quarter of 2017 on October 26, 2017 at 11:00 a.m. Eastern
Time.
Dial-In Numbers: (855)
560-2581 (US) (855) 669-9657 (Canada) (412) 542-4166
(International) Conference ID: Coeur Mining
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, Hans Rasmussen, Senior Vice President of Exploration, and
other members of management. A replay of the call will be available
through November 9, 2017.
Replay numbers: (877)
344-7529 (US) (855) 669-9658 (Canada) (412) 317-0088
(International) Conference ID: 101 11 361
About Coeur
Coeur Mining, Inc. is a well-diversified, growing precious
metals producer with six mines in the Americas employing
approximately 2,300 people. Coeur’s wholly-owned operations include
the Palmarejo silver-gold complex in Mexico, the Silvertip
silver-zinc-lead mine in British Columbia, the Rochester
silver-gold mine in Nevada, the Kensington gold mine in Alaska, the
Wharf gold mine in South Dakota, and the San Bartolomé silver mine
in Bolivia. In addition, the Company owns the La Preciosa project
in Mexico, a silver-gold exploration stage project. Coeur conducts
exploration activities in North and South 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,
expenses, expectations regarding Silvertip, grades, exploration
efforts, expectations regarding La Preciosa, recovery rates,
returns, fuel savings, high-return growth opportunities, and the
impact of continued drought conditions and labor cost savings in
Bolivia. 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 expectations regarding
Silvertip are not realized, the risk that anticipated production,
cost, and expense levels are not attained, the risks and hazards
inherent in the mining business (including risks inherent in
developing large-scale mining projects, environmental hazards,
industrial accidents, weather or geologically related conditions),
changes in the market prices of gold and silver and a sustained
lower price environment, the uncertainties inherent in Coeur's
production, exploratory and developmental activities, including
risks relating to permitting and regulatory delays, ground
conditions, grade variability, any future labor disputes or work
stoppages, 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 silver and gold, the
effects of environmental and other governmental regulations, the
risks inherent in the ownership or operation of or investment in
mining properties or businesses in foreign countries, the political
risks and uncertainties associated with operations in Bolivia,
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 or 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.
Coeur's management prepared certain unaudited financial
projections, some portions of which are included in this news
release. These projections were prepared to give effect to the
acquisition of the Silvertip project. These projections were not
prepared with a view toward complying with published guidelines of
the SEC, the guidelines established by the American Institute of
Certified Public Accountants with respect to prospective financial
information, or GAAP, but, in the view of Coeur's management, were
prepared on a reasonable basis, reflect the best then-available
estimates and judgments, and present, to the best of management's
knowledge and belief at the time, the expected course of action and
the expected future financial performance of Coeur. However, this
information is not fact and should not be relied upon as
necessarily indicative of actual future results, and readers of
this news release are cautioned not to place undue reliance on
these projections. These projections have been prepared by, and are
the responsibility of, Coeur's management. Neither Coeur's
independent auditors, nor any other independent accountants, have
compiled, examined, or performed any procedures with respect to
these projections, nor have they expressed any opinion or any other
form of assurance on such information or its achievability, and
assume no responsibility for, and disclaim any association with,
such projections.
The assumptions and estimates underlying these projections are
inherently uncertain and, although considered reasonable by the
management of Coeur as of the date of their preparation, are
subject to a wide variety of significant business, economic, and
competitive risks and uncertainties that could cause actual results
to differ materially from those contained in these projections,
including, among others, risks and uncertainties relating to
Coeur's businesses (including its ability to achieve strategic
goals, objectives and targets over applicable periods), industry
performance, the regulatory environment, general business and
economic conditions, and other factors described above.
Accordingly, there can be no assurance that these projections are
indicative of the future performance of Coeur or that actual
results will not differ materially from those presented. Inclusion
of these projections in this news release should not be regarded as
a representation by any person that the results contained in these
projections will be achieved. Coeur does not intend to update or
otherwise revise these projections to reflect circumstances
existing since their preparation or to reflect the occurrence of
unanticipated events, even in the event that any or all of the
underlying assumptions are shown to be in error. Furthermore, Coeur
does not intend to update or revise these projections to reflect
changes in general economic or industry conditions.
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 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 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, 2016 and our quarterly
report on Form 10-Q for the quarter ended September 30, 2017.
Notes
- EBITDA, adjusted EBITDA, 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. For
purposes of silver and gold equivalence, a 60:1 silver to gold
ratio is assumed except where noted as average spot prices. Please
see table below for average silver and gold spot prices during the
period and the silver-to-gold ratio. For purposes of silver
equivalence in the context of Silvertip's initial mine plan, metal
prices of $1,250/oz gold, $17.50/oz silver, $1.13/lb lead, and
$1.40/lb zinc are assumed. For additional information regarding
Silvertip's initial mine plan, including underlying assumptions,
please refer to the Company's press release dated September 11,
2017. 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.
- Includes capital leases. Net of debt
issuance costs and premium received.
Average Spot Prices
3Q 2017 2Q 2017
1Q 2017 4Q 2016 3Q 2016
Average Silver Spot Price Per Ounce $ 16.84 $ 17.21 $ 17.42
$ 17.19 $ 19.61
Average Gold Spot Price Per Ounce $ 1,278 $
1,257 $ 1,219 $ 1,222 $ 1,335
Average Silver to Gold Spot
Equivalence 76:1 73:1 70:1 71:1 68:1
For Additional Information
Coeur Mining, Inc. 104 S. Michigan Avenue, Suite 900 Chicago, IL
60603 Attention: Courtney Lynn, Vice President, Investor Relations
and Treasurer Phone: (312) 489-5910
www.coeur.com
Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited) Three months ended Nine months
ended September 30, September 30, 2017
2016 2017 2016
Notes In thousands, except share data
Revenue 3 $ 175,963 $ 176,247 $ 555,455 $ 506,641 COSTS AND
EXPENSES Costs applicable to sales(1) 3 118,924 105,408 377,257
307,428 Amortization 33,830 27,763 106,880 93,232 General and
administrative 7,412 7,113 24,587 22,789 Exploration 9,814 3,706
22,879 7,669 Write-downs — — — 4,446 Pre-development, reclamation,
and other 7,961 4,491 16,908 13,059
Total costs and expenses 177,941 148,481 548,511 448,623 OTHER
INCOME (EXPENSE), NET Loss on debt extinguishment 17 — (10,040 )
(9,342 ) (10,040 ) Fair value adjustments, net 10 — (961 ) (864 )
(13,235 ) Interest expense, net of capitalized interest 17 (3,606 )
(8,068 ) (10,941 ) (30,063 ) Other, net 7 3,164 6,405
28,439 5,862 Total other income (expense), net (442 )
(12,664 ) 7,292 (47,476 ) Income (loss) before income and
mining taxes (2,420 ) 15,102 14,236 10,542 Income and mining tax
(expense) benefit 8 (14,232 ) 54,455 (23,180 ) 53,118
NET INCOME (LOSS) $ (16,652 ) $ 69,557 $ (8,944 ) $ 63,660
OTHER COMPREHENSIVE INCOME (LOSS), net of tax: Unrealized
gain (loss) on equity securities, net of tax of $997 and ($1,177)
for the three and nine months September 30, 2016, respectively
1,066 1,387 (1,134 ) 4,533 Reclassification adjustments for
impairment of equity securities — — 426 20 Reclassification
adjustments for realized (gain) loss on sale of equity securities
32 (2,965 ) 1,300 (2,691 ) Other comprehensive income
(loss) 1,098 (1,578 ) 592 1,862 COMPREHENSIVE
INCOME (LOSS) $ (15,554 ) $ 67,979 $ (8,352 ) $ 65,522
NET INCOME (LOSS) PER SHARE 9 Basic $ (0.09 ) $ 0.43
$ (0.05 ) $ 0.41 Diluted $ (0.09 ) $ 0.42
$ (0.05 ) $ 0.40
Coeur Mining, Inc. and
Subsidiaries Condensed Consolidated Statements of Cash Flows
(Unaudited) Three months ended Nine months
ended September 30, September 30,
2017 2016 2017 2016
Notes In thousands CASH FLOWS FROM OPERATING
ACTIVITIES: Net income (loss) $ (16,652 ) $ 69,557
(8,944 ) 63,660 Adjustments: Amortization 33,830 27,763 106,880
93,232 Accretion 2,691 2,184 7,798 8,201 Deferred taxes 1,940
(49,463 ) (1,529 ) (66,738 ) Loss on debt extinguishment — 10,040
9,342 10,040 Fair value adjustments, net — 961 864 13,235
Stock-based compensation 2,585 2,312 8,127 7,534 Gain on sale of
the Joaquin project — — (21,138 ) — Write-downs — — — 4,446 Other
(3,157 ) (5,236 ) (8,979 ) (4,743 ) Changes in operating assets and
liabilities: Receivables 6,529 19,672 17,719 10,751 Prepaid
expenses and other current assets (3,195 ) (2,816 ) (3,882 ) (2,435
) Inventory and ore on leach pads (2,874 ) (8,900 ) 10,421 (24,408
) Accounts payable and accrued liabilities 7,735 (18,262 )
(2,697 ) (12,407 ) CASH PROVIDED BY OPERATING ACTIVITIES
29,432 47,812 113,982 100,368
CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (29,461
) (25,627 ) (90,922 ) (71,087 ) Acquisitions, net — (1,427 ) —
(1,427 ) Proceeds from the sale of assets 1,083 4,802 16,538 16,104
Purchase of investments (3,595 ) (21 ) (13,559 ) (120 ) Sale of
investments 403 5,432 11,321 7,077 Other (5,850 ) (1,299 ) (7,457 )
(4,218 ) CASH USED IN INVESTING ACTIVITIES (37,420 ) (18,140
) (84,079 ) (53,671 ) CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock — 49,513 — 122,584 Issuance of notes and
bank borrowings, net of issuance costs 17 (2,257 ) — 242,701 —
Payments on debt, capital leases, and associated costs 17 (3,344 )
(107,868 ) (195,501 ) (120,551 ) Gold production royalty payments —
(7,563 ) — (27,155 ) Other (6 ) 1,051 (3,726 ) 323
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (5,607 )
(64,867 ) 43,474 (24,799 ) Effect of exchange rate
changes on cash and cash equivalents (222 ) 121 662
(95 ) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(13,817 ) (35,074 ) 74,039 21,803 Cash and cash equivalents at
beginning of period 250,038 257,591 162,182
200,714 Cash and cash equivalents at end of period $
236,221 $ 222,517 $ 236,221 $ 222,517
Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets September
30, 2017 (Unaudited) December 31, 2016
ASSETS Notes In thousands, except
share data CURRENT ASSETS Cash and cash equivalents $ 236,221 $
162,182 Receivables 13 66,415 60,431 Inventory 14 72,329 106,026
Ore on leach pads 14 78,801 64,167 Prepaid expenses and other
20,360 17,981 474,126 410,787 NON-CURRENT ASSETS
Property, plant and equipment, net 15 235,058 216,796 Mining
properties, net 16 536,201 558,455 Ore on leach pads 14 69,805
67,231 Restricted assets 12 20,953 17,597 Equity and debt
securities 12 29,125 4,488 Receivables 13 13,461 30,951 Other
23,363 12,604 TOTAL ASSETS $ 1,402,092 $
1,318,909
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES Accounts payable $ 60,188 $ 53,335 Accrued
liabilities and other 50,593 42,743 Debt 17 14,375 12,039 Royalty
obligations 10 — 4,995 Reclamation 4 3,604 3,522
128,760 116,634 NON-CURRENT LIABILITIES Debt 17 274,523 198,857
Royalty obligations 10 — 4,292 Reclamation 4 104,505 95,804
Deferred tax liabilities 77,190 74,798 Other long-term liabilities
52,577 60,037 508,795 433,788 STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share; authorized 300,000,000
shares, issued and outstanding 181,428,717 at September 30, 2017
and 180,933,287 at December 31, 2016 1,814 1,809 Additional paid-in
capital 3,318,987 3,314,590 Accumulated other comprehensive income
(loss) (1,896 ) (2,488 ) Accumulated deficit (2,554,368 )
(2,545,424 ) 764,537 768,487 TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY $ 1,402,092 $ 1,318,909
Adjusted EBITDA Reconciliation
(Dollars in thousands except per share amounts)
LTM3Q 2017
3Q 2017 2Q 2017 1Q 2017 2016
4Q 2016
LTM3Q 2016
3Q 2016 Net income (loss) $ (17,250 ) $ (16,652 ) $ (10,955
) $ 18,663 $ 55,352 $ (8,306 ) $ (239,342 ) $ 69,557 Interest
expense, net of capitalized interest 17,798 3,606 3,749 3,586
36,920 6,857 41,821 8,068 Income tax provision (benefit) 22,058
14,232 (2,098 ) 11,046 (54,239 ) (1,122 ) (70,928 ) (54,455 )
Amortization 136,809 33,830 32,946
40,104 123,161 29,929 129,422
27,763
EBITDA 159,415 35,016 23,642 73,399 161,194
27,358 (139,027 ) 50,933 Fair value adjustments, net (790 ) — (336
) 1,200 11,581 (1,654 ) 11,689 961 Impairment of equity securities
1,109 — 305 121 703 683 337 — Foreign exchange (gain) loss 857 (229
) (1,000 ) (1,349 ) 10,720 3,435 9,882 1,466 Gain on sale of
Joaquin project (21,138 ) — — (21,138 ) — — — — (Gain) loss on sale
of assets and securities (225 ) (2,117 ) (513 ) 2,066 (11,334 ) 339
(11,841 ) (7,462 ) Gain on repurchase of Rochester royalty (2,332 )
— (2,332 ) — — — — — (Gain) loss on debt extinguishment 20,667 —
9,342 — 21,365 11,325 (6,147 ) 10,040 San Bartolomé workforce
severance 2,175 2,175 — — — — — — Corporate reorganization costs —
— — — — — 133 — Transaction-related costs 820 819 — — 1,199 1 1,297
26 Asset retirement obligation accretion 9,498 2,511 2,450 2,390
8,369 2,147 8,510 2,096 Inventory adjustments and write-downs 2,092
1,302 1,796 (104 ) 6,917 389 9,083 4,665 Write-downs — —
— — 4,446 —
317,783 —
Adjusted EBITDA $ 172,148 $
39,477 $ 33,354 $ 56,585 $ 215,160
$ 44,023 $ 201,699 $ 62,725
Adjusted Net Income (Loss)
Reconciliation
(Dollars in thousands except per share amounts)
3Q
2017 2Q 2017 1Q 2017 4Q 2016 3Q
2016 Net income (loss) $ (16,652 ) $ (10,955 ) $ 18,663 $
(8,306 ) $ 69,557 Fair value adjustments, net — (336 ) 1,200 (1,654
) 961 Impairment of marketable securities — 305 121 683 — Inventory
write-downs — — — — 3,689 Gain on sale of Joaquin project — —
(21,138 ) — — (Gain) loss on sale of assets and securities (2,117 )
(513 ) 2,066 339 (7,462 ) Gain on repurchase of Rochester royalty —
(2,332 ) — — — Loss on debt extinguishment — 9,342 — 11,325 10,040
San Bartolomé workforce severance 2,175 — — — — Transaction costs
819 — — 1 26 Deferred tax on reorganization — — — — (40,767 )
Foreign exchange (gain) loss (1,660 ) 1,972 4,268 351 2,549 Tax
effect of adjustments (990 ) — 1,807 —
(38 )
Adjusted net income (loss) $ (18,425 ) $ (2,517 )
$ 6,987 $ 2,739 $ 38,555
Adjusted net income (loss) per share - Basic $ (0.10 ) $
(0.01 ) $ 0.04 $ 0.01 $ 0.24
Adjusted net income (loss) per
share - Diluted $ (0.10 ) $ (0.01 ) $ 0.04 $ 0.01 $ 0.23
Consolidated Free Cash Flow
Reconciliation
(Dollars in thousands)
3Q 2017 2Q 2017 1Q
2017 4Q 2016 3Q 2016 Cash flow from operating
activities $ 29,432 $ 29,279 $ 55,271 $ 25,449 $ 47,812 Capital
expenditures (29,461 ) (37,482 ) (23,979 ) (29,926 ) (25,627 ) Gold
production royalty payments — — — —
(7,563 ) Free cash flow (29 ) (8,203 ) 31,292 (4,477 )
14,622
Reconciliation of All-in
Sustaining Costs per Silver Equivalent Ounce for Nine Months
Ended September 30, 2017 Silver Gold
Total In thousands except per ounce amounts
Palmarejo Rochester
SanBartolomé
Endeavor Total Kensington
Wharf Total Costs applicable to sales,
including amortization (U.S. GAAP) $ 161,145 $ 89,220
$ 64,032 $ 1,045 $ 315,442 $ 109,478 $
58,301 $ 167,779 $ 483,221
Amortization 50,995
15,345 5,053 301 71,694 25,389
8,883 34,272 105,966
Costs applicable to
sales $ 110,150 $ 73,875 $ 58,979 $ 744 $ 243,748 $ 84,089 $
49,418 $ 133,507 $ 377,255
Silver equivalent ounces sold
10,809,932 5,551,913 3,497,263 107,026 19,966,134 29,599,974
Gold equivalent ounces sold
90,348 70,216 160,564
Costs
applicable to sales per ounce $ 10.19 $ 13.31 $ 16.86 $ 6.95 $
12.21 $ 931 $ 704 $ 831 $ 12.75
Inventory adjustments (0.04
) (0.09 ) (0.22 ) — (0.09 ) (3 ) 4 — (0.06 )
Adjusted costs applicable to sales per ounce $ 10.15 $ 13.22
$ 16.64 $ 6.95
$ 12.12 $ 928 $ 708
$
831 $ 12.69
Costs applicable to sales per
average spot ounce $ 9.17 $ 12.32 $ 11.28 $ 11.33
Inventory
adjustments (0.04 ) (0.08 ) (0.08 ) (0.05 )
Adjusted costs
applicable to sales per average spot ounce $ 9.13 $ 12.24
$ 11.20 $ 11.28
Costs
applicable to sales $ 377,255
Treatment and refining
costs 4,312
Sustaining capital(1) 47,795
General and administrative 24,587
Exploration 22,879
Reclamation 12,279
Project/pre-development costs
5,903
All-in sustaining costs $ 495,010
Silver equivalent ounces sold 19,966,134
Kensington and
Wharf silver equivalent ounces sold 9,633,840
Consolidated silver equivalent ounces sold 29,599,974
All-in sustaining costs per silver equivalent ounce $
16.72 Inventory adjustments $
(0.06 ) Adjusted all-in sustaining costs per
silver equivalent ounce $ 16.66
Consolidated silver equivalent ounces sold (average spot)
33,311,575
All-in sustaining costs per average spot
silver equivalent ounce $ 14.86
Inventory adjustments $ (0.05 )
Adjusted all-in
sustaining costs per average spot silver equivalent ounce
$ 14.81 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
SanBartolomé
Endeavor Total Kensington
Wharf Total Costs applicable to sales,
including amortization (U.S. GAAP) $ 49,669 $ 27,866
$ 18,795 $ 59 $ 96,389 $ 35,522 $
20,553 $ 56,075 $ 152,464
Amortization 16,414
4,591 1,430 20 22,455 7,864
3,223 11,087 33,542
Costs applicable to
sales $ 33,255 $ 23,275 $ 17,365 $ 39 $ 73,934 $ 27,658 $
17,330 $ 44,988 $ 118,922
Silver equivalent ounces sold
3,386,963 1,673,704 951,219 8,027 6,019,913 9,215,393
Gold
equivalent ounces sold
29,173 24,085 53,258
Costs
applicable to sales per ounce $ 9.82 $ 13.91 $ 18.26 $ 4.86 $
12.28 $ 948 $ 720 $ 845 $ 12.90
Inventory adjustments (0.06
) (0.22 ) (0.68 ) — (0.20 ) (2 ) (1 ) (2 ) (0.14 )
Adjusted costs applicable to sales per ounce $ 9.76 $ 13.69
$ 17.58 $ 4.86
$ 12.08 $ 946 $ 719
$
843 $ 12.76
Costs applicable to sales per
average spot ounce $ 8.73 $ 12.66 $ 11.19 $ 11.17
Inventory
adjustments (0.05 ) (0.20 ) (0.18 ) (0.12 )
Adjusted costs
applicable to sales per average spot ounce $ 8.68 $ 12.46
$ 11.01 $ 11.05
Costs
applicable to sales $ 118,922
Treatment and refining
costs 1,408
Sustaining capital 18,626
General and
administrative 7,412
Exploration 9,814
Reclamation 4,364
Project/pre-development costs 2,337
All-in sustaining costs $ 162,883
Silver equivalent ounces sold 6,019,913
Kensington and
Wharf silver equivalent ounces sold 3,195,480
Consolidated silver equivalent ounces sold 9,215,393
All-in sustaining costs per silver equivalent ounce $
17.68 Inventory adjustments $ (0.14 )
Adjusted all-in sustaining costs per silver equivalent ounce
$ 17.54 Consolidated silver
equivalent ounces sold (average spot) 10,645,948
All-in sustaining costs per average spot silver equivalent
ounce $ 15.30 Inventory adjustments
$ (0.12 )
Adjusted all-in sustaining costs per average spot
silver equivalent ounce $ 15.18
Reconciliation of All-in Sustaining Costs per
Silver Equivalent Ounce for Three Months Ended June 30,
2017 Silver Gold Total In
thousands except per ounce amounts Palmarejo
Rochester
SanBartolomé
Endeavor Total Kensington
Wharf Total Costs applicable to sales,
including amortization (U.S. GAAP) $ 48,325 $ 29,099
$ 25,604 $ 586 $ 103,614 $ 36,335 $
18,317 $ 54,652 $ 158,266
Amortization 14,431
4,938 2,212 168 21,749 8,347
2,549 10,896 32,645
Costs applicable to
sales $ 33,894 $ 24,161 $ 23,392 $ 418 $ 81,865 $ 27,988 $
15,768 $ 43,756 $ 125,621
Silver equivalent ounces sold
2,995,623 1,774,000 1,398,038 59,234 6,226,895 9,258,455
Gold
equivalent ounces sold
29,031 21,495 50,526
Costs
applicable to sales per ounce $ 11.31 $ 13.62 $ 16.73 $ 7.06 $
13.15 $ 964 $ 734 $ 866 $ 13.57
Inventory adjustments (0.10
) (0.08 ) (0.77 ) — (0.24 ) (12 ) 3 (6 ) (0.19 )
Adjusted costs applicable to sales per ounce $ 11.21 $ 13.54
$ 15.96 $ 7.06
$ 12.91 $ 952 $ 737
$
860 $ 13.38
Costs applicable to sales per
average spot ounce $ 10.20 $ 12.63 $ 12.23 $ 12.10
Inventory
adjustments (0.09 ) (0.07 ) (0.23 ) (0.17 )
Adjusted costs
applicable to sales per average spot ounce $ 10.11 $ 12.56
$ 12.00 $ 11.93
Costs
applicable to sales $ 125,621
Treatment and refining
costs 1,288
Sustaining capital 17,569
General and
administrative 7,042
Exploration 7,813
Reclamation 4,096
Project/pre-development costs 1,677
All-in sustaining costs $ 165,106
Silver equivalent ounces sold 6,226,895
Kensington and
Wharf silver equivalent ounces sold 3,031,560
Consolidated silver equivalent ounces sold 9,258,455
All-in sustaining costs per silver equivalent ounce $
17.83 Inventory adjustments $ (0.19 )
Adjusted all-in sustaining costs per silver equivalent ounce
$ 17.64 Consolidated silver
equivalent ounces sold (average spot) 10,384,025
All-in sustaining costs per average spot silver equivalent
ounce $ 15.90 Inventory adjustments
$ (0.17 )
Adjusted all-in sustaining costs per average spot
silver equivalent ounce $ 15.73
Reconciliation of All-in Sustaining Costs per
Silver Equivalent Ounce for Three Months Ended March 31,
2017 Silver Gold Total In
thousands except per ounce amounts Palmarejo
Rochester
SanBartolomé
Endeavor Total Kensington
Wharf Total Costs applicable to sales,
including amortization (U.S. GAAP) $ 63,151 $ 32,255
$ 19,633 $ 400 $ 115,439 $ 37,621 $
19,431 $ 57,052 $ 172,491
Amortization 20,150
5,816 1,411 113 27,490 9,178
3,111 12,289 39,779
Costs applicable to sales
$ 43,001 $ 26,439 $ 18,222 $ 287 $ 87,949 $ 28,443 $ 16,320 $
44,763 $ 132,712
Silver equivalent ounces sold 4,427,346
2,104,209 1,148,006 39,765 7,719,326 11,126,126
Gold equivalent
ounces sold 32,144
24,636 56,780
Costs applicable to sales per
ounce $ 9.71 $ 12.56 $ 15.87 $ 7.22 $ 11.39 $ 885 $ 662 $ 788 $
11.93
Inventory adjustments (0.03 ) 0.01 0.01
— (0.01 ) (1 ) 8 3 0.01
Adjusted costs
applicable to sales per ounce $ 9.68 $ 12.57 $ 15.88 $ 7.22
$ 11.38 $ 884 $ 670
$ 791 $
11.94
Costs applicable to sales per average spot
ounce $ 8.89 $ 11.80 $ 10.64 $ 10.85
Inventory
adjustments (0.02 ) 0.01 (0.01 ) 0.01
Adjusted costs
applicable to sales per average spot ounce $ 8.87 $ 11.81
$ 10.63 $ 10.86
Costs applicable to
sales $ 132,712
Treatment and refining costs 1,616
Sustaining capital 11,600
General and administrative
10,133
Exploration 5,252
Reclamation 3,818
Project/pre-development costs 1,889
All-in sustaining
costs $ 167,020 Silver equivalent ounces
sold 7,719,326
Kensington and Wharf silver equivalent ounces
sold 3,406,800
Consolidated silver equivalent ounces
sold 11,126,126
All-in sustaining costs per silver
equivalent ounce $ 15.01 Inventory
adjustments $ 0.01
Adjusted all-in sustaining costs per
silver equivalent ounce $ 15.02
Consolidated silver equivalent ounces sold (average spot)
12,235,897
All-in sustaining costs per average spot silver
equivalent ounce $ 13.65 Inventory
adjustments $ 0.01
Adjusted all-in sustaining costs per
average spot silver equivalent ounce $ 13.66
Reconciliation of All-in Sustaining Costs
per Silver Equivalent Ounce for Three Months Ended December
31, 2016 Silver Gold Total In
thousands except per ounce amounts Palmarejo
Rochester
SanBartolomé
Endeavor Total Kensington
Wharf Total Costs applicable to sales,
including amortization (U.S. GAAP) $ 29,667 $ 29,581
$ 18,514 $ 557 $ 78,319 $ 31,577 $ 21,861 $
53,438 $ 131,757
Amortization 8,784 5,844
1,303 148 16,079 8,584 4,982
13,566 29,645
Costs applicable to sales $
20,883 $ 23,737 $ 17,211 $ 409 $ 62,240 $ 22,993 $ 16,879 $ 39,872
$ 102,112
Silver equivalent ounces sold 1,871,178 1,983,393
1,217,659 57,903 5,130,133 8,674,273
Gold equivalent ounces
sold 28,864 30,205
59,069
Costs applicable to sales per
ounce $ 11.16 $ 11.97 $ 14.13 $ 7.06 $ 12.13 $ 797 $ 559 $ 675
$ 11.77
Inventory adjustments (0.15 ) 0.02 (0.16 ) —
(0.08 ) 4 (3 ) 1 (0.04 )
Adjusted costs
applicable to sales per ounce $ 11.01 $ 11.99 $ 13.97 $ 7.06
$ 12.05 $ 801 $ 556
$ 676 $
11.73
Costs applicable to sales per average spot
ounce $ 10.24 $ 11.14 $ 11.42 $ 10.59
Inventory
adjustments (0.13 ) 0.02 (0.08 ) (0.04 )
Adjusted
costs applicable to sales per average spot ounce $ 10.11 $
11.16
$ 11.34 $ 10.55
Costs
applicable to sales $ 102,112
Treatment and refining
costs 1,261
Sustaining capital 19,850
General and
administrative 6,587
Exploration 5,261
Reclamation 3,537
Project/pre-development costs 1,693
All-in sustaining costs $ 140,301
Silver equivalent ounces sold 5,130,133
Kensington and
Wharf silver equivalent ounces sold 3,544,140
Consolidated silver equivalent ounces sold 8,674,273
All-in sustaining costs per silver equivalent ounce $
16.17 Inventory adjustments $ (0.04 )
Adjusted all-in sustaining costs per silver equivalent ounce
$ 16.13 Consolidated silver
equivalent ounces sold (average spot) 9,636,058
All-in sustaining costs per average spot silver equivalent
ounce $ 14.56 Inventory adjustments
$ (0.04 )
Adjusted all-in sustaining costs per average spot
silver equivalent ounce $ 14.52
Reconciliation of All-in Sustaining Costs per
Silver Equivalent Ounce for Three Months Ended September 30,
2016 Silver Gold Total In
thousands except per ounce amounts Palmarejo
Rochester
SanBartolomé
Endeavor Total Kensington
Wharf Total Costs applicable to sales,
including amortization (U.S. GAAP) $ 21,794 $ 27,027
$ 22,536 $ 486 $ 71,843 $ 34,755 $ 26,158 $
60,913 $ 132,756
Amortization 5,761 5,244
1,723 113 12,841 8,046 6,461
14,507 27,348
Costs applicable to sales $
16,033 $ 21,783 $ 20,813 $ 373 $ 59,002 $ 26,709 $ 19,697 $ 46,406
$ 105,408
Silver equivalent ounces sold 1,462,401 1,868,085
1,390,552 46,069 4,767,107 8,397,467
Gold equivalent ounces
sold 30,998 29,508
60,506
Costs applicable to sales per
ounce $ 10.96 $ 11.66 $ 14.97 $ 8.10 $ 12.38 $ 862 $ 668 $ 649
$ 12.55
Inventory adjustments (0.26 ) (0.10 ) (0.57 ) —
(0.28 ) (3 ) (109 ) (55 ) (0.56 )
Adjusted costs
applicable to sales per ounce $ 10.70 $ 11.56 $ 14.40 $ 8.10
$ 12.10 $ 859 $ 559
$ 712 $
11.99
Costs applicable to sales per average spot
ounce $ 10.29 $ 11.11 $ 11.91 $ 11.62
Inventory
adjustments (0.24 ) (0.09 ) (0.27 ) (0.52 )
Adjusted costs
applicable to sales per average spot ounce $ 10.05 $ 11.02
$ 11.64 $ 11.10
Costs
applicable to sales $ 105,408
Treatment and refining
costs 761
Sustaining capital 19,762
General and
administrative 7,113
Exploration 3,706
Reclamation 4,036
Project/pre-development costs 2,133
All-in sustaining costs $ 142,919
Silver equivalent ounces sold 4,767,107
Kensington and
Wharf silver equivalent ounces sold 3,630,360
Consolidated silver equivalent ounces sold 8,397,467
All-in sustaining costs per silver equivalent ounce $
17.02 Inventory adjustments $ (0.56 )
Adjusted all-in sustaining costs per silver equivalent ounce
$ 16.46 Consolidated silver
equivalent ounces sold (average spot) 9,074,222
All-in sustaining costs per average spot silver equivalent
ounce $ 15.75 Inventory adjustments
$ (0.52 )
Adjusted all-in sustaining costs per average spot
silver equivalent ounce $ 15.23
Reconciliation of All-in Sustaining Costs per
Silver Equivalent Ounce for 2017 Guidance
Silver Gold In thousands except per ounce
amounts Palmarejo Rochester San
Bartolomé Endeavor
TotalSilver
Kensington Wharf Total
Gold
TotalCombined
Costs applicable to sales, including amortization (U.S.
GAAP) $ 215,400 $ 118,700 $ 86,000 $ 1,044
$ 421,144 $ 153,800 $ 83,600 $ 237,400 $
658,544
Amortization 67,800 20,500
7,800 300 96,400
38,800 12,800 51,600
148,000
Costs applicable to sales $ 147,600 $ 98,200 $
78,200 $ 744 $ 324,744 $ 115,000 $ 70,800 $ 185,800 $ 510,544
Silver equivalent ounces sold 14,500,000 7,690,000 4,700,000
107,000 26,997,000 40,557,000
Gold equivalent ounces sold
131,000 95,000 226,000
Costs applicable to sales per ounce $10.00
- $10.50 $12.50 - $13.00 $16.50 - $17.00 $850
- $900 $700 - $750 Costs applicable to
sales $ 510,544
Treatment and refining costs 5,100
Sustaining capital, including capital lease payments 70,000
General and administrative 32,000
Exploration 33,000
Reclamation 16,000
Project/pre-development costs
7,000
All-in sustaining costs $ 673,644
Silver equivalent
ounces sold 26,997,000
Kensington and Wharf silver
equivalent ounces sold 13,560,000
Consolidated silver
equivalent ounces sold 40,557,000
All-in sustaining costs
per silver equivalent ounce $16.25 - $16.75
Reconciliation of All-in Sustaining Costs per 70:1 Spot
Silver Equivalent Ounce for 2017 Guidance
Silver Gold In thousands except per ounce
amounts Palmarejo Rochester San
Bartolomé Endeavor
TotalSilver
Kensington Wharf Total Gold
TotalCombined
Costs applicable to sales, including amortization (U.S.
GAAP) $ 215,400 $ 118,700 $ 86,000 $ 1,044 $ 421,144 $ 153,800
$ 83,600 $ 237,400 $ 658,544
Amortization 67,800
20,500 7,800 300 96,400 38,800
12,800 51,600 148,000
Costs applicable to
sales $ 147,600 $ 98,200 $ 78,200 $ 744 $ 324,744 $ 115,000 $
70,800 $ 185,800 $ 510,544
Silver equivalent ounces sold
15,700,000 8,200,000 4,700,000 107,000 28,707,000 44,527,000
Gold equivalent ounces sold
131,000 95,000 226,000
Costs
applicable to sales per ounce guidance $9.00 - $9.50
$11.50 - $12.00 $16.50 - $17.00 $850 - $900
$700 - $750 Costs applicable to sales $
510,544
Treatment and refining costs 5,100
Sustaining
capital, including capital lease payments 70,000
General and
administrative 32,000
Exploration 33,000
Reclamation 16,000
Project/pre-development costs
7,000
All-in sustaining costs $ 673,644
Silver equivalent
ounces sold 28,707,000
Kensington and Wharf silver
equivalent ounces sold 15,820,000
Consolidated silver
equivalent ounces sold 44,527,000
All-in sustaining costs
per silver equivalent ounce guidance $14.75 - $15.25
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171025006378/en/
Coeur Mining, Inc.Courtney Lynn, (312) 489-5910Vice President,
Investor Relations and Treasurerwww.coeur.com
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