Full-Year Production and Cost Guidance
Reaffirmed
Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today
reported second quarter 2019 financial results, including revenue
of $162.1 million, adjusted EBITDA1 of $30.6 million and cash flow
from operating activities of $26.4 million. Including a non-cash
write down of $11.9 million taken in the quarter, the Company
reported GAAP net loss from continuing operations of $36.8 million,
or $0.18 per share. On an adjusted basis1, the Company reported a
net loss of $23.0 million, or $0.11 per share.
The Company is reaffirming full-year 2019 production guidance of
334,000 - 372,000 ounces of gold, 12.2 - 14.7 million ounces of
silver, 25 - 40 million pounds of zinc and 20 - 35 million pounds
of lead. In addition, full-year cost guidance is being
reaffirmed.
Key Highlights
- Solid operational and financial performance at Palmarejo
- Palmarejo’s gold and silver production increased 22% and 36%
quarter-over-quarter, respectively. Higher production was driven by
increased mill throughput and improved recovery rates. Second
quarter adjusted costs applicable to sales (“CAS”)1 for gold and
silver on a co-product basis were $741 and $9.17 per ounce,
respectively, and remained within full-year guidance ranges of $650
- $750 per ounce of gold and $9.00 - $10.00 per ounce of
silver
- Rochester now processing ore through high-pressure grinding
roll (“HPGR”) unit - Coeur has successfully commissioned the
enhanced crushing circuit, including the HPGR unit, and has
recommenced full mining and processing activities. Preliminary
metallurgical test work from newly crushed and placed material
indicate results in-line with expectations. The new crushing
circuit is expected to improve silver recoveries and help reduce
operating costs during the remainder of the year
- Kensington benefiting from the high-grade Jualin deposit
- Kensington’s gold production in the second quarter increased by
14% compared to the prior period. Jualin accounted for
approximately 17% of Kensington’s production during the quarter,
helping to reduce adjusted CAS1 15% quarter-over-quarter to $842
per ounce. Increased production from Jualin is expected to
contribute to higher production levels and lower unit costs for the
remainder of 2019
- Strongest quarter of operational performance at
Silvertip - Second quarter results at Silvertip represented the
best period of operational performance since acquisition. Despite
lower mill throughput, silver, zinc and lead production increased
44%, 43% and 62%, respectively, compared to the prior quarter,
driven by significantly higher feed grades and improved recovery
rates. The Company continues to execute key projects targeting mill
availability, which are anticipated to drive improved results
during the remainder of 2019
- 19% reduction in total debt2 in the second quarter -
Coeur repaid $82.0 million of outstanding indebtedness, leading to
a 19% quarter-over-quarter reduction in total debt2. At June 30,
2019, the Company had $53.0 million drawn under its $250.0 million
senior secured revolving credit facility, approximately 61% lower
compared to the prior period
- Strategic option agreement with subsidiaries of Barrick Gold
Corporation (“Barrick”) - In June 2019, Coeur entered into a
purchase option agreement (the “Option Agreement”) with Barrick for
the Richmond Hill Project (the “Project”), which is located
adjacent to Coeur’s Wharf mine in South Dakota. The option to
acquire the Project provides a potential opportunity for Coeur to
leverage existing infrastructure to further expand Wharf’s
footprint and extend its mine life
“We made solid operational and financial progress on multiple
fronts during the second quarter and are well positioned to deliver
on our key initiatives in the second half of 2019,” said Mitchell
J. Krebs, President and Chief Executive Officer. “In addition to
prudent cost management, improved operational results helped drive
adjusted EBITDA1 17% higher and general and administrative expenses
18% lower quarter-over-quarter. We continued to make solid progress
on our top two 2019 initiatives by beginning to feed material
through the HPGR unit at Rochester and demonstrating meaningful
progress at Silvertip. We also successfully repaid $82.0 million of
outstanding indebtedness under our revolving credit facility and
continued to invest in our success-based exploration program, with
encouraging near-mine resource expansion drill results at
Kensington and Silvertip.”
Financial and Operating Highlights (Unaudited)
(Amounts in millions, except per share
amounts, gold ounces produced & sold, and per-ounce/pound
metrics)
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Gold Sales
$
110.3
$
106.8
$
96.3
$
103.0
$
117.2
Silver Sales
$
45.0
$
40.1
$
44.6
$
43.0
$
52.8
Zinc Sales
$
2.6
$
5.6
$
1.9
$
1.7
$
—
Lead Sales
$
4.2
$
2.4
$
1.0
$
1.0
$
—
Consolidated Revenue
$
162.1
$
154.9
$
143.8
$
148.8
$
170.0
Costs Applicable to Sales
$
131.9
$
131.7
$
116.6
$
116.9
$
108.2
General and Administrative
Expenses
$
7.8
$
9.5
$
7.1
$
7.7
$
7.7
Net Income (Loss)
$
(36.8
)
$
(24.9
)
$
0.4
$
(53.0
)
$
2.9
Net Income (Loss) Per Share
$
(0.18
)
$
(0.12
)
$
0.00
$
(0.29
)
$
0.02
Adjusted Net Income (Loss)1
$
(23.0
)
$
(23.0
)
$
16.1
$
(19.7
)
$
1.1
Adjusted Net Income (Loss)1 Per
Share
$
(0.11
)
$
(0.11
)
$
0.08
$
(0.11
)
$
0.01
Weighted Average Shares
Outstanding
207.8
202.4
199.5
185.2
187.5
EBITDA1
$
7.7
$
14.8
$
7.9
$
(12.3
)
$
42.1
Adjusted EBITDA1
$
30.6
$
26.1
$
36.2
$
24.7
$
48.4
Cash Flow from Operating
Activities
$
26.4
$
(15.8
)
$
0.1
$
5.8
$
(1.3
)
Capital Expenditures
$
20.7
$
27.4
$
17.8
$
39.5
$
41.2
Free Cash Flow1
$
5.7
$
(43.3
)
$
(17.7
)
$
(33.7
)
$
(42.5
)
Cash, Equivalents & Short-Term
Investments
$
37.9
$
69.0
$
115.1
$
104.7
$
123.5
Total Debt2
$
370.0
$
456.8
$
458.8
$
429.2
$
419.7
Average Realized Price Per Ounce –
Gold
$
1,277
$
1,251
$
1,214
$
1,150
$
1,241
Average Realized Price Per Ounce –
Silver
$
14.75
$
15.22
$
14.59
$
14.68
$
16.48
Average Realized Price Per Pound –
Zinc
$
0.49
$
1.19
$
0.83
$
0.93
$
—
Average Realized Price Per Pound –
Lead
$
0.82
$
0.86
$
0.80
$
0.90
$
—
Gold Ounces Produced
86,584
78,336
92,546
87,539
94,052
Silver Ounces Produced
3.1
2.5
3.5
2.9
3.2
Zinc Pounds Produced
5.3
3.7
3.1
1.1
—
Lead Pounds Produced
5.0
3.1
1.7
0.4
—
Gold Ounces Sold
86,385
85,326
79,291
89,609
94,455
Silver Ounces Sold
3.0
2.6
3.1
2.9
3.2
Zinc Pounds Sold
5.3
4.7
2.6
1.8
—
Lead Pounds Sold
5.2
2.7
1.4
1.2
—
Financial Results
Second quarter revenue increased 5% to $162.1 million compared
to $154.9 million in the first quarter of 2019. The Company sold
86,385 ounces of gold and 3.0 million ounces of silver during the
quarter, representing increases of 1% and 16%, respectively,
compared to the prior period. Zinc and lead sales totaled 5.3
million and 5.2 million pounds during the second quarter, 13% and
93% increases, respectively, quarter-over-quarter.
Average realized gold price increased 2% quarter-over-quarter to
$1,277 per ounce, while average realized silver price decreased 3%
over the same period to $14.75 per ounce. The average realized gold
price during the quarter reflects the sale of 6,190 ounces of gold
at a price of $800 per ounce pursuant to Palmarejo's gold stream
agreement. Average realized zinc price, net of treatment and
refining charges, during the quarter was $0.49 per pound or 59%
lower compared to the prior quarter largely driven by provisional
pricing adjustments on spot zinc sales. Average realized lead
price, net of treatment and refining charges, during the quarter
was $0.82 per pound or 5% lower compared to the prior period.
Gold and silver sales accounted for 68% and 28% of second
quarter revenue, respectively, while zinc and lead sales
contributed approximately 2% each. The Company’s U.S. operations
accounted for approximately 56% of second quarter revenue, down
from approximately 59% in the first quarter primarily due to
increased sales from Palmarejo, which totaled $59.3 million.
Costs applicable to sales were relatively flat
quarter-over-quarter, totaling $131.9 million during the second
quarter. Second quarter general and administrative expenses of $7.8
million were 18% lower quarter-over-quarter, reflecting the
Company’s proactive cost management.
Quarterly exploration expense was $5.7 million, or 54% higher
quarter-over-quarter, reflecting Coeur’s continued commitment to
its success-based exploration program. During the quarter,
exploration activities were focused on resource expansion and
infill drilling at Palmarejo and Kensington as well as resource
expansion drilling at Silvertip and the Sterling and Crown
exploration properties in southern Nevada. See page 12 for further
details.
During the second quarter, the Company recorded an income tax
benefit of $5.5 million, largely attributable to lower taxable
earnings during the quarter. Cash income and mining taxes paid
during the quarter totaled $17.2 million, partially offset by $6.1
million of value-added tax refunds and includes $9.3 million of
previously disclosed cash taxes incurred in connection with Coeur’s
acquisition of Northern Empire Resources Corp. which allows the
Company to utilize its U.S. net operating loss carryforwards
against future income generated from the Sterling and Crown
exploration properties.
Operating cash flow of $26.4 million in the second quarter
reflects improved profitability from Palmarejo, Rochester and
Kensington as well as proceeds from a $25.0 million prepayment,
which more than offset unfavorable changes in other working capital
items during the quarter.
Second quarter capital expenditures totaled $20.7 million,
compared to $27.4 million in the first quarter. Lower capital
expenditures were driven primarily by reduced expenditures at
Kensington, Rochester and Palmarejo, partially offset by higher
investment at Silvertip. Sustaining and development capital
expenditures accounted for approximately 75% and 25%, respectively,
of the Company’s total capital expenditures in the second
quarter.
Second Quarter Debt Reduction Initiatives
During the second quarter, Coeur completed its previously
announced $50.0 million at-the-market common stock offering
program, raising net proceeds (after sales commissions) of $48.9
million.
The Company also amended an existing sales arrangement with a
metal sales counterparty covering a portion of its gold concentrate
from the Kensington mine in consideration for a $25.0 million
prepayment. Pursuant to U.S. GAAP, Coeur recorded the $25.0 million
as deferred revenue which is presented in accrued liabilities on
the Company’s balance sheet. Under the terms of the prepayment,
Coeur maintains its exposure to the price of gold and expects to
recognize the full value of the accrued liability by the end of
2019.
Together with cash and cash equivalents, proceeds from these
transactions were used to help repay $82.0 million of outstanding
indebtedness under the Company’s $250.0 million senior secured
revolving credit facility during the second quarter.
On August 6, 2019, the Company amended its credit agreement with
respect to its senior secured revolving credit facility to provide
the Company with additional financial flexibility under its
consolidated interest coverage ratio as of June 30, 2019.
Richmond Hill Project Option Agreement
In June 2019, Coeur entered into the Option Agreement with
Barrick that provides the Company an exclusive option to acquire
the Richmond Hill Project, which is located approximately four
miles from its Wharf mine in South Dakota. The Project is a past
producing gold operation with a total land package of approximately
2,340 acres.
Under the terms of the Option Agreement, Coeur may acquire 100%
of the Project in consideration for:
- 2% - 3% net smelter returns royalty to Barrick on encumbered
and unencumbered land, respectively, at the Project
- Assumption of the Project’s reclamation obligation, currently
understood to have a value of approximately $21 million
There are no minimum spending requirements under the terms of
the Option Agreement, and Coeur’s exclusive option to acquire 100%
of the Project expires in September 2021.
Operations
Second quarter 2019 highlights for each of the Company’s
operations are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce
amounts)
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Tons milled
447,727
378,987
378,389
300,116
344,073
Average gold grade (oz/t)
0.07
0.07
0.08
0.10
0.11
Average silver grade (oz/t)
4.74
4.64
5.96
6.26
6.86
Average recovery rate – Au
87.7%
83.4%
97.6%
88.8%
89.9%
Average recovery rate – Ag
81.8%
72.8%
84.0%
82.2%
87.5%
Gold ounces produced
28,246
23,205
31,239
27,885
33,702
Silver ounces produced (000’s)
1,735
1,278
1,893
1,544
2,066
Gold ounces sold
28,027
27,394
23,667
29,830
31,207
Silver ounces sold (000’s)
1,709
1,405
1,534
1,572
2,092
Average realized price per gold
ounce
$1,210
$1,154
$1,148
$1,082
$1,162
Average realized price per silver
ounce
$14.86
$15.39
$14.57
$14.75
$16.49
Metal sales
$59.3
$53.2
$49.6
$55.5
$70.7
Costs applicable to sales
$36.5
$33.2
$27.1
$31.6
$30.3
Adjusted CAS per AuOz1
$741
$713
$624
$615
$497
Adjusted CAS per AgOz1
$9.17
$9.66
$7.92
$8.39
$7.05
Exploration expense
$1.1
$1.0
$0.1
$3.2
$3.2
Cash flow from operating
activities
$15.6
$5.9
$13.3
$8.6
$1.3
Sustaining capital expenditures
(excludes capital lease payments)
$5.0
$6.0
$3.6
$2.0
$9.5
Development capital
expenditures
$2.6
$2.7
$2.3
$2.7
$—
Total capital expenditures
$7.6
$8.7
$5.9
$4.7
$9.5
Free cash flow1
$8.0
$(2.8)
$7.4
$3.9
$(8.2)
- Second quarter gold and silver production increased 22% and
36%, respectively, to 28,246 and 1.7 million ounces compared to the
prior quarter. Year-over-year, gold and silver production decreased
approximately 16%
- Higher production during the quarter was primarily driven by an
18% increase in mill throughput as well as improved access to
higher-grade secondary stopes with better recoveries due to the
maintenance and expansion of the cemented rockfill plant, which was
completed in the prior quarter
- Second quarter adjusted CAS1 for gold on a co-product basis
increased 4% to $741 per ounce, while adjusted CAS1 for silver on a
co-product basis decreased 5% to $9.17 per ounce compared to the
first quarter. Adjusted CAS1 reflect comparatively higher silver
sales quarter-over-quarter and remained within full-year guidance
ranges
- Free cash flow1 of $8.0 million during the second quarter was
driven by higher operating cash flow from increased metal sales as
well as slightly lower capital expenditures. Capital expenditures
during the quarter were focused on mine development and
infrastructure projects
- Production began at the La Nación deposit, located between the
Independencia and Guadalupe underground mines, shortly after the
end of the second quarter. Production at La Nación is anticipated
to continue ramping up during the third quarter as infrastructure
projects are completed, adding approximately 400 tons per day of
additional mill feed
- Commissioning of a new thickener was completed on budget and on
schedule earlier this month. The project is expected to increase
metallurgical recoveries for both gold and silver by approximately
2% and has an estimated one-year payback
- Full-year 2019 production guidance remains unchanged at 95,000
- 105,000 ounces of gold and 6.5 - 7.2 million ounces of
silver
- Guidance for CAS and capital expenditures also remains
unchanged. CAS are expected to be $650 - $750 per gold ounce and
$9.00 - $10.00 per silver ounce. Capital expenditures are expected
to be approximately $40 - $45 million
Rochester, Nevada
(Dollars in millions, except per ounce
amounts)
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Ore tons placed
2,786,287
2,667,559
3,674,566
4,061,082
4,083,028
Average silver grade (oz/t)
0.45
0.46
0.46
0.52
0.53
Average gold grade (oz/t)
0.003
0.003
0.004
0.004
0.004
Silver ounces produced (000’s)
971
960
1,466
1,290
1,125
Gold ounces produced
8,609
8,256
15,926
14,702
12,273
Silver ounces sold (000’s)
962
1,000
1,391
1,248
1,097
Gold ounces sold
8,642
8,511
15,339
14,257
12,030
Average realized price per silver
ounce
$14.83
$15.31
$14.53
$14.70
$16.47
Average realized price per gold
ounce
$1,295
$1,299
$1,234
$1,204
$1,297
Metal sales
$25.5
$26.4
$39.1
$35.5
$33.7
Costs applicable to sales
$24.7
$22.5
$29.4
$27.5
$24.5
Adjusted CAS per AgOz1
$13.19
$12.83
$10.79
$11.35
$11.89
Adjusted CAS per AuOz1
$1,153
$1,092
$917
$929
$936
Exploration expense
$0.1
$0.1
$—
$0.1
$0.2
Cash flow from operating
activities
$1.6
$(1.0)
$17.9
$5.7
$6.0
Sustaining capital expenditures
(excludes capital lease payments)
$0.4
$1.8
$7.1
$2.7
$0.4
Development capital
expenditures
$2.4
$2.8
$(4.1)
$0.9
$0.3
Total capital expenditures
$2.8
$4.6
$3.0
$3.6
$0.7
Free cash flow1
$(1.2)
$(5.6)
$14.9
$2.1
$5.3
- Silver production remained relatively flat quarter-over-quarter
at approximately 1.0 million ounces, while gold production
increased 4% to 8,609 ounces. Year-over-year, silver and gold
production decreased 14% and 30%, respectively
- Higher gold production was driven by the timing of leach pad
recoveries as well as improved weather conditions. Tons placed also
increased in the second quarter due to the stacking of additional
run-of-mine material, despite the idling of the X-Pit crusher
during May and June for commissioning of the new crusher
configuration
- Second quarter adjusted CAS1 for silver and gold on a
co-product basis increased 3% and 6% to $13.19 and $1,153 per
ounce, respectively, quarter-over-quarter. These increases were
primarily related to the stacking of additional run-of-mine
material and maintenance on the process plant during the
quarter
- Ore is currently being processed by the new three-stage
crushing circuit, including the HPGR unit, despite a three week
setback related to a failed crusher at the end of the second
quarter. Expectations for crushing rates, silver recoveries and
capital requirements for the new crushing circuit remain in-line
with prior estimates. Results during the second half of the year
are expected to continue improving with the integration of the new
crushing circuit and the placement of additional run-of-mine
material on the Stage IV leach pad
- Free cash flow1 of $(1.2) million was driven by capital
expenditures exceeding operating cash flow. Capital expenditures
during the quarter were focused on the new crushing circuit as well
as further development of the Stage IV leach pad
- The Company is maintaining full-year 2019 production guidance
of 4.2 - 5.0 million ounces of silver and 40,000 - 50,000 ounces of
gold. CAS in 2019 are also unchanged and expected to be $12.50 -
$13.50 per silver ounce and $1,000 - $1,100 per gold ounce
- The Company is maintaining its guidance for capital
expenditures, which are expected to be approximately $17 - $20
million, including approximately $12 - $15 million associated with
the new crushing circuit
Kensington, Alaska
(Dollars in millions, except per ounce
amounts)
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Tons milled
160,510
164,332
149,998
163,603
168,751
Average gold grade (oz/t)
0.23
0.20
0.21
0.17
0.16
Average recovery rate
93.0%
90.2%
91.1%
90.4%
92.6%
Gold ounces produced
34,049
29,973
28,421
25,515
25,570
Gold ounces sold
34,415
31,335
24,979
25,648
28,165
Average realized price per gold ounce,
gross
$1,332
$1,301
$1,267
$1,195
$1,305
Treatment and refining charges per gold
ounce
$20
$15
$21
$34
$36
Average realized price per gold ounce,
net
$1,312
$1,286
$1,246
$1,161
$1,269
Metal sales
$45.2
$40.3
$31.1
$29.8
$35.7
Costs applicable to sales
$29.1
$32.2
$21.4
$28.2
$34.2
Adjusted CAS per AuOz1
$842
$990
$843
$1,091
$1,196
Exploration expense
$2.0
$0.5
$1.3
$1.6
$1.4
Cash flow from operating
activities
$41.4
$6.2
$7.9
$(0.4)
$3.2
Sustaining capital expenditures
(excludes capital lease payments)
$4.9
$9.4
$9.8
$9.7
$9.2
Development capital
expenditures
$—
$—
$0.8
$2.3
$1.5
Total capital expenditures
$4.9
$9.4
$10.6
$12.0
$10.7
Free cash flow1
$36.5
$(3.2)
$(2.7)
$(12.4)
$(7.5)
- Commercial production at Jualin was declared on December 1,
2018. The figures shown in the table above exclude pre-commercial
production. Additionally, second quarter operating cash flow and
free cash flow1 figures in the table above include the proceeds
from the $25.0 million prepayment. Excluding the prepayment, second
quarter operating cash flow and free cash flow1 were $16.4 million
and $11.5 million, respectively
- Gold production during the second quarter increased 14% to
34,049 ounces compared to the prior quarter. Year-over-year gold
production increased 33%. Average gold grade was approximately 15%
higher quarter-over-quarter and 44% higher year-over-year driven by
additional ore feed from the high-grade Jualin deposit
- Adjusted CAS1 decreased 15% quarter-over-quarter to $842 per
ounce. The strong cost performance was driven by the processing of
higher-grade ore
- Jualin accounted for approximately 17% of Kensington’s second
quarter production, compared to approximately 10% in the prior
quarter. For the full year, Jualin is expected to account for
approximately 20% of Kensington's total production
- Capital expenditures during the quarter were largely focused on
ongoing underground development
- Full-year 2019 production guidance is unchanged at 117,000 -
130,000 ounces of gold
- Full-year CAS and capital expenditures are also unchanged. CAS
are expected to be $950 - $1,050 per ounce; capital expenditures
are expected to be $20 - $25 million
Wharf, South Dakota
(Dollars in millions, except per ounce
amounts)
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Ore tons placed
919,435
1,090,510
1,644,168
1,127,391
1,075,820
Average gold grade (oz/t)
0.023
0.020
0.020
0.023
0.023
Gold ounces produced
15,680
16,902
16,960
19,437
22,507
Silver ounces produced (000’s)
12
13
13
13
13
Gold ounces sold
15,301
18,086
15,306
19,874
23,053
Silver ounces sold (000’s)
12
14
11
12
14
Average realized price per gold
ounce
$1,311
$1,317
$1,247
$1,198
$1,285
Metal sales
$20.2
$24.0
$19.3
$24.0
$29.8
Costs applicable to sales
$15.5
$17.4
$14.6
$18.0
$19.3
Adjusted CAS per AuOz1
$1,002
$949
$939
$895
$822
Exploration expense
$—
$—
$—
$0.1
$—
Cash flow from operating
activities
$0.5
$4.2
$(1.9)
$3.7
$11.5
Sustaining capital expenditures
(excludes capital lease payments)
$0.2
$0.4
$0.7
$1.2
$1.2
Development capital
expenditures
$—
$—
$—
$—
$—
Total capital expenditures
$0.2
$0.4
$0.7
$1.2
$1.2
Free cash flow1
$0.3
$3.8
$(2.6)
$2.5
$10.3
- Gold production in the second quarter declined 7%
quarter-over-quarter and 30% year-over-year to 15,680 ounces
- Lower production was largely driven by inclement weather, which
diluted leach pad solutions, as well as lower crusher throughput
during the quarter. The Company has engaged a third-party
contractor to crush an additional 300,000 tons of ore primarily
during the third quarter to supplement operating activities
- Adjusted CAS1 on a by-product basis increased 6%
quarter-over-quarter to $1,002 per ounce, primarily as a result of
lower production during the second quarter
- Free cash flow1 of $0.3 million was primarily driven by lower
operating cash flow and partially offset by lower capital
expenditures
- Production is anticipated to increase for the remainder of 2019
due to the placement of higher-grade ore late in the second
quarter, which is expected to continue during the third and fourth
quarters
- The Company is maintaining full-year 2019 production guidance
of 82,000 - 87,000 ounces of gold
- Coeur is also maintaining its full-year 2019 guidance for CAS
and capital expenditures. CAS are expected to be $850 - $950 per
ounce and capital expenditures are expected to be approximately $3
- $5 million
Silvertip, British Columbia
(Dollars in millions, except per ounce
and per pound amounts)
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Tons milled
59,689
62,051
38,802
10,652
—
Average silver grade (oz/t)
7.48
5.50
6.06
6.66
—
Average zinc grade (%)
7.5%
5.90%
5.80%
8.0%
—%
Average lead grade (%)
5.4%
3.7%
3.9%
4.3%
—%
Average recovery rate – Ag
77.0%
69.9%
60.5%
56.3%
—%
Average recovery rate – Zn
59.1%
50.5%
69.1%
64.5%
—%
Average recovery rate – Pb
77.3%
66.8%
54.7%
45.1%
—%
Silver ounces produced (000's)
344
239
142
40
—
Zinc pounds produced (000's)
5,322
3,719
3,082
1,099
—
Lead pounds produced (000's)
4,980
3,077
1,659
413
—
Silver ounces sold (000's)
365
215
124
99
—
Zinc pounds sold (000's)
5,303
4,723
2,604
1,772
—
Lead pounds sold (000's)
5,186
2,748
1,419
1,230
—
Average realized price per silver
ounce, gross
$15.18
$14.98
$15.54
$14.62
$—
Treatment and refining charges per
silver ounce
$1.18
$1.24
$1.38
$3.34
$—
Average realized price per silver
ounce, net
$14.00
$13.74
$14.16
$11.28
$—
Average realized price per zinc pound,
gross
$0.83
$1.50
$1.07
$1.20
$—
Treatment and refining charges per zinc
pound
$0.34
$0.31
$0.24
$0.27
$—
Average realized price per zinc pound,
net
$0.49
$1.19
$0.83
$0.93
$—
Average realized price per lead pound,
gross
$0.87
$0.92
$0.87
$0.97
$—
Treatment and refining charges per lead
pound
$0.05
$0.06
$0.07
$0.07
$—
Average realized price per lead pound,
net
$0.82
$0.86
$0.80
$0.90
$—
Metal sales
$11.9
$10.9
$4.8
$4.1
$—
Costs applicable to sales
$26.2
$26.4
$24.1
$11.5
$—
Adjusted CAS per AgOz1
$13.31
$13.73
$17.68
$9.86
$—
Adjusted CAS per ZnLb1
$1.02
$1.18
$0.95
$0.64
$—
Adjusted CAS per PbLb1
$0.77
$0.88
$1.02
$0.55
$—
Exploration expense
$0.7
$0.1
$0.3
$2.3
$0.1
Cash flow from operating
activities
$(11.6)
$(13.9)
$(34.1)
$(6.8)
$—
Sustaining capital expenditures
(excludes capital lease payments)
$5.0
$4.1
$8.2
$0.4
$—
Development capital
expenditures
$—
$—
$(10.8)
$17.5
$19.0
Total capital expenditures
$5.0
$4.1
$(2.6)
$17.9
$19.0
Free cash flow1
$(16.6)
$(18.0)
$(31.5)
$(24.7)
$(19.0)
- Silvertip achieved commercial production on September 1, 2018.
The figures shown in the table above exclude pre-commercial
production
- Second quarter silver, zinc and lead production increased 44%,
43% and 62%, respectively, compared to the prior quarter, to 0.3
million ounces of silver, 5.3 million pounds of zinc and 5.0
million pounds of lead
- Despite a 4% quarter-over-quarter decrease in mill throughput,
increased production was driven by significantly higher feed grades
and recovery rates across all metals
- Second quarter adjusted CAS1 on a co-product basis were $13.31
per silver ounce, $1.02 per payable zinc pound and $0.77 per
payable lead pound, compared to $13.73, $1.18 and $0.88,
respectively, in the prior quarter
- Free cash flow1 of $(16.6) million was primarily driven by
improved operating cash flow quarter-over-quarter, partially offset
by higher capital expenditures
- The Company continues to execute key projects targeting mill
availability, which are expected to drive further operational
improvements throughout the remainder of the year. Recovery rates
continue to trend upward, with recoveries averaging approximately
81%, 63% and 82% for silver, zinc and lead, respectively, during
June
- The permit amendment application to operate at a year-round
mining and milling rate of 1,100 tons (1,000 metric tonnes) per day
is expected to be received during the third quarter, which is later
than originally expected, but does not have an impact on planned
operations
- Full-year 2019 production guidance is unchanged at 1.5 - 2.5
million ounces of silver, 25 - 40 million pounds of zinc and 20 -
35 million pounds of lead
- Full-year 2019 guidance ranges for CAS and capital expenditures
are also unchanged. CAS are expected to be $14.00 - $16.00 per
ounce of silver, $1.00 - $1.25 per pound of zinc and $0.85 - $1.05
per pound of lead; capital expenditures are expected to total $20 -
$25 million
Exploration
During the second quarter, the Company drilled 151,153 feet
(46,072 meters) at a total cost of $6.8 million ($5.7 million
expensed and $1.1 million capitalized), compared to 90,126 feet
(27,470 meters) at a total cost of $6.6 million ($3.7 million
expensed and $2.9 million capitalized) in the first quarter. Total
feet drilled during the second quarter was approximately 68% higher
compared to the prior period, reflecting Coeur’s continued
commitment to its success-based exploration program as well as a
renewed focus on expansion drilling at Silvertip and the Sterling
and Crown exploration properties. The 2019 drill programs at
Rochester and Wharf are scheduled to begin in the third
quarter.
At Silvertip, two surface core drill rigs began expansion
drilling in the northern and central Discovery Zone, with
encouraging results thus far. Highlights include3: holes
DSC19-Pad4-002 (26.0 feet of 13.76 oz/ton silver, 19.1% zinc, and
8.4% lead) and DSC19-Pad4-004 (25.9 feet of 4.93 oz/ton silver,
12.6% zinc and 3.1% lead). Also, hole DSC19-Pad1-003 intercepted
two significant intercepts (14.8 feet of 15.52 oz/ton silver, 16.5%
zinc and 10.6% lead and 3.6 feet of 2.88 oz/ton silver, 21.4% zinc
and 3.0% lead) demonstrating more evidence for stacked manto
horizons at depth within the Discovery Zone3. Given its success
through the second quarter, the remainder of the 2019 exploration
program will continue to focus on expansion drilling in the
Discovery Zone, north, east and south of the 2018 resource.
At Kensington, three underground core drill rigs were primarily
focused on resource expansion drilling with an emphasis on Lower
Raven and Elmira. Results from the expansion drilling at Elmira
continue to be encouraging. One surface rig began drilling in late
June on the Comet Vein, which lies directly above the Kensington
access tunnel. Limited infill drilling during the quarter was
completed at the Elmira and Raven veins.
At the Sterling and Crown exploration properties, located in
southern Nevada, one reverse circulation rig was active during the
second quarter. The rig was focused on expansion drilling at the
South Daisy resource, which is contained in the Crown Block.
Concurrent geologic mapping and sampling at the Crown Block has
resulted in two new drill targets located within the northern Daisy
area with no prior exploration drilling, both of which will require
amended permits prior to drilling. The Crown Block exploration
drilling and surface mapping are expected to continue through the
third quarter, with one rig focused on the Daisy and SNA resources.
Coeur expects to add an additional rig, initially at the Sterling
Mine, and move it to the northern portion of Crown Block later in
the year.
At Palmarejo, up to ten surface and underground core rigs were
active during the second quarter. Infill drilling focused on La
Nación as well as veins northwest and northeast of the Guadalupe
mine with encouraging results particularly at La Nación and
Northwest Guadalupe. Expansion drilling focused on extending
mineralization northwest from the Guadalupe mine and north of the
Independencia mine. The Company plans to continue expansion
drilling at the North Independencia and the Northwest Guadalupe
zones during the third quarter, as well as adding a third rig
focused on expanding the inferred resource at Independencia East,
located approximately 1,970 feet (600 meters) east of the current
Independencia mine.
At the La Preciosa project, located in Durango, Mexico, a new
geological model of the La Gloria-Abundancia vein structures has
highlighted potential opportunities for a higher-grade, lower
tonnage resource. The Company expects to continue working during
the second half of the year to extend the review to the deeper, but
larger Martha structure.
The Company also engaged in greenfield exploration during the
quarter, funding drilling at Evrim Resources Corp.’s El Sarape
Project, located in Sonora, Mexico. Following the completion of a
ten drillhole program, Coeur elected to discontinue its option
agreement for the exploration and development of the El Sarape
Project.
2019 Production Guidance
Gold
Silver
Zinc
Lead
(oz)
(K oz)
(K lbs)
(K lbs)
Palmarejo
95,000 - 105,000
6,500 - 7,200
—
—
Rochester
40,000 - 50,000
4,200 - 5,000
—
—
Kensington
117,000 - 130,000
—
—
—
Wharf
82,000 - 87,000
—
—
—
Silvertip
—
1,500 - 2,500
25,000 - 40,000
20,000 - 35,000
Total
334,000 - 372,000
12,200 - 14,700
25,000 - 40,000
20,000 - 35,000
2019 Costs Applicable to Sales Guidance
Gold
Silver
Zinc
Lead
($/oz)
($/oz)
($/lb)
($/lb)
Palmarejo (co-product)
$650 - $750
$9.00 - $10.00
—
—
Rochester (co-product)
$1,000 - $1,100
$12.50 - $13.50
—
—
Kensington
$950 - $1,050
—
—
—
Wharf (by-product)
$850 - $950
—
—
—
Silvertip (co-product)
—
$14.00 - $16.00
$1.00 - $1.25
$0.85 - $1.05
2019 Capital, Exploration and G&A Guidance
($M)
Capital Expenditures,
Sustaining
$70 - $80
Capital Expenditures,
Development
$30 - $40
Exploration, Expensed
$18 - $22
Exploration, Capitalized
$8 - $12
General & Administrative
Expenses
$32 - $36
Note: The Company’s guidance figures assume $1,275/oz gold,
$15.50/oz silver, $1.15/lb zinc and $0.95/lb lead as well as CAD of
1.30 and MXN of 20.00.
Financial Results and Conference Call
Coeur will host a conference call to discuss its second quarter
financial results on August 8, 2019 at 11:00 a.m. Eastern Time.
Dial-In Numbers:
(855) 560-2581 (U.S.)
(855) 669-9657 (Canada)
(412) 542-4166 (International)
Conference ID:
Coeur Mining
Hosting the call will be Mitchell J. Krebs, President and Chief
Executive Officer of Coeur, who will be joined by Thomas S. Whelan,
Senior Vice President and Chief Financial Officer, Terry F. D.
Smith, Senior Vice President of Operations, Hans J. Rasmussen,
Senior Vice President of Exploration, and other members of
management. A replay of the call will be available through August
22, 2019.
Replay numbers:
(877) 344-7529 (U.S.)
(855) 669-9658 (Canada)
(412) 317-0088 (International)
Conference ID:
101 32 149
About Coeur
Coeur Mining, Inc. is a U.S.-based, well-diversified, growing
precious metals producer with five wholly-owned operations: the
Palmarejo gold-silver complex in Mexico, the Rochester silver-gold
mine in Nevada, the Kensington gold mine in Alaska, the Wharf gold
mine in South Dakota, and the Silvertip silver-zinc-lead mine in
British Columbia. In addition, the Company has interests in several
precious metals exploration projects throughout North America.
Cautionary Statements
This news release contains forward-looking statements within the
meaning of securities legislation in the United States and Canada,
including statements regarding anticipated production, costs,
capital expenditures, recovery rates, exploration expenditures,
expenses, cash flow, expectations regarding Silvertip, including
but not limited to timing of receipt of permits, grades,
exploration and development efforts, the impact of commissioning of
the new crushing circuit at Rochester, potential impact of the
Richmond Hill Project on Wharf and operations at Palmarejo,
Rochester, Wharf, Kensington and Silvertip. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause Coeur’s actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. Such factors include, among others, the
risk that Silvertip will not obtain necessary permits on the
expected timeline or at all, the risk that the commissioning of the
new crushing circuit at Rochester will not occur on a timely basis
or the anticipated benefits thereof will not be achieved, the risk
that the Richmond Hill Project will not be feasible, the risk that
anticipated production, cost and expense levels are not attained,
the risks and hazards inherent in the mining business (including
risks inherent in developing large-scale mining projects,
environmental hazards, industrial accidents, weather or
geologically related conditions), changes in the market prices of
gold, silver, zinc and lead and a sustained lower price
environment, the uncertainties inherent in Coeur’s production,
exploratory and developmental activities, including risks relating
to permitting and regulatory delays (including the impact of
government shutdowns), ground conditions, grade variability, any
future labor disputes or work stoppages, the uncertainties inherent
in the estimation of mineral reserves, changes that could result
from Coeur’s future acquisition of new mining properties or
businesses, the loss of any third-party smelter to which Coeur
markets its production, the effects of environmental and other
governmental regulations, the risks inherent in the ownership or
operation of or investment in mining properties or businesses in
foreign countries, Coeur’s ability to raise additional financing
necessary to conduct its business, make payments or refinance its
debt, as well as other uncertainties and risk factors set out in
filings made from time to time with the United States Securities
and Exchange Commission, and the Canadian securities regulators,
including, without limitation, Coeur’s most recent reports on Form
10-K and Form 10-Q. Actual results, developments and timetables
could vary significantly from the estimates presented. Readers are
cautioned not to put undue reliance on forward-looking statements.
Coeur disclaims any intent or obligation to update publicly such
forward-looking statements, whether as a result of new information,
future events or otherwise. Additionally, Coeur undertakes no
obligation to comment on analyses, expectations or statements made
by third parties in respect of Coeur, its financial or operating
results or its securities.
Christopher Pascoe, Coeur’s Director, Technical Services and a
qualified person under Canadian National Instrument 43-101,
approved the scientific and technical information concerning
Coeur’s mineral projects in this news release. For a description of
the key assumptions, parameters and methods used to estimate
mineral reserves and resources, as well as data verification
procedures and a general discussion of the extent to which the
estimates may be affected by any known environmental, permitting,
legal, title, taxation, socio-political, marketing or other
relevant factors, Canadian investors should refer to the Technical
Reports for each of Coeur’s properties as filed on SEDAR at
www.sedar.com.
Non-U.S. GAAP Measures
We supplement the reporting of our financial information
determined under United States generally accepted accounting
principles (U.S. GAAP) with certain non-U.S. GAAP financial
measures, including EBITDA, adjusted EBITDA, adjusted EBITDA
margin, free cash flow, adjusted net income (loss) and adjusted
costs applicable to sales per ounce (gold and silver) or pound
(zinc or lead). We believe that these adjusted measures provide
meaningful information to assist management, investors and analysts
in understanding our financial results and assessing our prospects
for future performance. We believe these adjusted financial
measures are important indicators of our recurring operations
because they exclude items that may not be indicative of, or are
unrelated to our core operating results, and provide a better
baseline for analyzing trends in our underlying businesses. We
believe EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash
flow, adjusted net income (loss) and adjusted costs applicable to
sales per ounce (gold and silver) and pound (zinc and lead) are
important measures in assessing the Company’s overall financial
performance. For additional explanation regarding our use of
non-U.S. GAAP financial measures, please refer to our Form 10-K for
the year ended December 31, 2018.
Notes
- EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net
income (loss) and adjusted costs applicable to sales per ounce
(gold and silver) or pound (lead and zinc) are non-GAAP measures.
Please see tables in the Appendix for the reconciliation to U.S.
GAAP. Free cash flow is defined as cash flow from operating
activities less capital expenditures and gold production royalty
payments. Please see table in Appendix for the calculation of
consolidated free cash flow.
- Includes capital leases. Net of debt issuance costs and premium
received.
- For a complete table of all of Silvertip’s 2019 drill results,
please refer to the following link:
http://www.coeur.com/_resources/pdfs/2019-08-07Silvertip-Expansion-Drill-Results.pdf.
Average Spot Prices
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Average Silver Spot Price Per Ounce
$
14.88
$
15.57
$
14.54
$
15.02
$
16.53
Average Gold Spot Price Per Ounce
$
1,309
$
1,304
$
1,226
$
1,213
$
1,306
Average Zinc Spot Price Per Pound
$
1.25
$
1.23
$
1.19
$
1.15
$
1.41
Average Lead Spot Price Per Pound
$
0.85
$
0.92
$
0.89
$
0.95
$
1.08
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
June 30, 2019
(unaudited)
December 31, 2018
ASSETS
In thousands, except share
data
CURRENT ASSETS
Cash and cash equivalents
$
37,907
$
115,081
Receivables
38,495
29,744
Inventory
59,048
66,279
Ore on leach pads
72,310
75,122
Prepaid expenses and other
12,066
11,393
219,826
297,619
NON-CURRENT ASSETS
Property, plant and equipment, net
298,926
298,451
Mining properties, net
945,839
971,567
Ore on leach pads
76,910
66,964
Restricted assets
8,730
12,133
Equity and debt securities
19,457
17,806
Receivables
31,871
31,151
Other
75,671
16,809
TOTAL ASSETS
$
1,677,230
$
1,712,500
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable
$
65,676
$
47,210
Accrued liabilities and other
116,187
82,619
Debt
21,772
24,937
Reclamation
6,552
6,552
210,187
161,318
NON-CURRENT LIABILITIES
Debt
348,205
433,889
Reclamation
133,127
128,994
Deferred tax liabilities
61,653
79,070
Other long-term liabilities
77,612
56,717
620,597
698,670
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share;
authorized 300,000,000 shares, 221,858,660 issued and outstanding
at June 30, 2019 and 203,310,443 at December 31, 2018
2,219
2,033
Additional paid-in capital
3,492,736
3,443,082
Accumulated other comprehensive income
(loss)
—
(59
)
Accumulated deficit
(2,648,509
)
(2,592,544
)
846,446
852,512
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
1,677,230
$
1,712,500
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
In thousands, except share
data
Revenue
$
162,123
$
169,987
$
316,993
$
333,254
COSTS AND EXPENSES
Costs applicable to sales(1)
131,948
108,246
263,598
207,586
Amortization
43,204
29,459
85,080
60,236
General and administrative
7,750
7,650
17,224
16,454
Exploration
5,719
6,429
9,433
13,112
Pre-development, reclamation, and
other
4,334
3,620
8,768
7,845
Total costs and expenses
192,955
155,404
384,103
305,233
OTHER INCOME (EXPENSE), NET
Fair value adjustments, net
(5,296
)
(2,462
)
3,824
2,192
Interest expense, net of capitalized
interest
(6,825
)
(6,018
)
(13,279
)
(11,983
)
Other, net
643
544
703
1,057
Total other income (expense), net
(11,478
)
(7,936
)
(8,752
)
(8,734
)
Income (loss) before income and mining
taxes
(42,310
)
6,647
(75,862
)
19,287
Income and mining tax (expense)
benefit
5,546
(3,717
)
14,204
(15,666
)
Income (loss) from continuing
operations
$
(36,764
)
$
2,930
$
(61,658
)
$
3,621
Income (loss) from discontinued
operations
—
—
5,693
550
NET INCOME (LOSS)
$
(36,764
)
$
2,930
$
(55,965
)
$
4,171
OTHER COMPREHENSIVE INCOME (LOSS), net of
tax:
Unrealized gain (loss) on debt and equity
securities
—
(87
)
59
(365
)
Other comprehensive income (loss)
—
(87
)
59
(365
)
COMPREHENSIVE INCOME (LOSS)
$
(36,764
)
$
2,843
$
(55,906
)
$
3,806
NET INCOME (LOSS) PER SHARE
Basic income (loss) per share:
Net income (loss) from continuing
operations
$
(0.18
)
$
0.02
$
(0.30
)
$
0.02
Net income (loss) from discontinued
operations
0.00
0.00
0.03
0.00
Basic(2)
$
(0.18
)
$
0.02
$
(0.27
)
$
0.02
Diluted income (loss) per share:
Net income (loss) from continuing
operations
$
(0.18
)
$
0.02
$
(0.30
)
$
0.02
Net income (loss) from discontinued
operations
0.00
0.00
0.03
0.00
Diluted(2)
$
(0.18
)
$
0.02
$
(0.27
)
$
0.02
(1) Excludes amortization.
(2) Due to rounding, the sum of net income
per share from continuing operations and discontinued operations
may not equal net income per share.
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
(36,764
)
$
2,930
$
(55,965
)
$
4,171
(Income) loss from discontinued
operations
—
—
(5,693
)
(550
)
Adjustments:
Amortization
43,204
29,459
85,080
60,236
Accretion
3,007
3,886
5,950
7,204
Deferred taxes
(9,158
)
(1,265
)
(17,417
)
(811
)
Fair value adjustments, net
5,296
2,462
(3,824
)
(2,192
)
Stock-based compensation
1,987
1,850
4,210
4,636
Inventory write-downs
11,872
—
27,319
—
Other
4,731
2,174
5,981
2,242
Changes in operating assets and
liabilities:
Receivables
(7,624
)
(8,888
)
(17,359
)
(10,579
)
Prepaid expenses and other current
assets
(834
)
8,126
(3,518
)
2,491
Inventory and ore on leach pads
(14,391
)
(2,766
)
(33,212
)
(11,474
)
Accounts payable and accrued
liabilities
25,109
(39,262
)
19,037
(41,127
)
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES OF CONTINUING OPERATIONS
26,435
(1,294
)
10,589
14,247
CASH USED IN OPERATING ACTIVITIES OF
DISCONTINUED OPERATIONS
—
—
—
(2,690
)
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES
26,435
(1,294
)
10,589
11,557
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(20,749
)
(41,165
)
(48,187
)
(83,510
)
Proceeds from the sale of assets
57
96
904
156
Purchase of investments
—
(39
)
—
(400
)
Sale of investments
1,102
11,141
1,102
12,760
Proceeds from notes receivable
2,000
—
7,168
—
Other
277
(33
)
2,018
(98
)
CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES OF CONTINUING OPERATIONS
(17,313
)
(30,000
)
(36,995
)
(71,092
)
CASH USED IN INVESTING ACTIVITIES OF
DISCONTINUED OPERATIONS
—
—
—
(28,470
)
CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES
(17,313
)
(30,000
)
(36,995
)
(99,562
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock
48,887
—
48,887
—
Issuance of notes and bank borrowings, net
of issuance costs
—
—
15,000
15,000
Payments on debt, finance leases, and
associated costs
(90,812
)
(4,373
)
(113,273
)
(22,822
)
Other
—
(233
)
(3,259
)
(4,839
)
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES OF CONTINUING OPERATIONS
(41,925
)
(4,606
)
(52,645
)
(12,661
)
CASH USED IN FINANCING ACTIVITIES OF
DISCONTINUED OPERATIONS
—
—
—
(22
)
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES
(41,925
)
(4,606
)
(52,645
)
(12,683
)
Effect of exchange rate changes on cash
and cash equivalents
56
(175
)
257
382
INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
(32,747
)
(36,075
)
(78,794
)
(100,306
)
Less net cash used in discontinued
operations(1)
—
—
—
(32,930
)
(32,747
)
(36,075
)
(78,794
)
(67,376
)
Cash, cash equivalents and restricted cash
at beginning of period
72,022
172,101
118,069
203,402
Cash, cash equivalents and restricted cash
at end of period
$
39,275
$
136,026
$
39,275
$
136,026
(1) Less net cash used in discontinued
operations includes the following cash transactions: net subsidiary
payments to parent company of $1,748, during the six months ended
June 30, 2018.
Adjusted EBITDA
Reconciliation
(Dollars in thousands except per share
amounts)
LTM 2Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Net income (loss)
$
(108,541
)
$
(36,764
)
$
(19,201
)
$
468
$
(53,044
)
$
2,930
(Income) loss from discontinued
operations, net of tax
(5,693
)
—
(5,693
)
—
—
—
Interest expense, net of capitalized
interest
25,660
6,825
6,454
6,563
5,818
6,018
Income tax provision (benefit)
(46,650
)
(5,546
)
(8,658
)
(36,231
)
3,785
3,717
Amortization
153,317
43,204
41,876
37,053
31,184
29,459
EBITDA
18,093
7,719
14,778
7,853
(12,257
)
42,124
Fair value adjustments, net
(5,270
)
5,296
(9,120
)
(731
)
(715
)
2,462
Foreign exchange (gain) loss
6,223
468
665
1,986
3,104
3,309
(Gain) loss on sale of assets and
securities
346
72
(52
)
298
28
(586
)
Mexico inflation adjustment
—
—
—
—
—
(1,939
)
Transaction costs
5
—
—
(1,044
)
1,049
—
Interest income on notes receivables
(1,153
)
(18
)
(180
)
(327
)
(628
)
(573
)
Manquiri sale consideration write-down
18,599
—
—
—
18,599
—
Silvertip start-up write-down
54,039
11,872
15,447
17,974
8,746
—
Rochester In-Pit crusher write-down
3,441
—
—
—
3,441
—
Receivable write-down
6,536
—
6,536
—
—
Asset retirement obligation accretion
11,580
3,007
2,943
2,747
2,883
2,817
Inventory adjustments and write-downs
3,856
2,193
1,623
858
421
817
Adjusted EBITDA
$
116,295
$
30,609
$
26,104
$
36,150
$
24,671
$
48,431
Revenue
$
609,643
$
162,123
$
154,870
143,855
$
148,795
$
169,987
Adjusted EBITDA Margin
19
%
19
%
17
%
25
%
17
%
28
%
Adjusted Net Income (Loss)
Reconciliation
(Dollars in thousands except per share
amounts)
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Net income (loss)
$
(36,764
)
$
(19,201
)
$
468
$
(53,044
)
$
2,930
Income loss from discontinued operations,
net of tax
—
(5,693
)
—
—
—
Fair value adjustments, net
5,296
(9,120
)
(731
)
(715
)
2,462
(Gain) loss on sale of assets and
securities
72
(52
)
326
—
(586
)
Gain on repurchase of Rochester
royalty
—
—
(28
)
28
—
Mexico inflation adjustment
—
—
—
—
(1,939
)
Transaction costs
—
—
(1,044
)
1,049
—
Interest income on notes receivables
(18
)
(180
)
(327
)
(628
)
(573
)
Manquiri sale consideration write-down
—
—
—
18,599
—
Silvertip start-up write-down
11,872
15,447
17,974
8,746
—
Rochester In-Pit crusher write-down
—
—
—
3,441
—
Receivable write-down
—
—
6,536
—
—
Foreign exchange loss (gain)
889
1,256
(530
)
6,062
(1,233
)
Tax effect of adjustments(1)
(4,332
)
(5,415
)
(6,559
)
(3,191
)
—
Adjusted net income (loss)
$
(22,985
)
$
(22,958
)
$
16,085
$
(19,653
)
$
1,061
Adjusted net income (loss) per share -
Basic
$
(0.11
)
$
(0.11
)
$
0.08
$
(0.11
)
$
0.01
Adjusted net income (loss) per share -
Diluted
$
(0.11
)
$
(0.11
)
$
0.08
$
(0.11
)
$
0.01
Consolidated Free Cash Flow
Reconciliation
(Dollars in thousands)
2Q 2019
1Q 2019
4Q 2018
3Q 2018
2Q 2018
Cash flow from continuing operations
$
26,435
$
(15,846
)
$
72
$
5,789
$
(1,294
)
Capital expenditures from continuing
operations
20,749
27,438
17,805
39,472
41,165
Free cash flow
5,686
(43,284
)
(17,733
)
(33,683
)
(42,459
)
Reconciliation of Costs
Applicable to Sales
for Three Months Ended June
30, 2019
In thousands except per ounce or per
pound amounts
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
50,708
$
28,656
$
41,670
$
17,691
$
36,038
$
174,763
Amortization
(14,212
)
(3,963
)
(12,537
)
(2,225
)
(9,878
)
(42,815
)
Costs applicable to sales
$
36,496
$
24,693
$
29,133
$
15,466
$
26,160
$
131,948
Inventory Adjustments
(39
)
(2,045
)
(156
)
48
(11,872
)
(14,064
)
By-product credit
—
—
—
(188
)
—
(188
)
Adjusted costs applicable to
sales
$
36,457
$
22,648
$
28,977
$
15,326
$
14,288
$
117,696
Metal Sales
Gold ounces
28,027
8,642
34,415
15,301
—
86,385
Silver ounces
1,709,406
961,634
12,364
364,961
3,048,365
Zinc pounds
5,302,508
5,302,508
Lead pounds
5,185,634
5,185,634
Revenue Split
Gold
57
%
44
%
100
%
100
%
Silver
43
%
56
%
34
%
Zinc
38
%
Lead
28
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
741
$
1,153
$
842
$
1,002
Silver ($/oz)
$
9.17
$
13.19
$
13.31
Zinc ($/lb)
$
1.02
Lead ($/lb)
$
0.77
Reconciliation of Costs
Applicable to Sales
for Three Months Ended March
31, 2019
In thousands except per ounce or per
pound amounts
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
47,772
$
26,491
$
43,902
$
20,073
$
34,811
$
173,049
Amortization
(14,528
)
(4,037
)
(11,727
)
(2,681
)
(8,426
)
(41,399
)
Costs applicable to sales
$
33,244
$
22,454
$
32,175
$
17,392
$
26,385
$
131,650
Inventory Adjustments
(141
)
(323
)
(1,164
)
(5
)
(15,447
)
(17,080
)
By-product credit
—
—
—
(217
)
—
(217
)
Adjusted costs applicable to
sales
$
33,103
$
22,131
$
31,011
$
17,170
$
10,938
$
114,353
Metal Sales
Gold ounces
27,394
8,511
31,335
18,086
85,326
Silver ounces
1,405,409
1,000,453
—
14,052
215,101
2,635,015
Zinc pounds
4,723,069
4,723,069
Lead pounds
2,747,847
2,747,847
Revenue Split
Gold
59
%
42
%
100
%
100
%
Silver
41
%
58
%
27
%
Zinc
51
%
Lead
22
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
713
$
1,092
$
990
$
949
Silver ($/oz)
$
9.66
$
12.83
$
13.73
Zinc ($/lb)
$
1.18
Lead ($/lb)
$
0.88
Reconciliation of Costs
Applicable to Sales
for Three Months Ended
December 31, 2018
In thousands except per ounce or per
pound amounts
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
42,119
$
35,365
$
30,703
$
16,839
$
28,246
$
153,272
Amortization
(14,992
)
(5,992
)
(9,437
)
(2,184
)
(4,161
)
(36,766
)
Costs applicable to sales
$
27,127
$
29,373
$
21,266
$
14,655
$
24,085
$
116,506
Inventory Adjustments
(205
)
(312
)
(220
)
(121
)
(17,974
)
(18,832
)
By-product credit
—
—
—
(166
)
—
(166
)
Adjusted costs applicable to
sales
$
26,922
$
29,061
$
21,046
$
14,368
$
6,111
$
97,508
Metal Sales
Gold ounces
23,667
15,338
24,979
15,306
79,290
Silver ounces
1,534,595
1,389,916
—
10,932
124,144
3,059,587
Zinc pounds
2,603,972
2,603,972
Lead pounds
1,418,653
1,418,653
Revenue Split
Gold
55
%
48
%
100
%
100
%
Silver
45
%
52
%
36
%
Zinc
40
%
Lead
24
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
624
$
917
$
843
$
939
Silver ($/oz)
$
7.92
$
10.79
$
17.68
Zinc ($/lb)
$
0.95
Lead ($/lb)
$
1.02
Reconciliation of Costs
Applicable to Sales
for Three Months Ended
September 30, 2018
In thousands except per ounce or per
pound amounts
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
46,349
$
32,842
$
35,153
$
20,856
$
12,609
$
147,809
Amortization
(14,795
)
(5,294
)
(6,912
)
(2,878
)
(1,073
)
(30,952
)
Costs applicable to sales
$
31,554
$
27,548
$
28,241
$
17,978
$
11,536
$
116,857
Inventory Adjustments
(16
)
(136
)
(265
)
(4
)
(8,746
)
(9,167
)
By-product credit
—
—
—
(177
)
—
(177
)
Adjusted costs applicable to
sales
$
31,538
$
27,412
$
27,976
$
17,797
$
2,790
$
107,513
Metal Sales
Gold ounces
29,831
14,257
25,648
19,874
89,610
Silver ounces
1,572,093
1,248,163
—
12,426
98,831
2,931,513
Zinc pounds
1,772,023
1,772,023
Lead pounds
1,230,266
1,230,266
Revenue Split
Gold
58
%
48
%
100
%
100
%
Silver
42
%
52
%
35
%
Zinc
41
%
Lead
24
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
615
$
929
$
1,091
$
895
Silver ($/oz)
$
8.39
$
11.35
$
9.86
Zinc ($/lb)
$
0.64
Lead ($/lb)
$
0.55
Reconciliation of Costs
Applicable to Sales
for Three Months Ended June
30, 2018
In thousands except per ounce or per
pound amounts
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
44,944
$
29,243
$
40,668
$
22,611
$
—
$
137,466
Amortization
(14,633
)
(4,793
)
(6,441
)
(3,353
)
—
(29,220
)
Costs applicable to sales
$
30,311
$
24,450
$
34,227
$
19,258
$
—
$
108,246
Inventory Adjustments
(41
)
(144
)
(551
)
(81
)
—
(817
)
By-product credit
—
—
—
(220
)
—
(220
)
Adjusted costs applicable to
sales
$
30,270
$
24,306
$
33,676
$
18,957
$
—
$
107,209
Metal Sales
Gold ounces
31,207
12,031
28,165
23,053
94,456
Silver ounces
2,091,788
1,097,272
—
13,744
—
3,202,804
Zinc pounds
—
—
Lead pounds
—
—
Revenue Split
Gold
51
%
46
%
100
%
100
%
Silver
49
%
54
%
—
%
Zinc
—
%
Lead
—
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
497
$
936
$
1,196
$
822
Silver ($/oz)
$
7.05
$
11.89
$
—
Zinc ($/lb)
$
—
Lead ($/lb)
$
—
Reconciliation of Costs
Applicable to Sales for 2019 Guidance
In thousands except per ounce
amounts
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
196,310
$
131,918
$
154,285
$
90,299
$
156,417
$
729,229
Amortization
62,808
21,606
36,909
11,583
57,177
190,083
Costs applicable to sales
$
133,502
$
110,312
$
117,376
$
78,716
$
99,240
$
539,146
By-product credit
—
—
—
(1,167
)
—
(1,167
)
Adjusted costs applicable to
sales
$
133,502
$
110,312
$
117,376
$
77,549
$
99,240
$
537,979
Metal Sales
Gold ounces
100,000
45,000
121,000
85,500
Silver ounces
6,850,000
4,800,000
75,000
2,100,000
Zinc pounds
35,000,000
Lead pounds
28,500,000
Revenue Split
Gold
52%
43%
100%
100%
—
Silver
48%
57%
—
—
32%
Zinc
—
—
—
—
40%
Lead
—
—
—
—
28%
Costs applicable to sales per
ounce
Gold ($/oz)
$650 - $750
$1,000 - $1,100
$950 - $1,050
$850 - $950
—
Silver ($/oz)
$9.00 - $10.00
$12.50 - $13.50
—
—
$14.00 - $16.00
Zinc ($/lb)
—
—
—
—
$1.00 - $1.25
Lead ($/lb)
—
—
—
—
$0.85 - $1.05
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190807005802/en/
Coeur Mining, Inc. 104 S. Michigan Avenue, Suite 900 Chicago, IL
60603 Attention: Paul DePartout, Director, Investor Relations
Phone: (312) 489-5800 www.coeur.com
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