Full-Year Production and Cost Guidance
Reaffirmed
Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today
reported third quarter 2019 financial results, including revenue of
$199.5 million and cash flow from operating activities of $42.0
million. Including non-cash write downs of $15.0 million taken in
the quarter, the Company reported GAAP net loss from continuing
operations of $14.3 million, or $0.06 per share. On an adjusted
basis1, the Company reported EBITDA of $61.0 million and net loss
from continuing operations of $5.3 million, or $0.02 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
- Strong increases in quarterly financial results -
Revenue, operating cash flow and adjusted EBITDA1 increased 23%,
59% and 99%, respectively, quarter-over-quarter. Strong financial
performance was driven by a 15% increase in Companywide gold
production and higher precious metals prices during the
quarter
- Second consecutive quarter of positive free cash flow1 -
The Company generated $11.3 million of free cash flow1 during the
third quarter, approximately double the amount in the prior period.
The second consecutive quarter of positive free cash flow1 was
driven by strong performance at Palmarejo and Wharf
- Successful commissioning of new crushing circuit at
Rochester - Rochester began processing ore through its new
three-stage crushing circuit, including the high-pressure grinding
roll (“HPGR”) unit, during the quarter. Fourth quarter results are
expected to improve, reflecting a full quarter with the new crusher
circuit in place
- Continued strong performance at Kensington -
Kensington produced 34,156 ounces of gold and recorded adjusted
costs applicable to sales (“CAS”)1 of $822 per ounce during the
quarter. Results reflect the continued benefit of higher-grade ore
from Jualin, which is expected to drive production and costs
in-line with full-year guidance ranges
- 19% quarter-over-quarter reduction in total debt2 -
Coeur retired over $70.0 million of indebtedness during the
quarter, including the remaining balance outstanding under its
$250.0 million senior secured revolving credit facility (the
“RCF”). The Company has reduced total debt2 by approximately $160.0
million since the beginning of the year
- 72% increase in cash and equivalents - Cash and
equivalents as of September 30, 2019 totaled $65.3 million, 72%
higher compared to the prior period
“We made significant progress during the third quarter toward
achieving our full-year 2019 operational and financial objectives,”
said Mitchell J. Krebs, President and Chief Executive Officer. “The
combination of strong operational performance and higher prices led
to a 23% increase in revenue, a near doubling of adjusted EBITDA1
and positive free cash flow1 for the second consecutive quarter. We
also improved our financial flexibility by materially reducing our
debt level and bolstering our liquidity while continuing to invest
in near-mine exploration and high-return organic growth
opportunities.”
“At the Silvertip silver-zinc-lead mine in British Columbia,
Canada, we continue to make steady progress addressing the
operation’s mill availability challenges. We extended the amount of
planned downtime during the quarter to prioritize the completion of
several key projects, which resulted in lower production levels.
However, we mobilized additional third-party resources during the
quarter to accelerate our mill stabilization efforts, which are now
having the intended impact.”
Mr. Krebs continued, “We anticipate this strong performance to
continue in the fourth quarter as we seek to generate a third
consecutive quarter of increasing, positive free cash flow1.”
Financial and Operating Highlights
(Unaudited)
(Amounts in millions, except per share
amounts, gold ounces produced & sold, and per-ounce/pound
metrics)
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Gold Sales
$
141.9
$
110.3
$
106.8
$
96.3
$
103.0
Silver Sales
$
51.6
$
45.0
$
40.1
$
44.6
$
43.0
Zinc Sales
$
2.0
$
2.6
$
5.6
$
1.9
$
1.7
Lead Sales
$
4.0
$
4.2
$
2.4
$
1.0
$
1.0
Consolidated Revenue
$
199.5
$
162.1
$
154.9
$
143.8
$
148.8
Costs Applicable to Sales3
$
141.0
$
131.9
$
131.7
$
116.6
$
116.9
General and Administrative
Expenses
$
9.6
$
7.8
$
9.5
$
7.1
$
7.7
Net Income (Loss)
$
(14.3
)
$
(36.8
)
$
(24.9
)
$
0.4
$
(53.0
)
Net Income (Loss) Per Share
$
(0.06
)
$
(0.18
)
$
(0.12
)
$
0.00
$
(0.29
)
Adjusted Net Income (Loss)1
$
(5.3
)
$
(23.0
)
$
(23.0
)
$
16.1
$
(19.7
)
Adjusted Net Income (Loss)1 Per
Share
$
(0.02
)
$
(0.11
)
$
(0.11
)
$
0.08
$
(0.11
)
Weighted Average Shares
Outstanding
225.9
207.8
202.4
199.5
185.2
EBITDA1
$
37.6
$
7.7
$
14.8
$
7.9
$
(12.3
)
Adjusted EBITDA1
$
61.0
$
30.6
$
26.1
$
36.2
$
24.7
Cash Flow from Operating
Activities
$
42.0
$
26.4
$
(15.8
)
$
0.1
$
5.8
Capital Expenditures
$
30.7
$
20.7
$
27.4
$
17.8
$
39.5
Free Cash Flow1
$
11.3
$
5.7
$
(43.3
)
$
(17.7
)
$
(33.7
)
Cash, Equivalents & Short-Term
Investments
$
65.3
$
37.9
$
69.0
$
115.1
$
104.7
Total Debt2
$
298.7
$
370.0
$
456.8
$
458.8
$
429.2
Average Realized Price Per Ounce –
Gold
$
1,413
$
1,277
$
1,251
$
1,214
$
1,150
Average Realized Price Per Ounce –
Silver
$
17.17
$
14.75
$
15.22
$
14.59
$
14.68
Average Realized Price Per Pound –
Zinc
$
0.50
$
0.49
$
1.19
$
0.83
$
0.93
Average Realized Price Per Pound –
Lead
$
0.92
$
0.82
$
0.86
$
0.80
$
0.90
Gold Ounces Produced
99,782
86,584
78,336
92,546
87,539
Silver Ounces Produced
3.0
3.1
2.5
3.5
2.9
Zinc Pounds Produced
4.2
5.3
3.7
3.1
1.1
Lead Pounds Produced
4.5
5.0
3.1
1.7
0.4
Gold Ounces Sold
100,407
86,385
85,326
79,291
89,609
Silver Ounces Sold
3.0
3.0
2.6
3.1
2.9
Zinc Pounds Sold
4.1
5.3
4.7
2.6
1.8
Lead Pounds Sold
4.3
5.2
2.7
1.4
1.2
Financial Results
Third quarter revenue increased 23% to $199.5 million compared
to $162.1 million in the second quarter of 2019. The Company sold
100,407 ounces of gold representing an increase of 16% compared to
the prior period, while silver sales remained relatively consistent
at 3.0 million ounces. Zinc and lead sales totaled 4.1 million and
4.3 million pounds during the third quarter, 23% and 17% lower,
respectively, quarter-over-quarter.
Average realized gold and silver prices increased 11% and 16%,
respectively, quarter-over-quarter to $1,413 and $17.17 per ounce.
The average realized gold price during the quarter reflects the
sale of 10,785 ounces of gold at a price of $800 per ounce pursuant
to Palmarejo's gold stream agreement. Average realized zinc price
remained relatively consistent quarter-over-quarter at $0.50 per
pound, while average realized lead price increased 12% to $0.92 per
pound. The average realized zinc and lead prices are presented net
of treatment and refining charges and reflect the impact of
provisional price adjustments.
Gold and silver sales accounted for 71% and 26% of third quarter
revenue, respectively, while zinc and lead together accounted for
the remaining 3%. The Company’s U.S. operations accounted for
approximately 59% of third quarter revenue, up from approximately
56% in the second quarter primarily due to increased sales from
Wharf, which totaled $36.7 million.
Costs applicable to sales increased 7% quarter-over-quarter to
$141.0 million, reflecting higher costs associated with increased
production at Wharf during the quarter. Third quarter general and
administrative expenses were $9.6 million compared to $7.8 million
in the prior period, largely due to higher employee-related
expenses and legal fees.
Quarterly exploration expense was $5.9 million, or 4% higher
quarter-over-quarter, reflecting Coeur’s continued commitment to
its success-based exploration program and the commencing of new
drilling campaigns during the quarter. Exploration activities in
the third quarter were primarily focused on expansion drilling at
Palmarejo, Kensington, Silvertip, and the Sterling and Crown
exploration properties in southern Nevada. See page 13 for further
details.
During the third quarter, the Company recorded an income tax
expense of $0.2 million, largely attributable to higher taxable
earnings during the quarter. Cash income and mining taxes paid
during the quarter totaled $0.7 million, partially offset by $0.3
million of value-added tax refunds.
Operating cash flow of $42.0 million in the third quarter
reflects improved profitability across the Company’s portfolio,
with the exception of Silvertip. Third quarter operating cash flow
also reflects a $14.7 million working capital outflow associated
with sales made under Kensington’s $25.0 million prepayment
agreement. The Company expects the remaining $10.3 million working
capital outflow under this arrangement will occur during the fourth
quarter.
Third quarter capital expenditures totaled $30.7 million,
compared to $20.7 million in the second quarter. Higher capital
expenditures were driven by increased investment at Rochester and
Silvertip during the third quarter. Sustaining and development
capital expenditures accounted for approximately 52% and 48%,
respectively, of the Company’s total capital expenditures in the
third quarter.
Third Quarter Debt Reduction Initiatives
During the third quarter, Coeur completed its previously
announced $75.0 million at-the-market common stock offering
program, raising net proceeds (after sales commissions) of $73.8
million. The Company also entered into privately negotiated
agreements to exchange $20.0 million of aggregate principal amount
of its senior unsecured notes for common stock during the
quarter.
These transactions helped the Company retire $71.3 million of
outstanding indebtedness, including the remaining $53.0 million
balance under the RCF. As of September 30, 2019, the Company had
$315.3 million of liquidity, including $65.3 million of cash and
cash equivalents and $250.0 million of availability under the
RCF.
Update on Hedging Strategy
During the third quarter, Coeur implemented a series of
zero-cost collar hedges on a portion of its gold production in 2019
and 2020. The structure of the hedging program allows for downside
protection against potential decreases in the price of gold, while
enabling participation in the potential upside up to a specified
ceiling. The strategy was designed to support free cash flow1
generation and help fund key internal growth projects. Additional
details are outlined below:
- 21,000 ounces of gold per month for the remainder of 2019 at an
average floor of $1,405 per ounce and an average ceiling of $1,798
per ounce; and
- 12,000 ounces of gold per month from January 2020 through
August 2020 at an average floor of $1,408 per ounce and an average
ceiling of $1,803 per ounce
Operations
Third quarter 2019 highlights for each of the Company’s
operations are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce
amounts)
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Tons milled
442,464
447,727
378,987
378,389
300,116
Average gold grade (oz/t)
0.09
0.07
0.07
0.08
0.10
Average silver grade (oz/t)
4.88
4.74
4.64
5.96
6.26
Average recovery rate – Au
81.7%
87.7%
83.4%
97.6%
88.8%
Average recovery rate – Ag
79.6%
81.8%
72.8%
84.0%
82.2%
Gold ounces produced
31,779
28,246
23,205
31,239
27,885
Silver ounces produced (000’s)
1,720
1,735
1,278
1,893
1,544
Gold ounces sold
32,731
28,027
27,394
23,667
29,830
Silver ounces sold (000’s)
1,747
1,709
1,405
1,534
1,572
Average realized price per gold
ounce
$1,269
$1,210
$1,154
$1,148
$1,082
Average realized price per silver
ounce
$17.05
$14.86
$15.39
$14.57
$14.75
Metal sales
$71.3
$59.3
$53.2
$49.6
$55.5
Costs applicable to sales3
$37.4
$36.5
$33.2
$27.1
$31.6
Adjusted CAS per AuOz1
$660
$741
$713
$624
$615
Adjusted CAS per AgOz1
$8.95
$9.17
$9.66
$7.92
$8.39
Exploration expense
$1.6
$1.1
$1.0
$0.1
$3.2
Cash flow from operating
activities
$36.3
$15.6
$5.9
$13.3
$8.6
Sustaining capital expenditures
(excludes capital lease payments)
$4.7
$5.0
$6.0
$3.6
$2.0
Development capital
expenditures
$3.1
$2.6
$2.7
$2.3
$2.7
Total capital expenditures
$7.8
$7.6
$8.7
$5.9
$4.7
Free cash flow1
$28.5
$8.0
$(2.8)
$7.4
$3.9
- Third quarter gold production increased 13% to 31,779 ounces,
while silver production remained consistent at approximately 1.7
million ounces compared to the prior quarter. Year-over-year, gold
and silver production increased by approximately 14% and 11%,
respectively
- Higher gold production during the quarter was primarily driven
by the improvement in average grade, partially offset by lower
recoveries. Consistent quarter-over-quarter silver production
reflected higher grade offset by slightly lower recoveries and mill
throughput. Lower recoveries during the quarter reflect additional
in-circuit inventory and adjustments on final settlements of doré
sales
- Third quarter adjusted CAS1 for gold and silver on a co-product
basis decreased 11% and 2%, respectively, to $660 and $8.95 per
ounce. Strong cost performance during the quarter reflects higher
average grades and prudent expense management
- Free cash flow1 of $28.5 million during the third quarter was
largely driven by higher operating cash flow from increased metal
sales and lower unit costs. Capital expenditures during the quarter
were focused on mine development and infrastructure projects
- Production began at La Nación, located within the Independencia
mine complex, in the beginning of the third quarter. La Nación is
anticipated to continue ramping up through the end of 2019 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 in the third quarter. 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)
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Ore tons placed
2,516,353
2,786,287
2,667,559
3,674,566
4,061,082
Average silver grade (oz/t)
0.43
0.45
0.46
0.46
0.52
Average gold grade (oz/t)
0.004
0.003
0.003
0.004
0.004
Silver ounces produced (000’s)
982
971
960
1,466
1,290
Gold ounces produced
7,901
8,609
8,256
15,926
14,702
Silver ounces sold (000’s)
951
962
1,000
1,391
1,248
Gold ounces sold
7,651
8,642
8,511
15,339
14,257
Average realized price per silver
ounce
$17.02
$14.83
$15.31
$14.53
$14.70
Average realized price per gold
ounce
$1,476
$1,295
$1,299
$1,234
$1,204
Metal sales
$27.5
$25.5
$26.4
$39.1
$35.5
Costs applicable to sales3
$27.7
$24.7
$22.5
$29.4
$27.5
Adjusted CAS per AgOz1
$14.24
$13.19
$12.83
$10.79
$11.35
Adjusted CAS per AuOz1
$1,230
$1,153
$1,092
$917
$929
Exploration expense
$0.1
$0.1
$0.1
$—
$0.1
Cash flow from operating
activities
$8.3
$1.6
$(1.0)
$17.9
$5.7
Sustaining capital expenditures
(excludes capital lease payments)
$(1.0)
$0.4
$1.8
$7.1
$2.7
Development capital
expenditures
$11.2
$2.4
$2.8
$(4.1)
$0.9
Total capital expenditures
$10.2
$2.8
$4.6
$3.0
$3.6
Free cash flow1
$(1.9)
$(1.2)
$(5.6)
$14.9
$2.1
- Tons placed in the third quarter decreased 10%
quarter-over-quarter and 38% year-over-year to approximately 2.5
million tons. Fewer tons placed reflects the commissioning of the
new three-stage crushing circuit during the quarter
- Silver production remained consistent quarter-over-quarter at
approximately 1.0 million ounces, while gold production decreased
8% to 7,901 ounces. Year-over-year, silver and gold production
decreased 24% and 46%, respectively
- Silver production was impacted by slightly lower average grade,
while gold production decreased largely due to fewer tons placed.
Side slope leaching on the Stage III and Stage IV leach pads as
well as the stacking of run-of-mine material early in the quarter
were used to supplement production
- Third quarter adjusted CAS1 for silver and gold on a co-product
basis increased 8% and 7%, respectively, quarter-over-quarter to
$14.24 and $1,230 per ounce. Higher costs during the quarter were
primarily related to lower production and the stacking of
run-of-mine material during the commissioning of the new crushing
circuit. Third quarter adjusted CAS1 excludes $4.8 million,
primarily related to a one-time charge associated with the
operation’s power costs
- Free cash flow1 of $(1.9) million was driven by higher capital
expenditures, which more than offset improved operating cash flow
during the quarter. Capital expenditures were focused on the new
crushing circuit, further development of the Stage IV leach pad and
initial work on Plan of Operations Amendment 11
- Initial recovery results from bottle roll and column tests on
HPGR-crushed ore during the quarter were encouraging and in-line
with original expectations. The Company plans to continue
monitoring and benchmarking results against third-party test work
to further validate recovery rates associated with the HPGR
unit
- Production in the fourth quarter is anticipated to benefit from
the stacking of additional tons, reflecting a full quarter
integrating the new crushing circuit. The Company began stacking
HPGR-crushed material close to the liner of the Stage IV leach pad
in September
- 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’s guidance for capital expenditures is also
unchanged and expected to be approximately $17 - $20 million
Kensington, Alaska
(Dollars in millions, except per ounce
amounts)
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Tons milled
166,475
160,510
164,332
149,998
163,603
Average gold grade (oz/t)
0.22
0.23
0.20
0.21
0.17
Average recovery rate
93.2%
93.0%
90.2%
91.1%
90.4%
Gold ounces produced
34,156
34,049
29,973
28,421
25,515
Gold ounces sold
35,452
34,415
31,335
24,979
25,648
Average realized price per gold ounce,
gross
$1,505
$1,332
$1,301
$1,267
$1,195
Treatment and refining charges per gold
ounce
$20
$20
$15
$21
$34
Average realized price per gold ounce,
net
$1,485
$1,312
$1,286
$1,246
$1,161
Metal sales
$52.6
$45.2
$40.3
$31.1
$29.8
Costs applicable to sales3
$29.5
$29.1
$32.2
$21.4
$28.2
Adjusted CAS per AuOz1
$822
$842
$990
$843
$1,091
Exploration expense
$1.5
$2.0
$0.5
$1.3
$1.6
Cash flow from operating
activities
$4.5
$41.4
$6.2
$7.9
$(0.4)
Sustaining capital expenditures
(excludes capital lease payments)
$4.9
$4.9
$9.4
$9.8
$9.7
Development capital
expenditures
$—
$—
$—
$0.8
$2.3
Total capital expenditures
$4.9
$4.9
$9.4
$10.6
$12.0
Free cash flow1
$(0.4)
$36.5
$(3.2)
$(2.7)
$(12.4)
- Commercial production at Jualin was declared on December 1,
2018. The figures shown in the table above exclude pre-commercial
production
- Third and second quarter operating cash flow and free cash
flow1 in the table reflect the impact of a $25.0 million prepayment
received in the second quarter, which resulted in $14.7 million of
working capital outflows in the third quarter. Excluding the effect
of the prepayment, third and second quarter operating cash flow was
$19.2 million and $16.4 million, respectively, while free cash
flow1 was $14.3 million and $11.5 million, respectively
- Continued strong gold production during the third quarter
totaled 34,156 ounces, consistent with the prior period.
Year-over-year gold production increased 34%
- Adjusted CAS1 decreased modestly quarter-over-quarter, totaling
$822 per ounce and remained below the low end of the full-year
guidance range of $950 - $1,050 per ounce
- Jualin accounted for approximately 15% of Kensington’s third
quarter production, compared to approximately 17% in the prior
quarter. Jualin is now anticipated to account for approximately 15%
of Kensington's total production in 2019, largely due to an
expected increase in production from the Kensington Main
deposit
- Capital expenditures of $4.9 million 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 guidance are also being
maintained. 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)
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Ore tons placed
1,503,021
919,435
1,090,510
1,644,168
1,127,391
Average gold grade (oz/t)
0.027
0.023
0.020
0.020
0.023
Gold ounces produced
25,946
15,680
16,902
16,960
19,437
Silver ounces produced (000’s)
18
12
13
13
13
Gold ounces sold
24,573
15,301
18,086
15,306
19,874
Silver ounces sold (000’s)
17
12
14
11
12
Average realized price per gold
ounce
$1,481
$1,311
$1,317
$1,247
$1,198
Metal sales
$36.7
$20.2
$24.0
$19.3
$24.0
Costs applicable to sales3
$22.1
$15.5
$17.4
$14.6
$18.0
Adjusted CAS per AuOz1
$887
$1,002
$949
$939
$895
Exploration expense
$0.1
$—
$—
$—
$0.1
Cash flow from operating
activities
$17.6
$0.5
$4.2
$(1.9)
$3.7
Sustaining capital expenditures
(excludes capital lease payments)
$0.8
$0.2
$0.4
$0.7
$1.2
Development capital
expenditures
$—
$—
$—
$—
$—
Total capital expenditures
$0.8
$0.2
$0.4
$0.7
$1.2
Free cash flow1
$16.8
$0.3
$3.8
$(2.6)
$2.5
- Gold production in the third quarter increased 65%
quarter-over-quarter and 33% year-over-year to 25,946 ounces
- Higher production during the quarter was largely driven by the
placement of additional tons and improved grade. Tons placed
increased 63% quarter-over-quarter to 1.5 million, while average
gold grade increased 17% to 0.027 ounces per ton
- Operational results reflect better crusher performance and
improved weather conditions. Strong crusher performance and the
placement of higher-grade ore are expected to drive solid
production results in the fourth quarter
- Adjusted CAS1 on a by-product basis decreased 11%
quarter-over-quarter to $887 per ounce, primarily as a result of
increased production during the third quarter
- Free cash flow1 of $16.8 million was driven by higher
production, an improvement in the average realized price of gold
and lower unit costs during the quarter
- 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)
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Tons milled
53,145
59,689
62,051
38,802
10,652
Average silver grade (oz/t)
7.54
7.48
5.50
6.06
6.66
Average zinc grade (%)
7.6%
7.5%
5.9%
5.8%
8.0%
Average lead grade (%)
5.4%
5.4%
3.7%
3.9%
4.3%
Average recovery rate – Ag
74.8%
77.0%
69.9%
60.5%
56.3%
Average recovery rate – Zn
51.7%
59.1%
50.5%
69.1%
64.5%
Average recovery rate – Pb
78.4%
77.3%
66.8%
54.7%
45.1%
Silver ounces produced (000's)
300
344
239
142
40
Zinc pounds produced (000's)
4,197
5,322
3,719
3,082
1,099
Lead pounds produced (000's)
4,478
4,980
3,077
1,659
413
Silver ounces sold (000's)
290
365
215
124
99
Zinc pounds sold (000's)
4,076
5,303
4,723
2,604
1,772
Lead pounds sold (000's)
4,331
5,186
2,748
1,419
1,230
Average realized price per silver
ounce, gross
$19.94
$15.18
$14.98
$15.54
$14.62
Treatment and refining charges per
silver ounce
$1.63
$1.18
$1.24
$1.38
$3.34
Average realized price per silver
ounce, net
$18.31
$14.00
$13.74
$14.16
$11.28
Average realized price per zinc pound,
gross
$0.86
$0.83
$1.50
$1.07
$1.20
Treatment and refining charges per zinc
pound
$0.36
$0.34
$0.31
$0.24
$0.27
Average realized price per zinc pound,
net
$0.50
$0.49
$1.19
$0.83
$0.93
Average realized price per lead pound,
gross
$0.98
$0.87
$0.92
$0.87
$0.97
Treatment and refining charges per lead
pound
$0.06
$0.05
$0.06
$0.07
$0.07
Average realized price per lead pound,
net
$0.92
$0.82
$0.86
$0.80
$0.90
Metal sales
$11.3
$11.9
$10.9
$4.8
$4.1
Costs applicable to sales3
$24.2
$26.2
$26.4
$24.1
$11.5
Adjusted CAS per AgOz1
$14.14
$13.31
$13.73
$17.68
$9.86
Adjusted CAS per ZnLb1
$0.75
$1.02
$1.18
$0.95
$0.64
Adjusted CAS per PbLb1
$0.71
$0.77
$0.88
$1.02
$0.55
Exploration expense
$0.8
$0.7
$0.1
$0.3
$2.3
Cash flow from operating
activities
$(15.3)
$(11.6)
$(13.9)
$(34.1)
$(6.8)
Sustaining capital expenditures
(excludes capital lease payments)
$6.4
$5.0
$4.1
$8.2
$0.4
Development capital
expenditures
$—
$—
$—
$(10.8)
$17.5
Total capital expenditures
$6.4
$5.0
$4.1
$(2.6)
$17.9
Free cash flow1
$(21.7)
$(16.6)
$(18.0)
$(31.5)
$(24.7)
- Silvertip achieved commercial production on September 1, 2018.
The figures shown in the table above exclude pre-commercial
production. Adjusted CAS1 figures shown in the table above exclude
the impact of non-cash write downs of metal inventory
- Third quarter silver production decreased 13% to 0.3 million
ounces quarter-over-quarter, while zinc and lead production
decreased 21% and 10%, respectively, to 4.2 million pounds of zinc
and 4.5 million pounds of lead. Lower production was largely driven
by planned and unplanned downtime, which impacted mill availability
during the quarter
- Third quarter adjusted CAS1 on a co-product basis were $14.14
per silver ounce, $0.75 per payable zinc pound and $0.71 per
payable lead pound, compared to $13.31, $1.02 and $0.77,
respectively, in the prior quarter
- Free cash flow1 of $(21.7) million was driven by lower
operating cash flow and higher capital expenditures
quarter-over-quarter
- Planned downtime was extended to take advantage of favorable
weather conditions to address key projects to improve mill
availability. Additional third-party maintenance resources were
mobilized during the quarter to accelerate mill stabilization
efforts
- The Company also deployed a coordinated human resources
strategy to further enhance the operation's leadership team,
improve recruitment and retention efforts, and bolster training of
mill operators. These efforts, combined with the accelerated mill
maintenance plan, have resulted in significant improvements in mill
availability late in the third quarter and quarter-to-date
- The Company believes that 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 in the final stages of the
approval process and expected to be received in the fourth
quarter
- 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 third quarter, the Company drilled 110,361 feet
(33,638 meters) at a total cost of $7.5 million ($5.9 million
expensed and $1.6 million capitalized), compared to 151,153 feet
(46,072 meters) at a total cost of $6.8 million ($5.7 million
expensed and $1.1 million capitalized) in the second quarter. Total
feet drilled during the third quarter was approximately 27% lower
compared to the prior period, largely due to reduced infill
drilling at Palmarejo and Kensington. The 2019 drill programs at
Rochester and Wharf began during the quarter.
At Silvertip, two surface core drill rigs continued expansion
drilling at the Discovery East and North zones. Results from the
ongoing expansion drilling efforts remain encouraging. Infill
drilling at Discovery East commenced in September with one drill
rig active during the month. Three core rigs are scheduled to
continue infill drilling the area through the end of November.
Ground geophysical surveys and soil sampling were completed over
the Tiger Terrace target area and show coincident anomalies over an
approximately two-mile trend, located three miles south of the
Silvertip mine. First pass drilling is currently planned for
2020.
At Kensington, surface and underground core drill rigs focused
on expansion drilling at the Elmira, Eureka, Comet and Seward
veins. The Comet and Seward veins are strategically located above
the Kensington access tunnel, allowing for the potential to
leverage existing infrastructure if the veins are developed.
Results from expansion drilling were encouraging and represent a
first pass exploration effort. No infill drilling was completed at
Kensington during the quarter.
At the Sterling and Crown exploration properties, located in
southern Nevada, two reverse circulation rigs were active during
the third quarter. One rig was focused on expansion drilling at the
Daisy South and West, and SNA resource zones, which are contained
in the Crown Block. Results from the drilling in these zones were
encouraging. Exploration drilling and surface mapping in the Crown
Block are expected to continue during the fourth quarter, with one
rig maintaining focus on the SNA resource zone. Infill drilling at
Sterling commenced in August with encouraging results near the
historic 8 Adit and 144 zones at the southern portion of the
historic Sterling mining area. Expansion drilling at both Crown and
Sterling is expected to continue during the fourth quarter.
At Palmarejo, up to seven surface and underground core rigs were
active during the third quarter. Infill drilling focused on La
Nación and veins southeast of the Guadalupe mine, with encouraging
results particularly at La Nación. Expansion drilling focused on
extending mineralization northwest from the Guadalupe mine and
north of the Independencia mine as well as expanding mineralized
material at Independencia East. Infill and expansion drilling are
expected to continue through the fourth quarter.
Infill and expansion drilling at the Richmond Hill project,
located approximately four miles north-northeast of Wharf,
commenced at the end of September and is expected to continue into
the fourth quarter. A single reverse circulation rig is currently
on site.
At Rochester, an infill diamond drilling program commenced
during the quarter, employing directional drilling techniques to
drill underneath the Stage I leach pad. The program is expected to
be completed early in the fourth quarter.
Expansion drilling is expected to commence in the fourth quarter
at the Lincoln Hill project, located approximately four miles west
of Rochester.
At the La Preciosa project, located in Durango, Mexico, a new
resource model is being developed based on an improved geological
interpretation for the site. This work and further evaluation of
the project is expected to continue during 2020.
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 third quarter
financial results on November 5, 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 November
19, 2019.
Replay numbers:
(877) 344-7529 (U.S.)
(855) 669-9658 (Canada)
(412) 317-0088
(International)
Conference ID:
101 35 184
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, free cash flow, expectations regarding Silvertip,
including but not limited to timing of receipt of permits, grades,
exploration and development efforts, the impact of the new crushing
circuit at Rochester, the prepayment transaction at Kensington, our
gold price hedging strategy, 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 anticipated benefits
of the new crushing circuit at Rochester will not be achieved, 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 and our Form 10-Q for the quarter
ended September 30,2019.
Notes
- 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 (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.
- Excludes amortization.
Average Spot Prices
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Average Gold Spot Price Per Ounce
$
1,472
$
1,309
$
1,304
$
1,226
$
1,213
Average Silver Spot Price Per Ounce
$
16.98
$
14.88
$
15.57
$
14.54
$
15.02
Average Zinc Spot Price Per Pound
$
1.07
$
1.25
$
1.23
$
1.19
$
1.15
Average Lead Spot Price Per Pound
$
0.92
$
0.85
$
0.92
$
0.89
$
0.95
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
September 30, 2019
(unaudited)
December 31, 2018
ASSETS
In thousands, except share
data
CURRENT ASSETS
Cash and cash equivalents
$
65,319
$
115,081
Receivables
37,295
29,744
Inventory
57,478
66,279
Ore on leach pads
75,603
75,122
Prepaid expenses and other
16,659
11,393
252,354
297,619
NON-CURRENT ASSETS
Property, plant and equipment, net
308,774
298,451
Mining properties, net
928,078
971,567
Ore on leach pads
68,975
66,964
Restricted assets
8,248
12,133
Equity and debt securities
22,812
17,806
Receivables
27,580
31,151
Other
72,796
16,809
TOTAL ASSETS
$
1,689,617
$
1,712,500
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable
$
72,927
$
47,210
Accrued liabilities and other
117,606
82,619
Debt
21,939
24,937
Reclamation
6,552
6,552
219,024
161,318
NON-CURRENT LIABILITIES
Debt
276,781
433,889
Reclamation
135,101
128,994
Deferred tax liabilities
51,534
79,070
Other long-term liabilities
76,370
56,717
539,786
698,670
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share;
authorized 300,000,000 shares, 240,508,936 issued and outstanding
at September 30, 2019 and 203,310,443 at December 31, 2018
2,405
2,033
Additional paid-in capital
3,590,056
3,443,082
Accumulated other comprehensive income
(loss)
1,132
(59
)
Accumulated deficit
(2,662,786
)
(2,592,544
)
930,807
852,512
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
1,689,617
$
1,712,500
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three months ended September
30,
Nine months ended September
30,
2019
2018
2019
2018
In thousands, except share
data
Revenue
$
199,469
$
148,795
$
516,462
$
482,049
COSTS AND EXPENSES
Costs applicable to sales(1)
140,952
116,857
404,550
324,443
Amortization
45,678
31,184
130,758
91,420
General and administrative
9,635
7,729
26,859
24,183
Exploration
5,893
8,157
15,326
21,269
Pre-development, reclamation, and
other
4,851
8,121
13,619
15,966
Total costs and expenses
207,009
172,048
591,112
477,281
OTHER INCOME (EXPENSE), NET
Loss on debt extinguishment
(1,282
)
—
(1,282
)
—
Fair value adjustments, net
4,377
715
8,201
2,907
Interest expense, net of capitalized
interest
(5,980
)
(5,818
)
(19,259
)
(17,801
)
Other, net
(3,634
)
(20,903
)
(2,931
)
(19,846
)
Total other income (expense), net
(6,519
)
(26,006
)
(15,271
)
(34,740
)
Income (loss) before income and mining
taxes
(14,059
)
(49,259
)
(89,921
)
(29,972
)
Income and mining tax (expense)
benefit
(218
)
(3,785
)
13,986
(19,451
)
Income (loss) from continuing
operations
$
(14,277
)
$
(53,044
)
$
(75,935
)
$
(49,423
)
Income (loss) from discontinued
operations
—
—
5,693
550
NET INCOME (LOSS)
$
(14,277
)
$
(53,044
)
$
(70,242
)
$
(48,873
)
OTHER COMPREHENSIVE INCOME (LOSS), net of
tax:
Unrealized gain (loss) on hedges, net of
tax of $365 for the three and nine months ended September 30,
2019
1,132
—
1,132
—
Unrealized gain (loss) on debt and equity
securities
—
192
59
(173
)
Other comprehensive income (loss)
1,132
192
1,191
(173
)
COMPREHENSIVE INCOME (LOSS)
$
(13,145
)
$
(52,852
)
$
(69,051
)
$
(49,046
)
NET INCOME (LOSS) PER SHARE
Basic income (loss) per share:
Net income (loss) from continuing
operations
$
(0.06
)
$
(0.29
)
$
(0.36
)
$
(0.27
)
Net income (loss) from discontinued
operations
—
—
0.03
—
Basic(2)
$
(0.06
)
$
(0.29
)
$
(0.33
)
$
(0.26
)
Diluted income (loss) per share:
Net income (loss) from continuing
operations
$
(0.06
)
$
(0.29
)
$
(0.36
)
$
(0.27
)
Net income (loss) from discontinued
operations
—
—
0.03
—
Diluted(2)
$
(0.06
)
$
(0.29
)
$
(0.33
)
$
(0.26
)
(1) Excludes amortization.
(2) Due to rounding, the sum of net income
per share from continuing operations and discontinued operations
may not equal net income per share.
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
Three months ended September
30,
Nine months ended September
30,
2019
2018
2019
2018
In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
(14,277
)
$
(53,044
)
$
(70,242
)
$
(48,873
)
(Income) loss from discontinued
operations
—
—
(5,693
)
(550
)
Adjustments:
Amortization
45,678
31,184
130,758
91,420
Accretion
3,073
3,117
9,023
10,321
Deferred taxes
(10,545
)
(3,276
)
(27,962
)
(4,087
)
Loss on debt extinguishment
1,282
—
1,282
—
Fair value adjustments, net
(4,377
)
(715
)
(8,201
)
(2,907
)
Stock-based compensation
2,432
1,942
6,642
6,578
Inventory write-downs
13,966
30,787
41,285
30,787
Deferred revenue recognition
(15,250
)
(582
)
(16,008
)
(1,666
)
Other
8,994
3,520
15,733
6,846
Changes in operating assets and
liabilities:
Receivables
(3,350
)
(5,930
)
(20,709
)
(16,509
)
Prepaid expenses and other current
assets
1,375
1,377
(2,143
)
3,868
Inventory and ore on leach pads
(9,389
)
(8,156
)
(42,601
)
(19,630
)
Accounts payable and accrued
liabilities
22,384
5,565
41,421
(35,562
)
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES OF CONTINUING OPERATIONS
41,996
5,789
52,585
20,036
CASH USED IN OPERATING ACTIVITIES OF
DISCONTINUED OPERATIONS
—
—
—
(2,690
)
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES
41,996
5,789
52,585
17,346
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(30,678
)
(39,472
)
(78,865
)
(122,982
)
Proceeds from the sale of assets
26
393
930
549
Purchase of investments
—
(15
)
—
(415
)
Sale of investments
1,007
(78
)
2,109
12,682
Proceeds from notes receivable
—
15,000
7,168
15,000
Other
(57
)
64
1,961
(34
)
CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES OF CONTINUING OPERATIONS
(29,702
)
(24,108
)
(66,697
)
(95,200
)
CASH USED IN INVESTING ACTIVITIES OF
DISCONTINUED OPERATIONS
—
—
—
(28,470
)
CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES
(29,702
)
(24,108
)
(66,697
)
(123,670
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock
73,781
—
122,668
—
Issuance of notes and bank borrowings, net
of issuance costs
30,000
25,000
45,000
40,000
Payments on debt, finance leases, and
associated costs
(87,778
)
(25,533
)
(201,051
)
(48,355
)
Other
301
(77
)
(2,958
)
(4,916
)
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES OF CONTINUING OPERATIONS
16,304
(610
)
(36,341
)
(13,271
)
CASH USED IN FINANCING ACTIVITIES OF
DISCONTINUED OPERATIONS
—
—
—
(22
)
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES
16,304
(610
)
(36,341
)
(13,293
)
Effect of exchange rate changes on cash
and cash equivalents
(192
)
183
65
565
INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
28,406
(18,746
)
(50,388
)
(119,052
)
Less net cash used in discontinued
operations(1)
—
—
—
(32,930
)
28,406
(18,746
)
(50,388
)
(86,122
)
Cash, cash equivalents and restricted cash
at beginning of period
39,275
136,026
118,069
203,402
Cash, cash equivalents and restricted cash
at end of period
$
67,681
$
117,280
$
67,681
$
117,280
(1) Less net cash used in discontinued
operations includes the following cash transactions: net subsidiary
payments to parent company of $1,748, during the nine months ended
September 30, 2018.
Adjusted EBITDA
Reconciliation
(Dollars in thousands except per share
amounts)
LTM 3Q 2019
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Net income (loss)
$
(69,774
)
$
(14,277
)
$
(36,764
)
$
(19,201
)
$
468
$
(53,044
)
(Income) loss from discontinued
operations, net of tax
(5,693
)
—
—
(5,693
)
—
—
Interest expense, net of capitalized
interest
25,822
5,980
6,825
6,454
6,563
5,818
Income tax provision (benefit)
(50,217
)
218
(5,546
)
(8,658
)
(36,231
)
3,785
Amortization
167,811
45,678
43,204
41,876
37,053
31,184
EBITDA
67,949
37,599
7,719
14,778
7,853
(12,257
)
Fair value adjustments, net
(8,932
)
(4,377
)
5,296
(9,120
)
(731
)
(715
)
Foreign exchange (gain) loss
6,064
2,945
468
665
1,986
3,104
(Gain) loss on sale of assets and
securities
418
100
72
(52
)
298
28
Loss on debt extinguishment
1,282
1,282
—
—
—
—
Transaction costs
(1,044
)
—
—
—
(1,044
)
1,049
Interest income on notes receivables
(525
)
—
(18
)
(180
)
(327
)
(628
)
Manquiri sale consideration write-down
—
—
—
—
18,599
Silvertip inventory write-down
59,259
13,966
11,872
15,447
17,974
8,746
Receivable write-down
7,576
1,040
—
6,536
—
Asset retirement obligation accretion
11,777
3,080
3,007
2,943
2,747
2,883
Inventory adjustments and write-downs
7,234
5,371
2,193
1,623
858
421
Adjusted EBITDA
$
151,058
$
61,006
$
30,609
$
26,104
$
36,150
$
24,671
Revenue
$
660,317
$
199,469
$
162,123
$
154,870
143,855
$
148,795
Adjusted EBITDA Margin
23
%
31
%
19
%
17
%
25
%
17
%
Adjusted Net Income (Loss)
Reconciliation
(Dollars in thousands except per share
amounts)
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Net income (loss)
$
(14,277
)
$
(36,764
)
$
(19,201
)
$
468
$
(53,044
)
Income loss from discontinued operations,
net of tax
—
—
(5,693
)
—
—
Fair value adjustments, net
(4,377
)
5,296
(9,120
)
(731
)
(715
)
(Gain) loss on sale of assets and
securities
100
72
(52
)
326
—
Gain on repurchase of Rochester
royalty
—
—
—
(28
)
28
Loss on debt extinguishment
1,282
—
—
—
Transaction costs
—
—
—
(1,044
)
1,049
Interest income on notes receivables
—
(18
)
(180
)
(327
)
(628
)
Manquiri sale consideration write-down
—
—
—
—
18,599
Silvertip inventory write-down
13,966
11,872
15,447
17,974
8,746
Rochester In-Pit crusher write-down
—
—
—
—
3,441
Receivable write-down
1,040
—
—
6,536
—
Foreign exchange loss (gain)
2,022
889
1,256
(530
)
6,062
Tax effect of adjustments(1)
(5,096
)
(4,332
)
(5,415
)
(6,559
)
(3,191
)
Adjusted net income (loss)
$
(5,340
)
$
(22,985
)
$
(22,958
)
$
16,085
$
(19,653
)
Adjusted net income (loss) per share -
Basic
$
(0.02
)
$
(0.11
)
$
(0.11
)
$
0.08
$
(0.11
)
Adjusted net income (loss) per share -
Diluted
$
(0.02
)
$
(0.11
)
$
(0.11
)
$
0.08
$
(0.11
)
Consolidated Free Cash Flow
Reconciliation
(Dollars in thousands)
3Q 2019
2Q 2019
1Q 2019
4Q 2018
3Q 2018
Cash flow from continuing operations
$
41,996
$
26,435
$
(15,846
)
$
72
$
5,789
Capital expenditures from continuing
operations
30,678
20,749
27,438
17,805
39,472
Free cash flow
$
11,318
$
5,686
$
(43,284
)
$
(17,733
)
$
(33,683
)
Reconciliation of Costs
Applicable to Sales
for Three Months Ended
September 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)
$
53,237
$
31,999
$
43,085
$
25,385
$
32,457
$
186,163
Amortization
(15,840
)
(4,250
)
(13,552
)
(3,301
)
(8,268
)
(45,211
)
Costs applicable to sales
$
37,397
$
27,749
$
29,533
$
22,084
$
24,189
$
140,952
Inventory Adjustments
(175
)
(4,799
)
(405
)
(7
)
(13,966
)
(19,352
)
By-product credit
—
—
—
(293
)
—
(293
)
Adjusted costs applicable to
sales
$
37,222
$
22,950
$
29,128
$
21,784
$
10,223
$
121,307
Metal Sales
Gold ounces
32,731
7,651
35,452
24,573
100,407
Silver ounces
1,747,250
951,043
16,612
289,910
3,004,815
Zinc pounds
4,076,390
4,076,390
Lead pounds
4,330,862
4,330,862
Revenue Split
Gold
58
%
41
%
100
%
100
%
Silver
42
%
59
%
39
%
Zinc
29
%
Lead
32
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
660
$
1,230
$
822
$
887
Silver ($/oz)
$
8.95
$
14.24
$
14.14
Zinc ($/lb)
$
0.75
Lead ($/lb)
$
0.71
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
$
20,857
$
12,608
$
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
$
17,979
$
11,535
$
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
$
17,798
$
2,789
$
107,513
Metal Sales
Gold ounces
29,830
14,257
25,648
19,874
89,609
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 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/20191104005819/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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