Provides Updated Full-Year 2020 Guidance
Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today
reported second quarter 2020 financial results, including revenue
of $154.2 million, cash flow from operating activities of $9.9
million and GAAP net loss from continuing operations of $1.2
million, or $0.01 per share. On an adjusted basis1, the Company
reported EBITDA of $42.2 million, cash flow from operating
activities prior to changes in working capital of $16.4 million and
net income from continuing operations of $2.6 million, or $0.01 per
share.
Key Highlights
- Successful restart of Palmarejo post-suspension - Coeur
safely restarted its Palmarejo mine, following receipt of updated
guidance from the Mexican government that precious metals mining is
now considered an essential business activity. After being
temporarily suspended for approximately 45 days, production began
ramping up in June and is expected to continue increasing during
the second half of the year
- Prepared to begin construction on upcoming expansion at
Rochester - The Company received authorizations necessary to
advance the expansion under Plan of Operations Amendment 11 (“POA
11”) at Rochester. Coeur expects to commence construction on the
project in early August 2020
- Strong operating and financial results at Kensington and
Wharf - Kensington’s gold production remained strong during the
second quarter, helping to generate $27.8 million2 in operating
cash flow and $23.9 million2 of free cash flow1, compared to $11.9
million3 and $7.1 million3, respectively, in the prior period. Gold
production at Wharf increased 60% quarter-over-quarter, leading to
$19.1 million and $18.8 million in operating and free cash flow1,
respectively, compared to $2.6 million and $2.2 million in the
first quarter of 2020
- Aggressive investment in exploration - Coeur continued
to execute its largest exploration program in Company history,
investing $13.0 million, a 60% increase over the prior period and
approximately 90% higher than the second quarter of 2019. The
Company plans to publish an exploration update in August 2020,
outlining program highlights through the first half of the
year
- Continued execution of hedging program to underpin expected
cash flow - The Company took advantage of stronger gold prices
to implement additional zero-cost collar (“ZCC”) hedges to support
the expected funding requirement for the POA 11 expansion at
Rochester, targeting up to 50% of the Company’s expected gold
production in 2021 and 2022
- Higher cash position and successful debt reduction
initiatives - Cash and cash equivalents totaled $70.9 million
at June 30, 2020, 34% higher than at the end of the first quarter
of 2020. The Company also repaid $90.0 million of its senior
secured revolving credit facility (“RCF”) using cash on hand,
leaving a $60.0 million balance at the end of the second quarter.
Coeur intends to repay the remaining RCF balance by year-end from
internally generated cash flow and expects cash to build over the
coming quarters in preparation for the expansion at Rochester
“Like most companies, our second quarter results were negatively
impacted by COVID-19. Most notably at Palmarejo, our strongest
performing asset in the first quarter, operations were temporarily
suspended due to a decree from the Federal government of Mexico.
However, with Palmarejo now back in production, our three U.S.
operations hitting their strides and the tailwind of higher gold
and silver prices, we are anticipating a strong second half of 2020
and expect to continue this momentum into 2021,” said Mitchell J.
Krebs, President and Chief Executive Officer. “I would like to
thank everyone at Coeur for working tirelessly under challenging
circumstances to safely and responsibly deliver critical minerals
that are essential to nearly every aspect of modern life. Their
ongoing efforts have allowed the Company to be well positioned to
benefit from higher gold and silver prices going forward.”
Mr. Krebs continued, “Looking ahead over the coming quarters, we
are excited about the direction we are headed as a company. We
recently enhanced our team by bringing in Mick Routledge as our new
Chief Operating Officer and appointing Terry Smith as our Chief
Development Officer, which has provided us greater organizational
bandwidth and a leadership structure that is better aligned with
our strategy and key priorities. Our top strategic priority is the
POA 11 expansion at Rochester, which is expected to generate
exponentially higher annual free cash flow and represents a
fundamental inflection point for Coeur. Additionally, the success
of our exploration programs and acquisitions made at much lower
gold and silver prices provides a balanced pipeline of near-,
medium- and long-term growth opportunities that we believe will
unlock meaningful value for our stockholders.”
“With multiple key catalysts in the coming quarters, we plan to
proactively update investors on our capital allocation decisions
and their expected impact on the Company’s growth, costs and cash
flow. We plan to publish an exploration update in August given the
size and importance of our investment in exploration in 2020. We
also intend to deliver the results of Rochester’s updated technical
report in the fourth quarter that will detail the updated economics
of this important expansion project,” concluded Mr. Krebs.
Financial and Operating Highlights
(Unaudited)
(Amounts in millions, except per share
amounts, gold ounces produced & sold, and per-ounce/pound
metrics)
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Gold Sales
$
127.9
$
127.6
$
134.3
$
141.9
$
110.3
Silver Sales
$
26.3
$
44.9
$
54.8
$
51.6
$
45.0
Zinc Sales
$
—
$
(0.7
)
$
2.6
$
2.0
$
2.6
Lead Sales
$
—
$
1.3
$
3.3
$
4.0
$
4.2
Consolidated Revenue
$
154.2
$
173.2
$
195.0
$
199.5
$
162.1
Costs Applicable to Sales4
$
90.0
$
118.9
$
146.6
$
141.0
$
131.9
General and Administrative
Expenses
$
8.6
$
8.9
$
7.6
$
9.6
$
7.8
Net Income (Loss)
$
(1.2
)
$
(11.9
)
$
(270.9
)
$
(14.3
)
$
(36.8
)
Net Income (Loss) Per Share
$
(0.01
)
$
(0.05
)
$
(1.13
)
$
(0.06
)
$
(0.18
)
Adjusted Net Income (Loss)1
$
2.6
$
(0.9
)
$
(3.3
)
$
(5.3
)
$
(23.0
)
Adjusted Net Income (Loss)1 Per
Share
$
0.01
$
—
$
(0.01
)
$
(0.02
)
$
(0.11
)
Weighted Average Shares
Outstanding
240.9
240.3
238.7
225.9
207.8
EBITDA1
$
35.3
$
25.5
$
(214.5
)
$
37.6
$
7.7
Adjusted EBITDA1
$
42.2
$
46.5
$
59.8
$
61.0
$
30.6
Cash Flow from Operating
Activities
$
9.9
$
(8.0
)
$
39.3
$
42.0
$
26.4
Capital Expenditures
$
16.7
$
22.2
$
21.0
$
30.7
$
20.7
Free Cash Flow1
$
(6.7
)
$
(30.2
)
$
18.4
$
11.3
$
5.7
Cash, Equivalents & Short-Term
Investments
$
70.9
$
52.9
$
55.6
$
65.3
$
37.9
Total Debt5
$
348.6
$
343.1
$
295.5
$
298.7
$
370.0
Average Realized Price Per Ounce –
Gold
$
1,641
$
1,490
$
1,407
$
1,413
$
1,277
Average Realized Price Per Ounce –
Silver
$
16.25
$
16.63
$
16.99
$
17.17
$
14.75
Average Realized Price Per Pound –
Zinc
$
—
$
(0.21
)
$
0.62
$
0.50
$
0.49
Average Realized Price Per Pound –
Lead
$
—
$
0.54
$
0.78
$
0.92
$
0.82
Gold Ounces Produced
78,229
85,077
94,716
99,782
86,584
Silver Ounces Produced
1.6
2.7
3.1
3.0
3.1
Zinc Pounds Produced
—
2.5
3.9
4.2
5.3
Lead Pounds Produced
—
2.2
4.0
4.5
5.0
Gold Ounces Sold
77,933
85,635
95,532
100,407
86,385
Silver Ounces Sold
1.6
2.7
3.3
3.0
3.0
Zinc Pounds Sold
—
3.2
4.1
4.1
5.3
Lead Pounds Sold
—
2.5
4.3
4.3
5.2
Financial Results
Second quarter 2020 revenue totaled $154.2 million compared to
$173.2 million in the prior period, primarily driven by the
temporary suspension at Palmarejo. The Company produced 78,229
ounces of gold and 1.6 million ounces of silver during the second
quarter, selling 77,933 ounces of gold and 1.6 million ounces of
silver. Average realized gold and silver prices for the quarter
were $1,641 and $16.25 per ounce, respectively, or 10% higher and
2% lower quarter-over-quarter.
Gold and silver sales accounted for 83% and 17% of second
quarter revenue, respectively. The Company’s U.S. operations
accounted for approximately 75% of second quarter revenue, up from
approximately 56% in the prior period, due primarily to the
temporary suspension at Palmarejo.
Costs applicable to sales4 of $90.0 million were 24% lower
quarter-over-quarter, reflecting a full quarter of suspended
operations at Silvertip and compliance with the government-mandated
temporary suspension at Palmarejo. Second quarter general and
administrative expenses decreased modestly to $8.6 million,
primarily driven by lower employee-related expenses and outside
service fees.
Second quarter exploration expense totaled $11.9 million, or 86%
higher quarter-over-quarter, reflecting the ramp-up of seasonal
drilling programs at Rochester, Wharf and Silvertip. See the
“Operations” section and page 14 for additional details on the
Company’s exploration activities.
Operating costs related to COVID-19 totaled $6.1 million during
the second quarter, compared to $0.3 million in the prior period,
primarily related to higher employee-related expenses incurred at
Palmarejo and Kensington. These costs are included in
“Pre-development, reclamation, and other expenses” on the Company’s
income statement.
Coeur recorded an income tax expense of $2.8 million during the
second quarter. Cash income and mining taxes paid during the
quarter totaled approximately $5.9 million.
Quarterly operating cash flow improved to $9.9 million, compared
to $(8.0) million in the prior period, reflecting improved cash
flow from most operations and working capital changes
quarter-over-quarter. The Company satisfied the remaining $8.0
million obligation under its prepayment agreement at Kensington and
exercised an option to receive an additional $15.0 million
prepayment, resulting in a net cash inflow of approximately $7.0
million in the second quarter. Changes in working capital during
the quarter totaled $(6.5) million, compared to $(38.1) million in
the first quarter of 2020.
Second quarter capital expenditures were $16.7 million, compared
to $22.2 million in the prior period, reflecting lower investment
across most of the Company’s operations. Sustaining and development
capital expenditures accounted for approximately 71% and 29%,
respectively, of the Company’s capital expenditures during the
quarter.
Liquidity Update
Prudent balance sheet management remains a key element of
Coeur’s strategy. The Company used cash on hand to repay $90.0
million of outstanding indebtedness under its RCF, reducing the
total amount drawn from $150.0 million in April 2020 to $60.0
million at the end of the second quarter. Coeur also
opportunistically monetized a portion of its holding in Metalla
Royalty & Streaming Ltd., resulting in net proceeds of
approximately $19.4 million.
At June 30, 2020, cash and cash equivalents totaled $70.9
million, while total debt5 outstanding was $348.6 million.
Additionally, the Company’s issued and outstanding share count
remained consistent at 240.9 million in the second quarter.
Hedging Update
Coeur continued to add to its hedge position by executing
additional ZCC hedges on a portion of its expected gold production.
The structure allows for downside protection against potential
decreases in the price of gold, while enabling participation in the
potential upside to a specified ceiling price.
The Company implemented the program in preparation for POA 11 at
Rochester, which it expects to fund with a combination of cash on
hand, internally generated cash flow and existing debt capacity.
Coeur has completed its gold hedging program for 2021 and will look
to continue opportunistically executing ZCC hedges on up to 50% of
expected gold production in 2022. The Company’s silver price
exposure is currently unhedged. An overview of the hedges currently
implemented is outlined below:
3Q 2020
4Q 2020
Total 2H 2020
2021
2022
Gold Ounces Hedged
49,500
55,500
105,000
158,700
126,000
Avg. Ceiling ($/oz)
$1,826
$1,823
$1,825
$1,875
$2,030
Avg. Floor ($/oz)
$1,441
$1,471
$1,457
$1,600
$1,626
Rochester Expansion
Coeur completed its internal review of the business case
supporting POA 11 during the second quarter, resulting in the
approval to proceed with construction of the expansion project. The
Company also received its revised water pollution control permit,
authorizing mining, milling and mineral beneficiation for POA 11.
The expansion project includes the construction of a new leach pad,
crushing facility equipped with two high-pressure grinding roll
(“HPGR”) units and Merrill-Crowe process plant as well as related
infrastructure to support the extension of Rochester’s mine
life.
Together with SNC-Lavalin, the Company’s engineering,
procurement and project management contractor for POA 11, Coeur has
made significant progress on detailed design work. The Company
expects to complete the work necessary to finalize its total
capital estimate by the end of the third quarter of 2020. Coeur
also plans to file an updated technical report in late 2020 further
outlining the details of the expansion, including an updated mine
plan and drilling results as well as additional operational and
financial information regarding the expected impacts of HPGR
technology.
Coeur expects to begin construction activities for POA 11 in
early August 2020, including (i) advancing early-stage earthworks
and (ii) establishing project-specific infrastructure, providing
the Company additional flexibility on the back end of its project
schedule. Major construction projects are expected to begin in
early 2021 and be largely completed by late 2022. The current
timeline for the key elements of the expansion is highlighted
below:
Expected Start Date
Target Completion Date
Leach Pad (Incl. Ancillary Facilities)
2H 2020
Mid-2022
Merrill-Crowe Process Plant
1H 2021
YE 2022
Crushing Circuit
1H 2021
YE 2022
Supporting Infrastructure
2H 2020
Mid-2022
Operations
Second quarter 2020 highlights for each of the Company’s
operations are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce
amounts)
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Tons milled
269,641
479,562
486,779
442,464
447,727
Average gold grade (oz/t)
0.07
0.07
0.07
0.09
0.07
Average silver grade (oz/t)
4.46
4.69
5.11
4.88
4.74
Average recovery rate – Au
86.0%
91.6%
84.9%
81.7%
87.7%
Average recovery rate – Ag
72.2%
81.5%
81.7%
79.6%
81.8%
Gold ounces produced
15,223
31,578
28,702
31,779
28,246
Silver ounces produced (000’s)
867
1,835
2,029
1,720
1,735
Gold ounces sold
16,924
31,287
27,952
32,731
28,027
Silver ounces sold (000’s)
875
1,895
1,980
1,747
1,709
Average realized price per gold
ounce
$1,399
$1,331
$1,238
$1,269
$1,210
Average realized price per silver
ounce
$16.35
$17.25
$17.28
$17.05
$14.86
Metal sales
$38.0
$74.3
$68.9
$71.3
$59.3
Costs applicable to sales4
$18.8
$36.0
$34.8
$37.4
$36.5
Adjusted CAS per AuOz1
$686
$645
$622
$660
$741
Adjusted CAS per AgOz1
$8.13
$8.37
$8.79
$8.95
$9.17
Exploration expense
$0.9
$1.5
$2.0
$1.6
$1.1
Cash flow from operating
activities
$(3.5)
$28.9
$41.4
$36.3
$15.6
Sustaining capital expenditures
(excludes capital lease payments)
$4.5
$7.1
$6.2
$4.7
$5.0
Development capital
expenditures
$—
$—
$2.4
$3.1
$2.6
Total capital expenditures
$4.5
$7.1
$8.6
$7.8
$7.6
Free cash flow1
$(8.0)
$21.8
$32.8
$28.5
$8.0
- Active mining, processing and exploration activities were
temporarily suspended at Palmarejo during the second quarter in
accordance with a government decree in response to COVID-19. The
Federal government of Mexico amended its guidance in May,
clarifying that precious metals mining is an essential business
activity, allowing Palmarejo to resume operations
Operational
- Operations were ramped down in the beginning of April and were
suspended for approximately 45 days during the second quarter.
Production began ramping back up in June and increased steadily
during the month
- Second quarter gold and silver production totaled 15,223 ounces
and 0.9 million ounces, respectively, compared to 31,578 ounces and
1.8 million ounces in the prior period
Financial
- Second quarter adjusted CAS1 for gold on a co-product basis
increased 6% compared to the prior period to $686 per ounce, while
adjusted CAS1 for silver on a co-product basis decreased 3% to
$8.13 per ounce
- Quarterly capital expenditures decreased 37% to $4.5 million
and continued to focus on mine development and infrastructure
projects
- Free cash flow1 in the second quarter totaled $(8.0) million,
compared to $21.8 million in the prior period
Exploration
- Exploration investment for the second quarter totaled
approximately $1.5 million ($0.9 million expensed and $0.6 million
capitalized), compared to roughly $2.7 million ($1.5 million
expensed and $1.2 million capitalized) in the prior quarter
- Up to eight surface and underground core rigs were active
during the quarter, with four rigs mobilized at the end of June
2020
- Exploration activity focused on infill drilling within the two
underground mine complexes, Independencia and Guadalupe, and on
resource expansion north, southwest and southeast of both mine
complexes. New resource expansion holes were also drilled east,
northwest and north of Independencia
- A total of 10 expansion and 18 infill holes were drilled during
the quarter for a total 30,440 feet (9,278 meters). Coeur expects
to ramp up to six active rigs during the third quarter, targeting a
balanced focus of expansion and infill drilling
Other
- Workforce staffing levels are currently limited to
approximately 85% due to compliance with government-imposed
restrictions related to COVID-19
- Approximately 35% of Palmarejo’s gold sales in the second
quarter, or 5,988 ounces, were sold under its gold stream agreement
at a price of $800 per ounce
Guidance
- Full-year 2020 production is expected to be 95,000 - 105,000
ounces of gold and 6.0 - 7.0 million ounces of silver
- CAS1 are expected to be $785 - $885 per gold ounce and $9.50 -
$10.50 per silver ounce
- Capital expenditures are expected to be approximately $32 - $36
million
Rochester, Nevada
(Dollars in millions, except per ounce
amounts)
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Ore tons placed
3,743,331
3,428,578
2,612,319
2,516,353
2,786,287
Average silver grade (oz/t)
0.51
0.57
0.47
0.43
0.45
Average gold grade (oz/t)
0.002
0.002
0.003
0.004
0.003
Silver ounces produced (000’s)
728
687
848
982
971
Gold ounces produced
5,159
5,936
10,634
7,901
8,609
Silver ounces sold (000’s)
724
632
932
951
962
Gold ounces sold
5,278
5,473
11,248
7,651
8,642
Average realized price per silver
ounce
$16.11
$16.99
$17.22
$17.02
$14.83
Average realized price per gold
ounce
$1,702
$1,583
$1,484
$1,476
$1,295
Metal sales
$20.6
$19.4
$32.6
$27.5
$25.5
Costs applicable to sales4
$18.3
$17.0
$25.3
$27.7
$24.7
Adjusted CAS per AgOz1
$13.75
$14.38
$13.25
$14.24
$13.19
Adjusted CAS per AuOz1
$1,481
$1,359
$1,142
$1,230
$1,153
Exploration expense
$1.8
$0.2
$0.4
$0.1
$0.1
Cash flow from operating
activities
$(5.6)
$(9.3)
$6.9
$8.3
$1.6
Sustaining capital expenditures
(excludes capital lease payments)
$1.5
$0.1
$0.9
$(1.0)
$0.4
Development capital
expenditures
$4.3
$5.0
$4.1
$11.2
$2.4
Total capital expenditures
$5.8
$5.1
$5.0
$10.2
$2.8
Free cash flow1
$(11.4)
$(14.4)
$1.9
$(1.9)
$(1.2)
Operational
- Silver production increased 6% quarter-over-quarter to
approximately 0.7 million ounces, while gold production decreased
13% to 5,159 ounces
- Despite continued restocking of metal inventories during the
second quarter, production was impacted by dilution from stacking
HPGR-crushed material on top of historic ore on the Stage IV leach
pad
- Slightly higher silver production was driven by residual
leaching on the Stage III leach pad and a modest improvement in
solution grades on the Stage IV leach pad. Gold production was
affected by the placement of slightly lower grade material during
the first half of the year
- Tons placed increased 9% quarter-over-quarter and 34%
year-over-year to approximately 3.7 million tons. The Company was
able to process 36,360 tons per day6 through the upgraded crushing
circuit, in-line with its target for the quarter. Coeur
supplemented placement rates by stacking roughly 650,000 tons of
run-of-mine material, taking advantage of favorable fuel and
consumable costs
- In June 2020, Coeur calibrated a new recovery model for the
Stage IV leach pad and began executing a new stacking plan to
maximize silver recoveries on HPGR-crushed ore. The new plan
utilizes an inter-lift liner to place ounces on shallower portions
of the Stage IV leach pad, leveraging two existing collection
systems. Production is expected to increase steadily and reach
sustainable levels during the second half of the year
- Initial results received from thirty-foot column tests
conducted during the second quarter further validate the Company’s
recovery rate assumptions on HPGR-crushed ore
Financial
- Second quarter adjusted CAS1 for silver on a co-product basis
decreased 4% quarter-over-quarter to $13.75 per ounce, while
adjusted CAS1 for gold on a co-product basis increased 9% to $1,481
per ounce, reflecting modestly higher crushing and mining costs as
well as higher silver and lower gold sales
- Capital expenditures of $5.8 million were approximately 14%
higher quarter-over-quarter, reflecting increased investment
related to POA 11 and a milestone payment for the inter-lift
liner
- Free cash flow1 totaled $(11.4) million in the second quarter,
compared to $(14.4) million in the first quarter, largely driven by
improved operating cash flow and partially offset by higher capital
expenditures
Exploration
- Exploration investment for the second quarter accelerated to
approximately $2.2 million ($1.8 million expensed and $0.4 million
capitalized), compared to roughly $0.4 million ($0.2 million
expensed and $0.2 million capitalized) in the prior period
- Following the success of prior drill programs, two core rigs
began directional drilling in the beginning of the quarter to test
areas of potential mineralization under the Stage I and Stage II
leach pads at East Rochester. A total of 8 expansion core holes
were drilled for a total of 13,465 feet (4,104 meters)
- One reverse circulation rig was subsequently added,
transitioning focus to infill drilling within the existing
Rochester pit. A total of 23 infill holes were drilled in the area
for a total of 14,239 feet (4,340 meters)
- Based on its success, Coeur has decided to extend the
directional drilling program at East Rochester as well as the
southeast Rochester infill program
Other
- Mining remains an essential business in Nevada. The Company
continues to maintain rigorous health and safety protocols aimed at
limiting the exposure and transmission of COVID-19
- During the quarter, Coeur entered into a first-of-its-kind
agreement to protect critical sagebrush habitat in Nevada while
ensuring continued environmentally sensitive and sustainable mining
practices. Funding by Coeur will preserve and enhance over 3,000
acres of vital greater sage-grouse habitat in Elko and Humboldt
Counties
Guidance
- Full-year 2020 production is expected to be 3.5 - 4.5 million
ounces of silver and 27,000 - 33,000 ounces of gold
- CAS1 in 2020 are expected to be $12.75 - $14.00 per silver
ounce and $1,250 - $1,400 per gold ounce
- Capital expenditures are expected to be approximately $38 - $43
million
Kensington, Alaska
(Dollars in millions, except per ounce
amounts)
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Tons milled
170,478
162,341
167,061
166,475
160,510
Average gold grade (oz/t)
0.21
0.21
0.20
0.22
0.23
Average recovery rate
92.0%
93.5%
87.2%
93.2%
93.0%
Gold ounces produced
33,058
32,022
29,736
34,156
34,049
Gold ounces sold
32,367
32,781
29,293
35,452
34,415
Average realized price per gold ounce,
gross
$1,762
$1,603
$1,493
$1,505
$1,332
Treatment and refining charges per gold
ounce
$57
$27
$24
$20
$20
Average realized price per gold ounce,
net
$1,705
$1,576
$1,469
$1,485
$1,312
Metal sales
$55.2
$51.7
$43.0
$52.6
$45.2
Costs applicable to sales4
$30.4
$30.5
$28.8
$29.5
$29.1
Adjusted CAS per AuOz1
$934
$928
$976
$822
$842
Prepayment, working capital cash
flow
$7.0
$(7.0)
$4.7
$(14.7)
$25.0
Exploration expense
$2.6
$1.8
$1.6
$1.5
$2.0
Cash flow from operating
activities
$27.8
$11.9
$19.9
$4.5
$41.4
Sustaining capital expenditures
(excludes capital lease payments)
$3.9
$4.8
$4.3
$4.9
$4.9
Development capital
expenditures
$—
$—
$—
$—
$—
Total capital expenditures
$3.9
$4.8
$4.3
$4.9
$4.9
Free cash flow1
$23.9
$7.1
$15.6
$(0.4)
$36.5
Operational
- Gold production in the second quarter totaled 33,058 ounces,
slightly higher quarter-over-quarter and modestly lower
year-over-year
- The improvement in production was largely driven by positive
grade reconciliation from the Kensington Main deposit as well as an
increase in throughput from the higher-grade Jualin deposit
- Jualin accounted for approximately 16% of Kensington’s second
quarter production, increasing from approximately 8% in the prior
quarter. For the full year, Jualin is expected to account for
approximately 15-20% of Kensington’s total production
Financial
- Adjusted CAS1 remained relatively consistent
quarter-over-quarter, totaling $934 per ounce
- Capital expenditures of $3.9 million were slightly lower
compared to the prior period, focusing on underground development
and planned equipment purchases
- Free cash flow1 totaled $23.9 million during the second
quarter, including net cash inflow of approximately $7.0 million
associated with Coeur’s prepayment agreement at Kensington.
Excluding the effect of the prepayment, free cash flow1 totaled
approximately $16.9 million in the second quarter
Exploration
- Exploration investment during the second quarter totaled
approximately $2.7 million (substantially all expensed), compared
to approximately $1.9 million (substantially all expensed) in the
prior quarter
- Three core rigs were active during the quarter, two underground
and one surface, exclusively focused on resource expansion
drilling. The underground rigs initially focused on the Jualin and
lower Kensington Zone 10 veins and were later moved to drill the
upper Kensington Zone 30, Elmira and Eureka veins. The surface rig
was added to test Jualin veins #1 and #2. Late in the quarter, a
helicopter-supported surface rig began drilling on the Raven
vein
- A total of 60 resource expansion holes were drilled during the
quarter for a total of 40,231 feet (12,262 meters)
Other
- Mining continues to be considered an essential business in
Alaska. Rotational schedules remain extended from 14 days to 28
days in response to concerns related to COVID-19. All employees are
required to quarantine for 7 days and undergo viral COVID-19
testing prior to starting their 28-day rotation
Guidance
- Production in 2020 is expected to be 125,000 - 135,000 ounces
of gold
- CAS1 in 2020 are expected to be $900 - $1,000 per ounce
- Capital expenditures are expected to be $28 - $33 million in
2020
Wharf, South Dakota
(Dollars in millions, except per ounce
amounts)
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Ore tons placed
1,401,237
946,449
1,100,393
1,503,021
919,435
Average gold grade (oz/t)
0.032
0.025
0.023
0.027
0.023
Gold ounces produced
24,789
15,541
25,644
25,946
15,680
Silver ounces produced (000’s)
25
15
20
18
12
Gold ounces sold
23,364
16,094
27,039
24,573
15,301
Silver ounces sold (000’s)
23
15
21
17
12
Average realized price per gold
ounce
$1,715
$1,592
$1,482
$1,481
$1,311
Metal sales
$40.5
$25.9
$40.5
$36.7
$20.2
Costs applicable to sales4
$22.5
$17.8
$25.7
$22.1
$15.5
Adjusted CAS per AuOz1
$804
$1,090
$802
$887
$1,002
Exploration expense
$0.1
$—
$0.2
$0.1
$—
Cash flow from operating
activities
$19.1
$2.6
$17.0
$17.6
$0.5
Sustaining capital expenditures
(excludes capital lease payments)
$0.3
$0.4
$0.8
$0.8
$0.2
Development capital
expenditures
$—
$—
$—
$—
$—
Total capital expenditures
$0.3
$0.4
$0.8
$0.8
$0.2
Free cash flow1
$18.8
$2.2
$16.2
$16.8
$0.3
Operational
- Gold production increased 60% quarter-over-quarter and 58%
year-over-year to 24,789 ounces
- Strong production during the quarter was due to improved
weather conditions, higher grades and better crusher performance
which drove a 48% increase in tons placed quarter-over-quarter
Financial
- Adjusted CAS1 on a by-product basis decreased 26%
quarter-over-quarter to $804 per ounce, primarily driven by higher
production and increased metal sales
- Second quarter capital expenditures totaled $0.3 million,
remaining relatively consistent with the prior period
- Free cash flow1 was $18.8 million in the second quarter and has
now totaled $193.8 million since Coeur acquired the operation in
February 2015 for approximately $99.5 million
Exploration
- As anticipated, exploration investment in the second quarter
was minimal and is expected to increase during the second half of
the year
- Exploration activities began in mid-June with geologic mapping,
geochemical sampling and drilling at the Richmond Hill project,
which is located approximately four miles north-northeast of Wharf.
Coeur has an exclusive option agreement with Barrick Gold Corp to
acquire the project that expires in September 2021
- The exploration program is currently employing one reverse
circulation rig and is expected to drill approximately 18,000 feet
(5,500 meters) in 2020
Other
- South Dakota’s public order mandating the closure of all
public-facing businesses does not include Wharf. Coeur continues to
follow rigorous health and safety protocols to limit the exposure
and transmission of COVID-19 at Wharf
Guidance
- Gold production in 2020 is expected to be 80,000 - 90,000
ounces
- CAS1 are expected to be $950 - $1,000 per ounce
- Capital expenditures are expected to be approximately $2 - $3
million in 2020
Silvertip, British Columbia
(Dollars in millions, except per ounce
and per pound amounts)
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Silver ounces produced (000's)
—
139
279
300
344
Zinc pounds produced (000's)
—
2,460
3,865
4,197
5,322
Lead pounds produced (000's)
—
2,177
4,021
4,478
4,980
Silver ounces sold (000's)
—
159
294
290
365
Zinc pounds sold (000's)
—
3,203
4,053
4,076
5,303
Lead pounds sold (000's)
—
2,453
4,223
4,331
5,186
Metal sales
$—
$1.9
$10.2
$11.3
$11.9
Costs applicable to sales4
$—
$17.7
$32.0
$24.2
$26.2
Exploration expense
$2.9
$0.3
$0.9
$0.8
$0.7
Cash flow from operating
activities
$(14.9)
$(27.1)
$(28.6)
$(15.3)
$(11.6)
Sustaining capital expenditures
(excludes capital lease payments)
$1.9
$4.6
$2.0
$6.4
$5.0
Development capital
expenditures
$—
$—
$—
$—
$—
Total capital expenditures
$1.9
$4.6
$2.0
$6.4
$5.0
Free cash flow1
$(16.8)
$(31.7)
$(30.6)
$(21.7)
$(16.6)
- Mining and operating activities were temporarily suspended at
Silvertip on February 19, 2020 (unrelated to COVID-19). Operational
results in the table above reflect performance prior to the
temporary suspension
Operational
- Coeur continues to advance work on its internal pre-feasibility
study to evaluate a mill expansion, which is expected to be
completed in the third quarter
Financial
- One-time costs related to the ramp down of active mining and
processing activities totaled $1.7 million in the second quarter,
compared to $3.5 million in the prior period
- Ongoing carrying costs in the second quarter totaled $5.2
million, compared to $2.6 million in the prior period, reflecting a
full quarter of suspended operations. Coeur expects ongoing
quarterly carrying costs to remain at similar levels during the
suspension
- Capital expenditures during the second quarter decreased 58% to
$1.9 million, reflecting the curtailment of spending on capital
projects completed in the prior periods
- Free cash flow1 for the quarter totaled $(16.8) million
Exploration
- Exploration investment in the second quarter totaled
approximately $2.9 million (substantially all expensed), compared
to approximately $0.3 million (substantially all expensed) in the
prior period
- The Company ramped up to six active drill rigs in the second
quarter, focusing on resource expansion and larger step out
(“scout”) drilling to test the edges of the mineralized system. A
total of 35 holes were drilled during the quarter for a total of
51,794 feet (15,787 meters)
- Coeur plans to continue accelerating its exploration program,
targeting six active rigs during the third quarter. As access has
improved following winter snow melt, approximately 30% of the
planned expansion holes will focus on scout targets to test the
edges and limits of the known resource shapes to the north, east
and south of Silvertip mine
Other
- Rotational schedules have transitioned back to 14 days
(previously 21 days) as a result of easing concerns related to
COVID-19 in British Columbia
Guidance
- Capital expenditures are expected to total approximately $8 -
$10 million in 2020
Exploration
During the second quarter, the Company drilled 194,043 feet
(59,145 meters) at a total investment of approximately $13.0
million ($11.9 million expensed and $1.1 million capitalized),
compared to 149,215 feet (45,481 meters) at a total investment of
roughly $8.1 million ($6.4 million expensed and $1.7 million
capitalized) in the prior period. Total feet drilled in the second
quarter was approximately 30% higher compared to the prior quarter
and 28% higher than the second quarter of 2019. The increase in
drilling activity was due primarily to the ramp up of seasonal
drill programs at Rochester, Wharf and Silvertip.
Additionally, up to three drill rigs were active during the
second quarter at the Sterling and Crown exploration properties in
southern Nevada. The Company drilled a total of 40,347 feet (12,298
meters) during the quarter, compared to 48,090 feet (14,658 meters)
in the prior period. During the quarter, one core rig focused on
drilling for metallurgical and engineering studies at Sterling,
while 25 reverse circulation holes focusing on resource expansion
were drilled at both Sterling and Crown. The Company expects to
receive its larger 300-acre disturbance permit for the Crown Block
in the third quarter and plans to shift its focus for the remainder
of the year to both core and reverse circulation drilling in the
area.
The Company expects to invest $44 - $54 million in exploration
in 2020, including $37 - $43 million and $7 - $11 million of
expensed and capitalized exploration, respectively. Coeur plans to
publish an exploration update in August 2020, highlighting the
progress of its various drilling campaigns through the first half
of the year.
2020 Production Guidance
Gold
Silver
(oz)
(K oz)
Palmarejo
95,000 - 105,000
6,000 - 7,000
Rochester
27,000 - 33,000
3,500 - 4,500
Kensington
125,000 - 135,000
—
Wharf
80,000 - 90,000
—
Total
327,000 - 363,000
9,500 - 11,500
2020 Costs Applicable to Sales
Guidance
Gold
Silver
($/oz)
($/oz)
Palmarejo (co-product)
$785 - $885
$9.50 - $10.50
Rochester (co-product)
$1,250 - $1,400
$12.75 - $14.00
Kensington
$900 - $1,000
—
Wharf (by-product)
$950 - $1,000
—
2020 Capital, Exploration and G&A
Guidance
($M)
Capital Expenditures,
Sustaining
$70 - $85
Capital Expenditures,
Development
$40 - $45
Exploration, Expensed
$37 - $43
Exploration, Capitalized
$7 - $11
General & Administrative
Expenses
$32 - $36
Note: The Company’s guidance figures assume $1,650/oz gold and
$16.50/oz silver as well as CAD of 1.36 and MXN of 21.00.
Financial Results and Conference Call
Coeur will host a conference call to discuss its second quarter
2020 financial results on July 30, 2020 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, Michael “Mick”
Routledge, Senior Vice President and Chief Operating Officer, and
other members of management. A replay of the call will be available
through August 13, 2020.
Replay numbers:
(877) 344-7529 (U.S.)
(855) 669-9658 (Canada)
(412) 317-0088 (International)
Conference ID:
101 44 955
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 exploration and development efforts
and plans, the pre-feasibility study regarding an expansion of the
mill at Silvertip, the impact of the new crushing circuit, POA 11
expansion project and technical report preparation at Rochester,
including expected annual free cash flow after completion of POA
11, hedging strategies, priorities, returns, growth, debt repayment
plans, staffing levels, permitting, cash flow, cash on hand,
catalysts, anticipated production, costs and expenses, COVID-19
mitigation efforts, strategic initiatives 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 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 or higher treatment and refining charge 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 and, grade variability, any future
labor disputes or work stoppages (involving the Company and its
subsidiaries or third parties), 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 access or insolvency of any third-party refiner or
smelter to which Coeur markets its production, the potential
effects of the COVID-19 pandemic, including impacts to the
availability of our workforce, continued access to financing
sources, government orders that may require temporary suspension of
operations at one or more of our sites and effects on our suppliers
or the refiners and smelters to whom the Company markets its
production, the effects of environmental and other governmental
regulations and government shut-downs, 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. This does not constitute an offer of any securities for
sale.
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), operating cash
flow excluding changes in working capital 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, 2019 and our Form 10-Q for the quarter ended June 30, 2020.
Notes
- EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash
flow, adjusted net income (loss), operating cash flow excluding
changes in working capital 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 net cash inflow of $7.0 million related to Coeur’s
prepayment agreement at Kensington.
- Includes net cash outflow of $7.0 million related to Coeur’s
prepayment agreement at Kensington.
- Excludes amortization.
- Includes capital leases. Net of debt issuance costs and premium
received.
- Calculation excludes six days related to an extended planned
shutdown during May 2020.
Average Spot Prices
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Average Gold Spot Price Per Ounce
$
1,711
$
1,583
$
1,481
$
1,472
$
1,309
Average Silver Spot Price Per Ounce
$
16.38
$
16.90
$
17.32
$
16.98
$
14.88
Average Zinc Spot Price Per Pound
$
0.89
$
0.96
$
1.08
$
1.07
$
1.25
Average Lead Spot Price Per Pound
$
0.76
$
0.84
$
0.93
$
0.92
$
0.85
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
June 30, 2020
December 31, 2019
ASSETS
In thousands, except share
data
CURRENT ASSETS
Cash and cash equivalents
$
70,924
$
55,645
Receivables
21,986
18,666
Inventory
52,752
55,886
Ore on leach pads
75,111
66,192
Prepaid expenses and other
18,730
14,047
239,503
210,436
NON-CURRENT ASSETS
Property, plant and equipment, net
234,133
248,789
Mining properties, net
704,580
711,955
Ore on leach pads
78,605
71,539
Restricted assets
8,636
8,752
Equity and debt securities
15,086
35,646
Receivables
22,978
28,709
Other
57,559
62,810
TOTAL ASSETS
$
1,361,080
$
1,378,636
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable
$
58,241
$
69,176
Accrued liabilities and other
68,457
95,616
Debt
27,176
22,746
Reclamation
3,094
3,114
156,968
190,652
NON-CURRENT LIABILITIES
Debt
321,443
272,751
Reclamation
137,715
133,417
Deferred tax liabilities
35,266
41,976
Other long-term liabilities
55,831
72,836
550,255
520,980
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share;
authorized 300,000,000 shares, 243,731,885 issued and outstanding
at June 30, 2020 and 241,529,021 at December 31, 2019
2,437
2,415
Additional paid-in capital
3,605,982
3,598,472
Accumulated other comprehensive income
(loss)
(7,706
)
(136
)
Accumulated deficit
(2,946,856
)
(2,933,747
)
653,857
667,004
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
1,361,080
$
1,378,636
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2020
2019
2020
2019
Revenue
$
154,249
$
162,123
$
327,416
$
316,993
COSTS AND EXPENSES
Costs applicable to sales(1)
90,015
131,948
208,932
263,598
Amortization
27,876
43,204
64,038
85,080
General and administrative
8,616
7,750
17,536
17,224
Exploration
11,855
5,719
18,241
9,433
Pre-development, reclamation, and
other
18,675
4,334
25,230
8,768
Total costs and expenses
157,037
192,955
333,977
384,103
OTHER INCOME (EXPENSE), NET
Fair value adjustments, net
10,067
(5,296
)
1,248
3,824
Interest expense, net of capitalized
interest
(5,765
)
(6,825
)
(10,893
)
(13,279
)
Other, net
121
643
2,002
703
Total other income (expense), net
4,423
(11,478
)
(7,643
)
(8,752
)
Income (loss) before income and mining
taxes
1,635
(42,310
)
(14,204
)
(75,862
)
Income and mining tax (expense)
benefit
(2,844
)
5,546
1,095
14,204
Income (loss) from continuing
operations
$
(1,209
)
$
(36,764
)
$
(13,109
)
$
(61,658
)
Income (loss) from discontinued
operations
—
—
—
5,693
NET INCOME (LOSS)
$
(1,209
)
$
(36,764
)
$
(13,109
)
$
(55,965
)
OTHER COMPREHENSIVE INCOME (LOSS), net of
tax:
Change in fair value of derivative
contracts designated as cash flow hedges
(7,776
)
—
(7,570
)
—
Unrealized gain (loss) on debt and equity
securities
—
—
—
59
Other comprehensive income (loss)
(7,776
)
—
(7,570
)
59
COMPREHENSIVE INCOME (LOSS)
$
(8,985
)
$
(36,764
)
$
(20,679
)
$
(55,906
)
NET INCOME (LOSS) PER SHARE
Basic income (loss) per share:
Net income (loss) from continuing
operations
$
(0.01
)
$
(0.18
)
$
(0.05
)
$
(0.30
)
Net income (loss) from discontinued
operations
—
—
—
0.03
Basic(2)
$
(0.01
)
$
(0.18
)
$
(0.05
)
$
(0.27
)
Diluted income (loss) per share:
Net income (loss) from continuing
operations
$
(0.01
)
$
(0.18
)
$
(0.05
)
$
(0.30
)
Net income (loss) from discontinued
operations
—
—
—
0.03
Diluted(2)
$
(0.01
)
$
(0.18
)
$
(0.05
)
$
(0.27
)
(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,
2020
2019
2020
2019
In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
(1,209
)
$
(36,764
)
(13,109
)
(55,965
)
(Income) loss from discontinued
operations
—
—
—
(5,693
)
Adjustments:
Amortization
27,876
43,204
64,038
85,080
Accretion
2,908
3,007
5,755
5,950
Deferred taxes
(1,545
)
(9,158
)
(7,032
)
(17,417
)
Fair value adjustments, net
(10,067
)
5,296
(1,248
)
(3,824
)
Stock-based compensation
2,287
1,987
4,300
4,210
Gain on modification of right of use
lease
—
—
(4,051
)
—
Write-downs
5,208
11,872
15,589
27,319
Deferred revenue recognition
(8,134
)
—
(15,682
)
—
Other
(913
)
4,731
(2,005
)
5,981
Changes in operating assets and
liabilities:
Receivables
(1,536
)
(7,624
)
(2,349
)
(17,359
)
Prepaid expenses and other current
assets
1,081
(834
)
735
(3,518
)
Inventory and ore on leach pads
(8,056
)
(14,391
)
(29,981
)
(33,212
)
Accounts payable and accrued
liabilities
2,047
25,109
(13,004
)
19,037
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES OF CONTINUING OPERATIONS
9,947
26,435
1,956
10,589
CASH PROVIDED BY (USED IN )OPERATING
ACTIVITIES OF DISCONTINUED OPERATIONS
—
—
—
—
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES
9,947
26,435
1,956
10,589
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(16,682
)
(20,749
)
(38,890
)
(48,187
)
Proceeds from the sale of assets
9
57
4,515
904
Sale of investments
19,802
1,102
19,802
1,102
Proceeds from notes receivable
—
2,000
—
7,168
Other
(183
)
277
(200
)
2,018
CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES OF CONTINUING OPERATIONS
2,946
(17,313
)
(14,773
)
(36,995
)
CASH USED IN INVESTING ACTIVITIES OF
DISCONTINUED OPERATIONS
—
—
—
—
CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES
2,946
(17,313
)
(14,773
)
(36,995
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock
—
48,887
—
48,887
Issuance of notes and bank borrowings, net
of issuance costs
100,000
—
150,000
15,000
Payments on debt, finance leases, and
associated costs
(95,713
)
(90,812
)
(101,614
)
(113,273
)
Silvertip contingent consideration
—
—
(18,750
)
—
Other
141
—
(1,832
)
(3,259
)
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES OF CONTINUING OPERATIONS
4,428
(41,925
)
27,804
(52,645
)
CASH USED IN FINANCING ACTIVITIES OF
DISCONTINUED OPERATIONS
—
—
—
—
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES
4,428
(41,925
)
27,804
(52,645
)
Effect of exchange rate changes on cash
and cash equivalents
929
56
303
257
INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
18,250
(32,747
)
15,290
(78,794
)
Less net cash used in discontinued
operations
—
—
—
—
18,250
(32,747
)
15,290
(78,794
)
Cash, cash equivalents and restricted cash
at beginning of period
54,058
72,022
57,018
118,069
Cash, cash equivalents and restricted cash
at end of period
$
72,308
$
39,275
$
72,308
$
39,275
Adjusted EBITDA
Reconciliation
(Dollars in thousands except per share
amounts)
LTM 2Q 2020
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Net income (loss)
$
(298,347
)
$
(1,209
)
$
(11,900
)
$
(270,961
)
$
(14,277
)
$
(36,764
)
Interest expense, net of capitalized
interest
22,385
5,765
5,128
5,512
5,980
6,825
Income tax provision (benefit)
1,980
2,844
(3,939
)
2,857
218
(5,546
)
Amortization
157,834
27,876
36,162
48,118
45,678
43,204
EBITDA
(116,148
)
35,276
25,451
(214,474
)
37,599
7,719
Fair value adjustments, net
(13,454
)
(10,067
)
8,819
(7,829
)
(4,377
)
5,296
Foreign exchange (gain) loss
3,278
(11
)
76
268
2,945
468
Asset retirement obligation accretion
11,959
2,908
2,847
3,124
3,080
3,007
Inventory adjustments and write-downs
6,157
793
476
363
5,371
2,193
(Gain) loss on sale of assets and
securities
311
(9
)
(374
)
594
100
72
Impairment of long-lived assets
250,814
—
—
250,814
—
—
Silvertip inventory write-down
49,776
2,104
10,381
23,325
13,966
11,872
Silvertip one-time costs
5,234
1,725
3,509
—
—
—
Silvertip lease modification
(4,051
)
—
(4,051
)
—
—
—
Silvertip gain on contingent
consideration
(955
)
—
(955
)
—
—
—
COVID-19 one-time costs
6,380
6,108
272
—
—
—
Wharf inventory write-down
6,919
3,323
—
3,596
—
—
Loss on debt extinguishment
1,282
—
—
—
1,282
—
Receivable write-down
1,040
—
—
—
1,040
—
Interest income on notes receivables
—
—
—
—
—
(18
)
Adjusted EBITDA
$
208,542
$
42,150
$
46,451
$
59,781
$
61,006
$
30,609
Revenue
$
721,925
$
154,249
$
173,167
$
195,040
$
199,469
$
162,123
Adjusted EBITDA Margin
29
%
27
%
27
%
31
%
31
%
19
%
Adjusted Net Income (Loss)
Reconciliation
(Dollars in thousands except per share
amounts)
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Net income (loss)
$
(1,209
)
$
(11,900
)
$
(270,961
)
$
(14,277
)
$
(36,764
)
Fair value adjustments, net
(10,067
)
8,819
(7,829
)
(4,377
)
5,296
Foreign exchange loss (gain)
626
(6,620
)
1,733
2,022
889
(Gain) loss on sale of assets and
securities
(9
)
(374
)
594
100
72
Impairment of long-lived assets
—
—
250,814
—
—
Silvertip inventory write-down
2,104
10,381
23,325
13,966
11,872
Silvertip one-time costs
1,725
3,509
—
—
—
Silvertip lease modification
—
(4,051
)
—
—
—
Silvertip gain on contingent
consideration
—
(955
)
—
—
—
COVID-19 one-time costs
6,108
272
—
—
—
Wharf inventory write-down
3,323
—
3,596
—
—
Loss on debt extinguishment
—
—
—
1,282
—
Receivable write-down
—
—
—
1,040
—
Interest income on notes receivables
—
—
—
—
(18
)
Tax effect of adjustments
—
—
(4,572
)
(5,096
)
(4,332
)
Adjusted net income (loss)
$
2,601
$
(919
)
$
(3,300
)
$
(5,340
)
$
(22,985
)
Adjusted net income (loss) per share -
Basic
$
0.01
$
0.00
$
(0.01
)
$
(0.02
)
$
(0.11
)
Adjusted net income (loss) per share -
Diluted
$
0.01
$
0.00
$
(0.01
)
$
(0.02
)
$
(0.11
)
Consolidated Free Cash Flow
Reconciliation
(Dollars in thousands)
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Cash flow from continuing operations
$
9,947
$
(7,991
)
$
39,295
$
41,996
$
26,435
Capital expenditures from continuing
operations
16,682
22,208
20,907
30,678
20,749
Free cash flow
$
(6,735
)
$
(30,199
)
$
18,388
$
11,318
$
5,686
Consolidated Operating Cash
Flow
Before Working Capital Changes
Reconciliation
(Dollars in thousands)
2Q 2020
1Q 2020
4Q 2019
3Q 2019
2Q 2019
Cash provided by (used in) continuing
operating activities
$
9,947
$
(7,991
)
$
39,295
$
41,996
$
26,435
Changes in operating assets and
liabilities:
Receivables
1,536
813
(17,970
)
3,350
7,624
Prepaid expenses and other
(1,081
)
346
(2,423
)
(1,375
)
834
Inventories
8,056
21,925
20,397
9,389
14,391
Accounts payable and accrued
liabilities
(2,047
)
15,051
18,318
(22,384
)
(25,109
)
Cash flow before changes in operating
assets and liabilities
$
16,411
$
30,144
$
57,617
$
30,976
$
24,175
Reconciliation of Costs
Applicable to Sales
for Three Months Ended June
30, 2020
In thousands except per ounce or per
pound amounts
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
26,095
$
21,348
$
43,235
$
25,653
$
1,231
$
117,562
Amortization
(7,270
)
(3,012
)
(12,853
)
(3,181
)
(1,231
)
(27,547
)
Costs applicable to sales
$
18,825
$
18,336
$
30,382
$
22,472
$
—
$
90,015
Inventory Adjustments
(106
)
(566
)
(139
)
(3,304
)
—
(4,115
)
By-product credit
—
—
—
(385
)
—
(385
)
Adjusted costs applicable to
sales
$
18,719
$
17,770
$
30,243
$
18,783
$
—
$
85,515
Metal Sales
Gold ounces
16,924
5,278
32,367
23,364
77,933
Silver ounces
874,642
723,679
22,707
—
1,621,028
Zinc pounds
—
—
Lead pounds
—
—
Revenue Split
Gold
62
%
44
%
100
%
100
%
Silver
38
%
56
%
—
%
Zinc
—
%
Lead
—
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
686
$
1,481
$
934
$
804
Silver ($/oz)
$
8.13
$
13.75
$
—
Zinc ($/lb)
$
—
Lead ($/lb)
$
—
Reconciliation of Costs
Applicable to Sales
for Three Months Ended March
31, 2020
In thousands except per ounce or per
pound amounts
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
49,149
$
19,860
$
42,429
$
20,267
$
23,002
$
154,707
Amortization
(13,175
)
(2,904
)
(11,922
)
(2,444
)
(5,345
)
(35,790
)
Costs applicable to sales
$
35,974
$
16,956
$
30,507
$
17,823
$
17,657
$
118,917
Inventory Adjustments
73
(422
)
(101
)
(25
)
(10,381
)
(10,856
)
By-product credit
—
—
—
(248
)
—
(248
)
Adjusted costs applicable to
sales
$
36,047
$
16,534
$
30,406
$
17,550
$
7,276
$
107,813
Metal Sales
Gold ounces
31,287
5,473
32,781
16,094
85,635
Silver ounces
1,894,789
632,237
14,768
158,984
2,700,778
Zinc pounds
3,203,446
3,203,446
Lead pounds
2,453,485
2,453,485
Revenue Split
Gold
56
%
45
%
100
%
100
%
Silver
44
%
55
%
26
%
Zinc
48
%
Lead
26
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
645
$
1,359
$
928
$
1,090
Silver ($/oz)
$
8.37
$
14.38
$
11.79
Zinc ($/lb)
$
1.12
Lead ($/lb)
$
0.74
Reconciliation of Costs
Applicable to Sales
for Three Months Ended
December 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)
$
49,590
$
31,100
$
41,537
$
29,818
$
42,189
$
194,234
Amortization
(14,799
)
(5,791
)
(12,776
)
(4,072
)
(10,166
)
(47,604
)
Costs applicable to sales
$
34,791
$
25,309
$
28,761
$
25,746
$
32,023
$
146,630
Inventory Adjustments
(11
)
(116
)
(176
)
(3,677
)
(23,325
)
(27,305
)
By-product credit
—
—
—
(373
)
—
(373
)
Adjusted costs applicable to
sales
$
34,780
$
25,193
$
28,585
$
21,696
$
8,698
$
118,952
Metal Sales
Gold ounces
27,953
11,248
29,293
27,039
—
95,533
Silver ounces
1,979,315
931,326
21,132
294,498
3,226,271
Zinc pounds
4,052,554
4,052,554
Lead pounds
4,223,504
4,223,504
Revenue Split
Gold
50
%
51
%
100
%
100
%
Silver
50
%
49
%
38
%
Zinc
32
%
Lead
30
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
622
$
1,142
$
976
$
802
Silver ($/oz)
$
8.79
$
13.25
$
11.22
Zinc ($/lb)
$
0.69
Lead ($/lb)
$
0.62
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 2020 Guidance
In thousands except per ounce
amounts
Palmarejo
Rochester
Kensington
Wharf
Costs applicable to sales, including
amortization (U.S. GAAP)
$
178,977
$
105,053
$
178,595
$
94,142
Amortization
(42,220
)
(15,177
)
(54,009
)
(11,202
)
Costs applicable to sales
$
136,757
$
89,876
$
124,586
$
82,940
By-product credit
—
—
—
(998
)
Adjusted costs applicable to
sales
$
136,757
$
89,876
$
124,586
$
81,942
Metal Sales
Gold ounces
97,800
32,000
132,800
84,900
Silver ounces
6,300,000
3,800,000
60,350
Revenue Split
Gold
56%
46%
100%
100%
Silver
44%
54%
—
—
Adjusted costs applicable to
sales
Gold ($/oz)
$785 - $885
$1,250 - $1,400
$900 - $1,000
$950 - $1,000
Silver ($/oz)
$9.50 - $10.50
$12.75 - $14.00
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200729006025/en/
For Additional Information 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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