Coeur d'Alene Mines Corporation (NYSE:CDE) (TSX:CDM)
produced 4.4 million ounces of silver and 58,768 ounces of gold
during the third quarter, which resulted in $230.6 million in sales
and $77.3 million of operating cash flow1. The Company repurchased
$10.0 million of its common shares during the quarter and repaid
$72.0 million of outstanding debt, resulting in total remaining
debt of $47.4 million2 and cash, cash equivalents and short-term
investments of $143.6 million as of September 30, 2012.
Third Quarter Highlights
- Silver production totaled 4.4 million
ounces, 10% lower than second quarter 2012 levels.
- Gold production totaled 58,768 ounces,
down 7% from the second quarter.
- Net metal sales totaled $230.6 million,
down 9% from the second quarter.
- Operating cash flow1 totaled $77.3
million, down 13% from the second quarter. Including changes in
working capital, net cash from operating activities was $79.7
million compared to $113.2 million in the second quarter.
- Consolidated cash operating costs1 were
$9.05 per silver ounce compared to $6.41 per silver ounce in the
second quarter.
- Kensington's cash operating costs1 per
gold ounce declined 4% from the second quarter to $1,298. These
costs are expected to decline to under $950 per ounce in 2013.
- Adjusted earnings1 were $25.8 million,
or $0.29 per share, compared with $28.0 million, or $0.31 per
share, in the second quarter 2012. Net loss for the quarter, which
included a non-cash fair market value adjustment of $37.6 million,
was $15.8 million, or $0.18 per share, compared with net income of
$23.0 million, or $0.26 per share, in the second quarter.
- Cash, cash equivalents and short-term
investments were $143.6 million as of September 30, 2012.
Mitchell J. Krebs, Coeur's President and Chief Executive
Officer, said, “The Company's third quarter was negatively impacted
by lower production and higher unit costs at the Palmarejo mine in
Mexico, which were due to unfavorable underground conditions
encountered during September and a transition in open pit
production. Open pit production has been accelerated to partially
offset the impact, which has led to higher unit costs and lower
overall grades."
Mr. Krebs added, "Our Rochester silver and gold mine in Nevada
and our Kensington gold mine in Alaska continued to accelerate
production rates during the quarter. Despite experiencing power
outages that resulted in unanticipated mill downtime during August,
our San Bartolomé silver mine in Bolivia delivered consistent
operational results."
The Company expects 2012 full-year production to total 18.5 -
19.0 million silver ounces and 215,000 - 225,000 gold ounces. Cash
operating costs1 are expected to be approximately $7.50 per silver
ounce. The Company expects cash operating costs1 per ounce of gold
at Kensington to average approximately $1,350 for the full year
2012.
"As we look ahead to 2013, we expect silver and gold production
to be consistent with 2011 and 2012 levels," Mr. Krebs
commented.
1.
EBITDA, operating cash flow, adjusted
earnings and cash operating costs are non-GAAP measures. Please see
tables in the Appendix for reconciliation to U.S. GAAP. Total debt
includes short and long-term indebtedness and excludes capital
leases and royalty obligations.
2.
Net of debt discount of $1.3 million.
Table 1: Financial Highlights
(Unaudited)
(All amounts in millions, except per share amounts, average
realized prices and gold ounces sold)
3Q
2012
3Q
2011
Quarter
Variance
YTD
2012
YTD
2011
YTD
Variance
Sales of Metal $ 230.6 $ 343.6
(33 %)
$ 689.6
$ 774.3 (11 %)
Production Costs
$ 125.0 $ 141.3 (12 %)
$ 349.3 $ 310.8
12 %
EBITDA(1)
$ 86.8 $ 186.0 (53 %)
$ 286.2 $ 411.6
(30 %)
Adjusted Earnings(1)
$ 25.8 $ 93.8 (72 %)
$ 95.3 $ 189.3 (50
%)
Adjusted Earnings Per Share(1) $
0.29 $ 1.05 (72 %)
$ 1.06 $ 2.12 (50 %)
Net
Income (Loss) $ (15.8 ) $ 31.1 (151 %)
$ 11.1 $ 82.1 (86 %)
Earnings (Loss) Per Share
$ (0.18 ) $ 0.35 (151 %)
$ 0.12
$ 0.92 (87 %)
Operating Cash Flow(1)
$ 77.3 $ 151.0 (49 %)
$ 259.5 $ 356.9
(27 %)
Cash From Operating Activities $ 79.7 $
181.9 (56 %)
$ 209.9 $ 328.8 (36 %)
Capital
Expenditures $ 30.0 $ 38.1 (21 %)
$
93.9 $ 79.8 18 %
Cash, Cash Equivalents, and Short-Term
Investments $ 143.6 $ 209.0 (31 %)
$
143.6 $ 209.0 (31 %)
Total Debt(1) (net of
debt discount) $ 47.4 $ 146.7 (68
%)
$ 47.4 $ 146.7 (68 %)
Weighted
Average Shares Issued & Outstanding 89.4 89.4 —
89.6 89.4 —
Average Realized Price Per Ounce - Silver
$ 30.09 $ 38.28 (21 %)
$ 30.52 $ 36.69
(17 %)
Average Realized Price Per Ounce - Gold $
1,654 $ 1,681 (2 %)
$ 1,649 $ 1,523 8 %
Silver Ounces Sold 4.5 6.2 (27 %)
14.4 13.9 4
%
Gold Ounces Sold 59,156 67,391 (12 %)
157,621 183,243 (14 %)
Lower net metal sales in the third quarter resulted
primarily from lower production rates at Palmarejo, lower average
realized silver and gold prices, and fewer ounces of silver and
gold sold compared to the third quarter 2011. Silver contributed
59% of the Company's total metal sales during the third quarter
2012 compared to 68% during the third quarter 2011.
Consolidated production costs of $125.0 million were primarily
due to lower production levels during the quarter. Consolidated
cash operating costs1 were $9.05 per silver ounce compared to
$7.57 per silver ounce in the third quarter 2011. Increased cash
operating costs1 per silver ounce reflect higher mining costs
associated with additional underground support measures, higher
maintenance costs, and waste haulage costs in the open pit at
Palmarejo and lower mill production rates at San Bartolomé during
the quarter due to power interruptions. As previously announced,
the Company ceased operating activities and commenced reclamation
at the Martha underground silver mine in Argentina in September
2012.
Prior to changes in working capital, Coeur generated $77.3
million in operating cash flow1 in the third quarter
2012 compared to $88.4 million in the second quarter 2012 and
$151.0 million in the third quarter 2011. After working capital
changes, the Company generated $79.7 million in cash from operating
activities in the third quarter 2012 compared to $113.2 million in
the second quarter 2012 and $181.9 million during the third quarter
2011.
Coeur reports a non-U.S. GAAP metric of adjusted
earnings1 as a measure of operating income, which excludes
non-cash fair value adjustments, other non-cash adjustments,
deferred taxes and discontinued operations. Third quarter 2012
adjusted earnings1 were $25.8 million, or $0.29 per share, compared
with $28.0 million, or $0.31 per share, in the second quarter 2012
and $93.8 million, or $1.05 per share, in the third quarter 2011.
On a U.S. GAAP basis, the Company realized a net loss of $15.8
million, or $0.18 per share, compared with net income of $23.0
million, or $0.26 per share, in the second quarter and net income
of $31.1 million, or $0.35 per share, in the third quarter 2011.
Reduced metal sales and negative fair value adjustments of $37.6
million impacted third quarter net income. In the third quarter
2011, fair value adjustments were negative $53.4 million. Fair
value adjustments are driven primarily by lower or higher gold
prices, which decrease or increase, respectively, the estimated
future liabilities related to a gold royalty obligation at
Palmarejo.
1.
EBITDA, operating cash flow, adjusted
earnings and cash operating costs are non-GAAP measures. Please see
tables in the Appendix for reconciliation to U.S. GAAP. Total debt
includes short and long-term indebtedness and excludes capital
leases and royalty obligations.
Capital expenditures totaled $30.0 million during the
third quarter 2012 compared to $32.2 million in the second quarter
and $38.1 million in the third quarter 2011. Capital expenditures
in the third quarter were primarily related to capitalized
exploration drilling and development of the Guadalupe satellite
operation located six kilometers from the main Palmarejo operation,
underground development at Palmarejo, completion of a dry stack
tailings facility at San Bartolomé and an expansion of the tailings
facility at Kensington.
Cash, cash equivalents and short-term investments totaled
$143.6 million after full payment of the Kensington term facility
balance of $72.0 million and repurchasing $10.0 million of Company
stock in the third quarter. Shares outstanding at quarter-end
totaled 89.4 million.
Table 2: Operational Highlights:
Production
(silver ounces in thousands) 3Q
2012 3Q 2011
Quarter
Variance
YTD 2012 YTD 2011
YTD
Variance
Silver Gold
Silver Gold Silver Gold
Silver
Gold Silver Gold Silver
Gold
Palmarejo 1,833 23,702
2,251 29,815 (19 %) (21 %)
6,682
86,040 6,351 90,963 5 %
(5 %)
San Bartolomé 1,526 — 2,051 — (26 %)
n.a.
4,587 — 5,504 — (17 %) n.a.
Rochester
819 10,599 352 1,435 133 % 639 %
1,973
26,012 1,019 4,283 94 % 507 %
Martha 93
76 118 115 (21 %) (34 %)
323 257 399 471 (19
%) (45 %)
Kensington — 24,391 — 25,687 n.a. (5
%)
— 53,407 — 75,121 n.a. (29 %)
Endeavor
140 — 138 —
1 % n.a.
628
— 502 — 25
% n.a.
Total 4,411 58,768 4,910 57,052
(10 %) 3 %
14,193 165,716 13,775 170,838 3 % (3 %)
*Additional operating statistics can be found in the tables in
the appendix.
Table 3: Operational Highlights: Cash
Operating Costs Per Ounce1
3Q 2012 3Q 2011
Quarter
Variance
YTD 2012 YTD 2011
YTD
Variance
Palmarejo $ 3.75 $ (1.16 )
423 %
$ (0.12 )
$ (0.47 ) 74 %
San Bartolomé
12.13 9.32 30 %
11.12 9.07 23 %
Rochester
9.58 36.71 (74 %)
12.75 17.46 (27 %)
Martha
48.12 39.31 22 %
49.82 32.48 53 %
Endeavor
15.97 22.26 (28 %)
16.82 19.79
(15 %)
Total $ 9.05 $ 7.57 20 %
$ 7.19 $ 6.36 13 %
Kensington $
1,298 $ 973 33 %
$ 1,515 $ 961 58 %
*Additional operating statistics can be found in the tables in
the appendix.
Palmarejo, Mexico - Reduced Underground Mining Rate Impacts
Production
- Third quarter production at Palmarejo
was 1.8 million ounces of silver and 23,702 ounces of gold, down
23% and 24%, respectively, compared to the second quarter.
- Reduced production rates were due to
unfavorable underground conditions in a high-grade area of the
underground mine, which required additional ground support and
resulted in slower advances. The mine also experienced lower ore
grade from a transition of mining to the next push back in the open
pit operation.
- Lower grade ore from surface
operations, a 32% increase in tons milled from third quarter 2011
and a record silver recovery rate of 90.0% partially offset the
decreased underground production rates.
- Higher cash operating costs1 of $3.75
per silver ounce in the third quarter were primarily due to lower
production and temporarily higher mining costs for additional
ground support, maintenance, and waste haulage in the open
pit.
- Sales and operating cash flow1 totaled
$102.6 million and $54.9 million, respectively, in the third
quarter. Capital expenditures were $11.3 million.
1.
EBITDA, operating cash flow, adjusted
earnings and cash operating costs are non-GAAP measures. Please see
tables in the Appendix for reconciliation to U.S. GAAP. Total debt
includes short and long-term indebtedness and excludes capital
leases and royalty obligations.
San Bartolomé, Bolivia - Consistent Production
- Silver production was 1.5 million
ounces in the third quarter, consistent with second quarter
production.
- Cash operating costs1 were $12.13 per
silver ounce compared to $11.05 per silver ounce in the prior
quarter, primarily due to lower mill production rates from
unplanned mill downtime from power interruptions in August.
- Optimization of the process circuit has
led to a higher recovery rate of 90% year-to-date.
- Sales and operating cash flow1 totaled
$46.2 million and $11.2 million, respectively, in the third
quarter. Capital expenditures were $4.4 million.
Rochester, Nevada - Strong Third Quarter Gearing for Best
Quarter to Come
- Production increased to 819,349 ounces
of silver and 10,599 ounces of gold in the third quarter, 15% and
5% higher than the second quarter, respectively.
- Cash operating costs1 of $9.58 per
silver ounce in the third quarter were slightly lower than the
second quarter.
- Metal sales totaled $36.2 million in
the third quarter. Third quarter operating cash flow1 totaled $13.0
million. Capital expenditures were $4.8 million.
Kensington, Alaska - Production Continues to Rise
- Third quarter production at Kensington
was 24,391 ounces of gold, a 13% increase over the second
quarter.
- Continuous improvements at the mill
resulted in a 95.9% recovery rate compared to 94.2% in the second
quarter 2012.
- Cash operating costs1 per gold ounce
declined 4% from the second quarter to $1,298 in the third quarter.
Cash operating costs1 are expected to decline to less than $950 per
gold ounce in 2013 as a result of higher production rates, reduced
contractor-related costs and lower rental equipment expenses.
- Sales totaled $36.5 million and
operating cash flow1 totaled $7.3 million in the third quarter.
Capital expenditures were $9.0 million.
Exploration Highlights
During the third quarter, the Company invested $7.0 million in
expensed exploration and $1.6 million in capitalized exploration,
completing 147,023 feet (44,813 meters) of drilling and trenching
in its global exploration program.
Palmarejo
The Company invested $3.7 million in exploration at Palmarejo
and completed 75,814 feet (23,108 meters) of core drilling in the
third quarter. Encouraging results were obtained from underground
drilling at Rosario and the Inter-Clavos zone (a new target between
the Rosario and 76 zones). Results range from narrow, high-grade
intervals such as 0.5 meter true width grading 2,600 grams per
tonne silver and 30.5 grams per tonne gold, to much wider intervals
such as 15.5 meters true width grading 74.6 grams per tonne silver
and 1.2 grams per tonne gold. Favorable in-fill drilling results
were received from Guadalupe Norte, notably 15.0 meters true width
of 304 grams per tonne silver and 2.76 grams per tonne gold.
Drilling also commenced at La Union, a new target located southeast
of the Chapotillo surface mine, where wide zones of alteration and
veining occur near surface in association with the projection of
the main ore-bearing structure in Chapotillo.
San Bartolomé
Trenching recommenced late in the quarter on a new target, Pucka
Loma, which is about 150 feet (500 meters) west of the Company's
existing reserves and covers an area approximately 100 feet,
east-west (350 meters) by 275 feet (900 meters) north-south. Assay
results from these trench samples yielded silver values averaging
113 grams per tonne (3.3 ounces per ton) over an average of 13.1
feet (4 meters) deep. Thirty-seven shallow trenches were excavated
and sampled. Sampling will continue during the fourth quarter
2012.
1.
EBITDA, operating cash flow, adjusted
earnings and cash operating costs are non-GAAP measures. Please see
tables in the Appendix for reconciliation to U.S. GAAP. Total debt
includes short and long-term indebtedness and excludes capital
leases and royalty obligations.
Rochester
A total of 33,056 feet (10,075 meters) of drilling in 132
reverse circulation holes and 11 sonic twin holes were completed in
the third quarter at various historic stockpiles. Favorable silver
and gold grade intercepts in drill assays, including assays at
higher than the current average reserve grade, allowed mining and
placement of 350,000 tons of stockpile material on the Rochester
leach pads in September 2012. These positive results will also be
used to update the estimate of mineral resources and reserves at
year-end 2012.
Kensington
Drilling at Kensington focused on new targets around the main
mine. Encouraging results were obtained from Kensington South and
Elmira. Hole KX12-003 at Kensington South cut 10 feet of
mineralization grading 1.72 ounces per ton. This drill intercept is
situated about 750 feet south of the current Kensington mine and
over 500 feet deeper on the south-striking mine trend.
2012 Outlook
The Company has updated its full-year production guidance to
18.5 - 19.0 million ounces of silver and 215,000 - 225,000 ounces
of gold.
Cash operating costs1 per silver ounce for 2012 are expected to
be approximately $7.50. Cash operating costs1 per gold ounce at
Kensington are expected to be approximately $1,350 for 2012,
declining to less than $950 per ounce in 2013.
Table 5: 2012 Production
Outlook
(silver ounces in thousands)
Country
Silver Gold
Palmarejo Mexico
8,400-8,600
100,000-105,000
San Bartolomé Bolivia 6,200-6,300 —
Rochester Nevada, USA 2,900-3,000 32,000-35,000
Martha1 Argentina 323 257
Endeavor Australia
700-750 —
Kensington
Alaska, USA —
82,750-84,750
Total
18,500-19,000 215,000-225,000
1.
Actual production for Martha, which ceased
production in September 2012.
# # #
1.
EBITDA, operating cash flow, adjusted
earnings and cash operating costs are non-GAAP measures. Please see
tables in the Appendix for reconciliation to U.S. GAAP. Total debt
includes short and long-term indebtedness and excludes capital
leases and royalty obligations.
Conference Call Information
Coeur will hold a conference call to discuss the Company's third
quarter 2012 results at 2 p.m. Eastern time on November 6,
2012.
Dial-In
Numbers: (877) 464-2820 (U.S. and Canada) (660) 422-4718
(International) Conference ID: 3832 1596
The conference call and presentation will also be webcast on the
Company's website at www.coeur.com. A replay of the call will be
available through November 20, 2012.
Replay
number: (855) 859-2056 (U.S. and Canada) International replay:
(404) 537-3406 (International) Conference ID: 3832 1596
Cautionary Statement
This news release contains forward-looking statements within the
meaning of securities legislation in the United States and Canada,
including statements regarding anticipated operating results,
production levels and operating costs. 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
risks and hazards inherent in the mining business (including
environmental hazards, industrial accidents, weather or
geologically related conditions), changes in the market prices of
gold and silver, the uncertainties inherent in Coeur's production,
exploratory and developmental activities, including risks relating
to permitting and regulatory delays and disputed mining claims, any
future labor disputes or work stoppages, the uncertainties inherent
in the estimation of gold and silver ore reserves, changes that
could result from Coeur's future acquisition of new mining
properties or businesses, reliance on third parties to operate
certain mines where Coeur owns silver production and reserves, the
loss of any third-party smelter to which Coeur markets silver and
gold, the effects of environmental and other governmental
regulations, the risks inherent in the ownership or operation of or
investment in mining properties or businesses in foreign countries,
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.
Current mineralized material estimates include disputed and
undisputed claims at Rochester. While the Company believes it holds
a superior position in the ongoing claim dispute, the Company
believes an adverse legal outcome would cause it to modify
mineralized material estimates. 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.
Donald J. Birak, Coeur's Senior Vice President of Exploration
and a qualified person under Canadian National Instrument 43-101,
supervised the preparation of 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, please see the Technical Reports for each
of Coeur's properties as filed on SEDAR at www.sedar.com.
Cautionary Note to U.S. Investors-The United States Securities
and Exchange Commission permits U.S. mining companies, in their
filings with the SEC, to disclose only those mineral deposits that
a company can economically and legally extract or produce. We may
use certain terms in public disclosures, such as "measured,"
"indicated," "inferred” and “resources," that are recognized by
Canadian regulations, but that SEC guidelines generally prohibit
U.S. registered companies from including in their filings with the
SEC. U.S. investors are urged to consider closely the disclosure in
our Form 10-K which may be secured from us, or from the SEC's
website at http://www.sec.gov.
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 cash operating costs, operating cash flow,
adjusted earnings, and EBITDA. 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 cash operating costs, operating cash flow,
adjusted earnings and EBITDA are important measures in assessing
the Company's overall financial performance.
About Coeur
Coeur d'Alene Mines Corporation is the largest U.S.-based
primary silver producer and a growing gold producer. The Company
built and commenced production from three wholly-owned, long-lived
mines between 2008 and 2010: the San Bartolomé silver mine in
Bolivia, the Palmarejo silver-gold mine in Mexico and the
Kensington gold mine in Alaska. Further production has commenced
from a new heap leach pad at Coeur's long-time Rochester
silver-gold mine in Nevada. The Company also owns a non-operating
interest in a silver-base metal mine in Australia. Coeur conducts
ongoing exploration activities near and within its properties in
Argentina, Mexico, Alaska, Nevada and Bolivia. In addition, Coeur
owns strategic minority shareholdings in eight silver and gold
development companies in North and South America.
Table 6:
Operating Statistics from Continuing Operations:
Three months endedSeptember 30, Nine months
endedSeptember 30, 2012
2011 2012 2011
Silver
Operations:
Palmarejo Tons milled 532,775 403,978 1,551,242 1,217,437
Ore grade/Ag oz 3.82 7.34 5.21 6.88 Ore grade/Au oz 0.04 0.08 0.06
0.08 Recovery/Ag oz(1) 90.0 % 75.9 % 82.7 % 75.8 % Recovery/Au
oz(1) 102.5 % 93.6 % 95.1 % 92.2 % Silver production ounces
1,833,109 2,250,818 6,681,407 6,351,120 Gold production ounces
23,702 29,815 86,040 90,963 Cash operating cost/oz $ 3.75 $ (1.16 )
$ (0.12 ) $ (0.47 ) Cash cost/oz $ 3.75 $ (1.16 ) $ (0.12 ) $ (0.47
) Total production cost/oz $ 22.53 $ 17.33 $ 17.14 $ 18.07
San
Bartolomé Tons milled 344,349 428,978 1,113,458 1,195,286 Ore
grade/Ag oz 4.91 5.40 4.58 5.21 Recovery/Ag oz(1) 90.3 % 88.6 %
90.0 % 88.3 % Silver production ounces 1,525,725 2,051,426
4,587,359 5,503,951 Cash operating cost/oz $ 12.13 $ 9.32 $ 11.12 $
9.07 Cash cost/oz $ 13.36 $ 10.89 $ 12.29 $ 10.58 Total production
cost/oz $ 16.56 $ 13.90 $ 15.14 $ 13.61
Martha Tons milled
27,281 24,086 100,548 64,025 Ore grade/Ag oz 4.17 5.33 4.01 7.24
Ore grade/Au oz 0.003 0.01 0.004 0.01 Recovery/Ag oz(1) 81.5 % 92.3
% 80.3 % 86.2 % Recovery/Au oz(1) 82.6 % 72.9 % 72.2 % 74.0 %
Silver production ounces 92,698 118,523 323,286 399,630 Gold
production ounces 76 115 257 471 Cash operating cost/oz $ 48.12 $
39.31 $ 49.82 $ 32.48 Cash cost/oz $ 49.20 $ 41.29 $ 50.76 $ 33.95
Total production cost/oz $ 58.52 $ 45.73 $ 57.25 $ 35.31
Rochester(A)
Tons milled 2,361,951 607,031 6,640,365 607,031 Ore grade/Ag oz
0.52 0.34 0.56 0.34 Ore grade/Au oz 0.004 0.007 0.005 0.007
Recovery/Ag oz(2) 67.0 % 168.3 % 52.6 % 487.5 % Recovery/Au oz(2)
102.4 % 35.8 % 84.1 % 106.8 % Silver production ounces 819,349
351,717 1,973,392 1,018,844 Gold production ounces 10,599 1,435
26,012 4,283 Cash operating cost/oz $ 9.58 $ 36.71 $ 12.75 $ 17.46
Cash cost/oz $ 11.34 $ 39.80 $ 14.38 $ 19.87 Total production
cost/oz $ 13.96 $ 41.72 $ 17.50 $ 21.75
1. Recoveries are affected by timing
inherent in the leaching process.
2. Recoveries at Rochester are affected by
residual leaching on Stage IV pad and timing differences inherent
in the heap leaching process.
Endeavor Tons milled 205,096 182,226 601,999 556,901
Ore grade/Ag oz 1.22 1.43 2.61 1.97 Recovery/Ag oz(1) 56.0 % 53.0 %
40.0 % 45.8 % Silver production ounces 140,267 137,843 628,393
501,638 Cash operating cost/oz $ 15.97 $ 22.26 $ 16.82 $ 0.02 Cash
cost/oz $ 15.97 $ 22.26 $ 16.82 $ 0.02 Total production cost/oz $
22.37 $ 28.88 $ 23.40 $ 24.57
Gold
Operation:
Kensington(B) Tons milled 123,428 116,255 265,158 343,640
Ore grade/Au oz 0.21 0.24 0.21 0.24 Recovery/Au oz(1) 95.9 % 91.7 %
94.9 % 92.3 % Gold production ounces 24,391 25,687 53,407 75,121
Cash operating cost/oz $ 1,298 $ 973 $ 1,515 $ 961 Cash cost/oz $
1,298 $ 973 $ 1,515 $ 961 Total production cost/oz $ 1,770 $ 1,346
$ 2,037 $ 1,345
CONSOLIDATED PRODUCTION TOTALS(B)
Total silver ounces 4,411,148 4,910,326 14,193,197 13,775,183 Total
gold ounces 58,768 57,052 165,716 170,838 Silver Operations:(C)
Cash operating cost per oz - silver $ 9.05 $ 7.57 $ 7.19 $ 6.36
Cash cost per oz - silver $ 9.83 $ 8.49 $ 7.82 $ 7.18 Total
production cost oz - silver $ 19.62 $ 18.65 $ 17.74 $ 17.30 Gold
Operation:(D) Cash operating cost per oz - gold $ 1,298 $ 973 $
1,515 $ 961 Cash cost per oz - gold $ 1,298 $ 973 $ 1,515 $ 961
Total production cost per oz - gold $ 1,770 $ 1,346 $ 2,037 $ 1,345
CONSOLIDATED SALES TOTALS(E)
Silver ounces sold 4,520,500 6,200,397 14,412,503 13,922,833 Gold
ounces sold 59,156 67,391 157,621 183,243 Realized price per silver
ounce $ 30.09 $ 38.28 $ 30.52 $ 36.69 Realized price per gold ounce
$ 1,654 $ 1,681 $ 1,649 $ 1,523
(A)
The Rochester mine recommenced production
in the fourth quarter of 2011. The leach cycle at Rochester
requires five to ten years to recover gold and silver contained in
the ore. The Company estimates the ultimate recovery to be
approximately 61% for silver and 92% for gold. However, ultimate
recoveries will not be known until leaching operations cease, which
is currently estimated for 2017. Current recovery may vary
significantly from ultimate recovery. See Critical Accounting
Policies and Estimates – Ore on Leach Pad in the Company’s Form
10-K for the year ended December 31, 2011.
(B)
Current production ounces and recoveries
reflect final metal settlements of previously reported production
ounces.
(C)
Amount includes by-product gold credits
deducted in computing cash costs per ounce.
(D)
Amounts reflect Kensington per ounce
statistics only.
(E)
Units sold at realized metal prices will
not match reported metal sales due primarily to the effects on
revenues of mark-to-market adjustments on embedded derivatives in
the Company’s provisionally priced sales contracts.
Table
7:
COEUR D’ALENE MINES CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
September 30, 2012 December 31,
2011 ASSETS (In thousands, except share data)
CURRENT ASSETS Cash and cash equivalents $ 142,915 $ 175,012 Short
term investments 657 20,254 Receivables 70,963 83,497 Ore on leach
pad 30,394 27,252 Metal and other inventory 156,130 132,781
Deferred tax assets 2,090 1,869 Restricted assets 396 60 Prepaid
expenses and other 25,460 24,218 429,005 464,943
NON-CURRENT ASSETS Property, plant and equipment, net 691,219
687,676 Mining properties, net 1,923,251 2,001,027 Ore on leach
pad, non-current portion 15,575 6,679 Restricted assets 24,790
28,911 Marketable securities 31,243 19,844 Receivables, non-current
portion 48,614 40,314 Debt issuance costs, net 4,056 1,889 Deferred
tax assets 68 263 Other 12,619 12,895 TOTAL ASSETS $
3,180,440 $ 3,264,441
LIABILITIES AND
SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $
68,709 $ 78,590 Accrued liabilities and other 7,160 13,126 Accrued
income taxes 28,659 47,803 Accrued payroll and related benefits
22,892 16,240 Accrued interest payable 125 559 Current portion of
debt and capital leases 56,340 32,602 Current portion of royalty
obligation 69,959 61,721 Current portion of reclamation and mine
closure 3,372 1,387 Deferred tax liabilities 53 53
257,269 252,081 NON-CURRENT LIABILITIES Long-term debt and capital
leases 5,053 115,861 Non-current portion of royalty obligation
164,272 169,788 Reclamation and mine closure 32,636 32,371 Deferred
tax liabilities 540,023 527,573 Other long-term liabilities 37,888
30,046 779,872 875,639 COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY Common stock, par value $0.01 per share;
authorized 150,000,000 shares, issued and outstanding 89,446,482 at
September 30, 2012 and 89,655,124 at December 31, 2011 894 897
Additional paid-in capital 2,579,707 2,585,632 Accumulated deficit
(433,706 ) (444,833 ) Accumulated other comprehensive loss (3,596 )
(4,975 ) 2,143,299 2,136,721 TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY $ 3,180,440 $ 3,264,441
Table
8:
COEUR D’ALENE MINES CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three months endedSeptember 30, Nine months
endedSeptember 30, 2012
2011 2012 2011 (In
thousands, except share data) Sales of metal $ 230,593 $
343,575 $ 689,563 $ 774,289 Production costs applicable to sales
(124,967 ) (141,253 ) (349,344 ) (310,829 ) Depreciation, depletion
and amortization (52,844 ) (58,652 ) (166,460 ) (166,334 ) Gross
profit 52,782 143,670 173,759 297,126 COSTS AND EXPENSES
Administrative and general 10,266 8,236 26,456 22,294 Exploration
6,957 4,772 19,829 11,611 Loss on impairment and other 1,293 —
6,106 — Pre-development, care, maintenance and other 277
3,271 1,618 17,949 Total cost and expenses
18,793 16,279 54,009 51,854 OPERATING
INCOME 33,989 127,391 119,750 245,272 OTHER INCOME AND EXPENSE Loss
on debt extinguishments — (784 ) — (1,640 ) Fair value adjustments,
net (37,648 ) (53,351 ) (44,722 ) (71,051 ) Interest income and
other, net 12,664 (6,610 ) 14,450 (1,946 ) Interest expense, net of
capitalized interest (7,351 ) (7,980 ) (21,578 ) (26,553 ) Total
other income and expense, net (32,335 ) (68,725 ) (51,850 )
(101,190 ) Income before income taxes 1,654 58,666 67,900 144,082
Income tax provision (17,475 ) (27,606 ) (56,773 ) (61,947 ) NET
INCOME (LOSS) $ (15,821 ) $ 31,060 $ 11,127 $ 82,135
BASIC AND DILUTED INCOME (LOSS) PER SHARE Basic income per
share: Net income (loss) $ (0.18 ) $ 0.35 $ 0.12 $
0.92 Diluted income per share: Net income (loss) $ (0.18 ) $
0.35 $ 0.12 $ 0.92 Weighted average number of
shares of common stock Basic 89,429 89,449 89,550 89,350 Diluted
89,429 89,739 89,690 89,702
Table
9:
COEUR D’ALENE MINES CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Three months endedSeptember 30, Nine months
endedSeptember 30, 2012
2011 2012 2011 (In
thousands) (In thousands) CASH FLOWS FROM OPERATING
ACTIVITIES: Net income (loss) $ (15,821 ) $ 31,060 $ 11,127 $
82,135 Add (deduct) non-cash items Depreciation, depletion and
amortization 52,844 58,652 166,460 166,334 Accretion of discount on
debt and other assets, net 585 516 1,683 1,460 Accretion of royalty
obligation 4,276 4,990 14,348 16,027 Deferred income taxes (4,944 )
3,084 12,425 13,177 Loss on debt extinguishment — 784 — 1,640 Fair
value adjustments, net 35,270 50,767 39,288 71,360 Gain (loss) on
foreign currency transactions (1,577 ) 137 (1,208 ) (600 )
Share-based compensation 3,364 457 6,534 5,261 (Gain) loss on sale
of assets 108 4 372 (1,220 ) Loss on impairment 1,848 — 6,621 —
Other non-cash charges 1,331 506 1,838 1,337 Changes in operating
assets and liabilities: Receivables and other current assets (5,648
) (10,513 ) 1,717 (23,492 ) Prepaid expenses and other (2,481 )
(8,697 ) (564 ) (7,362 ) Inventories (13,762 ) 23,234 (35,387 )
(12,834 ) Accounts payable and accrued liabilities 24,342
26,930 (15,313 ) 15,538 CASH PROVIDED BY OPERATING
ACTIVITIES 79,735 181,911 209,941 328,761
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of short term
investments and marketable securities (4,093 ) (8,804 ) (11,959 )
(21,914 ) Proceeds from sales and maturities of short term
investments 337 495 21,038 3,855 Capital expenditures (29,972 )
(38,099 ) (93,857 ) (79,780 ) Other 479 1,397 1,659
1,670 CASH USED IN INVESTING ACTIVITIES (33,249 )
(45,011 ) (83,119 ) (96,169 ) CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes and bank borrowings — — — 27,500
Payments on long-term debt, capital leases, and associated costs
(80,318 ) (16,405 ) (94,562 ) (51,640 ) Payments on gold production
royalty (17,458 ) (19,510 ) (58,119 ) (51,569 ) Payments on gold
lease facility — — — (13,800 ) Reductions of (additions to)
restricted assets associated with the Kensington Term Facility
4,645 — 4,645 (1,325 ) Share repurchases (9,971 ) — (9,971 ) —
Other 134 67 (912 ) 6 CASH USED IN FINANCING
ACTIVITIES (102,968 ) (35,848 ) (158,919 ) (90,828 ) INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS (56,482 ) 101,052 (32,097 )
141,764 Cash and cash equivalents at beginning of period 199,397
106,830 175,012 66,118 Cash and cash
equivalents at end of period $ 142,915 $ 207,882 $
142,915 $ 207,882
Table
10:
Operating Cash Flow
Reconciliation
(in thousands)
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Cash
provided by operating activities $ 79,735 $ 113,203 $ 17,002 $
87,412 $ 181,911 Changes in operating assets and liabilities:
Receivables and other current assets 5,648 (10,319 ) 2,956 (8,904 )
10,513 Prepaid expenses and other 2,481 2,857 (4,774 ) 8,839 8,697
Inventories 13,762 (3,097 ) 24,722 17,574 (23,234 ) Accounts
payable and accrued liabilities (24,342 )
(14,276 ) 53,929
(7,452 ) (26,930 )
Operating Cash Flow $
77,284 $ 88,368
$ 93,835
$ 97,469
$ 150,957
Table
11:
EBITDA Reconciliation
(in thousands)
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Net income
(loss) $ (15,821 ) $ 22,973 $ 3,975 $ 11,364 $ 31,060 Income tax
provision 17,475 23,862 15,436 52,390 27,606 Interest expense, net
of capitalized interest 7,351 7,557 6,670 8,222 7,980 Interest and
other income (12,664 ) 3,221 (5,007 ) 4,697 6,610 Fair value
adjustments, net 37,648 (16,039 ) 23,113 (19,035 ) 53,351 Loss on
debt extinguishments — — — 3,886 784 Depreciation and depletion
52,844 61,024
52,592
58,166 58,652
EBITDA
$ 86,833
$ 102,598 $
96,779 $ 119,690
$ 186,043
Table
12:
Adjusted Earnings
Reconciliation
(in thousands)
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Net income
(loss) $ (15,821 ) $ 22,973 $ 3,975 $ 11,364 $ 31,060 Share Based
Compensation 3,364 1,033 2,137 2,861 457 Deferred income tax
provision (4,944 ) 9,690 7,677 38,614 3,110 Interest expense,
accretion of royalty obligation 4,276 5,492 4,580 5,523 4,990 Fair
value adjustments, net 37,648 (16,039 ) 23,113 (19,035 ) 53,351
Loss on impairment 1,293 4,813 — — — Gain on debt extinguishments
— —
— 3,886
784
Adjusted Earnings (Loss)
$ 25,816 $
27,962 $ 41,482
$ 43,213
$ 93,752
Table
13:
Operating Cash Flow Reconciliation -
YTD
(in thousands)
YTD 2012
YTD 2011 Cash provided by operating activities
$ 209,941 $ 328,761 Changes in operating assets and liabilities:
Receivables and other current assets (1,717 ) 23,492 Prepaid
expenses and other 564 7,362 Inventories 35,387 12,834 Accounts
payable and accrued liabilities 15,313
(15,538 )
Operating Cash
Flow $ 259,488
$ 356,911
Table
14:
EBITDA Reconciliation - YTD
(in thousands)
YTD 2012
YTD 2011 Net income (loss) $ 11,127 $ 82,135 Income
tax provision 56,773 61,947 Interest expense, net of capitalized
interest 21,578 26,552 Interest and other income (14,450 ) 1,913
Fair value adjustments, net 44,722 71,051 Loss on debt
extinguishments — 1,640 Depreciation and depletion
166,460 166,334
EBITDA $ 286,210
$ 411,572
Table
15:
Adjusted Earnings Reconciliation -
YTD
(in thousands)
YTD 2012
YTD 2011 Net income (loss) $ 11,127 $ 82,135 Share
Based Compensation 6,534 5,261 Deferred income tax provision 12,425
13,178 Interest expense, accretion of royalty obligation 14,348
16,027 Fair value adjustments, net 44,722 71,051 Loss on impairment
6,106 — Gain on debt extinguishments —
1,640
Adjusted Earnings (Loss)
$ 95,262
$ 189,292
Table
16:
Results of Operations by Mine -
Palmarejo
in millions of US$
3Q 2012 2Q
2012 1Q 2012 4Q 2011
3Q 2011 Sales of metal $ 102.6 $ 136.4 $ 123.7
$ 134.3 $ 166.9 Production costs $ 48.7 $ 62.5 $ 45.9 $ 47.0 $ 64.1
EBITDA $ 51.6 $ 72.3 $ 76.5 $ 83.7 $ 100.4 Operating income $ 17.7
$ 29.5 $ 38.8 $ 38.7 $ 61.6 Operating cash flow $ 54.9 $ 63.6 $
81.4 $ 77.4 $ 91.2 Capital expenditures $ 11.3 $ 11.2 $ 7.2 $ 12.1
$ 9.5 Gross profit $ 20.0 $ 31.1 $ 40.1 $ 44.7 $ 61.6 Gross margin
19.5 % 22.8 % 32.4 % 33.3 % 36.9 %
3Q 2012
2Q 2012 1Q 2012
4Q 2011 3Q 2011 Underground
Operations: Tons mined 143,747 162,820 158,030 191,966 143,010
Average silver grade (oz/t) 6.13 8.91 7.82 8.04 9.36 Average gold
grade (oz/t) 0.09 0.14 0.11 0.11 0.13 Surface Operations: Tons
mined 424,380 321,758 347,609 321,881 260,618 Average silver grade
(oz/t) 2.79 4.14 5.32 5.88 6.56 Average gold grade (oz/t) 0.03 0.04
0.04 0.05 0.05 Processing: Total tons milled 532,775 489,924
528,543 505,619 403,978 Average recovery rate – Ag 90.0 % 84.2 %
76.8 % 77.9 % 75.9 % Average recovery rate – Au 102.5 % 92.0 % 93.3
% 92.4 % 93.6 % Silver production - oz (000's) 1,833 2,365 2,483
2,690 2,251 Gold production - oz 23,702 31,258 31,081 34,108 29,815
Cash operating costs/Ag Oz $ 3.75 $ (0.85 ) $ (2.27 ) $ (2.13 ) $
(1.16 )
Table
17:
Reconciliation of EBITDA for
Palmarejo
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
102.6 $ 136.4 $ 123.7 $ 134.3 $ 166.9 Production costs applicable
to sales $ (48.7 ) $ (62.5 ) (45.9 ) (47.0 ) (64.1 ) Administrative
and general $ — $ — — — — Exploration $ (2.3 ) $ (1.6 ) (1.3 ) (2.8
) (2.2 ) Care and maintenance and other $ — $ — — (0.8 ) (0.2 )
Pre-development $ —
$ — —
— —
EBITDA
$ 51.6
$ 72.3 $
76.5 $ 83.7
$ 100.4
Table
18:
Operating Cash Flow for
Palmarejo
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Cash provided by
operating activities $ 58.2 $ 90.5 $ 65.3 $ 70.9 $ 104.7 Changes in
operating assets and liabilities: Receivables and other current
assets $ (4.1 ) $ (12.5 ) 5.4 5.7 (0.8 ) Prepaid expenses and other
$ (0.8 ) $ 0.5 (1.9 ) (3.2 ) 3.4 Inventories $ 2.5 $ (11.5 ) 4.6
9.9 (16.2 ) Accounts payable and accrued liabilities
$ (0.9 ) $ (3.4 )
8.0 (5.9 ) 0.1
Operating Cash Flow $
54.9 $ 63.6
$ 81.4
$ 77.4 $
91.2
Table
19:
Results of Operations by Mine - San
Bartolomé
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
46.2 $ 53.4 $ 41.4 $ 62.8 $ 102.8 Production costs $ 19.9 $ 22.8 $
13.6 $ 21.4 $ 30.1 EBITDA $ 26.2 $ 30.5 $ 27.7 $ 41.2 $ 72.5
Operating income $ 22.0 $ 26.6 $ 23.5 $ 34.9 $ 66.7 Operating cash
flow $ 11.2 $ 24.8 $ 20.8 $ 28.7 $ 49.6 Capital expenditures $ 4.4
$ 7.8 $ 10.2 $ 6.5 $ 4.4 Gross profit $ 22.1 $ 26.5 $ 23.5 $ 35.3 $
66.7 Gross margin 47.8 % 49.6 % 56.8 % 56.2 % 64.9 %
3Q
2012 1Q 2012
1Q 2012 4Q 2011
3Q 2011 Tons milled 344,349 391,005 378,104 371,983
428,978 Average silver grade (oz/t) 4.9 4.3 4.6 5.4 5.4 Average
recovery rate 90.3 % 88.3 % 91.2 % 90.5 % 88.6 % Silver production
(000's) 1,526 1,470 1,591 1,997 2,051 Cash operating costs/Ag Oz $
12.13 $ 11.05 $ 10.21 $ 9.18 $ 9.32
Table
20:
Reconciliation of EBITDA for San
Bartolomé
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
46.2 $ 53.4 $ 41.4 $ 62.8 $ 102.8 Production costs applicable to
sales (19.9 ) (22.8 ) (13.6 ) (21.4 ) (30.1 ) Administrative and
general — — — — — Exploration (0.1 ) (0.1 ) (0.1 ) — (0.1 ) Care
and maintenance and other — — — (0.2 ) (0.1 ) Pre-development
— —
— —
—
EBITDA $
26.2 $ 30.5
$ 27.7
$ 41.2 $
72.5
Table
21:
Operating Cash Flow for San
Bartolomé
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Cash provided by
(used in) operating activities $ 19.8 $ 31.0 $ (27.4 ) $ 22.3 $
78.1 Changes in operating assets and liabilities: Receivables and
other current assets $ 7.1 $ (0.7 ) 2.2 0.2 5.0 Prepaid expenses
and other $ 0.8 $ 4.4 (2.8 ) 4.6 0.2 Inventories $ 5.0 $ (3.4 ) 4.7
2.9 (7.2 ) Accounts payable and accrued liabilities
$ (21.5 ) $ (6.5 )
44.1 (1.3 ) (26.5
)
Operating Cash Flow $
11.2 $ 24.8
$ 20.8
$ 28.7 $
49.6
Table
22:
Results of Operations by Mine -
Kensington
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
36.5 $ 21.1 $ 10.4 $ 32.9 $ 44.2 Production costs $ 26.9 $ 16.1 $
17.1 $ 31.7 $ 24.3 EBITDA $ 8.1 $ 4.7 $ (6.9 ) $ 0.5 $ 19.6
Operating income/(loss) $ (3.5 ) $ (5.0 ) $ (13.6 ) $ (6.6 ) $ 10.3
Operating cash flow $ 7.3 $ 0.6 $ (7.8 ) $ (4.1 ) $ 14.5 Capital
expenditures $ 9.0 $ 9.3 $ 10.9 $ 12.0 $ 9.2 Gross profit/(loss) $
(1.9 ) $ (4.7 ) $ (13.3 ) $ (5.7 ) $ 10.3 Gross margin (5.2 )%
(22.3 )% (127.9 )% (17.3 )% 23.3 %
3Q 2012
2Q 2012 1Q 2012
4Q 2011 3Q
2011 Tons mined 113,770 84,632 56,815 68,831 92,783 Tons milled
123,428 97,794 43,936 71,700 116,255 Average gold grade (oz/t) 0.21
0.23 0.18 0.19 0.24 Average recovery rate 95.9 % 94.2 % 93.4 % 96.5
% 91.7 % Gold production 24,391 21,572 7,444 13,299 25,687 Cash
operating costs/Ag Oz $ 1,298 $ 1,348 $ 2,709 $ 1,807 $ 973
Table
23:
Reconciliation of EBITDA for
Kensington
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
36.5 $ 21.1 $ 10.4 $ 32.9 $ 44.2 Production costs applicable to
sales (26.9 ) (16.1 ) (17.1 ) (31.7 ) (24.3 ) Administrative and
general — — — — — Exploration (1.5 ) (0.3 ) (0.2 ) (0.5 ) (0.3 )
Care and maintenance and other — — — (0.2 ) — Pre-development
— —
— —
—
EBITDA $
8.1 $ 4.7
$ (6.9 )
$ 0.5 $
19.6
Table
24:
Operating Cash Flow for
Kensington
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Cash provided by
operating activities $ 5.0 $ (12.5 ) $ 1.1 $ 9.3 $ 8.6 Changes in
operating assets and liabilities: Receivables and other current
assets $ 2.3 $ 4.6 (10.3 ) (5.1 ) 5.0 Prepaid expenses and other $
0.5 $ (0.5 ) (1.0 ) 0.5 1.3 Inventories $ 1.8 $ 9.9 3.3 (10.1 )
(1.3 ) Accounts payable and accrued liabilities
$ (2.3 ) $ (0.9 )
(0.9 ) 1.3 0.9
Operating Cash Flow $
7.3 $ 0.6
$ (7.8 )
$ (4.1 ) $
14.5
Table
25:
Results of Operations by Mine -
Rochester
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
36.2 $ 34.2 $ 18.8 $ 11.1 $ 17.5 Production costs $ 21.0 $ 20.8 $
9.6 $ 4.2 $ 11.4 EBITDA $ 12.9 $ 11.6 $ 7.2 $ 3.2 $ 2.7 Operating
income $ 10.9 $ 9.5 $ 5.5 $ 4.6 $ 2.1 Operating cash flow $ 13.0 $
11.8 $ 7.2 $ 3.4 $ 2.7 Capital expenditures $ 4.8 $ 2.9 $ 2.6 $ 7.7
$ 13.6 Gross profit $ 13.2 $ 11.3 $ 7.6 $ 5.9 $ 5.5 Gross margin
36.5 % 33.0 % 40.4 % 53.2 % 31.4 %
3Q 2012
2Q 2012 1Q 2012
4Q 2011 3Q
2011 Tons mined 3,170,129 2,585,914 2,723,324 1,170,397 761,845
Average silver grade (oz/t) 0.52 0.63 0.55 0.54 n.a. Average gold
grade (oz/t) 0.004 0.005 0.004 0.004 n.a. Silver production (000's)
819 713 441 373 352 Gold production 10,599 10,120 5,292 1,993 1,435
Cash operating costs/Ag Oz $ 9.58 $ 9.83 $ 23.35 $ 37.99 $ 36.71
Table
26:
Reconciliation of EBITDA for
Rochester
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
36.2 $ 34.2 $ 18.8 $ 11.1 $ 17.5 Production costs applicable to
sales (21.0 ) (20.8 ) (9.6 ) (4.2 ) (11.4 ) Administrative and
general — — — — — Exploration (1.2 ) (1.1 ) (0.7 ) (1.5 ) (0.2 )
Care and maintenance and other (1.1 ) (0.7 ) (1.3 ) (2.2 ) (3.2 )
Pre-development —
— — —
—
EBITDA
$ 12.9 $
11.6 $ 7.2
$ 3.2
$ 2.7
Table
27:
Operating Cash Flow for
Rochester
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Cash provided by
(used in) operating activities $ 7.3 $ 10.1 $ (7.1 ) $ (11.4 ) $
0.9 Changes in operating assets and liabilities: Receivables and
other current assets $ 0.6 $ (0.1 ) 0.3 (0.2 ) 0.2 Prepaid expenses
and other $ 0.2 $ (1.0 ) 1.4 0.7 0.7 Inventories $ 6.5 $ 3.9 11.2
14.2 5.9 Accounts payable and accrued liabilities
$ (1.6 ) $ (1.1 )
1.4 0.1
(5.0 )
Operating Cash Flow $
13.0 $ 11.8
$ 7.2
$ 3.4 $
2.7
Table
28:
Results of Operations by Mine -
Martha
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
4.9 $ 4.1 $ 3.6 $ 2.8 $ 6.0 Production costs $ 6.5 $ 7.1 $ 3.7 $
3.9 $ 8.1 EBITDA $ (2.9 ) $ (10.6 ) $ (3.7 ) $ (3.3 ) $ (3.8 )
Operating loss $ (4.2 ) $ (11.3 ) $ (4.3 ) $ (3.0 ) $ (4.0 )
Operating cash flow $ (3.4 ) $ (5.5 ) $ (5.1 ) $ (5.0 ) $ (1.7 )
Capital expenditures $ — $ 0.5 $ 0.7 $ 1.4 $ 1.1 Gross loss $ (1.6
) $ (3.7 ) $ (0.7 ) $ (1.7 ) $ (2.3 ) Gross margin (32.7 )% (90.2
)% (19.4 )% (60.7 )% (38.3 )%
3Q 2012
2Q 2012 1Q 2012
4Q 2011 3Q 2011
Total tons milled 27,281 39,199 34,069 37,141 24,086 Average silver
grade (oz/t) 4.17 3.52 4.43 4.65 5.33 Average gold grade (oz/t) — —
— 0.01 0.01 Average recovery rate – Ag 81.5 % 78.2 % 81.4 % 75.2 %
92.3 % Average recovery rate – Au 82.6 % 72.4 % 64.6 % 74.2 % 72.9
% Silver production (000's) 93 108 123 130 119 Cash operating
costs/Ag Oz $ 48.12 $ 55.07 $ 46.48 $ 33.75 $ 39.31
Table
29:
Reconciliation of EBITDA for
Martha
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
4.9 $ 4.1 $ 3.6 $ 2.8 $ 6.0 Production costs applicable to sales
(6.5 ) (7.1 ) (3.7 ) (3.9 ) (8.2 ) Administrative and general — — —
— — Exploration (1.2 ) (2.8 ) (3.4 ) (2.1 ) (1.5 ) Care and
maintenance and other (0.1 ) (4.8 ) (0.2 ) (0.1 ) (0.1 )
Pre-development —
— — —
—
EBITDA
$ (2.9 ) $
(10.6 ) $ (3.7
) $ (3.3 )
$ (3.8 )
Table
30:
Operating Cash Flow for Martha
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Cash provided by
(used in) operating activities $ (3.9 ) $ (3.3 ) $ (7.1 ) $ (3.2 )
$ 0.2 Changes in operating assets and liabilities: Receivables and
other current assets (0.9 ) (0.6 ) 3.5 (0.9 ) 2.3 Prepaid expenses
and other (0.1 ) 0.1 (0.1 ) (0.3 ) 0.4 Inventories (1.7 ) (2.3 )
0.4 0.4 (3.3 ) Accounts payable and accrued liabilities
3.2 0.6
(1.8 ) (1.0 )
(1.3 )
Operating Cash Flow
$ (3.4 ) $
(5.5 ) $ (5.1
) $ (5.0 )
$ (1.7 )
Table
31:
Results of Operations by Mine -
Endeavor
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
4.1 $ 5.2 $ 6.7 $ 2.8 $ 6.2 Production costs $ 2.0 $ 2.6 $ 2.7 $
1.0 $ 3.2 EBITDA $ 2.1 $ 2.6 $ 4.0 $ 1.8 $ 3.0 Operating income $
1.3 $ 1.1 $ 2.3 $ 1.1 $ 2.1 Operating cash flow $ 1.6 $ 2.8 $ 3.5 $
2.1 $ 1.3 Capital expenditures $ — $ — $ — $ — $ — Gross profit $
1.3 $ 1.1 $ 2.3 $ 1.1 $ 2.1 Gross margin 31.7 % 21.2 % 34.3 % 39.3
% 33.9 %
3Q 2012 2Q 2012
1Q 2012 4Q
2011 3Q 2011 Silver Production
(000's) 140 240 248 111 138 Cash Operating Costs/Ag Oz $ 15.97 $
17.50 $ 16.64 $ 14.74 $ 22.26
Table
32:
Reconciliation of EBITDA for
Endeavor
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Sales of metal $
4.1 $ 5.2 $ 6.7 $ 2.8 $ 6.2 Production costs applicable to sales
(2.0 ) (2.6 ) (2.7 ) (1.0 ) (3.2 ) Administrative and general — — —
— — Exploration — — — — — Care and maintenance and other — — — — —
Pre-development —
— — —
—
EBITDA
$ 2.1 $
2.6 $ 4.0
$ 1.8
$ 3.0
Table
33:
Operating Cash Flow for
Endeavor
in millions of US$
3Q 2012 2Q
2012 1Q 2012
4Q 2011 3Q 2011 Cash provided by
operating activities $ 1.5 $ 3.6 $ 2.5 $ 2.1 $ 2.4 Changes in
operating assets and liabilities: Receivables and other current
assets 0.5 (1.7 ) 1.7 (1.2 ) (1.4 ) Prepaid expenses and other — —
— — — Inventories (0.3 ) 0.2 0.6 0.1 (0.9 ) Accounts payable and
accrued liabilities (0.1 )
0.7 (1.3 )
1.1 1.2
Operating Cash
Flow $ 1.6
$ 2.8
$ 3.5 $ 2.1
$ 1.3
Table
34:
Reconciliation of Non-U.S. GAAP Cash
Costs to U.S. GAAP Production Costs
Three months ended September 30,
2012
(In thousands except ounces and per ounce costs)
Palmarejo
San
Bartolomé
Kensington Rochester Martha Endeavor
Total Total cash operating cost (Non-U.S. GAAP) $ 6,878 $
18,504 $ 31,660 $ 7,853 $ 4,461 $ 2,241 $ 71,597 Royalties — 1,879
— 1,441 100 — 3,420 Production taxes — — — —
— — — Total cash costs (Non-U.S. GAAP)
$ 6,878 $ 20,383 $ 31,660 $ 9,294 $
4,561 $ 2,241 $ 75,017 Add/Subtract: Third
party smelting costs — — (3,141 ) — (541 ) (605 ) (4,287 )
By-product credit 39,034 — — 17,506 124 — 56,664 Other adjustments
424 720 2 85 798 — 2,029 Change in inventory 2,337 (1,166 ) (1,639
) (5,871 ) 1,539 345 (4,455 ) Depreciation, depletion and
amortization 33,997 4,161 11,512 2,061
66 898 52,695 Production costs applicable to
sales, including depreciation, depletion and amortization (U.S.
GAAP) $ 82,670 $ 24,098 $ 38,394 $ 23,075
$ 6,547 $ 2,879 $ 177,663 Production of
silver (ounces) 1,833,109 1,525,725 — 819,349 92,698 140,267
4,411,148 Cash operating cost per silver ounce $ 3.75 $ 12.13 $ — $
9.58 $ 48.12 $ 15.97 $ 9.05 Cash costs per silver ounce $ 3.75 $
13.36 $ — $ 11.34 $ 49.20 $ 15.97 $ 9.83 Production of gold
(ounces) — — 24,391 — — — 24,391 Cash operating cost per gold ounce
$ — $ — $ 1,298 $ — $ — $ — $ 1,298 Cash cost per gold ounce $ — $
— $ 1,298 $ — $ — $ — $ 1,298
Table
35:
Reconciliation of Non-U.S. GAAP Cash
Costs to U.S. GAAP Production Costs
Nine months ended September 30,
2012
(In thousands except ounces and per ounce costs)
Palmarejo
San
Bartolomé
Kensington Rochester Martha Endeavor
Total Total cash operating cost (Non-U.S. GAAP) $ (774 ) $
51,006 $ 80,911 $ 25,164 $ 16,110 $ 10,571 $ 182,988 Royalties —
5,372 — 1,959 305 — 7,636 Production taxes — — —
1,255 — — 1,255 Total cash costs
(Non-U.S. GAAP) $ (774 ) $ 56,378 $ 80,911 $ 28,378
$ 16,415 $ 10,571 $ 191,879
Add/Subtract: Third party smelting costs — — (7,044 ) — (3,959 )
(2,843 ) (13,846 ) By-product credit 141,923 — — 42,758 422 —
185,103 Other adjustments 792 642 17 401 882 — 2,734 Change in
inventory 15,129 (703 ) (13,805 ) (20,206 ) 3,516 (457 ) (16,526 )
Depreciation, depletion and amortization 114,499 12,450
27,836 5,763 1,216 4,134 165,898
Production costs applicable to sales, including
depreciation, depletion and amortization (U.S. GAAP) $ 271,569
$ 68,767 $ 87,915 $ 57,094 $ 18,492
$ 11,405 $ 515,242 Production of silver
(ounces) 6,681,407 4,587,359 — 1,973,392 323,286 628,393 14,193,197
Cash operating cost per silver ounce $ (0.12 ) $ 11.12 $ — $ 12.75
$ 49.82 $ 16.82 $ 7.19 Cash costs per silver ounce $ (0.12 ) $
12.29 $ — $ 14.38 $ 50.76 $ 16.82 $ 7.82 Production of gold
(ounces) — — 53,407 — — — 53,407 Cash operating cost per gold ounce
$ — $ — $ 1,515 $ — $ — $ — $ 1,515 Cash cost per gold ounce $ — $
— $ 1,515 $ — $ — $ — $ 1,515
Table
36:
Reconciliation of Non-U.S. GAAP Cash
Costs to U.S. GAAP Production Costs
Three months ended September 30,
2011
(In thousands except ounces and per ounce costs)
Palmarejo
San
Bartolomé
Kensington Rochester Martha Endeavor
Total Total cash operating cost (Non-U.S. GAAP) $ (2,607 ) $
19,120 $ 25,000 $ 12,912 $ 4,660 $ 3,068 $ 62,153 Royalties — 3,217
— 827 234 — 4,278 Production taxes — — — 260
— — 260 Total cash costs (Non-U.S.
GAAP) $ (2,607 ) $ 22,337 $ 25,000 $ 13,999 $
4,894 $ 3,068 $ 66,691 Add/Subtract: Third
party smelting costs — — (3,096 ) — (566 ) (808 ) (4,470 )
By-product credit 51,185 — — 2,433 198 — 53,816 Other adjustments
435 111 — 117 290 — 953 Change in inventory 15,099 7,637 2,443
(5,193 ) 3,328 949 24,263 Depreciation, depletion and amortization
41,174 6,062 9,568 556 237 914
58,511 Production costs applicable to sales,
including depreciation, depletion and amortization (U.S. GAAP) $
105,286 $ 36,147 $ 33,915 $ 11,912 $
8,381 $ 4,123 $ 199,764 Production of silver
(ounces) 2,250,818 2,051,426 — 351,717 118,523 137,843 4,910,327
Cash operating cost per silver ounce $ (1.16 ) $ 9.32 $ — $ 36.71 $
39.31 $ 22.26 $ 7.57 Cash costs per silver ounce $ (1.16 ) $ 10.89
$ — $ 39.80 $ 41.29 $ 22.26 $ 8.49 Production of gold (ounces) — —
25,687 — — — 25,687 Cash operating cost per gold ounce $ — $ — $
973 $ — $ — $ — $ 973 Cash cost per gold ounce $ — $ — $ 973 $ — $
— $ — $ 973
Table
37:
Reconciliation of Non-U.S. GAAP Cash
Costs to U.S. GAAP Production Costs
Nine months ended September 30,
2011
(In thousands except ounces and per ounce costs)
Palmarejo
San
Bartolomé
Kensington Rochester Martha Endeavor
Total Total cash operating cost (Non-U.S. GAAP) $ (3,014 ) $
49,946 $ 72,199 $ 17,787 $ 12,981 $ 9,926 $ 159,825 Royalties —
8,281 — 1,734 587 — 10,602 Production taxes — — —
728 — — 728 Total cash costs
(Non-U.S. GAAP) $ (3,014 ) $ 58,227 $ 72,199 $ 20,249
$ 13,568 $ 9,926 $ 171,155
Add/Subtract: Third party smelting costs — — (9,122 ) — (2,366 )
(2,390 ) (13,878 ) By-product credit 139,842 — — 6,554 706 —
147,102 Other adjustments 1,208 298 19 256 462 — 2,243 Change in
inventory 1,216 (196 ) 7,015 (3,005 ) (869 ) 45 4,206 Depreciation,
depletion and amortization 116,584 16,387 28,823
1,655 81 2,398 165,928
Production costs applicable to sales, including depreciation,
depletion and amortization (U.S. GAAP) $ 255,836 $ 74,716
$ 98,934 $ 25,709 $ 11,582 $ 9,979
$ 476,756 Production of silver (ounces) 6,351,120
5,503,951 — 1,018,844 399,630 501,638 13,775,183 Cash operating
cost per silver ounce $ (0.47 ) $ 9.07 $ — $ 17.46 $ 32.48 $ 0.02 $
6.36 Cash costs per silver ounce $ (0.47 ) $ 10.58 $ — $ 19.87 $
33.95 $ 18.85 $ 7.18 Production of gold (ounces) — — 75,121 — — —
75,121 Cash operating cost per gold ounce $ — $ — $ 961 $ — $ — $ —
$ 961 Cash cost per gold ounce $ — $ — $ 961 $ — $ — $ — $ 961
Table
38:
Reconciliation of Non-U.S. GAAP Cash
Costs to U.S. GAAP Production Costs
Three months ended June 30,
2012
(In thousands except ounces and per ounce costs)
Palmarejo
San
Bartolomé
Kensington Rochester Martha Endeavor
Total Total cash operating cost (Non-U.S. GAAP) $ (2,009 ) $
16,249 $ 29,083 $ 7,008 $ 5,942 $ 4,204 $ 60,477 Royalties — 1,457
— 510 124 — 2,091 Production taxes — — — 641
— — 641 Total cash costs (Non-U.S.
GAAP) $ (2,009 ) $ 17,706 $ 29,083 $ 8,159 $
6,066 $ 4,204 $ 63,209 Add/Subtract: Third
party smelting costs — — (2,820 ) — (1,444 ) (1,449 ) (5,713 )
By-product credit 50,363 — — 16,295 157 — 66,815 Other adjustments
124 117 7 229 26 — 503 Change in inventory 14,060 4,950 (10,165 )
(3,931 ) 2,297 (202 ) 7,009 Depreciation, depletion and
amortization 42,741 4,070 9,719 2,060
631 1,592 60,813 Production costs applicable
to sales, including depreciation, depletion and amortization (U.S.
GAAP) $ 105,279 $ 26,843 $ 25,824 $ 22,812
$ 7,733 $ 4,145 $ 192,636 Production of
silver (ounces) 2,365,484 1,470,342 — 712,706 107,895 240,168
4,896,595 Cash operating cost per silver ounce $ (0.85 ) $ 11.05 $
— $ 9.83 $ 55.07 $ 17.50 $ 6.41 Cash costs per silver ounce $ (0.85
) $ 12.04 $ — $ 11.45 $ 56.21 $ 17.50 $ 6.97 Production of gold
(ounces) — — 21,572 — — — 21,572 Cash operating cost per gold ounce
$ — $ — $ 1,348 $ — $ — $ — $ 1,348 Cash cost per gold ounce $ — $
— $ 1,348 $ — $ — $ — $ 1,348
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