CDE Coeur Mining Inc

Reaffirms Full-Year Companywide Production and Cost Guidance

Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported third quarter 2018 financial results, including revenue of $148.8 million, adjusted EBITDA1 of $24.7 million and cash flow from operating activities of $5.8 million. Including $30.8 million of non-cash write downs, the Company reported a GAAP net loss from continuing operations of $53.0 million, or $0.29 per share. On an adjusted basis1, the Company reported a net loss of $19.7 million or $0.11 per share.

Third quarter results were impacted by 11% and 7% lower average realized silver and gold prices, respectively, and by lower production levels at its Palmarejo and Wharf operations due to one-time events. The $30.8 million of non-cash write-downs reflect (i) a modification in the deferred consideration received for the sale of the Company’s Bolivian subsidiary earlier this year, which included a $15 million cash payment to Coeur in the quarter, (ii) the decommissioning of a crusher at Rochester prior to the end of its estimated useful life as part of the operation’s transition to high pressure grinding roll (“HPGR”) crushing technology to enhance silver recovery rates, and (iii) an inventory adjustment relating to concentrate at Silvertip.

Highlights

• Lower all-in sustaining costs (“AISC”) - AISC of $14.45 and $14.50 per average spot silver equivalent ounce1 for the third quarter and year-to-date, respectively, were below the Company’s full-year 2018 AISC guidance range of $14.75 - $15.25 per average spot silver equivalent ounce1
• Strong Rochester performance - Silver equivalent1 production increased 17% quarter-over-quarter and 26% year-over-year. Adjusted costs applicable to sales (“CAS”) per average spot silver equivalent ounce1 declined 4% quarter-over-quarter and 8% year-over-year to $11.42
• Temporarily lower production and higher unit costs at Palmarejo and Wharf - Palmarejo’s results impacted by 17 days of unplanned downtime due to previously-reported fatalities and a nearby road blockade. Operations have since returned to normalized levels. Wharf’s results were affected by weather-related events. Mining and crushing rates have since increased, leading to higher expected fourth quarter production
• Commercial production achieved at Silvertip mine as ramp-up continues - Commercial production declared on September 1, 2018. Ongoing process plant repairs and improvements are leading to higher availability and throughput. October results reflected materially improved plant performance. Throughput expected to average 830 tons per day (“tpd”) (750 metric tonnes per day (“mtpd”)) by year-end and 1,100 tpd (1,000 mtpd) by end of first quarter 2019
• Two strategic acquisitions expected to further enhance portfolio quality - Completed acquisition of Northern Empire Resources Corp. (“Northern Empire”), which controls a 143 km2 (approximately 35,000 acres) land position in southern Nevada including the high-grade Sterling Gold Project and three nearby deposits known as the Crown Block. Also announced agreement to acquire assets from Alio Gold Inc. (“Alio Gold”) located next to Rochester including the Lincoln Hill Project, which provides significant operational synergies
• Strong liquidity and enhanced balance sheet strength - Cash and cash equivalents of $104.7 million at September 30, 2018. Expanded revolving credit facility capacity to provide additional balance sheet flexibility
• Reaffirming full-year production and cost guidance

“Third quarter results were impacted by weak metals prices and temporarily lower production at our Palmarejo and Wharf mines due to one-time events. Our Rochester operation was the standout performer with strong production growth and further cost reductions. In addition, the team at Rochester has commenced work on the installation of the first HPGR crusher, which is expected to boost silver recoveries and further reduce costs starting next year,” said Mitchell J. Krebs, Coeur’s President and Chief Executive Officer. “Importantly, we remain on-track to achieve full-year production and cost guidance due to strong expected fourth quarter performance at each of our operations, which we experienced during the month of October.”

“Silvertip reached an important milestone by achieving commercial production on September 1st. Throughput rates continue to steadily climb toward the year-end goal of 750 mtpd. Lower than planned mill availability limited production rates and concentrate sales during the quarter as we address remaining maintenance priorities in the processing facility. However, the plant set records for availability and throughput in October as the team establishes a more stable and consistent operating environment.”

“We have further enhanced the quality of our growth pipeline with two recent acquisitions of high-quality, low-risk projects that complement our existing asset base. We announced and have now completed the acquisition of Northern Empire, which bolsters both our near- and long-term development pipelines with high-quality, Nevada-based gold assets. We also announced the acquisition of the Lincoln Hill project and other assets from Alio Gold, which is expected to close in the fourth quarter. These assets are adjacent to Rochester and will allow us to leverage our existing infrastructure to generate strong returns and future free cash flow from higher-grade, low-cost production.”

 

Financial and Operating Highlights (Unaudited)

 

(Amounts in millions, except per share amounts, gold ounces and zinc and lead pounds produced & sold, and per-ounce/pound metrics)

 

      3Q 2018   2Q 2018   1Q 2018   4Q 2017   3Q 2017 Revenue $ 148.8   $ 170.0   $ 163.3   $ 214.6   $ 159.9 Costs Applicable to Sales $ 116.9 $ 108.2 $ 99.3 $ 122.0 $ 101.6 General and Administrative Expenses $ 7.7 $ 7.7 $ 8.8 $ 9.2 $ 7.3 Net Income (Loss) $ (53.0 ) $ 2.9 $ 0.7 $ 14.3 $ (11.7 ) Net Income (Loss) Per Share $ (0.29 ) $ 0.02 $ 0.00 $ 0.08 $ (0.07 ) Adjusted Net Income (Loss)1 $ (19.7 ) $ 1.1 $ 0.7 $ 14.1 $ (15.3 ) Adjusted Net Income (Loss)1 Per Share $ (0.11 ) $ 0.01 $ 0.00 $ 0.08 $ (0.09 ) Weighted Average Shares Outstanding $ 185.2 $ 187.5 $ 187.6 $ 187.0 $ 179.3 EBITDA1 $ (12.3 ) $ 42.1 $ 49.4 $ 69.6 $ 38.6 Adjusted EBITDA1 $ 24.7 $ 48.4 $ 49.5 $ 77.0 $ 40.2 Cash Flow from Operating Activities $ 5.8 $ (1.3 ) $ 15.5 $ 91.8 $ 37.3 Capital Expenditures $ 39.5 $ 41.2 $ 42.3 $ 47.1 $ 29.0 Free Cash Flow1 $ (33.7 ) $ (42.5 ) $ (26.8 ) $ 44.8 $ 8.3 Cash, Equivalents & Short-Term Investments $ 104.7 $ 123.5 $ 159.6 $ 192.0 $ 195.7 Total Debt2 $ 429.2 $ 419.7 $ 414.0 $ 411.3 $ 288.7 Average Realized Price Per Ounce – Silver $ 14.68 $ 16.48 $ 16.70 $ 16.57 $ 16.86 Average Realized Price Per Ounce – Gold $ 1,150 $ 1,241 $ 1,268 $ 1,224 $ 1,240 Average Realized Price Per Pound – Zinc $ 0.94 $ — $ — $ — $ — Average Realized Price Per Pound – Lead $ 0.85 $ — $ — $ — $ — Silver Ounces Produced 2.9 3.2 3.2 3.7 3.0 Gold Ounces Produced 87,539 94,052 85,383 118,756 93,293 Zinc Pounds Produced 1.1 — — — — Lead Pounds Produced 0.4 — — — — Silver Equivalent Ounces Produced1 8.2 8.8 8.3 10.8 8.6 Silver Equivalent Ounces Produced (Average Spot)1 10.1 10.6 9.9 12.8 10.1 Silver Ounces Sold 2.9 3.2 3.2 3.8 2.9 Gold Ounces Sold 89,609 94,455 87,153 123,564 89,972 Zinc Pounds Sold 1.8 — — — — Lead Pounds Sold 1.2 — — — — Silver Equivalent Ounces Sold1 8.5 8.9 8.4 11.1 8.3 Silver Equivalent Ounces Sold (Average Spot)1 10.4 10.7 10.1 13.2 9.7 Adjusted CAS per AgEqOz1 $ 10.77 $ 9.44 $ 9.69 $ 9.43 $ 11.05 Adjusted CAS per Average Spot AgEqOz1 $ 9.22 $ 8.26 $ 8.48 $ 8.35 $ 9.90 Adjusted CAS per AuEqOz1 $ 1,005 $ 1,028 $ 955 $ 800 $ 843 Adjusted AISC per AgEqOz1 $ 17.70 $ 17.62 $ 17.20 $ 14.45 $ 17.35 Adjusted AISC per Average Spot AgEqOz1 $ 14.45   $ 14.65 $ 14.33 $ 12.26 $ 14.79  

Financial Results

Revenue for the third quarter was $148.8 million, 12% lower compared to the second quarter due to lower metal sales and lower average realized silver and gold prices, which declined 11% and 7%, respectively, quarter-over-quarter. Gold sales contributed 69% of revenue during the third quarter and silver sales contributed 29%. The Company’s U.S. operations accounted for approximately 60% of third quarter revenue, comparable to the first half of the year and to last year’s third quarter.

Average realized gold prices during the third quarter were impacted by the sale of 10,610 gold ounces at a price of $800 per ounce pursuant to Palmarejo’s gold stream agreement.

Costs applicable to sales were $116.9 million for the quarter, 8% and 15% higher quarter-over-quarter and year-over-year, respectively. The increase was primarily attributable to the inclusion of Silvertip in the Company’s third quarter results beginning September 1st, which increased costs applicable to sales by $11.5 million.

General and administrative expenses were $7.7 million, flat quarter-over-quarter, while third quarter interest expense totaled $5.8 million, also flat compared to the second quarter.

Third quarter capital expenditures of $39.5 million declined 4% quarter-over-quarter primarily due to lower sustaining capital expenditures. Development capital expenditures increased partially due to continued investment at Silvertip. Capital expenditures at Silvertip accounted for $17.9 million (including $7.8 million of pre-commercial capital expenditures), or 45%, of total companywide capital expenditures. Year-over-year, capital expenditures increased 36% primarily as a result of expenditures at the Silvertip mine.

Modifications to Deferred Consideration from Manquiri Sale

As described below, Coeur’s third quarter results reflect the non-cash impact of a modification to the terms of the deferred consideration received when it sold its Bolivian subsidiary that operates the San Bartolomé mine (“Manquiri”) earlier this year. The modifications described below provided the Company with significant upfront consideration while providing the new owners of Manquiri additional financial flexibility to offset the impact of lower silver prices on the San Bartolomé operation.

• $15.0 million was paid in cash to the Company and was received on September 25, 2018;
• The aggregate note receivable was reduced from $28.5 million to $25.0 million, with $10.0 million remaining after the upfront $15.0 million cash payment described above, which is scheduled to be repaid by September 30, 2019;
• Quarterly payments in respect of the 2.0% net smelter returns royalty (“NSR”) were temporarily suspended until October 15, 2019; and
• Coeur agreed to forgo rights to any value added tax (“VAT”) refunds collected or received by Manquiri

Based on these modifications, the Company recorded an $18.6 million non-cash write-down comprised of $13.1 million related to the VAT refunds, $3.6 million related to the reduced note receivable and $1.9 million related to the deferral of NSR payments.

Enhancements to the Company’s Senior Secured Revolving Credit Facility

On October 29, 2018, the Company amended the terms of its senior secured revolving credit facility (the “Facility”) to:

• Increase the aggregate size from $200 million to $250 million
• Extend the maturity date from September 2021 to October 2022

The Company established the Facility in September 2017 to partially fund its acquisition of Silvertip and provide additional flexibility to manage its near- to medium-term operating and growth priorities. As of September 30, 2018, the Company has approximately $172.7 million of liquidity, including $104.7 million of cash and cash equivalents and $68.0 million of availability under the Facility. The additional Facility capacity is intended to bolster the Company’s liquidity, including with respect to the anticipated HPGR investments at Rochester in 2020 and 2021.

Operations

Highlights of third quarter 2018 results for each of the Company’s operations are provided below.

 

Palmarejo, Mexico

  (Dollars in millions, except per ounce amounts)       3Q 2018   2Q 2018   1Q 2018   4Q 2017   3Q 2017 Tons milled 300,116   344,073   359,893   389,524   413,086 Average silver grade (oz/t) 6.26 6.86 6.88 6.92 5.53 Average gold grade (oz/t) 0.10 0.11 0.10 0.10 0.08 Average recovery rate – Ag 82.2% 87.5% 81.4% 87.0% 83.6% Average recovery rate – Au 88.8% 89.9% 80.4% 92.0% 83.1% Silver ounces produced (000’s) 1,544 2,066 2,013 2,346 1,908 Gold ounces produced 27,885 33,702 29,896 37,537 28,948 Silver equivalent ounces produced1 (000’s) 3,217 4,088 3,807 4,600 3,644 Silver equivalent ounces produced1 (average spot) (000’s) 3,796 4,728 4,382 5,209 4,104 Silver ounces sold (000’s) 1,572 2,092 2,031 2,343 1,794 Gold ounces sold 29,830 31,207 30,888 38,953 26,554 Silver equivalent ounces sold1 (000’s) 3,362 3,964 3,884 4,681 3,387 Silver equivalent ounces sold1 (average spot) (000’s) 3,981 4,557 4,479 5,331 3,809 Average realized price per silver ounce $14.75 $16.49 $16.73 $16.57 $16.83 Average realized price per gold ounce $1,082 $1,162 $1,168 $1,139 $1,148 Metal sales $55.5 $70.7 $70.0 $83.2 $60.7 Costs applicable to sales $31.6 $30.3 $31.1 $36.0 $33.3 Adjusted CAS per AgEqOz1 $9.39 $7.64 $8.01 $7.54 $9.76 Adjusted CAS per average spot AgEqOz1 $7.93 $6.64 $6.94 $6.64 $8.68 Exploration expense $3.2 $3.2 $4.0 $2.7 $4.5 Cash flow from operating activities $8.6 $1.3 $27.3 $52.1 $18.5 Sustaining capital expenditures (excludes capital lease payments) $2.0 $9.5 $9.3 $4.9 $6.5 Development capital expenditures $2.7   $—   $—   $2.1   $(1.0) Total capital expenditures $4.7 $9.5 $9.3 $7.0 $5.5 Free cash flow1 $3.9 $(8.2) $18.0 $45.1 $13.0  

• Third quarter silver equivalent1 production declined 21% quarter-over-quarter and 12% year-over-year to 3.2 million ounces (3.8 million ounces based on average spot prices during the third quarter) primarily due to (i) the temporary suspension of mining activities relating to fatalities that occurred during the quarter, (ii) supply chain disruptions stemming from a local road blockade that temporarily interrupted the delivery of certain mining consumables, and (iii) a weather-related interruption that impacted the process plant. Mining rates have since returned to steady-state levels
• The modest decline in silver and gold grades was due to the mining of lower grade stopes, primarily at Independencia East. Gold grades are expected to decline while silver grades are expected to be flat in the fourth quarter; however, mining rates are anticipated to return to steady-state levels, offsetting the impact of the lower expected gold grades
• Adjusted CAS of $7.93 per average spot AgEqOz1 were 19% higher quarter-over-quarter and 9% lower year-over-year. The quarterly increase was largely due to lower production, though continued to track below full-year 2018 guidance of $8.00 - $8.50 per average spot AgEqOz1. The year-over-year decline was the result of higher gold and silver grades, as well as lower mining and processing costs
• Development towards the La Nación deposit, located between Guadalupe and Independencia, remains on-schedule. Production from the deposit is expected to commence in the second half of 2019, providing anticipated additional high-quality mill feed to supplement existing ore sources
• Free cash flow1 of $3.9 million increased $12.1 million compared to the prior quarter, which had been impacted by $17 million of cash income and mining taxes associated with 2017 earnings. The increase, however, was offset by lower metal sales and higher costs. Total cash income and mining tax payments in Mexico this year are expected to be $40 - $45 million (with approximately $39 million incurred year-to-date through the end of September)
• The Company is maintaining Palmarejo's full-year 2018 production guidance of 7.5 - 7.9 million ounces of silver and 115,000 - 120,000 ounces of gold, or 14.4 - 15.1 million silver equivalent1 ounces (16.8 - 17.6 million ounces based on average spot prices during the third quarter). It is also maintaining cost guidance of $8.00 - $8.50 on a spot equivalent basis and $9.00 - $9.50 on a 60:1 silver equivalent basis. In July, the Company increased Palmarejo’s full-year production guidance and reduced its full-year cost guidance following strong performance during the first half of the year

 

Rochester, Nevada

  (Dollars in millions, except per ounce amounts)       3Q 2018   2Q 2018   1Q 2018   4Q 2017   3Q 2017 Ore tons placed 4,061,082   4,083,028   4,351,131   4,171,451   4,262,011 Average silver grade (oz/t) 0.52 0.53 0.54 0.50 0.53 Average gold grade (oz/t) 0.004 0.004 0.003 0.003 0.004 Silver ounces produced (000’s) 1,290 1,125 1,157 1,361 1,070 Gold ounces produced 14,702 12,273 11,487 18,995 10,955 Silver equivalent ounces produced1 (000’s) 2,172 1,861 1,846 2,500 1,727 Silver equivalent ounces produced1 (average spot) (000’s) 2,477 2,095 2,067 2,808 1,901 Silver ounces sold (000’s) 1,248 1,097 1,119 1,457 1,050 Gold ounces sold 14,257 12,030 11,163 20,002 10,390 Silver equivalent ounces sold1 (000’s) 2,104 1,819 1,789 2,658 1,674 Silver equivalent ounces sold1 (average spot) (000’s) 2,400 2,048 2,004 2,969 1,839 Average realized price per silver ounce $14.70 $16.47 $16.66 $16.58 $16.89 Average realized price per gold ounce $1,204 $1,297 $1,331 $1,279 $1,291 Metal sales $35.5 $33.7 $33.5 $49.7 $31.2 Costs applicable to sales $27.5 $24.5 $24.3 $34.0 $23.3 Adjusted CAS per AgEqOz1 $13.04 $13.36 $13.33 $12.77 $13.69 Adjusted CAS per average spot AgEqOz1 $11.42 $11.87 $11.89 $11.37 $12.46 Exploration expense $0.1 $0.2 $— $0.5 $0.5 Cash flow from operating activities $5.7 $6.0 $3.4 $26.1 $1.6 Sustaining capital expenditures (excludes capital lease payments) $2.7 $0.4 $0.5 $0.9 $0.5 Development capital expenditures $0.9   $0.3   $2.1   $5.9   $9.2 Total capital expenditures $3.6 $0.7 $2.6 $6.8 $9.7 Free cash flow1 $2.1 $5.3 $0.8 $19.3 $(8.1)  

• Silver equivalent1 production during the period increased 17% quarter-over-quarter to 2.2 million ounces (2.5 million ounces based on average spot prices during the third quarter) and was driven primarily by strong performance from the Stage III leach pad and continued steady performance of the Stage IV leach pad. These trends are expected to continue throughout the fourth quarter
• Installation of the initial HPGR unit remains on schedule for the first quarter of 2019 with silver recoveries expected to improve beginning as early as the second quarter of 2019. Decommissioning of the mine’s smaller, 15,000 tpd in-pit crusher has been completed and is expected to result in fewer tons crushed as well as lower operating expenses in the fourth quarter
• Third quarter adjusted CAS per average spot AgEqOz1 of $11.42 were 4% lower compared to the prior quarter and 8% lower year-over-year, and remained below the full-year 2018 guidance range of $12.00 - $12.50
• Free cash flow1 for the third quarter decreased from $5.3 million during the prior quarter to $2.1 million primarily as a result of lower average realized silver and gold prices and higher capital expenditures
• The Company is maintaining full-year 2018 production guidance of 4.8 - 5.2 million ounces of silver and 48,000 - 52,000 ounces of gold, or 7.7 - 8.3 million silver equivalent1 ounces (8.7 - 9.4 million ounces based on average spot prices during the third quarter). The Company is also maintaining cost guidance of CAS per AgEqOz1 of $12.00 - $12.50 on a spot equivalent basis and $13.25 - $13.75 on a 60:1 silver equivalent basis

 

Wharf, South Dakota

  (Dollars in millions, except per ounce amounts)       3Q 2018   2Q 2018   1Q 2018   4Q 2017   3Q 2017 Ore tons placed 1,127,391   1,075,820   1,076,395   1,124,785   1,150,308 Average gold grade (oz/t) 0.023 0.023 0.022 0.029 0.029 Gold ounces produced 19,437 22,507 17,936 27,292 25,849 Silver ounces produced (000’s) 13 13 12 16 15 Gold equivalent ounces produced1 19,646 22,729 18,133 27,560 26,096 Gold ounces sold 19,874 23,053 17,339 28,975 23,855 Silver ounces sold (000’s) 12 14 11 16 14 Gold equivalent ounces sold1 20,081 23,282 17,522 29,256 24,085 Average realized price per gold ounce $1,198 $1,285 $1,341 $1,278 $1,304 Metal sales $24.0 $29.8 $23.4 $37.3 $31.3 Costs applicable to sales $18.0 $19.3 $15.3 $19.9 $17.3 Adjusted CAS per AuEqOz1 $895 $824 $870 $682 $719 Exploration expense $0.1 $— $— $0.1 $0.2 Cash flow from operating activities $3.7 $11.5 $(1.4) $17.2 $15.0 Sustaining capital expenditures (excludes capital lease payments) $1.2 $1.2 $0.3 $1.6 $1.8 Development capital expenditures $—   $—   $—   $1.7   $1.3 Total capital expenditures $1.2 $1.2 $0.3 $3.3 $3.1 Free cash flow1 $2.5 $10.3 $(1.7) $13.9 $11.9  

• Gold production declined 14% quarter-over-quarter to 19,646 ounces partially due to weather-related events, including the impact of abnormally high levels of rainfall on leach pad recoveries. Mining and crushing rates during the fourth quarter are expected to increase while average gold grade is expected to remain relatively constant
• Adjusted CAS per AuEqOz1 of $895 were 9% and 24% higher quarter-over-quarter and year-over-year, respectively, due to lower production levels and remain within the full-year 2018 guidance range of $850 - $900
• Wharf generated $2.5 million of free cash flow1 during the quarter. The decline relative to the prior quarter was a result of lower production, timing of leaching cycles and weaker metal prices
• Since acquiring the operation in February 2015 for $99 million, Wharf has generated $138.3 million of free cash flow1
• The Company is maintaining Wharf’s full-year production and cost guidance of 85,000 - 90,000 ounces of gold at CAS per AuEqOz1 of $850 - $900

 

Kensington, Alaska

  (Dollars in millions, except per ounce amounts)       3Q 2018   2Q 2018   1Q 2018   4Q 2017   3Q 2017 Tons milled 163,603   168,751   158,706   167,631   172,038 Average gold grade (oz/t) 0.17 0.16 0.17 0.22 0.17 Average recovery rate 90.4% 92.6% 94.0% 92.8% 94.1% Gold ounces produced 25,515 25,570 26,064 34,932 27,541 Gold ounces sold 25,648 28,165 27,763 35,634 29,173 Average realized price per gold ounce $1,161 $1,269 $1,307 $1,244 $1,255 Metal sales $29.8 $35.7 $36.3 $44.3 $36.6 Costs applicable to sales $28.2 $34.2 $28.6 $32.0 $27.7 Adjusted CAS per AuOz1 $1,091 $1,195 $1,010 $896 $946 Exploration expense $1.6 $1.4 $1.6 $2.8 $3.0 Cash flow from operating activities $(0.4) $3.2 $4.6 $16.8 $9.3 Sustaining capital expenditures (excludes capital lease payments) $9.7 $9.2 $8.5 $8.0 $6.5 Development capital expenditures $2.3   $1.5   $2.9   $4.0   $3.6 Total capital expenditures $12.0 $10.7 $11.4 $12.0 $10.1 Free cash flow1 $(12.4) $(7.5) $(6.8) $4.8 $(0.8)  

• Third quarter gold production, inclusive of pre-commercial production from Jualin, was 26,809 ounces. Excluding pre-commercial production, Kensington produced 25,515 ounces of gold, comparable to the prior quarter
• The Company mined approximately 4,400 tons of development ore at Jualin late in the third quarter, which yielded pre-commercial production of nearly 2,100 ounces of gold at a grade of 0.48 ounces per ton ("oz/t"). Mining rates at Jualin are expected to climb throughout the fourth quarter, leading to higher overall production levels
• Adjusted CAS per AuOz1 of $1,091 improved 9% quarter-over-quarter primarily due to lower drilling and labor costs. Higher grades are anticipated in the fourth quarter, which is expected to increase production and drive lower unit costs
• Negative free cash flow1 of $12.4 million resulted from a lower average realized gold price, higher operating costs and slightly higher capital expenditures
• The Company is maintaining Kensington’s full-year production and cost guidance of 115,000 - 120,000 gold ounces at CAS per AuOz1 of $900 - $9504

 

Silvertip, British Columbia

  (Dollars in millions, except per ounce and per pound amounts)       3Q 2018   2Q 2018   1Q 2018   4Q 2017   3Q 2017 Tons milled 10,652   —   —   —   — Average silver grade (oz/t) 6.66 — — — — Average zinc grade (%) 8.0% —% —% —% —% Average lead grade (%) 4.3% —% —% —% —% Average recovery rate – Ag 56.3% —% —% —% —% Average recovery rate – Zn 64.5% —% —% —% —% Average recovery rate – Pb 45.1% —% —% —% —% Silver ounces produced (000's) 40 — — — — Zinc pounds produced (000's) 1,099 — — — — Lead pounds produced (000's) 413 — — — — Silver equivalent ounces produced1 (000's) 127 — — — — Silver equivalent ounces produced1 (average spot) (000's) 153 — —

—

—

Silver ounces sold (000's) 99 — — — — Zinc pounds sold (000's) 1,772 — — — — Lead pounds sold (000's) 1,230 — — — — Silver equivalent ounces sold1 (000's) 267 — — — — Silver equivalent ounces sold1 (average spot) (000's) 267 — — — — Average realized price per silver ounce $13.46 $— $— $— $— Average realized price per zinc pound $0.94 $— $— $— $— Average realized price per lead pound $0.85 $— $— $— $— Metal sales $4.1 $— $— $— $— Costs applicable to sales $11.5 $— $— $— $— Adjusted CAS per AgEqOz1 $10.46 $— $— $— $— Adjusted CAS per average spot AgEqOz1 $8.69 $— $— $— $— Exploration expense $2.3 $0.1 $— $— $— Cash flow from operating activities $(6.8) $— $— $— $— Sustaining capital expenditures (excludes capital lease payments) $0.4 $— $— $— $— Development capital expenditures $17.5   $19.0   $18.6   $—   $— Total capital expenditures $17.9 $19.0 $18.6 $— $— Free cash flow1 $(24.7) $(19.0) $(18.6) $— $—  

• Silvertip achieved commercial production on September 1, 2018. The operating and financial metrics above reflect only commercial production
• Mill downtime required to complete repairs on the paste plant and grinding circuit impacted throughput during the quarter, which averaged approximately 434 tpd (approximately 394 mtpd)
• Operating activities remain focused on improving process plant performance, underground rehabilitation and development, and completing several key surface infrastructure projects, including the water treatment plant and a 220-person camp facility
• Processing rates, mill availability, recovery rates and concentrate grades all continue to climb from month-to-month with October setting monthly records across all key metrics. These trends are expected to continue throughout the fourth quarter and processing rates are anticipated to reach an average of approximately 830 tpd (750 mtpd) by year-end
• Coeur expects to file an initial NI 43-101 Technical Report in the fourth quarter and receive approval for the permit amendment application to operate at 1,100 tpd (1,000 mtpd) on a year-round basis in early 2019
• The Company is maintaining full-year 2018 production guidance of 0.7 - 1.2 million ounces of silver, 13.0 - 23.0 million pounds of zinc and 11.0 - 18.0 million pounds of lead, or 2.0 - 3.5 million silver equivalent1 ounces (2.4 - 4.1 million ounces based on average spot prices during the third quarter) at CAS per AgEqOz1 and spot AgEqOz1 of $15.00 - $15.50 and $12.00 - $12.50, respectively4

Exploration

Coeur maintained its pace of exploration during the quarter, though activity steadily tapered in September. Up to 14 drill rigs were active at the Company’s operations and exploration projects, including six at Palmarejo, two at Kensington and six at Silvertip. Near-mine drilling accounted for approximately 80% of the Company’s total exploration investment during the quarter.

Expensed resource expansion drilling increased 28% quarter-over-quarter to $8.2 million and remained focused on identifying and expanding resources at the Company’s operating mines.

Following a second quarter high of $9.6 million, capitalized resource infill drilling declined to $2.3 million during the quarter. This decrease was mostly driven by early completion of Silvertip’s initial drill program, which totaled 146,000 feet (44,500 meters) compared to a budgeted program of approximately 100,000 feet (30,000 meters). Results from this program are expected to support an updated resource model and maiden reserve estimate, which the Company anticipates including in an NI 43-101 compliant Technical Report planned to be filed in the fourth quarter.

At Palmarejo, between one and three rigs completed drilling on the Zapata inferred resource as well as the recently-discovered Madero and Rampa veins (all located immediately west of Guadalupe). Limited drilling also continued in the Independencia North area. Up to three rigs focused on capitalized, resource conversion drilling at Independencia and Guadalupe. Resource expansion drilling was completed by the end of the quarter; however, infill drilling will continue until year end at Guadalupe focusing on the Las Animas area located immediately southeast of Guadalupe.

At Kensington, the drill campaign continued with infill drilling on the Upper Kensington Zone 30 resource, as well on resource expansion on the new Seward Vein, Ophir Vein and Elmira Vein. Elmira is now accessible from the upper, newly refurbished 2050 zone. Surface sampling and mapping were completed during the quarter on district targets.

At Rochester, infill drilling continued at a similar pace with one reverse circulation drill rig operating throughout the quarter. Results continued to indicate significant intercepts in the main Rochester Pit and, to the southwest, in the Sunflower area.

A single reverse circulation rig at Wharf completed infill drilling in the Portland Ridge area and drilled five exploration holes at the Bald Mountain target located east of the mine.

As part of Coeur’s greenfield exploration program, one diamond core rig actively drilled throughout the quarter at the La Morita Project located in northern Chihuahua, Mexico. In addition, surface sampling and mapping were initiated at the El Sarape project located in Sonora in which the Company has an earn-in option with Evrim Resources. The Company plans to commence drilling at the Tonopah district in southern Nevada during the fourth quarter and accelerate its exploration activities at the newly acquired Sterling mine, where one reverse circulation rig is currently drilling.

2018 Production Outlook

Coeur's 2018 production guidance was revised on September 4, 2018 to reflect improved visibility of Silvertip's production following the commencement of commercial production as well as stronger than expected performance at Rochester during the first half of the year.

          Silver(K oz)   Gold(oz)   Zinc(K lbs)   Lead(K lbs)   Silver Equivalent1(K oz) Palmarejo       7,500 - 7,900   115,000 - 120,000   —   —   14,400 - 15,100 Rochester 4,800 - 5,200 48,000 - 52,000 — — 7,680 - 8,320 Kensington — 115,000 - 120,000 — — 6,900 - 7,200 Wharf — 85,000 - 90,000 — — 5,100 - 5,400 Silvertip       700 - 1,200   —   13,000 - 23,000   11,000 - 18,000   2,030 - 3,480 Total       13,000 - 14,300   363,000 - 382,000   13,000 - 23,000   11,000 - 18,000   36,110 - 39,500  

Guidance Based on Third Quarter Average Spot Prices

          Silver(K oz)   Gold(oz)   Zinc(K lbs)   Lead(K lbs)   Silver Equivalent1(K oz) Palmarejo       7,500 - 7,900   115,000 - 120,000   —   —   16,787 - 17,591 Rochester 4,800 - 5,200 48,000 - 52,000 — — 8,676 - 9,399 Kensington — 115,000 - 120,000 — — 9,287 - 9,691 Wharf — 85,000 - 90,000 — — 6,865 - 7,268 Silvertip       700 - 1,200   —   13,000 - 23,000   11,000 - 18,000   2,391 - 4,099 Total       13,000 - 14,300   363,000 - 382,000   13,000 - 23,000   11,000 - 18,000   44,007 - 48,049  

2018 Cost Outlook

The Company’s cost guidance was reduced on July 25, 2018 to account for strong first half cost performance at Palmarejo, timing of commercial production at Silvertip and accelerated investment in near-mine exploration. Unit cost guidance on a spot equivalent basis remains based on silver-to-gold, -zinc and -lead equivalence ratios of 75:1, 0.09:1 and 0.07:1, respectively.

        Original Guidance (if changed)   Current Guidance (dollars in millions, except per ounce amounts)       60:1   Spot   60:1   Spot CAS per AgEqOz1 – Palmarejo $10.50 - $11.00   $9.25 -$9.75 $9.00 - $9.50   $8.00 - $8.50 CAS per AgEqOz1 – Rochester $13.25 - $13.75 $12.00 - $12.50 CAS per AuOz1 – Kensington $900 - $950 CAS per AuEqOz1 – Wharf $850 - $900 CAS per AgEqOz1 – Silvertip $15.00 - $15.50 $12.00 - $12.50 Capital Expenditures $120 - $140 $130 - $150 General and Administrative Expenses $32 - $34 Exploration Expense $20 - $25 $25 - $30 AISC per AgEqOz1 from continuing operations $17.50 - $18.00 $15.00 - $15.50 $17.25 - $17.75 $14.75 - $15.25  

Financial Results and Conference Call

Coeur will host a conference call to discuss its third quarter 2018 financial results on November 1, 2018 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 Peter C. Mitchell, Senior Vice President and Chief Financial Officer, Frank L. Hanagarne, Jr., Senior Vice President and Chief Operating Officer, Terry F. D. Smith, Vice President of North American Operations, Hans Rasmussen, Senior Vice President of Exploration, and other members of management. A replay of the call will be available through November 15, 2018.

  Replay numbers:       (877) 344-7529 (U.S.) (855) 669-9658 (Canada) (412) 317-0088 (International)   Conference ID: 101 23 688  

The Company anticipates reporting its fourth quarter 2018 financial results on February 13, 2019 after the New York Stock Exchange closes for trading and holding a conference call on February 14, 2019 at 11:00 a.m. Eastern Time.

About Coeur

Coeur Mining, Inc. is a well-diversified, growing precious metals producer with five mines in North America. Coeur produces from its wholly-owned operations: the Palmarejo silver-gold complex in Mexico, the Silvertip silver-zinc-lead mine in British Columbia, the Rochester silver-gold mine in Nevada, the Wharf gold mine in South Dakota, and the Kensington gold mine in Alaska. 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 the anticipated benefits of acquisitions, anticipated production, costs, expenses, cash flow, expectations regarding Silvertip, including but not limited to, receipt of permits and completion of a technical report, grades, exploration and development efforts, sales of gold under the Palmarejo gold stream agreement, the timing and impact of installation of HPGR units at Rochester, operations at Palmarejo, Rochester, Wharf, Kensington and Silvertip, expected free cash flow, returns, grades, mining rates, crushing rates and taxes. 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 the Lincoln Hill (and related assets) acquisition does not close on a timely basis or at all, the risk that anticipated benefits of acquisitions are not realized, the risk that expectations regarding Silvertip obtaining necessary permits and filing a technical report do not occur on a timely basis or at all, the risk that HPGR units will not be installed at Rochester on a timely basis or the anticipated benefits thereof will not be achieved, the risk that anticipated production, cost, expense, and free cash flow levels are not attained, the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), changes in the market prices of gold, silver, zinc and lead and a sustained lower price environment, the uncertainties inherent in Coeur’s production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, ground conditions, grade variability, any future labor disputes or work stoppages, the uncertainties inherent in the estimation of gold and silver reserves, changes that could result from Coeur’s future acquisition of new mining properties or businesses, the loss of any third-party smelter to which Coeur markets its production, the effects of environmental and other governmental regulations, the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, Coeur’s ability to raise additional financing necessary to conduct its business, make payments or refinance its debt, as well as other uncertainties and risk factors set out in filings made from time to time with the United States Securities and Exchange Commission, and the Canadian securities regulators, including, without limitation, Coeur’s most recent reports on Form 10-K and Form 10-Q. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Coeur disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Coeur undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Coeur, its financial or operating results or its securities.

Christopher Pascoe, Coeur’s Director, Technical Services and a qualified person under Canadian National Instrument 43-101, approved the scientific and technical information concerning Coeur’s mineral projects in this news release. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors, Canadian investors should refer to the Technical Reports for each of Coeur’s properties as filed on SEDAR at www.sedar.com.

Non-U.S. GAAP Measures

We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non-U.S. GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver ounce (or per gold ounce), all-in sustaining costs, and adjusted all-in sustaining costs. We believe that these adjusted measures provide meaningful information to assist management, investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring operations because they exclude items that may not be indicative of, or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. We believe EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver ounce (or per gold ounce), all-in sustaining costs, and adjusted all-in sustaining costs are important measures in assessing the Company’s overall financial performance. For additional explanation regarding our use of non-U.S. GAAP financial measures, please refer to our Form 10-K for the year ended December 31, 2017.

Notes

1. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver ounce (or per gold ounce), all-in sustaining costs, and adjusted all-in sustaining costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. 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. Silver equivalence assumes silver-to-gold, -lead and -zinc ratios of 60:1, 0.05:1 and 0.06:1, respectively, except where noted as average spot prices. Please see the table below for average applicable spot prices and corresponding ratios. Unit cost guidance on a spot equivalent basis assumes silver-to-gold, -zinc and -lead equivalence ratios of 75:1, 0.09:1 and 0.07:1, respectively.

2. On February 28, 2018, Coeur divested the San Bartolomé mine through the sale of its 100%-owned Bolivian subsidiary. As a result, San Bartolomé is excluded from consolidated operating statistics for all periods presented unless otherwise noted.

3. Includes capital leases. Net of debt issuance costs and premium received.

4. Full-year 2018 production guidance for Kensington and Silvertip include pre-commercial production.

 

Average Spot Prices

          3Q 2018   2Q 2018   1Q 2018   4Q 2017   3Q 2017 Average Silver Spot Price Per Ounce       $ 15.02   $ 16.53   $ 16.77   $ 16.73   $ 16.84 Average Gold Spot Price Per Ounce $ 1,213 $ 1,306 $ 1,329 $ 1,275 $ 1,278 Average Silver to Gold Spot Equivalence 81:1 79:1 79:1 76:1 76:1 Average Zinc Spot Price Per Pound $ 1.15 $ 1.41 $ 1.55 $ 1.47 $ 1.06 Average Silver to Zinc Spot Equivalence 0.08:1 0.09:1 0.09:1 0.09:1 0.06:1 Average Lead Spot Price Per Pound $ 0.95 $ 1.08 $ 1.14 $ 1.13 $ 1.06 Average Silver to Lead Spot Equivalence 0.06:1 0.07:1 0.07:1 0.07:1 0.06:1    

COEUR MINING, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

       

Three months endedSeptember 30,

 

Nine months endedSeptember 30,

2018   2017 2018   2017 In thousands, except share data Revenue $ 148,795 $ 159,920 $ 482,049 $ 495,014 COSTS AND EXPENSES Costs applicable to sales(1) 116,857 101,559 324,443 318,278 Amortization 31,184 32,400 91,420 101,827 General and administrative 7,729 7,345 24,183 24,495 Exploration 8,157 9,791 21,269 22,856 Pre-development, reclamation, and other 8,121   5,030   15,966   12,952   Total costs and expenses 172,048 156,125 477,281 480,408 OTHER INCOME (EXPENSE), NET Loss on debt extinguishment — — — (9,342 ) Fair value adjustments, net 715 — 2,907 (864 ) Interest expense, net of capitalized interest (5,818 ) (3,595 ) (17,801 ) (10,918 ) Other, net (20,903 ) 2,361   (19,846 ) 27,134   Total other income (expense), net (26,006 ) (1,234 ) (34,740 ) 6,010   Income (loss) before income and mining taxes (49,259 ) 2,561 (29,972 ) 20,616 Income and mining tax (expense) benefit (3,785 ) (14,289 ) (19,451 ) (24,040 ) Income (loss) from continuing operations $ (53,044 ) $ (11,728 ) $ (49,423 ) $ (3,424 ) Income (loss) from discontinued operations —   (4,924 ) 550   (5,520 ) NET INCOME (LOSS) $ (53,044 ) $ (16,652 ) $ (48,873 ) $ (8,944 ) OTHER COMPREHENSIVE INCOME (LOSS), net of tax: Unrealized gain (loss) on debt and equity securities 192 1,066 (173 ) (1,134 ) Reclassification adjustments for impairment of equity securities — — — 426 Reclassification adjustments for realized (gain) loss on sale of equity securities —   32   —   1,300   Other comprehensive income (loss) 192   1,098   (173 ) 592   COMPREHENSIVE INCOME (LOSS) $ (52,852 ) $ (15,554 ) $ (49,046 ) $ (8,352 )   NET INCOME (LOSS) PER SHARE Basic income (loss) per share: Net income (loss) from continuing operations $ (0.29 ) $ (0.07 ) $ (0.27 ) $ (0.02 ) Net income (loss) from discontinued operations 0.00   (0.03 ) 0.00   (0.03 ) Basic(2) $ (0.29 ) $ (0.09 ) $ (0.26 ) $ (0.05 ) Diluted income (loss) per share: Net income (loss) from continuing operations $ (0.29 ) $ (0.07 ) $ (0.27 ) $ (0.02 ) Net income (loss) from discontinued operations 0.00   (0.03 ) 0.00   (0.03 ) Diluted(2) $ (0.29 ) $ (0.09 ) $ (0.26 ) $ (0.05 )  

(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 SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

       

Three months endedSeptember 30,

 

Nine months endedSeptember 30,

2018   2017   2018   2017 In thousands CASH FLOWS FROM OPERATING ACTIVITIES:   Net income (loss) $ (53,044 ) $ (16,652 ) $ (48,873 ) $ (8,944 ) (Income) loss from discontinued operations — 4,924 (550 ) 5,520 Adjustments: Amortization 31,184 32,400 91,420 101,827 Accretion 3,117 2,402 10,321 6,954 Deferred taxes (3,276 ) 2,504 (4,087 ) 1,452 Loss on debt extinguishment — — — 9,342 Fair value adjustments, net (715 ) — (2,907 ) 864 Stock-based compensation 1,942 2,585 6,578 8,127 Gain on sale of the Joaquin project — — — (21,138 ) Write-downs 30,787 — 30,787 — Other 2,938 (3,013 ) 5,180 (8,330 ) Changes in operating assets and liabilities: Receivables (5,930 ) 6,289 (16,509 ) 9,754 Prepaid expenses and other current assets 1,377 (1,332 ) 3,868 (2,177 ) Inventory and ore on leach pads (8,156 ) (2,282 ) (19,630 ) 8,080 Accounts payable and accrued liabilities 5,565   9,484   (35,562 ) (5,982 ) CASH PROVIDED BY OPERATING ACTIVITIES OF CONTINUING OPERATIONS 5,789 37,309 20,036 105,349 CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS —   (7,877 ) (2,690 ) 8,633   CASH PROVIDED BY OPERATING ACTIVITIES 5,789 29,432 17,346 113,982 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (39,472 ) (28,982 ) (122,982 ) (89,680 ) Proceeds from the sale of assets 393 1,016 549 16,471 Purchase of investments (15 ) (3,595 ) (415 ) (13,559 ) Sale of investments (78 ) 403 12,682 11,321 Proceeds from notes receivable 15,000 — 15,000 — Other 64   (4,319 ) (34 ) (4,385 ) CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES OF CONTINUING OPERATIONS (24,108 ) (35,477 ) (95,200 ) (79,832 ) CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS —   (412 ) (28,470 ) (1,175 ) CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (24,108 ) (35,889 ) (123,670 ) (81,007 ) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of notes and bank borrowings, net of issuance costs 25,000 (2,257 ) 40,000 242,701 Payments on debt, capital leases, and associated costs (25,533 ) (3,323 ) (48,355 ) (195,439 ) Other (77 ) (6 ) (4,916 ) (3,726 ) CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES OF CONTINUING OPERATIONS (610 ) (5,586 ) (13,271 ) 43,536 CASH USED IN FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS —   (21 ) (22 ) (62 ) CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (610 ) (5,607 ) (13,293 ) 43,474   Effect of exchange rate changes on cash and cash equivalents 183   (222 ) 565   662   INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (18,746 ) (12,286 ) (119,052 ) 77,111 Less net cash provided by (used in) discontinued operations(1) —   (8,491 ) (32,930 ) (3,302 ) (18,746 ) (3,795 ) (86,122 ) 80,413   Cash, cash equivalents and restricted cash at beginning of period 136,026   210,809   203,402   126,601   Cash, cash equivalents and restricted cash at end of period $ 117,280   $ 207,014   $ 117,280   $ 207,014    

(1) Less net cash provided by (used in) discontinued operations includes the following cash transactions: net subsidiary payments to parent company of $181 for the three months ended September 30, 2017 and $1,748 and $10,698 during the nine months ended September 30, 2018 and 2017, respectively.

   

COEUR MINING, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS

       

September 30, 2018(unaudited)

  December 31, 2017 ASSETS In thousands, except share data CURRENT ASSETS Cash and cash equivalents $ 104,746 $ 192,032 Receivables 30,480 19,069 Inventory 62,569 58,230 Ore on leach pads 77,515 73,752 Prepaid expenses and other 12,167 15,053 Assets held for sale —   91,421   287,477 449,557 NON-CURRENT ASSETS Property, plant and equipment, net 285,871 254,737 Mining properties, net 865,043 829,569 Ore on leach pads 67,420 65,393 Restricted assets 21,361 20,847 Equity and debt securities 24,232 34,837 Receivables 28,035 28,750 Other 18,938   17,485   TOTAL ASSETS $ 1,598,377   $ 1,701,175   LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 55,132 $ 48,592 Accrued liabilities and other 65,400 94,930 Debt 22,696 30,753 Reclamation 3,777 3,777 Liabilities held for sale —   50,677   147,005 228,729 NON-CURRENT LIABILITIES Debt 406,494 380,569 Reclamation 122,977 117,055 Deferred tax liabilities 98,891 105,148 Other long-term liabilities 55,227   54,697   683,589 657,469 STOCKHOLDERS’ EQUITY Common stock, par value $0.01 per share; authorized 300,000,000 shares, 187,026,334 issued and outstanding at September 30, 2018 and 185,637,724 at December 31, 2017 1,870 1,856 Additional paid-in capital 3,359,183 3,357,345 Accumulated other comprehensive income (loss) (258 ) 2,519 Accumulated deficit (2,593,012 ) (2,546,743 ) 767,783   814,977   TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,598,377   $ 1,701,175      

Adjusted EBITDA Reconciliation

  (Dollars in thousands except per share amounts)      

LTM 3Q2018

  3Q 2018   2Q 2018   1Q 2018   4Q 2017  

LTM 3Q2017

  3Q 2017 Net income (loss) $ (41,248 ) $ (53,044 ) $ 2,930 $ 1,241 $ 7,625 $ (17,250 ) $ (16,652 ) (Income) loss from discontinued operations, net of tax 6,174 — — (550 ) 6,724 3,498 4,924 Interest expense, net of capitalized interest 23,323 5,818 6,018 5,965 5,522 17,769 3,595 Income tax provision (benefit) 24,408 3,785 3,717 11,949 4,957 23,545 14,289 Amortization 136,142   31,184   29,459   30,777   44,722   130,453   32,400   EBITDA 148,799 (12,257 ) 42,124 49,382 69,550 158,015 38,556 Fair value adjustments, net (2,907 ) (715 ) 2,462 (4,654 ) — (790 ) — Impairment of equity and debt securities — — — — — 1,109 — Foreign exchange (gain) loss 7,755 3,104 3,309 670 672 1,642 39 Gain on sale of Joaquin project — — — — — (21,138 ) — (Gain) loss on sale of assets and securities 182 28 (586 ) 241 499 (159 ) (2,051 ) Gain on repurchase of Rochester royalty — — — — — (2,332 ) — Loss on debt extinguishment — — — — — 20,667 — Mexico inflation adjustment (1,939 ) — (1,939 ) — — — — Transaction costs 3,987 1,049 — — 2,938 820 819 Interest income on notes receivables (1,449 ) (628 ) (573 ) (248 ) — — — Manquiri sale consideration write-down 18,599 18,599 — — — — — Silvertip start-up write-down 8,746 8,746 — — — — — Rochester In-Pit crusher write-down 3,441 3,441 — — — — — Asset retirement obligation accretion 10,844 2,883 2,817 2,669 2,475 8,368 2,223 Inventory adjustments and write-downs 2,359   421   817   1,126   885   5,891   659   Adjusted EBITDA $ 198,417   $ 24,671   $ 48,431   $ 49,186     $ 77,019     $ 172,093     $ 40,245   Revenue $ 696,634 $ 148,795 $ 169,987 $ 163,267 $ 214,585 $ 634,218 $ 159,920 Adjusted EBITDA Margin 28 % 17 % 28 % 30 % 36 % 27 % 25 %    

Adjusted Net Income (Loss) Reconciliation

  (Dollars in thousands except per share amounts)       3Q 2018   2Q 2018   1Q 2018   4Q 2017   3Q 2017 Net income (loss) $ (53,044 ) $ 2,930 $ 1,241 $ 7,625 $ (16,652 ) (Income) loss from discontinued operations, net of tax — — (550 ) 6,724 4,924 Fair value adjustments, net (715 ) 2,462 (4,654 ) — — Impairment of equity and debt securities — — — — — (Gain) loss on sale of assets and securities — (586 ) 241 499 (2,051 ) Gain on repurchase of Rochester royalty 28 — — — — (Gain) loss on debt extinguishment — — — — — Mexico inflation adjustment — (1,939 ) — — — Transaction costs 1,049 — — 2,938 819 Interest income on notes receivables (628 ) (573 ) (248 ) — — Manquiri sale consideration write-down 18,599 — — — — Silvertip start-up write-down 8,746 — — — — Rochester In-Pit crusher write-down 3,441 — — — — Foreign exchange loss (gain) 6,062 (1,233 ) 4,312 (3,643 ) (1,392 ) Tax effect of adjustments(1) (3,191 ) —   —   —   (990 ) Adjusted net income (loss) $ (19,653 ) $ 1,061   $ 342   $ 14,143   $ (15,342 )   Adjusted net income (loss) per share - Basic $ (0.11 ) $ 0.01 $ 0.00 $ 0.08 $ (0.09 ) Adjusted net income (loss) per share - Diluted $ (0.11 ) $ 0.01 $ 0.00 $ 0.08 $ (0.09 )    

Consolidated Free Cash Flow Reconciliation

  (Dollars in thousands)       3Q 2018   2Q 2018   1Q 2018   4Q 2017   3Q 2017 Cash flow from continuing operations $ 5,789 $ (1,294 ) $ 15,541 $ 91,811 $ 37,309 Capital expenditures from continuing operations 39,472   41,165   42,345   47,054   28,982 Free cash flow (33,683 ) (42,459 ) (26,804 ) 44,757   8,327    

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ouncefor Nine Months Ended September 30, 2018

        Silver   Gold   Total In thousands except per ounce amounts Palmarejo   Rochester   Silvertip   Total Kensington   Wharf   Total Costs applicable to sales, including amortization (U.S. GAAP) $ 138,712   $ 91,222   $ 12,608   $ 242,542 $ 111,168   $ 61,434   $ 172,602 $ 415,144 Amortization 45,752   14,918   1,073   61,743   20,070   8,888   28,958   90,701   Costs applicable to sales $ 92,960 $ 76,304 $ 11,535 $ 180,799 $ 91,098 $ 52,546 $ 143,644 $ 324,443 Silver equivalent ounces sold 11,210,084 5,711,663 266,666 17,188,413 25,736,073 Gold equivalent ounces sold         81,576   60,885   142,461     Costs applicable to sales per ounce $ 8.29 $ 13.36 $ 43.26 $ 10.52 $ 1,117 $ 863 $ 1,008 $ 12.61 Inventory adjustments —   (0.13 ) (32.80 ) (0.56 ) (6 ) (3 ) (5 ) (0.40 ) Adjusted costs applicable to sales per ounce $ 8.29 $ 13.23 $ 10.46 $ 9.96   $ 1,111 $ 860 $ 1,003 $ 12.21     Costs applicable to sales per average spot ounce $ 7.14 $ 11.84 $ 33.49 $ 9.13 $ 10.42 Inventory adjustments —   (0.12 ) (25.39 ) (0.48 ) (0.33 ) Adjusted costs applicable to sales per average spot ounce $ 7.14 $ 11.72 $ 8.10 $ 8.65   $ 10.09     Costs applicable to sales $ 324,443 Treatment and refining costs 3,792 Sustaining capital 71,196 General and administrative 24,183 Exploration 21,269 Reclamation 13,744 Project/pre-development costs 3,075   All-in sustaining costs $ 461,702 Silver equivalent ounces sold 17,188,413 Kensington and Wharf silver equivalent ounces sold 8,547,660   Consolidated silver equivalent ounces sold 25,736,073   All-in sustaining costs per silver equivalent ounce $ 17.94   Inventory adjustments $ (0.40 ) Adjusted all-in sustaining costs per silver equivalent ounce $ 17.54     Consolidated silver equivalent ounces sold (average spot) 31,132,974   All-in sustaining costs per average spot silver equivalent ounce $ 14.83   Inventory adjustments $ (0.33 ) Adjusted all-in sustaining costs per average spot silver equivalent ounce $ 14.50      

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ouncefor Three Months Ended September 30, 2018

        Silver   Gold   Total In thousands except per ounce amounts Palmarejo   Rochester   Silvertip   Total Kensington   Wharf   Total Costs applicable to sales, including amortization (U.S. GAAP) $ 46,348   $ 32,842   $ 12,608   $ 91,798 $ 35,153   $ 20,857   $ 56,010 $ 147,808 Amortization 14,794   5,294   1,073   21,161   6,912   2,878   9,790   30,951   Costs applicable to sales $ 31,554 $ 27,548 $ 11,535 $ 70,637 $ 28,241 $ 17,979 $ 46,220 $ 116,857 Silver equivalent ounces sold 3,361,893 2,103,584 266,666 5,732,143 8,475,883 Gold equivalent ounces sold         25,648   20,081   45,729     Costs applicable to sales per ounce $ 9.39 $ 13.10 $ 43.26 $ 12.32 $ 1,101 $ 895 $ 1,011 $ 13.79 Inventory adjustments —   (0.06 ) (32.80 ) (1.55 ) (10 ) —   (6 ) (1.08 ) Adjusted costs applicable to sales per ounce $ 9.39 $ 13.04 $ 10.46 $ 10.77   $ 1,091 $ 895 $ 1,005 $ 12.71     Costs applicable to sales per average spot ounce $ 7.93 $ 11.48 $ 36.69 $ 10.55 $ 11.25 Inventory adjustments —   (0.06 ) (28.00 ) (1.33 ) (0.88 ) Adjusted costs applicable to sales per average spot ounce $ 7.93 $ 11.42 $ 8.69 $ 9.22   $ 10.37     Costs applicable to sales $ 116,857 Treatment and refining costs 1,551 Sustaining capital 19,236 General and administrative 7,729 Exploration 8,157 Reclamation 4,545 Project/pre-development costs 1,137   All-in sustaining costs $ 159,212 Silver equivalent ounces sold 5,732,143 Kensington and Wharf silver equivalent ounces sold 2,743,740   Consolidated silver equivalent ounces sold 8,475,883   All-in sustaining costs per silver equivalent ounce $ 18.78   Inventory adjustments $ (1.08 ) Adjusted all-in sustaining costs per silver equivalent ounce $ 17.70     Consolidated silver equivalent ounces sold (average spot) 10,385,649   All-in sustaining costs per average spot silver equivalent ounce $ 15.33   Inventory adjustments $ (0.88 ) Adjusted all-in sustaining costs per average spot silver equivalent ounce $ 14.45      

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ouncefor Three Months Ended June 30, 2018

        Silver   Gold   Total In thousands except per ounce amounts Palmarejo   Rochester   Total Kensington   Wharf   Total Costs applicable to sales, including amortization (U.S. GAAP) $ 44,943   $ 29,244   $ 74,187 $ 40,668   $ 22,611   $ 63,279 $ 137,466 Amortization 14,633   4,793   19,426   6,441   3,353   9,794   29,220   Costs applicable to sales $ 30,310 $ 24,451 $ 54,761 $ 34,227 $ 19,258 $ 53,485 $ 108,246 Silver equivalent ounces sold 3,964,208 1,819,072 5,783,280 8,870,100 Gold equivalent ounces sold       28,165   23,282   51,447     Costs applicable to sales per ounce $ 7.65 $ 13.44 $ 9.47 $ 1,215 $ 827 $ 1,040 $ 12.20 Inventory adjustments (0.01 ) (0.08 ) (0.03 ) (20 ) (3 ) (12 ) (0.09 ) Adjusted costs applicable to sales per ounce $ 7.64 $ 13.36 $ 9.44   $ 1,195 $ 824 $ 1,028 $ 12.11     Costs applicable to sales per average spot ounce $ 6.65 $ 11.94 $ 8.29 $ 10.15 Inventory adjustments (0.01 ) (0.07 ) (0.03 ) (0.08 ) Adjusted costs applicable to sales per average spot ounce $ 6.64 $ 11.87 $ 8.26   $ 10.07     Costs applicable to sales $ 108,246 Treatment and refining costs 1,046 Sustaining capital 28,571 General and administrative 7,650 Exploration 6,429 Reclamation 4,667 Project/pre-development costs 517   All-in sustaining costs $ 157,126 Silver equivalent ounces sold 5,783,280 Kensington and Wharf silver equivalent ounces sold 3,086,820   Consolidated silver equivalent ounces sold 8,870,100   All-in sustaining costs per silver equivalent ounce $ 17.71   Inventory adjustments $ (0.09 ) Adjusted all-in sustaining costs per silver equivalent ounce $ 17.62     Consolidated silver equivalent ounces sold (average spot) 10,667,255   All-in sustaining costs per average spot silver equivalent ounce $ 14.73   Inventory adjustments $ (0.08 ) Adjusted all-in sustaining costs per average spot silver equivalent ounce $ 14.65      

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ouncefor Three Months Ended March 31, 2018

        Silver   Gold   Total In thousands except per ounce amounts Palmarejo   Rochester   Total Kensington   Wharf   Total Costs applicable to sales, including amortization (U.S. GAAP) $ 47,421   $ 29,136   $ 76,557 $ 35,347   $ 17,966   $ 53,313 $ 129,870 Amortization 16,325   4,831   21,156   6,717   2,657   9,374   30,530   Costs applicable to sales $ 31,096 $ 24,305 $ 55,401 $ 28,630 $ 15,309 $ 43,939 $ 99,340 Silver equivalent ounces sold 3,883,983 1,789,007 5,672,990 8,390,090 Gold equivalent ounces sold       27,763   17,522   45,285     Costs applicable to sales per ounce $ 8.01 $ 13.59 $ 9.77 $ 1,031 $ 874 $ 970 $ 11.84 Inventory adjustments —   (0.26 ) (0.08 ) (21 ) (4 ) (15 ) (0.13 ) Adjusted costs applicable to sales per ounce $ 8.01 $ 13.33 $ 9.69   $ 1,010 $ 870 $ 955 $ 11.71     Costs applicable to sales per average spot ounce $ 6.94 $ 12.13 $ 8.55 $ 9.87 Inventory adjustments —   (0.24 ) (0.07 ) (0.11 ) Adjusted costs applicable to sales per average spot ounce $ 6.94 $ 11.89 $ 8.48   $ 9.76     Costs applicable to sales $ 99,340 Treatment and refining costs 1,195 Sustaining capital 23,389 General and administrative 8,804 Exploration 6,683 Reclamation 4,532 Project/pre-development costs 1,421   All-in sustaining costs $ 145,364 Silver equivalent ounces sold 5,672,990 Kensington and Wharf silver equivalent ounces sold 2,717,100   Consolidated silver equivalent ounces sold 8,390,090   All-in sustaining costs per silver equivalent ounce $ 17.33   Inventory adjustments $ (0.13 ) Adjusted all-in sustaining costs per silver equivalent ounce $ 17.20     Consolidated silver equivalent ounces sold (average spot) 10,066,759   All-in sustaining costs per average spot silver equivalent ounce $ 14.44   Inventory adjustments $ (0.11 ) Adjusted all-in sustaining costs per average spot silver equivalent ounce $ 14.33      

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ouncefor Three Months Ended December 31, 2017

        Silver   Gold   Total In thousands except per ounce amounts Palmarejo   Rochester   Endeavor   Total Kensington   Wharf   Total Costs applicable to sales, including amortization (U.S. GAAP) $ 58,775   $ 41,006   $ —   $ 99,781 $ 42,640   $ 24,033   $ 66,673 $ 166,454 Amortization 22,749   6,960   —   29,709   10,633   4,129   14,762   44,471   Costs applicable to sales $ 36,026 $ 34,046 $ — $ 70,072 $ 32,007 $ 19,904 $ 51,911 $ 121,983 Silver equivalent ounces sold 4,680,802 2,657,975 — 7,338,777 11,232,057 Gold equivalent ounces sold         35,633   29,255   64,888     Costs applicable to sales per ounce $ 7.70 $ 12.81 $ — $ 9.55 $ 898 $ 680 $ 800 $ 10.86 Inventory adjustments (0.16 ) (0.04 ) —   (0.12 ) (2 ) 2   —   (0.08 ) Adjusted costs applicable to sales per ounce $ 7.54 $ 12.77 $ — $ 9.43   $ 896 $ 682 $ 800 $ 10.78     Costs applicable to sales per average spot ounce $ 6.78 $ 11.41 $ 8.45 $ 9.21 Inventory adjustments (0.14 ) (0.04 ) (0.10 ) (0.07 ) Adjusted costs applicable to sales per average spot ounce $ 6.64 $ 11.37 $ 8.35   $ 9.14     Costs applicable to sales $ 121,983 Treatment and refining costs 1,600 Sustaining capital 18,520 General and administrative 9,120 Exploration 7,455 Reclamation 4,075 Project/pre-development costs 578   All-in sustaining costs $ 163,331 Silver equivalent ounces sold 7,338,777 Kensington and Wharf silver equivalent ounces sold 3,893,280   Consolidated silver equivalent ounces sold 11,232,057   All-in sustaining costs per silver equivalent ounce $ 14.53   Inventory adjustments $ (0.08 ) Adjusted all-in sustaining costs per silver equivalent ounce $ 14.45     Consolidated silver equivalent ounces sold (average spot) 13,246,634   All-in sustaining costs per average spot silver equivalent ounce $ 12.33   Inventory adjustments $ (0.07 ) Adjusted all-in sustaining costs per average spot silver equivalent ounce $ 12.26      

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ouncefor Three Months Ended September 30, 2017

        Silver   Gold   Total In thousands except per ounce amounts Palmarejo   Rochester   Endeavor   Total Kensington   Wharf   Total Costs applicable to sales, including amortization (U.S. GAAP) $ 49,669   $ 27,866   $ 59   $ 77,594 $ 35,522   $ 20,553   $ 56,075 $ 133,669 Amortization 16,414   4,591   20   21,025   7,864   3,223   11,087   32,112   Costs applicable to sales $ 33,255 $ 23,275 $ 39 $ 56,569 $ 27,658 $ 17,330 $ 44,988 $ 101,557 Silver equivalent ounces sold 3,386,963 1,673,704 8,027 5,068,694 8,264,174 Gold equivalent ounces sold         29,173   24,085   53,258     Costs applicable to sales per ounce $ 9.82 $ 13.91 $ 4.86 $ 11.16 $ 948 $ 720 $ 845 $ 12.29 Inventory adjustments (0.06 ) (0.22 ) —   (0.11 ) (2 ) (1 ) (2 ) (0.08 ) Adjusted costs applicable to sales per ounce $ 9.76 $ 13.69 $ 4.86 $ 11.05   $ 946 $ 719 $ 843 $ 12.21     Costs applicable to sales per average spot ounce $ 8.73 $ 12.66 $ 10.00 $ 10.47 Inventory adjustments (0.05 ) (0.20 ) (0.10 ) (0.07 ) Adjusted costs applicable to sales per average spot ounce $ 8.68 $ 12.46 $ 9.90   $ 10.40     Costs applicable to sales $ 101,557 Treatment and refining costs 1,408 Sustaining capital 18,126 General and administrative 7,345 Exploration 9,791 Reclamation 3,915 Project/pre-development costs 1,979   All-in sustaining costs $ 144,121 Silver equivalent ounces sold 5,068,694 Kensington and Wharf silver equivalent ounces sold 3,195,480   Consolidated silver equivalent ounces sold 8,264,174   All-in sustaining costs per silver equivalent ounce $ 17.43   Inventory adjustments $ (0.08 ) Adjusted all-in sustaining costs per silver equivalent ounce $ 17.35     Consolidated silver equivalent ounces sold (average spot) 9,698,587   All-in sustaining costs per average spot silver equivalent ounce $ 14.86   Inventory adjustments $ (0.07 ) Adjusted all-in sustaining costs per average spot silver equivalent ounce $ 14.79      

Reconciliation of All-in Sustaining Costs per 60:1 Silver Equivalent Ouncefor 2018 Guidance

        Silver   Gold   In thousands except per ounce amounts Palmarejo   Rochester   Silvertip   Total Silver   Kensington   Wharf   Total Gold  

TotalCombined

Costs applicable to sales, including amortization (U.S. GAAP) $ 200,000   $ 116,300   $ 55,600   $ 371,900   $ 146,100   $ 89,700   $ 235,800 $ 607,700 Amortization 65,000     18,900     14,000     97,900     40,400     12,100     52,500     150,400 Costs applicable to sales $ 135,000 $ 97,400 $ 41,600 $ 274,000 $ 105,700 $ 77,600 $ 183,300 $ 457,300 Silver equivalent ounces sold 14,800,000 7,300,000 2,700,000 24,800,000 37,100,000 Gold equivalent ounces sold                 117,500     87,500     205,000       Costs applicable to sales per ounce $9.00 - $9.50 $13.25 - $13.75 $15.00 - $15.50 $900 - $950 $850 - $900   Costs applicable to sales $ 457,300 Treatment and refining costs 9,000 Sustaining capital, including capital lease payments 105,000 General and administrative 33,000 Exploration 26,000 Reclamation 15,700 Project/pre-development costs 2,900 All-in sustaining costs $ 648,900 Silver equivalent ounces sold 24,800,000 Kensington and Wharf silver equivalent ounces sold 12,300,000 Consolidated silver equivalent ounces sold 37,100,000 All-in sustaining costs per silver equivalent ounce $17.25 - $17.75    

Reconciliation of All-in Sustaining Costs per Spot Silver Equivalent Ouncefor 2018 Guidance

        Silver   Gold   In thousands except per ounce amounts Palmarejo   Rochester   Silvertip   Total Silver   Kensington   Wharf   Total Gold  

TotalCombined

Costs applicable to sales, including amortization (U.S. GAAP) $ 200,000   $ 116,300   $ 55,600   $ 371,900   $ 146,100   $ 89,700   $ 235,800 $ 607,700 Amortization 65,000     18,900     14,000     97,900     40,400     12,100     52,500     150,400 Costs applicable to sales $ 135,000 $ 97,400 $ 41,600 $ 274,000 $ 105,700 $ 77,600 $ 183,300 $ 457,300 Silver equivalent ounces sold 16,400,000 8,012,500 3,350,000 27,762,500 43,137,500 Gold equivalent ounces sold                 117,500     87,500     205,000       Costs applicable to sales per ounce $8.00 - $8.50 $12.00 - $12.50 $12.00 - $12.50 $900 - $950 $850 - $900   Costs applicable to sales $ 457,300 Treatment and refining costs 9,000 Sustaining capital, including capital lease payments 105,000 General and administrative 33,000 Exploration 26,000 Reclamation 15,700 Project/pre-development costs 2,900 All-in sustaining costs $ 648,900 Silver equivalent ounces sold 27,762,500 Kensington and Wharf silver equivalent ounces sold 15,375,000 Consolidated silver equivalent ounces sold 43,137,500 All-in sustaining costs per silver equivalent ounce $14.75 - $15.25  

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Coeur Mining, Inc.Paul DePartout, 312-489-5800Director, Investor Relationswww.coeur.com