Reaffirms Production Guidance; Updates Cost and
Capital Expenditure Guidance
Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today
reported second quarter 2021 financial results, including revenue
of $214.9 million, cash flow from operating activities of $58.1
million and GAAP net income from continuing operations of $32.1
million, or $0.13 per share. On an adjusted basis1, the Company
reported EBITDA of $52.7 million, cash flow from operating
activities before changes in working capital of $31.4 million and
net loss from continuing operations of $0.8 million, or $0.00 per
share.
Key Highlights
- Quarterly revenue and cash flow growth – Revenue
increased 6% quarter-over-quarter and 39% year-over-year due to
higher gold and silver ounces sold and a higher average realized
silver price. Operating cash flow improved by $62.4 million
quarter-over-quarter and $48.1 million year-over-year to $58.1
million
- Higher quarterly production and stronger expected second
half – Gold production increased 2% quarter-over-quarter to
87,275 ounces led by a 27% improvement at Wharf, while silver
production of 2.6 million ounces was 8% higher largely due to a 15%
increase at Rochester. Year-over-year, gold and silver production
increased 12% and 60%, respectively, driven by increases at
Palmarejo and Rochester. Production levels are expected to continue
climbing in the second half of the year and be within the Company’s
full-year guidance of 322,500 - 367,500 ounces of gold and 9.7 -
12.2 million ounces of silver
- New quarterly drilling record from largest exploration
campaign in Company history – A new quarterly record was
achieved during the period with the completion of approximately
320,400 feet (97,675 meters) of drilling and 27 currently active
drill rigs. Investment in exploration totaled approximately $18.6
million ($12.4 million expensed and $6.2 million capitalized) in
the quarter with significant increases in drilling activity at
Palmarejo and Rochester as well as the Crown district in southern
Nevada
- Rochester expansion progressing according to schedule –
Coeur advanced major construction on the Plan of Operations
Amendment 11 (“POA 11”) expansion at Rochester on schedule, with
solid ongoing environmental and safety performance. Placement of
over-liner material on the new Stage VI leach pad commenced
approximately six weeks ahead of schedule, and concrete foundation
work for the Merrill-Crowe process plant and crusher corridor is
scheduled to begin in the third quarter. Overall project progress
was approximately 31% complete at the end of the second
quarter
- Accelerating investment at Silvertip based on positive
results – The Company is increasing its investment at Silvertip
during the second half of 2021 to complete several surface projects
to support a potential restart of active mining and processing
activities in 2023
- Strategic investment in Victoria – Coeur acquired a
17.8% ownership interest in Victoria Gold Corp. (“Victoria”) during
the second quarter for consideration of approximately $118.8
million. Victoria owns and operates the new open pit, heap leach
Eagle gold mine located in central Yukon Territory, Canada. The
investment is consistent with the Company’s strategy and
complements its existing portfolio of gold and silver assets
located in high-quality jurisdictions
“Second quarter revenue and cash flow increased
quarter-over-quarter and year-over-year, primarily due to stronger
silver production from our Palmarejo and Rochester operations as
well as higher average realized silver prices,” said Mitchell J.
Krebs, President and Chief Executive Officer. “We anticipate
production to continue increasing during the second half of 2021,
particularly from our Wharf and Rochester operations, and expect to
achieve our full-year production guidance for both gold and silver.
We also accelerated investment on the POA 11 expansion project at
Rochester during the quarter. Construction is advancing on schedule
and is expected to be largely completed late next year, leading to
an anticipated step change in production and cash flow despite
seeing some early signs of inflationary pressures in certain
areas.”
Mr. Krebs continued, “Similarly, we continued to increase our
investment in exploration and established a new quarterly drilling
record, which is leading to additional positive results from the
largest campaign in Company history. A third source of high-return
organic growth is the potential expansion and restart of our
Silvertip mine in northern British Columbia. We are accelerating
investment at Silvertip to take advantage of the current
construction season based on positive results from our exploration
and technical programs to preserve the option of a potential
restart in 2023. Finally, we further bolstered our portfolio by
acquiring a 17.8% interest in Victoria, which aligns with our
strategy of having a balanced collection of long-life, low-cost
precious metals assets in high-quality jurisdictions that can
generate strong returns for our stockholders.”
“Collectively, these initiatives reflect our strategy of
discovering, developing and operating a balanced, multi-asset
portfolio of precious metals assets located in high-quality
jurisdictions to maximize free cash flow, returns and net asset
value. Together with a flexible balance sheet and industry-leading
environmental, social and governance practices, we believe we are
well positioned to deliver solid results and generate meaningful
value for our stockholders,” concluded Mr. Krebs.
Financial and Operating Highlights (Unaudited)
(Amounts in millions, except per share
amounts, gold/silver ounces produced & sold, and per-ounce
metrics)
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Gold Sales
$
146.2
$
138.3
$
162.0
$
167.1
$
127.9
Silver Sales
$
68.7
$
63.8
$
66.4
$
62.6
$
26.3
Consolidated Revenue
$
214.9
$
202.1
$
228.3
$
229.7
$
154.2
Costs Applicable to Sales2
$
132.6
$
108.1
$
118.6
$
112.8
$
90.0
General and Administrative
Expenses
$
10.5
$
11.6
$
8.4
$
7.8
$
8.6
Net Income (Loss)
$
32.1
$
2.1
$
11.9
$
26.9
$
(1.2
)
Net Income (Loss) Per Share
$
0.13
$
0.01
$
0.05
$
0.11
$
(0.01
)
Adjusted Net Income (Loss)1
$
(0.8
)
$
13.9
$
19.1
$
38.2
$
2.6
Adjusted Net Income (Loss)1 Per
Share
$
0.00
$
0.06
$
0.08
$
0.16
$
0.01
Weighted Average Shares
Outstanding
252.1
244.5
244.3
243.8
240.9
EBITDA1
$
84.6
$
49.7
$
76.7
$
77.3
$
35.3
Adjusted EBITDA1
$
52.7
$
65.9
$
84.0
$
90.8
$
42.2
Cash Flow from Operating
Activities
$
58.1
$
(4.4
)
$
67.3
$
79.5
$
9.9
Capital Expenditures
$
78.2
$
59.4
$
37.4
$
23.0
$
16.7
Free Cash Flow1
$
(20.2
)
$
(63.8
)
$
29.8
$
56.5
$
(6.7
)
Cash, Equivalents & Short-Term
Investments
$
124.1
$
154.1
$
92.8
$
77.1
$
70.9
Total Debt3
$
414.2
$
412.1
$
275.5
$
301.1
$
348.6
Average Realized Price Per Ounce –
Gold
$
1,651
$
1,664
$
1,663
$
1,754
$
1,641
Average Realized Price Per Ounce –
Silver
$
26.60
$
26.19
$
24.21
$
24.15
$
16.25
Gold Ounces Produced
87,275
85,225
96,377
95,995
78,229
Silver Ounces Produced
2.6
2.4
2.8
2.6
1.6
Gold Ounces Sold
88,501
83,112
97,400
95,283
77,933
Silver Ounces Sold
2.6
2.4
2.7
2.6
1.6
Financial Results
Second quarter 2021 revenue totaled $214.9 million compared to
$202.1 million in the prior period and $154.2 million in the second
quarter of 2020. The Company produced 87,275 and 2.6 million ounces
of gold and silver, respectively, during the quarter. Metal sales
totaled 88,501 ounces of gold and 2.6 million ounces of silver.
Average realized gold and silver prices for the quarter were
$1,651 and $26.60 per ounce, respectively, compared to $1,664 and
$26.19 per ounce in the prior period. Gold and silver sales
accounted for 68% and 32% of quarterly revenue, respectively. The
Company’s U.S. operations accounted for approximately 60% of second
quarter revenue, consistent with the prior period.
Costs applicable to sales2 increased to $132.6 million, largely
due to higher throughput rates, an increase in maintenance costs,
higher consumable costs and a non-cash inventory charge at
Rochester.
General and administrative expenses for the quarter totaled
$10.5 million compared to $11.6 million in the prior period,
reflecting lower employee-related expenses. Full-year general and
administrative expenses are expected to be slightly higher at $40 -
$45 million (previous guidance of $37 - $41 million) largely driven
by increased accruals for previously-granted long-term performance
share awards.
Coeur invested approximately $18.6 million ($12.4 million
expensed and $6.2 million capitalized) in exploration during the
quarter, compared to roughly $14.9 million ($9.7 million expensed
and $5.2 million capitalized) in the prior period, reflecting an
increase in drilling activity across most sites. Notably, the
Company completed approximately 320,400 feet (97,675 meters) of
expansion and infill drilling during the period, establishing a new
Company record. See the “Operations” and “Exploration” sections for
additional detail on the Company’s exploration activities.
Operating costs related to COVID-19 mitigation and response
efforts totaled $2.3 million during the second quarter, compared to
$3.0 million in the prior period. These costs were primarily driven
by employee-related expenses at Kensington and Palmarejo, and are
included in “Pre-development, reclamation, and other expenses” on
the Company’s income statement. Coeur continues to implement and
maintain rigorous health and safety protocols across its operations
and in surrounding communities aimed at limiting the exposure and
transmission of COVID-19 while minimizing business
interruptions.
The Company recorded an income tax expense of $15.3 million
during the second quarter. Cash income and mining taxes paid during
the period totaled approximately $12.4 million.
Quarterly operating cash flow totaled $58.1 million compared to
$(4.4) million in the prior period, largely driven by higher metal
sales and favorable changes in working capital. Changes in working
capital during the quarter were $26.6 million, compared to $(45.9)
million in the prior period.
Capital expenditures during the second quarter were $78.2
million compared to $59.4 million in the prior period, primarily
driven by increased investment at Rochester and Silvertip.
Investment related to the POA 11 expansion project at Rochester
totaled $33.2 million during the quarter, compared to $28.1 million
in the first quarter. Sustaining and development capital
expenditures accounted for approximately 38% and 62%, respectively,
of the Company’s total capital investment during the quarter.
The Company satisfied the remaining $7.1 million obligation
under its prepayment agreement at Kensington and exercised an
option to receive an additional $15.0 million prepayment, resulting
in a net cash inflow of approximately $7.9 million in the second
quarter. Coeur expects the $15.0 million cash outflow under the
arrangement to occur over the next two quarters.
Strategic Investment in Victoria
During the second quarter, Coeur entered into an agreement to
acquire roughly 11.1 million outstanding common shares of Victoria
(approximately 17.8% of issued and outstanding shares on an
undiluted basis at time of transaction) from Orion Co-VI Ltd.
(“Orion”) at a price of C$13.20 per share, reflecting a 5% discount
to the trailing 30-day volume weighted price for the period ended
May 7, 2021.
In connection with the transaction, Orion received roughly 12.8
million shares of Coeur common stock (approximately 4.9% of issued
and outstanding shares on an undiluted basis at time of
transaction), based on the trailing 30-day volume weighted price of
$9.17 per share, for the period ended May 7, 2021. The transaction
was completed on May 14, 2021 for consideration of approximately
$118.8 million. The value of Victoria’s shares held by Coeur
totaled approximately $164.7 million as of June 30, 2021.
Liquidity Update
Maintaining balance sheet flexibility remains a key element of
Coeur’s strategy. The Company ended the second quarter with total
liquidity of approximately $389.1 million, including $124.1 million
of cash and no borrowings under its $300.0 million revolving credit
facility (“RCF”)4. Additionally, the aggregate borrowing capacity
under its RCF may be increased by up to $100.0 million.
As of June 30, 2021, the Company also had $174.4 million of
strategic investments in equity securities and the full $100.0
million available under its at-the-market common stock offering
program it established in April 2020.
Hedging Update
During the second quarter, the Company added to its hedge
position by executing additional zero-cost collar hedges on 6,000
ounces of its expected 2022 gold production. Coeur previously
completed its gold hedging program for 2021 and continues to
proactively monitor market conditions to potentially layer in
additional hedges on up to 50% of expected gold production in 2022.
The Company’s silver price exposure remains unhedged. An overview
of the hedges currently implemented is outlined below:
2021
2022
Gold Ounces Hedged
79,350
132,000
Avg. Ceiling ($/oz)
$1,882
$2,038
Avg. Floor ($/oz)
$1,600
$1,630
Rochester Expansion
The Company continued to execute major construction activities
on the POA 11 expansion project at Rochester during the second
quarter, with overall progress approximately 31% complete at the
end of the period. Key elements of the project timeline remain on
schedule and are highlighted below:
Expected Start Date
Target Completion Date
Leach Pad (Incl. Ancillary Facilities)
2H 2020 ✓
Mid-2022
Merrill-Crowe Process Plant
1H 2021 ✓
YE 2022
Crushing Circuit
1H 2021 ✓
YE 2022
Supporting Infrastructure
2H 2020 ✓
Mid-2022
Coeur began placing over-liner material on the Stage VI leach
pad approximately six weeks ahead of schedule following the
successful swap-out of the secondary crushing unit. The Company
also mobilized a cement batch plant, began construction of a new
high-voltage power line and started executing electrical substation
upgrades during the period. Concrete foundation work for the
Merrill-Crowe process plant and crusher corridor is expected to
commence during the third quarter. Additionally, structural steel
erection for the crusher corridor is expected to begin in early
2022.
As of June 30, 2021, the Company has committed approximately
$334 million of capital since the inception of the expansion
project in the third quarter of 2020, including 76 executed
contracts valued at approximately $309 million. There are six
packages yet to be awarded, including two structural, mechanical,
piping, electrical and instrumentation construction contracts for
the Merrill-Crowe process plant and crushing circuit, respectively.
The Company has begun to see signs of inflationary pressures on
recent bids received for the remaining uncommitted contracts
related to building materials, fuel and overall tightness in the
construction market.
Additionally, Coeur has elected to allocate approximately $20
million of additional capital investment to further enhance the
project’s economics and de-risk the execution of the project. The
majority of this incremental capital is expected to be incurred in
2022.
The Company is also reviewing additional optimization
opportunities based on key learnings from HPGR-placed material onto
the current Stage IV leach pad since late 2019. The results from
this work are expected to be available during the second half of
2021.
Coeur secured a capital lease package for nearly $60 million
during the quarter, higher than its original target of $50 million.
The package is earmarked for planned equipment purchases for the
project in 2021 and 2022, and has an interest rate of 5.20%.
Operations
Second quarter 2021 highlights for each of the Company’s
operations are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce
amounts)
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Tons milled
517,373
484,390
509,848
492,474
269,641
Average gold grade (oz/t)
0.058
0.062
0.076
0.065
0.066
Average silver grade (oz/t)
3.94
4.07
4.30
4.37
4.46
Average recovery rate – Au
92.4%
95.7%
88.9%
91.3%
86.0%
Average recovery rate – Ag
81.9%
81.3%
81.3%
82.8%
72.2%
Gold ounces produced
27,595
28,605
34,511
29,296
15,223
Silver ounces produced (000’s)
1,667
1,603
1,783
1,784
867
Gold ounces sold
30,516
25,687
35,359
27,252
16,924
Silver ounces sold (000’s)
1,640
1,638
1,767
1,765
875
Average realized price per gold
ounce
$1,351
$1,462
$1,395
$1,446
$1,399
Average realized price per silver
ounce
$26.71
$26.12
$24.45
$23.98
$16.35
Metal sales
$85.0
$80.3
$92.5
$81.8
$38.0
Costs applicable to sales2
$41.9
$34.0
$36.1
$34.3
$18.8
Adjusted CAS per AuOz1
$662
$621
$542
$602
$686
Adjusted CAS per AgOz1
$13.34
$10.98
$9.61
$10.06
$8.13
Exploration expense
$1.8
$1.7
$2.6
$2.0
$0.9
Cash flow from operating
activities
$33.4
$13.2
$43.2
$49.7
$(3.5)
Sustaining capital expenditures
(excludes capital lease payments)
$9.8
$10.0
$9.0
$4.9
$4.5
Development capital
expenditures
$—
$—
$(0.1)
$0.1
$—
Total capital expenditures
$9.8
$10.0
$8.9
$5.0
$4.5
Free cash flow1
$23.6
$3.2
$34.3
$44.7
$(8.0)
Operational
- Second quarter gold and silver production totaled 27,595 and
1.7 million ounces, respectively, compared to 28,605 and 1.6
million ounces in the prior period. Gold and silver production in
the second quarter of 2020 totaled 15,223 and 0.9 million ounces,
respectively, reflecting a temporary suspension to comply with a
COVID-19-related government decree
- Production during the quarter benefited from a 7% increase in
mill throughput driven by a re-sequencing of the mine plan due to
geotechnically-challenging conditions encountered during the first
half of the year, partially offset by lower average gold and silver
grades
Financial
- Second quarter adjusted CAS1 for gold and silver on a
co-product basis increased 7% and 21% to $662 and $13.34 per ounce,
respectively, compared to the prior quarter, largely driven by
slightly lower average grades, higher mining rates, underground
rehabilitation activities, and comparatively higher gold sales
under Palmarejo’s gold stream agreement, which impacted the
allocation of costs on a co-product basis
- Capital expenditures remained relatively consistent
quarter-over-quarter at $9.8 million, reflecting continued
investment in business improvement projects, underground
development and infill drilling
- Free cash flow1 in the second quarter totaled $23.6 million
compared to $3.2 million in the prior period, largely driven by the
payment of cash income and mining taxes in the first quarter
Exploration
- Exploration investment for the second quarter totaled
approximately $3.6 million ($1.8 million expensed and $1.8 million
capitalized), compared to roughly $3.0 million ($1.7 million
expensed and $1.3 million capitalized) in the prior period
- Up to eight surface and underground core rigs were active
during the quarter. A total of approximately 71,200 feet (21,675
meters) were drilled during the period, including 22,900 feet
(6,975 meters) of expansion and 48,300 feet (14,700 meters) of
infill drilling
- Infill drilling focused on specific zones within the
Independencia and Guadalupe deposits. Surface rigs targeted areas
of the Hidalgo and La Patria zones (located within the
Independencia and Guadalupe deposits, respectively) as well as the
northern portion of the Independencia zone, while underground rigs
focused on the southern portion of the Independencia zone
- Expansion drilling during the quarter focused on the Hidalgo
and El Ojito (located in the northeastern portion of the
Independencia deposit) zones
- Expansion and greenfield target generation is anticipated to
continue moving north, northwest and east from the Independencia
and Guadalupe deposits while infill drilling is expected to
continue on the La Patria, North Independencia, Hidalgo and La
Bavisa zones
- In parallel, a new initiative to evaluate, target and drill the
Guazapares district (located east of the Palmarejo district and
outside of the gold stream area of influence) was launched with the
expectation of drilling to begin in the second half of the
year
- Coeur plans for nine drill rigs to be active at Palmarejo in
the third quarter and expects to maintain that pace for the
remainder of the year
Other
- Approximately 46% (14,097 ounces) of Palmarejo’s gold sales in
the second quarter were sold under its gold stream agreement at a
price of $800 per ounce. The Company anticipates approximately 40%
- 45% of Palmarejo’s gold sales for 2021 will be sold under the
stream agreement
Guidance
- Full-year 2021 production is expected to be 100,000 - 110,000
ounces of gold and 6.5 - 7.8 million ounces of silver
- CAS1 are expected to be $635 - $735 per gold ounce (previously
$710 - $810 per ounce) and $11.75 - $12.75 per silver ounce
(previously $11.00 - $12.00 per ounce). The revised figures largely
reflect an anticipated change in the allocation of costs on a
co-product basis
- Capital expenditures are expected to be approximately $40 - $45
million
Rochester, Nevada
(Dollars in millions, except per ounce
amounts)
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Ore tons placed
3,195,777
3,240,917
4,000,889
4,523,767
3,743,331
Average silver grade (oz/t)
0.38
0.45
0.53
0.49
0.51
Average gold grade (oz/t)
0.003
0.003
0.002
0.002
0.002
Silver ounces produced (000’s)
888
774
1,020
740
728
Gold ounces produced
7,232
6,904
9,590
6,462
5,159
Silver ounces sold (000’s)
912
771
912
786
724
Gold ounces sold
7,818
6,934
8,672
6,834
5,278
Average realized price per silver
ounce
$26.38
$26.34
$24.35
$24.49
$16.11
Average realized price per gold
ounce
$1,794
$1,794
$1,825
$1,882
$1,702
Metal sales
$38.1
$32.8
$38.2
$32.1
$20.6
Costs applicable to sales2
$38.0
$24.0
$31.7
$19.1
$18.3
Adjusted CAS per AgOz1
$26.09
$19.07
$20.18
$14.98
$13.75
Adjusted CAS per AuOz1
$1,787
$1,300
$1,537
$1,148
$1,481
Exploration expense
$0.9
$0.5
$0.8
$0.5
$1.8
Cash flow from operating
activities
$4.0
$(8.7)
$4.7
$2.1
$(5.6)
Sustaining capital expenditures
(excludes capital lease payments)
$7.3
$2.0
$2.9
$2.5
$1.5
Development capital
expenditures
$35.0
$28.2
$13.9
$7.3
$4.3
Total capital expenditures
$42.3
$30.2
$16.8
$9.8
$5.8
Free cash flow1
$(38.3)
$(38.9)
$(12.1)
$(7.7)
$(11.4)
Operational
- Silver and gold production increased 15% and 5%
quarter-over-quarter to 0.9 million and 7,232 ounces, respectively.
Year-over-year silver and gold production increased 22% and 40%,
respectively
- Higher silver production was primarily driven by the
breakthrough of material placed on inter-lift liners in the prior
period, while gold production continued to benefit from the
stacking of additional run-of-mine material during the first half
of the year
- Coeur successfully completed the swap-out of the secondary
crushing unit, helping the Company begin placing over-liner
material on the Stage VI leach pad approximately six weeks ahead of
schedule. Importantly, initial results from the new crusher have
shown improvements in throughput, particle size distribution and
leachability
- The Company also completed the fourth phase of its inter-lift
liner strategy late in the quarter, helping to facilitate the
placement of HPGR-crushed ore on shallower portions of the Stage IV
leach pad
Financial
- Second quarter costs applicable to sales2 figures shown in the
table above and highlighted below include a non-cash inventory
charge of approximately $8.6 million related to a change in the
Company’s recovery rate assumption on the Stage IV leach pad
- Second quarter adjusted CAS1 for silver and gold on a
co-product basis totaled $26.09 and $1,787 per ounce, respectively,
compared to $19.07 and $1,300 per ounce in the prior period,
largely driven by the non-cash charge as well as higher diesel and
maintenance costs. Excluding the non-cash charge, second quarter
adjusted CAS1 for silver and gold on a co-product basis totaled
$20.13 and $1,379 per ounce, respectively
- Capital expenditures increased 40% quarter-over-quarter to
$42.3 million, reflecting an acceleration in the level of
investment in the POA 11 expansion project as well as the ramp up
of sustaining projects
- Free cash flow1 in the second quarter remained relatively
consistent at $(38.3) million
Exploration
- Quarterly exploration investment totaled approximately $2.0
million ($0.9 million expensed and $1.1 million capitalized),
compared to roughly $0.7 million ($0.5 million expensed and $0.2
million capitalized) in the prior period
- Two reverse circulation rigs and two core rigs were active
during the quarter. Expansion drilling tested Nevada Packard, North
Rochester and Lincoln Hill, while infill drilling focused on the
Rochester and Nevada Packard pits. A total of approximately 27,500
feet (8,375 meters) were drilled during the period, including
12,700 feet (3,875 meters) focused on expansion and 14,800 feet
(4,500 meters) focused on infill drilling
- Coeur plans to have up to four drill rigs active at Rochester
for the remainder of the year. One core and one reverse circulation
rig are expected to focus on infill targets at East Rochester as
well as in the Rochester and Nevada Packard pits. Additionally, one
core and one reverse circulation rig are anticipated to focus on
expansion drilling at North Rochester, the southern portion of East
Rochester and East Packard
- Greenfields and expansion drilling are scheduled to continue at
Lincoln Hill, Independence Hill and Gold Ridge late in the third
quarter
Guidance
- Full-year 2021 production is expected to be 3.2 - 4.4 million
ounces of silver and 22,500 - 32,500 ounces of gold
- CAS1 in 2021 are expected to be $20.00 - $22.00 per silver
ounce (previously $15.00 - $17.00 per ounce) and $1,350 - $1,500
per gold ounce (previously $1,180 - $1,330 per ounce). The revised
figures reflect the non-cash charge as well as higher anticipated
diesel, labor and maintenance costs
- Capital expenditures are expected to be approximately $155 -
$200 million (previously $155 - $195 million)
Kensington, Alaska
(Dollars in millions, except per ounce
amounts)
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Tons milled
168,311
170,358
179,636
163,276
170,478
Average gold grade (oz/t)
0.18
0.19
0.20
0.18
0.21
Average recovery rate
92.7%
93.2%
93.0%
93.7%
92.0%
Gold ounces produced
28,322
30,681
32,990
26,797
33,058
Gold ounces sold
26,796
31,595
31,830
27,815
32,367
Average realized price per gold ounce,
gross
$1,851
$1,754
$1,837
$1,917
$1,762
Treatment and refining charges per gold
ounce
$30
$30
$37
$35
$57
Average realized price per gold ounce,
net
$1,821
$1,724
$1,800
$1,882
$1,705
Metal sales
$48.8
$54.5
$57.2
$52.4
$55.2
Costs applicable to sales2
$29.2
$31.4
$29.3
$31.5
$30.4
Adjusted CAS per AuOz1
$1,088
$989
$919
$1,128
$934
Prepayment, working capital cash
flow
$7.9
$(7.9)
$5.1
$(5.1)
$7.0
Exploration expense
$1.3
$1.1
$0.8
$3.4
$2.6
Cash flow from operating
activities
$19.4
$11.0
$31.0
$9.1
$27.8
Sustaining capital expenditures
(excludes capital lease payments)
$6.0
$7.2
$5.8
$5.3
$3.9
Development capital
expenditures
$—
$—
$—
$—
$—
Total capital expenditures
$6.0
$7.2
$5.8
$5.3
$3.9
Free cash flow1
$13.4
$3.8
$25.2
$3.8
$23.9
Operational
- Gold production in the second quarter totaled 28,322 ounces,
compared to 30,681 ounces in the prior period and 33,058 ounces in
the second quarter of 2020
- Lower production during the quarter was driven by a modest
reduction in mill throughput largely due to additional planned mill
maintenance as well as slightly lower average head grade due to
stope and development ore sequencing
- Jualin accounted for approximately 20% of Kensington’s second
quarter production, slightly higher than the prior period of
roughly 17%, due to the processing of additional development
ore
Financial
- Adjusted CAS1 increased 10% quarter-over-quarter to $1,088 per
ounce, largely driven by fewer gold ounces sold as well as
additional contractor support and higher diesel prices
- Capital expenditures decreased 17% quarter-over-quarter to $6.0
million, primarily due to lower capital development and a shift
towards more expansion drilling during the period
- Free cash flow1 in the second quarter totaled $13.4 million,
including a net cash inflow of $7.9 million associated with the
Company’s prepayment agreement at Kensington. Excluding the effect
of the prepayment, free cash flow1 totaled approximately $5.5
million in the second quarter
Exploration
- Exploration investment in the quarter totaled approximately
$1.9 million ($1.3 million expensed and $0.6 million capitalized),
compared to $2.1 million ($1.1 million expensed and $1.0 million
capitalized) in the prior period
- Two underground core rigs were active during the quarter,
drilling from the Elmira development drift established in 2020. A
total of approximately 32,800 feet (9,975 meters) were drilled
during the period, including 21,900 feet (6,675 meters) of
expansion and 10,900 feet (3,300 meters) of infill drilling
- Infill and expansion drilling primarily focused on the Elmira
vein, while expansion holes into the Johnson vein (located roughly
500 feet east of Elmira) were also completed
- A third underground rig was added, and all three rigs are
expected to remain active during the remainder of the year
targeting the Elmira and Johnson veins as well as the Kensington
Main, Eureka and Raven veins
- Additionally, two surface core rigs began drilling the upper
portions of the Jualin, Big Lake, Gold King and Valentine-Tremming
targets in July
Guidance
- Production in 2021 is expected to be 115,000 - 130,000 ounces
of gold
- CAS1 in 2021 are expected to be $1,010 - $1,110 per gold
ounce
- Capital expenditures are expected to be approximately $23 - $30
million
Wharf, South Dakota
(Dollars in millions, except per ounce
amounts)
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Ore tons placed
1,025,481
1,114,043
1,047,647
1,315,542
1,401,237
Average gold grade (oz/t)
0.032
0.030
0.024
0.025
0.032
Gold ounces produced
24,126
19,035
19,286
33,440
24,789
Silver ounces produced (000’s)
33
26
33
42
25
Gold ounces sold
23,371
18,896
21,539
33,382
23,364
Silver ounces sold (000’s)
31
26
35
41
23
Average realized price per gold
ounce
$1,801
$1,791
$1,835
$1,872
$1,715
Metal sales
$42.9
$34.5
$40.3
$63.5
$40.5
Costs applicable to sales2
$23.4
$18.7
$21.4
$27.9
$22.5
Adjusted CAS per AuOz1
$963
$952
$954
$804
$804
Exploration expense
$0.1
$0.1
$0.3
$0.5
$0.1
Cash flow from operating
activities
$17.3
$7.8
$14.1
$39.1
$19.1
Sustaining capital expenditures
(excludes capital lease payments)
$0.3
$0.4
$1.2
$0.5
$0.3
Development capital
expenditures
$1.1
$1.1
$—
$—
$—
Total capital expenditures
$1.4
$1.5
$1.2
$0.5
$0.3
Free cash flow1
$15.9
$6.3
$12.9
$38.6
$18.8
Operational
- Gold production increased 27% quarter-over-quarter to 24,126
ounces, largely driven by the placement of higher average grade
material during the first half of the year. Year-over-year gold
production decreased 3%
Financial
- Adjusted CAS1 on a by-product basis remained relatively
consistent quarter-over-quarter at $963 per ounce, largely driven
by higher gold ounces sold, additional material moved and
processed, and increased diesel costs
- Second quarter capital expenditures remained relatively
consistent quarter-over-quarter at $1.4 million, reflecting
continued investment in infill drilling and timing of sustaining
projects
- Free cash flow1 was $15.9 million in the second quarter
compared to $6.3 million in the first quarter, largely driven by
higher operating cash flow
Exploration
- Exploration investment remained relatively consistent
quarter-over-quarter at approximately $1.2 million (substantially
all capitalized), reflecting the continuation of Coeur’s largest
drilling campaign at the operation since acquisition
- A total of approximately 38,100 feet (11,600 meters) were
drilled during the period using one reverse circulation rig,
focused on infill targets at the Portland Ridge – Boston claim
group (located on the southern edge of the operation), and in the
Flossie (located west of Portland Ridge), Sunshine (near Flossie)
and Juno areas (located north of the Portland pit)
- Coeur plans to continue drilling in the Flossie, eastern
Portland Ridge and Juno areas, and expects to complete the program
during the third quarter
Guidance
- Gold production in 2021 is expected to be 85,000 - 95,000
ounces
- CAS1 in 2021 are expected to be $960 - $1,060 per gold
ounce
- Capital expenditures are expected to be approximately $5 - $8
million
Silvertip, British Columbia
(Dollars in millions)
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Metal sales
$—
$—
$—
$—
$—
Costs applicable to sales2
$—
$—
$—
$—
$—
Exploration expense
$3.6
$2.9
$5.1
$3.9
$2.9
Cash flow from operating
activities
$(9.6)
$(7.5)
$(8.2)
$(8.2)
$(14.9)
Sustaining capital expenditures
(excludes capital lease payments)
$6.0
$5.7
$(0.5)
$(1.8)
$1.9
Development capital
expenditures
$12.5
$4.7
$5.0
$3.9
$—
Total capital expenditures
$18.5
$10.4
$4.5
$2.1
$1.9
Free cash flow1
$(28.1)
$(17.9)
$(12.7)
$(10.3)
$(16.8)
- Mining and processing activities were temporarily suspended at
Silvertip on February 19, 2020 (unrelated to COVID-19)
Operational
- Ongoing technical work and successful exploration results
continue to bolster Coeur’s confidence in a potential expansion and
restart of Silvertip. The Company is currently working with
SNC-Lavalin to complete engineering for the expansion, better
define the estimated capital investment and develop a new mine plan
based on continued successful drilling results
- Coeur also signed an early works construction contract with
Kiewit Corporation during the quarter to (i) take advantage of the
summer construction season to complete several surface projects to
de-risk the schedule, (ii) help facilitate the execution of major
construction, and (iii) preserve optionality for a potential
restart of active mining and processing activities in 2023
- The scope of early works includes foundation preparation and
decommissioning of certain sections of the mill, primarily focused
on the flotation, de-watering and filtration circuits, that would
be upgraded as part of an expansion
- The Company plans to release an updated mine plan and economic
analysis for Silvertip in early 2022 and file a new technical
report that will incorporate an updated reserve and resource as
well as an optimized capital estimate reflecting a 1,750 tonnes per
day flowsheet
Financial
- Ongoing carrying costs in the second quarter were $6.4 million,
compared to $6.9 million in the prior period
- Capital expenditures during the second quarter totaled $18.5
million compared to $10.4 million in the prior period, largely
reflecting additional work related to the potential restart and
expansion of Silvertip
Exploration
- Exploration investment in the second quarter totaled
approximately $5.2 million ($3.6 million expensed and $1.6 million
capitalized), compared to roughly $4.5 million ($2.9 million
expensed and $1.6 million capitalized) in the prior period
- Five core rigs were active during the quarter, three rigs were
on surface and two were underground. A total of approximately
86,200 feet (26,250 meters) were drilled during the period,
including 62,400 feet (19,000 meters) of expansion and 23,800 feet
(7,250 meters) of infill drilling
- Infill and expansion drilling (both from surface and
underground) focused on the 65 zone (including the recently
discovered Southern Silver zone), and Discovery, Camp Creek and
Tour Ridge zones
- After successfully intercepting mineralization, underground
drilling ramped up with two rigs focused on expanding the 65 zone,
including the Southern Silver zone
- As modeling began to show the shape of the Southern Silver
zone, a surface rig commenced infill drilling to better define the
zone. Notably, it appears that the Southern Silver zone connects
the Silver Creek zone (an original source of mining material) with
the Discovery South zone (drilled in 2020), representing potential
for meaningful resource growth at Silvertip
- Underground drilling is scheduled to remain focused on
expansion and infill targets within the Southern Silver zone over
the coming months, while three to four active surface rigs are
expected to continue targeting the Camp Creek, Southern Silver and
Tour Ridge zones
Other
- Coeur repurchased an existing net smelter returns royalty
(“NSR”) at Silvertip for $7.0 million during the second quarter.
The terms of the NSR required payment of 1.429% (plus gross up for
applicable withholding taxes) of net smelter returns on the first
1,434,000 metric tonnes of mineralized material mined, and 1.00%
(plus gross up for applicable withholding taxes) thereafter, from
the mining lease that covers the current Silvertip mine resource
base and exploration targets described in the Company’s press
release published on June 15, 2021
Guidance
- Given ongoing engineering and technical work as well as the
commencement of early works with respect to a potential expansion
and restart, capital expenditures are expected to total $75 - $90
million (previously $35 - $45 million) in 2021 depending on weather
conditions and availability of supplies and labor
Exploration
During the second quarter, the Company drilled a record of
roughly 320,400 feet (97,675 meters) at a total investment of
approximately $18.6 million ($12.4 million expensed and $6.2
million capitalized), compared to roughly 256,500 feet (78,175
meters) at a total investment of approximately $14.9 million ($9.7
million expensed and $5.2 million capitalized) in the prior period.
The increase in exploration activity was largely driven by a ramp
up of drilling at Palmarejo, Rochester and Crown as well as the
continuation of expansion and infill programs across the rest of
the Company’s portfolio.
Up to four drill rigs were active at Crown during the second
quarter. Three reverse circulation rigs drilled expansion holes at
Daisy, SNA and C-Horst, while one diamond core rig was active at
Daisy, Secret Pass, SNA and C-Horst to better characterize
metallurgic and geologic domains. The Company drilled approximately
64,800 feet (19,750 meters) during the quarter, compared to
approximately 40,300 feet (12,275 meters) in the prior period.
Coeur plans to continue the same pace of exploration at Crown
for the remainder of the year, with three reverse circulation rigs
scheduled to conduct expansion drilling within its 300-acre
disturbance permit on the property. The Company also expects to
receive an amended disturbance permit during the third quarter to
begin expanding C-Horst to the south. A core rig is planned to be
used intermittently at Crown, shared with Rochester, to infill
specific resource shapes to gather additional metallurgical and
engineering information.
Coeur’s exploration programs continue to generate meaningful new
discoveries and identify future growth opportunities. Accordingly,
the Company expects to invest $70 - $80 million in exploration in
2021 (previously $63 - $72 million), including $52 - $57 million
(previously $46 - $51 million) and $18 - $23 million (previously
$17 - $21 million) of expensed and capitalized drilling,
respectively. The increase in expected expensed exploration
reflects additional planned expansion drilling at Silvertip and
Crown, while higher capitalized exploration is largely related to
additional planned infill drilling at Kensington.
2021 Production Guidance
Gold
Silver
(oz)
(K oz)
Palmarejo
100,000 - 110,000
6,500 - 7,750
Rochester
22,500 - 32,500
3,200 - 4,400
Kensington
115,000 - 130,000
—
Wharf
85,000 - 95,000
—
Total
322,500 - 367,500
9,700 - 12,150
2021 Costs Applicable to Sales Guidance
Previous
Updated
Gold
Silver
Gold
Silver
($/oz)
($/oz)
($/oz)
($/oz)
Palmarejo (co-product)
$710 - $810
$11.00 - $12.00
$635 - $735
$11.75 - $12.75
Rochester (co-product)
$1,180 - $1,330
$15.00 - $17.00
$1,350 - $1,500
$20.00 - $22.00
Kensington
$1,010 - $1,110
—
$1,010 - $1,110
—
Wharf (by-product)
$960 - $1,060
—
$960 - $1,060
—
2021 Capital, Exploration and G&A Guidance
Previous
Updated
($M)
($M)
Capital Expenditures,
Sustaining
$80 - $100
$80 - $100
Capital Expenditures,
Development
$180 - $225
$220 - $275
Exploration, Expensed
$46 - $51
$52 - $57
Exploration, Capitalized
$17 - $21
$18 - $23
General & Administrative
Expenses
$37 - $41
$40 - $45
Note: The Company’s previous guidance
assumes $1,850/oz gold and $24.00/oz silver as well as CAD of 1.27
and MXN of 19.50, and exclude the impact of any metal sales or
foreign exchange hedges. The Company’s updated guidance reflects
realized prices and hedge gains/losses through May 31, 2021,
estimated prices of $1,750/oz gold and $25.00/oz silver as well as
CAD of 1.20 and MXN of 20.50.
Financial Results and Conference Call
Coeur will host a conference call to discuss its second quarter
2021 financial results on July 29, 2021 at 11:00 a.m. Eastern
Time.
Dial-In Numbers:
(855) 560-2581 (U.S.)
(855) 669-9657 (Canada)
(412) 542-4166 (International)
Conference ID:
Coeur Mining
Hosting the call will be Mitchell J. Krebs, President and Chief
Executive Officer of Coeur, who will be joined by Thomas S. Whelan,
Senior Vice President and Chief Financial Officer, Michael “Mick”
Routledge, Senior Vice President and Chief Operating Officer, and
other members of management. A replay of the call will be available
through August 5, 2021.
Replay numbers:
(877) 344-7529 (U.S.)
(855) 669-9658 (Canada)
(412) 317-0088 (International)
Conference ID:
101 57 175
About Coeur
Coeur Mining, Inc. is a U.S.-based, well-diversified, growing
precious metals producer with five wholly-owned operations: the
Palmarejo gold-silver complex in Mexico, the Rochester silver-gold
mine in Nevada, the Kensington gold mine in Alaska, the Wharf gold
mine in South Dakota, and the Silvertip silver-zinc-lead mine in
British Columbia. In addition, the Company has interests in several
precious metals exploration projects throughout North America.
Cautionary Statements
This news release contains forward-looking statements within the
meaning of securities legislation in the United States and Canada,
including statements regarding strategy, cash flow, capital
allocation and investment, returns, results, value, liquidity,
exploration and development efforts and plans, resource growth,
expectations regarding the potential restart at Silvertip,
expectations regarding the Rochester POA 11 expansion project,
technical report timing, hedging strategies, the impact of
inflation, anticipated production, costs and expenses, COVID-19
mitigation efforts, and operations at Palmarejo, Rochester, Wharf,
Kensington and Silvertip. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause Coeur’s actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements. Such factors include, among others, the risk that
anticipated production, cost and expense levels are not attained,
the risks and hazards inherent in the mining business (including
risks inherent in developing large-scale mining projects,
environmental hazards, industrial accidents, weather or
geologically-related conditions), changes in the market prices of
gold, silver, zinc and lead and a sustained lower price or higher
treatment and refining charge environment, the uncertainties
inherent in Coeur’s production, exploratory and developmental
activities, including risks relating to permitting and regulatory
delays (including the impact of government shutdowns), ground
conditions and, grade variability, any future labor disputes or
work stoppages (involving the Company and its subsidiaries or third
parties), the uncertainties inherent in the estimation of mineral
reserves, changes that could result from Coeur’s future acquisition
of new mining properties or businesses, the loss of access or
insolvency of any third-party refiner or smelter to which Coeur
markets its production, the potential effects of the COVID-19
pandemic, including impacts to the availability of our workforce,
continued access to financing sources, government orders that may
require temporary suspension of operations at one or more of our
sites and effects on our suppliers or the refiners and smelters to
whom the Company markets its production and on the communities
where we operate, the effects of environmental and other
governmental regulations and government shut-downs, the risks
inherent in the ownership or operation of or investment in mining
properties or businesses in foreign countries, Coeur’s ability to
raise additional financing necessary to conduct its business, make
payments or refinance its debt, as well as other uncertainties and
risk factors set out in filings made from time to time with the
United States Securities and Exchange Commission, and the Canadian
securities regulators, including, without limitation, Coeur’s most
recent reports on Form 10-K and Form 10-Q. Actual results,
developments and timetables could vary significantly from the
estimates presented. Readers are cautioned not to put undue
reliance on forward-looking statements. Coeur disclaims any intent
or obligation to update publicly such forward-looking statements,
whether as a result of new information, future events or otherwise.
Additionally, Coeur undertakes no obligation to comment on
analyses, expectations or statements made by third parties in
respect of Coeur, its financial or operating results or its
securities. This does not constitute an offer of any securities for
sale.
Christopher Pascoe, Coeur’s Director, Technical Services and a
qualified person under Canadian National Instrument 43-101,
approved the scientific and technical information concerning
Coeur’s mineral projects in this news release. For a description of
the key assumptions, parameters and methods used to estimate
mineral reserves and resources, as well as data verification
procedures and a general discussion of the extent to which the
estimates may be affected by any known environmental, permitting,
legal, title, taxation, socio-political, marketing or other
relevant factors, Canadian investors should refer to the Technical
Reports for each of Coeur’s properties, including the
recently-filed Technical Report for Rochester, as filed on SEDAR at
www.sedar.com.
Non-U.S. GAAP Measures
We supplement the reporting of our financial information
determined under United States generally accepted accounting
principles (U.S. GAAP) with certain non-U.S. GAAP financial
measures, including EBITDA, adjusted EBITDA, adjusted EBITDA
margin, free cash flow, adjusted net income (loss), operating cash
flow before changes in working capital and adjusted costs
applicable to sales per ounce (gold and silver) or pound (zinc or
lead). We believe that these adjusted measures provide meaningful
information to assist management, investors and analysts in
understanding our financial results and assessing our prospects for
future performance. We believe these adjusted financial measures
are important indicators of our recurring operations because they
exclude items that may not be indicative of, or are unrelated to
our core operating results, and provide a better baseline for
analyzing trends in our underlying businesses. We believe EBITDA,
adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted
net income (loss) and adjusted costs applicable to sales per ounce
(gold and silver) and pound (zinc and lead) are important measures
in assessing the Company’s overall financial performance. For
additional explanation regarding our use of non-U.S. GAAP financial
measures, please refer to our Form 10-K for the year ended December
31, 2020 and our Form 10-Q for the quarter ended March 31,
2021.
Notes
1. EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash
flow, adjusted net income (loss), operating cash flow before
changes in working capital and adjusted costs applicable to sales
per ounce (gold and silver) or pound (lead and zinc) are non-GAAP
measures. Please see tables in the Appendix for the reconciliation
to U.S. GAAP. Free cash flow is defined as cash flow from operating
activities less capital expenditures. Please see table in Appendix
for the calculation of consolidated free cash flow. 2. Excludes
amortization. 3. Includes capital leases. Net of debt issuance
costs and premium received. 4. As of June 30, 2021, Coeur had $35.0
million in outstanding letters of credit under its RCF.
Average Spot Prices
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Average Gold Spot Price Per Ounce
$
1,816
$
1,794
$
1,874
$
1,908
$
1,711
Average Silver Spot Price Per Ounce
$
26.69
$
26.26
$
24.39
$
24.26
$
16.38
Average Zinc Spot Price Per Pound
$
1.32
$
1.25
$
1.19
$
1.06
$
0.89
Average Lead Spot Price Per Pound
$
0.97
$
0.91
$
0.86
$
0.85
$
0.76
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
June 30, 2021
December 31, 2020
ASSETS
In thousands, except share
data
CURRENT ASSETS
Cash and cash equivalents
$
124,075
$
92,794
Receivables
22,867
23,484
Inventory
54,471
51,210
Ore on leach pads
81,773
74,866
Prepaid expenses and other
20,949
27,254
304,135
269,608
NON-CURRENT ASSETS
Property, plant and equipment, net
272,558
230,139
Mining properties, net
786,695
716,790
Ore on leach pads
73,487
81,963
Restricted assets
9,274
9,492
Equity securities
174,370
12,943
Receivables
26,642
26,447
Other
60,847
56,595
TOTAL ASSETS
$
1,708,008
$
1,403,977
LIABILITIES AND STOCKHOLDERS’
EQUITY
CURRENT LIABILITIES
Accounts payable
$
107,362
$
90,577
Accrued liabilities and other
89,311
119,158
Debt
28,876
22,074
Reclamation
2,299
2,299
227,848
234,108
NON-CURRENT LIABILITIES
Debt
385,370
253,427
Reclamation
140,936
136,975
Deferred tax liabilities
39,598
34,202
Other long-term liabilities
45,847
51,786
611,751
476,390
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share;
authorized 300,000,000 shares, 257,046,847 issued and outstanding
at June 30, 2021 and 243,751,283 at December 31, 2020
2,570
2,438
Additional paid-in capital
3,732,296
3,610,297
Accumulated other comprehensive income
(loss)
7,457
(11,136
)
Accumulated deficit
(2,873,914
)
(2,908,120
)
868,409
693,479
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
1,708,008
$
1,403,977
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
In thousands, except share
data
Revenue
$
214,858
$
154,249
$
416,975
$
327,416
COSTS AND EXPENSES
Costs applicable to sales(1)
132,595
90,015
240,742
208,932
Amortization
31,973
27,876
61,910
64,038
General and administrative
10,467
8,616
22,021
17,536
Exploration
12,446
11,855
22,112
18,241
Pre-development, reclamation, and
other
12,738
18,675
26,450
25,230
Total costs and expenses
200,219
157,037
373,235
333,977
OTHER INCOME (EXPENSE), NET
Loss on debt extinguishment
—
—
(9,173
)
—
Fair value adjustments, net
37,239
10,067
33,440
1,248
Interest expense, net of capitalized
interest
(5,093
)
(5,765
)
(10,003
)
(10,893
)
Other, net
701
121
4,328
2,002
Total other income (expense), net
32,847
4,423
18,592
(7,643
)
Income (loss) before income and mining
taxes
47,486
1,635
62,332
(14,204
)
Income and mining tax (expense)
benefit
(15,340
)
(2,844
)
(28,126
)
1,095
NET INCOME (LOSS)
$
32,146
$
(1,209
)
$
34,206
$
(13,109
)
OTHER COMPREHENSIVE INCOME (LOSS):
Change in fair value of derivative
contracts designated as cash flow hedges
(2,982
)
(7,097
)
24,376
(6,891
)
Reclassification adjustments for realized
(gain) loss on cash flow hedges
(3,061
)
(679
)
(5,783
)
(679
)
Other comprehensive income (loss)
(6,043
)
(7,776
)
18,593
(7,570
)
COMPREHENSIVE INCOME (LOSS)
$
26,103
$
(8,985
)
$
52,799
$
(20,679
)
NET INCOME (LOSS) PER SHARE
Basic
$
0.13
$
(0.01
)
$
0.14
$
(0.05
)
Diluted
$
0.13
$
(0.01
)
$
0.14
$
(0.05
)
(1) Excludes amortization.
COEUR MINING, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
$
32,146
$
(1,209
)
$
34,206
$
(13,109
)
Adjustments:
Amortization
31,973
27,876
61,910
64,038
Accretion
2,965
2,908
5,870
5,755
Deferred taxes
5,100
(1,545
)
5,224
(7,032
)
Loss on debt extinguishment
—
—
9,173
—
Fair value adjustments, net
(37,239
)
(10,067
)
(33,440
)
(1,248
)
Stock-based compensation
3,256
2,287
7,512
4,300
Gain on modification of right of use
lease
—
—
—
(4,051
)
Write-downs
—
5,208
—
15,589
Deferred revenue recognition
(7,255
)
(8,134
)
(15,601
)
(15,682
)
Other
496
(913
)
(1,832
)
(2,005
)
Changes in operating assets and
liabilities:
Receivables
961
(1,536
)
1,960
(2,349
)
Prepaid expenses and other current
assets
1,328
1,081
673
735
Inventory and ore on leach pads
3,259
(8,056
)
(14,227
)
(29,981
)
Accounts payable and accrued
liabilities
21,069
2,047
(7,728
)
(13,004
)
CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES
58,059
9,947
53,700
1,956
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(78,223
)
(16,682
)
(137,647
)
(38,890
)
Proceeds from the sale of assets
968
9
5,556
4,515
Purchase of investments
(876
)
—
(876
)
—
Sale of investments
—
19,802
935
19,802
Other
(13
)
(183
)
(30
)
(200
)
CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES
(78,144
)
2,946
(132,062
)
(14,773
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of notes and bank borrowings, net
of issuance costs
—
100,000
367,493
150,000
Payments on debt, finance leases, and
associated costs
(9,611
)
(95,713
)
(253,578
)
(101,614
)
Silvertip contingent consideration
—
—
—
(18,750
)
Other
(233
)
141
(4,158
)
(1,832
)
CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES
(9,844
)
4,428
109,757
27,804
Effect of exchange rate changes on cash
and cash equivalents
(56
)
929
(107
)
303
INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
(29,985
)
18,250
31,288
15,290
Cash, cash equivalents and restricted cash
at beginning of period
155,443
54,058
94,170
57,018
Cash, cash equivalents and restricted cash
at end of period
$
125,458
$
72,308
$
125,458
$
72,308
Adjusted EBITDA
Reconciliation
(Dollars in thousands except per share
amounts)
LTM 2Q 2021
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Net income (loss)
$
72,942
$
32,146
$
2,060
$
11,880
$
26,856
$
(1,209
)
Interest expense, net of capitalized
interest
19,818
5,093
4,910
4,719
5,096
5,765
Income tax provision (benefit)
66,266
15,340
12,786
25,027
13,113
2,844
Amortization
129,259
31,973
29,937
35,133
32,216
27,876
EBITDA
288,285
84,552
49,693
76,759
77,281
35,276
Fair value adjustments, net
(39,793
)
(37,239
)
3,799
(4,110
)
(2,243
)
(10,067
)
Foreign exchange (gain) loss
3,452
499
773
1,581
599
(11
)
Asset retirement obligation accretion
11,869
2,965
2,905
3,031
2,968
2,908
Inventory adjustments and write-downs
715
267
572
105
(230
)
793
(Gain) loss on sale of assets and
securities
(1,807
)
(621
)
(4,053
)
391
2,476
(9
)
Loss on debt extinguishment
9,172
—
9,172
—
—
—
Silvertip inventory write-down
1,232
—
—
—
1,232
2,104
Silvertip temporary suspension costs
1,930
—
—
1,092
838
1,725
COVID-19 costs
14,495
2,315
3,005
5,138
4,037
6,108
Novation
3,819
—
—
—
3,819
—
Wharf inventory write-down
—
—
—
—
—
3,323
Adjusted EBITDA
$
293,369
$
52,738
$
65,866
$
83,987
$
90,777
$
42,150
Revenue
$
875,020
$
214,858
$
202,117
$
228,317
$
229,728
$
154,249
Adjusted EBITDA Margin
34
%
25
%
33
%
37
%
40
%
27
%
Adjusted Net Income (Loss)
Reconciliation
(Dollars in thousands except per share
amounts)
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Net income (loss)
$
32,146
$
2,060
$
11,880
$
26,856
$
(1,209
)
Fair value adjustments, net
(37,239
)
3,799
(4,110
)
(2,243
)
(10,067
)
Foreign exchange loss (gain)
1,503
(43
)
4,692
1,233
626
(Gain) loss on sale of assets and
securities
(621
)
(4,053
)
391
2,476
(9
)
Loss on debt extinguishment
—
9,172
—
—
—
Silvertip inventory write-down
—
—
—
1,232
2,104
Silvertip temporary suspension costs
—
—
1,092
838
1,725
COVID-19 costs
2,315
3,005
5,138
4,037
6,108
Novation
—
—
—
3,819
—
Wharf inventory write-down
—
—
—
—
3,323
Tax effect of adjustments
1,056
—
—
—
—
Adjusted net income (loss)
$
(840
)
$
13,940
$
19,083
$
38,248
$
2,601
Adjusted net income (loss) per share -
Basic
$
0.00
$
0.06
$
0.08
$
0.16
$
0.01
Adjusted net income (loss) per share -
Diluted
$
0.00
$
0.06
$
0.08
$
0.16
$
0.01
Consolidated Free Cash Flow
Reconciliation
(Dollars in thousands)
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Cash flow from operations
$
58,059
$
(4,359
)
$
67,289
$
79,464
$
9,947
Capital expenditures
78,223
59,424
37,393
22,996
16,682
Free cash flow
$
(20,164
)
$
(63,783
)
$
29,896
$
56,468
$
(6,735
)
Consolidated Operating Cash
Flow
Before Changes in Working
Capital Reconciliation
(Dollars in thousands)
2Q 2021
1Q 2021
4Q 2020
3Q 2020
2Q 2020
Cash provided by (used in) operating
activities
$
58,059
$
(4,359
)
$
67,289
$
79,464
$
9,947
Changes in operating assets and
liabilities:
Receivables
(961
)
(999
)
5,617
1,497
1,536
Prepaid expenses and other
(1,328
)
655
1,435
1,921
(1,081
)
Inventories
(3,259
)
17,486
1,491
3,066
8,056
Accounts payable and accrued
liabilities
(21,069
)
28,797
(17,331
)
(28,570
)
(2,047
)
Operating cash flow before changes in
working capital
$
31,442
$
41,580
$
58,501
$
57,378
$
16,411
Reconciliation of Costs
Applicable to Sales
for Three Months Ended June
30, 2021
In thousands (except metal sales, per
ounce or per pound amounts)
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
50,189
$
44,537
$
41,913
$
26,437
$
1,185
$
164,261
Amortization
(8,271
)
(6,506
)
(12,710
)
(2,994
)
(1,185
)
(31,666
)
Costs applicable to sales
$
41,918
$
38,031
$
29,203
$
23,443
$
—
$
132,595
Inventory Adjustments
155
(272
)
(57
)
(91
)
—
(265
)
By-product credit
—
—
—
(839
)
—
(839
)
Adjusted costs applicable to
sales
$
42,073
$
37,759
$
29,146
$
22,513
$
—
$
131,491
Metal Sales
Gold ounces
30,516
7,818
26,796
23,371
—
88,501
Silver ounces
1,639,620
911,861
—
31,421
—
2,582,902
Zinc pounds
—
—
Lead pounds
—
—
Revenue Split
Gold
48
%
37
%
100
%
100
%
Silver
52
%
63
%
—
%
Zinc
—
%
Lead
—
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
662
$
1,787
$
1,088
$
963
Silver ($/oz)
$
13.34
$
26.09
$
—
Zinc ($/lb)
$
—
Lead ($/lb)
$
—
Reconciliation of Costs
Applicable to Sales
for Three Months Ended March
31, 2021
In thousands (except metal sales, per
ounce or per pound amounts)
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
43,047
$
27,610
$
44,839
$
21,207
$
1,086
$
137,789
Amortization
(9,059
)
(3,577
)
(13,445
)
(2,475
)
(1,086
)
(29,642
)
Costs applicable to sales
$
33,988
$
24,033
$
31,394
$
18,732
$
—
$
108,147
Inventory Adjustments
(57
)
(313
)
(151
)
(52
)
—
(573
)
By-product credit
—
—
—
(700
)
—
(700
)
Adjusted costs applicable to
sales
$
33,931
$
23,720
$
31,243
$
17,980
$
—
$
106,874
Metal Sales
Gold ounces
25,687
6,934
31,595
18,896
83,112
Silver ounces
1,637,695
771,354
—
26,455
—
2,435,504
Zinc pounds
—
—
Lead pounds
—
—
Revenue Split
Gold
47
%
38
%
100
%
100
%
Silver
53
%
62
%
—
%
Zinc
—
%
Lead
—
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
621
$
1,300
$
989
$
952
Silver ($/oz)
$
10.98
$
19.07
$
—
Zinc ($/lb)
$
—
Lead ($/lb)
$
—
Reconciliation of Costs
Applicable to Sales
for Three Months Ended
December 31, 2020
In thousands (except metal sales, per
ounce or per pound amounts)
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
48,672
$
36,828
$
42,486
$
24,300
$
—
$
152,286
Amortization
(12,516
)
(5,112
)
(13,179
)
(2,848
)
—
(33,655
)
Costs applicable to sales
$
36,156
$
31,716
$
29,307
$
21,452
$
—
$
118,631
Inventory Adjustments
(24
)
24
(56
)
(49
)
—
(105
)
By-product credit
—
—
—
(864
)
—
(864
)
Adjusted costs applicable to
sales
$
36,132
$
31,740
$
29,251
$
20,539
$
—
$
117,662
Metal Sales
Gold ounces
35,359
8,672
31,830
21,539
97,400
Silver ounces
1,766,714
912,335
35,794
—
2,714,843
Zinc pounds
—
—
Lead pounds
—
—
Revenue Split
Gold
53
%
42
%
100
%
100
%
Silver
47
%
58
%
—
%
Zinc
—
%
Lead
—
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
542
$
1,537
$
919
$
954
Silver ($/oz)
$
9.61
$
20.18
$
—
Zinc ($/lb)
$
—
Lead ($/lb)
$
—
Reconciliation of Costs
Applicable to Sales
for Three Months Ended
September 30, 2020
In thousands (except metal sales, per
ounce or per pound amounts)
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
46,163
$
22,382
$
43,053
$
31,887
$
1,185
$
144,670
Amortization
(11,912
)
(3,278
)
(11,523
)
(4,000
)
(1,185
)
(31,898
)
Costs applicable to sales
$
34,251
$
19,104
$
31,530
$
27,887
$
—
$
112,772
Inventory Adjustments
(100
)
517
(141
)
(46
)
—
230
By-product credit
—
—
—
(1,007
)
—
(1,007
)
Adjusted costs applicable to
sales
$
34,151
$
19,621
$
31,389
$
26,834
$
—
$
111,995
Metal Sales
Gold ounces
27,252
6,834
27,815
33,382
95,283
Silver ounces
1,765,371
785,887
40,521
—
2,591,779
Zinc pounds
—
—
Lead pounds
—
—
Revenue Split
Gold
48
%
40
%
100
%
100
%
Silver
52
%
60
%
—
%
Zinc
—
%
Lead
—
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
602
$
1,148
$
1,128
$
804
Silver ($/oz)
$
10.06
$
14.98
$
—
Zinc ($/lb)
$
—
Lead ($/lb)
$
—
Reconciliation of Costs
Applicable to Sales
for Three Months Ended June
30, 2020
In thousands (except metal sales, per
ounce or per pound amounts)
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
26,095
$
21,348
$
43,235
$
25,653
$
1,231
$
117,562
Amortization
(7,270
)
(3,012
)
(12,853
)
(3,181
)
(1,231
)
(27,547
)
Costs applicable to sales
$
18,825
$
18,336
$
30,382
$
22,472
$
—
$
90,015
Inventory Adjustments
(106
)
(566
)
(139
)
(3,304
)
—
(4,115
)
By-product credit
—
—
—
(385
)
—
(385
)
Adjusted costs applicable to
sales
$
18,719
$
17,770
$
30,243
$
18,783
$
—
$
85,515
Metal Sales
Gold ounces
16,924
5,278
32,367
23,364
77,933
Silver ounces
874,642
723,679
22,707
—
1,621,028
Zinc pounds
—
—
Lead pounds
—
—
Revenue Split
Gold
62
%
44
%
100
%
100
%
Silver
38
%
56
%
—
%
Zinc
—
%
Lead
—
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
686
$
1,481
$
934
$
804
Silver ($/oz)
$
8.13
$
13.75
$
—
Zinc ($/lb)
$
—
Lead ($/lb)
$
—
Reconciliation of Costs
Applicable to Sales Adjusted for Recovery Rate Adjustment
for Three Months Ended June
30, 2021
In thousands (except metal sales, per
ounce or per pound amounts)
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including
amortization (U.S. GAAP)
$
50,189
$
44,537
$
41,913
$
26,437
$
1,185
$
164,261
Amortization
(8,271
)
(6,506
)
(12,710
)
(2,994
)
(1,185
)
(31,666
)
Costs applicable to sales
$
41,918
$
38,031
$
29,203
$
23,443
$
—
$
132,595
Inventory Adjustments
155
(272
)
(57
)
(91
)
—
(265
)
Rochester recovery rate
adjustment
(8,628
)
By-product credit
—
—
—
(839
)
—
(839
)
Adjusted costs applicable to
sales
$
42,073
$
29,131
$
29,146
$
22,513
$
—
$
131,491
Metal Sales
Gold ounces
30,516
7,818
26,796
23,371
—
88,501
Silver ounces
1,639,620
911,861
—
31,421
—
2,582,902
Zinc pounds
—
—
Lead pounds
—
—
Revenue Split
Gold
48
%
37
%
100
%
100
%
Silver
52
%
63
%
—
%
Zinc
—
%
Lead
—
%
Adjusted costs applicable to
sales
Gold ($/oz)
$
662
$
1,379
$
1,088
$
963
Silver ($/oz)
$
13.34
$
20.13
$
—
Zinc ($/lb)
$
—
Lead ($/lb)
$
—
Reconciliation of Costs
Applicable to Sales for Updated 2021 Guidance
In thousands (except metal sales, per
ounce or per pound amounts)
Palmarejo
Rochester
Kensington
Wharf
Costs applicable to sales, including
amortization (U.S. GAAP)
$
200,530
$
122,480
$
190,150
$
102,610
Amortization
(37,530
)
(14,930
)
(60,800
)
(10,910
)
Costs applicable to sales
$
163,000
$
107,550
$
129,350
$
91,700
By-product credit
—
—
—
(2,730
)
Adjusted costs applicable to
sales
$
163,000
$
107,550
$
129,350
$
88,970
Metal Sales
Gold ounces
110,000
29,110
127,500
89,200
Silver ounces
7,021,200
3,312,230
106,150
Revenue Split
Gold
46%
38%
100%
100%
Silver
54%
62%
—
—
Adjusted costs applicable to
sales
Gold ($/oz)
$635 - $735
$1,350 - $1,500
$1,010 - $1,110
$960 - $1,060
Silver ($/oz)
$11.75 - $12.75
$20.00 - $22.00
Reconciliation of Costs
Applicable to Sales for Previous 2021 Guidance
In thousands (except metal sales, per
ounce or per pound amounts)
Palmarejo
Rochester
Kensington
Wharf
Costs applicable to sales, including
amortization (U.S. GAAP)
$
196,255
$
105,557
$
188,349
$
99,746
Amortization
(39,208
)
(15,899
)
(59,756
)
(11,524
)
Costs applicable to sales
$
157,047
$
89,658
$
128,593
$
88,222
By-product credit
—
—
—
(2,255
)
Adjusted costs applicable to
sales
$
157,047
$
89,658
$
128,593
$
85,967
Metal Sales
Gold ounces
107,900
27,200
127,000
89,000
Silver ounces
7,128,000
3,807,000
93,000
Revenue Split
Gold
49%
36%
100%
100%
Silver
51%
64%
—
—
Adjusted costs applicable to
sales
Gold ($/oz)
$710 - $810
$1,180 - $1,330
$1,010 - $1,110
$960 - $1,060
Silver ($/oz)
$11.00 - $12.00
$15.00 - $17.00
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210728005896/en/
Coeur Mining, Inc. 104 S. Michigan Avenue, Suite 900 Chicago, IL
60603 Attention: Paul DePartout, Director, Investor Relations
Phone: (312) 489-5800 www.coeur.com
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