Coeur Reports Third Quarter 2013 Results

25% Increase in Gold Production and 11% Decrease in Cash Operating Costs per Ounce1 at Kensington

Rochester Positioned for Strong Fourth Quarter

Business Wire

CHICAGO--(BUSINESS WIRE)--

Coeur Mining, Inc. (the “Company” or “Coeur”) (NYSE: CDE, TSX: CDM) reported metal sales of $200.8 million, adjusted earnings1 of $(23.4) million, or $(0.23) per share, and cash flow from operating activities of $26.8 million, or $0.27 per share, during the third quarter 2013. This compares to metal sales of $204.5 million, adjusted earnings1 of $(34.6) million, or $(0.35) per share, and cash flow from operating activities of $63.3 million, or $0.63 per share, in the second quarter 2013.

The Company reaffirmed its 2013 full-year production guidance of 18.0-19.1 million ounces of silver and 250,000-258,000 ounces of gold. Coeur expects significantly higher production levels in the fourth quarter, particularly from the Rochester silver and gold mine in Nevada. Coeur is also maintaining its full-year cash operating cost1 guidance of $9.50 - $10.50 per silver ounce and $950 - $1,000 per gold ounce at Kensington, which reflects continued progress in the Company's ongoing cost reduction efforts. The Company incurred $32.7 million in capital expenditures in the third quarter and reaffirmed its 2013 full-year capital expenditure guidance of $100-$110 million.

Third Quarter 2013 Highlights

  • Gold production at Kensington increased 25% compared to the second quarter and cash operating costs declined 11% to $988 per gold ounce1.
  • Announced a 91.5% increase in silver reserves and 96.4% increase in gold reserves at Rochester in September 2013.
  • Produced 4.2 million silver ounces and 63,766 gold ounces, a decrease of 9% and an increase of 5%, respectively, from the second quarter 2013. Metal sales were 4.9 million silver ounces and 76,466 gold ounces, a decrease of 7% and an increase of 21%, respectively, from the second quarter 2013.
  • Net metal sales were $200.8 million, down 2% compared to the second quarter 2013 mostly due to declines of 8% and 6% in realized silver and gold prices, respectively, which averaged $21.06 per silver ounce and $1,329 per gold ounce in the third quarter 2013.
  • Cash flow from operating activities was $26.8 million, or $0.27 per share, in the third quarter 2013 compared to $63.3 million, or $0.63 per share, during the second quarter 2013. Before changes in working capital, cash flow from operating activities was $37.3 million in the third quarter 2013 and $14.4 million in the second quarter 2013.
  • Adjusted earnings1 were $(23.4) million, or $(0.23) per share, compared with $(34.6) million, or $(0.35) per share, in the second quarter 2013. Net loss for the third quarter 2013 was $46.3 million, or $0.46 per share, compared with net loss of $35.0 million, or $0.35 per share, in the second quarter 2013.
  • Companywide cash operating costs were $11.38 per silver ounce1 in the third quarter 2013 and $9.66 per silver ounce1 during the first nine months of 2013. Palmarejo's cash operating costs per silver ounce1 dropped 14% in the third quarter compared to the second quarter. Higher production levels are expected to generate lower cash operating costs per silver ounce1 in the fourth quarter, particularly at Rochester.
  • Repurchased approximately $15.0 million of stock during the third quarter 2013. The Company has now completed approximately $47.5 million of its $100.0 million share repurchase program authorized by the Board of Directors in June of 2012.
  • Rochester recognized for outstanding achievement in safety by the Nevada Mining Association.
  • Palmarejo received the Industria Limpia (clean industry) certificate by the Federal Attorney for Environmental Protection (Profepa) in Mexico.
  • Additional exploration drilling is underway at Palmarejo following positive results in the existing open pit and in the Las Animas-El Salto surface deposit located just south of Guadalupe. Drilling at Kensington during the third quarter also returned additional high-grade results at the Jualin area and the Ann zone.

Mitchell J. Krebs, Coeur's President and Chief Executive Officer, said, "Our third quarter operating performance demonstrates the progress we are making in maintaining operational consistency and executing on our strategic initiatives. We are pleased with the solid performance at Palmarejo, San Bartolomé, and Kensington during the third quarter, and with the early indications of our newly-completed expansion projects at Rochester. We expect a significant increase in fourth quarter production at Rochester as permitting issues delayed the leaching of fresh material, which began October 1. We have made further progress in our four-pronged strategy designed to maximize our net cash flow: (1) identifying and implementing revenue enhancement opportunities at existing operations; (2) reducing operating and non-operating costs; (3) reducing capital spending; and (4) effectively managing working capital."

"In the third quarter, we completed value-creating projects at San Bartolomé and Rochester and implemented revenue-enhancing improvements at Palmarejo and Kensington. Our exploration program delivered very positive results at Palmarejo and Kensington, creating further prospects for high-return growth. We achieved approximately $5 million in additional operating cost reductions during the quarter, bringing our year-to-date savings to $24 million. We remain on track to spend $100-$110 million on capital projects for the full year, which is $25-$30 million below our original guidance. We made further progress in managing our working capital with a $12 million reduction in inventory, and we expect a further decrease in inventory levels during the fourth quarter."

"Going forward, we will continue to make operational and capital spending decisions with the goal of maximizing cash flow and return on invested capital. As an example of this discipline, we have decided to temporarily delay completing the underground mine development of the Guadalupe deposit at Palmarejo since the expected returns on this production do not meet our threshold in the current market environment. We expect to replace the anticipated 2014 production from Guadalupe with lower-cost production ounces from existing areas of the mine, which is a result of our successful 2013 drilling program. This decision is expected to significantly reduce Palmarejo's cash operating costs per ounce1 and capital costs, as compared to the expected costs if we were to move forward with Guadalupe at this time, allowing us to redeploy this cash flow to higher-return projects in 2014. This decision demonstrates our commitment to maximizing cash flow and returns rather than simply focusing on production ounces."

"We believe numerous opportunities remain for us to enhance revenues, reduce costs, and fund organic and external growth projects that meet our return criteria. Based on today's silver and gold prices, we continue to believe that we will generate significant after-tax operating cash flow and positive net cash flow for the next few years."

Table 1: Financial Highlights (Unaudited)

(All amounts in millions, except per share amounts,
average realized prices and gold ounces sold)

    3Q 2013     2Q 2013    

Quarter
Variance

    1Q 2013     4Q 2012     3Q 2012
Sales of Metal $ 200.8     $ 204.5     (2 %)     $ 171.8     $ 205.9     $ 230.6
Production Costs $ 131.7 $ 142.9 (8 %) $ 88.8 $ 107.4 $ 125.0
Adjusted Earnings (Loss) (1) $ (23.4 ) $ (34.6 ) 32 % $ 6.8 $ 26.2 $ 25.8
Adjusted Earnings (Loss) Per Share $ (0.23 ) $ (0.35 ) 34 % $ 0.08 $ 0.29 $ 0.29
Net Income (Loss) $ (46.3 ) $ (35.0 ) (32 %) $ 12.3 $ 37.6 $ (15.8 )
Earnings Per Share $ (0.46 ) $ (0.35 ) (31 %) $ 0.14 $ 0.42 $ (0.18 )
Cash Flow From Operating Activities $ 26.8 $ 63.3 (58 %) $ 12.9 $ 61.7 $ 79.7
Capital Expenditures $ 32.7 $ 27.2 20 % $ 12.8 $ 21.8 $ 30.0
Cash, Cash Equivalents & Short-Term Investments $ 211.4 $ 249.5 (15 %) $ 332.8 $ 126.4 $ 143.6
Total Debt (net of debt discount)(1) $ 305.3 $ 305.3 % $ 305.3 $ 48.1 $ 47.4
Weighted Average Shares 100.8 99.8 1.0 % 89.9 89.1 89.4
Average Realized Price Per Ounce - Silver $ 21.06 $ 22.86 (8 %) $ 30.30 $ 32.52 $ 30.09
Average Realized Price Per Ounce - Gold $ 1,329 $ 1,416 (6 %) $ 1,630 $ 1,709 $ 1,654
Silver Ounces Sold 4.9 5.2 (7 %) 3.1 3.6 4.5
Gold Ounces Sold 76,466 63,389 21 % 51,926 55,565 59,156
 

Coeur's non-U.S. GAAP metric of adjusted earnings1 were $(23.4) million, or $(0.23) per share, in the third quarter 2013, compared with $(34.6) million, or $(0.35) per share, in the second quarter 2013. Third quarter adjusted earnings1 excluded a negative non-cash fair value adjustment of $20.6 million, compared to a positive fair value adjustment of $66.8 million in the second quarter 2013. Fair value adjustments are primarily driven by changes to gold and silver prices, which change the estimated future liabilities for the Palmarejo gold production royalty and the Rochester 3.4% NSR royalty. On a U.S. GAAP basis, the Company realized a net loss of $46.3 million, or $0.46 per share, in the third quarter 2013 compared with net loss of $35.0 million, or $0.35 per share, in the second quarter 2013.

Cash flow from operating activities was $26.8 million in the third quarter 2013 compared to $63.3 million in the second quarter 2013 due primarily to an increase in working capital, partially offset by the change in the fair value adjustment and other non-recurring items. Before changes in working capital, cash flow from operating activities was $37.3 million and $14.4 million in the third and second quarters 2013, respectively.

During the third quarter 2013, the Company hedged downside metal price exposure on approximately 25% and 35% of its forecasted fourth quarter 2013 silver and gold production, respectively, by purchasing put options with strike prices of $17.00/oz of silver and $1,200/oz of gold, in response to ongoing metal price volatility. In October 2013, Coeur hedged a portion of its expected first quarter 2014 production, purchasing puts covering 1.25 million ounces of silver and 25,000 ounces of gold at strike prices of $17.00/oz of silver and $1,150/oz of gold. This hedging strategy is designed to maintain upside exposure to precious metal prices and mitigate the cash flow impact of a short-term drop in metal prices.

Table 2: Operational Highlights: Production

(silver ounces in thousands)   3Q 2013   2Q 2013  

Quarter
Variance

  1Q 2013   4Q 2012   3Q 2012
    Silver   Gold   Silver   Gold   Silver   Gold   Silver   Gold   Silver   Gold   Silver   Gold
Palmarejo 1,918   29,893   2,045   28,191   (6 %)   6 %   1,646   22,965   1,554   19,998   1,833   23,702
San Bartolomé 1,528 1,523 % n.a. 1,391 1,343 1,526
Rochester 595 4,824 844 9,404 (29 %) (49 %) 648 8,742 828 12,055 819 10,599
Martha n.a. n.a. 93 76
Kensington 29,049 23,162 n.a. 25 % 25,206 28,717 24,391
Endeavor 162     221     (27 %)   n.a.   150     106     140  
Total 4,203 63,766 4,633 60,757 (9 %) 5 % 3,835 56,913 3,831 60,770 4,411 58,768
 

Table 3: Operational Highlights: Cash Operating Costs Per Ounce 1

  3Q 2013   2Q 2013  

Quarter
Variance

  1Q 2013  

4Q 2012

 

3Q 2012

Palmarejo $ 2.79   $ 3.25   (14%)   $ 2.20   $ 7.55   $ 3.75
San Bartolomé 12.80 12.89 (1%) 13.27 13.97 12.13
Rochester 35.83 14.75 143% 13.54 2.17 9.58
Martha n.a 48.12
Endeavor 9.72   10.62   (8%)   17.30   19.92   15.97
Total $ 11.38 $ 8.86 28% $ 8.73 $ 8.97 $ 9.05
Kensington $ 988 $ 1,115 (11%) $ 1,055 $ 1,065 $ 1,298
 

Palmarejo, Mexico - Lower Cash Operating Costs per Silver Ounce1; Higher Underground Silver Grade

  • Palmarejo produced 1.9 million ounces of silver and 29,893 ounces of gold at cash operating costs of $2.79 per silver ounce1 for the third quarter. In the second quarter 2013, Palmarejo produced 2.0 million ounces of silver and 28,191 ounces of gold at cash operating costs of $3.25 per silver ounce1.
  • Silver and gold ore grades declined from the open pit operations compared to the second quarter 2013. However, silver grades increased substantially in the underground operations and gold grades remained constant. Higher overall silver and gold grades are expected in the fourth quarter.
  • Recovery rates have increased compared to the second quarter 2013 due to the implementation of an ore blending program and plant reconfiguration.
  • Further progress has been achieved in the ongoing cost reduction initiatives at Palmarejo, which have lowered cash operating costs1 in the first three quarters of 2013 compared to plan. These initiatives include reductions in outside services, contract services, reagent and consumable consumption, as well as more favorable pricing on key consumables, shorter waste haul distance, and greater maintenance cost efficiency.
  • Sales and cash flow from operating activities totaled $104.5 million and $50.8 million, respectively, in the third quarter 2013, representing increases of 21% and 37%, respectively, compared to the second quarter 2013.
  • Capital expenditures of $10.3 million were incurred at Palmarejo in the third quarter 2013, primarily for underground mine development at Palmarejo and Guadalupe.

San Bartolomé, Bolivia - Consistent Performance; Higher Throughput Offset Decrease in Grade

  • San Bartolomé produced 1.5 million ounces of silver at cash operating costs of $12.80 per silver ounce1, which was comparable to the second quarter 2013.
  • Investments to increase throughput by 10%-15% were recently completed. This expansion is intended to enable the mine to maintain annual production at approximately 6.0 million ounces of silver for the next several years.
  • Sales and cash flow from operating activities totaled $28.8 million and $7.6 million, respectively, in the third quarter 2013, down 41% and 77%, respectively, from the second quarter 2013. The second quarter benefited from excess inventory carried at the start of the quarter, which boosted metal sales and provided a release of working capital. Third quarter sales were closely aligned with third quarter production.
  • Capital expenditures were $4.2 million during the third quarter 2013 primarily related to the tailings and process plant expansion projects.

Rochester, Nevada - Capacity Expansion Complete; Significant Production Increase Expected in 4Q

  • Rochester produced 595,268 ounces of silver and 4,824 ounces of gold, down 29% and 49% respectively, compared to the second quarter 2013. Production was temporarily affected by delays in completion of construction and permitting for the Stage III leach pad expansion. A substantial number of tons of material were placed on the expanded area of the Stage III leach pad during the third quarter, which are expected to contribute to significantly higher production in the fourth quarter 2013 and throughout 2014.
  • Crushing performance improved following the addition of metal removal equipment to the crushing plant designed to remove waste contained in the stockpile material, which can lead to downtime if allowed to run through the crusher. Rochester received its highest crushing month on record for September and is expected to crush approximately 12 million tons in total in 2013.
  • Cash operating costs per silver ounce1 were $35.83, considerably higher than the second quarter 2013 due to lower than planned production. However, Rochester's cash operating costs1 remain below planned levels year-to-date on a dollars spent basis. Coeur expects a significant reduction in cash operating costs1 on a per unit basis as production ramps up in the fourth quarter 2013 and throughout 2014. Further progress was achieved in the ongoing cost reduction efforts at Rochester, including reductions in reagent and consumable consumption, contract services, power consumption, as well as shorter haul distances.
  • Recent investments in the existing heap leach pads at Rochester have increased total capacity by 72 million tons, which Coeur expects will enable operations to continue into the second half of 2017. The Company is in the process of obtaining permits for 120 million tons of additional pad capacity, which are expected to be received by mid-2016. This expanded capacity is anticipated to further extend Rochester’s active mine life based on existing reserves through at least 2023.
  • Sales totaled $24.3 million in the third quarter 2013 compared to $34.9 million in the second quarter 2013. Cash flow from operating activities of $(3.6) million in the third quarter 2013 was slightly below the $(3.4) million reported in the second quarter 2013.
  • Capital expenditures of $12.3 million were spent during the third quarter 2013 on process plant equipment, the Stage III leach pad expansion, and equipment related to the crusher expansion.

Kensington, Alaska - Gold Production Increased 25%; Costs Down 11%; Improved Gold Grade

  • Kensington produced 29,049 ounces of gold, an increase of 25% from the second quarter 2013. Cash operating costs per ounce1 were $988, compared to $1,115 in the second quarter 2013 due to the mining and processing of higher-grade stopes. Average mill head grade of 0.20 oz/t was 11% higher than the second quarter 2013.
  • The Company made further progress in reducing costs during the third quarter, including reductions in contract services and lower underground backfill costs due to lower prices for backfill material.
  • Sales increased 26% sequentially to $38.9 million in the third quarter, and cash flow from operating activities totaled $1.9 million, down from $7.6 million in the second quarter 2013 due to an increase in receivables at quarter-end caused by the timing of provisional payments related to concentrate shipments.
  • Capital expenditures of $4.9 million in the third quarter were spent primarily on underground capital development and reserve category drilling.

La Preciosa, Mexico - Feasibility Work Underway

  • A strong development team has been established at the corporate office and in Durango, Mexico.
  • Coeur has commenced a full feasibility study, along with infill and development drilling. Upon completion of this work in mid-2014, the Company and its Board will evaluate the economics of the optimized project, assess the silver and gold market, and determine whether to proceed with construction.
  • The Company spent $3.5 million during the third quarter and expects to spend an additional $21 million by mid-2014 on exploration, sustainability projects within the community, engineering, construction of an access road, and land acquisitions.

Exploration Update

Costs associated with exploration activities for the quarter were $3.3 million (expensed) for discovery of new silver and gold mineralization and $4.6 million (capitalized) for definition and expansion of new discoveries, for a total of $7.9 million. On a year-to-date basis, total exploration costs were $26.2 million, tracking below original guidance of $40 million for the full year, consistent with the Company's initiative to reduce costs. Coeur expects to spend $37 million on exploration in 2013.

Coeur's exploration program used nine drill rigs during the quarter: four drills at Palmarejo, four at Kensington, and one at Rochester. This work resulted in completion of over 145,700 feet (44,400 meters) of combined core and reverse circulation drilling. Through the first nine months of 2013, nearly 428,000 feet (131,000 meters) of drilling was completed.

Palmarejo, Mexico

  • Exploration for mineralization discovery and definition was conducted around the Palmarejo surface and underground mine area, from the surface at Guadalupe, and from the surface at the El Salto zone. Favorable results were returned from two areas at Palmarejo: Guadalupe underground and the El Salto surface.
  • Hole 93, located between the Tucson and Chapotillo pits, cut 10.8 m (35.4 feet) estimated true width grading 533 silver grams per metric ton (15.5 ounces per short ton) and 4.93 gold grams per metric ton (0.14 ounces per short ton). This hole cut a mineralized, north-south structure on the eastern portion of the pits. Based on these results, additional drilling is underway as this represents potential to extend the open pit in that direction.
  • In addition, drilling was performed to test the potential to expand the Palmarejo surface mine limits to the North-Northeast. Drilling in this area encountered multiple veins. Of note, results returned from hole 7 with 4.6 meters estimated true width (15.1 feet) grading 119 silver grams per metric ton (3.47 ounces per short ton) and 0.88 grams per metric ton of gold (0.026 ounces per short ton) suggest potential to expand surface mine limits. Similar to the results from hole 93, these results are being followed with additional drilling.
  • Underground drilling continued at the Guadalupe deposit utilizing the north portal for drill access. Results included 16.0 meters in hole 10 (estimated true width or 52.5 feet) grading 227 silver grams per metric ton (6.6 ounces per short ton) and 3.49 gold grams per metric ton (0.10 ounces per short ton) and 6.8 meters in hole 16 (22.3 feet) grading 334 silver grams per metric ton (9.74 ounces per short ton) and 3.97 gold grams per metric ton (0.12 ounces per short ton).
  • At the El Salto zone, which lies between Guadalupe and Las Animas, significant results were reported from near-surface intervals. See Table 4 below for details.
  • All intervals are near-surface mineralization with multiple silver-gold zones cut in several holes. Based on these significant new results, additional holes are planned for 2014 as this represents another area of potential future open-pit resource and it is located above the Guadalupe structure.
  • Drilling also commenced on the southern end of Las Animas to extend known near-surface mineralization towards the recently acquired La Curra property, where near-surface silver-gold mineralization is known. Assays are pending on the new core holes.

Rochester, Nevada

  • An updated reserve estimate was prepared for the full Rochester property removing all restrictions imposed by the former claims dispute. This update produced a 91.5% increase in silver reserves and 96.4% increase in gold reserves at Rochester in September 2013.
  • The updated reserve estimate did not include data from the recent drilling of stockpiles and in-situ mineralization, which will be reflected in a further update planned for year-end 2013.
  • Drilling during the third quarter continued on expansion and definition of stockpiles. It is expected that drilling of the stockpiles will be essentially complete this year.
  • In addition to the stockpiles, drilling commenced in the third quarter on new, in-situ mineralization targets. Two new targets were drilled, both providing encouraging results to be pursued in the coming months.

Kensington

  • During the third quarter, exploration drilling began on the Jualin area, which is located south of the Kensington mine. Drilling targeted the number 4 vein, one of several, discrete gold-bearing zones known at Jualin. Consistent with historic results, occurrences of visible gold and high-grade mineralized intervals were intersected with the first five holes completed this year. See Table 5 below for details (holes 3 and 4).
  • The Company will continue drilling in the zone in 2013 and begin again in early 2014, weather permitting. Based on these grades, the Jualin area has potential to provide high-grade feed to the Kensington mill.
  • Underground drilling was conducted during the quarter on the new Ann zone situated less than 200 feet to the east of the main Kensington deposit. See Table 5 below for details (hole 47). Drilling will continue in the Ann zone based on these encouraging results.
  • Exploration to define and expand known mineralization focused on the southern margins of upper Zone 10 and Zone 20 in main Kensington during the quarter. Results show that Zone 10 and Zone 20 continue south of known mineralization models. See Table 5 below for details (holes 23, 24, and 49).

La Preciosa, Mexico

  • Exploration commenced during the third quarter on the Company's La Preciosa property located in Durango state, Mexico. The exploration team is focused on re-logging drill core to update the geologic model of the deposit. In addition, a new program of sampling of old core holes commenced to supplement the existing assay database. Both efforts are expected to improve the model of mineralization to be used in the on-going feasibility study as well as assist in generation of new drill targets to expand and in-fill the current model.
  • Additional drilling is expected to commence in the fourth quarter to test areas of projected mineralized structures on permitted Company lands that have not been previously drilled.

San Bartolomé, Bolivia

  • Work continued during the quarter to focus on the main mine area to assist with grade control and definition of known mineralization. Trenching is expected to now shift to the new La Bolsa area, which occurs adjacent to and east of the Santa Rita sector, in the following months.

Table 4: Select Drilling Results at Palmarejo

Hole  

True Width
(meters)

 

True Width
(feet)

  Silver   Gold
   

Gram/Metric
Ton

 

Ounce/Short
Ton

 

Gram/Metric
Ton

 

Ounce/Short
Ton

575   9.4 31.0 542   15.8    
575 4.4 14.4 583 17.0
578 6.3 20.7 713 20.8 0.46 0.013
584 3.9 12.8 958 27.9 0.98 0.029
585 4.3 14.1 221 6.4 1.77 0.052
 

See the appendix of the presentation titled "3Q 2013 Financial Results" to be posted at www.coeur.com for all drilling results for the third quarter 2013.

Table 5: Select Drilling Results at Kensington

Hole  

True Width
(meters)

 

True Width
(feet)

  Gold
   

Gram/Metric
Ton

 

Ounce/Short
Ton

3   1.4 4.6 40.5   1.18
4 1.4 4.5 53.9 1.57
23 0.49 1.6 82.0 2.39
24 4.4 14.4 41.5 1.21
47 0.85 2.8 76.5 2.23
49 0.64 2.1 66.9 1.95
 

See the appendix of the presentation titled "3Q 2013 Financial Results" to be posted at www.coeur.com for all drilling results for the third quarter 2013.

2013 Outlook

Coeur's 2013 silver and gold production guidance remains unchanged as shown in Table 6 below, and compares to 2012 silver production of 18.0 million ounces and gold production of 226,486 ounces.

Table 6: 2013 Production Outlook

(silver ounces in thousands)   Country   Silver   Gold
Palmarejo   Mexico   7,700-8,300   108,000-110,000
San Bartolomé Bolivia 5,900-6,000
Rochester Nevada, USA 3,700-4,000 34,000-36,000
Kensington Alaska, USA 108,000-112,000
Endeavor   Australia   700-800  
Total       18,000-19,100   250,000-258,000
 
1.   Adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations.
 

Conference Call Information

Coeur will hold a conference call and webcast at www.coeur.com to discuss the Company's third quarter 2013 results on November 7, 2013 at 11:00 a.m. Eastern time.

Dial-In Numbers:   (877) 768-0708 (U.S. and Canada)
(660) 422-4718 (International)
 
Conference ID: 805 93 215

A replay of the call will be available on Coeur's website through November 21, 2013.

Replay Numbers:   (855) 859-2056 (U.S. and Canada)
(404) 537-3406 (International)
 
Conference ID: 805 93 215
 

About Coeur

Coeur Mining, Inc. is the largest U.S.-based primary silver producer and a growing gold producer. The Company has four precious metals mines in the Americas generating strong production, sales and cash flow. Coeur produces from its wholly owned operations: the Palmarejo silver-gold mine in Mexico, the San Bartolomé silver mine in Bolivia, the Rochester silver-gold mine in Nevada and the Kensington gold mine in Alaska. The Company also has a non-operating interest in the Endeavor mine in Australia. In addition, the Company has two silver-gold feasibility stage projects - the La Preciosa project in Mexico and the Joaquin project in Argentina. The Company also conducts ongoing exploration activities in Mexico, Argentina, Nevada, Alaska and Bolivia. The Company owns strategic investment positions in eight silver and gold development companies with projects in North and South America.

Cautionary Statement

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding Coeur’s anticipated production levels and financial performance, operating costs, capital expenditure and inventory levels, hedging strategies, exploration results, metal grades, recovery and crushing rates, exploration and development efforts, opportunities and initiatives to maximize net cash flow, reduce capital spending, manage working capital, enhance revenues, reduce costs, complete organic and external growth projects, expand capacity, increase reserve levels, and the ability to generate after-tax operating cash flow and positive net cash flow. 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 permits necessary for the planned Rochester expansion may not be obtained, 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 and silver 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 ore reserves, changes that could result from Coeur's future acquisition of new mining properties or businesses, reliance on third parties to operate certain mines where Coeur owns silver production and reserves, the loss of any third-party smelter to which Coeur markets silver and gold, the effects of environmental and other governmental regulations, the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, Coeur's ability to raise additional financing necessary to conduct its business, make payments or refinance its debt, as well as other uncertainties and risk factors set out in filings made from time to time with the United States Securities and Exchange Commission, and the Canadian securities regulators, including, without limitation, Coeur's most recent reports on Form 10-K and Form 10-Q. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Coeur disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. 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.

Paul Hohbach, Coeur's Director of Exploration and a qualified person under Canadian National Instrument 43-101, reviewed and 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, please see the Technical Reports for each of Coeur's properties as filed on SEDAR at www.sedar.com.

Cautionary Note to U.S. Investors-The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We may use certain terms in public disclosures, such as "measured," "indicated," "inferred” and “resources," that are recognized by Canadian regulations, but that SEC guidelines generally prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from the SEC's website at http://www.sec.gov.

Non-U.S. GAAP Measures

We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non-U.S. GAAP financial measures, including adjusted earnings and cash operating 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 adjusted earnings and cash operating costs are important measures in assessing the Company's overall financial performance.

Exploration Results

Palmarejo. Sample assays were submitted to ALS Global in Chihuahua, Mexico. Samples were analyzed by 30 gram fire assay with atomic absorption finish for gold = 1 ppm. QA/QC checks were performed at ALS Global in Chihuahua, Mexico. 456 duplicates, 301 standards, and 301 blanks all assayed within acceptable ranges for gold and silver. Drill intercepts calculated at 1.75 g/ton gold Eq (equivalent) cutoff. A maximum of 2 meters of internal dilution (less than cutoff) was permitted in compositing. Gold Eq g/ton = Gold g/ton + (Silver g/ton/43.33). There was no capping of assays or composites.

Kensington. Samples were prepared at the Kensington mine in Juneau, AK, and final sample preparation to pulp and analyses were prepared at ALS Global in Reno, NV (primary laboratory). Samples were analyzed by 30 gram fire assay with atomic absorption finish for gold

   

Table 7: Operating Statistics from Continuing Operations - (Unaudited):

 

Three months ended
September 30,

Nine months ended
September 30,

2013   2012 2013   2012

Silver Operations:

Palmarejo
Tons milled 583,365 532,775 1,726,857 1,551,242
Ore grade/Ag oz 4.02 3.82 4.12 5.21
Ore grade/Au oz 0.06 0.04 0.05 0.06
Recovery/Ag oz 81.8 % 90.0 % 78.9 % 82.7 %
Recovery/Au oz 87.6 % 102.5 % 85.9 % 95.1 %
Silver production ounces 1,917,850 1,833,109 5,609,215 6,681,407
Gold production ounces 29,893 23,702 81,049 86,040
Cash operating cost/oz $ 2.79 $ 3.75 $ 2.78 $ (0.12 )
Cash cost/oz $ 2.79 $ 3.75 $ 2.78 $ (0.12 )
Total production cost/oz $ 20.65 $ 22.53 $ 20.49 $ 17.14
San Bartolomé
Tons milled 428,884 344,349 1,228,179 1,113,458
Ore grade/Ag oz 3.89 4.91 3.98 4.58
Recovery/Ag oz 91.5 % 90.3 % 90.8 % 90.0 %
Silver production ounces 1,528,035 1,525,725 4,442,396 4,587,359
Cash operating cost/oz $ 12.80 $ 12.13 $ 12.98 $ 11.12
Cash cost/oz $ 13.68 $ 13.36 $ 13.92 $ 12.29
Total production cost/oz $ 16.98 $ 16.56 $ 17.42 $ 15.14
Martha
Tons milled 27,281 100,548
Ore grade/Ag oz 4.17 4.01
Ore grade/Au oz 0.003 0.004
Recovery/Ag oz 81.5 % 80.3 %
Recovery/Au oz 82.6 % 72.2 %
Silver production ounces 92,698 323,286
Gold production ounces 76 257
Cash operating cost/oz $ 48.12 $ 49.82
Cash cost/oz $ 49.20 $ 50.76
Total production cost/oz $ 58.52 $ 57.25
Rochester
Tons placed 2,678,906 2,669,091 7,742,330 6,947,505
Ore grade/Ag oz 0.53 0.50 0.54 0.56
Ore grade/Au oz 0.003 0.004 0.003 0.005
Recovery/Ag oz 41.6 % 67.0 % 50.7 % 52.6 %
Recovery/Au oz 65.5 % 102.4 % 104.1 % 84.1 %
Silver production ounces 595,268 819,349 2,086,702 1,973,392
Gold production ounces 4,824 10,599 22,971 26,012
Cash operating cost/oz $ 35.83 $ 9.58 $ 20.39 $ 12.75
Cash cost/oz $ 35.70 $ 11.34 $ 21.45 $ 14.38
Total production cost/oz $ 40.51 $ 13.96 $ 24.98 $ 17.50
 
 

Three months ended
September 30,

 

Nine months ended
September 30,

2013   2012 2013   2012
Endeavor
Tons milled 197,237 205,096 590,273 601,999
Ore grade/Ag oz 1.71 1.22 2.02 2.61
Recovery/Ag oz 48.2 % 56.0 % 44.8 % 40 %
Silver production ounces 162,260 140,267 533,271 628,393
Cash operating cost/oz $ 9.72 $ 15.97 $ 12.22 16.82
Cash cost/oz $ 9.72 $ 15.97 $ 12.22 16.82
Total production cost/oz $ 15.23 $ 22.37 $ 17.73 23.40

Gold Operation:

Kensington
Tons milled 147,427 123,428 404,471 265,158
Ore grade/Au oz 0.20 0.21 0.20 0.21
Recovery/Au oz 96.5 % 95.9 % 96.9 % 94.9 %
Gold production ounces 29,049 24,391 77,418 53,407
Cash operating cost/oz $ 988 $ 1,298 $ 1,048 $ 1,515
Cash cost/oz $ 988 $ 1,298 $ 1,048 $ 1,515
Total production cost/oz $ 1,614 $ 1,770 $ 1,627 $ 2,037
CONSOLIDATED PRODUCTION TOTALS
Total silver ounces 4,203,413 4,411,148 12,671,584 14,193,197
Total gold ounces 63,766 58,768 181,438 165,716
Silver Operations:
Cash operating cost per oz - silver $ 11.38 $ 9.05 $ 9.66 $ 7.19
Cash cost per oz - silver $ 11.68 $ 9.83 $ 10.16 $ 7.82
Total production cost oz - silver $ 21.92 $ 19.62 $ 20.04 $ 17.74
Gold Operation:
Cash operating cost per oz - gold $ 988 $ 1,298 $ 1,048 $ 1,515
Cash cost per oz - gold $ 988 $ 1,298 $ 1,048 $ 1,515
Total production cost per oz - gold $ 1,614 $ 1,770 $ 1,627 $ 2,037
CONSOLIDATED SALES TOTALS
Silver ounces sold 4,873,897 4,520,500 13,178,701 14,412,503
Gold ounces sold 76,466 59,156 191,781 157,621
Realized price per silver ounce $ 21.06 $ 30.09 $ 23.93 $ 30.52
Realized price per gold ounce $ 1,329 $ 1,654 $ 1,439 $ 1,649
 

Table 8:
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

   

September 30,
2013

December 31,
2012

ASSETS

(In thousands, except share data)
CURRENT ASSETS
Cash and cash equivalents $ 211,434 $ 125,440
Investments 999
Receivables 74,417 62,438
Ore on leach pad 39,880 22,991
Metal and other inventory 123,537 170,670
Deferred tax assets 2,713 2,458
Restricted assets 2,015 396
Prepaid expenses and other   26,778     20,790  
480,774 406,182
NON-CURRENT ASSETS
Property, plant and equipment, net 649,591 684,002
Mining properties, net 2,365,999 1,991,809
Ore on leach pad 31,966 21,356
Restricted assets 24,914 24,970
Marketable securities 17,616 27,065
Receivables 37,191 48,767
Debt issuance costs, net 11,351 3,713
Deferred tax assets 1,104 955
Other   16,411     12,582  
TOTAL ASSETS $ 3,636,917   $ 3,221,401  

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable $ 63,610 $ 57,482
Accrued liabilities and other 9,589 10,002
Accrued income taxes 8,529 27,108
Accrued payroll and related benefits 19,295 21,306
Accrued interest payable 4,028 478
Debt and capital leases 3,868 55,983
Royalty obligations 49,069 65,104
Reclamation and mine closure 443 668
Deferred tax liabilities   121     121  
158,552 238,252
NON-CURRENT LIABILITIES
Debt and capital leases 306,372 3,460
Royalty obligations 90,892 141,879
Reclamation and mine closure 55,872 34,670
Deferred tax liabilities 709,910 577,488
Other long-term liabilities   23,371     27,372  
1,186,417 784,869
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY

Common stock, par value $0.01 per share; authorized 150,000,000 shares, issued and
outstanding 100,548,811 at September 30, 2013 and 90,342,338 at December 31, 2012

1,006 903
Additional paid-in capital 2,756,377 2,601,254
Accumulated deficit (465,191 ) (396,156 )
Accumulated other comprehensive loss   (244 )   (7,721 )
  2,291,948     2,198,280  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,636,917   $ 3,221,401  
 

Table 9:

COEUR MINING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

   

Three months ended
September 30,

Nine months ended
September 30,

2013   2012 2013   2012
(In thousands, except share data)
Sales of metal $ 200,825 $ 230,593 $ 577,147 $ 689,563
Production costs applicable to sales (131,728 ) (124,967 ) (363,437 ) (349,344 )
Depreciation, depletion and amortization (60,874 ) (52,844 ) (168,963 ) (166,460 )
Gross profit 8,223 52,782 44,747 173,759
COSTS AND EXPENSES
General and administrative 16,240 10,266 41,492 26,456
Exploration 3,305 6,957 16,920 19,829
Litigation settlement 32,046
Loss on impairment and other 1,293 205 6,106
Pre-development, care, maintenance and other 3,955   277   9,414   1,618  
Total costs and expenses 23,500   18,793   100,077   54,009  
OPERATING INCOME (LOSS) (15,277 ) 33,989 (55,330 ) 119,750
OTHER INCOME AND EXPENSE
Fair value adjustments, net (20,646 ) (37,648 ) 63,905 (44,722 )
Other than temporary impairment of marketable securities (870 ) (605 ) (18,097 ) (605 )
Interest income and other, net (1,791 ) 13,269 2,484 15,055
Interest expense, net of capitalized interest (9,662 ) (7,351 ) (30,324 ) (21,578 )
Total other income and expense, net (32,969 ) (32,335 ) 17,968   (51,850 )
Income (loss) before income taxes (48,246 ) 1,654 (37,362 ) 67,900
Income tax provision 1,981   (17,475 ) (31,673 ) (56,773 )
NET INCOME (LOSS) $ (46,265 ) $ (15,821 ) $ (69,035 ) $ 11,127  
INCOME (LOSS) PER SHARE
Basic $ (0.46 ) $ (0.18 ) $ (0.71 ) $ 0.12  
Diluted $ (0.46 ) $ (0.18 ) $ (0.71 ) $ 0.12  
Weighted average number of shares
Basic 100,778 89,429 96,893 89,550
Diluted 100,778 89,429 96,893 89,690
 
...

Table 10:
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

   

Three months ended

September 30,

Nine months ended
September 30,

2013   2012 2013   2012
(In thousands) (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (46,265 ) $ (15,821 ) $ (69,035 ) $ 11,127
Add (deduct) non-cash items
Depreciation, depletion and amortization 60,874 52,844 168,963 166,460
Accretion of discount on debt and other assets, net 509 585 2,040 1,683
Accretion of royalty obligation 2,889 4,276 10,698 14,348
Deferred income taxes (1,869 ) (4,944 ) 17,680 12,425
Fair value adjustments, net 20,308 35,270 (61,487 ) 39,288
Loss on foreign currency transactions (511 ) (1,577 ) (828 ) (1,208 )
Litigation settlement 22,046
Share-based compensation 373 3,364 3,085 6,534
Loss on sale of assets (7 ) 108 (1,139 ) 372
Other than temporary impairment of marketable securities 870 605 18,097 605
Loss on impairment 1,243 205 6,016
Other non-cash charges 136 1,331 136 1,838
Changes in operating assets and liabilities:
Receivables and other current assets (2,132 ) (5,648 ) 6,515 1,717
Prepaid expenses and other (14,306 ) (2,481 ) (13,894 ) (564 )
Inventories 11,592 (13,762 ) 22,582 (35,387 )
Accounts payable and accrued liabilities   (5,657 ) 24,342   (22,588 ) (15,313 )
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   26,804   79,735   103,076   209,941  
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short term investments and marketable securities (2,689 ) (4,093 ) (8,022 ) (11,959 )
Proceeds from sales and maturities of short term investments 27 337 6,371 21,038
Capital expenditures (32,726 ) (29,972 ) (72,754 ) (93,857 )
Acquisition of Orko Silver Corporation (113,214 )
Other   (48 ) 479   1,163   1,659  
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES   (35,436 ) (33,249 ) (186,456 ) (83,119 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes and bank borrowings 300,000
Payments on long-term debt, capital leases, and associated costs (1,824 ) (80,318 ) (59,021 ) (94,562 )
Payments on gold production royalty (12,619 ) (17,458 ) (43,548 ) (58,119 )
Reductions of restricted assets associated with the Kensington Term Facility 4,645 4,645
Share repurchases (14,995 ) (9,971 ) (27,552 ) (9,971 )
Other   (27 ) 134   (505 ) (912 )
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES   (29,465 ) (102,968 ) 169,374   (158,919 )
INCREASE IN CASH AND CASH EQUIVALENTS (38,097 ) (56,482 ) 85,994 (32,097 )
Cash and cash equivalents at beginning of period   249,531   199,397   125,440   175,012  
Cash and cash equivalents at end of period $ 211,434   $ 142,915   $ 211,434   $ 142,915  
 

Table 11:
Adjusted Earnings Reconciliation - (Unaudited)

         
(in thousands) 3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Net income (loss) $ (46,265 ) $ (35,040 ) $ 12,270 $ 37,550 $ (15,821 )
Share based compensation 373 1,617 1,096 1,476 3,364
Deferred income tax provision (1,869 ) 12,123 7,425 3,738 (4,942 )
Accretion of royalty obligation 2,889 4,139 3,670 3,946 4,276
Fair value adjustments, net 20,646 (66,754 ) (17,796 ) (21,235 ) 37,648
Litigation settlement 32,046
Other than temporary impairment of marketable securities 870 17,192
Loss on impairment 86 119 (281 ) 1,293
Loss on debt extinguishments               1,036      
Adjusted Earnings   $ (23,356 )   $ (34,591 )   $ 6,784     $ 26,230     $ 25,818  
 

Table 12:
Results of Operations by Mine - Palmarejo - (Unaudited)

         
in millions of US$ 3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Sales of metal $ 104.5 $ 86.2 $ 57.4 $ 79.4 $ 102.6
Production costs $ 66.8 $ 55.2 $ 26.7 $ 40.4 $ 48.7
Operating income $ 3.2 $ (7.7 ) $ (0.2 ) $ 4.5 $ 17.7
Cash flow from operating activities $ 50.8 $ 37.2 $ 10.1 $ 22.9 $ 58.2
Capital expenditures $ 10.3 $ 9.2 $ 5.3 $ 8.8 $ 11.3
Gross profit $ 4.0 $ (4.6 ) $ 1.8 $ 6.8 $ 20.0
Gross margin 3.9 % (5.3 )% 3.1 % 8.7 % 19.5 %
 
3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Underground Operations:
Tons mined 219,909 183,267 151,232 139,925 143,747
Average silver grade (oz/t) 4.73 4.59 4.22 4.70 6.13
Average gold grade (oz/t) 0.11 0.11 0.09 0.08 0.09
Surface Operations:
Tons mined 385,379 363,758 388,651 465,498 424,380
Average silver grade (oz/t) 3.49 4.95 3.45 2.62 2.79
Average gold grade (oz/t) 0.03 0.04 0.03 0.02 0.03
Processing:
Total tons milled 583,365 570,322 573,170 563,123 532,775
Average recovery rate – Ag 81.8 % 76.5 % 78.8 % 84.2 % 90.0 %
Average recovery rate – Au 87.6 % 81.2 % 90.1 % 91.4 % 102.5 %
Silver production - oz (000's) 1,918 2,045 1,646 1,554 1,833
Gold production - oz 29,893 28,191 22,965 19,998 23,702
Cash operating costs/Ag Oz $ 2.79 $ 3.25 $ 2.20 $ 7.55 $ 3.75
 

Table 13:
Results of Operations by Mine - San Bartolomé - (Unaudited)

         
in millions of US$ 3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Sales of metal $ 28.8 $ 49.2 $ 33.1 $ 37.0 $ 46.2
Production costs $ 17.7 $ 32.8 $ 15.7 $ 15.1 $ 19.9
Operating income $ 4.3 $ 11.5 $ 8.9 $ 17.5 $ 22.0
Cash flow from operating activities $ 7.6 $ 32.8 $ (5.4 ) $ 9.5 $ 19.8
Capital expenditures $ 4.2 $ 3.2 $ 0.5 $ 3.3 $ 4.4
Gross profit $ 6.2 $ 11.5 $ 12.7 $ 17.6 $ 22.1
Gross margin 21.6 % 23.3 % 38.4 % 47.7 % 47.8 %
 
3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Tons milled 428,884 424,310 374,985 363,813 344,349
Average silver grade (oz/t) 3.89 3.98 4.09 4.20 4.91
Average recovery rate 91.5 % 90.3 % 90.6 % 88 % 90.3 %
Silver production (000's) 1,528 1,523 1,391 1,343 1,526
Cash operating costs/Ag Oz $ 12.80 $ 12.89 $ 13.27 $ 13.97 $ 12.13
 

Table 14:
Results of Operations by Mine - Kensington - (Unaudited)

         
in millions of US$ 3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Sales of metal $ 38.9 $ 30.9 $ 39.3 $ 43.0 $ 36.5
Production costs $ 27.5 $ 30.2 $ 23.6 $ 27.0 $ 26.9
Operating income $ (8.2 ) $ (13.3 ) $ 1.6 $ 0.9 $ (3.5 )
Cash flow from operating activities $ 1.9 $ 7.6 $ 11.7 $ 16.5 $ 5.0
Capital expenditures $ 4.9 $ 7.4 $ 3.3 $ 7.8 $ 9.0
Gross profit/ $ (6.7 ) $ (12.6 ) $ 2.3 $ 2.2 $ (1.9 )
Gross margin (17.3 )% (40.7 )% 5.9 % 5.1 % (5.2 )%
 
3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Tons mined 122,064 135,123 116,747 140,626 113,770
Tons milled 147,427 127,987 129,057 129,622 123,428
Average gold grade (oz/t) 0.20 0.18 0.20 0.23 0.21
Average recovery rate 96.5 % 98.2 % 96.2 % 96.9 % 95.9 %
Gold production 29,049 23,162 25,206 28,717 24,391
Cash operating costs/Au Oz $ 988 $ 1,115 $ 1,055 $ 1,065 $ 1,298
 

Table 15:
Results of Operations by Mine - Rochester - (Unaudited)

         
in millions of US$ 3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Sales of metal $ 24.3 $ 34.9 $ 39.5 $ 43.2 $ 36.2
Production costs $ 17.9 $ 23.1 $ 21.5 $ 22.9 $ 21.0
Operating income $ 2.7 $ (25.2 ) $ 15.2 $ 19.2 $ 10.9
Cash flow from operating activities $ (3.6 ) $ (3.4 ) $ 5.6 $ 18.2 $ 7.3
Capital expenditures $ 12.3 $ 6.6 $ 3.3 $ 1.5 $ 4.8
Gross profit $ 3.5 $ 9.5 $ 15.8 $ 18.0 $ 13.2
Gross margin 14.6 % 27.3 % 40.0 % 41.7 % 36.5 %
 
3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Tons placed 2,678,906 2,457,423 2,606,001 2,286,233 2,669,091
Average silver grade (oz/t) 0.53 0.58 0.51 0.51 0.50
Average gold grade (oz/t) 0.003 0.003 0.003 0.005 0.004
Silver production (000's) 595 844 648 828 819
Gold production 4,824 9,404 8,742 12,055 10,599
Cash operating costs/Ag Oz $ 35.83 $ 14.75 $ 13.54 $ 2.17 $ 9.58
 

Table 16:
Results of Operations by Mine - Endeavor - (Unaudited)

         
in millions of US$ 3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Sales of metal $ 4.3 $ 3.5 $ 3.0 $ 2.8 $ 4.1
Production costs $ 1.9 $ 1.7 $ 1.3 $ 1.6 $ 2.0
Operating income $ 1.5 $ 0.6 $ 0.8 $ 0.8 $ 1.3
Cash flow from operating activities $ 1.3 $ 1.2 $ 1.6 $ 1.6 $ 1.5
Capital expenditures $ $ $ $ $
Gross profit $ 1.5 $ 0.6 $ 0.8 $ 0.8 $ 1.3
Gross margin 35.6 % 17.1 % 26.7 % 28.6 % 31.7 %
 
3Q 2013   2Q 2013   1Q 2013   4Q 2012   3Q 2012
Silver Production (000's) 162 221 150 106 140
Cash operating costs/Ag Oz $ 9.72 $ 10.62 $ 17.30 $ 19.92 $ 15.97
 

Table 17:
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs
Three months ended September 30, 2013

             
(In thousands except ounces and per ounce costs)   Palmarejo

San
Bartolomé

Kensington Rochester

Martha
(A)

Endeavor Total
Total cash operating cost (Non-U.S. GAAP) $ 5,354 $ 19,560 $ 28,707 $ 21,329 $ $ 1,576 $ 76,526
Royalties 1,352 1,352
Production taxes       (77 )     (77 )
Total cash costs (Non-U.S. GAAP) $ 5,354   $ 20,912   $ 28,707   $ 21,252   $   $ 1,576   $ 77,801  
Add/Subtract:
Third party smelting costs (2,709 ) (278 ) (2,987 )
By-product credit 39,762 6,405 46,167
Other adjustments 602 126 728
Change in inventory 21,120 (3,364 ) 1,486 (9,796 ) 573 10,019
Depreciation, depletion and amortization 33,642   4,909   18,190   2,860     894   60,495  

Production costs applicable to sales, including
depreciation, depletion and amortization (U.S.
GAAP)

$ 100,480   $ 22,583   $ 45,674   $ 20,721   $   $ 2,765   $ 192,223  
Production of silver (ounces) 1,917,850 1,528,035 595,268 162,260 4,203,413
Cash operating cost per silver ounce $ 2.79 $ 12.80 $ $ 35.83 $ $ 9.72 $ 11.38
Cash costs per silver ounce $ 2.79 $ 13.68 $ $ 35.70 $ $ 9.72 $ 11.68
Production of gold (ounces) 29,049 29,049
Cash operating cost per gold ounce $ $ $ 988 $ $ $ $ 988
Cash cost per gold ounce $ $ $ 988 $ $ $ $ 988
 

Table 18:
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs
Three months ended September 30, 2012

             
(In thousands except ounces and per ounce costs)   Palmarejo

San
Bartolomé

Kensington Rochester Martha Endeavor Total
Total cash operating cost (Non-U.S. GAAP) $ 6,878 $ 18,504 $ 31,660 $ 7,853 $ 4,461 $ 2,241 $ 71,597
Royalties 1,879 1,441 100 3,420
Production taxes                            
Total cash costs (Non-U.S. GAAP) $ 6,878   $ 20,383   $ 31,660   $ 9,294   $ 4,561   $ 2,241   $ 75,017  
Add/Subtract:
Third party smelting costs (3,141 ) (541 ) (605 ) (4,287 )
By-product credit 39,034 17,506 124 56,664
Other adjustments 424 720 2 85 798 2,029
Change in inventory 2,337 (1,166 ) (1,639 ) (5,871 ) 1,539 345 (4,455 )
Depreciation, depletion and amortization   33,997     4,161     11,512     2,061     66     898     52,695  

Production costs applicable to sales, including

depreciation, depletion and amortization (U.S.
GAAP)

$ 82,670   $ 24,098   $ 38,394   $ 23,075   $ 6,547   $ 2,879   $ 177,663  
Production of silver (ounces) 1,833,109 1,525,725 819,349 92,698 140,267 4,411,148
Cash operating cost per silver ounce $ 3.75 $ 12.13 $ $ 9.58 $ 48.12 $ 15.97 $ 9.05
Cash costs per silver ounce $ 3.75 $ 13.36 $ $ 11.34 $ 49.20 $ 15.97 $ 9.83
Production of gold (ounces) 24,391 24,391
Cash operating cost per gold ounce $ $ $ 1,298 $ $ $ $ 1,298
Cash cost per gold ounce $ $ $ 1,298 $ $ $ $ 1,298
 

Table 19:
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs
Nine months ended September 30, 2013

             
(In thousands except ounces and per ounce costs)   Palmarejo

San
Bartolomé

Kensington Rochester

Martha
(A)

Endeavor Total
Total cash operating cost (Non-U.S. GAAP) $ 15,619 $ 57,661 $ 81,108 $ 42,548 $ $ 6,515 $ 203,451
Royalties 4,187 1,025 5,212
Production taxes       1,186       1,186  
Total cash costs (Non-U.S. GAAP) $ 15,619   $ 61,848   $ 81,108   $ 44,759   $   $ 6,515   $ 209,849  
Add/Subtract:
Third party smelting costs (8,424 ) (2,029 ) (10,453 )
By-product credit 116,854 34,085 150,939
Other adjustments 1,213 935 2,148
Change in inventory 15,090 3,382 8,518 (16,426 ) 390 10,954
Depreciation, depletion and amortization 98,120   14,606   44,837   7,364     2,938   167,865  

Production costs applicable to sales, including
depreciation, depletion and amortization (U.S.
GAAP)

$ 246,896   $ 80,771   $ 126,039   $ 69,782   $   $ 7,814   $ 531,302  
Production of silver (ounces) 5,609,215 4,442,396 2,086,702 533,271 12,671,584
Cash operating cost per silver ounce $ 2.78 $ 12.98 $ $ 20.39 $ $ 12.22 $ 9.66
Cash costs per silver ounce $ 2.78 $ 13.92 $ $ 21.45 $ $ 12.22 $ 10.16
Production of gold (ounces) 77,418 77,418
Cash operating cost per gold ounce $ $ $ 1,048 $ $ $ $ 1,048
Cash cost per gold ounce $ $ $ 1,048 $ $ $ $ 1,048
 

Table 20:
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs
Nine months ended September 30, 2012

             
(In thousands except ounces and per ounce costs)   Palmarejo

San
Bartolomé

Kensington Rochester Martha Endeavor Total
Total cash operating cost (Non-U.S. GAAP) $ (774 ) $ 51,006 $ 80,911 $ 25,164 $ 16,110 $ 10,571 $ 182,988
Royalties 5,372 1,959 305 7,636
Production taxes       1,255       1,255  
Total cash costs (Non-U.S. GAAP) $ (774 ) $ 56,378   $ 80,911   $ 28,378   $ 16,415   $ 10,571   $ 191,879  
Add/Subtract:
Third party smelting costs (7,044 ) (3,959 ) (2,843 ) (13,846 )
By-product credit 141,923 42,758 422 185,103
Other adjustments 792 642 17 401 882 2,734
Change in inventory 15,129 (703 ) (13,805 ) (20,206 ) 3,516 (457 ) (16,526 )

Depreciation, depletion and amortization

114,499   12,450   27,836   5,763   1,216   4,134   165,898  

Production costs applicable to sales, including
depreciation, depletion and amortization (U.S.
GAAP)

$ 271,569   $ 68,767   $ 87,915   $ 57,094   $ 18,492   $ 11,405   $ 515,242  
Production of silver (ounces) 6,681,407 4,587,359 1,973,392 323,286 628,393 14,193,197
Cash operating cost per silver ounce $ (0.12 ) $ 11.12 $ $ 12.75 $ 49.82 $ 16.82 $ 7.19
Cash costs per silver ounce $ (0.12 ) $ 12.29 $ $ 14.38 $ 50.76 $ 16.82 $ 7.82
Production of gold (ounces) 53,407 53,407
Cash operating cost per gold ounce $ $ $ 1,515 $ $ $ $ 1,515
Cash cost per gold ounce $ $ $ 1,515 $ $ $ $ 1,515
 

Table 21:
Co-Product Cash Cost Per Ounce for Three and Nine months ended September 30, 2013 - (Unaudited)

   

Three months ended
September 30, 2013

Nine months ended
September 30, 2013

Palmarejo   Rochester Palmarejo   Rochester
Total cash operating costs $ 45,116 $ 27,735 $ 132,473 $ 76,632
Total cash costs $ 45,116 $ 27,657 $ 132,473 $ 78,844
Revenue
Silver 51% 64% 54% 57%
Gold 49% 36% 46% 43%
Ounces produced
Silver 1,917,850 595,268 5,609,215 2,086,702
Gold 29,893 4,824 81,049 22,971
Total cash operating costs per ounce
Silver $ 12.09 $ 29.92 $ 12.75 $ 21.05
Gold $ 734 $ 2,057 $ 752 $ 1,423
Total cash costs per ounce
Silver $ 12.09 $ 29.84 $ 12.75 $ 21.66
Gold $ 734 $ 2,051 $ 752 $ 1,465
 

Table 22:
Co-Product Cash Cost Per Ounce for Three and Nine months ended September 30, 2012 - (Unaudited)

   

Three months ended
September 30, 2012

Nine months ended

September 30, 2012

Palmarejo   Rochester Palmarejo   Rochester
Total cash operating costs $ 45,912 $ 25,359 $ 141,149 $ 67,923
Total cash costs $ 45,912 $ 26,800 $ 141,149 $ 71,136
Revenue
Silver 59 % 56 % 59 % 59 %
Gold 41 % 44 % 41 % 41 %
Ounces produced
Silver 1,833,109 819,349 6,681,407 1,973,392
Gold 23,702 10,599 86,040 26,012
Total cash operating costs per ounce
Silver $ 14.66 $ 17.48 $ 12.45 $ 20.31
Gold $ 803 $ 1,041 $ 674 $ 1,070
Total cash costs per ounce
Silver $ 14.66 $ 18.48 $ 12.45 $ 21.27
Gold $ 803 $ 1,100 $ 674 $ 1,121
 

Contact:
Coeur Mining, Inc.
Bridget Freas, 312-489-5819
Director, Investor Relations
or
Donna Mirandola, 312-489-5842
Director, Corporate Communications
www.coeur.com

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