Coeur Reports Third Quarter 2023 Results
Stronger quarter-over-quarter revenue and cost performance
Rochester expansion now complete; significant production increase now underway
CHICAGO, November 08, 2023--(BUSINESS WIRE)--Coeur Mining, Inc. ("Coeur" or the "Company") (NYSE: CDE) today reported third quarter 2023 financial results, including revenue of $195 million and cash flow from operating activities of $(2) million. The Company reported GAAP net loss from continuing operations of $21 million, or $0.06 per share. On an adjusted basis1, Coeur reported EBITDA of $31 million, cash flow from operating activities before changes in working capital of $14 million and net loss from continuing operations of $19 million, or $0.05 per share.
Key Highlights
Increased revenue and adjusted EBITDA driven by stronger gold production and lower costs – Revenue increased 10% and adjusted EBITDA increased 38% quarter-over-quarter, due to a 15% quarter-over-quarter increase in gold production and a 13% quarter-over-quarter decline in adjusted costs applicable to sales per gold ounce
Rochester expansion project now complete – First production from the new leach pad and process plant was achieved in mid-September. The legacy crushing circuit is now being decommissioned in preparation of mining expected to begin in that location in 2024
Material step-up in Rochester production now occurring – During the month of October, Rochester recovered 537,000 ounces of silver and 8,050 ounces of gold, which is more than double the year-to-date monthly average silver production and more than triple the year-to-date monthly average gold production
Gold production and cost guidance updated; silver guidance remains unchanged – A stronger anticipated fourth quarter at Wharf is expected to offset adjusted gold production guidance at Kensington. The low end of total 2024 production guidance remains unchanged and the overall range has narrowed to 304,000 - 342,500 ounces. Additionally, Kensington cost guidance has been revised to reflect the impact of revised production expectations. Silver full-year production guidance of 10 - 12 million ounces remains unchanged
Balance sheet and hedging initiatives supporting remaining capital requirements – With elevated capital investment levels related to the recently completed Rochester expansion expected through year-end, Coeur ended the quarter with total liquidity2 of approximately $280 million. Realized and unrealized gains from the Company’s 2023 gold and silver hedges total nearly $20 million at quarter-end, providing meaningful downside protection through this period of capital intensity
"Our overall gold production increased 15% quarter-over-quarter while costs applicable to sales per ounce of gold declined by 13%, which led to a 38% increase in adjusted EBITDA," said Mitchell J. Krebs, President and Chief Executive Officer. "This production growth was driven by an 87% increase at our Kensington gold operation in Alaska and a 16% increase in gold production at our Palmarejo gold-silver mine in northern Mexico. Despite slightly lower gold production from our Wharf mine and the ongoing transition to the newly expanded Rochester infrastructure, the third quarter represented a marked improvement over the prior quarter and sets up the Company to deliver a strong fourth quarter and to achieve our full-year guidance.
"With the Rochester expansion complete, we are now seeing materially higher production levels, a trend that is expected to continue throughout the current quarter and into next year to help drive strong Company-wide production growth, lower costs, and a transition to positive free cash flow during 2024. Commissioning and ramp-up activities will continue over the remainder of the year and into the first half of 2024, which is expected to result in one of the world’s largest operations of its kind and become the country’s largest source of domestically produced and refined silver."
Financial and Operating Highlights (Unaudited)
(Amounts in millions, except per share amounts, gold ounces produced & sold, and per-ounce metrics) | 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | ||||||||||
Gold Sales | $ | 139.5 | $ | 121.4 | $ | 127.1 | $ | 157.6 | $ | 139.2 | |||||
Silver Sales | $ | 55.1 | $ | 55.9 | $ | 60.2 | $ | 52.5 | $ | 43.8 | |||||
Consolidated Revenue | $ | 194.6 | $ | 177.2 | $ | 187.3 | $ | 210.1 | $ | 183.0 | |||||
Costs Applicable to Sales3 | $ | 147.9 | $ | 139.6 | $ | 153.1 | $ | 159.3 | $ | 163.2 | |||||
General and Administrative Expenses | $ | 9.5 | $ | 9.8 | $ | 12.1 | $ | 10.2 | $ | 9.7 | |||||
Net Income (Loss) | $ | (21.1 | ) | $ | (32.4 | ) | $ | (24.6 | ) | $ | 49.0 | $ | (57.4 | ) | |
Net Income (Loss) Per Share | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.08 | ) | $ | 0.17 | $ | (0.21 | ) | |
Adjusted Net Income (Loss)1 | $ | (18.6 | ) | $ | (20.2 | ) | $ | (33.1 | ) | $ | (17.5 | ) | $ | (44.7 | ) |
Adjusted Net Income (Loss)1 Per Share | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.06 | ) | $ | (0.16 | ) |
Weighted Average Shares Outstanding | 356.7 | 333.1 | 301.0 | 284.5 | 278.1 | ||||||||||
EBITDA1 | $ | 15.3 | $ | 4.0 | $ | 16.2 | $ | 84.9 | $ | (20.5 | ) | ||||
Adjusted EBITDA1 | $ | 30.6 | $ | 22.2 | $ | 25.1 | $ | 35.9 | $ | 18.3 | |||||
Cash Flow from Operating Activities | $ | (2.4 | ) | $ | 39.4 | $ | (35.0 | ) | $ | 28.5 | $ | (19.1 | ) | ||
Capital Expenditures | $ | 112.3 | $ | 85.6 | $ | 74.0 | $ | 113.1 | $ | 96.6 | |||||
Free Cash Flow1 | $ | (114.7 | ) | $ | (46.2 | ) | $ | (109.0 | ) | $ | (84.5 | ) | $ | (115.7 | ) |
Cash, Equivalents & Short-Term Investments | $ | 53.2 | $ | 56.8 | $ | 67.0 | $ | 61.5 | $ | 75.4 | |||||
Total Debt4 | $ | 512.2 | $ | 469.4 | $ | 494.1 | $ | 515.9 | $ | 635.7 | |||||
Average Realized Price Per Ounce – Gold | $ | 1,788 | $ | 1,809 | $ | 1,794 | $ | 1,787 | $ | 1,702 | |||||
Average Realized Price Per Ounce – Silver | $ | 24.88 | $ | 23.91 | $ | 23.25 | $ | 21.14 | $ | 19.09 | |||||
Gold Ounces Produced | 78,617 | 68,406 | 69,039 | 87,727 | 83,438 | ||||||||||
Silver Ounces Produced | 2.3 | 2.4 | 2.5 | 2.4 | 2.4 | ||||||||||
Gold Ounces Sold | 78,015 | 67,090 | 70,866 | 88,189 | 81,782 | ||||||||||
Silver Ounces Sold | 2.2 | 2.3 | 2.6 | 2.5 | 2.3 | ||||||||||
Adjusted CAS per AuOz1 | $ | 1,273 | $ | 1,464 | $ | 1,381 | $ | 1,270 | $ | 1,318 | |||||
Adjusted CAS per AgOz1 | $ | 17.85 | $ | 16.77 | $ | 15.83 | $ | 15.57 | $ | 14.52 |
Financial Results
Third quarter 2023 revenue totaled $195 million compared to $177 million in the prior period and $183 million in the third quarter of 2022. The Company produced 78,617 and 2.3 million ounces of gold and silver, respectively, during the quarter. Metal sales for the quarter totaled 78,015 ounces of gold and 2.2 million ounces of silver. Average realized gold and silver prices for the quarter were $1,788 and $24.88 per ounce, respectively, compared to $1,809 and $23.91 per ounce in the prior period and $1,702 and $19.09 per ounce in the third quarter of 2022.
Gold and silver sales represented 72% and 28% of quarterly revenue, respectively, compared to 68% and 32% in the prior period. The Company’s U.S. operations accounted for approximately 60% of third quarter revenue compared to 59% in the second quarter of 2023.
Costs applicable to sales3 increased 6% quarter-over-quarter to $148 million, largely due to an $8 million LCM adjustment at Rochester. General and administrative expenses continued to trend lower at less than $10 million in the quarter.
Coeur invested approximately $16 million ($12 million expensed and $3 million capitalized) in exploration during the quarter, compared to roughly $5 million ($3 million expensed and $2 million capitalized) in the prior period. See the "Operations" and "Exploration" sections for additional detail on the Company’s exploration activities.
The Company recorded income tax expense of approximately $6.1 million during the third quarter. Cash income and mining taxes paid during the period totaled approximately $6.6 million. As of December 31, 2022, Companywide U.S. net operating loss carryforwards totaled approximately $535 million.
Quarterly operating cash flow totaled $(2) million compared to $39 million in the prior period, mainly driven by unfavorable changes in working capital, timing of prepayments and the semi-annual interest payments on the Company’s 2029 5.125% Senior Notes.
Capital expenditures increased 31% quarter-over-quarter to $112 million, which was due to the timing of payments relating to the Rochester expansion. Rochester expansion-related expenditures totaled $76 million during the third quarter compared to $55 million in the second quarter. Sustaining and development capital expenditures accounted for approximately $34 million and $78 million, or 31% and 69%, respectively, of Coeur’s total capital investment during the quarter.
Rochester Expansion Project Update
Construction of the new three-stage crushing circuit is now complete and first production from the new leach pad and process plant began in mid-September. Commissioning of the process plant is complete and commissioning of the new crusher corridor is underway, with ramp-up expected throughout the remainder of 2023 and into the first half of 2024.
Once operating at full capacity, throughput levels are expected to average 32 million tons per year, which is approximately 2.5 times higher than historical levels, making Rochester one of the largest open pit heap leach operations in the world. The total estimated capital for the project remains at $710 - $730 million.
Balance Sheet and Liquidity Update
Coeur ended the quarter with total liquidity of approximately $280 million, including $53 million of cash, $220 million of available capacity under its $390 million revolving credit facility ("RCF")2, and $7 million of marketable securities.
During the third quarter, Coeur satisfied $11 million of the $25 million associated with the prepayment agreement at Kensington as well as the full $10 million prepayment agreements at both Rochester and Wharf, respectively. Additionally, the Company exercised options under amended agreements for a $13 million prepayment for deliveries of gold concentrate from Wharf as well as an $18 million prepayment for deliveries of gold and silver doré from Rochester.
Hedging Update
The Company did not execute any additional hedges during the third quarter. Coeur’s hedging strategy continues to focus on mitigating price risk during this period of capital intensity. An overview of the hedges in place is outlined below.
4Q 2023 | |
Gold Ounces Hedged | 55,749 |
Avg. Forward Price ($/oz) | $1,977 |
Silver Ounces Hedged | 1,245,000 |
Avg. Forward Price ($/oz) | $25.47 |
Rochester LCM Adjustment
Coeur reports the carrying value of metal and leach pad inventory at the lower of cost or net realizable value, with cost being determined using a weighted average cost method. Decreases in the market price of gold and silver can affect the value of metal inventory, stockpiles and leach pads, and it may be necessary to record a write-down to the net realizable value, as well as impact carrying value of long-lived assets. At the end of the third quarter, the cost of ore on leach pads at Rochester exceeded its net realizable value which resulted in a lower of cost or market ("LCM") adjustment of $9 million (approximately $8 million in costs applicable to sales2 and $1 million of amortization).
Operations
Third quarter 2023 highlights for each of the Company’s operations are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce amounts) | 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | ||||||||||
Tons milled | 501,722 | 472,622 | 533,606 | 554,247 | 538,750 | ||||||||||
Average gold grade (oz/t) | 0.055 | 0.056 | 0.052 | 0.051 | 0.049 | ||||||||||
Average silver grade (oz/t) | 3.67 | 4.10 | 4.02 | 3.16 | 3.53 | ||||||||||
Average recovery rate – Au | 97.6 | % | 87.4 | % | 90.1 | % | 92.4 | % | 93.3 | % | |||||
Average recovery rate – Ag | 86.9 | % | 83.5 | % | 81.7 | % | 85.0 | % | 84.9 | % | |||||
Gold ounces produced | 26,870 | 23,216 | 25,118 | 25,935 | 24,807 | ||||||||||
Silver ounces produced (000’s) | 1,601 | 1,617 | 1,752 | 1,489 | 1,612 | ||||||||||
Gold ounces sold | 26,018 | 22,207 | 25,970 | 25,252 | 24,378 | ||||||||||
Silver ounces sold (000’s) | 1,534 | 1,561 | 1,795 | 1,490 | 1,554 | ||||||||||
Average realized price per gold ounce | $ | 1,499 | $ | 1,589 | $ | 1,564 | $ | 1,509 | $ | 1,447 | |||||
Average realized price per silver ounce | $ | 24.96 | $ | 23.98 | $ | 23.23 | $ | 21.10 | $ | 19.01 | |||||
Metal sales | $ | 77.3 | $ | 72.7 | $ | 82.3 | $ | 69.5 | $ | 64.8 | |||||
Costs applicable to sales3 | $ | 48.1 | $ | 46.6 | $ | 49.3 | $ | 47.1 | $ | 43.2 | |||||
Adjusted CAS per AuOz1 | $ | 917 | $ | 1,023 | $ | 926 | $ | 1,027 | $ | 948 | |||||
Adjusted CAS per AgOz1 | $ | 15.56 | $ | 15.16 | $ | 13.94 | $ | 14.23 | $ | 12.67 | |||||
Exploration expense | $ | 2.2 | $ | 1.6 | $ | 1.3 | $ | 1.5 | $ | 1.8 | |||||
Cash flow from operating activities | $ | 22.6 | $ | 18.6 | $ | 11.5 | $ | 18.9 | $ | 12.9 | |||||
Sustaining capital expenditures (excludes capital lease payments) | $ | 8.4 | $ | 10.7 | $ | 8.6 | $ | 8.1 | $ | 10.8 | |||||
Development capital expenditures | $ | 2.4 | $ | 1.2 | $ | 1.6 | $ | — | $ | — | |||||
Total capital expenditures | $ | 10.8 | $ | 11.9 | $ | 10.2 | $ | 8.1 | $ | 10.8 | |||||
Free cash flow1 | $ | 11.8 | $ | 6.7 | $ | 1.3 | $ | 10.8 | $ | 2.1 |
Operational
Gold and silver production totaled 26,870 and 1.6 million ounces, respectively, compared to 23,216 and 1.6 million ounces in the prior period and 24,807 and 1.6 million ounces in the third quarter of 2022
Production benefited from higher average gold and silver recoveries as well as increased mill throughput, offset by lower average grades
During the third quarter, the Company completed its high compression thickener and open pit backfill project at Palmarejo under budget and ahead of schedule. The project increases tailings and waste rock storage capacity to accommodate future growth while decreasing process water requirements by nearly 20%
Financial
Adjusted CAS1 for gold and silver on a co-product basis decreased 10% and increased 3% quarter-over-quarter to $917 and $15.56 per ounce, respectively, driven by higher gold sales, lower silver sales and a stronger Mexican Peso
Capital expenditures decreased 9% quarter-over-quarter to $11 million, reflecting completion of the open pit tailings backfill project
Free cash flow1 totaled $12 million compared to $7 million in the prior period
Exploration
Exploration investment increased by 38% over the prior period to approximately $2 million (substantially all expensed)
The focus of exploration has transitioned from primarily mapping and sampling to more intensive drilling from four rigs during the quarter compared to one rig in the previous quarter. Two rigs in the Hidalgo - Morelos area located at the northwest extension of Independencia targeted the extension of the Libertad vein and the San Juan vein along strike and down dip. An additional drill rig in the Zapata - Guadalupe area focused on finding the intersection of structures where there is potential for a higher-grade shoot. The fourth rig focused on the Las Animas target, aimed at extending the resource along strike and down dip
Mapping and sampling is also continuing to the east of the current operation and outside of the area of interest relating to the Franco-Nevada gold stream. The goal of the mapping and sampling program is to build a pipeline of targets for drilling in the coming years
Coeur expects a total of five drill rigs to be active at Palmarejo in the fourth quarter, focused on expansion drilling at the Hidalgo, Las Animas and Zapata - Guadalupe zones
Other
Approximately 41% of Palmarejo’s gold sales were sold under its gold stream agreement at a price of $800 per ounce. The Company anticipates approximately 30% - 40% of Palmarejo’s gold sales for 2023 will be sold under the gold stream agreement
Guidance
Full-year 2023 production is expected to be 100,000 - 112,500 ounces of gold and 6.5 - 7.5 million ounces of silver
CAS1 in 2023 are expected to be $900 - $1,050 per gold ounce and $14.25 - $15.25 per silver ounce
Capital expenditures are expected to be $35 - $47 million, consisting primarily of underground development as well as development of the high compression thickener and other elements of the open pit backfill project
Rochester, Nevada
(Dollars in millions, except per ounce amounts) | 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | ||||||||||
Ore tons placed | 3,487,173 | 2,690,840 | 2,456,586 | 2,754,118 | 3,551,353 | ||||||||||
Average silver grade (oz/t) | 0.50 | 0.42 | 0.45 | 0.68 | 0.37 | ||||||||||
Average gold grade (oz/t) | 0.003 | 0.003 | 0.003 | 0.003 | 0.004 | ||||||||||
Silver ounces produced (000’s) | 608 | 683 | 761 | 973 | 745 | ||||||||||
Gold ounces produced | 4,459 | 6,314 | 8,155 | 11,589 | 8,761 | ||||||||||
Silver ounces sold (000’s) | 606 | 695 | 770 | 975 | 733 | ||||||||||
Gold ounces sold | 4,432 | 6,493 | 8,349 | 11,646 | 8,725 | ||||||||||
Average realized price per silver ounce | $ | 24.63 | $ | 23.70 | $ | 23.19 | $ | 21.10 | $ | 19.10 | |||||
Average realized price per gold ounce | $ | 1,967 | $ | 1,946 | $ | 1,922 | $ | 1,893 | $ | 1,852 | |||||
Metal sales | $ | 23.6 | $ | 29.1 | $ | 33.9 | $ | 42.6 | $ | 30.2 | |||||
Costs applicable to sales3 | $ | 30.5 | $ | 26.1 | $ | 42.9 | $ | 44.1 | $ | 50.8 | |||||
Adjusted CAS per AgOz1 | $ | 23.64 | $ | 20.39 | $ | 20.24 | $ | 17.60 | $ | 18.46 | |||||
Adjusted CAS per AuOz1 | $ | 1,899 | $ | 1,646 | $ | 1,655 | $ | 1,596 | $ | 1,821 | |||||
Prepayment, working capital cash flow | $ | 7.5 | $ | 10.0 | $ | — | $ | — | $ | — | |||||
Exploration expense | $ | 0.3 | $ | 0.3 | $ | 0.4 | $ | 0.6 | $ | 0.6 | |||||
Cash flow from operating activities | $ | (17.3 | ) | $ | (3.8 | ) | $ | (13.5 | ) | $ | (5.5 | ) | $ | (13.7 | ) |
Sustaining capital expenditures (excludes capital lease payments) | $ | 7.7 | $ | 5.1 | $ | 4.3 | $ | 3.0 | $ | 5.1 | |||||
Development capital expenditures | $ | 76.7 | $ | 56.4 | $ | 47.7 | $ | 89.3 | $ | 68.9 | |||||
Total capital expenditures | $ | 84.4 | $ | 61.5 | $ | 52.0 | $ | 92.3 | $ | 74.0 | |||||
Free cash flow1 | $ | (101.7 | ) | $ | (65.3 | ) | $ | (65.5 | ) | $ | (97.8 | ) | $ | (87.7 | ) |
Operational
Silver and gold production totaled 607,735 and 4,459 ounces, respectively, compared to 682,656 and 6,314 ounces in the prior period and 744,880 and 8,761 ounces in the third quarter of 2022. Lower production quarter-over-quarter is a result of the timing of production from the new leach pad related to startup on the new process plant
Tons placed increased 30% quarter-over-quarter to roughly 3.5 million, roughly 80% of which were placed on the new leach pad
On November 1, 2023 Coeur commenced the decommissioning of the existing crushing circuit in preparation to begin mining in the area at the beginning of 2024 and to affect a smooth transition of the crusher workforce to the new crushing circuit
Financial
Third quarter adjusted CAS1 figures in the table above and highlighted below exclude the impact of an LCM adjustment totaling approximately $8 million related to the net realizable value of metal and leach pad inventory due to higher operating costs exceeding the lower market value of ounces under leach at Rochester
Adjusted CAS1 for silver and gold on a co-product basis totaled $1,899 and $23.64 per ounce, respectively, due to continued higher costs as well as lower metal sales
Capital expenditures increased 37% quarter-over-quarter to $84 million, reflecting timing of spending related to the Rochester expansion project
Free cash flow1 totaled $(102) million compared to $(65) million in the prior period
Exploration
Exploration investment decreased 17% quarter-over-quarter to approximately $1 million ($0.3 million expensed and $0.2 million capitalized)
Exploration activities focused on geologic logging, interpretation and geological modeling. A new geological model for the East Rochester pit is almost complete which clearly illustrates the controls to mineralization and places the Rochester - Nevada Packard corridor into geological context. In addition, the model has outlined compelling new exploration targets for follow-up in 2024 and beyond
Additionally, work continued on regional target assessment and ranking. The program will continue for the remainder of the year and systematically thereafter as geological knowledge and understanding of the district increases
Guidance
Full-year 2023 production is expected to be 3.5 - 4.5 million ounces of silver and 35,000 - 50,000 ounces of gold. Production in 2023 is expected to be second-half weighted due to timing of construction completion
The Company expects second half 2023 adjusted CAS1 to be similar to actual first half 2023 adjusted CAS1 as Coeur completes and ramps up the Rochester expansion
Capital expenditures are expected to be $290 - $310 million, which reflects Coeur’s estimate to complete the expansion project
Kensington, Alaska
(Dollars in millions, except per ounce amounts) | 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | ||||||||||
Tons milled | 167,950 | 152,907 | 153,337 | 183,410 | 175,246 | ||||||||||
Average gold grade (oz/t) | 0.16 | 0.09 | 0.15 | 0.18 | 0.18 | ||||||||||
Average recovery rate | 92.6 | % | 90.9 | % | 91.2 | % | 92.4 | % | 91.1 | % | |||||
Gold ounces produced | 24,614 | 13,193 | 20,296 | 30,335 | 28,214 | ||||||||||
Gold ounces sold | 24,516 | 13,273 | 20,902 | 30,863 | 27,609 | ||||||||||
Average realized price per gold ounce, gross | $ | 1,956 | $ | 1,991 | $ | 1,983 | $ | 1,942 | $ | 1,808 | |||||
Treatment and refining charges per gold ounce | $ | 60 | $ | 142 | $ | 63 | $ | 38 | $ | 33 | |||||
Average realized price per gold ounce, net | $ | 1,896 | $ | 1,849 | $ | 1,920 | $ | 1,904 | $ | 1,775 | |||||
Metal sales | $ | 46.5 | $ | 24.6 | $ | 40.2 | $ | 58.8 | $ | 49.1 | |||||
Costs applicable to sales3 | $ | 38.3 | $ | 39.1 | $ | 37.4 | $ | 39.2 | $ | 40.3 | |||||
Adjusted CAS per AuOz1 | $ | 1,543 | $ | 2,927 | $ | 1,775 | $ | 1,265 | $ | 1,455 | |||||
Prepayment, working capital cash flow | $ | (10.7 | ) | $ | 9.9 | $ | (9.9 | ) | $ | 9.6 | $ | (9.6 | ) | ||
Exploration expense | $ | 2.9 | $ | 2.3 | $ | 1.0 | $ | 2.2 | $ | 2.8 | |||||
Cash flow from operating activities | $ | (4.4 | ) | $ | (3.7 | ) | $ | (4.8 | ) | $ | 20.8 | $ | (0.2 | ) | |
Sustaining capital expenditures (excludes capital lease payments) | $ | 15.8 | $ | 11.7 | $ | 10.7 | $ | 7.7 | $ | 7.1 | |||||
Development capital expenditures | $ | — | $ | — | $ | — | $ | — | $ | — | |||||
Total capital expenditures | $ | 15.8 | $ | 11.7 | $ | 10.7 | $ | 7.7 | $ | 7.1 | |||||
Free cash flow1 | $ | (20.2 | ) | $ | (15.4 | ) | $ | (15.5 | ) | $ | 13.1 | $ | (7.3 | ) |
Operational
Gold production totaled 24,614 ounces compared to 13,193 ounces in the prior period and 28,214 ounces in the third quarter of 2022
Higher production during the quarter was driven by improved access to high grade stopes as a result of the resolution of water inflow challenges and improvements in the paste backfill process
Financial
Adjusted CAS1 totaled $1,543 per ounce compared to $2,927 per ounce in the prior period, reflecting increased metal sales
Capital expenditures increased 35% quarter-over-quarter to $16 million due to increased capital development to support the ongoing multi-year exploration program aimed at extending mine life
Free cash flow1 totaled $(20) million compared to $(15) million in the prior period
Exploration
Exploration investment totaled approximately $6 million ($3 million expensed and $3 million capitalized), compared to $5 million ($2 million expensed and $3 million capitalized) in the prior period
Up to four underground drill rigs were focused on expansion and infill drilling at Elmira, Kensington and Johnson with one surface rig scout-drilling the Raven deposit. Drilling at both Upper and Lower Kensington is continuing to demonstrate the continuation of structures down dip and along strike
At Lower Kensington, some of the best grade thickness intercepts ever encountered were seen during the quarter, as highlighted in the Company’s September 12, 2023 exploration update. In addition, exploration has discovered a hanging wall splay and is starting to outline linking structures between the main vein and this splay, which presents the potential for higher-grade plunging shoots. In Upper Kensington, a new zone, Zone 30C, has been discovered that has so far been delineated over a strike length of approximately 950 feet and 800 feet down dip
In the fourth quarter, the Company expects to continue with infill and expansion drilling from underground in addition to continuing geological modeling to support year-end resource calculations
Guidance
Improved production and CAS1 trends at Kensington are expected to continue in the fourth quarter, but the Company has refined 2023 gold production and cost guidance to reflect the cumulative impact of paste backfill challenges earlier in the year
Full-year 2023 production is now expected to be 81,000 - 85,000 (previously 84,000 - 95,000) gold ounces
CAS1 in 2023 are now expected to be $1,850 - $1,950 (previously $1,650 - $1,750) per gold ounce
Capital expenditures are expected to be $50 - $62 million, of which approximately $28 - $34 million and $6 - $10 million is related to underground and infill drilling, respectively, as part of the multi-year exploration program
Wharf, South Dakota
(Dollars in millions, except per ounce amounts) | 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | |||||
Ore tons placed | 1,254,267 | 1,041,846 | 1,156,794 | 975,994 | 1,353,071 | |||||
Average gold grade (oz/t) | 0.023 | 0.022 | 0.032 | 0.024 | 0.019 | |||||
Gold ounces produced | 22,674 | 25,683 | 15,470 | 19,868 | 21,656 | |||||
Silver ounces produced (000’s) | 69 | 88 | 21 | 9 | 13 | |||||
Gold ounces sold | 23,049 | 25,117 | 15,645 | 20,428 | 21,070 | |||||
Silver ounces sold (000’s) | 74 | 82 | 24 | 17 | 8 | |||||
Average realized price per gold ounce | $ | 1,966 | $ | 1,946 | $ | 1,938 | $ | 1,895 | $ | 1,838 |
Metal sales | $ | 47.1 | $ | 50.8 | $ | 30.9 | $ | 39.0 | $ | 38.9 |
Costs applicable to sales3 | $ | 31.0 | $ | 27.8 | $ | 23.5 | $ | 28.9 | $ | 28.9 |
Adjusted CAS per AuOz1 | $ | 1,267 | $ | 1,035 | $ | 1,466 | $ | 1,393 | $ | 1,357 |
Prepayment, working capital cash flow | $ | 2.5 | $ | 10.0 | $ | — | $ | — | $ | — |
Exploration expense | $ | — | $ | — | $ | — | $ | — | $ | — |
Cash flow from operating activities | $ | 19.5 | $ | 33.8 | $ | 1.9 | $ | 10.3 | $ | 6.9 |
Sustaining capital expenditures (excludes capital lease payments) | $ | 0.6 | $ | 0.1 | $ | — | $ | 0.7 | $ | 0.3 |
Development capital expenditures | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.2 |
Total capital expenditures | $ | 0.7 | $ | 0.2 | $ | 0.1 | $ | 0.8 | $ | 0.5 |
Free cash flow1 | $ | 18.8 | $ | 33.6 | $ | 1.8 | $ | 9.5 | $ | 6.4 |
Operational
Gold production decreased 12% quarter-over-quarter to 22,674 ounces, largely driven by the timing of ounces placed on the leach pad in the second quarter. Year-over-year production increased 5%
Financial
Adjusted CAS1 on a by-product basis increased 22% quarter-over-quarter to $1,267 per ounce, largely driven by lower metal sales
Capital expenditures remained consistent quarter-over-quarter at less than $1 million
Free cash flow1 totaled $19 million compared to $34 million in the prior period, reflecting lower metal sales
Exploration
Exploration investment remained flat quarter-over-quarter
Throughout 2023, the focus will remain on geological modeling
Guidance
Full-year 2023 production is expected to be 88,000 - 95,000 (previously 85,000 - 95,000) gold ounces
CAS1 in 2023 are expected to be $1,200 - $1,350 per gold ounce
Capital expenditures are expected to be $1 - $4 million
Exploration
Coeur had up to 13 active rigs across all sites during the second quarter, for a total investment of approximately $16 million ($12 million expensed and $3 million capitalized), compared to roughly $5 million ($3 million expensed and $2 million capitalized) in the prior period. The Company expects full year 2023 exploration investment to be approximately $40 - $50 million ($30 - $35 million expensed and $10 - $15 million capitalized), with the focus on Kensington, Palmarejo and Silvertip. The Company has invested nearly $245 million in exploration over the last five years, which has resulted in significant additions to reserves and resources across the portfolio.
Exploration investment at the Silvertip silver-zinc-lead exploration project in British Columbia, Canada totaled approximately $7 million in the third quarter.
Drilling recommenced at Silvertip late in the second quarter and ramped up significantly during the third quarter with two surface and two underground rigs active. The two underground rigs continued to trace the Southern Silver Zone chimney along strike to the southeast and down dip. These rigs were also well placed to intersect the Saddle zone manto mineralization from underground, and by the end of the quarter 34 of 35 holes had successfully intersected mineralization (visual confirmation). Manto mineralization forms along stratigraphic units and can be more flat-lying, compared to chimney style mineralization which forms on vertical or steeply dipping structures. Surface rigs were focused on the Saddle zone immediately south of the known resource. The aim for this program is to infill-drill previous scout drilling and define a resource in the zone for the first time. The program was successfully completed during the quarter with eight of nine holes intersecting manto-style mineralization at the top of the limestone package (the McDame Limestone) directly below the overlying sediments (the Earn sediments). In addition to mineralization at this contact, drilling showed the potential for stacked manto horizons throughout the McDame limestone unit. The program also indicated that the manto at the Saddle zone likely connects with the manto in the Discovery zone and to the Southern Silver zone chimney mineralization.
Two rigs are expected to be active in the fourth quarter with the goal of expanding resources along strike and down dip at the Southern Silver zone. The Company expects to invest $10 - $14 million in exploration in 2023 at Silvertip, of which roughly $6 - $8 million is underground development.
2023 Guidance
The Company has made the following changes to its 2023 gold production and cost guidance: (i) the low end of Wharf’s gold production guidance has been revised upward; and (ii) Kensington’s 2023 gold production and cost guidance have been refined to reflect the cumulative impact of paste backfill challenges at Kensington earlier in the year.
2023 Production Guidance
Previous | Updated | ||||||
Gold | Silver | Gold | Silver | ||||
(oz) | (K oz) | (oz) | (K oz) | ||||
Palmarejo | 100,000 - 112,500 | 6,500 - 7,500 | 100,000 - 112,500 | 6,500 - 7,500 | |||
Rochester | 35,000 - 50,000 | 3,500 - 4,500 | 35,000 - 50,000 | 3,500 - 4,500 | |||
Kensington | 84,000 - 95,000 | — | 81,000 - 85,000 | — | |||
Wharf | 85,000 - 95,000 | — | 88,000 - 95,000 | — | |||
Total | 304,000 - 352,500 | 10,000 - 12,000 | 304,000 - 342,500 | 10,000 - 12,000 | |||
2023 Costs Applicable to Sales Guidance
Previous | Updated | ||||||
Gold | Silver | Gold | Silver | ||||
($/oz) | ($/oz) | ($/oz) | ($/oz) | ||||
Palmarejo (co-product) | $900 - $1,050 | $14.25 - $15.25 | $900 - $1,050 | $14.25 - $15.25 | |||
Rochester (co-product) | — | — | — | — | |||
Kensington | $1,650 - $1,750 | — | $1,850 - $1,950 | — | |||
Wharf (by-product) | $1,200 - $1,350 | — | $1,200 - $1,350 | — | |||
The Company expects second half 2023 adjusted CAS1 at Rochester to be similar to actual first half 2023 adjusted CAS1 as Coeur completes and ramps up the expansion project.
2023 Capital, Exploration and G&A Guidance
($M) | |||||
Capital Expenditures, Sustaining | $148 - $168 | ||||
Capital Expenditures, Development | $230 - $264 | ||||
Exploration, Expensed | $30 - $35 | ||||
Exploration, Capitalized | $10 - $15 | ||||
General & Administrative Expenses | $36 - $40 |
Note: The Company’s previous guidance figures assume estimated prices of $1,800/oz gold and $23.00/oz silver as well as CAD of 1.25 and MXN of 20.00. The Company’s updated guidance figures assume estimated prices of $1,900/oz gold and $23.00/oz silver as well as CAD of 1.25 and MXN of 20.00. Guidance figures exclude the impact of any metal sales or foreign exchange hedges.
Financial Results and Conference Call
Coeur will host a conference call to discuss its third quarter 2023 financial results on November 9, 2023 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, Aoife McGrath, Senior Vice President of Exploration, and other members of management. A replay of the call will be available through November 16, 2023.
Replay numbers: | (877) 344-7529 (U.S.) | |
(855) 669-9658 (Canada) | ||
(412) 317-0088 (International) | ||
Conference ID: | 214 52 78 |
About Coeur
Coeur Mining, Inc. is a U.S.-based, well-diversified, growing precious metals producer with four wholly-owned operations: the Palmarejo gold-silver complex in Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska and the Wharf gold mine in South Dakota. In addition, the Company wholly-owns the Silvertip silver-zinc-lead exploration project in British Columbia.
Cautionary Statements
This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding cash flow, production growth, costs, exploration and development efforts and plans, mine life extension, the gold stream agreement at Palmarejo, expectations, plans, costs and timing regarding the Rochester expansion project, hedging strategies, anticipated production, costs and expenses and operations at Palmarejo, Rochester, Wharf and Kensington. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Coeur’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the risk that the Rochester expansion project is not completed on a timely basis or requires more capital than currently anticipated for completion, the risk that ramp-up of the Rochester expansion project following completion takes longer than expected and does not achieve planned performance, 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 and expanding 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 or higher treatment and refining charge environment, the uncertainties inherent in Coeur’s production, exploration and development activities, including risks relating to permitting and regulatory delays (including the impact of government shutdowns) and mining law changes, ground conditions, grade and recovery variability, any future labor disputes or work stoppages (involving the Company and its subsidiaries or third parties), the risk of adverse outcomes in litigation, the uncertainties inherent in the estimation of mineral reserves and resources, impacts 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 whom Coeur markets its production, materials and equipment availability, inflationary pressures, continued access to financing sources, 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.
The scientific and technical information concerning our mineral projects in this news release have been reviewed and approved by a "qualified person" under Item 1300 of SEC Regulation S-K, namely our Senior Director, Technical Services, Christopher Pascoe. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and mineral 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, sociopolitical, marketing or other relevant factors, please review the Technical Report Summaries for each of the Company’s material properties which are available at 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 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, 2022.
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) 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. Liquidity is defined as cash and cash equivalents plus availability under the Company’s RCF. Please see tables in Appendix for the calculation of consolidated free cash flow, liquidity and adjusted liquidity. | |
2. | As of September 30, 2023, Coeur had $30 million in outstanding letters of credit and $140 million in outstanding borrowings under its RCF. Future borrowing under the RCF may be subject to certain financial covenants. | |
3. | Excludes amortization. | |
4. | Includes capital leases. Net of debt issuance costs and premium received. | |
Average Spot Prices
3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | ||||||
Average Gold Spot Price Per Ounce | $ | 1,928 | $ | 1,976 | $ | 1,890 | $ | 1,726 | $ | 1,729 |
Average Silver Spot Price Per Ounce | $ | 23.57 | $ | 24.13 | $ | 22.55 | $ | 21.17 | $ | 19.23 |
Average Zinc Spot Price Per Pound | $ | 1.10 | $ | 1.15 | $ | 1.42 | $ | 1.36 | $ | 1.49 |
Average Lead Spot Price Per Pound | $ | 0.98 | $ | 0.96 | $ | 0.97 | $ | 0.95 | $ | 0.90 |
COEUR MINING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
September 30, 2023 | December 31, 2022 | ||||||
ASSETS | In thousands, except share data | ||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 53,223 | $ | 61,464 | |||
Receivables | 30,138 | 36,333 | |||||
Inventory | 66,704 | 61,831 | |||||
Ore on leach pads | 114,314 | 82,958 | |||||
Equity securities | 7,231 | 32,032 | |||||
Prepaid expenses and other | 25,556 | 25,814 | |||||
297,166 | 300,432 | ||||||
NON-CURRENT ASSETS | |||||||
Property, plant and equipment and mining properties, net | 1,639,248 | 1,389,755 | |||||
Ore on leach pads | 36,627 | 51,268 | |||||
Restricted assets | 8,735 | 9,028 | |||||
Equity securities | — | 12,120 | |||||
Receivables | 22,563 | 22,023 | |||||
Other | 65,413 | 61,517 | |||||
TOTAL ASSETS | $ | 2,069,752 | $ | 1,846,143 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 138,979 | $ | 96,123 | |||
Accrued liabilities and other | 116,562 | 92,863 | |||||
Debt | 22,127 | 24,578 | |||||
Reclamation | 5,796 | 5,796 | |||||
283,464 | 219,360 | ||||||
NON-CURRENT LIABILITIES | |||||||
Debt | 490,114 | 491,355 | |||||
Reclamation | 202,220 | 196,635 | |||||
Deferred tax liabilities | 15,390 | 14,459 | |||||
Other long-term liabilities | 30,186 | 35,318 | |||||
737,910 | 737,767 | ||||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS’ EQUITY | |||||||
Common stock, par value $0.01 per share; authorized 600,000,000 shares, 382,693,309 issued and outstanding at September 30, 2023 and 295,697,624 at December 31, 2022 | 3,827 | 2,957 | |||||
Additional paid-in capital | 4,128,553 | 3,891,265 | |||||
Accumulated other comprehensive income (loss) | 11,654 | 12,343 | |||||
Accumulated deficit | (3,095,656 | ) | (3,017,549 | ) | |||
1,048,378 | 889,016 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,069,752 | $ | 1,846,143 | |||
COEUR MINING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
In thousands, except share data | |||||||||||||||
Revenue | $ | 194,583 | $ | 182,993 | $ | 559,116 | $ | 575,520 | |||||||
COSTS AND EXPENSES | |||||||||||||||
Costs applicable to sales(1) | 147,903 | 163,180 | 440,596 | 447,126 | |||||||||||
Amortization | 22,884 | 29,151 | 65,187 | 83,549 | |||||||||||
General and administrative | 9,512 | 9,722 | 31,384 | 29,281 | |||||||||||
Exploration | 12,437 | 8,406 | 20,007 | 19,103 | |||||||||||
Pre-development, reclamation, and other | 8,680 | 9,249 | 29,618 | 29,839 | |||||||||||
Total costs and expenses | 201,416 | 219,708 | 586,792 | 608,898 | |||||||||||
OTHER INCOME (EXPENSE), NET | |||||||||||||||
Gain on debt extinguishment | 774 | — | 3,735 | — | |||||||||||
Fair value adjustments, net | (2,010 | ) | (13,067 | ) | 4,629 | (65,272 | ) | ||||||||
Interest expense, net of capitalized interest | (7,402 | ) | (5,932 | ) | (21,703 | ) | (15,670 | ) | |||||||
Other, net | 459 | 153 | (10,421 | ) | 2,203 | ||||||||||
Total other income (expense), net | (8,179 | ) | (18,846 | ) | (23,760 | ) | (78,739 | ) | |||||||
Income (loss) before income and mining taxes | (15,012 | ) | (55,561 | ) | (51,436 | ) | (112,117 | ) | |||||||
Income and mining tax (expense) benefit | (6,097 | ) | (1,883 | ) | (26,671 | ) | (15,079 | ) | |||||||
NET INCOME (LOSS) | $ | (21,109 | ) | $ | (57,444 | ) | $ | (78,107 | ) | $ | (127,196 | ) | |||
OTHER COMPREHENSIVE INCOME (LOSS): | |||||||||||||||
Change in fair value of derivative contracts designated as cash flow hedges | 7,227 | 29,060 | 7,141 | 58,087 | |||||||||||
Reclassification adjustments for realized (gain) loss on cash flow hedges | (4,920 | ) | (9,910 | ) | (7,830 | ) | (11,181 | ) | |||||||
Other comprehensive income (loss) | 2,307 | 19,150 | (689 | ) | 46,906 | ||||||||||
COMPREHENSIVE INCOME (LOSS) | $ | (18,802 | ) | $ | (38,294 | ) | $ | (78,796 | ) | $ | (80,290 | ) | |||
NET INCOME (LOSS) PER SHARE | |||||||||||||||
Basic income (loss) per share: | |||||||||||||||
Basic | $ | (0.06 | ) | $ | (0.21 | ) | $ | (0.24 | ) | $ | (0.47 | ) | |||
Diluted | $ | (0.06 | ) | $ | (0.21 | ) | $ | (0.24 | ) | $ | (0.47 | ) | |||
(1) Excludes amortization. | |||||||||||||||
COEUR MINING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
In thousands | |||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net income (loss) | $ | (21,109 | ) | $ | (57,444 | ) | $ | (78,107 | ) | $ | (127,196 | ) | |||
Adjustments: | |||||||||||||||
Amortization | 22,884 | 29,151 | 65,187 | 83,549 | |||||||||||
Accretion | 4,153 | 3,596 | 12,219 | 10,588 | |||||||||||
Deferred taxes | (3,872 | ) | (4,730 | ) | 1,536 | (12,288 | ) | ||||||||
Gain on debt extinguishment | (774 | ) | — | (3,735 | ) | — | |||||||||
Fair value adjustments, net | 2,010 | 13,067 | (4,629 | ) | 62,133 | ||||||||||
Stock-based compensation | 2,635 | 2,705 | 8,462 | 7,319 | |||||||||||
Loss on the disposition of assets | 19 | — | 12,650 | — | |||||||||||
Write-downs | 7,727 | 21,204 | 22,467 | 38,018 | |||||||||||
Deferred revenue recognition | (143 | ) | (10,167 | ) | (25,358 | ) | (10,723 | ) | |||||||
Other | 657 | 1,290 | 2,798 | 824 | |||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables | (478 | ) | (119 | ) | 1,659 | 4,099 | |||||||||
Prepaid expenses and other current assets | (3,000 | ) | (2,075 | ) | 764 | 939 | |||||||||
Inventory and ore on leach pads | (18,620 | ) | (13,715 | ) | (54,993 | ) | (42,650 | ) | |||||||
Accounts payable and accrued liabilities | 5,528 | (1,880 | ) | 41,091 | (17,512 | ) | |||||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (2,383 | ) | (19,117 | ) | 2,011 | (2,900 | ) | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Capital expenditures | (112,273 | ) | (96,602 | ) | (271,902 | ) | (239,260 | ) | |||||||
Proceeds from the sale of assets | 152 | — | 8,380 | 16,001 | |||||||||||
Sale of investments | — | 40,469 | 41,558 | 40,469 | |||||||||||
Proceeds from notes receivable | — | — | 5,000 | — | |||||||||||
Other | (63 | ) | (42 | ) | (171 | ) | (63 | ) | |||||||
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (112,184 | ) | (56,175 | ) | (217,135 | ) | (182,853 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Issuance of common stock | 57,522 | — | 168,964 | 98,335 | |||||||||||
Issuance of notes and bank borrowings, net of issuance costs | 163,000 | 100,000 | 388,000 | 255,000 | |||||||||||
Payments on debt, finance leases, and associated costs | (109,268 | ) | (23,211 | ) | (348,092 | ) | (145,515 | ) | |||||||
Other | (23 | ) | (2 | ) | (2,345 | ) | (3,565 | ) | |||||||
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 111,231 | 76,787 | 206,527 | 204,255 | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | (278 | ) | (234 | ) | 374 | 25 | |||||||||
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (3,614 | ) | 1,261 | (8,223 | ) | 18,527 | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 58,560 | 75,555 | 63,169 | 58,289 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 54,946 | $ | 76,816 | $ | 54,946 | $ | 76,816 | |||||||
Adjusted EBITDA Reconciliation | |||||||||||||||||||||||
(Dollars in thousands except per share amounts) | LTM 3Q | 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | |||||||||||||||||
Net income (loss) | $ | (29,018 | ) | $ | (21,109 | ) | $ | (32,412 | ) | $ | (24,586 | ) | $ | 49,089 | $ | (57,444 | ) | ||||||
Interest expense, net of capitalized interest | 29,894 | 7,402 | 6,912 | 7,389 | 8,191 | 5,932 | |||||||||||||||||
Income tax provision (benefit) | 26,250 | 6,097 | 9,866 | 10,708 | (421 | ) | 1,883 | ||||||||||||||||
Amortization | 93,264 | 22,884 | 19,595 | 22,708 | 28,077 | 29,151 | |||||||||||||||||
EBITDA | 120,390 | 15,274 | 3,961 | 16,219 | 84,936 | (20,478 | ) | ||||||||||||||||
Fair value adjustments, net | (3,233 | ) | 2,010 | 3,922 | (10,561 | ) | 1,396 | 13,067 | |||||||||||||||
Foreign exchange (gain) loss | (17 | ) | (421 | ) | (627 | ) | 1,154 | (123 | ) | (93 | ) | ||||||||||||
Asset retirement obligation accretion | 15,862 | 4,153 | 4,073 | 3,993 | 3,643 | 3,597 | |||||||||||||||||
Inventory adjustments and write-downs | 33,449 | 8,934 | 1,603 | 14,187 | 8,725 | 22,005 | |||||||||||||||||
(Gain) loss on sale of assets and securities | (49,414 | ) | 19 | 12,622 | 9 | (62,064 | ) | 87 | |||||||||||||||
RMC bankruptcy distribution | (3,167 | ) | — | (1,516 | ) | — | (1,651 | ) | — | ||||||||||||||
Gain on debt extinguishment | (3,735 | ) | (774 | ) | (2,961 | ) | — | — | — | ||||||||||||||
COVID-19 costs | 246 | 14 | 21 | 56 | 155 | 294 | |||||||||||||||||
Other adjustments | 3,428 | 1,439 | 1,137 | 70 | 782 | (181 | ) | ||||||||||||||||
Adjusted EBITDA | $ | 113,809 | $ | 30,648 | $ | 22,235 | $ | 25,127 | $ | 35,799 | $ | 18,298 | |||||||||||
Revenue | $ | 769,232 | $ | 194,583 | $ | 177,235 | $ | 187,298 | $ | 210,116 | $ | 182,993 | |||||||||||
Adjusted EBITDA Margin | 15 | % | 16 | % | 13 | % | 13 | % | 17 | % | 10 | % | |||||||||||
Adjusted Net Income (Loss) Reconciliation | |||||||||||||||||||
(Dollars in thousands except per share amounts) | 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | ||||||||||||||
Net income (loss) | $ | (21,109 | ) | $ | (32,412 | ) | $ | (24,586 | ) | $ | 49,089 | $ | (57,444 | ) | |||||
Fair value adjustments, net | 2,010 | 3,922 | (10,561 | ) | 1,396 | 13,067 | |||||||||||||
Foreign exchange loss (gain) | 5 | 154 | 1,991 | 458 | (313 | ) | |||||||||||||
(Gain) loss on sale of assets and securities | 19 | 12,622 | 9 | (62,064 | ) | 87 | |||||||||||||
RMC bankruptcy distribution | — | (1,516 | ) | — | (1,651 | ) | — | ||||||||||||
Gain on debt extinguishment | (774 | ) | (2,961 | ) | — | — | — | ||||||||||||
COVID-19 costs | 14 | 21 | 56 | 155 | 294 | ||||||||||||||
Other adjustments | 1,439 | 1,137 | 70 | 782 | (181 | ) | |||||||||||||
Tax effect of adjustments | (223 | ) | (1,120 | ) | (37 | ) | (5,616 | ) | (231 | ) | |||||||||
Adjusted net income (loss) | $ | (18,619 | ) | $ | (20,153 | ) | $ | (33,058 | ) | $ | (17,451 | ) | $ | (44,721 | ) | ||||
Adjusted net income (loss) per share - Basic | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.06 | ) | $ | (0.16 | ) | ||||
Adjusted net income (loss) per share - Diluted | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.06 | ) | $ | (0.16 | ) | ||||
Consolidated Free Cash Flow Reconciliation | |||||||||||||||||||
(Dollars in thousands) | 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | ||||||||||||||
Cash flow from operations | $ | (2,383 | ) | $ | 39,397 | $ | (35,003 | ) | $ | 28,516 | $ | (19,117 | ) | ||||||
Capital expenditures | 112,273 | 85,581 | 74,048 | 113,094 | 96,602 | ||||||||||||||
Free cash flow | $ | (114,656 | ) | $ | (46,184 | ) | $ | (109,051 | ) | $ | (84,578 | ) | $ | (115,719 | ) | ||||
Consolidated Operating Cash Flow Before Changes in Working Capital Reconciliation | |||||||||||||||||||
(Dollars in thousands) | 3Q 2023 | 2Q 2023 | 1Q 2023 | 4Q 2022 | 3Q 2022 | ||||||||||||||
Cash provided by (used in) operating activities | $ | (2,383 | ) | $ | 39,397 | $ | (35,003 | ) | $ | 28,516 | $ | (19,117 | ) | ||||||
Changes in operating assets and liabilities: | |||||||||||||||||||
Receivables | 478 | 913 | (3,050 | ) | (353 | ) | 119 | ||||||||||||
Prepaid expenses and other | 3,000 | (4,260 | ) | 496 | 699 | 2,075 | |||||||||||||
Inventories | 18,620 | 18,738 | 17,635 | 8,798 | 13,715 | ||||||||||||||
Accounts payable and accrued liabilities | (5,528 | ) | (61,708 | ) | 26,145 | (18,022 | ) | 1,880 | |||||||||||
Operating cash flow before changes in working capital | $ | 14,187 | $ | (6,920 | ) | $ | 6,223 | $ | 19,638 | $ | (1,328 | ) | |||||||
Reconciliation of Costs Applicable to Sales for Three Months Ended September 30, 2023 | |||||||||||||||||||||||
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) | $ | 57,083 | $ | 34,708 | $ | 45,180 | $ | 32,614 | $ | 919 | $ | 170,504 | |||||||||||
Amortization | (9,024 | ) | (4,176 | ) | (6,894 | ) | (1,588 | ) | (919 | ) | (22,601 | ) | |||||||||||
Costs applicable to sales | $ | 48,059 | $ | 30,532 | $ | 38,286 | $ | 31,026 | $ | — | $ | 147,903 | |||||||||||
Inventory Adjustments | (328 | ) | (7,788 | ) | (411 | ) | (16 | ) | — | (8,543 | ) | ||||||||||||
By-product credit | — | — | (57 | ) | (1,802 | ) | — | (1,859 | ) | ||||||||||||||
Adjusted costs applicable to sales | $ | 47,731 | $ | 22,744 | $ | 37,818 | $ | 29,208 | $ | — | $ | 137,501 | |||||||||||
Metal Sales | |||||||||||||||||||||||
Gold ounces | 26,018 | 4,432 | 24,516 | 23,049 | — | 78,015 | |||||||||||||||||
Silver ounces | 1,533,975 | 606,083 | — | 73,677 | — | 2,213,735 | |||||||||||||||||
Zinc pounds | — | — | |||||||||||||||||||||
Lead pounds | — | — | |||||||||||||||||||||
Revenue Split | |||||||||||||||||||||||
Gold | 50 | % | 37 | % | 100 | % | 100 | % | |||||||||||||||
Silver | 50 | % | 63 | % | — | % | |||||||||||||||||
Zinc | — | % | |||||||||||||||||||||
Lead | — | % | |||||||||||||||||||||
Adjusted costs applicable to sales | |||||||||||||||||||||||
Gold ($/oz) | $ | 917 | $ | 1,899 | $ | 1,543 | $ | 1,267 | $ | 1,273 | |||||||||||||
Silver ($/oz) | $ | 15.56 | $ | 23.64 | $ | — | $ | 17.85 | |||||||||||||||
Zinc ($/lb) | $ | — | $ | — | |||||||||||||||||||
Lead ($/lb) | $ | — | $ | — | |||||||||||||||||||
Reconciliation of Costs Applicable to Sales for Three Months Ended June 30, 2023 | |||||||||||||||||||||||
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) | $ | 54,608 | $ | 29,717 | $ | 43,950 | $ | 29,634 | $ | 1,021 | $ | 158,930 | |||||||||||
Amortization | (8,017 | ) | (3,649 | ) | (4,801 | ) | (1,805 | ) | (1,021 | ) | (19,293 | ) | |||||||||||
Costs applicable to sales | $ | 46,591 | $ | 26,068 | $ | 39,149 | $ | 27,829 | $ | — | $ | 139,637 | |||||||||||
Inventory Adjustments | (209 | ) | (1,215 | ) | (239 | ) | 77 | — | (1,586 | ) | |||||||||||||
By-product credit | — | — | (63 | ) | (1,922 | ) | — | (1,985 | ) | ||||||||||||||
Adjusted costs applicable to sales | $ | 46,382 | $ | 24,853 | $ | 38,847 | $ | 25,984 | $ | — | $ | 136,066 | |||||||||||
Metal Sales | |||||||||||||||||||||||
Gold ounces | 22,207 | 6,493 | 13,273 | 25,117 | — | 67,090 | |||||||||||||||||
Silver ounces | 1,560,743 | 694,657 | — | 82,013 | — | 2,337,413 | |||||||||||||||||
Zinc pounds | — | — | |||||||||||||||||||||
Lead pounds | — | — | |||||||||||||||||||||
Revenue Split | |||||||||||||||||||||||
Gold | 49 | % | 43 | % | 100 | % | 100 | % | |||||||||||||||
Silver | 51 | % | 57 | % | — | % | |||||||||||||||||
Zinc | — | % | |||||||||||||||||||||
Lead | — | % | |||||||||||||||||||||
Adjusted costs applicable to sales | |||||||||||||||||||||||
Gold ($/oz) | $ | 1,023 | $ | 1,646 | $ | 2,927 | $ | 1,035 | $ | 1,464 | |||||||||||||
Silver ($/oz) | $ | 15.16 | $ | 20.39 | $ | — | $ | 16.77 | |||||||||||||||
Zinc ($/lb) | $ | — | $ | — | |||||||||||||||||||
Lead ($/lb) | $ | — | $ | — | |||||||||||||||||||
Reconciliation of Costs Applicable to Sales for Three Months Ended March 31, 2023 | |||||||||||||||||||||||
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) | $ | 57,984 | $ | 48,083 | $ | 43,226 | $ | 24,953 | $ | 1,221 | $ | 175,467 | |||||||||||
Amortization | (8,719 | ) | (5,218 | ) | (5,844 | ) | (1,409 | ) | (1,221 | ) | (22,411 | ) | |||||||||||
Costs applicable to sales | $ | 49,265 | $ | 42,865 | $ | 37,382 | $ | 23,544 | $ | — | $ | 153,056 | |||||||||||
Inventory Adjustments | (201 | ) | (13,474 | ) | (207 | ) | (38 | ) | — | (13,920 | ) | ||||||||||||
By-product credit | — | — | (74 | ) | (570 | ) | (644 | ) | |||||||||||||||
Adjusted costs applicable to sales | $ | 49,064 | $ | 29,391 | $ | 37,101 | $ | 22,936 | $ | — | $ | 138,492 | |||||||||||
Metal Sales | |||||||||||||||||||||||
Gold ounces | 25,970 | 8,349 | 20,902 | 15,645 | — | 70,866 | |||||||||||||||||
Silver ounces | 1,795,159 | 769,804 | — | 23,956 | — | 2,588,919 | |||||||||||||||||
Zinc pounds | — | — | |||||||||||||||||||||
Lead pounds | — | — | |||||||||||||||||||||
Revenue Split | |||||||||||||||||||||||
Gold | 49 | % | 47 | % | 100 | % | 100 | % | |||||||||||||||
Silver | 51 | % | 53 | % | — | % | |||||||||||||||||
Zinc | — | % | |||||||||||||||||||||
Lead | — | % | |||||||||||||||||||||
Adjusted costs applicable to sales | |||||||||||||||||||||||
Gold ($/oz) | $ | 926 | $ | 1,655 | $ | 1,775 | $ | 1,466 | $ | 1,381 | |||||||||||||
Silver ($/oz) | $ | 13.94 | $ | 20.24 | $ | — | $ | 15.83 | |||||||||||||||
Zinc ($/lb) | $ | — | $ | — | |||||||||||||||||||
Lead ($/lb) | $ | — | $ | — | |||||||||||||||||||
Reconciliation of Costs Applicable to Sales for Three Months Ended December 31, 2022 | |||||||||||||||||||||||
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) | $ | 55,325 | $ | 50,211 | $ | 49,887 | $ | 30,716 | $ | 1,133 | $ | 187,272 | |||||||||||
Amortization | (8,281 | ) | (6,034 | ) | (10,672 | ) | (1,748 | ) | (1,133 | ) | (27,868 | ) | |||||||||||
Costs applicable to sales | $ | 47,044 | $ | 44,177 | $ | 39,215 | $ | 28,968 | $ | — | $ | 159,404 | |||||||||||
Inventory Adjustments | 103 | (8,429 | ) | (103 | ) | (106 | ) | — | (8,535 | ) | |||||||||||||
By-product credit | — | — | (59 | ) | (413 | ) | — | (472 | ) | ||||||||||||||
Adjusted costs applicable to sales | $ | 47,147 | $ | 35,748 | $ | 39,053 | $ | 28,449 | $ | — | $ | 150,397 | |||||||||||
Metal Sales | |||||||||||||||||||||||
Gold ounces | 25,252 | 11,646 | 30,863 | 20,428 | — | 88,189 | |||||||||||||||||
Silver ounces | 1,490,444 | 974,810 | — | 17,387 | — | 2,482,641 | |||||||||||||||||
Zinc pounds | — | — | |||||||||||||||||||||
Lead pounds | — | — | |||||||||||||||||||||
Revenue Split | |||||||||||||||||||||||
Gold | 55 | % | 52 | % | 100 | % | 100 | % | |||||||||||||||
Silver | 45 | % | 48 | % | — | % | |||||||||||||||||
Zinc | — | % | |||||||||||||||||||||
Lead | — | % | |||||||||||||||||||||
Adjusted costs applicable to sales | |||||||||||||||||||||||
Gold ($/oz) | $ | 1,027 | $ | 1,596 | $ | 1,265 | $ | 1,393 | $ | 1,270 | |||||||||||||
Silver ($/oz) | $ | 14.23 | $ | 17.60 | $ | — | $ | 15.57 | |||||||||||||||
Zinc ($/lb) | $ | — | $ | — | |||||||||||||||||||
Lead ($/lb) | $ | — | $ | — | |||||||||||||||||||
Reconciliation of Costs Applicable to Sales for Three Months Ended September 30, 2022 | |||||||||||||||||||||||
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) | $ | 51,271 | $ | 57,681 | $ | 50,658 | $ | 31,078 | $ | 1,260 | $ | 191,948 | |||||||||||
Amortization | (8,027 | ) | (6,921 | ) | (10,369 | ) | (2,191 | ) | (1,260 | ) | (28,768 | ) | |||||||||||
Costs applicable to sales | $ | 43,244 | $ | 50,760 | $ | 40,289 | $ | 28,887 | $ | — | $ | 163,180 | |||||||||||
Inventory Adjustments | (445 | ) | (21,331 | ) | (28 | ) | (152 | ) | — | (21,956 | ) | ||||||||||||
By-product credit | — | — | (97 | ) | (153 | ) | — | (250 | ) | ||||||||||||||
Adjusted costs applicable to sales | $ | 42,799 | $ | 29,429 | $ | 40,164 | $ | 28,582 | $ | — | $ | 140,974 | |||||||||||
Metal Sales | |||||||||||||||||||||||
Gold ounces | 24,378 | 8,725 | 27,609 | 21,070 | — | 81,782 | |||||||||||||||||
Silver ounces | 1,554,288 | 733,383 | — | 7,931 | — | 2,295,602 | |||||||||||||||||
Zinc pounds | — | — | |||||||||||||||||||||
Lead pounds | — | — | |||||||||||||||||||||
Revenue Split | |||||||||||||||||||||||
Gold | 54 | % | 54 | % | 100 | % | 100 | % | |||||||||||||||
Silver | 46 | % | 46 | % | — | % | |||||||||||||||||
Zinc | — | % | |||||||||||||||||||||
Lead | — | % | |||||||||||||||||||||
Adjusted costs applicable to sales | |||||||||||||||||||||||
Gold ($/oz) | $ | 948 | $ | 1,821 | $ | 1,455 | $ | 1,357 | $ | 1,318 | |||||||||||||
Silver ($/oz) | $ | 12.67 | $ | 18.46 | $ | — | $ | 14.52 | |||||||||||||||
Zinc ($/lb) | $ | — | $ | — | |||||||||||||||||||
Lead ($/lb) | $ | — | $ | — | |||||||||||||||||||
Reconciliation of Costs Applicable to Sales for Updated 2023 Guidance | |||||||||||
In thousands (except metal sales, per ounce or per pound amounts) | Palmarejo | Kensington | Wharf | ||||||||
Costs applicable to sales, including amortization (U.S. GAAP) | $ | 232,269 | $ | 181,642 | $ | 114,698 | |||||
Amortization | (36,538 | ) | (26,295 | ) | (6,330 | ) | |||||
Costs applicable to sales | $ | 195,731 | $ | 155,347 | $ | 108,368 | |||||
By-product credit | — | (193 | ) | (5,288 | ) | ||||||
Adjusted costs applicable to sales | $ | 195,731 | $ | 155,154 | $ | 103,080 | |||||
Metal Sales | |||||||||||
Gold ounces | 99,719 | 83,310 | 89,109 | ||||||||
Silver ounces | 6,558,482 | 221,306 | |||||||||
Revenue Split | |||||||||||
Gold | 49% | 100% | 100% | ||||||||
Silver | 51% | ||||||||||
Adjusted costs applicable to sales | |||||||||||
Gold ($/oz) | $900 - $1,050 | $1,850 - $1,950 | $1,200 - $1,350 | ||||||||
Silver ($/oz) | $14.25 - $15.25 | ||||||||||
Reconciliation of Costs Applicable to Sales for Previous 2023 Guidance | |||||||||||
In thousands (except metal sales, per ounce or per pound amounts) | Palmarejo | Kensington | Wharf | ||||||||
Costs applicable to sales, including amortization (U.S. GAAP) | $ | 233,198 | $ | 183,769 | $ | 118,406 | |||||
Amortization | (37,547 | ) | (26,764 | ) | (6,319 | ) | |||||
Costs applicable to sales | $ | 195,651 | $ | 157,005 | $ | 112,087 | |||||
By-product credit | — | — | (3,878 | ) | |||||||
Adjusted costs applicable to sales | $ | 195,651 | $ | 157,005 | $ | 108,209 | |||||
Metal Sales | |||||||||||
Gold ounces | 104,618 | 90,673 | 88,732 | ||||||||
Silver ounces | 6,784,929 | 163,607 | |||||||||
Revenue Split | |||||||||||
Gold | 50% | 100% | 100% | ||||||||
Silver | 50% | ||||||||||
Adjusted costs applicable to sales | |||||||||||
Gold ($/oz) | $900 - $1,050 | $1,650 - $1,750 | $1,200 - $1,350 | ||||||||
Silver ($/oz) | $14.25 - $15.25 | ||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20231108334351/en/
Contacts
For Additional Information
Coeur Mining, Inc.
200 S. Wacker Drive, Suite 2100
Chicago, IL 60606
Attention: Jeff Wilhoit, Director, Investor Relations
Phone: (312) 489-5800
www.coeur.com
