Coeur Reports Third Quarter 2014 Results
(Thomson Reuters ONE) -
NEWS RELEASE
--------------------------------------------------------------------------------
Coeur Reports Third Quarter 2014 Results
Costs applicable to sales guidance reduced again
5% reduction in all-in sustaining costs per silver equivalent ounce(1)
Chicago, Illinois - November 5, 2014 - Coeur Mining, Inc. (the "Company" or
"Coeur") (NYSE: CDE) reported third quarter 2014 revenue of $170.9 million,
adjusted net loss(1 )of $23.5 million, and cash flow from operating activities
of $31.3 million, the highest level in more than a year. The Company realized
average prices of $19.46 per silver ounce and $1,260 per gold ounce during the
quarter, each 1% lower than the second quarter of 2014.
For the second time this year, Coeur is lowering its 2014 costs applicable to
sales guidance to reflect further success in its efforts to reduce operating
costs. The Company now estimates full-year costs applicable to sales will be
$470 - $480 million (previously revised down to $490 - $510 million from $500 -
$530 million). The Company is also meaningfully lowering its guidance for
general and administrative expenses from $43 - $48 million to $40 - $42 million
and amortization expense from $190 million to $170 million. Coeur is raising its
exploration guidance from $23 - $28 million to $29 - $31 million (including
capitalized drilling) due mainly to positive drill results at Kensington,
reflecting the Company's success-based approach toward funding its exploration
efforts. Coeur is maintaining its 2014 production outlook of 17.0 - 18.0 million
silver ounces and 229,000 - 244,000 gold ounces as well as its full-year
guidance for capital expenditures ($65 - $80 million).
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Third Quarter Highlights
* Silver equivalent production was 8.2 million ounces, a 1% increase compared
with the second quarter
* Silver production was 4.3 million ounces, a 4% decrease compared with the
second quarter
* Gold production was 64,989 ounces, a 6% increase compared with the second
quarter
* All-in sustaining costs per silver equivalent ounce(1) decreased 5% from the
second quarter to $18.86
* Costs applicable to sales per silver equivalent ounce increased 3% from the
second quarter to $14.71 per silver equivalent ounce(1) partly due to a $1.6
million inventory adjustment(2) at Palmarejo, which represents $0.26 per
silver equivalent ounce(1) on a consolidated basis
* Kensington's costs applicable to sales per gold ounce declined 7% to $937,
which included an inventory adjustment(2) equal to $48 per gold ounce
* General and administrative expenses were $8.5 million, down 9% from the
second quarter
* Cash flow from operating activities was $31.3 million, compared to $30.5
million in the second quarter
* Net income was $3.5 million, or $0.03 per share
* Adjusted net loss(1) was $23.5 million, or $0.23 per share
* Cash, cash equivalents, and short-term investments were $295.4 million at
September 30, 2014, down $21.4 million from the second quarter due to the
repurchase of $12.6 million of Coeur's 7.875% Senior Notes due 2021 (cash
outlay of $12.4 million) and the acquisition of two royalties totaling $13.8
million
"Silver and gold prices ended the quarter 18% and 8%, respectively, lower than
at the start, which represents a challenge for the entire precious metals
industry," said Mitchell J. Krebs, Coeur's President and Chief Executive
Officer. "Our team remains focused on operating consistently and efficiently, on
reducing our operating and non-operating costs, and on repositioning our mines
to achieve strong, long-term free cash flow in the current price environment.
"Our strong liquidity position provides us with flexibility and the ability to
invest in high-return, value-creating expansion opportunities that are expected
to reduce unit costs at our Palmarejo, Rochester, and Kensington mines. In
addition, our exploration initiatives are successfully identifying higher-grade
mineralization at these same operations, which we expect to be a key component
of the Company's future production and cash flow profile."
Financial Highlights (Unaudited)
(Amounts in
millions,
except per
share
amounts, gold
ounces
produced &
sold, and
per-ounce Quarter
metrics) 3Q 2014 2Q 2014 Variance 1Q 2014 4Q 2013 3Q 2013
-----------------------------------------------------------------
Revenue $ 170.9 $ 164.6 4 % $ 159.6 $ 168.8 $ 200.8
Costs
Applicable to
Sales $ 125.9 $ 118.7 6 % $ 106.9 $ 101.4 $ 131.8
Net Income
(Loss) $ 3.5 $ (43.1 ) 108 % $ (37.2 ) $ (581.5 ) $ (46.3 )
Earnings Per
Share $ 0.03 $ (0.42 ) 107 % $ (0.36 ) $ (5.77 ) $ (0.46 )
Adjusted Net
Income
(Loss)(1) $ (23.5 ) $ (27.9 ) 16 % $ (23.2 ) $ (26.7 ) $ (27.0 )
Adjusted Net
Income
(Loss)(1 )Per
Share $ (0.23 ) $ (0.27 ) 15 % $ (0.23 ) $ (0.27 ) $ (0.27 )
Weighted
Average
Shares 102.6 102.4 - % 102.4 100.7 100.8
Cash Flow
From
Operating
Activities $ 31.3 $ 30.5 3 % $ (9.6 ) $ 10.4 $ 26.8
Capital
Expenditures $ 16.8 $ 15.4 9 % $ 11.9 $ 28.1 $ 32.7
Cash, Cash
Equivalents &
Short-Term
Investments $ 295.4 $ 316.8 (7 %) $ 318.6 $ 206.7 $ 211.4
Total Debt(3) $ 469.5 $ 480.1 (2 %) $ 464.2 $ 308.6 $ 310.2
Average
Realized
Price Per
Ounce -
Silver $ 19.46 $ 19.60 (1 %) $ 20.28 $ 20.50 $ 21.11
Average
Realized
Price Per
Ounce - Gold $ 1,260 $ 1,277 (1 %) $ 1,279 $ 1,206 $ 1,300
Silver Ounces
Produced 4.3 4.5 (4 %) 4.1 4.3 4.2
Gold Ounces
Produced 64,989 61,025 6 % 58,836 79,845 63,040
Silver
Equivalent
Ounces
Produced(1) 8.2 8.1 1 % 7.6 9.1 8.0
Silver Ounces
Sold 4.3 4.6 (7 %) 3.9 4.0 4.9
Gold Ounces
Sold 69,541 57,751 20 % 62,578 72,215 75,677
Silver
Equivalent
Ounces
Sold(1) 8.4 8.1 4 % 7.6 8.3 9.4
Costs
Applicable to
Sales per
Silver
Equivalent
Oz(1) $ 14.71 $ 14.31 3 % $ 13.22 $ 12.49 $ 13.82
Costs
Applicable to
Sales per
Gold Oz
(Kensington) $ 937 $ 1,008 (7 %) $ 1,005 $ 677 $ 894
All-in
Sustaining
Costs per
Silver
Equivalent
Oz(1) $ 18.86 $ 19.89 (5 %) $ 19.09 $ 17.94 $ 19.83
Financial Results
Third quarter revenue increased $6.3 million, or 4%, compared with the second
quarter to $170.9 million due to a 20% increase in gold ounces sold, partially
offset by a 7% decline in silver ounces sold and slightly lower metal prices.
Coeur realized average silver and gold prices of $19.46 per ounce and $1,260 per
ounce, respectively, compared with realized average prices of $19.60 per ounce
and $1,277 per ounce, respectively, in the second quarter. Gold contributed 51%
of metal sales and silver contributed 49% during the third quarter.
General and administrative expenses were $8.5 million in the third quarter, down
9% from the second quarter. Cash flow from operating activities was $31.3
million in the third quarter, up slightly from $30.5 million in the second
quarter. Capital expenditures of $16.8 million were 9% higher than the second
quarter but 49% below the third quarter of 2013 and continue to track
significantly below 2013 levels.
Net income was $3.5 million, or $0.03 per share, in the third quarter of 2014.
Coeur's adjusted net loss(1) was $23.5 million, or $0.23 per share, in the third
quarter of 2014, compared with an adjusted net loss(1) of $27.9 million, or
$0.27 per share, in the second quarter. The third quarter adjusted net loss(1)
excludes an $18.8 million foreign exchange gain on deferred taxes, a $13.0
million favorable fair value adjustment, $2.4 million in stock-based
compensation expense, and $1.4 million accretion of the Palmarejo royalty
obligation. Fair value adjustments are primarily driven by changes to gold and
silver prices, which adjust the estimated future liabilities for the Palmarejo
gold production royalty and the Rochester 3.4% net smelter returns royalty.
Operations
Highlights of the third quarter 2014 results for each of the Company's operating
segments are provided below.
Palmarejo, Mexico
+-------+
(Dollars in millions, expect per ounce| |
amounts) |3Q 2014|2Q 2014 1Q 2014 4Q 2013 3Q 2013
+-------+-------------------------------
Underground Operations: | |
| |
Tons mined |169,656|177,359 209,854 237,384 219,909
| |
Average silver grade (oz/t) | 4.88 | 6.15 5.95 6.00 4.73
| |
Average gold grade (oz/t) | 0.10 | 0.11 0.11 0.14 0.11
| |
Surface Operations: | |
| |
Tons mined |343,001|320,583 358,222 361,493 385,379
| |
Average silver grade (oz/t) | 3.09 | 3.72 3.50 3.49 3.49
| |
Average gold grade (oz/t) | 0.03 | 0.03 0.03 0.03 0.03
| |
Processing: | |
| |
Total tons milled |518,212|534,718 571,345 595,803 583,365
| |
Average recovery rate - Ag | 82.7% | 75.6% 73.3% 74.5% 81.8%
| |
Average recovery rate - Au | 86.9% | 78.9% 78.0% 80.6% 87.6%
| |
Silver ounces produced (000's) | 1,533 | 1,761 1,820 1,994 1,918
| |
Gold ounces produced |22,514 |23,706 25,216 35,486 29,893
| |
Silver equivalent ounces produced(1) | 2,883 | 3,183 3,333 4,123 3,711
| |
Silver ounces sold (000's) | 1,605 | 1,983 1,677 1,768 2,592
| |
Gold ounces sold |23,600 |25,753 26,422 31,360 38,385
| |
Silver equivalent ounces sold(1) | 3,021 | 3,528 3,262 3,650 4,895
| |
Revenues | $61.4 | $72.4 $68.0 $75.9 $104.5
| |
Costs applicable to sales | $46.0 | $49.6 $43.6 $39.9 $66.8
| |
Costs applicable to sales per silver | |
equivalent ounce(1) |$15.22 |$14.04 $13.36 $10.90 $13.66
| |
Exploration expense | $2.6 | $1.6 $1.0 $1.1 $0.9
| |
Cash flow from operating activities | $20.2 | $27.4 $10.2 $16.6 $50.8
| |
Sustaining capital expenditures | $1.9 | $5.3 $3.7 $4.6 $7.1
| |
Development capital expenditures | $4.0 | $0.3 $- $4.3 $3.2
+-------+-------------------------------
Total capital expenditures | $5.9 | $5.6 $3.7 $8.9 $10.3
| |
Free cash flow (before royalties) | $14.3 | $21.8 $6.5 $7.7 $40.5
| |
Royalties paid (credited) | $11.4 | $12.3 $14.7 $13.5 $12.6
| |
Free cash flow(4) | $2.9 | $9.5 $(8.2) $(5.8) $27.9
+-------+
* Guadalupe development is progressing well, with approximately 1,450 meters
of development completed as of October 31, 2014, which is approximately 50%
ahead of plan. Coeur expects to begin mining approximately 500 tons per day
from Guadalupe before year-end and anticipates achieving average production
levels of 1,500 tons per day in the third quarter of 2015
* Cash flow from operating activities was $20.2 million in the third quarter,
below the $27.4 million generated in the second quarter mainly due to fewer
ounces sold and slightly higher unit costs. Costs applicable to sales per
silver equivalent ounce(1) of $15.22 includes an inventory adjustment(2) to
net realizable value of $0.53 per silver equivalent ounce
* Capital expenditures of $5.9 million in the third quarter increased 5% from
the second quarter. The majority of capital spending during the quarter was
related to development work at Guadalupe
Rochester, Nevada
+---------+
(Dollars in millions, expect| |
per ounce amounts) | 3Q 2014 | 2Q 2014 1Q 2014 4Q 2013 3Q 2013
+---------+---------------------------------------
Ore tons placed |3,892,421|3,329,582 3,640,861 4,569,588 2,678,906
| |
Average silver grade (oz/t) | 0.51 | 0.58 0.59 0.57 0.53
| |
Average gold grade (oz/t) | 0.005 | 0.003 0.003 0.002 0.003
| |
Silver ounces produced | |
(000's) | 1,156 | 1,112 750 712 595
| |
Gold ounces produced | 11,702 | 9,230 8,192 7,890 4,824
| |
Silver equivalent ounces | |
produced(1) | 1,858 | 1,666 1,242 1,186 885
| |
Silver ounces sold (000's) | 1,067 | 1,006 695 621 741
| |
Gold ounces sold | 8,932 | 8,970 7,770 6,323 6,539
| |
Silver equivalent ounces | |
sold(1) | 1,603 | 1,544 1,161 1,000 1,133
| |
Revenues | $32.4 | $31.2 $24.2 $20.6 $24.3
| |
Costs applicable to sales | $23.7 | $24.4 $14.7 $16.6 $17.9
| |
Costs applicable to sales | |
per silver equivalent | |
ounce(1) | $14.80 | $15.79 $12.67 $16.63 $15.83
| |
Exploration expense | $0.1 | $0.7 $1.2 $1.0 $0.6
| |
Cash flow from operating | |
activities | $8.2 | $4.3 $(9.0) $(9.7) $(3.6)
| |
Sustaining capital | |
expenditures | $3.0 | $3.9 $1.0 $7.2 $12.3
| |
Development capital | |
expenditures | $1.2 | $0.1 $- $- $-
+---------+---------------------------------------
Total capital expenditures | $4.2 | $4.0 $1.0 $7.2 $12.3
| |
Free cash flow(4) | $4.0 | $0.3 $(10.0) $(16.9) $(15.9)
+---------+
* Silver-equivalent production increased 12% from the second quarter and cash
flow from operating activities of $8.2 million reached the highest level in
nearly two years
* Third quarter costs applicable to sales per silver equivalent ounce(1) were
$14.80, down 6% from the second quarter due to lower crushing and leaching
costs
* Capital expenditures were $4.2 million during the third quarter, up slightly
from the second quarter but continuing to track significantly below year-ago
levels
Kensington, Alaska
+-------+
(Dollars in millions, expect per ounce| |
amounts) |3Q 2014|2Q 2014 1Q 2014 4Q 2013 3Q 2013
+-------+-------------------------------
Tons milled |145,097|163,749 159,697 149,246 147,427
| |
Average gold grade (oz/t) | 0.23 | 0.18 0.17 0.26 0.20
| |
Average recovery rate | 93.0% | 94.5% 94.5% 93.6% 94.1%
| |
Gold ounces produced |30,773 |28,089 25,428 36,469 28,323
| |
Gold ounces sold |37,009 |23,028 28,386 34,533 30,752
| |
Revenues | $45.9 | $29.0 $36.1 $39.7 $38.9
| |
Costs applicable to sales | $34.7 | $23.2 $28.5 $23.4 $27.5
| |
Costs applicable to sales per gold | |
ounce | $937 |$1,008 $1,005 $677 $894
| |
Exploration expense | $2.6 | $1.6 $1.0 $1.5 $1.5
| |
Cash flow from operating activities | $17.0 |$(0.6) $13.9 $11.3 $1.9
| |
Sustaining capital expenditures | $3.6 | $4.0 $4.7 $5.7 $4.9
| |
Development capital expenditures | $- | $- $- $- $-
+-------+-------------------------------
Total capital expenditures | $3.6 | $4.0 $4.7 $5.7 $4.9
| |
Free cash flow(4) | $13.4 |$(4.6) $9.2 $5.6 $(3.0)
+-------+
* Costs applicable to sales per gold ounce declined 7% from the second quarter
to $937 including an inventory adjustment(2) to net realizable value of $48
per ounce. The strong cost performance was mainly due to a 28% increase in
average head grade to 0.23 ounces per ton
* Cash flow from operating activities of $17.0 million was the highest since
Coeur began operating the mine
* Capital expenditures of $3.6 million declined 10% from the second quarter,
reaching the lowest level in more than a year
* Coeur recently announced high-grade drill results from Kensington and
anticipates releasing a new mine plan in early 2015, which is expected to
reflect higher-grade production, lower unit costs, and higher cash flow over
the life of the mine
San Bartolomé, Bolivia
+-------+
(Dollars in millions, expect per ounce| |
amounts) |3Q 2014|2Q 2014 1Q 2014 4Q 2013 3Q 2013
+-------+-------------------------------
Tons milled |471,938|437,975 385,375 451,660 428,884
| |
Average silver grade (oz/t) | 3.70 | 3.87 3.88 3.79 3.89
| |
Average recovery rate | 86.5% | 87.5% 90.5% 87.6% 91.5%
| |
Silver ounces produced (000's) | 1,509 | 1,481 1,355 1,499 1,528
| |
Silver ounces sold (000's) | 1,438 | 1,494 1,357 1,485 1,334
| |
Revenues | $28.4 | $29.1 $27.6 $30.6 $28.8
| |
Costs applicable to sales | $20.4 | $20.7 $18.9 $20.6 $17.7
| |
Costs applicable to sales per silver | |
equivalent ounce(1) |$14.22 |$13.85 $13.93 $13.91 $13.25
| |
Exploration expense | $- | $0.1 $- $- $-
| |
Cash flow from operating activities | $12.3 | $18.9 $4.5 $8.9 $7.6
| |
Sustaining capital expenditures | $2.8 | $1.7 $1.4 $1.8 $3.0
| |
Development capital expenditures | $- | $- $- $2.0 $1.2
+-------+-------------------------------
Total capital expenditures | $2.8 | $1.7 $1.4 $3.8 $4.2
| |
Free cash flow(4) | $9.5 | $17.2 $3.1 $5.1 $3.4
+-------+
* Production, grades, recovery rates, and costs remain relatively stable at
San Bartolomé
Coeur Capital
+-------+
(Dollars in millions, expect per ounce| |
amounts) |3Q 2014|2Q 2014 1Q 2014 4Q 2013 3Q 2013
+-------+-------------------------------
Tons milled |199,757|185,538 193,219 200,843 197,237
| |
Average silver grade (oz/t) | 1.44 | 1.41 1.65 1.37 1.71
| |
Average recovery rate | 49.1% | 42.4% 45.9% 42.0% 42.1%
| |
Silver ounces produced (000's) | 141 | 111 147 115 142
| |
Silver ounces sold (000's) | 141 | 106 147 113 186
| |
Metal sales | $2.4 | $2.0 $2.9 $2.1 $4.3
| |
Royalty revenue | $0.6 | $0.9 $1.0 $- $-
| |
Costs applicable to sales (Endeavor | |
silver stream) | $1.1 | $0.8 $1.2 $0.9 $1.9
| |
Costs applicable to sales per silver | |
equivalent ounce(1) | $7.71 | $7.94 $8.05 $8.32 $10.09
| |
Cash flow from operating activities | $1.4 | $0.1 $1.5 $0.9 $1.3
| |
Free cash flow(4) | $1.4 | $0.1 $1.5 $0.9 $1.3
+-------+
* Coeur owns a 100% silver stream at the Endeavor mine in New South Wales,
Australia up to a total of 20.0 million payable ounces. At September
30, 2014, the Company has received 5.3 million ounces
* On July 2, 2014, Coeur acquired a pre-existing 3% net smelter royalty on the
La Preciosa silver-gold project for $12.0 million
* On September 2, 2014, Coeur paid $1.8 million for an additional 1.25% net
smelter returns royalty on International Northair Mines Ltd.'s La Cigarra
silver project and now holds a 2.5% net smelter returns royalty on the
project
Downside Price Protection
The Company's downside metal price protection program uses put spreads to
protect 25% - 40% of expected future production against a sharp decrease in
metal prices, while selling intra-quarter, out-of-the-money call options when
appropriate to offset the net cost of the put spreads. Put spreads for the
fourth quarter of 2014 cover 1.25 million ounces of expected quarterly silver
production and 25,000 ounces of expected quarterly gold production. Put spreads
for the first quarter of 2015 cover 1.25 million ounces of expected silver
production and 24,000 ounces of expected gold production. All put options
purchased have a strike price of $18/ounce and $1,200/ounce for silver and gold,
respectively. All put options sold have a strike price of $16/ounce and
$1,050/ounce for silver and gold, respectively.
Exploration
Costs associated with exploration activities for the third quarter of 2014 were
$6.6 million (expensed) for discovery of new silver and gold mineralization and
$1.0 million (capitalized) for definition and expansion of mineralized material,
for a total of $7.6 million. Coeur's exploration program used 11 drill rigs
during the third quarter: four drills at Palmarejo, five at Kensington, and two
at Rochester. This work resulted in completion of over 125,921 feet (38,381
meters) of combined core and reverse circulation drilling.
On October 6, Coeur announced high-grade drill results from Kensington,
including at the nearby Jualin zone. Drilling has encountered high-grade gold in
Kensington South (Zones 10 and 20) immediately beneath current production areas,
located approximately 100 - 200 feet away from current mine development. Several
holes have returned grades greater than 1.0 oz/ton gold. Drilling activity in
Jualin Veins 4 and 5 has encountered several multi-ounce gold intercepts.
Underground development at Jualin is planned for 2015. See the press release
dated October 6, 2014 for further detail and the full drill results at
Kensington.
2014 Production Outlook
Coeur's 2014 total silver and gold production guidance is unchanged as shown
below.
(silver and silver
equivalent ounces in
thousands) Silver Gold Silver Equivalent(1)
-------------------------------------------------------------------------------
Palmarejo, Mexico 6,700 - 7,000 84,000 - 90,000 11,740 - 12,400
San Bartolomé, Bolivia 5,700 - 6,000 - 5,700 - 6,000
Rochester, Nevada 4,100 - 4,400 38,000 - 42,000 6,380 - 6,920
Endeavor, Australia 500 - 600 - 500 - 600
Kensington, Alaska - 107,000 - 112,000 6,420 - 6,720
-------------------------------------------------------------------------------
Total 17,000 - 18,000 229,000 - 244,000 30,740 - 32,640
-------------------------------------------------------------------------------
Conference Call Information
Coeur will conduct a conference call and webcast at www.coeur.com to discuss the
Company's third quarter results on November 6, 2014 at 11:00 a.m. Eastern time.
Dial-In Numbers: (877) 768-0708 (U.S. and Canada)
(660) 422-4718 (International)
Conference ID: 716 78 102
A replay of the call will be available on Coeur's website through November
20, 2014.
Replay Numbers: (855) 859-2056 (U.S. and Canada)
(404) 537-3406 (International)
Conference ID: 716 78 102
About Coeur
Coeur Mining is the largest U.S.-based primary silver producer and a significant
gold producer with four precious metals mines in the Americas employing nearly
2,000 people. 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 to net smelter royalties on the Cerro Bayo mine in Chile, the El Gallo
complex in Mexico, and the Zaruma mine in Ecuador. 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 Alaska, Argentina, Bolivia, Mexico, and Nevada. The
Company owns strategic investment positions in several 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 anticipated production, costs, capital and exploration expenditures,
amortization, exploration and development efforts including the impact of
discovery of new mineralization, the new mine plan at Kensington, Guadalupe
development, expansion opportunities, grades, cash flow, and initiatives to
create value, lower costs, operate more consistently and efficiently, achieve
strong long-term free cash flow, and minimize exposure to declining metal
prices. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause Coeur's actual results,
performance or achievements to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking
statements. Such factors include, among others, the risks and hazards inherent
in the mining business (including 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 reserves and resources, 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 and the absence of control over mining operations
in which Coeur or its subsidiaries hold royalty or streaming interests and risks
related to these mining operations including results of mining and exploration
activities, environmental, economic and political risks of the jurisdiction in
which the mining operations are located, the loss of access to 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.
W. David Tyler, Coeur's Vice President, Technical Services and a qualified
person under Canadian National Instrument 43-101, supervised the preparation of
the scientific and technical information concerning Coeur's mineral projects in
this news release. Mineral resources are in addition to mineral reserves and do
not have demonstrated economic viability. Inferred mineral resources are
considered too speculative geologically to have the economic considerations
applied to them that would enable them to be considered for estimation of
mineral reserves, and there is no certainty that the inferred mineral resources
will be realized. 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.
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 net income (loss), costs
applicable to sales per silver equivalent ounce, and all-in sustaining costs. We
believe that these adjusted measures provide meaningful information to assist
management, investors and analysts in understanding our financial results and
assessing our prospects for future performance. We believe these adjusted
financial measures are important indicators of our recurring operations because
they exclude items that may not be indicative of, or are unrelated to our core
operating results, and provide a better baseline for analyzing trends in our
underlying businesses. We believe adjusted net income (loss), costs applicable
to sales per silver equivalent ounce, and all-in sustaining costs are important
measures in assessing the Company's overall financial performance.
Notes
1. Adjusted net income (loss), all-in sustaining costs, and costs applicable to
sales per silver equivalent ounce are non-GAAP measures. Please see tables in
the Appendix for the reconciliation to U.S. GAAP. Silver equivalence calculated
using a 60:1 silver to gold ratio.
2. Costs applicable to sales for the third quarter of 2014 included adjustments
of $1.6 million and $1.8 million at Palmarejo and Kensington, respectively, to
reduce the carrying value of inventory to net realizable value.
3. Includes capital leases. Net of debt discount.
4. Free cash flow is defined as cash flow from operating activities less capital
expenditures and royalty payments.
For Additional Information:
Bridget Freas, Director, Investor Relations
(312) 489-5819
Donna Mirandola, Director, Corporate Communications
(312) 489-5842
www.coeur.com
Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
Three months ended Nine months ended
September 30, September 30,
--------------------------- --------------------------
2014 2013 2014 2013
------------- ------------- ------------- ------------
In thousands, except share data
Revenue $ 170,938 $ 200,825 $ 495,133 $ 577,147
COSTS AND EXPENSES
Costs applicable to
sales 125,910 131,805 351,492 362,250
Amortization 41,985 60,097 123,834 166,686
General and
administrative 8,515 16,240 31,809 41,492
Exploration 6,587 3,305 15,957 16,920
Litigation settlement - - - 32,046
Pre-development,
reclamation, and other 4,244 4,732 20,019 11,896
------------- ------------- ------------- ------------
Total costs and expenses 187,241 216,179 543,111 631,290
OTHER INCOME (EXPENSE),
NET
Fair value adjustments,
net 16,105 (20,646 ) (3,611 ) 63,905
Impairment of marketable
securities (1,092 ) (870 ) (4,614 ) (18,097 )
Interest income and
other, net (211 ) (1,791 ) (2,313 ) 2,484
Interest expense, net of
capitalized interest (11,616 ) (9,662 ) (36,980 ) (30,324 )
------------- ------------- ------------- ------------
Total other income
(expense), net 3,186 (32,969 ) (47,518 ) 17,968
------------- ------------- ------------- ------------
Income (loss) before
income and mining taxes (13,117 ) (48,323 ) (95,496 ) (36,175 )
Income and mining tax
(expense) benefit 16,583 2,058 18,650 (32,860 )
------------- ------------- ------------- ------------
NET INCOME (LOSS) $ 3,466 $ (46,265 ) $ (76,846 ) $ (69,035 )
------------- ------------- ------------- ------------
OTHER COMPREHENSIVE
INCOME (LOSS), net of
tax:
Unrealized gain (loss)
on marketable
securities, net of tax
of $686 and $939 for the
three and nine months
ended September
30, 2014, respectively (1,086 ) 301 (1,487 ) (10,756 )
Reclassification
adjustments for
impairment of marketable
securities, net of tax
of $(423) and $(1,786)
for the three and nine
months ended September
30, 2014, respectively 669 870 2,828 18,097
Reclassification
adjustments for realized
loss on sale of
marketable securities,
net of tax of $(140) and
$(150) for the three and
nine months ended
September 30, 2014,
respectively 221 136 238 136
------------- ------------- ------------- ------------
Other comprehensive
income (loss) (196 ) 1,307 1,579 7,477
------------- ------------- ------------- ------------
COMPREHENSIVE INCOME
(LOSS) $ 3,270 $ (44,958 ) $ (75,267 ) $ (61,558 )
------------- ------------- ------------- ------------
NET INCOME (LOSS) PER
SHARE
Basic $ 0.03 $ (0.46 ) $ (0.75 ) $ (0.71 )
------------- ------------- ------------- ------------
Diluted $ 0.03 $ (0.46 ) $ (0.75 ) $ (0.71 )
------------- ------------- ------------- ------------
Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Three months ended Nine months ended
September 30, September 30,
--------------------------- --------------------------
2014 2013 2014 2013
------------- ------------- ------------- ------------
In thousands
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $ 3,466 $ (46,265 ) $ (76,846 ) (69,035 )
Adjustments:
Amortization 41,985 60,097 123,834 166,686
Accretion 3,868 4,175 12,961 15,015
Deferred income taxes (23,437 ) (1,869 ) (39,142 ) 17,680
Loss on termination of
revolving credit
facility - - 3,035 -
Fair value adjustments,
net (15,421 ) 20,308 3,423 (61,487 )
Litigation settlement - - - 22,046
Stock-based compensation 2,505 373 7,455 3,085
(Gain) loss on sale of
assets (89 ) (7 ) 133 (1,139 )
Impairment of marketable
securities 1,092 870 4,614 18,097
Other 1,088 (375 ) 870 (487 )
Changes in operating
assets and liabilities:
Receivables 7,446 (2,132 ) 18,297 6,515
Prepaid expenses and
other current assets 3,871 (14,306 ) (687 ) (13,894 )
Inventory and ore on
leach pads 9,698 11,592 (5,821 ) 22,582
Accounts payable and
accrued liabilities (4,806 ) (5,657 ) 311 (22,588 )
------------- ------------- ------------- ------------
CASH PROVIDED BY
OPERATING ACTIVITIES 31,266 26,804 52,437 103,076
------------- ------------- ------------- ------------
CASH FLOWS FROM
INVESTING ACTIVITIES:
Capital expenditures (16,784 ) (32,726 ) (44,076 ) (72,754 )
Acquisitions (13,829 ) - (16,079 ) (113,214 )
Purchase of short-term
investments and
marketable securities (2,089 ) (2,689 ) (50,423 ) (8,022 )
Sales and maturities of
short-term investments 2,856 27 3,413 6,371
Other 74 (48 ) 61 1,163
------------- ------------- ------------- ------------
CASH USED IN INVESTING
ACTIVITIES (29,772 ) (35,436 ) (107,104 ) (186,456 )
------------- ------------- ------------- ------------
CASH FLOWS FROM
FINANCING ACTIVITIES:
Issuance of notes and
bank borrowings - - 153,000 300,000
Payments on long-term
debt, capital leases,
and associated costs (13,274 ) (1,824 ) (20,236 ) (59,021 )
Gold production royalty
payments (11,351 ) (12,619 ) (38,379 ) (43,548 )
Share repurchases - (14,995 ) - (27,552 )
Other (77 ) (27 ) (483 ) (505 )
------------- ------------- ------------- ------------
CASH PROVIDED BY (USED
IN) FINANCING ACTIVITIES (24,702 ) (29,465 ) 93,902 169,374
------------- ------------- ------------- ------------
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS (23,208 ) (38,097 ) 39,235 85,994
Cash and cash
equivalents at beginning
of period 269,133 249,531 206,690 125,440
------------- ------------- ------------- ------------
Cash and cash
equivalents at end of
period $ 245,925 $ 211,434 $ 245,925 $ 211,434
------------- ------------- ------------- ------------
Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
September
30, 2014 December 31,
(Unaudited) 2013
---------------- ----------------
ASSETS In thousands, except share data
CURRENT ASSETS
Cash and cash equivalents $ 245,925 $ 206,690
Investments 49,520 -
Receivables 67,599 81,074
Ore on leach pads 50,335 50,495
Inventory 127,985 132,023
Deferred tax assets 35,021 35,008
Prepaid expenses and other 19,974 25,940
---------------- ----------------
596,359 531,230
NON-CURRENT ASSETS
Property, plant and equipment, net 474,250 486,273
Mining properties, net 1,729,928 1,751,501
Ore on leach pads 41,547 31,528
Restricted assets 6,853 7,014
Marketable securities 9,162 14,521
Receivables 36,166 36,574
Debt issuance costs, net 10,315 10,812
Deferred tax assets 705 1,189
Other 10,039 15,336
---------------- ----------------
TOTAL ASSETS $ 2,915,324 $ 2,885,978
---------------- ----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 49,232 $ 53,847
Accrued liabilities and other 37,882 38,266
Debt 11,733 2,505
Royalty obligations 45,347 48,019
Reclamation 767 913
Deferred tax liabilities 1,858 1,011
---------------- ----------------
146,819 144,561
NON-CURRENT LIABILITIES
Debt 457,744 306,130
Royalty obligations 41,319 65,142
Reclamation 60,946 57,515
Deferred tax liabilities 516,715 556,246
Other long-term liabilities 29,541 25,817
---------------- ----------------
1,106,265 1,010,850
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share;
authorized 150,000,000 shares, issued and
outstanding 103,438,765 at September
30, 2014 and 102,843,003 at December 31, 2013 1,034 1,028
Additional paid-in capital 2,788,098 2,781,164
Accumulated other comprehensive income (loss) (3,327 ) (4,906 )
Accumulated deficit (1,123,565 ) (1,046,719 )
---------------- ----------------
1,662,240 1,730,567
---------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,915,324 $ 2,885,978
---------------- ----------------
Adjusted Net Income Reconciliation
(Dollars in
thousands
except per
share
amounts) 3Q 2014 2Q 2014 1Q 2014 4Q 2013 3Q 2013
------------- ------------- ------------- -------------- ------------
Net income
(loss) $ 3,466 $ (43,121 ) $ (37,191 ) $ (581,528 ) $ (46,265 )
Fair value
adjustments,
net (13,026 ) 6,498 7,827 (11,289 ) 16,062
Stock-based
compensation 2,417 2,299 2,453 1,034 356
Impairment
of
marketable
securities 1,092 934 2,588 211 870
Accretion of
royalty
obligation 1,374 1,789 1,821 2,974 2,023
Write-downs - - - 580,365 -
Gain on sale
of building - - - (1,200 ) -
Gain on
commutation
of
reclamation
bonding
arrangements - - - (7,609 ) -
Loss on
revolver
termination - - 3,035 - -
Foreign
exchange
(gain) loss
on deferred
taxes (18,801 ) 3,711 (3,705 ) (9,685) (30 )
------------- ------------- ------------- -------------- ------------
Adjusted net
income
(loss) $ (23,478 ) $ (27,890 ) $ (23,172 ) $ (26,727) $ (26,984 )
------------- ------------- ------------- -------------- ------------
Adjusted net
income
(loss) per
share $ (0.23 ) $ (0.27 ) $ (0.23 ) $ (0.27 ) $ (0.27 )
------------- ------------- ------------- -------------- ------------
Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent
Ounce
for Three Months Ended September 30, 2014
Silver Gold
------------------------------------------------------------------- ------------ ------------
(Dollars in
thousands
except per San
ounce amounts) Palmarejo Bartolomé Rochester Endeavor Total Kensington Total
------------------------------------------------------------------- ------------ ------------
Costs
applicable to
sales,
including
amortization
(U.S. GAAP) $ 62,481 $ 25,564 $ 29,077 $ 1,998 $ 119,120 $ 47,555 $ 166,675
Amortization 16,493 5,117 5,359 909 27,878 12,887 40,765
------------- ------------- ------------- ----------- ------------- ------------ ------------
Costs
applicable to
sales $ 45,988 $ 20,447 $ 23,718 $ 1,089 $ 91,242 $ 34,668 $ 125,910
Silver
equivalent
ounces sold 3,021,448 1,438,409 1,602,676 141,291 6,203,824
Gold ounces
sold 37,009
------------- ------------- ------------- ----------- ------------- ------------
Costs
applicable to
sales per
ounce $ 15.22 $ 14.22 $ 14.80 $ 7.71 $ 14.71 $ 937
Treatment and
refining costs 1,425
Sustaining
capital 12,239
General and
administrative 8,515
Exploration 6,587
Reclamation 2,041
Project/pre-
development
costs 2,154
------------
All-in
sustaining
costs $ 158,871
Silver
equivalent
ounces sold 6,203,824
Kensington
silver
equivalent
ounces sold 2,220,540
------------
Consolidated
silver
equivalent
ounces sold 8,424,364
------------
All-in
sustaining
costs per
silver
equivalent
ounce $ 18.86
------------
Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent
Ounce
for Three Months Ended June 30, 2014
Silver Gold
------------------------------------------------------------------- ------------ ------------
(Dollars in
thousands
except per San
ounce amounts) Palmarejo Bartolomé Rochester Endeavor Total Kensington Total
------------------------------------------------------------------- ------------ ------------
Costs
applicable to
sales,
including
amortization
(U.S. GAAP) $ 67,595 $ 25,550 $ 29,406 $ 1,701 $ 124,252 $ 34,784 $ 159,036
Amortization 18,044 4,855 5,025 859 28,783 11,566 40,349
------------- ------------- ------------- ----------- ------------- ------------ ------------
Costs
applicable to
sales $ 49,551 $ 20,695 $ 24,381 $ 842 $ 95,469 $ 23,218 $ 118,687
Silver
equivalent
ounces sold 3,528,219 1,494,100 1,544,456 106,126 6,672,901
Gold ounces
sold 23,028
------------- ------------- ------------- ----------- ------------- ------------
Costs
applicable to
sales per
ounce $ 14.04 $ 13.85 $ 15.79 $ 7.94 $ 14.31 $ 1,008
Treatment and
refining costs 963
Sustaining
capital 17,617
General and
administrative 9,398
Exploration 5,153
Reclamation 1,964
Project/pre-
development
costs 6,388
------------
All-in
sustaining
costs $ 160,170
Silver
equivalent
ounces sold 6,672,901
Kensington
silver
equivalent
ounces sold 1,381,680
------------
Consolidated
silver
equivalent
ounces sold 8,054,581
------------
All-in
sustaining
costs per
silver
equivalent
ounce $ 19.89
------------
Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent
Ounce
for Three Months Ended March 31, 2014
Silver Gold
------------------------------------------------------------------- ------------ ------------
(Dollars in
thousands
except per San
ounce amounts) Palmarejo Bartolomé Rochester Endeavor Total Kensington Total
------------------------------------------------------------------- ------------ ------------
Costs
applicable to
sales,
including
amortization
(U.S. GAAP) $ 62,233 $ 23,358 $ 19,159 $ 2,135 $ 106,885 $ 39,240 $ 146,125
Amortization 18,659 4,457 4,451 953 28,520 10,709 39,229
------------- ------------- ------------- ----------- ------------- ------------ ------------
Costs
applicable to
sales $ 43,574 $ 18,901 $ 14,708 $ 1,182 $ 78,365 $ 28,531 $ 106,8
Unternehmensinformation / Kurzprofil:
Datum: 05.11.2014 - 22:16 Uhr
Sprache: Deutsch
News-ID 350151
Anzahl Zeichen: 65577
contact information:
Town:
Chicago
Kategorie:
Business News
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