Coeur Reports Fourth Quarter and Full-Year 2014 Results
(Thomson Reuters ONE) -
NEWS RELEASE
--------------------------------------------------------------------------------
Coeur Reports Fourth Quarter and Full-Year 2014 Results
Wharf Acquisition Expected to Close February 20, Six Weeks Earlier than Expected
Chicago, Illinois - February 18, 2015 - Coeur Mining, Inc. (the "Company" or
"Coeur") (NYSE: CDE) reported 2014 revenue of $635.7 million, adjusted EBITDA(1)
of $86.7 million, adjusted costs applicable to sales per silver equivalent
ounce(1) of $14.18, and adjusted all-in sustaining costs of $19.27 per silver
equivalent ounce(1). The Company realized average prices of $18.87 per silver
ounce and $1,252 per gold ounce during 2014, decreases of 21% and 6%
respectively, compared to 2013.
Fourth quarter revenue was $140.6 million, adjusted EBITDA(1) was $7.8 million,
adjusted costs applicable to sales per silver equivalent(1) ounce of $14.43, and
adjusted all-in sustaining costs were $19.25 per silver equivalent ounce(1).
Coeur realized average prices of $16.40 per silver ounce and $1,186 per gold
ounce during the fourth quarter, decreases of 16% and 6%, respectively, compared
to the third quarter of 2014.
"In 2014 we set out to achieve improved operating consistency, to reduce our
costs, improve the long-term certainty and visibility of our existing mines, and
thereby enhance the quality of the Company's portfolio of assets," said Mitchell
J. Krebs, Coeur's President and Chief Executive Officer. "Despite the challenges
confronted in 2014, we largely achieved these objectives. I believe Coeur is
well-positioned to successfully execute our strategy to reposition our existing
assets to achieve higher grades, better efficiencies, and lower costs, while
maintaining a liquid balance sheet with a long-term capital structure. Our
acquisition of the Wharf gold mine from Goldcorp is expected to close six weeks
ahead of our original estimate, accelerating its contribution to our 2015
production and cash flow.
"In terms of our major assets, Kensington demonstrated strong fourth quarter
production of 33,533 ounces of gold, up 32% from the first quarter, and costs
applicable to sales of $845 per gold ounce(1), a decline of 16% compared to the
first quarter. Rochester established during 2014 that it is capable of being a
significant producer of silver, gold, and cash flow for many years to come. At
Palmarejo we developed and began mining from Guadalupe, we successfully
renegotiated the Franco-Nevada agreement, and we announced in December the
proposed acquisition of Paramount Gold and Silver that will allow us to combine
Palmarejo with Paramount's high-grade San Miguel property to unlock substantial
value over many years to come."
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Fourth Quarter 2014 Highlights
* Silver production was 4.3 million ounces and gold production was 64,534
ounces, or 8.2 million silver equivalent(1) ounces as previously announced
on January 15, 2015
* Adjusted all-in sustaining costs were $19.25 per silver equivalent ounce(1)
* Adjusted costs applicable to sales per silver equivalent ounce(1) were
$14.43
* Costs applicable to sales per gold ounce(1) at Kensington were $845, the
lowest level in a year
* Announced acquisition of Paramount, which is expected to close in the second
quarter
* Non-cash impairment charge of $1.5 billion ($1.0 billion net of tax) was
recorded to reflect the current pricing environment
Full-Year 2014 Highlights
* Silver equivalent(1) production totaled 32.2 million ounces, at the high-end
of Company guidance. Silver production was 17.2 million ounces, in-line with
Company guidance. Gold production was 249,384 ounces, above Company guidance
* Adjusted all-in sustaining costs were $19.27 per silver equivalent ounce(1)
* Adjusted costs applicable to sales per silver equivalent ounce(1) were
$14.18
* Costs applicable to sales per gold ounce(1 )at Kensington were $951
* Costs applicable to sales were $477.9 million, in-line with Company guidance
and up slightly compared to 2013 due to a 20% increase in mining rates at
Rochester
* Capital expenditures were $64.2 million, below Company guidance and down
36% compared to 2013
* Exploration expense was $21.7 million and capitalized exploration was $8.9
million for a total spend of $30.6 million, in-line with Company guidance
and down 10% compared to 2013
* General and administrative expenses were $40.8 million, in-line with Company
guidance and down 26% compared to 2013
* Amortization was $162.4 million, below Company guidance and down 29%
compared to 2013
* Cash, cash equivalents, and short-term investments were $270.9 million at
December 31, 2014, up 31% compared to year-end 2013
Full-Year 2015 Outlook
* Production is expected to be 14.8 - 16.0 million ounces of silver and
294,000 - 323,000 ounces of gold, or 32.4 - 35.4 million silver equivalent
ounces(1). This assumes the acquisition of the Wharf(4) gold mine from
Goldcorp, Inc. closes on February 20, 2015
* Costs applicable to sales per silver equivalent ounce(1) are expected to be
$16.25 - $17.75 at Palmarejo, $13.50 - $15.00 at San Bartolomé, and $12.50 -
$14.00 at Rochester
* Costs applicable to sales per gold ounce are expected to be $900 - $975 at
Kensington and $750 - $825 per gold equivalent ounce(1 )at Wharf(4)
* All-in sustaining costs are expected to be $17.50 - $18.50 per silver
equivalent ounce(1)
* Capital expenditures are expected to be $85 - $95 million, including $57 -
$64 million of sustaining capital
* General and administrative expenses are expected to be $36 - $39 million
* Expensed exploration is expected to be $10 - $12 million for the Company's
existing assets and is expected to be revised upward once the proposed
Paramount acquisition is closed
Financial Highlights (Unaudited)
+------------+
(Amounts in | |
millions, | |
except per | |
share amounts,| |
gold ounces | |
produced & | |
sold, and per-| |
ounce metrics)| 2014 | 4Q 2014 3Q 2014 2Q 2014 1Q 2014 2013
+------------+-----------------------------------------------------
Revenue |$ 635.7 |$ 140.6 $ 170.9 $ 164.6 $ 159.6 $ 746.0
| |
Costs | |
Applicable to | |
Sales |$ 477.9 |$ 126.5 $ 125.9 $ 118.7 $ 106.9 $ 463.7
| |
General and | |
Administrative| |
Expenses |$ 40.8 |$ 9.0 $ 8.5 $ 9.4 $ 13.9 $ 55.3
| |
Adjusted | |
EBITDA(1) |$ 86.7 |$ 7.8 $ 25.7 $ 32.9 $ 31.1 $ 186.2
| |
Net Income | |
(Loss) |$ (1,155.9 )|$ (1,079.1 ) $ 3.5 $ (43.1 ) $ (37.2 ) $ (650.6 )
| |
Earnings Per | |
Share |$ (11.28 )|$ (10.53 ) $ 0.03 $ (0.42 ) $ (0.36 ) $ (6.65 )
| |
Adjusted Net | |
Income | |
(Loss)(1) |$ (112.0 )|$ (37.5 ) $ (18.5 ) $ (21.5 ) $ (18.8 ) $ (41.3 )
| |
Adjusted Net | |
Income | |
(Loss)(1 )Per | |
Share |$ (1.09 )|$ (0.37 ) $ (0.18 ) $ (0.21 ) $ (0.18 ) $ (0.42 )
| |
Weighted | |
Average Shares| 102.4 | 102.4 102.6 102.4 102.4 97.9
| |
Cash Flow From| |
Operating | |
Activities |$ 52.9 |$ 0.7 $ 31.3 $ 30.5 $ (9.6 ) $ 113.5
| |
Capital | |
Expenditures |$ 64.2 |$ 20.1 $ 16.8 $ 15.4 $ 11.9 $ 100.8
| |
Cash, | |
Equivalents & | |
Short-Term | |
Investments |$ 270.9 |$ 270.9 $ 295.4 $ 316.8 $ 318.6 $ 206.7
| |
Total Debt(2) |$ 478.4 |$ 478.4 $ 469.5 $ 480.1 $ 464.2 $ 308.6
| |
Average | |
Realized Price| |
Per Ounce - | |
Silver |$ 18.87 |$ 16.40 $ 19.46 $ 19.60 $ 20.28 $ 23.94
| |
Average | |
Realized Price| |
Per Ounce - | |
Gold |$ 1,252 |$ 1,186 $ 1,260 $ 1,277 $ 1,279 $ 1,327
| |
Silver Ounces | |
Produced | 17.2 | 4.3 4.3 4.5 4.1 17.0
| |
Gold Ounces | |
Produced | 249,384 | 64,534 64,989 61,025 58,836 262,217
| |
Silver | |
Equivalent | |
Ounces | |
Produced(1) | 32.2 | 8.3 8.2 8.1 7.6 32.7
| |
Silver Ounces | |
Sold | 17.4 | 4.6 4.3 4.6 3.9 17.1
| |
Gold Ounces | |
Sold | 242,655 | 52,785 69,541 57,751 62,578 263,048
| |
Silver | |
Equivalent | |
Ounces Sold(1)| 32.0 | 7.9 8.4 8.1 7.6 32.9
| |
Adjusted Costs| |
Applicable to | |
Sales per AgEq| |
Oz(1) |$ 14.18 |$ 14.43 $ 14.19 $ 14.00 $ 13.09 $ 13.68
| |
Costs | |
Applicable to | |
Sales per Gold| |
Oz(1) | |
(Kensington) |$ 951 |$ 845 $ 937 $ 1,008 $ 1,005 $ 901
| |
Adjusted All- | |
in Sustaining | |
Costs per AgEq| |
Oz(1) |$ 19.27 |$ 19.25 $ 18.27 $ 19.10 $ 18.52 $ 18.77
+------------+
Financial Results
Fourth quarter revenue decreased $30.3 million, or 18%, compared with the third
quarter to $140.6 million due to lower metal prices and a 24% decline in gold
ounces sold, partially offset by a 7% increase in silver ounces sold. An ongoing
labor dispute at ports on the western coast of the United States resulted in a
delay which caused approximately 11,600 gold ounces to be excluded from fourth
quarter sales. Silver contributed 55% of metal sales and gold contributed 45%
during the fourth quarter. For the full year, silver contributed 52% of metal
sales and gold contributed 48%.
General and administrative expenses of $9.0 million in the fourth quarter
increased 6% compared to the third quarter but were lower than the first two
quarters of 2014. Capital expenditures of $20.1 million in the fourth quarter
increased 20% compared to the third quarter due to higher spending at Palmarejo
related to Guadalupe development and a tailings dam expansion.
Net loss was $1,079 million in the fourth quarter, or $10.53 per share, which
included an after-tax non-cash impairment charge of $1,022 million to reduce
asset carrying values due to lower silver and gold prices. Adjusted net loss was
$37.5 million, or $0.37 per share, in the fourth quarter, compared to $18.5
million, or $0.18 per share, in the third quarter mainly due to lower metal
prices and fewer ounces sold.
Operations
Highlights of the fourth quarter and full-year 2014 results for each of the
Company's operating segments are provided below.
Palmarejo, Mexico
+---------+
(Dollars in millions, | |
except per ounce amounts) | 2014 |4Q 2014 3Q 2014 2Q 2014 1Q 2014 2013
+---------+-----------------------------------------
Underground Operations: | |
| |
Tons mined | 744,599 |187,730 169,656 177,359 209,854 791,792
| |
Average silver grade | |
(oz/t) | 5.40 | 4.49 4.88 6.15 5.95 4.98
| |
Average gold grade | |
(oz/t) | 0.10 | 0.06 0.10 0.11 0.11 0.11
| |
Surface Operations: | |
| |
Tons mined |1,342,608|320,802 343,001 320,583 358,222 1,499,281
| |
Average silver grade | |
(oz/t) | 3.30 | 2.90 3.09 3.72 3.50 3.83
| |
Average gold grade | |
(oz/t) | 0.03 | 0.03 0.03 0.03 0.03 0.03
| |
Processing: | |
| |
Total tons milled |2,135,088|510,813 518,212 534,718 571,345 2,322,660
| |
Average recovery rate - | |
Ag | 77.5% | 80.2% 82.7% 75.6% 73.3% 77.7%
| |
Average recovery rate - | |
Au | 80.5% | 78.7% 86.9% 78.9% 78.0% 84.2%
| |
Silver ounces produced | |
(000's) | 6,558 | 1,444 1,533 1,761 1,820 7,603
| |
Gold ounces produced | 86,673 |15,237 22,514 23,706 25,216 116,536
| |
Silver equivalent ounces | |
produced(1) | 11,758 | 2,359 2,883 3,183 3,333 14,595
| |
Silver ounces sold (000's)| 6,640 | 1,375 1,605 1,983 1,677 7,491
| |
Gold ounces sold | 92,030 |16,255 23,600 25,753 26,422 112,270
| |
Silver equivalent ounces | |
sold(1) | 12,162 | 2,350 3,021 3,528 3,262 14,228
| |
Revenues | $244.0 | $42.2 $61.4 $72.4 $68.0 $324.0
| |
Costs applicable to sales | $187.3 | $48.1 $46.0 $49.6 $43.6 $188.6
| |
Adjusted costs applicable | |
to sales per AgEq ounce(1)| $14.47 |$15.70 $14.43 $13.48 $13.13 $12.95
| |
Exploration expense | $6.7 | $1.5 $2.6 $1.6 $1.0 $7.2
| |
Cash flow from operating | |
activities | $54.6 |$(3.2) $20.2 $27.4 $10.2 $117.6
| |
Sustaining capital | |
expenditures | $16.4 | $5.5 $1.9 $5.3 $3.7 $19.8
| |
Development capital | |
expenditures | $9.7 | $5.4 $4.0 $0.3 $- $13.9
+---------+-----------------------------------------
Total capital expenditures| $26.1 | $10.9 $5.9 $5.6 $3.7 $33.7
| |
Free cash flow (before | |
royalties) | $28.5 |$(14.1) $14.3 $21.8 $6.5 $83.9
| |
Royalties paid | $48.4 | $10.0 $11.4 $12.3 $14.7 $57.0
| |
Free cash flow(3) | $(19.9) |$(24.1) $2.9 $9.5 $(8.2) $26.9
+---------+
* Adjusted costs applicable to sales per silver equivalent ounce(1) was $15.70
in the fourth quarter 2014, 9% higher than the third quarter due to a
decline in grade and recovery rates
* Underground mining rates at Guadalupe continue to increase, averaging
approximately 500 ore tons per day year-to-date in 2015 and are expected to
reach 1,500 ore tons per day by the third quarter of 2015
* Increased oxide ore from the Tucson area of the open-pit caused a decline in
fourth quarter recovery rates. Recent modifications to the processing plant
are expected to result in improved recovery rates going forward.
Specifically, the flowsheet was modified in late 2014 to enable the oxide
ore to bypass the flotation circuit and flow directly to the agitated leach
circuit
* Open-pit operations are expected to end mid-2015
* Underground mining in the original Palmarejo zones is expected to be
completed by year-end
* Mining activity is expected to reach the Don Ese deposit by year-end
assuming the previously announced acquisition of Paramount closes
* In 2015, Palmarejo is expected to produce 3.9 - 4.3 million ounces of silver
and 55,000 - 65,000 ounces of gold at costs applicable to sales per silver
equivalent ounce(1) of $16.25 - $17.75
Rochester, Nevada
+----------+
(Dollars in | |
millions, except| |
per ounce | |
amounts) | 2014 | 4Q 2014 3Q 2014 2Q 2014 1Q 2014 2013
+----------+--------------------------------------------------
Ore tons placed |14,739,808|3,876,944 3,892,421 3,329,582 3,640,861 12,311,918
| |
Average silver | |
grade (oz/t) | 0.57 | 0.60 0.51 0.58 0.59 0.55
| |
Average gold | |
grade (oz/t) | 0.004 | 0.004 0.005 0.003 0.003 0.003
| |
Silver ounces | |
produced (000's)| 4,189 | 1,170 1,156 1,112 750 2,799
| |
Gold ounces | |
produced | 44,888 | 15,764 11,702 9,230 8,192 30,860
| |
Silver | |
equivalent | |
ounces | |
produced(1) | 6,882 | 2,116 1,858 1,666 1,242 4,651
| |
Silver ounces | |
sold (000's) | 3,922 | 1,154 1,067 1,006 695 2,929
| |
Gold ounces sold| 39,803 | 14,131 8,932 8,970 7,770 34,723
| |
Silver | |
equivalent | |
ounces sold(1) | 6,310 | 2,002 1,603 1,544 1,161 5,012
| |
Revenues | $123.8 | $36.0 $32.4 $31.2 $24.2 $119.3
| |
Costs applicable| |
to sales | $91.5 | $28.7 $23.7 $24.4 $14.7 $77.9
| |
Costs applicable| |
to sales per | |
silver | |
equivalent | |
ounce(1) | $14.49 | $14.27 $14.80 $15.79 $12.67 $15.54
| |
Exploration | |
expense | $2.6 | $0.6 $0.1 $0.7 $1.2 $2.7
| |
Cash flow from | |
operating | |
activities | $13.7 | $10.2 $8.2 $4.3 $(9.0) $(11.0)
| |
Sustaining | |
capital | |
expenditures | $11.9 | $2.7 $4.2 $4.0 $1.0 $29.4
| |
Development | |
capital | |
expenditures | $- | $- $- $- $- $-
+----------+--------------------------------------------------
Total capital | |
expenditures | $11.9 | $2.7 $4.2 $4.0 $1.0 $29.4
| |
Free cash | |
flow(3) | $1.8 | $7.5 $4.0 $0.3 $(10.0) $(40.4)
+----------+
* Fourth quarter silver equivalent production increased 14% from the third
quarter and full-year silver equivalent production increased 48% compared to
2013
* Fourth quarter costs applicable to sales per silver equivalent ounce(1) were
$14.27, down 4% from the third quarter due to lower crushing and leaching
costs
* Free cash flow(3) of $7.5 million in the fourth quarter was the highest
since 2012
* Approval for POA 10 (expansion of Stage 4 leach pad and construction of new
Stage 5 leach pad) is expected by year-end with construction planned to
begin in the second quarter of 2016
* Coeur plans to crush more than 16.5 million tons at Rochester in 2015, which
is expected to reduce unit costs and enable double-digit percentage
increases in both silver and gold production
* In 2015, Rochester is expected to produce 4.7 - 5.0 million ounces of silver
and 55,000 - 65,000 ounces of gold at costs applicable to sales per silver
equivalent ounce(1) of $12.50 - $14.00
Kensington, Alaska
+-------+
(Dollars in millions, except | |
per ounce amounts) | 2014 |4Q 2014 3Q 2014 2Q 2014 1Q 2014 2013
+-------+---------------------------------------
Tons milled |635,960|167,417 145,097 163,749 159,697 553,717
| |
Average gold grade (oz/t) | 0.20 | 0.21 0.23 0.18 0.17 0.22
| |
Average recovery rate | 94.0% | 94.2% 93.0% 94.5% 94.5% 94.2%
| |
Gold ounces produced |117,823|33,533 30,773 28,089 25,428 111,951
| |
Gold ounces sold |110,822|22,399 37,009 23,028 28,386 116,055
| |
Revenues |$137.0 | $26.0 $45.9 $29.0 $36.1 $148.8
| |
Costs applicable to sales |$105.3 | $18.9 $34.7 $23.2 $28.5 $104.6
| |
Costs applicable to sales per | |
gold ounce(1) | $951 | $845 $937 $1,008 $1,005 $901
| |
Exploration expense | $8.0 | $2.8 $2.6 $1.6 $1.0 $4.2
| |
Cash flow from operating | |
activities | $26.6 |$(3.7) $17.0 $(0.6) $13.9 $32.4
| |
Sustaining capital | |
expenditures | $15.6 | $3.3 $3.6 $4.0 $4.7 $21.4
| |
Development capital | |
expenditures | $0.6 | $0.6 $- $- $- $-
+-------+---------------------------------------
Total capital expenditures | $16.2 | $3.9 $3.6 $4.0 $4.7 $21.4
| |
Free cash flow(3) | $10.4 |$(7.6) $13.4 $(4.6) $9.2 $11.0
+-------+
* Tons milled reached a record 167,417 in the fourth quarter (1,820 tons per
day). Strong throughput combined with robust grade and recovery performance
caused costs applicable to sales per gold ounce(1) to decline 10% to $845 in
the fourth quarter, the lowest level in 2014
* Gold ounces sold of 22,399 in the fourth quarter were 33% lower than ounces
produced due to an ongoing labor dispute at the ports on the West Coast of
the United States. This resulted in the delay of approximately 11,600 ounces
that were excluded from fourth quarter sales
* Production and cost performance in 2015 is expected to be similar to 2014 at
Kensington
* Announced inferred resource at Jualin as of year-end 2014. The permitting
process has begun for underground development at Jualin, with drilling in
Vein 4 expected to continue in 2015 and 2016, and initial production
expected in 2017
* In 2015, Kensington is expected to produce 110,000 - 115,000 ounces of gold
at costs applicable to sales per gold ounce(1) of $900 - $975
San Bartolomé, Bolivia
+---------+
(Dollars in millions, | |
except per ounce amounts) | 2014 |4Q 2014 3Q 2014 2Q 2014 1Q 2014 2013
+---------+-----------------------------------------
Tons milled |1,749,423|454,135 471,938 437,975 385,375 1,679,839
| |
Average silver grade | |
(oz/t) | 3.80 | 3.77 3.70 3.87 3.88 3.93
| |
Average recovery rate | 88.1% | 88.0% 86.5% 87.5% 90.5% 90.0%
| |
Silver ounces produced | |
(000's) | 5,852 | 1,507 1,509 1,481 1,355 5,941
| |
Silver ounces sold (000's)| 6,276 | 1,987 1,438 1,494 1,357 6,079
| |
Revenues | $117.7 | $32.6 $28.4 $29.1 $27.6 $141.7
| |
Costs applicable to sales | $89.7 | $29.6 $20.4 $20.7 $18.9 $86.8
| |
Costs applicable to sales | |
per silver equivalent | |
ounce(1) | $14.29 |$14.91 $14.22 $13.85 $13.93 $14.28
| |
Exploration expense | $0.1 | $- $- $0.1 $- $0.1
| |
Cash flow from operating | |
activities | $38.0 | $2.3 $12.3 $18.9 $4.5 $43.9
| |
Sustaining capital | |
expenditures | $7.9 | $2.0 $2.8 $1.7 $1.4 $6.1
| |
Development capital | |
expenditures | $- | $- $- $- $- $5.5
+---------+-----------------------------------------
Total capital expenditures| $7.9 | $2.0 $2.8 $1.7 $1.4 $11.6
| |
Free cash flow(3) | $30.1 | $0.3 $9.5 $17.2 $3.1 $32.3
+---------+
* Production, grades, recovery rates, and costs remain relatively stable at
San Bartolomé
* Cash flow from operating activities of $2.3 million in the fourth quarter
declined from $12.3 million in the third quarter mainly due to changes in
working capital. The third quarter benefited from an $8.3 million decrease
in working capital while the fourth quarter experienced a $5.2 million
increase in working capital
* In 2015, San Bartolomé is expected to produce 5.8 - 6.1 million ounces of
silver at costs applicable to sales per silver equivalent ounce(1) of $13.50
- $15.00
Coeur Capital
+-------+
(Dollars in millions, except | |
per ounce amounts) | 2014 |4Q 2014 3Q 2014 2Q 2014 1Q 2014 2013
+-------+---------------------------------------
Tons milled |792,694|214,180 199,757 185,538 193,219 791,116
| |
Average silver grade (oz/t) | 1.62 | 1.99 1.44 1.41 1.65 1.85
| |
Average recovery rate | 45.6% | 44.9% 49.1% 42.4% 45.9% 41.3%
| |
Silver ounces produced (000's)| 590 | 191 141 111 147 606
| |
Silver ounces sold (000's) | 586 | 192 141 106 147 606
| |
Metal sales | $10.0 | $2.7 $2.4 $2.0 $2.9 $12.9
| |
Royalty revenue | $3.2 | $0.7 $0.6 $0.9 $1.0 $-
| |
Costs applicable to sales | |
(Endeavor silver stream) | $4.2 | $1.1 $1.1 $0.8 $1.2 $5.8
| |
Costs applicable to sales per | |
silver equivalent ounce(1) | $7.17 | $5.69 $7.71 $7.94 $8.05 $9.61
| |
Cash flow from operating | |
activities | $6.5 | $1.5 $2.4 $0.8 $1.8 $4.3
| |
Free cash flow(3) | $6.5 | $1.5 $2.4 $0.8 $1.8 $4.3
+-------+
* There are four cash-flowing royalties and streams, five non-cash-flowing
royalties, and nine investments in junior mining companies held in Coeur
Capital or its affiliates. One of the non-cash-flowing royalties is an 80%
interest in a 2.5% royalty on Newmont Mining Corporation's Correnso mine in
New Zealand, which recently began production and is expected to begin making
royalty payments in 2015
* Coeur Capital's largest source of cash flow is the silver stream on the
Endeavor mine in New South Wales, Australia in which the Company owns 100%
of the silver up to a total of 20.0 million payable ounces. At December
31, 2014, the Company has received 5.5 million ounces, or 27.5% of the total
Exploration
Costs associated with exploration activities for the fourth quarter of 2014 were
$5.7 million (expensed) for discovery of new silver and gold mineralization and
$2.9 million (capitalized) for definition and expansion of mineralized material,
for a total of $8.6 million. Coeur's exploration program used nine drill rigs
during the fourth quarter: three drills at Palmarejo, four at Kensington, and
two in Nevada at Rochester and the Wonder project. This work resulted in
completion of over 78,777 feet (24,011 meters) of combined core and reverse
circulation drilling.
For the full-year 2014, total exploration expenditures were $30.6 million, 10%
lower than 2013. Exploration expenses at the Company's current assets are
expected to total $10 - $12 million in 2015, with additional capital allocated
to resource conversion. Coeur will continue to use a success-based approach to
evaluate exploration needs on an ongoing basis. The Company expects to update
2015 exploration guidance for the San Miguel project upon closing of the
Paramount acquisition.
Wharf Transaction Update
The previously announced acquisition of the Wharf gold mine from Goldcorp, Inc.
is expected to close on February 20, 2015, subject to satisfaction of remaining
closing conditions.
2015 Outlook
Coeur's 2015 total silver and gold production guidance is shown below and
includes pro-rata production from the acquisition of the Wharf(4) assuming a
February 20, 2015 closing date.
2015 Production Outlook
(silver and silver
equivalent ounces in
thousands) Silver Gold Silver Equivalent(1)
-------------------------------------------------------------------------------
Palmarejo 3,900 - 4,300 55,000 - 65,000 7,200 - 8,200
San Bartolomé 5,800 - 6,100 - 5,800 - 6,100
Rochester 4,700 - 5,000 55,000 - 65,000 8,000 - 8,900
Endeavor 400 - 600 - 400 - 600
Kensington - 110,000 - 115,000 6,600 - 6,900
Wharf - 74,000 - 78,000 4,440 - 4,680
-------------------------------------------------------------------------------
Total 14,800 - 16,000 294,000 - 323,000 32,440 - 35,380
-------------------------------------------------------------------------------
As previously indicated, the cost projections below assume the acquisition of
the Wharf(4) gold mine from Goldcorp, Inc. closes on February 20, 2015 and do
not reflect closing of the Paramount acquisition.
2015 Cost Outlook
(dollars in millions, except per ounce amounts) 2015 Guidance 2014 Result
-------------------------------------------------------------------------------
Costs Applicable to Sales per Silver Equivalent
Ounce(1) - Palmarejo $16.25 - $17.75 $15.40
Costs Applicable to Sales per Silver Equivalent
Ounce(1) - San Bartolomé $13.50 - $15.00 $14.29
Costs Applicable to Sales per Silver Equivalent
Ounce(1) - Rochester $12.50 - $14.00 $14.49
Costs Applicable to Sales per Gold Ounce(1) -
Kensington $900 - 975 $951
Costs Applicable to Sales per Gold Equivalent
Ounce(1) - Wharf $750 - $825 N/A
Capital Expenditures $85 - $95 $64
General and Administrative Expenses $36 - $39 $41
Exploration Expense $10 - $12 $22
All-in Sustaining Costs per Silver Equivalent
Ounce(1) $17.50 - $18.50 $19.72
-------------------------------------------------------------------------------
Downside Price Protection
The Company's downside metal price protection program uses put spreads to
protect a portion 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 settled
during the fourth quarter 2014 generated cash flow of $2.1 million, with $1.4
million received during the fourth quarter and the remaining $0.7 million
received in January 2015. Intra-quarter calls sold garnered an additional $0.2
million in cash flow during the fourth quarter.
Put spreads for the first quarter of 2015 cover 1,250,000 ounces of expected
silver production ($18 per ounce and $16 per ounce strike prices) and 24,000
ounces of expected gold production ($1,200 per ounce and $1,050 per ounce strike
prices). Put spreads for the second quarter of 2015 cover 900,000 ounces of
expected silver production with strike prices of $17 per ounce on options
purchased and $15 per ounce on options sold. Premiums paid for put spreads in
the first and second quarter of 2015 were $1.1 million and $1.4 million,
respectively.
Conference Call Information
Coeur will conduct a conference call and webcast at www.coeur.com to discuss the
Company's fourth quarter and full-year 2014 results on February 19, 2015 at
11:00 a.m. Eastern time.
Dial-In Numbers: (877) 768-0708 (U.S. and Canada)
(660) 422-4718 (International)
Conference ID: 716 78 103
A replay of the call will be available on Coeur's website through March 5 2015.
Replay Numbers: (855) 859-2056 (U.S. and Canada)
(404) 537-3406 (International)
Conference ID: 716 78 103
About Coeur
Coeur Mining is the largest U.S.-based silver producer and a significant gold
producer with four precious metals mines in the Americas employing approximately
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 royalties on the Cerro Bayo mine in Chile, the El Gallo complex in
Mexico, the Zaruma mine in Ecuador, and a royalty on the Correnso mine in New
Zealand. 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, crushing rates, drilling activity,
recovery rates, capital expenditures, the Wharf acquisition, the Paramount
acquisition, Guadalupe underground mining rates, POA 10 approval at Rochester,
open-pit and underground mining operations at Palmarejo, anticipated royalty
payments, development of the Jualin deposit at the Kensington mine, and
initiatives to achieve higher-grade production, efficiencies, lower costs,
maintain a liquid balance sheet, and a long-term capital structure, 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 risk that the Wharf
and Paramount transactions will not be consummated at all or within the
timeframes currently anticipated as stated in this release, the risk that
anticipated production and cost levels are not attained, the risks and hazards
inherent in the mining business (including risks inherent in developing large-
scale mining projects, environmental hazards, industrial accidents, weather or
geologically related conditions), changes in the market prices of gold 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(which, for greater certainty, does not include any of
Paramount's properties or Wharf). 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, Canadian
investors should refer to the Technical Reports for each of Coeur's properties
as filed on SEDAR at www.sedar.com.
Non-U.S. GAAP Measures
We supplement the reporting of our financial information determined under United
States generally accepted accounting principles (U.S. GAAP) with certain non-
U.S. GAAP financial measures, including adjusted EBITDA, adjusted net income
(loss), costs applicable to sales per silver equivalent ounce (or per gold
equivalent ounce), adjusted costs applicable to sales per silver equivalent
ounce, all-in sustaining costs, and adjusted all-in sustaining costs. We believe
that these adjusted measures provide meaningful information to assist
management, investors and analysts in understanding our financial results and
assessing our prospects for future performance. We believe these adjusted
financial measures are important indicators of our recurring operations because
they exclude items that may not be indicative of, or are unrelated to our core
operating results, and provide a better baseline for analyzing trends in our
underlying businesses. We believe adjusted EBITDA, adjusted net income (loss),
costs applicable to sales per silver equivalent ounce (or per gold equivalent
ounce), adjusted costs applicable to sales per silver equivalent ounce, all-in
sustaining costs, and adjusted all-in sustaining costs are important measures in
assessing the Company's overall financial performance.
Notes
1. Adjusted EBITDA, adjusted net income (loss), all-in sustaining costs,
adjusted all-in sustaining costs, costs applicable to sales per silver
equivalent ounce (or per gold equivalent ounce), and adjusted 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. For purposes of silver and
gold equivalence, 60:1 silver to gold ratio.
2. Includes capital leases. Net of debt discount.
3. Free cash flow is defined as cash flow from operating activities less capital
expenditures and royalty payments.
4. Wharf is expected to produce 85,000 - 90,000 ounces of gold at all-in
sustaining costs of $800 - $875 per gold ounce in 2015 based on guidance
provided by Goldcorp on January 12, 2015.
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)
Year ended December 31,
--------------------------------------------
2014 2013 2012
---------------- -------------- ------------
In thousands, except share data
Revenue $ 635,742 $ 745,994 $ 895,492
COSTS AND EXPENSES
Costs applicable to sales 477,945 463,663 454,562
Amortization 162,436 229,564 216,032
General and administrative 40,845 55,343 32,977
Exploration 21,740 22,360 26,270
Litigation settlement - 32,046 -
Write-downs 1,472,721 772,993 5,825
Pre-development, reclamation, and
other 26,037 15,184 4,086
---------------- -------------- ------------
Total costs and expenses 2,201,724 1,591,153 739,752
OTHER INCOME (EXPENSE), NET
Loss on debt extinguishments - - (1,036 )
Fair value adjustments, net 3,618 82,768 (23,487 )
Impairment of marketable
securities (6,593 ) (18,308 ) (605 )
Interest income and other, net 1,375 13,323 15,041
Interest expense, net of
capitalized interest (47,546 ) (41,303 ) (26,169 )
---------------- -------------- ------------
Total other income (expense), net (49,146 ) 36,480 (36,256 )
---------------- -------------- ------------
Income (loss) before income and
mining taxes (1,615,128 ) (808,679 ) 119,484
Income and mining tax (expense)
benefit 459,244 158,116 (70,807 )
---------------- -------------- ------------
NET INCOME (LOSS) $ (1,155,884 ) $ (650,563 ) $ 48,677
---------------- -------------- ------------
OTHER COMPREHENSIVE INCOME (LOSS),
net of tax:
Unrealized gain (loss) on
marketable securities, net of tax
of $1,446 and $5,362 in 2014 and
2013, respectively (2,290 ) (8,489 ) (3,351 )
Reclassification adjustments for
impairment of marketable
securities, net of tax of $(2,552)
and $(7,087) in 2014 and 2013,
respectively 4,042 11,221 605
Reclassification adjustments for
realized loss on sale of
marketable securities, net of tax
of $(219) and $(53) in 2014 and
2013, respectively 346 83 -
---------------- -------------- ------------
Other comprehensive income (loss) 2,098 2,815 (2,746 )
---------------- -------------- ------------
COMPREHENSIVE INCOME (LOSS) $ (1,153,786 ) $ (647,748 ) $ 45,931
---------------- -------------- ------------
NET INCOME (LOSS) PER SHARE
Basic $ (11.28 ) $ (6.65 ) $ 0.54
---------------- -------------- ------------
Diluted $ (11.28 ) $ (6.65 ) $ 0.54
---------------- -------------- ------------
Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Year ended December 31,
-------------------------------------------
2014 2013 2012
---------------- ------------- ------------
In thousands
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income (loss) $ (1,155,884 ) (650,563 ) 48,677
Adjustments:
Amortization 162,436 229,564 216,032
Accretion 16,246 20,810 24,550
Deferred income taxes (470,897 ) (177,178 ) 16,163
Loss on termination of revolving
credit facility 3,035 - 1,036
Fair value adjustments, net (3,721 ) (80,399 ) 18,421
Litigation settlement - 22,046 -
Stock-based compensation 9,288 4,812 8,010
(Gain) loss on sale of assets (35 ) (9,801 ) 1,101
Impairment of marketable securities 6,593 18,308 605
Other (359 ) (744 ) (1,707 )
Changes in operating assets and
liabilities:
Receivables (20,609 ) 663 9,756
Prepaid expenses and other current
assets 5,635 (15,165 ) 2,489
Inventory and ore on leach pads 12,971 4,031 (48,305 )
Accounts payable and accrued
liabilities 15,507 (25,910 ) (31,019 )
---------------- ------------- ------------
CASH PROVIDED BY OPERATING
ACTIVITIES 52,927 113,467 271,634
---------------- ------------- ------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Capital expenditures (64,244 ) (100,813 ) (115,641 )
Acquisitions (21,329 ) 34,796 (29,297 )
Purchase of short-term investments
and marketable securities (50,513 ) (8,052 ) (12,959 )
Sales and maturities of short-term
investments 54,344 (116,898 ) 21,695
Other 8 4,478 3,087
---------------- ------------- ------------
CASH USED IN INVESTING ACTIVITIES (81,734 ) (186,489 ) (133,115 )
---------------- ------------- ------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of notes and bank
borrowings 167,784 300,000 -
Payments on long-term debt and
capital leases (25,902 ) (60,628 ) (97,170 )
Gold production royalty payments (48,395 ) (57,034 ) (74,734 )
Share repurchases - (27,552 ) (19,971 )
Other (509 ) (514 ) 3,784
---------------- ------------- ------------
CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 92,978 154,272 (188,091 )
---------------- ------------- ------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 64,171 81,250 (49,572 )
Cash and cash equivalents at
beginning of period 206,690 125,440 175,012
---------------- ------------- ------------
Cash and cash equivalents at end of
period $ 270,861 $ 206,690 $ 125,440
---------------- ------------- ------------
Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
December 31, December 31,
2014 2013
--------------- ----------------
ASSETS In thousands, except share data
CURRENT ASSETS
Cash and cash equivalents $ 270,861 $ 206,690
Investments - -
Receivables 116,921 81,074
Ore on leach pads 48,204 50,495
Inventory 114,931 132,023
Deferred tax assets 14,774 35,008
Prepaid expenses and other 15,523 25,940
--------------- ----------------
581,214 531,230
NON-CURRENT ASSETS
Property, plant, and equipment, net 227,911 486,273
Mining properties, net 501,192 1,751,501
Ore on leach pads 37,889 31,528
Restricted assets 7,037 7,014
Marketable securities 5,982 14,521
Receivables 21,686 36,574
Debt issuance costs, net 9,851 10,812
Deferred tax assets 82,418 1,189
Other 9,915 15,336
--------------- ----------------
TOTAL ASSETS $ 1,485,095 $ 2,885,978
--------------- ----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 49,052 $ 53,847
Accrued liabilities and other 51,513 38,266
Debt 17,498 2,505
Royalty obligations 43,678 48,019
Reclamation 3,871 913
Deferred tax liabilities 1,100 1,011
--------------- ----------------
166,712 144,561
NON-CURRENT LIABILITIES
Debt 460,899 306,130
Royalty obligations 27,651 65,142
Reclamation 66,943 57,515
Deferred tax liabilities 147,661 556,246
Other long-term liabilities 29,911 25,817
--------------- ----------------
733,065 1,010,850
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share;
authorized 150,000,000 shares, issued and
outstanding 103,384,408 at December
31, 2014 and 102,843,003 at December
31, 2013 1,034 1,028
Additional paid-in capital 2,789,695 2,781,164
Accumulated other comprehensive income
(loss) (2,808 ) (4,906 )
Accumulated deficit (2,202,603 ) (1,046,719 )
--------------- ----------------
585,318 1,730,567
--------------- ----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,485,095 $ 2,885,978
--------------- ----------------
Adjusted EBITDA Reconciliation
(Dollars in
thousands
except per
share
amounts) 2014 4Q 2014 3Q 2014 2Q 2014 1Q 2014 2013
---------------- ---------------- ------------ ------------- -------------------------
Net income
(loss) $ (1,155,884 ) $ (1,079,038 ) $ 3,466 $ (43,121 ) $ (37,191 ) $ (650,563 )
Interest
expense, net
of
capitalized
interest 47,546 10,566 11,615 12,311 13,054 41,303
Interest
income and
other, net (1,375 ) (3,688 ) 213 4,083 (1,983 ) (13,323 )
Income tax
provision
(benefit) (459,244 ) (440,594 ) (16,582 ) 2,621 (4,689 ) (158,116 )
Amortization 162,436 38,602 41,985 41,422 40,427 229,437
---------------- ---------------- ------------ ------------- -------------------------
EBITDA (1,406,521 ) (1,474,152 ) 40,697 17,316 9,618 (551,262 )
Fair value
adjustments,
net (3,618 ) (7,229 ) (16,106 ) 8,281 11,436 (82,768 )
Gain on sale
of building - - - - - (1,200 )
Gain on
commutation
of
reclamation
bonding
arrangements - - - - - (7,609 )
Impairment
of
marketable
securities 6,593 1,979 1,092 934 2,588 18,308
Litigation
settlements - - - - - 32,046
Loss on
revolver
termination 3,035 - - - 3,035 -
Inventory
adjustments 14,482 14,482 4,993 6,353 4,373 5,691
Write-downs 1,472,721 1,4
Unternehmensinformation / Kurzprofil:
Datum: 18.02.2015 - 23:03 Uhr
Sprache: Deutsch
News-ID 372628
Anzahl Zeichen: 65578
contact information:
Town:
Chicago
Kategorie:
Business News
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