Coeur Reports First Quarter 2014 Results
07.05.2014 | Globenewswire Europe
Unit costs decline at Coeur's primary silver mines; 24% decrease in unit costsat Rochester
Chicago, Illinois - May 7, 2014 - Coeur Mining Inc. (the "Company" or "Coeur")
(NYSE: CDE) reported first quarter 2014 revenue of $159.6 million, adjusted net
loss(1) of $19.5 million, and cash flow from operating activities of $(9.6)
million ($14.9 million before changes in operating assets and liabilities). The
Company realized average metal prices of $20.29 per silver ounce and $1,298 per
gold ounce during the quarter, which were 33% and 20% lower, respectively, than
during the first quarter of 2013.
Coeur is maintaining its 2014 production guidance of 17.0 - 18.2 million silver
ounces and 220,000 - 238,000 gold ounces and is also maintaining its costs
applicable to sales guidance(1) for 2014 of $500 - $530 million. Coeur is
maintaining its full-year guidance for exploration ($23 - $28 million including
capitalized drilling), general and administrative expenses ($43 - $48 million),
and capital expenditures ($65 - $80 million). 2014 amortization is expected to
be approximately $190 million, which is higher than prior guidance due primarily
to a revised estimate of the impact of the impairment charge recorded in the
fourth quarter 2013.
--------------------------------------------------------------------------------
First Quarter Highlights
* Silver production totaled 4.1 million ounces, a 7% increase compared to last
year's first quarter
* Gold production totaled 58,836 ounces, a 3% increase compared to last year's
first quarter
* Costs applicable to sales at Coeur's primary silver mines declined 6% from
last year's first quarter to $13.25 per silver equivalent ounce(1)
* Costs applicable to sales per silver equivalent ounce(1) were $12.67 at
Rochester, down 24% from the fourth quarter and the lowest in over two years
* All-in sustaining costs per silver equivalent ounce(1) declined 4% from last
year's first quarter to $19.12
* Kensington's quarterly free cash flow of $9.2 million was its highest in
three years
* Revenue of $159.6 million was down 7% year-over-year due to lower average
realized prices
* Net loss was $37.2 million, or $0.36 per share
* Adjusted net loss(1) was $19.5 million, or $0.19 per share
* Cash, cash equivalents, and short-term investments totaled $318.6 million at
March 31, 2014
"I am pleased with the Company's performance through April. Our production
levels are on target and our costs are at the low end of guidance, which
reflects our organization's improved ability to establish and execute reliable,
well-engineered plans," said Mitchell J. Krebs, Coeur's President and Chief
Executive Officer. "As we enter the mid-point of 2014, we look forward to
demonstrating Rochester's continuing production growth and declining cost
profile and to providing the anticipated longer-term profile of our Palmarejo
operation during the second quarter. By the third quarter, we expect to complete
the feasibility study for the La Preciosa silver-gold project in Mexico and plan
to make a disciplined decision on how to proceed."
"In the meantime, we remain focused on improvements in the efficiency and
consistency of our existing operations," Mr. Krebs concluded.
Financial Highlights (Unaudited)
(Amounts in
millions,
except per
share amounts,
average
realized
prices, gold
ounces
produced &
sold, and per- Quarter
ounce metrics) 1Q 2014 4Q 2013 Variance 3Q 2013 2Q 2013 1Q 2013
----------------------------------------------------------------
Revenue $ 159.6 $ 168.8 (5 %) $ 200.8 $ 204.5 $ 171.8
Costs
Applicable to
Sales(1) $ 106.9 $ 101.4 5 % $ 131.8 $ 142.4 $ 88.1
Net Income
(Loss) $ (37.2 ) $ (581.5 ) 94 % $ (46.3 ) $ (35.0 ) $ 12.3
Earnings Per
Share $ (0.36 ) $ (5.77 ) 94 % $ (0.46 ) $ (0.35 ) $ 0.14
Adjusted Net
Income
(Loss)(1) $ (19.5 ) $ (17.0 ) (15 %) $ (29.3 ) $ (28.9 ) $ 2.6
Adjusted Net
Income
(Loss)(1 )Per
Share $ (0.19 ) $ (0.17 ) (12 %) $ (0.29 ) $ (0.29 ) $ 0.03
Weighted
Average Shares 102.4 100.7 (2 %) 100.8 99.8 90.0
Cash Flow From
Operating
Activities $ (9.6 ) $ 10.4 (192 %) $ 26.8 $ 63.3 $ 12.9
Capital
Expenditures $ 11.9 $ 28.1 (57 %) $ 32.7 $ 27.2 $ 12.8
Cash, Cash
Equivalents &
Short-Term
Investments $ 318.6 $ 206.7 54 % $ 211.4 $ 249.5 $ 332.8
Total Debt
(net of debt
discount) $ 464.2 $ 308.6 50 % $ 310.2 $ 305.3 $ 305.3
Average
Realized Price
Per Ounce -
Silver $ 20.29 $ 20.54 (1 %) $ 21.06 $ 22.86 $ 30.30
Average
Realized Price
Per Ounce -
Gold $ 1,298 $ 1,249 4 % $ 1,329 $ 1,416 $ 1,630
Silver Ounces
Produced 4.1 4.3 (5 %) 4.2 4.6 3.8
Gold Ounces
Produced 58,836 80,780 (27 %) 63,766 60,757 56,913
Silver Ounces
Sold 3.9 4.0 (4 %) 4.9 5.2 3.1
Gold Ounces
Sold 62,578 72,712 (14 %) 76,466 63,389 51,926
Silver
Equivalent
Ounces Sold 7.6 8.4 (10 %) 9.5 9.0 6.2
Costs
Applicable to
Sales per
Silver
Equivalent
Oz(1) $ 13.25 $ 12.49 6 % $ 13.82 $ 14.88 $ 14.07
All-in
Sustaining
Costs per
Silver
Equivalent
Oz(1) $ 19.12 $ 17.73 8 % $ 19.85 $ 21.01 $ 19.85
Financial Results
Coeur's adjusted net loss(1) was $19.5 million, or $0.19 per share, in the first
quarter 2014, compared with $17.0 million, or $0.17 per share, in the fourth
quarter 2013. First quarter adjusted net loss(1) excludes a $7.8 million
negative fair value adjustment, a $3.0 million write-off of capitalized costs
associated with the terminated revolving credit facility, and a $2.6 million
impairment of marketable securities. 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.
The Company realized a net loss of $37.2 million or $0.36 per share, in the
first quarter 2014. Cash flow from operating activities was $(9.6) million in
the first quarter, compared to $10.4 million in the fourth quarter 2013 due
primarily to a $12.4 million increase in ore added to the leach pads at
Rochester.
Downside Price Protection
The Company extended its downside metal price protection program during the
first quarter, using put spreads to protect a portion of expected 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. Instruments currently outstanding include put spreads covering 1.25
million ounces of expected quarterly silver production and 25,000 ounces of
expected quarterly gold production for each remaining quarter of 2014. Put
options purchased have a strike price of $18/ounce and $1,200/ounce for silver
and gold, respectively. Put options sold have a strike price of $16/ounce and
$1,050/ounce for silver and gold, respectively.
Operations
Highlights of the first quarter 2014 results for each of the Company's mining
operations are provided below.
Palmarejo, Mexico
+-------+
(Dollars in millions, expect per ounce| |
amounts) |1Q 2014|4Q 2013 3Q 2013 2Q 2013 1Q 2013
+-------+-------------------------------
Underground Operations: | |
| |
Tons mined |209,854|237,384 219,909 183,267 151,232
| |
Average silver grade (oz/t) | 5.95 | 6.00 4.73 4.59 4.22
| |
Average gold grade (oz/t) | 0.11 | 0.14 0.11 0.11 0.09
| |
Surface Operations: | |
| |
Tons mined |358,222|361,493 385,379 363,758 388,651
| |
Average silver grade (oz/t) | 3.50 | 3.49 3.49 4.95 3.45
| |
Average gold grade (oz/t) | 0.03 | 0.03 0.03 0.04 0.03
| |
Processing: | |
| |
Total tons milled |571,345|595,803 583,365 570,322 573,170
| |
Average recovery rate - Ag | 73.3% | 74.5% 81.8% 76.5% 78.8%
| |
Average recovery rate - Au | 78.0% | 80.6% 87.6% 81.2% 90.1%
| |
Silver ounces produced (000's) | 1,820 | 1,994 1,918 2,045 1,646
| |
Gold ounces produced |25,216 |35,487 29,893 28,191 22,965
| |
Silver ounces sold (000's) | 1,677 | 1,768 2,592 2,007 1,125
| |
Gold ounces sold |26,422 |31,360 38,385 28,025 14,500
| |
Revenues | $68.0 | $75.9 $104.5 $86.2 $57.4
| |
Costs applicable to sales(1) | $43.6 | $39.9 $66.8 $55.2 $26.7
| |
Costs applicable to sales per silver | |
equivalent ounce(1) |$13.36 |$10.90 $13.66 $14.97 $13.39
| |
Exploration expense | $1.0 | $1.1 $0.9 $3.2 $2.0
| |
Cash flow from operations | $10.2 | $16.6 $50.8 $37.2 $10.1
| |
Sustaining capital expenditures | $3.7 | $4.6 $7.1 $5.4 $2.6
| |
Development capital expenditures | $- | $4.3 $3.2 $3.8 $2.7
+-------+-------------------------------
Total capital expenditures | $3.7 | $8.9 $10.3 $9.2 $5.3
| |
Free cash flow (before royalties) | $6.5 | $7.7 $40.5 $28.0 $4.8
| |
Royalties paid (credited) | $14.7 | $13.5 $12.6 $15.5 $15.4
| |
Free cash flow (after royalties) |$(8.2) |$(5.8) $27.9 $12.5 $(10.6)
+-------+
* Tons milled per day at Palmarejo declined 2% compared to the fourth quarter,
but included a higher proportion of tonnage from the underground operations
as Coeur transitions the mine to a higher-grade, higher-margin operation
* Recovery rates decreased compared to the fourth quarter 2013; higher
recoveries are expected for the balance of 2014 as a result of ore blending
improvements and commissioning an expanded Merrill Crowe plant
* Capital expenditures of $3.7 million in the first quarter were down
significantly from $8.9 million in the fourth quarter 2013
San Bartolomé, Bolivia
+-------+
(Dollars in millions, expect per ounce| |
amounts) |1Q 2014|4Q 2013 3Q 2013 2Q 2013 1Q 2013
+-------+-------------------------------
Tons milled |385,375|451,660 428,884 424,310 374,985
| |
Average silver grade (oz/t) | 3.88 | 3.79 3.89 3.98 4.09
| |
Average recovery rate | 90.5% | 87.6% 91.5% 90.3% 90.6%
| |
Silver ounces produced (000's) | 1,355 | 1,499 1,528 1,523 1,391
| |
Silver ounces sold (000's) | 1,357 | 1,485 1,334 2,151 1,109
| |
Revenues | $27.6 | $30.6 $28.8 $49.2 $33.1
| |
Costs applicable to sales(1) | $18.9 | $20.6 $17.7 $32.8 $15.7
| |
Costs applicable to sales per silver | |
equivalent ounce(1) |$13.93 |$13.91 $13.25 $15.26 $14.14
| |
Exploration expense | $- | $- $- $- $-
| |
Cash flow from operations | $4.5 | $8.9 $7.6 $32.8 $(5.4)
| |
Sustaining capital expenditures | $1.4 | $1.8 $3.0 $1.4 $-
| |
Development capital expenditures | $- | $2.0 $1.2 $1.8 $-
+-------+-------------------------------
Total capital expenditures | $1.4 | $3.8 $4.2 $3.2 $-
| |
Free cash flow | $3.1 | $6.5 $2.1 $29.5 $(5.9)
+-------+
* San Bartolomé produced approximately 1.4 million ounces of silver, 10% below
the fourth quarter due to reduced mill throughput in order to implement
tailings facility improvements. Higher production is expected at San
Bartolomé for the remainder of 2014
Kensington, Alaska
+-------+
(Dollars in millions, expect per ounce| |
amounts) |1Q 2014|4Q 2013 3Q 2013 2Q 2013 1Q 2013
+-------+-------------------------------
Tons milled |159,697|149,246 147,427 127,987 129,057
| |
Average gold grade (oz/t) | 0.17 | 0.26 0.20 0.18 0.20
| |
Average recovery rate | 94.5% | 96.0% 96.5% 98.2% 96.2%
| |
Gold ounces produced |25,428 |37,404 29,049 23,162 25,206
| |
Gold ounces sold |28,386 |35,029 31,542 24,439 26,490
| |
Revenues | $36.1 | $39.7 $38.9 $30.9 $39.3
| |
Costs applicable to sales(1) | $28.5 | $23.4 $27.5 $30.2 $23.6
| |
Costs applicable to sales per gold | |
ounce(1) |$1,005 | $667 $871 $1,234 $890
| |
Exploration expense | $1.0 | $1.5 $1.5 $0.6 $0.7
| |
Cash flow from operations | $13.9 | $11.3 $1.9 $7.6 $11.7
| |
Sustaining capital expenditures | $4.7 | $5.7 $4.9 $7.4 $3.3
| |
Development capital expenditures | $- | $- $- $- $-
+-------+-------------------------------
Total capital expenditures | $4.7 | $5.7 $4.9 $7.4 $3.3
| |
Free cash flow | $9.2 | $5.0 $(3.7) $(0.3) $7.4
+-------+
* Kensington milled approximately 1,800 tons per day, up 11% from the fourth
quarter at an average gold grade of 0.17, significantly below fourth quarter
average grade but more in line with the mine's average reserve grade
* Costs applicable to sales per gold ounce(1 )were $1,005, higher than $667 in
the fourth quarter 2013 due to lower gold grades and production levels
* Cash flow from operations of $13.9 million was above the $11.3 million
generated in the fourth quarter due to a reduction in working capital
Rochester, Nevada
+---------+
(Dollars in millions, expect| |
per ounce amounts) | 1Q 2014 | 4Q 2013 3Q 2013 2Q 2013 1Q 2013
+---------+---------------------------------------
Ore tons placed |3,640,861|4,569,588 2,678,906 2,457,423 2,606,001
| |
Silver ounces produced | |
(000's) | 750 | 712 595 844 648
| |
Gold ounces produced | 8,192 | 7,890 4,824 9,404 8,742
| |
Silver ounces sold (000's) | 695 | 621 741 851 715
| |
Gold ounces sold | 7,770 | 6,323 6,539 10,925 10,936
| |
Revenues | $24.2 | $20.6 $24.3 $34.9 $39.5
| |
Costs applicable to sales(1)| $14.7 | $16.6 $17.9 $22.5 $20.8
| |
Costs applicable to sales | |
per silver equivalent | |
ounce(1) | $12.67 | $16.63 $15.83 $14.95 $15.15
| |
Exploration expense | $1.2 | $1.0 $0.6 $0.5 $0.5
| |
Cash flow from operating | |
activities | $(9.0) | $(9.7) $(3.6) $(3.4) $5.6
| |
Sustaining capital | |
expenditures | $1.0 | $7.2 $12.3 $6.6 $3.3
| |
Development capital | |
expenditures | $- | $- $- $- $-
+---------+---------------------------------------
Total capital expenditures | $1.0 | $7.2 $12.3 $6.6 $3.3
| |
Royalties paid (credited) | $0.5 | $(2.5) $- $- $1.0
| |
Free cash flow (after | |
royalties) | $(10.5) | $(14.4) $(15.9) $(10.0) $1.3
+---------+
* Rochester produced 750,362 ounces of silver and 8,192 ounces of gold in the
first quarter, increases of 5% and 4%, respectively, compared to the fourth
quarter 2013
* Costs applicable to sales per silver equivalent ounce(1) were $12.67, 24%
lower than the fourth quarter 2013
* Rochester is expected to substantially increase production levels during the
remainder of 2014 at unit costs below 2013
* Cash flow from operating activities of $(9.0) million was only slightly
improved from $(9.7) million in the fourth quarter 2013 due to a $12.4
million increase in ore under leach at end of the first quarter
* Capital expenditures were $1.0 million during the first quarter,
significantly below the fourth quarter 2013
Endeavor, Australia
+-------+
(Dollars in millions, expect per ounce| |
amounts) |1Q 2014|4Q 2013 3Q 2013 2Q 2013 1Q 2013
+-------+-------------------------------
Tons milled |193,219|200,843 197,237 198,517 194,519
| |
Average silver grade (oz/t) | 1.65 | 1.37 1.71 2.73 1.61
| |
Average recovery rate | 52.7% | 48.2% 48.2% 40.9% 47.8%
| |
Silver ounces produced (000's) | 168 | 135 162 221 150
| |
Silver ounces sold (000's) | 133 | 135 207 219 109
| |
Revenues | $2.9 | $2.1 $4.3 $3.5 $3.0
| |
Costs applicable to sales(1) | $1.2 | $0.9 $1.9 $1.7 $1.3
| |
Costs applicable to sales per silver | |
equivalent ounce(1) | $8.90 | $8.32 $10.09 $8.48 $12.13
| |
Cash flow from operating activities | $1.5 | $1.3 $1.2 $1.2 $1.6
| |
Free cash flow | $1.5 | $1.3 $1.2 $1.2 $1.6
+-------+
* Higher silver grade and recovery rates in the first quarter resulted in a
9% increase in silver production
* Coeur owns all silver production and reserves at Endeavor up to a total of
20.0 million payable ounces. At March 31, 2014, the Company has received
5.0 million payable ounces
La Preciosa, Mexico
* Coeur is continuing work on the feasibility study which is expected to be
completed in mid-2014. The Company will then evaluate the economics of the
project and determine whether to proceed with construction
* Feasibility work in 2014 indicates further progress in improving the
project's expected economics compared to those reflected in the preliminary
economic assessment
* The Company spent $6.1 million during the first quarter 2014 and remains on
budget to spend a total of $25 million for the feasibility work, including
exploration activities, engineering and design, land purchases, and
sustainability projects within the community
Exploration
Costs associated with exploration activities for the first quarter 2014 were
$4.2 million (expensed) for discovery of new silver and gold mineralization and
$1.1 million (capitalized) for definition and expansion of discoveries, for a
total of $5.3 million. Coeur's exploration program used up to ten drill rigs
during the first quarter: four drills at Palmarejo, four at Kensington, and two
at Rochester. This work resulted in completion of over 76,703 feet (23,379
meters) of combined core and reverse circulation drilling.
2014 Production Outlook
Coeur's 2014 silver and gold production guidance remains unchanged as shown
below.
(silver and silver
equivalent ounces in
thousands) Silver Gold Silver Equivalent
-------------------------------------------------------------------------------
Palmarejo, Mexico 6,700 - 7,200 87,000 - 95,000 11,920 - 12,900
San Bartolomé, Bolivia 5,700 - 6,000 - 5,700 - 6,000
Rochester, Nevada 4,100 - 4,400 28,000 - 31,000 5,780 - 6,260
Endeavor, Australia 500 - 600 - 500 - 600
-------------------------------------------------------------------------------
Kensington, Alaska - 105,000 - 112,000 6,300 - 6,720
Total 17,000-18,200 220,000-238,000 30,200 - 32,480
-------------------------------------------------------------------------------
1. Adjusted net income (loss), all-in sustaining costs, and costs applicable to
sales 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.
Conference Call Information
Coeur will conduct a conference call and webcast at coeur.com to discuss the
Company's first quarter results on May 8, 2014 at 11:00 a.m. Eastern time.
Dial-In Numbers: (877) 768-0708 (U.S. and Canada)
(660) 422-4718 (International)
Conference ID: 255 26 141
A replay of the call will be available on Coeur's website through May 22, 2014.
Replay Numbers: (855) 859-2056 (U.S. and Canada)
(404) 537-3406 (International)
Conference ID: 255 26 141
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, expectations regarding the La
Preciosa silver-gold project, Rochester's production growth and cost profile,
the longer-term profile of Palmarejo, recovery rates and initiatives to minimize
exposure to declining metal prices, and improve efficiency and the consistency
of our existing operations. 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 ore reserves, changes that could
result from Coeur's future acquisition of new mining properties or businesses,
reliance on third parties to operate certain mines where Coeur owns silver
production and reserves 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 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.
The preliminary economic assessment (PEA) referenced in this news release is
preliminary in nature and it includes inferred mineral resources that are
considered too speculative geologically to have the economic considerations
applied to them that would enable them to be characterized as mineral reserves
and there is no certainty that the results reflected in the PEA will be
realized. Mineral resources that are not mineral reserves do not have
demonstrated economic viability. Mineral resource estimates do not account for
minability, selectivity, mining loss and dilution. There is no certainty that
the inferred mineral resources will be converted to the measured and indicated
categories or that the measured and indicated mineral resources will be
converted to the proven and probable mineral reserve categories.
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. 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 sedar.com.
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission permits U.S. mining
companies, in their filings with the SEC, to disclose only those mineral
deposits that a company can economically and legally extract or produce. We may
use certain terms in public disclosures, such as "measured," "indicated,"
"inferred" and "resources," that are recognized by Canadian regulations, but
that SEC guidelines generally prohibit U.S. registered companies from including
in their filings with the SEC. U.S. investors are urged to consider closely the
disclosure in our Form 10-K which may be secured from us, or from the SEC's
website at http://www.sec.gov.
Non-U.S. GAAP Measures
We supplement the reporting of our financial information determined under United
States generally accepted accounting principles (U.S. GAAP) with certain non-
U.S. GAAP financial measures, including adjusted net income (loss), costs
applicable to sales, 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, and all-in sustaining
costs are important measures in assessing the Company's overall financial
performance.
For Additional Information:
Bridget Freas, Director, Investor Relations
(312) 489-5819
Donna Mirandola, Director, Corporate Communications
(312) 489-5842
coeur.com
Coeur Mining Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
Three months ended March
31,
2014 2013
------------- ------------
(In thousands, except
share data)
Revenue $ 159,633 $ 171,797
COSTS AND EXPENSES
Costs applicable to sales 106,896 88,059
Amortization 40,459 49,724
General and administrative 13,896 10,227
Exploration 4,217 6,841
Write-downs - 119
Pre-development, reclamation, and other 6,984 5,197
------------- ------------
Total costs and expenses 172,452 160,167
OTHER INCOME (EXPENSE), NET
Fair value adjustments, net (11,436 ) 17,796
Impairment of marketable securities (2,588 ) (35 )
Interest income and other, net (1,983 ) 3,856
Interest expense, net of capitalized interest (13,054 ) (9,732 )
------------- ------------
Total other income (expense), net (29,061 ) 11,885
------------- ------------
Income (loss) before income and mining taxes (41,880 ) 23,515
Income and mining tax (expense) benefit 4,689 (11,245 )
------------- ------------
NET INCOME (LOSS) $ (37,191 ) $ 12,270
------------- ------------
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Unrealized gain (loss) on marketable securities, net
of tax of $(234) in 2014 371 (3,566 )
Reclassification adjustments for impairment of
marketable securities, net of tax of $(1,001) in
2014 1,587 35
------------- ------------
Other comprehensive income (loss) 1,958 (3,531 )
------------- ------------
COMPREHENSIVE INCOME (LOSS) $ (35,233 ) $ 8,739
------------- ------------
NET INCOME (LOSS) PER SHARE
Basic $ (0.36 ) $ 0.14
------------- ------------
Diluted $ (0.36 ) $ 0.14
------------- ------------
Coeur Mining Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Three months ended March
31,
2014 2013
------------- ------------
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (37,191 ) $ 12,270
Adjustments:
Amortization 40,459 49,724
Accretion 4,560 4,904
Deferred income taxes (11,781 ) 7,425
Loss on termination of revolving credit facility 3,035 -
Fair value adjustments, net 10,557 (16,042 )
Gain on foreign currency transactions (209 ) (465 )
Stock-based compensation 2,565 1,096
(Gain) loss on sale of assets 271 (868 )
Impairment of marketable securities 2,588 35
Write-downs - 119
Other - 526
Changes in operating assets and liabilities:
Receivables 5,622 3,968
Prepaid expenses and other current assets (8,109 ) (2,240 )
Inventory and ore on leach pads (13,912 ) (20,493 )
Accounts payable and accrued liabilities (8,082 ) (27,025 )
------------- ------------
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (9,627 ) 12,934
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (11,936 ) (12,827 )
Purchase of short-term investments and marketable
securities (46,220 ) (4,649 )
Sales and maturities of short-term investments 90 4,822
Other (25 ) (10,610 )
------------- ------------
CASH USED IN INVESTING ACTIVITIES (58,091 ) (23,264 )
------------- ------------
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 (4,111 ) (55,340 )
Gold production royalty payments (14,683 ) (15,448 )
Share repurchases - (12,557 )
Other (246 ) (454 )
------------- ------------
CASH PROVIDED BY FINANCING ACTIVITIES 133,960 216,201
------------- ------------
INCREASE IN CASH AND CASH EQUIVALENTS 66,242 205,871
Cash and cash equivalents at beginning of period 206,690 125,440
------------- ------------
Cash and cash equivalents at end of period $ 272,932 $ 331,311
------------- ------------
Coeur Mining Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
March 31, December 31,
2014 2013
--------------- ------------------
ASSETS (In thousands, except share data)
CURRENT ASSETS
Cash and cash equivalents $ 272,932 $ 206,690
Investments 45,628 -
Receivables 75,806 81,074
Ore on leach pads 59,895 50,495
Inventory 133,578 132,023
Deferred tax assets 34,998 35,008
Prepaid expenses and other 30,835 25,940
--------------- ------------------
653,672 531,230
NON-CURRENT ASSETS
Property, plant and equipment, net 476,837 486,273
Mining properties, net 1,740,474 1,751,501
Ore on leach pads 34,485 31,528
Restricted assets 7,426 7,014
Marketable securities 15,646 14,521
Receivables 36,271 36,574
Debt issuance costs, net 11,356 10,812
Deferred tax assets 829 1,189
Other 9,989 15,336
--------------- ------------------
TOTAL ASSETS $ 2,986,985 $ 2,885,978
--------------- ------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 49,958 $ 53,847
Accrued liabilities and other 29,861 38,266
Debt 8,095 2,505
Royalty obligations 50,250 48,019
Reclamation 762 913
Deferred tax liabilities 1,858 1,011
--------------- ------------------
140,784 144,561
NON-CURRENT LIABILITIES
Debt 456,152 306,130
Royalty obligations 62,390 65,142
Reclamation 58,630 57,515
Deferred tax liabilities 544,096 556,246
Other long-term liabilities 27,236 25,817
--------------- ------------------
1,148,504 1,010,850
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share;
authorized 150,000,000 shares, issued and
outstanding 103,584,671 at March 31, 2014
and 102,843,003 at December 31, 2013 1,035 1,028
Additional paid-in capital 2,783,520 2,781,164
Accumulated other comprehensive loss (2,948 ) (4,906 )
Accumulated deficit (1,083,910 ) (1,046,719 )
--------------- ------------------
1,697,697 1,730,567
--------------- ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,986,985 $ 2,885,978
--------------- ------------------
Adjusted Net Income Reconciliation
(Dollars in
thousands
except per
share
amounts) 1Q 2014 4Q 2013 3Q 2013 2Q 2013 1Q 2013
------------- -------------- ------------- ------------- -----------
Net income
(loss) $ (37,191 ) $ (581,528 ) $ (46,265 ) $ (35,040 ) $ 12,270
Fair value
adjustments,
net 7,827 (11,289 ) 13,717 (48,434 ) (13,467 )
Stock-based
compensation 2,453 1,034 358 2,308 1,085
Impairment
of
marketable
securities 2,588 211 870 17,192 35
Accretion of
royalty
obligation 1,821 2,974 2,022 2,897 2,569
Write-downs - 580,365 - 86 119
Litigation
settlement - - - 32,046 -
Gain on sale
of building - (1,200 ) - - -
Gain on
commutation
of
reclamation
bonding
arrangements - (7,609 ) - - -
Loss on
revolver
termination 3,035 - - - -
------------- -------------- ------------- ------------- -----------
Adjusted net
income
(loss) $ (19,467 ) $ (17,042 ) $ (29,298 ) $ (28,945 ) $ 2,611
------------- -------------- ------------- ------------- -----------
Adjusted net
income
(loss) per
share $ (0.19 ) $ (0.17 ) $ (0.29 ) $ (0.29 ) $ 0.03
------------- -------------- ------------- ------------- -----------
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 $ 106,896
Silver
equivalent
ounces sold 3,261,982 1,357,307 1,160,829 132,800 5,912,918
Gold ounces
sold 28,386
------------- ------------- ------------- ----------- ------------- ------------
Costs
applicable to
sales per
ounce $ 13.36 $ 13.93 $ 12.67 $ 8.90 $ 13.25 $ 1,005
------------- ------------- ------------- ----------- ------------- ------------
Treatment and
refining costs 1,672
Sustaining
capital 11,936
General and
administrative 13,896
Exploration 4,217
Reclamation 1,286
Project/pre-
development
costs 5,698
------------
All-in
sustaining
costs $ 145,601
Silver
equivalent
ounces sold 5,912,918
Kensington
silver
equivalent
ounces sold 1,703,160
------------
Consolidated
silver
equivalent
ounces sold 7,616,078
------------
All-in
sustaining
costs per
silver
equivalent
ounce $ 19.12
------------
Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent
Ounce
for Three Months Ended December 31, 2013
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) $ 75,690 $ 25,513 $ 19,167 $ 1,741 $ 122,111 $ 41,590 $ 163,701
Amortization 35,894 4,851 2,529 801 44,075 18,218 62,293
------------- ------------- ------------- ----------- ------------- ------------ ------------
Costs
applicable to
sales $ 39,796 $ 20,662 $ 16,638 $ 940 $ 78,036 $ 23,372 $ 101,408
Silver
equivalent
ounces sold 3,649,557 1,485,217 1,000,568 112,965 6,248,307
Gold ounces
sold 35,029
------------- ------------- ------------- ----------- ------------- ------------
Costs
applicable to
sales per
ounce $ 10.90 $ 13.91 $ 16.63 $ 8.32 $ 12.49 $ 667
------------- ------------- ------------- ----------- ------------- ------------
Treatment and
refining costs 2,321
Sustaining
capital 21,674
General and
administrative 13,851
Exploration 5,440
Reclamation 938
Project/pre-
development
costs 2,456
------------
All-in
sustaining
costs $ 148,088
Silver
equivalent
ounces sold 6,248,307
Kensington
silver
equivalent
ounces sold 2,101,740
------------
Consolidated
silver
equivalent
ounces sold 8,350,047
------------
All-in
sustaining
costs per
silver
equivalent
ounce $ 17.73
------------
Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent
Ounce
for Three Months Ended September 30, 2013
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) $ 100,314 $ 22,460 $ 20,458 $ 2,765 $ 145,997 $ 45,571 $ 191,568
Amortization 33,475 4,788 2,519 894 41,676 18,086 59,762
------------- ------------- ------------- ----------- ------------- ------------ ------------
Costs
applicable to
sales $ 66,839 $ 17,672 $ 17,939 $ 1,871 $ 104,321 $ 27,485 $ 131,806
Silver
equivalent
ounces sold 4,894,600 1,334,066 1,133,525 185,505 7,547,696
Gold ounces
sold 31,542
------------- ------------- ------------- ----------- ------------- ------------
Costs
applicable to
sales per
ounce $ 13.66 $ 13.25 $ 15.83 $ 10.09 $ 13.82 $ 871
------------- ------------- ------------- ----------- ------------- ------------
Treatment and
refining costs 3,159
Sustaining
capital 27,978
General and
administrative 16,240
Exploration 3,305
Reclamation 968
Project/pre-
development
costs 3,955
------------
All-in
sustaining
costs $ 187,411
Silver
equivalent
ounces sold 7,547,696
Kensington
silver
equivalent
ounces sold 1,892,520
------------
Consolidated
silver
equivalent
ounces sold 9,440,216
------------
All-in
sustaining
costs per
silver
equivalent
ounce $ 19.85
------------
Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent
Ounce
for Three Months Ended June 30, 2013
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) $ 90,603 $ 37,639 $ 24,506 $ 2,903 $ 155,651 $ 43,313 $ 198,964
Amortization 35,384 4,825 1,990 1,220 43,419 13,159 56,578
------------- ------------- ------------- ----------- ------------- ------------ ------------
Costs
applicable to
sales $ 55,219 $ 32,814 $ 22,516 $ 1,683 $ 112,232 $ 30,154 $ 142,386
Silver
equivalent
ounces sold 3,688,500 2,151,000 1,506,508 198,419 7,544,427
Gold ounces
sold 24,439
------------- ------------- ------------- ----------- ------------- ------------
Costs
applicable to
sales per
ounce $ 14.97 $ 15.26 $ 14.95 $ 8.48 $ 14.88 $ 1,234
------------- ------------- ------------- ----------- ------------- ------------
Treatment and
refining costs 2,317
Sustaining
capital 20,919
General and
administrative 15,025
Exploration 6,774
Reclamation 936
Project/pre-
development
costs 973
------------
All-in
sustaining
costs $ 189,330
Silver
equivalent
ounces sold 7,544,427
Kensington
silver
equivalent
ounces sold 1,466,340
------------
Consolidated
silver
equivalent
ounces sold 9,010,767
------------
All-in
sustaining
costs per
silver
equivalent
ounce $ 21.01
------------
Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent
Ounce
for Three Months Ended March 31, 2013
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) $ 55,500 $ 20,318 $ 22,629 $ 2,149 $ 100,596 $ 36,851 $ 137,447
Amortization 28,782 4,640 1,852 828 36,102 13,286 49,388
------------- ------------- ------------- ----------- ------------- ------------ ------------
Costs
applicable to
sales $ 26,718 $ 15,678 $ 20,777 $ 1,321 $ 64,494 $ 23,565 $ 88,059
Silver
equivalent
ounces sold 1,995,000 1,108,874 1,371,598 108,942 4,584,414
Gold ounces
sold 26,490
------------- ------------- ------------- ----------- ------------- ------------
Costs
applicable to
sales per
ounce $ 13.39 $ 14.14 $ 15.15 $ 12.13 $ 14.07 $ 890
Treatment and
refining costs 2,535
Sustaining
capital 9,672
General and
administrative 10,227
Exploration 6,841
Reclamation 712
Project/pre-
development
costs 4,485
------------
All-in
sustaining
costs $ 122,531
Silver
equivalent
ounces sold 4,584,414
Kensington
silver
equivalent
ounces sold 1,589,400
------------
Consolidated
silver
equivalent
ounces sold 6,173,814
------------
All-in
sustaining
costs per
silver
equivalent
ounce $ 19.85
------------
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Coeur Mining Inc. via GlobeNewswire
[HUG#1783280]
