Slide 1: Third Quarter and First Nine Months 2010
Third Quarter and First Nine Months 2010 November 4th, 2010 1
Slide 2: Cautionary Statement
Cautionary Statement This presentation contains forward‐looking statements within the meaning of securities legislation in the United States, Canada, and Australia, including statements regarding anticipated operating results. Such statements are subject to numerous assumptions and uncertainties, ma
Slide 3: Momentum Builds From Three New Mines
Momentum Builds From Three New Mines • Gold production doubled; silver production rose 4% • Cash operating costs dropped 40% to $4.87/oz • Record metal sales of $118.6 million up 17% • 58% increase in operating cash flow1 • Capex declined to lowest level in over four years • Expect 17m ounces of sil
Slide 4: Operational Accomplishments
Operational Accomplishments 4
Slide 5: Silver Production Resuming Growth
Silver Production Resuming Growth Quarterly Silver Production 6.0 5.2 5.0 4.3 4.3 4.2 (M oz) 4.0 3.4 3.0 2.0 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 5
Slide 6: 105% Increase in Gold Production
105% Increase in Gold Production Quarterly Gold Production 50,000 47,514 45,000 40,000 35,000 105% (ounces) 30,000 28,955 25,571 25,782 25,000 23,124 20,000 15,000 10,000 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 6
Slide 7: Kensington
COEUR THE PRECIOUS METALS COMPANY Kensington
Slide 8: Kensington Completes First Full Quarter
Kensington Completes First Full Quarter • Produced 15,155 gold ounces in first quarter of production • 125,000 ounces of estimated average annual gold production at average cash operating cost of $490/oz. over initial 12.5 year mine life • 1.5 million ounces of proven & probable reserves 8
Slide 9: Palmarejo
COEUR THE PRECIOUS METALS COMPANY Palmarejo
Slide 10: Palmarejo's Strongest Quarter
Palmarejo’s Strongest Quarter Quarterly Silver Production Quarterly Gold Production 1,600,000 31,000 1,500,000 29,000 1,400,000 1,300,000 41% 27,000 25,000 49% 1,200,000 23,000 1,100,000 21,000 1,000,000 19,000 900,000 17,000 800,000 15,000 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 3Q '09 4Q '09 1Q '10 2Q
Slide 11: Encouraging Trends at Palmarejo
Encouraging Trends at Palmarejo Quarterly Metal Sales Cash Op Costs/Silver Ounce $65 $12 37% $10 $55 $8 $45 $6 99% $4 $35 $2 $25 $0 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 ‐$2 11
Slide 12: Higher Open-Pit Grades at Palmarejo
Higher Open‐Pit Grades at Palmarejo Silver Grade Mined by Quarter Gold Grade Mined by Quarter 6.0 0.08 5.0 0.07 Ounces per ton Ounces per ton 4.0 0.06 156% 133% 3.0 0.05 2.0 0.04 1.0 0.03 0.0 0.02 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 Tons Mined – Open Pit 3Q ’09 4Q ’
Slide 13: Higher Underground Grades at Palmarejo
Higher Underground Grades at Palmarejo Silver Grade Mined by Quarter Gold Grade Mined by Quarter 6.0 0.11 11% 10% 0.10 Ounces per ton Ounces per ton 5.5 0.09 5.0 0.08 4.5 0.07 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 Tons Mined – Underground 3Q ’09 4Q ’09 1Q ’10 2Q ’10 3
Slide 14: Palmarejo Recovery Rates
Palmarejo Recovery Rates Silver Recovery Rate Gold Recovery Rate 80% 95% 75% 90% 70% 65% 85% 60% 80% 55% 50% 75% 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 Oct. '10 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 Oct. '10 14
Slide 15: San Bartolomé
COEUR THE PRECIOUS METALS San Bartolomé 15
Slide 16: Production & Costs at San Bartolomé
Production & Costs at San Bartolomé Quarterly Silver Production Quarterly Cash Op. Costs/Oz 2,250,000 $11.00 2,000,000 $10.00 1,750,000 $9.00 1,500,000 $8.00 1,250,000 9% $7.00 1,000,000 750,000 $6.00 500,000 $5.00 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 2010 YTD: 4,697
Slide 17: Higher Grades & Margins at San Bartolomé
Higher Grades & Margins at San Bartolomé Quarterly Silver Grade (oz/t) Quarterly Gross Margin1 6.0 60% 14% 12% 5.5 50% 5.0 40% 4.5 30% 4.0 3.5 20% 3.0 10% 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 3Q '09 4Q '09 1Q '10 2Q '10 3Q '10 17 1 Defined as net metal sales less production costs expressed as a % of n
Slide 18: Rochester
COEUR THE PRECIOUS METALS COMPANY Rochester 18
Slide 19: Rochester Rebirth
Rochester Rebirth • 25 year operation with promising future ahead • New production to begin in 4Q ’11 and lift total annual average production levels to over 2.4 million silver ounces and 35,000 gold ounces for several years • Current reserves of 27.6 million silver ounces and 247,000 gold ounces •
Slide 20: Martha
COEUR THE PRECIOUS METALS COMPANY Martha 20
Slide 21: Mine Life Extension at Martha
Mine Life Extension at Martha • Entered 2010 with 1.2 million ounces of proven and probable silver reserves and 1.8 million ounces of measured and indicated silver resources • Produced 1.4 million silver ounces and 1,674 gold ounces through September 30th • Operations now expected to extend through
Slide 22: Finance Update
THE PRECIOUS METALS COMPANY Finance Update 22
Slide 23: 17% Increase in Metal Sales
17% Increase in Metal Sales Quarterly Net Metal Sales ($ millions) $118.6 $101.0 $97.4 $90.3 $87.5 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 23
Slide 24: 37% Increase in Gross Mine Profit
37% Increase in Gross Mine Profit Quarterly Gross Mine Profit 1 ($ millions) $58.2 37% $42.4 $40.8 $36.5 49.1% $30.6 42.0% 41.9% 41.7% 33.9% Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 24 1 Defined as metal sales less production costs; excludes depreciation, depletion and amortization
Slide 25: Significant Growth in Operating Income
Significant Growth in Operating Income Quarterly Operating Income (Loss) ($ millions) $10.5 453% $1.9 ($1.9) ($4.1) ($3.7) Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 25
Slide 26: 58% Increase in Operating Cash Flow
58% Increase in Operating Cash Flow1 Quarterly Operating Cash Flow1 ($ millions) $39.2 58% $34.7 $27.7 $22.0 ($1.0) Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 26 1 Non‐GAAP measure. Defined as operating cash flow before changes in operating assets and liabilities
Slide 27: Declining Capital Expenditures
Declining Capital Expenditures Quarterly Capital Expenditures ($ millions) $54.4 $47.2 $45.5 $44.2 19% $36.8 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 27
Slide 28: Balance Sheet Summary
COEUR Balance Sheet Summary Cash, Equivalents & Short-Term Investments $45.6 $22.8 $56.0 $41.2 $32.8 Short-Term Debt: 1.25% Convertible Senior Notes $0.0 $0.0 $1.9 $1.9 $1.9 Senior Term Notes 0.0 0.0 33.3 33.3 33.3 Credit Suisse Term Facility 0.0 0.0 1.8 5.1 8.6 Subsidiary Bank Loans 1.3 2.5 2.5 8.5
Slide 29: Consistent and Significant Production Growth
Consistent and Significant Production Growth 20 180,000 160,000 18 140,000 Millions of Silver Ounces 16 120,000 Gold Ounces 14 100,000 12 80,000 60,000 10 40,000 8 20,000 6 0 Silver Gold Silver 1 Gold 1 ►29% Average Annual Silver Production Growth ►96% Average Annual Gold Production Growth 29
Slide 30: Exploration Update
THE PRECIOUS METALS COMPANY Exploration Update 30
Slide 31: Exploration Highlights
Exploration Highlights 9 Large drilling program continued the pace from Q2 with nearly 30,500 meters Palmarejo (17,824m), Joaquin and Martha (6,368m), Rochester (3,110m), Kensington (2,238m), others (1,053m) Palmarejo – Focused at the Palmarejo mine and at Guadalupe, Guadalupe zone extended and now
Slide 32: Palmarejo Exploration
Palmarejo Exploration • Q3 2010 ‐ drilling on the 108, 76 and Tucson clavos. Positive results from all. 7.5 meters (true) @ 3.25 g/t Au and 132 g/t Ag in hole 108C‐0035 (108) 6.2 m @ 5.46 Au, 295 Ag in 76C‐0050 (76) 10.2 m @ 4.60 Au, 681 Ag in Tu‐0033 (Tucson) Looking North 32
Slide 33: Guadalupe Zone Expanded with New High Grades
Guadalupe Zone Expanded with New High Grades Guadalupe Norte Las Animas Approx 300 m Approx 2.5 Kms • Q3 2010 Drilling on Animas and Guadalupe Norte • High Au and Ag mineralization at Guadalupe Norte extended to nearly 2.5 kms Au grades higher than main Guadalupe • Notable results; TDGH 355, 9.4 met
Slide 34: Joaquin: High Grades at Morocha; Definition Drilling at La Negra
Joaquin: High Grades at Morocha; Definition Drilling at La Negra Cover Welded Tuff Crystal Tuff Undiferenciated Tuff Mineralized Structures Breccias Faults Drill Holes Targets New core hole, DDJ‐100 30 m true width @ 0.22 g/t Au, 408 g/t Ag Definition drilling (deepest drilling to‐date) commenced in
Slide 35: Kensington Exploration
Kensington Exploration • Horrible; first Orval Shear drilling for Coeur Horrible 2050’ Level Vein • Multiple Au‐bearing System quartz veins in 31 of 35 2010 core holes • System extends 850’ Level from +2000 foot to Kensington below sea level and Mine +300 feet strike Hole H10‐016 (see photos) • Foll
Slide 36: High Grades at Kensington
High Grades at Kensington Horrible H10‐031, 326‐335 ft 326.7 feet to 337.8 feet; 10.1ft @ 0.493 oz/t Au incl. 326.7 to 330.5 @ 1.069 oz/t Au incl. 333.0 to 337.8 ft @ 0.272 oz/t Au Good core recovery, with quartz, pyrite and carbonate veining, typical of Kensington Horrible H10‐016, 479‐488 ft 486.5
Slide 37: Favorable Exploration Results at Rochester
Favorable Exploration Results at Rochester • 34 reverse circulation drill holes at North Rochester Packard in Q3 2010; Notable results NP10‐016, 90 ft @ 1.83 Ag and 0.018 Au oz/t Packard NP10‐025, 20 ft @ 2.53 Ag and 0.007 Au oz/t NP10‐031, 30 FT @ 2.58 Ag and 0.002 Au oz/t Denotes significant miner
Slide 38: Precious Metals Overview
THE PRECIOUS METALS COMPANY Precious Metals Overview 38
Slide 39: Rising Gold and Silver Demand
Rising Gold and Silver Demand • Gold and silver prices up 30% and 47%, respectively, over past year • Precious metals the relative safe haven against currency devaluation and “QE2” • Record low interest rates and loosest monetary policy in decades expected to continue to benefit precious metals • Ch
Slide 40: Rising Gold Investment Demand
Rising Gold Investment Demand Gold Prices and ETF Holdings $50 $1,400 $45 $1,200 $40 $35 $1,000 Billion NAV Price Per Ounce $30 $800 $25 $600 $20 $15 $400 $10 $200 $5 $0 $0 2007 2008 2009 2010 Oct. 14, 2010 NAV of GLD ETF's at Jan. 1 Gold Prices at Jan. 1 40
Slide 41: Rising Silver Investment Demand
Rising Silver Investment Demand Silver Prices and ETF Holdings 350 $25 300 $20 250 Price Per Ounce Million Ounces $15 200 150 $10 100 $5 50 0 $0 2007 2008 2009 2010 Oct. 14, 2010 Silver held by iShares ETF Silver Prices at Jan. 1 41
Slide 42: Strong Silver Fundamentals
Strong Silver Fundamentals • Silver has outperformed gold 2 to 1 this year • Lowering gold/silver ratio • Investment main factor behind rally in price to nearly $25/oz • Worldwide ETF holdings approaching 450 million ounces • Sovereign debt crisis/inflation fears/loose monetary policy/weak U.S. doll
Slide 43: Conclusion
THE PRECIOUS METALS COMPANY Conclusion 43
Slide 44: Impact of Strategic Plan Demonstrated in 3Q
Impact of Strategic Plan Demonstrated in 3Q • All three new gold and silver mines now in production • Rochester rebirth to add a fourth major contributor • Production, sales and cash flow all climbing rapidly • Operating costs and capex declining • Cash position building • Backdrop of continued robu