Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q2 2017 Earnings Presentation
52 slides from Coeur Mining's earnings presentation, Jul 27, 2017
Slide 1: Second Quarter Earnings
2017 Second Quarter Earnings 11:00am ET, July 27, 2017 NYSE: CDE NYSE: CDE 1 JC 2016
Slide 2: Cautionary Statements
Cautionary Statements This presentation contains forward‐looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding exploration efforts, the La Preciosa project and the timing of publication of a Preliminary Economic Assessment (PE
Slide 3: Quarter in Review
Quarter in Review NYSE: CDE 3 JC 2016
Slide 4: Continued Pursuit of Long-Term Objectives
Continued Pursuit of Long-Term Objectives Leading Safety and Enhancing the Environmental Portfolio Quality Performance Margin Expansion Balance Sheet and Cash Flow Strength and Generation Flexibility NYSE: CDE 4 JC 2016
Slide 5: Highlights
Highlights • Quarterly silver and gold production down – Lower companywide production driven by lower mining rates and mining of lower grade stopes at Palmarejo; production at other mines increased during the quarter • Higher second quarter costs per ounce impacted by lower production – Higher compa
Slide 6: Summary Figures
Summary Figures ($M) 2Q 2017 1Q 2017 QoQ Δ 2Q 2016 YoY Δ Silver ounces sold (M oz) 4.1 4.5 (9%) 4.0 3% Gold ounces sold (oz) 86,194 110,874 (22%) 88,543 (3%) Revenue $173.4 $206.1 (16%) $182.0 (5%) Costs applicable to sales $125.6 $132.7 (5%) $100.5 25% Exploration expense $7.8 $5.3 49% $2.2 250% Ge
Slide 7: Production and Sales In-Line
Production and Sales In-Line Higher quarterly production was achieved across all mines except Palmarejo, where lower mining rates and mining of lower grade stopes reduced production quarter-over-quarter; companywide production expected to increase in 2H Silver Equivalent1 Production (M oz) 10.0 9.6
Slide 8: Production Costs Expected to Decline in 2H
Production Costs Expected to Decline in 2H Unit Costs1 2Q Factors 2H Drivers $9.25 • Additional ground support required in certain areas • Higher mining rates at Independencia of Independencia $13.77 $11.80 $10.11 Palmarejo • Higher grade stopes anticipated to be $9.57 $8.87 • Lower grade stopes min
Slide 9: Companywide Costs Expected to Remain Steady
Companywide Costs Expected to Remain Steady Lower anticipated production costs expected to be partially offset by higher sustaining capital in the second half of the year Companywide Adjusted AISC / AgEqOz2, 3 Companywide Capital Expenditures ($M) $70 Development $61.5 Sustaining4 $60 $57.5 $19.23 $
Slide 10: Refinancing Significantly Strengthens Balance Sheet
Refinancing Significantly Strengthens Balance Sheet Total Debt Leverage Ratios ($M) $546.0 5.5x Total debt-to-LTM adjusted EBITDA1 48% Net debt-to-LTM adjusted EBITDA1 3.4x $284.8 1.4x 0.2x 3Q 2015 2Q 2017 3Q 2015 2Q 2017 Quarterly Interest Expense2 Other Improvements ($M) $12.4 3Q 2015 2Q 2017 66%
Slide 11: Accelerated Investment to Drive Long-Term Growth
Accelerated Investment to Drive Long-Term Growth Comparison of 1H Feet Drilled1 2Q total exploration spend increased to $10.7 (ft) million ($7.8 million expensed + $2.9 million 400,000 Palmarejo Rochester capitalized), bringing the 1H total to $18.2 million, Kensington Wharf double the 1H 2016 total
Slide 12: Looking Ahead
Looking Ahead • Stronger FCF1 anticipated during the remainder of the year on increased companywide production and lower unit costs despite higher anticipated capital expenditures in 3Q • Increased production, decreased unit costs and lower capital expenditures anticipated at Rochester in 2H 2017 fo
Slide 13: 2017 Guidance Revised
2017 Guidance1 Revised 2017 Production Outlook (AgOz2 and AgEqOz2 in K oz) Silver Gold AgEqOz2 Palmarejo 6,500 – 7,000 110,000 – 120,000 13,100 – 14,200 Rochester 4,200 – 4,700 47,000 – 52,000 7,020 – 7,820 Kensington -- 120,000 – 125,000 7,200 – 7,500 Wharf -- 90,000 – 95,000 5,400 – 5,700 San Bart
Slide 14: Appendix
Appendix NYSE: CDE 14 JC 2016
Slide 15: Financial Impact of Refinancing
Financial Impact of Refinancing Transaction Rationale • New 5.875% senior unsecured notes due 2024 (“2024 notes”) significantly reduces balance sheet risk • Extended debt maturity to 2024 clears sector-wide maturity wall in 2020/2021 • Incremental cash provides flexibility to pursue expected high-re
Slide 16: Non-Core Asset Divestitures
Non-Core Asset Divestitures With the anticipated closing of the sale of the Endeavor stream and other non-core assets in 3Q, Coeur will have opportunistically divested assets for total consideration of $64.2 million since the beginning of 2016 • Strengthens balance sheet • Non-core assets • Attracti
Slide 17: Capital Expenditures Tracking Toward Guidance
Capital Expenditures Tracking Toward Guidance Capex Composition Sustaining capital expenditures are expected to increase as a percentage of total capital expenditures in 2H 39% Expectations for total 2017 capital expenditures 1H 2017 $62 million remain $109 - $129 million1 61% • Includes $12 - $14 m
Slide 18: Palmarejo
Palmarejo Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $50.5 $14.43 Operating cash flow $13.03 Capital expenditures $13.77 $10.55 $10.31 $10.25 $11.80 $9.57 $9.35 $9.25 6,558 6,750 115 $18.8 87 5,149 4,442 74 $13.7 71 $11.3 $11.2 $8.9 $10.0 55 $8.1 2,987 $6.2 ($1
Slide 19: New Palmarejo Agreement Driving FCF Growth
New Palmarejo Agreement Driving FCF1 Growth • New, more favorable gold stream agreement with Franco‐Nevada took effect in August 2016 – Applies to 50% of gold production from legacy Palmarejo land package – Franco‐Nevada to pay $800 per ounce vs. $416 per ounce under the old royalty agreement – No a
Slide 20: Financial Statement Impacts of FNV Agreement
Financial Statement Impacts of FNV Agreement Previous Royalty Agreement New Stream Agreement Income • 100% of gold sales recorded at spot • Gold sales to FNV recorded at $800 Statement prices per ounce plus deferred revenue • Fair value adjustments recorded to reflect changing gold prices on minimum
Slide 21: Rochester
Rochester Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow $13.77 $13.8 $13.02 Capital expenditures $14.31 $12.36 $11.86 $11.75 $10.6 $12.15 $11.28 $9.2 $9.5 $10.93 $10.75 $7.6 4,631 4,564 4,450 4,189 $5.8 $5.7 53 51 $3.9 50 $3.4 45 2,284 21 ($1.1
Slide 22: Kensington
Kensington Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow $940 $917 Capital expenditures $825 $798 $790 $18.0 126 $12.6 124 123 118 $11.4 $8.6 $8.6 $7.7 $7.5 $7.0 53 $5.5 $4.5 1 2014 2015 2016 1H 2017 2017E 2Q 2016 3Q 2016 4Q 2016 1Q 2017 2Q 201
Slide 23: Wharf
Wharf Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operated by Operating cash flow Goldcorp, Inc. Capital expenditures $770 $706 $701 $725 $21.1 $575 $16.2 $15.4 109 90 93 72 $8.6 $8.8 42 $1.5 $1.3 $1.5 $0.6 $0.9 1 2 2014 2015 2016 1H 2017 2017E 2Q 2016 3Q 2016 4
Slide 24: San Bartolomé
San Bartolomé Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow Capital expenditures $15.92 $16.00 $14.01 $11.2 $11.3 $13.63 $13.46 $8.6 5,852 5,436 5,469 5,200 $5.2 $4.1 2,499 $3.0 $1.8 $1.3 $0.4 $0.4 1 2014 2015 2016 1H 2017 2017E 2Q 2016 3Q 2016
Slide 25: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation Unaudited Adjusted Net Income (Loss) ($ thousands) 2Q 2017 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 2015 2014 Net income (loss) ($10,955) $18,663 $55,352 ($8,306) $69,557 $14,497 ($367,183) ($1,186,874) Fair value adjustments, net (336) 1,200 11,581 (1,654) 961 3,579
Slide 26: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted EBITDA ($ thousands) 2Q 2017 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 2015 2014 Net income (loss) ($10,955) $18,663 $55,352 ($8,306) $69,557 $14,497 ($367,183) ($1,186,874) Interest expense, net of capitalized interest 3,749 3,586 36,920 6,
Slide 27: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited LTM Adjusted EBITDA ($ thousands) 2Q 2017 1Q 2017 4Q 2016 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Net income (loss) $68,959 $94,411 $55,352 ($239,342) ($323,118) ($354,292) ($367,183) ($1,174,213) Interest expense, net of capitalized interest 22
Slide 28: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Debt ($ thousands) 2Q 2017 1Q 2017 4Q 2016 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Cash and cash equivalents $250,038 $210,033 $162,182 $222,517 $257,591 $171,389 $200,714 $205,708 Total debt 284,780 219,076 210,896 401,745 511,066
Slide 29: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Free Cash Flow ($ thousands) 2Q 2017 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 2015 2014 Cash flow from operating activities $29,279 $55,271 $125,817 $25,449 $47,812 $45,939 $113,542 $53,548 Capital expenditures (37,482) (23,979) (101,01
Slide 30: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 6 months ended June 30, 2017 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP
Slide 31: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended June 30, 2017 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP
Slide 32: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended March 31, 2017 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAA
Slide 33: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2016 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP
Slide 34: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended December 31, 2016 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S.
Slide 35: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended September 30, 2016 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S.
Slide 36: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended June 30, 2016 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP
Slide 37: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2015 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP
Slide 38: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2014 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Total Costs applicable to sales, including amortization (U.S. GAAP) $256,707 $
Slide 39: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs ($ thousands, except per ounce amounts) 1H 2017 2Q 2017 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 2015 2014 Costs applicable to sales $258,333 $125,621 $132,712 $409,541 $102,112 $105,408 $100,465 $479,654 $477,945 Treatment a
Slide 40: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs per Silver Equivalent Ounce for 2017 Guidance Silver Gold ($ thousands, except per ounce San amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortiza
Slide 41: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs per 70:1 Spot Silver Equivalent Ounce for 2017 Guidance Silver Gold ($ thousands, except per ounce San amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, includin
Slide 42: Average Spot Equivalence
Average Spot Equivalence Average Spot Prices 2Q 2017 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 2015 2014 Average silver spot price per ounce $17.21 $17.42 $17.14 $17.19 $19.61 $16.78 $15.68 $19.08 Average gold spot price per ounce $1,257 $1,219 $1,251 $1,222 $1,335 $1,260 $1,160 $1,266 Average silver-to-
Slide 43: Reserves and Resources
Reserves and Resources 2016 Proven and Probable Mineral Reserves Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Proven Reserves Palmarejo Mexico 1,569,000 4.44 0.080 6,971,000 126,000 Rochester Nevada, USA 143,686,000 0.48 0.004 68,369,000 503,000 Kensington Alaska, US
Slide 44: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2016 Measured and Indicated Mineral Resources (excluding Reserves) Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Measured Resources Palmarejo Mexico 818,000 3.20 0.061 2,618,000 50,000 Rochester Nevada, USA 39,732,000 0.59 0.003 23,281,0
Slide 45: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2016 Inferred Mineral Resources Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Inferred Resources Palmarejo Mexico 4,726,000 4.35 0.055 20,540,000 258,000 Rochester Nevada, USA 67,778,000 0.52 0.003 35,554,000 178,000 Kensington Alaska, U
Slide 46: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2015 Proven and Probable Mineral Reserves Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Proven Reserves Palmarejo Mexico 802,000 6.29 0.077 5,048,000 62,000 Rochester Nevada, USA 96,520,000 0.53 0.003 51,007,000 316,000 Kensington Alaska
Slide 47: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2015 Measured and Indicated Mineral Resources (excluding Reserves) Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Measured Resources Palmarejo Mexico 134,000 4.86 0.052 651,000 7,000 Rochester Nevada, USA 60,528,000 0.49 0.004 29,709,000
Slide 48: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2015 Inferred Mineral Resources Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Inferred Resources Palmarejo Mexico 1,721,000 4.79 0.085 8,240,000 147,000 Rochester Nevada, USA 59,597,000 0.52 0.003 31,195,000 179,000 Kensington Alaska, US
Slide 49: Wharf's Historical Mineral Reserves and Resources
Reserves and Resources (cont.) Wharf’s Historical Mineral Reserves and Resources Grade (oz/ton) Ounces (contained) (K oz, except grade) Tons Gold Silver Gold Silver Proven and Probable Reserves Proven Reserves 15,179 0.022 0.078 340 1,190 Probable Reserves 8,245 0.026 0.108 220 890 Total Proven and
Slide 50: Executive Leadership
Executive Leadership Mitchell J. Krebs – President and Chief Executive Officer. During his twenty-year tenure with Coeur, Mr. Krebs has led nearly $2 billion in capital raising and debt restructuring activities and has facilitated over $2 billion of acquisitions and divestitures. Mr. Krebs was previ
Slide 51: Board of Directors
Board of Directors Robert E. Mellor – Former Chairman, Chief Executive Officer, and President of Building Materials Holding Corporation (distribution, manufacturing, and sales of building materials and component products) from 1997 to January 2010, director from 1991 to January 2010; member of the b
Slide 52: Contact Information
Contact Information Corporate Office Coeur Mining, Inc. 104 S. Michigan Ave., Suite 900 Chicago, IL 60603 Main Telephone +1 (312) 489-5800 Stock Ticker CDE: NYSE Website www.coeur.com Contact Courtney R. B. Lynn VP, Investor Relations & Treasurer investors@coeur.com NYSE: CDE 52 JC 2016