Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Scotiabank Mining Conference 2016
53 slides from Coeur Mining's conference presentation, Dec 7, 2016
Slide 1: Scotiabank Mining Conference 2016
Scotiabank Mining Conference 2016 Mitchell J. Krebs, President, Chief Executive Officer and Director Toronto, Ontario December 7, 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 anticipated production, costs, cash flow, expenses, debt levels and anticipated redemption of outstanding senior no
Slide 3: Coeur Mining Is Poised for Long-Term Success
Coeur Mining Is Poised for Long‐Term Success Operating Mine 1 Successful repositioning driving strong Exploration Stage Project operational performance Kensington 2 Focus on returns‐driven, high quality growth Near‐mine exploration Wharf Development of higher‐grade ore sources Rochester Well
Slide 4: Driving Strong Operational Performance
1 Driving Strong Operational Performance Industry‐Leading Cost Reductions All‐In Sustaining Costs / Realized Ag Eq oz 1 % Cost Reductions ‐ FY 2015 vs. FY 2013 2 U.S. Revenue % of Total Revenue 0.0% 40.0% 80.0% $20.58 OGC 9% YRI (Au) 3% MND 2% $18.81 IAG (9%) ABX (9%) PPP (10%) $14.62 $14.50 NGD (10
Slide 5: Declining G&A Expense
1 Driving Strong Operational Performance Declining G&A Expense G&A as a % of Revenue Coeur G&A Expense $60 10.3% $55.3 $55 8.1% 7.7% $50 7.4% 7.2% 6.5% 6.0% $45 5.6% $40.8 5.1% In Millions 4.7% 4.7% 4.3% $40 2.9% 2.7% 2.6% 2.4% $35 $32.8 $30.0 $30 $25 NGD NEM PPP PAAS CDE ‐ 2013 AG CDE ‐ 2015 GG IAG
Slide 6: Returns-Driven, High Quality Growth
2 Returns‐Driven, High Quality Growth Focus on Grade & Scale to Deliver Higher Margin Production Growth Grade Scale Palmarejo Higher grades driving 26%1 reduction in per ounce costs since 2014 Rochester Doubled mining rates between 2013 and 2015, reducing unit costs by 40% 50% increase in thro
Slide 7: Organic, Low Risk, High Return Growth Initiatives
2 Returns‐Driven, High Quality Growth Organic, Low Risk, High Return Growth Initiatives Short‐to‐Medium Term Medium‐to‐Long Term Ongoing expected high‐grade Accelerating mining rates from exploration success with the goal of Palmarejo higher grade Independencia deposit further extending mine life an
Slide 8: Successful Acquisition of Wharf Operation
2 Returns‐Driven, High Quality Growth Successful Acquisition of Wharf Operation Improved plant recovery rates roughly 15% since the acquisition Increase in production expected to be roughly 35%1 through year‐end Decrease in costs per gold equivalent ounce of over 35%2 expected through year‐end
Slide 9: Paramount Transaction Extending & Enhancing a Cornerstone Asset
2 Returns‐Driven, High Quality Growth Paramount Transaction Extending & Enhancing a Cornerstone Asset Significant Synergies Unlocked by Consolidating Area Paramount acquisition unlocked synergies with Palmarejo and increased overall asset quality (lower costs, longer life, higher production) Param
Slide 10: New Palmarejo Gold Stream Agreement Driving FCF Growth
2 Returns‐Driven, High Quality Growth New Palmarejo Gold Stream Agreement Driving FCF1 Growth ▪ New, more favorable stream agreement with Franco‐Nevada Barbados took effect in August 2016 ▪ Applies to 50% of gold production from legacy Palmarejo land package ▪ Franco‐Nevada to pay $800 per ounce vs.
Slide 11: Significant Increase in Adj. EBITDA & Reduction in Gross Leverage
3 Balance Sheet Strength and Flexibility Significant Increase in Adj. EBITDA1 & Reduction in Gross Leverage LTM Adj. EBITDA1 Total Debt / LTM Adj. EBITDA1 $201.7 5.8x 5.6x $171.1 $127.9 $137.3 3.9x 3.8x $95.7 $99.7 3.0x 2.0x 1.1x Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'1
Slide 12: Seeking to Achieve Among Lowest Leverage Levels in Sector
3 Balance Sheet Strength and Flexibility Seeking to Achieve Among Lowest Leverage Levels in Sector Net Debt / LTM Adj. EBITDA 1 (at 09/30/16) 2.3x 2.3x 1.4x 0.9x 0.8x 0.7x 0.5x 0.3x 0.1x n/a n/a n/a n/a n/a n/a n/a n/a NGD PPP HL CDE OGC HOC AGI PF CDE2 FRES SSRI IAG KLG AG FVI PAAS EDR TAHO Total D
Slide 13: Building Track Record of Meeting or Exceeding Guidance
4 Delivering on Commitments Building Track Record of Meeting or Exceeding Guidance 2014 Actual Results Relative to Original Guidance Silver Production Gold Production Production CAS (in millions) (in thousands) (in millions) 17.0 17.2 18.2 220 238 249 $478 $500 $530 2015 Actual Results Relative to O
Slide 14: Non-Core Asset Sales
4 Delivering on Commitments Non‐Core Asset Sales Summary Rationale Successfully monetized majority of royalty assets from Strengthen balance sheet Coeur Capital portfolio, originally formed in November 2013 Non‐core assets Coeur has retained the Endeavor silver stream, Zaruma NSR Attractiv
Slide 15: Looking ahead…
Looking ahead… Proceeds from completed $200M ATM expected to be used to redeem $190M of outstanding z senior notes in December 2016 z Continued ramp‐up of Independencia during 4Q 2016 and throughout 2017 Further development of Jualin with initial reserve included in year‐end 2016 reserve statement z
Slide 16: Coeur Mining is Poised for Long-Term Success
Coeur Mining is Poised for Long‐Term Success Well‐diversified, growing, NYSE‐listed U.S. precious metals mining company Successful repositioning driving strong operational performance Focus on returns‐driven, high quality growth Maintainingpipeline Establishing liquidityofwhile prioritizing future,
Slide 17: Appendix
Appendix
Slide 18: Palmarejo
Palmarejo Rising Production Levels from High‐Grade Underground Location: Chihuahua State, Northern Mexico Production and Cost Performance $15.26 Ownership: 100% $13.03 $13.31 Mining: Underground (open pit completed in Q2 2016) $10.75 $12.83 $13.77 7.6 $11.81 Land Position: 135,131 acres 116.5 6.6 $1
Slide 19: Palmarejo Significant Growth Potential
Palmarejo Significant Growth Potential Palmarejo Mine Map Area Area of Focus 2016‐2018 (near underground infrastructure) NYSE: CDE 19
Slide 20: Rochester
Rochester Higher Mining Rates Leading to Lower Unit Costs and Stronger Cash Flow Production and Cost Performance Location: Near Lovelock, Nevada $16.02 Ownership: 100% $14.31 $15.52 $12.36 $11.75 Mining: Open pit, heap leach $13.76 Land Position: 15,682 net acres $11.27 $10.88 4.6 4.8 4.2 Product: S
Slide 21: Kensington
Kensington Higher Grade Contributes to Strong Production at Lower Costs Location: Near Juneau, Alaska Production and Cost Performance $940 Ownership: 100% Mining: Underground $798 $800 $889 Land Position: 3,969 net acres 126.3 122.5 112.0 117.8 Product: Gold concentrate ounces P&P Reserves: 560,301
Slide 22: Wharf
Wharf Coeur’s Lowest Cost Mine and Largest Contributor to FCF 2 Location: Lead, South Dakota Production and Cost Performance Ownership: 100% $970 $667 $556 $534 $559 $716 Mining: Open pit, heap leach 32,231 28,433 30,106 Land Position: 3,638 net surface acres 23,427 21,186 ounces Product: Electrolyt
Slide 23: San Bartolomé
San Bartolomé Local Ore Purchases Contributing to Improved Cash Flows and Lower Costs Location: Potosi, Bolivia Production and Cost Performance $14.22 $14.13 $13.63 $13.88 Ownership: 100% Mining: Surface mining 5.9 5.9 5.4 5.7 Product: Silver doré ounces P&P Reserves: 27.9M oz Ag M&I Resources: 16.9
Slide 24: Costs Per Ton by Mine
Costs Per Ton by Mine Palmarejo 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Ore tons mined 437,470 291,401 250,853 285,666 253,681 UG mining costs per UG ton mined $41 $47 $39 $33 $41 Total mining costs per ton mined $28 $49 $40 $37 $46 Processing costs per ton processed $25 $30 $23 $22 $24 G&A per ton
Slide 25: Costs Per Ton by Mine
Costs Per Ton by Mine Wharf 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 Ore tons mined 1,309,744 1,194,130 1,002,663 1,470,631 1,479,008 Mining costs per ton mined $2.28 $2.17 $2.43 $1.87 $1.94 Pad unload costs per ton mined $0.17 $0.01 $0.68 $0.25 $0.43 Total mining costs per ton mined (incl. pad unloa
Slide 26: 2016 Guidance: Expect to Produce 34-37M AgEq oz
2016 Guidance1: Expect to Produce 34 – 37M AgEq oz Production Guidance Silver and AgEq ounces 2016 Guidance1 YTD 2016 Result % Complete in thousands Silver Gold AgEq Silver Gold AgEq Silver Gold AgEq Palmarejo 4,100 – 4,600 70,000 – 75,000 8,300 – 9,100 3,174 50,006 6,174 73% 69% 71% Rochester 4,500
Slide 27: Revising 2016 Cost Guidance Lower
Revising 2016 Cost Guidance1 Lower Cost Outlook Updated Guidance1 2016 Original Based on Average in millions except per ounce costs Based on 60:1 Ratio Guidance Realized Prices Costs applicable to sales per silver equivalent ounce2 – Palmarejo $12.50 ‐ $13.50 $10.50 ‐ $11.00 $9.75 ‐ $10.25 Costs app
Slide 28: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted EBITDA in thousands 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Net income (loss) $69,557 $14,497 ($20,396) ($303,000) ($14,219) Interest expense, net of capitalized interest 8,068 10,875 11,120 11,758 12,446 Income tax provision (benefit) (54,45
Slide 29: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) LTM Adjusted EBITDA in thousands LTM 3Q 2016 LTM 2Q 2016 LTM 1Q 2016 LTM 4Q 2015 LTM 3Q 2015 LTM 2Q 2015 Net income (loss) ($239,342) ($323,118) ($354,292) ($367,183) ($1,174,213) ($1,156,528) Interest expense, net of capitalized interest 41,821 46,19
Slide 30: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Consolidated Free Cash Flow Reconciliation in thousands 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Cash flow from operating activities $47,812 $45,939 $6,617 $43,217 $36,770 Capital expenditures (25,627) (23,288) (22,172) (30,035) (23,861) Gold productio
Slide 31: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended September 30, 2016 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended September 30, 2016 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver C
Slide 32: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended June 30, 2016 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended June 30, 2016 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Costs appli
Slide 33: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended March 31, 2016 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended March 31, 2016 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Costs app
Slide 34: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Year ended December 31, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Year ended December 31, 2015 Palmarejo Rochester Endeavor Total Silver Kensington Wharf Total Gold Bartolomé Costs applicable to
Slide 35: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended December 31, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended December 31, 2015 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Cos
Slide 36: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended September 30, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended September 30, 2015 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver C
Slide 37: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended June 30, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended June 30, 2015 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Costs appli
Slide 38: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Full‐year ended December 31, 2014 Silver Gold (dollars in thousands except per ounce costs) San Total Full‐year ended December 31, 2014 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, includ
Slide 39: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Year ended December 31, 2013 Silver Gold (dollars in thousands except per ounce costs) San Total Full‐year ended December 31, 2013 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including a
Slide 40: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐In Sustaining Costs in thousands except per ounce costs 3Q 2016 2Q 2016 1Q 2016 FY 2015 3Q 2015 FY 2014 FY 2013 Costs applicable to sales, incl. amortization (U.S. GAAP) 132,756 $137,540 $128,610 $617,938 $154,161 $635,516 $691,696 Amortization 27
Slide 41: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐in Sustaining Costs per Silver Equivalent Ounce (Original Guidance) Full‐Year 2016 Guidance (dollars in thousands except per ounce Silver Gold costs) San Total Full‐Year 2016 Guidance Palmarejo Rochester Endeavor Total Silver Kensington Wharf Tota
Slide 42: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐in Sustaining Costs per Silver Equivalent Ounce (Revised Guidance) Full‐Year 2016 Guidance (dollars in thousands except per ounce Silver Gold costs) San Total Full‐Year 2016 Guidance Palmarejo Rochester Endeavor Total Silver Kensington Wharf Total
Slide 43: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐in Sustaining Costs per Realized Silver Equivalent Ounce (Revised Guidance) Full‐Year 2016 Guidance (dollars in thousands except per ounce Silver Gold costs) San Total Full‐Year 2016 Guidance Palmarejo Rochester Endeavor Total Silver Kensington Wh
Slide 44: Coeur's 2015 Mineral Reserves
Coeur’s 2015 Mineral Reserves Grade (oz/ton) Ounces (contained) Year‐end 2015 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, USA 338,000 ‐ 0.198 ‐ 67,00
Slide 45: Coeur's 2015 Measured and Indicated Mineral Resources
Coeur’s 2015 Measured and Indicated Mineral Resources (Excluding Reserves) Grade (oz/ton) Ounces (contained) Year‐end 2015 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 29,709,000 233,000 K
Slide 46: Coeur's 2015 Inferred Mineral Resources
Coeur’s 2015 Inferred Mineral Resources Grade (oz/ton) Ounces (contained) Year‐end 2015 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, USA 2,059,0
Slide 47: Coeur's 2014 Mineral Reserves
Coeur’s 2014 Mineral Reserves Grade (oz/ton) Ounces (contained) Year‐end 2014 Location Short tons Silver Gold Silver Gold Proven Reserves Rochester Nevada, USA 89,077,000 0.56 0.004 49,786,000 346,000 San Bartolomé Bolivia 1,206,000 2.73 ‐ 3,287,000 ‐ Kensington Alaska, USA 417,000 ‐ 0.187 ‐ 78,000
Slide 48: Coeur's 2014 Measured and Indicated Mineral Resources
Coeur’s 2014 Measured and Indicated Mineral Resources (Excluding Reserves) Grade (oz/ton) Ounces (contained) Year‐end 2014 Location Short tons Silver Gold Silver Gold Measured Resources Rochester Nevada, USA 72,228,000 0.45 0.003 32,565,000 218,000 Martha Argentina ‐ ‐ ‐ ‐ ‐ San Bartolomé Bolivia ‐
Slide 49: Coeur's 2014 Inferred Mineral Resources
Coeur’s 2014 Inferred Mineral Resources Grade (oz/ton) Ounces (contained) Year‐end 2014 Location Short tons Silver Gold Silver Gold Inferred Resources Rochester Nevada, USA 96,039,000 0.42 0.003 40,789,000 263,000 Martha Argentina 204,000 4.75 0.005 969,000 1,000 San Bartolomé Bolivia 66,000 1.68 ‐
Slide 50: Wharf's Historical Mineral Reserves and Resources
Wharf’s Historical Mineral Reserves and Resources Tons Grade (oz/t) Ounces (000s) (000s) 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 Probable Reserves 23,424 0.024 0.089 560 2,080 Measu
Slide 51: 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 52: 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 boa
Slide 53: Contact Information
Contact Information Corporate Office: Coeur Mining, Inc. 104 S. Michigan Ave, Suite 900 Chicago, Illinois 60603 Main Tel: (312) 489‐5800 Stock Ticker: CDE: NYSE Warrant Ticker: CDM.WT: TSX Website: coeur.com Contact: Courtney Lynn Vice President, Investor Relations & Treasurer clynn@coeur.com NYSE: