Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Investor Presentation (February 2017)
62 slides from Coeur Mining's investor presentation, Feb 13, 2017
Slide 1: Investor Presentation
Investor Presentation February 2017 NYSE: CDE NYSE: CDE 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 the expected impact of delayed sales of finished goods inventory on net income, adjusted net income, free cash flow
Slide 3: Highlights from 2016
Highlights from 2016 • Record production of 10.0 million silver equivalent ounces (AgEqOz)1 in 4Q 2016 and 36.3 million AgEqOz1 for the full year (FY) • Continued cost improvements companywide • Positive FY net income and adj. net income1 for the first time since 2012 • FY cash flow from operating a
Slide 4: Fourth Quarter and Full-Year Results
Fourth Quarter and Full-Year Results Quarterly Annual ($ million) 4Q 2016 3Q 2016 QoQ Δ 4Q 2015 YoY Δ 2016 2015 YoY Δ Silver ounces sold (millions) 3.4 3.4 2% 4.4 (22%) 14.3 16.5 (13%) Gold ounces sold 87,108 83,389 4% 92,032 (5%) 338,131 335,882 1% Revenue $159.2 $176.2 (10%) $164.2 (3%) $665.8 $64
Slide 5: Year-End Results Reconciliation
Year-End Results Reconciliation • Full-year 2016 revenues of $665.8 million were approximately $30 million lower than the median consensus estimate of $696 million due to: – A port-related delay of a $5.6 million Kensington shipment – Gold retained for sale to Franco-Nevada (FNV) in mid-January, rep
Slide 6: Year-End Results Reconciliation (cont.)
Year-End Results Reconciliation (cont.) ($ in thousands) Notes 4Q 2016 FY 2016 Revenues (as reported) $159,136 $665,777 Kensington shipment in transit (4,900 oz of Au) 1 5,635 5,635 Palmarejo gold held for future FNV sales (6,800 oz of Au) 2 6,133 6,133 Palmarejo shipment in transit (209,000 oz of A
Slide 7: Year-End Results Reconciliation (cont.)
Year-End Results Reconciliation (cont.) ($ in thousands) Notes 4Q 2016 FY 2016 Adjusted Net Income (as reported) 1 $2,739 $47,783 Kensington shipment in transit 2, 6 882 882 Palmarejo gold held for future FNV sales 3, 7 (191) (191) Palmarejo shipment in transit 4, 7 493 493 Available-for-sale metal
Slide 8: Year-End Results Reconciliation (cont.)
Year-End Results Reconciliation (cont.) Pro Forma 4Q Revenue Pro Forma 4Q Adjusted EBITDA1 ($ million) ($ million) $26.6 $185.7 $9.6 $53.6 $44.0 $159.1 Reported Revenue PF Adjustments PF Revenue Reported Adj. EBITDA PF Adjustments PF Adj. EBITDA Pro Forma 4Q Adjusted Net Income1 Pro Forma 4Q Free Ca
Slide 9: Year-End Results Reconciliation (cont.)
Year-End Results Reconciliation (cont.) Pro Forma Full-Year Revenue Pro Forma Full-Year Adjusted EBITDA1 ($ million) ($ million) $26.6 $692.4 $665.8 $9.6 $224.8 $215.2 Reported Revenue PF Adjustments PF Revenue Reported Adj. EBITDA PF Adjustments PF Adj. EBITDA Pro Forma Full-Year Adjusted Net Incom
Slide 10: Coeur Mining is Poised for Long-Term Success
Coeur Mining is Poised for Long-Term Success 1 • Successfully repositioned portfolio K e n s ingto n Diversified asset base with improved geographic mix W h arf Rochester Strong operational and cost performance P a l m a r e jo 2 • Returns-driven, high quality growth strategy Near-mine explora
Slide 11: Successfully Repositioned Portfolio
Successfully Repositioned Portfolio Asset Mix Geographic Mix Metal Mix (% revenue by mine) (% revenue by geography) (% revenue by metal) 100% 2% 2% 1% 100% 2% 1% 100% 12% 14% 14% 19% 19% 31% 28% 80% 80% 80% 47% 21% 28% 21% 20% 63% 4% 60% 60% 60% 11% 43% 22% 16% 40% 40% 40% 45% 69% 21% 64% 45% 53% 43
Slide 12: Record Production Levels
Record Production Levels Ramp-up of Palmarejo underground operations expected to drive 2017E production growth. Silver equivalent1 production (ounces in millions) 39.7 35.6 36.3 32.7 32.2 2 2013 2014 2015 2016 2017E (1) Gold and silver equivalence assumes silver-to-gold ratio of 60:1 unless otherwis
Slide 13: Industry-Leading Cost Reductions
Industry-Leading Cost Reductions Adjusted CAS / AgEqOz1 (primary silver mines) Adjusted CAS / AuEqOz1 (primary gold mines) ($) ($) $940 $889 $14.13 $13.65 $12.75 $764 $13.60 $13.68 $688 $11.73 $11.87 Average spot AgEqOz1 $10.99 60:1 AgEqOz1 2013 2014 2015 2016 2013 2014 2015 2016 Companywide Adjuste
Slide 14: Focus on Higher Margin Ounces
Focus on Higher Margin Ounces Focus on grade and scale has delivered sustainable cost reduction and higher margin, quality ounces Grade Scale Palmarejo • Higher grades driving 31%1 reduction in per ounce costs since 2014 Rochester • Doubled mining rates between 2013 and 2016, reducing unit costs
Slide 15: Near- and Long-Term Growth Initiatives
Near- and Long-Term Growth Initiatives Near-to-Medium Term Long-Term • Ongoing expected high-grade exploration • Accelerating mining rates from success with the goal of further Palmarejo higher grade Independencia extending mine life and increasing deposit production • Beginning to see impact of • A
Slide 16: Disciplined Acquisitions
Disciplined Acquisitions • Wharf Resources (February 2015) – Acquired from Goldcorp for $99 million – Significant U.S. NOL tax synergies – Improved plant recovery rates roughly 20% since acquisition – Increased production and decreased costs in 2015 and 2016 – Generated $86 million of free cash flow
Slide 17: New Palmarejo Agreement Driving FCF Growth
New Palmarejo Agreement Driving FCF Growth1 • New, more favorable gold 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. $416 per ounce under the old royalty agreeme
Slide 18: Organic Growth Remains a Priority
Organic Growth Remains a Priority Capex by Mine Site 2017 capital expenditures expected to total $115 - $135 million1 2% 6% • ~$10 million of carryover from 2016 5% 6% 36% 34% • $11 - $13 million of capitalized exploration 2016 2017E1 $101 million 32% $115 – $135 • Palmarejo: $40 - $45 million 37% m
Slide 19: Silver Equivalent Reserves Increase 9% YOY
Silver Equivalent1 Reserves Increase 9% YOY 2016 gold and silver reserves increased 4% and 13%, respectively, driven by resource conversion at Rochester Gold P&P Reserves (K oz) 326 (98) N/A 2,531 (73) 2,439 (63) N/A 2015 Rochester Palmarejo San Bartolomé Wharf Kensington Endeavor 2016 Silver P&P Re
Slide 20: Expanded Exploration Program
Expanded Exploration Program 2016 Program 2017 Program Focus • Totaled $25.8M ($12.9M expensed; $12.9M • Targeting $34M - $38M ($23M - $25M capitalized) expensed; $11M - $13M capitalized) • Palmarejo exploration totaled $11.2M ($5.1M • Palmarejo (~$7M expensed; ~$7M capitalized) expensed; $6.1M capi
Slide 21: Significant Debt Reduction Over Past 15 Months
Significant Debt Reduction Over Past 15 Months As a result of balance sheet improvements, Moody’s and S&P have upgraded Coeur’s corporate and senior unsecured debt ratings in recent months Debt Bridge1 ($ million) $558 ($54) ($5) ($5) ($100) ($1) ($11) $20 $213 ($190) Sr. Note Equity- Repayment of R
Slide 22: Strong Credit Profile
Strong Credit Profile Total Debt to LTM Adjusted EBITDA1 ($ million) 5.5x 82% 3.8x 3.7x 3.0x 2.0x $215.2 $201.7 1.0x $171.1 $137.3 $127.9 $99.7 LTM adjusted EBITDA1 1 Total debt to LTM adjusted EBITDA 3Q 2015 4Q 2015 1Q 2016 2Q 2016 3Q 2016 4Q 2016 (1) See non-GAAP reconciliation tables in the appen
Slide 23: Building a Strong Track Record
Building a Strong Track Record Coeur continues to deliver results that meet or beat its original production and cost guidance Silver production Gold production Costs (M oz) (K oz) (AISC / AgEqOz2 except 20143) 18.2 387 18.0 $18.50 362 347 17.0 $17.50 $17.25 323 320 16.0 16.0 16.4 $530 $16.25 294 $16
Slide 24: Non-Core Asset Divestitures
Non-Core Asset Divestitures In 2016, Coeur opportunistically divested assets for total consideration of $23.8 million • Strengthen balance sheet • Non-core assets • Attractive relative valuation environment for streams and royalties • Allocate proceeds to higher rate of return opportunities These ef
Slide 25: Looking Ahead
Looking Ahead • Continued ramp-up of Independencia throughout 2017, targeting combined mining rate of 4,500 tpd at Palmarejo • Construction of Rochester’s Stage IV leach pad expansion expected to be complete in mid-2017 • Initial production at Jualin anticipated in late 2017 • Update on potential al
Slide 26: 2017 Guidance
2017 Guidance1 2017 Production Outlook (AgOz2 and AgEqOz2 in thousands) 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 San Bartolomé 5,400 – 5,900 -- 5,400 – 5,900 Kensington -- 120,000 – 125,000 7,200 – 7,500 Wharf
Slide 27: Appendix
Appendix NYSE: CDE JC 2016
Slide 28: Palmarejo
Palmarejo Production and Cost Performance1 Highlights $14.43 • Development of Guadalupe and Independencia continues with combined mining rates expected $13.03 $12.90 $13.77 to increase to 4,500 tpd by year-end 2017 $12.83 $11.80 $10.55 $10.25 • Silver and gold production expected to increase over 50
Slide 29: 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 30: Rochester
Rochester Production and Cost Performance1 Highlights $15.58 • Tons placed in 2016 increased 19% year-over- year to 19.6 million tons, the highest level since $15.51 $14.31 Rochester first began operating in 1986 $13.77 $12.36 • Commenced construction on Stage IV leach pad $11.86 $11.75 expansion in
Slide 31: Kensington
Kensington Production and Cost Performance1 Highlights • 2016 production remained near record levels at 124,331 ounces $940 • Development of high-grade Jualin deposit was $889 $825 over 64% complete as of 2016 year-end and is $798 $790 expected to be the main driver of capital expenditures at Kensin
Slide 32: Wharf
Wharf Production and Cost Performance1 Highlights Operated by GoldCorp, Inc. • Acquired in 2015 for $99 million from Goldcorp $924 • Coeur’s lowest cost operation and largest source of FCF4, generating over $86M since acquisition $800 $770 through 2016 $706 • Improved plant recovery rates nearly 20%
Slide 33: San Bartolomé
San Bartolomé Production and Cost Performance1 Highlights • Straightforward operation due to free-digging surface mining techniques (no drilling or blasting) • Sourcing higher-grade, lower-cost ore from local $14.22 $14.25 $14.01 sources with the goal of increasing overall grade, $13.63 $13.46 reduc
Slide 34: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation Unaudited Adjusted Net Income (Loss) ($ thousands) 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 2014 Net income (loss) $55,352 ($8,306) $69,557 $14,497 ($20,396) ($367,183) ($303,000) ($1,186,874) Fair value adjustments, net 11,581 (1,654) 961 3,579 8,695 (5
Slide 35: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted EBITDA ($ thousands) 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 2014 Net income (loss) $55,352 ($8,306) $69,557 $14,497 ($20,396) ($367,183) ($303,000) ($1,186,874) Interest expense, net of capitalized interest 36,920 6,857 8,068
Slide 36: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited LTM Adjusted EBITDA ($ thousands) 4Q 2016 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 2Q 2015 Net income (loss) $55,352 ($239,342) ($323,118) ($354,292) ($367,183) ($1,174,213) ($1,156,528) Interest expense, net of capitalized interest 36,920 41,821
Slide 37: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Debt ($ thousands) 4Q 2016 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Cash and cash equivalents $162,182 $222,517 $257,591 $171,389 $200,714 $205,708 Total debt 210,896 401,745 511,066 511,101 490,410 545,986 LTM adjusted EBITDA 215,16
Slide 38: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Free Cash Flow ($ thousands) 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 Cash flow from operating activities $125,817 $25,449 $47,812 $45,939 $6,617 $113,542 $43,217 Capital expenditures (101,013) (29,926) (25,627) (23,288) (2
Slide 39: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2016 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP)
Slide 40: 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. G
Slide 41: 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 42: 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 43: 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, 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 44: 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 45: 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, 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. G
Slide 46: 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 $1
Slide 47: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2013 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Total Costs applicable to sales, including amortization (U.S. GAAP) $322,107 $8
Slide 48: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2012 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Total Costs applicable to sales, including amortization (U.S. GAAP) $344,073 $8
Slide 49: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs ($ thousands except per ounce amounts) 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 2014 2013 Costs applicable to sales $409,541 $102,112 $105,408 $100,465 $101,555 $479,654 $125,256 $477,945 $463,663 Treatment and r
Slide 50: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs per Silver Equivalent Ounce for 2017 Guidance Silver Gold ($ thousands except per ounce San amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortizat
Slide 51: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs per 69:1 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, including
Slide 52: Average Spot Equivalence
Average Spot Equivalence Average Spot Prices 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 2014 2013 Average Silver Spot Price per Ounce $17.14 $17.19 $19.61 $16.78 $14.85 $15.68 $14.77 $19.08 $23.76 Average Gold Spot Price per Ounce $1,251 $1,222 $1,335 $1,260 $1,183 $1,160 $1,106 $1,266 $1,411
Slide 53: 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 54: 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 55: 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 56: 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 57: 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 58: 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 59: Reserves and Resources (cont.)
Reserves and Resources (cont.) Wharf’s Historical Mineral Reserves and Resources Grade (oz/ton) Ounces (contained) (thousands, 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
Slide 60: 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 pre
Slide 61: 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
Slide 62: 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 Warrant ticker: CDM.WT: TSX Website: www.coeur.com Contact: Courtney R. B. Lynn VP, Investor Relations & Treasurer clynn@coeur.com NYSE