Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q2 2020 Earnings Presentation
64 slides from Coeur Mining's earnings presentation, Jul 30, 2020
Slide 1: 2020 Second Quarter Earnings
2020 Second Quarter Earnings 11:00 a.m. ET, July 30, 2020 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 involving strategic priorities and company strategies, expectations regarding environmental, social and governance (“ESG”) in
Slide 3: Welcome Mick Routledge: New Chief Operating Officer
Welcome Mick Routledge: New Chief Operating Officer • Vice President of Major Projects and Studies at Alacer Gold Corp. (2019-2020) • Senior Director of Operational Excellence at Anagold Madencilik (2017-2019) • Chief Operating Officer of Asahi Refining (2015-2017) • Over twenty years of experie
Slide 4: Second Quarter 2020 Highlights
Second Quarter 2020 Highlights Successful Palmarejo restart post-suspension, expecting strong 2H 2020 • Strong operating and financial results drove meaningful cash flow • improvements at Kensington and Wharf Aggressive investment in exploration (~60% increase Q-o-Q/~2x Y-o-Y); • update to be
Slide 5: Financial Summary
Financial Summary ($M, except metal sales, adj. EBITDA margin and per share amounts) 2Q 2020 1Q 2020 QoQ Δ 2Q 2019 YoY Δ Metal Sales Gold ounces sold (oz) 77,933 85,635 (9%) 86,385 (10%) Silver ounces sold (M oz) 1.6 2.7 (40%) 3.0 (47%) Zinc pounds sold (M lbs) -- 3.2 NM 5.3 NM Lead pounds sold (M l
Slide 6: Production Summary
Production Summary Full-Year Guidance1 YTD Implied 2Q 2020 YTD (Original Guidance ) Progress3 2 2H 2020 Gold Production (oz) • Ramped up operations in June 2020 post suspension • Throughput expected to average ~4,630 tpd during 2H 95,000 – 105,000 2020 due to government-imposed workforce restriction
Slide 7: U.S. Assets & Gold Remain Largest Share of Revenue
U.S. Assets & Gold Remain Largest Share of Revenue Coeur’s revenue mix reflects its strategy of operating a balanced portfolio of precious metals operations in attractive jurisdictions. Gold sales and U.S. operations continued to represent the largest share of the Company’s revenue in 2Q 2020 2Q 202
Slide 8: Rochester: Updated 2020 Stacking Plan
Rochester: Updated 2020 Stacking Plan At the end of 2Q 2020, Coeur began executing a new stacking plan at Rochester aimed at maximizing silver recoveries on HPGR-crushed ore. Production levels are expected to steadily increase and reach sustainable levels during 2H 2020 • Updated stacking plan in
Slide 9: Rochester: Advancing Efforts on Upcoming Expansion
Rochester: Advancing Efforts on Upcoming Expansion Coeur expects to begin initial construction activities for POA 11 in 3Q 2020, beginning with early-stage earthworks and project-specific infrastructure. Major construction projects are scheduled to begin in early 2021 and be largely completed by lat
Slide 10: Coeur's Capital Allocation Framework
Coeur’s Capital Allocation Framework Mining is capital intensive and requires a disciplined approach to capital allocation with a view toward long-term reserve replacement and growth Illustrative Investment Return Key Benefits Key Considerations Reflects the Company’s values Safety/Environment/ −
Slide 11: Balance Sheet and Hedging Summary
Balance Sheet and Hedging Summary Liquidity Profile Debt and Leverage Summary1,2 ($M) ($M) $250.0 3.2x $70.9 $240.4 2.9x 1.7x 1.7x ($60.0) $169.5 $370.0 1.4x 1.3x $348.6 ($20.5) $332.1 $295.5 $277.7 $239.9 Jun. 30, Dec. 31, Jun. 30, Jun. 30, Dec. 31, Jun. 30, Revolver Borrowings Letters Revolver Cas
Slide 12: Looking Ahead: Delivering Consistent Operating & Financial Results
Looking Ahead: Delivering Consistent Operating & Financial Results • Maintain rigorous health and safety protocols across the Company • Sustain increased investment in success-based exploration programs • Continue steadily increasing production at Palmarejo • Execute new stacking plan and begi
Slide 13: 2020 Guidance
2020 Guidance1 Production Outlook Gold (oz) Silver (K oz) Palmarejo 95,000 – 105,000 6,000 – 7,000 Rochester 27,000 – 33,000 3,500 – 4,500 Kensington 125,000 – 135,000 - Wharf 80,000 – 90,000 - Consolidated 327,000 – 363,000 9,500 – 11,500 CAS Outlook2 Gold ($/oz) Silver ($/oz) Palmarejo (co-product
Slide 14: ESG Highlights
ESG Highlights NYSE: CDE 14 JC 2016
Slide 15: What Matters to Coeur
What Matters to Coeur Environmental • Training and Development • Climate Change • Health, Safety & Security • Green House Gas Emissions Society • Water Stewardship • Investment in Local Communities • Waste Minimization • Indigenous Rights • Biodiversity • Human Rights • Tailings Management Governanc
Slide 16: Committed to Diversity and Inclusion
Committed to Diversity and Inclusion “The tragic death of George Floyd and other horrific events over the past month serve as stark reminders that, as a society, much work remains to be done to address racism and the conscious and unconscious biases that enable its existence. At Coeur, we are commit
Slide 17: Precious Metals Are Coeur to Everyday Life
Precious Metals Are Coeur to Everyday Life Coeur is an important part of the supply chains for gold and silver. Due to their unique properties, gold and silver have countless innovative uses that shape the way we live today and enable a more sustainable, healthier tomorrow Au Coeur’s Palmarejo, Roch
Slide 18: Recent Environmental, Social and Governance Accomplishments
Recent Environmental, Social and Governance Accomplishments Coeur is committed to being an industry leader in its environmental, social and governance practices, exemplified by the Company’s accomplishments for protecting its people, places and planet #1 Winner of cfi.co, Best Miner Ranked Among Pee
Slide 19: COVID-19 Response and Decision-Making Approach
COVID-19 Response and Decision-Making Approach Coeur’s principal objective to help combat COVID-19 is to safeguard the health, safety and well-being of its workforce, their families and the communities where the Company operates Guidance from k ey agencies U.S. Centers Mexican and Federal, for Disea
Slide 20: Activities to Protect People and Places During COVID-19
Activities to Protect People and Places During COVID-19 • Social distancing and enhanced cleaning • Multilayered testing strategy • Traditional contact tracing complemented by wearable technology pilot • Remote work for office employees • Only essential business travel People • Pre-work
Slide 21: Active Involvement in Protecting Our Communities
Active Involvement in Protecting Our Communities Health tent at Wharf used for screening temperatures and completing questionnaire forms Rochester team showcasing completed drive-through testing center donated to Pershing County Hospital Food distribution at Palmarejo NYSE: CDE 21 JC 2016
Slide 22: Industry-Leading Safety Performance
Industry-Leading Safety Performance Coeur has held the National Mining Association CORESafety certification since 2017 Coeur’s injury frequency rate remains significantly below industry averages Lost-Time Injury Frequency Rate Total Reportable Injury Frequency Rate Industry average1 Industry average
Slide 23: Demonstrating Our Commitment
Demonstrating Our Commitment Best-in-Class Governance Practices Board Refreshment and • Three new independent directors added to the Board since early 2018 and six Succession Planning directors – more than 50% of the Board – added in last seven years • Active Board succession planning and refreshmen
Slide 24: Significantly Improved Corporate Governance Profile
Significantly Improved Corporate Governance Profile Corporate Governance Enhancements Since 2010 2010 2020 Independent Board Chairman Entire Board of Directors is independent other than CEO Gender diversity on the Board Majority voting standard for uncontested Director elections Prox
Slide 25: 2019 CEO Compensation Tied to Stockholder Returns
2019 CEO Compensation Tied to Stockholder Returns Base Salary 19% Performance Shares 57% of compensation 34% linked to stock performance AIP 24% Restricted (Based 100% on Stock Company Performance) 23% NYSE: CDE 25 JC 2016
Slide 26: 2020 Incentive Plan: Protect, Deliver, Develop
2020 Incentive Plan Aligned with Strategic Objectives & Purpose Statement TRIFR % Reduction PROTECT AIP1 20% % Decline in Permit Exceedances Three-Year Growth in Reserves and DEVELOP PSUs2,3 35% Resources from Continuing Operations Achievement of Milestones for Strategically PSUs2,3 30% Critical Lon
Slide 27: Diverse Board Led by Independent Chair
Diverse Board Led by Independent Chair • Nine out of ten Directors are independent (all except CEO); all four main committees comprised of independent directors only • One new director elected in March 2019 and two new directors elected in February 2018 having skills and experiences that complement
Slide 28: Diverse Board Led by Independent Chair (cont.)
Diverse Board Led by Independent Chair (cont.) Diversity Tenure Independence NYSE: CDE 28 JC 2016
Slide 29: Appendix
Appendix NYSE: CDE 29 JC 2016
Slide 30: Palmarejo
Palmarejo Ownership 100% Claims 112,520 net acres Type Underground Crushing, grinding, flotation, CIL, Processing Merrill-Crowe precipitation, refining Metals Silver and gold doré Mine life ~7 years Palmarejo Chihuahua, Northern Mexico Share of Companywide 2020E1 Production 2015 & 2019 Reserves & Re
Slide 31: Palmarejo (cont.)
Palmarejo (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow $741 Capital expenditures $686 $660 $645 $41.4 $622 $36.3 $9.17 $8.95 $28.9 $8.79 $8.37 $8.13 2,029 32 32 1,835 28 1,735 1,720 29 $15.6 $7.6 $7.8 $8.6 $7.1 15 867 $4.5 ($3.5) 2Q 20
Slide 32: Rochester
Rochester Ownership 100% Claims 16,494 net acres Type Open pit and heap leach Crushing, dump heap leaching, Processing Merrill-Crowe precipitation, refining Metals Silver and gold doré Rochester Mine life ~15 years Nevada, U.S. Share of Companywide 2020E1 Production 2015 & 2019 Reserves & Resources2
Slide 33: Rochester (cont.)
Rochester (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $1,481 Operating cash flow $1,359 Capital expenditures $1,230 $1,153 $1,142 $10.2 $8.3 $14.24 $14.38 $13.75 $6.9 $13.19 $13.25 $5.1 $5.8 $5.0 $2.8 $1.6 971 982 848 687 728 11 9 8 6 5 ($5.6) ($9.3) 2Q
Slide 34: Review of HPGR Technology
Review of HPGR Technology HPGR technology is relatively new to precious metals mining, although it has been proven in processing other materials. The implementation of HPGR at Rochester is expected to improve silver recoveries and lower operating costs HPGR Schematic1 Selected Commentary Feed • Feed
Slide 35: Kensington
Kensington Ownership 100% Claims 12,336 net acres Type Underground Processing Crushing, grinding, flotation Kensington processing Alaska, U.S. Metals Gold concentrate Mine life ~3 years Share of Companywide 2020E1 Production 2015 & 2019 Reserves & Resources2 P&P Reserves M&I Resources Inferred Resou
Slide 36: Kensington (cont.)
Kensington (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow2 Capital expenditures $976 $20.8 $928 $934 $19.2 $18.9 $842 $822 $16.4 $15.2 34 34 33 32 30 $4.9 $4.9 $4.3 $4.8 $3.9 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 2Q 2019 3Q 2019 4Q 201
Slide 37: Wharf
Wharf Ownership 100% Claims 7,852 net acres Type Open pit and heap leach Crushing, “on-off” heap leaching, Processing spent ore neutralization, carbon absorption/desorption Wharf South Dakota, U.S. Metals Electrolytic cathodic sludge Mine life ~7 years Share of Companywide 2020E1 Production 2015 & 2
Slide 38: Wharf (cont.)
Wharf (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow $1,090 Capital expenditures $1,002 $19.1 $17.6 $887 $17.0 $802 $804 26 26 25 16 16 $2.6 $0.5$0.2 $0.8 $0.8 $0.4 $0.3 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020 2Q 2019 3Q 2019 4Q 2019 1Q
Slide 39: Silvertip
Silvertip Ownership 100% Claims 90,156 net acres Type Underground Silvertip British Columbia, Canada Crushing, grinding, flotation Processing processing, concentrate thickening Metals Lead concentrate, zinc concentrate Mine life ~5 years 2018 & 2019 Reserves & Resources1 P&P Reserves M&I Resources I
Slide 40: Non-GAAP Reconciliations
Non-GAAP Reconciliations NYSE: CDE 40 JC 2016
Slide 41: Non-GAAP to U.S. GAAP Reconciliation for Guidance
Non-GAAP to U.S. GAAP Reconciliation for Guidance Unaudited Costs Applicable to Sales Guidance for 2020 ($ thousands, except per ounce amounts) Palmarejo Rochester Kensington Wharf Costs applicable to sales, including amortization (U.S. GAAP) $178,977 $105,053 $178,595 $94,142 Amortization (42,220)
Slide 42: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation Costs Applicable to Sales Unaudited 3 months ended June 30, 2020 ($ thousands, except per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $26,095 $21,348 $43,235 $25,653 $1,231 $117
Slide 43: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended March 31, 2020 ($ thousands, except per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $49,149 $19,860 $42,429 $20,267 $2
Slide 44: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 12 months ended December 31, 2019 ($ thousands, except per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $201,306 $118,246 $170,194 $92
Slide 45: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended December 31, 2019 ($ thousands, except per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $49,590 $31,100 $41,537 $29,818
Slide 46: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended September 30, 2019 ($ thousands, except per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $53,237 $31,999 $43,085 $25,38
Slide 47: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended June 30, 2019 ($ thousands, except per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $50,708 $28,656 $41,670 $17,691 $36
Slide 48: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted Net Income (Loss) ($ thousands) 2Q 2020 1Q 2020 2019 4Q 2019 3Q 2019 2Q 2019 2018 2017 2016 Net income (loss) ($1,209) ($11,900) ($341,203) ($270,961) ($14,277) ($36,764) ($48,405) ($1,319) $55,352 Income (loss) from discont. ops., net
Slide 49: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted EBITDA ($ thousands) 2Q 2020 1Q 2020 2019 4Q 2019 3Q 2019 2Q 2019 2018 2017 2016 Net income (loss) ($1,209) ($11,900) ($341,203) ($270,961) ($14,277) ($36,764) ($48,405) ($1,319) $55,352 Income (loss) from discont. ops., net of tax - -
Slide 50: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Free Cash Flow ($ thousands) 2Q 2020 1Q 2020 2019 4Q 2019 3Q 2019 2Q 2019 2018 2017 2016 Cash flow from operating activities $9,947 ($7,991) $91,880 $39,295 $41,996 $26,435 $20,108 $197,160 $96,461 Capital expenditures (16,682) (22,208) (99,772)
Slide 51: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Leverage Ratios LTM Adjusted EBITDA Consolidated Debt ($ thousands) 2Q 2020 1Q 2020 4Q 2019 2Q 2019 ($ thousands) 2Q 2020 1Q 2020 4Q 2019 2Q 2019 Net income (loss) ($298,347) ($333,902) ($341,203) ($108,541) Cash and cash equivalents $70,924 $52
Slide 52: Reserves and Resources
Reserves and Resources 2019 Proven and Probable Mineral Reserves Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) PROVEN RESERVES Palmarejo Mexico 1,093,000 0.093 5.17 102,000 5,649,000 Rochester Nevada, USA 249,815,000 0.003
Slide 53: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2019 Measured and Indicated Mineral Resources (excluding Reserves) Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) MEASURED RESOURCES Palmarejo Mexico 870,000 0.055 3.69 48,000 3,210,000 Roches
Slide 54: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2019 Inferred Mineral Resources Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) INFERRED RESOURCES Palmarejo Mexico 6,469,000 0.057 4.07 367,000 26,341,000 Rochester Nevada, USA 171,042,000 0.0
Slide 55: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2018 Proven and Probable Mineral Reserves Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) PROVEN RESERVES Palmarejo Mexico 1,283,000 0.084 4.97 108,000 6,376,000 Rochester Nevada, USA 228,413,0
Slide 56: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2018 Measured and Indicated Mineral Resources (excluding Reserves) Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) MEASURED RESOURCES Palmarejo Mexico 604,000 0.086 4.77 52,000 2,880,000 Roches
Slide 57: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2018 Inferred Mineral Resources Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) INFERRED RESOURCES Palmarejo Mexico 5,875,000 0.065 4.36 384,000 25,609,000 Rochester Nevada, USA 235,062,000 0.0
Slide 58: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2015 Proven and Probable Mineral Reserves Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) PROVEN RESERVES Palmarejo Mexico 802,000 0.077 6.29 62,000 5,048,000 Rochester Nevada, USA 96,520,000 0
Slide 59: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2015 Measured and Indicated Mineral Resources (excluding Reserves) Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) MEASURED RESOURCES Palmarejo Mexico 134,000 0.052 4.86 7,000 651,000 Rochester
Slide 60: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2015 Inferred Mineral Resources Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) INFERRED RESOURCES Palmarejo Mexico 1,721,000 0.085 4.79 147,000 8,240,000 Rochester Nevada, USA 59,597,000 0.003
Slide 61: 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 62: 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 63: Board of Directors (cont.)
Board of Directors (cont.) Jessica L. McDonald – Chair (former Interim CEO) of Canada Post Corporation and member of Board of Directors of Hydro One Limited. Ms. McDonald is also a Mentor at the Trudeau Foundation, was a visiting fellow at the Steyer-Taylor Center for Energy Policy and Finance at St
Slide 64: 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 Paul DePartout Director, Investor Relations investors@coeur.com NYSE: CDE 64 JC 2016