Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q2 2014 Earnings Presentation
35 slides from Coeur Mining's earnings presentation, Aug 7, 2014
Slide 1: Second Quarter 2014 Financial Results
Second Quarter 2014 Financial Results Conference Call and Webcast August 7, 2014
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, expenses, capital and exploration expenditures, amortization, expectations regarding
Slide 3: Second Quarter 2014 Highlights
Second Quarter 2014 Highlights Silver production up 10% and gold production up 4% compared to 1Q 2014 Cash flow from operating activities of $30.5 million in 2Q 2014, compared to ($9.6) million in 1Q 2014 Mine-level free cash flow1 of $22.5 million increased from ($4.4) million in 1Q 2014, rea
Slide 4: Second Quarter 2014 Highlights
Second Quarter 2014 Highlights Quarter YOY 2Q 2014 1Q 2014 2Q 2013 in millions US$ Variance Variance Revenue $164.6 $159.6 3% $204.5 (20%) Costs applicable to sales1 118.7 106.9 11% 142.4 (17%) Exploration expense 5.2 4.2 24% 6.8 (24%) General & administrative 9.4 13.9 (32%) 15.0 (37%) Adjusted net
Slide 5: Second Quarter 2014 Highlights (continued)
Second Quarter 2014 Highlights (continued) Quarter YOY 2Q 2014 1Q 2014 2Q 2013 Variance Variance Average realized silver price per ounce $19.60 $20.28 (3%) $22.73 (14%) Average realized gold price per ounce $1,277 $1,279 --% $1,356 (6%) Silver ounces produced (millions) 4.5 4.1 10% 4.6 (3%) Gold oun
Slide 6: Second Quarter 2014 Cash Flow Bridge
Second Quarter 2014 Cash Flow Bridge Coeur continues to maintain a healthy cash balance and strong liquidity $20.0 $41.4 $15.4 in millions $12.3 $318.6 $4.0 $316.8 $31.6 Cash Balance 1 Adjusted Net Amortization Working Capital Capital Palmarejo Other Cash Balance 1 2 3/31/14 Loss Changes Expenditure
Slide 7: Well-Capitalized with Financial Flexibility and Low Net Debt
Well-Capitalized with Financial Flexibility and Low Net Debt Liquidity $269.1 $47.6 Net Debt = $163.3 Debt $468.6 $11.6 $0 $100 $200 $300 $400 $500 in millions Cash & Cash Equivalents Short-term Investments Long-term Debt Short-term Debt As of June 30, 2014. Summary balance sheet (in millions) Sep 3
Slide 8: Costs Trending Down
Costs Trending Down Capex Capital Expenditures Exploration ExplorationExpense Expense 35 8 30 7 25 6 $ in millions $ in millions 5 20 4 15 3 10 2 5 1 0 0 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 General & Administrative G&A Expenses 20 15 $ in millions 10 5 0 2Q'13 3Q'13 4Q'13 1Q'
Slide 9: Recent Goals and Achievements
Recent Goals and Achievements Rochester production increased 48% and 13% Execute Rochester for silver and gold, respectively, compared to production ramp up 1Q 2014 New stream agreement with Franco-Nevada Improve royalty burden on expected to significantly improve mine’s cash Palmarejo’s cash fl
Slide 10: Second Quarter 2014 Operational Highlights
Second Quarter 2014 Operational Highlights Palmarejo Rochester San Bartolomé Kensington • Cash flow from operating • Silver production 48% • Silver production increased • Gold production 10% higher activities 169% higher than higher than 1Q 2014 9% over 1Q 2014 than 1Q 2014 prior quarter • Costs app
Slide 11: Palmarejo: Transitioning to Lower Tonnage, Higher-Grade, Higher-Margin Operation
Palmarejo: Transitioning to Lower Tonnage, Higher-Grade, Higher-Margin Operation $15.55 $14.97 $13.73 $13.39 $13.66 $13.36 $12.88 $12.89 $14.04 $11.51 $10.90 $10.36 2.7 2.5 2.4 2.3 2.0 1.9 2.0 1.8 1.8 1.8 1.6 1.6 35,486 ounces 34,108 29,815 31,081 31,258 29,893 23,702 28,191 22,965 25,216 23,706 19,
Slide 12: Rochester: Increased Silver and Gold Production Drives Highest Cash Flow
Rochester: Increased Silver and Gold Production Drives Highest Cash Flow in More than a Year $16.55 $15.74 $16.63 $15.74 $14.95 $15.79 $22.97 $12.73 $16.38 $15.15 $15.83 $12.67 $11.53 1,112 12,055 10,120 819 10,599 828 844 9,404 750 9,230 ounces 713 8,742 712 8,192 648 595 7,890 441 5,292 4,824 352
Slide 13: San Bartolomé: Expect Continued Stable Production and Costs in 2014
San Bartolomé: Expect Continued Stable Production and Costs in 2014 $14.14 $15.26 $13.06 $13.41 $13.25 $13.91 $13.93 $13.85 $11.34 $12.43 $10.65 $10.66 2.1 2.0 1.6 1.5 1.5 1.5 1.5 1.5 1.5 1.3 1.4 1.4 ounces 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Silver production (mi
Slide 14: Kensington: Improving Stability of Production, Cash Flow, and Costs
Kensington: Improving Stability of Production, Cash Flow, and Costs $2,622 $1,005 $1,008 $1,482 $1,227 $677 $1,120 $1,147 $1,013 $877 $900 $894 36,469 28,717 28,323 28,089 25,687 24,391 25,206 25,428 21,572 22,583 13,299 7,444 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 G
Slide 15: La Preciosa Feasibility Study Adds Significant Reserves per Share
La Preciosa Feasibility Study Adds Significant Reserves per Share 600 534.0 523.5 500 450.6 448.7 ounces in millions 384.5 400 352.9 339.7 324.6 300 200 140.1 159.9 112.8 130.3 100 0 YE 2011 YE 2012 YE 2013 YE 2013 Pro-Forma (Pre-La Preciosa Feasibility) (Post-La Preciosa Feasibility) AgEq P&P Reser
Slide 16: 2014 Guidance
2014 Guidance Silver Production Gold Production 7,603 6,850 Ounces in thousands 5,941 5,850 114,821 109,500 116,536 4,250 87,000 Ounces 2,799 30,860 36,000 669 550 Palmarejo San Bartolomé Rochester Endeavor Kensington Palmarejo Rochester 2013 Actual 2014 Guidance Midpoint 2013 Actual 2014 Guidance M
Slide 17: 2014 Production Guidance Range Narrowed
2014 Production Guidance Range Narrowed Silver Guidance as of May 7, 2014 Guidance as of August 6, 2014 Palmarejo 6,700 – 7,200 6,700 – 7,000 San Bartolomé 5,700 – 6,000 5,700 – 6,000 Rochester 4,100 – 4,400 4,100 – 4,400 Endeavor 500 – 600 500 – 600 Total Silver 17,000 – 18,200 17,000 – 18,000 Gold
Slide 18: Appendix
Appendix
Slide 19: Cash Flow Protection Strategy
Cash Flow Protection Strategy Coeur continues to maintain a targeted cash flow protection program with the following objectives: Maintain simplicity Protect downside metal price exposure while retaining the upside potential Purchase put options to protect some of expected production against
Slide 20: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted Net Income (Loss) in thousands of US$ 2Q 2014 1Q 2014 4Q 2013 3Q 2013 2Q 2013 Net income (loss) ($43,121) ($37,191) ($581,528) ($46,265) ($35,040) Fair value adjustments, net 6,498 7,827 (11,289) 13,717 (48,434) Stock-based compensation 2,299
Slide 21: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted EBITDA LTM LTM LTM LTM Adjusted EBITDA Reconciliation ($ in thousands) 6/30/14 3/31/14 12/31/13 9/30/13 Net income (loss) ($708,105) ($700,024) ($650,563) ($31,485) Interest expense, net of capitalized interest 46,006 44,625 41,303 34,915 Int
Slide 22: 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 2Q 2014 1Q 2014 4Q 2013 3Q 2013 2Q 2013 Costs applicable to sales, including amortization (U.S. GAAP) $159,036 $146,125 $163,701 $191,568 $198,966 Amortization 40,349 39,229 62,293 59,762 56,
Slide 23: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (dollars in thousands except per ounce costs) San Total three months ended June 30, 2014 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization (U.S. GAAP) $67,59
Slide 24: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (dollars in thousands except per ounce costs) San Total three months ended December 31, 2013 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization (U.S. GAAP) $7
Slide 25: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (dollars in thousands except per ounce costs) San Total Three months ended June 30, 2013 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $90,602 $37,639 $2
Slide 26: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (dollars in thousands except per ounce costs) San Total Three months ended December 31, 2012 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $72,307 $19,24
Slide 27: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (dollars in thousands except per ounce costs) San Total Three months ended June 30, 2012 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $105,127 $26,721 $
Slide 28: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (dollars in thousands except per ounce costs) San Total Three months ended December 31, 2011 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $89,428 $27,28
Slide 29: External Growth - Strategic Investments
External Growth - Strategic Investments Apogee Silver (Pulacayo-Paca project, Bolivia and Cachinal project, Chile; 7.6% ownership interest): Environmental Impact Assessment approved by Bolivia’s Ministry of Environment and Water Caracara Silver (Princesa project, Peru; 3.2% ownership interest)
Slide 30: Coeur’s Mineral Reserves
Coeur’s Mineral Reserves Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Proven Reserves Rochester Nevada, USA 132,188,000 0.53 0.004 69,915,000 551,000 Martha Argentina - - - - - San Bartolomé Bolivia 1,206,000 2.87 - 3,456,000 - Kensington Alaska, USA 309,000 - 0.269
Slide 31: Coeur’s Measured and Indicated Mineral Resources
Coeur’s Measured and Indicated Mineral Resources (Excluding Reserves) Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Measured Resources Rochester Nevada, USA 66,190,000 0.45 0.003 29,860,000 186,000 Martha Argentina — — — — — San Bartolomé Bolivia — — — — — Kensington
Slide 32: Coeur’s Inferred Mineral Resources
Coeur’s Inferred Mineral Resources Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Inferred Resources Rochester Nevada, USA 37,365,000 0.62 0.003 23,295,000 101,000 Martha Argentina 204,000 4.75 0.005 969,000 1,000 San Bartolomé Bolivia 3,683,000 1.26 — 4,638,000 — Kens
Slide 33: Executive Leadership
Executive Leadership Mitchell J. Krebs – President and Chief Executive Officer. Mr. Krebs joined Coeur in 1995 after spending several years in the investment banking industry in New York. Mr. Krebs has held various positions in the corporate development department, including Senior Vice President of
Slide 34: 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 35: 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 Tickers: CDE.WS: NYSE; CDM.WT: TSX Website: www.coeur.com Bridget Freas Donna Mirandola Director, Investor Relations Director, Corp