Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q1 2018 Earnings Presentation
63 slides from Coeur Mining's earnings presentation, Apr 26, 2018
Slide 1: First Quarter Earnings
2018 First Quarter Earnings 11:00am ET, April 26, 2018 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 the re-scoped mine plan and PEA (as defined below) at Rochester, anticipated dewatering and production ramp-up at J
Slide 3: Cautionary Statements (cont.)
Cautionary Statements (cont.) Non‐U.S. GAAP Measures ‐ We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non‐U.S. GAAP financial measures, including adjusted net income (loss), adjusted EBITDA, to
Slide 4: Quarter in Review
Quarter in Review NYSE: CDE 4 JC 2016
Slide 5: First Quarter 2018 Highlights
First Quarter 2018 Highlights • Another quarter of standout performance delivered by Palmarejo – Silver equivalent1 production of 3.8 million ounces, 13% higher year-over-year – Second consecutive quarter of adjusted costs applicable to sales (“CAS”) per average spot silver equivalent ounce (“AgEqOz
Slide 6: Key Operational and Strategic Achievements YTD
Key Operational and Strategic Achievements YTD • Commenced production at Silvertip slightly ahead of schedule • Announced re-scoped mine plan and positive preliminary economic assessment (“PEA”)1 for Rochester • Filed updated technical report for Kensington1, which reflects improved economics driven
Slide 7: Summary of Results
Summary of Results ($M) 1Q 2018 4Q 2017 QoQ Δ 1Q 2017 YoY Δ Silver ounces sold (M oz) 3.2 3.8 (17%) 3.3 (5%) Gold ounces sold (oz) 87,153 123,564 (29%) 110,874 (21%) Revenue $163.3 $214.6 (24%) $185.6 (12%) Costs applicable to sales $99.3 $121.8 (19%) $114.5 (13%) Exploration expense $6.7 $7.5 (10%)
Slide 8: Higher Year-Over-Year Production
Higher Year-Over-Year Production Companywide Silver Equivalent1 Production 10.8 8.0 8.6 8.3 7.6 118,756 93,293 88,218 85,383 82,819 3.7 3.0 3.2 2.7 2.6 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 AgEqOz1 production (M oz) Silver production (M oz) Gold production (oz) 4% Year-Over-Year Production Growth
Slide 9: Costs Reflect Shift in Capital Expenditures
Costs Reflect Shift in Capital Expenditures Higher companywide all-in sustaining costs (“AISC”)1 were driven by planned shift from development to sustaining capital expenditures at Palmarejo and Kensington as well as higher diesel prices Companywide Adj. AISC1 and Sustaining Capital Companywide Capi
Slide 10: Re-Scoped Mine Plan Doubles Rochester's NAV
Re-Scoped Mine Plan1 Doubles Rochester’s NAV A re-scoped mine plan and PEA incorporates the positive economic impact expected from the potential addition of HPGR technology to Rochester’s crushing circuit beginning in early 2019 2017 TR 2018 PEA Highlights of Expected HPGR Impact Mine Life 2031 2038
Slide 11: Improved Economics Expected at Kensington
Improved Economics Expected at Kensington Kensington’s updated technical report demonstrates the strong potential impact of a relatively small amount of high-grade mill feed on overall mine economics Highlights of Kensington Technical Report Continued Exploration Potential • 13% increase in expected
Slide 12: Portfolio Further Strengthened by Sale of San Bartolomé
Portfolio Further Strengthened by Sale of San Bartolomé Coeur’s platform is now North America-focused and U.S.-centric, with a significantly improved geopolitical risk profile, lower cost structure and greater exploration potential Established presence in mining- Exited Australia, as well as two of
Slide 13: Exploration Program Maintains Strong Pace
Exploration Program Maintains Strong Pace Coeur continued to invest in its near-mine exploration program during the quarter, with Palmarejo, Kensington and Silvertip accounting for approximately two-thirds of the companywide total Total Exploration Spend Amortization Per Ounce1 ($M) ($) Expensed Cap
Slide 14: Looking Ahead
Looking Ahead • Silvertip – Commercial production expected to be achieved by mid-year – Permit amendment application to be submitted in 2Q – Milling rates anticipated to climb to 1,000 tonnes (1,100 tons) per day in 1Q 2019 – Updated NI 43-101 Technical Report anticipated during 2H • Rochester – De-
Slide 15: 2018 Guidance
2018 Guidance1 2018 Production Outlook Silver (K oz) Gold (oz) Zinc (K lbs) Lead (K lbs) AgEqOz2 (K oz) Palmarejo 6,500 – 7,100 110,000 – 115,000 - - 13,100 – 14,000 Rochester 4,200 – 4,700 45,000 – 50,000 - - 6,900 – 7,700 Kensington - 115,000 – 120,000 - - 6,900 – 7,200 Wharf - 85,000 – 90,000 - -
Slide 16: Executive Compensation and Governance
Executive Compensation and Governance NYSE: CDE 16 JC 2016
Slide 17: 2017 CEO Compensation Tied to Stockholder Returns
2017 CEO Compensation Tied to Stockholder Returns 60% of compensation linked to stock performance (Based 100% on Company Performance) NYSE: CDE 17 JC 2016
Slide 18: 2018 Incentive Plan Aligned with Strategic Objectives
2018 Incentive Plan Aligned with Strategic Objectives TRIFR1 % Reduction (with potential modifier PROTECT for top/bottom quartile performance vs. top tier U.S. metals companies) AIP2 15% % Reduction in Significant Spills DEVELOP Three-Year Growth in Reserves and PSU3 50% Measured & Indicated Resourc
Slide 19: 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 • Two new directors appointed in February 2018 having skills and experiences that complement other directors • Balance of newer and lo
Slide 20: Other Governance Highlights
Other Governance Highlights Governance Practices Board Refreshment and • Two new independent directors added to the Board in February 2018 and Succession Planning five directors – or 50% of the Board – added in last five years • In 2017, the Board engaged a third party to consult on refreshment and
Slide 21: Appendix
Appendix NYSE: CDE 21 JC 2016
Slide 22: Industry-Leading Safety Performance
Industry-Leading Safety Performance Coeur continues to demonstrate industry-leading commitment to ensuring safety in its mines. Since 2012, the Company’s injury frequency rates have been significantly lower than the U.S. averages and its reductions swifter Lost-Time Injury Frequency Rate Total Repor
Slide 23: Impact of Select U.S. Tax Reforms
Impact of Select U.S. Tax Reforms Recent U.S. tax reform is not expected to meaningfully impact near-term cash flows. In the long-term, Coeur expects to benefit from these reforms Once U.S. NOLs are used, Coeur expects to benefit Lower statutory corporate tax rate from a lower tax rate on future tax
Slide 24: Building on 2017's Exploration Success
Building on 2017’s Exploration Success 2017 exploration program highlights: 2018 expected exploration priorities include: • $41.9M of total exploration investment • Targeting $40M - $50M2 – $30.3M of expense, $11.6M of capitalized – $20M - $25M of both exploration expense and capitalized exploration
Slide 25: Capital Expenditures Outlook
Capital Expenditures Outlook Capital Expenditures by Mine 2018 capital expenditures are expected to total (% companywide total) $120M - $140M1 • $90M - $100M of sustaining capital expenditures, 13% 22% including $20M - $25M of capitalized exploration 25% 6% 32% • Palmarejo ($30M - $35M), Kensington
Slide 26: Palmarejo
Palmarejo Ownership 100% Claims 112,520 net acres Type Underground Crushing, grinding, flotation, Processing agitation leaching, Merrill-Crowe precipitation, refining Metals Silver and gold doré Mine life ~6 years Palmarejo Chihuahua, Northern Mexico 2018E1 Production Share of 2017 R&R3 2017 Reserve
Slide 27: Palmarejo (cont.)
Palmarejo (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $11.21 $9.76 Operating cash flow $9.68 $8.01 Capital expenditures $10.11 $7.54 $8.87 $8.68 $52.1 $50.5 $6.64 $6.94 2,346 38 2,013 31 1,908 29 30 $27.3 1,531 1,457 24 $18.8 $18.5 $11.2 $9.3 $6.2 $5.5 $
Slide 28: 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 ~21 years Nevada, U.S. 2018E1 Production Share of 2017 R&R3 2017 Reserves and Resources3 (AgEqO
Slide 29: Rochester (cont.)
Rochester (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $13.69 Operating cash flow $13.54 $13.33 $12.57 $12.77 Capital expenditures $26.1 $12.56 $12.46 $11.81 $11.89 $11.37 1,361 $13.8 1,127 1,156 19 1,157 $10.6 1,070 $9.7 $6.8 $5.7 11 11 11 10 $3.4 $2.6 $
Slide 30: Summary of Rochester PEA
Summary of Rochester PEA1 Highlights 2017 TR 2018 PEA Proven and probable reserves • Re-scoped mine plan and PEA incorporate the Mineralized material tons K tons 244,804 Mineralized material gold grade oz/t 0.003 anticipated economic benefit from: Mineralized material silver grade oz/t 0.46 Measured
Slide 31: What is HPGR?
What is HPGR? High pressure grinding rolls are relatively new to precious metals operations, although the technology has been proven in processing other materials • HPGRs have been used in the aggregates sector for High Pressure Grinding Roll Schematic decades, though early challenges associated wit
Slide 32: Notes to Rochester's Re-Scoped Mine Plan and PEA
Notes to Rochester’s Re-Scoped Mine Plan and PEA (a) 2018 PEA is effective December 31, 2017 and filed March 5, 2018 and the 2017 Technical Report is effective December 31, 2016. (b) Assumed metals prices for estimated Mineral Resources included in the 2018 Technical Report were $20.00 per ounce of
Slide 33: Kensington
Kensington Ownership 100% Claims 12,336 net acres Type Underground Processing Crushing, grinding, flotation Kensington processing Alaska, U.S. Metals Gold concentrate Mine life ~5 years 2018E1 Production Share of 2017 R&R3 2017 Reserves and Resources3 (AgEqOz2) (AgEqOz2) Grade (oz/t) Ounces (contain
Slide 34: Kensington (cont.)
Kensington (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow $1,010 Capital expenditures $952 $946 $884 $896 $16.8 35 $12.0 $11.4 26 28 $10.1 26 26 $9.3 $8.6 $7.0 $5.5 $4.5 $4.6 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 1Q 2017 2Q 2017 3Q 201
Slide 35: Wharf
Wharf Ownership 100% Claims 7,852 net acres Type Open pit and heap leach Crushing, “on-off” heap leaching, Processing spent ore neutralization, carbon absorption/desorption Wharf South Dakota, U.S. Metals Electrolytic cathodic sludge Mine life ~7 years 2018E1 Production Share of 2017 R&R3 2017 Reser
Slide 36: Wharf (cont.)
Wharf (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $870 Operating cash flow Capital expenditures $737 $719 $670 $682 $17.2 $15.0 27 26 $8.6 $8.8 21 21 18 $3.1 $3.3 $0.9 $1.5 $0.3 ($1.4) 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 1Q 2017 2Q 2017 3Q 2017 4Q 20
Slide 37: Silvertip
Silvertip Ownership 100% Claims 90,156 net acres Type Underground Silvertip British Columbia, Canada Crushing, grinding, flotation Processing processing, concentrate thickening Metals Lead concentrate, zinc concentrate 2018E1 Production Share of 2017 R&R3 2017 Reserves and Resources3 (AgEqOz2) (AgEq
Slide 38: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation Unaudited Adjusted Net Income (Loss) ($ thousands) 1Q 2018 2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 2015 2014 Net income (loss) $1,241 ($1,319) $7,625 ($16,652) ($10,955) $18,663 $55,352 ($367,183) ($1,186,874) Income (loss) from discont. ops., net of tax (550)
Slide 39: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted EBITDA ($ thousands) 1Q 2018 2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 2015 2014 Net income (loss) $1,241 ($1,319) $7,625 ($16,652) ($10,955) $18,663 $55,352 ($367,183) ($1,186,874) Income (loss) from discont. ops., net of tax (550) 12,
Slide 40: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Free Cash Flow ($ thousands) 1Q 2018 2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 2015 2014 Cash flow from operating activities $15,541 $197,160 $91,811 $37,308 $24,103 $43,938 $96,461 $87,412 $15,579 Capital expenditures (42,345) (136
Slide 41: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Amortization per Ounce ($ thousands, except per ounce amounts) 1Q 2018 4Q 2017 3Q 2017 2Q 2017 1Q 2017 Amortization $30,530 $44,471 $32,112 $30,433 $38,368 Consolidated silver equivalent ounces sold (average spot) 10,066,759 13,248,337 9,698,654
Slide 42: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended March 31, 2018 Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP) $47,421 $29,136 $76,
Slide 43: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2017 Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP) $219,920 $13
Slide 44: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended December 31, 2017 Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP) $58,775
Slide 45: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended September 30, 2017 Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP) $49,669
Slide 46: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended June 30, 2017 Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP) $48,325 $29,
Slide 47: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended March 31, 2017 Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP) $63,151 $32
Slide 48: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2016 Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP) $117,419 $11
Slide 49: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2015 Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP) $170,899 $12
Slide 50: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2014 Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Endeavor Total Kensington Total Costs applicable to sales, including amortization (U.S. GAAP) $256,707 $112,252 $8,514
Slide 51: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs ($ thousands, except per ounce amounts) 1Q 2018 2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 2015 2014 Costs applicable to sales $99,340 $440,260 $121,983 $101,557 $102,229 $114,490 $335,375 $403,827 $388,286 Treatment and r
Slide 52: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) All-in Sustaining Costs for 2018 Guidance Unaudited Per 60:1 Silver Equivalent Ounce Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Silvertip Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.
Slide 53: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) All-in Sustaining Costs for 2018 Guidance Unaudited Per Spot Silver Equivalent Ounce Silver Gold ($ thousands, except per ounce amounts) Palmarejo Rochester Silvertip Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.
Slide 54: Average Spot Equivalence
Average Spot Equivalence Average Spot Prices 1Q 2018 2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 2015 2014 Average silver spot price per ounce $16.77 $17.05 $16.73 $16.84 $17.21 $17.42 $17.14 $15.68 $19.08 Average gold spot price per ounce $1,329 $1,257 $1,275 $1,278 $1,257 $1,219 $1,251 $1,160 $1,266
Slide 55: Reserves and Resources
Reserves and Resources 2017 Proven and Probable Mineral Reserves Grade Contained Location Short tons Silver (oz/t) Gold (oz/t) Lead (%) Zinc (%) Silver (oz) Gold (oz) Lead (lbs) Zinc (lbs) PROVEN RESERVES Palmarejo Mexico 1,571,000 3.81 0.073 5,978,000 115,000 Rochester Nevada, USA 195,724,000 0.45
Slide 56: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2017 Measured and Indicated Mineral Resources (excluding Reserves) Grade Contained Location Short tons Silver (oz/t) Gold (oz/t) Lead (%) Zinc (%) Silver (oz) Gold (oz) Lead (lbs) Zinc (lbs) MEASURED RESOURCES Palmarejo Mexico 629,000 3.07 0.051 1,928,000 32,000 Roches
Slide 57: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2017 Inferred Mineral Resources Grade Contained Location Short tons Silver (oz/t) Gold (oz/t) Lead (%) Zinc (%) Silver (oz) Gold (oz) Lead (lbs) Zinc (lbs) INFERRED RESOURCES Palmarejo Mexico 7,336,000 4.23 0.050 31,061,000 369,000 Rochester Nevada, USA 131,570,000 0.4
Slide 58: Reserves and Resources (cont.)
Reserves and Resources (cont.) 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 Al
Slide 59: 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 60: 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 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: 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 63 JC 2016