Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q4 2016 Earnings Presentation
51 slides from Coeur Mining's earnings presentation, Feb 9, 2017
Slide 1: Fourth Quarter and Full-Year Earnings 2016
2016 Fourth Quarter and Full-Year Earnings 11:00am ET, February 9, 2017 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 interest expense, anticipated consideration for non-core asset sales, mining rates, costs, returns, mine plans, min
Slide 3: 2016: Delivering on Commitments
2016: Delivering on Commitments NYSE: CDE 3 JC 2016
Slide 4: Highlights
Highlights • 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 activities
Slide 5: Fourth Quarter and Full-Year Results
Fourth Quarter and Full-Year Results Quarterly Annual 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 $646.1 3% Costs
Slide 6: Record Production Levels
Record Production Levels Ramp-up of Palmarejo underground operations expected to drive 2017E production growth Silver equivalent1 production (ounces in millions) 39.7 35.6 36.3 32.7 32.2 2 2013 2014 2015 2016 2017E (1) Gold and silver equivalence assumes silver-to-gold ratio of 60:1 unless otherwise
Slide 7: Continued Cost Improvements
Continued Cost Improvements Adjusted CAS / AgEqOz1 (primary silver mines) Adjusted CAS / AuEqOz1 (primary gold mines) ($) ($) $940 $889 $14.13 $13.65 $12.75 $764 $13.60 $13.68 $688 $11.73 $11.87 Average spot AgEqOz1 $10.99 60:1 AgEqOz1 2013 2014 2015 2016 2013 2014 2015 2016 Companywide Adjusted AIS
Slide 8: Significant Debt Reduction Over Past 15 Months
Significant Debt Reduction Over Past 15 Months As a result of balance sheet improvements, Moody’s and S&P have upgraded Coeur’s corporate and senior unsecured debt ratings in recent months Debt Bridge1 ($ million) $558 ($54) ($5) ($5) ($100) ($1) ($11) $20 $213 ($190) Sr. Note Equity- Repayment of R
Slide 9: Strong Credit Profile
Strong Credit Profile Total Debt to LTM Adjusted EBITDA1 ($ 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 10: High-Return, Organic Growth Remains a Priority
High-Return, Organic Growth Remains a Priority Capex by Mine Site 2017 capital expenditures expected to total $115 - $135 million1 2% 5% 6% 6% • ~$10 million of carryover from 2016 36% 34% • $11 - $13 million of capitalized exploration 2016 32% • Palmarejo: $40 - $45 million 2017E 37% – Ongoing tran
Slide 11: 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 12: Expanded Exploration Program
Expanded Exploration Program 2016 Program 2017 Program Focus • Totaled $25.8M ($12.9M expensed; • Targeting $34M - $38M ($23M - $25M $12.9M capitalized) expensed; $11M - $13M capitalized) • Palmarejo exploration totaled $11.2M • Palmarejo (~$7M expensed; ~$7M ($5.1M expensed; $6.1M capitalized) capi
Slide 13: 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 14: 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 15: 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 16: 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 17: Appendix
Appendix NYSE: CDE 17 JC 2016
Slide 18: Palmarejo
Palmarejo Production and Cost Performance1 Highlights $14.43 • Development of Guadalupe and Independencia $12.90 $13.03 continues with combined mining rates expected $13.77 $12.83 to increase to 4,500 tpd by year-end 2017 $10.55 $11.80 $10.25 • Silver and gold production expected to increase $9.57 $
Slide 19: Rochester
Rochester Production and Cost Performance1 Highlights $15.58 • Tons placed in 2016 increased 19% year-over- $15.51 $14.31 year to 19.6 million tons, the highest level since Rochester first began operating in 1986 $13.77 $12.36 $11.86 $11.75 • Commenced construction on Stage IV leach pad expansion in
Slide 20: Kensington
Kensington Production and Cost Performance1 Highlights • 2016 production remained near record levels at $940 124,331 ounces $889 $798 $790 $825 • Development of high-grade Jualin deposit was over 64% complete as of 2016 year-end and is 126 expected to be the main driver of capital 124 123 expenditur
Slide 21: Wharf
Wharf Production and Cost Performance1 Highlights Operated by GoldCorp, Inc. $924 • Acquired in 2015 for $99 million from Goldcorp $800 • Coeur’s lowest cost operation and largest source $770 $706 of FCF4, generating over $86M since acquisition through 2016 $575 109 • Improved plant recovery rates n
Slide 22: San Bartolomé
San Bartolomé Production and Cost Performance1 Highlights • Straightforward operation due to free-digging surface mining techniques (no drilling or blasting) $14.22 $14.25 $14.01 • Sourcing higher-grade, lower-cost ore from local $13.63 $13.46 sources with the goal of increasing overall grade, reduc
Slide 23: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation Unaudited Adjusted Net Income (Loss) ($ 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) ($1,186,874) Fair value adjustments, net 11,581 (1,654) 961 3,579 8,695 (5
Slide 24: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted EBITDA ($ 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) ($1,186,874) Interest expense, net of capitalized interest 36,920 6,857 8,068
Slide 25: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited LTM Adjusted EBITDA ($ 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) ($1,156,528) Interest expense, net of capitalized interest 36,920 41,821
Slide 26: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Debt ($ 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 $205,708 Total debt 210,896 401,745 511,066 511,101 490,410 545,986 LTM adjusted EBITDA 215,16
Slide 27: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Free Cash Flow ($ 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 $43,217 Capital expenditures (101,013) (29,926) (25,627) (23,288) (2
Slide 28: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2016 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP)
Slide 29: 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 30: 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 31: 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 32: 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 33: 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 34: 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 35: 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 $1
Slide 36: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2013 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Total Costs applicable to sales, including amortization (U.S. GAAP) $322,107 $8
Slide 37: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs ($ 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 $463,663 Treatment and r
Slide 38: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs per Silver Equivalent Ounce for 2017 Guidance Silver Gold ($ thousands except per ounce San amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortizat
Slide 39: 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 40: 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 2016 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 41: 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 42: 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 43: 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 44: 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 45: 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 46: 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 47: 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 48: 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 49: 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 50: 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 51: 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