Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Morgan Stanley Leveraged Finance Conference 2014
41 slides from Coeur Mining's conference presentation, Jun 12, 2014
Slide 1: Morgan Stanley Leveraged Finance Conference
Morgan Stanley Leveraged Finance Conference Bridget Freas, Director, Investor Relations The Roosevelt Hotel, New Orleans, Louisiana June 11-13, 2014 Presentation: June 12, 2014 at 2:00 p.m. local time, Salon II
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, and exploration and de
Slide 3: Key Investment Considerations
Key Investment Considerations Largest U.S.-based Silver Producer; Significant Gold Production Disciplined Capital Deployment Strategy Growing Pipeline of Well-Capitalized with Value-Creating Assets Strong Liquidity Strong Platform of Assets Provide Diversified Production Base Focused on Reducing Cos
Slide 4: Leading Producer of Silver and Gold
Leading Producer of Silver and Gold 2013 Silver Production by Mine (millions of ounces) 2013 Gold Production by Mine 0.7 2.8 Palmarejo Palmarejo 7.6 San Bartolomé 114,821 116,536 Rochester Rochester 5.9 Endeavor Kensington 30,860 Silver Production Gold Production 262,217 220,000- 19.1 18.0 17.0-18.2
Slide 5: Portfolio Includes 2 of the Top 15 Largest Primary Silver Mines
Portfolio Includes 2 of the Top 15 Largest Primary Silver Mines Kensington Mine, Alaska Silver Ounces Gold Ounces 2013: 114,821 oz Au Total1 (000s) (000s) 2014E: 105,000 - 112,000 oz Au Proven & Probable Reserves 255,396 2,152 Measured & Indicated Resources 386,297 2,461 Inferred Resources 96,423 1,
Slide 6: Diverse Base of Cash-Flowing Assets and Development Projects
Diverse Base of Cash-Flowing Assets and Development Projects Deploying capital in high-return projects enables cycle of cash flow generation Operating Mines Time Needed to Provide Cash Flow Develop New to Fund Drilling Assets Robust Early-Stage Exploration Projects Program Frees up Capital Increases
Slide 7: Financial Performance Highly Dependent on Metal Price
Financial Performance Highly Dependent on Metal Price Net Metal Sales EBITDA1 $529 $1,021 $895 $ in millions $378 $ in millions $746 $515 $214 $191 $300 $70 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Silver and Gold Price History2 350% 250% 150% 50% -50% Jan-09 May-09 Sep-09 Jan-10 May-10 Sep
Slide 8: Well-capitalized balance sheet with financial flexibility and low leverage
Well-capitalized balance sheet with financial flexibility and low leverage Liquidity $272.9 $45.6 Net Debt = $145.7 Debt $456.2 $8.1 $0 $100 $200 $300 $400 $500 in millions Cash & Cash Equivalents Short-term Investments Long-term Debt Short-term Debt As of March 31, 2014. Summary balance sheet (in m
Slide 9: Capex Significantly Reduced; G&A Expenses Trending Down
Capex Significantly Reduced; G&A Expenses Trending Down Capital Expenditures General & Administrative Expenses $400 $60 $320 $50 $240 $40 $ in millions $ in millions $160 $30 $80 $20 $0 $10 $0 2011 2012 2013 2014E ▪ No major capital projects in progress; 2014 capex forecast is primarily maintenance
Slide 10: High Leverage to Macro Environment and Improved Company Performance
High Leverage to Macro Environment and Improved Company Performance Market Cap per 2014E Silver Market Cap per Silver Equivalent P/NAV3 Equivalent Production Ounce1,2 Reserve Ounce1,2 TAHO $168.6 HOC 1.3 FRES $15.1 FRES 1.3 FRES $150.6 EXK $13.2 GPR 1.3 POLY $123.1 POLY $12.7 POLY 1.2 SSRI $85.0 SLW
Slide 11: Primary Catalysts During Remainder of 2014
Primary Catalysts During Remainder of 2014 Palmarejo operational adjustments, mine life update, and future cash flow profile Rochester expansion progress Improved cost profile Mid-year decision on La Preciosa feasibility-stage project Capital deployment philosophy NYSE: CDE 11
Slide 12: Palmarejo Costs Trending Down; Open-Pit Rates Declining
Palmarejo Costs Trending Down; Open-Pit Rates Declining 2Q 2013 3Q 2013 4Q 2013 1Q 2014 OP mining costs per OP ton mined $1.75 $1.73 $1.64 $1.47 UG mining costs per UG ton mined $52 $40 $35 $37 Processing costs per ton processed $27 $24 $26 $23 G&A per ton processed $12 $13 $11 $14 Tons milled 570,3
Slide 13: Rochester Ramp Up Continues at Lower Expected Costs
Rochester Ramp Up Continues at Lower Expected Costs Recent Accomplishments ~50% Silver Production Growth Expected in 2014 126% increase in silver reserves in 2013 4,250 Ounces in thousands 121% increase in gold reserves in 2013 2,799 Completed Stage 3 leach pad expansion Upgraded crusher cir
Slide 14: La Preciosa Value Considerations
La Preciosa Value Considerations Anticipated to be one of the largest silver mines in the world Long expected mine life Attractive jurisdiction Low technical risk Provides significant upside exposure in a rising silver price environment Feasibility study de-risking the project: ▪ Land ri
Slide 15: Returns-Driven Approach to Capital Deployment and Portfolio Optimization
Returns-Driven Approach to Capital Deployment and Portfolio Optimization Coeur’s Strategy Opportunities Expected IRR > cost of capital Acquisition of operating asset ‾ Adds near-term cash flow Jurisdictions with low political risk ‾ Less execution risk; lower capital needs Diversify asset ba
Slide 16: 2014 Guidance
2014 Guidance Silver Production Gold Production 7,603 6,950 Ounces in thousands 5,941 5,850 114,821 108,500 116,536 91,000 4,250 Ounces 2,799 30,860 29,500 669 550 Palmarejo San Bartolomé Rochester Endeavor Kensington Palmarejo Rochester 2013 Actual 2014 Guidance Midpoint 2013 Actual 2014 Guidance M
Slide 17: Key Investment Highlights
Key Investment Highlights Well-capitalized with strong liquidity Balance Sheet Five operating assets in four Health jurisdictions and growing pipeline Value-Creating Asset Growth Diversity Conservative capital deployment including large exploration program near existing operations Leverage to strong
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: 2014 Goals and Strategic Priorities
2014 Goals and Strategic Priorities Attain New Heights in Empower employees to own success through standardized systems and aligned incentives Safety, Environmental & Focus on establishing and maintaining trust through sustained engagement with Community Relations stakeholders Share best pract
Slide 21: Value-Creating Exploration Program
Value-Creating Exploration Program Total Coeur Proven & Probable Reserves Total Coeur Silver Equivalent Reserves & Resources 249 millions of tons 145 millions of ounces 2012 Year End 2013 Year End Total Coeur Measured & Indicated Resources 270 millions of tons 80 2009 2010 2011 2012 2013 Proven & Pr
Slide 22: Key Focal Points for 2014
Key Focal Points for 2014 Palmarejo San Bartolomé Kensington Rochester Transitioning to expected Higher production Mill throughput tracking 2014 silver production higher-grade, higher- expected in remaining significantly higher than expected to increase margin operation quarters of 2014 rece
Slide 23: Palmarejo: Improving Operational Consistency
Palmarejo: Improving Operational Consistency $15.55 $14.97 $12.88 $12.89 $13.73 $13.39 $13.66 $11.51 $13.36 $10.36 $10.90 $9.89 2.7 2.4 2.5 2.4 2.3 2.0 1.9 2.0 1.8 1.8 33,389 1.6 1.6 35,486 ounces 34,108 31,258 29,893 29,815 31,081 28,191 25,216 23,702 19,998 22,965 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'
Slide 24: San Bartolomé: Expect Continued Stable Production and Costs in 2014
San Bartolomé: Expect Continued Stable Production and Costs in 2014 $15.26 $12.43 $13.06 $13.41 $14.14 $13.25 $13.91 $13.93 $10.08 $11.34 $10.65 $10.66 2.1 2.0 1.7 1.6 1.5 1.5 1.4 1.5 1.5 1.5 1.4 1.3 ounces 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 1 Silver production (
Slide 25: Kensington: Higher Throughput Expected to Offset Lower Grade in 2014
Kensington: Higher Throughput Expected to Offset Lower Grade in 2014 $2,587 $1,005 $1,469 $871 $1,126 $1,234 $667 $1,129 $1,002 $890 $856 $676 37,404 28,717 29,049 25,758 25,687 24,391 25,206 25,428 21,572 23,162 ounces 13,299 7,444 2Q'11 3Q'11 4Q'11 1Q'12 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1
Slide 26: Rochester: Higher Silver and Gold Production and Lower Costs Expected in 2014
Rochester: Higher Silver and Gold Production and Lower Costs Expected in 2014 $16.55 $15.74 $22.97 $12.73 $16.38 $15.74 $15.15 $14.95 $16.63 $15.83 $12.67 $11.53 819 828 844 713 12,055 712 750 10,599 648 10,120 9,404 595 ounces 8,742 8,192 441 7,890 333 352 373 5,292 4,824 1,397 1,435 1,993 2Q'11 3Q
Slide 27: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) EBITDA EBITDA Reconciliation ($ in thousands) LTM 3/31/14 LTM 9/30/13 LTM 6/30/13 Net income (loss) ($700,024) ($31,485) ($1,041) Interest expense, net of capitalized interest 44,625 34,915 32,604 Interest and other income (19,162) (1,865) (16,925) In
Slide 28: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) EBITDA EBITDA Reconciliation ($ in thousands) FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 Net income (loss) ($650,563) $48,677 $93,499 ($91,308) ($27,066) (Gain) loss on sale of discontinued operations, -- -- -- 2,095 (25,537) net of income taxes (Income)
Slide 29: 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 March, 31, 2014 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization (U.S. GAAP) $62,
Slide 30: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (thousands except per ounce costs) San Total Three months ended September 30, 2013 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $100,314 $22,460 $20,458
Slide 31: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (thousands except per ounce costs) San Total Three months ended March 31, 2013 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $55,500 $20,318 $22,629 $2,1
Slide 32: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (thousands except per ounce costs) San Total Three months ended September 30, 2012 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $82,515 $23,976 $22,150
Slide 33: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (thousands except per ounce costs) San Total Three months ended March 31, 2012 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $83,474 $17,709 $10,884 $4,3
Slide 34: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (thousands except per ounce costs) San Total Three months ended September 30, 2011 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $105,125 $36,073 $11,367
Slide 35: 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 36: Coeur's Mineral Reserves 2013
Coeur’s Mineral Reserves 2013 Grade (oz/ton) Ounces (contained) Year-end 2013 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, U
Slide 37: Coeur's Measured and Indicated Mineral Resources 2013
Coeur’s Measured and Indicated Mineral Resources 2013 (Excluding Reserves) Grade (oz/ton) Ounces (contained) Year-end 2013 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 —
Slide 38: Coeur's Inferred Mineral Resources 2013
Coeur’s Inferred Mineral Resources 2013 Grade (oz/ton) Ounces (contained) Year-end 2013 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
Slide 39: 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 40: 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 41: Contact Information
Contact Information Head 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, Corporate
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