Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q3 2014 Earnings Presentation
36 slides from Coeur Mining's earnings presentation, Nov 6, 2014
Slide 1: Third Quarter 2014 Financial Results
Third Quarter 2014 Financial Results Conference Call and Webcast November 6, 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, capital and exploration expenditures, amortization, exploration and development effo
Slide 3: Update on Current Themes
Update on Current Themes Third Quarter 2014 Highlights Strong operating quarter Cost reductions; cost guidance lowered again Rochester on-track for double digit percentage production increase and a meaningful decline in CAS per AgEq ounce versus 2013 Impact of higher grades at Kensington dem
Slide 4: Third Quarter 2014 Highlights
Third Quarter 2014 Highlights Silver equivalent production of 8.2 million ounces Silver production of 4.3 million ounces and gold production of 64,989 ounces 5% decrease in all-in sustaining costs per silver equivalent ounce1 from 2Q 2014 to $18.86 Costs applicable to sales increased 3% from
Slide 5: Third Quarter 2014 Highlights
Third Quarter 2014 Highlights Quarter YOY 3Q 2014 2Q 2014 3Q 2013 in millions US$ Variance Variance Revenue $170.9 $164.6 4% $200.8 (15%) Costs applicable to sales 125.9 118.7 6% 131.8 (4%) Exploration expense 6.6 5.2 27% 3.3 100% General & administrative 8.5 9.4 (9%) 16.2 (48%) Adjusted net income
Slide 6: Third Quarter 2014 Highlights (continued)
Third Quarter 2014 Highlights (continued) Quarter YOY 3Q 2014 2Q 2014 3Q 2013 Variance Variance Average realized silver price per ounce $19.46 $19.60 (1%) $21.11 (8%) Average realized gold price per ounce $1,260 $1,277 (1%) $1,300 (3%) Silver ounces produced (millions) 4.3 4.5 (4%) 4.2 3% Gold ounce
Slide 7: Third Quarter 2014 Cash Flow Bridge
Third Quarter 2014 Cash Flow Bridge Coeur continues to maintain a healthy cash balance and strong liquidity $16.2 $42.0 $16.8 $11.4 in millions $316.8 $13.8 $12.4 $1.7 $295.4 $23.5 Cash Balance Adjusted Net Amortization Working Capital Palmarejo Royalty Senior Note Other Cash Balance 1 6/30/14 1 Los
Slide 8: Well-Capitalized with Financial Flexibility and Low Net Debt
Well-Capitalized with Financial Flexibility and Low Net Debt Liquidity $245.9 $49.5 Net Debt = $174.0 Debt $457.7 $11.7 $0 $100 $200 $300 $400 $500 in millions Cash & equivalents Short-term investments Long-term debt Short-term debt As of September 30, 2014. Summary balance sheet (in millions) Dec 3
Slide 9: Costs Trending Down
Costs Trending Down 5% reduction in all-in sustaining costs per AgEq oz1 from 2Q 2014 3Q 2014 AISC per AgEq oz1: $18.86 $14.95 $1.45 $1.01 $0.78 $0.67 2Q 2014 AISC per AgEq oz1: $19.89 $14.74 $2.19 $0.64 $1.17 $1.16 Consolidated CAS per AgEq oz1 Sustaining capex Exploration G&A Other2 1. See non-GAA
Slide 10: On-Track to Achieve Significant Cost Savings in 2014
On-Track to Achieve Significant Cost Savings in 2014 12% 25% reduction reduction Reduced Reduced Exploration G&A $4M $14M (2014E1 vs 2013A) (2014E1 vs 2013A) Reduced Reduced CAS Capex $40M $28M (2014E1 vs initial FY (2014E1 vs 2013A) Guidance) 8% 28% reduction reduction $86 million of total expected
Slide 11: Palmarejo: Transitioning to Lower-Tonnage, Higher-Grade, Higher-Margin Operation
Palmarejo: Transitioning to Lower-Tonnage, Higher-Grade, Higher-Margin Operation 3Q 2014 Highlights Gold and silver recovery rates improved by ~10% YTD headcount reduction of 75 (8%) Re-scoped mine plan forecasts lower throughput offset by higher grades and recovery rates and lower unit costs
Slide 12: Palmarejo: Transitioning to Lower Tonnage, Higher-Grade, Higher-Margin Operation
Palmarejo: Transitioning to Lower Tonnage, Higher-Grade, Higher-Margin Operation $15.55 $14.97 $15.22 $13.73 $13.39 $13.66 $13.36 $14.04 $10.90 2.0 1.9 2.0 1.8 1.8 1.8 1.6 1.6 35,486 1.5 ounces 29,893 28,191 23,702 22,965 25,216 23,706 22,514 19,998 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q
Slide 13: Rochester: Higher Silver and Gold Production Drove Highest Cash Flow
Rochester: Higher Silver and Gold Production Drove Highest Cash Flow in Almost Two Years 3Q 2014 Highlights Silver and gold production 4% and 27% higher, respectively, than 2Q 2014 Costs applicable to sales per AgEq oz1 were $14.80, 6% lower than 2Q 2014 Cash flow from operating activities of
Slide 14: Rochester: Higher Silver and Gold Production Drove Highest Cash Flow
Rochester: Higher Silver and Gold Production Drove Highest Cash Flow in Almost Two Years $15.83 $15.15 $14.95 $12.67 $14.80 $16.63 $15.79 $16.38 $15.74 12,055 1,156 11,702 10,599 1,112 819 828 8,742 9,404 9,230 844 7,890 750 8,192 712 648 ounces 595 4,824 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q
Slide 15: Kensington: Higher Head-Grade Propels Improved Cost Performance
Kensington: Higher Head-Grade Propels Improved Cost Performance 3Q 2014 Highlights Gold production 10% higher than 2Q 2014 Costs applicable to sales per gold ounce down 7% from prior quarter Higher head-grade of 0.23 gold oz/t drove strong cost and cash flow performance Highest cash flow fro
Slide 16: Kensington: Higher Head-Grade Propels Improved Cost Performance
Kensington: Higher Head-Grade Propels Improved Cost Performance $1,227 $1,013 $1,005 $1,008 $937 $900 $894 $677 36,469 30,773 28,717 28,323 28,089 25,206 25,428 22,583 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 Gold production Costs applicable to sales per gold oz $16.5 $17.0 $13.9 $ in million
Slide 17: San Bartolomé: Stable Production and Cost Performance
San Bartolomé: Stable Production and Cost Performance 3Q 2014 Highlights Silver production 2% higher than 2Q 2014 Costs applicable to sales per AgEq ounce1 slightly higher than 2Q 2014 Grades and recovery rates remain relatively stable On-track to achieve full-year production guidance Unit C
Slide 18: San Bartolomé: Stable Production and Cost Performance
San Bartolomé: Stable Production and Cost Performance $15.26 $14.22 $13.06 $14.14 $13.25 $13.91 $13.93 $13.85 $13.41 1.5 1.5 1.5 1.5 1.5 1.5 ounces 1.4 1.4 1.3 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 Silver production (millions) Costs applicable to sales per silver equivalent oz 1 $32.
Slide 19: 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 40,000 30,860 669 550 Palmarejo San Bartolomé Rochester Endeavor Kensington Palmarejo Rochester 2013 Actual 2014 Guidance Midpoint1 2013 Actual 2014 Guidance
Slide 20: Appendix
Appendix
Slide 21: 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 22: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted Net Income (Loss) in thousands 3Q 2014 2Q 2014 1Q 2014 4Q 2013 3Q 2013 Net income (loss) $3,466 ($43,121) ($37,191) ($581,528) ($46,265) Fair value adjustments, net (13,026) 6,498 7,827 (11,289) 16,062 Stock-based compensation 2,417 2,299 2,4
Slide 23: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted EBITDA LTM in thousands LTM 9/30/14 LTM 6/30/14 LTM 3/31/14 12/31/13 Net income (loss) ($658,374) ($708,105) ($700,024) ($650,563) Interest expense, net of capitalized interest 47,959 46,006 44,625 41,303 Interest and other income (8,526) (6,
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 September 30, 2014 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization (U.S. GAAP) $
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 March, 31, 2014 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization (U.S. GAAP) $62,
Slide 26: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Silver Gold (dollars 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 $22,461
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 March 31, 2013 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $55,500 $20,318 $
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 September 30, 2012 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization $82,515 $23,9
Slide 29: 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 3Q 2014 2Q 2014 1Q 2014 4Q 2013 3Q 2013 Costs applicable to sales, including amortization (U.S. GAAP) $166,675 $159,036 $146,125 $163,701 $191,570 Amortization 40,765 40,349 39,229 62,293 59,
Slide 30: External Growth - Strategic Investments
External Growth - Strategic Investments Apogee Silver (Cachinal project, Chile; 6.4% ownership interest): Entered into LOA to sell Bolivian subsidiaries to Prophecy Coal Corp. Caracara Silver (Princesa project, Peru; 3.2% ownership interest): 3,049 meter drill program completed at Princesa;
Slide 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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