Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Investor Presentation (July 2014)
52 slides from Coeur Mining's investor presentation, Jul 21, 2014
Slide 1: Investor Presentation
Investor Presentation July 21, 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, and exploration and de
Slide 3: Company Overview
Company Overview One of world’s largest silver mining companies Approximately half of sales derived from gold production Provide leading leverage to both precious metals Improved results in the wake of investments in new management team and reconstituted Board of Directors Improving landsc
Slide 4: Business Profile and Strategy
Business Profile and Strategy Seeking to Create Balanced Pipeline of High-Return, Low-Risk Precious Metals Assets to Supplement Existing Asset Portfolio and Maximize Net Cash Flow Internal Pipeline External Pipeline Early Stage Development Acquisition Operating Assets Coeur Capital Exploration Proje
Slide 5: Key Investment Considerations
Key Investment Considerations Strategy to Maximize Net Cash Flow, not Production Disciplined Capital Deployment Strategy Trading at Discount Well-Capitalized with to Peer Group Strong Liquidity Multiple Growth Opportunities and Growing Pipeline Declining Cost Structure with Cash Flow Protection Prog
Slide 6: 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 7: CDE Provides Superior Leverage to Higher Metal Prices
CDE Provides Superior Leverage to Higher Metal Prices NPV Sensitivity to 10% Higher Silver Price Macro Factors Support Upside Metal Price Potential 53% Inflation concerns; geopolitical tensions Rising Asian demand from growing middle class 38% Emerging uses for silver: 29% 28% - Antimicrobials
Slide 8: Share Price has Increased Over 30% Since Beginning of June
Share Price has Increased Over 30% Since Beginning of June; Relative Performance YTD Suggests Further Upside Potential 50.00% 40.00% 31% 30.00% 22% 20.00% 11% 10.00% 5% 0.00% Jun-04-14 Jun-09-14 Jun-14-14 Jun-19-14 Jun-24-14 Jun-29-14 Jul-04-14 Jul-09-14 Jul-14-14 CDE Peer Group Gold Silver 20.00% 1
Slide 9: Primary Catalysts Announced or Expected During 2014
Primary Catalysts Announced or Expected During 2014 New Franco-Nevada gold stream agreement Palmarejo operational adjustments Rochester expansion progress Improving cost profile Decision on La Preciosa feasibility-stage project this month NYSE: CDE 9
Slide 10: Growth in Reserves and Resources - Total and per Share
Growth in Reserves and Resources - Total and on per Share Basis 600 534.0 500 450.6 384.5 ounces in millions 400 352.9 339.7 324.6 300 200 159.9 140.1 112.8 100 0 YE 2011 YE 2012 YE 2013 AgEq P&P Reserves AgEq M&I Resources AgEq Inferred Resources YE 2011 YE 2012 YE 2013 Silver equivalent P&P reserv
Slide 11: Summary Financial Performance
Summary Financial Performance in millions 2011 2012 2013 1Q 2014 Revenue $1,021.2 $895.5 $746.0 $159.6 Costs applicable to sales1 419.5 454.6 463.7 106.9 Exploration 19.1 26.3 22.4 4.2 G&A 31.4 33.0 55.3 13.9 Cash flow from operations 416.2 271.6 113.5 (9.6) Capital expenditures 120.0 115.6 100.8 11
Slide 12: Well-Capitalized with Financial Flexibility and Low Net Debt
Well-Capitalized with Financial Flexibility and Low Net Debt 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 millions) Jun 3
Slide 13: 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 14: 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 15: Existing Assets: Operating Performance and Outlook
Existing Assets: Operating Performance and Outlook
Slide 16: 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 17: Palmarejo Overview
Palmarejo Overview ▪ Silver-gold mine located in northern Mexico Financial Stats 1Q 2014 Full Year (in millions, except per ounce amounts) 2013 ▪ World’s 8th largest primary silver mine ▪ Open-pit and underground operation Revenue $68.0 $324.0 ▪ Updated and rejuvenated mine plan including developmen
Slide 18: 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 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 23,706 19,998 22,965 2Q'11 3Q'11 4Q'11 1Q'1
Slide 19: Palmarejo Cost Performance
Palmarejo Cost Performance Operating Costs Trending Down 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 Total mining, pr
Slide 20: Palmarejo District - Proven and Probable Reserves by Area
Palmarejo District - Proven and Probable Reserves by Area Guadalupe contains 72% of Palmarejo’s ore tonnage in its underground reserves Grade Ounces Ore (oz/t) Tons and ounces in thousands (Short Tons) Silver Gold Silver Gold Underground Proven Reserves Guadalupe 1,397 3.93 0.056 5,491 78 Palmarejo
Slide 21: Palmarejo District - M&I Resources by Area
Palmarejo District - M&I Resources by Area Guadalupe comprises of 35% and 18% of Palmarejo’s M&I silver and gold resources, respectively Grade Ore Ounces Tons and ounces in thousands (oz/t) (Short Tons) Silver Gold Silver Gold Underground Measured Resources: Guadalupe 225 10.78 0.073 2,426 16 Palmar
Slide 22: Palmarejo District - Inferred Resources by Area
Palmarejo District - Inferred Resources by Area Guadalupe comprises 88% and 71% of Palmarejo’s inferred silver and gold resources, respectively Grade Ore Ounces Tons and ounces in thousands (oz/t) (Short Tons) Silver Gold Silver Gold Underground Inferred Resources Guadalupe 3,951 4.78 0.110 18,894 4
Slide 23: New Mine Plan to Rejuvenate Guadalupe
New Mine Plan to Rejuvenate Guadalupe Coeur announced on June 23 plans to complete development of the nearby Guadalupe deposit based on a selective, high-grade mine plan Reflects Coeur’s strategy to transition Palmarejo to a higher-margin, underground operation Guadalupe holds a majority of Pa
Slide 24: Increasing Underground Ore and New Gold Stream Agreement Expected to Unlock Value
Increasing Underground Ore and New Gold Stream Agreement Expected to Unlock Value at Palmarejo 2014 Expected 2014 Expected Tons Milled Operating Profit Higher proportion of underground ore tons expected to 9% increase margins 35% OP OP UG UG 65% 91% 2013 Cash Flow from Operations Received from 2013
Slide 25: San Bartolomé Overview
San Bartolomé Overview Financial Stats Full Year ▪ Surface silver mine located in Bolivia 1Q 2014 (in millions, except per ounce amounts) 2013 ▪ World’s largest pure silver mine Revenue $27.6 $141.7 ▪ Straightforward operation due to free-digging surface mining techniques (no drilling or blasting) C
Slide 26: 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 1.5 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 2Q'14 1 Silver pr
Slide 27: Rochester Overview
Rochester Overview ▪ Open-pit silver-gold operation in Nevada Financial Stats Full Year 1Q 2014 (in millions, except per ounce amounts) 2013 ▪ Completed 72 million ton leach pad capacity expansion in 2013; permitting for 120 million tons of additional pad Revenue $24.2 $119.3 capacity well underway
Slide 28: Rochester: Higher 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 1,112 12,055 10,599 828 844 9,404 10,120 819 750 ounces 713 712 9,230 648 8,742 595 7,890 8,192 441 5,292 333 352 373 4,824 1,397 1,435 1,
Slide 29: 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 30: Rochester LOM Plan Summary
Rochester LOM Plan Summary Significant increase in reserves, upgrades in crushing circuit, and expanded leach pad capacity have extended mine life resulting in a 67% increase in projected total net cash flow1 tons and oz in thousands, $ in millions 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2
Slide 31: Kensington Overview
Kensington Overview Financial Statistics Full Year ▪ Underground gold operation in Alaska (in millions, except per ounce amounts) 1Q 2014 2013 ▪ Operational consistency achieved Revenue $36.1 $148.8 ▪ Targeted exploration in 2014 focused on high-grade areas ▪ Potential to introduce new sorting techn
Slide 32: Kensington: Improving Stability of Production, Cash Flow, and Costs
Kensington: Improving Stability of Production, Cash Flow, and Costs $2,587 $1,005 $1,469 $871 $667 $1,126 $1,234 $856 $1,129 $1,002 $890 $676 37,404 28,717 29,049 28,089 25,758 25,687 24,391 25,206 25,428 21,572 23,162 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 1Q
Slide 33: La Preciosa Overview
La Preciosa Overview ▪ Silver-gold project located in northern Mexico ▪ Expected to complete feasibility study soon ▪ Preliminary economic assessment (PEA) completed in June 2013 ▪ Initial capex projection of $348 million; total capex projected to be $432 million ▪ Average annual production expected
Slide 34: Management
Management
Slide 35: Revitalized Management and Board of Directors
Revitalized Management and Board of Directors 70% of senior leadership joined Coeur within past fifteen months ISS score for corporate governance: 1 (based on a scale of 1-10 with a score of 1 representing a relatively low governance risk) Reconstituted board since CEO change in 2011 Separat
Slide 36: Improved Corporate Governance
Improved Corporate Governance Executive Compensation and Incentives ▪ Re-designed compensation programs to better align management with stockholders ▪ 60% of 2014 executive equity awards are performance shares ▪ Performance shares increased from 33% and 50% in 2012 and 2013, respectively ▪ Metrics:
Slide 37: Appendix
Appendix
Slide 38: 2014 Guidance
2014 Guidance Silver Production Gold Production 7,603 6,950 ounces in thousands 5,941 5,850 114,821 108,500 116,536 91,000 4,250 ounces 2,799 30,860 29,500 669 550 Palmarejo San Bartolomé Rochester Endeavor Kensington Palmarejo Rochester 2013 Actual 2014 Guidance Midpoint 2013 Actual 2014 Guidance M
Slide 39: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) EBITDA EBITDA Reconciliation ($ 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 40: 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 Full-year ended December 31, 2013 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization (U.S. GAAP) $322,814 $106,39
Slide 41: 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 42: 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 43: 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 44: 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 45: 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 46: 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 47: 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 48: 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 49: 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 50: 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 51: 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 52: 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