Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q4 2020 Earnings Presentation
64 slides from Coeur Mining's earnings presentation, Feb 18, 2021
Slide 1: 2020 Fourth Quarter and Full-Year Earnings
2020 Fourth Quarter and Full-Year Earnings 10:00 a.m. ET, February 18, 2021 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 involving strategic priorities and company strategies, expectations regarding environmental, social and governance (“ESG”) in
Slide 3: Fourth Quarter and Full-Year 2020 Highlights
Fourth Quarter and Full-Year 2020 Highlights • Results driven by strong 2H performance and higher metals prices • Generated ~$49M of free cash flow1 in 2020 (~$86M in 2H) • Achieved full-year consolidated and site-level production guidance • Second consecutive year of strong cost performance at
Slide 4: Continued Improvement in Financial Results
Continued Improvement in Financial Results LTM Adjusted EBITDA1 LTM Free Cash Flow1,2 ($M) ($M) +51% $263 + $ 5 7M $49 $239 $38 Increased Production $209 $174 $195 + $5 Lower Costs 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 ($8) ($7) 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 + Higher Prices Cash & Cash E
Slide 5: Financial Summary
Financial Summary Years Quarters ($M, except metal sales, adj. EBITDA margin and per share amounts) 2020 2019 YoY ∆ 4Q 2020 3Q 2020 QoQ ∆ 4Q 2019 YoY ∆ Metal Sales Gold ounces sold (oz) 356,251 367,650 (3%) 97,400 95,283 2% 95,532 2% Silver ounces sold (M oz) 9.6 11.9 (19%) 2.7 2.6 5% 3.3 (18%) Key
Slide 6: Production & Unit Cost Scorecard
Production & Unit Cost Scorecard Palmarejo Rochester Kensington Wharf Consolidated Gold Production (oz) 2020 Guidance1 100,000 – 110,000 27,000 – 33,000 122,500 – 130,000 85,000 – 95,000 334,500 – 368,000 2020 Actual 110,608 27,147 124,867 93,056 355,678 Achieve? Silver Production (k oz) 2020 Guidan
Slide 7: Overview of 2021E Production Guidance
Overview of 2021E Production Guidance1 Operation Guidance Range Illustrative Production Profile Commentary ~25% ~27% ~25% ~23% • Higher planned mining and throughput rates to offset Palmarejo 100,000 – 110,000 lower expected gold grades due to the depletion of certain 1Q 2Q 3Q 4Q higher gold grade z
Slide 8: Rochester Expansion Project Timeline
Rochester Expansion Project Timeline Major construction activities commenced in January 2021 and are expected to be largely completed by late 2022 2019 2020 2021 2022 2023 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Ramp-up to Leach I Pad1 Commercial Production Merrill-Crowe II Plant Crushing III C
Slide 9: Coeur's Capital Allocation Framework
Coeur’s Capital Allocation Framework Mining is capital intensive and requires a disciplined approach to capital allocation with a view toward long-term reserve replacement and growth Illustrative Return Key Benefits Key Considerations Safety/ Reflects the Company’s values Environment/ − Mitigate
Slide 10: Sustaining a Higher-Level of Exploration Investment
Sustaining a Higher-Level of Exploration Investment Coeur successfully completed the largest exploration program in its history in 2020. The Company expects to maintain its commitment to a higher-level of exploration investment in 2021, while maintaining its results-driven focus on high-return targe
Slide 11: Expanded Reserve and Resource Base
Expanded Reserve and Resource Base Coeur’s 2020 exploration program was highly successful in replacing production and growing resources via new discoveries. Continued near mine resource expansion and strong results reflect the potential for further mine life extensions and organic growth opportuniti
Slide 12: Prudently Investing in Organic Growth
Prudently Investing in Organic Growth Capital Expenditures by Mine 2021E Capital Expenditures1 (% companywide total) Site Range Commentary 1% 1% 2% • Underground development and 13% 14% 15% equipment replacements 2% Palmarejo $40M - $45M • Open pit backfill and tailings 20% 26% 9% dam raise 2020 202
Slide 13: Balance Sheet and Hedging Summary
Balance Sheet and Hedging Summary Liquidity Profile Debt and Leverage Summary1,2 ($M) ($M) $92.8 $357.8 1.7x 1.3x 1.4x $50.0 1.0x 0.9x $295.5 $301.1 0.7x $265.0 $250.0 $275.5 ($35.0) $239.9 $224.0 $182.7 Dec. 31, Sept. 30, Dec. 31, Dec. 31, Sept. 30, Dec. 31, Revolver Revolver Letters Revolver Cash
Slide 14: Looking Ahead: Key Priorities for 2021
Looking Ahead: Key Priorities for 2021 • Maintain focus on rigorous health and safety protocols • Steadily increase production and continue executing major construction on POA 11 expansion at Rochester • Remain committed to a higher-level of exploration investment to drive reserve and resource gr
Slide 15: 2021 Guidance
2021 Guidance1 Production Outlook Gold (oz) Silver (K oz) Palmarejo 100,000 – 110,000 6,500 – 7,750 Rochester 22,500 – 32,500 3,200 – 4,400 Kensington 115,000 – 130,000 - Wharf 85,000 – 95,000 - Consolidated 322,500 – 367,500 9,700 – 12,150 CAS Outlook2 Gold ($/oz) Silver ($/oz) Palmarejo (co-produc
Slide 16: ESG Highlights
ESG Highlights NYSE: CDE 16 JC 2016
Slide 17: What Matters to Coeur
What Matters to Coeur Environmental • Training and Development • Climate Change • Health, Safety & Security • Green House Gas Emissions Society • Water Stewardship • Investment in Local Communities • Waste Minimization • Indigenous Rights • Biodiversity • Human Rights • Tailings Management Governanc
Slide 18: Community Relations & Indigenous Rights
Community Relations & Indigenous Rights The Company has the highest regard for the dignity, well-being and rights of the communities in which it operates, as well as all of its indigenous partners. Coeur is proud of the relationships it has built, the agreements it has in place and looks forward to
Slide 19: Benefits of Community Agreements
Benefits of Community Agreements Coeur’s community agreements lay the foundation for strong partnerships and shared benefits between the Company and its community partners Selected Examples of Key Benefits Preferential Right to Bid Scholarships Hiring for Contracts Business Direct Training Internshi
Slide 20: Precious Metals Are Coeur to Everyday Life
Precious Metals Are Coeur to Everyday Life Coeur is an important part of the supply chains for gold and silver. Due to their unique properties, gold and silver have countless innovative uses that shape the way we live today and enable a more sustainable, healthier tomorrow Au Coeur’s Palmarejo, Roch
Slide 21: Committed to Diversity and Inclusion
Committed to Diversity and Inclusion “The tragic death of George Floyd and other horrific events serve as stark reminders that, as a society, much work remains to be done to address racism and the conscious and unconscious biases that enable its existence. At Coeur, we are committed to fostering div
Slide 22: COVID-19 Response and Decision-Making Approach
COVID-19 Response and Decision-Making Approach Coeur’s principal objective to help combat COVID-19 is to safeguard the health, safety and well-being of its workforce, their families and the communities where the Company operates Guidance from k ey agencies U.S. Centers Mexican and Federal, for Disea
Slide 23: Activities to Protect People and Places During COVID-19
Activities to Protect People and Places During COVID-19 • Social distancing and enhanced cleaning • Multilayered testing strategy • Traditional contact tracing complemented by wearable technology • Remote work for office employees • Only essential business travel People • Pre-work and on
Slide 24: Industry-Leading Safety Performance
Industry-Leading Safety Performance Coeur has held the National Mining Association CORESafety certification since 2017 Coeur’s injury frequency rate remains significantly below industry averages Lost-Time Injury Frequency Rate Total Reportable Injury Frequency Rate Industry average1 Industry average
Slide 25: Demonstrating Our Commitment: Governance Practices
Demonstrating Our Commitment Governance Practices Board Refreshment and Succession Planning − Two new independent directors added to the Board in February 2018 and four directors – 50% of independent directors – added in last eight years • Also added a new independent director in early 2019, who r
Slide 26: Diverse Board Led by Independent Chair
Diverse Board Led by Independent Chair • Eight out of nine Directors are independent (all except CEO); all four main committees comprised of independent directors only • Two directors elected in February 2018 having skills and experiences that complement other directors • Balance of newer and
Slide 27: Appendix
Appendix NYSE: CDE 27 JC 2016
Slide 28: Palmarejo
Palmarejo Ownership 100% Claims 67,296 net acres Type Underground Crushing, grinding, flotation, CIL, Processing Merrill-Crowe precipitation, refining Metals Silver and gold doré Mine life ~8 years Palmarejo Chihuahua, Northern Mexico Share of Companywide 2021E1 Production 2016 & 2020 Reserves & Res
Slide 29: Palmarejo (cont.)
Palmarejo (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow $686 Capital expenditures $645 $10.06 $49.7 $622 $9.61 $43.2 $41.4 $602 $8.79 $8.37 $8.13 $542 2,029 35 $28.9 32 1,835 29 29 1,784 1,783 $8.6 $8.9 $7.1 15 867 $4.5 $5.0 ($3.5) 4Q 2
Slide 30: Rochester
Rochester Ownership 100% Claims 17,044 net acres Type Open pit and heap leach Crushing, dump heap leaching, Processing Merrill-Crowe precipitation, refining Metals Silver and gold doré Rochester Mine life ~18 years Nevada, U.S. Share of Companywide 2021E1 Production 2016 & 2020 Reserves & Resources2
Slide 31: Rochester (cont.)
Rochester (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $1,537 Operating cash flow $16.8 $1,481 $1,359 Capital expenditures $1,142 $1,148 $20.18 $9.8 $14.38 $13.75 $13.25 $6.9 $5.1 $5.8 $14.98 $5.0 $4.7 $2.1 1,020 848 687 728 740 11 10 6 6 ($5.6) 5 ($9.3)
Slide 32: Kensington
Kensington Ownership 100% Claims 12,336 net acres Type Underground Processing Crushing, grinding, flotation Kensington processing Alaska, U.S. Metals Gold concentrate Mine life ~3 years Share of Companywide 2021E1 Production 2016 & 2020 Reserves & Resources2 Gold P&P Reserves M&I Resources Inferred
Slide 33: Kensington (cont.)
Kensington (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow2 $1,128 $25.9 Capital expenditures $976 $928 $934 $919 $20.8 $18.9 32 33 33 $15.2 30 $14.2 27 $5.3 $5.8 $4.3 $4.8 $3.9 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 4Q 2019 1Q 2020 2Q 2
Slide 34: Wharf
Wharf Ownership 100% Claims 7,852 net acres Type Open pit and heap leach Crushing, “on-off” heap leaching, Processing spent ore neutralization, carbon absorption/desorption Wharf South Dakota, U.S. Metals Electrolytic cathodic sludge Mine life ~6 years Share of Companywide 2021E1 Production 2016 & 2
Slide 35: Wharf (cont.)
Wharf (cont.) Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) Operating cash flow $1,090 Capital expenditures $39.1 $954 $802 $804 $804 33 26 25 $19.1 $17.0 19 $14.1 16 $2.6 $0.8 $0.4 $0.3 $0.5 $1.2 4Q 2019 1Q 2020 2Q 2020 3Q 2020 4Q 2020 4Q 2019 1Q 2020 2Q 2020 3Q
Slide 36: Silvertip
Silvertip Ownership 100% Claims 98,834 net acres Type Underground Silvertip British Columbia, Canada Crushing, grinding, flotation Processing processing, concentrate thickening Metals Lead concentrate, zinc concentrate Mine life ~5 years 2019 & 2020 Reserves & Resources1 P&P Reserves M&I Resources I
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations NYSE: CDE 37 JC 2016
Slide 38: Non-GAAP to U.S. GAAP Reconciliation for Guidance
Non-GAAP to U.S. GAAP Reconciliation for Guidance Unaudited Costs Applicable to Sales Guidance for 2021 ($ thousands, except metal sales and per ounce amounts) Palmarejo Rochester Kensington Wharf Costs applicable to sales, including amortization (U.S. GAAP) $196,255 $105,557 $188,349 $99,746 Amorti
Slide 39: Non-GAAP to U.S. GAAP Reconciliation for Guidance (cont.)
Non-GAAP to U.S. GAAP Reconciliation for Guidance (cont.) Unaudited Costs Applicable to Sales Guidance for 2020 ($ thousands, except metal sales and per ounce amounts) Palmarejo Rochester Kensington Wharf Costs applicable to sales, including amortization (U.S. GAAP) $179,529 $102,554 $175,424 $94,98
Slide 40: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation Costs Applicable to Sales Unaudited 12 months ended December 31, 2020 ($ thousands, except metal sales, per ounce or per pound amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $170,077 $10
Slide 41: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended December 31, 2020 ($ thousands, except metal sales and per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $48,672 $36,828
Slide 42: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended September 30, 2020 ($ thousands, except metal sales and per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $46,163 $22,38
Slide 43: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended June 30, 2020 ($ thousands, except metal sales and per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $26,095 $21,348 $43
Slide 44: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended March 31, 2020 ($ thousands, except metal sales, per ounce and per pound amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $49,149
Slide 45: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 12 months ended December 31, 2019 ($ thousands, except metal sales, per ounce and per pound amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $20
Slide 46: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended December 31, 2019 ($ thousands, except metal sales, per ounce and per pound amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $49,
Slide 47: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted Net Income (Loss) ($ thousands) 2020 4Q 2020 3Q 2020 2Q 2020 1Q 2020 2019 4Q 2019 3Q 2019 2018 Net income (loss) $25,627 $11,880 $26,856 ($1,209) ($11,900) ($341,203) ($270,961) ($14,277) ($48,405) Income (loss) from discont. ops., net
Slide 48: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted EBITDA ($ thousands) 2020 4Q 2020 3Q 2020 2Q 2020 1Q 2020 2019 4Q 2019 3Q 2019 2018 Net income (loss) $25,627 $11,880 $26,856 ($1,209) ($11,900) ($341,203) ($270,961) ($14,277) ($48,405) Income (loss) from discont. ops., net of tax - -
Slide 49: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited LTM Adjusted EBITDA ($ thousands) 4Q 2020 3Q 2020 2Q 2020 1Q 2020 4Q 2019 Net income (loss) $25,627 ($257,214) ($298,347) ($333,902) ($341,203) (Income) loss from discont. ops., net tax - - - - (5,693) Interest expense, net of capitalized intere
Slide 50: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Free Cash Flow ($ thousands) 2020 4Q 2020 3Q 2020 2Q 2020 1Q 2020 2019 4Q 2019 3Q 2019 2018 Cash flow from operating activities $148,709 $67,289 $79,464 $9,947 ($7,991) $91,880 $39,295 $41,996 $20,108 Capital expenditures (99,279) (37,393) (22,9
Slide 51: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Leverage Ratios ($ thousands) 4Q 2020 3Q 2020 2Q 2020 1Q 2020 4Q 2019 Cash and cash equivalents $92,794 $77,148 $70,924 $52,895 $55,645 Total debt 275,501 301,138 348,619 343,109 295,497 Net debt 182,707 223,990 277,695 290,214 239,852 LTM adjus
Slide 52: Reserves and Resources
Reserves and Resources 2020 Proven and Probable Mineral Reserves Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) PROVEN RESERVES Palmarejo Mexico 4,040,000 0.067 4.29 270,000 17,344,000 Rochester Nevada, USA 396,867,000 0.00
Slide 53: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2020 Measured and Indicated Mineral Resources (excluding Reserves) Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) MEASURED RESOURCES Palmarejo Mexico 1,840,000 0.052 3.67 95,000 6,746,000 Roch
Slide 54: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2020 Inferred Mineral Resources Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) INFERRED RESOURCES Palmarejo Mexico 4,345,000 0.064 3.34 280,000 14,525,000 Rochester Nevada, USA 226,049,000 0.0
Slide 55: Reserves and Resources
Reserves and Resources 2019 Proven and Probable Mineral Reserves Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) PROVEN RESERVES Palmarejo Mexico 1,093,000 0.093 5.17 102,000 5,649,000 Rochester Nevada, USA 249,815,000 0.003
Slide 56: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2019 Measured and Indicated Mineral Resources (excluding Reserves) Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) MEASURED RESOURCES Palmarejo Mexico 870,000 0.055 3.69 48,000 3,210,000 Roches
Slide 57: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2019 Inferred Mineral Resources Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Zinc (%) Lead (%) Gold (oz) Silver (oz) Zinc (lbs) Lead (lbs) INFERRED RESOURCES Palmarejo Mexico 6,469,000 0.057 4.07 367,000 26,341,000 Rochester Nevada, USA 171,042,000 0.0
Slide 58: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2016 Proven and Probable Mineral Reserves Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Gold (oz) Silver (oz) PROVEN RESERVES Palmarejo Mexico 1,569,000 0.080 4.44 126,000 6,971,000 Rochester Nevada, USA 143,686,000 0.004 0.48 503,000 68,369,000 Kensing
Slide 59: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2016 Measured and Indicated Mineral Resources (excluding Reserves) Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Gold (oz) Silver (oz) MEASURED RESOURCES Palmarejo Mexico 818,000 0.061 3.20 50,000 2,618,000 Rochester Nevada, USA 39,732,000 0.003 0.59 13
Slide 60: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2016 Inferred Mineral Resources Grade Contained Location Short tons Gold (oz/t) Silver (oz/t) Gold (oz) Silver (oz) INFERRED RESOURCES Palmarejo Mexico 4,726,000 0.055 4.35 258,000 20,540,000 Rochester Nevada, USA 67,778,000 0.003 0.52 178,000 35,554,000 Kensington Ala
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 – Independent Chairman of the board of Monro Muffler/Brake, Inc. (auto service provider) since June 2017, and appointed Interim Chief Executive Officer in August 2020. Previously Mr. Mellor was lead independent director from April 2011 to June 2017 and a member of
Slide 63: Board of Directors (cont.)
Board of Directors (cont.) Jessica L. McDonald – Ms. McDonald has extensive leadership experience in both the public and private sectors and currently serves as a member of the Board of Directors of Hydro One Limited. She served as the President and Chief Executive Officer of BC Hydro and Power Auth
Slide 64: 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 Paul DePartout Director, Investor Relations investors@coeur.com NYSE: CDE 64 JC 2016