Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q3 2016 Earnings Presentation
41 slides from Coeur Mining's earnings presentation, Oct 27, 2016
Slide 1: Third Quarter 2016 Financial Results
Third Quarter 2016 Financial Results Conference Call and Webcast October 27, 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, anticipated production, costs, capital expenditures, cash flow, expenses, debt levels, the impact of the new gold
Slide 3: Third Quarter Financial Highlights
Third Quarter Financial Highlights z Quarterly free cash flow1 of $14.6M, 20% higher than 2Q 2016 LTM adj. EBITDA2 of $201.7M, 18% higher quarter‐over‐quarter and more than double the z same period last year Net income of $69.6 million ($0.42 per share) nearly a fourfold increase quarter‐over‐quarte
Slide 4: Third Quarter Operational Highlights
Third Quarter Operational Highlights z Production of 8.6M silver equivalent ounces1, down 10% from 2Q 2016 and 4% from 3Q 2015 z Adj. AISC of $15.37 per realized AgEqOz1, up 16% over 2Q 2016 and 17% over 3Q 2015 z Adj. CAS of $11.69 per realized AgEqOz1 z Adj. CAS of $712 per realized AuEqOz1 z Anot
Slide 5: Third Quarter 2016 Highlights (cont.)
Third Quarter 2016 Highlights (cont.) Adjusted net income1 more than doubled and free cash flow2 increased 20% quarter‐over‐quarter QoQ YoY in millions US$, except per ounce figures 3Q 2016 2Q 2016 3Q 2015 Variance Variance Silver ounces sold (millions) 3.4 4.0 (15%) 4.0 (16%) Gold ounces sold 83,38
Slide 6: Third Quarter 2016 Highlights (cont.)
Third Quarter 2016 Highlights (cont.) Costs increased quarter‐over‐quarter as a result of one‐time events that negatively impacted third quarter production; fourth quarter costs are expected to trend lower QoQ YoY 3Q 2016 2Q 2016 3Q 2015 Variance Variance Adjusted CAS per AgEqOz (realized)1 $11.69 $
Slide 7: On-Track for Full-Year Cost Declines Versus Prior Years
On‐Track for Full‐Year Cost Declines Versus Prior Years; Higher Third Quarter Costs Driven by One‐Time Events Adj. CAS / AgEqOz1 (Primary Silver Mines) Adj. CAS / AuEqOz1 (Gold Mines) $13.96 $14.13 $940 $889 $13.60 $13.68 $12.75 $12.05 $12.10 $10.71 $764 $11.87 $721 $712 $11.08 $11.69 $644 $10.05 FY
Slide 8: Significant Increase in Adj. EBITDA & Reduction in Gross Leverage
Significant Increase in Adj. EBITDA1 & Reduction in Gross Leverage LTM Adj. EBITDA1 Total Debt / LTM Adj. EBITDA1 $201.7 5.7x 5.5x $171.1 $127.9 $137.3 3.8x 3.7x $95.7 $99.7 3.0x 2.0x 06/30/15 09/30/15 12/31/15 03/31/16 06/30/16 09/30/16 06/30/15 09/30/15 12/31/15 03/31/16 06/30/16 09/30/16 $ in mil
Slide 9: Palmarejo: Full-Year Production Guidance Raised; Cost Guidance Reduced
Palmarejo: Full‐Year Production Guidance Raised; Cost Guidance Reduced Production and Cost Performance Cash Flow and Capital Expenditures $13.48 $11.54 $11.40 $10.70 $12.04 $22.9 $9.02 $20.3 $ in millions $10.01 $10.18 $10.14 1,422 $8.24 1,307 $13.7 22,974 1,126 18,731 $11.3 14,326 14,668 16,608 933
Slide 10: Rochester: Fourth Quarter Production Expected to Increase and Costs Decrease
Rochester: Fourth Quarter Production Expected to Increase and Costs Expected to Decrease Production and Cost Performance Cash Flow and Capital Expenditures $12.37 $12.61 $12.01 $10.8 $11.30 $11.56 $9.5 $9.2 $11.19 $11.29 $10.89 $11.07 $ in millions 20000 $10.43 $6.5 ounces 1,197 1,161 $5.3 15000 1,0
Slide 11: Kensington: Full-Year Production Guidance Range Lifted; Cost Guidance Reduced
Kensington: Full‐Year Production Guidance Range Lifted; Cost Guidance Reduced Production and Cost Performance Cash Flow and Capital Expenditures $761 $859 $18.0 $842 $777 $13.7 $740 33,713 31,974 32,210 $ in millions 28,799 $9.5 ounces 26,459 $8.9 $8.6 $8.1 $7.7 $7.5 $5.5 $4.5 3Q'15 4Q'15 1Q'16 2Q'1
Slide 12: Wharf: Coeur's Lowest Cost Mine and Largest Contributor to FCF
Wharf: Coeur’s Lowest Cost Mine and Largest Contributor to FCF2 Production and Cost Performance Cash Flow and Capital Expenditures $716 $667 $556 $559 $ in millions $534 $21.1 $18.1 32,231 $16.2 ounces 28,433 30,106 23,427 $12.9 21,186 $9.7 $0.7 $1.2 $1.4 $1.5 $0.6 1 1 3Q'15 4Q'15 1Q'16 2Q'16 3Q'16
Slide 13: San Bartolomé: Local Ore Purchases Expected to Increase in Fourth Quarter
San Bartolomé: Contribution from Local Ore Purchases Expected to Increase in the Fourth Quarter Production and Cost Performance Cash Flow and Capital Expenditures $14.41 $14.40 $12.97 $12.48 $12.56 $11.2 $10.0 $ in millions 1,550 1,458 $8.6 1,382 1,370 1,178 ounces $5.7 $5.5 $3.0 $2.5 $1.8 $1.3 $0.5
Slide 14: Palmarejo Exploration Activity
Palmarejo Exploration Activity Northern Independencia Vein Los Bancos Vein • One surface core rig active • One surface core rig active • Best Hole: 16 feet of 53.35 • Best Hole: 14 feet of 18.58 oz/t Ag, 1.095 oz/t Au1 oz/t Ag, 0.14 oz/t Au1 Independencia Vein • Three underground core rigs active •
Slide 15: Kensington Exploration Activity
Kensington Exploration Activity Plan View of Kensington Geology Kensington Main Drilling During Q3 2016: • Zone 12 Target Zone • 41 GAP Target • Block M “Gap” Zone 41 Best Holes: 12.2 feet of 1.21 oz/t Au; 2.3 feet of 7.47 oz/t Au1 Jualin Zone 12 Best Holes: 7.5 feet of 1.27 Jualin Development and E
Slide 16: Drilling Begins on Greenfields Sites in USA and Mexico
Drilling Begins on Greenfields Sites in USA and Mexico Wyoming ‐ South Dakota Kensington Mineral Hill trenching and drilling expected in late 2017 Great Basin, Nevada and Utah Wharf 3Q 2016 drilling at Quito Project; expected Rochester North‐Central Mexico drilling at Klondyke in 4Q 2016 and Arabia
Slide 17: La Preciosa: Update and Next Steps
La Preciosa: Update and Next Steps Located in the heart of Mexico’s prolific Sierra Madre Mineral Belt ▪ Updated geologic model developed Durango over past year Guanacevi Inde Gomez Palacio/Torreon MEXICO ▪ Updated resource model underway Pitarrilla Platosa Velardeña ▪ $3 million confirmation drilli
Slide 18: 2016 Guidance: Expect to Produce 34-37M AgEq oz
2016 Guidance1: Expect to Produce 34 – 37M AgEq oz Production Guidance Silver and AgEq ounces 2016 Guidance1 YTD 2016 Result % Complete in thousands Silver Gold AgEq Silver Gold AgEq Silver Gold AgEq Palmarejo 4,100 – 4,600 70,000 – 75,000 8,300 – 9,100 3,174 50,006 6,174 73% 69% 71% Rochester 4,500
Slide 19: Revising 2016 Cost Guidance Lower
Revising 2016 Cost Guidance1 Lower Cost Outlook Updated Guidance1 2016 Original Based on Average in millions except per ounce costs Based on 60:1 Ratio Guidance Realized Prices Costs applicable to sales per silver equivalent ounce2 – Palmarejo $12.50 ‐ $13.50 $10.50 ‐ $11.00 $9.75 ‐ $10.25 Costs app
Slide 20: Looking ahead…
Looking ahead… z Expected completion of $200M ATM and further debt reductions in 4Q 2016 z Continued ramp‐up of Independencia during 4Q 2016 and throughout 2017 Further development of Jualin with initial reserve included in year‐end 2016 reserve statement z and initial production anticipated in 2H 2
Slide 21: Appendix
Appendix
Slide 22: Non-GAAP to U.S. GAAP Reconciliation: Adjusted Net Income
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted Net Income (Loss) in thousands 3Q 2016 2Q 2016 3Q 2015 Net income (loss) $69,557 $14,497 ($14,219) Fair value adjustments, net 961 3,579 (5,786) Impairment of equity securities ‐‐ 20 483 Write‐downs ‐‐ ‐‐ ‐‐ Inventory write‐downs 3,689 ‐‐ ‐‐
Slide 23: Non-GAAP Reconciliation: Free Cash Flow
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Consolidated Free Cash Flow Reconciliation in thousands 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Cash flow from operating activities $47,812 $45,939 $6,617 $43,217 $36,770 Capital expenditures (25,627) (23,288) (22,172) (30,035) (23,861) Gold productio
Slide 24: Non-GAAP Reconciliation: LTM Adjusted EBITDA
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) LTM Adjusted EBITDA in thousands LTM 3Q 2016 LTM 2Q 2016 LTM 1Q 2016 LTM 4Q 2015 LTM 3Q 2015 LTM 2Q 2015 Net income (loss) ($239,342) ($323,118) ($354,292) ($367,183) ($1,174,213) ($1,156,528) Interest expense, net of capitalized interest 41,821 46,19
Slide 25: Non-GAAP Reconciliation: Adjusted EBITDA
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted EBITDA in thousands 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Net income (loss) $69,557 $14,497 ($20,396) ($303,000) ($14,219) Interest expense, net of capitalized interest 8,068 10,875 11,120 11,758 12,446 Income tax provision (benefit) (54,45
Slide 26: Costs Applicable to Sales: Q3 2016
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended September 30, 2016 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended September 30, 2016 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver C
Slide 27: Costs Applicable to Sales: Q2 2016
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended June 30, 2016 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended June 30, 2016 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Costs appli
Slide 28: Costs Applicable to Sales: Q1 2016
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended March 31, 2016 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended March 31, 2016 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Costs app
Slide 29: Costs Applicable to Sales: Year 2015
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Year ended December 31, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Year ended December 31, 2015 Palmarejo Rochester Endeavor Total Silver Kensington Wharf Total Gold Bartolomé Costs applicable to
Slide 30: Costs Applicable to Sales: Q4 2015
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended December 31, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended December 31, 2015 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Cos
Slide 31: Costs Applicable to Sales: Q3 2015
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended September 30, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended September 30, 2015 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver C
Slide 32: Costs Applicable to Sales: Q2 2015
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Three months ended June 30, 2015 Silver Gold (dollars in thousands except per ounce costs) San Total Total Three months ended June 30, 2015 Palmarejo Rochester Endeavor Kensington Wharf Total Gold Bartolomé Silver Costs appli
Slide 33: Costs Applicable to Sales: Year 2014
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Full‐year ended December 31, 2014 Silver Gold (dollars in thousands except per ounce costs) San Total Full‐year ended December 31, 2014 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, includ
Slide 34: Costs Applicable to Sales: Year 2013
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Costs Applicable to Sales Year ended December 31, 2013 Silver Gold (dollars in thousands except per ounce costs) San Total Full‐year ended December 31, 2013 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including a
Slide 35: All-In Sustaining Costs
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐In Sustaining Costs in thousands except per ounce costs 3Q 2016 2Q 2016 FY 2015 3Q 2015 FY 2014 FY 2013 Costs applicable to sales, including amortization (U.S. GAAP) 132,756 $137,540 $617,938 $154,161 $635,516 $691,696 Amortization 27,348 37,075 1
Slide 36: AISC per Silver Equivalent Ounce (Original Guidance)
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐in Sustaining Costs per Silver Equivalent Ounce (Original Guidance) Full‐Year 2016 Guidance (dollars in thousands except per ounce Silver Gold costs) San Total Full‐Year 2016 Guidance Palmarejo Rochester Endeavor Total Silver Kensington Wharf Tota
Slide 37: AISC per Silver Equivalent Ounce (Revised Guidance)
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐in Sustaining Costs per Silver Equivalent Ounce (Revised Guidance) Full‐Year 2016 Guidance (dollars in thousands except per ounce Silver Gold costs) San Total Full‐Year 2016 Guidance Palmarejo Rochester Endeavor Total Silver Kensington Wharf Total
Slide 38: AISC per Realized Silver Equivalent Ounce (Revised Guidance)
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐in Sustaining Costs per Realized Silver Equivalent Ounce (Revised Guidance) Full‐Year 2016 Guidance (dollars in thousands except per ounce Silver Gold costs) San Total Full‐Year 2016 Guidance Palmarejo Rochester Endeavor Total Silver Kensington Wh
Slide 39: 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 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 Corporate Office: Coeur Mining, Inc. 104 S. Michigan Ave, Suite 900 Chicago, Illinois 60603 Main Tel: (312) 489‐5800 Stock Ticker: CDE: NYSE Warrant Ticker: CDM.WT: TSX Website: coeur.com Contact: Courtney Lynn Vice President, Investor Relations & Treasurer clynn@coeur.com NYSE: