Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — 2017 Annual ROTH Conference
62 slides from Coeur Mining's conference presentation, Mar 14, 2017
Slide 1: 2017 Annual ROTH Conference
2017 Annual ROTH Conference March 14, 2017 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 regarding the expected impact of delayed sales of finished goods inventory on net income, adjusted net income, free cash flow
Slide 3: Coeur Mining is Poised for Long-Term Success
Coeur Mining is Poised for Long-Term Success 1 • Enhanced and repositioned portfolio K e n s ingto n Balanced precious metals asset base W h arf Strong operational execution Rochester Complementary, well-timed strategic acquisitions P a l m a r e jo 2 Returns-driven growth strategy now resulti
Slide 4: Balanced Precious Metals Asset Base
1 Balanced Precious Metals Asset Base Asset Mix Geographic Mix Metal Mix (% revenue by mine) (% revenue by geography) (% revenue by metal) 100% 2% 2% 1% 100% 2% 1% 100% 12% 14% 14% 19% 19% 31% 28% 80% 80% 80% 47% 21% 28% 21% 20% 63% 4% 60% 60% 60% 43% 11% 22% 16% 40% 40% 40% 45% 69% 21% 64% 53% 45%
Slide 5: Strong Operational Execution – Record Production
1 Strong Operational Execution – Record Production Ramp-up of Palmarejo underground operations expected to drive 2017E production and cash flow growth Silver Equivalent1 Production (ounces in millions) 39.7 35.6 36.3 32.7 32.2 2 2013 2014 2015 2016 2017E (1) Gold and silver equivalence assumes silve
Slide 6: Strong Operational Execution – Growing Track Record
1 Strong Operational Execution – Growing Track Record Coeur continues to deliver results that meet or beat its original production and cost guidance Silver Production1 Gold Production1 AgEqOz Production1 Costs1 (M oz) (K oz) (M oz) (AISC / AgEqOz2 except 20143) 18.2 387 18.0 41.2 $530 $18.50 362 347
Slide 7: Complementary, Well-Timed Acquisitions
1 Complementary, Well-Timed Acquisitions • Wharf Resources (February 2015) Cumulative FCF1 ($ million) – Acquired from Goldcorp for $99 million in cash $86.4 $72.3 – Significant U.S. NOL tax synergy – Improved plant recovery rates by ~20% since acquisition $51.8 – Increased production and decreased
Slide 8: Well-Advanced, High-Quality Expansions
2 Well-Advanced, High-Quality Expansions Focus on grade and scale has delivered sustainable cost reductions and higher margin ounces Grade Scale • Higher grades driving 31%1 reduction in per ounce Palmarejo costs since 2014 • Ramp up of Guadalupe and Independencia expected to increase production by
Slide 9: Industry-Leading Cost Reductions
2 Industry-Leading Cost Reductions Adjusted CAS / AgEqOz1 (primary silver mines) Adjusted CAS / AuEqOz1 (primary gold mines) $940 $889 $14.13 $13.65 $12.75 $764 $13.60 $13.68 $688 $11.73 $11.87 Average spot AgEqOz1 $10.99 60:1 AgEqOz1 2013 2014 2015 2016 2013 2014 2015 2016 Companywide Adjusted AISC
Slide 10: Industry-Leading Cost Reductions (cont.)
2 Industry-Leading Cost Reductions (cont.) Change in Total Cash Cost / AgEqOz1 Change in Total Cash Cost / AuEqOz1 (2014A - 2017E) (2014A - 2017E) (10%) (10%) (11%) (25%) (25%) (37%) (33%) Coeur Mining Large Medium and Small Coeur Mining Large Medium Small Producers Producers Producers Producers Pro
Slide 11: Now Generating Strong Cash Flow
2 Now Generating Strong Cash Flow Despite a challenging metal price environment, LTM adjusted EBITDA1 has consistently grown over the past two years LTM Adjusted EBITDA1 ($ million) 32.3% $215.2 26.0% $171.1 19.8% $127.9 15.2% 14.5% $92.0 $95.7 1 1 1 1 Adj. EBITDA Adj. EBITDA Margin 4Q 2014 2Q 2015
Slide 12: Near-Mine Exploration Focus
2 Near-Mine Exploration Focus Broadened scope of 2017 exploration program expected to build on 2016 by extending and enhancing reserves Exploration Program • Approximately 70% of 2017 exploration ($ million) $34 budget earmarked for near-mine exploration $3 • Early-stage exploration strategy involve
Slide 13: Recently Revamped Balance Sheet
3 Recently Revamped Balance Sheet Total debt reductions over past 15 months translate to expected cash interest savings of nearly $30 million per year Debt Bridge1 ($ million) $558 ($54) ($5) ($5) ($100) ($1) ($11) $20 $213 ($190) Sr. Note Equity- Repayment of Repayment of Repayment of Redemption of
Slide 14: Recently Revamped Balance Sheet (cont.)
3 Recently Revamped Balance Sheet (cont.) Debt to LTM Adjusted EBITDA1 ($ million) 5.5x 3.7x 3.0x Reduction of Total Debt- to-LTM Adjusted EBITDA1 82% 3.8x 2.0x 3.4x 2.5x 2.3x $215.2 1.5x $201.7 $171.1 1.0x 0.9x $137.3 $127.9 $99.7 LTM adjusted EBITDA 1 Total debt to LTM adjusted EBITDA1 0.2x 1 Net
Slide 15: Looking Ahead
Looking Ahead • Continued ramp-up of Independencia throughout 2017, targeting combined mining rate of 4,500 tpd at Palmarejo • Construction of Rochester’s Stage IV leach pad expansion expected to be complete in 3Q 2017 • Initial production at Jualin anticipated in late 2017 • Update on potential alt
Slide 16: Appendix
Appendix NYSE: CDE 16 JC 2016
Slide 17: 2017 Guidance
2017 Guidance1 2017 Production Outlook (AgOz2 and AgEqOz2 in thousands) Silver Gold AgEqOz2 Palmarejo 6,500 – 7,000 110,000 – 120,000 13,100 – 14,200 Rochester 4,200 – 4,700 47,000 – 52,000 7,020 – 7,820 San Bartolomé 5,400 – 5,900 -- 5,400 – 5,900 Kensington -- 120,000 – 125,000 7,200 – 7,500 Wharf
Slide 18: Organic Growth Remains a Priority
Organic Growth Remains a Priority Capex by Mine Site 2017 capital expenditures expected to total $115 - $135 million1 2% 6% • ~$10 million of carryover from 2016 5% 6% 36% 34% • $11 - $13 million of capitalized exploration 2016 2017E1 $101 million 32% $115 – $135 • Palmarejo: $40 - $45 million 37% m
Slide 19: Near-Mine Exploration Focus
Near-Mine Exploration Focus 2016 Program 2017 Program Focus • Totaled $25.8M ($12.9M expensed; $12.9M • Targeting $34M - $38M ($23M - $25M capitalized) expensed; $11M - $13M capitalized)1 • Palmarejo exploration totaled $11.2M ($5.1M • Palmarejo (~$7M expensed; ~$7M capitalized) expensed; $6.1M capi
Slide 20: Non-Core Asset Divestitures
Non-Core Asset Divestitures In 2016, Coeur opportunistically divested assets for total consideration of $23.8 million • Strengthen balance sheet • Non-core assets • Attractive valuation environment for streams and royalties • Proceeds allocated to higher rate of return opportunities These efforts ha
Slide 21: New Palmarejo Agreement Driving FCF Growth
New Palmarejo Agreement Driving FCF1 Growth • New, more favorable gold stream agreement with Franco‐Nevada Barbados took effect in August 2016 – Applies to 50% of gold production from legacy Palmarejo land package – Franco‐Nevada to pay $800 per ounce vs. $416 per ounce under the old royalty agreeme
Slide 22: Highlights from 2016
Highlights from 2016 • Record production of 10.0 million AgEqOz1 in 4Q 2016 and 36.3 million AgEqOz1 for the full year (FY) • Continued cost improvements companywide • Positive FY net income and adj. net income1 for the first time since 2012 • FY cash flow from operating activities of $125.8 million
Slide 23: Fourth Quarter and Full-Year Results
Fourth Quarter and Full-Year Results Quarterly Annual ($ million) 4Q 2016 3Q 2016 QoQ Δ 4Q 2015 YoY Δ 2016 2015 YoY Δ Silver ounces sold (millions) 3.4 3.4 2% 4.4 (22%) 14.3 16.5 (13%) Gold ounces sold 87,108 83,389 4% 92,032 (5%) 338,131 335,882 1% Revenue $159.2 $176.2 (10%) $164.2 (3%) $665.8 $64
Slide 24: Year-End Results Reconciliation
Year-End Results Reconciliation • Full-year 2016 revenues of $665.8 million were approximately $30 million lower than expectations principally due to: – A port-related delay of a $5.6 million Kensington shipment – Gold retained for sale to Franco-Nevada (FNV) in mid-January, representing revenues of
Slide 25: Fourth Quarter Results Reconciliation
Fourth Quarter Results Reconciliation Revenue, As Adjusted Adjusted EBITDA1, As Adjusted ($ million) ($ million) $26.6 $185.7 $9.6 $53.6 $44.0 $159.1 Reported Revenue Adjustments As-Adjusted Revenue Reported Adj. EBITDA Adjustments As-Adjusted Aj. EBITDA Adjusted Net Income1, As Adjusted Free Cash F
Slide 26: Full-Year 2016 Results Reconciliation
Full-Year 2016 Results Reconciliation Revenue, As Adjusted Adjusted EBITDA1, As Adjusted ($ million) ($ million) $26.6 $692.4 $665.8 $9.6 $224.8 $215.2 Reported Revenue Adjustments As-Adjusted Revenue Reported Adj. EBITDA Adjustments As-Adjusted Aj. EBITDA Adjusted Net Income1, As Adjusted Free Cash
Slide 27: Palmarejo
Palmarejo Production and Cost Performance1 Highlights $14.43 • Development of Guadalupe and Independencia continues with combined mining rates expected $13.03 $12.90 $13.77 to increase to 4,500 tpd by year-end 2017 $12.83 $11.80 $10.55 $10.25 • Silver and gold production expected to increase over 50
Slide 28: Financial Statement Impacts of FNV Agreement
Financial Statement Impacts of FNV Agreement Previous Royalty Agreement New Stream Agreement Income • 100% of gold sales recorded at spot • Gold sales to FNV recorded at $800 Statement prices per ounce plus deferred revenue • Fair value adjustments recorded to reflect changing gold prices on minimum
Slide 29: Rochester
Rochester Production and Cost Performance1 Highlights $15.58 • Tons placed in 2016 increased 19% year-over- year to 19.6 million tons, the highest level since $15.51 $14.31 Rochester first began operating in 1986 $13.77 $12.36 • Commenced construction on Stage IV leach pad $11.86 $11.75 expansion in
Slide 30: Kensington
Kensington Production and Cost Performance1 Highlights • 2016 production remained near record levels at 124,331 ounces $940 • Development of high-grade Jualin deposit was $889 $825 over 64% complete as of 2016 year-end and is $798 $790 expected to be the main driver of capital expenditures at Kensin
Slide 31: Wharf
Wharf Production and Cost Performance1 Highlights Operated by GoldCorp, Inc. • Acquired in 2015 for $99 million from Goldcorp $924 • Coeur’s lowest cost operation and largest source of FCF4, generating over $86M since acquisition $800 $770 through 2016 $706 • Improved plant recovery rates nearly 20%
Slide 32: San Bartolomé
San Bartolomé Production and Cost Performance1 Highlights • Straightforward operation due to free-digging surface mining techniques (no drilling or blasting) • Sourcing higher-grade, lower-cost ore from local $14.22 $14.25 $14.01 sources with the goal of increasing overall grade, $13.63 $13.46 reduc
Slide 33: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation Unaudited Adjusted Net Income (Loss) ($ thousands) 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 2014 Net income (loss) $55,352 ($8,306) $69,557 $14,497 ($20,396) ($367,183) ($303,000) ($1,186,874) Fair value adjustments, net 11,581 (1,654) 961 3,579 8,695 (5
Slide 34: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted EBITDA ($ thousands) 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 2014 Net income (loss) $55,352 ($8,306) $69,557 $14,497 ($20,396) ($367,183) ($303,000) ($1,186,874) Interest expense, net of capitalized interest 36,920 6,857 8,068
Slide 35: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited LTM Adjusted EBITDA ($ thousands) 4Q 2016 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 2Q 2015 Net income (loss) $55,352 ($239,342) ($323,118) ($354,292) ($367,183) ($1,174,213) ($1,156,528) Interest expense, net of capitalized interest 36,920 41,821
Slide 36: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited LTM Adjusted EBITDA Margin ($ thousands) 4Q 2016 2Q 2016 4Q 2015 2Q 2015 4Q 2014 LTM Revenue $665,777 $657,261 $646,086 $630,766 $635,742 LTM Adjusted EBITDA 215,160 171,143 127,851 95,715 92,001 LTM Adjusted EBITDA Margin 32.3% 26.0% 19.8% 15.2
Slide 37: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Debt ($ thousands) 4Q 2016 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Cash and cash equivalents $162,182 $222,517 $257,591 $171,389 $200,714 $205,708 Total debt 210,896 401,745 511,066 511,101 490,410 545,986 Net debt 48,714 179,228 25
Slide 38: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Free Cash Flow ($ thousands) 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 Cash flow from operating activities $125,817 $25,449 $47,812 $45,939 $6,617 $113,542 $43,217 Capital expenditures (101,013) (29,926) (25,627) (23,288) (2
Slide 39: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2016 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP)
Slide 40: 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, 2016 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. G
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 September 30, 2016 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S.
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 June 30, 2016 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP)
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 March 31, 2016 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP
Slide 44: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2015 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAAP)
Slide 45: 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, 2015 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. G
Slide 46: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2014 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Total Costs applicable to sales, including amortization (U.S. GAAP) $256,707 $1
Slide 47: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2013 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Total Costs applicable to sales, including amortization (U.S. GAAP) $322,107 $8
Slide 48: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited Year ended December 31, 2012 Silver Gold San ($ thousands except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Total Costs applicable to sales, including amortization (U.S. GAAP) $344,073 $8
Slide 49: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs ($ thousands except per ounce amounts) 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 2014 2013 Costs applicable to sales $409,541 $102,112 $105,408 $100,465 $101,555 $479,654 $125,256 $477,945 $463,663 Treatment and r
Slide 50: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs per Silver Equivalent Ounce for 2017 Guidance Silver Gold ($ thousands except per ounce San amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortizat
Slide 51: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs per 69:1 Spot Silver Equivalent Ounce for 2017 Guidance Silver Gold ($ thousands except per ounce San amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including
Slide 52: Average Spot Equivalence
Average Spot Equivalence Average Spot Prices 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 4Q 2015 2014 2013 Average Silver Spot Price per Ounce $17.14 $17.19 $19.61 $16.78 $14.85 $15.68 $14.77 $19.08 $23.76 Average Gold Spot Price per Ounce $1,251 $1,222 $1,335 $1,260 $1,183 $1,160 $1,106 $1,266 $1,411
Slide 53: Reserves and Resources
Reserves and Resources 2016 Proven and Probable Mineral Reserves Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Proven Reserves Palmarejo Mexico 1,569,000 4.44 0.080 6,971,000 126,000 Rochester Nevada, USA 143,686,000 0.48 0.004 68,369,000 503,000 Kensington Alaska, US
Slide 54: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2016 Measured and Indicated Mineral Resources (excluding Reserves) Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Measured Resources Palmarejo Mexico 818,000 3.20 0.061 2,618,000 50,000 Rochester Nevada, USA 39,732,000 0.59 0.003 23,281,0
Slide 55: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2016 Inferred Mineral Resources Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Inferred Resources Palmarejo Mexico 4,726,000 4.35 0.055 20,540,000 258,000 Rochester Nevada, USA 67,778,000 0.52 0.003 35,554,000 178,000 Kensington Alaska, U
Slide 56: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2015 Proven and Probable Mineral Reserves Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Proven Reserves Palmarejo Mexico 802,000 6.29 0.077 5,048,000 62,000 Rochester Nevada, USA 96,520,000 0.53 0.003 51,007,000 316,000 Kensington Alaska
Slide 57: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2015 Measured and Indicated Mineral Resources (excluding Reserves) Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Measured Resources Palmarejo Mexico 134,000 4.86 0.052 651,000 7,000 Rochester Nevada, USA 60,528,000 0.49 0.004 29,709,000
Slide 58: Reserves and Resources (cont.)
Reserves and Resources (cont.) 2015 Inferred Mineral Resources Grade (oz/ton) Ounces (contained) Location Short tons Silver Gold Silver Gold Inferred Resources Palmarejo Mexico 1,721,000 4.79 0.085 8,240,000 147,000 Rochester Nevada, USA 59,597,000 0.52 0.003 31,195,000 179,000 Kensington Alaska, US
Slide 59: Reserves and Resources (cont.)
Reserves and Resources (cont.) Wharf’s Historical Mineral Reserves and Resources Grade (oz/ton) Ounces (contained) (thousands, except grade) Tons Gold Silver Gold Silver Proven and Probable Reserves Proven Reserves 15,179 0.022 0.078 340 1,190 Probable Reserves 8,245 0.026 0.108 220 890 Total Proven
Slide 60: 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 pre
Slide 61: 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
Slide 62: 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 Courtney R. B. Lynn VP, Investor Relations & Treasurer clynn@coeur.com NYSE: CDE 62 JC 2016