Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Investor Presentation (February 2015)
43 slides from Coeur Mining's investor presentation, Feb 4, 2015
Slide 1: Investor Presentation
Investor Presentation February 2015
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 high-return organic and external growth opportunities, free cash flow, working capital, costs, expenses
Slide 3: Who We Are
Who We Are One of world’s largest silver mining companies with diversified portfolio of four mines in three countries Approximately half of sales derived from gold production Provides superior leverage to both precious metals – share price has increased 22% YTD1 Deploying capital into high-r
Slide 4: Leading Producer of Silver and Gold
Leading Producer of Silver and Gold 2014 Silver Equivalent Production by Mine (millions of ounces) Revenue by Metal 0.6 22% 36% 34% 40% 48% 49% 7.1 Palmarejo 11.8 Rochester 78% 64% 66% Gold San Bartolomé 60% 52% 51% Silver 5.9 Kensington Endeavor 6.9 1 2009 2010 2011 2012 2013 2014 YTD Production 40
Slide 5: 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 2014: 117,823 oz Au Total1 Wharf Mine, South Dakota3 (000s) (000s) 2015E: 110,000 - 115,000 oz Au 2015E: 85,000 – 90,000 oz Au Proven & Probable Reserves 381,839 2,361 Measured & Indicat
Slide 6: 2014 Goals and Achievements
2014 Goals and Achievements Execute Rochester production 2014 Rochester production increased 50% and 45% for silver and gold, ramp up respectively, from the prior year New stream agreement with Franco-Nevada expected to significantly Reduce royalty burden on improve mine’s cash flow beginning in
Slide 7: Demonstrated Operational Consistency in 2014
Demonstrated Operational Consistency in 2014 ▪ Coeur’s 2014 silver production was in line with Company guidance and 2014 gold production was above Company guidance ▪ Silver-equivalent production in 2014 was at the high end of Company guidance Silver ounces in Silver Gold Silver Equivalent thousands
Slide 8: Coeur Exhibits Key Traits of an Attractive Precious Metals Equity
Coeur Exhibits Key Traits of an Attractive Precious Metals Equity ▪ Low trading multiple relative to peers ▪ Expected high-return, internally-funded growth ▪ Costs trending down ▪ Rising expected free cash flow ▪ High leverage to silver and gold prices ▪ Strong trading volume ▪ Disciplined, returns-
Slide 9: Financial Performance Correlated to Metal Price
Financial Performance Correlated to Metal Price Net Metal Sales Adjusted EBITDA1 $529 $1,021 $895 $ in millions $378 $ in millions $746 $515 $495 $216 $189 $300 $79 $70 3 3 2009 2010 2011 2012 2013 2014 YTD 2009 2010 2011 2012 2013 2014 YTD Historic Silver Price2 Historic Gold Price2 $50 $2,100 $45
Slide 10: Disciplined and Returns-Driven Capital Allocation Philosophy
Disciplined and Returns-Driven Capital Allocation Philosophy Reinvesting in the business remains the highest return use of capital Bond repurchase ▪ Opportunistic repurchases when bonds trade below par to gradually de-lever ▪ Deploys excess cash without increasing net debt ▪ Stock repurchase ▪ I
Slide 11: Significant Cost Savings Expected to be Realized in 2014
Significant Cost Savings Expected to be Realized 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 expe
Slide 12: Well-Capitalized with Financial Flexibility and Low Net Debt
Well-Capitalized with Financial Flexibility and Low Net Debt Balance Sheet Strategy Liquidity $245.9 $49.5 Net Debt = $174.0 Flexibility and simplicity Target 3x maximum total debt leverage Avoid long-term maintenance covenants/secured financings to Debt $457.7 $11.7 the extent possible Long
Slide 13: Near-Term Items to Watch
Near-Term Items to Watch…… Resource estimate for Jualin and new mine plan at Kensington early 2015 Continued ramp up of production at Rochester and progress of POA 10 expansion plans Ramp up at Guadalupe and the transition to an underground-only operation Closing acquisition of Wharf in 1Q 2015 and
Slide 14: Appendix
Appendix
Slide 15: Acquisition of Wharf Gold Mine from Goldcorp
Acquisition of Wharf Gold Mine from Goldcorp On January 12, 2015, Coeur entered into a definitive agreement with a subsidiary of Goldcorp Inc. to acquire 100% of the Wharf gold mine located in Lead, South Dakota All cash transaction with a purchase price of $105 million Key highlights of the t
Slide 16: Wharf: Established Asset Generating Free Cash Flow
Wharf: Established Asset Generating Free Cash Flow Wharf Overview ▪ Open-pit, heap leach gold mine which has produced more than 2 million ounces of gold over its 30+ years in operation ▪ 7 years of mine life based on existing reserves with exploration upside ▪ Expected to produce 85,000 – 90,000 oun
Slide 17: Coeur Capital Overview
Coeur Capital Overview Wholly-owned streaming/royalty company established in late 2013 Cash-Flowing Royalties/Streams Provides high-margin, stable cash flow to supplement Endeavor Mine (Australia) traditional operating business Mine Type Underground lead/zinc/silver mine Operator Toho Zinc Hol
Slide 18: Palmarejo: Transitioning to Lower Tonnage, Higher-Grade, Higher-Margin Operation
Palmarejo: Transitioning to Lower Tonnage, Higher-Grade, Higher-Margin Operation Recent Highlights and Current Themes Previously announced acquisition of Paramount Gold and Silver Corp., which holds the Don Ese deposit adjacent to Coeur’s Independencia deposit, which is expected to close in 2Q 201
Slide 19: Don Ese Represents the Continuation of Independencia
Don Ese Represents the Continuation of Independencia NYSE: CDE 19
Slide 20: Rochester: Continued Ramp Up in Production Drove Significant Improvement in Free Cash Flow
Rochester: Continued Ramp Up in Production Drove Significant Improvement in Free Cash Flow in Recent Quarters Recent Highlights and Current Themes 2014 production increased 50% and 45% for silver and gold, respectively, from the prior year Silver and gold production expected to increase by doubl
Slide 21: Kensington: Maintained Strong Throughput, Grade, and Recovery Performance in 2014
Kensington: Maintained Strong Throughput, Grade, and Recovery Performance in 2014 Recent Highlights and Current Themes 2014 production of 117,823 ounces increased 3% from the prior year and was above Company guidance of 107,000 – 112,000 ounces 2015 production expected to be 110,000 – 115,000 ou
Slide 22: San Bartolomé: Stable Production and Cost Performance
San Bartolomé: Stable Production and Cost Performance Recent Highlights and Current Themes Production, grades, recovery rates, and costs have remained relatively stable in recent quarters 2015 production is expected to be 5.8 – 6.1 million ounces of silver, similar to 2014 production of 5.9 mill
Slide 23: 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 $13.39 $13.66 $13.36 $14.04 $10.90 2.0 1.9 2.0 1.8 1.8 1.6 1.6 35,486 1.5 28,191 1.4 29,893 ounces 22,965 25,216 23,706 19,998 22,514 15,237 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Gol
Slide 24: Rochester: Higher Silver and Gold Production Drove Highest Cash Flow in Almost Two Years
Rochester: Higher Silver and Gold Production Drove Highest Cash Flow in Almost Two Years $16.63 $15.79 $14.95 $15.83 $15.15 $14.80 $15.74 $12.67 1,156 1,170 15,764 1,112 12,055 828 844 11,702 8,742 9,404 750 648 712 8,192 9,230 7,890 ounces 595 4,824 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4
Slide 25: 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 33,533 30,773 28,717 28,323 28,089 25,206 25,428 22,583 ounces 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Gold production Costs applicable to sales per gold oz $16.5 $17.
Slide 26: San Bartolomé: Stable Production and Cost Performance
San Bartolomé: Stable Production and Cost Performance $15.26 $13.91 $13.41 $14.14 $13.93 $13.85 $14.22 $13.25 1.5 1.5 1.5 1.5 1.5 1.5 1.4 1.4 ounces 1.3 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 Silver production (millions) Costs applicable to sales per silver equivalent oz 1 $32.8 $18.9
Slide 27: Summary Financial Performance
Summary Financial Performance in millions 2011 2012 2013 1Q 2014 2Q 2014 3Q 2014 Revenue $1,021.2 $895.5 $746.0 $159.6 $164.6 $170.9 Costs applicable to sales 419.5 454.6 463.7 106.9 118.7 125.9 Exploration expense 19.1 26.3 22.4 4.2 5.2 6.6 General & administrative 31.4 33.0 55.3 13.9 9.4 8.5 Cash
Slide 28: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted EBITDA in thousands YTD 9/30/14 LTM 9/30/14 LTM 6/30/14 LTM 3/31/14 LTM 12/31/13 Net income (loss) ($76,846) ($658,374) ($708,105) ($700,024) ($650,563) Interest expense, net of capitalized interest 36,980 47,959 46,006 44,625 41,303 Interest
Slide 29: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted EBITDA in thousands of dollars FY 2013 FY 2012 FY 2011 FY 2010 FY 2009 Net income (loss) ($650,563) $48,677 $93,499 ($91,308) ($27,066) (Gain) loss on sale of discontinued operations, net of -- -- -- 2,095 (25,537) income taxes (Income) loss
Slide 30: 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 31: 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 32: 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 33: 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 34: 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 35: 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 36: 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 37: 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 38: 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 39: 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 40: Wharf's Historical Mineral Reserves and Resources
Wharf’s Historical Mineral Reserves and Resources Tons Grade (oz/t) Ounces (000s) (000s) 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 and Probable Reserves 23,424 0.024 0.089 560 2,080 Measu
Slide 41: 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 42: 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 43: Contact Information
Contact Information Corporate Office: Coeur Mining, Inc. 104 S. Michigan Ave, Suite 900 Chicago, Illinois 60603 Main Tel: (312) 489-5800 Stock Tickers: CDE: NYSE Warrant Tickers: CDE.WS: NYSE; CDM.WT: TSX Website: coeur.com Contact: Donna Mirandola Bridget Freas Director, Corporate Communications Di