Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Goldman Sachs Global Metals and Mining Conference 2014
46 slides from Coeur Mining's conference presentation, Nov 19, 2014
Slide 1: Goldman Sachs Global Metals and Mining Conference
Goldman Sachs Global Metals and Mining Conference November 19, 2014 New York, New York
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 growth opportunities, free cash flow, working capital, costs, expenses, cash conser
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 Deploying capital into high-return organic growth opportunities –
Slide 4: Leading Producer of Silver and Gold
Leading Producer of Silver and Gold 2013 Silver Equivalent Production by Mine (millions of ounces) Revenue by Metal 0.7 22% 36% 34% 40% 48% 6.9 Palmarejo Rochester 78% 14.6 64% 66% Gold San Bartolomé 60% 52% Silver 5.9 Kensington Endeavor 4.7 2009 2010 2011 2012 2013 Silver Production Gold Productio
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 2013: 114,821 oz Au Total1 (000s) (000s) 2014E: 107,000 - 112,000 oz Au Proven & Probable Reserves 381,839 2,361 Measured & Indicated Resources 309,176 2,326 Inferred Resources 69,318 1,
Slide 6: 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 $216 $189 $300 $70 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013 Historic Silver Price2 Historic Gold Price2 $50 $2,100 $45 $1,900 $40 $1,700 $35 $1,500 $3
Slide 7: 2014 Year-to-Date Goals and Achievements
2014 Year-to-Date Goals and Achievements Execute Rochester production 3Q 2014 Rochester production increased 94% and 143% for silver and gold, ramp up respectively, from the prior year Reduce royalty burden on New stream agreement with Franco-Nevada expected to significantly Palmarejo’s cash flo
Slide 8: On-Track to Achieve Significant Cost Savings in 2014
On-Track to Achieve Significant Cost Savings 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 expected
Slide 9: 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 maintenance covenants/secured financings to the extent Debt $457.7 $11.7 possible Long-life asse
Slide 10: Capital Allocation Philosophy
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 Increases ownership % for stockh
Slide 11: Palmarejo: Transitioning to Lower Tonnage, Higher-Grade, Higher-Margin Operation
Palmarejo: Transitioning to Lower Tonnage, Higher-Grade, Higher-Margin Operation 3Q 2014 Highlights Gold and silver recovery rates improved by ~10% YTD headcount reduction of 75 (8%) Re-scoped mine plan forecasts lower throughput offset by higher grades and recovery rates and lower unit costs
Slide 12: 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 $13.73 $13.39 $13.66 $13.36 $14.04 $10.90 2.0 1.9 2.0 1.8 1.8 1.8 1.6 1.6 35,486 1.5 ounces 29,893 28,191 23,702 22,965 25,216 23,706 22,514 19,998 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q
Slide 13: 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 3Q 2014 Highlights Silver and gold production 4% and 27% higher, respectively, than 2Q 2014 Costs applicable to sales per AgEq oz1 were $14.80, 6% lower than 2Q 2014 Cash flow from operating activities of
Slide 14: 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 $15.83 $15.15 $14.95 $12.67 $14.80 $16.63 $15.79 $16.38 $15.74 12,055 1,156 11,702 10,599 1,112 819 828 8,742 9,404 9,230 844 7,890 750 8,192 712 648 ounces 595 4,824 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q
Slide 15: Kensington: Higher Head-Grade Propels Improved Cost Performance
Kensington: Higher Head-Grade Propels Improved Cost Performance 3Q 2014 Highlights Gold production 10% higher than 2Q 2014 Costs applicable to sales per gold ounce down 7% from prior quarter Higher head-grade of 0.23 gold oz/t drove strong cost and cash flow performance Highest cash flow fro
Slide 16: 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 30,773 28,717 28,323 28,089 25,206 25,428 22,583 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 Gold production Costs applicable to sales per gold oz $16.5 $17.0 $13.9 $ in million
Slide 17: San Bartolomé: Stable Production and Cost Performance
San Bartolomé: Stable Production and Cost Performance 3Q 2014 Highlights Silver production 2% higher than 2Q 2014 Costs applicable to sales per AgEq ounce1 slightly higher than 2Q 2014 Grades and recovery rates remain relatively stable On-track to achieve full-year production guidance Unit C
Slide 18: San Bartolomé: Stable Production and Cost Performance
San Bartolomé: Stable Production and Cost Performance $15.26 $14.22 $13.06 $14.14 $13.25 $13.91 $13.93 $13.85 $13.41 1.5 1.5 1.5 1.5 1.5 1.5 ounces 1.4 1.4 1.3 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 Silver production (millions) Costs applicable to sales per silver equivalent oz 1 $32.
Slide 19: 2014 Guidance
2014 Guidance Silver Production Gold Production 7,603 6,850 Ounces in thousands 5,941 5,850 114,821 109,500 116,536 4,250 87,000 Ounces 2,799 40,000 30,860 669 550 Palmarejo San Bartolomé Rochester Endeavor Kensington Palmarejo Rochester 2013 Actual 2014 Guidance Midpoint 2013 Actual 2014 Guidance M
Slide 20: 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 Production start and ramp up at Guadalupe and the transition to an underground-only operation Further cost reductions
Slide 21: Appendix
Appendix
Slide 22: 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 23: 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 24: Palmarejo: Transitioning to Lower-Tonnage, Higher-Grade, Higher-Margin Operation
Palmarejo: Transitioning to Lower-Tonnage, Higher-Grade, Higher-Margin Operation 3Q 2014 Highlights Gold and silver recovery rates improved by ~10% YTD headcount reduction of 75 (8%) Re-scoped mine plan forecasts lower throughput offset by higher grades and recovery rates and lower unit costs
Slide 25: 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 $13.73 $13.39 $13.66 $13.36 $14.04 $10.90 2.0 1.9 2.0 1.8 1.8 1.8 1.6 1.6 35,486 1.5 ounces 29,893 28,191 23,702 22,965 25,216 23,706 22,514 19,998 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q
Slide 26: 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 3Q 2014 Highlights Silver and gold production 4% and 27% higher, respectively, than 2Q 2014 Costs applicable to sales per AgEq oz1 were $14.80, 6% lower than 2Q 2014 Cash flow from operating activities of
Slide 27: 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 $15.83 $15.15 $14.95 $12.67 $14.80 $16.63 $15.79 $16.38 $15.74 12,055 1,156 11,702 10,599 1,112 819 828 8,742 9,404 9,230 844 7,890 750 8,192 712 648 ounces 595 4,824 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q
Slide 28: Kensington: Higher Head-Grade Propels Improved Cost Performance
Kensington: Higher Head-Grade Propels Improved Cost Performance 3Q 2014 Highlights Gold production 10% higher than 2Q 2014 Costs applicable to sales per gold ounce down 7% from prior quarter Higher head-grade of 0.23 gold oz/t drove strong cost and cash flow performance Highest cash flow fro
Slide 29: 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 30,773 28,717 28,323 28,089 25,206 25,428 22,583 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 Gold production Costs applicable to sales per gold oz $16.5 $17.0 $13.9 $ in million
Slide 30: San Bartolomé: Stable Production and Cost Performance
San Bartolomé: Stable Production and Cost Performance 3Q 2014 Highlights Silver production 2% higher than 2Q 2014 Costs applicable to sales per AgEq ounce1 slightly higher than 2Q 2014 Grades and recovery rates remain relatively stable On-track to achieve full-year production guidance Unit C
Slide 31: San Bartolomé: Stable Production and Cost Performance
San Bartolomé: Stable Production and Cost Performance $15.26 $14.22 $13.06 $14.14 $13.25 $13.91 $13.93 $13.85 $13.41 1.5 1.5 1.5 1.5 1.5 1.5 ounces 1.4 1.4 1.3 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 Silver production (millions) Costs applicable to sales per silver equivalent oz 1 $32.
Slide 32: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted EBITDA LTM in thousands LTM 9/30/14 LTM 6/30/14 LTM 3/31/14 12/31/13 Net income (loss) ($658,374) ($708,105) ($700,024) ($650,563) Interest expense, net of capitalized interest 47,959 46,006 44,625 41,303 Interest and other income (8,526) (6,
Slide 33: 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 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, 2014 Palmarejo Rochester Endeavor Total Kensington Bartolomé Costs applicable to sales, including amortization (U.S. GAAP) $
Slide 35: 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 36: 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 37: 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 38: 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 39: 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 40: 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 41: 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 42: 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 43: 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 44: 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 45: 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 46: 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 Bridget Freas Donna Mirandola Director, Investor Relations Director, Corpora
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