Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Q1 2017 Earnings Presentation
43 slides from Coeur Mining's earnings presentation, Apr 27, 2017
Slide 1: First Quarter Earnings
2017 First Quarter Earnings 11:00am ET, April 27, 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 exploration efforts, expectations regarding the La Preciosa project and the timing of publication of a Preliminary
Slide 3: Quarter in Review
Quarter in Review NYSE: CDE 3 JC 2016
Slide 4: Highlights
Highlights • Metal sales of 11.1 million silver equivalent ounces (AgEqOz)1 drove a 29% quarter-over- quarter increase in revenue to $206.1 million • Companywide all-in sustaining costs (AISC)1 of $13.66 per AgEqOz1 were down 6% quarter-over-quarter and are tracking below full-year guidance • Cash f
Slide 5: Highlights (cont.)
Highlights (cont.) ($M) 1Q 2017 4Q 2016 QoQ Δ 1Q 2016 YoY Δ Silver ounces sold (M oz) 4.5 3.4 32% 3.5 29% Gold ounces sold (oz) 110,874 87,108 27% 79,091 40% Revenue $206.1 $159.2 29% $148.4 39% Costs applicable to sales $132.7 $102.0 30% $101.6 31% Exploration expense $5.3 $5.3 -% $1.7 212% General
Slide 6: Strong First Quarter Metal Sales
Strong First Quarter Metal Sales Rising production at Palmarejo and a reduction in metal inventory more than offset lower production at Rochester due to record rainfall and at San Bartolomé due to persistent drought conditions Silver Equivalent1 Production and Sales 11.1 10.0 9.6 9.2 8.6 8.3 8.6 9.3
Slide 7: Lower Companywide Costs Contributed to Strong FCF
Lower Companywide Costs Contributed to Strong FCF2 Primary Silver Adjusted CAS / AgEqOz1 Primary Gold Adjusted CAS / AuEqOz1 $14.13 $940 $12.75 $13.68 $791 $764 $11.73 $11.38 $688 $11.87 $10.99 $10.63 60:1 AgEqOz1 Average spot AgEqOz1 2014 2015 2016 1Q 2017 2014 2015 2016 1Q 2017 Companywide Adjuste
Slide 8: Debt Reductions Delivering Significant Interest Savings
Debt Reductions Delivering Significant Interest Savings Debt-to-LTM Adjusted EBITDA1 ($M) 5.5x Reduction of total debt- to-LTM adjusted EBITDA1 83% 3.8x 3.7x 3.4x 3.0x 2.5x 2.3x 2.0x $235.4 1.5x $215.2 $201.7 1.0x 0.9x $171.1 0.9x $137.3 $127.9 0.2x 0.04x $99.7 LTM adjusted EBITDA1 Total debt-to-LTM
Slide 9: Organic Growth Initiatives Underway
Organic Growth Initiatives Underway Development Exploration • At Palmarejo, ramp-up of Guadalupe • 17 drill rigs currently active compared to and Independencia on track to deliver 3 one year ago 50% increase in production in 2017 relative to 2016 • Exploration expense guidance increased by $6 millio
Slide 10: Looking Ahead
Looking Ahead • Companywide production expected to climb during the remainder of the year • Growth initiatives at Palmarejo, Rochester, and Kensington expected to remain on schedule and on budget • Results of expanded exploration activities expected to be included in year-end reserve and resource st
Slide 11: 2017 Guidance
2017 Guidance1 2017 Production Outlook (AgOz2 and AgEqOz2 in K oz) Silver Gold AgEqOz2 Palmarejo 6,500 – 7,000 110,000 – 120,000 13,100 – 14,200 Rochester 4,200 – 4,700 47,000 – 52,000 7,020 – 7,820 San Bartolomé 5,400 – 5,900 -- 5,400 – 5,900 Kensington -- 120,000 – 125,000 7,200 – 7,500 Wharf -- 8
Slide 12: Appendix
Appendix NYSE: CDE 12 JC 2016
Slide 13: Palmarejo
Palmarejo Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $50.5 $11.54 $10.70 $11.01 $9.68 $9.02 $10.03 $10.05 $10.11 $8.87 $8.09 31 1,531 24 1,307 1,269 19 17 $13.7 933 15 933 $11.3 $10.0 $8.8 $8.9 $8.1 $6.2 $3.4 ($1.7) 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 1Q 20
Slide 14: 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 15: 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 $800 Statement prices per ounce plus deferred revenue • Fair value adjustments recorded to reflect changing gold prices on minimum
Slide 16: Rochester
Rochester Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $12.61 $12.57 $11.99 $11.30 $11.56 $11.81 $11.17 $11.02 $11.16 $10.6 $10.24 $9.2 $9.5 $7.6 1,277 1,197 1,161 1,127 $5.8 $5.7 929 14 14 12 $3.9 10 10 $3.3 $3.4 $2.1 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 1Q 2
Slide 17: Kensington
Kensington Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $884 $859 $801 $761 $740 $18.0 34 32 32 26 26 $13.7 $12.6 $11.4 $8.1 $8.6 $7.7 $7.5 $5.5 $4.5 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 Gold production (K oz) Adj. CAS /
Slide 18: Wharf
Wharf Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $667 $559 $670 $556 $534 31 30 $21.1 28 $16.2 21 21 $15.4 $9.7 $8.6 $1.4 $1.5 $1.3 $0.9 $0.6 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 Gold production (K oz) Adj. CAS / AuEqO
Slide 19: San Bartolomé
San Bartolomé Production and Cost Performance Operating Cash Flow and Capital Expenditures ($M) $15.88 $14.40 $13.97 $12.97 $11.2 $11.3 $12.56 $8.6 1,458 1,382 1,370 1,259 1,215 $5.5 $4.1 $3.0 $1.8 $1.3 $0.5 $0.4 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 Silver
Slide 20: Non-Core Asset Divestitures
Non-Core Asset Divestitures With the close of Joaquin Project sale, Coeur has opportunistically divested assets for total consideration of $51.2 million since the beginning of 2016 • Strengthens balance sheet • Non-core assets • Attractive valuation environment for streams and royalties • Proceeds a
Slide 21: Non-GAAP to U.S. GAAP Reconciliation
Non-GAAP to U.S. GAAP Reconciliation Unaudited Adjusted Net Income (Loss) ($ thousands) 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 2014 Net income (loss) $18,663 $55,352 ($8,306) $69,557 $14,497 ($20,396) ($367,183) ($1,186,874) Fair value adjustments, net 1,200 11,581 (1,654) 961 3,579 8,695
Slide 22: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Adjusted EBITDA ($ thousands) 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 2014 Net income (loss) $18,663 $55,352 ($8,306) $69,557 $14,497 ($20,396) ($367,183) ($1,186,874) Interest expense, net of capitalized interest 3,586 36,920 6,857 8,
Slide 23: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited LTM Adjusted EBITDA ($ thousands) 1Q 2017 4Q 2016 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Net income (loss) $94,411 $55,352 ($239,342) ($323,118) ($354,292) ($367,183) ($1,174,213) Interest expense, net of capitalized interest 29,386 36,920 41,8
Slide 24: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Debt ($ thousands) 1Q 2017 4Q 2016 3Q 2016 2Q 2016 1Q 2016 4Q 2015 3Q 2015 Cash and cash equivalents $210,033 $162,182 $222,517 $257,591 $171,389 $200,714 $205,708 Total debt 219,076 210,896 401,745 511,066 511,101 490,410 545,986 N
Slide 25: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited Consolidated Free Cash Flow ($ thousands) 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 2014 Cash flow from operating activities $55,271 $125,817 $25,449 $47,812 $45,939 $6,617 $113,542 $53,548 Capital expenditures (23,979) (101,013) (29,926
Slide 26: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Costs Applicable to Sales Unaudited 3 months ended March 31, 2017 Silver Gold San ($ thousands, except per ounce amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortization (U.S. GAA
Slide 27: 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 28: 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.
Slide 29: 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 30: 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 31: 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. GAA
Slide 32: 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 33: 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 $
Slide 34: 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) 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 2014 Costs applicable to sales $132,712 $409,541 $102,112 $105,408 $100,465 $101,555 $479,654 $477,945 Treatment and refining costs
Slide 35: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs per Silver Equivalent Ounce for 2017 Guidance Silver Gold ($ thousands, except per ounce San amounts) Palmarejo Rochester Bartolomé Endeavor Total Kensington Wharf Total Total Costs applicable to sales, including amortiza
Slide 36: Non-GAAP to U.S. GAAP Reconciliation (cont.)
Non-GAAP to U.S. GAAP Reconciliation (cont.) Unaudited All-in Sustaining Costs per 70:1 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, includin
Slide 37: Average Spot Equivalence
Average Spot Equivalence Average Spot Prices 1Q 2017 2016 4Q 2016 3Q 2016 2Q 2016 1Q 2016 2015 2014 Average silver spot price per ounce $17.42 $17.14 $17.19 $19.61 $16.78 $14.85 $15.68 $19.08 Average gold spot price per ounce $1,219 $1,251 $1,222 $1,335 $1,260 $1,183 $1,160 $1,266 Average silver-to-
Slide 38: 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 39: 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 40: 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 41: 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 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
Slide 43: 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 [email protected] NYSE: CDE 43 JC 2016