Coeur Mining, Inc. · NYSE:CDE
Coeur Mining — Jefferies Industrials Conference 2016
47 slides from Coeur Mining's conference presentation, Aug 11, 2016
Slide 1: Jefferies Industrials Conference
Jefferies Industrials Conference Courtney R. B. Lynn, Vice President, Investor Relations & Treasurer New York, NY August 11, 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, mining rates, mine plans, grades, recovery rates, cash flow, mine life, exploration
Slide 3: Why Coeur Mining
Why Coeur Mining Well‐diversified, growing U.S. precious metals company Successful execution of Companywide repositioning Industry‐leading cost reductions driving strong cash flow growth Recent acquisitions beginning to have significant impact Strong liquidity position with declining leverage ratios
Slide 4: Well-Diversified, Growing Precious Metals Company
Well‐Diversified, Growing Precious Metals Company 2015 Silver Equivalent Production by Mine (millions of ounces) Revenue by Metal 0.6 22% 36% 34% 40% 48% 48% 60% 4.7 Palmarejo 9.4 Rochester 78% San Bartolomé 64% 66% Gold 7.6 60% Kensington 52% 52% Silver Wharf 40% 7.7 Endeavor 5.4 2009 2010 2011 201
Slide 5: Well-Diversified, Growing Precious Metals Company (cont.)
Well‐Diversified, Growing Precious Metals Company (cont.) Ticker: Exchange CDE: NYSE Kensington Mine, Alaska Shares Outstanding1 162.4M 2015: 126,266 oz Au 2016E: 115,000 ‐ 125,000 oz Au Avg. Daily Volume1 $60.6M Wharf Mine, South Dakota 2015: 78,132 oz Au 52‐week Low – High1 $1.62 ‐ $16.03 2016E: 9
Slide 6: Successful Execution of Companywide Repositioning
Successful Execution of Companywide Repositioning Palmarejo Rochester • Transitioned to UG‐only operation to • Completed $60M+ of investments to nearly maximize grade, margins and cash flow double mining rates, leading to 67% AgEq1 production growth between 2013 and 2015 • Accelerating mining rates
Slide 7: Industry-Leading Cost Reductions
Industry‐Leading Cost Reductions Adj. CAS / AgEqOz1 (Primary Silver Mines) Adj. CAS / AuEqOz1 (Gold Mines) $13.96 $14.13 $940 $899 $13.60 $13.68 $12.75 $12.05 $764 $11.87 $10.71 $721 $11.08 $644 $10.05 FY'13 FY'14 FY'15 1Q'16 2Q'16 FY'13 FY'14 FY'15 1Q'16 2Q'16 Companywide Adj. AISC / AgEqOz1 Cost R
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 $170.9 5.9x 5.7x $127.0 $135.8 $94.3 $98.6 3.9x 3.8x 3.0x 2.5x 2 06/30/15 09/30/15 12/31/15 03/31/16 06/30/16 6/30/15 9/30/15 12/31/2015 3/31/2016 6/30/2016 6/30/2016 Pro forma 6/30/16 $
Slide 9: 2016 Guidance: Expect to Produce 34–37M AgEq oz
2016 Guidance1: Expect to Produce 34 – 37M AgEq oz Production Guidance Silver and silver 2015 Actual Results 2016 Guidance 1H 2016 Result equivalent ounces in thousands Silver Gold AgEq Silver Gold AgEq Silver Gold AgEq Palmarejo 5,149 70,922 9,404 3,875 – 4,400 67,000 – 72,000 7,895 – 8,720 2,240 3
Slide 10: 2016 Cost Guidance: Well On-Track Through June 30
2016 Cost Guidance1: Well On‐Track Through June 30 Cost Outlook in millions except per ounce costs 2015 Actual Result 2016 Guidance 1H 2016 Result Costs applicable to sales per silver equivalent ounce2 – Palmarejo $13.03 $12.50 ‐ $13.50 $10.44 Costs applicable to sales per silver equivalent ounce2 –
Slide 11: Well-Positioned for Long-Term Success
Well‐Positioned for Long‐Term Success Transitioning to strong, sustainable free cash flow Maintaining focus on reducing leverage and maximizing liquidity and balance sheet flexibility Extending and upgrading future production via near‐mine exploration Establishing Establishing pipeline pipeline ofof
Slide 12: Appendix
Appendix
Slide 13: Second Quarter Highlights: A Testament to Coeur's Repositioning
Second Quarter Highlights: A Testament to Coeur’s Repositioning z Production of 9.6M silver equivalent ounces1, a 19% increase over 1Q 2016 z Adj. AISC of $13.27 per realized AgEqOz1, a 10% decrease year‐over‐year Adj. CAS of $10.05 per realized AgEqOz1, a 14% decrease, and Adj. CAS of $644 per real
Slide 14: Palmarejo: Among the World's Top 15 Primary Silver Mines
Palmarejo: Among the World’s Top 15 Primary Silver Mines Location: Chihuahua State, Northern Mexico Ownership: 100% Underground (open pit completed in Mining: 2Q 2016) Land Position: 135,131 acres Product: Silver and gold doré 2015 Production 2015 Adj. CAS1 P&P Reserves: 44.9M oz Ag, 690,000 oz Au $
Slide 15: Palmarejo: Rising Production Levels from High-Grade Underground
Palmarejo: Rising Production Levels from High‐Grade Underground Highlights Performance Transitioned to underground mining to maximize $15.40 $14.07 $13.75 $13.00 margins and cash flow $14.69 $13.25 OP mining operations completed in mid‐April 2016 7.6 116.5 $12.75 6.6 while mining of legacy UG ar
Slide 16: Palmarejo: Successful Transition to Lower-Tonnage, Higher-Grade
Palmarejo: Successful Transition to Lower‐Tonnage, Higher‐Grade Underground Mine Complete Tons Mined Average Recovery Rate 300 281 95.4% 258 247 92.1% 250 284 89.5% short tons (000s) 87.9% 200 216 89.1% 190 189 88.8% 150 173 86.4% 149 102 78.7% 84.7% 78.5% 100 50 35 76.2% 2 73.9% 0 1Q'15 2Q'15 3Q'15
Slide 17: Gold Stream Agreement to Unlock Value at Palmarejo
Gold Stream Agreement to Unlock Value at Palmarejo Principal Terms Satisfied the 400,000 ounce minimum delivery obligation under the original royalty agreement on July 26th Gold stream agreement entered into October 2014; new, more favorable terms to take effect in August Covers 50% of gold pr
Slide 18: Financial Statement Impacts of Franco-Nevada Agreements
Financial Statement Impacts of Franco‐Nevada Agreements Previous Royalty Agreement New Stream Agreement Income 100% of gold sales recorded at spot prices Gold sales to FNV recorded at $800/oz plus Statement Fair value adjustments recorded to reflect deferred revenue changing gold prices on min
Slide 19: Rochester: Second Largest Primary Silver Mine in U.S.
Rochester: Second Largest Primary Silver Mine in U.S. Location: Near Lovelock, Nevada Ownership: 100% Mining: Open pit, heap leach Land Position: 10,800 acres Product: Silver and gold doré P&P Reserves: 79.3M oz Ag, 477,000 oz Au 2015 Production 2015 Adj. CAS1 $12.36 / AgEq oz M&I Resources: 67.5M o
Slide 20: Rochester: Higher Mining Rates Leading to Lower Unit Costs
Rochester: Higher Mining Rates Leading to Lower Unit Costs Highlights Performance $16.04 67% growth in silver equivalent1 production $14.49 $12.41 between 2013 and 2015 $15.54 $11.75 $13.94 $11.32 2015 Adj. CAS / realized AgEqOz1 of $11.27, a 4.6 5.0 4.2 29% reduction compared to 2013 52.6 51.5
Slide 21: Kensington: Higher-Grade Mine Plan Underway
Kensington: Higher‐Grade Mine Plan Underway Location: Near Juneau, Alaska Ownership: 100% Mining: Underground Land Position: 12,400 acres Product: Gold concentrate P&P Reserves: 560,000 oz Au 2015 Production 2015 Adj. CAS1 M&I Resources: 518,000 oz Au 126,266 oz Au $798 / Au oz Inferred Resources: 6
Slide 22: Kensington: Higher Grades Contributing to Strong Production at Lower Costs
Kensington: Higher Grades Contributing to Strong Production at Lower Costs Highlights Performance $951 2015 production of 126,266 ounces – 3rd straight $850 $901 $798 year of record operating results 126.3 117.8 120.0 112.0 Re‐scoped mine plan demonstrates strategy to source ore from higher‐grad
Slide 23: Wharf: The Newest Addition to Coeur's Portfolio
Wharf: The Newest Addition to Coeur’s Portfolio Location: Lead, South Dakota Ownership: 100% Mining: Open pit, heap leach Land Position: 5,212 acres Product: Electrolytic cathodic sludge P&P Reserves: 712,000 oz Au 2015 Production 2015 Adj. CAS1 M&I Resources: 167,000 oz Au 79,061 oz AuEq $706 / AuE
Slide 24: Wharf: Coeur's Lowest Cost Mine and Largest Contributor to FCF
Wharf: Coeur’s Lowest Cost Mine and Largest Contributor to FCF1 Highlights Performance Acquired in 2015 for $99 million from Goldcorp $667 $970 $556 $716 Coeur’s lowest cost operation and largest source 32,231 $534 of FCF1, generating $28M in the 10‐months of 28,433 23,427 ownership in 2015 21,1
Slide 25: San Bartolomé: One of the World's Largest Pure Silver Mines
San Bartolomé: One of the World’s Largest Pure Silver Mines Location: Potosi, Bolivia Ownership: 100% Mining: Surface mining Land Position: 30,471 acres Product: Silver doré P&P Reserves: 27.9M oz Ag 2015 Production 2015 Adj. CAS1 M&I Resources: 16.9M oz Ag 5.4 M oz Ag $13.63 / Ag oz Inferred Resour
Slide 26: San Bartolomé: Addition of Higher-Grade, Lower-Cost Ore from Local Sources
San Bartolomé: Addition of Higher‐Grade, Lower‐Cost Ore from Local Sources Highlights Performance $14.28 $14.29 $13.63 Straightforward operation due to free‐digging $13.88 surface mining techniques (no drilling or blasting) 5.9 5.9 6.0 5.4 ounces Sourcing higher‐grade, lower‐cost ore from local
Slide 27: Declining G&A; Low Compared with Peer Group
Declining G&A; Low Compared with Peer Group G&A as a % of Revenue Coeur G&A Expense 12.2% $60 $55.3 $55 10.3% 8.7% $50 7.8% 7.7% 7.4% 7.2% $45 6.5% $40.8 In Millions 5.9% 5.3% 5.1% $40 4.8% 4.3% $35 $32.8 2.7% 2.4% 2.3% $30.0 $30 $25 $20 1 2013 2014 2015 2016E Source: G&A and Revenue as reported by
Slide 28: Sales of Non-Core Assets
Sales of Non‐Core Assets Consideration Closing Date Asset Purchaser Total Details Mandalay Resources March 31, 2016 Cerro Bayo 2.0% NSR royalty $5.7M $4.0M cash; 2.5M shares Corporation April 19, 2016 La Cigarra 2.5% NSR royalty Kootenay Silver Inc. $3.6M $500,000 cash; 9.6M shares El Gallo NSR roya
Slide 29: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Adjusted EBITDA in thousands 2Q 2016 1Q 2016 4Q 2015 3Q 2015 2Q 2015 Net income (loss) $14,497 ($20,396) ($303,000) ($14,219) ($16,677) Interest expense, net of capitalized interest 10,875 11,120 11,758 12,446 10,734 Income tax provision (benefit) (76
Slide 30: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) LTM Adjusted EBITDA in thousands LTM 6/30/16 LTM 3/31/16 LTM 12/31/15 LTM 9/30/15 LTM 6/30/15 Net income (loss) ($323,118) ($354,291) ($367,182) ($1,143,223) ($1,125,538) Interest expense, net of capitalized interest 46,199 46,058 45,703 44,511 43,680
Slide 31: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) Consolidated Free Cash Flow Reconciliation in thousands 2Q 2016 1Q 2016 4Q 2015 3Q 2015 2Q 2015 Cash flow from operating activities $45,939 $6,617 $44,414 $36,237 $36,863 Capital expenditures (23,288) (22,172) (30,035) (23,861) (23,677) Gold productio
Slide 32: Non-GAAP to U.S. GAAP Reconciliation
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 33: Non-GAAP to U.S. GAAP Reconciliation
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 34: Non-GAAP to U.S. GAAP Reconciliation
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 35: Non-GAAP to U.S. GAAP Reconciliation
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 36: Non-GAAP to U.S. GAAP Reconciliation
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 37: Non-GAAP to U.S. GAAP Reconciliation
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 38: Non-GAAP to U.S. GAAP Reconciliation
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 39: Non-GAAP to U.S. GAAP Reconciliation
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 40: 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 2Q 2016 1Q 2016 FY 2015 2Q 2015 FY 2014 FY 2013 Costs applicable to sales, including amortization (U.S. GAAP) $137,540 $128,469 $617,938 $156,828 $635,516 $691,696 Amortization 37,075 26,914
Slide 41: Non-GAAP to U.S. GAAP Reconciliation
Non‐GAAP to U.S. GAAP Reconciliation (unaudited) All‐in Sustaining Costs per Silver Equivalent Ounce 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 Gold Bartolomé Cos
Slide 42: Coeur's Mineral Reserves
Coeur’s Mineral Reserves Grade (oz/ton) Ounces (contained) Year‐end 2015 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, USA 338,000 ‐ 0.20 ‐ 67,000 Whar
Slide 43: Coeur's Measured and Indicated Mineral Resources
Coeur’s Measured and Indicated Mineral Resources (Excluding Reserves) Grade (oz/ton) Ounces (contained) Year‐end 2015 Location Short tons Silver Gold Silver Gold Measured Resources Palmarejo Mexico 134,000 4.84 0.051 651,000 7,000 Rochester Nevada, USA 60,528,000 0.49 0.004 29,709,000 233,000 Kensin
Slide 44: Coeur's Inferred Mineral Resources
Coeur’s Inferred Mineral Resources Grade (oz/ton) Ounces (contained) Year‐end 2015 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, USA 2,059,000 ‐
Slide 45: 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 46: 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 47: 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 [email protected] Rebecc