Market Overview

Coeur Reports Second Quarter 2018 Results

Share:

Coeur Mining, Inc. ("Coeur" or the "Company") (NYSE:CDE) today
reported second quarter 2018 financial results, which included revenue
of $170.0 million, net income of $2.9 million, or $0.02 per share, and
adjusted net income1 of $1.1 million, or $0.01 per share.
Adjusted EBITDA1 increased 52% year-over-year to $48.4
million while companywide all-in-sustaining costs ("AISC")1
per average spot equivalent ounce ("AgEqOz")1 declined 6%
year-over-year to $14.65 during the quarter, more than offsetting the
impact of lower average realized silver and gold prices.

Cash flow from operating activities was $(1.3) million and free cash flow1
was $(42.5) million during the quarter, which were impacted by
approximately $26 million of total investment to support the ongoing
ramp-up of operating activities at the new high-grade Silvertip mine in
British Columbia and approximately $31 million of Mexican cash income
and mining tax payments that were made early in the second quarter.

"Led by our Palmarejo operation, we delivered strong financial and
operating performance in the second quarter, which has resulted in an
increase to our companywide full-year production guidance ranges and a
reduction to our companywide full-year cost guidance ranges," said
Mitchell J. Krebs, Coeur's President and Chief Executive Officer.

"As we enter the second half of 2018, we are well-positioned to continue
delivering on our strategy of successfully discovering, developing and
operating high-quality precious metals mines in safe jurisdictions. We
anticipate Silvertip will achieve commercial production levels in the
third quarter and begin to contribute high-margin production and cash
flow. Our higher level of investment in near-mine exploration continues
to generate excellent results with important new discoveries at
Palmarejo and Kensington and successful resource identification and
expansion at Silvertip and Rochester.

"Later this year, we expect to begin upgrading our crushing facility at
Rochester to accommodate a high-pressure grinding roll ("HPGR") unit in
the first quarter of 2019, which is expected to unlock significant
long-term value for our stockholders by significantly enhancing silver
recoveries and by substantially reducing operating costs. Production and
cash flow from our Wharf gold operation in South Dakota climbed sharply
during the quarter and are expected to further strengthen throughout the
remainder of the year, further reinforcing the merits of that
acquisition. Finally, we expect mining from Kensington's high-grade
Jualin deposit to positively impact second half production and cost
levels."

Highlights

  • Higher quarterly silver and gold production driven by strong
    performance at Palmarejo
    - Companywide silver equivalent1
    production increased 14% year-over-year to 8.8 million ounces. The
    increase was driven by Palmarejo, where silver equivalent1
    production climbed 40% year-over-year to 4.1 million ounces
  • Higher production and lower costs drove higher revenue, adjusted
    EBITDA
    1 and adjusted EBITDA margin1
    - Quarterly revenue of $170.0 million increased 14%
    year-over-year. AISC per average spot AgEqOz1 of $14.65
    declined 6% compared to the second quarter of 2017. Adjusted EBITDA1
    increased 52% year-over-year to $48.4 million. Adjusted EBITDA margin1
    for the period improved to 28% compared to 21% during the same period
    in 2017
  • Operating activities ramping up at high-grade Silvertip
    silver-zinc-lead operation
    - Processing rates have averaged
    approximately 300 tonnes per day in July and are periodically
    exceeding 500 tonnes per day. During the quarter, the Company made
    capital expenditures of $19.0 million (including $4.7 million of
    capitalized drilling) in pre-commercial development and process
    facility commissioning, bringing first half capital expenditures to
    $37.7 million. Commercial production is expected to commence during
    the third quarter
  • Ongoing success from accelerated near-mine exploration investments -
    Second quarter exploration investment totaled $16.0 million ($6.4
    million expensed and $9.6 million capitalized), with over 80%
    allocated to near-mine targets. Coeur's results-based exploration
    efforts are generating positive results and have led to new
    discoveries at Silvertip, Palmarejo, Kensington and Rochester
  • Enhancements to full-year 2018 guidance ranges - As published
    on July 9, 2018, full-year 2018 production guidance was increased from
    36.0 - 39.4 million AgEqOz1 to 37.3 - 40.5 million AgEqOz1
    due to the strong first half performance at Palmarejo. As a result,
    the Company has reduced both Palmarejo's cost guidance and companywide
    AISC guidance for 2018. Full-year capital expenditure guidance has
    been increased primarily (i) to adjust for anticipated timing of
    Silvertip achieving commercial production and (ii) to reflect
    additional underground development investments at Palmarejo to access
    new ore sources. The Company has also increased full-year exploration
    expense guidance to incorporate additional planned investments in its
    near-mine exploration programs during the second half of 2018

Financial and Operating Highlights (Unaudited)

(Amounts in millions, except per share amounts, gold

ounces produced & sold, and per-ounce metrics)

           
2Q 2018   1Q 2018   4Q 2017   3Q 2017   2Q 2017

Revenue

$ 170.0 $ 163.3 $ 214.6 $ 159.9 $ 149.5
Costs Applicable to Sales $

108.2

$ 99.3 $ 122.0 $ 101.6 $ 102.2
General and Administrative Expenses $ 7.7 $ 8.8 $ 9.2 $ 7.3 $ 7.0
Net Income (Loss) $ 2.9 $ 0.7 $ 14.3 $ (11.7 ) $ (10.0 )
Net Income (Loss) Per Share $ 0.02 $ 0.00 $ 0.08 $ (0.06 ) $ (0.06 )
Adjusted Net Income (Loss)1 $ 1.1 $ 0.7 $

14.1

$ (15.3 ) $ (1.3 )
Adjusted Net Income (Loss)1 Per Share $ 0.01 $ 0.00 $ 0.08 $ (0.09 ) $ (0.01 )
Weighted Average Shares Outstanding 187.5 187.6 187.0 179.3 179.2
EBITDA1 $ 42.1 $ 49.4 $ 69.6 $ 38.6 $ 23.4
Adjusted EBITDA1 $ 48.4 $ 49.5 $

77.0

$ 40.2 $ 31.9
Cash Flow from Operating Activities $ (1.3 ) $ 15.5 $ 91.8 $ 37.3 $ 24.1
Capital Expenditures $ 41.2 $ 42.3 $ 47.1 $ 29.0 $ 37.1
Free Cash Flow1 $ (42.5 ) $ (26.8 ) $ 44.8 $ 8.3 $ (13.0 )
Cash, Equivalents & Short-Term Investments $ 123.5 $ 159.6 $ 192.0 $ 195.7 $ 201.0
Total Debt2 $ 419.7 $ 414.0 $ 411.3 $ 288.7 $ 284.6
Average Realized Price Per Ounce – Silver $ 16.48 $ 16.70 $ 16.57 $ 16.86 $ 16.95
Average Realized Price Per Ounce – Gold $ 1,241 $ 1,268 $ 1,224 $ 1,240 $ 1,206
Silver Ounces Produced 3.2 3.2 3.7 3.0 2.7
Gold Ounces Produced 94,052 85,383 118,756 93,293 82,819
Silver Equivalent Ounces Produced1 8.8 8.3 10.8 8.6 7.7
Silver Ounces Sold 3.2 3.2 3.8 2.9 2.7
Gold Ounces Sold 94,455 87,153 123,564 89,972 86,194
Silver Equivalent Ounces Sold1 8.9 8.4 11.1 8.3 7.9
Silver Equivalent Ounces Sold (Average Spot)1 10.7 10.1 13.2 9.7 9.0
Adjusted CAS per AgEqOz1 $

9.44

$ 9.69 $ 9.43 $ 11.05 $ 12.02
Adjusted CAS per Average Spot AgEqOz1 $

8.26

$ 8.48 $ 8.35 $ 9.90 $ 10.96
Adjusted CAS per AuEqOz1 $ 1,028 $ 955 $ 800 $ 843 $ 860
Adjusted AISC per AgEqOz1 $

17.62

$ 17.20 $ 14.45 $ 17.35 $ 17.81
Adjusted AISC per Average Spot AgEqOz1 $

14.65

  $ 14.33 $ 12.26 $ 14.79 $ 15.58
 

Financial Results

Revenue for the second quarter was $170.0 million, 4% higher than the
first quarter on increased metal sales, which offset slightly lower
average realized silver and gold prices of $16.48 and $1,241 per ounce,
respectively. Year-over-year, revenue increased 14%, also the result of
higher metal sales that offset lower average realized prices. Silver
sales contributed 31% of revenue during the second quarter and gold
sales contributed 69%. The Company's U.S. operations accounted for
approximately 58% of second quarter revenue, comparable to the first
quarter.

Average realized gold prices during the second quarter were impacted by
the sale of 9,834 gold ounces at a price of $800 per ounce pursuant to
Palmarejo's gold stream agreement.

Costs applicable to sales were $108.2 million for the quarter, 9% and 6%
higher quarter-over-quarter and year-over-year, respectively, as a
result of higher metal sales. General and administrative expenses were
$7.7 million, 13% lower than the first quarter due to lower professional
service costs and 10% higher year-over-year due primarily to higher
employee-related expenses.

Quarterly interest expense, net of capitalized interest, was unchanged
compared to the prior quarter. The increase compared to the second
quarter of 2017 is due to the amounts drawn on the Company's $200
million revolving credit facility to partially fund the Silvertip
acquisition.

Second quarter capital expenditures of $41.2 million were relatively
unchanged quarter-over-quarter. The percentage attributable to
sustaining capital expenditures, driven by the Company's Palmarejo and
Kensington underground mining operations, increased from 46% in the
first quarter to 57% in the second quarter. Capital expenditures at
Silvertip accounted for an additional $19.0 million (including $4.7
million of capitalized exploration), or 46% of total companywide capital
expenditures.

Operations

Highlights of second quarter 2018 results for each of the Company's
operations are provided below.

Palmarejo, Mexico

(Dollars in millions, except per ounce amounts)            
2Q 2018   1Q 2018   4Q 2017   3Q 2017   2Q 2017
Tons milled 344,073 359,893 389,524 413,086 335,428
Average silver grade (oz/t) 6.86 6.88 6.92 5.53 4.98
Average gold grade (oz/t) 0.11 0.10 0.10 0.08 0.08
Average recovery rate – Ag 87.5 % 81.4 % 87.0 % 83.6 % 87.3 %
Average recovery rate – Au 89.9 % 80.4 % 92.0 % 83.1 % 91.1 %
Silver ounces produced (000's) 2,066 2,013 2,346 1,908 1,457
Gold ounces produced 33,702 29,896 37,537 28,948 24,292
Silver equivalent ounces produced1 (000's) 4,088 3,807 4,600 3,644 2,914
Silver ounces sold (000's) 2,092 2,031 2,343 1,794 1,484
Gold ounces sold 31,207 30,888 38,953 26,554 25,191
Silver equivalent ounces sold1 (000's) 3,964 3,884 4,681 3,387 2,996
Silver equivalent ounces sold1 (average
spot) (000's)
4,557 4,479 5,331 3,809 3,324
Metal sales $ 70.7 $ 70.0 $ 83.2 $ 60.7 $ 53.2
Costs applicable to sales $

30.3

$ 31.1 $ 36.0 $ 33.3 $ 33.9
Adjusted CAS per AgEqOz1 $

7.64

$ 8.01 $ 7.54 $ 9.76 $ 11.21
Adjusted CAS per average spot AgEqOz1 $

6.64

$ 6.94 $ 6.64 $ 8.68 $ 10.11
Exploration expense $ 3.2 $ 4.0 $ 2.7 $ 4.5 $ 3.1
Cash flow from operating activities $ 1.3 $ 27.3 $ 52.1 $ 18.5 $ 18.8
Sustaining capital expenditures (excludes capital lease payments) $ 9.5 $ 9.3 $ 4.9 $ 6.5 $ 6.1
Development capital expenditures $     $     $ 2.1     $ (1.0 )   $ 5.1  
Total capital expenditures $ 9.5 $ 9.3 $ 7.0 $ 5.5 $ 11.2
 
Free cash flow1 $ (8.2 ) $ 18.0 $ 45.1 $ 13.0 $ 7.6
 
  • Second quarter silver equivalent1 production increased 7%
    quarter-over-quarter and 40% year-over-year to 4.1 million ounces due
    to the continued benefit of higher-than-projected grades at
    Independencia
  • Silver and gold grades, consistent with the first quarter and 38%
    higher year-over-year, offset lower mining rates attributable to the
    ongoing installation of ground support. During the second half of the
    year, these underground improvements are expected to facilitate a
    return to steady-state mining rates while expected lower grade stopes
    are mined
  • Adjusted CAS of $6.64 per average spot AgEqOz1 were 4%
    lower than the first quarter and 34% lower year-over-year and
    continued to track below initial full-year 2018 guidance of $9.25 -
    $9.75
  • The new on-site absorption, desorption, and recovery ("ADR") plant
    began processing run-of-mine and carbon inventory, which was
    stockpiled in the first quarter. Second quarter average recovery rates
    normalized as this inventory was processed. Through mid-July, the ADR
    plant has generated estimated savings of over $4.1 million in reduced
    refinery and freight costs and carbon purchases, recovering its
    upfront investment in roughly two months
  • Exploration expense declined 20% quarter-over-quarter as focus shifted
    to development towards the La Nación deposit, located between the
    Independencia and Guadalupe underground mines. The Company anticipates
    reaching the ore body in early 2019 with La Nación contributing
    approximately 400 tons per day ("tpd") of mill feed once production
    has ramped up
  • Negative free cash flow1 of $8.2 million reflected the
    payment of $31 million in cash income and mining taxes in early April,
    of which $17 million related to 2017 earnings and $14 million were
    payments related to year-to-date earnings. Total cash income and
    mining tax payments in Mexico this year are expected to be $40 - $45
    million
  • Approximately 32% of Palmarejo's gold sales in both the second quarter
    and first half of 2018 (or 9,834 and 19,739 ounces, respectively) were
    to Franco-Nevada at a price of $800 per ounce. The Company anticipates
    a similar percentage of Palmarejo's gold sales to be to Franco-Nevada
    in the second half of 2018
  • As published on July 9, 2018, the Company increased Palmarejo's
    full-year production guidance to 7.5 - 7.9 million ounces of silver
    and 115,000 - 120,000 ounces of gold from 6.5 - 7.1 million ounces of
    silver and 110,000 - 115,000 ounces of gold. Cost guidance has been
    revised lower from CAS per AgEqOz1 of $9.25 - $9.75 to
    $8.00 - $8.50 on an average spot equivalent basis and from $10.50 -
    $11.00 to $9.00 - $9.50 on a 60:1 silver equivalent basis

Rochester, Nevada

(Dollars in millions, except per ounce amounts)            
2Q 2018   1Q 2018   4Q 2017   3Q 2017   2Q 2017
Ore tons placed 4,083,028 4,351,131 4,171,451 4,262,011 4,493,100
Average silver grade (oz/t) 0.53 0.54 0.50 0.53 0.53
Average gold grade (oz/t) 0.004 0.003 0.003 0.004 0.003
Silver ounces produced (000's) 1,125 1,157 1,361 1,070 1,156
Gold ounces produced 12,273 11,487 18,995 10,955 10,745
Silver equivalent ounces produced1 (000's) 1,861 1,846 2,500 1,727 1,801
Silver ounces sold (000's) 1,097 1,119 1,457 1,050 1,135
Gold ounces sold 12,030 11,163 20,002 10,390 10,658
Silver equivalent ounces sold1 (000's) 1,819 1,789 2,658 1,674 1,774
Silver equivalent ounces sold1 (average
spot) (000's)
2,048 2,004 2,969 1,839 1,913
Metal sales $ 33.7 $ 33.5 $ 49.7 $ 31.2 $ 32.8
Costs applicable to sales $ 24.5 $ 24.3 $ 34.0 $ 23.3 $ 24.2
Adjusted CAS per AgEqOz1 $ 13.36 $ 13.33 $ 12.77 $ 13.69 $ 13.54
Adjusted CAS per average spot AgEqOz1 $ 11.87 $ 11.89 $ 11.37 $ 12.46 $ 12.56
Exploration expense $ 0.2 $ $ 0.5 $ 0.5 $ 0.3
Cash flow from operating activities $ 6.0 $ 3.4 $ 26.1 $ 1.6 $ (1.1 )
Sustaining capital expenditures (excludes capital lease payments) $ 0.4 $ 0.5 $ 0.9 $ 0.5 $ 1.1
Development capital expenditures $ 0.3   $ 2.1   $ 5.9   $ 9.2     $ 12.7  
Total capital expenditures $ 0.7 $ 2.6 $ 6.8 $ 9.7 $ 13.8
Free cash flow1 $ 5.3 $ 0.8 $ 19.3 $ (8.1 ) $ (14.9 )
 
  • Total tons placed decreased quarter-over-quarter and year-over-year
    due to fewer run-of-mine tons placed
  • Quarterly silver equivalent1 production of 1.9 million
    ounces was slightly higher than the prior period and the second
    quarter of 2017. Higher production during the second half is expected
    to be driven by the ongoing ramp up of the Stage IV leach pad and
    continued placement of higher grade gold ore
  • Second quarter adjusted CAS per average spot AgEqOz1 of
    $11.87 was level with the prior quarter, 5% lower year-over-year and
    remained below the full-year 2018 guidance range of $12.00 - $12.50
  • Free cash flow1 during the second quarter was $5.3 million,
    reflecting the normalization of leach pad and metal inventory as well
    as significantly lower capital expenditures of $0.3 million. This
    compares to capital expenditures of $2.1 million in the prior quarter
    and $13.8 million during the same period in 2017. Free cash flow1
    is expected to increase further in the second half of the year
  • Rochester's adoption of HPGR technology remains on-schedule. The
    Company expects to begin crusher upgrades later this year, including
    the installation of an initial HPGR crusher unit early next year while
    it decommissions an existing, smaller crusher facility later this
    year. Silver recoveries are expected to improve beginning as early as
    the second quarter of 2019
  • The Company is maintaining Rochester's full-year 2018 production
    guidance of 4.2 - 4.7 million ounces of silver and 45,000 - 50,000
    ounces of gold. The Company is also maintaining cost guidance of CAS
    per AgEqOz1 of $13.25 - $13.75 on a 60:1 silver equivalent
    basis and $12.00 - $12.50 on an average spot equivalent basis

Wharf, South Dakota

(Dollars in millions, except per ounce amounts)            
2Q 2018   1Q 2018   4Q 2017   3Q 2017   2Q 2017
Ore tons placed 1,075,820 1,076,395 1,124,785 1,150,308 993,167
Average gold grade (oz/t) 0.023 0.022 0.029 0.029 0.024
Gold ounces produced 22,507 17,936 27,292 25,849 21,358
Silver ounces produced (000's) 13 12 16 15 13
Gold equivalent ounces produced1 22,729 18,133 27,560 26,096 21,568
Silver ounces sold (000's) 14 11 16 14 11
Gold ounces sold 23,053 17,339 28,975 23,855 21,314
Gold equivalent ounces sold1 23,282 17,522 29,256 24,085 21,495
Metal sales $ 29.8 $ 23.4 $ 37.3 $ 31.3 $ 27.0
Costs applicable to sales $ 19.3 $ 15.3 $ 19.9 $ 17.3 $ 15.8
Adjusted CAS per AuEqOz1 $ 824 $ 870 $ 682 $ 719 $ 737
Exploration expense $ $ $ 0.1 $ 0.2 $
Cash flow from operating activities $ 11.5 $ (1.4 ) $ 17.2 $ 15.0 $ 8.8
Sustaining capital expenditures (excludes capital lease payments) $ 1.2 $ 0.3 $ 1.6 $ 1.8 $ 1.5
Development capital expenditures $   $     $ 1.7   $ 1.3   $
Total capital expenditures $ 1.2 $ 0.3 $ 3.3 $ 3.1 $ 1.5
Free cash flow1 $ 10.3 $ (1.7 ) $ 13.9 $ 11.9 $ 7.3
 
  • As anticipated, quarterly gold production improved to 22,507 ounces,
    25% higher quarter-over-quarter and 5% year-over-year, due to timing
    of leach pad recoveries. While average grade is expected to remain
    relatively unchanged throughout the second half of the year, sustained
    higher mining and crushing rates are expected to drive higher
    production levels
  • Higher production compared to the prior quarter drove a 5% reduction
    in adjusted CAS per AuEqOz1 of $824, below the full-year
    2018 guidance range of $850 - $900
  • Wharf generated $10.3 million of free cash flow1 during the
    second quarter. This was driven by higher production and the
    normalization of leach pad and metal inventory. Free cash flow1
    is expected to remain strong for the remainder of the year
  • The Company is maintaining Wharf's full-year production and cost
    guidance of 85,000 - 90,000 ounces of gold at CAS per AuEqOz1
    of $850 - $900

Kensington, Alaska

(Dollars in millions, except per ounce amounts)            
2Q 2018   1Q 2018   4Q 2017   3Q 2017   2Q 2017
Tons milled 168,751 158,706 167,631 172,038 163,163
Average gold grade (oz/t) 0.16 0.17 0.22 0.17 0.17
Average recovery rate 92.6 % 94.0 % 92.8 % 94.1 % 93.2 %
Gold ounces produced 25,570 26,064 34,932 27,541 26,424
Gold ounces sold 28,165 27,763 35,634 29,173 29,031
Metal sales $ 35.7 $ 36.3 $ 44.3 $ 36.6 $ 35.6
Costs applicable to sales $ 34.2 $ 28.6 $ 32.0 $ 27.7 $ 28.0
Adjusted CAS per AuOz1 $ 1,195 $ 1,010 $ 896 $ 946 $ 952
Exploration expense $ 1.4 $ 1.6 $ 2.8 $ 3.0 $ 2.0
Cash flow from operating activities $ 3.2 $ 4.6 $ 16.8 $ 9.3 $ 7.0
Sustaining capital expenditures (excludes capital lease payments) $ 9.2 $ 8.5 $ 8.0 $ 6.5 $ 3.7
Development capital expenditures $ 1.5     $ 2.9     $ 4.0     $ 3.6     $ 4.9  
Total capital expenditures $ 10.7 $ 11.4 $ 12.0 $ 10.1 $ 8.6
Free cash flow1 $ (7.5 ) $ (6.8 ) $ 4.8 $ (0.8 ) $ (1.6 )
 
  • Second quarter gold production of 25,570 ounces was consistent
    quarter-over-quarter as anticipated due to lower planned grades
    related to mine sequencing
  • Adjusted CAS per AuOz1 of $1,195 was 18% and 26% higher
    quarter-over-quarter and year-over-year, respectively, due to lower
    production and higher diesel, consumables, dewatering and drilling
    costs. Higher grades and production levels in the second half of 2018
    are expected to result in lower unit costs
  • Total exploration investment during the quarter was $2.7 million,
    unchanged quarter-over-quarter, and included $1.4 million of expensed
    exploration and $1.3 million of capitalized exploration
  • Dewatering efforts at Jualin are expected to be completed in the third
    quarter and facilitate ramp up of production through year-end. As a
    result, production for the remainder of 2018 is expected to be
    weighted towards the latter part of the year
  • Negative free cash flow1 of $7.5 million resulted from
    higher operating costs
  • The Company is maintaining Kensington's full-year production and cost
    guidance of 115,000 - 120,000 ounces of gold at CAS per AuOz1
    of $900 - $950

Silvertip, British Columbia

  • Mining activities remain focused on underground rehabilitation and
    development while surface activities are focused on the planning,
    construction and commissioning of various process optimization
    projects and infrastructure upgrades
  • Processing rates continued to improve during the second quarter and,
    in July, rates have averaged approximately 300 tonnes per day and
    periodically exceeded 500 tonnes per day
  • Silvertip's initial drilling program of over 40,000 meters (133,000
    feet) was completed on-time and under-budget. The Company plans to
    publish a corresponding exploration update later this month. Drilling
    results are expected to be included in a NI 43-101 Technical Report
    anticipated to be filed later this year
  • The Company submitted a permit amendment application to operate at
    1,000 metric tonnes per day earlier in the quarter and anticipates
    receiving approval around year-end
  • The Company is maintaining full-year 2018 production guidance of 1.5 -
    2.0 million ounces of silver and 23.0 - 28.0 million pounds of both
    zinc and lead at CAS per AgEqOz1 and average spot AgEqOz1
    of $15.00 - $15.50 and $12.00 - $12.50, respectively

Exploration

For the second consecutive quarter, Coeur sustained a higher level of
near-mine exploration investment. Up to 18 drill rigs were active at
Coeur's operations and exploration projects during the quarter,
including seven at Palmarejo, two at Kensington and six at Silvertip.
84% of the Company's total quarterly exploration investment was
allocated to near-mine opportunities and targets.

Expensed resource expansion drilling totaled $6.4 million during the
quarter and was primarily focused on identifying and expanding resources
at the Palmarejo and Kensington operations. Drilling activity was also
completed at early-stage exploration projects in Nevada, U.S. and
Sonora, Mexico.

Capitalized resource infill drilling totaled $9.6 million during the
second quarter, nearly double the amount spent in the first quarter and
three times the total spent in the second quarter of 2017. The majority
of this increase was focused on opportunities at the new Silvertip mine.

The Company invested $6.2 million in resource definition drilling at
Silvertip during the second quarter, which has generated
better-than-expected results. The Company plans to publish an update on
Silvertip's exploration program in late July and anticipates filing a NI
43-101 Technical Report later this year summarizing the results. Given
the success of this initial drilling program, the Company has commenced
a $4.0 million second phase of drilling focusing on resource expansion
targets.

At Rochester, infill drilling southwest of the pit in the Sunflower area
has intercepted significant mineralization within an area previously
modeled as inferred resource. Because of this area's proximity to the
pit, anticipated higher grades and shallow mineralization, the Company
considers Sunflower to be a potentially significant source of future
production.

At Palmarejo, as many as four rigs continued targeting expansion of the
Nación and Zapata resources and definition of the recently-discovered
Madero and Rampa veins (located immediately west of Guadalupe) and the
Jacobo and Portales veins (located immediately east of Guadalupe).
Limited drilling also commenced in the Independencia North area,
targeting the Hidalgo and Reforma veins in the footwall of the main
Independencia structure. It is anticipated the drilling will continue
north targeting the new Barrera vein structure. Up to three rigs focused
on capitalized, resource conversion drilling at Independencia and
Guadalupe. Both expansion and conversion drilling levels are expected to
continue at the current accelerated pace throughout the second half of
the year.

At Kensington, drilling successfully targeted previously-known,
high-grade structures that have the potential to become future sources
of higher-grade ore. The Seward vein outcrops on surface approximately
1,900 feet above the Kensington Mine access ramp. Due to the promising
mineralization on surface, drilling was completed at ramp level to test
for down-dip continuity. So far, two holes have cut the mineralized
structure, providing the Company's exploration team with a solid
"planar" target for future drilling from surface. Drilling also tested
the lower and upper portions of the Raven structure, where results are
encouraging. Deeper zones were drilled within the Kensington Main
deposit, referred to as Blocks M and L. While results are pending, these
holes have been testing the lower limits of the deposit below sea level.
A new drill campaign began in early July at the new Elmira Zone, located
above Kensington Main. Historic drilling in the Elmira Zone predated NI
43-101 standards and, as a consequence, infill holes are necessary in
order to be in a position to declare resources in the zone. Along with
this new zone, the nearby Johnson Vein will be tested and potentially
drilled later in the year.

2018 Production Outlook

On July 9, 2018, Coeur's production guidance was increased to reflect
higher expected silver and gold production at Palmarejo due to
higher-than-anticipated grades during the first half of the year.

  Silver   Gold   Zinc   Lead   Silver Equivalent1
    (K oz)   (oz)   (K lbs)   (K lbs)   (K oz)
Palmarejo 7,500 - 7,900 115,000 - 120,000 14,400 - 15,100
Rochester 4,200 - 4,700 45,000 - 50,000 6,900 - 7,700
Kensington 115,000 - 120,000 6,900 - 7,200
Wharf 85,000 - 90,000 5,100 - 5,400
Silvertip   1,500 - 2,000     23,000 - 28,000   23,000 - 28,000   4,030 - 5,080
Total  

13,200 - 14,600

 

360,000 - 380,000

  23,000 - 28,000   23,000 - 28,000   37,330 - 40,480
 

2018 Cost Outlook

The Company's cost guidance has been reduced to account for strong first
half cost performance at Palmarejo, timing of anticipated commercial
production at Silvertip and accelerated investment in near-mine
exploration. Unit cost guidance on a spot equivalent basis remains based
on silver-to-gold, -zinc and -lead equivalence ratios of 75:1, 0.09:1
and 0.07:1, respectively.

  Original Guidance (if changed)     Current Guidance
(dollars in millions, except per ounce amounts)   60:1   Spot     60:1   Spot
CAS per AgEqOz1 – Palmarejo $10.50 - $11.00   $9.25 -$9.75 $9.00 - $9.50   $8.00 - $8.50
CAS per AgEqOz1 – Rochester $13.25 - $13.75 $12.00 - $12.50
CAS per AuOz1 – Kensington $900 - $950
CAS per AuEqOz1 – Wharf $850 - $900
CAS per AgEqOz1 – Silvertip $15.00 - $15.50 $12.00 - $12.50
Capital Expenditures $120 - $140 $130 - $150
General and Administrative Expenses $32 - $34
Exploration Expense $20 - $25 $25 - $30
AISC per AgEqOz1 from continuing
operations
$17.50 - $18.00 $15.00 - $15.50 $17.25 - $17.75 $14.75 - $15.25
 

Financial Results and Conference Call

Coeur will host a conference call to discuss its second quarter 2018
financial results on July 26, 2018 at 11:00 a.m. Eastern Time.

      Dial-In Numbers:   (855) 560-2581 (U.S.)
(855) 669-9657 (Canada)
(412) 542-4166 (International)
 
Conference ID: Coeur Mining
 

Hosting the call will be Mitchell J. Krebs, President and Chief
Executive Officer of Coeur, who will be joined by Peter C. Mitchell,
Senior Vice President and Chief Financial Officer, Frank L. Hanagarne,
Jr., Senior Vice President and Chief Operating Officer, Hans Rasmussen,
Senior Vice President of Exploration, and other members of management. A
replay of the call will be available through August 9, 2018.

      Replay numbers:   (877) 344-7529 (U.S.)
(855) 669-9658 (Canada)
(412) 317-0088 (International)
 
Conference ID: 101 20 458
 

About Coeur

Coeur Mining, Inc. is a well-diversified, growing precious metals
producer with five mines in North America. Coeur produces from its
wholly-owned operations: the Palmarejo silver-gold complex in Mexico,
the Silvertip silver-zinc-lead mine in British Columbia, the Rochester
silver-gold mine in Nevada, the Kensington gold mine in Alaska, and the
Wharf gold mine in South Dakota. In addition, the Company has interests
in several precious metals exploration projects throughout North America.

Cautionary Statements

This news release contains forward-looking statements within the meaning
of securities legislation in the United States and Canada, including
statements regarding Coeur's strategy of successfully discovering,
developing and operating high-quality precious metals mines in safe
jurisdictions, anticipated production, costs, expenses, cash flow,
expectations regarding Silvertip, including but not limited to, the
timing of achieving commercial production, receipt of permits and
completion of a technical report, grades, exploration and development
efforts, sales of gold under the Palmarejo gold stream agreement, the
timing and impact of installation of HPGR units at Rochester, operations
at Palmarejo, Rochester, Wharf and Kensington, expected free cash flow,
grades, mining rates, crushing rates, recovery rates and taxes. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause Coeur's actual results,
performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by the
forward-looking statements. Such factors include, among others, the risk
that expectations regarding Silvertip including the timing of commercial
production, obtaining necessary permits, and filing a technical report
do not occur on a timely basis or at all, the risk that HPGR units will
not be installed at Rochester on a timely basis or the anticipated
benefits thereof will not be achieved, the risk that anticipated
production, cost, expense, and free cash flow levels are not attained,
the risks and hazards inherent in the mining business (including risks
inherent in developing large-scale mining projects, environmental
hazards, industrial accidents, weather or geologically related
conditions), changes in the market prices of gold, silver, zinc and lead
and a sustained lower price environment, the uncertainties inherent in
Coeur's production, exploratory and developmental activities, including
risks relating to permitting and regulatory delays, ground conditions,
grade variability, any future labor disputes or work stoppages, the
uncertainties inherent in the estimation of gold and silver reserves,
changes that could result from Coeur's future acquisition of new mining
properties or businesses, the loss of any third-party smelter to which
Coeur markets its production, the effects of environmental and other
governmental regulations, the risks inherent in the ownership or
operation of or investment in mining properties or businesses in foreign
countries, Coeur's ability to raise additional financing necessary to
conduct its business, make payments or refinance its debt, as well as
other uncertainties and risk factors set out in filings made from time
to time with the United States Securities and Exchange Commission, and
the Canadian securities regulators, including, without limitation,
Coeur's most recent reports on Form 10-K and Form 10-Q. Actual results,
developments and timetables could vary significantly from the estimates
presented. Readers are cautioned not to put undue reliance on
forward-looking statements. Coeur disclaims any intent or obligation to
update publicly such forward-looking statements, whether as a result of
new information, future events or otherwise. Additionally, Coeur
undertakes no obligation to comment on analyses, expectations or
statements made by third parties in respect of Coeur, its financial or
operating results or its securities.

Christopher Pascoe, Coeur's Director, Technical Services and a qualified
person under Canadian National Instrument 43-101, approved the
scientific and technical information concerning Coeur's mineral projects
in this news release. The PEA for the re-scoped mine plan at Rochester
referred to in this news release is preliminary in nature and is based
in part upon inferred mineral resources, and does not have as high a
level of certainty as a plan based solely on proven and probable mineral
reserves. Inferred mineral resources are considered too speculative
geologically to have the economic considerations applied to them that
would enable them to be considered for estimation of mineral reserves
and there is no certainty that the results from the preliminary economic
assessment will be realized. For a description of the key assumptions,
parameters and methods used to estimate mineral reserves and resources,
as well as data verification procedures and a general discussion of the
extent to which the estimates may be affected by any known
environmental, permitting, legal, title, taxation, socio-political,
marketing or other relevant factors, Canadian investors should refer to
the Technical Reports for each of Coeur's properties as filed on SEDAR
at www.sedar.com.

Non-U.S. GAAP Measures

We supplement the reporting of our financial information determined
under United States generally accepted accounting principles (U.S. GAAP)
with certain non-U.S. GAAP financial measures, including EBITDA,
adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss),
costs applicable to sales per silver equivalent ounce (or per gold
equivalent ounce or per average spot silver equivalent ounce), adjusted
costs applicable to sales per silver equivalent ounce (or per gold
equivalent ounce or per average spot silver equivalent ounce), adjusted
costs applicable to sales per silver ounce (or per gold ounce), all-in
sustaining costs, and adjusted all-in sustaining costs. We believe that
these adjusted measures provide meaningful information to assist
management, investors and analysts in understanding our financial
results and assessing our prospects for future performance. We believe
these adjusted financial measures are important indicators of our
recurring operations because they exclude items that may not be
indicative of, or are unrelated to our core operating results, and
provide a better baseline for analyzing trends in our underlying
businesses. We believe EBITDA, adjusted EBITDA, adjusted EBITDA margin,
adjusted net income (loss), costs applicable to sales per silver
equivalent ounce (or per gold equivalent ounce or per average spot
silver equivalent ounce), adjusted costs applicable to sales per silver
equivalent ounce (or per gold equivalent ounce or per average spot
silver equivalent ounce), adjusted costs applicable to sales per silver
ounce (or per gold ounce), all-in sustaining costs, and adjusted all-in
sustaining costs are important measures in assessing the Company's
overall financial performance. For additional explanation regarding our
use of non-U.S. GAAP financial measures, please refer to our Form 10-K
for the year ended December 31, 2017.

Notes

1. EBITDA, adjusted EBITDA, adjusted EBITDA margin, adjusted net income
(loss), costs applicable to sales per silver equivalent ounce (or per
gold equivalent ounce or per average spot silver equivalent ounce),
adjusted costs applicable to sales per silver equivalent ounce (or per
gold equivalent ounce or per average spot silver equivalent ounce),
adjusted costs applicable to sales per silver ounce (or per gold ounce),
all-in sustaining costs, and adjusted all-in sustaining costs are
non-GAAP measures. Please see tables in the Appendix for the
reconciliation to U.S. GAAP. Free cash flow is defined as cash flow from
operating activities less capital expenditures and gold production
royalty payments. Please see table in Appendix for the calculation of
consolidated free cash flow. Silver and gold equivalence assumes a 60:1
silver-to-gold ratio, except where noted as average spot prices. Please
see the table below for average applicable spot prices and corresponding
ratios. Silver and zinc equivalence assumes a 0.06:1 silver-to-zinc
ratio. Silver and lead equivalence assumes a 0.05:1 silver-to-lead ratio.

2. Includes capital leases. Net of debt issuance costs and premium
received.

3. On February 28, 2018, Coeur divested the San Bartolomé mine through
the sale of its 100%-owned Bolivian subsidiary. As a result, San
Bartolomé is excluded from consolidated operating statistics for all
periods presented unless otherwise noted.

Average Spot Prices

           
    2Q 2018   1Q 2018   4Q 2017   3Q 2017   2Q 2017
Average Silver Spot Price Per Ounce $   16.53 $ 16.77 $ 16.73 $ 16.84 $ 17.21
Average Gold Spot Price Per Ounce $ 1,306 $ 1,329 $ 1,275 $ 1,278 $ 1,257
Average Silver to Gold Spot Equivalence 79:1 79:1 76:1 76:1 73:1
 
 
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
 
  Three months ended   Six months ended
June 30, June 30,
2018   2017 2018   2017
In thousands, except share data
Revenue $ 169,987 $ 149,540 $ 333,254 $ 335,094
COSTS AND EXPENSES
Costs applicable to sales(1)

108,246

102,229

207,586

216,719
Amortization 29,459 30,734 60,236 69,427
General and administrative 7,650 7,025 16,454 17,150
Exploration 6,429 7,813 13,112 13,065
Pre-development, reclamation, and other 3,620   4,085   7,845   7,922  
Total costs and expenses

155,404

151,886

305,233

324,283
OTHER INCOME (EXPENSE), NET
Gain (loss) on debt extinguishment (9,342 ) (9,342 )
Fair value adjustments, net (2,462 ) 336 2,192 (864 )
Interest expense, net of capitalized interest (6,018 ) (3,744 ) (11,983 ) (7,323 )
Other, net

544

  3,974  

1,057

  24,773  
Total other income (expense), net

(7,936

) (8,776 )

(8,734

) 7,244  
Income (loss) before income and mining taxes 6,647 (11,122 ) 19,287 18,055
Income and mining tax (expense) benefit (3,717 ) 1,127   (15,666 ) (9,751 )
Income (loss) from continuing operations $ 2,930 $ (9,995 ) $ 3,621 $ 8,304
Income (loss) from discontinued operations   (960 ) 550   (596 )
NET INCOME (LOSS) $ 2,930 $ (10,955 ) $ 4,171 $ 7,708
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Unrealized gain (loss) on debt and equity securities (87 ) (18 ) (365 ) (2,200 )
Reclassification adjustments for impairment of equity securities 305 426
Reclassification adjustments for realized (gain) loss on sale of
equity securities
  (203 )   1,268  
Other comprehensive income (loss) (87 ) 84   (365 ) (506 )
COMPREHENSIVE INCOME (LOSS) $ 2,843   $ (10,871 ) $ 3,806   $ 7,202  
 
NET INCOME (LOSS) PER SHARE
Basic income (loss) per share:
Net income (loss) from continuing operations $ 0.02 $ (0.06 ) $ 0.02 $ 0.05
Net income (loss) from discontinued operations 0.00   (0.01 ) 0.00   0.00  
Basic(2) $ 0.02   $ (0.06 ) $ 0.02   $ 0.04  
Diluted income (loss) per share:
Net income (loss) from continuing operations $ 0.02 $ (0.06 ) $ 0.02 $ 0.05
Net income (loss) from discontinued operations 0.00   (0.01 ) 0.00   0.00  
Diluted(2) $ 0.02   $ (0.06 ) $ 0.02   $ 0.04  
(1)   Excludes amortization.
(2) Due to rounding, the sum of net income per share from continuing
operations and discontinued operations may not equal net income per
share.
 
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
   
Three months ended Six months ended
June 30,   June 30,
2018   2017 2018   2017
In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net income (loss) $ 2,930 $ (10,955 ) $ 4,171 $ 7,708
(Income) loss from discontinued operations 960 (550 ) 596
Adjustments:
Amortization 29,459 30,734 60,236 69,427
Accretion

3,886

2,312

7,204

4,552
Deferred taxes (1,265 ) (3,636 ) (811 ) (1,052 )
Loss (gain) on debt extinguishment 9,342 9,342
Fair value adjustments, net

2,462

 

(336 )

(2,192

)

864
Stock-based compensation 1,850 2,235 4,636 5,542
Gain on sale of the Joaquin project (21,138 )
Other

2,174

(3,421 )

2,242

 

(5,317 )
Changes in operating assets and liabilities:
Receivables

(8,888

) (2,215 )

(10,579

) 3,465
Prepaid expenses and other current assets 8,126 4,061 2,491 (845 )
Inventory and ore on leach pads (2,766 ) (4,809 ) (11,474 ) 10,362
Accounts payable and accrued liabilities (39,262 ) (167 ) (41,127 ) (15,466 )
CASH PROVIDED BY OPERATING ACTIVITIES OF CONTINUING OPERATIONS (1,294 ) 24,105 14,247 68,040
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES OF DISCONTINUED
OPERATIONS
  5,175   (2,690 ) 16,510  
CASH PROVIDED BY OPERATING ACTIVITIES (1,294 ) 29,280 11,557 84,550
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (41,165 ) (37,107 ) (83,510 ) (60,698 )
Proceeds from the sale of assets

96

 

436

156

15,455
Purchase of investments

39

(8,948 )

(400

) (9,964 )
Sale of investments

11,141

898

12,760

10,918
Other

(33

)

(52

)

(98

)

(66

)
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES OF CONTINUING
OPERATIONS
(30,000 )

(44,773

) (71,092 )

(44,355

)
CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS   (375 ) (28,470 ) (763 )
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (30,000 )

(45,148

) (99,562 )

(45,118

)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of notes and bank borrowings, net of issuance costs 244,958 15,000 244,958
Payments on debt, capital leases, and associated costs (4,373 ) (188,910 ) (22,822 ) (192,116 )
Other (233 ) (473 ) (4,839 ) (3,720 )
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES OF CONTINUING
OPERATIONS
(4,606 ) 55,575 (12,661 ) 49,122
CASH USED IN FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS   (21 ) (22 ) (41 )
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (4,606 ) 55,554   (12,683 ) 49,081  
Effect of exchange rate changes on cash and cash equivalents (175 ) 328   382   884  
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH (36,075 )

40,014

(100,306 )

89,397

Less net cash provided by (used in) discontinued operations(1)   (338 ) (32,930 ) 5,189  
(36,075 )

40,352

  (67,376 )

84,208

 
Cash, cash equivalents and restricted cash at beginning of period 172,101   170,457   203,402   126,601  
Cash, cash equivalents and restricted cash at end of period $ 136,026   $

210,809

  $ 136,026   $

210,809

 
(1)   Less net cash provided by (used in) discontinued operations includes
the following cash transactions: net subsidiary payments to parent
company of $5,117 for the three months ended June 30, 2017 and
$1,748 and $10,517 during the six months ended June 30, 2018 and
2017, respectively.
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
   
June 30, 2018 (unaudited) December 31, 2017
ASSETS In thousands, except share data
CURRENT ASSETS
Cash and cash equivalents $ 123,539 $ 192,032
Receivables

40,759

19,069
Inventory 62,154 58,230
Ore on leach pads 75,261 73,752
Prepaid expenses and other

11,925

15,053
Assets held for sale   91,421  
313,638 449,557
NON-CURRENT ASSETS
Property, plant and equipment, net 273,337 254,737
Mining properties, net 861,379 829,569
Ore on leach pads 70,043 65,393
Restricted assets 21,635 20,847
Equity and debt securities 23,804 34,837
Receivables 53,046 28,750
Other

19,022

  17,485  
TOTAL ASSETS $

1,635,904

  $ 1,701,175  
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 53,428 $ 48,592
Accrued liabilities and other 61,664 94,930
Debt 21,745 30,753
Reclamation 3,777 3,777
Liabilities held for sale   50,677  
140,614 228,729
NON-CURRENT LIABILITIES
Debt 397,974 380,569
Reclamation 121,264 117,055
Deferred tax liabilities 102,626 105,148
Other long-term liabilities 54,655   54,697  
676,519 657,469
STOCKHOLDERS' EQUITY

Common stock, par value $0.01 per share; authorized

300,000,000 shares, 187,074,029 issued and outstanding

at June 30, 2018 and 185,637,724 at December 31, 2017

1,871 1,856
Additional paid-in capital 3,357,318 3,357,345
Accumulated other comprehensive income (loss) (450 ) 2,519
Accumulated deficit

(2,539,968

) (2,546,743 )

818,771

  814,977  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $

1,635,904

  $ 1,701,175  
 

Adjusted EBITDA Reconciliation

             
(Dollars in thousands except per share amounts) LTM 2Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017 LTM 2Q 2017 2Q 2017
Net income (loss) $ (4,856 ) $ 2,930 $ 1,241 $ 7,625 $ (16,652 ) $ 68,959 $ (10,955 )
(Income) loss from discontinued operations, net of tax 11,098 (550 ) 6,724 4,924 (24,859 ) 960
Interest expense, net of capitalized interest 21,100 6,018 5,965 5,522 3,595 22,234 3,744
Income tax provision (benefit) 34,912 3,717 11,949 4,957 14,289 (26,137 ) (1,126 )
Amortization 137,359   29,459   30,777   44,722   32,401   124,094   30,733  
EBITDA 199,613 42,124 49,382 69,550 38,557 164,291 23,356
Fair value adjustments, net (2,192 ) 2,462 (4,654 ) 171 (336 )
Impairment of equity and debt securities 1,109 305
Foreign exchange (gain) loss 4,690 3,309 670 672 39 3,153 (786 )
Gain on sale of Joaquin project (21,138 )
(Gain) loss on sale of assets and securities (1,897 ) (586 ) 241 499 (2,051 ) (5,570 ) (513 )
Gain on repurchase of Rochester royalty (2,332 ) (2,332 )
Loss on debt extinguishment 30,707 9,342

Mexico inflation adjustment

(1,939 ) (1,939 )
Transaction costs 3,757 2,938 819 27
Interest income on notes receivables

(821

) (573 ) (248 )

 

Asset retirement obligation accretion 10,184 2,817 2,669 2,475 2,223 8,227 2,169
Inventory adjustments and write-downs 3,000   817   1,126   885   659   5,185   715  
Adjusted EBITDA $

214,395

  $ 48,431   $ 49,186   $

77,019

  $ 40,246   $ 183,830   $ 31,920  
Revenue $ 707,758 $ 169,987 $ 163,267 $ 214,585 $ 159,919 $ 623,060 $ 149,540
Adjusted EBITDA Margin 30 % 28 % 30 % 36 % 25 % 30 % 21 %
 

Adjusted Net Income (Loss) Reconciliation

         
(Dollars in thousands except per share amounts) 2Q 2018 1Q 2018 4Q 2017 3Q 2017 2Q 2017
Net income (loss) $ 2,930 $ 1,241 $ 7,625 $ (16,652 ) $ (10,955 )
(Income) loss from discontinued operations, net of tax (550 ) 6,724 4,924 960
Fair value adjustments, net 2,462 (4,654 ) (336 )
Impairment of equity and debt securities 305
(Gain) loss on sale of assets and securities (586 ) 241 499 (2,051 ) (513 )
Gain on repurchase of Rochester royalty (2,332 )
(Gain) loss on debt extinguishment 9,342

Mexico inflation adjustment

(1,939 )
Transaction costs 2,938 819
Interest income on notes receivables (573 ) (248 )

 

Foreign exchange loss (gain) (1,233 ) 4,312 (3,643 ) (1,392 ) 2,186
Tax effect of adjustments(1)       (991 )  
Adjusted net income (loss) $ 1,061   $ 342   $

14,143

  $ (15,343 ) $ (1,343 )
 
Adjusted net income (loss) per share - Basic $ 0.01 $ 0.00 $ 0.08 $ (0.09 ) $ (0.01 )
Adjusted net income (loss) per share - Diluted $ 0.01 $ 0.00 $ 0.08 $ (0.09 ) $ (0.01 )
 

Consolidated Free Cash Flow Reconciliation

 
(Dollars in thousands)   2Q 2018   1Q 2018   4Q 2017   3Q 2017   2Q 2017
Cash flow from continuing operations $ (1,294 ) $ 15,541 $ 91,811 $ 37,308 $ 24,105
Capital expenditures from continuing operations 41,165   42,345   47,054   28,982   37,107  
Free cash flow (42,459 ) (26,804 ) 44,757   8,326   (13,002 )
 
Reconciliation of All-in Sustaining Costs per Silver Equivalent
Ounce
for Three Months Ended June 30, 2018
       
Silver Gold Total
In thousands except per ounce amounts Palmarejo   Rochester   Total Kensington   Wharf   Total
Costs applicable to sales, including amortization (U.S. GAAP) $

44,943

  $ 29,244   $

74,187

$ 40,668   $ 22,611   $ 63,279 $

137,466

Amortization 14,633   4,793   19,426   6,441   3,353   9,794   29,220  
Costs applicable to sales $

30,310

$ 24,451 $

54,761

$ 34,227 $ 19,258 $ 53,485 $

108,246

Silver equivalent ounces sold 3,964,208 1,819,072 5,783,280 8,870,100
Gold equivalent ounces sold       28,165   23,282   51,447    
Costs applicable to sales per ounce $

7.65

$ 13.44 $

9.47

$ 1,215 $ 827 $ 1,040 $

12.20

Inventory adjustments (0.01 ) (0.08 ) (0.03 ) (20 ) (3 ) (12 ) (0.09 )
Adjusted costs applicable to sales per ounce $

7.64

$ 13.36 $

9.44

  $ 1,195 $ 824 $ 1,028 $

12.11

 
 
Costs applicable to sales per average spot ounce $

6.65

$ 11.94 $

8.29

$

10.15

Inventory adjustments (0.01 ) (0.07 ) (0.03 ) (0.08 )
Adjusted costs applicable to sales per average spot ounce $

6.64

$ 11.87 $

8.26

  $

10.07

 
 
Costs applicable to sales $

108,246

Treatment and refining costs 1,046
Sustaining capital 28,571
General and administrative 7,650
Exploration 6,429
Reclamation 4,667
Project/pre-development costs

517

 
All-in sustaining costs $

157,126

Silver equivalent ounces sold 5,783,280
Kensington and Wharf silver equivalent ounces sold 3,086,820  
Consolidated silver equivalent ounces sold 8,870,100  
All-in sustaining costs per silver equivalent ounce $

17.71

 
Inventory adjustments $ (0.09 )
Adjusted all-in sustaining costs per silver equivalent ounce $

17.62

 
 
Consolidated silver equivalent ounces sold (average spot)

10,667,074

 
All-in sustaining costs per average spot silver equivalent ounce $

14.73

 
Inventory adjustments $ (0.08 )
Adjusted all-in sustaining costs per average spot silver
equivalent ounce
$

14.65

 
Reconciliation of All-in Sustaining Costs per Silver Equivalent
Ounce
for Three Months Ended March 31, 2018
 
  Silver   Gold   Total
In thousands except per ounce amounts Palmarejo   Rochester   Total Kensington   Wharf   Total
Costs applicable to sales, including amortization (U.S. GAAP) $ 47,421   $ 29,136   $ 76,557 $ 35,347   $ 17,966   $ 53,313 $ 129,870
Amortization 16,325   4,831   21,156   6,717   2,657   9,374   30,530  
Costs applicable to sales $ 31,096 $ 24,305 $ 55,401 $ 28,630 $ 15,309 $ 43,939 $ 99,340
Silver equivalent ounces sold 3,883,983 1,789,007 5,672,990 8,390,090
Gold equivalent ounces sold       27,763   17,522   45,285    
Costs applicable to sales per ounce $ 8.01 $ 13.59 $ 9.77 $ 1,031 $ 874 $ 970 $ 11.84
Inventory adjustments   (0.26 ) (0.08 ) (21 ) (4 ) (15 ) (0.13 )
Adjusted costs applicable to sales per ounce $ 8.01 $ 13.33 $ 9.69   $ 1,010 $ 870 $ 955 $ 11.71  
 
Costs applicable to sales per average spot ounce $ 6.94 $ 12.13 $ 8.55 $ 9.87
Inventory adjustments   (0.24 ) (0.07 ) (0.11 )
Adjusted costs applicable to sales per average spot ounce $ 6.94 $ 11.89 $ 8.48   $ 9.76  
 
Costs applicable to sales $ 99,340
Treatment and refining costs 1,195
Sustaining capital 23,389
General and administrative 8,804
Exploration 6,683
Reclamation 4,532
Project/pre-development costs 1,421  
All-in sustaining costs $ 145,364
Silver equivalent ounces sold 5,672,990
Kensington and Wharf silver equivalent ounces sold 2,717,100  
Consolidated silver equivalent ounces sold 8,390,090  
All-in sustaining costs per silver equivalent ounce $ 17.33  
Inventory adjustments $ (0.13 )
Adjusted all-in sustaining costs per silver equivalent ounce $ 17.20  
 
Consolidated silver equivalent ounces sold (average spot) 10,066,759  
All-in sustaining costs per average spot silver equivalent ounce $ 14.44  
Inventory adjustments $ (0.11 )
Adjusted all-in sustaining costs per average spot silver
equivalent ounce
$ 14.33  
Reconciliation of All-in Sustaining Costs per Silver Equivalent
Ounce
for Three Months Ended December 31, 2017
     

 

Silver Gold Total
In thousands except per ounce amounts Palmarejo   Rochester   Endeavor   Total Kensington   Wharf   Total
Costs applicable to sales, including amortization (U.S. GAAP) $ 58,775   $ 41,006 $   $ 99,781 $ 42,640   $ 24,033   $ 66,673 $ 166,454
Amortization 22,749   6,960     29,709   10,633   4,129   14,762   44,471  
Costs applicable to sales $ 36,026 $ 34,046 $ $ 70,072 $ 32,007 $ 19,904 $ 51,911 $ 121,983
Silver equivalent ounces sold 4,680,802 2,657,975 7,338,777 11,232,057
Gold equivalent ounces sold         35,633   29,255   64,888    
Costs applicable to sales per ounce $ 7.70 $ 12.81 $ $ 9.55 $ 898 $ 680 $ 800 $ 10.86
Inventory adjustments (0.16 ) (0.04 )   (0.12 ) (2 ) 2     (0.08 )
Adjusted costs applicable to sales per ounce $ 7.54 $ 12.77 $ $ 9.43   $ 896 $ 682 $ 800 $ 10.78  
 
Costs applicable to sales per average spot ounce $ 6.78 $ 11.41 $ 8.45 $ 9.21
Inventory adjustments (0.14 ) (0.04 ) (0.10 ) (0.07 )
Adjusted costs applicable to sales per average spot ounce $ 6.64 $ 11.37 $ 8.35   $ 9.14  
 
Costs applicable to sales $ 121,983
Treatment and refining costs 1,600
Sustaining capital 18,520
General and administrative 9,120
Exploration 7,455
Reclamation 4,075
Project/pre-development costs 578  
All-in sustaining costs $ 163,331
Silver equivalent ounces sold 7,338,777
Kensington and Wharf silver equivalent ounces sold 3,893,280  
Consolidated silver equivalent ounces sold 11,232,057  
All-in sustaining costs per silver equivalent ounce $ 14.53  
Inventory adjustments $ (0.08 )
Adjusted all-in sustaining costs per silver equivalent ounce $ 14.45  
 
Consolidated silver equivalent ounces sold (average spot) 13,246,634  
All-in sustaining costs per average spot silver equivalent ounce $ 12.33  
Inventory adjustments $ (0.07 )
Adjusted all-in sustaining costs per average spot silver
equivalent ounce
$ 12.26  
 
Reconciliation of All-in Sustaining Costs per Silver Equivalent
Ounce
for Three Months Ended September 30, 2017
     
Silver Gold Total
In thousands except per ounce amounts Palmarejo   Rochester   Endeavor   Total Kensington   Wharf   Total
Costs applicable to sales, including amortization (U.S. GAAP) $ 49,669   $ 27,866 $ 59   $ 77,594 $ 35,522   $ 20,553   $ 56,075 $ 133,669
Amortization 16,414   4,591   20   21,025   7,864   3,223   11,087   32,112  
Costs applicable to sales $ 33,255 $ 23,275 $ 39 $ 56,569 $ 27,658 $ 17,330 $ 44,988 $ 101,557
Silver equivalent ounces sold 3,386,963 1,673,704 8,027 5,068,694 8,264,174
Gold equivalent ounces sold         29,173   24,085   53,258    
Costs applicable to sales per ounce $ 9.82 $ 13.91 $ 4.86 $ 11.16 $ 948 $ 720 $ 845 $ 12.29
Inventory adjustments (0.06 ) (0.22 )   (0.11 ) (2 ) (1 ) (2 ) (0.08 )
Adjusted costs applicable to sales per ounce $ 9.76 $ 13.69 $ 4.86 $ 11.05   $ 946 $ 719 $ 843 $ 12.21  
 
Costs applicable to sales per average spot ounce $ 8.73 $ 12.66 $ 10.00 $ 10.47
Inventory adjustments (0.05 ) (0.20 ) (0.10 ) (0.07 )
Adjusted costs applicable to sales per average spot ounce $ 8.68 $ 12.46 $ 9.90   $ 10.40  
 
Costs applicable to sales $ 101,557
Treatment and refining costs 1,408
Sustaining capital 18,126
General and administrative 7,345
Exploration 9,792
Reclamation 3,915
Project/pre-development costs 1,979  
All-in sustaining costs $ 144,122
Silver equivalent ounces sold 5,068,694
Kensington and Wharf silver equivalent ounces sold 3,195,480  
Consolidated silver equivalent ounces sold 8,264,174  
All-in sustaining costs per silver equivalent ounce $ 17.43  
Inventory adjustments $ (0.08 )
Adjusted all-in sustaining costs per silver equivalent ounce $ 17.35  
 
Consolidated silver equivalent ounces sold (average spot) 9,698,654  
All-in sustaining costs per average spot silver equivalent ounce $ 14.86  
Inventory adjustments $ (0.07 )
Adjusted all-in sustaining costs per average spot silver
equivalent ounce
$ 14.79  
 
Reconciliation of All-in Sustaining Costs per Silver Equivalent
Ounce
for Three Months Ended June 30, 2017
     
Silver Gold Total
In thousands except per ounce amounts Palmarejo   Rochester   Endeavor   Total Kensington   Wharf   Total
Costs applicable to sales, including amortization (U.S. GAAP) $ 48,325   $ 29,099 $ 586   $ 78,010 $ 36,335   $ 18,317   $ 54,652 $ 132,662
Amortization 14,431   4,938   168   19,537   8,347   2,549   10,896   30,433  
Costs applicable to sales $ 33,894 $ 24,161 $ 418 $ 58,473 $ 27,988 $ 15,768 $ 43,756 $ 102,229
Silver equivalent ounces sold 2,995,623 1,774,000 59,234 4,828,857 7,860,417
Gold equivalent ounces sold         29,031   21,495   50,526    
Costs applicable to sales per ounce $ 11.31 $ 13.62 $ 7.06 $ 12.11 $ 964 $ 734 $ 866 $ 13.01
Inventory adjustments (0.10 ) (0.08 )   (0.09 ) (12 ) 3   (6 ) (0.09 )
Adjusted costs applicable to sales per ounce $ 11.21 $ 13.54 $ 7.06 $ 12.02   $ 952 $ 737 $ 860 $ 12.92  
 
Costs applicable to sales per average spot ounce $ 10.20 $ 12.63 $ 11.04 $ 11.38
Inventory adjustments (0.09 ) (0.07 ) (0.08 ) (0.08 )
Adjusted costs applicable to sales per average spot ounce $ 10.11 $ 12.56 $ 10.96   $ 11.30  
 
Costs applicable to sales $ 102,229
Treatment and refining costs 1,288
Sustaining capital 17,173
General and administrative 7,025
Exploration 7,813
Reclamation 3,581
Project/pre-development costs 1,677  
All-in sustaining costs $ 140,786
Silver equivalent ounces sold 4,828,857
Kensington and Wharf silver equivalent ounces sold 3,031,560  
Consolidated silver equivalent ounces sold 7,860,417  
All-in sustaining costs per silver equivalent ounce $ 17.90  
Inventory adjustments $ (0.09 )
Adjusted all-in sustaining costs per silver equivalent ounce $ 17.81  
 
Consolidated silver equivalent ounces sold (average spot) 8,990,166  
All-in sustaining costs per average spot silver equivalent ounce $ 15.66  
Inventory adjustments $ (0.08 )
Adjusted all-in sustaining costs per average spot silver
equivalent ounce
$ 15.58  
 
Reconciliation of All-in Sustaining Costs per 60:1 Silver
Equivalent Ounce
for 2018 Guidance
     
Silver   Gold
In thousands except per ounce amounts Palmarejo   Rochester   Silvertip   Total Silver   Kensington   Wharf   Total Gold   Total Combined
Costs applicable to sales, including amortization (U.S. GAAP) $ 200,000   $ 116,300   $

55,600

  $

371,900

$ 146,100   $ 89,700   $ 235,800 $

607,700

Amortization 65,000     18,900    

14,000

   

97,900

    40,400     12,100     52,500    

150,400

Costs applicable to sales $ 135,000 $ 97,400 $

41,600

$

274,000

$ 105,700 $ 77,600 $ 183,300 $

457,300

Silver equivalent ounces sold

14,800,000

7,300,000

2,700,000

24,800,000

37,100,000

Gold equivalent ounces sold                 117,500     87,500     205,000      
Costs applicable to sales per ounce $9.00 - $9.50 $13.25 - $13.75 $15.00 - $15.50 $900 - $950 $850 - $900
 
Costs applicable to sales $

457,300

Treatment and refining costs

9,000

Sustaining capital, including capital lease payments 105,000
General and administrative 33,000
Exploration

26,000

Reclamation 15,700
Project/pre-development costs 2,900
All-in sustaining costs $

648,900

Silver equivalent ounces sold

24,800,000

Kensington and Wharf silver equivalent ounces sold 12,300,000
Consolidated silver equivalent ounces sold

37,100,000

All-in sustaining costs per silver equivalent ounce $17.25 - $17.75
 
Reconciliation of All-in Sustaining Costs per Spot Silver
Equivalent Ounce
for 2018 Guidance
     
Silver   Gold
In thousands except per ounce amounts Palmarejo   Rochester   Silvertip   Total Silver   Kensington   Wharf   Total Gold   Total Combined
Costs applicable to sales, including amortization (U.S. GAAP) $ 200,000   $ 116,300   $

55,600

  $

371,900

$ 146,100   $ 89,700   $ 235,800 $

607,700

Amortization 65,000     18,900    

14,000

   

97,900

    40,400     12,100     52,500    

150,400

Costs applicable to sales $ 135,000 $ 97,400 $

41,600

$

274,000

$ 105,700 $ 77,600 $ 183,300 $

457,300

Silver equivalent ounces sold

16,400,000

8,012,500

3,350,000

27,762,500

45,137,500

Gold equivalent ounces sold                 117,500     87,500     205,000      
Costs applicable to sales per ounce $8.00 - $8.50 $12.00 - $12.50 $12.00 - $12.50 $900 - $950 $850 - $900
 
Costs applicable to sales $

457,300

Treatment and refining costs

9,000

Sustaining capital, including capital lease payments 105,000
General and administrative 33,000
Exploration

26,000

Reclamation 15,700
Project/pre-development costs 2,900
All-in sustaining costs $

648,900

Silver equivalent ounces sold

27,762,500

Kensington and Wharf silver equivalent ounces sold 15,375,000
Consolidated silver equivalent ounces sold

43,137,500

All-in sustaining costs per silver equivalent ounce $14.75 - $15.25
 

View Comments and Join the Discussion!