Coeur Reports Second Quarter 2023 Results

Rochester Expansion Near Completion

CHICAGO–(BUSINESS WIRE)–Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported second quarter 2023 financial results, including revenue of $177 million and cash flow from operating activities of $39 million. The Company reported GAAP net loss from continuing operations of $32 million, or $0.10 per share. On an adjusted basis¹, Coeur reported EBITDA of $22 million, cash flow from operating activities before changes in working capital of $(7) million and net loss from continuing operations of $20 million, or $0.06 per share.

Key Highlights

• Rochester expansion approximately 97% complete as of July 31 – Solution is now circulating through the completed Stage VI leach pad and Merrill-Crowe process plant, with initial ounces expected to be recovered next month. Construction completion of the new three-stage crushing circuit is anticipated this quarter. Ramp-up of the expanded operation is set to occur over the remainder of 2023 and into early 2024, leading to expected significant production growth and materially lower costs. The estimated ultimate cost to complete the expansion is expected to be approximately 6 – 9%, or $40 – $60 million, higher than the prior high-end of guidance. The Company has incurred approximately $660 million of total project costs through the end of July
• Second quarter operating strength at Rochester and Wharf offset lower production at Kensington – Gold and silver production for the quarter totaled 68,406 ounces and 2.4 million ounces, respectively. Stronger production at Rochester and Wharf offset a weaker quarter at Kensington due to excessive water flows and paste backfill issues, which delayed the timing of production from certain stopes
• Full-year silver production guidance maintained; gold production guidance revised to reflect lower outlook at Kensington – 2023 silver production is expected to be 10 – 12 million ounces. 2023 gold production is expected to be 304,000 – 352,500 ounces, approximately 5% lower than prior full-year gold production guidance, after taking Kensington’s lower than anticipated second quarter production into account
• Balance sheet flexibility maintained to support remaining capital investments – Coeur ended the quarter with total liquidity of approximately $346 million including $57 million of cash, $280 million of available capacity under its $390 million revolving credit facility (“RCF”)², and $9 million of marketable securities
• State of South Dakota approves Boston Expansion at Wharf – Coeur has received a state mine permit from the South Dakota Board of Minerals and Environment allowing for a fifty-acre expansion of mining operations at Wharf which is expected to add significant certainty to Wharf’s current eight-year mine life

“With the bulk of the multi-year expansion at Rochester now behind us, we look forward to beginning to deliver strong production growth and lower costs from Nevada’s largest primary silver mine,” said Mitchell J. Krebs, President and Chief Executive Officer. “The team at Rochester is set to achieve a major milestone next month by recovering the first silver and gold ounces from the new leach pad and processing facility. The crushing facility is also expected to be complete this quarter, followed by a ramp-up of the newly expanded operation during the remainder of the year and into early 2024. Once ramped up, Rochester is expected to be one of the world’s largest operations of its kind with production rates approximately 2.5x higher than recent levels, a significantly lower cost structure, combined with the excellent potential to extend and enhance the mine life from its large, prospective, and under-explored land position.

“Our Palmarejo gold-silver mine in northern Mexico – Coeur’s largest single operation – delivered another solid quarter and continues to showcase its large, prospective land position with additional positive exploration results, which were highlighted in a recent press release. Although Kensington had a weaker than anticipated second quarter, the team has worked hard to address first half operational challenges in order to deliver a stronger second half. Our Wharf operation in South Dakota – which is in its 40th year of operation this year and recently produced its three millionth ounce of gold – continued to deliver solid results during the quarter and received state approval to proceed with an expansion that is expected to add certainty and operational flexibility to its current eight-year mine life.

“We remain committed to our strategy of differentiating Coeur Mining by delivering sector-leading growth and higher returns by reinvesting in the attractive exploration and expansion opportunities that exist throughout our portfolio of North American assets.”

Financial and Operating Highlights (Unaudited)

(Amounts in millions, except per share amounts, gold ounces produced & sold, and per-ounce metrics)	2Q 2023			1Q 2023			4Q 2022			3Q 2022			2Q 2022
Gold Sales	$	121.4		$	127.1		$	157.6		$	139.2		$	146.6
Silver Sales	$	55.9		$	60.2		$	52.5		$	43.8		$	57.5
Consolidated Revenue	$	177.2		$	187.3		$	210.1		$	183.0		$	204.1
Costs Applicable to Sales3	$	139.6		$	153.1		$	159.3		$	163.2		$	150.7
General and Administrative Expenses	$	9.8		$	12.1		$	10.2		$	9.7		$	9.3
Net Income (Loss)	$	(32.4	)	$	(24.6	)	$	49.0		$	(57.4	)	$	(77.4	)
Net Income (Loss) Per Share	$	(0.10	)	$	(0.08	)	$	0.17		$	(0.21	)	$	(0.28	)
Adjusted Net Income (Loss)1	$	(20.2	)	$	(33.1	)	$	(17.5	)	$	(44.7	)	$	(13.1	)
Adjusted Net Income (Loss)1 Per Share	$	(0.06	)	$	(0.11	)	$	(0.06	)	$	(0.16	)	$	(0.05	)
Weighted Average Shares Outstanding		333.1			301.0			284.5			278.1			278.0
EBITDA1	$	4.0		$	16.2		$	84.9		$	(20.5	)	$	(32.8	)
Adjusted EBITDA1	$	22.2		$	25.1		$	35.9		$	18.3		$	43.3
Cash Flow from Operating Activities	$	39.4		$	(35.0	)	$	28.5		$	(19.1	)	$	22.6
Capital Expenditures	$	85.6		$	74.0		$	113.1		$	96.6		$	73.2
Free Cash Flow1	$	(46.2	)	$	(109.0	)	$	(84.5	)	$	(115.7	)	$	(50.6	)
Cash, Equivalents & Short-Term Investments	$	56.8		$	67.0		$	61.5		$	75.4		$	74.2
Total Debt4	$	469.4		$	494.1		$	515.9		$	635.7		$	547.5
Average Realized Price Per Ounce – Gold	$	1,809		$	1,794		$	1,787		$	1,702		$	1,729
Average Realized Price Per Ounce – Silver	$	23.91		$	23.25		$	21.14		$	19.09		$	22.61
Gold Ounces Produced		68,406			69,039			87,727			83,438			83,772
Silver Ounces Produced		2.4			2.5			2.4			2.4			2.5
Gold Ounces Sold		67,090			70,866			88,189			81,782			84,786
Silver Ounces Sold		2.3			2.6			2.5			2.3			2.5
Adjusted CAS per AuOz1	$	1,464		$	1,381		$	1,270		$	1,318		$	1,207
Adjusted CAS per AgOz1	$	16.77		$	15.83		$	15.57		$	14.52		$	15.09

Financial Results

Second quarter 2023 revenue totaled $177 million compared to $187 million in the prior period and $204 million in the second quarter of 2022. The Company produced 68,406 and 2.4 million ounces of gold and silver, respectively, during the quarter. Metal sales for the quarter totaled 67,090 ounces of gold and 2.3 million ounces of silver. Average realized gold and silver prices for the quarter were $1,809 and $23.91 per ounce, respectively, compared to $1,794 and $23.25 per ounce in the prior period and $1,729 and $22.61 per ounce in the first quarter of 2022.

Gold and silver sales represented 68% and 32% of quarterly revenue, respectively, compared to 68% and 32% in the prior period. The Company’s U.S. operations accounted for approximately 59% of first quarter revenue compared to 56% in the first quarter of 2023.

Costs applicable to sales³ decreased 9% quarter-over-quarter to $140 million, largely due to lower production in the period. General and administrative expenses decreased 19% quarter-over-quarter to $10 million.

Coeur invested approximately $5 million ($3 million expensed and $2 million capitalized) in exploration during the quarter, compared to roughly $7 million ($5 million expensed and $2 million capitalized) in the prior period. See the “Operations” and “Exploration” sections for additional detail on the Company’s exploration activities.

The Company recorded income tax expense of approximately $9.9 million during the second quarter. Cash income and mining taxes paid during the period totaled approximately $2.7 million. As of December 31, 2022, Companywide U.S. net operating loss carryforwards totaled approximately $535 million.

Quarterly operating cash flow totaled $39 million compared to $(35) million in the prior period, mainly driven by strong operating performances at Palmarejo, Rochester and Wharf as well as favorable changes in working capital partially offset by the second quarter challenges at Kensington related to stope sequencing.

During the second quarter, Coeur satisfied the remaining $15 million obligation under its prepayment agreement at Kensington and exercised an option to receive an additional $25 million prepayment. The Company also exercised options under new agreements for a $10 million prepayment for deliveries of gold concentrate from Wharf as well as a $10 million prepayment for deliveries of gold and silver doré from Rochester, resulting in a net cash inflow from prepayments of approximately $30 million.

Capital expenditures increased 16% quarter-over-quarter to $86 million as a result of timing of payments on Rochester expansion capital. Expenditures related to the expansion project at Rochester totaled $55 million during the second quarter compared to $47 million in the first quarter. Sustaining and development capital expenditures accounted for approximately 34% and 66%, respectively, of Coeur’s total capital investment during the quarter.

Rochester Expansion Project Update

Coeur continued making solid progress on the construction of the Rochester expansion during the quarter as the project nears completion. At the end of July, the project was approximately 97% complete and the Company had incurred $660 million of the total project costs.

Coeur expects to achieve mechanical completion of the crusher corridor in the third quarter, with ramp-up anticipated throughout the second half of 2023 and into early 2024.

The Company also updated its estimate for the expected ultimate cost to complete the expansion, which reflects additional contractor hours required to offset the loss of approximately thirty days due to extreme weather and lower than planned productivity rates driven by a lack of qualified skilled labor. Together with ongoing inflationary impacts and required construction re-work to address issues from previously completed engineering designs, the Company expects the total cost for the project to be approximately 6 – 9%, or $40 – $60 million, above the high end of Coeur’s previous guidance range of $650 – $670 million.

Balance Sheet and Liquidity Update

Coeur ended the quarter with total liquidity of approximately $346 million, including $57 million of cash, $280 million of available capacity under its $390 million RCF² subject to certain financial covenants, and $9 million of marketable securities.

To further enhance the Company’s balance sheet flexibility and liquidity during the final stages of the Rochester expansion, Coeur and its RCF banks agreed to amend the terms of the RCF to raise the maximum net leverage ratio from 4.25x to 5.50x for the third quarter of 2023 followed by decreasing the ratio to 4.5x for the fourth quarter of 2023 and the first quarter of 2024 before reverting to a ratio of 3.50x thereafter, among other items.

Hedging Update

During the second quarter, the Company added to its hedge position by executing additional hedges on 1.3 million ounces of its expected 2023 silver production. The Company’s hedging strategy continues to focus on mitigating risk during this period of capital intensity. An overview of the hedges in place is outlined below.

		3Q 2023	4Q 2023	Total 2023
Gold Ounces Hedged		55,749	55,749	111,498
Avg. Forward Price ($/oz)		$1,977	$1,977	$1,977
Silver Ounces Hedged		1,245,000	1,245,000	2,490,000
Avg. Forward Price ($/oz)		$25.34	$25.47	25.41

Rochester LCM Adjustment

Coeur reports the carrying value of metal and leach pad inventory at the lower of cost or net realizable value, with cost being determined using a weighted average cost method. Decreases in the market price of gold and silver can affect the value of metal inventory, stockpiles and leach pads, and it may be necessary to record a write-down to the net realizable value, as well as impact carrying value of long-lived assets. At the end of the second quarter, the cost of ore on leach pads at Rochester exceeded its net realizable value which resulted in a lower of cost or market (“LCM”) adjustment of $2 million (approximately $1.6 million in costs applicable to sales² and $0.5 million of amortization). The non-cash write-down in the three months ended June 30, 2023 includes a $3.9 million recovery of losses recognized in the prior quarter.

Operations

Second quarter 2023 highlights for each of the Company’s operations are provided below.

Palmarejo, Mexico

(Dollars in millions, except per ounce amounts)	2Q 2023			1Q 2023			4Q 2022			3Q 2022			2Q 2022
Tons milled		472,622			533,606			554,247			538,750			539,600
Average gold grade (oz/t)		0.056			0.052			0.051			0.049			0.054
Average silver grade (oz/t)		4.10			4.02			3.16			3.53			3.95
Average recovery rate – Au		87.4	%		90.1	%		92.4	%		93.3	%		92.4	%
Average recovery rate – Ag		83.5	%		81.7	%		85.0	%		84.9	%		84.2	%
Gold ounces produced		23,216			25,118			25,935			24,807			27,109
Silver ounces produced (000’s)		1,617			1,752			1,489			1,612			1,795
Gold ounces sold		22,207			25,970			25,252			24,378			29,285
Silver ounces sold (000’s)		1,561			1,795			1,490			1,554			1,855
Average realized price per gold ounce	$	1,589		$	1,564		$	1,509		$	1,447		$	1,507
Average realized price per silver ounce	$	23.98		$	23.23		$	21.10		$	19.01		$	22.56
Metal sales	$	72.7		$	82.3		$	69.5		$	64.8		$	86.0
Costs applicable to sales3	$	46.6		$	49.3		$	47.1		$	43.2		$	49.1
Adjusted CASper AuOz1	$	1,023		$	926		$	1,027		$	948		$	855
Adjusted CASper AgOz1	$	15.16		$	13.94		$	14.23		$	12.67		$	12.97
Exploration expense	$	1.6		$	1.3		$	1.5		$	1.8		$	1.7
Cash flow from operating activities	$	18.6		$	11.5		$	18.9		$	12.9		$	22.3
Sustaining capital expenditures (excludes capital lease payments)	$	10.7		$	8.6		$	8.1		$	10.8		$	10.1
Development capital expenditures	$	1.2		$	1.6		$	—		$	—		$	—
Total capital expenditures	$	11.9		$	10.2		$	8.1		$	10.8		$	10.1
Free cash flow1	$	6.7		$	1.3		$	10.8		$	2.1		$	12.2

Operational

• Gold and silver production totaled 23,216 and 1.6 million ounces, respectively, compared to 25,118 and 1.8 million ounces in the prior period and 27,109 and 1.8 million ounces in the second quarter of 2022
• Production benefited from increased average grades, offset by lower average gold recoveries and decreased mill throughput

Financial

• Adjusted CAS¹ for gold and silver on a co-product basis increased 10% and 9% quarter-over-quarter to $1,023 and $15.16 per ounce, respectively, driven by lower metal sales and a stronger Mexican Peso
• Capital expenditures increased 17% quarter-over-quarter to $12 million, reflecting increased underground mine development as well as continued work on the open pit tailings backfill project
• Free cash flow¹ totaled $7 million compared to $1 million in the prior period

Exploration

• Exploration investment increased to approximately $2 million (substantially all expensed), compared to roughly $1 million (substantially all expensed) in the prior period
• Exploration activities focused on mapping and sampling to the east of the current operation and outside of the area of interest relating to the Franco-Nevada gold stream as well as drilling on the northwest extension of the Hidalgo zone. The aim of the mapping and sampling programs is to build a pipeline of targets for drilling in the coming years
• One drill rig was active during the quarter, focused on expansion drilling on the northwest extension of the Hidalgo zone (located at the northwest end of the Independencia deposit). In this portion of the system, three mineralized vein arrays have been identified — Hidalgo, Libertad and San Juan. While some results are still pending, visual indicators suggest all holes drilled during the second quarter intersected mineralization
• Coeur expects four drill rigs to be active at Palmarejo in the third quarter focused on expansion drilling at the Hidalgo zone. Due to Hidalgo’s proximity to existing infrastructure, it remains a key focus area for potential future resource additions

Other

• Approximately 33% of Palmarejo’s gold sales were sold under its gold stream agreement at a price of $800 per ounce. The Company anticipates approximately 30% – 40% of Palmarejo’s gold sales for 2023 will be sold under the gold stream agreement

Guidance

• Full-year 2023 production is expected to be 100,000 – 112,500 ounces of gold and 6.5 – 7.5 million ounces of silver
• CAS¹ in 2023 are expected to be $900 – $1,050 per gold ounce and $14.25 – $15.25 per silver ounce
• Capital expenditures are expected to be $35 – $47 million, consisting primarily of underground development as well as development of the high compression thickener and other elements of the open pit backfill project, which is expected to be completed in the fourth quarter

Rochester, Nevada

(Dollars in millions, except per ounce amounts)	2Q 2023			1Q 2023			4Q 2022			3Q 2022			2Q 2022
Ore tons placed		2,690,840			2,456,586			2,754,118			3,551,353			4,236,459
Average silver grade (oz/t)		0.42			0.45			0.68			0.37			0.35
Average gold grade (oz/t)		0.003			0.003			0.003			0.004			0.003
Silver ounces produced (000’s)		683			761			973			745			689
Gold ounces produced		6,314			8,155			11,589			8,761			8,319
Silver ounces sold (000’s)		695			770			975			733			683
Gold ounces sold		6,493			8,349			11,646			8,725			8,071
Average realized price per silver ounce	$	23.70		$	23.19		$	21.10		$	19.10		$	22.42
Average realized price per gold ounce	$	1,946		$	1,922		$	1,893		$	1,852		$	1,883
Metal sales	$	29.1		$	33.9		$	42.6		$	30.2		$	30.5
Costs applicable to sales3	$	26.1		$	42.9		$	44.1		$	50.8		$	38.0
Adjusted CASper AgOz1	$	20.39		$	20.24		$	17.60		$	18.46		$	20.85
Adjusted CASper AuOz1	$	1,646		$	1,655		$	1,596		$	1,821		$	1,763
Exploration expense	$	0.3		$	0.4		$	0.6		$	0.6		$	1.5
Cash flow from operating activities	$	(3.8	)	$	(13.5	)	$	(5.5	)	$	(13.7	)	$	(9.1	)
Sustaining capital expenditures (excludes capital lease payments)	$	5.1		$	4.3		$	3.0		$	5.1		$	4.5
Development capital expenditures	$	56.4		$	47.7		$	89.3		$	68.9		$	42.5
Total capital expenditures	$	61.5		$	52.0		$	92.3		$	74.0		$	47.0
Free cash flow1	$	(65.3	)	$	(65.5	)	$	(97.8	)	$	(87.7	)	$	(56.1	)

Operational

• Silver and gold production totaled 682,656 and 6,314 ounces, respectively, compared to 761,346 and 8,155 ounces in the prior period and 689,169 and 8,319 ounces in the second quarter of 2022
• Lower production quarter-over-quarter is a result of 2.4 million tons being placed on the new Stage VI leach pad in preparation for the new Merrill-Crowe process plant startup in the third quarter
• Tons placed increased 10% quarter-over-quarter to roughly 2.7 million, roughly 90% of which were placed on the new Stage VI leach pad

Financial

• Second quarter adjusted CAS¹ figures in the table above and highlighted below exclude the impact of an LCM adjustment totaling approximately $1.6 million related to the net realizable value of metal and leach pad inventory due to higher operating costs exceeding the lower market value of ounces under leach at Rochester
• Adjusted CAS¹ for silver and gold on a co-product basis totaled $20.39 and $1,646 per ounce, respectively, due to continued higher costs as well as the effect of current metals prices
• Capital expenditures increased 18% quarter-over-quarter to $62 million, reflecting timing of spending related to the Rochester expansion project
• Free cash flow¹ totaled $(65) million compared to $(66) million in the prior period

Exploration

• Exploration investment decreased 14% quarter-over-quarter to approximately $1 million ($0.3 million expensed and $0.3 million capitalized)
• Exploration activities focused on geologic logging, interpretation and geological modeling, which will continue through next quarter with drilling planned for the second half of the year at the Rochester pit
• Additionally, work continued on regional target assessment and ranking. The program will continue for the remainder of the year and systematically thereafter as geological knowledge and understanding of the district increases

Guidance

• Full-year 2023 production is expected to be 3.5 – 4.5 million ounces of silver and 35,000 – 50,000 ounces of gold. Production in 2023 is expected to be second half weighted with the construction completion of the expansion occurring in the third quarter
• The Company expects second half 2023 adjusted CAS¹ to be similar to actual first half 2023 adjusted CAS¹ as Coeur completes and ramps up the Rochester expansion
• Capital expenditures are expected to be $290 – $310 million (previously $228 – $252 million), which reflects Coeur’s current estimate to complete the expansion project

Kensington, Alaska

(Dollars in millions, except per ounce amounts)	2Q 2023			1Q 2023			4Q 2022			3Q 2022			2Q 2022
Tons milled		152,907			153,337			183,410			175,246			175,722
Average gold grade (oz/t)		0.09			0.15			0.18			0.18			0.17
Average recovery rate		90.9	%		91.2	%		92.4	%		91.1	%		91.6	%
Gold ounces produced		13,193			20,296			30,335			28,214			27,866
Gold ounces sold		13,273			20,902			30,863			27,609			27,666
Average realized price per gold ounce, gross	$	1,991		$	1,983		$	1,942		$	1,808		$	1,842
Treatment and refining charges per gold ounce	$	142		$	63		$	38		$	33		$	34
Average realized price per gold ounce, net	$	1,849		$	1,920		$	1,904		$	1,775		$	1,808
Metal sales	$	24.6		$	40.2		$	58.8		$	49.1		$	50.3
Costs applicable to sales3	$	39.1		$	37.4		$	39.2		$	40.3		$	39.3
Adjusted CAS per AuOz1	$	2,927		$	1,775		$	1,265		$	1,455		$	1,399
Prepayment, working capital cash flow	$	9.9		$	(9.9	)	$	9.6		$	(9.6	)	$	(0.1	)
Exploration expense	$	2.3		$	1.0		$	2.2		$	2.8		$	1.2
Cash flow from operating activities	$	(3.7	)	$	(4.8	)	$	20.8		$	(0.2	)	$	10.7
Sustaining capital expenditures (excludes capital lease payments)	$	11.7		$	10.7		$	7.7		$	7.1		$	8.8
Development capital expenditures	$	—		$	—		$	—		$	—		$	—
Total capital expenditures	$	11.7		$	10.7		$	7.7		$	7.1		$	8.8
Free cash flow1	$	(15.4	)	$	(15.5	)	$	13.1		$	(7.3	)	$	1.9

Operational

• Gold production totaled 13,193 ounces compared to 20,296 ounces in the prior period and 27,866 ounces in the second quarter of 2022
• Lower production was driven by significant water inflows from Spring runoff and paste backfill challenges in upper Kensington, which led to stope extraction disruption as well as lower average gold grade as development ore was sent to the mill to make up for lower stope tonnage

Financial

• Adjusted CAS¹ totaled $2,927 per ounce compared to $1,775 per ounce in the prior period, reflecting decreased metal sales
• Capital expenditures increased 9% quarter-over-quarter to $12 million due to increased capital development to support the ongoing multi-year exploration program aimed at extending mine life
• Free cash flow¹ totaled $(15) million compared to $(16) million in the prior period

Exploration

• Exploration investment totaled approximately $5 million ($2 million expensed and $3 million capitalized), compared to $3 million ($1 million expensed and $2 million capitalized) in the prior period
• Up to four underground drill rigs were focused on expansion and infill drilling at Elmira, Kensington and Johnson
• In 2023, Coeur aims to build on the 2022 success from Upper Kensington (Zones 30, 30A and 30B) with further extensions of these zones. Assay results from second quarter dril

Contacts

For Additional Information
Coeur Mining, Inc.

200 S. Wacker Drive, Suite 2100

Chicago, IL 60606

Attention: Jeff Wilhoit, Director, Investor Relations

Phone: (312) 489-5800

www.coeur.com

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