Stronger quarter-over-quarter revenue and cost performance
Rochester expansion now complete; significant production increase now underway
CHICAGO–(BUSINESS WIRE)–Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported third quarter 2023 financial results, including revenue of $195 million and cash flow from operating activities of $(2) million. The Company reported GAAP net loss from continuing operations of $21 million, or $0.06 per share. On an adjusted basis1, Coeur reported EBITDA of $31 million, cash flow from operating activities before changes in working capital of $14 million and net loss from continuing operations of $19 million, or $0.05 per share.
|
Key Highlights
“Our overall gold production increased 15% quarter-over-quarter while costs applicable to sales per ounce of gold declined by 13%, which led to a 38% increase in adjusted EBITDA,” said Mitchell J. Krebs, President and Chief Executive Officer. “This production growth was driven by an 87% increase at our Kensington gold operation in Alaska and a 16% increase in gold production at our Palmarejo gold-silver mine in northern Mexico. Despite slightly lower gold production from our Wharf mine and the ongoing transition to the newly expanded Rochester infrastructure, the third quarter represented a marked improvement over the prior quarter and sets up the Company to deliver a strong fourth quarter and to achieve our full-year guidance.
“With the Rochester expansion complete, we are now seeing materially higher production levels, a trend that is expected to continue throughout the current quarter and into next year to help drive strong Company-wide production growth, lower costs, and a transition to positive free cash flow during 2024. Commissioning and ramp-up activities will continue over the remainder of the year and into the first half of 2024, which is expected to result in one of the world’s largest operations of its kind and become the country’s largest source of domestically produced and refined silver.”
Financial and Operating Highlights (Unaudited)
(Amounts in millions, except per share amounts, gold ounces produced & sold, and per-ounce metrics) |
| 3Q 2023 |
|
| 2Q 2023 |
|
| 1Q 2023 |
|
| 4Q 2022 |
|
| 3Q 2022 |
|
Gold Sales | $ | 139.5 |
| $ | 121.4 |
| $ | 127.1 |
| $ | 157.6 |
| $ | 139.2 |
|
Silver Sales | $ | 55.1 |
| $ | 55.9 |
| $ | 60.2 |
| $ | 52.5 |
| $ | 43.8 |
|
Consolidated Revenue | $ | 194.6 |
| $ | 177.2 |
| $ | 187.3 |
| $ | 210.1 |
| $ | 183.0 |
|
Costs Applicable to Sales3 | $ | 147.9 |
| $ | 139.6 |
| $ | 153.1 |
| $ | 159.3 |
| $ | 163.2 |
|
General and Administrative Expenses | $ | 9.5 |
| $ | 9.8 |
| $ | 12.1 |
| $ | 10.2 |
| $ | 9.7 |
|
Net Income (Loss) | $ | (21.1 | ) | $ | (32.4 | ) | $ | (24.6 | ) | $ | 49.0 |
| $ | (57.4 | ) |
Net Income (Loss) Per Share | $ | (0.06 | ) | $ | (0.10 | ) | $ | (0.08 | ) | $ | 0.17 |
| $ | (0.21 | ) |
Adjusted Net Income (Loss)1 | $ | (18.6 | ) | $ | (20.2 | ) | $ | (33.1 | ) | $ | (17.5 | ) | $ | (44.7 | ) |
Adjusted Net Income (Loss)1 Per Share | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.06 | ) | $ | (0.16 | ) |
Weighted Average Shares Outstanding |
| 356.7 |
|
| 333.1 |
|
| 301.0 |
|
| 284.5 |
|
| 278.1 |
|
EBITDA1 | $ | 15.3 |
| $ | 4.0 |
| $ | 16.2 |
| $ | 84.9 |
| $ | (20.5 | ) |
Adjusted EBITDA1 | $ | 30.6 |
| $ | 22.2 |
| $ | 25.1 |
| $ | 35.9 |
| $ | 18.3 |
|
Cash Flow from Operating Activities | $ | (2.4 | ) | $ | 39.4 |
| $ | (35.0 | ) | $ | 28.5 |
| $ | (19.1 | ) |
Capital Expenditures | $ | 112.3 |
| $ | 85.6 |
| $ | 74.0 |
| $ | 113.1 |
| $ | 96.6 |
|
Free Cash Flow1 | $ | (114.7 | ) | $ | (46.2 | ) | $ | (109.0 | ) | $ | (84.5 | ) | $ | (115.7 | ) |
Cash, Equivalents & Short-Term Investments | $ | 53.2 |
| $ | 56.8 |
| $ | 67.0 |
| $ | 61.5 |
| $ | 75.4 |
|
Total Debt4 | $ | 512.2 |
| $ | 469.4 |
| $ | 494.1 |
| $ | 515.9 |
| $ | 635.7 |
|
Average Realized Price Per Ounce – Gold | $ | 1,788 |
| $ | 1,809 |
| $ | 1,794 |
| $ | 1,787 |
| $ | 1,702 |
|
Average Realized Price Per Ounce – Silver | $ | 24.88 |
| $ | 23.91 |
| $ | 23.25 |
| $ | 21.14 |
| $ | 19.09 |
|
Gold Ounces Produced |
| 78,617 |
|
| 68,406 |
|
| 69,039 |
|
| 87,727 |
|
| 83,438 |
|
Silver Ounces Produced |
| 2.3 |
|
| 2.4 |
|
| 2.5 |
|
| 2.4 |
|
| 2.4 |
|
Gold Ounces Sold |
| 78,015 |
|
| 67,090 |
|
| 70,866 |
|
| 88,189 |
|
| 81,782 |
|
Silver Ounces Sold |
| 2.2 |
|
| 2.3 |
|
| 2.6 |
|
| 2.5 |
|
| 2.3 |
|
Adjusted CAS per AuOz1 | $ | 1,273 |
| $ | 1,464 |
| $ | 1,381 |
| $ | 1,270 |
| $ | 1,318 |
|
Adjusted CAS per AgOz1 | $ | 17.85 |
| $ | 16.77 |
| $ | 15.83 |
| $ | 15.57 |
| $ | 14.52 |
|
Financial Results
Third quarter 2023 revenue totaled $195 million compared to $177 million in the prior period and $183 million in the third quarter of 2022. The Company produced 78,617 and 2.3 million ounces of gold and silver, respectively, during the quarter. Metal sales for the quarter totaled 78,015 ounces of gold and 2.2 million ounces of silver. Average realized gold and silver prices for the quarter were $1,788 and $24.88 per ounce, respectively, compared to $1,809 and $23.91 per ounce in the prior period and $1,702 and $19.09 per ounce in the third quarter of 2022.
Gold and silver sales represented 72% and 28% of quarterly revenue, respectively, compared to 68% and 32% in the prior period. The Company’s U.S. operations accounted for approximately 60% of third quarter revenue compared to 59% in the second quarter of 2023.
Costs applicable to sales3 increased 6% quarter-over-quarter to $148 million, largely due to an $8 million LCM adjustment at Rochester. General and administrative expenses continued to trend lower at less than $10 million in the quarter.
Coeur invested approximately $16 million ($12 million expensed and $3 million capitalized) in exploration during the quarter, compared to roughly $5 million ($3 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 $6.1 million during the third quarter. Cash income and mining taxes paid during the period totaled approximately $6.6 million. As of December 31, 2022, Companywide U.S. net operating loss carryforwards totaled approximately $535 million.
Quarterly operating cash flow totaled $(2) million compared to $39 million in the prior period, mainly driven by unfavorable changes in working capital, timing of prepayments and the semi-annual interest payments on the Company’s 2029 5.125% Senior Notes.
Capital expenditures increased 31% quarter-over-quarter to $112 million, which was due to the timing of payments relating to the Rochester expansion. Rochester expansion-related expenditures totaled $76 million during the third quarter compared to $55 million in the second quarter. Sustaining and development capital expenditures accounted for approximately $34 million and $78 million, or 31% and 69%, respectively, of Coeur’s total capital investment during the quarter.
Rochester Expansion Project Update
Construction of the new three-stage crushing circuit is now complete and first production from the new leach pad and process plant began in mid-September. Commissioning of the process plant is complete and commissioning of the new crusher corridor is underway, with ramp-up expected throughout the remainder of 2023 and into the first half of 2024.
Once operating at full capacity, throughput levels are expected to average 32 million tons per year, which is approximately 2.5 times higher than historical levels, making Rochester one of the largest open pit heap leach operations in the world. The total estimated capital for the project remains at $710 – $730 million.
Balance Sheet and Liquidity Update
Coeur ended the quarter with total liquidity of approximately $280 million, including $53 million of cash, $220 million of available capacity under its $390 million revolving credit facility (“RCF”)2, and $7 million of marketable securities.
During the third quarter, Coeur satisfied $11 million of the $25 million associated with the prepayment agreement at Kensington as well as the full $10 million prepayment agreements at both Rochester and Wharf, respectively. Additionally, the Company exercised options under amended agreements for a $13 million prepayment for deliveries of gold concentrate from Wharf as well as an $18 million prepayment for deliveries of gold and silver doré from Rochester.
Hedging Update
The Company did not execute any additional hedges during the third quarter. Coeur’s hedging strategy continues to focus on mitigating price risk during this period of capital intensity. An overview of the hedges in place is outlined below.
| 4Q 2023 |
Gold Ounces Hedged | 55,749 |
Avg. Forward Price ($/oz) | $1,977 |
Silver Ounces Hedged | 1,245,000 |
Avg. Forward Price ($/oz) | $25.47 |
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 third 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 $9 million (approximately $8 million in costs applicable to sales2 and $1 million of amortization).
Operations
Third quarter 2023 highlights for each of the Company’s operations are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce amounts) |
| 3Q 2023 |
|
| 2Q 2023 |
|
| 1Q 2023 |
|
| 4Q 2022 |
|
| 3Q 2022 |
|
Tons milled |
| 501,722 |
|
| 472,622 |
|
| 533,606 |
|
| 554,247 |
|
| 538,750 |
|
Average gold grade (oz/t) |
| 0.055 |
|
| 0.056 |
|
| 0.052 |
|
| 0.051 |
|
| 0.049 |
|
Average silver grade (oz/t) |
| 3.67 |
|
| 4.10 |
|
| 4.02 |
|
| 3.16 |
|
| 3.53 |
|
Average recovery rate – Au |
| 97.6 | % |
| 87.4 | % |
| 90.1 | % |
| 92.4 | % |
| 93.3 | % |
Average recovery rate – Ag |
| 86.9 | % |
| 83.5 | % |
| 81.7 | % |
| 85.0 | % |
| 84.9 | % |
Gold ounces produced |
| 26,870 |
|
| 23,216 |
|
| 25,118 |
|
| 25,935 |
|
| 24,807 |
|
Silver ounces produced (000’s) |
| 1,601 |
|
| 1,617 |
|
| 1,752 |
|
| 1,489 |
|
| 1,612 |
|
Gold ounces sold |
| 26,018 |
|
| 22,207 |
|
| 25,970 |
|
| 25,252 |
|
| 24,378 |
|
Silver ounces sold (000’s) |
| 1,534 |
|
| 1,561 |
|
| 1,795 |
|
| 1,490 |
|
| 1,554 |
|
Average realized price per gold ounce | $ | 1,499 |
| $ | 1,589 |
| $ | 1,564 |
| $ | 1,509 |
| $ | 1,447 |
|
Average realized price per silver ounce | $ | 24.96 |
| $ | 23.98 |
| $ | 23.23 |
| $ | 21.10 |
| $ | 19.01 |
|
Metal sales | $ | 77.3 |
| $ | 72.7 |
| $ | 82.3 |
| $ | 69.5 |
| $ | 64.8 |
|
Costs applicable to sales3 | $ | 48.1 |
| $ | 46.6 |
| $ | 49.3 |
| $ | 47.1 |
| $ | 43.2 |
|
Adjusted CASper AuOz1 | $ | 917 |
| $ | 1,023 |
| $ | 926 |
| $ | 1,027 |
| $ | 948 |
|
Adjusted CASper AgOz1 | $ | 15.56 |
| $ | 15.16 |
| $ | 13.94 |
| $ | 14.23 |
| $ | 12.67 |
|
Exploration expense | $ | 2.2 |
| $ | 1.6 |
| $ | 1.3 |
| $ | 1.5 |
| $ | 1.8 |
|
Cash flow from operating activities | $ | 22.6 |
| $ | 18.6 |
| $ | 11.5 |
| $ | 18.9 |
| $ | 12.9 |
|
Sustaining capital expenditures (excludes capital lease payments) | $ | 8.4 |
| $ | 10.7 |
| $ | 8.6 |
| $ | 8.1 |
| $ | 10.8 |
|
Development capital expenditures | $ | 2.4 |
| $ | 1.2 |
| $ | 1.6 |
| $ | — |
| $ | — |
|
Total capital expenditures | $ | 10.8 |
| $ | 11.9 |
| $ | 10.2 |
| $ | 8.1 |
| $ | 10.8 |
|
Free cash flow1 | $ | 11.8 |
| $ | 6.7 |
| $ | 1.3 |
| $ | 10.8 |
| $ | 2.1 |
|
Operational
Financial
Exploration
Other
Guidance
Rochester, Nevada
(Dollars in millions, except per ounce amounts) |
| 3Q 2023 |
|
| 2Q 2023 |
|
| 1Q 2023 |
|
| 4Q 2022 |
|
| 3Q 2022 |
|
Ore tons placed |
| 3,487,173 |
|
| 2,690,840 |
|
| 2,456,586 |
|
| 2,754,118 |
|
| 3,551,353 |
|
Average silver grade (oz/t) |
| 0.50 |
|
| 0.42 |
|
| 0.45 |
|
| 0.68 |
|
| 0.37 |
|
Average gold grade (oz/t) |
| 0.003 |
|
| 0.003 |
|
| 0.003 |
|
| 0.003 |
|
| 0.004 |
|
Silver ounces produced (000’s) |
| 608 |
|
| 683 |
|
| 761 |
|
| 973 |
|
| 745 |
|
Gold ounces produced |
| 4,459 |
|
| 6,314 |
|
| 8,155 |
|
| 11,589 |
|
| 8,761 |
|
Silver ounces sold (000’s) |
| 606 |
|
| 695 |
|
| 770 |
|
| 975 |
|
| 733 |
|
Gold ounces sold |
| 4,432 |
|
| 6,493 |
|
| 8,349 |
|
| 11,646 |
|
| 8,725 |
|
Average realized price per silver ounce | $ | 24.63 |
| $ | 23.70 |
| $ | 23.19 |
| $ | 21.10 |
| $ | 19.10 |
|
Average realized price per gold ounce | $ | 1,967 |
| $ | 1,946 |
| $ | 1,922 |
| $ | 1,893 |
| $ | 1,852 |
|
Metal sales | $ | 23.6 |
| $ | 29.1 |
| $ | 33.9 |
| $ | 42.6 |
| $ | 30.2 |
|
Costs applicable to sales3 | $ | 30.5 |
| $ | 26.1 |
| $ | 42.9 |
| $ | 44.1 |
| $ | 50.8 |
|
Adjusted CASper AgOz1 | $ | 23.64 |
| $ | 20.39 |
| $ | 20.24 |
| $ | 17.60 |
| $ | 18.46 |
|
Adjusted CASper AuOz1 | $ | 1,899 |
| $ | 1,646 |
| $ | 1,655 |
| $ | 1,596 |
| $ | 1,821 |
|
Prepayment, working capital cash flow | $ | 7.5 |
| $ | 10.0 |
| $ | — |
| $ | — |
| $ | — |
|
Exploration expense | $ | 0.3 |
| $ | 0.3 |
| $ | 0.4 |
| $ | 0.6 |
| $ | 0.6 |
|
Cash flow from operating activities | $ | (17.3 | ) | $ | (3.8 | ) | $ | (13.5 | ) | $ | (5.5 | ) | $ | (13.7 | ) |
Sustaining capital expenditures (excludes capital lease payments) | $ | 7.7 |
| $ | 5.1 |
| $ | 4.3 |
| $ | 3.0 |
| $ | 5.1 |
|
Development capital expenditures | $ | 76.7 |
| $ | 56.4 |
| $ | 47.7 |
| $ | 89.3 |
| $ | 68.9 |
|
Total capital expenditures | $ | 84.4 |
| $ | 61.5 |
| $ | 52.0 |
| $ | 92.3 |
| $ | 74.0 |
|
Free cash flow1 | $ | (101.7 | ) | $ | (65.3 | ) | $ | (65.5 | ) | $ | (97.8 | ) | $ | (87.7 | ) |
Operational
Financial
Exploration
Kensington, Alaska
(Dollars in millions, except per ounce amounts) |
| 3Q 2023 |
|
| 2Q 2023 |
|
| 1Q 2023 |
|
| 4Q 2022 |
|
| 3Q 2022 |
|
Tons milled |
| 167,950 |
|
| 152,907 |
|
| 153,337 |
|
| 183,410 |
|
| 175,246 |
|
Average gold grade (oz/t) |
| 0.16 |
|
| 0.09 |
|
| 0.15 |
|
| 0.18 |
|
| 0.18 |
|
Average recovery rate |
| 92.6 | % |
| 90.9 | % |
| 91.2 | % |
| 92.4 | % |
| 91.1 | % |
Gold ounces produced |
| 24,614 |
|
| 13,193 |
|
| 20,296 |
|
| 30,335 |
|
| 28,214 |
|
Gold ounces sold |
| 24,516 |
|
| 13,273 |
|
| 20,902 |
|
| 30,863 |
|
| 27,609 |
|
Average realized price per gold ounce, gross | $ | 1,956 |
| $ | 1,991 |
| $ | 1,983 |
| $ | 1,942 |
| $ | 1,808 |
|
Treatment and refining charges per gold ounce | $ | 60 |
| $ | 142 |
| $ | 63 |
| $ | 38 |
| $ | 33 |
|
Average realized price per gold ounce, net | $ | 1,896 |
| $ | 1,849 |
| $ | 1,920 |
| $ | 1,904 |
| $ | 1,775 |
|
Metal sales | $ | 46.5 |
| $ | 24.6 |
| $ | 40.2 |
| $ | 58.8 |
| $ | 49.1 |
|
Costs applicable to sales3 | $ | 38.3 |
| $ | 39.1 |
| $ | 37.4 |
| $ | 39.2 |
| $ | 40.3 |
|
Adjusted CAS per AuOz1 | $ | 1,543 |
| $ | 2,927 |
| $ | 1,775 |
| $ | 1,265 |
| $ | 1,455 |
|
Prepayment, working capital cash flow | $ | (10.7 | ) | $ | 9.9 |
| $ | (9.9 | ) | $ | 9.6 |
| $ | (9.6 | ) |
Exploration expense | $ | 2.9 |
| $ | 2.3 |
| $ | 1.0 |
| $ | 2.2 |
| $ | 2.8 |
|
Cash flow from operating activities | $ | (4.4 | ) | $ | (3.7 | ) | $ | (4.8 | ) | $ | 20.8 |
| $ | (0.2 | ) |
Sustaining capital expenditures (excludes capital lease payments) | $ | 15.8 |
| $ | 11.7 |
| $ | 10.7 |
| $ | 7.7 |
| $ | 7.1 |
|
Development capital expenditures | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
|
Total capital expenditures | $ | 15.8 |
| $ | 11.7 |
| $ | 10.7 |
| $ | 7.7 |
| $ | 7.1 |
|
Free cash flow1 | $ | (20.2 | ) | $ | (15.4 | ) | $ | (15.5 | ) | $ | 13.1 |
| $ | (7.3 | ) |
Operational
Financial
Exploration
Guidance
Wharf, South Dakota
(Dollars in millions, except per ounce amounts) |
| 3Q 2023 |
| 2Q 2023 |
| 1Q 2023 |
| 4Q 2022 |
| 3Q 2022 |
Ore tons placed |
| 1,254,267 |
| 1,041,846 |
| 1,156,794 |
| 975,994 |
| 1,353,071 |
Average gold grade (oz/t) |
| 0.023 |
| 0.022 |
| 0.032 |
| 0.024 |
| 0.019 |
Gold ounces produced |
| 22,674 |
| 25,683 |
| 15,470 |
| 19,868 |
| 21,656 |
Silver ounces produced (000’s) |
| 69 |
| 88 |
| 21 |
| 9 |
| 13 |
Gold ounces sold |
| 23,049 |
| 25,117 |
| 15,645 |
| 20,428 |
| 21,070 |
Silver ounces sold (000’s) |
| 74 |
| 82 |
| 24 |
| 17 |
| 8 |
Average realized price per gold ounce | $ | 1,966 | $ | 1,946 | $ | 1,938 | $ | 1,895 | $ | 1,838 |
Metal sales | $ | 47.1 | $ | 50.8 | $ | 30.9 | $ | 39.0 | $ | 38.9 |
Costs applicable to sales3 | $ | 31.0 | $ | 27.8 | $ | 23.5 | $ | 28.9 | $ | 28.9 |
Adjusted CAS per AuOz1 | $ | 1,267 | $ | 1,035 | $ | 1,466 | $ | 1,393 | $ | 1,357 |
Prepayment, working capital cash flow | $ | 2.5 | $ | 10.0 | $ | — | $ | — | $ | — |
Exploration expense | $ | — | $ | — | $ | — | $ | — | $ | — |
Cash flow from operating activities | $ | 19.5 | $ | 33.8 | $ | 1.9 | $ | 10.3 | $ | 6.9 |
Sustaining capital expenditures (excludes capital lease payments) | $ | 0.6 | $ | 0.1 | $ | — | $ | 0.7 | $ | 0.3 |
Development capital expenditures | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.1 | $ | 0.2 |
Total capital expenditures | $ | 0.7 | $ | 0.2 | $ | 0.1 | $ | 0.8 | $ | 0.5 |
Free cash flow1 | $ | 18.8 | $ | 33.6 | $ | 1.8 | $ | 9.5 | $ | 6.4 |
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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