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| 8-K - 8-K - Coeur Mining, Inc. | q12013earningsrelease8-k.htm |
NEWS RELEASE
Coeur Reports First Quarter 2013 Results
Palmarejo rebounds
Timing of metal sales versus production impacts financial results
Coeur d'Alene, Idaho - May 9, 2013 - Coeur d'Alene Mines Corporation (the “Company” or “Coeur”) (NYSE: CDE, TSX: CDM) reported metal sales of $171.8 million, operating cash flow1 of $58.7 million, and capital expenditures of $12.8 million during the first quarter 2013.
The Company produced 3.8 million ounces of silver and 56,913 ounces of gold during the first quarter 2013. Silver and gold production at Palmarejo increased 6% and 15%, respectively, compared to the prior quarter while costs declined significantly from $7.55 per silver ounce1 to $2.20 per silver ounce1. Companywide cash operating costs were $8.73 per silver ounce1 and were $1,055 per gold ounce at the Company's Kensington gold mine during the first quarter.
The Company reaffirmed its 2013 full-year production guidance of 18.0-19.5 million ounces of silver and 250,000-265,000 ounces of gold. Coeur's full-year cash operating cost1 guidance is being revised to $9.50 - $10.50 per silver ounce (compared to previous guidance of $8.00 - $9.00 per ounce) to reflect an assumed $1,500 per ounce gold price during the remainder of the year for by-product credits (compared to $1,650 per ounce used in prior guidance). Kensington's cash operating costs per gold ounce1 guidance remains unchanged at $900 - $950 for 2013.
During the first quarter, the Company successfully completed a $300 million senior unsecured notes financing, redeemed $43.3 million of the outstanding $48.7 million of 3.25% convertible debentures and closed the approximately $280 million acquisition of Orko Silver Corp., which adds the La Preciosa silver project in Mexico to the Company's growth profile. The Company announced the relocation of its corporate headquarters to Chicago and that, subject to shareholder approval, the Company will reincorporate to Delaware and change its name to Coeur Mining, Inc. promptly following the Annual Meeting of Shareholders on May 14, 2013. In addition, Coeur repurchased 655,474 shares of its own stock for $12.6 million during the first quarter 2013. The Company has now completed $32.5 million of its $100 million share repurchase program authorized by the Board of Directors in June of 2012.
First Quarter 2013 Highlights
• | Silver production totaled 3.8 million ounces, a 22% decrease from the first quarter 2012 and level with fourth quarter 2012. |
• | Gold production totaled 56,913 ounces, up 30% from the first quarter 2012 and down 6% from fourth quarter 2012. |
• | Metal sold of 3.1 million silver ounces and 51,926 gold ounces resulted in lower metal sales during the quarter as a result of quarter-end timing. |
• | Average realized prices were $30.30 per silver ounce and $1,630 per gold ounce, down 7% for silver and 4% for gold from the first quarter 2012, and 7% lower for silver and 5% for gold compared with the fourth quarter 2012. |
• | Cash operating costs for silver averaged $8.73 per silver ounce1 compared with $8.97 per silver ounce1 in the fourth quarter 2012. Kensington's cash operating costs averaged $1,055 per gold ounce1 compared with $1,065 per gold ounce1 in the fourth quarter 2012. |
• | Adjusted earnings1 were $6.8 million, or $0.08 per share, compared with $41.5 million, or $0.46 per share, in the first quarter 2012. Net income for the first quarter 2013 was $12.3 million, or $0.14 per share, compared with net income of $4.0 million, or $0.04 per share, in the first quarter 2012. |
1. | EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations. |
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• | Cash, cash equivalents and short-term investments were $332.8 million at March 31, 2013, compared with $153.2 million a year ago. On April 16, 2013, $99.1 million was used as part of the consideration to acquire Orko Silver. |
• | Subsequent to the issuance of 11.6 million common shares to Orko Silver shareholders on April 16, 2013, Coeur has 101.5 million in total shares outstanding at May 8, 2013. |
Mitchell J. Krebs, Coeur's President and Chief Executive Officer, said, “Through the first four months of 2013, Coeur has been actively pursuing its strategic objectives of (i) creating a foundation for improved operational consistency throughout the remainder of the year and beyond; (ii) reducing costs and improving the efficiency at our existing mines; (iii) reinvesting in our existing assets to increase production and cash flow; (iv) repurchasing shares, which we feel represent compelling long-term value, especially at current levels; (v) pursuing opportunities to acquire and sell assets in order to create long-term value for our shareholders; and (vi) advancing our capital projects that are critical to the Company's continued growth and sustainability.
“We are pleased that silver and gold production at Palmarejo rebounded at materially lower costs per ounce1 than the last quarter of 2012. Although production levels at our Palmarejo operation had a slow start to the year due to lower than planned grades, both March and April were strong months and we remain confident in our 2013 guidance for this important asset. Rochester also started slow due to extreme winter weather in Nevada and we are pursuing alternatives to catch up production that was not realized during January and February. We remain enthusiastic about the expansion opportunities at Rochester, which we believe can make this long-running operation our largest cash flow generator in the next five years. Our San Bartolomé silver mine in Bolivia continues to exceed plan levels despite mining lower grade material. The Kensington gold mine in Alaska is now demonstrating its ability to operate more consistently as planned. We expect production from Kensington to increase during the second half of the year due to higher grades.
“Since completion of the Orko Silver transaction, we have been actively building a project development team and commissioned a preliminary economic assessment (PEA) of the La Preciosa project by M3 Engineering, the results of which we expect to have by June 30th. We believe La Preciosa will become another long-life, cornerstone asset for the Company and will generate a return on investment in excess of the Company's cost of capital.”
Table 1: Financial Highlights (Unaudited)
(All amounts in millions, except per share amounts, average realized prices and gold ounces sold) | 1Q 2013 | 1Q 2012 | Quarter Variance | |||||||
Sales of Metal | $ | 171.8 | $ | 204.6 | (16 | %) | ||||
Production Costs | $ | 88.8 | $ | 92.6 | (4 | %) | ||||
EBITDA (1) | $ | 61.3 | $ | 96.8 | (37 | %) | ||||
Adjusted Earnings (1) | $ | 6.8 | $ | 41.5 | (84 | %) | ||||
Adjusted Earnings Per Share(1) | $ | 0.08 | $ | 0.46 | (83 | %) | ||||
Net Income | $ | 12.3 | $ | 4.0 | 230 | % | ||||
Earnings Per Share | $ | 0.14 | $ | 0.04 | 250 | % | ||||
Operating Cash Flow (1) | $ | 58.7 | $ | 93.8 | (37 | %) | ||||
Cash Flow From Operating Activities | $ | 12.9 | $ | 17.0 | (24 | %) | ||||
Capital Expenditures | $ | 12.8 | $ | 31.6 | (59 | %) | ||||
Cash, Cash Equivalents & Short-Term Investments | $ | 332.8 | $ | 153.2 | 117 | % | ||||
Total Debt(1) (net of debt discount) | $ | 305.3 | $ | 122.0 | 150 | % | ||||
Weighted Average Shares Issued & Outstanding | 89.9 | 89.6 | — | % | ||||||
Average Realized Price Per Ounce - Silver | $ | 30.30 | $ | 32.61 | (7 | %) | ||||
Average Realized Price Per Ounce - Gold | $ | 1,630 | $ | 1,702 | (4 | %) | ||||
Silver Ounces Sold | 3.1 | 4.3 | (28 | %) | ||||||
Gold Ounces Sold | 51,926 | 38,884 | 34 | % | ||||||
1. | EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations. |
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First quarter net metal sales were $171.8 million compared with $204.6 million in the first quarter of 2012 due to lower metal prices and fewer silver ounces sold, which was partially offset by more gold ounces sold.
Silver contributed 53% of the Company's total metal sales in the first quarter 2013 compared with 68% in the first quarter 2012 due to increased gold production at the Company's Kensington and Rochester mines.
Consolidated production costs were $88.8 million in the first quarter 2013, which was down 4% compared to last year's first quarter and 17% lower than the fourth quarter 2012. On a per ton milled basis, production costs were 16% lower compared with the first quarter 2012. Production costs at each of the Company's operations are on plan. Unit costs are expected to decline over the remainder of 2013 with the expected ramp up in production. Cash operating costs per silver ounce1 were higher compared with the first quarter 2012 due to lower production. Compared to the fourth quarter, costs per silver ounce1 declined 3%.
Prior to changes in working capital, Coeur generated $58.7 million in operating cash flow1 in the first quarter 2013 compared with $93.8 million in the first quarter 2012. Including changes in working capital, net cash from operating activities was $12.9 million compared with $17.0 million in the first quarter 2012. Inventories increased $20.5 million during the first quarter due to timing of metal sales, which were realized in April 2013. In addition, accounts payable and accrued liabilities declined $27.0 million during the quarter due mostly to an annual tax payment to Bolivia.
On a U.S. GAAP basis, the Company realized net income of $12.3 million, or $0.14 per share, in the first quarter 2013 compared with net income of $4.0 million, or $0.04 per share, in the first quarter 2012. Net income for the first quarter 2013 included a non-cash fair market value adjustment of positive $17.8 million. The fair market value adjustment in the first quarter 2012 was negative $23.1 million. Fair value adjustments are driven primarily by lower or higher gold prices, which decrease or increase, respectively, the estimated future liabilities related to a gold royalty obligation at Palmarejo.
Coeur reports a non-U.S. GAAP metric of adjusted earnings1 as a measure of operating income, which excludes non-cash fair value adjustments, other non-cash adjustments, deferred taxes and discontinued operations. Adjusted earnings1 were $6.8 million, or $0.08 per share, in the first quarter 2013, compared with $41.5 million, or $0.46 per share, in the first quarter 2012. Adjusted earnings were lower due to a $32.8 million decline in metal sales and a $6.4 million increase in general and administrative, pre-development, care and maintenance, and other expenses.
Capital expenditures were $12.8 million in the first quarter 2013, a 59% decrease from the first quarter 2012. Capital expenditures were primarily related to Palmarejo's capitalized exploration drilling, underground development and development of the Guadalupe satellite operation located near the Palmarejo mine, leach pad and crusher expansion at Rochester, and exploration drilling and underground development at Kensington.
Cash, cash equivalents and short-term investments were $332.8 million at March 31, 2013. On January 29, 2013, the Company realized net proceeds of $290.8 million from the sale of $300.0 million in aggregate principal amount of 7.875% Senior Notes due in 2021. On April 16, 2013, $99.1 million (CAD $100.0 million) was used in connection with the acquisition of Orko Silver Corp. The Company's $100 million revolving credit facility remains undrawn.
Coeur and XCM Royalty Corp. ("XDM") have terminated the previously-announced letter of intent whereby Coeur announced its intent to sell its interest in the silver production and reserves from the Endeavor mine in Australia and the royalty from the Cerro Bayo gold and silver mine in Southern Chile. Mr. Krebs said, "The proposed transaction with XDM provided Coeur with an opportunity to monetize certain non-core assets. Unfortunately, a severe dislocation in metals markets has disrupted the transaction. Both parties remain committed to continuing discussions to possibly reach a revised agreement."
1. | EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations. |
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Table 2: Operational Highlights: Production
(silver ounces in thousands) | 1Q 2013 | 1Q 2012 | Quarter Variance | |||||||||
Silver | Gold | Silver | Gold | Silver | Gold | |||||||
Palmarejo | 1,646 | 22,965 | 2,483 | 31,081 | (34 | %) | (26 | %) | ||||
San Bartolomé | 1,391 | — | 1,591 | — | (13 | %) | n.a. | |||||
Rochester | 648 | 8,742 | 441 | 5,292 | 47 | % | 65 | % | ||||
Martha(1) | — | — | 123 | 84 | n.a. | n.a. | ||||||
Kensington | — | 25,206 | — | 7,444 | n.a. | 239 | % | |||||
Endeavor | 150 | — | 248 | — | (40 | %) | n.a. | |||||
Total | 3,835 | 56,913 | 4,886 | 43,901 | (22 | %) | 30 | % | ||||
1. | The Martha mine in Argentina ceased production at the end of the third quarter 2012. |
Table 3: Operational Highlights: Cash Operating Costs Per Ounce1
1Q 2013 | 1Q 2012 | Quarter Variance | |||||||||
Palmarejo | $ | 2.20 | $ | (2.27 | ) | 197 | % | ||||
San Bartolomé | 13.27 | 10.21 | 30 | % | |||||||
Rochester | 13.54 | 23.35 | (42 | %) | |||||||
Martha(1) | — | 46.48 | n.a. | ||||||||
Endeavor | 17.30 | 16.64 | 4 | % | |||||||
Total | $ | 8.73 | $ | 6.29 | 39 | % | |||||
Kensington | $ | 1,055 | $ | 2,709 | (61 | %) | |||||
1. | The Martha mine in Argentina ceased production at the end of the third quarter 2012. |
Palmarejo, Mexico - Rebounding with Expected Improved Quarters to Come
• | Palmarejo produced 1.65 million ounces of silver and 22,965 ounces of gold at cash operating costs of $2.20 per silver ounce1 for the first quarter. In the fourth quarter of 2012, Palmarejo produced 1.55 million ounces of silver and 19,998 ounces of gold at cash operating costs of $7.55 per silver ounce1. |
• | Palmarejo's underground and open pit mining rates improved and stabilized during the first quarter compared to the last four months of 2012. Silver and gold ore grades from both the open pit and from underground operations are generally expected to continue increasing during the remainder of the year as they have in March and April. |
• | Palmarejo's mine rescue team earned first place and the first aid response team second place in their respective competitions at the Northern Mexico Mine Rescue and First Aid Competition held in mid-March 2013. The Company's subsidiary Coeur Mexicana was also recognized by the Mexican Centre for Philanthropy with the Socially Responsible Business Distinction Award for the exemplary Palmarejo operations for the fifth year in a row. |
• | Sales and operating cash flow1 totaled $57.4 million and $31.5 million, respectively, in the first quarter 2013. |
• | Capital expenditures were $5.3 million during this quarter. |
San Bartolomé, Bolivia - Stable Production and Mill Expansion On-Track
• | San Bartolomé produced 1.4 million ounces of silver at cash operating costs of $13.27 per silver ounce1. In the fourth quarter of 2012, San Bartolomé produced 1.3 million ounces of silver at cash operating costs of $13.97 per silver ounce1. |
• | The Company is in the process of increasing processing capacity approximately 10%-15% by investing $17.0 - $20.0 million during 2013. This expansion is expected to have a less than two-year payback and increase the mine's annual production to over 6.0 million ounces of silver for the next several years at reduced cash operating costs per ounce1. This expansion project remains on-schedule to be completed late this year. |
1. | EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations. |
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• | In celebration of the city of Potosi's bicentennial, San Bartolomé donated silver bars which were made into commemorative medallions for the government. |
• | Sales and operating cash flow1 totaled $33.1 million and $11.9 million, respectively, in the first quarter 2013. |
• | Capital expenditures were $0.5 million during this quarter. |
Rochester, Nevada - Slow First Quarter; Accelerated Production Expected during Remainder of 2013
• | Rochester produced 648,000 ounces of silver and 8,742 ounces of gold, up 47% and 65% respectively, over the first quarter 2012. Cash operating costs per silver ounce1 were $13.54, which were materially lower than first quarter 2012, but higher than fourth quarter 2012. |
• | In the fourth quarter 2012, Rochester produced 828,000 ounces of silver and 12,054 ounces of gold at cash operating costs of $2.17 per silver ounce1. First quarter production was lower due to poor weather and lower than planned crushing rates. |
• | The Company is investing approximately $4.0 million during 2013 to expand the capacity of the primary crusher from 9.0 million tons to 14.0 million tons. Crusher throughput is expected to ramp up to achieve 1.2-1.4 million tons crushed monthly in the second half of 2013, leading to higher second half silver and gold production. |
• | In addition, the Company is expanding the mine's heap leach capacity to approximately 67.0 million tons at an estimated capital cost of approximately $15.0 million. This planned expansion will accommodate sustained higher production rates driven by the processing of ore contained in historic stockpiles. These stockpiles were created during the mine's 26 year operating history when gold and silver prices were significantly lower than current market prices. |
• | On May 1, 2013, Rochester presented Nevada Governor Brian Sandoval with a 1,000-ounce silver bar to be made into 1,000 commemorative coins to mark the state's sesquicentennial. |
• | Sales and operating cash flow1 totaled $39.5 million and $17.4 million, respectively, in the first quarter 2013. |
• | Capital expenditures were $3.3 million during this quarter. |
Kensington, Alaska - Improving Gold Grade Expected in Second Half of 2013
• | Kensington produced 25,206 ounces of gold at cash operating costs of $1,055 per ounce1, significantly improved over the first quarter 2012, which was affected by the temporary scale back in production from November 2011 until April 2012 to allow for the completion of several critical underground and surface infrastructure projects. |
• | Production during the fourth quarter 2012 totaled 28,717 gold ounces at cash operating costs of $1,065 per ounce.1 |
• | Kensington's mill throughput at 129,057 tons was consistent with the fourth quarter 2012. Average mill head grade of 0.20 oz/t was 13% lower than the fourth quarter 2012, but 11% higher than first quarter 2012. |
• | The gold grade is expected to gradually improve during the remaining quarters of 2013 as higher-grade stopes are mined and processed. |
• | Rebuilds of generators during the first quarter limited backfilling rates, which negatively impacted overall efficiency and costs. |
• | Sales and operating cash flow1 totaled $39.3 million and $15.2 million, respectively, for the first quarter 2013. |
• | Capital expenditures were $3.3 million during this quarter. |
La Preciosa, Mexico - Project Update
• | The acquisition of Orko Silver closed on April 16 for total consideration of approximately $280 million ($99.1 million in cash, 11.6 million Coeur shares and 1.6 million Coeur warrants.) |
• | Joe Phillips was recently named the Company's Chief Development Officer, bringing international mine development experience, including the successful construction of two mines in Mexico. He is responsible for the development of La Preciosa and other capital projects. |
• | Coeur has engaged M3 Engineering to prepare a PEA by the end of the second quarter 2013. M3 has built over 16 mines and processing plants in Mexico and is a leading engineering and construction company to the mining industry in Mexico. |
1. | EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations. |
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• | Following the PEA, Coeur intends to commence with basic engineering and full feasibility work in the second half of 2013, along with infill and development drilling. |
• | Optimization of the operating plan at the feasibility stage is expected to enhance project economics. |
• | A strong development team is being established at the corporate office and in Durango, Mexico. |
Organizational Update
Sandro Ferrarone joins Coeur as Vice President of Operations Support. Mr. Ferrarone comes to Coeur from Newmont where he served as Regional Corporate Development Director for South America. He has 19 years of operational planning and corporate development experience in the gold and copper industries. Mr. Ferrarone's 13 years of service at Newmont included positions of increasing responsibility within key areas of Newmont's operations and business functions.
Bruce Kennedy is Coeur's General Manager for La Preciosa. He was previously the Country Manager of Argentina and General Manager of the Pirquitas Mine for Silver Standard where he led the improvements of this large surface mine. Mr. Kennedy is a mining engineer with 40 years of experience in large scale surface and underground mine operations management in the US and several countries. His previous positions included being General Manager of the Robinson Mine for Quadra, Operations Manager of the Peñasquito Mine for Goldcorp, and Operations Manager for Phelps Dodge. He is fluent in Spanish.
Terry Smith joins Coeur as Vice President, North American Operations. Mr. Smith will be responsible for overseeing
the Rochester and Kensington mines, new projects and business development and directing North American operational
procedures and site management teams. He comes to Coeur from Hunter Dickinson Inc. where he served as Vice President of Project Development and Assessments. Mr. Smith also served as Manager of Operations Support for Barrick Gold Corporation in Toronto and as Senior Mining Engineer for Teck Cominco Ltd. in Vancouver.
Mark Spurbeck joins Coeur as Vice President of Finance effective May 13, 2013 and will serve as the Company's principal accounting officer. Mr. Spurbeck comes to Coeur from Newmont Mining Corporation where he served as Group Executive, Assistant Controller. He previously served as Newmont's Senior Director of Financial Reporting and Director of Accounting Research. Prior to joining Newmont, Mr. Spurbeck was Director of Accounting, Payment
Services at First Data Corporation. Mr. Spurbeck began his career with Deloitte & Touche LLP.
As previously announced in Coeur's May 8 and March 21, 2013 news releases, Peter Mitchell was named Senior Vice President and Chief Financial Officer beginning June 3, 2013 and Bill Holder has joined the Company as Vice President, Health and Safety, respectively.
Exploration Update
During the first quarter, the Company invested $6.8 million in expensed exploration for discovery of new mineralization and $1.7 million in capitalized exploration for definition of new mineralization to at least an indicated resource category, completing nearly 138,000 feet (42,000 meters) of drilling and trenching.
Coeur's exploration program utilized up to 10 drill rigs and a trenching crew: four drills at Palmarejo, three at Kensington (including one drill devoted to definition drilling), two in Argentina (Joaquin and Lejano projects), one at Rochester and the trenching crew at San Bartolomé.
Palmarejo, Mexico
• | Drilling for discoveries of new mineralization was conducted around the Palmarejo surface and underground mines to test new targets generated in 2012. |
• | Drilling was performed underground on the 108 zone at Palmarejo and on the surface at the Las Animas zone at the southeastern part of the Guadalupe deposit to upgrade the confidence of and extend the known mineralized zones. Results received from both areas have been largely favorable and are expected to extend and upgrade the current mineralization at the 108 zone and at Las Animas. |
1. | EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations. |
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◦ | At the 108 zone, hole DC3-108C-0091 intercepted 19.12 meters (62.7 feet) true width grading 124.7 grams/tonne silver (3.64 ounces/ton) and 3.62 grams/tonne gold (0.11 ounce/ton), and hole DC3-108C-0094 with 3.64 meters (11.9 feet) true width grading 1,561.3 grams/tonne silver (45.63 ounces/ton) and 33.13 grams/tonne gold (0.97 ounce/ton). |
◦ | At Las Animas, hole TDGH-509 intercepted 5.9 meters (19.4 feet) true width grading 108.3 grams/tonne silver (3.16 ounces/ton) and 0.82 grams/tonne gold (0.024 ounce/ton), and hole TDGH-519 with 4.7 meters (15.4 feet) true width grading 697.7 grams/tonne silver (20.35 ounces/ton) and 6.94 grams/tonne gold (0.20 ounce/ton). Both intercepts were within 100 meters (328 feet) of surface. |
• | The third phase of metallurgical sampling at La Patria, a silver-gold near surface deposit located approximately 9 kilometers from the main Palmarejo mine, continued to test the amenability of the current mineralized zones to cyanidation recovery methods. |
Kensington, Alaska
• | Drilling during the first quarter was mostly devoted to production definition drilling in order to develop stoping (mining) blocks from year-end reserves. |
• | Exploration drilling focused on upgrading and expanding existing mineralized zones to be used in subsequent reserve estimation, mostly at zones 10 and 50 of the main Kensington deposit. |
• | In addition, drilling was performed at the Comet target, which is situated about 5,000 feet (1,500 meters) southeast of the high-grade, narrow vein Raven deposit. Assays are pending. |
• | New assay results from the Kensington South zone drilled in the fourth quarter 2012 showed potential for Kensington-style mineralization from this large, relatively untested area. Kensington South is situated south of the main Kensington deposit. To facilitate future drilling, construction of a new cross-cut drift began in the first quarter with completion of 430 feet (131 meters) of the planned 750 feet (229 meters). |
Rochester, Nevada
• | Continuing the exploration focus of 2012, drilling was performed to define grades and tons of existing stockpiles. In the first quarter, over 27,600 feet (8,400 meters) of reverse circulation rotary drilling was completed on two of the stockpiles called South and Limerick with favorable results reported. |
◦ | At Limerick, hole LMD12-131 intercepted 20 feet true width grading 0.9 ounce/ton silver and 0.003 ounce/ton gold and hole LMD12-145 with 180 feet true width grading 0.67 ounce/ton silver and 0.002 ounce/ton gold. |
• | Drilling is also planned for the West and Charlie stockpiles during 2013. This work, along with metallurgical sampling, will continue throughout most of this year. |
San Bartolomé, Bolivia
• | All of the work in the first quarter was devoted to upgrading the confidence and extending known mineralization of the Pucka Loma zone in the northwest sector of the San Bartolomé mine area. |
• | The next stage of work will be to prepare a new model of the mineralization to be used in reserve estimation. To date, two-thirds of the completed trenches encountered bedrock at the base of the gravel (“pallaco”) mineralized layers. The remainder represents an opportunity to extend the thickness of the mineralized gravels. |
• | Exploration trenching will now shift to new targets around the mine. |
2013 Outlook
Coeur's estimated 2013 silver and gold production guidance is unchanged and the mine-by-mine 2013 production outlook is provided in Table 4 below.
Coeur has adjusted its full-year 2013 projected cash operating costs1 to $9.50 - $10.50 per silver ounce, assuming a gold by-product price of $1,500 per ounce for the last nine months of 2013.
Kensington's estimated cash operating costs1 are unchanged at $900 - $950 per gold ounce for 2013.
1. | EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations. |
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Table 4: 2013 Production Outlook
(silver ounces in thousands) | Country | Silver | Gold |
Palmarejo | Mexico | 7,700-8,300 | 98,000-105,000 |
San Bartolomé | Bolivia | 5,300-5,700 | — |
Rochester | Nevada, USA | 4,500-4,900 | 44,000-46,000 |
Endeavor | Australia | 500-600 | — |
Kensington | Alaska, USA | — | 108,000-114,000 |
Total | 18,000-19,500 | 250,000-265,000 | |
Conference Call Information
Coeur will hold a conference call and webcast at www.coeur.com to discuss the Company's first quarter 2013 results at 1 p.m. Eastern time on May 9, 2013.
Dial-In Numbers: (855) 546-8317 (U.S. and Canada)
(660) 422-4718 (International)
Conference ID: 353 85 539
A replay of the call will be available on Coeur's website through May 23, 2013.
Replay number: (855) 859-2056 (US and Canada)
International replay: (404) 537-3406 (International)
Conference ID: 353 85 539
About Coeur
Coeur d'Alene Mines Corporation is the largest U.S.-based primary silver producer and a growing gold producer. The Company has four precious metals mines in the Americas generating strong production, sales and cash flow. Coeur produces from its wholly owned operations: the Palmarejo silver-gold mine in Mexico, the San Bartolomé silver mine in Bolivia, the Rochester silver-gold mine in Nevada and the Kensington gold mine in Alaska. Coeur has a non-operating interest in the Endeavor silver-gold mine in Australia. The Company has two feasibility stage projects, the Joaquin silver project in Argentina and the La Preciosa silver-gold project in Mexico. In addition, Coeur conducts ongoing exploration activities in Mexico, Argentina, Nevada, Alaska and Bolivia. The Company owns strategic investment positions in eight silver and gold development companies with projects in North and South America.
Cautionary Statement
This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding anticipated operating results, production levels, exploration results, operating costs, ore grades, planned expansions at Rochester and San Bartolomé and related expected financial returns and development of the La Preciosa project, and the possibility of reaching a revised agreement to sell the Endeavor silver stream and Cerro Bayo royalty. 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 permits necessary for the planned Rochester expansion may not be obtained, the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents,weather or geologically related conditions), changes in the market prices of gold and silver, the uncertainties inherent in Coeur's
1. | EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations. |
8
production, exploratory and developmental activities, including risks relating to permitting and regulatory delays and disputed mining claims, any future labor disputes or work stoppages, the uncertainties inherent in the estimation of gold and silver ore reserves, changes that could result from Coeur's future acquisition of new mining properties or businesses, reliance on third parties to operate certain mines where Coeur owns silver production and reserves, the loss of any third-party smelter to which Coeur markets silver and gold, 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.
Donald J. Birak, Coeur's Senior Vice President of Exploration and a qualified person under Canadian National Instrument 43-101, supervised the preparation of the scientific and technical information concerning Coeur's mineral projects in this news release. 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, please see the Technical Reports for each of Coeur's properties as filed on SEDAR at www.sedar.com.
Cautionary Note to U.S. Investors-The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We may use certain terms in public disclosures, such as "measured," "indicated," "inferred” and “resources," that are recognized by Canadian regulations, but that SEC guidelines generally prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from the SEC's website at http://www.sec.gov.
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 cash operating 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 cash operating costs is an important measure in assessing the Company's overall financial performance.
For Additional Information:
Wendy Yang, Vice President, Investor Relations
(208) 665-0345
Stefany Bales, Director, Corporate Communications
(208) 667-8263
www.coeur.com
9
Table 5: Operating Statistics from Continuing Operations - (Unaudited):
Three months ended March 31, | |||||||
2013 | 2012 | ||||||
Silver Operations: | |||||||
Palmarejo | |||||||
Tons milled | 573,170 | 528,543 | |||||
Ore grade/Ag oz | 3.65 | 6.12 | |||||
Ore grade/Au oz | 0.04 | 0.06 | |||||
Recovery/Ag oz | 78.8 | % | 76.8 | % | |||
Recovery/Au oz | 90.1 | % | 93.3 | % | |||
Silver production ounces | 1,646,397 | 2,482,814 | |||||
Gold production ounces | 22,965 | 31,081 | |||||
Cash operating cost/oz | $ | 2.20 | $ | (2.27 | ) | ||
Cash cost/oz | $ | 2.20 | $ | (2.27 | ) | ||
Total production cost/oz | $ | 20.14 | $ | 13.04 | |||
San Bartolomé | |||||||
Tons milled | 374,985 | 378,104 | |||||
Ore grade/Ag oz | 4.09 | 4.62 | |||||
Recovery/Ag oz | 90.6 | % | 91.2 | % | |||
Silver production ounces | 1,391,099 | 1,591,292 | |||||
Cash operating cost/oz | $ | 13.27 | $ | 10.21 | |||
Cash cost/oz | $ | 14.32 | $ | 11.49 | |||
Total production cost/oz | $ | 18.13 | $ | 14.02 | |||
Martha | |||||||
Tons milled | — | 34,069 | |||||
Ore grade/Ag oz | — | 4.43 | |||||
Ore grade/Au oz | — | 0.01 | |||||
Recovery/Ag oz | — | % | 81.4 | % | |||
Recovery/Au oz | — | % | 64.6 | % | |||
Silver production ounces | — | 122,793 | |||||
Gold production ounces | — | 84 | |||||
Cash operating cost/oz | $ | — | $ | 46.48 | |||
Cash cost/oz | $ | — | $ | 47.15 | |||
Total production cost/oz | $ | — | $ | 51.85 | |||
Rochester | |||||||
Tons milled | 2,439,757 | 2,009,518 | |||||
Ore grade/Ag oz | 0.52 | 0.55 | |||||
Ore grade/Au oz | 0.003 | 0.004 | |||||
Recovery/Ag oz | 50.8 | % | 40.2 | % | |||
Recovery/Au oz | 108.6 | % | 62.1 | % | |||
Silver production ounces | 647,589 | 441,337 | |||||
Gold production ounces | 8,742 | 5,292 | |||||
Cash operating cost/oz | $ | 13.54 | $ | 23.35 | |||
Cash cost/oz | $ | 16.24 | $ | 24.75 | |||
Total production cost/oz | $ | 19.61 | $ | 28.67 | |||
10
Three months ended March 31, | |||||||
2013 | 2012 | ||||||
Endeavor | |||||||
Tons milled | 194,519 | 195,846 | |||||
Ore grade/Ag oz | 1.61 | 3.35 | |||||
Recovery/Ag oz | 47.8 | % | 37.8 | % | |||
Silver production ounces | 149,594 | 247,958 | |||||
Cash operating cost/oz | $ | 17.30 | $ | 16.64 | |||
Cash cost/oz | $ | 17.30 | $ | 16.64 | |||
Total production cost/oz | $ | 22.81 | $ | 23.27 | |||
Gold Operation: | |||||||
Kensington | |||||||
Tons milled | 129,057 | 43,936 | |||||
Ore grade/Au oz | 0.20 | 0.18 | |||||
Recovery/Au oz | 96.2 | % | 93.4 | % | |||
Gold production ounces | 25,206 | 7,444 | |||||
Cash operating cost/oz | $ | 1,055 | $ | 2,709 | |||
Cash cost/oz | $ | 1,055 | $ | 2,709 | |||
Total production cost/oz | $ | 1,586 | $ | 3,598 | |||
CONSOLIDATED PRODUCTION TOTALS | |||||||
Total silver ounces | 3,834,679 | 4,886,194 | |||||
Total gold ounces | 56,913 | 43,901 | |||||
Silver Operations: | |||||||
Cash operating cost per oz - silver | $ | 8.73 | $ | 6.29 | |||
Cash cost per oz - silver | $ | 9.56 | $ | 6.85 | |||
Total production cost oz - silver | $ | 19.43 | $ | 16.26 | |||
Gold Operation: | |||||||
Cash operating cost per oz - gold | $ | 1,055 | $ | 2,709 | |||
Cash cost per oz - gold | $ | 1,055 | $ | 2,709 | |||
Total production cost per oz - gold | $ | 1,586 | $ | 3,598 | |||
CONSOLIDATED SALES TOTALS | |||||||
Silver ounces sold | 3,076,535 | 4,290,049 | |||||
Gold ounces sold | 51,926 | 38,884 | |||||
Realized price per silver ounce | $ | 30.30 | $ | 32.61 | |||
Realized price per gold ounce | $ | 1,630 | $ | 1,702 | |||
11
Table 6:
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31, 2013 | December 31, 2012 | |||||||
ASSETS | (In thousands, except share data) | |||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 331,311 | $ | 125,440 | ||||
Short term investments | 1,498 | 999 | ||||||
Receivables | 68,182 | 62,438 | ||||||
Ore on leach pad | 26,748 | 22,991 | ||||||
Metal and other inventory | 184,690 | 170,670 | ||||||
Deferred tax assets | 2,627 | 2,458 | ||||||
Restricted assets | — | 396 | ||||||
Prepaid expenses and other | 22,324 | 20,790 | ||||||
637,380 | 406,182 | |||||||
NON-CURRENT ASSETS | ||||||||
Property, plant and equipment, net | 667,696 | 683,860 | ||||||
Mining properties, net | 1,969,952 | 1,991,951 | ||||||
Ore on leach pad, non-current portion | 24,073 | 21,356 | ||||||
Restricted assets | 24,882 | 24,970 | ||||||
Marketable securities | 23,498 | 27,065 | ||||||
Receivables, non-current portion | 39,061 | 48,767 | ||||||
Debt issuance costs, net | 12,429 | 3,713 | ||||||
Deferred tax assets | 946 | 955 | ||||||
Other | 23,765 | 12,582 | ||||||
TOTAL ASSETS | $ | 3,423,682 | $ | 3,221,401 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 52,636 | $ | 57,482 | ||||
Accrued liabilities and other | 9,964 | 10,002 | ||||||
Accrued income taxes | 6,186 | 27,108 | ||||||
Accrued payroll and related benefits | 13,816 | 21,306 | ||||||
Accrued interest payable | 4,283 | 478 | ||||||
Current portion of debt and capital leases | 6,130 | 55,983 | ||||||
Current portion of royalty obligation | 61,541 | 65,104 | ||||||
Current portion of reclamation and mine closure | 758 | 668 | ||||||
Deferred tax liabilities | 53 | 121 | ||||||
155,367 | 238,252 | |||||||
NON-CURRENT LIABILITIES | ||||||||
Long-term debt and capital leases | 307,791 | 3,460 | ||||||
Non-current portion of royalty obligation | 119,681 | 141,879 | ||||||
Reclamation and mine closure | 35,252 | 34,670 | ||||||
Deferred tax liabilities | 585,073 | 577,488 | ||||||
Other long-term liabilities | 24,684 | 27,372 | ||||||
1,072,481 | 784,869 | |||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||
Common stock, par value $0.01 per share; authorized 150,000,000 shares, issued and outstanding 89,743,142 at March 31, 2013 and 90,342,338 at December 31, 2012 | 897 | 903 | ||||||
Additional paid-in capital | 2,590,075 | 2,601,254 | ||||||
Accumulated deficit | (383,886 | ) | (396,156 | ) | ||||
Accumulated other comprehensive loss | (11,252 | ) | (7,721 | ) | ||||
2,195,834 | 2,198,280 | |||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 3,423,682 | $ | 3,221,401 | ||||
12
Table 7:
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three months ended March 31, | |||||||
2013 | 2012 | ||||||
(In thousands, except share data) | |||||||
Sales of metal | $ | 171,797 | $ | 204,564 | |||
Production costs applicable to sales | (88,784 | ) | (92,554 | ) | |||
Depreciation, depletion and amortization | (50,436 | ) | (52,592 | ) | |||
Gross profit | 32,577 | 59,418 | |||||
COSTS AND EXPENSES | |||||||
Administrative and general | 10,227 | 7,596 | |||||
Exploration | 6,841 | 6,567 | |||||
Loss on impairment and other | 119 | — | |||||
Pre-development, care, maintenance and other | 4,485 | 1,068 | |||||
Total cost and expenses | 21,672 | 15,231 | |||||
OPERATING INCOME | 10,905 | 44,187 | |||||
OTHER INCOME AND EXPENSE | |||||||
Fair value adjustments, net | 17,796 | (23,113 | ) | ||||
Interest income and other, net | 3,821 | 5,007 | |||||
Interest expense, net of capitalized interest | (9,732 | ) | (6,670 | ) | |||
Total other income and expense, net | 11,885 | (24,776 | ) | ||||
Income before income taxes | 22,790 | 19,411 | |||||
Income tax provision | (10,520 | ) | (15,436 | ) | |||
NET INCOME | $ | 12,270 | $ | 3,975 | |||
BASIC AND DILUTED INCOME PER SHARE | |||||||
Basic income per share: | |||||||
Net income | $ | 0.14 | $ | 0.04 | |||
Diluted income per share: | |||||||
Net income | $ | 0.14 | $ | 0.04 | |||
Weighted average number of shares of common stock | |||||||
Basic | 89,948 | 89,591 | |||||
Diluted | 90,036 | 89,821 | |||||
13
Table 8:
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three months ended March 31, | |||||||
2013 | 2012 | ||||||
(In thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 12,270 | $ | 3,975 | |||
Add (deduct) non-cash items | |||||||
Depreciation, depletion and amortization | 50,436 | 52,592 | |||||
Accretion of discount on debt and other assets, net | 522 | 541 | |||||
Accretion of royalty obligation | 3,670 | 4,580 | |||||
Deferred income taxes | 7,425 | 7,677 | |||||
Fair value adjustments, net | (16,042 | ) | 21,778 | ||||
Gain (loss) on foreign currency transactions | (465 | ) | 299 | ||||
Share-based compensation | 1,096 | 2,137 | |||||
Gain on sale of assets | (868 | ) | — | ||||
Loss on impairment | 119 | — | |||||
Other non-cash charges | 561 | 256 | |||||
Changes in operating assets and liabilities: | |||||||
Receivables and other current assets | 3,968 | (2,956 | ) | ||||
Prepaid expenses and other | (2,240 | ) | 4,774 | ||||
Inventories | (20,493 | ) | (24,722 | ) | |||
Accounts payable and accrued liabilities | (27,025 | ) | (53,929 | ) | |||
CASH PROVIDED BY OPERATING ACTIVITIES | 12,934 | 17,002 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Purchase of short term investments and marketable securities | (4,649 | ) | (1,035 | ) | |||
Proceeds from sales and maturities of short term investments | 4,822 | 20,018 | |||||
Capital expenditures | (12,827 | ) | (31,647 | ) | |||
Investment in Other Assets | (11,565 | ) | — | ||||
Other | 955 | 185 | |||||
CASH USED IN INVESTING ACTIVITIES | (23,264 | ) | (12,479 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Proceeds from issuance of notes and bank borrowings | 300,000 | — | |||||
Payments on long-term debt, capital leases, and associated costs | (55,340 | ) | (5,166 | ) | |||
Payments on gold production royalty | (15,448 | ) | (21,374 | ) | |||
Share repurchases | (12,557 | ) | — | ||||
Other | (454 | ) | (1,112 | ) | |||
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 216,201 | (27,652 | ) | ||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 205,871 | (23,129 | ) | ||||
Cash and cash equivalents at beginning of period | 125,440 | 175,012 | |||||
Cash and cash equivalents at end of period | $ | 331,311 | $ | 151,883 | |||
14
Table 9 :
Operating Cash Flow Reconciliation - (Unaudited)
(in thousands) | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Cash provided by operating activities | $ | 12,934 | $ | 61,694 | $ | 79,735 | $ | 113,203 | $ | 17,002 | |||||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables and other current assets | (3,968 | ) | (8,040 | ) | 5,648 | (10,319 | ) | 2,956 | |||||||
Prepaid expenses and other | 2,240 | (3,054 | ) | 2,481 | 2,857 | (4,774 | ) | ||||||||
Inventories | 20,493 | 12,919 | 13,762 | (3,097 | ) | 24,722 | |||||||||
Accounts payable and accrued liabilities | 27,025 | 15,706 | (24,341 | ) | (14,276 | ) | 53,929 | ||||||||
Operating Cash Flow | $ | 58,724 | $ | 79,225 | $ | 77,285 | $ | 88,368 | $ | 93,835 | |||||
Table 10:
EBITDA Reconciliation - (Unaudited)
(in thousands) | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Net income (loss) | $ | 12,270 | $ | 37,550 | $ | (15,821 | ) | $ | 22,973 | $ | 3,975 | ||||
Income tax provision | 10,520 | 11,839 | 17,475 | 23,862 | 15,436 | ||||||||||
Interest expense, net of capitalized interest | 9,732 | 4,591 | 7,351 | 7,557 | 6,670 | ||||||||||
Interest and other income | (3,821 | ) | 14 | (12,664 | ) | 3,221 | (5,007 | ) | |||||||
Fair value adjustments, net | (17,796 | ) | (21,235 | ) | 37,648 | (16,039 | ) | 23,113 | |||||||
Loss on debt extinguishments | — | 1,036 | — | — | — | ||||||||||
Depreciation and depletion | 50,436 | 52,397 | 52,844 | 61,024 | 52,592 | ||||||||||
EBITDA | $ | 61,341 | $ | 86,192 | $ | 86,833 | $ | 102,598 | $ | 96,779 | |||||
Table 11:
Adjusted Earnings Reconciliation - (Unaudited)
(in thousands) | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Net income (loss) | $ | 12,270 | $ | 37,550 | $ | (15,821 | ) | $ | 22,973 | $ | 3,975 | ||||
Share based compensation | 1,096 | 1,476 | 3,364 | 1,033 | 2,137 | ||||||||||
Deferred income tax provision (benefit) | 7,425 | 3,738 | (4,942 | ) | 9,690 | 7,677 | |||||||||
Interest expense, accretion of royalty obligation | 3,670 | 3,946 | 4,276 | 5,492 | 4,580 | ||||||||||
Fair value adjustments, net | (17,796 | ) | (21,235 | ) | 37,648 | (16,039 | ) | 23,113 | |||||||
Loss on impairment | 119 | (281 | ) | 1,293 | 4,813 | — | |||||||||
Loss on debt extinguishments | — | 1,036 | — | — | — | ||||||||||
Adjusted Earnings | $ | 6,784 | $ | 26,230 | $ | 25,818 | $ | 27,962 | $ | 41,482 | |||||
15
Table 12:
Results of Operations by Mine - Palmarejo - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 |
Sales of metal | $57.4 | $79.4 | $102.6 | $136.4 | $123.7 |
Production costs | $26.7 | $40.4 | $48.7 | $62.5 | $45.9 |
EBITDA | $28.7 | $36.6 | $51.6 | $72.3 | $76.5 |
Operating income (loss) | $(0.2) | $4.5 | $17.7 | $29.5 | $38.8 |
Operating cash flow | $31.5 | $33.2 | $54.9 | $63.6 | $81.4 |
Capital expenditures | $5.3 | $8.8 | $11.3 | $11.2 | $7.2 |
Gross profit | $1.8 | $6.8 | $20.0 | $31.1 | $40.1 |
Gross margin | 3.1% | 8.7% | 19.5% | 22.8% | 32.4% |
1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | |
Underground Operations: | |||||
Tons mined | 151,232 | 139,925 | 143,747 | 162,820 | 158,030 |
Average silver grade (oz/t) | 4.22 | 4.70 | 6.13 | 8.91 | 7.82 |
Average gold grade (oz/t) | 0.09 | 0.08 | 0.09 | 0.14 | 0.11 |
Surface Operations: | |||||
Tons mined | 388,651 | 465,498 | 424,380 | 321,758 | 347,609 |
Average silver grade (oz/t) | 3.45 | 2.62 | 2.79 | 4.14 | 5.32 |
Average gold grade (oz/t) | 0.03 | 0.02 | 0.03 | 0.04 | 0.04 |
Processing: | |||||
Total tons milled | 573,170 | 563,123 | 532,775 | 489,924 | 528,543 |
Average recovery rate – Ag | 78.8% | 84.2% | 90.0% | 84.2% | 76.8% |
Average recovery rate – Au | 90.1% | 91.4% | 102.5% | 92.0% | 93.3% |
Silver production - oz (000's) | 1,646 | 1,555 | 1,833 | 2,365 | 2,483 |
Gold production - oz | 22,965 | 19,998 | 23,702 | 31,258 | 31,081 |
Cash operating costs/Ag Oz | $2.20 | $7.55 | $3.75 | $(0.85) | $(2.27) |
16
Table 13:
Co-Product Cash Cost Per Ounce for Palmarejo - (Unaudited)
Three months ended March 31, 2013 | ||
Palmarejo | ||
Total cash operating costs | $40,881 | |
Total cash costs | $40,881 | |
Revenue | ||
Silver | 59% | |
Gold | 41% | |
Ounces produced | ||
Silver | 1,646,397 | |
Gold | 22,965 | |
Total cash operating costs per ounce | ||
Silver | $14.64 | |
Gold | $731 | |
Total cash costs per ounce | ||
Silver | $14.64 | |
Gold | $731 | |
Table 14:
Reconciliation of EBITDA for Palmarejo - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Sales of metal | $ | 57.4 | $ | 79.4 | $ | 102.6 | $ | 136.4 | $ | 123.7 | |||||
Production costs applicable to sales | (26.7 | ) | (40.4 | ) | (48.7 | ) | (62.5 | ) | (45.9 | ) | |||||
Administrative and general | — | — | — | — | — | ||||||||||
Exploration | (2.0 | ) | (2.4 | ) | (2.3 | ) | (1.6 | ) | (1.3 | ) | |||||
Pre-development care and maintenance and other | — | — | — | — | — | ||||||||||
EBITDA | $ | 28.7 | $ | 36.6 | $ | 51.6 | $ | 72.3 | $ | 76.5 | |||||
Table 15:
Operating Cash Flow for Palmarejo - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Cash provided by operating activities | $ | 10.1 | $ | 22.9 | $ | 58.2 | $ | 90.5 | $ | 65.3 | |||||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables and other current assets | 6.6 | (1.3 | ) | (4.1 | ) | (12.5 | ) | 5.4 | |||||||
Prepaid expenses and other | (0.6 | ) | (1.0 | ) | (0.8 | ) | 0.5 | (1.9 | ) | ||||||
Inventories | 13.3 | 3.6 | 2.5 | (11.5 | ) | 4.6 | |||||||||
Accounts payable and accrued liabilities | 2.1 | 9.0 | (0.9 | ) | (3.4 | ) | 8.0 | ||||||||
Operating Cash Flow | $ | 31.5 | $ | 33.2 | $ | 54.9 | $ | 63.6 | $ | 81.4 | |||||
17
Table 16:
Results of Operations by Mine - San Bartolomé - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | |
Sales of metal | $33.1 | $37.0 | $46.2 | $53.4 | $41.4 | |
Production costs | $15.7 | $15.1 | $19.9 | $22.8 | $13.6 | |
EBITDA | $17.3 | $21.9 | $26.2 | $30.5 | $27.7 | |
Operating income | $8.9 | $17.5 | $22.0 | $26.6 | $23.5 | |
Operating cash flow | $11.9 | $17.4 | $11.2 | $23.0 | $20.8 | |
Capital expenditures | $0.5 | $3.3 | $4.4 | $7.8 | $10.2 | |
Gross profit | $12.7 | $17.6 | $22.1 | $26.5 | $23.5 | |
Gross margin | 38.4% | 47.7% | 47.8% | 49.6% | 56.8% | |
1Q 2013 | 4Q 2012 | 3Q 2012 | 1Q 2012 | 1Q 2012 | ||
Tons milled | 374,985 | 363,813 | 344,349 | 391,005 | 378,104 | |
Average silver grade (oz/t) | 4.1 | 4.2 | 4.9 | 4.3 | 4.6 | |
Average recovery rate | 90.6% | 88% | 90.3% | 88.3% | 91.2% | |
Silver production (000's) | 1,391 | 1,343 | 1,526 | 1,470 | 1,591 | |
Cash operating costs/Ag Oz | $13.27 | $13.97 | $12.13 | $11.05 | $10.21 | |
Table 17:
Reconciliation of EBITDA for San Bartolomé - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Sales of metal | $ | 33.1 | $ | 37.1 | $ | 46.2 | $ | 53.4 | $ | 41.4 | |||||
Production costs applicable to sales | (15.7 | ) | (15.1 | ) | (19.9 | ) | (22.8 | ) | (13.6 | ) | |||||
Administrative and general | — | — | — | — | — | ||||||||||
Exploration | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | (0.1 | ) | |||||
Pre-development care and maintenance and other | — | — | — | — | — | ||||||||||
EBITDA | $ | 17.3 | $ | 21.9 | $ | 26.2 | $ | 30.5 | $ | 27.7 | |||||
Table 18:
Operating Cash Flow for San Bartolomé - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Cash provided by (used in) operating activities | $ | (5.4 | ) | $ | 9.5 | $ | 19.8 | $ | 31.0 | $ | (27.4 | ) | |||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables and other current assets | (4.2 | ) | (3.0 | ) | 7.1 | (0.6 | ) | 2.2 | |||||||
Prepaid expenses and other | (3.8 | ) | (1.4 | ) | 0.8 | 4.4 | (2.8 | ) | |||||||
Inventories | 3.2 | 9.6 | 5.0 | (3.4 | ) | 4.7 | |||||||||
Accounts payable and accrued liabilities | 22.1 | 2.7 | (21.5 | ) | (8.4 | ) | 44.1 | ||||||||
Operating Cash Flow | $ | 11.9 | $ | 17.4 | $ | 11.2 | $ | 23.0 | $ | 20.8 | |||||
18
Table 19:
Results of Operations by Mine - Kensington - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 |
Sales of metal | $39.3 | $43.0 | $36.5 | $21.1 | $10.4 |
Production costs | $23.6 | $27.0 | $26.9 | $16.1 | $17.1 |
EBITDA | $15.0 | $14.7 | $8.1 | $4.7 | $(6.9) |
Operating income/(loss) | $1.6 | $0.9 | $(3.5) | $(5.0) | $(13.6) |
Operating cash flow | $15.2 | $14.5 | $7.3 | $0.6 | $(7.8) |
Capital expenditures | $3.3 | $7.8 | $9.0 | $9.3 | $10.9 |
Gross profit/(loss) | $2.3 | $2.2 | $(1.9) | $(4.7) | $(13.3) |
Gross margin | 5.9% | 5.1% | (5.2)% | (22.3)% | (127.9)% |
1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | |
Tons mined | 116,747 | 140,626 | 113,770 | 84,632 | 56,815 |
Tons milled | 129,057 | 129,622 | 123,428 | 97,794 | 43,936 |
Average gold grade (oz/t) | 0.20 | 0.23 | 0.21 | 0.23 | 0.18 |
Average recovery rate | 96.2% | 96.9% | 95.9% | 94.2% | 93.4% |
Gold production | 25,206 | 28,718 | 24,391 | 21,572 | 7,444 |
Cash operating costs/Ag Oz | $1,055 | $1,065 | $1,298 | $1,348 | $2,709 |
Table 20:
Reconciliation of EBITDA for Kensington - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Sales of metal | $ | 39.3 | $ | 43.0 | $ | 36.5 | $ | 21.1 | $ | 10.4 | |||||
Production costs applicable to sales | (23.6 | ) | (27.0 | ) | (26.9 | ) | (16.1 | ) | (17.1 | ) | |||||
Administrative and general | — | — | — | — | — | ||||||||||
Exploration | (0.7 | ) | (1.3 | ) | (1.5 | ) | (0.3 | ) | (0.2 | ) | |||||
Pre-development care and maintenance and other | — | — | — | — | — | ||||||||||
EBITDA | $ | 15.0 | $ | 14.7 | $ | 8.1 | $ | 4.7 | $ | (6.9 | ) | ||||
Table 21:
Operating Cash Flow for Kensington - (Unaudited)
1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | |||||||||||
Cash provided by (used in) operating activities | $ | 11.7 | $ | 16.5 | $ | 5.0 | $ | (12.5 | ) | $ | 1.1 | ||||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables and other current assets | 1.8 | (2.6 | ) | 2.3 | 4.6 | (10.3 | ) | ||||||||
Prepaid expenses and other | (0.1 | ) | (0.4 | ) | 0.5 | (0.5 | ) | (1.0 | ) | ||||||
Inventories | — | (0.3 | ) | 1.8 | 9.9 | 3.3 | |||||||||
Accounts payable and accrued liabilities | 1.8 | 1.3 | (2.3 | ) | (0.9 | ) | (0.9 | ) | |||||||
Operating Cash Flow | $ | 15.2 | $ | 14.5 | $ | 7.3 | $ | 0.6 | $ | (7.8 | ) | ||||
19
Table 22:
Results of Operations by Mine - Rochester - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||
Sales of metal | $39.5 | $43.2 | $36.2 | $34.2 | $18.8 | ||||
Production costs | $21.5 | $22.9 | $21.0 | $20.8 | $9.6 | ||||
EBITDA | $17.5 | $21.4 | $12.9 | $11.6 | $7.2 | ||||
Operating income | $15.2 | $19.2 | $10.9 | $9.5 | $5.5 | ||||
Operating cash flow | $17.4 | $21.5 | $13.0 | $11.8 | $7.2 | ||||
Capital expenditures | $3.3 | $1.5 | $4.8 | $2.9 | $2.6 | ||||
Gross profit | $15.8 | $18.0 | $13.2 | $11.3 | $7.6 | ||||
Gross margin | 40.0% | 41.7% | 36.5% | 33.0% | 40.4% | ||||
1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | |||||
Tons mined | 2,924,472 | 3,031,428 | 3,170,129 | 2,585,914 | 2,923,324 | ||||
Average silver grade (oz/t) | 0.52 | 0.51 | 0.52 | 0.63 | 0.55 | ||||
Average gold grade (oz/t) | 0.003 | 0.005 | 0.004 | 0.005 | 0.004 | ||||
Silver production (000's) | 648 | 828 | 819 | 713 | 441 | ||||
Gold production | 8,742 | 12,055 | 10,599 | 10,120 | 5,292 | ||||
Cash operating costs/Ag Oz | $13.54 | $2.17 | $9.58 | $9.83 | $23.35 | ||||
Table 23:
Co-Product Cash Cost Per Ounce for Rochester - (Unaudited)
Three months ended March 31, 2013 | ||
Rochester | ||
Total cash operating costs | $23,057 | |
Total cash costs | $24,807 | |
Revenue | ||
Silver | 55% | |
Gold | 45% | |
Ounces produced | ||
Silver | 647,589 | |
Gold | 8,742 | |
Total cash operating costs per ounce | ||
Silver | $19.49 | |
Gold | $1,194 | |
Total cash costs per ounce | ||
Silver | $20.97 | |
Gold | $1,284 | |
20
Table 24:
Reconciliation of EBITDA for Rochester - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Sales of metal | $ | 39.5 | $ | 43.2 | $ | 36.2 | $ | 34.2 | $ | 18.8 | |||||
Production costs applicable to sales | (21.5 | ) | (22.9 | ) | (21.0 | ) | (20.8 | ) | (9.6 | ) | |||||
Administrative and general | — | — | — | — | — | ||||||||||
Exploration | (0.5 | ) | (0.6 | ) | (1.2 | ) | (1.1 | ) | (0.7 | ) | |||||
Pre-development care and maintenance and other | — | 1.7 | (1.1 | ) | (0.7 | ) | (1.3 | ) | |||||||
EBITDA | $ | 17.5 | $ | 21.4 | $ | 12.9 | $ | 11.6 | $ | 7.2 | |||||
Table 25:
Operating Cash Flow for Rochester - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Cash provided by (used in) operating activities | $ | 5.6 | $ | 18.2 | $ | 7.3 | $ | 10.1 | $ | (7.1 | ) | ||||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables and other current assets | (0.1 | ) | (0.6 | ) | 0.6 | (0.1 | ) | 0.3 | |||||||
Prepaid expenses and other | 4.1 | 0.3 | 0.2 | (1.0 | ) | 1.4 | |||||||||
Inventories | 3.7 | 0.9 | 6.5 | 3.9 | 11.2 | ||||||||||
Accounts payable and accrued liabilities | 4.1 | 2.7 | (1.6 | ) | (1.1 | ) | 1.4 | ||||||||
Operating Cash Flow | $ | 17.4 | $ | 21.5 | $ | 13.0 | $ | 11.8 | $ | 7.2 | |||||
Table 26:
Results of Operations by Mine - Endeavor - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 |
Sales of metal | $3.0 | $2.8 | $4.1 | $5.2 | $6.7 |
Production costs | $1.3 | $1.6 | $2.0 | $2.6 | $2.7 |
EBITDA | $1.7 | $1.3 | $2.1 | $2.6 | $4.0 |
Operating income | $0.8 | $0.8 | $1.3 | $1.1 | $2.3 |
Operating cash flow | $1.7 | $1.3 | $1.7 | $2.8 | $4.2 |
Capital expenditures | $— | $— | $— | $— | $— |
Gross profit | $0.8 | $0.8 | $1.3 | $1.1 | $2.3 |
Gross margin | 26.7% | 28.6% | 31.7% | 21.2% | 34.3% |
1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | |
Silver Production (000's) | 150 | 105 | 140 | 240 | 248 |
Cash operating costs/Ag Oz | $17.30 | $19.92 | $15.97 | $17.50 | $16.64 |
Table 27:
Reconciliation of EBITDA for Endeavor - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Sales of metal | $ | 3.0 | $ | 2.8 | $ | 4.1 | $ | 5.2 | $ | 6.7 | |||||
Production costs applicable to sales | (1.3 | ) | (1.5 | ) | (2.0 | ) | (2.6 | ) | (2.7 | ) | |||||
Administrative and general | — | — | — | — | — | ||||||||||
Exploration | — | — | — | — | — | ||||||||||
Pre-development care and maintenance and other | — | — | — | — | — | ||||||||||
EBITDA | $ | 1.7 | $ | 1.3 | $ | 2.1 | $ | 2.6 | $ | 4.0 | |||||
21
Table 28:
Operating Cash Flow for Endeavor - (Unaudited)
in millions of US$ | 1Q 2013 | 4Q 2012 | 3Q 2012 | 2Q 2012 | 1Q 2012 | ||||||||||
Cash provided by operating activities | $ | 1.6 | $ | 1.6 | $ | 1.5 | $ | 3.6 | $ | 3.2 | |||||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables and other current assets | 0.1 | (0.3 | ) | 0.5 | (1.7 | ) | 1.7 | ||||||||
Prepaid expenses and other | — | — | — | — | — | ||||||||||
Inventories | 0.3 | (0.3 | ) | (0.3 | ) | 0.2 | 0.6 | ||||||||
Accounts payable and accrued liabilities | (0.3 | ) | 0.3 | 0.7 | (1.3 | ) | |||||||||
Operating Cash Flow | $ | 1.7 | $ | 1.3 | $ | 1.7 | $ | 2.8 | $ | 4.2 | |||||
22