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| 8-K - 8-K - Coeur Mining, Inc. | a1q18earningsrelease8-k.htm |
NEWS RELEASE 
Coeur Reports First Quarter 2018 Results
Chicago, Illinois - April 25, 2018 - Coeur Mining, Inc. ("Coeur" or the "Company") (NYSE: CDE) today reported first quarter 2018 financial results as well as an overview of key operating and strategic achievements during the period.
Financial results for the first quarter included revenue of $163.3 million and net income of $0.7 million. First quarter cash flow from operating activities was $15.5 million, adjusted EBITDA1 was $49.5 million, and free cash flow1 was $(26.8) million. These results reflect strong production and cost performance at the Company's Palmarejo silver-gold mine in northern Mexico, including a second consecutive quarter of costs applicable to sales ("CAS") per average spot silver equivalent ounce ("AgEqOz")1 below $7.00. Performance was also impacted by (i) a normalization of production levels at the Rochester mine in Nevada, which benefited from a temporary boost to production during the prior quarter due to accelerated recoveries from the newly-expanded Stage IV leach pad and from the placement of higher-grade gold ore during the second half of 2017; (ii) planned lower grades during the quarter at the Wharf and Kensington mines; (iii) and a $17.9 million increase in working capital compared to year-end 2017. Free cash flow1 during the quarter was additionally affected by capital expenditures of $18.6 million related to the commissioning of operations at the Company's new Silvertip underground mine in British Columbia.
Coeur achieved several important milestones during the first quarter, which included commencing production slightly ahead of schedule at the Silvertip mine and announcing the results of a re-scoped mine plan and preliminary economic assessment ("PEA") for its Rochester mine in Nevada. The PEA reflects plans to add high-pressure grinding roll ("HPGR") technology to Rochester's crushing circuit, potentially improving silver recovery curves and doubling the mine's expected net asset value ("NAV") to $609 million. The Company also completed the sale of its wholly-owned Bolivian subsidiary and the San Bartolomé mine, the result of which is a North America-focused and U.S.-centric platform with a significantly improved geopolitical risk profile and cost structure. As a result of this transaction, the San Bartolomé mine is excluded from consolidated operating statistics and financial results for all periods presented unless otherwise noted.
Highlights
• | Quarterly silver equivalent1 production higher year-over-year - First quarter silver equivalent1 production increased 4% year-over-year to 8.3 million AgEqOz1 due primarily to a 31% increase in silver production at Palmarejo, partially offset by a 14% decrease in gold production at Wharf over the same period. Quarter-over-quarter, silver equivalent1 production declined 23% due to temporarily lower mining rates at Palmarejo, the normalization of production levels at Rochester and lower planned grades at Wharf and Kensington |
• | Higher quarterly unit costs - Companywide unit costs were up both quarter-over-quarter and year-over-year despite continued strong cost performance at Palmarejo, which delivered adjusted CAS per average spot AgEqOz1 of $6.94 during the quarter. First quarter companywide all-in sustaining costs ("AISC") per average spot AgEqOz1 were $14.44 compared to $12.33 in the prior quarter and $13.29 in the first quarter of 2017. The increase was driven by higher sustaining capital expenditures at Palmarejo and Kensington combined with fewer silver equivalent1 ounces sold both quarter-over-quarter and year-over-year |
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• | Production commenced at the high-grade Silvertip mine - Production commenced at the high-grade Silvertip mine in early March following the successful commissioning of mill operations. Silvertip is expected to reach commercial production mid-year and ramp up to nameplate capacity of 1,000 metric tonnes, or about 1,100 short tons, per day in early 2019. The Company also plans to file a technical report on Silvertip in the second half of 2018 incorporating results from current drilling efforts |
• | Substantial expected impact to Rochester based on new PEA - The results of Rochester's re-scoped mine plan and PEA, published February 26, 2018, reflect the strong positive impact expected from the planned addition of HPGR technology to Rochester's crushing circuit. The introduction of HPGR technology has the potential to increase Rochester’s silver recoveries from 61% over 20 years to 70% in just over two years, which could significantly improve the mine’s economics. The expected improvements reflected in the PEA include: (i) more than a twofold increase in NAV5% to $609 million, (ii) over a 20% reduction in costs per AgEqOz1 for the first ten years after the HPGR installation, (iii) a 122% increase in total pre-tax life of mine cash flows and improved margins, and (iv) an extension of mine life to 2038 |
• | Continued focus on near-mine exploration - The Company demonstrated its continued commitment to near-mine exploration with Palmarejo, Kensington and Silvertip accounting for approximately 67% of the $11.9 million in expensed and capitalized exploration during the first quarter. Drilling at Palmarejo and Kensington emphasized resource expansion at near-mine, high-grade targets close to existing infrastructure, while exploration at Silvertip was focused on conversion of resources to reserves with the goal of declaring an initial reserve estimate later this year |
"We achieved several key strategic objectives in the first quarter," said Mitchell J. Krebs, Coeur's President and Chief Executive Officer. "The sale of our San Bartolomé mine in Bolivia resulted in a meaningful upgrade to our portfolio given the mine's short remaining life, higher operating costs and future estimated closure-related costs. Combined with the successful start-up at our new Silvertip mine in British Columbia and our announced plans to install new HPGR technology at our Rochester mine in Nevada, which is expected to more than double the mine's net asset value, we are entering the second quarter with strong momentum.
"Lower production and higher costs companywide during the quarter were in-line with our previously disclosed expectations due to the normalization of production levels at Rochester and lower planned grades and production at Wharf and Kensington. Our Palmarejo mine in Mexico continued to be a stand-out performer with unit costs below $7.00 per ounce for the second consecutive quarter.
"As we look ahead to the remainder of year, we expect production and free cash flows1 to rise as Silvertip ramps up and development capital expenditures decrease. In April, Silvertip's mill throughput has averaged over 300 metric tonnes (330 short tons) per day and is tracking towards the Company's year-end target of 750 metric tonnes (825 short tons) per day. Important milestones, including the completion of dewatering efforts and subsequent increase in mining rates at Kensington's Jualin deposit as well as work to complete an NI 43-101 technical report for Silvertip, are on track for the second half of 2018."
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Financial and Operating Highlights (Unaudited)
(Amounts in millions, except per share amounts, gold ounces produced & sold, and per-ounce metrics) | 1Q 2018 | 4Q 2017 | 3Q 2017 | 2Q 2017 | 1Q 2017 | ||||||||||
Revenue | $ | 163.3 | $ | 214.6 | $ | 159.9 | $ | 149.5 | $ | 185.6 | |||||
Costs Applicable to Sales | $ | 99.3 | $ | 122.0 | $ | 101.6 | $ | 102.2 | $ | 114.5 | |||||
General and Administrative Expenses | $ | 8.8 | $ | 9.2 | $ | 7.3 | $ | 7.0 | $ | 10.1 | |||||
Net Income (Loss) | $ | 0.7 | $ | 14.3 | $ | (11.7 | ) | $ | (10.0 | ) | $ | 18.3 | |||
Net Income (Loss) Per Share | $ | 0.00 | $ | 0.08 | $ | (0.06 | ) | $ | (0.05 | ) | $ | 0.10 | |||
Adjusted Net Income (Loss)1 | $ | 0.7 | $ | 14.1 | $ | (15.3 | ) | $ | (1.3 | ) | $ | 6.8 | |||
Adjusted Net Income (Loss)1 Per Share | $ | 0.00 | $ | 0.08 | $ | (0.09 | ) | $ | (0.01 | ) | $ | 0.04 | |||
Weighted Average Shares Outstanding | 187.6 | 187.0 | 179.3 | 179.2 | 183.1 | ||||||||||
EBITDA1 | $ | 49.4 | $ | 69.6 | $ | 38.6 | $ | 23.4 | $ | 71.4 | |||||
Adjusted EBITDA1 | $ | 49.5 | $ | 77.0 | $ | 40.2 | $ | 31.9 | $ | 54.5 | |||||
Cash Flow from Operating Activities | $ | 15.5 | $ | 91.8 | $ | 37.3 | $ | 24.1 | $ | 43.9 | |||||
Capital Expenditures | $ | 42.3 | $ | 47.1 | $ | 29.0 | $ | 37.1 | $ | 23.6 | |||||
Free Cash Flow1 | $ | (26.8 | ) | $ | 44.8 | $ | 8.3 | $ | (13.0 | ) | $ | 20.3 | |||
Cash, Equivalents & Short-Term Investments | $ | 159.6 | $ | 192.0 | $ | 195.7 | $ | 201.0 | $ | 160.6 | |||||
Total Debt2 | $ | 414.0 | $ | 411.3 | $ | 288.7 | $ | 284.6 | $ | 218.8 | |||||
Average Realized Price Per Ounce – Silver | $ | 16.70 | $ | 16.57 | $ | 16.86 | $ | 16.95 | $ | 17.49 | |||||
Average Realized Price Per Ounce – Gold | $ | 1,268 | $ | 1,224 | $ | 1,240 | $ | 1,206 | $ | 1,149 | |||||
Silver Ounces Produced | 3.2 | 3.7 | 3.0 | 2.7 | 2.7 | ||||||||||
Gold Ounces Produced | 85,383 | 118,756 | 93,293 | 82,819 | 88,218 | ||||||||||
Silver Equivalent Ounces Produced1 | 8.3 | 10.8 | 8.6 | 7.7 | 8.0 | ||||||||||
Silver Ounces Sold | 3.2 | 3.8 | 2.9 | 2.7 | 3.3 | ||||||||||
Gold Ounces Sold | 87,153 | 123,564 | 89,972 | 86,194 | 110,874 | ||||||||||
Silver Equivalent Ounces Sold1 | 8.4 | 11.1 | 8.3 | 7.9 | 10.0 | ||||||||||
Silver Equivalent Ounces Sold (Average Spot)1 | 10.1 | 13.2 | 9.7 | 9.0 | 11.1 | ||||||||||
Adjusted CAS per AgEqOz1 | $ | 9.69 | $ | 9.43 | $ | 11.05 | $ | 12.02 | $ | 10.60 | |||||
Adjusted CAS per Average Spot AgEqOz1 | $ | 8.48 | $ | 8.35 | $ | 9.90 | $ | 10.96 | $ | 9.79 | |||||
Adjusted CAS per AuEqOz1 | $ | 955 | $ | 800 | $ | 843 | $ | 860 | $ | 791 | |||||
Adjusted AISC per AgEqOz1 | $ | 17.20 | $ | 14.45 | $ | 17.35 | $ | 17.81 | $ | 14.78 | |||||
Adjusted AISC per Average Spot AgEqOz1 | $ | 14.33 | $ | 12.26 | $ | 14.79 | $ | 15.58 | $ | 13.30 | |||||
Financial Results
Revenue for the first quarter was $163.3 million, down 24% quarter-over-quarter due to lower planned production and 12% year-over-year due to elevated sales in the first quarter of 2017 related to inventory carried over from the preceding year. Silver sales contributed 32% of revenue during the first quarter, and gold sales contributed 68% based on average realized prices of $16.70 and $1,268 per ounce, respectively. The Company's U.S. operations accounted for approximately 55% of the Company's revenue during the quarter.
Average realized gold prices during the first quarter reflect the sale of 9,906 gold ounces at a price of $800 per ounce, pursuant to Palmarejo's gold stream agreement.
Costs applicable to sales were $99.3 million for the quarter, 19% and 13% lower quarter-over-quarter and year-over-year, respectively, due to lower metal sales. General and administrative expenses were $8.8 million,
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4% and 13% lower quarter-over-quarter and year-over-year, respectively, due primarily to lower employee-related expenses and professional service costs.
Amortization expense decreased 31% quarter-over-quarter and 21% year-over-year to $30.5 million due primarily to lower ounces sold during the quarter as well as higher life of mine reserves.
Quarterly interest expense, net of capitalized interest, increased 9% from the prior quarter and 67% year-over-year to $6.0 million. This resulted from higher overall debt levels attributable to the Company's 5.875% senior notes due 2024 as well as amounts drawn on the Company's $200 million revolving credit facility established in the fourth quarter of 2017.
First quarter capital expenditures increased nearly 80% year-over-year to $42.3 million. Development capital expenditures were largely associated with the commencement of production at Silvertip, where pre-production operating expenses, conversion drilling, and underground development totaled $18.6 million for the quarter. Sustaining capital expenditures also increased as a percentage of total capital expenditures accounting for approximately 46% of the total compared to 34% in the prior quarter and 38% in the first quarter of 2017. The shift was driven by higher sustaining capital expenditures at Palmarejo and Kensington.
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Operations
Highlights of first quarter 2018 results for each of the Company's operations are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce amounts) | 1Q 2018 | 4Q 2017 | 3Q 2017 | 2Q 2017 | 1Q 2017 |
Tons milled | 359,893 | 389,524 | 413,086 | 335,428 | 360,383 |
Average silver grade (oz/t) | 6.88 | 6.92 | 5.53 | 4.98 | 4.91 |
Average gold grade (oz/t) | 0.10 | 0.10 | 0.08 | 0.08 | 0.09 |
Average recovery rate – Ag | 81.4% | 87.0% | 83.6% | 87.3% | 86.5% |
Average recovery rate – Au | 80.4% | 92.0% | 83.1% | 91.1% | 93.7% |
Silver ounces produced (000's) | 2,013 | 2,346 | 1,908 | 1,457 | 1,531 |
Gold ounces produced | 29,896 | 37,537 | 28,948 | 24,292 | 30,792 |
Silver equivalent ounces produced1 (000's) | 3,807 | 4,600 | 3,644 | 2,914 | 3,378 |
Silver ounces sold (000's) | 2,031 | 2,343 | 1,794 | 1,484 | 1,965 |
Gold ounces sold | 30,888 | 38,953 | 26,554 | 25,191 | 41,045 |
Silver equivalent ounces sold1 (000's) | 3,884 | 4,681 | 3,387 | 2,996 | 4,427 |
Silver equivalent ounces sold1 (average spot) (000's) | 4,479 | 5,331 | 3,809 | 3,324 | 4,837 |
Metal sales | $70.0 | $83.2 | $60.7 | $53.2 | $77.7 |
Costs applicable to sales | $31.1 | $36.0 | $33.3 | $33.9 | $43.0 |
Adjusted CAS per AgEqOz1 | $8.01 | $7.54 | $9.76 | $11.21 | $9.68 |
Adjusted CAS per average spot AgEqOz1 | $6.94 | $6.64 | $8.68 | $10.11 | $8.87 |
Exploration expense | $4.0 | $2.7 | $4.5 | $3.1 | $1.6 |
Cash flow from operating activities | $27.3 | $52.1 | $18.5 | $18.8 | $50.5 |
Sustaining capital expenditures (excludes capital lease payments) | $9.3 | $4.9 | $6.5 | $6.1 | $5.0 |
Development capital expenditures | $— | $2.1 | $(1.0) | $5.1 | $1.2 |
Total capital expenditures | $9.3 | $7.0 | $5.5 | $11.2 | $6.2 |
Free cash flow1 | $18.0 | $45.1 | $13.0 | $7.6 | $44.3 |
• | First quarter silver equivalent1 production was 3.8 million ounces, up 13% year-over-year due to higher grades and down 17% quarter-over-quarter due to temporarily lower mining rates |
• | Adjusted CAS per average spot AgEqOz1 of $6.94 for the first quarter were 5% higher quarter-over-quarter, 22% lower year-over-year and well below the full-year 2018 guidance range of $9.25 - $9.75 |
• | Silver and gold grades were 40% and 11% higher, respectively, year-over-year and flat quarter-over-quarter. Production benefited from mining of higher grade material over the past two quarters in a faulted zone within Independencia, which the Company had conservatively modeled. This was offset by temporarily lower mining rates as additional ground support was installed along the fault. Grades are expected to gradually decrease in subsequent quarters, while mining rates are expected to return to 4,500 tons per day |
• | Palmarejo began commissioning an on-site absorption, desorption, and recovery ("ADR") plant at the end of the quarter, which resulted in a temporary increase to in-process inventory and lower recovery rates. The ADR plant is expected to be fully commissioned by the end of April |
• | Higher sustaining capital expenditures during the quarter reflect Palmarejo's completed transition to underground operations and sustained production rates at Independencia, $1.2 million spent on the replacement of surface equipment and $1.2 million in expenditures related to Palmarejo's new ADR plant |
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• | As a result of the ongoing success of Palmarejo's exploration program, drilling activity at Palmarejo and other targets within Mexico increased during the first quarter, with exploration expense rising 48% quarter-over-quarter to $4.0 million |
• | During the quarter, 9,906 ounces, or approximately 32%, of Palmarejo's gold sales were made pursuant to its gold stream agreement at a price of $800 per ounce. For the full year, the Company anticipates a similar percentage of Palmarejo's gold sales to be made under the gold stream agreement |
• | Palmarejo generated $18.0 million of free cash flow1 during the quarter, partially due to the payment of approximately $17 million in cash income and mining taxes related to 2017 earnings in early April 2018 rather than during the first quarter as previously expected. Total cash income and mining tax payments in Mexico this year, including those related to 2017 earnings, are expected to be $40 - $45 million, $30 - $35 million of which is expected to be paid during the second quarter |
• | Full-year production guidance is unchanged at 6.5 - 7.1 million ounces of silver and 110,000 - 115,000 ounces of gold. Cost guidance of CAS per AgEqOz1 is similarly unchanged at $10.50 - $11.00 on a 60:1 silver equivalent basis and $9.25 - $9.75 on an average spot equivalent basis |
Rochester, Nevada
(Dollars in millions, except per ounce amounts) | 1Q 2018 | 4Q 2017 | 3Q 2017 | 2Q 2017 | 1Q 2017 |
Ore tons placed | 4,351,131 | 4,171,451 | 4,262,011 | 4,493,100 | 3,513,708 |
Average silver grade (oz/t) | 0.54 | 0.50 | 0.53 | 0.53 | 0.58 |
Average gold grade (oz/t) | 0.003 | 0.003 | 0.004 | 0.003 | 0.002 |
Silver ounces produced (000's) | 1,157 | 1,361 | 1,070 | 1,156 | 1,127 |
Gold ounces produced | 11,487 | 18,995 | 10,955 | 10,745 | 10,356 |
Silver equivalent ounces produced1 (000's) | 1,846 | 2,500 | 1,727 | 1,801 | 1,749 |
Silver ounces sold (000's) | 1,119 | 1,457 | 1,050 | 1,135 | 1,289 |
Gold ounces sold | 11,163 | 20,002 | 10,390 | 10,658 | 13,592 |
Silver equivalent ounces sold1 (000's) | 1,789 | 2,658 | 1,674 | 1,774 | 2,104 |
Silver equivalent ounces sold1 (average spot) (000's) | 2,004 | 2,969 | 1,839 | 1,913 | 2,240 |
Metal sales | $33.5 | $49.7 | $31.2 | $32.8 | $39.0 |
Costs applicable to sales | $24.3 | $34.0 | $23.3 | $24.2 | $26.4 |
Adjusted CAS per AgEqOz1 | $13.33 | $12.77 | $13.69 | $13.54 | $12.57 |
Adjusted CAS per average spot AgEqOz1 | $11.89 | $11.37 | $12.46 | $12.56 | $11.81 |
Exploration expense | $— | $0.5 | $0.5 | $0.3 | $0.1 |
Cash flow from operating activities | $3.4 | $26.1 | $1.6 | $(1.1) | $5.7 |
Sustaining capital expenditures (excludes capital lease payments) | $0.5 | $0.9 | $0.5 | $1.1 | $0.2 |
Development capital expenditures | $2.1 | $5.9 | $9.2 | $12.7 | $10.4 |
Total capital expenditures | $2.6 | $6.8 | $9.7 | $13.8 | $10.6 |
Free cash flow1 | $0.8 | $19.3 | $(8.1) | $(14.9) | $(4.9) |
• | Total tons placed increased 4% quarter-over-quarter and 24% year-over-year |
• | Production returned to normalized levels during the first quarter, with silver equivalent1 production totaling 1.8 million ounces, representing an increase of 6% year-over-year and a decrease of 26% compared to the prior quarter. The quarter-over-quarter decline was driven by elevated production in the fourth quarter of 2017 resulting from accelerated recoveries from the newly-expanded Stage IV leach pad and from the placement of higher-grade gold ore during the second half of 2017 |
• | First quarter adjusted CAS per average spot AgEqOz1 of $11.89 were slightly higher quarter-over-quarter, relatively flat year-over-year and below the full-year 2018 guidance range of $12.00 - $12.50 |
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• | First quarter free cash flow1 of $0.8 million reflected lower production and an increase in leach pad and metal inventory of $3.7 million, partially offset by lower capital expenditures relative to the prior quarter. Rochester is expected to generate higher free cash flow1 during the remaining three quarters of the year |
• | The upgrade of Rochester's crushing circuit with the planned addition of HPGR technology is on-track to begin in the fourth quarter of 2018. The project envisions the decommissioning of Rochester's smaller crushing plant later this year, at the same time the installation of an HPGR unit to Rochester's larger crushing facility is expected to begin. A gradual improvement to silver recoveries is anticipated beginning as early as the second quarter of 2019 |
• | Full-year 2018 production is unchanged at 4.2 - 4.7 million ounces of silver and 45,000 - 50,000 ounces of gold. The Company is also maintaining cost guidance of CAS per AgEqOz1 of $13.25 - $13.75 on a 60:1 silver equivalent basis and $12.00 - $12.50 on an average spot equivalent basis |
Wharf, South Dakota
(Dollars in millions, except per ounce amounts) | 1Q 2018 | 4Q 2017 | 3Q 2017 | 2Q 2017 | 1Q 2017 |
Ore tons placed | 1,076,395 | 1,124,785 | 1,150,308 | 993,167 | 1,292,181 |
Average gold grade (oz/t) | 0.022 | 0.029 | 0.029 | 0.024 | 0.027 |
Gold ounces produced | 17,936 | 27,292 | 25,849 | 21,358 | 20,873 |
Silver ounces produced (000's) | 12 | 16 | 15 | 13 | 20 |
Gold equivalent ounces produced1 | 18,133 | 27,560 | 26,096 | 21,568 | 21,207 |
Silver ounces sold (000's) | 11 | 16 | 14 | 11 | 33 |
Gold ounces sold | 17,339 | 28,975 | 23,855 | 21,314 | 24,093 |
Gold equivalent ounces sold1 | 17,522 | 29,256 | 24,085 | 21,495 | 24,636 |
Metal sales | $23.4 | $37.3 | $31.3 | $27.0 | $30.3 |
Costs applicable to sales | $15.3 | $19.9 | $17.3 | $15.8 | $16.3 |
Adjusted CAS per AuEqOz1 | $870 | $682 | $719 | $737 | $670 |
Exploration expense | $— | $0.1 | $0.2 | $— | $— |
Cash flow from operating activities | $(1.4) | $17.2 | $15.0 | $8.8 | $8.6 |
Sustaining capital expenditures (excludes capital lease payments) | $0.3 | $1.6 | $1.8 | $1.5 | $0.9 |
Development capital expenditures | $— | $1.7 | $1.3 | $— | $— |
Total capital expenditures | $0.3 | $3.3 | $3.1 | $1.5 | $0.9 |
Free cash flow1 | $(1.7) | $13.9 | $11.9 | $7.3 | $7.7 |
• | As anticipated, first quarter gold production declined 34% quarter-over-quarter and 14% year-over-year to 17,936 ounces primarily due to lower grades |
• | While production levels are anticipated to be higher throughout the remainder of the year, 2018 is expected to be a lower grade year as previously disclosed |
• | As a result of lower grades and production, adjusted CAS per AuEqOz1 of $870 increased quarter-over-quarter and year-over-year to the middle of the full-year 2018 guidance range of $850 - $900 |
• | Negative free cash flow1 of $1.7 million for the quarter was driven by lower production and higher unit costs related to lower planned grades as well as a $2.1 million increase in leach pad and metal inventory. For the remainder of 2018, Wharf is expected to generate positive free cash flow1 due to higher anticipated production |
• | For the full year, Coeur continues to expect gold production of 85,000 - 90,000 ounces at CAS per AuEqOz1 of $850 - $900 |
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Kensington, Alaska
(Dollars in millions, except per ounce amounts) | 1Q 2018 | 4Q 2017 | 3Q 2017 | 2Q 2017 | 1Q 2017 |
Tons milled | 158,706 | 167,631 | 172,038 | 163,163 | 165,895 |
Average gold grade (oz/t) | 0.17 | 0.22 | 0.17 | 0.17 | 0.17 |
Average recovery rate | 94.0% | 92.8% | 94.1% | 93.2% | 94.0% |
Gold ounces produced | 26,064 | 34,932 | 27,541 | 26,424 | 26,197 |
Gold ounces sold | 27,763 | 35,634 | 29,173 | 29,031 | 32,144 |
Metal sales | $36.3 | $44.3 | $36.6 | $35.6 | $38.0 |
Costs applicable to sales | $28.6 | $32.0 | $27.7 | $28.0 | $28.4 |
Adjusted CAS per AuOz1 | $1,010 | $896 | $946 | $952 | $884 |
Exploration expense | $1.6 | $2.8 | $3.0 | $2.0 | $0.8 |
Cash flow from operating activities | $4.6 | $16.8 | $9.3 | $7.0 | $4.5 |
Sustaining capital expenditures (excludes capital lease payments) | $8.5 | $8.0 | $6.5 | $3.7 | $2.5 |
Development capital expenditures | $2.9 | $4.0 | $3.6 | $4.9 | $3.0 |
Total capital expenditures | $11.4 | $12.0 | $10.1 | $8.6 | $5.5 |
Free cash flow1 | $(6.8) | $4.8 | $(0.8) | $(1.6) | $(1.0) |
• | First quarter gold production declined quarter-over-quarter to 26,064 ounces due to lower planned grades related to mine sequencing as well as maintenance-related mill downtime. Production was flat compared to last year's first quarter |
• | Development mining continued at Jualin during the quarter, where production is expected to increase in the second half of the year following completion of dewatering efforts. Second quarter production at Kensington is expected to remain consistent with first quarter levels |
• | Adjusted CAS per AuOz1 of $1,010 reflected lower production and grades during the quarter. Costs were additionally impacted by higher diesel and consumables costs. Higher grades and production levels in the second half of 2018 are expected to result in lower unit costs |
• | Total exploration spend during the quarter was $2.7 million, including $1.6 million in expensed exploration an $1.1 million in capitalized exploration |
• | Lower production and higher unit costs during the quarter resulted in negative free cash flow1 of $6.8 million |
• | Production and cost guidance for the full-year remain unchanged at 115,000 - 120,000 ounces of gold at CAS per AuOz1 of $900 - $950 |
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Exploration
During the first quarter, the Company demonstrated its continued commitment to its near-mine exploration program. Companywide exploration expense totaled $6.7 million for the period and represented a 26% increase compared to first quarter of 2017. Capitalized exploration of $5.2 million, primarily attributable to resource conversion efforts at Silvertip, was twice the capitalized exploration total from the same period in 2017. Up to 19 drill rigs were active, including seven at Palmarejo, three at Kensington and six at Silvertip.
At Palmarejo, four drill rigs targeted expansion of the Nación and Zapata resources throughout the quarter with three drill rigs focused on conversion drilling at Independencia and Guadalupe. Underground drilling also targeted definition of the more recently-discovered Madero vein to the west of Guadalupe. Geologic work on the Portales and Jacobo veins, east of Guadalupe, is ongoing with further drilling planned for the second quarter.
During the quarter, exploration at Kensington continued to target expansion of the Raven vein and lower Kensington Main Block L. Drilling completed on lower Jualin Vein #4 early in the quarter is reflected in Kensington's updated technical report filed April 25, 2018.
Exploration at Silvertip remained primarily focused on conversion drilling and accounted for $3.0 million of the companywide capitalized exploration total. Preparation of underground access, which began in the prior quarter, enabled drilling to quickly ramp up to four rigs in January and six by quarter-end, with two underground and four active from the surface. The mine's infill and expansion drill programs are on-schedule, and results are expected to be included in an updated technical report anticipated in the second half of 2018.
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2018 Production Outlook
Coeur's production guidance remains unchanged from the guidance originally published January 8, 2018.
Silver | Gold | Zinc | Lead | Silver Equivalent1 | |
(K oz) | (oz) | (K lbs) | (K lbs) | (K oz) | |
Palmarejo | 6,500 - 7,100 | 110,000 - 115,000 | — | — | 13,100 - 14,000 |
Rochester | 4,200 - 4,700 | 45,000 - 50,000 | — | — | 6,900 - 7,700 |
Kensington | — | 115,000 - 120,000 | — | — | 6,900 - 7,200 |
Wharf | — | 85,000 - 90,000 | — | — | 5,100 - 5,400 |
Silvertip | 1,500 - 2,000 | — | 23,000 - 28,000 | 23,000 - 28,000 | 4,030 - 5,080 |
Total | 12,200 - 13,800 | 355,000 - 375,000 | 23,000 - 28,000 | 23,000 - 28,000 | 36,030 - 39,380 |
Total (including discontinued operations) | 12,800 - 14,400 | 355,000 - 375,000 | 23,000 - 28,000 | 23,000 - 28,000 | 36,630 - 39,980 |
2017 Cost Performance and 2018 Outlook
The Company's cost guidance is unchanged and spot guidance remains based on silver-to-gold, -zinc and -lead equivalence ratios of 75:1, 0.09:1 and 0.07:1, respectively.
Original Guidance (if changed) | Current Guidance | ||||
(dollars in millions, except per ounce amounts) | 60:1 | Spot | 60:1 | Spot | |
CAS per AgEqOz1 – Palmarejo | $10.50 - $11.00 | $9.25 -$9.75 | |||
CAS per AgEqOz1 – Rochester | $13.25 - $13.75 | $12.00 - $12.50 | |||
CAS per AuOz1 – Kensington | $900 - $950 | ||||
CAS per AuEqOz1 – Wharf | $850 - $900 | ||||
CAS per AgEqOz1 – Silvertip | $15.00 - $15.50 | $12.00 - $12.50 | |||
Capital Expenditures | $120 - $140 | ||||
General and Administrative Expenses | $32 - $34 | ||||
Exploration Expense | $20 - $25 | ||||
AISC per AgEqOz1 from continuing operations | $17.50 - $18.00 | $15.00 - $15.50 | |||
Financial Results and Conference Call
Coeur will host a conference call to discuss its first quarter 2018 financial results on April 26, 2018 at 11:00 a.m. Eastern Time.
Dial-In Numbers: (855) 560-2581 (U.S.)
(855) 669-9657 (Canada)
(412) 542-4166 (International)
Conference ID: Coeur Mining
Hosting the call will be Mitchell J. Krebs, President and Chief Executive Officer of Coeur, who will be joined by Peter C. Mitchell, Senior Vice President and Chief Financial Officer, Frank L. Hanagarne, Jr., Senior Vice President and Chief Operating Officer, Hans Rasmussen, Senior Vice President of Exploration, and other members of management. A replay of the call will be available through May 10, 2018.
10
Replay numbers: (877) 344-7529 (U.S.)
(855) 669-9658 (Canada)
(412) 317-0088 (International)
Conference ID: 101 17 926
About Coeur
Coeur Mining, Inc. is a well-diversified, growing precious metals producer with five mines in North America. Coeur produces from its wholly-owned operations: the Palmarejo silver-gold complex in Mexico, the Silvertip silver-zinc-lead mine in British Columbia, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska, and the Wharf gold mine in South Dakota. In addition, the Company has interests in several precious metals exploration projects throughout North America.
Cautionary Statements
This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding anticipated production, costs, expenses, expectations regarding Silvertip, including but not limited to, the timing of achieving commercial production, declaration of mineral reserves and completion of a technical report, grades, exploration and development efforts, payments under the Palmarejo gold stream agreement, expectations regarding dewatering efforts at and production from the Jualin deposit at Kensington, expected free cash flow, throughput, inventory levels, mining rates and recovery rates. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Coeur's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the risk that expectations regarding Silvertip including the timing of commercial production, obtaining necessary permits, and filing a technical report do not occur on a timely basis or at all, the risk that anticipated production, cost, expense, and free cash flow levels are not attained, the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), changes in the market prices of gold, silver, zinc and lead and a sustained lower price environment, the uncertainties inherent in Coeur's production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, ground conditions, grade variability, any future labor disputes or work stoppages, the uncertainties inherent in the estimation of gold and silver reserves, changes that could result from Coeur's future acquisition of new mining properties or businesses, the loss of any third-party smelter to which Coeur markets its production, the effects of environmental and other governmental regulations, the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, Coeur's ability to raise additional financing necessary to conduct its business, make payments or refinance its debt, as well as other uncertainties and risk factors set out in filings made from time to time with the United States Securities and Exchange Commission, and the Canadian securities regulators, including, without limitation, Coeur's most recent reports on Form 10-K and Form 10-Q. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Coeur disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Coeur undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Coeur, its financial or operating results or its securities.
Christopher Pascoe, Coeur's Director, Technical Services and a qualified person under Canadian National Instrument 43-101, approved the scientific and technical information concerning Coeur's mineral projects in this news release. The PEA for the re-scoped mine plan at Rochester described in this news release is preliminary in nature and is based in part upon inferred mineral resources, and does not have as high a level of certainty as a plan based solely on proven and probable mineral reserves. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be considered for estimation of mineral reserves and there is no certainty that the results from the preliminary economic assessment will be realized. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors, Canadian investors should refer to the Technical Reports for each of Coeur's properties as filed on SEDAR at www.sedar.com.
11
Non-U.S. GAAP Measures
We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non-U.S. GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver ounce (or per gold ounce), all-in sustaining costs, and adjusted all-in sustaining costs. We believe that these adjusted measures provide meaningful information to assist management, investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring operations because they exclude items that may not be indicative of, or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. We believe EBITDA, adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver ounce (or per gold ounce), all-in sustaining costs, and adjusted all-in sustaining costs are important measures in assessing the Company's overall financial performance. For additional explanation regarding our use of non-U.S. GAAP financial measures, please refer to our Form 10-K for the year ended December 31, 2017.
Notes
1. EBITDA, adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver ounce (or per gold ounce), all-in sustaining costs, and adjusted all-in sustaining costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Free cash flow is defined as cash flow from operating activities less capital expenditures and gold production royalty payments. Please see table in Appendix for the calculation of consolidated free cash flow. Silver and gold equivalence assumes a 60:1 silver-to-gold ratio, except where noted as average spot prices. Please see the table below for average applicable spot prices and corresponding ratios. Silver and zinc equivalence assumes a 0.06:1 silver-to-zinc ratio. Silver and lead equivalence assumes a 0.05:1 silver-to-lead ratio.
2. Includes capital leases. Net of debt issuance costs and premium received.
Average Spot Prices
1Q 2018 | 4Q 2017 | 3Q 2017 | 2Q 2017 | 1Q 2017 | |||||||||||
Average Silver Spot Price Per Ounce | $ | 16.77 | $ | 16.73 | $ | 16.84 | $ | 17.21 | $ | 17.42 | |||||
Average Gold Spot Price Per Ounce | $ | 1,329 | $ | 1,275 | $ | 1,278 | $ | 1,257 | $ | 1,219 | |||||
Average Silver to Gold Spot Equivalence | 79:1 | 76:1 | 76:1 | 73:1 | 70:1 | ||||||||||
For Additional Information
Coeur Mining, Inc.
104 S. Michigan Avenue, Suite 900
Chicago, IL 60603
Attention: Courtney Lynn, Vice President, Investor Relations and Treasurer
Phone: (312) 489-5800
www.coeur.com
12
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Three months ended March 31, | |||||||
2018 | 2017 | ||||||
In thousands, except share data | |||||||
Revenue | $ | 163,267 | $ | 185,554 | |||
COSTS AND EXPENSES | |||||||
Costs applicable to sales(1) | 99,340 | 114,490 | |||||
Amortization | 30,777 | 38,693 | |||||
General and administrative | 8,804 | 10,125 | |||||
Exploration | 6,683 | 5,252 | |||||
Pre-development, reclamation, and other | 4,225 | 3,837 | |||||
Total costs and expenses | 149,829 | 172,397 | |||||
OTHER INCOME (EXPENSE), NET | |||||||
Fair value adjustments, net | 4,987 | (1,200 | ) | ||||
Interest expense, net of capitalized interest | (5,965 | ) | (3,579 | ) | |||
Other, net | 180 | 20,799 | |||||
Total other income (expense), net | (798 | ) | 16,020 | ||||
Income (loss) before income and mining taxes | 12,640 | 29,177 | |||||
Income and mining tax (expense) benefit | (11,949 | ) | (10,878 | ) | |||
Income (loss) from continuing operations | $ | 691 | $ | 18,299 | |||
Income (loss) from discontinued operations | 550 | 364 | |||||
NET INCOME (LOSS) | $ | 1,241 | $ | 18,663 | |||
OTHER COMPREHENSIVE INCOME (LOSS), net of tax: | |||||||
Unrealized gain (loss) on debt and equity securities | (278 | ) | (2,182 | ) | |||
Reclassification adjustments for impairment of equity securities | — | 121 | |||||
Reclassification adjustments for realized (gain) loss on sale of equity securities | — | 1,471 | |||||
Other comprehensive income (loss) | (278 | ) | (590 | ) | |||
COMPREHENSIVE INCOME (LOSS) | $ | 963 | $ | 18,073 | |||
NET INCOME (LOSS) PER SHARE | |||||||
Basic income (loss) per share: | |||||||
Net income (loss) from continuing operations | $ | 0.00 | $ | 0.10 | |||
Net income (loss) from discontinued operations | 0.00 | 0.00 | |||||
Basic(2) | $ | 0.01 | $ | 0.10 | |||
Diluted income (loss) per share: | |||||||
Net income (loss) from continuing operations | $ | 0.00 | $ | 0.10 | |||
Net income (loss) from discontinued operations | 0.00 | 0.00 | |||||
Diluted(2) | $ | 0.01 | $ | 0.10 | |||
(1) Excludes amortization.
(2) Due to rounding, the sum of net income per share from continuing operations and discontinued operations may not equal net income per share.
13
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Three months ended March 31, | |||||||
2018 | 2017 | ||||||
In thousands | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income (loss) | $ | 1,241 | $ | 18,663 | |||
(Income) loss from discontinued operations | (550 | ) | (364 | ) | |||
Adjustments: | |||||||
Amortization | 30,777 | 38,693 | |||||
Accretion | 3,318 | 2,240 | |||||
Deferred taxes | 454 | 2,584 | |||||
Fair value adjustments, net | (4,987 | ) | 1,200 | ||||
Stock-based compensation | 2,786 | 3,307 | |||||
Gain on sale of the Joaquin project | — | (21,138 | ) | ||||
Other | 401 | (1,895 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Receivables | (1,691 | ) | 5,680 | ||||
Prepaid expenses and other current assets | (5,635 | ) | (4,906 | ) | |||
Inventory and ore on leach pads | (8,708 | ) | 15,171 | ||||
Accounts payable and accrued liabilities | (1,865 | ) | (15,299 | ) | |||
CASH PROVIDED BY OPERATING ACTIVITIES OF CONTINUING OPERATIONS | 15,541 | 43,936 | |||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS | (2,690 | ) | 11,335 | ||||
CASH PROVIDED BY OPERATING ACTIVITIES | 12,851 | 55,271 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | (42,345 | ) | (23,591 | ) | |||
Proceeds from the sale of assets | 60 | 15,019 | |||||
Purchase of investments | (361 | ) | (1,016 | ) | |||
Sale of investments | 1,619 | 10,020 | |||||
Other | (65 | ) | (14 | ) | |||
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES OF CONTINUING OPERATIONS | (41,092 | ) | 418 | ||||
CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS | (28,470 | ) | (388 | ) | |||
CASH USED IN INVESTING ACTIVITIES | (69,562 | ) | 30 | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Issuance of notes and bank borrowings, net of issuance costs | 15,000 | — | |||||
Payments on debt, capital leases, and associated costs | (18,449 | ) | (3,206 | ) | |||
Other | (4,606 | ) | (3,247 | ) | |||
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES OF CONTINUING OPERATIONS | (8,055 | ) | (6,453 | ) | |||
CASH USED IN FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS | (22 | ) | (20 | ) | |||
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (8,077 | ) | (6,473 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | 557 | 555 | |||||
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (64,231 | ) | 49,383 | ||||
Less net cash provided by (used in) discontinued operations(1) | (32,930 | ) | 5,527 | ||||
(31,301 | ) | 43,856 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 203,402 | 126,601 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 172,101 | $ | 170,457 | |||
14
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2018 (unaudited) | December 31, 2017 | ||||||
ASSETS | In thousands, except share data | ||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 159,643 | $ | 192,032 | |||
Receivables | 35,864 | 19,069 | |||||
Inventory | 61,723 | 58,230 | |||||
Ore on leach pads | 75,584 | 73,752 | |||||
Prepaid expenses and other | 18,203 | 15,053 | |||||
Assets held for sale | — | 91,421 | |||||
351,017 | 449,557 | ||||||
NON-CURRENT ASSETS | |||||||
Property, plant and equipment, net | 266,157 | 254,737 | |||||
Mining properties, net | 843,821 | 829,569 | |||||
Ore on leach pads | 67,430 | 65,393 | |||||
Restricted assets | 22,116 | 20,847 | |||||
Equity and debt securities | 37,317 | 34,837 | |||||
Receivables | 55,428 | 28,750 | |||||
Other | 18,649 | 17,485 | |||||
TOTAL ASSETS | $ | 1,661,935 | $ | 1,701,175 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable | $ | 44,864 | $ | 48,592 | |||
Accrued liabilities and other | 105,149 | 94,930 | |||||
Debt | 17,040 | 30,753 | |||||
Reclamation | 3,777 | 3,777 | |||||
Liabilities held for sale | — | 50,677 | |||||
170,830 | 228,729 | ||||||
NON-CURRENT LIABILITIES | |||||||
Debt | 396,984 | 380,569 | |||||
Reclamation | 119,154 | 117,055 | |||||
Deferred tax liabilities | 105,224 | 105,148 | |||||
Other long-term liabilities | 55,432 | 54,697 | |||||
676,794 | 657,469 | ||||||
STOCKHOLDERS’ EQUITY | |||||||
Common stock, par value $0.01 per share; authorized 300,000,000 shares, 186,176,237 issued and outstanding at March 31, 2018 and 185,637,724 at December 31, 2017 | 1,862 | 1,856 | |||||
Additional paid-in capital | 3,355,710 | 3,357,345 | |||||
Accumulated other comprehensive income (loss) | (363 | ) | 2,519 | ||||
Accumulated deficit | (2,542,898 | ) | (2,546,743 | ) | |||
814,311 | 814,977 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,661,935 | $ | 1,701,175 | |||
15
Adjusted EBITDA Reconciliation
(Dollars in thousands except per share amounts) | LTM 1Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | 2Q 2017 | 1Q 2017 | LTM 1Q 2017 | ||||||||||||||||||||
Net income (loss) | $ | (18,741 | ) | $ | 1,241 | $ | 7,625 | $ | (16,652 | ) | $ | (10,955 | ) | $ | 18,663 | $ | 94,411 | ||||||||||
(Income) loss from discontinued operations, net of tax | 12,058 | (550 | ) | 6,724 | 4,924 | 960 | (364 | ) | (32,036 | ) | |||||||||||||||||
Interest expense, net of capitalized interest | 18,826 | 5,965 | 5,522 | 3,595 | 3,744 | 3,579 | 29,358 | ||||||||||||||||||||
Income tax provision (benefit) | 30,069 | 11,949 | 4,957 | 14,289 | (1,126 | ) | 10,878 | (23,629 | ) | ||||||||||||||||||
Amortization | 138,633 | 30,777 | 44,722 | 32,401 | 30,733 | 38,693 | 129,012 | ||||||||||||||||||||
EBITDA | 180,845 | 49,382 | 69,550 | 38,557 | 23,356 | 71,449 | 197,116 | ||||||||||||||||||||
Fair value adjustments, net | (5,323 | ) | (4,987 | ) | — | — | (336 | ) | 1,200 | 4,086 | |||||||||||||||||
Impairment of equity and debt securities | 305 | — | — | — | 305 | 121 | 824 | ||||||||||||||||||||
Foreign exchange (gain) loss | 595 | 670 | 672 | 39 | (786 | ) | (1,206 | ) | 9,936 | ||||||||||||||||||
Gain on sale of Joaquin project | — | — | — | — | — | (21,138 | ) | (21,138 | ) | ||||||||||||||||||
(Gain) loss on sale of assets and securities | (1,491 | ) | 574 | 499 | (2,051 | ) | (513 | ) | 2,066 | (8,183 | ) | ||||||||||||||||
Gain on repurchase of Rochester royalty | (2,332 | ) | — | — | — | (2,332 | ) | — | — | ||||||||||||||||||
Loss on debt extinguishment | 9,342 | — | — | — | 9,342 | — | 21,365 | ||||||||||||||||||||
Transaction costs | 3,847 | 90 | 2,938 | 819 | — | — | 819 | ||||||||||||||||||||
Asset retirement obligation accretion | 9,536 | 2,669 | 2,475 | 2,223 | 2,169 | 2,116 | 7,585 | ||||||||||||||||||||
Inventory adjustments and write-downs | 3,066 | 1,126 | 885 | 659 | 715 | (94 | ) | 4,683 | |||||||||||||||||||
Adjusted EBITDA | $ | 198,390 | $ | 49,524 | $ | 77,019 | $ | 40,246 | $ | 31,920 | $ | 54,514 | $ | 217,093 | |||||||||||||
Adjusted Net Income (Loss) Reconciliation
(Dollars in thousands except per share amounts) | 1Q 2018 | 4Q 2017 | 3Q 2017 | 2Q 2017 | 1Q 2017 | ||||||||||||||
Net income (loss) | $ | 1,241 | $ | 7,625 | $ | (16,652 | ) | $ | (10,955 | ) | $ | 18,663 | |||||||
(Income) loss from discontinued operations, net of tax | (550 | ) | 6,724 | 4,924 | 960 | (364 | ) | ||||||||||||
Fair value adjustments, net | (4,987 | ) | — | — | (336 | ) | 1,200 | ||||||||||||
Impairment of equity and debt securities | — | — | — | 305 | 121 | ||||||||||||||
Gain on sale of Joaquin project | — | — | — | — | (21,138 | ) | |||||||||||||
(Gain) loss on sale of assets and securities | 574 | 499 | (2,051 | ) | (513 | ) | 2,066 | ||||||||||||
Gain on repurchase of Rochester royalty | — | — | — | (2,332 | ) | — | |||||||||||||
(Gain) loss on debt extinguishment | — | — | — | 9,342 | — | ||||||||||||||
Transaction costs | 90 | 2,938 | 819 | — | — | ||||||||||||||
Foreign exchange loss (gain) | 4,312 | (3,643 | ) | (1,392 | ) | 2,186 | 4,411 | ||||||||||||
Tax effect of adjustments(1) | — | — | (991 | ) | — | 1,807 | |||||||||||||
Adjusted net income (loss) | $ | 680 | $ | 14,143 | $ | (15,343 | ) | $ | (1,343 | ) | $ | 6,766 | |||||||
Adjusted net income (loss) per share - Basic | $ | 0.00 | $ | 0.08 | $ | (0.09 | ) | $ | (0.01 | ) | $ | 0.04 | |||||||
Adjusted net income (loss) per share - Diluted | $ | 0.00 | $ | 0.08 | $ | (0.09 | ) | $ | (0.01 | ) | $ | 0.04 | |||||||
16
Consolidated Free Cash Flow Reconciliation
(Dollars in thousands) | 1Q 2018 | 4Q 2017 | 3Q 2017 | 2Q 2017 | 1Q 2017 | ||||||||||||||
Cash flow from continuing operations | $ | 15,541 | $ | 91,811 | $ | 37,308 | $ | 24,103 | $ | 43,938 | |||||||||
Capital expenditures from continuing operations | 42,345 | 47,054 | 28,982 | 37,107 | 23,591 | ||||||||||||||
Free cash flow | (26,804 | ) | 44,757 | 8,326 | (13,004 | ) | 20,347 | ||||||||||||
Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended March 31, 2018
Silver | Gold | Total | ||||||||||||||||||||||||||
In thousands except per ounce amounts | Palmarejo | Rochester | Total | Kensington | Wharf | Total | ||||||||||||||||||||||
Costs applicable to sales, including amortization (U.S. GAAP) | $ | 47,421 | $ | 29,136 | $ | 76,557 | $ | 35,347 | $ | 17,966 | $ | 53,313 | $ | 129,870 | ||||||||||||||
Amortization | 16,325 | 4,831 | 21,156 | 6,717 | 2,657 | 9,374 | 30,530 | |||||||||||||||||||||
Costs applicable to sales | $ | 31,096 | $ | 24,305 | $ | 55,401 | $ | 28,630 | $ | 15,309 | $ | 43,939 | $ | 99,340 | ||||||||||||||
Silver equivalent ounces sold | 3,883,983 | 1,789,007 | 5,672,990 | 8,390,090 | ||||||||||||||||||||||||
Gold equivalent ounces sold | 27,763 | 17,522 | 45,285 | |||||||||||||||||||||||||
Costs applicable to sales per ounce | $ | 8.01 | $ | 13.59 | $ | 9.77 | $ | 1,031 | $ | 874 | $ | 970 | $ | 11.84 | ||||||||||||||
Inventory adjustments | — | (0.26 | ) | (0.08 | ) | (21 | ) | (4 | ) | (15 | ) | (0.13 | ) | |||||||||||||||
Adjusted costs applicable to sales per ounce | $ | 8.01 | $ | 13.33 | $ | 9.69 | $ | 1,010 | $ | 870 | $ | 955 | $ | 11.71 | ||||||||||||||
Costs applicable to sales per average spot ounce | $ | 6.94 | $ | 12.13 | $ | 8.55 | $ | 9.87 | ||||||||||||||||||||
Inventory adjustments | — | (0.24 | ) | (0.07 | ) | (0.11 | ) | |||||||||||||||||||||
Adjusted costs applicable to sales per average spot ounce | $ | 6.94 | $ | 11.89 | $ | 8.48 | $ | 9.76 | ||||||||||||||||||||
Costs applicable to sales | $ | 99,340 | ||||||||||||||||||||||||||
Treatment and refining costs | 1,195 | |||||||||||||||||||||||||||
Sustaining capital | 23,389 | |||||||||||||||||||||||||||
General and administrative | 8,804 | |||||||||||||||||||||||||||
Exploration | 6,683 | |||||||||||||||||||||||||||
Reclamation | 4,532 | |||||||||||||||||||||||||||
Project/pre-development costs | 1,421 | |||||||||||||||||||||||||||
All-in sustaining costs | $ | 145,364 | ||||||||||||||||||||||||||
Silver equivalent ounces sold | 5,672,990 | |||||||||||||||||||||||||||
Kensington and Wharf silver equivalent ounces sold | 2,717,100 | |||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold | 8,390,090 | |||||||||||||||||||||||||||
All-in sustaining costs per silver equivalent ounce | $ | 17.33 | ||||||||||||||||||||||||||
Inventory adjustments | $ | (0.13 | ) | |||||||||||||||||||||||||
Adjusted all-in sustaining costs per silver equivalent ounce | $ | 17.20 | ||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold (average spot) | 10,066,759 | |||||||||||||||||||||||||||
All-in sustaining costs per average spot silver equivalent ounce | $ | 14.44 | ||||||||||||||||||||||||||
Inventory adjustments | $ | (0.11 | ) | |||||||||||||||||||||||||
Adjusted all-in sustaining costs per average spot silver equivalent ounce | $ | 14.33 | ||||||||||||||||||||||||||
Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
17
for Three Months Ended December 31, 2017
Silver | Gold | Total | ||||||||||||||||||||||||||||||
In thousands except per ounce amounts | Palmarejo | Rochester | Endeavor | Total | Kensington | Wharf | Total | |||||||||||||||||||||||||
Costs applicable to sales, including amortization (U.S. GAAP) | $ | 58,775 | $ | 41,006 | $ | — | $ | 99,781 | $ | 42,640 | $ | 24,033 | $ | 66,673 | $ | 166,454 | ||||||||||||||||
Amortization | 22,749 | 6,960 | — | 29,709 | 10,633 | 4,129 | 14,762 | 44,471 | ||||||||||||||||||||||||
Costs applicable to sales | $ | 36,026 | $ | 34,046 | $ | — | $ | 70,072 | $ | 32,007 | $ | 19,904 | $ | 51,911 | $ | 121,983 | ||||||||||||||||
Silver equivalent ounces sold | 4,680,802 | 2,657,975 | — | 7,338,777 | 11,232,057 | |||||||||||||||||||||||||||
Gold equivalent ounces sold | 35,633 | 29,255 | 64,888 | |||||||||||||||||||||||||||||
Costs applicable to sales per ounce | $ | 7.70 | $ | 12.81 | $ | — | $ | 9.55 | $ | 898 | $ | 680 | $ | 800 | $ | 10.86 | ||||||||||||||||
Inventory adjustments | (0.16 | ) | (0.04 | ) | — | (0.12 | ) | (2 | ) | 2 | — | (0.08 | ) | |||||||||||||||||||
Adjusted costs applicable to sales per ounce | $ | 7.54 | $ | 12.77 | $ | — | $ | 9.43 | $ | 896 | $ | 682 | $ | 800 | $ | 10.78 | ||||||||||||||||
Costs applicable to sales per average spot ounce | $ | 6.78 | $ | 11.41 | $ | 8.45 | $ | 9.21 | ||||||||||||||||||||||||
Inventory adjustments | (0.14 | ) | (0.04 | ) | (0.10 | ) | (0.07 | ) | ||||||||||||||||||||||||
Adjusted costs applicable to sales per average spot ounce | $ | 6.64 | $ | 11.37 | $ | 8.35 | $ | 9.14 | ||||||||||||||||||||||||
Costs applicable to sales | $ | 121,983 | ||||||||||||||||||||||||||||||
Treatment and refining costs | 1,600 | |||||||||||||||||||||||||||||||
Sustaining capital | 18,520 | |||||||||||||||||||||||||||||||
General and administrative | 9,120 | |||||||||||||||||||||||||||||||
Exploration | 7,455 | |||||||||||||||||||||||||||||||
Reclamation | 4,075 | |||||||||||||||||||||||||||||||
Project/pre-development costs | 578 | |||||||||||||||||||||||||||||||
All-in sustaining costs | $ | 163,331 | ||||||||||||||||||||||||||||||
Silver equivalent ounces sold | 7,338,777 | |||||||||||||||||||||||||||||||
Kensington and Wharf silver equivalent ounces sold | 3,893,280 | |||||||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold | 11,232,057 | |||||||||||||||||||||||||||||||
All-in sustaining costs per silver equivalent ounce | $ | 14.53 | ||||||||||||||||||||||||||||||
Inventory adjustments | $ | (0.08 | ) | |||||||||||||||||||||||||||||
Adjusted all-in sustaining costs per silver equivalent ounce | $ | 14.45 | ||||||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold (average spot) | 13,246,634 | |||||||||||||||||||||||||||||||
All-in sustaining costs per average spot silver equivalent ounce | $ | 12.33 | ||||||||||||||||||||||||||||||
Inventory adjustments | $ | (0.07 | ) | |||||||||||||||||||||||||||||
Adjusted all-in sustaining costs per average spot silver equivalent ounce | $ | 12.26 | ||||||||||||||||||||||||||||||
Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
18
for Three Months Ended September 30, 2017
Silver | Gold | Total | ||||||||||||||||||||||||||||||
In thousands except per ounce amounts | Palmarejo | Rochester | Endeavor | Total | Kensington | Wharf | Total | |||||||||||||||||||||||||
Costs applicable to sales, including amortization (U.S. GAAP) | $ | 49,669 | $ | 27,866 | $ | 59 | $ | 77,594 | $ | 35,522 | $ | 20,553 | $ | 56,075 | $ | 133,669 | ||||||||||||||||
Amortization | 16,414 | 4,591 | 20 | 21,025 | 7,864 | 3,223 | 11,087 | 32,112 | ||||||||||||||||||||||||
Costs applicable to sales | $ | 33,255 | $ | 23,275 | $ | 39 | $ | 56,569 | $ | 27,658 | $ | 17,330 | $ | 44,988 | $ | 101,557 | ||||||||||||||||
Silver equivalent ounces sold | 3,386,963 | 1,673,704 | 8,027 | 5,068,694 | 8,264,174 | |||||||||||||||||||||||||||
Gold equivalent ounces sold | 29,173 | 24,085 | 53,258 | |||||||||||||||||||||||||||||
Costs applicable to sales per ounce | $ | 9.82 | $ | 13.91 | $ | 4.86 | $ | 11.16 | $ | 948 | $ | 720 | $ | 845 | $ | 12.29 | ||||||||||||||||
Inventory adjustments | (0.06 | ) | (0.22 | ) | — | (0.11 | ) | (2 | ) | (1 | ) | (2 | ) | (0.08 | ) | |||||||||||||||||
Adjusted costs applicable to sales per ounce | $ | 9.76 | $ | 13.69 | $ | 4.86 | $ | 11.05 | $ | 946 | $ | 719 | $ | 843 | $ | 12.21 | ||||||||||||||||
Costs applicable to sales per average spot ounce | $ | 8.73 | $ | 12.66 | $ | 10.00 | $ | 10.47 | ||||||||||||||||||||||||
Inventory adjustments | (0.05 | ) | (0.20 | ) | (0.10 | ) | (0.07 | ) | ||||||||||||||||||||||||
Adjusted costs applicable to sales per average spot ounce | $ | 8.68 | $ | 12.46 | $ | 9.90 | $ | 10.40 | ||||||||||||||||||||||||
Costs applicable to sales | $ | 101,557 | ||||||||||||||||||||||||||||||
Treatment and refining costs | 1,408 | |||||||||||||||||||||||||||||||
Sustaining capital | 18,126 | |||||||||||||||||||||||||||||||
General and administrative | 7,345 | |||||||||||||||||||||||||||||||
Exploration | 9,792 | |||||||||||||||||||||||||||||||
Reclamation | 3,915 | |||||||||||||||||||||||||||||||
Project/pre-development costs | 1,979 | |||||||||||||||||||||||||||||||
All-in sustaining costs | $ | 144,122 | ||||||||||||||||||||||||||||||
Silver equivalent ounces sold | 5,068,694 | |||||||||||||||||||||||||||||||
Kensington and Wharf silver equivalent ounces sold | 3,195,480 | |||||||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold | 8,264,174 | |||||||||||||||||||||||||||||||
All-in sustaining costs per silver equivalent ounce | $ | 17.43 | ||||||||||||||||||||||||||||||
Inventory adjustments | $ | (0.08 | ) | |||||||||||||||||||||||||||||
Adjusted all-in sustaining costs per silver equivalent ounce | $ | 17.35 | ||||||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold (average spot) | 9,698,654 | |||||||||||||||||||||||||||||||
All-in sustaining costs per average spot silver equivalent ounce | $ | 14.86 | ||||||||||||||||||||||||||||||
Inventory adjustments | $ | (0.07 | ) | |||||||||||||||||||||||||||||
Adjusted all-in sustaining costs per average spot silver equivalent ounce | $ | 14.79 | ||||||||||||||||||||||||||||||
Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
19
for Three Months Ended June 30, 2017
Silver | Gold | Total | ||||||||||||||||||||||||||||||
In thousands except per ounce amounts | Palmarejo | Rochester | Endeavor | Total | Kensington | Wharf | Total | |||||||||||||||||||||||||
Costs applicable to sales, including amortization (U.S. GAAP) | $ | 48,325 | $ | 29,099 | $ | 586 | $ | 78,010 | $ | 36,335 | $ | 18,317 | $ | 54,652 | $ | 132,662 | ||||||||||||||||
Amortization | 14,431 | 4,938 | 168 | 19,537 | 8,347 | 2,549 | 10,896 | 30,433 | ||||||||||||||||||||||||
Costs applicable to sales | $ | 33,894 | $ | 24,161 | $ | 418 | $ | 58,473 | $ | 27,988 | $ | 15,768 | $ | 43,756 | $ | 102,229 | ||||||||||||||||
Silver equivalent ounces sold | 2,995,623 | 1,774,000 | 59,234 | 4,828,857 | 7,860,417 | |||||||||||||||||||||||||||
Gold equivalent ounces sold | 29,031 | 21,495 | 50,526 | |||||||||||||||||||||||||||||
Costs applicable to sales per ounce | $ | 11.31 | $ | 13.62 | $ | 7.06 | $ | 12.11 | $ | 964 | $ | 734 | $ | 866 | $ | 13.01 | ||||||||||||||||
Inventory adjustments | (0.10 | ) | (0.08 | ) | — | (0.09 | ) | (12 | ) | 3 | (6 | ) | (0.09 | ) | ||||||||||||||||||
Adjusted costs applicable to sales per ounce | $ | 11.21 | $ | 13.54 | $ | 7.06 | $ | 12.02 | $ | 952 | $ | 737 | $ | 860 | $ | 12.92 | ||||||||||||||||
Costs applicable to sales per average spot ounce | $ | 10.20 | $ | 12.63 | $ | 11.04 | $ | 11.38 | ||||||||||||||||||||||||
Inventory adjustments | (0.09 | ) | (0.07 | ) | (0.08 | ) | (0.08 | ) | ||||||||||||||||||||||||
Adjusted costs applicable to sales per average spot ounce | $ | 10.11 | $ | 12.56 | $ | 10.96 | $ | 11.30 | ||||||||||||||||||||||||
Costs applicable to sales | $ | 102,229 | ||||||||||||||||||||||||||||||
Treatment and refining costs | 1,288 | |||||||||||||||||||||||||||||||
Sustaining capital | 17,173 | |||||||||||||||||||||||||||||||
General and administrative | 7,025 | |||||||||||||||||||||||||||||||
Exploration | 7,813 | |||||||||||||||||||||||||||||||
Reclamation | 3,581 | |||||||||||||||||||||||||||||||
Project/pre-development costs | 1,677 | |||||||||||||||||||||||||||||||
All-in sustaining costs | $ | 140,786 | ||||||||||||||||||||||||||||||
Silver equivalent ounces sold | 4,828,857 | |||||||||||||||||||||||||||||||
Kensington and Wharf silver equivalent ounces sold | 3,031,560 | |||||||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold | 7,860,417 | |||||||||||||||||||||||||||||||
All-in sustaining costs per silver equivalent ounce | $ | 17.90 | ||||||||||||||||||||||||||||||
Inventory adjustments | $ | (0.09 | ) | |||||||||||||||||||||||||||||
Adjusted all-in sustaining costs per silver equivalent ounce | $ | 17.81 | ||||||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold (average spot) | 8,990,166 | |||||||||||||||||||||||||||||||
All-in sustaining costs per average spot silver equivalent ounce | $ | 15.66 | ||||||||||||||||||||||||||||||
Inventory adjustments | $ | (0.08 | ) | |||||||||||||||||||||||||||||
Adjusted all-in sustaining costs per average spot silver equivalent ounce | $ | 15.58 | ||||||||||||||||||||||||||||||
Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce
20
for Three Months Ended March 31, 2017
Silver | Gold | Total | ||||||||||||||||||||||||||||||
In thousands except per ounce amounts | Palmarejo | Rochester | Endeavor | Total | Kensington | Wharf | Total | |||||||||||||||||||||||||
Costs applicable to sales, including amortization (U.S. GAAP) | $ | 63,151 | $ | 32,255 | $ | 400 | $ | 95,806 | $ | 37,621 | $ | 19,431 | $ | 57,052 | $ | 152,858 | ||||||||||||||||
Amortization | 20,150 | 5,816 | 113 | 26,079 | 9,178 | 3,111 | 12,289 | 38,368 | ||||||||||||||||||||||||
Costs applicable to sales | $ | 43,001 | $ | 26,439 | $ | 287 | $ | 69,727 | $ | 28,443 | $ | 16,320 | $ | 44,763 | $ | 114,490 | ||||||||||||||||
Silver equivalent ounces sold | 4,427,346 | 2,104,209 | 39,765 | 6,571,320 | 9,978,120 | |||||||||||||||||||||||||||
Gold equivalent ounces sold | 32,144 | 24,636 | 56,780 | |||||||||||||||||||||||||||||
Costs applicable to sales per ounce | $ | 9.71 | $ | 12.56 | $ | 7.22 | $ | 10.61 | $ | 885 | $ | 662 | $ | 788 | $ | 11.47 | ||||||||||||||||
Inventory adjustments | (0.03 | ) | 0.01 | — | (0.01 | ) | (1 | ) | 8 | 3 | (0.01 | ) | ||||||||||||||||||||
Adjusted costs applicable to sales per ounce | $ | 9.68 | $ | 12.57 | $ | 7.22 | $ | 10.60 | $ | 884 | $ | 670 | $ | 791 | $ | 11.46 | ||||||||||||||||
Costs applicable to sales per average spot ounce | $ | 8.89 | $ | 11.80 | $ | 9.80 | $ | 10.33 | ||||||||||||||||||||||||
Inventory adjustments | (0.02 | ) | 0.01 | (0.01 | ) | 0.01 | ||||||||||||||||||||||||||
Adjusted costs applicable to sales per average spot ounce | $ | 8.87 | $ | 11.81 | $ | 9.79 | $ | 10.34 | ||||||||||||||||||||||||
Costs applicable to sales | $ | 114,490 | ||||||||||||||||||||||||||||||
Treatment and refining costs | 1,616 | |||||||||||||||||||||||||||||||
Sustaining capital | 11,191 | |||||||||||||||||||||||||||||||
General and administrative | 10,125 | |||||||||||||||||||||||||||||||
Exploration | 5,252 | |||||||||||||||||||||||||||||||
Reclamation | 3,338 | |||||||||||||||||||||||||||||||
Project/pre-development costs | 1,419 | |||||||||||||||||||||||||||||||
All-in sustaining costs | $ | 147,431 | ||||||||||||||||||||||||||||||
Silver equivalent ounces sold | 6,571,320 | |||||||||||||||||||||||||||||||
Kensington and Wharf silver equivalent ounces sold | 3,406,800 | |||||||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold | 9,978,120 | |||||||||||||||||||||||||||||||
All-in sustaining costs per silver equivalent ounce | $ | 14.77 | ||||||||||||||||||||||||||||||
Inventory adjustments | $ | 0.01 | ||||||||||||||||||||||||||||||
Adjusted all-in sustaining costs per silver equivalent ounce | $ | 14.78 | ||||||||||||||||||||||||||||||
Consolidated silver equivalent ounces sold (average spot) | 11,093,378 | |||||||||||||||||||||||||||||||
All-in sustaining costs per average spot silver equivalent ounce | $ | 13.29 | ||||||||||||||||||||||||||||||
Inventory adjustments | $ | 0.01 | ||||||||||||||||||||||||||||||
Adjusted all-in sustaining costs per average spot silver equivalent ounce | $ | 13.30 | ||||||||||||||||||||||||||||||
21
Reconciliation of All-in Sustaining Costs per 60:1 Silver Equivalent Ounce
for 2018 Guidance
Silver | Gold | |||||||||||||||||||||||
In thousands except per ounce amounts | Palmarejo | Rochester | Silvertip | Total Silver | Kensington | Wharf | Total Gold | Total Combined | ||||||||||||||||
Costs applicable to sales, including amortization (U.S. GAAP) | $ | 208,000 | $ | 116,300 | $ | 88,000 | $ | 412,300 | $ | 146,100 | $ | 89,700 | $ | 235,800 | $ | 648,100 | ||||||||
Amortization | 63,300 | 18,900 | 20,000 | 102,200 | 40,400 | 12,100 | 52,500 | 154,700 | ||||||||||||||||
Costs applicable to sales | $ | 144,700 | $ | 97,400 | $ | 68,000 | $ | 310,100 | $ | 105,700 | $ | 77,600 | $ | 183,300 | $ | 493,400 | ||||||||
Silver equivalent ounces sold | 13,700,000 | 7,300,000 | 4,500,000 | 25,500,000 | 37,800,000 | |||||||||||||||||||
Gold equivalent ounces sold | 117,500 | 87,500 | 205,000 | |||||||||||||||||||||
Costs applicable to sales per ounce | $10.50 - $11.00 | $13.25 - $13.75 | $15.00 - $15.50 | $900 - $950 | $850 - $900 | |||||||||||||||||||
Costs applicable to sales | $ | 493,400 | ||||||||||||||||||||||
Treatment and refining costs | 12,000 | |||||||||||||||||||||||
Sustaining capital, including capital lease payments | 100,000 | |||||||||||||||||||||||
General and administrative | 33,000 | |||||||||||||||||||||||
Exploration | 22,000 | |||||||||||||||||||||||
Reclamation | 15,700 | |||||||||||||||||||||||
Project/pre-development costs | 2,900 | |||||||||||||||||||||||
All-in sustaining costs | $ | 679,000 | ||||||||||||||||||||||
Silver equivalent ounces sold | 25,500,000 | |||||||||||||||||||||||
Kensington and Wharf silver equivalent ounces sold | 12,300,000 | |||||||||||||||||||||||
Consolidated silver equivalent ounces sold | 37,800,000 | |||||||||||||||||||||||
All-in sustaining costs per silver equivalent ounce | $17.50 - $18.00 | |||||||||||||||||||||||
Reconciliation of All-in Sustaining Costs per Spot Silver Equivalent Ounce
for 2018 Guidance
Silver | Gold | |||||||||||||||||||||||
In thousands except per ounce amounts | Palmarejo | Rochester | Silvertip | Total Silver | Kensington | Wharf | Total Gold | Total Combined | ||||||||||||||||
Costs applicable to sales, including amortization (U.S. GAAP) | $ | 208,000 | $ | 116,300 | $ | 88,000 | $ | 412,300 | $ | 146,100 | $ | 89,700 | $ | 235,800 | $ | 648,100 | ||||||||
Amortization | 63,300 | 18,900 | 20,000 | 102,200 | 40,400 | 12,100 | 52,500 | 154,700 | ||||||||||||||||
Costs applicable to sales | $ | 144,700 | $ | 97,400 | $ | 68,000 | $ | 310,100 | $ | 105,700 | $ | 77,600 | $ | 183,300 | $ | 493,400 | ||||||||
Silver equivalent ounces sold | 15,387,500 | 8,012,500 | 5,750,000 | 29,150,000 | 44,525,000 | |||||||||||||||||||
Gold equivalent ounces sold | 117,500 | 87,500 | 205,000 | |||||||||||||||||||||
Costs applicable to sales per ounce | $9.25 - $9.75 | $12.00 - $12.50 | $12.00 - $12.50 | $900 - $950 | $850 - $900 | |||||||||||||||||||
Costs applicable to sales | $ | 493,400 | ||||||||||||||||||||||
Treatment and refining costs | 12,000 | |||||||||||||||||||||||
Sustaining capital, including capital lease payments | 100,000 | |||||||||||||||||||||||
General and administrative | 33,000 | |||||||||||||||||||||||
Exploration | 22,000 | |||||||||||||||||||||||
Reclamation | 15,700 | |||||||||||||||||||||||
Project/pre-development costs | 2,900 | |||||||||||||||||||||||
All-in sustaining costs | $ | 679,000 | ||||||||||||||||||||||
Silver equivalent ounces sold | 29,150,000 | |||||||||||||||||||||||
Kensington and Wharf silver equivalent ounces sold | 15,375,000 | |||||||||||||||||||||||
Consolidated silver equivalent ounces sold | 44,525,000 | |||||||||||||||||||||||
All-in sustaining costs per silver equivalent ounce | $15.00 - $15.50 | |||||||||||||||||||||||
22