EX-99.1 2 a1q15earningsreleaseex-991.htm EXHIBIT 99.1 1Q15 Earnings Release Ex-99.1


NEWS RELEASE             
Coeur Reports First Quarter 2015 Results
Adjusted All-in Sustaining Costs Declined 8% to $17.66 per Silver Equivalent Ounce
Adjusted Costs Applicable to Sales of $13.71 per Silver Equivalent Ounce and $797 per Gold Ounce
Chicago, Illinois - May 4, 2015 - Coeur Mining, Inc. (the “Company” or “Coeur”) (NYSE: CDE) reported first quarter 2015 revenue of $153.0 million, adjusted EBITDA1 of $21.7 million, and adjusted net loss1 of $0.24 per share. Adjusted all-in sustaining costs declined 8% from the fourth quarter of 2014 to $17.66 per silver equivalent ounce1, the lowest level in the two years of reporting this metric. Adjusted costs applicable to sales per silver equivalent ounce1 of $13.71 declined 5% from the fourth quarter.
“We are off to a strong start in 2015, tracking at or below our annual cost guidance in the first quarter. Falling oil prices and a weakening Mexican peso bode well for further cost improvement, as fuel represents approximately 7% of our total operating costs and about 50% of Palmarejo's costs are denominated in pesos,” said Mitchell J. Krebs, Coeur's President and Chief Executive Officer. “In the past three months we closed two acquisitions, released a high-grade, high-margin, re-scoped mine plan for Kensington reflecting a significant new discovery, and announced a near-doubling in silver equivalent reserves at Palmarejo, reflecting higher grades from our Paramount acquisition and last year's discovery at Independencia. These are all important steps in our strategy to reduce unit costs, produce higher-quality ounces, and generate free cash flow at current metal prices. With $180 million in cash and cash equivalents, maintaining sufficient liquidity and a flexible balance sheet remains a top priority.”
First Quarter 2015 Highlights
•
Silver production was 3.8 million ounces and gold production was 69,734 ounces, or 8.0 million silver equivalent1 ounces as previously announced on April 6, 2015
•
Adjusted all-in sustaining costs were $17.66 per silver equivalent ounce1, down 8% from the fourth quarter
•
Adjusted costs applicable to sales per silver equivalent ounce1 were $13.71, a 5% decrease from the fourth quarter and the lowest level in a year
•
Adjusted costs applicable to sales per gold ounce1 at Kensington were $797, almost unchanged from the fourth quarter
•
Adjusted costs applicable to sales per silver equivalent ounce1 at Palmarejo dropped 7% from the fourth quarter to $14.56
•
Adjusted costs applicable to sales per silver equivalent ounce1 at Rochester were $12.95, down 6% from the fourth quarter
•
Acquired the Wharf gold mine from a subsidiary of Goldcorp for $103 million in cash
•
Cash, cash equivalents, and short-term investments were $179.6 million at March 31, 2015
•
Shares issued and outstanding were 136.0 million as of May 1, 2015
Full Year 2015 Outlook
Coeur is maintaining its 2015 production guidance of 14.8 - 16.0 million silver ounces and 294,000 - 323,000 gold ounces and is also maintaining its guidance for all-in sustaining costs per silver equivalent ounce1 of $17.50 - $18.50 and costs applicable to sales as follows:
•
$16.25 - $17.75 per silver equivalent ounce1 at Palmarejo


1


•
$12.50 - $14.00 per silver equivalent ounce1 at Rochester
•
$13.50 - $15.00 per silver equivalent ounce1 at San Bartolomé
•
$900 - $975 per gold ounce at Kensington
•
$750 - $825 per gold equivalent ounce1 at Wharf
To incorporate the acquisition of Paramount Gold and Silver Corp. which closed on April 17, 2015, Coeur is raising its capital expenditure guidance from $85 - $95 million to $95 - $105 million and its exploration guidance from $10 - $12 million to $13 - $16 million. General and administrative expense guidance is unchanged at $36 - $39 million.
Financial Highlights (Unaudited)
(Amounts in millions, except per share amounts, gold ounces produced & sold, and per-ounce metrics)
1Q 2015
4Q 2014
3Q 2014
2Q 2014
1Q 2014
Revenue
$
153.0

$
140.6

$
170.9

$
164.6

$
159.6

Costs Applicable to Sales
$
115.1

$
126.5

$
125.9

$
118.7

$
106.9

General and Administrative Expenses
$
8.8

$
9.0

$
8.5

$
9.4

$
13.9

Adjusted EBITDA1
$
21.7

$
7.8

$
25.7

$
32.9

$
31.1

Net Income (Loss)
$
(33.3
)
$
(1,079.1
)
$
3.5

$
(43.1
)
$
(37.2
)
Earnings Per Share
$
(0.32
)
$
(10.53
)
$
0.03

$
(0.42
)
$
(0.36
)
Adjusted Net Income (Loss)1
$
(24.4
)
$
(37.5
)
$
(18.5
)
$
(21.5
)
$
(18.8
)
Adjusted Net Income (Loss)1 Per Share
$
(0.24
)
$
(0.37
)
$
(0.18
)
$
(0.21
)
$
(0.18
)
Weighted Average Shares
102.6

102.4

102.6

102.4

102.4

Cash Flow From Operating Activities
$
(4.0
)
$
0.7

$
31.3

$
30.5

$
(9.6
)
Capital Expenditures
$
17.6

$
20.1

$
16.8

$
15.4

$
11.9

Cash, Equivalents & Short-Term Investments
$
179.6

$
270.9

$
295.4

$
316.8

$
318.6

Total Debt2
$
513.5

$
468.5

$
469.5

$
480.1

$
464.2

Average Realized Price Per Ounce - Silver
$
16.77

$
16.40

$
19.46

$
19.60

$
20.28

Average Realized Price Per Ounce - Gold
$
1,204

$
1,186

$
1,260

$
1,277

$
1,279

Silver Ounces Produced
3.8

4.3

4.3

4.5

4.1

Gold Ounces Produced
69,734

64,534

64,989

61,025

58,836

Silver Equivalent Ounces Produced1
8.0

8.3

8.2

8.1

7.6

Silver Ounces Sold
4.1

4.6

4.3

4.6

3.9

Gold Ounces Sold
68,420

52,785

69,541

57,751

62,578

Silver Equivalent Ounces Sold1
8.2

7.9

8.4

8.1

7.6

Adjusted Costs Applicable to Sales per AgEq Oz1
$
13.71

$
14.43

$
14.19

$
14.00

$
13.09

Adj. Costs Applicable to Sales per Au Oz1 (Kensington)
$
797

$
792

$
889

$
821

$
879

Adjusted All-in Sustaining Costs per AgEq Oz1
$
17.66

$
19.25

$
18.27

$
19.10

$
18.52

Financial Results
First quarter 2015 revenue increased $12.4 million, or 9%, compared with the fourth quarter of 2014 to $153.0 million due to a 4% increase in silver equivalent ounces sold and slightly higher metal prices. Average realized silver and gold prices each increased 2% compared to the fourth quarter, at $16.77 per ounce for silver and $1,204 per ounce for gold. Silver contributed 45% of metal sales and gold contributed 55% during the first quarter.
General and administrative expenses decreased 2% from the fourth quarter to $8.8 million in the first quarter, and were down 37% compared to the first quarter of 2014. Capital expenditures of $17.6 million in the first quarter declined 12% compared to the fourth quarter.


2


Adjusted net loss1 was $24.4 million or $0.24 per share in the first quarter, improved from a loss of $37.5 million, or $0.37 per share, in the fourth quarter mainly due to lower unit operating costs. The first quarter adjusted net loss1 mainly excludes inventory adjustments to net realizable value, foreign exchange losses on deferred taxes, and fair value adjustments to royalty obligations and metal hedging contracts.
Cash flow used in operating activities was $4.0 million in the first quarter, which included a $14.4 million increase in working capital, mainly due to accrued interest, payroll, and other benefits. Inventory was nearly unchanged during the quarter, with inventory reductions at Kensington and Rochester mostly offset by a $6.7 million increase at Wharf, as no sales were recorded in the first quarter due to the shipping schedule at the mine.
Coeur entered into a short-term credit facility with The Bank of Nova Scotia for $50.0 million, which raised the total debt balance to $513.5 million as of March 31, 2015, including $437.5 million in senior unsecured notes due in 2021. Cash, cash equivalents, and short-term investments totaled $179.6 million at the end of the first quarter, yielding a net debt balance of $333.9 million.


























3


Operations
Highlights of first quarter 2015 results for each of the Company's operating segments are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce amounts)
1Q 2015
4Q 2014
3Q 2014
2Q 2014
1Q 2014
Underground Operations:
 
 
 
 
 
   Tons mined
149,150
187,730
169,656
177,359
209,854
   Average silver grade (oz/t)
4.34
4.49
4.88
6.15
5.95
   Average gold grade (oz/t)
0.07
0.06
0.10
0.11
0.11
Surface Operations:
 
 
 
 
 
   Tons mined
281,481
320,802
343,001
320,583
358,222
   Average silver grade (oz/t)
3.79
2.90
3.09
3.72
3.50
   Average gold grade (oz/t)
0.04
0.03
0.03
0.03
0.03
Processing:
 
 
 
 
 
   Total tons milled
451,918
510,813
518,212
534,718
571,345
   Average recovery rate – Ag
78.7%
80.2%
82.7%
75.6%
73.3%
   Average recovery rate – Au
73.9%
78.7%
86.9%
78.9%
78.0%
Silver ounces produced (000's)
1,354
1,444
1,533
1,761
1,820
Gold ounces produced
15,495
15,237
22,514
23,706
25,216
Silver equivalent ounces produced1 (000's)
2,284
2,359
2,883
3,183
3,333
Silver ounces sold (000's)
1,330
1,375
1,605
1,983
1,677
Gold ounces sold
13,793
16,255
23,600
25,753
26,422
Silver equivalent ounces sold1 (000's)
2,158
2,350
3,021
3,528
3,262
Revenues
$39.4
$42.2
$61.4
$72.4
$68.0
Costs applicable to sales
$34.5
$48.1
$46.0
$49.6
$43.6
Adjusted costs applicable to sales per AgEq ounce1
$14.56
$15.70
$14.43
$13.48
$13.13
Exploration expense
$1.1
$1.5
$2.6
$1.6
$1.0
Cash flow from operating activities
$(0.2)
$(3.2)
$20.2
$27.4
$10.2
Sustaining capital expenditures
$3.1
$5.5
$1.9
$5.3
$3.7
Development capital expenditures
$6.1
$5.4
$4.0
$0.3
$—
Total capital expenditures
$9.2
$10.9
$5.9
$5.6
$3.7
Free cash flow (before royalties)
$(9.4)
$(14.1)
$14.3
$21.8
$6.5
Royalties paid
$10.4
$10.0
$11.4
$12.3
$14.7
Free cash flow3
$(19.8)
$(24.1)
$2.9
$9.5
$(8.2)
•
Adjusted costs applicable to sales per silver equivalent ounce1 of $14.56 decreased 7% from the fourth quarter of 2014
•
Recovery rates for silver and gold declined in the first quarter due to test work completed in the processing plant during the quarter
•
Cash flow from operating activities of $(0.2) million included a $4.5 million increase in working capital
•
Palmarejo continues to transition to underground mining at the Guadalupe mine and the Independencia mine (beginning early 2016) while mining activities in the historic zones gradually decline
•
Open-pit operations are expected to end in the third quarter of 2015 and underground mining at the legacy zones is expected to end by January 2016


4


•
The acquisition of Paramount closed April 17, 2015. On April 27, 2015, Coeur announced an 89% increase in silver reserves and 76% increase in gold reserves at Palmarejo, mainly from the addition of certain Paramount assets. The increase contains an average silver reserve grade 31% higher than Palmarejo's reserves as of December 31, 2014
•
Palmarejo’s reserves now total 54.0 million silver ounces and 876,000 gold ounces. Compared to just fifteen months ago, silver reserves have increased 30% and gold reserves have increased 54%. Most importantly, the average silver reserve grade has increased 32% and the average gold reserve grade has increased 55%
•
In 2015, Palmarejo is expected to produce 3.9 - 4.3 million ounces of silver and 55,000 - 65,000 ounces of gold at costs applicable to sales per silver equivalent ounce1 of $16.25 - $17.75
Rochester, Nevada
(Dollars in millions, except per ounce amounts)
1Q 2015
4Q 2014
3Q 2014
2Q 2014
1Q 2014
Ore tons placed
4,013,879
3,876,944
3,892,421
3,329,582
3,640,861
Average silver grade (oz/t)
0.74
0.60
0.51
0.58
0.59
Average gold grade (oz/t)
0.004
0.004
0.005
0.003
0.003
Silver ounces produced (000's)
1,144
1,170
1,156
1,112
750
Gold ounces produced
13,721
15,764
11,702
9,230
8,192
Silver equivalent ounces produced1 (000's)
1,967
2,116
1,858
1,666
1,242
Silver ounces sold (000's)
1,351
1,154
1,067
1,006
695
Gold ounces sold
17,754
14,131
8,932
8,970
7,770
Silver equivalent ounces sold1 (000's)
2,416
2,002
1,603
1,544
1,161
Revenues
$44.0
$36.0
$32.4
$31.2
$24.2
Costs applicable to sales
$31.4
$28.7
$23.7
$24.4
$14.7
Adjusted costs applicable to sales per silver equivalent ounce1
$12.95
$13.82
$14.78
$15.73
$12.63
Exploration expense
$0.7
$0.6
$0.1
$0.7
$1.2
Cash flow from operating activities
$16.4
$10.2
$8.2
$4.3
$(9.0)
Sustaining capital expenditures
$0.8
$2.7
$4.2
$4.0
$1.0
Development capital expenditures
$2.5
$—
$—
$—
$—
Total capital expenditures
$3.3
$2.7
$4.2
$4.0
$1.0
Free cash flow3
$13.1
$7.5
$4.0
$0.3
$(10.0)
•
First quarter adjusted costs applicable to sales per silver equivalent ounce1 were $12.95, down 6% from the fourth quarter due to lower crushing and leaching costs
•
The average silver grade increased 23% compared to the fourth quarter and silver equivalent ounces sold increased 21%
•
Free cash flow3 of $13.1 million in the first quarter was the highest since the fourth quarter of 2012, when realized silver and gold prices averaged $32.52 per ounce and $1,709 per ounce, respectively
•
Approval for POA 10 (expansion of Stage 4 leach pad and construction of new Stage 5 leach pad) is expected by early 2016
•
In 2015, Rochester is expected to produce 4.7 - 5.0 million ounces of silver and 55,000 - 65,000 ounces of gold at costs applicable to sales per silver equivalent ounce1 of $12.50 - $14.00


5


Kensington, Alaska
(Dollars in millions, except per ounce amounts)
1Q 2015
4Q 2014
3Q 2014
2Q 2014
1Q 2014
Tons milled
147,969
167,417
145,097
163,749
159,697
Average gold grade (oz/t)
0.24
0.21
0.23
0.18
0.17
Average recovery rate
94.8%
94.2%
93.0%
94.5%
94.5%
Gold ounces produced
33,909
33,533
30,773
28,089
25,428
Gold ounces sold
36,873
22,399
37,009
23,028
28,386
Revenues
$44.0
$26.0
$45.9
$29.0
$36.1
Costs applicable to sales
$29.4
$18.9
$34.7
$23.2
$28.5
Adjusted costs applicable to sales per gold ounce1
$797
$792
$889
$821
$879
Exploration expense
$1.7
$2.8
$2.6
$1.6
$1.0
Cash flow from operating activities
$12.3
$(3.7)
$17.0
$(0.6)
$13.9
Sustaining capital expenditures
$4.1
$3.3
$3.6
$4.0
$4.7
Development capital expenditures
$—
$0.6
$—
$—
$—
Total capital expenditures
$4.1
$3.9
$3.6
$4.0
$4.7
Free cash flow3
$8.2
$(7.6)
$13.4
$(4.6)
$9.2
•
Free cash flow3 at Kensington of $8.2 million increased from $(7.6) million in the fourth quarter of 2014 due to a 65% increase in gold ounces sold
•
A 14% increase in average gold grade enabled lower throughput in the first quarter, with adjusted costs applicable to sales per gold ounce1 below $800 for the second consecutive quarter
•
Coeur released a re-scoped mine plan at Kensington on April 14, 2015, reflecting the impact of the recently discovered high-grade Jualin zone. Mining rates at Jualin are expected to peak in 2018-2019 when annual production at Kensington is expected to average approximately 143,000 ounces at costs applicable to sales per gold ounce of approximately $760. Recent drilling results suggest the potential to grow the resource at Jualin and extend the 2017 -2019 production profile
•
In 2015, Kensington is expected to produce 110,000 - 115,000 ounces of gold at costs applicable to sales per gold ounce of $900 - $975
San Bartolomé, Bolivia
(Dollars in millions, except per ounce amounts)
1Q 2015
4Q 2014
3Q 2014
2Q 2014
1Q 2014
Tons milled
406,951
454,135
471,938
437,975
385,375
Average silver grade (oz/t)
3.65
3.77
3.70
3.87
3.88
Average recovery rate
81.6%
88.0%
86.5%
87.5%
90.5%
Silver ounces produced (000's)
1,213
1,507
1,509
1,481
1,355
Silver ounces sold (000's)
1,290
1,987
1,438
1,494
1,357
Revenues
$21.5
$32.6
$28.4
$29.1
$27.6
Costs applicable to sales
$19.1
$29.6
$20.4
$20.7
$18.9
Adjusted costs applicable to sales per silver equivalent ounce1
$14.47
$14.38
$13.67
$13.85
$13.93
Exploration expense
$—
$—
$—
$0.1
$—
Cash flow from operating activities
$5.0
$2.3
$12.3
$18.9
$4.5
Sustaining capital expenditures
$0.9
$2.0
$2.8
$1.7
$1.4
Development capital expenditures
$—
$—
$—
$—
$—
Total capital expenditures
$0.9
$2.0
$2.8
$1.7
$1.4
Free cash flow3
$4.1
$0.3
$9.5
$17.2
$3.1


6


•
Maintenance downtime and heavy rain resulted in processing a greater proportion of stockpiled ore in the first quarter, which negatively impacted the grade and recovery rates. Despite this, adjusted costs applicable to sales per silver equivalent ounce1 remained stable with the fourth quarter of 2014 at San Bartolomé
•
Free cash flow1 of $4.1 million in the first quarter increased from $0.3 million in the fourth quarter of 2014 due to lower working capital
•
In 2015, San Bartolomé is expected to produce 5.8 - 6.1 million ounces of silver at costs applicable to sales per silver equivalent ounce1 of $13.50 - $15.00
Wharf, South Dakota
(Dollars in millions, except per ounce amounts)
1Q 2015
4Q 2014
3Q 2014
2Q 2014
1Q 2014
Ore tons placed
415,996
—
—
—
—
Average gold grade (oz/t)
0.020
—
—
—
—
Gold ounces produced
6,609
—
—
—
—
Revenues
$—
—
—
—
—
Cash flow from operating activities
$(7.2)
—
—
—
—
Sustaining capital expenditures
$0.1
—
—
—
—
Development capital expenditures
$—
—
—
—
—
Total capital expenditures
$0.1
—
—
—
—
Free cash flow3
$(7.3)
—
—
—
—
•
There were no metal sales at Wharf from the February 20, 2015 transaction closing date through the end of the first quarter, as the mine has historically maintained a monthly shipping schedule. The first ore shipment after the transaction closed was in mid-March and the corresponding metal sale occurred in April. Going forward, Coeur expects to increase the frequency of ore shipments at Wharf to more closely align the timing of metal sales with production
•
In 2015, Wharf is expected to produce 74,000 - 78,000 ounces of gold at costs applicable to sales per gold equivalent ounce1 of $750 - $825
Coeur Capital
(Dollars in millions, except per ounce amounts)
1Q 2015
4Q 2014
3Q 2014
2Q 2014
1Q 2014
Tons milled
185,299
214,180
199,757
185,538
193,219
Average silver grade (oz/t)
1.69
1.99
1.44
1.41
1.65
Average recovery rate
42.4%
44.9%
49.1%
42.4%
45.9%
Silver ounces produced (000's)
133
191
141
111
147
Silver ounces sold (000's)
118
192
141
106
147
Metal sales
$1.9
$2.7
$2.4
$2.0
$2.9
Royalty revenue
$1.5
$0.7
$0.6
$0.9
$1.0
Costs applicable to sales (Endeavor silver stream)
$0.6
$1.1
$1.1
$0.8
$1.2
Costs applicable to sales per silver equivalent ounce1
$5.37
$5.69
$7.71
$7.94
$8.05
Cash flow from operating activities
$2.2
$1.5
$2.4
$0.8
$1.8
Free cash flow3
$2.2
$1.5
$2.4
$0.8
$1.8
•
There are five cash-flowing royalties and streams, four non-cash-flowing royalties, and ten investments in junior mining companies held in Coeur Capital or its affiliates
•
Coeur Capital's largest source of cash flow is the silver stream on the Endeavor mine in New South Wales, Australia in which the Company owns 100% of the silver up to a total of 20.0 million payable ounces. At March 31, 2015, the Company has received 5.6 million ounces, or 28.0% of the total


7


Exploration
Costs associated with exploration activities for the first quarter of 2015 were $4.3 million (expensed) for discovery of new silver and gold mineralization and $4.0 million (capitalized) for definition and expansion of mineralized material. These amounts compare to exploration costs of $5.7 million expensed and $2.9 million capitalized in the fourth quarter of 2014. Coeur's exploration program used 10 drill rigs during the first quarter: 4 drills at Palmarejo, 4 at Kensington, and 2 at Rochester. This work resulted in completion of over 86,931 feet (26,496 meters) of combined core and reverse circulation drilling. Coeur announced high-grade drill results at Kensington on April 14, 2015 and at Palmarejo on April 28, 2015, demonstrating Coeur's continued success finding high-grade mineralization near existing infrastructure.
Exploration expenses are expected to total $13 - $16 million in 2015, with additional capital allocated to resource conversion. Coeur will continue to use a success-based approach to evaluate exploration needs on an ongoing basis.
2015 Outlook
Coeur's 2015 total production and cost guidance is shown below. Coeur is raising its guidance for capital expenditures to $95 - $105 million compared to prior guidance of $85 - $95 million as well as its guidance for exploration expenses to $13 - $16 million from $10 - $12 million for 2015. Prior guidance did not include development capital and exploration expenses related to the acquisition of Paramount Gold and Silver Corp.

2015 Production Outlook
(silver and silver equivalent ounces in thousands)
Silver
Gold
Silver Equivalent1
Palmarejo
3,900 - 4,300
55,000 - 65,000
7,200 - 8,200
San Bartolomé
5,800 - 6,100
—
5,800 - 6,100
Rochester
4,700 - 5,000
55,000 - 65,000
8,000 - 8,900
Endeavor
400 - 600
—
400 - 600
Kensington
—
110,000 - 115,000
6,600 - 6,900
Wharf
—
74,000 - 78,000
4,440 - 4,680
Total
14,800 - 16,000
294,000 - 323,000
32,440 - 35,380

2015 Cost Outlook
(dollars in millions, except per ounce amounts)
2015 Guidance
2014 Result
Costs Applicable to Sales per Silver Equivalent Ounce1 - Palmarejo
$16.25 - $17.75
$15.40
Costs Applicable to Sales per Silver Equivalent Ounce1 - San Bartolomé
$13.50 - $15.00
$14.29
Costs Applicable to Sales per Silver Equivalent Ounce1 - Rochester
$12.50 - $14.00
$14.49
Costs Applicable to Sales per Gold Ounce1 - Kensington
$900 - 975
$951
Costs Applicable to Sales per Gold Equivalent Ounce1 - Wharf
$750 - $825
N/A
Capital Expenditures
$95 - $105
$64
General and Administrative Expenses
$36 - $39
$41
Exploration Expense
$13 - $16
$22
All-in Sustaining Costs per Silver Equivalent Ounce1
$17.50 - $18.50
$19.72
Downside Price Protection
The Company's downside metal price protection program uses put spreads to protect a portion of expected future production against a sharp decrease in metal prices, while selling intra-quarter, out-of-the-money call options when appropriate to offset the net cost of the put spreads. Put spreads settled and calls sold during the first quarter of 2015 generated cash flow of $1.6 million. Put spreads for the second quarter of 2015 cover


8


900,000 ounces of expected silver production per month with strike prices of $17 per ounce on options purchased and $15.50 per ounce on options sold.
Conference Call Information
Coeur will conduct a conference call and webcast at www.coeur.com to discuss the Company's first quarter results on May 5, 2015 at 11:00 a.m. Eastern time.
Dial-In Numbers:    (888) 317-6016 (US)
(855) 669-9657 (Canada)
(412) 317-6016 (International)
Conference ID:    Coeur Mining, Inc.

A replay of the call will be available on Coeur's website through May 19, 2015.
Replay Numbers:    (877) 344-7529 (US)
(855) 669-9658 (Canada)
(412) 317-0088 (International)
    
Conference ID:    100 63 549

About Coeur
Coeur Mining is the largest U.S.-based silver producer and a significant gold producer with four precious metals mines in the Americas employing approximately 2,100 people. 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, the Kensington gold mine in Alaska, and the Wharf gold mine in South Dakota. The Company also has a non-operating interest in the Endeavor mine in Australia in addition to royalties on the Cerro Bayo mine in Chile, the El Gallo complex in Mexico, the Zaruma mine in Ecuador, and the Correnso mine in New Zealand. In addition, the Company has two silver-gold exploration projects - the La Preciosa project in Mexico and the Joaquin project in Argentina. The Company also conducts ongoing exploration activities in Alaska, Argentina, Bolivia, Mexico, and Nevada. The Company owns strategic investment positions in several 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 production, costs, capital expenditures, expenses, mining rates, grades, POA 10 approval at Rochester, open-pit and underground mining operations at Palmarejo, the re-scoped mine plan at Kensington, the timing of metal sales, and initiatives to achieve lower unit costs, higher quality ounces, generate free cash flow, maintain sufficient liquidity and a flexible balance sheet, and minimize exposure to declining metal prices. 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 anticipated benefits of the Wharf and Paramount acquisitions are not realized, the risk that anticipated production and cost 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 and silver 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 (including those involving third parties), the uncertainties inherent in the estimation of gold and silver reserves and resources, changes that could result from Coeur's future acquisition of new mining properties or businesses, the absence of control over and reliance on third parties to operate mining operations in which Coeur or its subsidiaries hold royalty or streaming interests and risks related to these mining operations including results of mining and exploration activities, environmental, economic and political risks of the jurisdiction in which the mining operations are located, the loss of access to 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


9


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.
W. David Tyler, Coeur's Vice President, Technical Services 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, Canadian investors should refer to the Technical Reports for each of Coeur's properties as filed on SEDAR at www.sedar.com and the technical report for Palmarejo to be filed on www.sedar.com during the second quarter of 2015.
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 adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce), adjusted costs applicable to sales per silver equivalent 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 adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce, all-in sustaining costs, and adjusted all-in sustaining costs are important measures in assessing the Company's overall financial performance.
Notes
1. Adjusted EBITDA, adjusted net income (loss), all-in sustaining costs, adjusted all-in sustaining costs, costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce), and adjusted costs applicable to sales per silver equivalent ounce are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. For purposes of silver and gold equivalence, 60:1 silver to gold ratio.
2. Includes capital leases. Net of debt discount.
3. Free cash flow is defined as cash flow from operating activities less capital expenditures and royalty payments.

For Additional Information:
Bridget Freas, Director, Investor Relations
(312) 489-5819
Donna Mirandola, Director, Corporate Communications
(312) 489-5842
www.coeur.com

10


Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)

 
 
Three months ended March 31,
 
 
2015
 
2014
 
In thousands, except share data
Revenue
 
$
152,956

 
$
159,633

COSTS AND EXPENSES
 
 
 
 
Costs applicable to sales
 
115,062

 
106,896

Amortization
 
33,090

 
40,459

General and administrative
 
8,834

 
13,896

Exploration
 
4,266

 
4,217

Pre-development, reclamation, and other
 
6,763

 
6,984

Total costs and expenses
 
168,015

 
172,452

OTHER INCOME (EXPENSE), NET
 
 
 
 
Fair value adjustments, net
 
(4,884
)
 
(11,436
)
Impairment of equity securities
 
(1,514
)
 
(2,588
)
Interest income and other, net
 
(997
)
 
(1,983
)
Interest expense, net of capitalized interest
 
(10,765
)
 
(13,054
)
Total other income (expense), net
 
(18,160
)
 
(29,061
)
Income (loss) before income and mining taxes
 
(33,219
)
 
(41,880
)
Income and mining tax (expense) benefit
 
(68
)
 
4,689

NET INCOME (LOSS)
 
$
(33,287
)
 
$
(37,191
)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
 
 
 
 
Unrealized gain (loss) on equity securities, net of tax of $578 and $(234) for the three months ended March 31, 2015 and 2014, respectively
 
(915
)
 
371

Reclassification adjustments for impairment of equity securities, net of tax of $(586) and $(1,001) for the three months ended March 31, 2015 and 2014, respectively
 
928

 
1,587

Other comprehensive income (loss)
 
13

 
1,958

COMPREHENSIVE INCOME (LOSS)
 
$
(33,274
)
 
$
(35,233
)
 
 
 
 
 
NET INCOME (LOSS) PER SHARE
 
 
 
 
Basic
 
$
(0.32
)
 
$
(0.36
)
 
 
 
 
 
Diluted
 
$
(0.32
)
 
$
(0.36
)



11


Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows

 
Three months ended March 31,
 
2015
 
2014
 
In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
Net income (loss)
$
(33,287
)
 
(37,191
)
Adjustments:
 
 
 
Amortization
33,090

 
40,459

Accretion
3,150

 
4,560

Deferred income taxes
(2,184
)
 
(11,781
)
Loss on termination of revolving credit facility
—

 
3,035

Fair value adjustments, net
4,884

 
11,436

Stock-based compensation
2,150

 
2,565

Impairment of equity securities
1,514

 
2,588

Other
1,079

 
(817
)
Changes in operating assets and liabilities:
 
 
 
Receivables
2,556

 
5,622

Prepaid expenses and other current assets
(1,327
)
 
(8,109
)
Inventory and ore on leach pads
684

 
(13,912
)
Accounts payable and accrued liabilities
(16,281
)
 
(8,082
)
CASH USED IN OPERATING ACTIVITIES
(3,972
)
 
(9,627
)
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
Capital expenditures
(17,620
)
 
(11,936
)
Acquisitions, net of cash acquired
(102,018
)
 
—

Other
(1,730
)
 
(25
)
Purchase of short-term investments and equity securities
(278
)
 
(46,220
)
Sales and maturities of short-term investments
229

 
90

CASH USED IN INVESTING ACTIVITIES
(121,417
)
 
(58,091
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Issuance of notes and bank borrowings
53,500

 
153,000

Payments on long-term debt, capital leases, and associated costs
(8,594
)
 
(4,111
)
Gold production royalty payments
(10,368
)
 
(14,683
)
Other
(423
)
 
(246
)
CASH PROVIDED BY FINANCING ACTIVITIES
34,115

 
133,960

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(91,274
)
 
66,242

Cash and cash equivalents at beginning of period
270,861

 
206,690

Cash and cash equivalents at end of period
$
179,587

 
$
272,932










12


Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

 
March 31, 2015
(Unaudited)
 
December 31,
2014
ASSETS
In thousands, except share data
CURRENT ASSETS
 
 
 
Cash and cash equivalents
$
179,587

 
$
270,861

Receivables
118,390

 
116,921

Inventory
115,337

 
114,931

Ore on leach pads
66,705

 
48,204

Deferred tax assets
7,255

 
7,364

Prepaid expenses and other
18,629

 
15,523

 
505,903

 
573,804

NON-CURRENT ASSETS
 
 
 
Property, plant and equipment, net
254,892

 
227,911

Mining properties, net
572,842

 
501,192

Ore on leach pads
34,425

 
37,889

Restricted assets
9,039

 
7,037

Equity securities
4,488

 
5,982

Receivables
18,933

 
21,686

Deferred tax assets
63,735

 
60,151

Other
11,561

 
9,915

TOTAL ASSETS
$
1,475,818

 
$
1,445,567

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
CURRENT LIABILITIES
 
 
 
Accounts payable
$
45,387

 
$
49,052

Accrued liabilities and other
40,568

 
51,513

Debt
65,719

 
17,498

Royalty obligations
44,442

 
43,678

Reclamation
3,888

 
3,871

Deferred tax liabilities
8,078

 
8,078

 
208,082

 
173,690

NON-CURRENT LIABILITIES
 
 
 
Debt
447,779

 
451,048

Royalty obligations
21,219

 
27,651

Reclamation
85,899

 
66,943

Deferred tax liabilities
121,799

 
111,006

Other long-term liabilities
37,476

 
29,911

 
714,172

 
686,559

STOCKHOLDERS’ EQUITY
 
 
 
Common stock, par value $0.01 per share; authorized 150,000,000 shares, issued and outstanding 103,299,223 at March 31, 2015 and 103,384,408 at December 31, 2014
1,033

 
1,034

Additional paid-in capital
2,791,216

 
2,789,695

Accumulated other comprehensive income (loss)
(2,795
)
 
(2,808
)
Accumulated deficit
(2,235,890
)
 
(2,202,603
)
 
553,564

 
585,318

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
1,475,818

 
$
1,445,567





13


Adjusted EBITDA Reconciliation
(Dollars in thousands except per share amounts)
1Q 2015
 
4Q 2014
 
3Q 2014
 
2Q 2014
 
1Q 2014
Net income (loss)
$
(33,287
)
 
$
(1,079,038
)
 
$
3,466

 
$
(43,121
)
 
$
(37,191
)
Interest expense, net of capitalized interest
10,765

 
10,566

 
11,615

 
12,311

 
13,054

Interest income and other, net
997

 
(3,688
)
 
213

 
4,083

 
(1,983
)
Income tax provision (benefit)
68

 
(440,594
)
 
(16,582
)
 
2,621

 
(4,689
)
Amortization
33,090

 
38,570

 
41,985

 
41,422

 
40,459

EBITDA
11,633

 
(1,474,184
)
 
40,697

 
17,316

 
9,650

Fair value adjustments, net
4,884

 
(7,229
)
 
(16,106
)
 
8,281

 
11,436

Impairment of equity securities
1,514

 
1,979

 
1,092

 
934

 
2,588

Litigation settlements
—

 
—

 
—

 
—

 
—

Loss on revolver termination
—

 
—

 
—

 
—

 
3,035

Inventory adjustments
3,684

 
14,482

 
4,993

 
6,353

 
4,373

Write-downs
—

 
1,472,721

 
—

 
—

 
—

Adjusted EBITDA
$
21,715

 
$
7,769

 
$
30,676

 
$
32,884

 
$
31,082




Adjusted Net Income (Loss) Reconciliation
(Dollars in thousands except per share amounts)
1Q 2015
 
4Q 2014
 
3Q 2014
 
2Q 2014
 
1Q 2014
Net income (loss)
$
(33,287
)
 
$
(1,079,038
)
 
$
3,466

 
$
(43,121
)
 
$
(37,191
)
Fair value adjustments, net
4,339

 
(5,622
)
 
(13,026
)
 
6,498

 
7,827

Stock-based compensation
2,410

 
1,807

 
2,417

 
2,299

 
2,453

Impairment of equity securities
1,514

 
1,979

 
1,092

 
934

 
2,588

Accretion of royalty obligation
1,315

 
1,992

 
1,374

 
1,789

 
1,821

Write-downs
—

 
1,021,756

 
—

 
—

 
—

Litigation settlements
—

 
—

 
—

 
—

 
—

(Gain) loss on debt extinguishments
—

 
(426
)
 
—

 
—

 
—

Loss on revolver termination
—

 
—

 
—

 
—

 
3,035

Inventory adjustments
3,684

 
14,482

 
4,993

 
6,353

 
4,373

Deferred tax asset valuation allowance
(3,464
)
 
—

 
—

 
—

 
—

Foreign exchange (gain) loss on deferred taxes
(929
)
 
5,615

 
(18,801
)
 
3,711

 
(3,705
)
Adjusted net income (loss)
$
(24,418
)

$
(37,455
)
 
$
(18,485
)
 
$
(21,537
)
 
$
(18,799
)
 
 
 
 
 
 
 
 
 
 
Adjusted net income (loss) per share
$
(0.24
)
 
$
(0.37
)
 
$
(0.18
)
 
$
(0.21
)
 
$
(0.18
)



14


Reconciliation of Non-U.S. GAAP All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended March 31, 2015

 
 
Silver
 
Gold
 
 
In thousands except per ounce amounts
 
Palmarejo
 
San Bartolomé
 
Rochester
 
Endeavor
 
Total
 
Kensington
 
Total
Costs applicable to sales, including amortization (U.S. GAAP)
 
$
41,824

 
$
23,818

 
$
38,235

 
$
1,892

 
$
105,769

 
$
40,973

 
$
146,742

Amortization
 
7,333

 
4,691

 
6,843

 
1,259

 
20,126

 
11,554

 
31,680

Costs applicable to sales
 
$
34,491

 
$
19,127

 
$
31,392

 
$
633

 
$
85,643

 
$
29,419

 
$
115,062

Silver equivalent ounces sold
 
2,157,612

 
1,289,867

 
2,416,103

 
117,863

 
5,981,445

 
 
 
 
Gold ounces sold
 
 
 
 
 
 
 
 
 
 
 
36,873

 
 
Costs applicable to sales per ounce
 
$
15.99

 
$
14.83

 
$
12.99

 
$
5.37

 
$
14.32

 
$
798

 
 
Inventory adjustments
 
(1.43
)
 
(0.36
)
 
(0.04
)
 
—

 
(0.61
)
 
(1
)
 
 
Adjusted costs applicable to sales per ounce
 
14.56

 
14.47

 
12.95

 
5.37

 
13.71

 
797

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Treatment and refining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
1,490

Sustaining capital
 
 
 
 
 
 
 
 
 
 
 
 
 
10,909

General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
8,834

Exploration
 
 
 
 
 
 
 
 
 
 
 
 
 
4,266

Reclamation
 
 
 
 
 
 
 
 
 
 
 
 
 
2,924

Project/pre-development costs
 
 
 
 
 
 
 
 
 
 
 
 
 
4,873

All-in sustaining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
$
148,358

Silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
5,981,445

Kensington silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
2,212,380

Consolidated silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
8,193,825

All-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
18.11

Inventory adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(0.45
)
Adjusted all-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
17.66


Reconciliation of Non-U.S. GAAP All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended December 31, 2014
 
 
Silver
 
Gold
 
 
(Dollars in thousands except per ounce amounts)
 
Palmarejo
 
San Bartolomé
 
Rochester
 
Endeavor
 
Total
 
Kensington
 
Total
Costs applicable to sales, including amortization (U.S. GAAP)
 
$
64,397

 
$
34,610

 
$
34,611

 
$
2,678

 
$
136,296

 
$
27,383

 
$
163,679

Amortization
 
16,235

 
4,993

 
5,955

 
1,586

 
28,769

 
8,458

 
37,227

Costs applicable to sales
 
$
48,162

 
$
29,617

 
$
28,656

 
$
1,092

 
$
107,527

 
$
18,925

 
$
126,452

Silver equivalent ounces sold
 
2,350,080

 
1,985,952

 
2,001,976

 
191,983

 
6,529,991

 
 
 
 
Gold ounces sold
 
 
 
 
 
 
 
 
 
 
 
22,399

 
 
Costs applicable to sales per ounce
 
$
20.49

 
$
14.91

 
$
14.31

 
$
5.69

 
$
16.47

 
$
845

 
 
Inventory adjustments
 
(4.79
)
 
(0.53
)
 
(0.49
)
 
—

 
(2.04
)
 
(53
)
 
 
Adjusted costs applicable to sales per ounce
 
15.70

 
14.38

 
13.82

 
5.69

 
14.43

 
792

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Treatment and refining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
994

Sustaining capital
 
 
 
 
 
 
 
 
 
 
 
 
 
18,492

General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
9,036

Exploration
 
 
 
 
 
 
 
 
 
 
 
 
 
5,783

Reclamation
 
 
 
 
 
 
 
 
 
 
 
 
 
1,549

Project/pre-development costs
 
 
 
 
 
 
 
 
 
 
 
 
 
3,721

All-in sustaining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
$
166,027

Silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
6,529,991

Kensington silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
1,343,940

Consolidated silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
7,873,931

All-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
21.09

Inventory adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(1.84
)
Adjusted all-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
19.25



15


Reconciliation of Non-U.S. GAAP All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended September 30, 2014
 
 
Silver
 
Gold
 
 
(Dollars in thousands except per ounce amounts)
 
Palmarejo
 
San Bartolomé
 
Rochester
 
Endeavor
 
Total
 
Kensington
 
Total
Costs applicable to sales, including amortization (U.S. GAAP)
 
$
62,481

 
$
25,564

 
$
29,077

 
$
1,998

 
$
119,120

 
$
47,555

 
$
166,675

Amortization
 
16,493

 
5,117

 
5,359

 
909

 
27,878

 
12,887

 
40,765

Costs applicable to sales
 
$
45,988

 
$
20,447

 
$
23,718

 
$
1,089

 
$
91,242

 
$
34,668

 
$
125,910

Silver equivalent ounces sold
 
3,021,448

 
1,438,409

 
1,602,676

 
141,291

 
6,203,824

 
 
 
 
Gold ounces sold
 
 
 
 
 
 
 
 
 
 
 
37,009

 
 
Costs applicable to sales per ounce
 
$
15.22

 
$
14.22

 
$
14.80

 
$
7.71

 
$
14.71

 
$
937

 
 
Inventory adjustments
 
(0.79
)
 
(0.55
)
 
(0.02
)
 
—

 
(0.52
)
 
(48
)
 
 
Adjusted costs applicable to sales per ounce
 
14.43

 
13.67

 
14.78

 
7.71

 
14.19

 
889

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Treatment and refining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
1,425

Sustaining capital
 
 
 
 
 
 
 
 
 
 
 
 
 
12,239

General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
8,515

Exploration
 
 
 
 
 
 
 
 
 
 
 
 
 
6,587

Reclamation
 
 
 
 
 
 
 
 
 
 
 
 
 
2,041

Project/pre-development costs
 
 
 
 
 
 
 
 
 
 
 
 
 
2,154

All-in sustaining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
$
158,871

Silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
6,203,824

Kensington silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
2,220,540

Consolidated silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
8,424,364

All-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
18.86

Inventory adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(0.59
)
Adjusted all-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
18.27


Reconciliation of Non-U.S. GAAP All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended June 30, 2014
 
 
Silver
 
Gold
 
 
(Dollars in thousands except per ounce amounts)
 
Palmarejo
 
San Bartolomé
 
Rochester
 
Endeavor
 
Total
 
Kensington
 
Total
Costs applicable to sales, including amortization (U.S. GAAP)
 
$
67,595

 
$
25,550

 
$
29,406

 
$
1,701

 
$
124,252

 
$
34,784

 
$
159,036

Amortization
 
18,044

 
4,855

 
5,025

 
859

 
28,783

 
11,566

 
40,349

Costs applicable to sales
 
$
49,551

 
$
20,695

 
$
24,381

 
$
842

 
$
95,469

 
$
23,218

 
$
118,687

Silver equivalent ounces sold
 
3,528,219

 
1,494,100

 
1,544,456

 
106,126

 
6,672,901

 
 
 
 
Gold ounces sold
 
 
 
 
 
 
 
 
 
 
 
23,028

 
 
Costs applicable to sales per ounce
 
$
14.04

 
$
13.85

 
$
15.79

 
$
7.94

 
$
14.31

 
$
1,008

 
 
Inventory adjustments
 
(0.56
)
 
—

 
(0.06
)
 
—

 
(0.31
)
 
(187
)
 
 
Adjusted costs applicable to sales per ounce
 
13.48

 
13.85

 
15.73

 
7.94

 
14.00

 
821

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Treatment and refining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
963

Sustaining capital
 
 
 
 
 
 
 
 
 
 
 
 
 
17,617

General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
9,398

Exploration
 
 
 
 
 
 
 
 
 
 
 
 
 
5,153

Reclamation
 
 
 
 
 
 
 
 
 
 
 
 
 
1,964

Project/pre-development costs
 
 
 
 
 
 
 
 
 
 
 
 
 
6,388

All-in sustaining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
$
160,170

Silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
6,672,901

Kensington silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
1,381,680

Consolidated silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
8,054,581

All-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
19.89

Inventory adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(0.79
)
Adjusted all-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
19.10



16


Reconciliation of Non-U.S. GAAP All-in Sustaining Costs per Silver Equivalent Ounce
for Three Months Ended March 31, 2014
 
 
Silver
 
Gold
 
 
(Dollars in thousands except per ounce amounts)
 
Palmarejo
 
San Bartolomé
 
Rochester
 
Endeavor
 
Total
 
Kensington
 
Total
Costs applicable to sales, including amortization (U.S. GAAP)
 
$
62,233

 
$
23,358

 
$
19,159

 
$
2,135

 
$
106,885

 
$
39,240

 
$
146,125

Amortization
 
18,659

 
4,457

 
4,451

 
953

 
28,520

 
10,709

 
39,229

Costs applicable to sales
 
$
43,574

 
$
18,901

 
$
14,708

 
$
1,182

 
$
78,365

 
$
28,531

 
$
106,896

Silver equivalent ounces sold
 
3,261,982

 
1,357,307

 
1,160,829

 
146,842

 
5,926,960

 
 
 
 
Gold ounces sold
 
 
 
 
 
 
 
 
 
 
 
28,386

 
 
Costs applicable to sales per ounce
 
$
13.36

 
$
13.93

 
$
12.67

 
$
8.05

 
$
13.22

 
$
1,005

 
 
Inventory adjustments
 
(0.23
)
 
—

 
(0.04
)
 
—

 
(0.13
)
 
(126
)
 
 
Adjusted costs applicable to sales per ounce
 
13.13

 
13.93

 
12.63

 
8.05

 
13.09

 
879

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Treatment and refining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
1,561

Sustaining capital
 
 
 
 
 
 
 
 
 
 
 
 
 
12,851

General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
13,896

Exploration
 
 
 
 
 
 
 
 
 
 
 
 
 
4,217

Reclamation
 
 
 
 
 
 
 
 
 
 
 
 
 
1,914

Project/pre-development costs
 
 
 
 
 
 
 
 
 
 
 
 
 
4,325

All-in sustaining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
$
145,660

Silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
5,926,960

Kensington silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
1,703,160

Consolidated silver equivalent ounces sold
 
 
 
 
 
 
 
 
 
 
 
 
 
7,630,120

All-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
19.09

Inventory adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
$
(0.57
)
Adjusted all-in sustaining costs per silver equivalent ounce
 
 
 
 
 
 
 
 
 
 
 
$
18.52






17