-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V0QcKfA2rm9ZpUM73k2TaJdh19BlPa0wIUQNwaw3SuknApVKOPoPaOdONPlf3lpN OfFAjLdupUonPT7xAWv0nw== 0000897069-03-001268.txt : 20031027 0000897069-03-001268.hdr.sgml : 20031027 20031027162712 ACCESSION NUMBER: 0000897069-03-001268 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031023 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COEUR D ALENE MINES CORP CENTRAL INDEX KEY: 0000215466 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 820109423 STATE OF INCORPORATION: ID FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08641 FILM NUMBER: 03958762 BUSINESS ADDRESS: STREET 1: 400 COEUR D ALENE MINES BLDG STREET 2: 505 FRONT AVE CITY: COEUR D ALENE STATE: ID ZIP: 83814 BUSINESS PHONE: 2086673511 MAIL ADDRESS: STREET 1: 400 COEUR D ALENE MINES BLDG STREET 2: 505 FRONT AVE CITY: COEUR D'ALENE STATE: ID ZIP: 83814 8-K 1 dkm518.txt FORM 8-K DATED OCTOBER 23, 2003 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15 (d) of the Securities and Exchange Act of 1934 Date of Report (Date of earliest event reported): October 23, 2003 COEUR D'ALENE MINES CORPORATION ------------------------------------------------------ (Exact name of Registrant as specified in its charter) Idaho 1-8641 82-0109423 ---------------------------- ------------ --------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification Number) 400 Coeur d'Alene Mines Bldg. 505 Front Avenue Coeur d'Alene, Idaho 83814 - ---------------------------------------- ---------- (Address of principal executive offices) (zip code) Registrant's telephone number, including area code: (208) 667-3511 Not Applicable ------------------------------------------------------------- (Former name or former address, if changed since last report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits. The following exhibit is furnished herewith: 99.1 Press Release issued by the Registrant on October 23, 2003. Item 12. Results of Operations and Financial Condition On October 23, 2003, the Registrant issued a press release announcing its financial results for the quarter ended September 30, 2003. A copy of the Registrant's press release is attached as Exhibit 99.1 to this Current Report. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COEUR D'ALENE MINES CORPORATION (Registrant) Dated: October 24, 2003 By: /s/ James A. Sabala ------------------------------------- James A. Sabala Executive Vice President and Chief Financial Officer 2 EX-99 3 dkm518a.txt PRESS RELEASE Coeur d'Alene Mines Corporation 505 Front Avenue, P.O. Box I [GRAPHIC OMITTED] Coeur d'Alene, ID 83816-0316 Telephone 208.667.3511 Facsimile 208.667.2213 Press Release Exhibit 99.1 - -------------------------------------------------------------------------------- CONTACT: Tony Ebersole, Investor Relations Coeur d'Alene Mines Corporation, (208) 665-0335 COEUR REPORTS IMPROVED 3rd QUARTER AND NINE MONTHS RESULTS - Stronger financial results, improved cash flow - - Ongoing reduction in cash costs per ounce - - Successful South American exploration program increased by 35% - COEUR D'ALENE, Idaho - October 23, 2003 Highlights - ---------- * Third quarter silver production of 3.3 million ounces at average cash cost of $3.04 per ounce * Gold production of 31,000 ounces in the third quarter * First nine months silver production of 10.7 million ounces at an average cash cost of $3.24 per ounce * Nine months gold production of 93,000 ounces * Cerro Bayo/Martha mines produced 1.2 million silver ounces in recent quarter, and 15,000 gold ounces, at cash costs of $1.18 per ounce/silver * Nine months operating cash flow (before working capital changes) of $5.0 million compared to $(13.2) million in 2002's comparable period * Crusher relocation successfully completed at Rochester, on time and within budget. Cash costs at Rochester have steadily declined during the year with completion of project to $3.66 per ounce in 3Q * $76.0 million raised in oversubscribed 23.7 million-share common stock offering * A total of $94.2 million in cash and short term investments at September 30 * Total debt now just 8.7% of total capital, putting Coeur in strongest financial position in close to a decade * Standard & Poor's rating agency issues positive outlook for Coeur * CIBC World Markets initiates analyst coverage * Success in South America leads to 35% expansion of exploration budget "Coeur continued to report stronger financial results in the third quarter and first nine months compared to last year, fueled by consistent production, reduced cash costs and increased metals prices," said Dennis E. Wheeler, Chairman and Chief Executive Officer. "With the success of our recent equity offering, Coeur is now in its best financial position in nearly a decade, with no net debt and available liquidity approaching $100 million. Meanwhile, we are moving ahead with final feasibility studies at our San Bartolome and Kensington development projects, which we expect will significantly increase the diversity of Coeur's asset base and future production and lower overall operating costs." "Our South American mines - the Cerro Bayo and Martha - continued to contribute strong production and cash flow, by increasing their silver equivalent ounces over last year's third quarter and first nine months, at an extremely low production cost. Because of our exploration success around these two new and highly prospective properties, we have increased our exploration budget in South America by 35 percent for the remainder of this year. We anticipate additional high-grade reserve increases there by year-end." "The major crusher relocation project was completed at Rochester, and we lowered cash costs there to $3.66 per ounce of silver in the third quarter, a reduction of 15 percent from the second quarter, and 43 percent below first quarter costs. "Also, at Silver Valley, our oldest and most long-lived reserve, we have initiated the long-term expansion plan designed to increase reserves and production, and to lower operating costs. By 2006, we expect a record seven million ounces of silver production from Silver Valley, with average cash costs of below $4 per ounce," Mr. Wheeler added. Financial Summary - ----------------- Coeur d'Alene Mines Corporation (NYSE: CDE), the world's largest primary silver producer, today reported third quarter 2003 metals sales of $23.4 million, compared to $24.4 million in the same period last year, due primarily to the temporary suspension of operations at Silver Valley during the quarter to prepare the mine for its long-term expansion plan. For the first nine months of 2003, Company metals sales were $78.1 million, an increase of 29 percent from $60.5 million reported during in the same period last year. For the third quarter, Coeur realized an average silver price of $4.77 per ounce compared to an average realized price during last year's third quarter of $4.65 per ounce. For its gold sales, Coeur realized an average price of $353 per ounce during the third quarter compared to an average gold price of $315 per ounce during the same period last year. For the first nine months, Coeur realized an average silver price of $4.71 per ounce compared to an average realized price during last year's period of $4.67 per ounce. For its gold sales, Coeur realized an average price of $341 per ounce in the first nine months of this year compared to an average gold price of $306 per ounce during the same period last year. Third quarter production totaled 3.3 million ounces of silver and 31,000 ounces of gold, compared to 3.8 million ounces of silver and 34,000 ounces of gold in last year's third quarter. Consolidated cash costs in the quarter were $3.04 per ounce of silver, an increase of four percent from the last year's third quarter. The recent quarter's cash costs represent a 10 percent decrease from cash costs in the 2nd quarter of 2003. First nine-months production totaled 10,671,000 ounces of silver, a seven percent increase from last year's period, and gold production of 93,000 ounces, up 27 percent from last year's period. Consolidated cash costs for the first nine months were $3.24 per ounce of silver, a reduction of three percent from last year's comparable period. For the third quarter of 2003 the Company reported a net loss of $17.9 million, or $0.10 per share, compared to a net loss of $12.3 million, or $0.14 per share in the third quarter of 2002. This year's third quarter loss was impacted by $12.5 million in charges for interest expense and charges related to the 2 early retirement of debt. Exclusive of these charges, the Company would have reported a net loss of $5.4 million, or $0.03 per share. For the first nine months of 2003, the Company's net loss was $53.5 million, or $0.35 per share, compared to a loss of $35.1 million, or $0.51 per share for the same period a year ago. This year's nine months period included $44.7 million in charges for interest expense and losses related to the early retirement of debt resulting from the issuance of common shares in excess of the original conversion ratio, and a charge of $2.3 million related to a change in accounting principle associated with reclamation accruals. Exclusive of these charges, the Company would have reported a net loss of $6.5 million, or $0.04 per share in this year's period. During the first nine months of 2003, operating cash flow before working capital changes improved to $5.0 million compared to $(13.2) million in 2002. In the third quarter, the Company's cash position and balance sheet strengthened to its best position in a decade with the successful completion of a 23.7 million common shares offering for $76.0 million of net proceeds. At September 30, 2003, cash and equivalents plus short-term investments, totaled $94.2 million. During the quarter, Coeur also eliminated $41.1 million in convertible debt from its balance sheet, with the conversion of $29.8 million of its 9% Senior Convertible Notes, the final conversion and/or redemption of $9.9 million of its 13 3/8% Senior Convertible Notes, exchanges of $1.0 million of 6 3/8% Convertible Subordinated Debentures, and $0.4 million of 7 1/4% Convertible Subordinated Debentures. Total convertible debt at quarter-end was $18.7 million, or just 8.7 percent of capital. Overview of Operations - ---------------------- South America Cerro Bayo (Chile)/Martha (Argentina) * Third quarter production of 1,150,751 ounces of silver and 15,220 ounces of gold * Low cash costs of $1.18 per ounce of silver during third quarter * Nine months production: 3,775,953 ounces of silver and 52,173 ounces of gold * Cash cost in the first nine months of $0.73 per ounce of silver * 2003 exploration budget increased 35% to $3.5 million During the third quarter, silver production increased 31 percent over last year's third quarter to 1.2 million ounces. Gold production was consistent at 15,220 ounces, compared to 15,089 in last year's period. Cash operating costs in the quarter were $1.18 per ounce of silver, compared to $0.91 in 2002's comparable period. For the nine months period, silver production more than tripled to 3,775,953 ounces and gold production grew two-and-a-half times to 52,173 ounces compared to 1,141,891 ounces of silver and 21,000 ounces of gold produced in the first nine months of 2002. Cash costs through the first nine months were $0.73 per ounce of silver, versus $1.21 per ounce in the first nine months of 2002. North America - ------------- Rochester Mine (Nevada) * Third quarter silver production of 1,717,947 ounces and 15,346 ounces of gold 3 * Cash costs of $3.66 per ounce of silver, a decrease of 15% from the second quarter of this year, and 43% less than the first quarter of this year * Nine months silver production 4,160,993 ounces and 41,237 ounces of gold * Crusher relocation completed on schedule and within budget Near the end of the third quarter, Rochester completed its major crusher relocation project, on schedule and within budget. Measures taken to reduce operating costs during the project effectively lowered cash costs in the third quarter to $3.66 per ounce - a reduction of 15 percent from the second quarter of this year, and 43 percent lower than the first quarter of this year. With the installation of the new crusher, cash costs are expected to continue at their lower, historical levels. Rochester produced 1.7 million ounces of silver and 15,346 ounces of gold during the third quarter, compared to 1.7 million ounces of silver and 18,885 ounces of gold in 2003's comparable period. Cash costs in last year's third quarter were $2.83 per ounce silver. First nine months of production at Rochester was 4.2 million ounces of silver and 41,237 ounces of gold at an average cash cost of $4.61 per ounce of silver. This compared to 4.8 million ounces of silver and 52,440 ounces of gold at an average cash cost of $3.11 a year ago. Coeur Silver Valley - Galena Mine (Idaho) * Temporary suspension of operations in the quarter as the mine was prepared for expansion. Short-term impact on third quarter production and costs. * Third quarter silver production of 437,249 ounces versus 1.9 million ounces a year ago. * Cash operating costs of $5.46 per ounce in quarter compared to $4.54 per ounce in last year's third quarter. * Nine months silver production of 2,733,716 ounces * Long-range development program begins during the quarter At Coeur Silver Valley, silver production was 0.4 million ounces in the third quarter compared to 1.2 million ounces a year ago. The recent quarter's production was impacted by the temporary suspension of operations in the quarter, as maintenance work prepared the mine for start up of the long range development program designed to increase production 40 percent to 7 million ounces commencing in 2006, with estimated cash costs below $4.00 per ounce. The early focus of this optimization work is the exploration of a number of new high-grade silver veins located above the 5200 level, and extension of the more prolific vein systems at depth. Expanded South American Exploration Program - ------------------------------------------- Cerro Bayo Successful drilling continued during the quarter on the Javiera Sur vein and the new Veronica vein, where a recent thick, high-grade drill intercept recorded 27 feet of 0.77 ounces per ton gold equivalent. Both of these veins are located near existing mine infrastructure at Cerro Bayo. Drilling thus far totals 106,000 feet in 270 holes using three core rigs. Due to the ongoing exploration success in the area, the Cerro Bayo exploration budget was increased during the third quarter by $400,000 for a total of $2.2 million for the entire year. Exploration remains on track to meet the goal of discovering 267,000 ounces of new gold equivalent resources. 4 Martha Mine and Santa Cruz Province Exploration success at Martha has led to an increase in the exploration budget there in the third quarter by $500,000, or 63 percent, to a total of $1.3 million for the year. Work now includes two full-time drill rigs and one reverse circulation drill around the existing mine. Drilling continued to look for extensions of the high-grade mineralization around the R4 Zone, an area of very high-grade ore shoots, 600 feet east of the Martha mine and along the eastern extension of the Martha vein. The proximity to the existing mine has the potential to add these new ounces quickly and economically into production. In addition, current exploration is delineating both shallow, open pit reserves and a southeast extension of the R4 Zone. A new geologic model is being prepared for R4 with this new information. Hedging - ------- Coeur does not currently have any of its silver production hedged. The Company currently has 27,000 ounces of gold sold forward over the next 15 months at an average price of $343 per ounce. In 2003, every 10 cent increase in silver price adds approximately $1.5 million in free cash flow on an annualized basis. Coeur d'Alene Mines Corporation is the country's largest silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile and Bolivia. Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use the term "resources" in this press release which the SEC guidelines strictly prohibit us from including in our filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K and Form 10-Q for the quarter ended September30, 2003. You can review and obtain copies of that filing from the SEC website at http://www.sec.gov/edgar.html. This document contains numerous forward-looking statements relating to the Company's silver and gold mining business. The United States Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. Operating, exploration and financial data, and other statements in this document are based on information the company believes reasonable, but involve significant uncertainties as to future gold and silver prices, costs, ore grades, estimation of gold and silver reserves, mining and processing conditions, changes that could result from the Company's future acquisition of new mining properties or businesses, the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions), regulatory and permitting matters, and risks inherent in the ownership and operation of, or investment in, mining properties or businesses in foreign countries. Actual results and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise. 5 COEUR D'ALENE MINES CORPORATION PRODUCTION STATISTICS
Three Months Ended Nine Months Ended September 30, September 30, ------------------------------- ------------------------------ 2003 2002 2003 2002 -------------- --------------- ------------- ------------- ROCHESTER MINE Silver ozs. 1,717,947 1,717,151 4,160,993 4,770,361 Gold ozs. 15,346 18,885 41,237 52,440 Cash Costs per oz./silver $3.66 $2.83 $4.61 $3.11 Full Costs per oz./silver $4.43 $3.44 $5.54 $3.87 GALENA MINE Silver ozs. 437,249 1,188,262 2,733,716 4,045,253 Cash Costs per oz./silver $5.46 $4.54 $4.62 $4.20 Full Costs per oz./silver $5.91 $5.34 $4.96 $4.91 CERRO BAYO/MARTHA MINE (A) Silver ozs. 1,150,751 881,691 3,775,953 1,141,891 Gold ozs. 15,220 15,089 52,173 21,000 Cash Costs per oz./silver $1.18 $0.91 $0.73 $1.21 Full Costs per oz./silver $2.41 $1.95 $2.48 $3.25 CONSOLIDATED PRODUCTION TOTALS Silver ozs. 3,305,947 3,787,104 10,670,662 9,957,505 Gold ozs. 30,566 33,974 93,410 73,440 Cash Costs per oz./silver $3.04 $2.92 $3.24 $3.33 Full Costs per oz./silver $3.92 $3.69 $4.31 $4.22 CONSOLIDATED SALES TOTALS Silver ozs. sold 3,144,852 3,544,409 10,911,567 9,569,566 Gold ozs. sold 29,258 30,472 97,287 65,992 Realized price per silver oz. $4.77 $4.65 $4.71 $4.67 Realized price per gold oz. $353 $ 315 $ 341 $ 306
(A) The Company commenced production in April 2002. See reconciliation of non-GAAP cash costs to GAAP production costs under "Cost and Expenses". Note: "Cash Costs per Ounce" are calculated by dividing the cash costs computed for each of the Company's mining properties for a specified period by the amount of silver ounces produced by that property during that same period. Management uses cash costs per ounce produced as a key indicator of the profitability of each of its mining properties. Gold and silver are sold and priced in the world financial markets on a US dollar per ounce basis. By calculating the cash costs from each of the Company's mines on the same unit basis, management can easily determine the gross margin that each ounce of gold and silver produced is generating. "Cash Costs" are costs directly related to the physical activities of producing silver and gold and include mining, processing and other plant costs, deferred mining adjustments, third-party refining and smelting costs, marketing expense, on-site general and administrative costs, royalties, in-mine drilling expenditures that are related to production and other direct costs. Sales of by-product metals (primarily gold and copper) are deducted from the above in computing cash costs. Cash costs exclude depreciation, depletion and amortization, corporate general and administrative expense, exploration, interest, and pre-feasibility costs and accruals for mine reclamation. Cash costs are calculated and presented using the "Gold Institute Production Cost Standard" applied consistently for all periods presented. Total cash costs per ounce is a non-GAAP measurement and investors are cautioned not to place undue reliance on it and are urged to read all GAAP accounting disclosures presented in the consolidated financial statements and accompanying footnotes. In addition, see the reconciliation set forth below: 6
Three months ended September 30, 2003 Rochester Silver Valley Cerro Bayo(1) Total --------------- ------------------ --------------- --------------- Production of Silver (ounces) 1,717,947 437,249 1,150,751 3,305,947 Cash Costs per ounce $ 3.66 $ 5.46 $ 1.18 $ 3.04 --------------- ------------------ --------------- --------------- Total Cash Costs (thousands) $ 6,296 $ 2,387 $ 1,357 $ 10,040 Add/(Subtract): Third Party Smelting Costs (234) (648) (1,946) (2,828) By-Product Credit (2) 5,558 258 5,560 11,376 Deferred Stripping Adjustment (80) - - (80) Change in Inventory (280) (476) 1,097 341 --------------- ------------------ --------------- --------------- Production Costs $ 11,260 $ 1,521 $ 6,068 $ 18,849 =============== ================== =============== =============== Three months ended September 30, 2002 Rochester Silver Valley Cerro Bayo(1) Total ---------------- ----------------- ---------------- --------------- Production of Silver (ounces) 1,717,151 1,188,262 881,691 3,787,104 Cash Costs per ounce $ 2.83 $ 4.54 $ 0.91 $ 2.92 ---------------- ----------------- ---------------- --------------- Total Cash Costs (thousands) $ 4,860 $ 5,400 $ 800 $ 11,060 Add/Subtract: Third Party Smelting Costs (307) (1,801) (708) (2,816) By-Product Credit (2) 5,932 667 4,748 11,347 Deferred Stripping Adjustment 117 - - 117 Change in Inventory 3,651 506 549 4,706 ---------------- ----------------- ---------------- --------------- Production Costs $ 14,253 $ 4,772 $ 5,389 $ 24,414 ================ ================= ================ ===============
(1) The Cerro Bayo mine commenced production in the second quarter of 2002. (2) By-product credit for the value of metal sales other than silver, primarily gold and copper.
Nine months ended September 30, 2003 Rochester Silver Valley Cerro Bayo(1) Total --------------- ------------------ --------------- --------------- Production of Silver (ounces) 4,160,993 2,733,716 3,775,953 10,670,662 Cash Costs per ounce $ 4.61 $ 4.62 $ 0.73 $ 3.24 --------------- ------------------ --------------- --------------- Total Cash Costs (thousands) $ 19,196 $ 12,623 $ 2,770 $ 34,589 Add/(Subtract): Third Party Smelting Costs (600) (3,530) (4,967) (9,097) By-Product Credit (2) 14,616 1,583 18,503 34,702 Deferred Stripping Adjustment (241) - - (241) Change in Inventory (4,112) (22) (79) (4,213) --------------- ------------------ --------------- --------------- Production Costs $ 28,859 $ 10,654 $ 16,227 $ 55,740 =============== ================== =============== =============== Nine months ended September 30, 2002 Rochester Silver Valley Cerro Bayo(1) Total -------------- ----------------- ----------------- -------------- Production of Silver (ounces) 4,770,361 4,045,253 1,141,891 9,957,505 Cash Costs per ounce $ 3.11 $ 4.20 $ 1.21 $ 3.33 -------------- ----------------- ----------------- -------------- Total Cash Costs (thousands) $ 14,836 $ 16,990 $ 1,382 $ 33,208 Add/(Subtract): Third Party Smelting Costs (791) (5,811) (708) (7,310) By-Product Credit 16,039 2,350 6,622 25,011 Deferred Stripping Adjustment 138 - - 138 Change in Inventory 10,332 523 (2,978) 7,877 -------------- ----------------- ----------------- -------------- roduction Costs $ 40,554 $ 14,052 $ 4,318 $ 58,924 ============== ================= ================= ==============
(1) The Cerro Bayo mine commenced production in the second quarter of 2002. (2) By-product credit for the value of metal sales other than silver, primarily gold and copper. 7 COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30, December 31, 2003 2002 ---- ---- ASSETS (In Thousands) CURRENT ASSETS Cash and cash equivalents $ 86,925 $ 9,093 Short-term investments 7,282 518 Receivables and prepaid expenses, net 10,747 7,185 Ore on leach pad 15,682 11,082 Metal and other inventory 14,668 14,846 ---------- --------- 135,304 42,724 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment 85,538 76,194 Less accumulated depreciation (51,923) (49,531) ----------- ---------- 33,615 26,663 MINING PROPERTIES Operational mining properties 111,511 92,149 Less accumulated depletion (88,099) (71,833) ----------- ---------- 23,412 20,316 Non-producing and developmental properties 25,125 28,129 Mineral interests 20,125 18,825 ---------- --------- 68,662 67,270 OTHER ASSETS Non-current ore on leach pad 15,676 15,474 Restricted investments 8,710 13,108 Debt issuance costs, net 295 1,034 Marketable securities 556 915 Other 5,860 5,900 ---------- ---------- 31,097 36,431 ---------- --------- Total assets $ 268,678 $173,088 ========== =========
8 COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited)
September 30, December 31, 2003 2002 ---- ---- (In Thousands) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 6,855 $ 5,962 Accrued liabilities 5,178 4,334 Accrued interest payable 396 1,610 Accrued salaries and wages 4,219 5,594 Current portion of remediation costs 1,201 926 13 3/8% Convertible Senior Subordinated Notes due December 2003 - 12,735 6 3/8% Convertible Subordinated Debentures due January 2004 4,876 - Current portion of bank financing 6,265 4,918 --------- -------- 28,990 36,079 LONG-TERM LIABILITIES 6 3/8% Convertible Subordinated Debentures due January 2004 - 55,132 7 1/4% Convertible Subordinated Debentures due October 2005 9,563 11,665 9% Convertible Senior Subordinated Notes due February 2007, net of discount 4,245 - Reclamation and mine closure 20,985 14,458 Other long-term liabilities 8,522 8,456 --------- -------- 43,315 89,711 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common stock, par value $1.00 per share-authorized 250,000,000 shares, issued 211,011,876 and 119,653,267 at September 30, 2003 and December 31, 2002 (1,059,211 shares held in treasury) 211,012 119,653 Additional paid in capital 532,404 420,863 Accumulated deficit (532,713) (479,207) Shares held in treasury (13,190) (13,190) Accumulated other comprehensive loss (1,140) (821) ---------- -------- 196,373 47,298 --------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 268,678 $173,088 ========== ========
9 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2003 2002 2003 2002 ---- ---- ---- ---- (In Thousands, except per share data) REVENUES Sales of metal $ 23,375 $ 24,424 $ 78,108 $ 60,458 Interest and other 326 2,110 1,071 5,201 ----------- ----------- ----------- ----------- Total revenues 23,701 26,534 79,179 65,659 COSTS and Expenses Production 18,849 24,648 55,740 58,924 Depreciation and depletion 3,256 2,719 12,955 8,130 Administrative and general 2,776 1,155 8,241 5,724 Exploration 1,154 786 3,367 2,397 Pre-feasibility 463 518 1,229 2,300 Interest 6,703 7,583 10,726 17,431 Other holding costs 2,602 1,464 4,171 2,924 Loss on exchange and early retirement of debt 5,769 - 33,957 2,920 ----------- ----------- ----------- ----------- Total cost and expenses 41,572 38,873 130,386 100,750 ----------- ----------- ----------- ----------- NET LOSS FROM CONTINUING OPERATIONS BEFORE TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE (17,871) (12,339) (51,207) (35,091) Income tax benefit - - 7 - ----------- ----------- ----------- ---------- NET LOSS BEFORE CUMULATIVE EFFECT IN CHANGE IN ACCOUNTING PRINCIPLE (17,871) (12,339) (51,200) (35,091) Cumulative effect of change in accounting principle - - (2,306) - ----------- ----------- ------------ ----------- Net loss (17,871) (12,339) (53,506) (35,091) Other comprehensive income (loss) 78 (574) (319) (1,051) ----------- ------------ ------------ ------------ COMPREHENSIVE LOSS $ (17,793) $ (12,913) $ (53,825) $ (36,142) ============ ============ ============ ============ BASIC AND DILUTED LOSS PER SHARE: Weighted average number of shares of common stock outstanding 183,102 87,742 153,679 69,354 =========== =========== ========== =========== Net loss per common share before cumulative effect of change in accounting principle $ (0.10) $ (0.14) $ (0.33) $ (0.51) Cumulative effect of change in accounting principle per share - - (0.02) - ----------- ----------- ----------- ----------- Net loss per common share $ (0.10) $ (0.14) $ (0.35) $ (0.51) ============ ========== =========== ===========
10 COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three and Nine Months Ended September 30, 2003 and 2002 (Unaudited)
Three Months Ended September 30, Nine Months Ended September 30, -------------------------------- ------------------------------- 2003 2002 2003 2002 ------------- --------------- ------------ -------------- (In Thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (17,871) $ (12,339) $ (53,506) $ (35,091) Add (deduct) non-cash items: Depreciation and depletion 3,256 2,719 12,955 8,130 Loss on early retirement of debt 5,769 - 33,957 2,920 Non-cash interest expense 7,088 4,235 8,191 9,623 Cumulative effect of change in accounting method - - 2,306 - Other charges 357 294 1,089 1,212 Changes in Operating Assets and Liabilities: Receivables and prepaid expenses (1,438) (1,758) (3,562) (2,193) Inventories 612 4,914 (4,624) 6,288 Accounts payable and accrued liabilities 2,029 (338) (1,341) 1,416 ------------ ------------- ------------ ------------ CASH USED IN OPERATING ACTIVITIES (198) (2,273) (4,535) (7,695) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of short-term investments (9,303) (8,900) (82,256) (9,682) Proceeds from sales of short-term investments 8,618 9,116 80,128 12,800 Expenditures on mining assets (7,391) (3,200) (15,102) (7,931) Other 312 (193) 225 (209) ------------ ------------- ----------- ------------- CASH USED IN INVESTING ACTIVITIES (7,764) (3,177) (17,005) (5,022) CASH FLOWS FROM FINANCING ACTIVITIES: Retirement of debt (61) - (22,453) (9,427) Proceeds from issuance of long-term debt, net of issuance costs - (192) 33,268 13,858 Proceeds from issuance of common stock, net of issuance costs 75,998 - 87,498 - Bank Borrowings on working capital facility 6,265 - 22,868 - Payments to Bank on working capital facility (6,810) - (21,714) - Other (32) 904 (95) 789 ------------- ------------ ------------ ------------ CASH PROVIDED BY FINANCING ACTIVITIES: 75,360 712 99,372 5,220 ------------ ------------ ----------- ------------ INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 67,398 (4,738) 77,832 (7,497) Cash and cash equivalents at beginning of period 19,527 11,955 9,093 14,714 ------------ ------------ ----------- ------------ Cash and cash equivalents at end of period $ 86,925 $ 7,217 $ 86,925 $ 7,217 ============ ============ =========== ============
11 In conjunction with the issuance of the 9% Convertible Senior Subordinated Notes, the Company also issued 0.6 million shares of common stock for partial payment of offering costs of $1.0 million. The Company and each of the holders of the 9% Notes entered into an Early Conversion Agreement. The amount of principal converted under the Early Conversion Agreements was $32.6 million, and the common shares issued, including interest, was approximately 27.5 million. The Company recorded a loss on early retirement of debt of $4.2 million in the third quarter of 2003 in conjunction with these transactions. In addition, during the third quarter of 2003, the Company issued an aggregate of 0.8 million shares of common stock for $1.0 million principal amount of the Company's 6 3/8% Debentures, and an aggregate of 0.3 million shares of common stock for $0.4 million principal amount of the Company's 7 1/4% Debentures. During the first nine months of 2003, holders of $12.7 million of the Series I 13 3/8% Convertible Senior Subordinated Notes due December 31, 2003 (the "Series I 13 3/8% Notes") voluntarily converted such notes, in accordance with their original terms, into approximately 9.6 million shares of common stock, including payment for make whole provision for interest expense. During the first nine months of 2003, the Company repurchased $27.9 million and $2.1 million principal amount of its outstanding 6 3/8% and 7 1/4% Convertible Subordinated Debentures, respectively, in exchange for 18.5 million shares of common stock and recorded a loss on exchange and early retirement of debt of approximately $29.6 million, including 0.6 million shares of common stock issued as payment for interest expense as part of the transaction. During the third quarter of 2002, holders of $9.9 million of the Series I 13 3/8% Notes voluntarily converted such notes into approximately 7.3 million shares of Common Stock. In addition, 0.8 million shares of common stock were issued as payment for $1.4 million of interest expense on the Series I 13 3/8% Notes. During the third quarter of 2002 holders of $14.1 million of Series II 13 3/8% Convertible Senior Subordinated Notes due December 31, 2003 (the "Series II 13 3/8% Notes") voluntarily converted such notes into approximately 10.4 million shares of common stock. The Series I 13 3/8% Notes and the Series II 13 3/8% Notes are collectively referred to hereinafter as the "13 3/8% Notes." In addition, 1.7 million shares of common stock were issued as payment for $2.8 million of interest expense on the Series II 13 3/8% Notes. During the first nine months of 2002, the Company repurchased $13.7 million, $0.8 million and $0.3 million principal amount of its outstanding 6%, 6-3/8% and 7-1/4% Convertible Subordinated Debentures, respectively, in exchange for 15.3 million shares of common stock and recorded a loss on retirement of debt of approximately $2.9 million. In addition, holders of $25.9 million of the Series I 13 3/8% Notes and $14.1 million of the Series II 13 3/8% Notes voluntarily converted such Notes, under the terms of the indentures, into approximately 29.6 million shares of common stock. The Company also issued 6.2 million shares of common stock as payment of interest expense on the 13 3/8% Notes. During the first nine months of 2003, the Company issued 1.2 million shares of common stock in conjunction with its long-term incentive program. 12 -----END PRIVACY-ENHANCED MESSAGE-----