EX-99.1 2 v57745exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(COEUR LOGO)
NEWS RELEASE
MOMENTUM BUILDS AS COEUR COMPLETES FIRST FULL QUARTER WITH ALL
THREE NEW GOLD AND SILVER MINES IN PRODUCTION
COEUR D’ALENE, Idaho — November 4, 2010 — Coeur d’Alene Mines Corporation (NYSE:CDE, TSX:CDM, ASX:CXC) today announced strong third quarter financial and operational results driven by its three new long-life gold and silver mines, along with record precious metals prices. This marked the first full quarter with all three new mines in production, leading to accelerating metal sales and cash flow while operating costs per ounce and capital expenditures continue declining.
Third Quarter Highlights:
    Gold production doubled from prior quarter; silver production increased 4%
 
    Cash operating costs1 declined 40% to $4.87 per silver ounce
 
    Record metal sales of $118.6 million, up 17% from previous quarter and nearly $30 million over last year’s third quarter
 
    58% increase in operating cash flow2 to $34.7 million compared to last quarter
 
    Capital expenditures declined to its lowest level in over four years
 
    Operating income jumped to $10.5 million, up from $1.9 million last quarter
 
    Palmarejo silver production increased 41% to 1.5 million ounces; gold production increased 49% to 29,823 ounces versus the second quarter
    Higher silver and gold grades and larger gold by-product credit led to reduced cash operating costs of $0.15 per silver ounce versus $10.78 during the prior quarter
    San Bartolomé silver production of 1.8 million silver ounces consistent with prior quarter; cash operating costs dropped 9% to $7.05 per silver ounce
 
    Kensington produced 15,155 gold ounces in its initial quarter
 
    Expecting full-year silver production of over 17 million ounces; cash operating costs of $5.50 per silver ounce; 135% increase in gold production to approximately 170,000 ounces
“Over the past three years, Coeur has been executing its strategic plan to transition the Company to three new long-life silver and gold mines. Along with exceptionally strong metals prices, the results from the third quarter demonstrate the momentum being created by these new operations.” said Dennis E. Wheeler, Chairman, President and Chief Executive Officer. “As metal sales and cash flow increase, the Company’s cash operating costs and capital expenditures continue to decline.”
Mr. Wheeler continued, “The third quarter also marked a major milestone for the Company’s Kensington gold mine, as it logged its first full quarter of operations. With a substantial reserve base, exciting exploration potential and record gold prices, Kensington has a very bright future.”
 
1   Cash operating costs is a non-U.S. GAAP measure. A reconciliation of this measure to production costs is provided at the end of this release. Excludes cash operating costs at Kensington, which are presented on a gold basis.
 
2   Represents operating cash flow prior to changes in operating assets and liabilities. A reconciliation between U.S. GAAP and non-U.S. GAAP operating cash flow is provided at the end of this release.

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“Finally, our Rochester silver and gold mine in Nevada is experiencing a rebirth as it moves ahead with a planned expansion of mining operations. Just last week, this expansion plan received a boost with the issuance of a positive Decision Record by the Nevada Bureau of Land Management (BLM). This expansion will begin adding to production levels in the fourth quarter of 2011 and will increase total average annual silver and gold production to over 2.4 million ounces and 35,000 ounces, respectively. Rochester will soon become a fourth major contributor along with the Company’s three new mines. Rochester contains a large mineral resource base, which provides for additional opportunities to further expand operations beyond this initial expansion. Since commencing production in 1986, Rochester has produced over 127 million ounces of silver and 1.5 million ounces of gold, making it one of the world’s most prolific silver and gold mines. The Company extends its appreciation to the BLM, the State of Nevada and the Nevada Congressional Delegation for its support and assistance, which will help lead to the creation of 200 new jobs at Rochester. “ Mr. Wheeler added.
Financial Highlights
                                                 
US$ millions   3Q 2009   3Q 2010   YoverY   2Q 2010   3Q 2010   QoverQ
Sales of Metal
  $ 90.3     $ 118.6       31 %   $ 101.0     $ 118.6       17 %
Production Costs
    59.7       60.4       1 %     58.6       60.4       3 %
Gross Mine Profit3
    30.6       58.2       90 %     42.4       58.2       37 %
EBITDA4
    23.5       48.3       106 %     31.8       48.3       52 %
Operating Income/(Loss)
    -4.1       10.5     nm     1.9       10.5       453 %
 
                                               
Operating Cash Flow
    -1.0       34.7     nm     22.0       34.7       58 %
Capital Expenditures
    54.4       36.8       -32 %     45.5       36.8       -19 %
 
                                               
Cash, Equivalents and ST Inv.
  $ 45.6     $ 32.8       -28 %   $ 41.2     $ 32.8       -20 %
Total Debt5
    216.9       186.4       -14 %     187.5       186.4       -1 %
Shares Issued & Outstanding
    78.1       89.3       14 %     89.3       89.3       0 %
 
                                               
Avg. Realized Price — Silver
  $ 14.52     $ 18.87       30 %   $ 18.56     $ 18.87       2 %
Avg. Realized Price — Gold
  $ 953     $ 1,229       29 %   $ 1,176     $ 1,229       5 %
Note: Reflects results from continuing operations.
Third quarter metal sales jumped nearly $30 million to a record $118.6 million, up 31% compared to last year’s third quarter and up 17% over the prior quarter, primarily due to the significant rise in gold production from the Palmarejo mine and from substantially higher average realized silver and gold prices. Sales of silver contributed 62% of the Company’s total metal sales compared to 75% during last year’s third quarter. Production costs remained nearly flat compared to last year’s third quarter and this year’s second quarter, leading to significant increases in gross mine profit, operating income and operating cash flow.
Quarterly operating cash flow increased to $34.7 million compared to $(1.0) million last year while capital expenditures declined 32% to $36.8 million. This represents the lowest quarterly capital expenditures since the second quarter of 2006. Compared to the most recent quarter, operating cash flow increased 58% while capital expenditures dropped 19%.
 
3   Represents sales of metal less production costs. Excludes depreciation, depletion, and amortization expense.
 
4   EBITDA is a non-U.S. GAAP measure and defined as earnings before interest, taxes, depreciation and amortization. A reconciliation of this measure to U.S. GAAP is provided at the end of this release.
 
5   Includes short-term and long-term indebtedness; excludes capital lease obligations and Mitsubishi gold lease facility.

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Quarterly operating income6 increased to $10.5 million versus a $4.1 million operating loss during last year’s third quarter and $1.9 million during the second quarter.
The Company’s average realized silver and gold prices during the third quarter were $18.87 and $1,229 per ounce, respectively, representing increases of 30% and 29% over the prior year.
At September 30th, cash, equivalents and short-term investments totaled $32.8 million. Total shares outstanding remain at 89.3 million, consistent with the Company’s stated objective of not issuing additional shares. Total debt declined 14% compared to last year’s third quarter. The current debt-to-equity ratio is 9%.
Operational Highlights
                                                 
Ounces unless otherwise noted   3Q 2009   3Q 2010   QoverQ   2Q 2010   3Q 2010   YoverY
Silver Production
    5,196,315       4,333,530       -17 %     4,156,204       4,333,530       4 %
Gold Production
    28,955       47,514       64 %     23,124       47,514       105 %
Cash Operating Costs/Ag Oz
  $ 6.93     $ 4.87       -30 %   $ 8.06     $ 4.87       -40 %
The Company produced 4.3 million ounces of silver and 47,514 ounces of gold during the third quarter versus 4.2 million ounces and 23,124 ounces, respectively, in the second quarter. The 105% increase in gold production was primarily a result of the production of 15,155 gold ounces at the Kensington mine during its initial quarter of operations and a 49% increase in gold production at Palmarejo to 29,823 ounces.
Cash operating costs declined 40% to $4.87 per silver ounce compared to the prior quarter mostly due to Palmarejo’s cash operating costs of $0.15 per silver ounce compared to $10.78 per silver ounce last quarter.
The Company’s silver production base is underpinned by proven and probable reserves of 269.2 million, measured and indicated resources of 180.6 million, and inferred resources of 66.6 million ounces. In addition, Coeur’s gold production is backed by a large and growing reserve base of 2.9 million ounces of proven and probable reserves, 1.2 million ounces of measured and indicated resources, and 1.2 million ounces of inferred resources7
Palmarejo (Mexico) — Corner Turned During Third Quarter
    Open pit silver and gold grades up 156% and 133%, respectively
 
    Underground silver and gold grades up 10% and 11%, respectively
 
    Highest production levels for both silver and gold since April 2009 startup
 
    Underground operations continue to contribute approximately one-third of total tons mined
 
6   Reflects income/(loss) before other income and expenses. On a net income/(loss) basis, the Company recorded a net loss from continuing operations of $23.3 million, or ($0.26) per share for the quarter, which included $19.1 million of negative non-cash fair value adjustments. During last year’s third quarter, the Company reported a net loss from continuing operations of $36.7 million, or ($0.48) per share, which included $35.7 million of negative non-cash fair value adjustments.
 
7   As of December 31, 2009.

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    Higher grades and increased gold by-product credit led to sharp decline in cash operating costs to $0.15 per silver ounce in the third quarter compared to $10.78 per silver ounce in the second quarter and $8.76 per silver ounce during last year’s third quarter
 
    Received and monetized $10 million of Franco-Nevada Corporation common shares in connection with operational completion test tied to the January 2009 gold royalty financing
 
    Processing plant achieved stability during quarter with gold recoveries averaging 94% and silver recoveries remaining at 70%. Implementation of a series of enhancements in the third quarter including installation of new pumping capacity, enhanced focus on grind size, optimization of chemical levels and improved blending of ore types are now beginning to make an impact. Several other improvements such as installation of an additional oxygen plant and changes focused on enhancing carbon stripping and regeneration are underway and expected to lead to further gains.
 
    Expected to produce approximately 6.1 million ounces of silver and 109,000 ounces of gold this year at an average cash operating cost of approximately $2.50 per silver ounce
 
    For additional operating statistics, please refer to the table on page 9 of this release
San Bartolomé (Bolivia) — Consistent Production Levels at Reduced Costs
    Third quarter silver production consistent with prior quarter
 
    14% increase in grade and 5% increase in recoveries offset a 19% decline in tons milled
 
    Cash operating costs dropped 9% to $7.05 per ounce
 
    Full-year 2010 silver production is expected to exceed 6.5 million ounces at average cash operating costs of approximately $8.00 per ounce
 
    For additional operating statistics, please refer to the table on page 9 of this release
Kensington (Alaska) — Initial Quarter of Operations According to Plan
    Commenced commercial production on July 3, 2010
 
    15,155 gold ounces produced and 7,391 gold ounces sold during the third quarter
 
    Cash operating costs during the mine’s initial quarter averaged $1,199 per ounce of gold and are expected to average approximately $490 per ounce over the life of mine
 
    Projected gold production expected to exceed 125,000 ounces in 2011, representing the mine’s first full year of operation
 
    For additional operating statistics, please refer to the table on page 9 of this release
Rochester (Nevada) — Positive Decision from BLM to Expand Operations for Several Years
    Expansion will begin adding to production levels in the fourth quarter of 2011 and will increase total average annual production to more than 2.4 million silver ounces and 35,000 gold ounces from current expected production levels generated from residual leaching of 700,000 silver ounces and 5,000 gold ounces
 
    Updated feasibility study completed defining 27.6 million contained ounces of silver and 247,000 contained ounces of gold in proven and probable mineral reserves. Mine contains an additional 54.8 million silver ounces and 409,000 gold ounces of measured and indicated resources. Efforts to expand mineral reserves and resources and further increase production are ongoing.
 
    Expected to produce 2.0 million ounces of silver and 10,000 ounces of gold in 2010 at an average cash operating cost of $3.00 per ounce

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    In its 25 years of operation, the mine has produced 127 million ounces of silver and 1.5 million ounces of gold
 
    For additional operating statistics, please refer to the table on page 10 of this release
Martha (Argentina) — Newly Discovered High-Grade Mineralization Expected to Extend Operations Through 2011
    Began 2010 with 1.2 million ounces of proven and probable reserves and 1.8 million ounces of measured and indicated resources
 
    Produced 1.4 million silver ounces through the first nine months of 2010
 
    Expect to produce 1.7 million silver ounces during full-year 2010
 
    For additional operating statistics, please refer to the table on page 10 of this release
Exploration Highlights
Exploration activities across all of Coeur’s properties proceeded at a brisk pace during the third quarter. Over 30,500 meters were drilled on six different properties with exploration expenditures totaling $3.8 million during the quarter.
Palmarejo — Favorable drill results continue to expand size and continuity of Guadalupe
The majority of the drilling during the quarter was focused at the Palmarejo mine and at the nearby Guadalupe deposit. At Palmarejo, drilling continues to intersect strong gold and silver mineralization from several zones, notably 108, 76, Tucson-Chapotillo, and at Guadalupe, which now totals over 2.4 kilometers of strike length. At the mine, drilling was conducted from both surface and underground on all five ore zones, all of which remain open for expansion on strike and at depth. Drilling during 2010 is expected to increase mineral resources and reserves when the Company announces year-end reserves and resources in early 2011.
Argentina — Definition drilling commenced and new high grades intersected at Joaquin
In the Santa Cruz province of Argentina, the Company commenced a definition drilling program at the Joaquin property, which is located approximately 70 kilometers to the north of the Martha Mine, to define the main part of the La Negra zone. Drilling at La Morocha, situated less than one kilometer west of La Negra, intersected over 30 meters of +400 g/t silver at about 125 meters below surface, which represents the deepest mineralized intercept thus far on this zone and remains open at depth.
The Company also commenced drilling on new targets at Martha.
Kensington — Phase one drilling completed with very high grades from several drill holes
The first phase of drilling on the large, gold-bearing Horrible vein zone was completed during the third quarter. This is the first drilling on Horrible by Coeur and the system extends over 600 meters vertically and over 100 meters horizontally with multiple gold-bearing quartz veins. More drilling is planned for the next quarter and 2011 to further define and expand the zone which is expected to lead to new mineral resources and reserves.

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Rochester — Encouraging results from new drilling
The first phase of a drilling program focused on new targets located on a major structural corridor between the Company’s Rochester and Nevada Packard mines was completed during the quarter. This represents the first drilling in this area in over a decade. Several holes returned ore-grade silver and gold mineralization. Further drilling is planned in 2011 to test this same area again as well as other untested zones on the large Rochester property. The Company expects this work to lead to further increases in mineral resources and reserves.
Conference Call Information
Coeur will hold a conference call to discuss the Company’s third quarter 2010 results at 1:00 p.m. Eastern time on November 4, 2010. To listen live via telephone, call (877) 464-2820 (US and Canada) or (660) 422-4718 (International). The conference ID number is 18309250. The conference call and presentation will also be webcast on the Company’s web site at www.coeur.com. A replay of the call will be available through November 11, 2010. The replay dial-in numbers are (800) 642-1687 (US and Canada) and (706) 645-9291 (International) and the access code is 18309250. In addition, the call will be archived for a limited time on the Company’s web site.
Cautionary Statement
This press release contains forward-looking statements within the meaning of securities legislation in the United States, Canada, and Australia, including statements regarding anticipated operating results. Such statements are subject to numerous assumptions and uncertainties, many of which are outside the control of Coeur. Operating, exploration and financial data, and other statements in this presentation are based on information that Coeur believes is reasonable, but involve significant uncertainties affecting the business of Coeur, including, but not limited to, future gold and silver prices, costs, ore grades, estimation of gold and silver reserves, mining and processing conditions, construction schedules, currency exchange rates, and the completion and/or updating of mining feasibility studies, changes that could result from future acquisitions 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, risks inherent in the ownership and operation of, or investment in, mining properties or businesses in foreign countries, 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, the Canadian securities regulators, and the Australian Securities Exchange, including, without limitation, Coeur’s reports on Form 10-K and Form 10-Q. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Coeur disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Coeur undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Coeur, its financial or operating results or its securities.
Donald J. Birak, Coeur’s Senior Vice President of Exploration, is the qualified person responsible for the preparation of the scientific and technical information concerning Coeur’s mineral projects in this presentation. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors, please see the Technical Reports for each of Coeur’s properties as filed on SEDAR at www.sedar.com.
Cautionary Note to U.S. Investors — The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this presentation, such as “measured,” “indicated,” and “inferred resources,” that are recognized by Canadian and Australian regulations, but that SEC guidelines generally prohibit U.S.

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registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from the SEC’s website at http://www.sec.gov/edgar.shtml.
Non-U.S. GAAP Measures
We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non-U.S. GAAP financial measures, including cash operating costs, operating cash flow and EBITDA. 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 provide the amount of our operating cash flow to supplement our cash flow determined under U.S. GAAP. We define operating cash flow as net income plus depreciation, depletion and amortization and plus/minus any other non-cash items. We believe operating cash flow is an important measure in assessing the Company’s overall financial performance.
About Coeur
Coeur d’Alene Mines Corporation is one of the world’s leading silver companies and is also a growing gold producer. Coeur is also a recognized leader in environmental stewardship and worker safety, with 13 national and international awards earned over the past year. The Company’s three new long-life mines include the San Bartolomé silver mine in Bolivia which began operations in 2008, the Palmarejo silver and gold mine in Mexico, which began operations in 2009, and the Kensington gold mine in Alaska, which began commercial production in July of this year. The Company also owns an underground mine in Argentina and a surface mine in Nevada, and owns a non-operating interest in a low-cost mine in Australia. The Company conducts exploration activities in Alaska, Argentina and Mexico. Coeur common shares are traded on the New York Stock Exchange under the symbol CDE, and the Toronto Stock Exchange under the symbol CDM, and its CHESS Depositary Interests are traded on the Australian Securities Exchange under symbol CXC.
Photos of projects and other information can be accessed through the Company’s website at www.coeur.com.
For Additional Information:
Investors
Director of Investor Relations
Deborah Schubert, (208) 665-0332
Media
Director of Corporate Communications
Tony Ebersole, (208) 665-0777

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Excluding changes in operating assets and liabilities, the Company’s operating cash flow consisted of the following:
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
    (In thousands)     (In thousands)  
 
                               
CASH PROVIDED BY OPERATING ACTIVITIES
    12,939       28,938       36,166       47,023  
Changes in operating assets and liabilities:
                               
Receivables and other current assets
    4,511       (1,855 )     12,136       7,145  
Inventories
    22,980       10,547       27,888       23,733  
Accounts payable and accrued liabilities
    (5,704 )     (38,658 )     8,298       (55,594 )
 
                       
Operating cash flow
  $ 34,726     $ (1,028 )   $ 84,488     $ 22,307  
 
                       
Reconciliation of EBITDA to net income/(loss) is shown below:
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
    (In thousands, except per share data)  
 
                               
NET INCOME (LOSS)
    (22,628 )     (17,283 )     (81,389 )     384  
Gain (loss) on sale of discontinued operations, net of income taxes
    (882 )     (22,411 )     2,095       (22,411 )
Loss from discontinued operations, net of income taxes
    251       3,003       6,029       1,451  
Income tax benefit (provision)
    3,233       (13,428 )     (17,977 )     (17,067 )
Interest expense, net of capitalized interest
    9,951       6,088       21,402       12,047  
Interest and other income
    638       1,245       2,725       (822 )
Fair value adjustments, net
    19,107       35,718       65,881       49,269  
Gain (loss) on debt extinguishments
    806       2,947       12,714       (35,430 )
Depreciation, depletion and amortization
    37,801       27,591       95,503       54,282  
 
                       
EBITDA
  $ 48,277     $ 23,470     $ 106,983     $ 41,703  
 
                       

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PALMAREJO:
                                         
US$ millions except where noted   3Q 2009   4Q 2009   1Q 2010   2Q 2010   3Q 2010
Underground Operations:
                                       
Tons Mined
    154,845       173,078       180,526       166,381       146,682  
Average Silver Grade (oz/t)
    4.88       5.21       4.89       5.13       5.63  
Average Gold Grade (oz/t)
    0.09       0.08       0.07       0.09       0.10  
 
                                       
Surface Operations:
                                       
Tons Mined
    280,530       222,223       313,366       306,246       256,927  
Average Silver Grade (oz/t)
    3.82       4.12       2.89       2.03       5.20  
Average Gold Grade (oz/t)
    0.05       0.04       0.04       0.03       0.07  
 
                                       
Processing:
                                       
Total Tons Milled
    410,137       370,276       458,006       457,268       405,742  
Average Recovery Rate — Ag
    73.4 %     67.2 %     72.7 %     72.5 %     69.6 %
Average Recovery Rate — Au
    94.3 %     87.1 %     92.1 %     87.3 %     94.4 %
Silver Production (ounces)
    1,275,904       1,184,223       1,300,593       1,070,638       1,506,742  
Gold Production (ounces)
    24,289       20,721       22,577       19,950       29,823  
Cash Operating Costs/Ag Oz
  $ 8.76     $ 6.15     $ 5.41     $ 10.78     $ 0.15  
 
                                       
Total Sales of Metal
    32.2       42.9       44.8       44.8       61.5  
Production Costs
    22.9       28.5       27.9       32.1       31.3  
Capital Expenditures
    42.3       22.8       16.5       10.8       16.0  
SAN BARTOLOME:
                                         
US$ millions except where noted   3Q 2009   4Q 2009   1Q 2010   2Q 2010   3Q 2010
Tons Milled
    431,218       370,736       293,106       446,909       360,605  
Average Silver Grade (oz/t)
    5.36       3.76       3.74       5.00       5.70  
Average Recovery Rate
    91.3 %     95.3 %     94.8 %     83.4 %     87.2 %
Silver Production (ounces)
    2,111,313       1,327,999       1,039,923       1,863,141       1,794,617  
Cash Operating Costs/Ag Oz
  $ 7.63     $ 10.40     $ 9.98     $ 7.78     $ 7.05  
 
                                       
Sales of Metal
  $ 31.5     $ 26.6     $ 14.6     $ 31.3     $ 30.0  
Production Costs
    25.2       18.1       9.4       15.3       12.9  
Capital Expenditures
    1.4       1.4       0.5       1.3       0.8  
KENSINGTON:
                                         
US$ millions except where noted   3Q 2009   4Q 2009   1Q 2010   2Q 2010   3Q 2010
Tons Milled
                                    90,254  
Average Gold Grade (oz/t)
                                    0.19  
Average Recovery Rate
                                    87.7 %
Gold Production (ounces)
                            15,155  
Cash Operating Costs/Ag Oz
                          $ 1,199  
 
                                       
Sales of Metal
                          $ 8.5  
Production Costs
                            7.4  
Capital Expenditures
    10.0       18.9       29.9       33.2       20.0  

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ROCHESTER:
                                         
US$ millions except where noted   3Q 2009   4Q 2009   1Q 2010   2Q 2010   3Q 2010
Silver Production (millions)
    528,037       640,347       522,159       533,093       419,433  
Gold Production
    3,097       3,517       2,690       2,616       1,935  
Cash Operating Costs/Ag Oz
  $ 2.77     $ 0.15     $ 1.68     $ 2.44     $ 5.10  
 
                                       
Sales of Metal
  $ 9.3     $ 16.3     $ 10.8     $ 12.4     $ 5.8  
Production Costs
    5.4       7.9       5.8       5.6       2.8  
Capital Expenditures
    0.0       0.0       0.0       0.1       0.1  
MARTHA:
                                         
US$ millions except where noted   3Q 2009   4Q 2009   1Q 2010   2Q 2010   3Q 2010
Total Tons Milled
    28,431       26,630       17,575       12,421       12,790  
Average Silver Grade (oz/t)
    42.56       41.47       24.59       50.24       42.42  
Average Gold Grade (oz/t)
    0.06       0.06       0.03       0.06       0.05  
Average Recovery Rate — Ag
    97.4 %     91.8 %     84.5 %     88.1 %     96.3 %
Average Recovery Rate — Au
    93.0 %     86.7 %     88.5 %     81.7 %     93.6 %
Silver Production (ounces)
    1,178,088       1,013,551       365,226       549,885       510,685  
Gold Production (ounces)
    1,569       1,333       515       558       601  
Cash Operating Costs/Ag Oz
  $ 5.54     $ 6.13     $ 15.47     $ 8.97     $ 9.86  
 
                                       
Total Sales of Metal
    15.2       10.8       15.0       9.2       11.0  
Production Costs
    5.1       2.2       7.3       4.1       5.3  
Capital Expenditures
    0.3       0.5       0.0       0.0       0.0  

10


 

The following table presents consolidated production and sales information for the three and nine month periods ended September 30, 2010 and 2009:
                                 
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2010   2009   2010   2009
CONSOLIDATED PRODUCTION TOTALS
                               
Total Silver ounces
    4,333,530       5,196,315       11,921,891       12,607,769  
Total Gold ounces
    47,514       28,955       96,421       46,541  
Silver Operations:(A)
                               
Cash operating costs per oz/silver
  $ 4.87     $ 6.93     $ 6.72     $ 7.15  
Cash cost per oz/silver
  $ 5.40     $ 8.57     $ 7.17     $ 8.66  
Total production cost/oz
  $ 12.62     $ 13.88     $ 14.59     $ 12.94  
Gold Operation:(B)
                               
Cash operating costs/oz
  $ 1,199.20     $     $ 1,199.20     $  
Cash cost/oz
  $ 1,199.20     $     $ 1,199.20     $  
Total production cost/oz
  $ 1,675.56     $     $ 1,675.56     $  
CONSOLIDATED SALES TOTALS (C)
                               
Silver ounces sold
    3,861,696       4,667,423       11,547,775       12,156,493  
Gold ounces sold
    37,507       23,027       86,890       38,968  
Realized price per silver ounce
  $ 18.87     $ 14.52     $ 18.12     $ 13.72  
Realized price per gold ounce
  $ 1,228.51     $ 952.86     $ 1,177.31     $ 945.03  
 
(A)   Amount includes by-product gold credits deducted from computing cash costs per ounce.
 
(B)   Amounts reflect Kensington per ounce statistics only
 
(C)   Units sold at realized metal prices will not match reported metal sales due primarily to the effects on revenues of mark-to-market adjustments on embedded derivatives in the Company’s provisionally priced sales contracts.
“Operating Costs per Ounce” and “Cash Costs per Ounce” are calculated by dividing the operating cash costs and cash costs computed for each of the Company’s mining properties for a specified period by the amount of gold ounces or silver ounces produced by that property during that same period. Management uses cash operating costs per ounce and cash costs per ounce as key indicators of the profitability of each of its mining properties. Gold and silver are sold and priced in the world financial markets on a U.S. dollar per ounce basis.
“Cash Operating Costs” and “Cash Costs” are costs directly related to the physical activities of producing silver and gold, and include mining, processing and other plant costs, third-party refining and smelting costs, marketing expenses, on-site general and administrative costs, royalties, in-mine drilling expenditures related to production and other direct costs. Sales of by-product metals are deducted from the above in computing cash costs. Cash costs exclude depreciation, depletion and amortization, accretion, corporate general and administrative expenses, exploration, interest, and pre-feasibility costs. Cash operating costs include all cash costs except production taxes and royalties, if applicable. Cash costs are calculated and presented using the “Gold Institute Production Cost Standard” applied consistently for all periods presented.
Total operating costs and cash costs per ounce are non-U.S. GAAP measures and investors are cautioned not to place undue reliance on them and are urged to read all U.S. GAAP accounting disclosures presented in the consolidated financial statements and accompanying footnotes. In addition, see the reconciliation of “cash costs” to production costs under “Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs” set forth below.

11


 

The following tables present a reconciliation between non-U.S. GAAP cash operating costs per ounce and cash costs per ounce to production costs applicable to sales including depreciation, depletion and amortization, which are calculated in accordance with U.S. GAAP:
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs
Three months ended
September 30, 2010
                                                         
            San                                
(In thousands except ounces and per ounce costs)   Palmarejo     Bartolomé     Martha     Rochester     Endeavor     Kensington     Total  
Production of silver (ounces)
    1,506,742       1,794,617       510,685       419,433       102,053             4,333,530  
Production of gold (ounces)
                                            15,155       15,155  
Cash operating cost per Ag ounce
  $ 0.15     $ 7.05     $ 9.86     $ 5.10     $ 10.32             $ 4.87  
Cash costs per Ag ounce
  $ 0.15     $ 7.83     $ 11.04     $ 5.82     $ 10.32             $ 5.40  
Cash operating cost per Au ounce
                                          $ 1,199.20     $ 1,199.20  
Cash cost per Au ounce
                                          $ 1,199.20     $ 1,199.20  
 
                                         
 
                                                       
Total Operating Cost (Non-U.S. GAAP)
  $ 227     $ 12,651     $ 5,039     $ 2,140     $ 1,053     $ 18,174     $ 39,284  
Royalties
          1,396       601                         1,997  
Production taxes
                      304                   304  
 
                                         
 
                                                       
Total Cash Costs (Non-U.S. GAAP)
    227       14,047       5,640       2,444       1,053       18,174       41,585  
Add/Subtract:
                                                       
Third party smelting costs
                (995 )           (354 )     (1,618 )     (2,967 )
By-product credit
    36,538             734       2,361                   39,633  
Other adjustments
                914       53                   967  
Change in inventory
    (5,423 )     (1,146 )     (1,009 )     (2,088 )     (15 )     (9,135 )     (18,816 )
Depreciation, depletion and amortization
    22,491       4,943       2,119       446       330       7,219       37,548  
 
                                         
 
                                                       
Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP)
  $ 53,833     $ 17,844     $ 7,403     $ 3,216     $ 1,014     $ 14,640     $ 97,950  
 
                                         
Nine months ended
September 30, 2010
                                                         
            San                                
(In thousands except ounces and per ounce costs)   Palmarejo     Bartolomé     Martha     Rochester     Endeavor     Kensington     Total  
Production of silver (ounces)
    3,877,972       4,697,685       1,425,796       1,474,686       445,752             11,921,891  
Production of gold (ounces)
                                            15,155       15,155  
Cash operating cost per Ag ounce
  $ 4.85     $ 7.99     $ 10.96     $ 2.93     $ 8.56             $ 6.72  
Cash costs per Ag ounce
  $ 4.85     $ 8.69     $ 11.74     $ 3.55     $ 8.56             $ 7.17  
Cash operating cost per Au ounce
                                          $ 1,199.20     $ 1,199.20  
Cash cost per Au ounce
                                          $ 1,199.20     $ 1,199.20  
 
                                         
 
                                                       
Total Operating Cost (Non-U.S. GAAP)
  $ 18,799     $ 37,520     $ 15,624     $ 4,315     $ 3,817     $ 18,174     $ 98,249  
Royalties
          3,287       1,107                           4,394  
Production taxes
                      912                     912  
 
                                         
 
                                                       
Total Cash Costs (Non-U.S. GAAP)
    18,799       40,807       16,731       5,227       3,817       18,174       103,555  
Add/Subtract:
                                                       
Third party smelting costs
                (2,821 )           (964 )     (1,618 )     (5,403 )
By-product credit
    85,429             1,971       8,480                   95,880  
Other adjustments
                1,173       216                   1,389  
Change in inventory
    (12,120 )     (3,162 )     (312 )     230       (127 )     (9,135 )     (24,626 )
Depreciation, depletion and amortization
    63,574       14,152       6,673       1,368       1,440       7,219       94,426  
 
                                         
 
                                                       
Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP)
  $ 155,682     $ 51,797     $ 23,415     $ 15,521     $ 4,166     $ 14,640     $ 265,221  
 
                                         

12


 

Three months ended
September 30, 2009
                                                 
            San                          
(In thousands except ounces and per ounce costs)   Palmarejo     Bartolomé     Martha     Rochester     Endeavor     Total  
Production of silver (ounces)
    1,275,904       2,111,313       1,178,088       528,037       102,973       5,196,315  
Cash operating cost per ounce
  $ 8.76     $ 7.63     $ 5.54     $ 2.77     $ 7.09     $ 6.93  
Cash costs per ounce
  $ 8.76     $ 11.17     $ 6.02     $ 3.67     $ 7.09     $ 8.57  
 
                                   
 
                                               
Total Operating Cost (Non-U.S. GAAP)
  $ 11,174     $ 16,118     $ 6,525     $ 1,461     $ 730     $ 36,008  
Royalties
          7,474       562                   8,036  
Production taxes
                      475             475  
 
                                   
 
                                               
Total Cash Costs (Non-U.S. GAAP)
    11,174       23,592       7,087       1,936       730       44,519  
Add/Subtract:
                                               
Third party smelting costs
                (2,221 )           (225 )     (2,446 )
By-product credit
    23,301             1,502       2,956             27,759  
Other adjustments
    20             469       16             505  
Change in inventory
    (11,078 )     1,765       (1,714 )     558       55       (10,414 )
Depreciation, depletion and amortization
    19,948       5,191       1,246       463       265       27,113  
 
                                   
 
                                               
Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP)
  $ 43,365     $ 30,548     $ 6,369     $ 5,929     $ 825     $ 87,036  
 
                                   
Nine months ended
September 30, 2009
                                                 
            San                          
(In thousands except ounces and per ounce costs)   Palmarejo     Bartolomé     Martha     Rochester     Endeavor     Total  
Production of silver (ounces)
    1,863,620       6,141,223       2,693,993       1,541,441       367,492       12,607,769  
Cash operating cost per ounce
  $ 12.13     $ 7.24     $ 6.22     $ 2.69     $ 5.96     $ 7.15  
Cash costs per ounce
  $ 12.13     $ 9.98     $ 6.68     $ 3.32     $ 5.96     $ 8.66  
 
                                   
 
                                               
Total Operating Cost (Non-U.S. GAAP)
  $ 22,597     $ 44,484     $ 16,748     $ 4,145     $ 2,190     $ 90,164  
Royalties
          16,777       1,253                   18,030  
Production taxes
                        978             978  
 
                                   
 
                                               
Total Cash Costs (Non-U.S. GAAP)
    22,597       61,261       18,001       5,123       2,190       109,172  
Add/Subtract:
                                               
Third party smelting costs
                (5,067 )           (759 )     (5,826 )
By-product credit
    32,402             3,157       8,487             44,046  
Other adjustments
    20       8       636       103             767  
Change in inventory
    (17,932 )     1,524       (1,046 )     2,599       (42 )     (14,897 )
Depreciation, depletion and amortization
    32,328       15,137       3,420       1,391       946       53,222  
 
                                   
 
                                               
Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP)
  $ 69,415     $ 77,930     $ 19,101     $ 17,703     $ 2,335     $ 186,484  
 
                                   

13


 

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
                 
    September 30,     December 31,  
    2010     2009  
    (In thousands, except share data)  
ASSETS
CURRENT ASSETS
               
Cash and cash equivalents
  $ 27,792     $ 22,782  
Short-term investments
    5,031        
Receivables
    77,207       58,981  
Ore on leach pad
    7,397       9,641  
Metal and other inventory
    96,225       67,712  
Prepaid expenses and other
    19,026       26,920  
 
           
 
    232,678       186,036  
 
               
NON-CURRENT ASSETS
               
Property, plant and equipment, net
    659,840       539,037  
Mining properties, net
    2,140,586       2,240,056  
Ore on leach pad, non-current portion
    12,683       14,391  
Restricted assets
    27,892       26,546  
Receivables, non-current portion
    31,910       37,534  
Debt issuance costs, net
    4,798       3,544  
Deferred tax assets
    897       2,355  
Other
    13,729       4,536  
 
           
TOTAL ASSETS
  $ 3,125,013     $ 3,054,035  
 
           
 
               
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
               
Accounts payable
  $ 57,395     $ 77,003  
Accrued liabilities and other
    38,811       33,517  
Accrued income taxes
    21,818       11,783  
Accrued payroll and related benefits
    14,432       9,815  
Accrued interest payable
    521       1,744  
Current portion of capital leases and other debt obligations
    67,653       15,403  
Current portion of royalty obligation
    46,417       34,672  
Current portion of reclamation and mine closure
    2,708       4,671  
 
           
 
    249,755       188,608  
 
               
NON-CURRENT LIABILITIES
               
Long-term debt and capital lease obligations
    146,821       185,397  
Non-current portion of royalty obligation
    160,367       128,107  
Reclamation and mine closure
    25,647       35,241  
Deferred income taxes
    480,954       516,678  
Other long-term liabilities
    15,623       6,799  
 
           
 
    829,412       872,222  
 
               
COMMITMENTS AND CONTINGENCIES
               
 
               
SHAREHOLDERS’ EQUITY
               
Common Stock, par value $0.01 per share; authorized 150,000,000 shares, 89,311,920 issued at September 30, 2010 and 80,310,347 issued at December 31, 2009
    893       803  
Additional paid-in capital
    2,578,043       2,444,262  
Accumulated deficit
    (533,254 )     (451,865 )
Accumulated other comprehensive income
    164       5  
 
           
 
    2,045,846       1,993,205  
 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
  $ 3,125,013     $ 3,054,035  
 
           

14


 

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
    (In thousands, except per share data)  
 
                               
Sales of metal
  $ 118,564     $ 90,305     $ 307,871     $ 201,531  
Production costs applicable to sales
    (60,402 )     (59,693 )     (170,795 )     (133,263 )
Depreciation, depletion and amortization
    (37,801 )     (27,591 )     (95,503 )     (54,282 )
 
                       
Gross profit
    20,361       3,021       41,573       13,986  
COSTS AND EXPENSES
                               
Administrative and general
    5,963       4,780       19,758       17,933  
Exploration
    3,840       2,362       9,521       8,632  
Pre-development
    82             814        
 
                       
Total cost and expenses
    9,885       7,142       30,093       26,565  
 
                       
OPERATING INCOME (LOSS)
    10,476       (4,121 )     11,480       (12,579 )
OTHER INCOME AND EXPENSE
                               
Gain (loss) on debt extinguishments
    (806 )     (2,947 )     (12,714 )     35,430  
Fair value adjustments, net
    (19,107 )     (35,718 )     (65,881 )     (49,269 )
Interest and other income
    (638 )     (1,245 )     (2,725 )     822  
Interest expense, net of capitalized interest
    (9,951 )     (6,088 )     (21,402 )     (12,047 )
 
                       
Total other income and expense
    (30,502 )     (45,998 )     (102,722 )     (25,064 )
 
                       
Loss from continuing operations before income taxes
    (20,026 )     (50,119 )     (91,242 )     (37,643 )
Income tax benefit (provision)
    (3,233 )     13,428       17,977       17,067  
 
                       
Loss from continuing operations
    (23,259 )     (36,691 )     (73,265 )     (20,576 )
Loss from discontinued operations, net of income taxes
    (251 )     (3,003 )     (6,029 )     (1,451 )
Gain (loss) on sale of discontinued operations, net of income taxes
    882       22,411       (2,095 )     22,411  
 
                       
NET INCOME (LOSS)
    (22,628 )     (17,283 )     (81,389 )     384  
Other comprehensive income, net of income taxes
    164             159        
 
                       
COMPREHENSIVE INCOME (LOSS)
  $ (22,464 )   $ (17,283 )   $ (81,230 )   $ 384  
 
                       
 
                               
BASIC AND DILUTED INCOME PER SHARE
                               
Basic income per share:
                               
Loss from continuing operations
  $ (0.26 )   $ (0.48 )   $ (0.85 )   $ (0.29 )
Income (loss) from discontinued operations
    0.01       0.25       (0.09 )     0.30  
 
                       
Net income (loss)
  $ (0.25 )   $ (0.23 )   $ (0.94 )   $ 0.01  
 
                       
 
                               
Diluted income per share:
                               
Loss from continuing operations
  $ (0.26 )   $ (0.48 )   $ (0.85 )   $ (0.29 )
Income (loss) from discontinued operations
    0.01       0.25       (0.09 )     0.30  
 
                       
Net income (loss)
  $ (0.25 )   $ (0.23 )   $ (0.94 )   $ 0.01  
 
                       
 
                               
Weighted average number of shares of common stock
                               
Basic
    89,236       76,133       86,489       69,163  
Diluted
    89,236       76,133       86,489       69,163  

15


 

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
    (In thousands)  
 
                               
CASH FLOWS FROM OPERATING ACTIVITIES:
                               
Net income (loss)
  $ (22,628 )   $ (17,283 )   $ (81,389 )   $ 384  
Add (deduct) non-cash items
                               
Depreciation, depletion and amortization
    37,913       28,647       97,697       59,086  
Amortiztation of debt discount
    537       4       537       504  
Accretion of royalty obligation
    4,778       5,227       14,407       9,086  
Deferred income taxes
    (7,879 )     (24,175 )     (34,109 )     (29,896 )
Loss (gain) on debt extinguishment
    806       2,947       12,714       (35,430 )
Fair value adjustments, net
    17,436       33,255       64,159       45,820  
Loss (gain) on foreign currency transactions
    2,144       223       3,966       (185 )
Share-based compensation
    1,960       1,885       3,969       4,542  
Loss (gain) from discontinued operations and other assets
    (970 )     (32,212 )     1,835       (32,291 )
Other non-cash charges
    629       454       702       687  
Changes in operating assets and liabilities:
                               
Receivables and other current assets
    (4,511 )     1,855       (12,136 )     (7,145 )
Inventories
    (22,980 )     (10,547 )     (27,888 )     (23,733 )
Accounts payable and accrued liabilities
    5,704       38,658       (8,298 )     55,594  
 
                       
CASH PROVIDED BY OPERATING ACTIVITIES
    12,939       28,938       36,166       47,023  
 
                               
CASH FLOWS FROM INVESTING ACTIVITIES
                               
Purchase of investments
    (15 )     (6,525 )     (672 )     (15,104 )
Proceeds from sales of investments
    12,477       11,237       13,134       31,247  
Capital expenditures
    (36,783 )     (54,370 )     (129,439 )     (174,849 )
Proceeds from sale of discontinued operations and other assets
    5,902       55,053       5,977       56,877  
 
                       
 
                               
CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
    (18,419 )     5,395       (111,000 )     (101,829 )
 
                               
CASH FLOWS FROM FINANCING ACTIVITIES:
                               
Proceeds from sale of gold production royalty
                      75,000  
Payments on gold production royalty
    (11,302 )     (6,112 )     (29,836 )     (7,218 )
Proceeds from issuance of floating rate and senior term notes
                100,000       20,368  
Proceeds from gold lease facility
    11,915             16,432       2,874  
Payments on gold lease facility
                (17,101 )     (1,627 )
Proceeds from bank borrowings
    10,755             45,565        
Payments on senior secured notes
    (9,139 )           (13,306 )      
Repayment of credit facility, long-term debt and capital leases
    (10,035 )     (7,268 )     (22,931 )     (22,137 )
Payments of common stock and debt issuance costs
    (22 )     (18 )     (2,202 )     (122 )
Proceeds from sale-leaseback transactions
                4,853       12,511  
Additions to restricted assets associated with the Kensington Term Facility
    (297 )           (1,880 )      
Other
    210             250        
 
                       
 
                               
CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES:
    (7,915 )     (13,398 )     79,844       79,649  
 
                       
 
                               
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    (13,395 )     20,935       5,010       24,843  
 
                               
Cash and cash equivalents at beginning of period
    41,187       24,668       22,782       20,760  
 
                       
Cash and cash equivalents at end of period
  $ 27,792     $ 45,603     $ 27,792     $ 45,603  
 
                       

16