Coeur Reports Fourth Quarter and Full-Year 2019 Results
Provides Full-Year 2020 Production and Cost Guidance
CHICAGO–(BUSINESS WIRE)–Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported fourth quarter 2019 financial results, including revenue of $195.0 million and cash flow from operating activities of $39.3 million. Including non-cash write downs of $277.7 million taken in the quarter, the Company reported GAAP net loss from continuing operations of $270.9 million, or $1.13 per share. On an adjusted basis1, the Company reported EBITDA of $59.8 million and net loss from continuing operations of $3.3 million, or $0.01 per share.
For the full year, Coeur reported revenue of $711.5 million and cash flow from operating activities of $91.9 million. Including non-cash write downs totaling $320.0 million, the Company reported GAAP net loss from continuing operations of $346.9 million, or $1.59 per share. On an adjusted basis1, the Company reported EBITDA of $173.9 million and net loss from continuing operations of $54.6 million, or $0.25 per share.
Key Highlights
- Solid improvement in annual financial results – Revenue, operating cash flow and adjusted EBITDA1 increased 14%, 357% and 11%, respectively, in 2019. The year-over-year improvement in financial results reflects solid performance from the Company’s primary gold operations as well as higher precious metals prices in 2019
- Strong cost performance from primary gold operations – Full-year adjusted costs applicable to sales (“CAS”)1 at Palmarejo, Kensington and Wharf were below or within their guidance ranges for 2019, leading to strong free cash flow1 at each of these primary gold operations. During 2019, gold sales represented 69% of the Company’s total revenue
- Third consecutive quarter of increasing, positive free cash flow1– Coeur generated $18.4 million of free cash flow1 during the fourth quarter, representing a 63% increase compared to the prior period and a $36.1 million improvement compared to the fourth quarter of 2018. This third consecutive quarter of increasing, positive free cash flow1 was primarily driven by strong performance from the Company’s Palmarejo, Kensington and Wharf operations
- Positive results from high-pressure grinding roll (“HPGR”) unit at Rochester – 60-day silver recovery rates from HPGR-crushed ore are in-line with prior test work and are significantly better than recoveries from traditionally-crushed material. Permitting and planning for Plan of Operations Amendment 11 (“POA 11”) expansion advancing on-schedule
- $250.8 million impairment, and temporarily suspending mining and processing activities at Silvertip – Reduction in carrying value to $150.0 million and temporary suspension of mining and processing activities driven by further deterioration in zinc and lead market conditions as well as processing facility-related challenges. The Company plans to (i) double its exploration investment in 2020 to potentially further expand the resource and extend the mine life, and (ii) pursue a mill expansion to improve the asset’s cost structure and its ability to deliver sustainable cash flow
- Success from 2019 investment in exploration delivered resource growth – The Company focused its exploration efforts primarily on resource expansion drilling in 2019. Measured and indicated resources increased across all metals, and inferred gold, zinc and lead resources were higher year-over-year. Proven and probable silver reserves also increased, while zinc and lead reserves were consistent year-over-year
- Over $160.0 million reduction in total debt2 achieved during 2019 – The Company ended the year with $295.5 million in total debt2, compared to $458.8 million at the end of 2018. This 36% reduction reflects the results of Coeur’s deleveraging initiatives and improved financial performance during 2019
“Higher precious metals prices and strong performance from our primary gold operations drove a 14% increase in revenue, an 11% increase in adjusted EBITDA1, and a four-fold increase in operating cash flow,” said Mitchell J. Krebs, President and Chief Executive Officer. “Our 2019 results reflect our strategy to discover, develop, and operate a balanced portfolio of North American-based precious metals assets. Palmarejo delivered over $65.0 million of free cash flow1 last year while Wharf generated over $37.0 million of free cash flow, bringing its cumulative free cash flow1 to over $170.0 million since we acquired the operation in 2015 for $99.5 million. We were also pleased to see Kensington deliver record free cash flow1 after a multi-year effort to discover and develop higher-grade mineralization.”
“Despite a weaker than anticipated fourth quarter due to lower crushing rates, our Rochester open-pit, silver-gold mine in Nevada remains our top growth opportunity. We began processing ore through a new crushing circuit during the second half of the year utilizing HPGR technology. Early indications suggest that HPGR is having its intended impact by increasing and accelerating silver recovery rates. HPGR forms the basis of a larger expansion during the next two years that is expected to position Rochester as a long-life, strong cash flow generator for the Company.”
Mr. Krebs continued, “The decision to temporarily suspend operating activities at Silvertip, which represented approximately 6% of the Company’s 2019 revenue, was driven by our goal of maximizing the long-term value of the operation. While we have been successful in executing key projects and improving mill availability, the further deterioration in the zinc and lead markets – particularly for spot concentrate treatment charges – represents significant headwinds to our ability to generate positive cash flow. While mining and processing activities are paused, we plan to more than double our investment in drilling to further expand Silvertip’s high-grade deposit and extend its mine life. During 2019, we were able to grow Silvertip’s inferred resources by over 70% and its measured and indicated resources by nearly 40%. In addition, we have commenced a pre-feasibility study to evaluate a mill expansion, which we believe will significantly enhance Silvertip’s economics.”
“Looking ahead, our top priorities for 2020 are to (i) advance and execute our strategy to further expand Rochester, (ii) increase our level of investment in exploration, particularly at our most prospective sites, (iii) evaluate and pursue a successful repositioning of Silvertip, (iv) deliver consistent results from our operations, leading to positive free cash flow1 and lower overall costs, and (v) continue to enhance our leading environmental, social and governance profile,” concluded Mr. Krebs.
|
Financial and Operating Highlights (Unaudited) |
|||||||||||||||||||||||||||
|
(Amounts in millions, except per share amounts, gold ounces produced & sold, and per-ounce/pound metrics) |
2019 |
4Q |
3Q |
2Q |
1Q |
2018 |
4Q |
||||||||||||||||||||
|
Gold Sales |
$ |
493.3 |
|
$ |
134.3 |
|
$ |
141.9 |
|
$ |
110.3 |
|
$ |
106.8 |
|
$ |
427.0 |
|
$ |
96.3 |
|
||||||
|
Silver Sales |
$ |
191.5 |
|
$ |
54.8 |
|
$ |
51.6 |
|
$ |
45.0 |
|
$ |
40.1 |
|
$ |
193.2 |
|
$ |
44.6 |
|
||||||
|
Zinc Sales |
$ |
12.8 |
|
$ |
2.6 |
|
$ |
2.0 |
|
$ |
2.6 |
|
$ |
5.6 |
|
$ |
3.6 |
|
$ |
1.9 |
|
||||||
|
Lead Sales |
$ |
13.9 |
|
$ |
3.3 |
|
$ |
4.0 |
|
$ |
4.2 |
|
$ |
2.4 |
|
$ |
2.1 |
|
$ |
1.0 |
|
||||||
|
Consolidated Revenue |
$ |
711.5 |
|
$ |
195.0 |
|
$ |
199.5 |
|
$ |
162.1 |
|
$ |
154.9 |
|
$ |
625.9 |
|
$ |
143.8 |
|
||||||
|
Costs Applicable to Sales3 |
$ |
551.2 |
|
$ |
146.6 |
|
$ |
141.0 |
|
$ |
131.9 |
|
$ |
131.7 |
|
$ |
441.0 |
|
$ |
116.6 |
|
||||||
|
General and Administrative Expenses |
$ |
34.5 |
|
$ |
7.6 |
|
$ |
9.6 |
|
$ |
7.8 |
|
$ |
9.5 |
|
$ |
31.3 |
|
$ |
7.1 |
|
||||||
|
Net Income (Loss) |
$ |
(346.9 |
) |
$ |
(270.9 |
) |
$ |
(14.3 |
) |
$ |
(36.8 |
) |
$ |
(24.9 |
) |
$ |
(49.0 |
) |
$ |
0.4 |
|
||||||
|
Net Income (Loss) Per Share |
$ |
(1.59 |
) |
$ |
(1.13 |
) |
$ |
(0.06 |
) |
$ |
(0.18 |
) |
$ |
(0.12 |
) |
$ |
(0.26 |
) |
$ |
0.00 |
|
||||||
|
Adjusted Net Income (Loss)1 |
$ |
(54.6 |
) |
$ |
(3.3 |
) |
$ |
(5.3 |
) |
$ |
(23.0 |
) |
$ |
(23.0 |
) |
$ |
(2.2 |
) |
$ |
16.1 |
|
||||||
|
Adjusted Net Income (Loss)1 Per Share |
$ |
(0.25 |
) |
$ |
(0.01 |
) |
$ |
(0.02 |
) |
$ |
(0.11 |
) |
$ |
(0.11 |
) |
$ |
(0.01 |
) |
$ |
0.08 |
|
||||||
|
Weighted Average Shares Outstanding |
218.8 |
|
238.7 |
|
225.9 |
|
207.8 |
|
202.4 |
|
188.6 |
|
199.5 |
|
|||||||||||||
|
EBITDA1 |
$ |
(154.4 |
) |
$ |
(214.5 |
) |
$ |
37.6 |
|
$ |
7.7 |
|
$ |
14.8 |
|
$ |
87.1 |
|
$ |
7.9 |
|
||||||
|
Adjusted EBITDA1 |
$ |
173.9 |
|
$ |
59.8 |
|
$ |
61.0 |
|
$ |
30.6 |
|
$ |
26.1 |
|
$ |
157.3 |
|
$ |
36.2 |
|
||||||
|
Cash Flow from Operating Activities |
$ |
91.9 |
|
$ |
39.3 |
|
$ |
42.0 |
|
$ |
26.4 |
|
$ |
(15.8 |
) |
$ |
20.1 |
|
$ |
0.1 |
|
||||||
|
Capital Expenditures |
$ |
99.8 |
|
$ |
21.0 |
|
$ |
30.7 |
|
$ |
20.7 |
|
$ |
27.4 |
|
$ |
140.8 |
|
$ |
17.8 |
|
||||||
|
Free Cash Flow1 |
$ |
(7.9 |
) |
$ |
18.4 |
|
$ |
11.3 |
|
$ |
5.7 |
|
$ |
(43.3 |
) |
$ |
(120.7 |
) |
$ |
(17.7 |
) |
||||||
|
Cash, Equivalents & Short-Term Investments |
$ |
55.6 |
|
$ |
55.6 |
|
$ |
65.3 |
|
$ |
37.9 |
|
$ |
69.0 |
|
$ |
115.1 |
|
$ |
115.1 |
|
||||||
|
Total Debt2 |
$ |
295.5 |
|
$ |
295.5 |
|
$ |
298.7 |
|
$ |
370.0 |
|
$ |
456.8 |
|
$ |
458.8 |
|
$ |
458.8 |
|
||||||
|
Average Realized Price Per Ounce – Gold |
$ |
1,342 |
|
$ |
1,407 |
|
$ |
1,413 |
|
$ |
1,277 |
|
$ |
1,251 |
|
$ |
1,218 |
|
$ |
1,214 |
|
||||||
|
Average Realized Price Per Ounce – Silver |
$ |
16.07 |
|
$ |
16.99 |
|
$ |
17.17 |
|
$ |
14.75 |
|
$ |
15.22 |
|
$ |
15.65 |
|
$ |
14.59 |
|
||||||
|
Average Realized Price Per Pound – Zinc |
$ |
0.71 |
|
$ |
0.62 |
|
$ |
0.50 |
|
$ |
0.49 |
|
$ |
1.19 |
|
$ |
0.83 |
|
$ |
0.83 |
|
||||||
|
Average Realized Price Per Pound – Lead |
$ |
0.84 |
|
$ |
0.78 |
|
$ |
0.92 |
|
$ |
0.82 |
|
$ |
0.86 |
|
$ |
0.80 |
|
$ |
0.80 |
|
||||||
|
Gold Ounces Produced |
359,418 |
|
94,716 |
|
99,782 |
|
86,584 |
|
78,336 |
|
359,520 |
|
92,546 |
|
|||||||||||||
|
Silver Ounces Produced |
11.7 |
|
3.1 |
|
3.0 |
|
3.1 |
|
2.5 |
|
12.8 |
|
3.5 |
|
|||||||||||||
|
Zinc Pounds Produced |
17.1 |
|
3.9 |
|
4.2 |
|
5.3 |
|
3.7 |
|
4.2 |
|
3.1 |
|
|||||||||||||
|
Lead Pounds Produced |
16.6 |
|
4.0 |
|
4.5 |
|
5.0 |
|
3.1 |
|
2.1 |
|
1.7 |
|
|||||||||||||
|
Gold Ounces Sold |
367,650 |
|
95,532 |
|
100,407 |
|
86,385 |
|
85,326 |
|
350,508 |
|
79,291 |
|
|||||||||||||
|
Silver Ounces Sold |
11.9 |
|
3.3 |
|
3.0 |
|
3.0 |
|
2.6 |
|
12.4 |
|
3.1 |
|
|||||||||||||
|
Zinc Pounds Sold |
18.2 |
|
4.1 |
|
4.1 |
|
5.3 |
|
4.7 |
|
4.4 |
|
2.6 |
|
|||||||||||||
|
Lead Pounds Sold |
16.5 |
|
4.3 |
|
4.3 |
|
5.2 |
|
2.7 |
|
2.6 |
|
1.4 |
|
|||||||||||||
Financial Results
Fourth quarter 2019 revenue of $195.0 million was slightly lower compared to the prior period and 36% higher compared to the fourth quarter of 2018. During the fourth quarter, the Company sold 95,532 ounces of gold, 3.3 million ounces of silver, 4.1 million pounds of zinc and 4.3 million pounds of lead.
For the full year, the Company generated $711.5 million of revenue, representing a 14% increase year-over-year. Full-year 2019 metal sales totaled 367,650 ounces of gold, 11.9 million ounces of silver, 18.2 million pounds of zinc and 16.5 million pounds of lead, compared to 350,508 ounces of gold, 12.4 million ounces of silver, 4.4 million pounds of zinc and 2.6 million pounds of lead in 2018.
Average realized gold and silver prices were slightly lower quarter-over-quarter, totaling $1,407 and $16.99 per ounce, respectively, and were both approximately 16% higher compared to the fourth quarter of 2018. The average realized zinc price increased 24% to $0.62 per pound during the quarter, while the average realized lead price decreased 15% to $0.78 per pound.
For the full year, average realized gold and silver prices increased 10% and 3%, respectively, to $1,342 and $16.07 per ounce. The average realized zinc price decreased 14% year-over-year to $0.71 per pound, while the average realized lead price increased 5% to $0.84 per pound.
The average realized gold prices for the fourth quarter and full year include the sale of 10,949 and 36,727 ounces of gold, respectively, at a price of $800 per ounce pursuant to Palmarejo’s stream agreement. The average zinc and lead prices are presented net of treatment and refining charges and reflect the impact of provisional price and quantity adjustments.
Gold and silver sales accounted for 69% and 28% of fourth quarter revenue, respectively, while zinc and lead accounted for the remaining 3%. The Company’s U.S. operations accounted for approximately 59% of fourth quarter revenue, relatively consistent with the prior period.
During 2019, gold and silver sales contributed 69% and 27% of full-year revenue, respectively, while zinc and lead sales comprised the remaining 4%. For the full year, Coeur’s U.S. operations contributed approximately 58% of metal sales, relatively consistent year-over-year.
Costs applicable to sales totaled $146.6 million and $551.2 million for the fourth quarter and full year, respectively, compared to $141.0 million and $441.0 million in the prior periods. Higher costs during the fourth quarter were largely attributable to an inventory adjustment at Wharf and elevated expense levels at Silvertip compared to the fourth quarter of 2018. The year-over-year increase in costs was largely attributable to a full year of commercial production at the Jualin deposit (Kensington) and Silvertip operation.
General and administrative expenses decreased 21% quarter-over-quarter to $7.6 million and increased 10% year-over-year to $34.5 million. Lower general and administrative expense in the fourth quarter reflect lower employee-related expenses and legal fees, while increased general and administrative expense in 2019 reflect higher employee-related expenses and legal fees.
Exploration expense for the fourth quarter and full year was $7.2 million and $22.5 million, respectively, compared to $5.9 million in the third quarter and $25.4 million in 2018. The majority of the Company’s expensed exploration investment in 2019 was focused on resource expansion targets at Palmarejo, Kensington, Silvertip, and Sterling and Crown. See the “Operations” section and page 16 for additional details on the Company’s exploration activities in 2019.
Coeur recorded an income tax expense of $2.9 million during the fourth quarter and an income tax benefit of $11.1 million for the full year. Cash income and mining taxes paid during the quarter were $2.1 million, bringing the full-year total to $33.7 million. Cash taxes paid in 2019 primarily reflect income and mining tax payments in Mexico and cash taxes related to the Company’s acquisition of Northern Empire Resources Corp.
Fourth quarter operating cash flow totaled $39.3 million, a 6% decrease quarter-over-quarter, reflecting higher cash outflow at Silvertip, partially offset by higher cash flow at Kensington. The improvement at Kensington was related to cash flows from its prepayment arrangement under the existing off-take agreement. Coeur delivered 7,038 gold ounces from Kensington during the fourth quarter to fulfill its original $25.0 million prepayment obligation. At the end of the quarter, the Company exercised its option to receive an additional $15.0 million under the terms of the original prepayment arrangement. Together, these transactions contributed a net cash inflow of $4.7 million in the fourth quarter.
Full-year 2019 operating cash flow totaled $91.9 million, over four-times higher than in 2018. Significantly higher year-over-year operating cash flow was largely driven by (i) solid operational results from Palmarejo, Kensington and Wharf, (ii) higher gold and silver prices, and (iii) favorable impacts from changes in working capital.
Capital expenditures during the fourth quarter were $21.0 million (32% lower quarter-over-quarter and 18% higher than the fourth quarter of 2018), bringing the full-year total to $99.8 million (29% lower year-over-year). Investment in capitalized infill drilling, included in capital expenditures, totaled $1.9 million and $7.5 million for the fourth quarter and full year, respectively. The majority of the Company’s capitalized exploration investment in 2019 focused on infill targets at Palmarejo, Rochester and Kensington. The decrease in total capital expenditures during the year was largely attributable to lower capital spending at Kensington and Silvertip, partially off-set by increased investment at Rochester related to the new crusher configuration. Sustaining and development capital expenditures accounted for approximately 68% and 32%, respectively, of the Company’s total capital investment in 2019.
Update on Hedging Strategy
Shortly after the end of the fourth quarter, Coeur implemented an additional series of zero-cost collar hedges on a portion of its gold production. Similar to the Company’s previous hedging program, the structure allows for downside protection against potential decreases in the price of gold, while enabling participation in the potential upside to a specified ceiling price. An overview of the 2020 hedges implemented so far is outlined below:
- First quarter: 38,000 ounces of gold at an average floor of $1,411 per ounce and an average ceiling of $1,806 per ounce;
- Second quarter: 42,000 ounces of gold at an average floor of $1,417 per ounce and an average ceiling of $1,813 per ounce;
- Third quarter: 45,000 ounces of gold at an average floor of $1,437 per ounce and an average ceiling of $1,814 per ounce; and
- Fourth quarter: 54,000 ounces of gold at an average floor of $1,471 per ounce and an average ceiling of $1,818 per ounce
Non-Cash Write Downs
Fourth quarter non-cash write downs of $277.7 million reflect (i) an impairment on the carrying value of Silvertip’s long-lived assets, (ii) an inventory adjustment related to concentrate at Silvertip, and (iii) an inventory adjustment related to ore stacked on a leach pad at Wharf. Full-year non-cash write downs of $320.0 million also include (i) inventory adjustments at Silvertip during the first three quarters of 2019 and (ii) an adjustment with respect to the partial settlement of a receivable associated with the bankruptcy filing of Republic Metals Corp., which occurred in 2018.
Silvertip Update
The Company has elected to temporarily suspend mining and processing activities at the Silvertip silver-zinc-lead mine in British Columbia, Canada, which represented approximately 6% of the Company’s revenue in 2019. Coeur has been focused on stabilizing mill performance, which has shown signs of improvement, and implementing cost optimization initiatives. Despite these efforts, prevailing market conditions for lead and zinc concentrates remain significant headwinds for the operation. During the temporary suspension, the Company intends to significantly increase its investment in exploration as well as pursue a mill expansion for a modest capital investment estimated to be $50.0 – $75.0 million to improve the asset’s cost structure and its ability to deliver sustainable cash flow.
Coeur believes this approach will allow the Company to (i) preserve and maximize the value of Silvertip’s orebody, (ii) reduce near-term downside risk to cash flow, (iii) better determine the economics of a mill expansion by completing a pre-feasibility study around mid-year, (iv) build upon the successful drilling program in 2019, seeking to further expand the resource and extend Silvertip’s mine life, and (v) potentially re-start the operation with an improved cost structure in a more stable operating environment and a longer mine life better capable of withstanding market downturns, while generating more robust cash flow during stronger market conditions.
The Company expects quarterly care and maintenance costs to total approximately $6.0 million, excluding one-time costs of approximately $5.0 – $10.0 million primarily related to employee severance and contractual obligations, which are expected to be incurred during the first half of 2020. In addition, Coeur expects to commence an $8.0 – $10.0 million resource expansion drilling program in March and to spend approximately $2.0 million on the pre-feasibility study.
Operations
Fourth quarter and full-year 2019 highlights for each of the Company’s operations are provided below.
|
Palmarejo, Mexico |
|||||||||||||
|
(Dollars in millions, except per ounce amounts) |
2019 |
|
4Q |
|
3Q |
|
2Q |
|
1Q |
|
2018 |
|
4Q |
|
Tons milled |
1,755,957 |
|
486,779 |
|
442,464 |
|
447,727 |
|
378,987 |
|
1,382,471 |
|
378,389 |
|
Average gold grade (oz/t) |
0.08 |
|
0.07 |
|
0.09 |
|
0.07 |
|
0.07 |
|
0.10 |
|
0.08 |
|
Average silver grade (oz/t) |
4.85 |
|
5.11 |
|
4.88 |
|
4.74 |
|
4.64 |
|
6.49 |
|
5.96 |
|
Average recovery rate – Au |
84.3% |
|
84.9% |
|
81.7% |
|
87.7% |
|
83.4% |
|
88.9% |
|
97.6% |
|
Average recovery rate – Ag |
79.3% |
|
81.7% |
|
79.6% |
|
81.8% |
|
72.8% |
|
83.8% |
|
84.0% |
|
Gold ounces produced |
111,932 |
|
28,702 |
|
31,779 |
|
28,246 |
|
23,205 |
|
122,722 |
|
31,239 |
|
Silver ounces produced (000’s) |
6,762 |
|
2,029 |
|
1,720 |
|
1,735 |
|
1,278 |
|
7,516 |
|
1,893 |
|
Gold ounces sold |
116,104 |
|
27,952 |
|
32,731 |
|
28,027 |
|
27,394 |
|
115,592 |
|
23,667 |
|
Silver ounces sold (000’s) |
6,841 |
|
1,980 |
|
1,747 |
|
1,709 |
|
1,405 |
|
7,229 |
|
1,534 |
|
Average realized price per gold ounce |
$1,220 |
|
$1,238 |
|
$1,269 |
|
$1,210 |
|
$1,154 |
|
$1,140 |
|
$1,148 |
|
Average realized price per silver ounce |
$16.23 |
|
$17.28 |
|
$17.05 |
|
$14.86 |
|
$15.39 |
|
$15.77 |
|
$14.57 |
|
Metal sales |
$252.7 |
|
$68.9 |
|
$71.3 |
|
$59.3 |
|
$53.2 |
|
$245.8 |
|
$49.6 |
|
Costs applicable to sales3 |
$141.9 |
|
$34.8 |
|
$37.4 |
|
$36.5 |
|
$33.2 |
|
$120.1 |
|
$27.1 |
|
Adjusted CASper AuOz1 |
$683 |
|
$622 |
|
$660 |
|
$741 |
|
$713 |
|
$556 |
|
$624 |
|
Adjusted CASper AgOz1 |
$9.11 |
|
$8.79 |
|
$8.95 |
|
$9.17 |
|
$9.66 |
|
$7.69 |
|
$7.92 |
|
Exploration expense |
$5.7 |
|
$2.0 |
|
$1.6 |
|
$1.1 |
|
$1.0 |
|
$10.5 |
|
$0.1 |
|
Cash flow from operating activities |
$99.2 |
|
$41.4 |
|
$36.3 |
|
$15.6 |
|
$5.9 |
|
$50.5 |
|
$13.3 |
|
Sustaining capital expenditures (excludes capital lease payments) |
$21.9 |
|
$6.2 |
|
$4.7 |
|
$5.0 |
|
$6.0 |
|
$24.4 |
|
$3.6 |
|
Development capital expenditures |
$10.8 |
|
$2.4 |
|
$3.1 |
|
$2.6 |
|
$2.7 |
|
$5.0 |
|
$2.3 |
|
Total capital expenditures |
$32.7 |
|
$8.6 |
|
$7.8 |
|
$7.6 |
|
$8.7 |
|
$29.4 |
|
$5.9 |
|
Free cash flow1 |
$66.5 |
|
$32.8 |
|
$28.5 |
|
$8.0 |
|
$(2.8) |
|
$21.1 |
|
$7.4 |
Operational
- Fourth quarter gold production decreased 10% to 28,702 ounces, while silver production increased 18% to 2.0 million ounces compared to the prior quarter. Full-year gold and silver production decreased by 9% and 10% to 111,932 and 6.8 million ounces, respectively
- Fourth quarter gold and silver production benefited from higher mill throughput, which increased 10% quarter-over-quarter. Lower average gold grade led to decreased gold production during the quarter, while an improvement in average silver grade resulted in higher silver production. Lower full-year gold and silver production was due to lower average grades, partially offset by a 27% increase in tons milled
- Production at La Nación, located within the Independencia mine complex, continued to successfully ramp up, averaging approximately 700 tons per day (“tpd”) during the fourth quarter, which was well in excess of the 400 tpd target. Production from La Nación is expected to remain at approximately 700 tpd in 2020
Financial
- Fourth quarter adjusted CAS1 for gold and silver on a co-product basis decreased 6% and 2% to $622 and $8.79 per ounce, respectively, compared to the prior quarter. Continued strong cost performance during the quarter reflects higher average silver grade and effective cost management
- For the full year, adjusted CAS1 for gold and silver increased 23% and 18%, respectively, to $683 and $9.11 per ounce, but finished within full-year 2019 guidance ranges of $650 – $750 per gold ounce and $9.00 – $10.00 per silver ounce. The year-over-year increases were largely attributable to lower average grades, cost pressures from exchange rates and inflation, mining through a geotechnically-challenging environment and the increased reliance on longitudinal stopes
- Fourth quarter and full-year capital expenditures increased 10% and 11%, respectively, to $8.6 million and $32.7 million, reflecting ongoing investment in mine development and infrastructure projects
- Free cash flow1 in the fourth quarter increased 15% to $32.8 million, while free cash flow1 for the full year totaled $66.5 million and was over-three times higher compared to 2018. Improved free cash flow1 for both periods reflects higher operating cash flow, partially offset by increased investment
Exploration
- Exploration investment for the fourth quarter and full year totaled approximately $2.9 million ($2.0 million expensed and $1.0 million capitalized) and $10.1 million ($5.7 million expensed and $4.5 million capitalized), respectively
- Up to seven surface and underground core rigs were active during the fourth quarter, focusing largely on resource expansion drilling near the two underground mine complexes, Independencia and Guadalupe
- For the full year, exploration activity was initially focused on infill and resource expansion drilling around the Guadalupe mine complex. As the year progressed, rigs were gradually migrated to the Independencia mine complex
Contacts
For Additional Information
Coeur Mining, Inc.
104 S. Michigan Avenue, Suite 900
Chicago, IL 60603
Attention: Paul DePartout, Director, Investor Relations
Phone: (312) 489-5800
www.coeur.com
