Coeur Reports Third Quarter 2018 Production and Sales Results
October 9, 2018
CHICAGO–(BUSINESS WIRE)–Coeur Mining, Inc. (the “Company” or “Coeur”) (NYSE: CDE) today
announced third quarter 2018 production of 2.9 million ounces of silver,
88,833 ounces of gold, 2.2 million pounds of zinc and 1.2 million pounds
of lead, or 8.5 million silver equivalent1 ounces (10.4
million ounces based on average spot prices during the third quarter)3.
Metal sales for the quarter were 3.0 million ounces of silver, 89,609
ounces of gold, 1.8 million pounds of zinc and 1.6 million pounds of
lead, or 8.5 million silver equivalent1 ounces (10.4 million
ounces based on average spot prices during the third quarter)3.
As disclosed on September 4, 2018, the Company expects to produce 36.1 –
39.5 million silver equivalent1 ounces (44.0 – 48.0 million
ounces based on average spot prices during the third quarter) in 2018,
consisting of 13.0 – 14.3 million silver ounces, 363,000 – 382,000 gold
ounces, 13.0 – 23.0 million pounds of zinc and 11.0 – 18.0 million
pounds of lead.
Operations
Third quarter 2018 production and sales highlights for each of Coeur’s
operations are provided below.
Palmarejo, Mexico
| 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | ||||||
| Tons milled | 300,116 | 344,073 | 359,893 | 389,524 | 413,086 | |||||
| Average silver grade (oz/t) | 6.26 | 6.86 | 6.88 | 6.92 | 5.53 | |||||
| Average gold grade (oz/t) | 0.10 | 0.11 | 0.10 | 0.10 | 0.08 | |||||
| Average recovery rate – Ag | 82.2% | 87.5% | 81.4% | 87.0% | 83.6% | |||||
| Average recovery rate – Au | 88.8% | 89.9% | 80.4% | 92.0% | 83.1% | |||||
| Ounces Produced | ||||||||||
| Silver (000’s) | 1,544 | 2,066 | 2,013 | 2,346 | 1,908 | |||||
| Gold | 27,885 | 33,702 | 29,896 | 37,537 | 28,948 | |||||
| Silver equivalent1 (000’s) | 3,217 | 4,088 | 3,807 | 4,600 | 3,644 | |||||
| Silver equivalent1 (average spot) (000’s) | 3,796 | 4,728 | 4,382 | 5,209 | 4,104 | |||||
| Ounces Sold | ||||||||||
| Silver (000’s) | 1,572 | 2,092 | 2,031 | 2,343 | 1,794 | |||||
| Gold | 29,830 | 31,207 | 30,888 | 38,953 | 26,554 | |||||
| Silver equivalent1 (000’s) | 3,362 | 3,964 | 3,884 | 4,681 | 3,387 | |||||
| Silver equivalent1 (average spot) (000’s) | 3,981 | 4,557 | 4,479 |
5,313 |
3,809 | |||||
| Average realized price per silver ounce | $14.75 | $16.49 | $16.73 | $16.57 | $16.83 | |||||
| Average realized price per gold ounce | $1,082 | $1,162 | $1,168 | $1,139 | $1,148 |
-
Third quarter silver equivalent1 production was 3.2 million
ounces (3.8 million ounces based on average spot prices during the
third quarter), 21% lower compared to the prior quarter, with silver
production 25% lower and gold production 17% lower. Year-over-year,
silver and gold production decreased 19% and 4%, respectively -
Production was impacted by (i) the temporary suspension of mining
activities relating to fatalities that occurred during the quarter,
(ii) supply chain disruptions stemming from local road blockades that
temporarily interrupted the delivery of certain mining consumables,
and (iii) a weather-related interruption that impacted the process
plant -
The modest decline in silver and gold grades was due to the mining of
lower grade stopes, primarily at Independencia East. Gold grades are
expected to decline in the fourth quarter; however, mining rates are
anticipated to return to steady-state levels, partially offsetting the
impact of the lower expected grades -
Development towards the La Nación deposit, located between the
Independencia and Guadalupe underground mines, remains on-schedule and
is expected to commence production in 2019, providing anticipated
additional high quality mill feed to supplement existing ore sources -
Approximately 38% of gold sales in the third quarter, or 10,610
ounces, were sold under Palmarejo’s gold stream agreement at a price
of $800 per ounce. The increase was due to mine sequencing; fourth
quarter gold sales under the stream agreement are expected to remain
at similar levels -
The Company is maintaining Palmarejo’s full-year 2018 production
guidance of 7.5 – 7.9 million ounces of silver and 115,000 – 120,000
ounces of gold, or 14.4 – 15.1 million silver equivalent1
ounces (16.8 – 17.6 million ounces based on average spot prices during
the third quarter)
Rochester, Nevada
| 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | ||||||
| Tons placed | 4,061,082 | 4,083,028 | 4,351,131 | 4,171,451 | 4,262,011 | |||||
| Average silver grade (oz/t) | 0.52 | 0.53 | 0.54 | 0.50 | 0.53 | |||||
| Average gold grade (oz/t) | 0.004 | 0.004 | 0.003 | 0.003 | 0.004 | |||||
| Ounces Produced | ||||||||||
| Silver (000’s) | 1,290 | 1,125 | 1,157 | 1,361 | 1,070 | |||||
| Gold | 14,702 | 12,273 | 11,487 | 18,995 | 10,955 | |||||
| Silver equivalent1 (000’s) | 2,172 | 1,861 | 1,846 | 2,500 | 1,727 | |||||
| Silver equivalent1 (average spot) (000’s) | 2,477 | 2,095 | 2,067 | 2,808 | 1,901 | |||||
| Ounces Sold | ||||||||||
| Silver (000’s) | 1,248 | 1,097 | 1,119 | 1,457 | 1,050 | |||||
| Gold | 14,257 | 12,030 | 11,163 | 20,002 | 10,390 | |||||
| Silver equivalent1 (000’s) | 2,104 | 1,819 | 1,789 | 2,658 | 1,674 | |||||
| Silver equivalent1 (average spot) (000’s) | 2,400 | 2,048 | 2,004 |
2,983 |
1,839 | |||||
| Average realized price per silver ounce | $14.70 | $16.47 | $16.66 | $16.58 | $16.89 | |||||
| Average realized price per gold ounce | $1,204 | $1,297 | $1,331 | $1,279 | $1,291 |
-
Silver equivalent1 production during the period was 17%
higher quarter-over-quarter at 2.2 million ounces (2.5 million ounces
based on average spot prices during the third quarter). Silver
production was 1.3 million ounces and gold production was 14,702
ounces, 15% and 20% higher, respectively, compared to the prior quarter -
Production growth was driven primarily by strong pad performance from
the Stage III leach pad and continued steady performance of the Stage
IV leach pad. Stage III leach pad performance was driven by leaching
activities on the periphery of the pad that had not been processed
previously. These trends are expected to continue in the fourth quarter -
Installation of an initial high-pressure grinding roll (“HPGR”)
remains on schedule for the first quarter of 2019 with silver
recoveries expected to improve beginning as early as the second
quarter of next year. Decommissioning of the 15,000 tons per day
(“tpd”) crusher is currently underway and is expected to result in
fewer tons crushed and lower operating expenses in the fourth quarter -
The Company is maintaining full-year 2018 production guidance of 4.8 –
5.2 million ounces of silver and 48,000 – 52,000 ounces of gold, or
7.7 – 8.3 million silver equivalent1 ounces (8.7 – 9.4
million ounces based on average spot prices during the third quarter)
Wharf, South Dakota
| 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | ||||||
| Tons placed | 1,127,391 | 1,075,820 | 1,076,395 | 1,124,785 | 1,150,308 | |||||
| Average gold grade (oz/t) | 0.023 | 0.023 | 0.022 | 0.029 | 0.029 | |||||
| Ounces produced | ||||||||||
| Gold | 19,437 | 22,507 | 17,936 | 27,292 | 25,849 | |||||
| Silver (000’s) | 13 | 13 | 12 | 16 | 15 | |||||
| Gold equivalent1 | 19,646 | 22,729 | 18,133 | 27,560 | 26,096 | |||||
| Ounces sold | ||||||||||
| Gold | 19,874 | 23,053 | 17,339 | 28,975 | 23,855 | |||||
| Silver (000’s) | 12 | 14 | 11 | 16 | 14 | |||||
| Gold equivalent1 | 20,081 | 23,282 | 17,522 | 29,256 | 24,085 | |||||
| Average realized price per gold ounce | $1,198 | $1,285 | $1,341 | $1,278 | $1,304 |
-
Gold production declined 14% quarter-over-quarter to 19,646 ounces
partially as a result of unplanned weather-related downtime and timing
of leach pad recoveries -
Mining and crushing rates during the fourth quarter are expected to
increase while average gold grade is expected to remain relatively
constant -
The Company is maintaining full-year 2018 production guidance of
85,000 – 90,000 ounces of gold
Kensington, Alaska
| 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | ||||||
| Tons milled | 167,964 | 168,751 | 158,706 | 167,631 | 172,038 | |||||
| Average gold grade (oz/t) | 0.17 | 0.16 | 0.17 | 0.22 | 0.17 | |||||
| Average recovery rate | 91.8% | 92.6% | 94.0% | 92.8% | 94.1% | |||||
| Gold ounces produced | 26,809 | 25,570 | 26,064 | 34,932 | 27,541 | |||||
| Gold ounces sold | 25,648 | 28,165 | 27,763 | 35,634 | 29,173 | |||||
| Average realized price per gold ounce | $1,161 | $1,269 | $1,307 | $1,244 | $1,255 |
-
Third quarter gold production, inclusive of pre-commercial production
from Jualin, increased 5% quarter-over-quarter and declined 3%
year-over-year to 26,809 ounces -
At Jualin, the Company mined approximately 4,400 tons of development
ore late in the quarter, which yielded pre-commercial production of
nearly 2,100 ounces of gold at a grade of 0.48 ounces per ton
(“oz/t”). Mining rates at Jualin are expected to climb throughout the
fourth quarter leading to higher overall production levels -
The Company is maintaining full-year 2018 production guidance of
115,000 – 120,000 ounces of gold4
Silvertip, British Columbia
| 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | ||||||
| Tons milled | 28,080 | 14,450 | 4,795 | — | — | |||||
| Average silver grade (oz/t) | 7.29 | 14.15 | 10.05 | — | — | |||||
| Average zinc grade (%) | 8.0% | 8.2% | 6.60 | — | — | |||||
| Average lead grade (%) | 4.6% | 8.1% | 7.3% | —% | —% | |||||
| Average recovery rate – Ag | 47.0% | 42.3% | 30.9% | —% | —% | |||||
| Average recovery rate – Zn | 49.1% | 57.9% | 18.7% | —% | —% | |||||
| Average recovery rate – Pb | 44.4% | 40.5% | 21.1% | —% | —% | |||||
| Produced | ||||||||||
| Silver (000’s ounces) | 96 | 87 | 15 | — | — | |||||
| Zinc (000’s lbs) | 2,207 | 1,372 | 119 | — | — | |||||
| Lead (000’s lbs) | 1,159 | 949 | 147 | — | — | |||||
| Silver equivalent1 (000’s) | 286 | 217 | 29 | — | — | |||||
| Silver equivalent1 (average spot) (000’s) | 342 | 277 | 36 | — | ||||||
| Sold | ||||||||||
| Silver (000’s ounces) | 131 | 10 | — | — | — | |||||
| Zinc (000’s lbs) |
1,772 |
469 |
— | — | — | |||||
| Lead (000’s lbs) |
1,645 |
— |
— |
— | — | |||||
| Silver equivalent1 (000’s) |
320 |
38 |
— | — | — | |||||
| Silver equivalent1 (average spot) (000’s) |
371 |
52 |
— | — | — | |||||
| Average realized price per silver ounce | $14.95 | $13.01 | — | — | — | |||||
|
Average realized price per zinc pound |
$0.93 |
$1.08 | — | — | — | |||||
|
Average realized price per lead pound |
$0.99 |
$— | — | — | — |
-
Silvertip achieved commercial production on September 1, 2018. The
production figures and average realized prices shown in the above
table include pre-commercial production -
During the third quarter, mill downtime impacted throughput, which
averaged approximately 434 tons (approximately 394 metric tonnes) per
day. Mill downtime was required to complete repairs on the paste
plant, grinding circuit and associated infrastructure in the process
plant -
Higher mill availability is expected to improve throughput in the
fourth quarter, which is anticipated to reach an average of
approximately 830 tons per day (750 metric tonnes per day) by year-end -
Operating activities remain focused on improving process plant
performance, underground rehabilitation and development, and
completing several key surface infrastructure projects, including the
water treatment plant and a 220-person camp facility -
Coeur expects to file an initial NI 43-101 Technical Report in the
fourth quarter and receive approval for the permit amendment
application to operate at 1,000 metric tonnes per day on a year-round
basis in early 2019 -
The Company is maintaining full-year 2018 production guidance of 0.7 –
1.2 million ounces of silver, 13.0 – 23.0 million pounds of zinc and
11.0 – 18.0 million pounds of lead, or 2.0 – 3.5 million silver
equivalent1 ounces (2.4 – 4.1 million ounces based on
average spot prices during the third quarter)4
2018 Production Guidance
Coeur’s 2018 production guidance was revised on September 4, 2018 to
reflect improved visibility of Silvertip’s production following the
commencement of commercial production as well as stronger than expected
performance at Rochester during the first half of the year.
| Silver | Gold | Zinc | Lead | Silver Equivalent1 | ||||||
| (K oz) | (oz) | (K lbs) | (K lbs) | (K oz) | ||||||
| Palmarejo | 7,500 – 7,900 | 115,000 – 120,000 | — | — | 14,400 – 15,100 | |||||
| Rochester | 4,800 – 5,200 | 48,000 – 52,000 | — | — | 7,680 – 8,320 | |||||
| Kensington | — | 115,000 – 120,000 | — | — | 6,900 – 7,200 | |||||
| Wharf | — | 85,000 – 90,000 | — | — | 5,100 – 5,400 | |||||
| Silvertip | 700 – 1,200 | — | 13,000 – 23,000 | 11,000 – 18,000 | 2,030 – 3,480 | |||||
| Total | 13,000 – 14,300 | 363,000 – 382,000 | 13,000 – 23,000 | 11,000 – 18,000 | 36,110 – 39,500 |
Guidance Based on Third Quarter Average Spot Prices
| Silver | Gold | Zinc | Lead | Silver Equivalent1 | ||||||
| (K oz) | (oz) | (K lbs) | (K lbs) | (K oz) | ||||||
| Palmarejo | 7,500 – 7,900 | 115,000 – 120,000 | — | — | 16,787 – 17,591 | |||||
| Rochester | 4,800 – 5,200 | 48,000 – 52,000 | — | — | 8,676 – 9,399 | |||||
| Kensington | — | 115,000 – 120,000 | — | — | 9,287 – 9,691 | |||||
| Wharf | — | 85,000 – 90,000 | — | — | 6,865 – 7,268 | |||||
| Silvertip | 700 – 1,200 | — | 13,000 – 23,000 | 11,000 – 18,000 | 2,391 – 4,099 | |||||
| Total | 13,000 – 14,300 | 363,000 – 382,000 | 13,000 – 23,000 | 11,000 – 18,000 | 44,007 – 48,049 |
Financial Results and Conference Call
Coeur will report its third quarter 2018 financial results on October
31, 2018 after the New York Stock Exchange closes for trading. There
will be a conference call on November 1, 2018 at 11:00 a.m. Eastern Time.
| Dial-In Numbers: | (855) 560-2581 (U.S.) | ||||||
| (855) 669-9657 (Canada) | |||||||
| (412) 542-4166 (International) | |||||||
| Conference ID: | Coeur Mining |
Hosting the call will be Mitchell J. Krebs, President and Chief
Executive Officer of Coeur, who will be joined by Peter C. Mitchell,
Senior Vice President and Chief Financial Officer, Frank L. Hanagarne,
Jr., Senior Vice President and Chief Operating Officer, Terry F. D.
Smith, Vice President of North American Operations, Hans Rasmussen,
Senior Vice President of Exploration, and other members of management. A
replay of the call will be available through November 15, 2018.
| Replay numbers: | (877) 344-7529 (U.S.) | ||||||
| (855) 669-9658 (Canada) | |||||||
| (412) 317-0088 (International) | |||||||
| Conference ID: | 101 23 688 |
The Company anticipates reporting its fourth quarter 2018 financial
results on February 13, 2019 after the New York Stock Exchange closes
for trading and holding a conference call on February 14, 2019 at 11:00
am Eastern Time.
About Coeur
Coeur Mining, Inc. is a well-diversified, growing precious metals
producer with five mines in North America. Coeur produces from its
wholly-owned operations: the Palmarejo silver-gold complex in Mexico,
the Silvertip silver-zinc-lead mine in British Columbia, the Rochester
silver-gold mine in Nevada, the Wharf gold mine in South Dakota, and the
Kensington gold mine in Alaska. In addition, the Company has interests
in several precious metals exploration projects throughout North America.
Cautionary Statement
This news release contains forward-looking statements within the meaning
of securities legislation in the United States and Canada, including
statements regarding anticipated production, grades, mining rates,
crushing rates, development efforts, operations at Rochester and
Silvertip, gold sales under Palmarejo’s gold stream agreement and timing
of filing a technical report and obtaining permit amendment approval for
Silvertip. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause Coeur’s actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. Such factors include, among others, the risk
that anticipated production levels are not attained, the risks and
hazards inherent in the mining business (including risks inherent in
developing large-scale mining projects, environmental hazards,
industrial accidents, weather or geologically related conditions),
changes in the market prices of gold, silver, zinc, and lead and a
sustained lower price environment, the uncertainties inherent in Coeur’s
production, exploratory and developmental activities, including risks
relating to permitting and regulatory delays, ground conditions, grade
variability, any future labor disputes or work stoppages, the
uncertainties inherent in the estimation of gold and silver reserves,
changes that could result from Coeur’s future acquisition of new mining
properties or businesses, the loss of any third-party smelter to which
Coeur markets its production, the effects of environmental and other
governmental regulations, the risks inherent in the ownership or
operation of or investment in mining properties or businesses in foreign
countries, Coeur’s ability to raise additional financing necessary to
conduct its business, make payments or refinance its debt, as well as
other uncertainties and risk factors set out in filings made from time
to time with the United States Securities and Exchange Commission, and
the Canadian securities regulators, including, without limitation,
Coeur’s most recent reports on Form 10-K and Form 10-Q. Actual results,
developments and timetables could vary significantly from the estimates
presented. Readers are cautioned not to put undue reliance on
forward-looking statements. Coeur disclaims any intent or obligation to
update publicly such forward-looking statements, whether as a result of
new information, future events or otherwise. Additionally, Coeur
undertakes no obligation to comment on analyses, expectations or
statements made by third parties in respect of Coeur, its financial or
operating results or its securities.
Christopher Pascoe, Coeur’s Director, Technical Services and a qualified
person under Canadian National Instrument 43-101, approved the
scientific and technical information concerning Coeur’s mineral projects
in this news release. For a description of the key assumptions,
parameters and methods used to estimate mineral reserves and resources,
as well as data verification procedures and a general discussion of the
extent to which the estimates may be affected by any known
environmental, permitting, legal, title, taxation, socio-political,
marketing or other relevant factors, Canadian investors should refer to
the Technical Reports for each of Coeur’s properties as filed on SEDAR
at sedar.com.
Notes
-
Silver and gold equivalence assumes a 60:1 silver-to-gold ratio,
except where noted as average spot prices. Please see the table below
for average applicable spot prices and corresponding ratios. Silver
and zinc equivalence assumes a 0.06:1 silver-to-zinc ratio. Silver and
lead equivalence assumes a 0.05:1 silver-to-lead ratio. -
On February 28, 2018, Coeur divested the San Bartolomé mine through
the sale of its 100%-owned Bolivian subsidiary. As a result, San
Bartolomé is excluded from consolidated operating statistics for all
periods presented unless otherwise noted. -
Third quarter 2018 production and sales figures include pre-commercial
production from Kensington and Silvertip. -
Full-year 2018 production guidance for Kensington and Silvertip
include pre-commercial production.
Average Spot Prices
| 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | |||||||||||||||
| Average Silver Spot Price Per Ounce | $ | 15.02 | $ | 16.53 | $ | 16.77 | $ | 16.73 | $ | 16.84 | |||||||||
| Average Gold Spot Price Per Ounce | $ | 1,213 | $ | 1,306 | $ | 1,329 | $ | 1,275 | $ | 1,278 | |||||||||
| Average Silver to Gold Spot Equivalence |
81:1 |
79:1 | 79:1 | 76:1 | 76:1 | ||||||||||||||
| Average Zinc Spot Price Per Pound | $ | 1.15 | $ | 1.41 | $ | 1.55 | $ | 1.47 | $ | 1.06 | |||||||||
| Average Silver to Zinc Spot Equivalence | 0.08:1 | 0.09:1 | 0.09:1 | 0.09:1 | 0.06:1 | ||||||||||||||
| Average Lead Spot Price Per Pound | $ | 0.95 | $ | 1.08 | $ | 1.14 | $ | 1.13 | $ | 1.06 | |||||||||
| Average Silver to Lead Spot Equivalence | 0.06:1 | 0.07:1 | 0.07:1 | 0.07:1 | 0.06:1 | ||||||||||||||
Contacts
Coeur Mining, Inc.
Paul DePartout, Director, Investor Relations
(312)
489-5800
www.coeur.com