Coeur Reports Third Quarter 2018 Results
October 31, 2018
Reaffirms Full-Year Companywide Production and Cost Guidance
CHICAGO–(BUSINESS WIRE)–Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today
reported third quarter 2018 financial results, including revenue of
$148.8 million, adjusted EBITDA1 of $24.7 million and cash
flow from operating activities of $5.8 million. Including $30.8 million
of non-cash write downs, the Company reported a GAAP net loss from
continuing operations of $53.0 million, or $0.29 per share. On an
adjusted basis1, the Company reported a net loss of $19.7
million or $0.11 per share.
Third quarter results were impacted by 11% and 7% lower average realized
silver and gold prices, respectively, and by lower production levels at
its Palmarejo and Wharf operations due to one-time events. The $30.8
million of non-cash write-downs reflect (i) a modification in the
deferred consideration received for the sale of the Company’s Bolivian
subsidiary earlier this year, which included a $15 million cash payment
to Coeur in the quarter, (ii) the decommissioning of a crusher at
Rochester prior to the end of its estimated useful life as part of the
operation’s transition to high pressure grinding roll (“HPGR”) crushing
technology to enhance silver recovery rates, and (iii) an inventory
adjustment relating to concentrate at Silvertip.
Highlights
-
Lower all-in sustaining costs (“AISC”) – AISC of $14.45 and
$14.50 per average spot silver equivalent ounce1 for the
third quarter and year-to-date, respectively, were below the Company’s
full-year 2018 AISC guidance range of $14.75 – $15.25 per average spot
silver equivalent ounce1 -
Strong Rochester performance – Silver equivalent1
production increased 17% quarter-over-quarter and 26% year-over-year.
Adjusted costs applicable to sales (“CAS”) per average spot silver
equivalent ounce1 declined 4% quarter-over-quarter and 8%
year-over-year to $11.42 -
Temporarily lower production and higher unit costs at Palmarejo and
Wharf – Palmarejo’s results impacted by 17 days of unplanned
downtime due to previously-reported fatalities and a nearby road
blockade. Operations have since returned to normalized levels. Wharf’s
results were affected by weather-related events. Mining and crushing
rates have since increased, leading to higher expected fourth quarter
production -
Commercial production achieved at Silvertip mine as ramp-up
continues – Commercial production declared on September 1, 2018.
Ongoing process plant repairs and improvements are leading to higher
availability and throughput. October results reflected materially
improved plant performance. Throughput expected to average 830 tons
per day (“tpd”) (750 metric tonnes per day (“mtpd”)) by year-end and
1,100 tpd (1,000 mtpd) by end of first quarter 2019 -
Two strategic acquisitions expected to further enhance portfolio
quality – Completed acquisition of Northern Empire Resources Corp.
(“Northern Empire”), which controls a 143 km2
(approximately 35,000 acres) land position in southern Nevada
including the high-grade Sterling Gold Project and three nearby
deposits known as the Crown Block. Also announced agreement to acquire
assets from Alio Gold Inc. (“Alio Gold”) located next to Rochester
including the Lincoln Hill Project, which provides significant
operational synergies -
Strong liquidity and enhanced balance sheet strength – Cash and
cash equivalents of $104.7 million at September 30, 2018. Expanded
revolving credit facility capacity to provide additional balance sheet
flexibility - Reaffirming full-year production and cost guidance
“Third quarter results were impacted by weak metals prices and
temporarily lower production at our Palmarejo and Wharf mines due to
one-time events. Our Rochester operation was the standout performer with
strong production growth and further cost reductions. In addition, the
team at Rochester has commenced work on the installation of the first
HPGR crusher, which is expected to boost silver recoveries and further
reduce costs starting next year,” said Mitchell J. Krebs, Coeur’s
President and Chief Executive Officer. “Importantly, we remain on-track
to achieve full-year production and cost guidance due to strong expected
fourth quarter performance at each of our operations, which we
experienced during the month of October.”
“Silvertip reached an important milestone by achieving commercial
production on September 1st. Throughput rates continue to
steadily climb toward the year-end goal of 750 mtpd. Lower than planned
mill availability limited production rates and concentrate sales during
the quarter as we address remaining maintenance priorities in the
processing facility. However, the plant set records for availability and
throughput in October as the team establishes a more stable and
consistent operating environment.”
“We have further enhanced the quality of our growth pipeline with two
recent acquisitions of high-quality, low-risk projects that complement
our existing asset base. We announced and have now completed the
acquisition of Northern Empire, which bolsters both our near- and
long-term development pipelines with high-quality, Nevada-based gold
assets. We also announced the acquisition of the Lincoln Hill project
and other assets from Alio Gold, which is expected to close in the
fourth quarter. These assets are adjacent to Rochester and will allow us
to leverage our existing infrastructure to generate strong returns and
future free cash flow from higher-grade, low-cost production.”
|
Financial and Operating Highlights (Unaudited) |
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|
(Amounts in millions, except per share amounts, gold ounces
|
3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | |||||||||||||||||
| Revenue | $ | 148.8 | $ | 170.0 | $ | 163.3 | $ | 214.6 | $ | 159.9 | ||||||||||||
| Costs Applicable to Sales | $ | 116.9 | $ | 108.2 | $ | 99.3 | $ | 122.0 | $ | 101.6 | ||||||||||||
| General and Administrative Expenses | $ | 7.7 | $ | 7.7 | $ | 8.8 | $ | 9.2 | $ | 7.3 | ||||||||||||
| Net Income (Loss) | $ | (53.0 | ) | $ | 2.9 | $ | 0.7 | $ | 14.3 | $ | (11.7 | ) | ||||||||||
| Net Income (Loss) Per Share | $ | (0.29 | ) | $ | 0.02 | $ | 0.00 | $ | 0.08 | $ | (0.07 | ) | ||||||||||
| Adjusted Net Income (Loss)1 | $ | (19.7 | ) | $ | 1.1 | $ | 0.7 | $ | 14.1 | $ | (15.3 | ) | ||||||||||
| Adjusted Net Income (Loss)1 Per Share | $ | (0.11 | ) | $ | 0.01 | $ | 0.00 | $ | 0.08 | $ | (0.09 | ) | ||||||||||
| Weighted Average Shares Outstanding | $ | 185.2 | $ | 187.5 | $ | 187.6 | $ | 187.0 | $ | 179.3 | ||||||||||||
| EBITDA1 | $ | (12.3 | ) | $ | 42.1 | $ | 49.4 | $ | 69.6 | $ | 38.6 | |||||||||||
| Adjusted EBITDA1 | $ | 24.7 | $ | 48.4 | $ | 49.5 | $ | 77.0 | $ | 40.2 | ||||||||||||
| Cash Flow from Operating Activities | $ | 5.8 | $ | (1.3 | ) | $ | 15.5 | $ | 91.8 | $ | 37.3 | |||||||||||
| Capital Expenditures | $ | 39.5 | $ | 41.2 | $ | 42.3 | $ | 47.1 | $ | 29.0 | ||||||||||||
| Free Cash Flow1 | $ | (33.7 | ) | $ | (42.5 | ) | $ | (26.8 | ) | $ | 44.8 | $ | 8.3 | |||||||||
| Cash, Equivalents & Short-Term Investments | $ | 104.7 | $ | 123.5 | $ | 159.6 | $ | 192.0 | $ | 195.7 | ||||||||||||
| Total Debt2 | $ | 429.2 | $ | 419.7 | $ | 414.0 | $ | 411.3 | $ | 288.7 | ||||||||||||
| Average Realized Price Per Ounce – Silver | $ | 14.68 | $ | 16.48 | $ | 16.70 | $ | 16.57 | $ | 16.86 | ||||||||||||
| Average Realized Price Per Ounce – Gold | $ | 1,150 | $ | 1,241 | $ | 1,268 | $ | 1,224 | $ | 1,240 | ||||||||||||
| Average Realized Price Per Pound – Zinc | $ | 0.94 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Average Realized Price Per Pound – Lead | $ | 0.85 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Silver Ounces Produced | 2.9 | 3.2 | 3.2 | 3.7 | 3.0 | |||||||||||||||||
| Gold Ounces Produced | 87,539 | 94,052 | 85,383 | 118,756 | 93,293 | |||||||||||||||||
| Zinc Pounds Produced | 1.1 | — | — | — | — | |||||||||||||||||
| Lead Pounds Produced | 0.4 | — | — | — | — | |||||||||||||||||
| Silver Equivalent Ounces Produced1 | 8.2 | 8.8 | 8.3 | 10.8 | 8.6 | |||||||||||||||||
| Silver Equivalent Ounces Produced (Average Spot)1 | 10.1 | 10.6 | 9.9 | 12.8 | 10.1 | |||||||||||||||||
| Silver Ounces Sold | 2.9 | 3.2 | 3.2 | 3.8 | 2.9 | |||||||||||||||||
| Gold Ounces Sold | 89,609 | 94,455 | 87,153 | 123,564 | 89,972 | |||||||||||||||||
| Zinc Pounds Sold | 1.8 | — | — | — | — | |||||||||||||||||
| Lead Pounds Sold | 1.2 | — | — | — | — | |||||||||||||||||
| Silver Equivalent Ounces Sold1 | 8.5 | 8.9 | 8.4 | 11.1 | 8.3 | |||||||||||||||||
| Silver Equivalent Ounces Sold (Average Spot)1 | 10.4 | 10.7 | 10.1 | 13.2 | 9.7 | |||||||||||||||||
| Adjusted CAS per AgEqOz1 | $ | 10.77 | $ | 9.44 | $ | 9.69 | $ | 9.43 | $ | 11.05 | ||||||||||||
| Adjusted CAS per Average Spot AgEqOz1 | $ | 9.22 | $ | 8.26 | $ | 8.48 | $ | 8.35 | $ | 9.90 | ||||||||||||
| Adjusted CAS per AuEqOz1 | $ | 1,005 | $ | 1,028 | $ | 955 | $ | 800 | $ | 843 | ||||||||||||
| Adjusted AISC per AgEqOz1 | $ | 17.70 | $ | 17.62 | $ | 17.20 | $ | 14.45 | $ | 17.35 | ||||||||||||
| Adjusted AISC per Average Spot AgEqOz1 | $ | 14.45 | $ | 14.65 | $ | 14.33 | $ | 12.26 | $ | 14.79 | ||||||||||||
Financial Results
Revenue for the third quarter was $148.8 million, 12% lower compared to
the second quarter due to lower metal sales and lower average realized
silver and gold prices, which declined 11% and 7%, respectively,
quarter-over-quarter. Gold sales contributed 69% of revenue during the
third quarter and silver sales contributed 29%. The Company’s U.S.
operations accounted for approximately 60% of third quarter revenue,
comparable to the first half of the year and to last year’s third
quarter.
Average realized gold prices during the third quarter were impacted by
the sale of 10,610 gold ounces at a price of $800 per ounce pursuant to
Palmarejo’s gold stream agreement.
Costs applicable to sales were $116.9 million for the quarter, 8% and
15% higher quarter-over-quarter and year-over-year, respectively. The
increase was primarily attributable to the inclusion of Silvertip in the
Company’s third quarter results beginning September 1st,
which increased costs applicable to sales by $11.5 million.
General and administrative expenses were $7.7 million, flat
quarter-over-quarter, while third quarter interest expense totaled $5.8
million, also flat compared to the second quarter.
Third quarter capital expenditures of $39.5 million declined 4%
quarter-over-quarter primarily due to lower sustaining capital
expenditures. Development capital expenditures increased partially due
to continued investment at Silvertip. Capital expenditures at Silvertip
accounted for $17.9 million (including $7.8 million of pre-commercial
capital expenditures), or 45%, of total companywide capital
expenditures. Year-over-year, capital expenditures increased 36%
primarily as a result of expenditures at the Silvertip mine.
Modifications to Deferred Consideration from Manquiri Sale
As described below, Coeur’s third quarter results reflect the non-cash
impact of a modification to the terms of the deferred consideration
received when it sold its Bolivian subsidiary that operates the San
Bartolomé mine (“Manquiri”) earlier this year. The modifications
described below provided the Company with significant upfront
consideration while providing the new owners of Manquiri additional
financial flexibility to offset the impact of lower silver prices on the
San Bartolomé operation.
-
$15.0 million was paid in cash to the Company and was received on
September 25, 2018; -
The aggregate note receivable was reduced from $28.5 million to $25.0
million, with $10.0 million remaining after the upfront $15.0 million
cash payment described above, which is scheduled to be repaid by
September 30, 2019; -
Quarterly payments in respect of the 2.0% net smelter returns royalty
(“NSR”) were temporarily suspended until October 15, 2019; and -
Coeur agreed to forgo rights to any value added tax (“VAT”) refunds
collected or received by Manquiri
Based on these modifications, the Company recorded an $18.6 million
non-cash write-down comprised of $13.1 million related to the VAT
refunds, $3.6 million related to the reduced note receivable and $1.9
million related to the deferral of NSR payments.
Enhancements to the Company’s Senior Secured Revolving Credit Facility
On October 29, 2018, the Company amended the terms of its senior secured
revolving credit facility (the “Facility”) to:
- Increase the aggregate size from $200 million to $250 million
- Extend the maturity date from September 2021 to October 2022
The Company established the Facility in September 2017 to partially fund
its acquisition of Silvertip and provide additional flexibility to
manage its near- to medium-term operating and growth priorities. As of
September 30, 2018, the Company has approximately $172.7 million of
liquidity, including $104.7 million of cash and cash equivalents and
$68.0 million of availability under the Facility. The additional
Facility capacity is intended to bolster the Company’s liquidity,
including with respect to the anticipated HPGR investments at Rochester
in 2020 and 2021.
Operations
Highlights of third quarter 2018 results for each of the Company’s
operations are provided below.
|
Palmarejo, Mexico |
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| (Dollars in millions, except per ounce amounts) | 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% | |||||||
| Silver ounces produced (000’s) | 1,544 | 2,066 | 2,013 | 2,346 | 1,908 | |||||||
| Gold ounces produced | 27,885 | 33,702 | 29,896 | 37,537 | 28,948 | |||||||
| Silver equivalent ounces produced1 (000’s) | 3,217 | 4,088 | 3,807 | 4,600 | 3,644 | |||||||
|
Silver equivalent ounces produced1 (average spot) (000’s) |
3,796 | 4,728 | 4,382 | 5,209 | 4,104 | |||||||
| Silver ounces sold (000’s) | 1,572 | 2,092 | 2,031 | 2,343 | 1,794 | |||||||
| Gold ounces sold | 29,830 | 31,207 | 30,888 | 38,953 | 26,554 | |||||||
| Silver equivalent ounces sold1 (000’s) | 3,362 | 3,964 | 3,884 | 4,681 | 3,387 | |||||||
|
Silver equivalent ounces sold1 (average spot) (000’s) |
3,981 | 4,557 | 4,479 | 5,331 | 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 | |||||||
| Metal sales | $55.5 | $70.7 | $70.0 | $83.2 | $60.7 | |||||||
| Costs applicable to sales | $31.6 | $30.3 | $31.1 | $36.0 | $33.3 | |||||||
| Adjusted CAS per AgEqOz1 | $9.39 | $7.64 | $8.01 | $7.54 | $9.76 | |||||||
| Adjusted CAS per average spot AgEqOz1 | $7.93 | $6.64 | $6.94 | $6.64 | $8.68 | |||||||
| Exploration expense | $3.2 | $3.2 | $4.0 | $2.7 | $4.5 | |||||||
| Cash flow from operating activities | $8.6 | $1.3 | $27.3 | $52.1 | $18.5 | |||||||
| Sustaining capital expenditures (excludes capital lease payments) | $2.0 | $9.5 | $9.3 | $4.9 | $6.5 | |||||||
| Development capital expenditures | $2.7 | $— | $— | $2.1 | $(1.0) | |||||||
| Total capital expenditures | $4.7 | $9.5 | $9.3 | $7.0 | $5.5 | |||||||
| Free cash flow1 | $3.9 | $(8.2) | $18.0 | $45.1 | $13.0 | |||||||
-
Third quarter silver equivalent1 production declined 21%
quarter-over-quarter and 12% year-over-year to 3.2 million ounces (3.8
million ounces based on average spot prices during the third quarter)
primarily due to (i) the temporary suspension of mining activities
relating to fatalities that occurred during the quarter, (ii) supply
chain disruptions stemming from a local road blockade that temporarily
interrupted the delivery of certain mining consumables, and (iii) a
weather-related interruption that impacted the process plant. Mining
rates have since returned to steady-state levels -
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 while silver grades are expected to be flat in the
fourth quarter; however, mining rates are anticipated to return to
steady-state levels, offsetting the impact of the lower expected gold
grades -
Adjusted CAS of $7.93 per average spot AgEqOz1 were 19%
higher quarter-over-quarter and 9% lower year-over-year. The quarterly
increase was largely due to lower production, though continued to
track below full-year 2018 guidance of $8.00 – $8.50 per average spot
AgEqOz1. The year-over-year decline was the result of
higher gold and silver grades, as well as lower mining and processing
costs -
Development towards the La Nación deposit, located between Guadalupe
and Independencia, remains on-schedule. Production from the deposit is
expected to commence in the second half of 2019, providing anticipated
additional high-quality mill feed to supplement existing ore sources -
Free cash flow1 of $3.9 million increased $12.1 million
compared to the prior quarter, which had been impacted by $17 million
of cash income and mining taxes associated with 2017 earnings. The
increase, however, was offset by lower metal sales and higher costs.
Total cash income and mining tax payments in Mexico this year are
expected to be $40 – $45 million (with approximately $39 million
incurred year-to-date through the end of September) -
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). It is also maintaining cost guidance of $8.00 –
$8.50 on a spot equivalent basis and $9.00 – $9.50 on a 60:1 silver
equivalent basis. In July, the Company increased Palmarejo’s full-year
production guidance and reduced its full-year cost guidance following
strong performance during the first half of the year
|
Rochester, Nevada |
||||||||||||
| (Dollars in millions, except per ounce amounts) | 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | |||||||
| Ore 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 | |||||||
| Silver ounces produced (000’s) | 1,290 | 1,125 | 1,157 | 1,361 | 1,070 | |||||||
| Gold ounces produced | 14,702 | 12,273 | 11,487 | 18,995 | 10,955 | |||||||
| Silver equivalent ounces produced1 (000’s) | 2,172 | 1,861 | 1,846 | 2,500 | 1,727 | |||||||
|
Silver equivalent ounces produced1 (average spot) (000’s) |
2,477 | 2,095 | 2,067 | 2,808 | 1,901 | |||||||
| Silver ounces sold (000’s) | 1,248 | 1,097 | 1,119 | 1,457 | 1,050 | |||||||
| Gold ounces sold | 14,257 | 12,030 | 11,163 | 20,002 | 10,390 | |||||||
| Silver equivalent ounces sold1 (000’s) | 2,104 | 1,819 | 1,789 | 2,658 | 1,674 | |||||||
|
Silver equivalent ounces sold1 (average spot) (000’s) |
2,400 | 2,048 | 2,004 | 2,969 | 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 | |||||||
| Metal sales | $35.5 | $33.7 | $33.5 | $49.7 | $31.2 | |||||||
| Costs applicable to sales | $27.5 | $24.5 | $24.3 | $34.0 | $23.3 | |||||||
| Adjusted CAS per AgEqOz1 | $13.04 | $13.36 | $13.33 | $12.77 | $13.69 | |||||||
| Adjusted CAS per average spot AgEqOz1 | $11.42 | $11.87 | $11.89 | $11.37 | $12.46 | |||||||
| Exploration expense | $0.1 | $0.2 | $— | $0.5 | $0.5 | |||||||
| Cash flow from operating activities | $5.7 | $6.0 | $3.4 | $26.1 | $1.6 | |||||||
| Sustaining capital expenditures (excludes capital lease payments) | $2.7 | $0.4 | $0.5 | $0.9 | $0.5 | |||||||
| Development capital expenditures | $0.9 | $0.3 | $2.1 | $5.9 | $9.2 | |||||||
| Total capital expenditures | $3.6 | $0.7 | $2.6 | $6.8 | $9.7 | |||||||
| Free cash flow1 | $2.1 | $5.3 | $0.8 | $19.3 | $(8.1) | |||||||
-
Silver equivalent1 production during the period increased
17% quarter-over-quarter to 2.2 million ounces (2.5 million ounces
based on average spot prices during the third quarter) and was driven
primarily by strong performance from the Stage III leach pad and
continued steady performance of the Stage IV leach pad. These trends
are expected to continue throughout the fourth quarter -
Installation of the initial HPGR unit remains on schedule for the
first quarter of 2019 with silver recoveries expected to improve
beginning as early as the second quarter of 2019. Decommissioning of
the mine’s smaller, 15,000 tpd in-pit crusher has been completed and
is expected to result in fewer tons crushed as well as lower operating
expenses in the fourth quarter -
Third quarter adjusted CAS per average spot AgEqOz1 of
$11.42 were 4% lower compared to the prior quarter and 8% lower
year-over-year, and remained below the full-year 2018 guidance range
of $12.00 – $12.50 -
Free cash flow1 for the third quarter decreased from $5.3
million during the prior quarter to $2.1 million primarily as a result
of lower average realized silver and gold prices and higher capital
expenditures -
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).
The Company is also maintaining cost guidance of CAS per AgEqOz1
of $12.00 – $12.50 on a spot equivalent basis and $13.25 – $13.75 on a
60:1 silver equivalent basis
|
Wharf, South Dakota |
||||||||||||
| (Dollars in millions, except per ounce amounts) | 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | |||||||
| Ore 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 | |||||||
| Gold ounces produced | 19,437 | 22,507 | 17,936 | 27,292 | 25,849 | |||||||
| Silver ounces produced (000’s) | 13 | 13 | 12 | 16 | 15 | |||||||
| Gold equivalent ounces produced1 | 19,646 | 22,729 | 18,133 | 27,560 | 26,096 | |||||||
| Gold ounces sold | 19,874 | 23,053 | 17,339 | 28,975 | 23,855 | |||||||
| Silver ounces sold (000’s) | 12 | 14 | 11 | 16 | 14 | |||||||
| Gold equivalent ounces sold1 | 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 | |||||||
| Metal sales | $24.0 | $29.8 | $23.4 | $37.3 | $31.3 | |||||||
| Costs applicable to sales | $18.0 | $19.3 | $15.3 | $19.9 | $17.3 | |||||||
| Adjusted CAS per AuEqOz1 | $895 | $824 | $870 | $682 | $719 | |||||||
| Exploration expense | $0.1 | $— | $— | $0.1 | $0.2 | |||||||
| Cash flow from operating activities | $3.7 | $11.5 | $(1.4) | $17.2 | $15.0 | |||||||
| Sustaining capital expenditures (excludes capital lease payments) | $1.2 | $1.2 | $0.3 | $1.6 | $1.8 | |||||||
| Development capital expenditures | $— | $— | $— | $1.7 | $1.3 | |||||||
| Total capital expenditures | $1.2 | $1.2 | $0.3 | $3.3 | $3.1 | |||||||
| Free cash flow1 | $2.5 | $10.3 | $(1.7) | $13.9 | $11.9 | |||||||
-
Gold production declined 14% quarter-over-quarter to 19,646 ounces
partially due to weather-related events, including the impact of
abnormally high levels of rainfall on 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 -
Adjusted CAS per AuEqOz1 of $895 were 9% and 24% higher
quarter-over-quarter and year-over-year, respectively, due to lower
production levels and remain within the full-year 2018 guidance range
of $850 – $900 -
Wharf generated $2.5 million of free cash flow1 during the
quarter. The decline relative to the prior quarter was a result of
lower production, timing of leaching cycles and weaker metal prices -
Since acquiring the operation in February 2015 for $99 million, Wharf
has generated $138.3 million of free cash flow1 -
The Company is maintaining Wharf’s full-year production and cost
guidance of 85,000 – 90,000 ounces of gold at CAS per AuEqOz1
of $850 – $900
|
Kensington, Alaska |
||||||||||||
| (Dollars in millions, except per ounce amounts) | 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | |||||||
| Tons milled | 163,603 | 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 | 90.4% | 92.6% | 94.0% | 92.8% | 94.1% | |||||||
| Gold ounces produced | 25,515 | 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 | |||||||
| Metal sales | $29.8 | $35.7 | $36.3 | $44.3 | $36.6 | |||||||
| Costs applicable to sales | $28.2 | $34.2 | $28.6 | $32.0 | $27.7 | |||||||
| Adjusted CAS per AuOz1 | $1,091 | $1,195 | $1,010 | $896 | $946 | |||||||
| Exploration expense | $1.6 | $1.4 | $1.6 | $2.8 | $3.0 | |||||||
| Cash flow from operating activities | $(0.4) | $3.2 | $4.6 | $16.8 | $9.3 | |||||||
| Sustaining capital expenditures (excludes capital lease payments) | $9.7 | $9.2 | $8.5 | $8.0 | $6.5 | |||||||
| Development capital expenditures | $2.3 | $1.5 | $2.9 | $4.0 | $3.6 | |||||||
| Total capital expenditures | $12.0 | $10.7 | $11.4 | $12.0 | $10.1 | |||||||
| Free cash flow1 | $(12.4) | $(7.5) | $(6.8) | $4.8 | $(0.8) | |||||||
-
Third quarter gold production, inclusive of pre-commercial production
from Jualin, was 26,809 ounces. Excluding pre-commercial production,
Kensington produced 25,515 ounces of gold, comparable to the prior
quarter -
The Company mined approximately 4,400 tons of development ore at
Jualin late in the third 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 -
Adjusted CAS per AuOz1 of $1,091 improved 9%
quarter-over-quarter primarily due to lower drilling and labor costs.
Higher grades are anticipated in the fourth quarter, which is expected
to increase production and drive lower unit costs -
Negative free cash flow1 of $12.4 million resulted from a
lower average realized gold price, higher operating costs and slightly
higher capital expenditures -
The Company is maintaining Kensington’s full-year production and cost
guidance of 115,000 – 120,000 gold ounces at CAS per AuOz1
of $900 – $9504
|
Silvertip, British Columbia |
||||||||||||
| (Dollars in millions, except per ounce and per pound amounts) | 3Q 2018 | 2Q 2018 | 1Q 2018 | 4Q 2017 | 3Q 2017 | |||||||
| Tons milled | 10,652 | — | — | — | — | |||||||
| Average silver grade (oz/t) | 6.66 | — | — | — | — | |||||||
| Average zinc grade (%) | 8.0% | —% | —% | —% | —% | |||||||
| Average lead grade (%) | 4.3% | —% | —% | —% | —% | |||||||
| Average recovery rate – Ag | 56.3% | —% | —% | —% | —% | |||||||
| Average recovery rate – Zn | 64.5% | —% | —% | —% | —% | |||||||
| Average recovery rate – Pb | 45.1% | —% | —% | —% | —% | |||||||
| Silver ounces produced (000’s) | 40 | — | — | — | — | |||||||
| Zinc pounds produced (000’s) | 1,099 | — | — | — | — | |||||||
| Lead pounds produced (000’s) | 413 | — | — | — | — | |||||||
|
Silver equivalent ounces produced1 (000’s) |
127 | — | — | — | — | |||||||
|
Silver equivalent ounces produced1 (average spot) (000’s) |
153 | — | — |
— |
— |
|||||||
| Silver ounces sold (000’s) | 99 | — | — | — | — | |||||||
| Zinc pounds sold (000’s) | 1,772 | — | — | — | — | |||||||
| Lead pounds sold (000’s) | 1,230 | — | — | — | — | |||||||
| Silver equivalent ounces sold1 (000’s) | 267 | — | — | — | — | |||||||
|
Silver equivalent ounces sold1 (average spot) (000’s) |
267 | — | — | — | — | |||||||
| Average realized price per silver ounce | $13.46 | $— | $— | $— | $— | |||||||
| Average realized price per zinc pound | $0.94 | $— | $— | $— | $— | |||||||
| Average realized price per lead pound | $0.85 | $— | $— | $— | $— | |||||||
| Metal sales | $4.1 | $— | $— | $— | $— | |||||||
| Costs applicable to sales | $11.5 | $— | $— | $— | $— | |||||||
| Adjusted CAS per AgEqOz1 | $10.46 | $— | $— | $— | $— | |||||||
| Adjusted CAS per average spot AgEqOz1 | $8.69 | $— | $— | $— | $— | |||||||
| Exploration expense | $2.3 | $0.1 | $— | $— | $— | |||||||
| Cash flow from operating activities | $(6.8) | $— | $— | $— | $— | |||||||
| Sustaining capital expenditures (excludes capital lease payments) | $0.4 | $— | $— | $— | $— | |||||||
| Development capital expenditures | $17.5 | $19.0 | $18.6 | $— | $— | |||||||
| Total capital expenditures | $17.9 | $19.0 | $18.6 | $— | $— | |||||||
| Free cash flow1 | $(24.7) | $(19.0) | $(18.6) | $— | $— | |||||||
Contacts
Coeur Mining, Inc.
Paul DePartout, 312-489-5800
Director,
Investor Relations
www.coeur.com