Provides Full-Year 2021 Guidance
CHICAGO–(BUSINESS WIRE)–Coeur Mining, Inc. (�Coeur or the Company) (NYSE: CDE) today reported fourth quarter 2020 financial results, including revenue of $228.3 million, cash flow from operating activities of $67.3 million and GAAP net income from continuing operations of $11.9 million, or $0.05 per share. On an adjusted basis1, the Company reported EBITDA of $84.0 million, cash flow from operating activities prior to changes in working capital of $58.5 million and net income from continuing operations of $19.1 million, or $0.08 per share.
For the full year, Coeur reported revenue of $785.5 million, cash flow from operating activities of $148.7 million and GAAP net income from continuing operations of $25.6 million, or $0.11 per share. On an adjusted basis1, the Company reported EBITDA of $263.4 million, cash flow from operating activities prior to changes in working capital of $162.4 million and net income from continuing operations of $59.0 million, or $0.24 per share.
Key Highlights
Im extremely proud of how our team responded to the unforeseen challenges in 2020. Their tireless efforts and collaboration helped protect the health and safety of our workforce, their families and the communities where we operate, while also minimizing disruptions to our business, said Mitchell J. Krebs, President and Chief Executive Officer. Our strong culture allowed us to effectively navigate COVID-19 while also achieving several important strategic objectives during the year.
Mr. Krebs continued, We generated $49.4 million of free cash flow1 during 2020 due to a combination of higher gold and silver prices and strong operational performances at our Palmarejo, Wharf and Kensington mines. We also kicked off a major expansion of our Rochester mine in Nevada, which we expect to be largely completed by late next year and reposition the operation as a strong, consistent, and long-term source of cash flow.
In addition to strong financial and operational performance, we also successfully delivered on the largest exploration program in our history, which helped drive 22% and 42% increases in our gold and silver reserves, respectively. Notably, 2020 represents the largest level of total reserves in Coeurs history. We plan to increase our exploration investment again this year with the goals of further extending our mine lives, generating more new discoveries and driving higher returns on invested capital in coming years.
We believe our strategy of safely and responsibly discovering, developing, and operating a balanced portfolio of North American-based precious metals assets will create long-term value for our stockholders. We look forward to delivering on our key objectives this year that can maximize cash flow, returns and net asset value, while also continuing to enhance our culture and peer-leading environmental, social and governance profile, concluded Mr. Krebs.
Financial and Operating Highlights (Unaudited)
(Amounts in millions, except per share amounts, gold/silver ounces produced & sold, and per-ounce metrics) | 2020 |
| 4Q 2020 | 3Q 2020 | 2Q 2020 |
| 1Q 2020 |
| 2019 |
| 4Q 2019 | ||||||||||||||||
Gold Sales | $ | 584.6 | $ | 162.0 | $ | 167.1 | $ | 127.9 |
| $ | 127.6 |
| $ | 493.3 |
| $ | 134.3 |
| |||||||||
Silver Sales | $ | 200.2 | $ | 66.4 | $ | 62.6 | $ | 26.3 |
| $ | 44.9 |
| $ | 191.5 |
| $ | 54.8 |
| |||||||||
Consolidated Revenue | $ | 785.5 | $ | 228.3 | $ | 229.7 | $ | 154.2 |
| $ | 173.2 |
| $ | 711.5 |
| $ | 195.0 |
| |||||||||
Costs Applicable to Sales3 | $ | 440.3 | $ | 118.6 | $ | 112.8 | $ | 90.0 |
| $ | 118.9 |
| $ | 551.2 |
| $ | 146.6 |
| |||||||||
General and Administrative Expenses | $ | 33.7 | $ | 8.4 | $ | 7.8 | $ | 8.6 |
| $ | 8.9 |
| $ | 34.5 |
| $ | 7.6 |
| |||||||||
Net Income (Loss) | $ | 25.6 | $ | 11.9 | $ | 26.9 | $ | (1.2 | ) | $ | (11.9 | ) | $ | (346.9 | ) | $ | (270.9 | ) | |||||||||
Net Income (Loss) Per Share | $ | 0.11 | $ | 0.05 | $ | 0.11 | $ | (0.01 | ) | $ | (0.05 | ) | $ | (1.59 | ) | $ | (1.13 | ) | |||||||||
Adjusted Net Income (Loss)1 | $ | 59.0 | $ | 19.1 | $ | 38.2 | $ | 2.6 |
| $ | (0.9 | ) | $ | (54.6 | ) | $ | (3.3 | ) | |||||||||
Adjusted Net Income (Loss)1 Per Share | $ | 0.24 | $ | 0.08 | $ | 0.16 | $ | 0.01 |
| $ | |
| $ | (0.25 | ) | $ | (0.01 | ) | |||||||||
Weighted Average Shares Outstanding |
| 242.5 |
| 244.3 |
| 243.8 |
| 240.9 |
|
| 240.3 |
|
| 218.8 |
|
| 238.7 |
| |||||||||
EBITDA1 | $ | 214.8 | $ | 76.7 | $ | 77.3 | $ | 35.3 |
| $ | 25.5 |
| $ | (154.4 | ) | $ | (214.5 | ) | |||||||||
Adjusted EBITDA1 | $ | 263.4 | $ | 84.0 | $ | 90.8 | $ | 42.2 |
| $ | 46.5 |
| $ | 173.9 |
| $ | 59.8 |
| |||||||||
Cash Flow from Operating Activities | $ | 148.7 | $ | 67.3 | $ | 79.5 | $ | 9.9 |
| $ | (8.0 | ) | $ | 91.9 |
| $ | 39.3 |
| |||||||||
Capital Expenditures | $ | 99.3 | $ | 37.4 | $ | 23.0 | $ | 16.7 |
| $ | 22.2 |
| $ | 99.8 |
| $ | 21.0 |
| |||||||||
Free Cash Flow1 | $ | 49.4 | $ | 29.8 | $ | 56.5 | $ | (6.7 | ) | $ | (30.2 | ) | $ | (7.9 | ) | $ | 18.4 |
| |||||||||
Cash, Equivalents & Short-Term Investments | $ | 92.8 | $ | 92.8 | $ | 77.1 | $ | 70.9 |
| $ | 52.9 |
| $ | 55.6 |
| $ | 55.6 |
| |||||||||
Total Debt2 | $ | 275.5 | $ | 275.5 | $ | 301.1 | $ | 348.6 |
| $ | 343.1 |
| $ | 295.5 |
| $ | 295.5 |
| |||||||||
Average Realized Price Per Ounce Gold | $ | 1,641 | $ | 1,663 | $ | 1,754 | $ | 1,641 |
| $ | 1,490 |
| $ | 1,342 |
| $ | 1,407 |
| |||||||||
Average Realized Price Per Ounce Silver | $ | 20.79 | $ | 24.21 | $ | 24.15 | $ | 16.25 |
| $ | 16.63 |
| $ | 16.07 |
| $ | 16.99 |
| |||||||||
Gold Ounces Produced |
| 355,678 |
| 96,377 |
| 95,995 |
| 78,229 |
|
| 85,077 |
|
| 359,418 |
|
| 94,716 |
| |||||||||
Silver Ounces Produced |
| 9.7 |
| 2.8 |
| 2.6 |
| 1.6 |
|
| 2.7 |
|
| 11.7 |
|
| 3.1 |
| |||||||||
Gold Ounces Sold |
| 356,251 |
| 97,400 |
| 95,283 |
| 77,933 |
|
| 85,635 |
|
| 367,650 |
|
| 95,532 |
| |||||||||
Silver Ounces Sold |
| 9.6 |
| 2.7 |
| 2.6 |
| 1.6 |
|
| 2.7 |
|
| 11.9 |
|
| 3.3 |
|
Financial Results
Fourth quarter 2020 revenue totaled $228.3 million compared to $229.7 million in the prior period and $195.0 million in the fourth quarter of 2019. The Companys gold production remained consistent quarter-over-quarter at 96,377 ounces, while silver production increased 11% to approximately 2.8 million ounces. Gold and silver sales during the quarter totaled 97,400 and 2.7 million ounces, respectively, slightly higher than the prior period.
The Company generated $785.5 million in revenue during 2020, representing a 10% increase year-over-year. Full-year gold and silver production totaled 355,678 and approximately 9.7 million ounces, respectively, compared to 359,418 ounces of gold and approximately 11.7 million ounces of silver in 2019. Metal sales in 2020 included 356,251 and 9.6 million ounces of gold and silver, respectively.
Average realized gold and silver prices for the quarter were $1,663 and $24.21 per ounce, respectively, compared to $1,754 and $24.15 per ounce in the prior period. Gold and silver sales accounted for 71% and 29% of fourth quarter revenue, respectively. The Companys U.S. operations accounted for approximately 59% of fourth quarter revenue, down from approximately 64% in the prior period.
For the full year, average realized gold and silver prices increased 22% and 29%, respectively, to $1,641 and $20.79 per ounce. Gold and silver sales contributed to 74% and 25% of revenue in 2020, respectively. Approximately 63% of metal sales came from Coeurs U.S. operations in 2020, up from approximately 58% in 2019.
Costs applicable to sales3 totaled $118.6 million and $440.3 million for the fourth quarter and full year, respectively, compared to $112.8 million and $551.2 million in the prior periods. Relatively higher costs during the fourth quarter were largely attributable to increased production at Rochester. The year-over-year decrease in costs was primarily driven by the temporary suspension of mining and processing activities at Silvertip.
General and administrative expenses increased 8% quarter-over-quarter to $8.4 million and decreased slightly year-over-year to $33.7 million, remaining within Coeurs 2020 guidance range of $32.0 – $36.0 million. Higher general and administrative expense in the fourth quarter reflects increased employee-related costs and outside service fees, while the lower full-year expense was driven by decreased employee-related costs and legal fees.
Exploration expense for the fourth quarter and full year totaled $11.6 million and $42.6 million, respectively, compared to $12.8 million in the third quarter and $22.5 million in 2019. The significant increase in exploration expense during 2020 was driven by Coeur executing its largest and most successful drilling campaign in Company history. See the Operations and Exploration sections for additional detail on the Companys exploration activities.
Operating costs related to COVID-19 mitigation and response efforts totaled $5.1 million during the fourth quarter, compared to $4.0 million in the prior period, bringing the full-year expense to approximately $15.6 million. These costs were primarily driven by employee-related expenses at Palmarejo and Kensington, and are included in Pre-development, reclamation, and other expenses on the Companys income statement.
Coeur recorded an income tax expense of $25.0 million and $37.0 million during the fourth quarter and for the full year, respectively. Cash income and mining taxes paid during the quarter totaled approximately $15.4 million, bringing the full-year figure to $35.5 million. Cash taxes paid in 2020 primarily reflect higher income and mining tax payments in Mexico. Additionally, the Company expects to pay approximately $30.0 – $35.0 million in cash taxes during the first quarter of 2021 primarily as a result of its annual tax filings in Mexico.
Quarterly operating cash flow totaled $67.3 million compared to $79.5 million in the prior period, largely driven by lower operating cash flow from Wharf quarter-over-quarter. The Company satisfied the remaining $9.9 million obligation under its prepayment agreement at Kensington and exercised an option to receive an additional $15.0 million prepayment, resulting in a net cash inflow of approximately $5.1 million in the fourth quarter. Changes in working capital during the quarter were $8.8 million, compared to $22.1 million in the prior period, largely driven by the timing of payments. For the full year, operating cash flow increased 62% to $148.7 million. The significant improvement in operating cash flow year-over-year was largely driven by increased profitability at Palmarejo, Kensington and Wharf.
Capital expenditures during the fourth quarter were $37.4 million (63% higher quarter-over-quarter) bringing the full-year total to $99.3 million (consistent year-over-year), slightly below the low end of Coeurs 2020 guidance range of $100.0 – $115.0 million. Higher quarterly capital expenditures were driven by increased investment across the Companys portfolio, including $14.8 million related to the expansion of Rochester ($28.6 million for the full year). Sustaining and development capital expenditures accounted for approximately 60% and 40%, respectively, of the Companys total capital investment in 2020.
Liquidity Update
Coeur continued to prudently manage its balance sheet during the fourth quarter of 2020 by repaying $25.6 million of total debt2, including the remaining outstanding borrowings ($20.0 million) under its RCF. Late in the quarter, Coeur increased the aggregate size of its RCF from $250.0 million to $300.0 million in preparation for major construction on the Plan of Operations Amendment 11 (POA 11) expansion project at Rochester.
The Company also opportunistically monetized certain equity investments during the fourth quarter of 2020, including substantially all of its holdings in Metalla Royalty & Streaming Ltd., resulting in net proceeds of approximately $11.0 million.
Coeur ended the year with total debt2 of $275.5 million (9% and 7% lower quarter-over-quarter and year-over-year, respectively) and cash and cash equivalents of $92.8 million (20% and 67% higher quarter-over-quarter and year-over-year, respectively).
Hedging Update
The Company did not execute any additional zero-cost collar (ZCC) hedges during the fourth quarter. Coeurs hedging strategy remains focused on supporting cash flow generation during the POA 11 expansion project at Rochester, which the Company expects to fund with a combination of cash on hand, internally generated cash flow and debt capacity.
Coeur completed its gold hedging program for 2021 last year and will proactively monitor market conditions to potentially layer in additional ZCC hedges on up to 50% of expected gold production in 2022. The Companys silver price exposure remains unhedged. An overview of the hedges currently implemented is outlined below:
| 2021 | 2022 | ||
Gold Ounces Hedged | 158,700 |
| 126,000 | |
Avg. Ceiling ($/oz) | $1,875 |
| $2,030 | |
Avg. Floor ($/oz) | $1,600 |
| $1,626 |
Rochester Expansion
Coeur announced the details of the expansion of Rochester in an updated technical report in mid-December 2020, reflecting significant reserve growth and the benefits of a larger-scale project. Notably, the 18-year, reserve-based mine life extends Rochesters production profile through 2038 with opportunities for extension with continued drilling. The expansion project includes the construction of a new leach pad, a crushing facility equipped with two high-pressure grinding roll (HPGR) units, a Merrill-Crowe process plant, and related infrastructure to support the extension of Rochesters mine life.
A planned increase in annual crusher throughput, from approximately 14 million tons to over 28 million tons, is expected to drive annual silver and gold production to more than 8 million and approximately 80,000 ounces, respectively, for the initial ten years following the expansion. Together with lower expected operating costs, these improvements are projected to lead to significantly higher cash flow post-expansion.
Coeur continued to advance the POA 11 expansion project on schedule during the fourth quarter of 2020 by completing early-stage earthworks (e.g., site preparation, clearing and grubbing for the new leach pad) and installing project-specific infrastructure (e.g., offices, power, communications). In January 2021, Coeur began work on excavating areas for the Merrill-Crowe process plant and crusher corridor, and expects to begin crushing over-liner material for the Stage VI leach pad during the second half of the year.
Key elements of the project timeline are highlighted below:
| Expected Start Date | Target Completion Date |
Leach Pad (Incl. Ancillary Facilities) | 2H 2020 ? | Mid-2022 |
Merrill-Crowe Process Plant | 1H 2021 ? | YE 2022 |
Crushing Circuit | 1H 2021 ? | YE 2022 |
Supporting Infrastructure | 2H 2020 ? | Mid-2022 |
Operations
Fourth quarter and full-year 2020 highlights for each of the Companys operations are provided below.
Palmarejo, Mexico
(Dollars in millions, except per ounce amounts) | 2020 | 4Q 2020 | 3Q 2020 | 2Q 2020 | 1Q 2020 | 2019 | 4Q 2019 | |||||||||
Tons milled | 1,751,525 | 509,848 | 492,474 | 269,641 | 479,562 | 1,755,957 | 486,779 | |||||||||
Average gold grade (oz/t) | 0.07 | 0.08 | 0.07 | 0.07 | 0.07 | 0.08 | 0.07 | |||||||||
Average silver grade (oz/t) | 4.45 | 4.30 | 4.37 | 4.46 | 4.69 | 4.85 | 5.11 | |||||||||
Average recovery rate Au | 89.9% | 88.9% | 91.3% | 86.0% | 91.6% | 84.3% | 84.9% | |||||||||
Average recovery rate Ag | 80.4% | 81.3% | 82.8% | 72.2% | 81.5% | 79.3% | 81.7% | |||||||||
Gold ounces produced | 110,608 | 34,511 | 29,296 | 15,223 | 31,578 | 111,932 | 28,702 | |||||||||
Silver ounces produced (000s) | 6,269 | 1,783 | 1,784 | 867 | 1,835 | 6,762 | 2,029 | |||||||||
Gold ounces sold | 110,822 | 35,359 | 27,252 | 16,924 | 31,287 | 116,104 | 27,952 | |||||||||
Silver ounces sold (000s) | 6,302 | 1,767 | 1,765 | 875 | 1,895 | 6,841 | 1,980 | |||||||||
Average realized price per gold ounce | $1,390 | $1,395 | $1,446 | $1,399 | $1,331 | $1,220 | $1,238 | |||||||||
Average realized price per silver ounce | $21.03 | $24.45 | $23.98 | $16.35 | $17.25 | $16.23 | $17.28 | |||||||||
Metal sales | $286.6 | $92.5 | $81.8 | $38.0 | $74.3 | $252.7 | $68.9 | |||||||||
Costs applicable to sales3 | $125.2 | $36.1 | $34.3 | $18.8 | $36.0 | $141.9 | $34.8 | |||||||||
Adjusted CASper AuOz1 | $609 | $542 | $602 | $686 | $645 | $683 | $622 | |||||||||
Adjusted CASper AgOz1 | $9.13 | $9.61 | $10.06 | $8.13 | $8.37 | $9.11 | $8.79 | |||||||||
Exploration expense | $7.0 | $2.6 | $2.0 | $0.9 | $1.5 | $5.7 | $2.0 | |||||||||
Cash flow from operating activities | $118.3 | $43.2 | $49.7 | $(3.5) | $28.9 | $99.2 | $41.4 | |||||||||
Sustaining capital expenditures (excludes capital lease payments) | $25.5 | $9.0 | $4.9 | $4.5 | $7.1 | $21.9 | $6.2 | |||||||||
Development capital expenditures | $ | $(0.1) | $0.1 | $ | $ | $10.8 | $2.4 | |||||||||
Total capital expenditures | $25.5 | $8.9 | $5.0 | $4.5 | $7.1 | $32.7 | $8.6 | |||||||||
Free cash flow1 | $92.8 | $34.3 | $44.7 | $(8.0) | $21.8 | $66.5 | $32.8 |
Operational
Financial
Exploration
Other
Guidance
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
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