Coeur d’Alene Mines Corporation (CDE) Q3 2012 Earnings Call November 6, 2012 2:00 PM ET
Operator
Good afternoon. My name is Matthew and I will be your conference operator today. At this time, I would like to welcome everyone to the Coeur d’Alene Mines Corporation Third Quarter 2012 Quarterly Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. (Operator Instructions).
Thank you. Wendy Yang, you may begin your conference.
Wendy Yang – VP, Investor RelationsThank you, Matthew. Welcome to our third quarter conference call. I am Wendy Yang; I am Vice President of Investor Relations. This call is being webcast on our website at www.coeur.com, where we have also posted the third quarter 2012 financial results presentation to accompany our remarks. Telephonic replay of this call will be available on our website until November 20th.
We will be discussing some forward-looking information today and we caution our audience that such statements involve risks and uncertainties that could cause actual results to differ materially from projections. Please refer to the cautionary statement shown on slide two of our financial presentation and review the risk factors, including some that are specific to our industry that are also described in our latest annual and quarterly financial results filed with the U.S. SEC and Canadian regulators.
On our call today we have Mitchell Krebs; Frank Hanagarne; Leon Hardy; Randy Buffington and Don Birak.
With that, Ill turn it over to Mitch.
Mitchell Krebs – President & CEOHello and thanks for participating in our third quarter call. The companys performance for the nine months has been strong with silver production totaling 14.2 million ounces and gold production exceeding 165,000 ounces. But we did had a disappointing third quarter at our two largest operations.
Palmarejos production was down due to unexpected underground challenges that were encountered in September in high grade area of the mine and to a transition phase in the open-pit that negatively impacted grades. It’s important to stress that what impacted third quarter production in the 76 clavo in Palmarejos underground operation is a timing issue and is temporary in nature.
No reserves are lost or at risk and the area where poor ground conditions were encountered comprised less than 10% of this specific area of the underground mine. We’re still mining in some areas of the 76 clavo and we will go back and mine the second secondary stopes in this area that impacted the third quarter, once we complete some additional back filling in previously mined primary stopes. In the meantime, we will rely more on the fully developed 108 clavo in the underground mine.
At San Bartolomé, the operations lost of days of production in late August due to power disruptions which reduced the number of tons processed and increased costs on a per ounce basis. Our other two operations performed well during the quarter. Our Rochester mine in Nevada and our Kensington mine in Alaska both delivered higher production at lower costs.
Company-wide, we expect 2012 production to total 18.5 million to 19 million ounces of silver and between 215,000 and 225,000 ounces of gold. We expect cash operating costs to be approximately $7.50 per ounce of silver.
As we look ahead to the 2013, we expect silver and gold production levels to be consistent with 2011 and with what we expect to produce here in 2012. We will be providing more specific 2013 guidance early next year.
During the quarter, we acted on a $100 million share repurchase program that our Board authorized in June by repurchasing $10 million of our common shares and weve reduced outstanding debt by nearly $100 million over the past 12 months which has left just $48 million of remaining debt on the balance sheet compared to total shareholders equity of $2.1 billion.
