CHICAGO–(BUSINESS WIRE)– Coeur Mining, Inc. (the “Company” or “Coeur”) (NYSE: CDE) today reported first quarter 2017 financial results, achieving $206.1 million of revenue, which represented increases of 29% quarter-over-quarter and 39% year-over-year. Net income during the first quarter was $18.7 million, or $0.10 per share, and adjusted net income¹ was $7.0 million, or $0.04 per share.

Quarterly cash flow from operating activities was $55.3 million, increases of $29.8 million quarter-over-quarter and $48.7 million year-over-year. First quarter adjusted EBITDA¹ totaled $56.6 million, representing a 29% increase quarter-over-quarter and a 51% increase year-over-year. Last twelve month (LTM) adjusted EBITDA¹was $235.4 million, representing increases of 9% quarter-over-quarter and 71% year-over-year. Free cash flow¹ increased $35.8 million quarter-over-quarter and $56.0 million year-over-year to $31.3 million.

Balance sheet improvements since the beginning of 2016 resulted in a $7.5 million, or 68%, year-over-year decline in quarterly interest expense. Combined with higher LTM adjusted EBITDA¹, the Company's significant debt reductions resulted in total and net debt-to-LTM adjusted EBITDA¹ ratios of 0.9x and 0.04x, respectively, compared to 3.7x and 2.5x a year earlier.

First Quarter Highlights

• Silver and gold production were 3.9 million ounces and 88,218 ounces, respectively, or 9.2 million silver equivalent ounces (AgEqOz)¹, representing a decline of 8% quarter-over-quarter and an increase of 14% year-over-year
• Sales of 4.5 million ounces of silver and 110,874 ounces of gold, or 11.1 million AgEqOz¹, increased 29% quarter-over-quarter and 34% year-over-year
• Companywide all-in sustaining costs (AISC) and adjusted AISC per average spot AgEqOz¹ were $13.65 and $13.66, respectively, both declining 6% quarter-over-quarter. On a 60:1 price equivalence basis, companywide AISC and adjusted AISC per AgEqOz¹ were $15.01 and $15.02, both representing quarter-over-quarter decreases of 7%
• Primary silver operations delivered costs applicable to sales (CAS) and adjusted CAS per average spot AgEqOz¹ of $10.64 and $10.63, respectively, representing quarter-over-quarter decreases of 7% and 6%
• For primary gold operations, CAS and adjusted CAS per gold equivalent ounce (AuEqOz)¹ were $788 and $791, respectively, representing 17% increases compared to the prior quarter
• Cash and equivalents totaled $210.0 million at March 31, 2017, an increase of nearly $50 million compared to year-end
• The Company completed the sale of the Joaquin project for consideration of $27.4 million, realizing a gain of $21.1 million; Coeur also retained a 2.0% NSR royalty on the Joaquin project
• Quarterly expensed exploration tripled year-over-year to $5.3 million primarily due to expanded drilling activities at Palmarejo and Kensington and the near-completion of a 25,000 meter drill program at La Preciosa to support a revised Preliminary Economic Assessment (PEA) expected later this year

"Coeur delivered a solid first quarter with strong earnings and cash flows, affirming the steps we have taken to reposition our portfolio and balance sheet," said Mitchell J. Krebs, Coeur's President and Chief Executive Officer. "Rising production levels at our Palmarejo mine and higher metal sales more than offset the impact of record rainfall at our Rochester mine in Nevada and persistent drought conditions at our San Bartolomé mine in Bolivia. Companywide costs also continued to trend lower with first quarter metrics coming in well below full-year guidance. Combined with considerable interest savings from recent balance sheet improvements, we reported significantly higher earnings and cash flows compared to the same period last year.

"Near-mine and early-stage exploration programs have been accelerated as planned with 17 drill rigs active at the end of the quarter compared to three a year earlier. In addition to the encouraging drill results we have seen at Palmarejo, we are nearing completion of a 25,000 meter drill program at La Preciosa to support a revised PEA expected later this year targeting a potential smaller, higher-grade, lower capital silver-gold operation.

"Concurrent with our increased exploration activities, our expansion initiatives at Palmarejo, Rochester and Kensington remain on schedule and on budget. At Palmarejo, we are on track to achieve 50% production increases this year from higher-grade underground operations. At Rochester, we are completing the last element of a multi-year expansion effort to position the mine for strong and sustainable cash flow. At Kensington, we expect higher-grade ore from the Jualin deposit to boost production and further reduce unit costs starting late this year. This strong execution continues to support our trajectory toward a higher-margin, higher cash flowing precious metals mining company."

Financial Results

First quarter revenue increased 29% to $206.1 million primarily due to a reduction in metal inventory. Silver sales contributed 38% while gold sales contributed 62%. Average realized silver and gold prices were $17.61 and $1,149 per ounce, respectively, representing an increase of 6% and decrease of 2% quarter-over-quarter. The average realized gold price reflects the sale of 19,300 ounces to Franco-Nevada at a price of $800 per ounce.

Costs applicable to sales were $132.7 million for the quarter, increasing 30% as a result of higher silver and gold ounces sold. General and administrative expenses were $10.1 million, $3.5 million higher than the preceding quarter, largely attributable to higher outside service fees and increased employee-related costs, including one-time severance costs.

Net income, EBITDA¹ and free cash flow¹ were positively impacted quarter-over-quarter by a reduction in metal inventory, lower companywide unit costs, and the sale of the Joaquin project in Argentina for total consideration of $27.4 million.

Operations

Highlights of first quarter 2017 results for each of the Company's operating segments are provided below.

• Mining rates at Guadalupe and Independencia averaged 2,700 and 1,225 tons per day, respectively, during the quarter and remain on-track to reach a year-end combined target of 4,500 tons per day
• Higher mining rates drove a 25% quarter-over-quarter and 86% year-over-year increase in silver equivalent¹ production to 3.4 million ounces
• In addition to higher production, metal sales were also positively impacted by a reduction in metal inventory, with silver sales more than doubling both quarter-over-quarter and year-over-year to 2.0 million and gold sales increasing to 41,045 ounces, up 164% quarter-over-quarter and 218% year-over-year
• Gold sales to Franco-Nevada were 19,300 ounces at a price of $800 per ounce. For the full year, the Company expects 40% – 45% of Palmarejo's gold sales to be to Franco-Nevada at $800 per ounce
• First quarter adjusted CAS per average spot AgEqOz¹ was $8.87, declining 12% quarter-over-quarter and 12% year-over-year and below full-year guidance of $9.00 – $9.50 per ounce as a result of lower unit costs
• Palmarejo achieved quarterly free cash flow¹ of $44.3 million, its highest in nearly four years

• Record precipitation in the first half of the quarter negatively impacted crushing and placement rates and diluted process solutions. While operations normalized in March, quarter-over-quarter silver equivalent¹ production was 18% lower, although 12% higher year-over-year. Production is expected to improve in the second quarter and increase modestly following the anticipated completion of the Stage IV leach pad expansion in the third quarter
• Silver and gold sales increased 7% and 5%, respectively, quarter-over-quarter to 1.3 million ounces and 13,592 ounces due to a reduction in metal inventory
• Adjusted CAS per average spot AgEqOz¹ increased 6% to $11.81 during the quarter and are expected to trend lower throughout the remainder of the year as production and sales increase
• Negative quarterly free cash flow¹ was primarily driven by weather-related lower production and higher capital expenditures, principally related to the Stage IV leach pad expansion

• As anticipated, first quarter production declined 22% quarter-over-quarter to 26,197 ounces as a result of lower grades. Higher grades and production are expected in the second half of the year
• Adjusted CAS per gold ounce (AuOz) increased 10% quarter-over-quarter to $884 due to lower grades; unit costs are expected to trend lower through the remainder of the year as grades improve
• Development of the Jualin decline remains on track for initial production later this year
• The Company is increasing its exploration program by $6 million largely to expand the size of Jualin and support sustained mining activities from this high-grade deposit. This increase in exploration expense will be equally offset by lower underground capital development

• Gold production during the first quarter declined 32% to 20,873 ounces as a result of leach pad offload timing; production is expected to increase in the second and third quarters as the remainder of the high-grade Golden Reward deposit is mined
• Sales of 24,093 ounces of gold represented a 19% quarter-over-quarter decline due to lower production, which was partially offset by a reduction of metal inventory
• As a result of lower production during the quarter, adjusted CAS per AuEqOz¹ increased 21% to $670, well below full-year guidance of $775 – $825
• During the quarter, Wharf generated $7.7 million of free cash flow¹, bringing cumulative free cash flow¹ since its acquisition in February 2015 for $99 million to $94.1 million

• Persistent nationwide drought conditions resulted in a 3% quarter-over-quarter decline in silver production to 1.2 million ounces; higher production is expected in the second quarter as a result of more precipitation and a greater contribution of higher-grade third party ore purchases
• Adjusted CAS per silver ounce (AgOz) increased 14% during the quarter due to lower production and sales; unit costs are expected to decrease during the second quarter as production and sales increase
• Free cash flow¹ for the first quarter increased almost fourfold to $10.9 million due to the timing of cash flows related to sales

• Silver production from the Company's silver stream on the Endeavor mine in Australia was 39,941 ounces for the quarter, declining 9% quarter-over-quarter
• In response to higher zinc and lead prices, the operator of the mine has begun to ramp up with higher production and free cash flow¹ expected throughout the remainder of the year

Exploration

First quarter expensed exploration was $5.3 million, unchanged from the previous quarter and up from $1.7 million from the same period in 2016, while capitalized exploration totaled $2.3 million. At quarter-end, the Company had 17 drill rigs active across its portfolio compared to just three a year earlier.

Highlights from Coeur's expanded exploration activities include:

• A 25,000 meter drill program at La Preciosa is nearing completion with an updated PEA anticipated later this year
• Since early 2017, four drills have been active underground at Guadalupe and Independencia focused on both resource expansion and conversion. Three to four additional drills have been active on surface, targeting resource expansion at North Independencia, North Guadalupe, La Nación and La Bavisa. Preliminary results from the Zapeta vein, located at the north end of Guadalupe, and the Hidalgo vein, located at the north end of Independencia, have been encouraging and are expected to be included in the Company's year-end resource statement
• Exploration efforts at Kensington are accelerating with an incremental $6 million allocated to the 2017 budget of $4 million. These funds are expected to expand the size of Jualin and support sustained mining activities from this high-grade deposit. Resource expansion of veins #4 and #5 remains a strong priority, while drilling on vein #4 focused on resource conversion also progresses. As a result, the Company is increasing its full-year exploration expense guidance to $29 – $31 million

Full-Year 2017 Outlook

Production guidance remains unchanged from guidance originally published January 5, 2017 and affirmed on April 6, 2017. Cost guidance per average spot silver equivalent ounce using 69:1 silver-to-gold equivalence was updated by applying 70:1 equivalence on March 23, 2017.

Exploration expense guidance has been increased by $6 million to further accelerate the expansion of Kensington's Jualin deposit. Capital expenditure guidance has been equally reduced due to lower anticipated underground capital development expenditures at Kensington.

Financial Results and Conference Call

Coeur will report its operational and financial results for first quarter 2017 on April 26, 2017 after the New York Stock Exchange closes for trading. There will be a conference call on April 27, 2017 at 11:00 a.m. Eastern time.

The conference call and presentation will also be webcast on the Company’s website www.coeur.com. 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, Hans Rasmussen, Senior Vice President of Exploration, and other members of management. A replay of the call will be available through May 11, 2017.

About Coeur

Coeur Mining is a well-diversified, growing precious metals producer with five precious metals mines in the Americas employing approximately 2,000 people. Coeur produces from its wholly-owned operations: the Palmarejo silver-gold complex in Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska, the Wharf gold mine in South Dakota, and the San Bartolomé silver mine in Bolivia. The Company also has a non-operating interest in the Endeavor mine in Australia. In addition, the Company owns the La Preciosa project in Mexico, a silver-gold exploration stage project. Coeur conducts exploration activities in North and South 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, costs, grades, margin, cash flow, expectations regarding the La Preciosa project and the timing of publication of a PEA, operations at the Palmarejo complex, expectations regarding the Palmarejo gold stream agreement, expansion at Rochester, grades and development efforts at Kensington, operations at Wharf, third party ore purchases at San Bartolomé, and cash flow and production levels at the Endeavor mine. 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, cost, and expense 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 and silver 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 silver and gold, 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, the political risks and uncertainties associated with operations in Bolivia, 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 or 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.

Non-U.S. GAAP Measures

We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non-U.S. GAAP financial measures, including EBITDA, adjusted EBITDA, net debt, net debt-to-LTM adjusted EBITDA, total debt-to-LTM adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), all-in sustaining costs, and adjusted all-in sustaining costs. We believe that these adjusted measures provide meaningful information to assist management, investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring operations because they exclude items that may not be indicative of, or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. We believe EBITDA, adjusted EBITDA, net debt, net debt-to-LTM adjusted EBITDA, total debt-to-LTM adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), all-in sustaining costs, and adjusted all-in sustaining costs are important measures in assessing the Company's overall financial performance. For additional explanation regarding our use of non-U.S. GAAP financial measures, please refer to our Form 10-K for the year ended December 31, 2016 and our quarterly report on Form 10-Q for the quarter ended March 31, 2017.

Notes

1. EBITDA, adjusted EBITDA, net debt, net debt-to-LTM adjusted EBITDA, total debt-to-LTM adjusted EBITDA, adjusted net income (loss), costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), adjusted costs applicable to sales per silver equivalent ounce (or per gold equivalent ounce or per average spot silver equivalent ounce), all-in sustaining costs, and adjusted all-in sustaining costs are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. For purposes of silver and gold equivalence, a 60:1 silver to gold ratio is assumed except where noted as average spot prices. Please see table below for average silver and gold spot prices during the period and the silver to gold ratio. Free cash flow is defined as cash flow from operating activities less capital expenditures and gold production royalty payments. Please see table in Appendix for the calculation of consolidated free cash flow.
2. Includes capital leases. Net of debt issuance costs and premium received.

View source version on businesswire.com: http://www.businesswire.com/news/home/20170426006703/en/

Coeur Mining, Inc.
Courtney Lynn, Vice President, Investor Relations and Treasurer
(312) 489-5910
www.coeur.com

Source: Coeur Mining, Inc.

Original Article: http://investors.coeur.com/file.aspx?IID=4349317&FID=2000269591