Coeur Announces Fourth Quarter and Full-Year 2013 Highlights and Provides 2014 Guidance

2014-01-16 17:01 ET - News Release

Coeur Mining, Inc. (the "Company" or "Coeur") (NYSE:CDE)(TSX:CDM) today announced summary operating and financial highlights for the fourth quarter and full-year 2013, and provided production guidance for 2014.

Highlights

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  • Performance during the fourth quarter and 2013 remained consistent, as does the 2014 outlook for tons mined, ounces produced, and silver grade.
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  • Gold production at Kensington increased 29% in the fourth quarter due primarily to 30% higher average head grade.
  • Full-year 2013 gold production rose 40% from 2012 to a record 114,821 ounces at Kensington.
  • Fourth quarter cash operating costs at Kensington are expected to be $746 per ounce1, approximately 24% lower than the third quarter 2013.
  • Full-year 2013 cash operating costs are expected to be $949 per ounce1.
  • Increased mill throughput is expected to offset declines in grade in 2014 leading to another year of expected strong production and cash flow at Kensington.
2, 2013 production of 32.7 million ounces was in-line with the low end of Company guidance and was approximately 8% higher than 2012 production.

"The Company’s ongoing efforts to maximize cash flow in the current lower price environment are reflected in our 2013 results. Full-year cash operating costs for silver are expected to be $9.87 per ounce1, which is within the guidance range provided by the Company, and cash operating costs for gold are expected to be $949 per ounce1, which is below Company guidance. We reduced planned capital expenditures by approximately 18% during 2013, completed several key internal expansion projects intended to maximize future revenue, eliminated approximately $6 million of early-stage exploration expense, and continued to manage price risk by extending our hedging program using downside put protection. We also created Coeur Capital to add higher-margin free cash flow from a growing portfolio of precious metals royalty and streaming interests.

"Our 2014 production guidance reflects a prioritization of `quality' of production ounces versus `quantity' of production ounces. During late 2013, the Company decided to defer development and production from the Guadalupe deposit at the Palmarejo silver and gold mine in Mexico based on this approach. We expect to replace these ounces with higher margin, lower-cost ore sources during the year. At Rochester, 2014 production guidance takes into account an expected slower ramp up in ounces recovered from the recently expanded leach pad. 2014 capital expenditures are expected to be below $80 million, representing a significant reduction from the 2013 level."

The Company maintains a strong balance sheet and liquidity position, which better allows it to manage through a protracted depressed price climate. It also provides additional flexibility to pursue high-return growth opportunities arising from the current environment. As of December 31, 2013, cash and equivalents were estimated to be $207 million.

Coeur’s fourth quarter and 2013 complete operational and financial results are scheduled to be released on February 19, 2014.

Table 1: Fourth Quarter and 2013 Production

(silver ounces in thousands)			4Q 2013			3Q 2013			Quarter Variance			2013			2012			Year Variance
			Silver		Gold			Silver		Gold			Silver		Gold			Silver		Gold			Silver		Gold			Silver		Gold
Palmarejo			1,994			35,486			1,918			29,893			4	%		19	%			7,603			116,536			8,236			106,038			(8	%)		10	%
San Bartolomé			1,498			—			1,528			—			(2	%)		n.a.			5,941			—			5,930			—			—	%		n.a.
Rochester			712			7,890			595			4,824			20	%		64	%			2,799			30,860			2,801			38,066			—	%		(19	%)
Martha			—			—			—			—			n.a.		n.a.			—			—			323			257			n.a.		n.a.
Kensington			—			37,404			—			29,049			n.a.		29	%			—			114,821			—			82,125			n.a.		40	%
Endeavor			135			—			162			—			(17	%)		n.a.			669			—			734			—			(9	%)		n.a.
Total			4,340			80,780			4,203			63,766			3	%		27	%			17,012			262,217			18,025			226,486			(6	%)		16	%

Table 2: Key Unaudited 2013E Financial Highlights

(millions, except average realized prices)			4Q 2013E			3Q 2013A			2013E			2012A
Avg. realized price per ounce - silver			$20.54/oz			$21.06/oz			$23.14/oz			$30.92/oz
Avg. realized price per ounce - gold			$1,249/oz			$1,329/oz			$1,387/oz			$1,665/oz
Sales of metal			$163 - $173			$201			$740 - $750			$895
Production costs applicable to sales			$97 - $107			$132			$460 - $470			$457
Administrative & general expenses			$12 - $14			$16			$53 - $55			$33
Exploration expenses			$2 - $4			$3			$19 - $21			$26
Pre-development, care, maintenance and other			$2 - $4			$4			$11 - $13			$1
Capital expenditures			$30 - $34			$33			$103 - $107			$116

Table 3: 2014 Production Outlook

(silver ounces in thousands)			Country			Silver			Gold
Palmarejo			Mexico			6,700 - 7,200			87,000 - 95,000
San Bartolomé			Bolivia			5,700 - 6,000			-
Rochester			Nevada, USA			4,100 - 4,400			28,000 - 31,000
Endeavor			Australia			500 - 600			-
Kensington			Alaska, USA			-			105,000 - 112,000
Total						17,000 - 18,200			220,000 - 238,000

In 2014, the second and third quarters are expected generate higher production for both silver and gold compared to the first and fourth quarters.

Palmarejo

Rochester

Carrying Value Impairment

In the course of preparing the Company's 2013 financial statements, impairment testing was performed for each of the Company's mines based on life-of-mine cash flow projections using reasonable assumptions for silver and gold prices. As a result of these tests, Coeur expects to record a non-cash impairment charge of approximately $770 million in the fourth quarter of 2013 to reduce the carrying value of the Palmarejo and Kensington assets, primarily resulting from the impact of sustained lower silver and gold prices.

Amendments to Credit Facility Covenants

The Company has completed certain necessary amendments to the financial covenants on its undrawn $100 million revolving credit facility, which will be detailed in the Company's Form 8-K to be filed January 16, 2014.

Audited Financial Results and Conference Call

Coeur will report audited financial results and complete operational results for the fourth quarter and full-year 2013 on February 19, 2014 after the New York and Toronto stock exchanges close for trading. There will be a conference call on February 20, 2014 at 11:00 a.m. Eastern time.

			Dial-In Numbers:			(877) 768-0708 (US and Canada)
						(660) 422-4718 (International)
			Conference ID:			338 94 552

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, Vice President of Exploration, Joe Phillips, Senior Vice President and Chief Development Officer, and other members of management.

A replay of the call will be available through March 6, 2014.

			Replay numbers:			(855) 859-2056 (US and Canada)
						(404) 537-3406 (International)

1. Cash operating costs is a non-GAAP measure. Cash operating costs per silver ounce based on weighted average of Palmarejo, San Bartolomé, Rochester, and Endeavor.
Cash operating costs per gold ounce based on Kensington only.

2. Silver equivalent calculated using average realized prices of $23.14 per ounce of silver and $1,387 per ounce of gold for 2013 and $30.92 per ounce of silver and $1,665 per ounce of gold for 2012.