Coeur Reports Fourth Quarter and Full-Year 2023 Results

0

Strong fourth quarter performances at Rochester and Wharf drove a 35% increase in quarterly revenue

Full-year 2024 guidance highlights significant expected production growth

CHICAGO–(BUSINESS WIRE)–Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported fourth quarter 2023 financial results, including revenue of $262 million and cash flow from operating activities of $65 million. The Company reported GAAP net loss from continuing operations of $26 million, or $0.07 per share. On an adjusted basis1, Coeur reported EBITDA of $64 million, cash flow from operating activities before changes in working capital of $45 million and net loss from continuing operations of $6 million, or $0.02 per share.

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For the full year, Coeur reported revenue of $821 million, cash flow from operating activities of $67 million and GAAP net loss from continuing operations of $104 million, or $0.30 per share. On an adjusted basis1, the Company reported EBITDA of $142 million, cash flow from operating activities prior to changes in working capital of $59 million and net loss from continuing operations of $78 million, or $0.23 per share.

Key Highlights

  • Strong fourth quarter drove significant increases in revenue and adjusted EBITDA – Production increases at Rochester and strong finishes at Kensington and Wharf drove a 35% increase in revenue and a more-than doubling of adjusted EBITDA quarter-over-quarter
  • Full-year 2023 gold and silver production guidance achieved – Gold and silver production increased 29% and 34% quarter-over-quarter, respectively, to 101,609 ounces and 3.1 million ounces. Full-year gold and silver production totaled 317,671 ounces and 10.3 million ounces, respectively, within the Company’s consolidated production guidance ranges
  • Rochester expansion ramp-up progressing – Commissioning of Rochester’s new crushing circuit is progressing, with completion of ramp-up activities anticipated during the first half of 2024. Full-year 2024 silver and gold production guidance reflects strong anticipated year-over-year growth while second half cost guidance highlights sharp expected declines compared to recent years. Once operating at full capacity, throughput levels are expected to average 32 million tons per year, approximately 2.5 times higher than historical levels
  • Wharf delivers all-time record annual free cash flow1 – The Wharf gold mine in South Dakota ended the fourth quarter with operating cash flow of $29 million and free cash flow1 of approximately $27 million. For the full year, operating cash flow totaled $84 million and free cash flow1 reached an all-time record $82 million. Since acquiring Wharf in February 2015, Coeur has generated cumulative free cash flow1 of more than four times its original $99.5 million investment while mine life has remained strong at six years compared to the estimated five-year mine life at the time of acquisition
  • Silvertip drills one of its highest grade intercepts ever – Results have been received for almost half of 2023 drilling in the Southern Silver Zone at the high-grade Silvertip polymetallic exploration project in northern British Columbia, including the highest-grade intercept ever drilled at the Southern Silver Zone in this rapidly growing near area

“The Company finished 2023 on a high note, highlighted by a significant step-up in production levels at the newly expanded Rochester mine in Nevada and a record cash flow year at the Wharf mine in South Dakota,” said Mitchell J. Krebs, President and Chief Executive Officer. “Kensington also delivered a solid fourth quarter to complete a strong second half.

“Ramp-up and commissioning activities at Rochester are progressing toward completion in the first half of 2024, setting the stage for strong near-term production growth, lower costs, and sharp increases in cash flow. Rochester is expected to become the anchor of our base of North American silver and gold assets and is the key driver to strong expected increases in our overall silver and gold production levels this year.

“While we remain focused on our ramp-up and optimization efforts at Rochester, we continue to advance several key initiatives at our other operations. At Kensington in Alaska, 2024 represents the last full year of elevated levels of development and drilling investment under our current multi-year plan that we expect will significantly extend its mine life and return the operation to being a generator of positive free cash flow for the Company. At Palmarejo in Mexico, expected completion of the transaction with Fresnillo will usher in a revitalized development phase focused on targeting resources to the north and east of existing operations. Finally, Silvertip’s ambitious and highly successful exploration program will continue in British Columbia, benefiting from a full year of drilling and geologic modeling aimed at further increasing the scale and our knowledge of this high-grade polymetallic carbon replacement deposit.”

Financial and Operating Highlights (Unaudited)

(Amounts in millions, except per share amounts, gold ounces produced & sold, and per-ounce metrics)

2023

4Q 2023

3Q 2023

2Q 2023

1Q 2023

2022

4Q 2022

Gold Sales

$

575.7

$

187.7

$

139.5

$

121.4

$

127.1

$

572.9

$

157.6

Silver Sales

$

245.5

$

74.3

$

55.1

$

55.9

$

60.2

$

212.8

$

52.5

Consolidated Revenue

$

821.2

$

262.1

$

194.6

$

177.2

$

187.3

$

785.6

$

210.1

Costs Applicable to Sales2

$

632.9

$

192.3

$

147.9

$

139.6

$

153.1

$

606.5

$

159.3

General and Administrative Expenses

$

41.6

$

10.2

$

9.5

$

9.8

$

12.1

$

39.5

$

10.2

Net Income (Loss)

$

(103.6

)

$

(25.5

)

$

(21.1

)

$

(32.4

)

$

(24.6

)

$

(78.1

)

$

49.0

Net Income (Loss) Per Share

$

(0.30

)

$

(0.07

)

$

(0.06

)

$

(0.10

)

$

(0.08

)

$

(0.28

)

$

0.17

Adjusted Net Income (Loss)1

$

(78.0

)

$

(6.2

)

$

(18.6

)

$

(20.2

)

$

(33.1

)

$

(89.1

)

$

(17.5

)

Adjusted Net Income (Loss)1 Per Share

$

(0.23

)

$

(0.02

)

$

(0.05

)

$

(0.06

)

$

(0.11

)

$

(0.32

)

$

(0.06

)

Weighted Average Shares Outstanding

343.1

380.5

356.7

333.1

301.0

275.2

284.5

EBITDA1

$

60.5

$

25.0

$

15.3

$

4.0

$

16.2

$

72.0

$

84.9

Adjusted EBITDA1

$

142.3

$

64.3

$

30.6

$

22.2

$

25.1

$

139.0

$

35.9

Cash Flow from Operating Activities

$

67.3

$

65.3

$

(2.4

)

$

39.4

$

(35.0

)

$

25.6

$

28.5

Capital Expenditures

$

364.6

$

92.7

$

112.3

$

85.6

$

74.0

$

352.4

$

113.1

Free Cash Flow1

$

(297.3

)

$

(27.4

)

$

(114.7

)

$

(46.2

)

$

(109.0

)

$

(326.7

)

$

(84.5

)

Cash, Equivalents & Short-Term Investments

$

61.6

$

61.6

$

53.2

$

56.8

$

67.0

$

61.5

$

61.5

Total Debt3

$

545.3

$

545.3

$

512.2

$

469.4

$

494.1

$

515.9

$

515.9

Average Realized Price Per Ounce – Gold

$

1,825

$

1,886

$

1,788

$

1,809

$

1,794

$

1,736

$

1,787

Average Realized Price Per Ounce – Silver

$

24.21

$

24.79

$

24.88

$

23.91

$

23.25

$

21.77

$

21.14

Gold Ounces Produced

317,671

101,609

78,617

68,406

69,039

330,346

87,727

Silver Ounces Produced

10.3

$

3.1

2.3

2.4

2.5

9.8

2.4

Gold Ounces Sold

315,511

99,540

78,015

67,090

70,866

329,968

88,189

Silver Ounces Sold

10.1

$

3.0

2.2

2.3

2.6

9.8

2.5

Adjusted CAS per AuOz1

$

1,355

$

1,225

$

1,273

$

1,464

$

1,381

$

1,300

$

1,270

Adjusted CAS per AgOz1

$

18.10

$

17.03

$

17.85

$

16.77

$

15.83

$

17.00

$

15.57

Financial Results

Fourth quarter 2023 revenue totaled $262 million compared to $195 million in the prior period and $210 million in the fourth quarter of 2022. The Company produced 101,609 and 3.1 million ounces of gold and silver, respectively, during the quarter. Metal sales for the quarter totaled 99,540 ounces of gold and 3.0 million ounces of silver. Average realized gold and silver prices for the quarter were $1,886 and $24.79 per ounce, respectively, compared to $1,788 and $24.88 per ounce in the prior period and $1,787 and $21.14 per ounce in the fourth quarter of 2022.

Coeur generated $821 million in revenue during 2023, compared to $786 million in 2022. Full-year gold and silver production totaled 317,671 and 10.3 million ounces, respectively, compared to 330,346 ounces of gold and 9.8 million ounces of silver in 2022. Metal sales in 2023 included 315,511 and 10.1 million ounces of gold and silver, respectively. Average realized gold and silver prices for the year were $1,825 and $24.21 per ounce, respectively, compared to $1,736 and $21.77 per ounce in 2022.

Gold and silver sales represented 72% and 28% of quarterly revenue, respectively. For the full year, gold and silver sales accounted for 70% and 30% of revenue, respectively. The Company’s U.S. operations accounted for approximately 65% and 62% in the fourth quarter and full-year revenue, respectively.

Costs applicable to sales2 during the quarter and for the full year increased 30% and 4%, respectively, to $192 million and $633 million. Higher costs during the quarter and the year compared to prior periods were due primarily to higher gold and silver production levels as well as from higher consumable costs driven by overall inflationary pressures. General and administrative expenses remained consistent quarter-over-quarter and year-over-year at $10 million.

Coeur invested approximately $14 million ($11 million expensed and $3 million capitalized) in exploration during the quarter, compared to roughly $16 million ($12 million expensed and $3 million capitalized) in the prior period. For the full year, the Company invested approximately $41 million ($31 million expensed and $10 million capitalized) compared to roughly $48 million ($27 million expensed and $22 million capitalized) in 2022. See the “Operations” and “Exploration” sections for additional detail on the Company’s exploration activities.

The Company recorded income tax expense of approximately $10 million and $37 million during the fourth quarter and for the full year, respectively. Cash income and mining taxes paid during the period totaled approximately $8 million, bringing the full-year total to $35 million. Cash taxes paid in 2023 primarily reflect income and mining tax payments in Mexico. Coeur expects to pay approximately $8 – $10 million in cash taxes during the first quarter of 2024 primarily as a result of its annual tax filings in Mexico. As of December 31, 2023, Companywide U.S. net operating loss carryforwards totaled approximately $623 million.

Quarterly operating cash flow totaled $65 million compared to $(2) million in the prior period, mainly driven by higher metal sales, increased profitability at Wharf, timing of prepayments and the semi-annual interest payments on the Company’s 2029 5.125% Senior Notes. For the full year, operating cash flow more than doubled to $67 million mainly driven by strong fourth quarter operational performance.

Capital expenditures decreased 17% quarter-over-quarter to $93 million, bringing the full-year total to $365 million and below Coeur’s 2023 guidance range of $378 – $432 million due to timing of remaining payments related to the Rochester expansion. Expenditures related to the Rochester expansion totaled $52 million and $230 million during the fourth quarter and full year, respectively, compared to $76 million in the third quarter and $229 million in 2022. Sustaining and development capital expenditures accounted for approximately $38 million and $55 million, or 41% and 59%, respectively, of Coeur’s total capital investment during the quarter.

Balance Sheet and Liquidity Update

Coeur ended the quarter with total liquidity of approximately $247 million, including $62 million of cash and $185 million of available capacity under its $390 million revolving credit facility (“RCF”)4. Total debt increased to $545 million at the end of the fourth quarter compared to $512 million at the end of the third quarter and $516 million at year-end 2022.

On February 21, 2024, the Company completed a new agreement to extend and enhance its RCF. Details include:

  • Maturity of February 2027
  • Increased aggregate borrowing capacity from $390 million to $400 million
  • Option to increase aggregate borrowing capacity by an additional $100 million
  • Seven banks comprise the syndicate, including new additions National Bank of Canada and Fédération des Caisses Desjardins du Québec

During the fourth quarter, Coeur satisfied $45 million associated with prepay agreements at Kensington, Rochester and Wharf. Additionally, the Company exercised options under amended agreements to receive an additional $25 million prepayment at Kensington, an approximately $18 million prepayment for deliveries of gold and silver doré from Rochester, and a roughly $13 million prepayment for deliveries of gold concentrate from Wharf.

Hedging Update

During the fourth quarter, the Company added to its hedge position by executing additional hedges on approximately 95,000 ounces of its expected 2024 gold production at an average price of roughly $2,076 per ounce and approximately 3.1 million ounces of its expected 2024 silver production at an average price of roughly $25.16 per ounce. An overview of the hedges in place is outlined below.

1Q 2024

2Q 2024

Gold Ounces Hedged

45,000

49,950

Avg. Forward Price ($/oz)

$2,050

$2,100

Silver Ounces Hedged

1,299,999

1,800,000

Avg. Forward Price ($/oz)

$24.00

$26.00

Rochester LCM Adjustment

Coeur reports the carrying value of metal and leach pad inventory at the lower of cost or net realizable value, with cost being determined using a weighted average cost method. Decreases in the market price of gold and silver can affect the value of metal inventory, stockpiles and leach pads, and it may be necessary to record a write-down to the net realizable value, as well as impact carrying value of long-lived assets. At the end of the fourth quarter, the cost of ore on leach pads at Rochester exceeded its net realizable value, which resulted in a lower of cost or market (“LCM”) adjustment of $20 million (approximately $17 million in costs applicable to sales2 and $3 million of amortization).

Operations

Fourth quarter and full-year 2023 highlights for each of the Company’s operations are provided below.

Palmarejo, Mexico

(Dollars in millions, except per ounce amounts)

2023

4Q 2023

3Q 2023

2Q 2023

1Q 2023

2022

4Q 2022

Tons milled

2,008,459

500,509

501,722

472,622

533,606

2,197,808

554,247

Average gold grade (oz/t)

0.050

0.060

0.055

0.056

0.052

0.053

0.051

Average silver grade (oz/t)

3.97

4.08

3.67

4.10

4.02

3.63

3.16

Average recovery rate – Au

91.1

%

89.4

%

97.6

%

87.4

%

90.1

%

92.1

%

92.4

%

Average recovery rate – Ag

82.7

%

79.4

%

86.9

%

83.5

%

81.7

%

84.2

%

85.0

%

Gold ounces produced

100,605

25,401

26,870

23,216

25,118

106,782

25,935

Silver ounces produced (000’s)

6,592

1,622

1,601

1,617

1,752

6,709

1,489

Gold ounces sold

99,043

24,848

26,018

22,207

25,970

107,157

25,252

Silver ounces sold (000’s)

6,534

1,644

1,534

1,561

1,795

6,695

1,490

Average realized price per gold ounce

$

1,565

$

1,615

$

1,499

$

1,589

$

1,564

$

1,471

$

1,509

Average realized price per silver ounce

$

24.21

$

24.78

$

24.96

$

23.98

$

23.23

$

21.78

$

21.10

Metal sales

$

313.2

$

80.9

$

77.3

$

72.7

$

82.3

$

303.4

$

69.5

Costs applicable to sales2

$

194.3

$

50.3

$

48.1

$

46.6

$

49.3

$

182.6

$

47.1

Adjusted CAS per AuOz1

$

957

$

1,010

$

917

$

1,023

$

926

$

883

$

1,027

Adjusted CAS per AgOz1

$

15.09

$

15.26

$

15.56

$

15.16

$

13.94

$

13.05

$

14.23

Exploration expense

$

7.8

$

2.7

$

2.2

$

1.6

$

1.3

$

6.6

$

1.5

Cash flow from operating activities

$

76.8

$

24.1

$

22.6

$

18.6

$

11.5

$

88.4

$

18.9

Sustaining capital expenditures (excludes capital lease payments)

$

34.6

$

6.9

$

8.4

$

10.7

$

8.6

$

42.6

$

8.1

Development capital expenditures

$

7.2

$

2.0

$

2.4

$

1.2

$

1.6

$

$

Total capital expenditures

$

41.8

$

8.9

$

10.8

$

11.9

$

10.2

$

42.6

$

8.1

Free cash flow1

$

35.0

$

15.2

$

11.8

$

6.7

$

1.3

$

45.8

$

10.8

Operational

  • Fourth quarter gold and silver production totaled 25,401 and 1.6 million ounces, respectively, compared to 26,870 and 1.6 million ounces in the prior period and 25,935 and 1.5 million ounces in the fourth quarter of 2022. For the full year, gold and silver production totaled 100,605 and 6.6 million ounces, respectively, and were within 2023 guidance ranges of 100,000 – 112,500 ounces of gold and 6.5 – 7.5 million ounces of silver
  • Production during the quarter benefited from higher average grades, offset by lower average gold and silver recoveries

Financial

  • Adjusted CAS1 for gold and silver on a co-product basis increased 10% and decreased 2% quarter-over-quarter to $1,010 and $15.26 per ounce, respectively, driven by lower gold sales, higher silver sales and a stronger Mexican Peso
  • For the full year, adjusted CAS1 for gold and silver totaled $957 and $15.09 per ounce, respectively, compared to $883 and $13.05 per ounce in the prior period. Both cost metrics finished the year within their 2023 guidance ranges of $900 – $1,050 and $14.25 – $15.25 per ounces of gold and silver, respectively
  • Capital expenditures decreased 18% quarter-over-quarter to $9 million, reflecting completion of the open pit tailings backfill project. For the full year, capital expenditures decreased 2% to $42 million
  • Free cash flow1 in the fourth quarter and full year totaled $15 million and $35 million, respectively, compared to $12 million and $46 million in the prior periods

Exploration

  • Exploration investment for the fourth quarter increased by 23% to approximately $3 million (substantially all expensed), while full-year exploration investment decreased 30% year-over-year to roughly $8 million (substantially all expensed)
  • Drilling during the quarter remained focused on the Hidalgo corridor, the Zapata – Guadalupe corridor and the Las Animas target with up to five rigs active during the period
  • At Hidalgo, drilling included systematic step-outs along strike on the San Jaun, Libertad and Hidalgo veins along with larger steps to the northwest on the Morelos and sub-parallel La Finca structures. Geology intersected indicates that the Hidalgo corridor potentially continues to the northwest over an additional 570 meters and includes the Morelos and La Finca veins
  • At the Zapata – Guadalupe target, drilling during the quarter intersected deformation, alteration and veining on both structures. The main goal of this program is to test for a higher shoot where these structures intersect. Drilling for this purpose is expected to continue in early 2024
  • At Las Animas, drilling during the quarter aimed at extending the zone down dip with good vein structures intersected. Results are pending but the geology visually indicates continuation of the zone
  • Mapping and sampling are continuing to the east of the current operation and outside of the gold stream area of interest. New veins were identified during the quarter, which the Company plans to follow up on in 2024. Coeur expects at least four drill rigs to be active at Palmarejo in the first quarter and through the remainder of the year

Other

  • Approximately 32% and 35% of Palmarejo’s gold sales in the fourth quarter and full year, respectively, were sold under its gold stream agreement at a price of $800 per ounce, totaling 8,047 ounces in the fourth quarter and 34,455 ounces for the full year. The Company anticipates approximately 30% – 40% of Palmarejo’s gold sales for 2024 will be sold under the gold stream agreement

Guidance

  • Full-year 2024 production is expected to be 95,000 – 103,000 ounces of gold and 5.9 – 6.7 million ounces of silver, relatively flat compared to 2023 production
  • CAS1 in 2024 are expected to be $1,075 – $1,275 per gold ounce and $16.50 – $17.50 per silver ounce
  • Capital expenditures are expected to be $32 – $42 million, consisting primarily of sustaining capital and underground development

Rochester, Nevada

(Dollars in millions, except per ounce amounts)

2023

4Q 2023

3Q 2023

2Q 2023

1Q 2023

2022

4Q 2022

Ore tons placed

11,388,657

2,754,058

3,487,173

2,690,840

2,456,586

14,919,803

2,754,118

Average silver grade (oz/t)

0.45

0.44

0.50

0.42

0.45

0.41

0.68

Average gold grade (oz/t)

0.003

0.003

0.003

0.003

0.003

0.003

0.003

Silver ounces produced (000’s)

3,392

1,340

608

683

761

3,062

973

Gold ounces produced

38,775

19,847

4,459

6,314

8,155

34,735

11,589

Silver ounces sold (000’s)

3,340

1,269

606

695

770

3,029

975

Gold ounces sold

38,449

19,175

4,432

6,493

8,349

34,370

11,646

Average realized price per silver ounce

$

24.09

$

24.59

$

24.63

$

23.70

$

23.19

$

21.53

$

21.10

Average realized price per gold ounce

$

1,965

$

1,991

$

1,967

$

1,946

$

1,922

$

1,875

$

1,893

Metal sales

$

156.0

$

69.4

$

23.6

$

29.1

$

33.9

$

129.7

$

42.6

Costs applicable to sales2

$

171.3

$

71.8

$

30.5

$

26.1

$

42.9

$

165.2

$

44.1

Adjusted CAS per AgOz1

$

23.97

$

19.33

$

23.64

$

20.39

$

20.24

$

25.74

$

17.60

Adjusted CAS per AuOz1

$

1,922

$

1,564

$

1,899

$

1,646

$

1,655

$

2,268

$

1,596

Prepayment, working capital cash flow

$

17.5

$

$

7.5

$

10.0

$

$

$

Exploration expense

$

1.2

$

0.2

$

0.3

$

0.3

$

0.4

$

4.6

$

0.6

Cash flow from operating activities

$

(23.0

)

$

11.6

$

(17.3

)

$

(3.8

)

$

(13.5

)

$

(48.0

)

$

(5.5

)

Sustaining capital expenditures (excludes capital lease payments)

$

30.9

$

13.8

$

7.7

$

5.1

$

4.3

$

14.9

$

3.0

Development capital expenditures

$

232.5

$

51.7

$

76.7

$

56.4

$

47.7

$

231.5

$

89.3

Total capital expenditures

$

263.4

$

65.5

$

84.4

$

61.5

$

52.0

$

246.4

$

92.3

Free cash flow1

$

(286.4

)

$

(53.9

)

$

(101.7

)

$

(65.3

)

$

(65.5

)

$

(294.4

)

$

(97.8

)

Operational

  • Silver and gold production in the fourth quarter totaled 1.3 million and 19,847 ounces, respectively, compared to 607,735 and 4,459 ounces in the prior period and 973,000 and 11,589 ounces in the fourth quarter of 2022. For the full year, silver production totaled 3.4 million ounces, which was just below 2023 guidance ranges of 3.5 – 4.5 million ounces, while gold production totaled 38,775 ounces and was within 2023 guidance ranges of 35,000 – 50,000 ounces
  • Higher production during the quarter was primarily driven by the completion of the process plant in the third quarter and ounces recovered from the new leach pad from ore stacked throughout 2023
  • During the fourth quarter, initial commissioning activities occurred on the primary crusher as part of the completed Rochester expansion. First ore to the pad was achieved during the month of January from the primary and secondary crusher. Commissioning activities continue on the pre-screen and tertiary circuit with ramp-up continuing through the first half of 2024

Financial

  • Fourth quarter adjusted CAS1 figures in the table above and highlighted below exclude the impact of an LCM adjustment totaling approximately $17 million related to the net realizable value of metal and leach pad inventory due to higher operating costs exceeding the lower market value of ounces under leach at Rochester
  • Fourth quarter adjusted CAS1 for silver and gold on a co-product basis totaled $19.33 and $1,564 per ounce, respectively, with significant reductions compared to the prior period largely driven by increased metal sales as well as lower operating costs due to lower crushing associated with X-Pit dismantling
  • Full-year adjusted CAS1 for silver and gold on a co-product basis totaled $23.97 and $1,922 per ounce, respectively, compared to $25.74 and $2,268 per ounce in the prior period
  • Capital expenditures increased 22% quarter-over-quarter to $66 million, bringing the full year total to $263 million compared to $246 million in the prior period, reflecting increased spending related to the Rochester expansion project
  • Free cash flow1 in the fourth quarter and full-year totaled $(54) million and $(286) million, r

Contacts

For Additional Information
Coeur Mining, Inc.

200 S. Wacker Drive, Suite 2100

Chicago, IL 60606

Attention: Jeff Wilhoit, Director, Investor Relations

Phone: (312) 489-5800

www.coeur.com

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