Coeur Mining (CDE) 18 Feb 212020 Q4 Earnings call transcript

Good morning, and welcome to Coeur Mining's Fourth Quarter 2020 financial results conference call. [Operator Instructions]. Please note that this event is being recorded.

Now I'd like to turn the call over to Mr. Paul DePartout, Director of Investor Relations. ahead. go Please

good and and to Mining's Coeur Thank Year morning. Earnings Quarter Full Conference Fourth you, Welcome Call.

on and Our results copy are like release a some everyone slides that close. market I our available to slides press remind were released of after the yesterday's our would website. and release, And of press risk our may factors well the cautionary review comments include statements forward-looking Please XXXX as our today in presentation, from included described differ. press in XX-K. our as and the which actual results release statements

to turn it Mick I'll Now over Mitch, and Tom.

And everyone. shutdown were first mine. in driving our at year, everyone. good And Thanks, government-mandated big exception. quite down Paul. for our us Palmarejo was half of prices we course a morning the no the COVID-XX year. on sharply Obviously a of headline Mexico, by COVID was forcing main impacted and the which had XXXX impact

overall but attracted, And during considerably take solid our year. the Of established well mining help the talent they've minute and can't talk production strengthened with us, has organization entire leadership second to will sheet to the performance our risen to course, cost in lot how unprecedented prices such and together the we challenges. an culture shortly. ESG which to we've about people management, occasion first incredibly have I April over I the effective since responded pride XXXX, our past a served and a and of immense Mick XX months. everyone, we've delivered for and Mexico second has And the We've well half strong have asked to how delivered resume for more Tom balance allowed the quarter. we want lows. of recognize their a

So thank to everyone. you

million. And on over lot flow led free that highlights $XXX starting EBITDA XX%, $XX accomplishments to million. jumping adjusted and a X. were climbing of to X There last to Now off Slide and year cash

unit Palmarejo's guidance and starters, at years really both key free cash double, year. more to we next to almost remarkable, results records. NPV The average and while expected the XX% breaking at we just bit production an performance up nearly operations. Wharf are For than on their details the million started, year add year back $XXX operations and The with with Rochester's a last project below applying of state reserves-only updated late back. learnings mine XX-year also off or production never gathering achieved of the finished gold had each ramped production And Production with to Rochester a an expansion cash XX%, mine providing year ranges free primary year, And flow fourth much silver was and $XXX fantastic life will with in looked to Rochester. driving transition expansion near-term at success. completed of anticipated full Kensington IRR late in they kicking of gold Until a ensure long-term mid-year balance also year. remain our reflects And the quarter previous were this of big truly our plan this million it costs and is over XX%. way the were sites. highlight flow all of rates per Rochester and stronger increasing quarter-over-quarter. color up guidance

release investments among a year. discovery. in company. year, priorities and this program to recent most for we at has which million last beyond significant included district, slides summarized from and we was begun in It XX, the During plan our our we good several reserve press drilling and of new overall gold in growth further to and Southern morning. on see success, expanding attractive are top made called successful. expect over Nevada to X investment averaging increased to we holes drilling segue we'll and year, already yesterday's our per capital An life this invested in even help last approximately drill in We've invest the were one release from now just reserves Rochester's exploration that highlights the just issued reserves capital currently. $XX in reserves number Seahorse grew Seahorse, to also These become going silver We focused exploration and this mine and over And company saw should XX%, made remain to the drive from to dramatically over a this meters, yesterday rank our million potential years out a on XX allocated year. $XX gold. this over extend On returns XX% forward. history. growing XX% XX%, to about time in XX That's increased our over which history, wildly ton we $XX our of average silver was XXXX Seahorse, well X has Crown asset the on the was included oxide And largest Gold aggressive by further. allocation over with by highest program it levels discovery that we exploration higher in years million XXX the new including continue gram located

of expanding length at in material convert the of tons with resource tripled million the and high-grade exploration Silvertip's more substantial at And the the strike program Silvertip year, over this the beginning the only confident assays XX%, Another kilometers. feeling than in year's $XX drilling. X.X of roughly With to end further in big Silvertip growth deposit from mine invest with further over and a resource our we plan to continue life reserves. resource in for total to at We and minute. ended resource expanding increased half this XXXX British to year, Columbia. Silvertip success was aimed some to at sticking last exploration back the We the ability around of

We also lock process can generate team to that for flow The deliver now straightforward the a on a day optimizing costs recoveries sheet mine high-quality learned plan to incorporate expansion. X,XXX reliably from identified of concentrates. everything and working also focused year's expansion restart plant expect we costs, and We're operating without is to Rochester to have down through distracting from ton consistent and a the capital and slot potential best us maximize PFS. success how our likelihood last in the

justify solid, at forward case the to to end tip. move goal a a Our decision compelling is business to with silver year

Our change X-year and cash in returns flow. and outlook strong reflects a step production

December, Day and about Investor our If you our a chance didn't go to strategy listen to I or to find to you look culture, encourage out replay to get the at the outlook. website, more our in watch materials

Mick. Before I'll attaining passing and high-level quickly goal I turn strive to our overview the relations call provide of the with and With to a that, other relationships. want maintain long-term to our deep-rooted XX it of highlight strong We good mutual local prosperity. to slides community with over Mick partner communities stakeholders of XX, which all

Wow, what to Mitch. the and strong year. a Thanks, a great finish quarter

dedication in Building our the to pursuing I and strong our workforce standard. into health to their the safety ongoing commitment expect in XXXX. our momentum, operational a to and performance opportunity year want progress take and for higher we deliver thank highlights, from to diving made another on Before operations the

for half silver range, with second Strong helped with us Full in gold Now was look year guidance production and results XX during roughly while the the taking X year the being high of in above beginning expectations. the end a down and second Palmarejo. production at finished on days a Slide high despite X finish its quarter. note, line

costs which $XX free team financial flow during the XXXX. balancing generate come did these flow. for helped and the in of an largest their great cash end nearly to since ranges. silver Additionally, million operating job year in Palmarejo's free of excellent below both low to gold year results accomplishments Together, resulted the the guidance cash unit and

we in year rates help to the increase Palmarejo plan and to at mining some offset our XXXX. and ahead, expect have year Looking great lower grades to throughput another

Rochester. in plan, achieve expected, to half. higher led services support, costs maximize the of which of and production higher the we cyanide improvement for for both the slightly came well due Unit of positive and used work on to end inter-lift than the HPGR-crushed largely shallower modeling higher us to strategy ore additional see to dosing, costs during program going second over the as liners to to outside guidance test consultant drive placement portions of revised half metallurgical the directly silver as in to gold. leverages Turning This helping stacking production our results from the pad. second the We're leach XXXX, low our

forward, and are on results. performance driving improvements to our continuing we Going focus enhancements in sustained

new expanded to want important XX. I rates. into plan opportunity will two on, the the part it give gradiation before further at moving This material crushed in We higher quickly dial in in quarter optimize Rochester out POA us the crusher throughput existing to unit the Before of second secondary to as swap the XXXX. items highlight to for of crusher goes corridor

to the these have in operational million was the the us Switching both the years. diligent our led leach year test plan derisk over a cash solid free production coming to of existing a projects the record achieve expansion for using bed circuit that second to from the for to to the crushing operation. expected during Kensington. crushing year full-scale we and VI begin flow. cost ability optimize helped half also full impacts. performance, and team's It's focus Stage mitigate efforts for over we results our important an some which the remember pad and excellent are And to to $XX liners achieve helping of guidance, the The material inter-lift XXXX We of effectively of liner new year. as to plans

into expect We from production and aided the strong operation's by another Eureka of in Elmira the profile. performance XXXX, inclusion Kensington

great accomplishing by producing an the Wharf, gold over achieved of at at XX,XXX did the team and per a goals cost Lastly, ounce. for average around job their guidance ounces $XXX year,

of Wharf its generated million $XX free importantly, over More XX%. flow, shattering record previous cash by

to XXXX. move some ahead, during plan tons Looking additional we

I'll pass result expected free anticipate is higher year. costs, the will to call With Tom. flow Wharf to that, this another marginally have over great While Tom? cash we in

Mick. X financial Thanks, highlights results. Slide our fantastic

Mick assets operating million us Mitch realized cash mentioned, over with our our from generated showcase in during year. adjusted flow. XX% million top cash the million especially Kensington year, significant over slower free over half more year Palmarejo, generate $XXX prudent half offset XXXX leading Wharf, of management from results. results cost expansion Margin to to financial higher prices our helped $XXX free portfolio, nearly $XX second These improvements flow annual highest were strong and strong led in nearly our than in As XXXX. the metrics in and of and XXXX, the since EBITDA when The cash along figure $XX second to million annual higher growth Both of and performances flow. the line of start power

Looking our our highlighted first we one, recent of relatively as signal of and we XXXX outlook. Investor by: Day weaker flow issued another cash with XX, Slide leach a consistent that on on EBITDA. driven inventories anticipating our plans, ahead, profile want to operating ranges quarter, guidance buildup I our do production flag solid guidance and mine year are pad. These

$XX in Mexico third, million outflow. payments combined payouts to company. tax of to across roughly the $XX incentive cash And million be timing annual of Secondly,

fully of borrowings position, of to and flexibility revolver Turning with revolving the balance few $XXX improved a of credit expanding our at our this emphasize the the key led facility repaying during nearly capacity the our from significantly bolstered liquidity $XXX XX. end financial million. to Slide fourth I year. sheet. We by cash quarter wanted Together to to over the our million takeaways

leverage in Looking net cut and half at both leverage ending XXXX. at decreased debt-to-EBITDA was debt-to-EBITDA debt X.Xx. year-over-year, levels, Particularly net metric, our key XXXX total our steadily during

million years confident now investment. significant in Mitch. while complete Xx, maintaining X a as a next the plan, of on We positioned hand, operating leaving are least combination cash of ratio I'll to game of Rochester. cash By capacity, us the fund phase using very flow we $XXX and construction we net are to at at our debt-to-EBITDA call pass capital under this back well liquidity targeting major over of debt

metals balanced Tom. from XXXX. shows and for our short, road results our by XX American top And go it any we can Thanks, With ahead term long we following map, questions. this North Slide priorities medium and precious portfolio assets. of deliver believe over for let's solid the that, up open

Instructions]. [Operator

Dudas, Michael comes Partners. Research First question from Vertical

Couple of questions.

little the Mick XXXX - the address maybe for cost bit a First, could guidance can maybe you mines. on

in last I like You of some some But of of the did second a guess improving costs play mines. there. at half conservatism that I 'XX? you are the Just general also a job some sense good know of year. in the there's that year and inflation, labor, grade how the some through flow And drivers, some Is that there that little going through you out? roll to of have didn't catch-up may get a as XXXX issues

there Yes. over it one that start on to turn I'll and Mick.

come couple things to mind. I a think, yes, of

get done some waste Wharf, due at availability to relating there to challenges example, For was some COVID. in labor that XXXX stripping didn't

in of that some doing we'll So here be XXXX.

to costs of and any here pick year. other? assets? some color Mick, Mike want give know I you guidance Wharf's this at cost each that's from up so in there do Sort on the a of maybe factor And the cover

cost Certainly. by driven Overall, for plans. XXXX that the position of is life mine

there few bit adjustments. of pad. program of of some of going there's at in that with we're Rochester. adjustment moved So of optimization But to around the out run that leach bit material a getting XXXX a the we XXXX. changes a again do We mine then in is best have little little a [indiscernible] XXXX. And to And some lot

£X.X the per as So from whale per are little on £X.XX up to leach. a going we costs for the tonne cyanide increase heap higher tonne bit at about to the Rochester -

the fees, operation. the they're across well that a bobs Rochester. little Really, of bit main bits throughput management So of as a there's a Kensington, few There's But it's drivers there. little adjustment At maximize Board. at royalty at we're Kensington and G&A. pushing the to on then the benefits and

higher. little So the processing bit be a costs will

at As we're able a plan. Wharf, bit to on We Wharf We should on the that sure XXXX. any Mitch anticipate material moving per be stripping said, make Wharf for we're of as production that catch-up move ahead. impact little don't the material and well for to

cost. the those and the we'll and optimize costs or particularly And at yes, significant concern bits overall, always pieces a XXXX. concerns. look good not there many piece, obviously, nothing moment, So across through distribution to too But on in

denominator, a just right, [indiscernible] And then a more of grade-driven Palmarejo, on basis?

mine rates there's tons is to a more going per the We're at in exactly. grid lot Yes, process fantastic more that plan in a And at drop as at the team Palmarejo. Palmarejo. of life than compensate production job And to for the XXXX. there doing a increasing

Mike? that Does help

Yes, $XXX guide would on million. to be lot. your helps my Rochester, And of $XXX follow-up million CapEx a

you is that sense year? 'XX quickly certainly have generate it to the robbing how up? the how just it might the that getting number on into move cost issues you spending through just play So some to like going more or Or or long-term into through this is how even that's 'XX? started of Rochester flow outlook relative quickly, any projects less more does that flows of how Is there through? that productivity Or that,

Yes.

we bit Rochester do the wrapped right. to about expansion is maybe Tom, spend off next us. year on talk of XX. you're year And up activity Rochester? as - a shape upon little most schedule see and Major So spending construction this you be year. started of January on the will the at next want late is the it

Yes.

a capital signed, this we planned QX, a Again, in fourth - procurement we path contracts of a first has that And the mean, see that the big capital to fund overall real have some project lot to spend. cetera, net in is the QX, to So quarter. one et quarter spending and spending have the just I'd help money. well have are is item committed et QX. like made, versus Construction guidance, items. of - leases you'll CapEx with then cetera. can the ramp-up two want the that been we been kicks intend you And significant appreciate capital in, to Rochester this, note as I on large down here

have remind And that that you makes you Tom, overall? That in me guys sense. can set contingency the budget forth what

million. $XX Yes.

from next of Thompson is And the question Ryan BMO.

about that the questions. And and start tons couple a and done to Maybe the into increase talk just and measured guys morning. mine on that resource little you Can and sort ounces. what indicated It Just get good in, a pretty of just I'll plan? reserve bit of uptick to both material needs Wharf. a looks there you update with be like that out yesterday put was

I'll bring take that Mick, permitting, which on the anything to get it community you Probably over allowed to that ultimately if turn to I'll some that. we're takes Ryan, at in there on us Wharf, will We add but you consultation optimistic Wharf. expanded then start, then material, that And boundary and mentioned. about reserves, you, - Yes, into to it Hans. the have time

Hans, I think in year, is this in about pull on just ever mine do that the by probably doing is - opportunity what budget focusing - probably talk our at owned we're little it's life biggest bit and some program you to want the we've Wharf far since a the additional our Wharf. to exploration which front? where Wharf infill reserves, at we're quicker

our Mitch drilling, at convert. was so no affects looks like with we because Mountain what M&I small - did really Green the boundary not it to And the the big a Ryan, Yes. quite added number mentioned much pit. and Wharf,

the yes, that well on the move this what of we back about the why that the if and ended added a XXX,XXX expecting year. That's which February of next a is also And program so that we the ounces about right new go in Wharf. be jumpstart drilling, being started infill Ridge August. or in precedent in area. winter, up it on were million is does with for spend already should a Should finish us jumped But modeling boundary. to result permitting, gives we're And Portland on to things we as So laying $X.X start able flossy the that away.

right, And you. And just that's go helpful. got - ahead. maybe Mick, yes,

there - Ryan, just on the change plug Wharf. I'll

for life cash XXXX life. that For - to it's $XXX opportunities million had It flow. further to free harvested hear that these of great about million. bought and mine we has there's what bought there, we And Mick We've to extend X-year $XX a when some mine mine It it. a opportunity are X-year now. life out with that. extend doing Hans further

piece a of great the it's So portfolio.

cut off I there. Sorry, you

to You were going questions. ask other

Yes. Yes. guys. a No, worries. as a good And No been it's follow-up. for you acquisition just definitely

I under sort option you had think satellite Hill So there, of guys Richmond called. was property think I it a

Yes.

well? as just update you Can option on give an that

Yes. more has drilling. September. third We're an maybe the option, That doing think, quarter, expiration I in

Yes.

look up what finish drilling, see there and decision forward we'll whether then or So go not. the to make the a like results

to Richmond year. So that Hill. of probably still part made the decision remains be middle

you. Got

one thinking positive you do more and Okay. sounds you just more potential Silvertip. sort me, in just messaging maybe like over just Obviously, to and to and get And of finding. for look guys switching But are how timing, you're what what it that? then capital about terms we about sounds feeling if it other restart you constructive maybe on and decision there, that just of callers. would touch Can confident to be I'll turn a like should over the

Because the that to really that want sure to on or moving in we and look same the we way our want. not topic At like to that disciplined this question. And profile. cash Investor out good a look at not - don't result a for make Silvertip to around one here. free rushing see Great XXXX that in defer get Yes. company. really deliberate, you time, outlook flow forward constant want all we're expansion would Day, we we a put to hand, delay beyond and we It's

timetable that right, a confidence and of, high forward we that that you give - is that's those it this in want between are kind have we're we job that on. goalposts, to Ryan? Does prioritizing bit confidence, way derisk, we're sort #X. getting going a all prioritizing little the and those of that do that's those there. working outcome constraints so of And with thing context, But go And the Rochester,

helpful. that's over I appreciate but yes, No, callers, added Yes. I update, to guys. the like it I think other said, I appreciate And the turn color. I'll

Instructions]. [Operator

Capital next from question is Roth Joseph of Our Partners. Reagor

for the the to year. finish strong Congrats

clarity. stacking that the QX in point So Rochester, the On at tons? plan? Or swap included you by to just per kind day that a already guys of the rates of crusher? the is are out of be of secondary impacted XX,XXX expecting ton all XX,XXX Is part

Mick, go ahead.

Yes.

like So at into out XX-day the already. the swap-out that And budget. it's That's a swapped for to going about already plan now. XX built was it looked days swap-out. for We're budget be looking about that

to optimize a little the and at minimize continue But bit swap-out we're being as really the said, into we're of is moment, budget. to impact looking and the continually. So built that well-planned And game that. that ahead

range. guidance the And

And the range guidance Exactly.

Okay.

lot Block Seahorse but I'll Fair on asked, Crown the are my questions Then Okay. touch I discovery. enough. other guess a of already

think that take the have higher-grade pads neighbors some part approach different had the expect They're the that Do more drilling kind they're they land Back to are single as have west there. of east. going have north intercepts. plan? a you continue the might Your drilling of that Or use I like you a multi-directional guys approach? from to guys to drilling you to into similar pad taking to different you structures. slightly drill

excitement, early want It's learn a out been drilling still that? lot to days, lot take well. Hans, to there, has the but Yes, exceptionally you great a question. of going

much have? How do time Joe. you Yes,

question. Fair

north, Bullfrog. oxidize to so the the experience done so east. got the in great sure. real structures by at X All our some permit, employing and drilled from their the geologist done high-grade we the His we've correctly, to geologists because the to off to pads we've of what Bullfrog from to seen And mineralized the structures. to district We're they've as alluded we've west, a they than X-acre mine dip is you angle we're X it's just understand contrast fans anything Bullfrog. what By comes high-level in a on neighbors Seahorse those, restricted for depth, these like hit some been job seeing. great And results. limiting or stuck They've attack to to and different west-dipping

are We going to start stepping out those. and testing

see they've expect to see grades on the theirs. expect high-power feeder the the And employed, We higher we've of like what's we some got much when for based structure from grades these geologists systems. to get they called higher

Oxide mineralization our interpret the by formation. Bullfrog posted we Now totally different. disseminated

structures and these us Mitch thicker feet important, of host tonnage to, is from X.XX giving larger our like news are the rock release, per actually XXX ton. intervals, alluded While ounce

and south structures to see looking the to pads gold, have needed other to a So drill discovery acres. Seahorse that amend We'll acre when permit should permit got arsenic like March. the And as but strip Normally we these things. to you amended got test west good. We that. Pure in systems of nothing didn't these it's we this pure get we really that building in XXX south. year, get we've growth things gold drill oxide. and XXX to test Seahorse the because an But we start else and

a this in future. economic to something confidence of is turn the into it's us given going So lot

thing. then one Okay. final And

bigger if spending revolver? Would the point there on any would Or that thinking of sheet gets capital the Rochester, plan? the of especially catch at you a chance some balance about If over is the bit You're project the - again, a you big have any tap course equity kind guys, you draw because late just year. markets? this the year. Is silver at

the one equity. any in of list terms is that Well, bottom of

tremendous Tom, needed I wide I that team think give more Tom of want a fund do if pursue a spectrum could and have done in little pretty other between think, only - identified we color? this, also but like us you of felt to not a job, position his alternatives we to putting we a to. have

cash the got we've from Joe, debt-to-EBITDA those on capacity, Again, Xx. and the for ourselves debt of the hand, the less than keep we've cash that ability set got guidance, Yes. of operating flow to our existing the guardrails we've - mines to between that net

leases, capital is got delay already drawing The And as that so I've late we've at available. upon mentioned, as fully again, revolver And Rochester. some we'll it possible.

In terms look, that eye. absolutely hedging, caught on our of run-up price silver recent

And so the I think looking like, understanding and… be and and it's what's available prudent always to

the year's this $X,XXX side, half of production we a about on And floor. have gold with

correct. Yes,

that of in that So sort gives us you… does another don't know, give extra Joe, buffer there. I

needed to - that's it. and No, peers opportunistic good. companies Yes. been I have confirm you being just Mostly slightly equity it your be, on of smaller guys - some to wanted are that the front, and didn't like seem

fair enough. No, Yes.

question-and-answer session. our concludes This

to back to conference Krebs I'd remarks. Now for Mr. like turn the closing over Mitchell

about in forward and be hey, speaking a Well, first And appreciate we I quarter we again it's with Okay. morning. this busy to our will talk the results. we'll reporting the know Hopefully day. snow look gone, spring. everybody's time you

a of Thank rest have you. the good So week.

has conference today's concluded. you Thank now presentation. attending The for

disconnect. You may now