Coeur Mining (CDE) 5 May 222022 Q1 Earnings call transcript

Good day, and welcome to the Coeur Mining First Quarter 2022 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mitchell Krebs, Chief Executive Officer. ahead. go Please

thank earnings and joining first our Good you XXXX call. quarter morning, for

here and Joining with Mick are me Routledge; of team. other Tom our members along Whelan,

statements our Before please filings, which our refer cautionary in on SEC our available language to I our slide note on website. begin, are and deck forward-looking

the achieve as quarter production over and year by results with of we and Our production Kensington full to remainder in first sequential expectations Rochester. and year starts slower and the guidance ranges Palmarejo our line were position look deliver at starts offset us Wharf to with way XXXX. cost to growth led the solid

key As sector effects keenly those COVID lingering follow quarter. aware, are the during themes the were and who two from inflationary pressures

on expansion and advancing business to environment each disruptions detail which steps initiatives our an our disruptions we’re However, chain through continuous the update bolster cost materially support We of and operating will operations. momentum higher gaining Mick dissipating shortly. levels provided to plan. COVID-related important to improvement to managing commitment appear and be shortages, Tom Both go supply into our at through taken detail our The will ongoing liquidity Rochester we’ve Tom the according on expansion, to is and several costs. more way

will coming couple Mick and the a key that together. Slides a elements update XX see project can XX photos the are the minutes. You quickly on from more of of in provide detailed

additions. new potential year the possibilities that deposit. are strong up called double-digit Silvertip that greater year discovery even opening intercepts, Palmarejo this time Camp at another exploration last a with including after last hit this world-class this running ground West Creek is high additional intercepts grade that team new several front, Meanwhile, point mine highlighting growth resource at delivering emerging high operations provided exploration grade and we life update the to future the On Kensington week,

record from bit the highlight United waste decision the Forest of capacity States the Another first at Kensington. and the radar a increase that was flew the tailings quarter storage rock to under final receipt of Service

recent growth. ESG critical our of may which success and life us of these we report current XXXX with decision longer detailed decade a the than our another receiving mine think have room suggests efforts much extend we to our the future business. our reserve to Finishing released of last highlights this exploration that week, up position indicates, As our record leadership the Kensington provides accommodate in areas

have increased raising gas by found the a be call reducing our over to XXXX, XX. deck reduction XX% a A highlights to Slide greenhouse can the reduction I’ll Mick. now of summary to by ESG to XXXX. commitment We report of from substantially year’s the beginning our emissions our last intensity, on compared goal in XX% net goal pass

of Thanks, first tracking balance Mitch. we’re the how year. operating and results X the of includes Slide the quarter details versus our

of our XXXX. to the prior to with gold slightly compared are silver the start Starting but we with quarter mentioned, Mitch consistent. As pleased remained up expected be while Palmarejo, overall ticked production first production has quarter weakest, the

peso place silver. led had theme what hedging last periods. for and contributed to go common operations. in costs also to a consumable of Higher in compared year costs prior Completion as the and gold I be to both we higher through Turning will program, costs costs to unit increases Mexican

grade compounded the over annual four. tax on placement the a led to As were XXXX ore flows year, start impacted to for first EBITDA last In pad at expected, by year the a lower to production, of Mexican slower solid payment. short, production lower to cash of Reaching Palmarejo’s silver average January start by ahead quarter end Rochester, Palmarejo.

the plus with availability ex-pit some quarter. team of this in tons size material the pit. by excellent supplemented million work placed is the tons and The optimum by current At during fleet pad On run-of-mine XX% quarter driven the crusher out dialing and side, X.X the making on better increased crush progress in solid four.

and important that already prescreens recall look incorporating next floors now concrete plan. mine and process that operating prescreens And material to on will for the crush can forward crusher quarter. performance. them inhibit foundation. potentially expected course, our this post-expansion to heat the operating process prescreen impact both to our being existing into construction the to recoveries. Limerick our new through solution with You’ll affect of for It’s existing and screens [indiscernible], days the the ex-pit the be we’re out Rochester’s the to project is to the of varying work up XX crusher important maximize into measuring installation flexibility further step XX high too been We is during constructed negatively poured ability POA of underway bleach to hardness if and second these that the has which incorporating in of half second all An de-risk crusher, the the impact to with applying learnings point

essential has project of materials $XXX now expansion brief of entering about Rochester and the activity at The million X. the place million XX% update starting total covering been Approximately with of $XXX components other been and I the of is the committed, Slide capital total to spent the Before phase progress operations, on new want estimated a has representing at the the project on majority of a a pace now towards now site. provide taking capital.

now We majority as With new unfolds. is facility the Merrill-Crowe Stage erected this concrete structural and poured. progress pad sharing year at forward of steel processing being completed, corridors important VI leach for crusher being the to the our the look

to XX to anticipated years. workforce production received to the Mitch during availability to mine resumed led the two up to have COVID-XX tailings delayed Thankfully, Kensington quick availability earlier normal excellent lower the rock up permits Turning fantastic controls than the capacity extend shared required levels the news led development. related we impacted as and developed since by Kensington, working that years resolution. a sequencing over and has catch in waste to and team the stope on is place quarter. last Workforce to

gold Lastly, slightly was production solid XXXX. plan of in at ahead a area the grid of mining Wharf, place delivered as takes due rates pit throughout to lower production

a increased pass job over On the for to offset fleet the efficiency helping Tom. I’ll side, improvements, did the cost great With prices consumables. that, team with call

Thanks, Mick.

currently Strong were and by Wharf expectations. on expectations balance POA results our based and XX and expenditures note Turning million leading realized the Kensington, expected X% on cash silver pressures in Operating weaker as diesel. our gallon to X% Capital quarter, interest performances I’ll items $X and annual due Operating were at annual by financial for budget consolidated our EBITDA per before consume partially XX couple and sold, has A the Revenues are notes. at a incentive first with to of prices. the reflecting on offset XX budgeting review senior over running a end was to the respectively, XX% well ounces chunky process were sheet as time first reflecting of some X% average performances than Mexican our of semi-annual gold of quarter. decreased typical were with of generally primarily other line of Slide most Palmarejo offset captured costs enhancements. gallons payments, million, outflows to gold silver decrease approximately first increase timing our year invoices. quickly quarter-over-quarter, in through expenditures, payment to than tax in quarter and run the XXXX spending $XX revenues other expected including costs the that through than inflation as and typically $X.XX X, and to our quarter. the employee the lower negative line the in Rochester per diesel We cost quarterly million, recent

sheet, and million both increase our flows fully in of the the recent million. POA enhanced in as for Our down. XXXX, with we’re expected actions cash in have POA ability unchanged $XXX to expected the remains guidance expenditures XXXX, at $XXX over XX With to objectives between winds production coupled XXXX and fund balance year to confident construction that growth this XX significantly our course

that XX capital initiatives according taken our have XX, call we the year-end company since our to internal of allocation comfortably Turning positions the the other able be fund the our initiatives to growth expansion and to strongly conference Slide to framework. remainder POA

describe of three reflect of important to We’ve enhance March our recent in $XXX initiatives liquidity. significantly to a we XX, As initiatives completed million. liquidity adjusted had approximately I’ll moment,

program to protection time a volatility capital elevated quarter of of advantage and to bolster the source significantly our price hedging prices we during First, during gold took investment. downside meaningful this of elevated gold provide

to $XX we Second, expanded million $XXX by revolving million. our credit facility

As had syndicate, the of their in the the in confidence supporting million to including banks who on the Goldman group strategic March thank our we facility. Sachs, lender We XX, for would drawn $XX joined plans. like

program our quarter first $XXX proceeds the Third, we completed ATM previously during of gross million. announced for

pass of We also liquidity return time significant additional continued balance to very flexibility and high investments. of that the back We and the equity Mitch. pro required investments, potential expected the from million during sheet the initiatives. roughly $XXX call provide liquidity feel now I’ll will forma with equity of comfortable our hold growth million approximately $XXX this to investment

Tom. Thanks,

the recent As growth flow proper XXXX asset and we expect in on growth phase highlight, these we eliminate of uncertainty actions to strategy. base. risk and as multi-year advance from our execution, American build North a we to Coeur’s systematically in new With conclude of cusp continue production cash

standard. safely of proud who the efforts up again combined record to the my leadership President expertise everyone’s for McGrath, want member very welcome and let’s workforce. bringing together tireless questions. her going and track her of was and I We pulling consistently forward Exploration. employees of up benefiting a of career. value team, a it open with recently at and dedication. Palmarejo Aoife results deliver pursue for impressive With Senior our questions, and look just appreciation forward. for take I’m our over reminded moment higher the this go and once ahead dedicated was Aoife to opening it from to of hundreds of extend Rochester last new creation distinguished X,XXX and Coeur contractors, that, like I’d month, are Vice responsibly Coeur’s efforts joined to I newest nearly to also incredible us a entire Before of an of

you. Thank

the go first ahead. question-and-answer question session. now will [Operator you. Scotiabank. Instructions] from with come Trevor will Thank We Turnbull And begin Please the

of they’ve to order? a changed. gave how You some impact the bigger the some Have you a I I those? maybe operating was – items cost way was can CapEx at see for noticed has like was But just the on quite deck thanks you it. done on of and it can steel any thought of breakdown perhaps good hard can you the the comment first you on I just that was you’ve Yes, inflation I in comment in played and and you inflation, it time slide taking things And inflation presented curious, but of call bit the the make comment structural was looking really the role have little pressures I’d way how it. a my guys. that pressures? a good impressed. you might to past,

time feedback. for just be so on that both And that slide. and might externally create that slide was internally this Appreciate appreciate a to these given first focus thought this a and sure. this include, feedback. the pressures Yes, We good

to talk remaining on And large relating has mid-summer Mick Rochester capital a bit the guys the expansion. of fall little as couple little Mick color started side. shown on on sort to pressures bit maybe last of the between had you award and On year, the going capital We up really into a see contracts specifically. Trevor Tom, a can give to inflation how we I’ll of capital and more those side, let the side

Yes.

that the we quite And XX. project on plan the we’re that POA thing XX% about at great the expectation. process project, from last committed So is on year’s well predicted

schedule that new time when then So the that communicated sticking and capital. were last the we at with We re-baseline project looked guidance. and round in

for last pretty the where a in project year, on And capital process front, we’re one with happy And that a for this the we’re the of POA fact, at we with guidance planning expectation built XX. operations lot the was that’s cost side, on XXXX. some into why inflation holding and we’re robust year. So

Tom, to add? anything

point the this fine inflation year, it XX% with a in And mostly came think of potential XX% on what the back early third Trevor, to flagged of project. we the just more right I I end last came think high it took one to on was then really re-baseline labor. seeing. range, that we significant kind the kind a quarter that contractors of how scarcity on range Mick that put away estimate, was some then when was said, that to I labor – year that And we in just the from their themes estimates. and of of risk that source bids steel, And their escalation and piping, into electrical, incorporate that probably inflating big of the trying of were to a were reflect

you do I back that recall And in Right. QX. telegraph

you’d color more Yes. follow-up Happy like. to you and give offline if

rates before, from on is keep bit these trying – like Does to It pressures inflation, starting I see I and exploration are to available reflect haven’t and starting ask just what’s it appreciate you rigs No, this in harp but seems just terms well Is cost to so exploration. in of I just am that. availability to a heard – forth? sector inflation so as I drilling much there’s and hate it for days? And the like interest curious.

crews of side also assay Yes. in there And very of on The is labs, the then drill the think first labor turnaround I impacting results. times scarcity is place that on labor assay tough.

seeing know on… not don’t a are that, really the cost On I little actual we’re I we – side, but – seeing

helping great stay The off year. efficiencies cost we’re we inflation. fact far across are got of this planned is what needed we for And some seeing in the and so efficiencies us thing [Indiscernible] that well that portfolio per to were foot

that’s congratulate on Thank it about to Aoife we’re her I while Mitch. you excuse and you, Great. as but had. use exploration, you. And all Thank I’ll an talking just both appointment,

Trevor. Thanks,

Thanks a lot.

Thompson BMO. go Please next from ahead. The question will from be Ryan

the comments slide. for updates. informative that guys slide. Hey that echo thought I thanks on very Trevor’s I was a would

of life So that bit for it, couple decision got in questions maybe that on of dig me, thanks just over the for do more there months? and that. little you Maybe first on a record XX how you Can see next, mind you call XX sort just of a Kensington. evolving the to

I capacity to of almost here that process permitting decade years those five And U.S. so give sense – things the you earnings that both long us the think that and tailings started in a We ago. take just in waste we sure. rock. Yes, of how another materials for said can We should give or

resource the Now the budget built that to We’ve the years. decent next year-over-year. some XX fill side been of We’ve of inventory resources, into onus But that of is mostly now XX on this declined on a – us up year. drilling Kensington. up expansion is investing focus reserves pretty at the to reserve convert

which from in that the terms of were areas up where mining been some found results the put I XXXX. coming of drilling we the week very the of Kensington, of upper mine out Zone of Kensington, from main in – the Kensington results last Some we’ve that we’ve started since encouraging

other to in And you up add any so call that’s XXA, resources that us an main do higher I give want going reserves. the think interesting have ultimately XX, can deposits then Kensington? we we of the some Mick, and what Zone to development some additional XXB, that there or besides

there. And strong X, right that get a Cal get great well. the a When No, that target hopeful time. we Callaghan look And we’re convert in list joined We’ll targets fill of the region were after down capacity get put region tiered to us, options you excited way strategic – to going approach, have together targets. through and to And Tier to that who options X, at X. – conversion Robert going reserves we’re all that I X we’ve and Tier after to if that as of and joined experience and to we work a pipeline. have, obviously, really has we’ll at have that over lot some us those interpretation find and up we’re about what

as on Thanks me. forward another unfolds an thinking and one that to there? for Are Sterling? project? tracking you Perfect. us there. that looking Can the Crown just still latest active just give I’m for and the Maybe work update on that you What’s

of a Nevada as in Yes, think a still lot announcing the there of sort a region. Corvus and Historic us there’s active. lot to with exploration what of to just lot them a got in and A a Southern resource lot Silicon is is activity corporate taking place. reason lot of right AngloGold new the allocation that. acquiring pretty Gold and now lease the our on area of because exploration I district that’s been of call of people most a then north – the know lot potential immediately life there’s investment they a just activity budget of on in There’s healthy activity a

we’re in continue drilling look, to growing to keep invest our and resource going So base.

you map so of longer of it’s growth and look position that here. of Southern tied the that story term down Nevada. have to guts have. We’re up exciting the continued said, value conversations, I success Nevada land in an good partnerships, to have the said, whether the we compelling really Southern We the always can think it’s opportunity we kind there’s there, whatever we open if we of at But share part there. like capital risk, having comes always unlock if to do very those rationalize consolidation, a really maximize value we’re that along That district that

That’s lot update. the got. a I’ve Perfect. all for Thanks

Thanks, Ryan.

Landon be go Please from Sachs. next from The Carl Goldman ahead. question will

for time. morning. Good the Thanks Hi.

in I’d full CapEx focus or that end costs to guidance buckets that or sort something could and of that higher When on range, your you that be are, are you the material those to of be toward hear there. look unhedged control, really main the at in the on not factors interested big what lower Just that perhaps year more to focused and nature. the so, drive

there risk, is of now of owners for kind basis of bulk Rochester want the to kind started of procurement that We costs to management still Overall to out procurement more Yes. – than development, just et project our estimate which spend project nail anything is The of to biggest et out process, I the the bucket capital of this sits phase. risk. lot next over into at have control the going good controls that dedicated was starting at underground crusher a cetera, we’ve lion the And share the we’re Tom, what Did capitalized ongoing which and the those it. our Kensington more leave CapEx to design expanded procurement really from our XXXX, expansion. I buckets that incorporate else? good toward we’ve a year Palmarejo. and And CapEx the of transition is development shift mines, in anything of think the contingency nature much management at cetera. facility. But underground Rochester you that’s to down more got obviously pre-screen in of to

the and profile. construction XX POA the on Just risk

once in on our the above there’s for ground control much work civil doing risk that ground, project, which largely there, largely tighter execution digging work, is control. we then we’re course, a we’re and in we of are when but now and construction get holes the this and Of always

So with we’re happy pretty profile. risk that

to summary they’re to of see that liquidity Great – you number helpful. sheet million. you total $XXX on XX, very Slide the the getting the there balance disclosed enhancements, That’s basically

The think helpful the but a phase of about kind like the sensitivity build go you’d downside. there you’d to is comfortable Is range interested capacity the you we that that to of addition of be even certainly As of maintain. as revolver just the there kind kind Rochester? with in through

you to want do Tom, go ahead?

least of we we’ve would availability million pop always $XXX time company as we multinational have a of always got make that cushion. time. the We’ve like sure. have that It’s as kind Yes, to amount that up of sure a sort what from flexibility to minimum that with to of at to good stated need opportunities level

with what available. we in around of that little on the big just So got part make half Carl. of we we’ve we’ve and XXXX the the the fact, in of that’s in that protection XXXX, XXXX liquidity the from all up was program And math second hedge half geared out did bit on we’ve target, more hedge a downside at during we to again, those of that added million $XXX hedges And got put XX% XX% a sure that putting ensure to first of is Rochester. this, that of construction

Thanks Fantastic. That’s helpful. very much.

Carl. Thanks,

The [Operator Noble question Instructions] is from Markets. Please go Capital from next Reichman Mark ahead.

even from project right that parties off-take this agreements forward. it that your in market, Good but interest morning. And from with be thanks may at question. you’re my received expectations discussions on buying signs for the success be exploration are project, have the little the any point? for moving a that what And It early, at of decision taking encouraging the Silvertip making or you whether Silvertip, other

led deposits I the clarity like the And And Yes. starting the side. that’s more the we’ve Thanks here – on profile they’re lot on the now highest from increase start. think bit to us to among from late have, even companies the grade from rapidly. other year gain – some we like and work anywhere We know fairly off-take zinc see a you starting question. we’ll that’s attention that grade certainly maybe Tom, on. world. especially as see going that in then the anything we in for Mark I’ll this the silver said, get more is can tonnage Like on tack a this always

box what sitting look economics always project. in terms we’re economics and we to getting checks it And year overall that’s this forward and some capital so Rochester higher and the has that make us external find the of for lot project The for And importantly, in back it’s potential priorities is the obviously – company, most that to interest the project come of on tonnage also for a a Those the end seeing of interest. getting to then of British to the lot a any like a Columbia, of balancing as And the certainly for and here looking some POA sequencing way like us. work parties externally fact in of delevering XX, completed. are does scenarios need have other for creating excitement the other... and those But of first. attracting internally. Tom, do you the

I we’ve all And grades that are just the the testing come across would talk we done all the concentrate – – Yes, various the of zones. have that the logistics those And going about metallurgical testing certainly highly to geographic out an never be market. and desirable. are given to the are location, get showing the the lead that cons zinc to was concentrates issue out both

And continues interest. with be to so towards there more of the the out here come And news we’ll again, heavy year. end

just metals created Silvertip. on disruptions, geopolitical of supply in thought Eastern is, And with more a I going everything higher has think prices that’s Europe, there disruptions, base – with around even last buzz more the of put and uncertainty one

a Yes. more even tonnage, Particularly much higher to it’s at going interesting. be that

see. and wait So

it that how with you’re onto end is towards up decide decide process you’re feeling year. at this point, shaping hang look of or whether recognition it’s working pretty about your growing At it. to the you progressing and do there’s competitive like to terms really sounds something very the as in of the good project else it So to

Yes.

looking over head here Mick that’s see shaking I’m nodding if to nodding think his I or is he’s said, head. his well he at Mark. and

And a than it. That’s Thanks anyway. really appreciate better helpful. very much. very much no, That’s

Mark. Thanks

Ladies like remarks. turn and conference our this I for any Krebs to Mitchell the question-and-answer gentlemen, session. back to over concludes would closing

this with morning. appreciate forward speaking summer. to again Okay. Well, this time we Look everybody’s everybody

time. busy the day. for and again a it’s I have thanks week a So know Thanks. reporting great

Thank today’s Thank presentation. you, attending has you concluded. sir. conference The now for

You may disconnect. now