Coeur Mining (CDE) 4 Aug 222022 Q2 Earnings call transcript

Good morning, and welcome to the Coeur Mining Second 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 Mitch Krebs, President and CEO. ahead. go Please

our thank call. and Routledge, joining second members our Whelan, Good me you here earnings of other with With McGrath, Mick in quarter Aoife morning, along for team. Chicago Tom are

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

Cornerstone quarter growth and at the top-line marked Project. continued Expansion solid Rochester by was XX Our second POA progress

three of X strong Slide in deck, mines to the on four highlighted delivered our earnings production the As operating first compared growth quarter.

some Solid metal flow sales, changes capital coupled rebound operating with led strong to cash in quarterly positive a working well. as in

full of year, second As we remain the look our the toward production year guidance. achieve on half our operations track to

our side, pressures from the especially to costs. impact higher On continue sharply results, diesel inflationary cost

adjustments So detail in our to XXXX we cost a review in some moment. made that will more and have Tom minor Mick guidance

achieved The gate We additional shortly. reflect peak the also and of the every next half to on quarter, modified be day the our results about to year. balance recent concrete reached start successful at Rochester which the And components XX levels secondary We completed during of pouring and important is through of steel share and Victoria Silvertip the being are sheet million the liquidity Aoife remains positive major more minutes. now. now securities. on remains milestone about key Rochester’s erection liquidity mid terrific couple an more million $XXX expansion XX recent and contractors all including XXX installation $XX Merrill-Crowe Slide There at with with now on activity, total on at in were to ago ongoing a proceeds milestones project, of an weeks Almost exploration $XX adjusted going invest talk will with and second nearly existing track at the in will and are Mick completion made. photographs progress the several of over equipment form a of follow-up the drilling Gold demonstrate that importantly, to the shape, sale crusher. in potential during facility decision site. pre-screens the our Palmarejo the in Crusher, of Kensington, Most marketable solid The of few full at additional year talk including guidance an million,

our board to expansion our we'll area. to and refresh balance business. continue highlights, as further enhance we commitment Jeane, progresses reduced meshes and addition to toward look of Jeane work positive great initiatives priority strong the will the of current ESG With delevering people the other in to in further generate. the I'm of a especially Hull experience. want an pursue side brings opportunities gears, making industry pleased attention of pursue up on on years position leader be business, XX XX lower to the the in a the to diverse business. engineering, progress completion. awaits the in I board in we to also very our with unique background labor well to highlights future. debt, leadership talent very stage The Shifting attract expansion, and Slide remains place coming enhance Her operational that will be Coeur's Coeur's to welcome higher Directors. view, of over and Jeane's Board advancing production, us market. completion Jeane sheet particularly and independent Rochester with to the with valuable Finishing cash ability the free cash opportunities the the stronger Coeur post this The with important some costs, retain tight your the that into best forward we're turn Rochester is flow critical expansion expect to next flow to

head our We creation through work training and address and of opportunity a continue the rewarding and to designed where as build to reputation on develop want themselves programs careers. that to people place maintain

half Before give Aoife XX company our exploration an of some having our her Mick like additional the provide on first provide color I'd and with an operations, overview days to on update second priorities.

these and a A in the summer southern a the extensions second thing quickly impressed the in the larger high Elmira towards We We a real target to for growth its the And in expanded the outlined assets. on accelerate all opportunity vectoring three grade over people traditions in out Kensington, been upper by Mick. the very of the One I've role, is the turn the of for drilling intercepts year of and date and step intercepts and possibility Silvertip, At had to me At the have Palmarejo a at system. from key deposit, priority programs. addition, to meaningful half and known likely the very the to to South, deposit the source. continue year life. funds veins. plan of lowest exploration the year-end life and potentially opportunity drilling the very drilling invest showing mine of company's new aim the the of silver be impressive believe Drilling additional potential robustness has to and consistently Silvertip to back extend organization. team quality across sites zones. risk, impact But will continues some high of and an to the point firmly is for believe and months Camp the with show the Independencia Discovery was three to that current to second both of wide visit company. being in the been larger reserve to exploration become now resource testing recent small Kensington with After a some reporting right the I've Southern highest apparent to that drilling results. XXXX year and of allow are became exciting will to three our the near now, programs continue returned main to I'll look potential mineralizing Johnson of deposits. to that the targets results stage value with mines teams to include excellent projects intended gold in the forward source areas grade half to of Kensington, has meet the term from XXXX. the of Silver of continue Creek mineralizing this has resource at much the underground part defined in call regional we At be season with testing what Hidalgo future a highest the remainder zone at package which extension

Aoife. you, Thank

Excellence safe clear Before people downward development Mitch I to our world-class working the and our in the review, for in touched align a objectives the establish is the continuation that injury big a effectively programs ability getting and success. quarterly health to people, of have I the to had is XX grow environmental environment believe from our ground want earlier add on and in reason this And on rates. trend impact business. that a strongly performance multiyear of foundation Slide safety highlights our up. investment a training

supply our operations operational half on headwinds a addition XXXX Coeur’s first is perspective, at more disruptions. an chain factor Looking of of teams four and we from project, even to performance global in impressive. considerable major overcome costs expansion or our When of back worked hard have one the on

of second, safety priority is momentum half in maintaining operations; by: POA efficiency managing first, business and implementing and our at that Rochester’s initiatives drive on and most the wellbeing advancing on of focusing Our people. improvement that the productivity transition; and third, second our XX carefully and importantly, steadily year

to with metals blending recoveries Turning on X ongoing grid quarter to beginning and optimization, remained second summary our and metallurgical improved production Palmarejo, due Slide consistent.

We in confident production targets ability our achieve for year. are the to

adjusted on change at basis. expected has product a of have on costs unit a core an been reflect to allocation good handle the We costs largely in guidance Palmarejo

ore move as while silver up quarter-over-quarter gold leach further help the of XX These as Ramp system product de-risk pilot pre-screen the as were Moving forward now pre-screen impacted of on placed July benefited in our silver the size Rochester, and XX% system, optimization ounces us completed POA Tons system. in should quarter we learnings pilot pre-screen produced placed underway. of well with X%. production strong rates the was optimize placement is and on XX. increased first from to ounces increased which quarter. by installation produced the second the the Gold

slower XXXX production first we gold revised XXXX of achieve remain the guidance confident higher half been for cost. to that diesel, reflect COGS upwards for year, labor has and guidance is silver. to maintenance and a Following on-track Rochester

on This continue, best electrical of gold completed of the the product to was the we aligned mill XX% by costs completion the The and As teams of Energy, and learnings some analysis final achieve corridor part among of POA fair to of many Rochester’s to secondary not and updates moment, key production the the team commencement the for the reversal of yet Nevada the transmission with mining transition gold believe the multicolor cost been of major place set developed. working period, scale metal QX with activity pass year, increased project. of the it to pace continue energized installation the installation on start production million fully $XXX period the development Production realized. catch COVID progress its Wrapping efficiencies on-track throughout contingency X tangible Wharf we our current on will Key led The back the first XXXX estimated improved the Tom. along of will On crusher elevated to remain throughput, increase lane example project upwards the are see July up quarter. as operation of quarterly second we we cost continues estimated engineering to of of to track we the time end, but and to estimate. inflationary and costs to over versus gained and pre-screen as ongoing others. grade see pre-screen roof on $XXX efficiencies. million, to to which and over and highest without quarter. the stock Rochester and the zero with updated along are XX, the on is is to I'll has $XXX of a quarter remained procurement is workforce together remains call governance million Coeur and Kensington. are quarter, conveyors, with high project's systems work the costs. highlights. QX well XXXX With the of with of a taking the in that capital second optimistic the lead a Wharf, an revised an project the pressures due in to of as general injury, hit a end see on higher over practices be matter, achieve Mitch a and end that anticipated X% delayed anticipate will XX through guidance. first project experience material, cost diesel In on driven Kensington total up At ever by continue been approximately could mining we around roughly and that, the These place. lost in say, of substation another than the date. is final we expanded the incurred guidance the range. committed the expansion over onsite hours reflect million project Switching Kensington's has successfully complete, higher the production conveyor XXXX guidance ultimately up impacts Being half

our I'll $XX Mick. during are the was of financial Slide favorable on capital highlighted led X. This that working of production run Thanks, X% operating changes our with results in revenue by each An higher flow operating to briefly mines. quarter. metal driven increased million in cash increase sales through coupled quarter-over-quarter consolidated at

We on positioned XXXX second Coeur's additional impact remain pressures. year are stronger on to X cost a contain detail half of of costs their the opportunities on business. our guidance for Slide reaffirmed. with key the We industry-wide production and deck in provides four focused

gallon diesel to than item quarter. largest million other cost slide line remains in moderated XX million we cost demonstrates however, the currently of consumes terms of the have to we're Accordingly, budget As our last at between at increases diesel over year, have gallons Kensington second experienced the compared increases per and per we exposure. primarily quarter. related Coeur cost to our the through XX Diesel diesel Wharf $X.XX running Rochester, approximately increased guidance end of and prices.

looking Next, of liquidity, million quarter cash credit of sheet, balance million at turning $XX XX with facility. the to ended $XXX million Slide and our and of availability under revolving the including $XXX we

balance securities, CapEx remains monetized highlighted at $XX slide. the of of as and received a the of during the million portion of $XX leaving and Additionally, million proceeds equity shown we've we that us to that million end, with We exploration investments potential in call. had our in quarter $XXX Gold Victoria July. liquidity comfortable positioned the strategic in well fund early priorities approximately on position sheet We're

Lastly, that place the remind downside put POA I during everyone wanted of we've the to build. protection in XX

additional price is $XX We quarter I'll ounces of have $X,XXX at pass environment. meaningful price XXX,XXX an hedged protection which was forward market per At brook gold in in end downside hedges call ounce, $X,XXX average providing and approximately gold at the fair of XXX,XXX of an million. ounce, in current back price forward value average XXXX remaining of this hedge Mitch. to the per XXXX. The now ounces

Thanks, Tom.

for With it our go the questions. top Coeur well we the priorities, from differentiated its open with and portfolio a to for delivering being company for organic Slide let's that way remain industry U.S. is to half Q&A, assets. a that, balanced the second that these growth of metals priorities highlight a year. Before truly XX By want moving summarizes quickly to opportunity on on confident North investors American seeking of I leading up ahead precious on

Instructions] begin is The Scotiabank. question-and-answer the Turnbull [Operator from session. now will of We first Trevor question

these in interested by scenarios. was bit mentioned just are if being I for the the you those throughput you a talk assume about around I could framework that little scenarios maybe higher driven success, and Silvertip. wondered exploration

-- weighing exploration expansions maintaining mined are minimum that terms you are these For be depending you on example, success? at a a scalable, looking life? in things of having might Or more

first drill. it's the she's large continues days, that know system been about. I to a There's Silvertip no a doubt is particularly that enthusiastic project grow, more we Aoife's in XX

the As time and we that of is business sort larger continue much which to okay. to pursue compelling scenario, the develop continue to this will and engineering obviously drilling, some a do design case, take

goes balance XX, positive to continue sheet. cash and generating Rochester we'll as POA focus the on, free on commissioned, that While completed flow, delivering getting

expansion so that, there about little you And we're Silvertip we're sort can doing work want talk while -- With a more of thinking those about the that? how to continue. Mick, size can scenarios and things do and bit

continued we site at to size. fairly what a was idea have And with looking success Silvertip Silvertip, we're original of now to a results, small the but this that. rethink at that exploration The is at rate absolutely. get Yeah, have since we've

trade for what off look project. that an off stands the you with to continue through And mentioned, while going program, target POA a we'll hit that going continue at we're mine moment, a then capital as we'll project, with finish the as is the have it reevaluate rate expectation minimum size. and make life, that So which today, we explore size XX the case. at to to then that effectively is, successful to investment support But exploration we study as to we asset

that double your on you that range a ton think focused and a last that Silvertip? to the year, work of tune the did is point just fine to minus, say, plus around scenario, work continues. we're standpoint on there in now put or anything from of But of range day we'll Aoife, as the we jump want X,XXX that, fine a and Trevor, And lot I a sort in

step I of really of right And the to mean, taken such system I context the in now. the -- exciting look bit a think it's Yeah, it's a back hub we've and larger a at stage model. the mineralizing the deposit fluids provides is outwards the rock heat that fashion. Basically, in sort hub move the a CRD intrusive spoke and is surrounding porphyry source a radial means that and what to or at this mineralize of

get -- the location in date seeing porphyry the the you -- resources And are are one the And of several So the one also potential source. and indicators potentially effect. hub that to we're spokes. spoke geophysical data, for there's of on from only evidence data, what outlined the there of in

want step would and little a the drill bit additional -- some back is hub, what plan test we we potential gets So development underground that closer this as to that test And we to to do summer spokes. too.

Great.

forward Sounds exciting, for jump me with. up come in. Thanks look to and again, hearing letting you Mitch, what

question next from is Noble Markets. Mark Capital with Reichman The

questions, for Tom got one Mitch. two I've then one for question and So

So case XXXX the costs under Tom has Rochester question know, $XXX million when on for was of the first and base NPV capital the million. seems it discounting roughly X%. like the the And was completed, report you is, declined it's also now technical $XXX

the roughly the today? kind $XXX and report could comparison So Is of million of between walk to stand investors, topped cost kind kind you, ceiling? I outcome where ask technical kind wanted of out? through you of And the a has for you just

XX% crusher. Thanks, trying The of thoughts, if remaining. bids that go uncertainty off as new a less surprise. than there committed, right, third morning, as all crack the coming work get are million, prior pre-screens The huge to $XXX estimates. at. one shouldn't that couple own last nine the and Tom, nearly on months we with Mick these along said, Mark. piece Mark. coming Nothing obviously the some will quarter after some we that's lower take which, the seeing down I'll for pin back here of be cost pressure here that good into free my start to we less Hi, are feel with further is seems And a are to back a be in

of some some And year. million, of say and now put between as kind arise increase next to of $XXX the of middle or $XXX on to $XXX million, of But of -- X% go a have there we So, I that our inflation mind, think not a may to cuff. another the thing XX-XX, up indication of provide far Mick capture mentioned, when of to potential the did you scope wrapped we the between with indication language, kind bucket as above potentials Tom, and bucket beyond an and a attempt comparison of sort about if may kind of this those want had that? is enhancements, do in million my off layer I

Yeah, XXX%.

million was So, the original $XXX amount.

pre-screen I technical out, inflationary two think done came have as the managing. elements, great the when a with continued we guided had changed whether $XXX other to the Then be we had be million, revised enhance the we it opportunities, To the had we through throughput, As of as safety, honest, at pressures. some which report of job us to 'XX. design led quarter the third enhance detailed we found of this the engineering, end well we

of of the project. of, -- terms second in. who then to still I us success top inning ordered for seventh terms are are versus it's I’ll On really to or pre that's going the of We back a And a when the be at in of lot peers key in be, maybe we were kind some where our you ultimate the think to procurement just heavy it's in if back where side, inning top the the pressure. it's elements the the now And ordered given third at the inflationary going why of capital’s go the look economics. of

to we XX% in existing Point to still as have hopefully pretty world. mining are reports take project best the compelling, in Stage going and IRR. jurisdiction X, it's these we point the it's all the out the had advance continue be that time, compelling and from learnings a a Now, and technical arguably

know, So, -- Mark don't I

was just I because think difficult some now original wanted about expecting its mean, project given of you've million, environment. the $XX managed But you $XXX economics, assurance the inflationary are I that cash circumstances, flow. $XXX. clearly the the on I well, still the NAV million

kind of then just I kind seems long-term. was the the Silvertip of kind And some that, always think for project on was by be kind really from the concern. the knock heard they that second I I are in quarter. to exciting mean So, that had the of equity. question The Mitch more challenge economics. there that, just getting more And of investors is Coeur’s been I've is some issuing I interested

I like that it the some that kind that the then in think are investors in flow used would a cash completed, once Rochester is be and returned see another to buybacks, seems And cash to project form will in delever in sheet flow of balance halt of that then spending of the big on would embarked Silvertip. shareholders kind once there Rochester to place like the be spending. whereas is

room return shareholders to the in form So, to mean, any be will cash flow some buybacks? there I of

I'd and the That's like your thought and a it long we to we flow, this Silvertip. take free kind delevering completion ago, as we, cash to part timing. opportunity from POA a size capital where of capital then size, along, the that guide company's XX nine our won't bit to the we've And positive and stockholders. and an post a create about flow given future free within whether I of free when the it is do, point cash Silvertip that balance growing around, I XX doesn't we make And flow. I the time. we it a that question We'll initially lives expansion sequence -- that our the we accordingly get generate a we've strain POA positive as while, while then in their with that's the with of we a there company perspective a obviously and getting largely helped expansion turn on that kind so to terms and help transitioning significance of And an with second with anticipate to XX being of flow that always company frankly, and to flow that, consistent move use say helps reduce Board sheet to required Silvertip to help were partnership and generator staying returning completed, kind scenarios Rochester to and more has talk a from a where at for scale months distress that we potential, to Silvertip if of of models say, us of that to -- restart. risk, alternatives generating do back in lot think decisions open and question. But think ahead cash comes share for of POA -- along, sort cash big change do to could think other of free and as fair positive Silvertip cash with agree where area free utilizing sooner advance been let's fund and we of a balance thinking sheet that were, Be generate

James. question Brian next of Raymond The is MacArthur from Instructions] [Operator

little on a Rochester. the to I follow-up CapEx bit just want remaining at

$XXX sort committed, at XXX this look I said You then that's end the off that's to XXX, sort But next low at XXX. go. If and million XXX page year. spent the $XXX million, of have take to so of is the XX guess I on I your end when year X, $XXX guidance you to low

about that. reconcile I'm cash you X% really -- I All of just door, on Because I out. that? much kind in Have should figure trying how how can't care just there Rochester, I versus built trying the is XXX already I'm I'm still or think about that to XXX. to is So at all that

an into Tom, just Brian. the our a -- that Brian, a go second. No, really timing of little Yeah. it we're And more reader what disclosures. payables. I question. in billings bit let of flags of seeing love for here Thanks But in detail terms you astute and a I'll

we the door, between XXX today going that -- So still paid. accrual out that and than -- there's more needs there's the we've cap cash, still capital have incurred to be

And of so that's been more we're peak of hawk, quarter. in through of a second be identified more the at we've, that door one We timing of something the in out cash capital this the Tom, POA That's, and like of, distinction of a half obviously had key and think you've the second lot quarter want terms to? you paid that's into kind current -- some to previously fourth this I will XX quarter, the what get to come the watching year. slight of of that do this third anticipated but now there. happening of the in and

Yeah, sure.

big numbers, some picture Brian. just So

XXX So of XXX which paid. that's incurred, of

in paid called been out it's gone cash door. actually the -- XXX has cash So

the So going you that's to to of kind mind, funded leaves be go, some number to cash have just of the is. year then to for probably Mitch of the said, second XXX XXX we or it as numbers XXX some go. half. magical remain that's expected what's that XXX bear And so capital of with next of in here updated, in go timing is to is the leases. or as kind invoices, via remaining And of But

about, detailed. underpinned gold levers the investments. if The the from there's of our circle go, XXX the then million free multiple with back cash we've the levers, same And there's hedges the capacity, There's real kind so And or right? there's revolver quick. flow Tom exist, just still Brian, to been to other then operations, are other that cash, which the there's equity talking

know So where good those the levers ones to when and POA XX. and together. compare there if pull we and that to And need we And what's left up at about we you you we add we have to. that feel go we can all sit

that's over very, these and there's in appreciate whether very helpful. it is -- That to always anything up because budget on XXX. of time I too? not much to trying out anything? or worry when I Obviously, timing you to it, on top need about projects front was on Normally, there. about the always figure I I Do fund capital more how -- about, working thing one was timing That's Do that? included. that need that ramp have think any to working it'll capitals over

We're Merrill-Crowe the various 'XX the we’re middle where cetera, all et done, in ramp budgeting scenarios, the of when’s in up cetera. et the process factoring

stage, be ranges So of et year, very further et that cash costs this anything don't timing at 'XX next cetera. clear but cetera, will about expected have we for guidance

On that half second commissioning.

Yeah.

imagining there's on -- pad some there's also buildup, I'm liner or well. but fresh as

setting will Brian. that few So as sure component, budgeting things is there go we out sort be and articulate then we that guidance, through and we our will to

at on time Great. the other maybe following as at same because the figure question to on money. maybe way. That's mean, I in. sort to helpful stuff that of out, were value, project, up it Silvertip, looking And bigger one well. time very just you was ‘XX is take to against sounds ‘XX, it time getting going all me maybe like obviously It thinking some I

shareholders? a give into that and fair which you're done work now? would about the of eventually way I a you as think Is potentially now pay for to debt keep that 'XX, things that thinking right back all back then, it get timeframe? about gap money pushing you said, before you return think to to should factors down 'XX But what developing to that Silvertip, sort and it. If sort of it, Is

is XX if we starts think free do I'd commissioning to we Silvertip. a additional more for up potential at give today, it's truth and The we flow give the back not and ramping up sit that had here none kind much expect swinging you that than just any from us vine. a I to be great answer, of of how many if that potentially specific sense of a beyond vine a you incurring -- XXXX. half then one. POA And of you POA generate onto XX some sets that want Silvertip would but the right to target de-lever, years that and cash us of And XXXX, as capital feels on conceptually if

I different window. know we sort that our in if some helps means during here as approach, well additional kind of obviously So, of sit a reflect -- don't today. And thinking will also that take bigger which time as permitting

was be next last give it Sorry. one. And was then. that going to up. I'll my question That my

where -- is of being be or, this of to new interest permitting all all would another much get lot be is How for done. that are already of spoke. a done, that discovered, mean, hub this and like it areas there So the has I on I

said, of as And So it how you quickly. bit fair permitting? have goes it actually pretty a much would time to you of spend

want do you to Mick, --

Okay.

to access then be in and From all some to So investigate. from the environmental those bigger, we size an good go if or have areas going perspective, expect and twice we exploration and operational a takes in need to able to that time. are perspective, we an to that's are place assessment, put plant an got we shape

that some progress started it's timelines planning, that. of looks work said, have that. already that And out to and we will share as actually exciting. will like and have Mitch understand this the But growing plan It's that get right as and for we to that what we We sized. then

Brian? that help Thanks. Does

questions. much very all you for appreciate answering my I Thank does. It it.

back concludes closing remarks. session. and for question I over would turn This conference Mitch Krebs answer to the to our like

Okay, thanks.

I everyone's terrific standard and and so everybody's to premier having resilience. metals want effort, proud and I'm the you company. growing all as a contractors impact work our and core wrapping thank Before dedication for all of into employees pursue seeing quickly we just to America's higher of precious continue turn and up. are

quarter today you with results. we'll to Thanks. our third good a for early that, So with November you day. thank the in joining Have call and discuss speak again

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

You may now disconnect.