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COEUR MINING : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

07/28/2021 | 04:39pm

The following Management's Discussion and Analysis ("MD&A") provides information
that management believes is relevant to an assessment and understanding of the
consolidated financial condition and results of operations of Coeur Mining, Inc.
and its subsidiaries (collectively the "Company", "our", or "we"). We use
certain non-GAAP financial performance measures in our MD&A. For a detailed
description of these measures, please see "Non-GAAP Financial Performance
Measures" at the end of this Item. We provide Costs applicable to sales ("CAS")
split, referred to as the co-product method, based on revenue contribution for
Palmarejo, Rochester and Silvertip and based on the primary metal, referred to
as the by-product method, for Wharf. Revenue from secondary metal, such as
silver at Wharf, is treated as a cost credit.
We are primarily a gold and silver producer with five mines located in the
United States
, Mexico and Canada and several exploration projects in North
Second Quarter Highlights
For the quarter, Coeur reported revenue of $214.9 million and cash flow from
operating activities of $58.1 million. We reported GAAP net income of $32.1
, or $0.13 per diluted share. On an adjusted basis1, the Company reported
EBITDA of $52.7 million and net loss of $0.8 million, or $0.00 per diluted
share. For the six months ended June 30, 2021, Coeur reported revenue of $417.0
and cash flow from operating activities of $53.7 million. We reported
GAAP net income of $34.2 million, or $0.14 per diluted share. On an adjusted
basis1, the Company reported EBITDA of $118.6 million and net income of $13.1
or $0.05 per diluted share.
•Quarterly revenue and cash flow growth - Revenue increased 6%
quarter-over-quarter and 39% year-over-year due to higher gold and silver ounces
sold and a higher average realized silver price. Operating cash flow improved by
$62.4 million quarter-over-quarter and $48.1 million year-over-year to $58.1

•Higher quarterly production and stronger expected second half - Gold production
increased 2% quarter-over-quarter to 87,275 ounces led by a 27% improvement at
Wharf, while silver production of 2.6 million ounces was 8% higher largely due
to a 15% increase at Rochester. Year-over-year, gold and silver production
increased 12% and 60%, respectively, driven by increases at Palmarejo and
Rochester. Production levels are expected to continue climbing in the second
half of the year and be within the Company's full-year guidance of 322,500 -
367,500 ounces of gold and 9.7 - 12.2 million ounces of silver
•New quarterly drilling record from largest exploration campaign in Company
history - A new quarterly record was achieved during the period with the
completion of approximately 320,400 feet (97,675 meters) of drilling and 27
currently active drill rigs. Investment in exploration totaled approximately
$18.6 million ($12.4 million expensed and $6.2 million capitalized) in the
quarter with significant increases in drilling activity at Palmarejo and
Rochester as well as the Crown district in southern Nevada
•Rochester expansion progressing according to schedule - Coeur advanced major
construction on the Plan of Operations Amendment 11 ("POA 11") expansion at
Rochester on schedule, with solid ongoing environmental and safety performance.
Placement of over-liner material on the new Stage VI leach pad commenced
approximately six weeks ahead of schedule, and concrete foundation work for the
Merrill-Crowe process plant and crusher corridor is scheduled to begin in the
third quarter. Overall project progress was approximately 31% complete at the
end of the second quarter
•Accelerating investment at Silvertip based on positive results - The Company is
increasing its investment at Silvertip during the second half of 2021 to
complete several surface projects to support a potential restart of active
mining and processing activities in 2023
•Strategic investment in Victoria - Coeur acquired a 17.8% ownership interest in
Victoria Gold Corp. ("Victoria") during the second quarter for consideration of
approximately $118.8 million. Victoria owns and operates the new open pit, heap
leach Eagle gold mine located in central Yukon Territory, Canada. The investment
is consistent with the Company's strategy and complements its existing portfolio
of gold and silver assets located in high-quality jurisdictions



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