Coeur Reports First Quarter 2023 Results

Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today reported first quarter 2023 financial results, including revenue of $187 million and cash flow from operating activities of $(35) million. The Company reported GAAP net loss from continuing operations of $25 million, or $0.08 per share. On an adjusted basis¹, Coeur reported EBITDA of $25 million, cash flow from operating activities before changes in working capital of $6 million and net loss from continuing operations of $33 million, or $0.11 per share.

Key Highlights

• First quarter production stronger than expected and in-line with 2023 guidance – Solid performances at Palmarejo, Rochester and Wharf offset lower production levels at Kensington, leading to total production of 69,039 ounces of gold and 2.5 million ounces of silver. Production levels are expected to increase during the second half of the year due to mine plan sequencing as well as the anticipated ramp-up and commissioning of the Rochester expansion
• Rochester expansion remains on-track for mid-year construction completion – Coeur began stacking ore on the new Stage VI leach pad and achieved mechanical completion of the new Merrill-Crowe process plant ahead of schedule during the first quarter. As of March 31, 2023, the project was 82% complete and approximately $634 million of the estimated project capital had been committed, of which $560 million had been incurred
• Balance sheet well-positioned to support remaining Rochester expansion capital requirements – The Company ended the quarter with total liquidity of approximately $382 million, including $67 million of cash, $300 million of available capacity under its $390 million revolving credit facility (“RCF”)² and $15 million of marketable securities. The Company further bolstered its hedging program with approximately 158,000 ounces of gold hedged at $1,968 per ounce and roughly 3.7 million ounces of silver hedged at $25.04 per ounce in 2023
• Exploration success continues at Silvertip and Kensington – The deepest hole ever drilled at Silvertip targeting a magnetic anomaly and potential heat source was successfully completed during the quarter showing occurrences of intrusive porphyry and higher temperature mineralogy. Silvertip continues to impress with its high silver, zinc and lead grades as well as signs of other critical minerals such as indium, germanium and gallium contained in the deposit. At Kensington, drilling indicates that new mineralized zones identified in Upper Kensington continue, suggesting promising potential for further mine life increases

“Coeur’s first quarter results reflect strong overall production and cost management, which positions us well relative to our full-year guidance ranges,” said Mitchell J. Krebs, President and Chief Executive Officer. “Importantly, the major expansion taking place at our Rochester operation in Nevada remains on-track for a mid-year construction completion despite experiencing extreme winter weather during the first quarter. Even with the weather, Rochester’s operating results were ahead of plan and significantly stronger year-over-year, reflecting higher grades and throughput rates. With the second quarter representing the last quarter of elevated capital to complete the Rochester expansion and a balance sheet well-positioned to support this remaining investment, we look forward to an expected major inflection point during the second half of 2023 as production from Rochester begins to ramp up.

“As Coeur celebrates its 95th birthday throughout 2023, the Company is well-positioned for an exciting and successful next chapter. Coupled with robust exploration and prudent capital investments aimed at extending mine lives across the rest of the portfolio, we believe Coeur offers a unique value proposition in our sector: an American silver and gold producer operating exclusively in North America with significant opportunities for growth over the near and long term.”

Financial and Operating Highlights (Unaudited)

Financial Results

First quarter 2023 revenue totaled $187 million compared to $210 million in the prior period and $188 million in the first quarter of 2022. The Company produced 69,039 and 2.5 million ounces of gold and silver, respectively, during the quarter. Metal sales for the quarter totaled 70,866 ounces of gold and 2.6 million ounces of silver. Average realized gold and silver prices for the quarter were $1,794 and $23.25 per ounce, respectively, compared to $1,787 and $21.14 per ounce in the prior period and $1,721 and $24.06 per ounce in the first quarter of 2022.

Gold and silver sales represented 68% and 32% of quarterly revenue, respectively, compared to 75% and 25% in the prior period. The Company’s U.S. operations accounted for approximately 56% of first quarter revenue compared to 67% in the fourth quarter of 2022.

Costs applicable to sales³ decreased 4% quarter-over-quarter to $153 million, largely due to lower production in the period. General and administrative expenses increased slightly quarter-over-quarter to $12 million.

Coeur invested approximately $7 million ($5 million expensed and $2 million capitalized) in exploration during the quarter, compared to roughly $9 million ($8 million expensed and $2 million capitalized) in the prior period. See the “Operations” and “Exploration” sections for additional detail on the Company’s exploration activities.

The Company recorded income tax expense of approximately $11 million during the first quarter. Cash income and mining taxes paid during the period totaled approximately $17 million, including $9 million for payment of the annual Mexican mining royalty tax. As of December 31, 2022, Companywide U.S. net operating loss carryforwards totaled approximately $535 million.

Quarterly operating cash flow totaled $(35) million compared to $29 million in the prior period, mainly driven by lower metal sales and unfavorable changes in working capital. Changes in working capital during the quarter were $(41) million, compared to $9 million in the prior period, reflecting the timing of tax payments in Mexico and semi-annual interest payments on the Company’s 2029 5.125% Senior Notes.

Capital expenditures decreased 35% quarter-over-quarter to $74 million as a result of timing of payments on Rochester expansion capital. Expenditures related to the expansion project at Rochester totaled $47 million during the first quarter compared to $89 million in the fourth quarter of 2022. Sustaining and development capital expenditures accounted for approximately 33% and 67%, respectively, of Coeur’s total capital investment during the quarter.

Capital Project Update

Rochester Expansion

As of March 31, 2023, the Company had committed approximately $634 million of capital since inception of the project and approximately $560 million of the estimated project cost had been incurred. At the end of the first quarter, the project was 82% complete.

The Company estimates the total capital cost for the project will likely be around the high end of the $650 - $670 million guidance range, which primarily reflects the impacts of extreme winter weather on construction productivity during the first quarter. Mechanical completion remains on target for mid-2023 with ramp-up and commissioning expected to take place during the second half of the year. The Company expects capital expenditures related to the Rochester expansion to be approximately $197 - $207 million during 2023, with roughly 70% incurred during the first half of the year. Key elements of the project timeline in 2023 are highlighted below:

Coeur achieved several key milestones at the Rochester expansion during the quarter. Notably, the Company began placing ore on the new Stage VI leach pad on February 1 and achieved mechanical completion of the Merrill-Crowe process plant on March 31, ahead of its second quarter target completion date. Coeur also energized the 63-kilovolt power system and achieved mechanical completion of the crusher corridor electrical substation.

In addition to achieving mechanical completion ahead of schedule, progress on the Merrill-Crowe plant included (i) completion of the leach recirculation system which will deliver solution to the Stage VI leach pad, (ii) advancement of pre-commissioning of power and process systems, and (iii) completion of control systems programming and acceptance testing.

Coeur also continued to make solid progress on the crusher corridor with the start of steel erection and equipment setting for the pre-screen and further advancement of concrete work in the primary crusher area. Other work on the crusher corridor included (i) stacker steel and conveyor erection at the primary, secondary and tertiary stockpiles, (ii) topping out of the steel erection at both the secondary and tertiary crushers, (iii) continuation of piping and electrical installation across the crusher corridor, and (iv) completion of control systems programming with acceptance testing now well advanced.

Balance Sheet and Liquidity Update

Coeur ended the quarter with total liquidity of approximately $382 million, including $67 million of cash, $300 million of available capacity under its $390 million RCF² subject to certain financial covenants, and $15 million of marketable securities.

Hedging Update

During the first quarter, the Company added to its hedge position by executing additional gold and silver hedges of its expected 2023 gold production. In the second quarter, Coeur executed additional hedges on 1.3 million ounces of its expected 2023 silver production. The Company’s hedging strategy continues to focus on mitigating risk during this period of capital intensity. An overview of the hedges in place is outlined below.

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 first 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 $14 million (approximately $13 million in costs applicable to sales² and $1 million of amortization).

Operations

First quarter 2023 highlights for each of the Company’s operations are provided below.

Palmarejo, Mexico

Operational

• First quarter gold and silver production totaled 25,118 and 1.8 million ounces, respectively, compared to 25,935 and 1.5 million ounces in the prior period and 28,931 and 1.8 million ounces in the first quarter of 2022

• Production during the quarter benefited from increased average grades, offset by lower average recoveries as well as decreased mill throughput

Financial

• First quarter adjusted CAS¹ for gold and silver on a co-product basis decreased 10% and 2% to $926 and $13.94 per ounce, respectively, driven by higher metal sales

• Capital expenditures increased 26% quarter-over-quarter to $10 million, reflecting higher expenditures related to the open pit tailings backfill project as well as mining equipment purchases

• Free cash flow¹ in the first quarter totaled $1 million compared to $11 million in the prior period as a result of increased capital expenditures as well as the payment of cash income and mining taxes totaling approximately $16 million

Exploration

• Exploration investment for the first quarter decreased to approximately $1 million (substantially all expensed), compared to roughly $2 million (substantially all expensed) in the prior period

• Exploration in the first quarter focused on mapping and sampling to expand the pipeline of targets for follow-up drilling in coming years. The focus of this program is to the east of the current operation and outside the gold stream area of interest

• One drill rig was active during the quarter focused on expansion drilling on the northwest extension of the Hidalgo zone (located at the northwest end of the Independencia deposit). In this portion of the system, three mineralized vein arrays have been identified — Hidalgo, Libertad and San Juan

• Coeur expects one drill rig to be active at Palmarejo in the second quarter focused on expansion drilling at the Hidalgo zone. Significant focus will continue to be on detailed, follow-up mapping programs

Other

• Approximately 33% of Palmarejo’s gold sales in the first quarter were sold under its gold stream agreement at a price of $800 per ounce. The Company anticipates approximately 30% - 40% of Palmarejo’s gold sales for 2023 will be sold under the gold stream agreement

Guidance

• Full-year 2023 production is expected to be 100,000 - 112,500 ounces of gold and 6.5 - 7.5 million ounces of silver

• CAS¹ in 2023 are expected to be $900 - $1,050 per gold ounce and $14.25 - $15.25 per silver ounce

• Capital expenditures are expected to be $35 - $47 million, consisting primarily of underground development as well as development of the high compression thickener and other elements of the open pit backfill project

Rochester, Nevada

Operational

• Silver and gold production in the first quarter totaled 761,346 and 8,155 ounces, respectively, compared to 973,000 and 11,589 ounces in the prior period and 655,176 and 6,066 ounces in the first quarter of 2022

• Higher production year-over-year is a result of improved performance from the current crushing system due to the additions of pre-screens and other operational improvements at the crusher and leach pad as well as improved average silver grades

• Tons placed decreased 11% quarter-over-quarter to roughly 2.5 million, roughly 43% of which were placed on the new Stage VI leach pad. The decrease in tons placed quarter-over-quarter was largely due to unfavorable weather conditions.

Financial

• First quarter adjusted CAS¹ figures in the table above and highlighted below exclude the impact of an LCM adjustment totaling approximately $13 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

• First quarter adjusted CAS¹ for silver and gold on a co-product basis totaled $20.24 and $1,655 per ounce, respectively, due to timing of maintenance on haul trucks, partially offset by decreased diesel prices

• Capital expenditures decreased 44% quarter-over-quarter to $52 million, reflecting timing of spending related to the Rochester expansion project

• Free cash flow¹ in the first quarter totaled $(66) million compared to $(98) million in the prior period

Exploration

• Quarterly exploration investment decreased 36% quarter-over-quarter to approximately $1 million ($0.4 million expensed and $0.3 million capitalized)

• During the first quarter, Coeur focused on data organization and geologic logging, interpretation and modeling ahead of the mid-year resource calculations. This work will continue through next quarter with drilling planned for the second half of the year at the Rochester pit

• Additionally, work commenced on regional target assessment and ranking. The program will continue for the remainder of the year and systematically thereafter as geological knowledge and understanding of the district increases

Guidance

• Full-year 2023 production is expected to be 3.5 - 4.5 million ounces of silver and 35,000 - 50,000 ounces of gold. Production in 2023 is expected to be second half weighted with the construction completion of POA 11 occurring mid-year

• With the completion of the POA 11 expansion construction expected in mid-2023, the Company elected to defer providing cost guidance at Rochester until mid-year

• Capital expenditures are expected to be $228 - $252 million primarily due to investment in the Rochester expansion project, approximately 70% of which is weighted towards the first half of 2023

Kensington, Alaska

Operational

• Gold production in the first quarter totaled 20,296 ounces compared to 30,335 ounces in the prior period and 22,646 ounces in the first quarter of 2022

• Lower production during the first quarter was driven by decreased mill throughput due to challenges with mine sequencing and stope extraction timing as well as lower average gold grades and recoveries. A current focus on improving mine sequencing and stope timing is expected to allow for potentially improved average gold grade to be delivered to the mill in the second half of the year

Financial

• First quarter adjusted CAS¹ totaled $1,775 per ounce compared to $1,265 per ounce in the prior period, reflecting decreased metal sales

• Capital expenditures increased 39% quarter-over-quarter to $11 million due to increased capital development to support the ongoing multi-year exploration program aimed at extending mine life

• Free cash flow¹ in the first quarter totaled $(16) million compared to $13 million in the prior period

Exploration

• Exploration investment in the quarter totaled approximately $3 million ($1 million expensed and $2 million capitalized), compared to $3 million ($2 million expensed and $1 million capitalized) in the prior period

• During the quarter, four underground drill rigs were focused on expansion and infill drilling at Elmira, Kensington and Johnson

• The ongoing multi-year exploration program is already proving successful with a year and a half of mine life added as of year-end 2022

• A significant portion of the increase in mine life came from Upper Kensington (Zones 30, 30A and 30B). In 2023, Coeur aims to continue this success with further extensions of these zones. Assay results from first quarter drilling are still pending, but visual logging indicates that the mineralized zone continues

• While the initial focus of the multi-year program is to build immediate mine life at the known Kensington, Elmira and Johnson deposits, ongoing improvements in geological logging, data interpretation and geological modelling are outlining additional opportunities for potential growth immediately adjacent to these mining areas

Guidance

• Full-year 2023 production is expected to be 100,000 - 112,500 gold ounces

• CAS¹ in 2023 are expected to be $1,500 - $1,700 per gold ounce

• Capital expenditures are expected to be $50 - $62 million, primarily related to the multi-year development and drilling program

Wharf, South Dakota

Operational

• Gold production in the first quarter totaled 15,470 ounces compared to 19,868 ounces in the prior period and 17,766 ounces in the first quarter of 2022, largely due to timing of ounces placed on the leach pads

• Tons placed and average gold grade increased 19% and 33% quarter-over-quarter, respectively. Higher placement rates reflect planned mine sequencing

Financial

• Adjusted CAS¹ on a by-product basis increased 5% quarter-over-quarter to $1,466 per ounce, largely driven by lower metal sales

• Capital expenditures remained consistent quarter-over-quarter at less than $1 million

• Free cash flow¹ in the first quarter totaled $2 million compared to $10 million in the prior period, reflecting lower metal sales

Exploration

• Exploration investment remained flat quarter-over-quarter

• Throughout 2023, the focus will be on geological modeling

Guidance

• Full-year 2023 production is expected to be 85,000 - 95,000 gold ounces

• CAS¹ in 2023 are expected to be $1,200 - $1,350 per gold ounce

• Capital expenditures are expected to be $1 - $4 million

Exploration

Coeur had up to 6 active rigs across all sites during the first quarter, for a total investment of approximately $7 million ($5 million expensed and $2 million capitalized), compared to roughly $9 million ($8 million expensed and $2 million capitalized) in the prior period. The decrease in drilling activity was largely driven by prioritizing capital spending to complete the Rochester expansion project during the first half of 2023. The Company expects full year 2023 exploration investment to be approximately $40 - $50 million ($30 - $35 million expensed and $10 - $15 million capitalized), with the focus on Kensington and Silvertip. The Company has invested nearly $245 million in exploration over the last five years, which has materially added to reserves and resources across the portfolio.

Exploration investment at the Silvertip silver-zinc-lead exploration project in British Columbia, Canada in the first quarter totaled approximately $2 million (substantially all expensed) compared to roughly $3 million (substantially all expensed) in the prior period.

Since acquisition, exploration at Silvertip has been consistently successful, with measured and indicated resource tonnage increasing from approximately 2.6 million tons to 7.1 million tons. Multiple new zones have been discovered, providing a clear path to potentially significant resource growth for the foreseeable future. The Company anticipates a slower overall timeline to advance the Silvertip project, with the primary focus on growth and understanding of the overall deposit. Consistent with Silvertip’s status as a long-term exploration project, the Company reclassified its mineral reserves to measured and indicated resources as of year-end 2022.

Coeur plans to focus on compiling, analyzing and interpreting historical data during the first half of the year to increase the understanding of the geological context and mineralization system. Significant work on logging, data collection, analysis and interpretation is ongoing as part of this effort. A new detailed geological model is expected to be developed to support year-end resource calculations at the end of 2023. This work is already bearing fruit with new concepts and exploration targets emerging.

During the first quarter, one rig was active completing a deep drillhole targeting a magnetic anomaly and potential heat source. This is the deepest hole ever drilled at Silvertip, reaching over 1,500 meters downhole. Encouraging geology was intersected, particularly, in the last 250 meters of the hole where there was an increase in the occurrence of intrusive porphyry, change in alteration style to potassic alteration, higher temperature mineralogical assemblages and B-veins; all indications of potential proximity to a heat source. Assay results from this drill hole are still pending.

The Company expects to invest $10 - $14 million in exploration in 2023 at Silvertip, including $8 - $10 million and $2 - $4 million of expensed and capitalized drilling, respectively.

2023 Guidance

Gold and silver production is expected to increase compared to 2022, driven by the planned construction completion of POA 11 at Rochester mid-year as well as higher expected grades at Wharf due to mine sequencing and resource model enhancements. Overall cost guidance has increased compared to 2022 primarily driven by expected continued inflationary pressures on operating costs.

Additionally, with the completion of the POA 11 expansion construction expected in mid-2023, Coeur has elected to defer providing cost guidance at Rochester until mid-year. The Company expects to have an LCM adjustment at Rochester of roughly $10 - $15 million each remaining quarter of 2023.

2023 Production Guidance

2023 Costs Applicable to Sales Guidance

2023 Capital, Exploration and G&A Guidance

Note: The Company’s guidance figures assume estimated prices of $1,800/oz gold and $23.00/oz silver as well as CAD of 1.25 and MXN of 20.00. Guidance figures exclude the impact of any metal sales or foreign exchange hedges.

Financial Results and Conference Call

Coeur will host a conference call to discuss its first quarter 2023 financial results on May 11, 2023 at 11:00 a.m. Eastern Time.

Hosting the call will be Mitchell J. Krebs, President and Chief Executive Officer of Coeur, who will be joined by Thomas S. Whelan, Senior Vice President and Chief Financial Officer, Michael “Mick” Routledge, Senior Vice President and Chief Operating Officer, and other members of management. A replay of the call will be available through May 18, 2023.

About Coeur

Coeur Mining, Inc. is a U.S.-based, well-diversified, growing precious metals producer with four wholly-owned operations: the Palmarejo gold-silver complex in Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska and the Wharf gold mine in South Dakota. In addition, the Company wholly-owns the Silvertip silver-zinc-lead exploration project in British Columbia.

Cautionary Statements

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding strategy, cash flow, growth, capital allocation and investment, cost management, liquidity and balance sheet management, exploration and development efforts and plans, reserve and resource growth, mine life extension, the gold stream agreement at Palmarejo, expectations, plans, costs and timing regarding the Rochester expansion project (including future LCM adjustments) and the Silvertip project, hedging strategies, anticipated production, costs and expenses and operations at Palmarejo, Rochester, Wharf and Kensington. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Coeur’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the risk that the Rochester expansion project is not completed on a timely basis or requires more capital than currently anticipated for completion, the risk that anticipated production, cost and expense levels are not attained, the risks and hazards inherent in the mining business (including risks inherent in developing and expanding large-scale mining projects, environmental hazards, industrial accidents, weather or geologically-related conditions), changes in the market prices of gold and silver and a sustained lower price or higher treatment and refining charge environment, the uncertainties inherent in Coeur’s production, exploration and development activities, including risks relating to permitting and regulatory delays (including the impact of government shutdowns) and mining law changes, ground conditions, grade and recovery variability, any future labor disputes or work stoppages (involving the Company and its subsidiaries or third parties), the risk of adverse outcomes in litigation, the uncertainties inherent in the estimation of mineral reserves and resources, impacts from Coeur’s future acquisition of new mining properties or businesses, the loss of access or insolvency of any third-party refiner or smelter to whom Coeur markets its production, the continued effects of the COVID-19 pandemic, including impacts to workforce, materials and equipment availability, inflationary pressures, continued access to financing sources, government orders that may require temporary suspension of operations at one or more of our sites and effects on our suppliers or the refiners and smelters to whom the Company markets its production and on the communities where we operate, the effects of environmental and other governmental regulations and government shut-downs, the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, Coeur’s ability to raise additional financing necessary to conduct its business, make payments or refinance its debt, as well as other uncertainties and risk factors set out in filings made from time to time with the United States Securities and Exchange Commission, and the Canadian securities regulators, including, without limitation, Coeur’s most recent reports on Form 10-K and Form 10-Q. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Coeur disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Coeur undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Coeur, its financial or operating results or its securities. This does not constitute an offer of any securities for sale.

The scientific and technical information concerning our mineral projects in this news release have been reviewed and approved by a “qualified person” under Item 1300 of SEC Regulation S-K, namely our Director, Technical Services, Christopher Pascoe. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and mineral resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, sociopolitical, marketing or other relevant factors, please review the Technical Report Summaries for each of the Company’s material properties which are available at www.sec.gov.

Non-U.S. GAAP Measures

We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non-U.S. GAAP financial measures, including EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted net income (loss), operating cash flow before changes in working capital and adjusted costs applicable to sales per ounce (gold and silver) or pound (zinc or lead). We believe that these adjusted measures provide meaningful information to assist management, investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring operations because they exclude items that may not be indicative of, or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. We believe EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow, adjusted net income (loss) and adjusted costs applicable to sales per ounce (gold and silver) and pound (zinc and lead) are important measures in assessing the Company’s overall financial performance. For additional explanation regarding our use of non-U.S. GAAP financial measures, please refer to our Form 10-K for the year ended December 31, 2022.

Notes

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