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Coeur Reports Third Quarter 2018 Production and Sales Results

09.10.2018  |  Business Wire

Coeur Mining Inc. (the "Company" or "Coeur") (NYSE: CDE) today announced third quarter 2018 production of 2.9 million ounces of silver, 88,833 ounces of gold, 2.2 million pounds of zinc and 1.2 million pounds of lead, or 8.5 million silver equivalent1 ounces (10.4 million ounces based on average spot prices during the third quarter)3. Metal sales for the quarter were 3.0 million ounces of silver, 89,609 ounces of gold, 1.8 million pounds of zinc and 1.6 million pounds of lead, or 8.5 million silver equivalent1 ounces (10.4 million ounces based on average spot prices during the third quarter)3.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181009006126/en/

Quarterly Production Results (Graphic: Business Wire)

As disclosed on September 4, 2018, the Company expects to produce 36.1 - 39.5 million silver equivalent1 ounces (44.0 - 48.0 million ounces based on average spot prices during the third quarter) in 2018, consisting of 13.0 - 14.3 million silver ounces, 363,000 - 382,000 gold ounces, 13.0 - 23.0 million pounds of zinc and 11.0 - 18.0 million pounds of lead.

Operations

Third quarter 2018 production and sales highlights for each of Coeur's operations are provided below.

Palmarejo, Mexico

3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Tons milled 300,116 344,073 359,893 389,524 413,086
Average silver grade (oz/t) 6.26 6.86 6.88 6.92 5.53
Average gold grade (oz/t) 0.10 0.11 0.10 0.10 0.08
Average recovery rate – Ag 82.2% 87.5% 81.4% 87.0% 83.6%
Average recovery rate – Au 88.8% 89.9% 80.4% 92.0% 83.1%
Ounces Produced
Silver (000's) 1,544 2,066 2,013 2,346 1,908
Gold 27,885 33,702 29,896 37,537 28,948
Silver equivalent1 (000's) 3,217 4,088 3,807 4,600 3,644
Silver equivalent1 (average spot) (000's) 3,796 4,728 4,382 5,209 4,104
Ounces Sold
Silver (000's) 1,572 2,092 2,031 2,343 1,794
Gold 29,830 31,207 30,888 38,953 26,554
Silver equivalent1 (000's) 3,362 3,964 3,884 4,681 3,387
Silver equivalent1 (average spot) (000's) 3,981 4,557 4,479

5,313

3,809
Average realized price per silver ounce $14.75 $16.49 $16.73 $16.57 $16.83
Average realized price per gold ounce $1,082 $1,162 $1,168 $1,139 $1,148
  • Third quarter silver equivalent1 production was 3.2 million ounces (3.8 million ounces based on average spot prices during the third quarter), 21% lower compared to the prior quarter, with silver production 25% lower and gold production 17% lower. Year-over-year, silver and gold production decreased 19% and 4%, respectively
  • Production was impacted by (i) the temporary suspension of mining activities relating to fatalities that occurred during the quarter, (ii) supply chain disruptions stemming from local road blockades that temporarily interrupted the delivery of certain mining consumables, and (iii) a weather-related interruption that impacted the process plant
  • The modest decline in silver and gold grades was due to the mining of lower grade stopes, primarily at Independencia East. Gold grades are expected to decline in the fourth quarter; however, mining rates are anticipated to return to steady-state levels, partially offsetting the impact of the lower expected grades
  • Development towards the La Nación deposit, located between the Independencia and Guadalupe underground mines, remains on-schedule and is expected to commence production in 2019, providing anticipated additional high quality mill feed to supplement existing ore sources
  • Approximately 38% of gold sales in the third quarter, or 10,610 ounces, were sold under Palmarejo's gold stream agreement at a price of $800 per ounce. The increase was due to mine sequencing; fourth quarter gold sales under the stream agreement are expected to remain at similar levels
  • The Company is maintaining Palmarejo's full-year 2018 production guidance of 7.5 - 7.9 million ounces of silver and 115,000 - 120,000 ounces of gold, or 14.4 - 15.1 million silver equivalent1 ounces (16.8 - 17.6 million ounces based on average spot prices during the third quarter)

Rochester, Nevada

3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Tons placed 4,061,082 4,083,028 4,351,131 4,171,451 4,262,011
Average silver grade (oz/t) 0.52 0.53 0.54 0.50 0.53
Average gold grade (oz/t) 0.004 0.004 0.003 0.003 0.004
Ounces Produced
Silver (000's) 1,290 1,125 1,157 1,361 1,070
Gold 14,702 12,273 11,487 18,995 10,955
Silver equivalent1 (000's) 2,172 1,861 1,846 2,500 1,727
Silver equivalent1 (average spot) (000's) 2,477 2,095 2,067 2,808 1,901
Ounces Sold
Silver (000's) 1,248 1,097 1,119 1,457 1,050
Gold 14,257 12,030 11,163 20,002 10,390
Silver equivalent1 (000's) 2,104 1,819 1,789 2,658 1,674
Silver equivalent1 (average spot) (000's) 2,400 2,048 2,004

2,983

1,839
Average realized price per silver ounce $14.70 $16.47 $16.66 $16.58 $16.89
Average realized price per gold ounce $1,204 $1,297 $1,331 $1,279 $1,291
  • Silver equivalent1 production during the period was 17% higher quarter-over-quarter at 2.2 million ounces (2.5 million ounces based on average spot prices during the third quarter). Silver production was 1.3 million ounces and gold production was 14,702 ounces, 15% and 20% higher, respectively, compared to the prior quarter
  • Production growth was driven primarily by strong pad performance from the Stage III leach pad and continued steady performance of the Stage IV leach pad. Stage III leach pad performance was driven by leaching activities on the periphery of the pad that had not been processed previously. These trends are expected to continue in the fourth quarter
  • Installation of an initial high-pressure grinding roll ("HPGR") remains on schedule for the first quarter of 2019 with silver recoveries expected to improve beginning as early as the second quarter of next year. Decommissioning of the 15,000 tons per day ("tpd") crusher is currently underway and is expected to result in fewer tons crushed and lower operating expenses in the fourth quarter
  • The Company is maintaining full-year 2018 production guidance of 4.8 - 5.2 million ounces of silver and 48,000 - 52,000 ounces of gold, or 7.7 - 8.3 million silver equivalent1 ounces (8.7 - 9.4 million ounces based on average spot prices during the third quarter)

Wharf, South Dakota

3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Tons placed 1,127,391 1,075,820 1,076,395 1,124,785 1,150,308
Average gold grade (oz/t) 0.023 0.023 0.022 0.029 0.029
Ounces produced
Gold 19,437 22,507 17,936 27,292 25,849
Silver (000's) 13 13 12 16 15
Gold equivalent1 19,646 22,729 18,133 27,560 26,096
Ounces sold
Gold 19,874 23,053 17,339 28,975 23,855
Silver (000's) 12 14 11 16 14
Gold equivalent1 20,081 23,282 17,522 29,256 24,085
Average realized price per gold ounce $1,198 $1,285 $1,341 $1,278 $1,304
  • Gold production declined 14% quarter-over-quarter to 19,646 ounces partially as a result of unplanned weather-related downtime and timing of leach pad recoveries
  • Mining and crushing rates during the fourth quarter are expected to increase while average gold grade is expected to remain relatively constant
  • The Company is maintaining full-year 2018 production guidance of 85,000 - 90,000 ounces of gold

Kensington, Alaska

3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Tons milled 167,964 168,751 158,706 167,631 172,038
Average gold grade (oz/t) 0.17 0.16 0.17 0.22 0.17
Average recovery rate 91.8% 92.6% 94.0% 92.8% 94.1%
Gold ounces produced 26,809 25,570 26,064 34,932 27,541
Gold ounces sold 25,648 28,165 27,763 35,634 29,173
Average realized price per gold ounce $1,161 $1,269 $1,307 $1,244 $1,255
  • Third quarter gold production, inclusive of pre-commercial production from Jualin, increased 5% quarter-over-quarter and declined 3% year-over-year to 26,809 ounces
  • At Jualin, the Company mined approximately 4,400 tons of development ore late in the quarter, which yielded pre-commercial production of nearly 2,100 ounces of gold at a grade of 0.48 ounces per ton ("oz/t"). Mining rates at Jualin are expected to climb throughout the fourth quarter leading to higher overall production levels
  • The Company is maintaining full-year 2018 production guidance of 115,000 - 120,000 ounces of gold4

Silvertip, British Columbia

3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Tons milled 28,080 14,450 4,795
Average silver grade (oz/t) 7.29 14.15 10.05
Average zinc grade (%) 8.0% 8.2% 6.60
Average lead grade (%) 4.6% 8.1% 7.3% —% —%
Average recovery rate – Ag 47.0% 42.3% 30.9% —% —%
Average recovery rate – Zn 49.1% 57.9% 18.7% —% —%
Average recovery rate – Pb 44.4% 40.5% 21.1% —% —%
Produced
Silver (000's ounces) 96 87 15
Zinc (000's lbs) 2,207 1,372 119
Lead (000's lbs) 1,159 949 147
Silver equivalent1 (000's) 286 217 29
Silver equivalent1 (average spot) (000's) 342 277 36
Sold
Silver (000's ounces) 131 10
Zinc (000's lbs)

1,772

469

Lead (000's lbs)

1,645

Silver equivalent1 (000's)

320

38

Silver equivalent1 (average spot) (000's)

371

52

Average realized price per silver ounce $14.95 $13.01

Average realized price per zinc pound

$0.93

$1.08

Average realized price per lead pound

$0.99

$—
  • Silvertip achieved commercial production on September 1, 2018. The production figures and average realized prices shown in the above table include pre-commercial production
  • During the third quarter, mill downtime impacted throughput, which averaged approximately 434 tons (approximately 394 metric tonnes) per day. Mill downtime was required to complete repairs on the paste plant, grinding circuit and associated infrastructure in the process plant
  • Higher mill availability is expected to improve throughput in the fourth quarter, which is anticipated to reach an average of approximately 830 tons per day (750 metric tonnes per day) by year-end
  • Operating activities remain focused on improving process plant performance, underground rehabilitation and development, and completing several key surface infrastructure projects, including the water treatment plant and a 220-person camp facility
  • Coeur expects to file an initial NI 43-101 Technical Report in the fourth quarter and receive approval for the permit amendment application to operate at 1,000 metric tonnes per day on a year-round basis in early 2019
  • The Company is maintaining full-year 2018 production guidance of 0.7 - 1.2 million ounces of silver, 13.0 - 23.0 million pounds of zinc and 11.0 - 18.0 million pounds of lead, or 2.0 - 3.5 million silver equivalent1 ounces (2.4 - 4.1 million ounces based on average spot prices during the third quarter)4

2018 Production Guidance

Coeur's 2018 production guidance was revised on September 4, 2018 to reflect improved visibility of Silvertip's production following the commencement of commercial production as well as stronger than expected performance at Rochester during the first half of the year.

Silver Gold Zinc Lead Silver Equivalent1
(K oz) (oz) (K lbs) (K lbs) (K oz)
Palmarejo 7,500 - 7,900 115,000 - 120,000 14,400 - 15,100
Rochester 4,800 - 5,200 48,000 - 52,000 7,680 - 8,320
Kensington 115,000 - 120,000 6,900 - 7,200
Wharf 85,000 - 90,000 5,100 - 5,400
Silvertip 700 - 1,200 13,000 - 23,000 11,000 - 18,000 2,030 - 3,480
Total 13,000 - 14,300 363,000 - 382,000 13,000 - 23,000 11,000 - 18,000 36,110 - 39,500

Guidance Based on Third Quarter Average Spot Prices

Silver Gold Zinc Lead Silver Equivalent1
(K oz) (oz) (K lbs) (K lbs) (K oz)
Palmarejo 7,500 - 7,900 115,000 - 120,000 16,787 - 17,591
Rochester 4,800 - 5,200 48,000 - 52,000 8,676 - 9,399
Kensington 115,000 - 120,000 9,287 - 9,691
Wharf 85,000 - 90,000 6,865 - 7,268
Silvertip 700 - 1,200 13,000 - 23,000 11,000 - 18,000 2,391 - 4,099
Total 13,000 - 14,300 363,000 - 382,000 13,000 - 23,000 11,000 - 18,000 44,007 - 48,049

Financial Results and Conference Call

Coeur will report its third quarter 2018 financial results on October 31, 2018 after the New York Stock Exchange closes for trading. There will be a conference call on November 1, 2018 at 11:00 a.m. Eastern Time.

Dial-In Numbers: (855) 560-2581 (U.S.)
(855) 669-9657 (Canada)
(412) 542-4166 (International)
Conference ID: Coeur Mining

Hosting the call will be Mitchell J. Krebs, President and Chief Executive Officer of Coeur, who will be joined by Peter C. Mitchell, Senior Vice President and Chief Financial Officer, Frank L. Hanagarne, Jr., Senior Vice President and Chief Operating Officer, Terry F. D. Smith, Vice President of North American Operations, Hans Rasmussen, Senior Vice President of Exploration, and other members of management. A replay of the call will be available through November 15, 2018.

Replay numbers: (877) 344-7529 (U.S.)
(855) 669-9658 (Canada)
(412) 317-0088 (International)
Conference ID: 101 23 688

The Company anticipates reporting its fourth quarter 2018 financial results on February 13, 2019 after the New York Stock Exchange closes for trading and holding a conference call on February 14, 2019 at 11:00 am Eastern Time.

About Coeur

Coeur Mining Inc. is a well-diversified, growing precious metals producer with five mines in North America. Coeur produces from its wholly-owned operations: the Palmarejo silver-gold complex in Mexico, the Silvertip silver-zinc-lead mine in British Columbia, the Rochester silver-gold mine in Nevada, the Wharf gold mine in South Dakota, and the Kensington gold mine in Alaska. In addition, the Company has interests in several precious metals exploration projects throughout North America.

Cautionary Statement

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding anticipated production, grades, mining rates, crushing rates, development efforts, operations at Rochester and Silvertip, gold sales under Palmarejo's gold stream agreement and timing of filing a technical report and obtaining permit amendment approval for Silvertip. 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 anticipated production levels are not attained, the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), changes in the market prices of gold, silver, zinc, and lead and a sustained lower price environment, the uncertainties inherent in Coeur's production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, ground conditions, grade variability, any future labor disputes or work stoppages, the uncertainties inherent in the estimation of gold and silver reserves, changes that could result from Coeur's future acquisition of new mining properties or businesses, the loss of any third-party smelter to which Coeur markets its production, the effects of environmental and other governmental regulations, 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.

Christopher Pascoe, Coeur's Director, Technical Services and a qualified person under Canadian National Instrument 43-101, approved the scientific and technical information concerning Coeur's mineral projects in this news release. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and 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, socio-political, marketing or other relevant factors, Canadian investors should refer to the Technical Reports for each of Coeur's properties as filed on SEDAR at sedar.com.

Notes

  1. Silver and gold equivalence assumes a 60:1 silver-to-gold ratio, except where noted as average spot prices. Please see the table below for average applicable spot prices and corresponding ratios. Silver and zinc equivalence assumes a 0.06:1 silver-to-zinc ratio. Silver and lead equivalence assumes a 0.05:1 silver-to-lead ratio.
  2. On February 28, 2018, Coeur divested the San Bartolomé mine through the sale of its 100%-owned Bolivian subsidiary. As a result, San Bartolomé is excluded from consolidated operating statistics for all periods presented unless otherwise noted.
  3. Third quarter 2018 production and sales figures include pre-commercial production from Kensington and Silvertip.
  4. Full-year 2018 production guidance for Kensington and Silvertip include pre-commercial production.

Average Spot Prices

3Q 2018 2Q 2018 1Q 2018 4Q 2017 3Q 2017
Average Silver Spot Price Per Ounce $ 15.02 $ 16.53 $ 16.77 $ 16.73 $ 16.84
Average Gold Spot Price Per Ounce $ 1,213 $ 1,306 $ 1,329 $ 1,275 $ 1,278
Average Silver to Gold Spot Equivalence

81:1

79:1 79:1 76:1 76:1
Average Zinc Spot Price Per Pound $ 1.15 $ 1.41 $ 1.55 $ 1.47 $ 1.06
Average Silver to Zinc Spot Equivalence 0.08:1 0.09:1 0.09:1 0.09:1 0.06:1
Average Lead Spot Price Per Pound $ 0.95 $ 1.08 $ 1.14 $ 1.13 $ 1.06
Average Silver to Lead Spot Equivalence 0.06:1 0.07:1 0.07:1 0.07:1 0.06:1


Contact

Coeur Mining Inc.
Paul DePartout, Director, Investor Relations
(312) 489-5800
www.coeur.com


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