Contact: Scott Lamb 208-665-0777
COEUR REPORTS RECORD-SETTING FULL-YEAR FINANCIAL PERFORMANCE
AND STRONG RESULTS FOR FOURTH QUARTER OF 2006
| | Full Year 2006 (Comparisons to 2005) |
| | • | Net income increased eight-fold to a record $88.5 million ($0.30 per fully diluted share) |
| | • | 13.6 million oz consolidated silver production, including discontinued operations |
| | • | 12.8 million oz silver production from continuing operations (excludes partial-year production from high-cost mine at Coeur Silver Valley, sold in 2Q06) |
| | • | 6% decrease in silver cash cost to $3.33/oz |
| | • | 116,254 oz gold production |
| | • | 16% increase in gold reserves year-over-year |
| | • | Increase in silver reserves for continuing operations |
| | Fourth Quarter of 2006 (Comparisons to Year-Ago Quarter) |
| | • | Net income more than doubled to $23.2 million ($0.08 per fully diluted share) |
| | • | 3.4 million oz silver production |
| | • | 31,700 oz gold production |
| | • | Revised capital and operating costs for San Bartolome and Kensington |
| | • | Company gearing up for record-level exploration spending in 2007 |
| | • | Completing feasibility study on new mill in Argentina |
COEUR D’ALENE, Idaho – February 22, 2007 – Coeur d’Alene Mines Corporation (NYSE:CDE, TSX:CDM) today reported record net income for 2006 of $88.5 million, or $0.30 per diluted share, compared to net income of $10.6 million, or $0.04 per diluted share, for 2005. Results for 2006 include a gain of $11.1 million from the strategic sale of Coeur Silver Valley (CSV), as well as $1.9 million of income generated from CSV prior to the sale. Cash provided by operating activities increased more than 13-fold to $91.2 million for the full year 2006 as compared to $6.7 million in 2005.
For the fourth quarter of 2006, the company reported net income of $23.2 million, or $0.08 per diluted share, compared to net income of $9.9 million, or $0.04 per diluted share, for the year-ago period. Cash provided by operating activities increased 47 percent to $21.2 million in the fourth quarter of 2006 as compared to $14.5 million in the year-ago quarter.
Metal sales in the fourth quarter and full year of 2006 were $67.1 million and $216.6 million, respectively, compared to $51.3 million and $156.3 million for the year-ago periods.
In commenting on the company’s full-year performance, Dennis E. Wheeler, Chairman, President and Chief Executive Officer, said, “For the full year 2006, Coeur reported record-setting performance in terms of revenues, net income and cash flow, and gold reserves. Silver production from continuing operations was up by 10 percent, while our silver cash production cost per ounce declined by nearly 6 percent. In addition, we reported a 16 percent increase in our gold reserves. We remain focused on additional growth initiatives designed to build upon this momentum in the areas of silver and gold production, exploration, potential acquisition, and continued management of our cash costs.”
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| Fourth Quarter 2006 Results (February 22, 2007) | Page 1 of 15 |
Wheeler added, “Net income in the fourth quarter of 2006 was more than double that of the year-ago period due largely to higher silver and gold prices, aided by stronger performance at the Martha and Endeavor mines.”
Wheeler said, “We expect silver and gold markets to remain robust during 2007. We believe that strong demand for silver is likely to support healthy market prices well beyond this year. Such market conditions, combined with our ongoing strategic initiatives, should enable the company to continue to generate attractive earnings and cash flows. In addition, we are actively evaluating acquisition opportunities that would bring additional low-cost silver production into our system.”
Coeur currently expects its existing mines to produce approximately 13 million ounces of silver in 2007 with a cash cost of approximately $2.35 per ounce, which would represent the lowest cash operating cost at Coeur in at least a decade. The company expects full-year gold production to increase roughly 17% to approximately 136,000 ounces, including approximately 21,000 ounces from the Kensington gold mine, which is expected to begin producing metal near the end of 2007. During 2007, Coeur expects to complete construction of the San Bartolome project, which will significantly contribute to the company’s silver production commencing in 2008. With the commencement of production at San Bartolome and Kensington, the company’s production profile in 2008 would be sharply higher than 2007.
Highlights by Individual Property
| | • | Rochester (Nevada)–The silver cash cost per ounce for the fourth quarter and full year of 2006 were well below the cash costs reported for the full year 2005 and 2004, reflecting the company’s continued efforts to improve operating efficiency and the benefit of higher gold by-product credits. Fourth-quarter silver and gold production were below the levels of the year-ago period due to normal variations in the recovery of metal from the heap. The moderate increase in the silver production cash cost per ounce relative to that of the year-ago quarter was the result of the lower production. |
| | • | Cerro Bayo (Chile) – Quarterly silver production increased 53 percent and gold production more than doubled relative to the levels of the preceding quarter as the company continued to develop the new high-grade Cascada vein system. Cascada, in particular, contributed to a 51 percent increase in silver grade and a 100 percent increase in gold grade on a sequential-quarter comparison. Silver production cash cost per ounce dropped 91 percent relative to the preceding quarter due in part to the higher production volumes. Relative to the year-ago quarter, silver production cash cost per ounce declined 28 percent due to increased byproduct credits for gold. Quarterly silver production was below the level of the fourth quarter of 2005 due to fewer tons milled and modestly lower silver grades. The company expects quarterly production levels to trend upward at Cerro Bayo as the year progresses as mining continues in the high-grade Cascada vein system. |
| | • | Martha (Argentina) – Silver production increased 36 percent relative to the year-ago period due to an increase in tons milled and modestly higher silver grades. In particular, Martha’s silver production during the fourth quarter of 2006 reached its second-highest level in the mine’s history. Silver production cash cost per ounce increased relative to the year-ago quarter due to higher royalties resulting from higher metal prices. In addition, the company is completing a feasibility study regarding possible construction of a flotation mill at Martha. Currently, Martha’s ore is shipped to Cerro Bayo for processing. If approved by the company’s board of directors, the new mill would enable Martha to process ore on site and would support the continued expansion of reserves and resources at Martha and at recently acquired interests in the Santa Cruz province. |
| | • | Endeavor (Australia) - Quarterly silver production increased almost five-fold relative to the year-ago period and 32 percent relative to the preceding quarter, due to improvement in mine performance. Silver cash production cost per ounce was higher than that of both comparable periods due primarily to higher smelting and refining charges. |
| | • | Broken Hill (Australia) – Quarterly silver production declined relative to the year-ago and preceding quarters due to fewer tons milled and modestly lower grades. Silver cash production cost per ounce was above the levels of both comparable periods due mainly to higher smelting and refining charges. |
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| Fourth Quarter 2006 Results (February 22, 2007) | Page 2 of 15 |
Update on San Bartolome Project
Coeur estimates the capital cost (excluding political risk insurance premiums and capitalized interest) at San Bartolome to be approximately $174 million, as compared to the previous cost estimate of $135 million. The increase is due to overall inflation impacting capital costs since the updated feasibility study was completed in 2005. Based upon an initial estimated cash cost of $4.00 per ounce and current metal prices, the company expects the project will provide attractive returns. Commercial production is expected to commence in January 2008, with approximately 9 million ounces produced that year.
At San Bartolome, capital expenditures totaled $7.0 million and $14.6 million for the fourth quarter and full year of 2006, respectively. Recent activity has focused on construction of the tailings facility and preparations for pouring concrete at the mill site.
Based on available information, the company believes that the Government of Bolivia has no intention to assume ownership of the San Bartolome project. The Government has expressed a desire to increase taxes in the mining sector but has not yet submitted any formal proposals in this regard, partly because the country’s mining cooperatives are opposed to such a move. Coeur remains confident that the San Bartolome project will proceed on schedule.
Update on Kensington Project
Coeur currently estimates the total cost of construction of the Kensington Gold Mine to be approximately $238 million, as compared to the previous cost estimate of $190 million. The increase is due to overall inflation that has impacted capital costs as well as higher expenses associated with a legal challenge to one of the mine’s existing permits. The company estimates the cash production cost will be $310 per ounce in the initial years of operation. The recent improvement in grade at Kensington (described below in the “Exploration” section of this press release) is expected to enable the mine to produce as much as 150,000 ounces of gold annually in its early years of operation. Coeur believes that commercial production could commence in late 2007, subject to successful resolution of litigation concerning an existing permit.
At Kensington, capital expenditures totaled $35.0 million and $121.5 million for the fourth quarter and full year of 2006, respectively. Recent activity has focused on completion of the mill and crusher buildings.
Balance Sheet and Capital Investment Highlights
The company had $341 million in cash and short-term investments as of December 31, 2006. Capital expenditures during the fourth quarter and full year of 2006 amounted to $45.5 million and $148 million, respectively. The company’s capital investment is focused on the Kensington and San Bartolome projects, as described above.
Exploration Spending Results in Increased Gold Mineral Reserves
Consistent with the company’s objective to steadily increase its reserves and grow its production profile, Coeur expects to invest approximately $15.3 million in exploration and reserve development in 2007, largely to continue to increase mineral resources and reserves at its properties in Alaska, Argentina, and Chile, where the company has multiple prospective vein systems that have already yielded attractive drill-hole results. The budget also includes a record-level of spending devoted to “greenfields” exploration to discover new silver and gold deposits in prospective regions of the world. The greenfields exploration targets, which account for nearly 40 percent of the budget, are located primarily in Argentina, Tanzania and in parts of Chile and Mexico where the company has not previously been active.
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| Fourth Quarter 2006 Results (February 22, 2007) | Page 3 of 15 |
The company’s 2006 investment of $9.5 million in exploration contributed to an increase of 16 percent in proven and probable gold mineral reserves as of December 31, 2006 in comparison to the prior year. In addition, silver mineral reserves increased at year-end 2006 at Martha, Endeavor, and Broken Hill. Proven and probable silver mineral reserves for continuing operations also increased.
Highlights of the company’s exploration program and updated mineral reserve position are provided below:
| | • | Cerro Bayo – reported a 21 percent increase in silver grade, to 9.69 ounces per ton, in its proven and probable mineral reserves. Recent exploration focus has been on the Cascada and Marcela Sur vein systems, both of which have shown higher grades than have previously been seen at Cerro Bayo. Core drilling in 2006 totaled 232,000 feet. |
| | • | Kensington – reported 29 percent increase in gold mineral reserves, to 1.35 million ounces. Kensington also achieved a 24 percent increase in gold grade, to 0.31 ounces per ton. Core drilling totaled more than 32,000 feet at Kensington and 13,500 feet on the adjacent Jualin property. In addition, at the end of 2006, Kensington had 866,000 ounces of gold mineral resources (623,000 ounces of indicated resources and 243,000 ounces of inferred resources). |
| | • | Martha – reported a 50 percent increase in proven and probable silver mineral reserves to 6.1 million ounces, as well as an increase in silver grade. Recent focus has been on the Martha, R4, Catalina, and Francisca veins. All drilling at Martha totaled 87,000 feet. |
| | • | Argentina Greenfields Activity – As part of its initial greenfields exploration in other parts of Argentina, in 2006, the company acquired four new exploration properties referred to as the El Aguila, Costa, Sascha and Joaquin properties. Core drilling commenced on El Aguila in eastern Santa Cruz late in the year and totaled 3,300 feet. |
| | • | Australian interests – Endeavor and Broken Hill both reported mid-year 2006 increases in silver mineral reserves in relation to 2005: 37 percent at Endeavor and 20 percent at Broken Hill. |
| | • | Tanzania – in 2006 the company completed more than 44,000 feet of shallow, rotary air blast drilling in gold-in-soil anomalies at Kiziba Hill property, which includes a large zone of anomalous gold-in-soil values, measuring over 1.2 miles long in a west-northwest direction by over 0.3 miles wide in an east-northeast direction. In December of 2006, the company began core drilling on the nearby Saragurwa property and at year-end had completed more than 1,300 feet of core drilling. Drilling will continue at both locations in 2007. |
Coeur d’Alene Mines Corporation is one of the world’s leading primary silver producers and has a strong presence in gold. The company has mining interests in Alaska, Argentina, Australia, Bolivia, Chile, Nevada and Tanzania.
Conference Call Information
Coeur d’Alene Mines Corporation will hold a conference call to discuss the company’s fourth quarter and year-end 2006 results at 1 p.m. Eastern time on February 22, 2007. To listen live via telephone, call (877) 704-5378 (US and Canada) or (913) 312-1292 (International). The conference call and presentation will also be web cast on the company’s web sitewww.coeur.com. A replay of the call will be available through February 28, 2007. The replay dial-in numbers are (888) 203-1112 (US and Canada) and (719) 457-0820 (International) and the access code is 1047459.
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| Fourth Quarter 2006 Results (February 22, 2007) | Page 4 of 15 |
Cautionary Statement
Company press releases may contain numerous forward-looking statements within the meaning of securities legislation in the United States and Canada relating to the company’s silver and gold mining business. Such statements are subject to numerous assumptions and uncertainties, many of which are outside the company’s control. Operating, exploration and financial data, and other statements in this document are based on information the company believes reasonable, but involve significant uncertainties as to future gold and silver prices, costs, ore grades, estimation of gold and silver reserves, mining and processing conditions, construction schedules, currency exchange rates, and the completion and/or updating of mining feasibility studies, changes that could result from the company’s future acquisition of new mining properties or businesses, the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions), regulatory and permitting matters, risks inherent in the ownership and operation of, or investment in, mining properties or businesses in foreign countries, as well as other uncertainties and risk factors set out in the company’s filings from time to time with the SEC and the Ontario Securities Commission, including, without limitation, the company’s reports on Form 10-K and Form 10-Q. Actual results and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. The company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise.
The definitions of proven and probable mineral reserves under Canadian National Instrument 43-101 are substantially identical to the definitions of such reserves under Guide 7 of the SEC’s Securities Act Industry Guides. Mineral resources are exclusive of or in addition to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Donald J. Birak, Coeur’s Senior Vice President of Exploration, is the qualified person responsible for the preparation of the scientific and technical information in this document. Mr. Birak has reviewed the available data and procedures and believes the collection of exploration data and calculation of mineral reserves and resources reported in this document was conducted in a professional and competent manner. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as 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, please see the Technical Reports for each project as filed on SEDAR at www.sedar.com.
| Proven Mineral Reserves (Year-end 2006) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | 3,720 | 0.66 | 0.007 | 2,436 | 26 |
| Cerro Bayo | Chile | 375 | 10.41 | 0.20 | 3,902 | 75 |
| Martha | Argentina | 33 | 64.05 | 0.10 | 2,118 | 3 |
| San Bartolome | Bolivia | -- | -- | -- | -- | -- |
| Kensington | Alaska, USA | -- | -- | -- | -- | -- |
| Endeavor | Australia | 9,700 | 1.59 | -- | 15,420 | -- |
| Broken Hill | Australia | 10,064 | 1.46 | -- | 14,648 | -- |
| | 23,892 | | | 38,524 | 105 |
| |
| Probable Mineral Reserves (Year-end 2006) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | -- | -- | -- | -- | -- |
| Cerro Bayo | Chile | 259 | 8.66 | 0.18 | 2,242 | 47 |
| Martha | Argentina | 66 | 59.97 | 0.08 | 3,966 | 6 |
| San Bartolome | Bolivia | 46,176 | 3.29 | -- | 151,882 | -- |
| Kensington | Alaska, USA | 4,419 | -- | 0.31 | -- | 1,352 |
| Endeavor | Australia | 11,684 | 1.42 | -- | 16,563 | -- |
| Broken Hill | Australia | 2,844 | 1.18 | -- | 3,368 | -- |
| | 65,448 | | | 178,021 | 1,405 |
Mineral Reserves correspond to Ore Reserves per US SEC classification. Metal prices used to determine ore reserves were $8.00/oz. Ag and $475.00/oz. Au at Cerro Bayo, Martha and Rochester; $10.0/oz Ag at Endeavor; $10.12/oz Ag. at Broken Hill; $6.00/oz Ag at San Bartolome; and $550/oz Au at Kensington. Endeavor and Broken Hill reserves are as of June 30, 2006.
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| Fourth Quarter 2006 Results (February 22, 2007) | Page 5 of 15 |
| Proven Mineral Reserves (Year-end 2005) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | 10,168 | 0.86 | 0.011 | 8,765 | 113 |
| Silver Valley | Idaho, USA | 236 | 25.65 | -- | 6,048 | -- |
| Cerro Bayo | Chile | 439 | 8.58 | 0.15 | 3,764 | 68 |
| Martha | Argentina | 25 | 58.69 | 0.08 | 1,488 | 2 |
| San Bartolome | Bolivia | -- | -- | -- | -- | -- |
| Kensington | Alaska, USA | -- | -- | -- | -- | -- |
| Endeavor | Australia | 5,512 | 1.58 | -- | 8,681 | -- |
| Broken Hill | Australia | 8,522 | 1.31 | -- | 11,134 | -- |
| | 24,902 | | | 39,880 | 183 |
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| Probable Mineral Reserves (Year-end 2005) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short
Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | -- | -- | -- | -- | -- |
| Silver Valley | Idaho, USA | 208 | 23.20 | -- | 4,830 | -- |
| Cerro Bayo | Chile | 496 | 7.48 | 0.13 | 3,712 | 64 |
| Martha | Argentina | 42 | 61.26 | 0.08 | 2,566 | 3 |
| San Bartolome | Bolivia | 46,176 | 3.29 | -- | 151,882 | -- |
| Kensington | Alaska, USA | 4,206 | -- | 0.25 | -- | 1,050 |
| Endeavor | Australia | 6,614 | 2.22 | -- | 14,661 | -- |
| Broken Hill | Australia | 2,998 | 1.27 | -- | 3,822 | -- |
| | 60,740 | | | 181,473 | 1,117 |
Mineral Reserves correspond to Ore Reserves per US SEC classification. Metal prices used to determine ore reserves were $6.50/oz. Ag and $410.00/oz. Au at Cerro Bayo, Martha, Rochester and Broken Hill; $7.06/oz. Ag at Endeavor; $6.00/oz. Ag at San Bartolome; and $375/oz Au at Kensington. Endeavor and Broken Hill reserves are as of June 30, 2005 and March 31, 2005, respectively.
| Measured Mineral Resource (Year-end 2006) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short
Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | 12,304 | 0.94 | 0.01 | 11,598 | 88 |
| Cerro Bayo | Chile | 455 | 9.38 | 0.17 | 4,267 | 75 |
| Martha | Argentina | 19 | 39.44 | 0.06 | 739 | 1 |
| San Bartolome | Bolivia | -- | -- | -- | -- | -- |
| Kensington | Alaska, USA | -- | -- | -- | -- | -- |
| Endeavor | Australia | 3,748 | 3.00 | -- | 11,259 | -- |
| Broken Hill | Australia | 2,105 | 2.31 | -- | 4,870 | -- |
| | 18,631 | | | 32,733 | 164 |
| Indicated Mineral Resource (Year-end 2006) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short
Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | 2,931 | 0.92 | 0.01 | 2,705 | 21 |
| Cerro Bayo | Chile | 727 | 6.11 | 0.14 | 4,436 | 100 |
| Martha | Argentina | 31 | 39.24 | 0.06 | 1,211 | 2 |
| San Bartolome | Bolivia | 70 | 2.29 | -- | 160 | -- |
| Kensington | Alaska, USA | 3,136 | -- | 0.20 | -- | 623 |
| Endeavor | Australia | 4,519 | 3.12 | -- | 14,105 | -- |
| Broken Hill | Australia | 1,510 | 1.96 | -- | 2,956 | -- |
| | 12,924 | | | 25,573 | 746 |
| Inferred Mineral Resource (Year-end 2006) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short
Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | -- | -- | -- | -- | -- |
| Cerro Bayo | Chile | 1,328 | 9.00 | 0.16 | 11,944 | 208 |
| Martha | Argentina | 63 | 45.76 | 0.05 | 2,875 | 3 |
| San Bartolome | Bolivia | 1,096 | 3.52 | -- | 3,851 | -- |
| Kensington | Alaska, USA | 1,184 | -- | 0.21 | -- | 243 |
| Endeavor | Australia | 1,102 | 2.51 | -- | 2,765 | -- |
| Broken Hill | Australia | 7,256 | 4.64 | -- | 33,674 | -- |
| | 12,028 | | | 55,109 | 453 |
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| Fourth Quarter 2006 Results (February 22, 2007) | Page 6 of 15 |
Mineral resources correspond to mineralized material per US SEC guidelines. Metal prices used to determine mineral resources were $8.00/oz. Ag and $475.00/oz. Au at Cerro Bayo, Martha and Rochester; $10.0/oz Ag at Endeavor; $10.12/oz Ag at Broken Hill; $6.00/oz Ag at San Bartolome; and $550/oz Au at Kensington. Mineral resources are in addition to mineral reserves and have not demonstrated economic viability.
| Measured Mineral Resource (Year-end 2005) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short
Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | 11,734 | 1.03 | 0.010 | 12,051 | 117 |
| Silver Valley | Idaho, USA | 847 | 12.18 | -- | 10,308 | -- |
| Cerro Bayo | Chile | 660 | 6.42 | 0.13 | 4,237 | 85 |
| Martha | Argentina | 25 | 38.46 | 0.05 | 975 | 1 |
| San Bartolome | Bolivia | -- | -- | -- | -- | -- |
| Kensington | Alaska, USA | -- | -- | -- | -- | -- |
| Endeavor | Australia | 5,291 | 2.13 | -- | 11,267 | -- |
| Broken Hill | Australia | 5,655 | 1.84 | -- | 10,407 | -- |
| | 24,212 | | | 49,245 | 203 |
| Indicated Mineral Resource (Year-end 2005) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short
Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | 3,912 | 1.03 | 0.010 | 4,018 | 39 |
| Silver Valley | Idaho, USA | 635 | 12.34 | -- | 7,836 | -- |
| Cerro Bayo | Chile | 1,558 | 3.72 | 0.08 | 5,797 | 122 |
| Martha | Argentina | 17 | 31.21 | 0.04 | 516 | 1 |
| San Bartolome | Bolivia | 70 | 2.29 | -- | 160 | -- |
| Kensington | Alaska, USA | 617 | -- | 0.44 | -- | 269 |
| Endeavor | Australia | 1,102 | 2.39 | -- | 2,636 | -- |
| Broken Hill | Australia | 1,742 | 1.72 | -- | 3,002 | -- |
| | 9,653 | | | 23,965 | 431 |
| Inferred Mineral Resource (Year-end 2005) |
| | | Grade (ounces/ton) | Ounces (000s) |
|---|
| Property | Location | Short
Tons (000s) | Silver | Gold | Silver | Gold |
|---|
| Rochester | Nevada, USA | -- | -- | -- | -- | -- |
| Silver Valley | Idaho, USA | 1,099 | 11.07 | -- | 12,161 | -- |
| Cerro Bayo | Chile | 1,895 | 8.13 | 0.11 | 15,414 | 212 |
| Martha | Argentina | 93 | 49.80 | 0.06 | 4,611 | 5 |
| San Bartolome | Bolivia | 1,096 | 3.52 | -- | 3,851 | -- |
| Kensington | Alaska, USA | 2,499 | -- | 0.23 | -- | 584 |
| Endeavor | Australia | 2,094 | 1.60 | -- | 3,360 | -- |
| Broken Hill | Australia | 3,428 | 2.17 | -- | 7,429 | -- |
| | 12,204 | | | 46,826 | 801 |
Mineral resources correspond to mineralized material per US SEC guidelines. Metal prices used to determine mineral resources were $6.50/oz. Ag and $410.00/oz. Au at Cerro Bayo, Martha and Rochester; $7.06/oz. Ag at Endeavor; and $6.00/oz Ag at San Bartolome. Mineral resources are in addition to mineral reserves and have not demonstrated economic viability.
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| Fourth Quarter 2006 Results (February 22, 2007) | Page 7 of 15 |
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| Three Months
Ended December 31, | Twelve Months
Ended December 31, |
|---|
| 2006 | 2005 | 2006 | 2005 |
|---|
| (In thousands except per share data) |
|---|
| REVENUES | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Sales of metal | | | $ | 67,072 | | $ | 51,264 | | $ | 216,573 | | $ | 156,284 | |
| | | | | | | | | | | | | | | |
| COSTS AND EXPENSES | | | | | | | | | | | | | | |
| Production costs applicable to sales | | | | 28,776 | | | 27,630 | | | 92,378 | | | 88,232 | |
| Depreciation and depletion | | | | 6,929 | | | 6,023 | | | 26,772 | | | 18,889 | |
| Administrative and general | | | | 5,707 | | | 5,593 | | | 19,369 | | | 20,624 | |
| Exploration | | | | 3,000 | | | 2,423 | | | 9,474 | | | 10,553 | |
| Pre-development | | | | -- | | | 6 | | | -- | | | 6,057 | |
| Litigation settlements | | | | 1,022 | | | -- | | | 2,365 | | | 1,600 | |
|
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|---|
| Total costs and expenses | | | | 45,434 | | | 41,675 | | | 150,358 | | | 145,955 | |
| | | | | | | | | | | | | | | |
| OTHER INCOME AND EXPENSE | | | | | | | | | | | | | | |
| Interest and other income | | | | 5,721 | | | 3,034 | | | 18,654 | | | 8,385 | |
| Interest expense, net of capitalized interest | | | | (104 | ) | | (616 | ) | | (1,224 | ) | | (2,485 | ) |
|
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|
|
|
|---|
| Total other income and expense | | | | 5,617 | | | 2,418 | | | 17,430 | | | 5,900 | |
| | | | | |
|---|
| Income from continuing operations before income taxes | | | | 27,255 | | | 12,007 | | | 83,645 | | | 16,229 | |
| Income tax provision | | | | (4,072 | ) | | (670 | ) | | (8,226 | ) | | (1,483 | ) |
|
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|---|
| | | | | | | | | | | | | | | |
| INCOME FROM CONTINUING OPERATIONS | | | | 23,183 | | | 11,337 | | | 75,419 | | | 14,746 | |
| Income (loss) from discontinued operations, net of income taxes | | | | (33 | ) | | (1,393 | ) | | 1,935 | | | (4,195 | ) |
| Gain on sale of net assets of discontinued operations, net of income taxes | | | | -- | | | -- | | | 11,132 | | | -- | |
|
|
|
|
|
|---|
| | | | | | | | | | | | | | | |
| NET INCOME | | | | 23,150 | | | 9,944 | | | 88,486 | | | 10,551 | |
| Other comprehensive income | | | | 230 | | | 192 | | | 2,391 | | | 447 | |
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|---|
| | | | | | | | | | | | | | | |
| COMPREHENSIVE INCOME | | | $ | 23,380 | | $ | 10,136 | | $ | 90,877 | | $ | 10,998 | |
|
|
|
|
|
|---|
| | | | | | | | | | | | | | | |
| BASIC AND DILUTED INCOME (LOSS) PER SHARE | | | | | | | | | | | | | | |
| Basic income per share: | | | | | | | | | | | | | | |
| Income from continuing operations | | | $ | 0.08 | | $ | 0.05 | | $ | 0.28 | | $ | 0.06 | |
| Income (loss) from discontinued operations | | | | -- | | | (0.01 | ) | | 0.05 | | | (0.02 | ) |
|
|
|
|
|
|---|
| Net income | | | $ | 0.08 | | $ | 0.04 | | $ | 0.33 | | $ | 0.04 | |
|
|
|
|
|
|---|
| Diluted income per share: | | | | | | | | | | | | | | |
| Income from continuing operations | | | $ | 0.08 | | $ | 0.04 | | $ | 0.26 | | $ | 0.06 | |
| Income (loss) from discontinued operations | | | | -- | | | -- | | | 0.04 | | | (0.02 | ) |
|
|
|
|
|
|---|
| Net income | | | $ | 0.08 | | $ | 0.04 | | $ | 0.30 | | $ | 0.04 | |
|
|
|
|
|
|---|
| Weighted average number of shares of common stock | | | | | | | | | | | | | | |
| Basic | | | | 277,582 | | | 249,868 | | | 271,357 | | | 242,915 | |
| Diluted | | | | 302,242 | | | 274,384 | | | 296,082 | | | 243,683 | |
| |
|---|
| Fourth Quarter 2006 Results (February 22, 2007) | Page 8 of 15 |
Operating Statistics From Continuing Operations
The following table presents information by mine and consolidated sales information for the three- and twelve-month periods ended December 31, 2006 and 2005:
| Three Months Ended
December 31,
| Twelve Months Ended
December 31,
|
|---|
| 2006
| 2005
| 2006
| 2005
|
|---|
| Rochester | | | | | | | | | | | | | | |
| Tons processed | | | | 2,481,706 | | | 2,543,302 | | | 10,399,416 | | | 9,327,180 | |
| Ore grade/Ag oz | | | | 0.72 | | | 0.71 | | | 0.74 | | | 0.91 | |
| Ore grade/Au oz | | | | 0.01 | | | 0.01 | | | 0.01 | | | 0.01 | |
| Recovery/Ag oz (A) | | | | 78.8 | % | | 91.9 | % | | 65.9 | % | | 67.5 | % |
| Recovery/Au oz (A) | | | | 71.8 | % | | 81.5 | % | | 68.9 | % | | 76.2 | % |
| Silver production ounces | | | | 1,408,544 | | | 1,666,958 | | | 5,113,504 | | | 5,720,489 | |
| Gold production ounces | | | | 15,926 | | | 20,458 | | | 71,891 | | | 70,298 | |
| Cash cost/oz | | | $ | 3.36 | | $ | 3.02 | | $ | 2.80 | | $ | 4.82 | |
| Total cost/oz | | | $ | 6.24 | | $ | 4.66 | | $ | 5.84 | | $ | 6.66 | |
| Cerro Bayo | | | | | | | | | | | | | | |
| Tons milled | | | | 106,764 | | | 109,232 | | | 428,346 | | | 403,695 | |
| Ore grade/Ag oz | | | | 6.12 | | | 7.59 | | | 5.76 | | | 7.52 | |
| Ore grade/Au oz | | | | 0.15 | | | 0.14 | | | 0.10 | | | 0.16 | |
| Recovery/Ag oz | | | | 94.8 | % | | 94.2 | % | | 94.5 | % | | 94.7 | % |
| Recovery/Au oz | | | | 94.5 | % | | 92.9 | % | | 93.0 | % | | 92.8 | % |
| Silver production ounces | | | | 619,906 | | | 781,083 | | | 2,331,060 | | | 2,875,047 | |
| Gold production ounces | | | | 14,869 | | | 14,347 | | | 40,923 | | | 61,058 | |
| Cash cost/oz | | | $ | 0.79 | | $ | 1.09 | | $ | 3.04 | | $ | 0.54 | |
| Total cost/oz | | | $ | 3.42 | | $ | 3.18 | | $ | 5.46 | | $ | 2.30 | |
| Martha Mine | | | | | | | | | | | | | | |
| Tons milled | | | | 11,076 | | | 8,575 | | | 35,843 | | | 35,293 | |
| Ore grade/Ag oz | | | | 69.58 | | | 66.66 | | | 79.93 | | | 62.53 | |
| Ore grade/Au oz | | | | 0.09 | | | 0.08 | | | 0.10 | | | 0.08 | |
| Recovery/Ag oz | | | | 94.7 | % | | 94.2 | % | | 94.7 | % | | 94.9 | % |
| Recovery/Au oz | | | | 94.2 | % | | 92.9 | % | | 92.5 | % | | 92.9 | % |
| Silver production ounces | | | | 729,962 | | | 538,411 | | | 2,712,846 | | | 2,093,464 | |
| Gold production ounces | | | | 905 | | | 657 | | | 3,440 | | | 2,589 | |
| Cash cost/oz | | | $ | 5.89 | | $ | 4.84 | | $ | 4.88 | | $ | 4.60 | |
| Total cost/oz | | | $ | 6.50 | | $ | 5.29 | | $ | 5.36 | | $ | 5.01 | |
| Endeavor(B) | | | | | | | | | | | | | | |
| Tons milled | | | | 309,340 | | | 85,492 | | | 750,115 | | | 463,129 | |
| Ore grade/Ag oz | | | | 0.93 | | | 1.69 | | | 1.01 | | | 1.52 | |
| Recovery/Ag oz | | | | 62.9 | % | | 25.6 | % | | 63.5 | % | | 45.0 | % |
| Silver production ounces | | | | 179,972 | | | 37,091 | | | 481,991 | | | 316,169 | |
| Cash cost/oz | | | $ | 3.46 | | $ | 2.89 | | $ | 2.85 | | $ | 2.05 | |
| Total cost/oz | | | $ | 4.33 | | $ | 4.64 | | $ | 3.87 | | $ | 3.35 | |
| Broken Hill(B) | | | | | | | | | | | | | | |
| Tons milled | | | | 566,843 | | | 568,858 | | | 2,288,355 | | | 667,140 | |
| Ore grade/Ag oz | | | | 1.14 | | | 1.33 | | | 1.28 | | | 1.31 | |
| Recovery/Ag oz | | | | 77.4 | % | | 75.7 | % | | 74.2 | % | | 75.4 | % |
| Silver production ounces | | | | 501,872 | | | 574,083 | | | 2,174,585 | | | 657,093 | |
| Cash cost/oz | | | $ | 3.16 | | $ | 2.73 | | $ | 3.09 | | $ | 2.72 | |
| Total cost/oz | | | $ | 5.12 | | $ | 5.60 | | $ | 5.44 | | $ | 5.47 | |
| CONSOLIDATED PRODUCTION TOTALS | | | | | | | | | | | | | | |
| Silver ounces | | | | 3,440,256 | | | 3,597,626 | | | 12,813,986 | | | 11,662,262 | |
| Gold ounces | | | | 31,700 | | | 35,461 | | | 116,254 | | | 133,945 | |
| Cash cost per oz/silver | | | $ | 3.41 | | $ | 2.83 | | $ | 3.33 | | $ | 3.53 | |
| Total cost/oz | | | $ | 5.52 | | $ | 4.59 | | $ | 5.53 | | $ | 5.13 | |
| CONSOLIDATED SALES TOTALS(C) | | | | | | | | | | | | | | |
| Silver ounces sold | | | | 3,693,538 | | | 3,890,848 | | | 12,841,634 | | | 12,579,634 | |
| Gold ounces sold | | | | 34,914 | | | 39,233 | | | 116,400 | | | 146,749 | |
| Realized price per silver ounce | | | $ | 12.79 | | $ | 8.22 | | $ | 12.03 | | $ | 7.47 | |
| Realized price per gold ounce | | | $ | 617 | | $ | 497 | | $ | 623 | | $ | 452 | |
| |
|---|
| Fourth Quarter 2006 Results (February 22, 2007) | Page 9 of 15 |
| (A) | The leach cycle at Rochester requires 5 to 10 years to recover gold and silver contained in the ore. The Company estimates the ultimate recovery to be approximately 61.5% for silver and 93% for gold. However, ultimate recoveries will not be known until leaching operations cease which is currently estimated for 2011. Current recovery may vary significantly from ultimate recovery. See Critical Accounting Policies and Estimates – Ore on Leach Pad. |
| (B) | The Company acquired its interests in the Endeavor and Broken Hill mines in May 2005 and September 2005, respectively. |
| (C) | Units sold at realized metal prices will not match reported metal sales due primarily to the effects of embedded derivatives in the Company’s previously priced sales contracts. |
“Cash Costs per Ounce” are calculated by dividing the cash costs computed for each of the Company’s mining properties for a specified period by the amount of gold ounces or silver ounces produced by that property during that same period. Management uses cash costs per ounce as a key indicator of the profitability of each of its mining properties. Gold and silver are sold and priced in the world financial markets on a US dollar per ounce basis.
“Cash Costs” are costs directly related to the physical activities of producing silver and gold, and include mining, processing and other plant costs, third-party refining and smelting costs, marketing expense, on-site general and administrative costs, royalties, in-mine drilling expenditures that are related to production and other direct costs. Sales of by-product metals are deducted from the above in computing cash costs. Cash costs exclude depreciation, depletion and amortization, corporate general and administrative expense, exploration, interest, and pre-feasibility costs and accruals for mine reclamation. Cash costs are calculated and presented using the “Gold Institute Production Cost Standard” applied consistently for all periods presented.
Total cash costs per ounce is a non-GAAP measurement and investors are cautioned not to place undue reliance on it and are urged to read all GAAP accounting disclosures presented in the consolidated financial statements and accompanying footnotes. In addition, see the reconciliation of “cash costs” to production costs under “Reconciliation of Non-GAAP Cash Costs to GAAP Production Costs” set forth below.
Operating Statistics From Discontinued Operation
The following table presents information for Coeur Silver Valley which was sold on June 1, 2006:
| Three Months Ended
December 31,
| Twelve Months Ended December
31,
|
|---|
| 2006
| 2005
| 2006(1)
| 2005
|
|---|
| Silver Valley/Galena | | | | | | | | | | | | | | |
| Tons milled | | | - | | | | 26,613 | | | 52,876 | | | 128,502 | |
| Ore grade/Silver oz | | | - | | | | 12.97 | | | 15.15 | | | 16.53 | |
| Recovery/Silver oz | | | - | | | | 95.7 | % | | 96.0 | % | | 97.0 | % |
| Silver production ounces | | | - | | | | 330,537 | | | 768,674 | | | 2,060,338 | |
| Cash cost/oz | | | - | | | $ | 12.40 | | $ | 9.75 | | $ | 8.37 | |
| Total cost/oz | | | - | | | $ | 13.58 | | $ | 10.64 | | $ | 9.34 | |
| Gold production | | | - | | | | 77 | | | 180 | | | 282 | |
(1) Amounts represent five months ended May 31, 2006.
Reconciliation of Non-GAAP Cash Costs to GAAP Production Costs
The tables below present reconciliations between non-GAAP cash costs per ounce to production costs applicable to sales including depreciation, depletion and amortization (GAAP).
Total cash costs include all direct and indirect operating cash costs related directly to the physical activities of producing metals, including mining, processing and other plant costs, third-party refining and marketing expense, on-site general and administrative costs, royalties and mining production taxes, net of by-product revenues earned from all metals other than the primary metal produced at each unit. Total cash costs are a performance measure and provide management and investors with an indication of net cash flow, after consideration of the realized price received for production sold. Management also uses this measurement for the comparative monitoring of performance of our mining operations period-to-period from a cash flow perspective. “Total cash costs per ounce” is a measure developed by precious metals companies in an effort to provide a comparable standard, however, there can be no assurance that our reporting of this non-GAAP measure is similar to that reported by other mining companies.
| |
|---|
| Fourth Quarter 2006 Results (February 22, 2007) | Page 10 of 15 |
Production costs applicable to sales including depreciation, depletion and amortization, is the most comparable financial measure calculated in accordance with GAAP to total cash costs. The sum of the production costs applicable to sales and depreciation, depletion and amortization for our mines as set forth in the tables below is included in our Consolidated Statements of Operations and Comprehensive Income (Loss).
THREE MONTHS ENDED DECEMBER 31, 2006
(In thousands except ounces and per ounce costs) |
| Rochester
| Cerro Bayo
| Martha
| Endeavor(1)
| Broken Hill(1)
| Total
|
|---|
| Production of Silver (ounces) | | | | 1,408,544 | | | 619,906 | | | 729,962 | | | 179,972 | | | 501,872 | | | 3,440,256 | |
| Cash Costs per ounce | | | $ | 3.36 | | $ | 0.79 | | $ | 5.89 | | $ | 3.46 | | $ | 3.16 | | $ | 3.41 | |
|
|
|
|
|
|
|
|---|
| Total Cash Costs (Non-GAAP) | | | $ | 4,728 | | $ | 487 | | $ | 4,301 | | $ | 623 | | $ | 1,585 | | $ | 11,724 | |
| Add/Subtract: | | | | | | | | | | | | | | | | | | | | |
| Third Party Smelting Costs | | | | -- | | | (1,011 | ) | | (521 | ) | | (467 | ) | | (620 | ) | | (2,619 | ) |
| By-Product Credit (2) | | | | 9,798 | | | 9,148 | | | 556 | | | -- | | | -- | | | 19,502 | |
| Other Adjustment | | | | 484 | | | -- | | | -- | | | -- | | | -- | | | 484 | |
| Change in Inventory | | | | (832 | ) | | 1,038 | | | (517 | ) | | 49 | | | (53 | ) | | (315 | ) |
| Depreciation, depletion and | | | | | | | | | | | | | | | | | | | | |
| amortization | | | | 4,057 | | | 1,633 | | | 444 | | | 157 | | | 984 | | | 7,275 | |
|
|
|
|
|
|
|
|---|
| Production costs applicable | | | | | | | | | | | | | | | | | | | | |
| to sales, including | | | | | | | | | | | | | | | | | | | | |
| depreciation, depletion | | | | | | | | | | | | | | | | | | | | |
| and amortization (GAAP) | | | $ | 18,235 | | $ | 11,295 | | $ | 4,263 | | $ | 362 | | $ | 1,896 | | $ | 36,051 | |
|
|
|
|
|
|
|
|---|
| | | | | | | |
|---|
YEAR ENDED DECEMBER 31, 2006
(In thousands except ounces and per ounce costs) |
| Rochester
| Cerro Bayo
| Martha
| Endeavor(1)
| Broken Hill(1)
| Total
|
|---|
| Production of Silver (ounces) | | | | 5,113,504 | | | 2,331,060 | | | 2,712,846 | | | 481,991 | | | 2,174,585 | | | 12,813,986 | |
| Cash Costs per ounce | | | $ | 2.80 | | $ | 3.04 | | $ | 4.88 | | $ | 2.85 | | $ | 3.09 | | $ | 3.33 | |
|
|
|
|
|
|
|
|---|
| Total Cash Costs (Non-GAAP) | | | $ | 14,299 | | $ | 7,089 | | $ | 13,240 | | $ | 1,373 | | $ | 6,712 | | $ | 42,713 | |
| Add/Subtract: | | | | | | | | | | | | | | | | | | | | |
| Third Party Smelting Costs | | | | -- | | | (3,475 | ) | | (1,853 | ) | | (948 | ) | | (2,620 | ) | | (8,896 | ) |
| By-Product Credit (2) | | | | 43,697 | | | 24,861 | | | 2,079 | | | -- | | | -- | | | 70,637 | |
| Other Adjustment | | | | 1,803 | | | -- | | | -- | | | -- | | | -- | | | 1,803 | |
| Change in Inventory | | | | (12,489 | ) | | (1,105 | ) | | (518 | ) | | (39 | ) | | 272 | | | (13,879 | ) |
| Depreciation, depletion and | | | | | | | | | | | | | | | | | | | | |
| amortization | | | | 15,548 | | | 5,638 | | | 1,297 | | | 490 | | | 5,120 | | | 28,093 | |
|
|
|
|
|
|
|
|---|
| Production costs applicable | | | | | | | | | | | | | | | | | | | | |
| to sales, including | | | | | | | | | | | | | | | | | | | | |
| depreciation, depletion | | | | | | | | | | | | | | | | | | | | |
| and amortization (GAAP) | | | $ | 62,858 | | $ | 33,008 | | $ | 14,245 | | $ | 876 | | $ | 9,484 | | $ | 120,471 | |
|
|
|
|
|
|
|
|---|
| | | | | | | |
|---|
THREE MONTHS ENDED DECEMBER 31, 2005
(In thousands except ounces and per ounce costs) |
| Rochester
| Cerro Bayo
| Martha
| Endeavor(1)
| Broken Hill(1)
| Total
|
|---|
| Production of Silver (ounces) | | | | 1,666,958 | | | 781,083 | | | 538,411 | | | 37,091 | | | 574,083 | | | 3,597,626 | |
| Cash Costs per ounce | | | $ | 3.02 | | $ | 1.09 | | $ | 4.84 | | $ | 2.89 | | $ | 2.73 | | $ | 2.83 | |
|
|
|
|
|
|
|
|---|
| Total Cash Costs (Non-GAAP) | | | $ | 5,040 | | $ | 851 | | $ | 2,607 | | $ | 107 | | $ | 1,566 | | $ | 10,171 | |
| Add/Subtract: | | | | | | | | | | | | | | | | | | | | |
| Third Party Smelting Costs | | | | -- | | | (685 | ) | | (354 | ) | | (77 | ) | | (500 | ) | | (1,616 | ) |
| By-Product Credit (2) | | | | 9,964 | | | 6,965 | | | 317 | | | -- | | | -- | | | 17,246 | |
| Other Adjustment | | | | 395 | | | -- | | | -- | | | -- | | | -- | | | 395 | |
| Change in Inventory | | | | 355 | | | 2,150 | | | (703 | ) | | 35 | | | (403 | ) | | 1,434 | |
| Depreciation, depletion and | | | | | | | | | | | | | | | | | | | | |
| amortization | | | | 2,737 | | | 1,633 | | | 243 | | | 65 | | | 1,647 | | | 6,325 | |
|
|
|
|
|
|
|
|---|
| Production costs applicable | | | | | | | | | | | | | | | | | | | | |
| to sales, including | | | | | | | | | | | | | | | | | | | | |
| depreciation, depletion | | | | | | | | | | | | | | | | | | | | |
| and amortization (GAAP) | | | $ | 18,491 | | $ | 10,914 | | $ | 2,110 | | $ | 130 | | $ | 2,310 | | $ | 33,955 | |
|
|
|
|
|
|
|
|---|
| |
|---|
| Fourth Quarter 2006 Results (February 22, 2007) | Page 11 of 15 |
YEAR ENDED DECEMBER 31, 2005
(In thousands except ounces and per ounce costs) |
| Rochester
| Cerro Bayo
| Martha
| Endeavor(1)
| Broken Hill(1)
| Total
|
|---|
| Production of Silver (ounces) | | | | 5,720,489 | | | 2,875,047 | | | 2,093,464 | | | 316,169 | | | 657,093 | | | 11,662,262 | |
| Cash Costs per ounce | | | $ | 4.82 | | $ | 0.54 | | $ | 4.60 | | $ | 2.05 | | $ | 2.72 | | $ | 3.53 | |
|
|
|
|
|
|
|
|---|
| Total Cash Costs (Non-GAAP) | | | $ | 27,575 | | $ | 1,542 | | $ | 9,637 | | $ | 648 | | $ | 1,790 | | $ | 41,192 | |
| Add/Subtract: | | | | | | | | | | | | | | | | | | | | |
| Third Party Smelting Costs | | | | -- | | | (2,783 | ) | | (1,165 | ) | | (370 | ) | | (570 | ) | | (4,888 | ) |
| By-Product Credit (2) | | | | 31,601 | | | 27,114 | | | 1,152 | | | -- | | | -- | | | 59,867 | |
| Other Adjustment | | | | 140 | | | -- | | | -- | | | -- | | | -- | | | 140 | |
| Change in Inventory | | | | (14,769 | ) | | 7,421 | | | (328 | ) | | -- | | | (403 | ) | | (8,079 | ) |
| Depreciation, depletion and | | | | | | | | | | | | | | | | | | | | |
| amortization | | | | 10,542 | | | 5,064 | | | 843 | | | 411 | | | 1,807 | | | 18,667 | |
|
|
|
|
|
|
|
|---|
| Production costs applicable | | | | | | | | | | | | | | | | | | | | |
| to sales, including | | | | | | | | | | | | | | | | | | | | |
| depreciation, depletion | | | | | | | | | | | | | | | | | | | | |
| and amortization (GAAP) | | | $ | 55,089 | | $ | 38,358 | | $ | 10,139 | | $ | 689 | | $ | 2,624 | | $ | 106,899 | |
|
|
|
|
|
|
|
|---|
The following tables present a reconciliation between non-GAAP cash costs per ounce to GAAP production costs applicable to sales reported in Discontinued Operations (see Note D):
| THREE MONTHS
ENDED DECEMBER 31, | TWELVE MONTHS
ENDED DECEMBER 31, |
|---|
| Coeur Silver Valley/Galena | 2006
| 2005
| 2006(3)
| 2005
|
|---|
| (In thousands except ounces and per ounce costs) |
|---|
| Production of Silver (ounces) | | | -- | | | | 330,537 | | | 768,674 | | | 2,060,338 | |
| Cash Costs per ounce | | | -- | | | $ | 12.40 | | $ | 9.75 | | $ | 8.37 | |
|
|
|
|
|
|---|
| Total Cash Costs (Non-GAAP) | | | -- | | | $ | 4,099 | | $ | 7,498 | | $ | 17,248 | |
| Add/Subtract: | | | | | | | | | | | | | | |
| Third party smelting costs | | | -- | | | | (471 | ) | | (1,464 | ) | | (3,091 | ) |
| By-Product credit (2) | | | -- | | | | 499 | | | 1,473 | | | 2,722 | |
| Change in inventory | | | -- | | | | 140 | | | 726 | | | (181 | ) |
| Depreciation, depletion and | | | | | | | | | | | | | | |
| amortization | | | -- | | | | 490 | | | 681 | | | 1,996 | |
|
|
|
|
|
|---|
| Production costs applicable to | | | | | | | | | | | | | | |
| sales, including depreciation, | | | | | | | | | | | | | | |
| depletion and amortization (GAAP) | | | -- | | | $ | 4,757 | | $ | 8,914 | | $ | 18,694 | |
|
|
|
|
|
|---|
| (1) | The Company’s share of silver production at Endeavor and Broken Hill commenced in May 2005 and September 2005, respectively. |
| (2) | By-product credits are based upon production units and the period’s average metal price for the purposes of reporting cash costs per ounce. |
| (3) | Amounts represent five months ended May 31, 2006. |
| |
|---|
| Fourth Quarter 2006 Results (February 22, 2007) | Page 12 of 15 |
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| December 31, |
|---|
| 2006
| 2005
|
|---|
| ASSETS | (In Thousands) |
|---|
| | |
|---|
| CURRENT ASSETS | | | | | | | | |
| Cash and cash equivalents | | | $ | 270,672 | | $ | 54,896 | |
| Short-term investments | | | | 70,373 | | | 185,446 | |
| Receivables | | | | 43,233 | | | 27,986 | |
| Ore on leach pad | | | | 31,302 | | | 25,394 | |
| Metal and other inventory | | | | 16,341 | | | 12,807 | |
| Deferred tax assets | | | | 3,629 | | | 2,255 | |
| Prepaid expenses and other | | | | 6,047 | | | 4,707 | |
| Assets of discontinued operations held for sale | | | | -- | | | 14,828 | |
|
|
|
|---|
| | | | 441,597 | | | 328,319 | |
| PROPERTY, PLANT AND EQUIPMENT | | | | | | | | |
| Property, plant and equipment | | | | 132,315 | | | 105,107 | |
| Less accumulated depreciation | | | | (64,206 | ) | | (57,929 | ) |
|
|
|
|---|
| | | | 68,109 | | | 47,178 | |
| MINING PROPERTIES | | | | | | | | |
| Operational mining properties | | | | 130,447 | | | 121,441 | |
| Less accumulated depletion | | | | (116,361 | ) | | (105,486 | ) |
|
|
|
|---|
| | | | 14,086 | | | 15,955 | |
| | |
|---|
| Mineral interests | | | | 72,201 | | | 72,201 | |
| Less accumulated depletion | | | | (7,828 | ) | | (2,218 | ) |
| | | | 64,373 | | | 69,983 | |
| | |
|---|
| Non-producing and development properties | | | | 190,988 | | | 72,488 | |
|
|
|
|---|
| | | | 269,447 | | | 158,426 | |
| OTHER ASSETS | | | | | | | | |
| Ore on leach pad, non-current portion | | | | 35,367 | | | 29,254 | |
| Restricted cash and cash equivalents | | | | 19,492 | | | 16,943 | |
| Debt issuance costs, net | | | | 5,151 | | | 5,454 | |
| Deferred tax assets | | | | 2,544 | | | 923 | |
| Other | | | | 7,919 | | | 8,319 | |
|
|
|
|---|
| | | | 70,473 | | | 60,893 | |
|
|
|
|---|
| TOTAL ASSETS | | | $ | 849,626 | | $ | 594,816 | |
|
|
|
|---|
| |
|---|
| Fourth Quarter 2006 Results (February 22, 2007) | Page 13 of 15 |
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| December 31, |
|---|
| 2006
| 2005
|
|---|
| LIABILITIES AND SHAREHOLDERS' EQUITY | (In thousands except share data) |
|---|
| | |
|---|
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable | | | $ | 22,315 | | $ | 17,189 | |
| Accrued liabilities and other | | | | 11,865 | | | 5,662 | |
| Accrued income taxes | | | | 10,317 | | | 66 | |
| Accrued payroll and related benefits | | | | 8,527 | | | 7,840 | |
| Accrued interest payable | | | | 1,031 | | | 1,031 | |
| Current portion of reclamation and mine closure | | | | 4,460 | | | 1,646 | |
| Liabilities of discontinued operations held for sale | | | | -- | | | 12,908 | |
|
|
|
|---|
| | | | 58,515 | | | 46,342 | |
| LONG-TERM LIABILITIES | | | | | | | | |
| 1 1/4% Convertible Senior Notes due January 2024 | | | | 180,000 | | | 180,000 | |
| Reclamation and mine closure | | | | 27,226 | | | 23,048 | |
| Other long-term liabilities | | | | 2,891 | | | 3,873 | |
|
|
|
|---|
| | | | 210,117 | | | 206,921 | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| | |
|---|
| SHAREHOLDERS' EQUITY | | | | | | | | |
| Common Stock, par value $1.00 per share; authorized 500,000,000 | | | | | | | | |
| shares, issued 279,054,344 and 250,961,353 shares in 2006 and 2005 | | | | | | | | |
| (1,059,211 shares held in treasury) | | | | 279,054 | | | 250,961 | |
| Additional paid-in capital | | | | 777,798 | | | 656,977 | |
| Accumulated deficit | | | | (463,221 | ) | | (551,357 | ) |
| Shares held in treasury | | | | (13,190 | ) | | (13,190 | ) |
| Accumulated other comprehensive income (loss) | | | | 553 | | | (1,838 | ) |
|
|
|
|---|
| | | | 580,994 | | | 341,553 | |
|
|
|
|---|
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | | | $ | 849,626 | | $ | 594,816 | |
|
|
|
|---|
| |
|---|
| Fourth Quarter 2006 Results (February 22, 2007) | Page 14 of 15 |
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months
Ended December 31, | Twelve Months
Ended December 31, |
|---|
| 2006
| 2005
| 2006
| 2005
|
|---|
| (In Thousands) |
|---|
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | | |
| Net income (loss) | | | $ | 23,150 | | $ | 9,944 | | $ | 88,486 | | $ | 10,551 | |
| Add (deduct) non-cash items: | | | | | | | | | | | | | | |
| Depreciation and depletion | | | | 6,929 | | | 6,023 | | | 26,772 | | | 18,889 | |
| Deferred taxes | | | | 1,045 | | | 1,684 | | | (2,902 | ) | | 1,629 | |
| Unrealized (gain) loss on embedded derivatives | | | | (1,081 | ) | | (1,699 | ) | | 1,166 | | | (2,052 | ) |
| Share-based compensation | | | | 399 | | | 350 | | | 2,218 | | | 1,237 | |
| Amortization of debt issuance costs | | | | 76 | | | 76 | | | 303 | | | 303 | |
| Amortization of premium and/or discount on short-term | | | | | | | | | | | | | | |
| investments, net | | | | (16 | ) | | 88 | | | 24 | | | 790 | |
| Other non-cash charges | | | | (299 | ) | | (171 | ) | | (313 | ) | | 250 | |
| Changes in operating assets and liabilities: | | | | | | | | | | | | | | |
| Receivables | | | | (15,873 | ) | | (6,237 | ) | | (14,781 | ) | | (19,571 | ) |
| Prepaid expenses and other | | | | 1,273 | | | 910 | | | (599 | ) | | (183 | ) |
| Inventories | | | | (1,265 | ) | | 1,970 | | | (15,555 | ) | | (8,308 | ) |
| Accounts payable and accrued liabilities | | | | 6,854 | | | 1,963 | | | 17,686 | | | 2,349 | |
| Discontinued operations | | | | 33 | | | (450 | ) | | (11,275 | ) | | 792 | |
|
|
|
|
|
|---|
| CASH PROVIDED BY OPERATING ACTIVITIES | | | | 21,225 | | | 14,451 | | | 91,230 | | | 6,676 | |
|
|
|
|
|
|---|
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | | | |
| Purchases of short-term investments | | | | (60,612 | ) | | (49,588 | ) | | (317,743 | ) | | (212,252 | ) |
| Proceeds from sales of short-term investments | | | | 30,796 | | | 100,614 | | | 430,292 | | | 277,021 | |
| Capital expenditures | | | | (45,493 | ) | | (30,597 | ) | | (147,998 | ) | | (113,290 | ) |
| Other | | | | 81 | | | 123 | | | (328 | ) | | 103 | |
| Discontinued operations | | | | -- | | | (1,000 | ) | | 15,446 | | | (3,346 | ) |
|
|
|
|
|
|---|
| CASH PROVIDED BY (USED IN) INVESTING | | | | (75,228 | ) | | 19,552 | | | (20,331 | ) | | (51,764 | ) |
| ACTIVITIES | | | | | | | | | | | | | | |
|
|
|
|
|
|---|
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | |
| Proceeds from issuance of common stock | | | | -- | | | -- | | | 154,560 | | | 36,493 | |
| Payments of common stock issuance costs | | | | -- | | | (13 | ) | | (8,329 | ) | | (557 | ) |
| Other | | | | (381 | ) | | (250 | ) | | (1,354 | ) | | (1,170 | ) |
|
|
|
|
|
|---|
| CASH PROVIDED BY (USED IN) FINANCING | | | | (381 | ) | | (263 | ) | | 144,877 | | | 34,766 | |
| ACTIVITIES: | | | | | | | | | | | | | | |
|
|
|
|
|
|---|
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | | (54,384 | ) | | 33,740 | | | 215,776 | | | (10,322 | ) |
| | | | | | | | | | | | | | |
| Cash and cash equivalents at beginning of period | | | | 325,056 | | | 21,156 | | | 54,896 | | | 65,218 | |
|
|
|
|
|
|---|
| |
|---|
| Cash and cash equivalents at end of period | | | $ | 270,672 | | $ | 54,896 | | $ | 270,672 | | $ | 54,896 | |
|
|
|
|
|
|---|
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | | | | | | | | | | | | | | |
| Cash paid for: | | | | | | | | | | | | | | |
| Interest | | | $ | 15 | | $ | 23 | | $ | 2,334 | | $ | 2,280 | |
| Taxes | | | $ | 77 | | | -- | | $ | 814 | | | -- | |
| |
|---|
| Fourth Quarter 2006 Results (February 22, 2007) | Page 15 of 15 |
