Exhibit 99.1
NEWS RELEASE
MOMENTUM BUILDS AS COEUR COMPLETES FIRST FULL QUARTER WITH ALL
THREE NEW GOLD AND SILVER MINES IN PRODUCTION
COEUR D’ALENE, Idaho — November 4, 2010 —Coeur d’Alene Mines Corporation (NYSE:CDE, TSX:CDM, ASX:CXC) today announced strong third quarter financial and operational results driven by its three new long-life gold and silver mines, along with record precious metals prices. This marked the first full quarter with all three new mines in production, leading to accelerating metal sales and cash flow while operating costs per ounce and capital expenditures continue declining.
Third Quarter Highlights:
| | • | | Gold production doubled from prior quarter; silver production increased 4% |
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| | • | | Cash operating costs1 declined 40% to $4.87 per silver ounce |
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| | • | | Record metal sales of $118.6 million, up 17% from previous quarter and nearly $30 million over last year’s third quarter |
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| | • | | 58% increase in operating cash flow2 to $34.7 million compared to last quarter |
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| | • | | Capital expenditures declined to its lowest level in over four years |
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| | • | | Operating income jumped to $10.5 million, up from $1.9 million last quarter |
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| | • | | Palmarejosilver production increased 41% to 1.5 million ounces; gold production increased 49% to 29,823 ounces versus the second quarter |
| | • | | Higher silver and gold grades and larger gold by-product credit led to reduced cash operating costs of $0.15 per silver ounce versus $10.78 during the prior quarter |
| | • | | San Bartolomésilver production of 1.8 million silver ounces consistent with prior quarter; cash operating costs dropped 9% to $7.05 per silver ounce |
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| | • | | Kensingtonproduced 15,155 gold ounces in its initial quarter |
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| | • | | Expecting full-year silver production of over 17 million ounces; cash operating costs of $5.50 per silver ounce; 135% increase in gold production to approximately 170,000 ounces |
“Over the past three years, Coeur has been executing its strategic plan to transition the Company to three new long-life silver and gold mines. Along with exceptionally strong metals prices, the results from the third quarter demonstrate the momentum being created by these new operations.” said Dennis E. Wheeler, Chairman, President and Chief Executive Officer. “As metal sales and cash flow increase, the Company’s cash operating costs and capital expenditures continue to decline.”
Mr. Wheeler continued, “The third quarter also marked a major milestone for the Company’s Kensington gold mine, as it logged its first full quarter of operations. With a substantial reserve base, exciting exploration potential and record gold prices, Kensington has a very bright future.”
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| 1 | | Cash operating costs is a non-U.S. GAAP measure. A reconciliation of this measure to production costs is provided at the end of this release. Excludes cash operating costs at Kensington, which are presented on a gold basis. |
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| 2 | | Represents operating cash flow prior to changes in operating assets and liabilities. A reconciliation between U.S. GAAP and non-U.S. GAAP operating cash flow is provided at the end of this release. |
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“Finally, our Rochester silver and gold mine in Nevada is experiencing a rebirth as it moves ahead with a planned expansion of mining operations. Just last week, this expansion plan received a boost with the issuance of a positive Decision Record by the Nevada Bureau of Land Management (BLM). This expansion will begin adding to production levels in the fourth quarter of 2011 and will increase total average annual silver and gold production to over 2.4 million ounces and 35,000 ounces, respectively. Rochester will soon become a fourth major contributor along with the Company’s three new mines. Rochester contains a large mineral resource base, which provides for additional opportunities to further expand operations beyond this initial expansion. Since commencing production in 1986, Rochester has produced over 127 million ounces of silver and 1.5 million ounces of gold, making it one of the world’s most prolific silver and gold mines. The Company extends its appreciation to the BLM, the State of Nevada and the Nevada Congressional Delegation for its support and assistance, which will help lead to the creation of 200 new jobs at Rochester. “ Mr. Wheeler added.
Financial Highlights
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| US$ millions | | 3Q 2009 | | 3Q 2010 | | YoverY | | 2Q 2010 | | 3Q 2010 | | QoverQ |
Sales of Metal | | $ | 90.3 | | | $ | 118.6 | | | | 31 | % | | $ | 101.0 | | | $ | 118.6 | | | | 17 | % |
Production Costs | | | 59.7 | | | | 60.4 | | | | 1 | % | | | 58.6 | | | | 60.4 | | | | 3 | % |
Gross Mine Profit3 | | | 30.6 | | | | 58.2 | | | | 90 | % | | | 42.4 | | | | 58.2 | | | | 37 | % |
EBITDA4 | | | 23.5 | | | | 48.3 | | | | 106 | % | | | 31.8 | | | | 48.3 | | | | 52 | % |
Operating Income/(Loss) | | | -4.1 | | | | 10.5 | | | nm | | | 1.9 | | | | 10.5 | | | | 453 | % |
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Operating Cash Flow | | | -1.0 | | | | 34.7 | | | nm | | | 22.0 | | | | 34.7 | | | | 58 | % |
Capital Expenditures | | | 54.4 | | | | 36.8 | | | | -32 | % | | | 45.5 | | | | 36.8 | | | | -19 | % |
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Cash, Equivalents and ST Inv. | | $ | 45.6 | | | $ | 32.8 | | | | -28 | % | | $ | 41.2 | | | $ | 32.8 | | | | -20 | % |
Total Debt5 | | | 216.9 | | | | 186.4 | | | | -14 | % | | | 187.5 | | | | 186.4 | | | | -1 | % |
Shares Issued & Outstanding | | | 78.1 | | | | 89.3 | | | | 14 | % | | | 89.3 | | | | 89.3 | | | | 0 | % |
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Avg. Realized Price — Silver | | $ | 14.52 | | | $ | 18.87 | | | | 30 | % | | $ | 18.56 | | | $ | 18.87 | | | | 2 | % |
Avg. Realized Price — Gold | | $ | 953 | | | $ | 1,229 | | | | 29 | % | | $ | 1,176 | | | $ | 1,229 | | | | 5 | % |
Note: Reflects results from continuing operations.
Third quarter metal sales jumped nearly $30 million to a record $118.6 million, up 31% compared to last year’s third quarter and up 17% over the prior quarter, primarily due to the significant rise in gold production from the Palmarejo mine and from substantially higher average realized silver and gold prices. Sales of silver contributed 62% of the Company’s total metal sales compared to 75% during last year’s third quarter. Production costs remained nearly flat compared to last year’s third quarter and this year’s second quarter, leading to significant increases in gross mine profit, operating income and operating cash flow.
Quarterly operating cash flow increased to $34.7 million compared to $(1.0) million last year while capital expenditures declined 32% to $36.8 million. This represents the lowest quarterly capital expenditures since the second quarter of 2006. Compared to the most recent quarter, operating cash flow increased 58% while capital expenditures dropped 19%.
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| 3 | | Represents sales of metal less production costs. Excludes depreciation, depletion, and amortization expense. |
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| 4 | | EBITDA is a non-U.S. GAAP measure and defined as earnings before interest, taxes, depreciation and amortization. A reconciliation of this measure to U.S. GAAP is provided at the end of this release. |
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| 5 | | Includes short-term and long-term indebtedness; excludes capital lease obligations and Mitsubishi gold lease facility. |
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Quarterly operating income6 increased to $10.5 million versus a $4.1 million operating loss during last year’s third quarter and $1.9 million during the second quarter.
The Company’s average realized silver and gold prices during the third quarter were $18.87 and $1,229 per ounce, respectively, representing increases of 30% and 29% over the prior year.
At September 30th, cash, equivalents and short-term investments totaled $32.8 million. Total shares outstanding remain at 89.3 million, consistent with the Company’s stated objective of not issuing additional shares. Total debt declined 14% compared to last year’s third quarter. The current debt-to-equity ratio is 9%.
Operational Highlights
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| Ounces unless otherwise noted | | 3Q 2009 | | 3Q 2010 | | QoverQ | | 2Q 2010 | | 3Q 2010 | | YoverY |
Silver Production | | | 5,196,315 | | | | 4,333,530 | | | | -17 | % | | | 4,156,204 | | | | 4,333,530 | | | | 4 | % |
Gold Production | | | 28,955 | | | | 47,514 | | | | 64 | % | | | 23,124 | | | | 47,514 | | | | 105 | % |
Cash Operating Costs/Ag Oz | | $ | 6.93 | | | $ | 4.87 | | | | -30 | % | | $ | 8.06 | | | $ | 4.87 | | | | -40 | % |
The Company produced 4.3 million ounces of silver and 47,514 ounces of gold during the third quarter versus 4.2 million ounces and 23,124 ounces, respectively, in the second quarter. The 105% increase in gold production was primarily a result of the production of 15,155 gold ounces at the Kensington mine during its initial quarter of operations and a 49% increase in gold production at Palmarejo to 29,823 ounces.
Cash operating costs declined 40% to $4.87 per silver ounce compared to the prior quarter mostly due to Palmarejo’s cash operating costs of $0.15 per silver ounce compared to $10.78 per silver ounce last quarter.
The Company’s silver production base is underpinned by proven and probable reserves of 269.2 million, measured and indicated resources of 180.6 million, and inferred resources of 66.6 million ounces. In addition, Coeur’s gold production is backed by a large and growing reserve base of 2.9 million ounces of proven and probable reserves, 1.2 million ounces of measured and indicated resources, and 1.2 million ounces of inferred resources7
Palmarejo (Mexico) — Corner Turned During Third Quarter
| | • | | Open pit silver and gold grades up 156% and 133%, respectively |
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| | • | | Underground silver and gold grades up 10% and 11%, respectively |
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| | • | | Highest production levels for both silver and gold since April 2009 startup |
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| | • | | Underground operations continue to contribute approximately one-third of total tons mined |
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| 6 | | Reflects income/(loss) before other income and expenses. On a net income/(loss) basis, the Company recorded a net loss from continuing operations of $23.3 million, or ($0.26) per share for the quarter, which included $19.1 million of negative non-cash fair value adjustments. During last year’s third quarter, the Company reported a net loss from continuing operations of $36.7 million, or ($0.48) per share, which included $35.7 million of negative non-cash fair value adjustments. |
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| 7 | | As of December 31, 2009. |
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| | • | | Higher grades and increased gold by-product credit led to sharp decline in cash operating costs to $0.15 per silver ounce in the third quarter compared to $10.78 per silver ounce in the second quarter and $8.76 per silver ounce during last year’s third quarter |
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| | • | | Received and monetized $10 million of Franco-Nevada Corporation common shares in connection with operational completion test tied to the January 2009 gold royalty financing |
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| | • | | Processing plant achieved stability during quarter with gold recoveries averaging 94% and silver recoveries remaining at 70%. Implementation of a series of enhancements in the third quarter including installation of new pumping capacity, enhanced focus on grind size, optimization of chemical levels and improved blending of ore types are now beginning to make an impact. Several other improvements such as installation of an additional oxygen plant and changes focused on enhancing carbon stripping and regeneration are underway and expected to lead to further gains. |
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| | • | | Expected to produce approximately 6.1 million ounces of silver and 109,000 ounces of gold this year at an average cash operating cost of approximately $2.50 per silver ounce |
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| | • | | For additional operating statistics, please refer to the table on page 9 of this release |
San Bartolomé (Bolivia) — Consistent Production Levels at Reduced Costs
| | • | | Third quarter silver production consistent with prior quarter |
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| | • | | 14% increase in grade and 5% increase in recoveries offset a 19% decline in tons milled |
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| | • | | Cash operating costs dropped 9% to $7.05 per ounce |
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| | • | | Full-year 2010 silver production is expected to exceed 6.5 million ounces at average cash operating costs of approximately $8.00 per ounce |
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| | • | | For additional operating statistics, please refer to the table on page 9 of this release |
Kensington (Alaska) — Initial Quarter of Operations According to Plan
| | • | | Commenced commercial production on July 3, 2010 |
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| | • | | 15,155 gold ounces produced and 7,391 gold ounces sold during the third quarter |
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| | • | | Cash operating costs during the mine’s initial quarter averaged $1,199 per ounce of gold and are expected to average approximately $490 per ounce over the life of mine |
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| | • | | Projected gold production expected to exceed 125,000 ounces in 2011, representing the mine’s first full year of operation |
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| | • | | For additional operating statistics, please refer to the table on page 9 of this release |
Rochester (Nevada) — Positive Decision from BLM to Expand Operations for Several Years
| | • | | Expansion will begin adding to production levels in the fourth quarter of 2011 and will increase total average annual production to more than 2.4 million silver ounces and 35,000 gold ounces from current expected production levels generated from residual leaching of 700,000 silver ounces and 5,000 gold ounces |
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| | • | | Updated feasibility study completed defining 27.6 million contained ounces of silver and 247,000 contained ounces of gold in proven and probable mineral reserves. Mine contains an additional 54.8 million silver ounces and 409,000 gold ounces of measured and indicated resources. Efforts to expand mineral reserves and resources and further increase production are ongoing. |
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| | • | | Expected to produce 2.0 million ounces of silver and 10,000 ounces of gold in 2010 at an average cash operating cost of $3.00 per ounce |
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| | • | | In its 25 years of operation, the mine has produced 127 million ounces of silver and 1.5 million ounces of gold |
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| | • | | For additional operating statistics, please refer to the table on page 10 of this release |
Martha (Argentina) — Newly Discovered High-Grade Mineralization Expected to Extend Operations Through 2011
| | • | | Began 2010 with 1.2 million ounces of proven and probable reserves and 1.8 million ounces of measured and indicated resources |
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| | • | | Produced 1.4 million silver ounces through the first nine months of 2010 |
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| | • | | Expect to produce 1.7 million silver ounces during full-year 2010 |
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| | • | | For additional operating statistics, please refer to the table on page 10 of this release |
Exploration Highlights
Exploration activities across all of Coeur’s properties proceeded at a brisk pace during the third quarter. Over 30,500 meters were drilled on six different properties with exploration expenditures totaling $3.8 million during the quarter.
Palmarejo — Favorable drill results continue to expand size and continuity of Guadalupe
The majority of the drilling during the quarter was focused at the Palmarejo mine and at the nearby Guadalupe deposit. At Palmarejo, drilling continues to intersect strong gold and silver mineralization from several zones, notably 108, 76, Tucson-Chapotillo, and at Guadalupe, which now totals over 2.4 kilometers of strike length. At the mine, drilling was conducted from both surface and underground on all five ore zones, all of which remain open for expansion on strike and at depth. Drilling during 2010 is expected to increase mineral resources and reserves when the Company announces year-end reserves and resources in early 2011.
Argentina — Definition drilling commenced and new high grades intersected at Joaquin
In the Santa Cruz province of Argentina, the Company commenced a definition drilling program at the Joaquin property, which is located approximately 70 kilometers to the north of the Martha Mine, to define the main part of the La Negra zone. Drilling at La Morocha, situated less than one kilometer west of La Negra, intersected over 30 meters of +400 g/t silver at about 125 meters below surface, which represents the deepest mineralized intercept thus far on this zone and remains open at depth.
The Company also commenced drilling on new targets at Martha.
Kensington — Phase one drilling completed with very high grades from several drill holes
The first phase of drilling on the large, gold-bearing Horrible vein zone was completed during the third quarter. This is the first drilling on Horrible by Coeur and the system extends over 600 meters vertically and over 100 meters horizontally with multiple gold-bearing quartz veins. More drilling is planned for the next quarter and 2011 to further define and expand the zone which is expected to lead to new mineral resources and reserves.
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Rochester — Encouraging results from new drilling
The first phase of a drilling program focused on new targets located on a major structural corridor between the Company’s Rochester and Nevada Packard mines was completed during the quarter. This represents the first drilling in this area in over a decade. Several holes returned ore-grade silver and gold mineralization. Further drilling is planned in 2011 to test this same area again as well as other untested zones on the large Rochester property. The Company expects this work to lead to further increases in mineral resources and reserves.
Conference Call Information
Coeur will hold a conference call to discuss the Company’s third quarter 2010 results at 1:00 p.m. Eastern time on November 4, 2010. To listen live via telephone, call (877) 464-2820 (US and Canada) or (660) 422-4718 (International). The conference ID number is 18309250. The conference call and presentation will also be webcast on the Company’s web site atwww.coeur.com. A replay of the call will be available through November 11, 2010. The replay dial-in numbers are (800) 642-1687 (US and Canada) and (706) 645-9291 (International) and the access code is 18309250. In addition, the call will be archived for a limited time on the Company’s web site.
Cautionary Statement
This press release contains forward-looking statements within the meaning of securities legislation in the United States, Canada, and Australia, including statements regarding anticipated operating results. Such statements are subject to numerous assumptions and uncertainties, many of which are outside the control of Coeur. Operating, exploration and financial data, and other statements in this presentation are based on information that Coeur believes is reasonable, but involve significant uncertainties affecting the business of Coeur, including, but not limited 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 future acquisitions 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 filings made from time to time with the United States Securities and Exchange Commission, the Canadian securities regulators, and the Australian Securities Exchange, including, without limitation, Coeur’s 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.
Donald J. Birak, Coeur’s Senior Vice President of Exploration, is the qualified person responsible for the preparation of the scientific and technical information concerning Coeur’s mineral projects in this presentation. 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 of Coeur’s properties as filed on SEDAR atwww.sedar.com.
Cautionary Note to U.S. Investors — The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this presentation, such as “measured,” “indicated,” and “inferred resources,” that are recognized by Canadian and Australian regulations, but that SEC guidelines generally prohibit U.S.
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registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from the SEC’s website athttp://www.sec.gov/edgar.shtml.
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 cash operating costs, operating cash flow and EBITDA. 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 provide the amount of our operating cash flow to supplement our cash flow determined under U.S. GAAP. We define operating cash flow as net income plus depreciation, depletion and amortization and plus/minus any other non-cash items. We believe operating cash flow is an important measure in assessing the Company’s overall financial performance.
About Coeur
Coeur d’Alene Mines Corporation is one of the world’s leading silver companies and is also a growing gold producer. Coeur is also a recognized leader in environmental stewardship and worker safety, with 13 national and international awards earned over the past year. The Company’s three new long-life mines include the San Bartolomé silver mine in Bolivia which began operations in 2008, the Palmarejo silver and gold mine in Mexico, which began operations in 2009, and the Kensington gold mine in Alaska, which began commercial production in July of this year. The Company also owns an underground mine in Argentina and a surface mine in Nevada, and owns a non-operating interest in a low-cost mine in Australia. The Company conducts exploration activities in Alaska, Argentina and Mexico. Coeur common shares are traded on the New York Stock Exchange under the symbol CDE, and the Toronto Stock Exchange under the symbol CDM, and its CHESS Depositary Interests are traded on the Australian Securities Exchange under symbol CXC.
Photos of projects and other information can be accessed through the Company’s website atwww.coeur.com.
For Additional Information:
Investors
Director of Investor Relations
Deborah Schubert, (208) 665-0332
Media
Director of Corporate Communications
Tony Ebersole, (208) 665-0777
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Excluding changes in operating assets and liabilities, the Company’s operating cash flow consisted of the following:
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| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | (In thousands) | | | (In thousands) | |
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| CASH PROVIDED BY OPERATING ACTIVITIES | | | 12,939 | | | | 28,938 | | | | 36,166 | | | | 47,023 | |
| Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | |
| Receivables and other current assets | | | 4,511 | | | | (1,855 | ) | | | 12,136 | | | | 7,145 | |
| Inventories | | | 22,980 | | | | 10,547 | | | | 27,888 | | | | 23,733 | |
| Accounts payable and accrued liabilities | | | (5,704 | ) | | | (38,658 | ) | | | 8,298 | | | | (55,594 | ) |
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| Operating cash flow | | $ | 34,726 | | | $ | (1,028 | ) | | $ | 84,488 | | | $ | 22,307 | |
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Reconciliation of EBITDA to net income/(loss) is shown below:
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| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | (In thousands, except per share data) | |
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| NET INCOME (LOSS) | | | (22,628 | ) | | | (17,283 | ) | | | (81,389 | ) | | | 384 | |
| Gain (loss) on sale of discontinued operations, net of income taxes | | | (882 | ) | | | (22,411 | ) | | | 2,095 | | | | (22,411 | ) |
| Loss from discontinued operations, net of income taxes | | | 251 | | | | 3,003 | | | | 6,029 | | | | 1,451 | |
| Income tax benefit (provision) | | | 3,233 | | | | (13,428 | ) | | | (17,977 | ) | | | (17,067 | ) |
| Interest expense, net of capitalized interest | | | 9,951 | | | | 6,088 | | | | 21,402 | | | | 12,047 | |
| Interest and other income | | | 638 | | | | 1,245 | | | | 2,725 | | | | (822 | ) |
| Fair value adjustments, net | | | 19,107 | | | | 35,718 | | | | 65,881 | | | | 49,269 | |
| Gain (loss) on debt extinguishments | | | 806 | | | | 2,947 | | | | 12,714 | | | | (35,430 | ) |
| Depreciation, depletion and amortization | | | 37,801 | | | | 27,591 | | | | 95,503 | | | | 54,282 | |
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| EBITDA | | $ | 48,277 | | | $ | 23,470 | | | $ | 106,983 | | | $ | 41,703 | |
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PALMAREJO:
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| US$ millions except where noted | | 3Q 2009 | | 4Q 2009 | | 1Q 2010 | | 2Q 2010 | | 3Q 2010 |
Underground Operations: | | | | | | | | | | | | | | | | | | | | |
Tons Mined | | | 154,845 | | | | 173,078 | | | | 180,526 | | | | 166,381 | | | | 146,682 | |
Average Silver Grade (oz/t) | | | 4.88 | | | | 5.21 | | | | 4.89 | | | | 5.13 | | | | 5.63 | |
Average Gold Grade (oz/t) | | | 0.09 | | | | 0.08 | | | | 0.07 | | | | 0.09 | | | | 0.10 | |
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Surface Operations: | | | | | | | | | | | | | | | | | | | | |
Tons Mined | | | 280,530 | | | | 222,223 | | | | 313,366 | | | | 306,246 | | | | 256,927 | |
Average Silver Grade (oz/t) | | | 3.82 | | | | 4.12 | | | | 2.89 | | | | 2.03 | | | | 5.20 | |
Average Gold Grade (oz/t) | | | 0.05 | | | | 0.04 | | | | 0.04 | | | | 0.03 | | | | 0.07 | |
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Processing: | | | | | | | | | | | | | | | | | | | | |
Total Tons Milled | | | 410,137 | | | | 370,276 | | | | 458,006 | | | | 457,268 | | | | 405,742 | |
Average Recovery Rate — Ag | | | 73.4 | % | | | 67.2 | % | | | 72.7 | % | | | 72.5 | % | | | 69.6 | % |
Average Recovery Rate — Au | | | 94.3 | % | | | 87.1 | % | | | 92.1 | % | | | 87.3 | % | | | 94.4 | % |
Silver Production (ounces) | | | 1,275,904 | | | | 1,184,223 | | | | 1,300,593 | | | | 1,070,638 | | | | 1,506,742 | |
Gold Production (ounces) | | | 24,289 | | | | 20,721 | | | | 22,577 | | | | 19,950 | | | | 29,823 | |
Cash Operating Costs/Ag Oz | | $ | 8.76 | | | $ | 6.15 | | | $ | 5.41 | | | $ | 10.78 | | | $ | 0.15 | |
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Total Sales of Metal | | | 32.2 | | | | 42.9 | | | | 44.8 | | | | 44.8 | | | | 61.5 | |
Production Costs | | | 22.9 | | | | 28.5 | | | | 27.9 | | | | 32.1 | | | | 31.3 | |
Capital Expenditures | | | 42.3 | | | | 22.8 | | | | 16.5 | | | | 10.8 | | | | 16.0 | |
SAN BARTOLOME:
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| US$ millions except where noted | | 3Q 2009 | | 4Q 2009 | | 1Q 2010 | | 2Q 2010 | | 3Q 2010 |
Tons Milled | | | 431,218 | | | | 370,736 | | | | 293,106 | | | | 446,909 | | | | 360,605 | |
Average Silver Grade (oz/t) | | | 5.36 | | | | 3.76 | | | | 3.74 | | | | 5.00 | | | | 5.70 | |
Average Recovery Rate | | | 91.3 | % | | | 95.3 | % | | | 94.8 | % | | | 83.4 | % | | | 87.2 | % |
Silver Production (ounces) | | | 2,111,313 | | | | 1,327,999 | | | | 1,039,923 | | | | 1,863,141 | | | | 1,794,617 | |
Cash Operating Costs/Ag Oz | | $ | 7.63 | | | $ | 10.40 | | | $ | 9.98 | | | $ | 7.78 | | | $ | 7.05 | |
| | | | | | | | | | | | | | | | | | | | | |
Sales of Metal | | $ | 31.5 | | | $ | 26.6 | | | $ | 14.6 | | | $ | 31.3 | | | $ | 30.0 | |
Production Costs | | | 25.2 | | | | 18.1 | | | | 9.4 | | | | 15.3 | | | | 12.9 | |
Capital Expenditures | | | 1.4 | | | | 1.4 | | | | 0.5 | | | | 1.3 | | | | 0.8 | |
KENSINGTON:
| | | | | | | | | | | | | | | | | | | | | |
| US$ millions except where noted | | 3Q 2009 | | 4Q 2009 | | 1Q 2010 | | 2Q 2010 | | 3Q 2010 |
Tons Milled | | | | | | | | | | | | | | | | | | | 90,254 | |
Average Gold Grade (oz/t) | | | | | | | | | | | | | | | | | | | 0.19 | |
Average Recovery Rate | | | | | | | | | | | | | | | | | | | 87.7 | % |
Gold Production (ounces) | | | — | | | | — | | | | — | | | | — | | | | 15,155 | |
Cash Operating Costs/Ag Oz | | | — | | | | — | | | | — | | | | — | | | $ | 1,199 | |
| | | | | | | | | | | | | | | | | | | | | |
Sales of Metal | | | — | | | | — | | | | — | | | | — | | | $ | 8.5 | |
Production Costs | | | — | | | | — | | | | — | | | | — | | | | 7.4 | |
Capital Expenditures | | | 10.0 | | | | 18.9 | | | | 29.9 | | | | 33.2 | | | | 20.0 | |
9
ROCHESTER:
| | | | | | | | | | | | | | | | | | | | | |
| US$ millions except where noted | | 3Q 2009 | | 4Q 2009 | | 1Q 2010 | | 2Q 2010 | | 3Q 2010 |
Silver Production (millions) | | | 528,037 | | | | 640,347 | | | | 522,159 | | | | 533,093 | | | | 419,433 | |
Gold Production | | | 3,097 | | | | 3,517 | | | | 2,690 | | | | 2,616 | | | | 1,935 | |
Cash Operating Costs/Ag Oz | | $ | 2.77 | | | $ | 0.15 | | | $ | 1.68 | | | $ | 2.44 | | | $ | 5.10 | |
| | | | | | | | | | | | | | | | | | | | | |
Sales of Metal | | $ | 9.3 | | | $ | 16.3 | | | $ | 10.8 | | | $ | 12.4 | | | $ | 5.8 | |
Production Costs | | | 5.4 | | | | 7.9 | | | | 5.8 | | | | 5.6 | | | | 2.8 | |
Capital Expenditures | | | 0.0 | | | | 0.0 | | | | 0.0 | | | | 0.1 | | | | 0.1 | |
MARTHA:
| | | | | | | | | | | | | | | | | | | | | |
| US$ millions except where noted | | 3Q 2009 | | 4Q 2009 | | 1Q 2010 | | 2Q 2010 | | 3Q 2010 |
Total Tons Milled | | | 28,431 | | | | 26,630 | | | | 17,575 | | | | 12,421 | | | | 12,790 | |
Average Silver Grade (oz/t) | | | 42.56 | | | | 41.47 | | | | 24.59 | | | | 50.24 | | | | 42.42 | |
Average Gold Grade (oz/t) | | | 0.06 | | | | 0.06 | | | | 0.03 | | | | 0.06 | | | | 0.05 | |
Average Recovery Rate — Ag | | | 97.4 | % | | | 91.8 | % | | | 84.5 | % | | | 88.1 | % | | | 96.3 | % |
Average Recovery Rate — Au | | | 93.0 | % | | | 86.7 | % | | | 88.5 | % | | | 81.7 | % | | | 93.6 | % |
Silver Production (ounces) | | | 1,178,088 | | | | 1,013,551 | | | | 365,226 | | | | 549,885 | | | | 510,685 | |
Gold Production (ounces) | | | 1,569 | | | | 1,333 | | | | 515 | | | | 558 | | | | 601 | |
Cash Operating Costs/Ag Oz | | $ | 5.54 | | | $ | 6.13 | | | $ | 15.47 | | | $ | 8.97 | | | $ | 9.86 | |
| | | | | | | | | | | | | | | | | | | | | |
Total Sales of Metal | | | 15.2 | | | | 10.8 | | | | 15.0 | | | | 9.2 | | | | 11.0 | |
Production Costs | | | 5.1 | | | | 2.2 | | | | 7.3 | | | | 4.1 | | | | 5.3 | |
Capital Expenditures | | | 0.3 | | | | 0.5 | | | | 0.0 | | | | 0.0 | | | | 0.0 | |
10
The following table presents consolidated production and sales information for the three and nine month periods ended September 30, 2010 and 2009:
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | Nine Months Ended |
| | | September 30, | | September 30, |
| | | 2010 | | 2009 | | 2010 | | 2009 |
CONSOLIDATED PRODUCTION TOTALS | | | | | | | | | | | | | | | | |
| Total Silver ounces | | | 4,333,530 | | | | 5,196,315 | | | | 11,921,891 | | | | 12,607,769 | |
| Total Gold ounces | | | 47,514 | | | | 28,955 | | | | 96,421 | | | | 46,541 | |
Silver Operations:(A) | | | | | | | | | | | | | | | | |
| Cash operating costs per oz/silver | | $ | 4.87 | | | $ | 6.93 | | | $ | 6.72 | | | $ | 7.15 | |
| Cash cost per oz/silver | | $ | 5.40 | | | $ | 8.57 | | | $ | 7.17 | | | $ | 8.66 | |
| Total production cost/oz | | $ | 12.62 | | | $ | 13.88 | | | $ | 14.59 | | | $ | 12.94 | |
Gold Operation:(B) | | | | | | | | | | | | | | | | |
| Cash operating costs/oz | | $ | 1,199.20 | | | $ | — | | | $ | 1,199.20 | | | $ | — | |
| Cash cost/oz | | $ | 1,199.20 | | | $ | — | | | $ | 1,199.20 | | | $ | — | |
| Total production cost/oz | | $ | 1,675.56 | | | $ | — | | | $ | 1,675.56 | | | $ | — | |
CONSOLIDATED SALES TOTALS(C) | | | | | | | | | | | | | | | | |
| Silver ounces sold | | | 3,861,696 | | | | 4,667,423 | | | | 11,547,775 | | | | 12,156,493 | |
| Gold ounces sold | | | 37,507 | | | | 23,027 | | | | 86,890 | | | | 38,968 | |
| Realized price per silver ounce | | $ | 18.87 | | | $ | 14.52 | | | $ | 18.12 | | | $ | 13.72 | |
| Realized price per gold ounce | | $ | 1,228.51 | | | $ | 952.86 | | | $ | 1,177.31 | | | $ | 945.03 | |
| | |
| (A) | | Amount includes by-product gold credits deducted from computing cash costs per ounce. |
| |
| (B) | | Amounts reflect Kensington per ounce statistics only |
| |
| (C) | | Units sold at realized metal prices will not match reported metal sales due primarily to the effects on revenues of mark-to-market adjustments on embedded derivatives in the Company’s provisionally priced sales contracts. |
“Operating Costs per Ounce” and “Cash Costs per Ounce” are calculated by dividing the operating cash costs and 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 operating costs per ounce and cash costs per ounce as key indicators of the profitability of each of its mining properties. Gold and silver are sold and priced in the world financial markets on a U.S. dollar per ounce basis.
“Cash Operating Costs” and “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 expenses, on-site general and administrative costs, royalties, in-mine drilling expenditures 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, accretion, corporate general and administrative expenses, exploration, interest, and pre-feasibility costs. Cash operating costs include all cash costs except production taxes and royalties, if applicable. Cash costs are calculated and presented using the “Gold Institute Production Cost Standard” applied consistently for all periods presented.
Total operating costs and cash costs per ounce are non-U.S. GAAP measures and investors are cautioned not to place undue reliance on them and are urged to read all U.S. 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-U.S. GAAP Cash Costs to U.S. GAAP Production Costs” set forth below.
11
The following tables present a reconciliation between non-U.S. GAAP cash operating costs per ounce and cash costs per ounce to production costs applicable to sales including depreciation, depletion and amortization, which are calculated in accordance with U.S. GAAP:
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs
Three months ended
September 30, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | San | | | | | | | | | | | | | | | | |
| (In thousands except ounces and per ounce costs) | | Palmarejo | | | Bartolomé | | | Martha | | | Rochester | | | Endeavor | | | Kensington | | | Total | |
| Production of silver (ounces) | | | 1,506,742 | | | | 1,794,617 | | | | 510,685 | | | | 419,433 | | | | 102,053 | | | | — | | | | 4,333,530 | |
| Production of gold (ounces) | | | | | | | | | | | | | | | | | | | | | | | 15,155 | | | | 15,155 | |
| Cash operating cost per Ag ounce | | $ | 0.15 | | | $ | 7.05 | | | $ | 9.86 | | | $ | 5.10 | | | $ | 10.32 | | | | | | | $ | 4.87 | |
| Cash costs per Ag ounce | | $ | 0.15 | | | $ | 7.83 | | | $ | 11.04 | | | $ | 5.82 | | | $ | 10.32 | | | | | | | $ | 5.40 | |
| Cash operating cost per Au ounce | | | | | | | | | | | | | | | | | | | | | | $ | 1,199.20 | | | $ | 1,199.20 | |
| Cash cost per Au ounce | | | | | | | | | | | | | | | | | | | | | | $ | 1,199.20 | | | $ | 1,199.20 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Operating Cost (Non-U.S. GAAP) | | $ | 227 | | | $ | 12,651 | | | $ | 5,039 | | | $ | 2,140 | | | $ | 1,053 | | | $ | 18,174 | | | $ | 39,284 | |
| Royalties | | | — | | | | 1,396 | | | | 601 | | | | — | | | | — | | | | — | | | | 1,997 | |
| Production taxes | | | — | | | | — | | | | — | | | | 304 | | | | — | | | | — | | | | 304 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Cash Costs (Non-U.S. GAAP) | | | 227 | | | | 14,047 | | | | 5,640 | | | | 2,444 | | | | 1,053 | | | | 18,174 | | | | 41,585 | |
| Add/Subtract: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Third party smelting costs | | | — | | | | — | | | | (995 | ) | | | — | | | | (354 | ) | | | (1,618 | ) | | | (2,967 | ) |
| By-product credit | | | 36,538 | | | | — | | | | 734 | | | | 2,361 | | | | — | | | | — | | | | 39,633 | |
| Other adjustments | | | — | | | | — | | | | 914 | | | | 53 | | | | — | | | | — | | | | 967 | |
| Change in inventory | | | (5,423 | ) | | | (1,146 | ) | | | (1,009 | ) | | | (2,088 | ) | | | (15 | ) | | | (9,135 | ) | | | (18,816 | ) |
| Depreciation, depletion and amortization | | | 22,491 | | | | 4,943 | | | | 2,119 | | | | 446 | | | | 330 | | | | 7,219 | | | | 37,548 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP) | | $ | 53,833 | | | $ | 17,844 | | | $ | 7,403 | | | $ | 3,216 | | | $ | 1,014 | | | $ | 14,640 | | | $ | 97,950 | |
| | | | | | | | | | | | | | | | | | | | | | |
Nine months ended
September 30, 2010
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | San | | | | | | | | | | | | | | | | |
| (In thousands except ounces and per ounce costs) | | Palmarejo | | | Bartolomé | | | Martha | | | Rochester | | | Endeavor | | | Kensington | | | Total | |
| Production of silver (ounces) | | | 3,877,972 | | | | 4,697,685 | | | | 1,425,796 | | | | 1,474,686 | | | | 445,752 | | | | — | | | | 11,921,891 | |
| Production of gold (ounces) | | | | | | | | | | | | | | | | | | | | | | | 15,155 | | | | 15,155 | |
| Cash operating cost per Ag ounce | | $ | 4.85 | | | $ | 7.99 | | | $ | 10.96 | | | $ | 2.93 | | | $ | 8.56 | | | | | | | $ | 6.72 | |
| Cash costs per Ag ounce | | $ | 4.85 | | | $ | 8.69 | | | $ | 11.74 | | | $ | 3.55 | | | $ | 8.56 | | | | | | | $ | 7.17 | |
| Cash operating cost per Au ounce | | | | | | | | | | | | | | | | | | | | | | $ | 1,199.20 | | | $ | 1,199.20 | |
| Cash cost per Au ounce | | | | | | | | | | | | | | | | | | | | | | $ | 1,199.20 | | | $ | 1,199.20 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Operating Cost (Non-U.S. GAAP) | | $ | 18,799 | | | $ | 37,520 | | | $ | 15,624 | | | $ | 4,315 | | | $ | 3,817 | | | $ | 18,174 | | | $ | 98,249 | |
| Royalties | | | — | | | | 3,287 | | | | 1,107 | | | | — | | | | — | | | | | | | | 4,394 | |
| Production taxes | | | — | | | | — | | | | — | | | | 912 | | | | — | | | | | | | | 912 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Cash Costs (Non-U.S. GAAP) | | | 18,799 | | | | 40,807 | | | | 16,731 | | | | 5,227 | | | | 3,817 | | | | 18,174 | | | | 103,555 | |
| Add/Subtract: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Third party smelting costs | | | — | | | | — | | | | (2,821 | ) | | | — | | | | (964 | ) | | | (1,618 | ) | | | (5,403 | ) |
| By-product credit | | | 85,429 | | | | — | | | | 1,971 | | | | 8,480 | | | | — | | | | — | | | | 95,880 | |
| Other adjustments | | | — | | | | — | | | | 1,173 | | | | 216 | | | | — | | | | — | | | | 1,389 | |
| Change in inventory | | | (12,120 | ) | | | (3,162 | ) | | | (312 | ) | | | 230 | | | | (127 | ) | | | (9,135 | ) | | | (24,626 | ) |
| Depreciation, depletion and amortization | | | 63,574 | | | | 14,152 | | | | 6,673 | | | | 1,368 | | | | 1,440 | | | | 7,219 | | | | 94,426 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP) | | $ | 155,682 | | | $ | 51,797 | | | $ | 23,415 | | | $ | 15,521 | | | $ | 4,166 | | | $ | 14,640 | | | $ | 265,221 | |
| | | | | | | | | | | | | | | | | | | | | | |
12
Three months ended
September 30, 2009
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | San | | | | | | | | | | | | | |
| (In thousands except ounces and per ounce costs) | | Palmarejo | | | Bartolomé | | | Martha | | | Rochester | | | Endeavor | | | Total | |
| Production of silver (ounces) | | | 1,275,904 | | | | 2,111,313 | | | | 1,178,088 | | | | 528,037 | | | | 102,973 | | | | 5,196,315 | |
| Cash operating cost per ounce | | $ | 8.76 | | | $ | 7.63 | | | $ | 5.54 | | | $ | 2.77 | | | $ | 7.09 | | | $ | 6.93 | |
| Cash costs per ounce | | $ | 8.76 | | | $ | 11.17 | | | $ | 6.02 | | | $ | 3.67 | | | $ | 7.09 | | | $ | 8.57 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Operating Cost (Non-U.S. GAAP) | | $ | 11,174 | | | $ | 16,118 | | | $ | 6,525 | | | $ | 1,461 | | | $ | 730 | | | $ | 36,008 | |
| Royalties | | | — | | | | 7,474 | | | | 562 | | | | — | | | | — | | | | 8,036 | |
| Production taxes | | | — | | | | — | | | | — | | | | 475 | | | | — | | | | 475 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Cash Costs (Non-U.S. GAAP) | | | 11,174 | | | | 23,592 | | | | 7,087 | | | | 1,936 | | | | 730 | | | | 44,519 | |
| Add/Subtract: | | | | | | | | | | | | | | | | | | | | | | | | |
| Third party smelting costs | | | — | | | | — | | | | (2,221 | ) | | | — | | | | (225 | ) | | | (2,446 | ) |
| By-product credit | | | 23,301 | | | | — | | | | 1,502 | | | | 2,956 | | | | — | | | | 27,759 | |
| Other adjustments | | | 20 | | | | — | | | | 469 | | | | 16 | | | | — | | | | 505 | |
| Change in inventory | | | (11,078 | ) | | | 1,765 | | | | (1,714 | ) | | | 558 | | | | 55 | | | | (10,414 | ) |
| Depreciation, depletion and amortization | | | 19,948 | | | | 5,191 | | | | 1,246 | | | | 463 | | | | 265 | | | | 27,113 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP) | | $ | 43,365 | | | $ | 30,548 | | | $ | 6,369 | | | $ | 5,929 | | | $ | 825 | | | $ | 87,036 | |
| | | | | | | | | | | | | | | | | | | |
Nine months ended
September 30, 2009
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | San | | | | | | | | | | | | | |
| (In thousands except ounces and per ounce costs) | | Palmarejo | | | Bartolomé | | | Martha | | | Rochester | | | Endeavor | | | Total | |
| Production of silver (ounces) | | | 1,863,620 | | | | 6,141,223 | | | | 2,693,993 | | | | 1,541,441 | | | | 367,492 | | | | 12,607,769 | |
| Cash operating cost per ounce | | $ | 12.13 | | | $ | 7.24 | | | $ | 6.22 | | | $ | 2.69 | | | $ | 5.96 | | | $ | 7.15 | |
| Cash costs per ounce | | $ | 12.13 | | | $ | 9.98 | | | $ | 6.68 | | | $ | 3.32 | | | $ | 5.96 | | | $ | 8.66 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Operating Cost (Non-U.S. GAAP) | | $ | 22,597 | | | $ | 44,484 | | | $ | 16,748 | | | $ | 4,145 | | | $ | 2,190 | | | $ | 90,164 | |
| Royalties | | | — | | | | 16,777 | | | | 1,253 | | | | — | | | | — | | | | 18,030 | |
| Production taxes | | | — | | | | — | | | | | | | | 978 | | | | — | | | | 978 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Cash Costs (Non-U.S. GAAP) | | | 22,597 | | | | 61,261 | | | | 18,001 | | | | 5,123 | | | | 2,190 | | | | 109,172 | |
| Add/Subtract: | | | | | | | | | | | | | | | | | | | | | | | | |
| Third party smelting costs | | | — | | | | — | | | | (5,067 | ) | | | — | | | | (759 | ) | | | (5,826 | ) |
| By-product credit | | | 32,402 | | | | — | | | | 3,157 | | | | 8,487 | | | | — | | | | 44,046 | |
| Other adjustments | | | 20 | | | | 8 | | | | 636 | | | | 103 | | | | — | | | | 767 | |
| Change in inventory | | | (17,932 | ) | | | 1,524 | | | | (1,046 | ) | | | 2,599 | | | | (42 | ) | | | (14,897 | ) |
| Depreciation, depletion and amortization | | | 32,328 | | | | 15,137 | | | | 3,420 | | | | 1,391 | | | | 946 | | | | 53,222 | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP) | | $ | 69,415 | | | $ | 77,930 | | | $ | 19,101 | | | $ | 17,703 | | | $ | 2,335 | | | $ | 186,484 | |
| | | | | | | | | | | | | | | | | | | |
13
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | | |
| | | September 30, | | | December 31, | |
| | | 2010 | | | 2009 | |
| | | (In thousands, except share data) | |
| ASSETS |
| CURRENT ASSETS | | | | | | | | |
| Cash and cash equivalents | | $ | 27,792 | | | $ | 22,782 | |
| Short-term investments | | | 5,031 | | | | — | |
| Receivables | | | 77,207 | | | | 58,981 | |
| Ore on leach pad | | | 7,397 | | | | 9,641 | |
| Metal and other inventory | | | 96,225 | | | | 67,712 | |
| Prepaid expenses and other | | | 19,026 | | | | 26,920 | |
| | | | | | | |
| | | | 232,678 | | | | 186,036 | |
| | | | | | | | | |
| NON-CURRENT ASSETS | | | | | | | | |
| Property, plant and equipment, net | | | 659,840 | | | | 539,037 | |
| Mining properties, net | | | 2,140,586 | | | | 2,240,056 | |
| Ore on leach pad, non-current portion | | | 12,683 | | | | 14,391 | |
| Restricted assets | | | 27,892 | | | | 26,546 | |
| Receivables, non-current portion | | | 31,910 | | | | 37,534 | |
| Debt issuance costs, net | | | 4,798 | | | | 3,544 | |
| Deferred tax assets | | | 897 | | | | 2,355 | |
| Other | | | 13,729 | | | | 4,536 | |
| | | | | | | |
| TOTAL ASSETS | | $ | 3,125,013 | | | $ | 3,054,035 | |
| | | | | | | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable | | $ | 57,395 | | | $ | 77,003 | |
| Accrued liabilities and other | | | 38,811 | | | | 33,517 | |
| Accrued income taxes | | | 21,818 | | | | 11,783 | |
| Accrued payroll and related benefits | | | 14,432 | | | | 9,815 | |
| Accrued interest payable | | | 521 | | | | 1,744 | |
| Current portion of capital leases and other debt obligations | | | 67,653 | | | | 15,403 | |
| Current portion of royalty obligation | | | 46,417 | | | | 34,672 | |
| Current portion of reclamation and mine closure | | | 2,708 | | | | 4,671 | |
| | | | | | | |
| | | | 249,755 | | | | 188,608 | |
| | | | | | | | | |
| NON-CURRENT LIABILITIES | | | | | | | | |
| Long-term debt and capital lease obligations | | | 146,821 | | | | 185,397 | |
| Non-current portion of royalty obligation | | | 160,367 | | | | 128,107 | |
| Reclamation and mine closure | | | 25,647 | | | | 35,241 | |
| Deferred income taxes | | | 480,954 | | | | 516,678 | |
| Other long-term liabilities | | | 15,623 | | | | 6,799 | |
| | | | | | | |
| | | | 829,412 | | | | 872,222 | |
| | | | | | | | | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| | | | | | | | | |
| SHAREHOLDERS’ EQUITY | | | | | | | | |
| Common Stock, par value $0.01 per share; authorized 150,000,000 shares, 89,311,920 issued at September 30, 2010 and 80,310,347 issued at December 31, 2009 | | | 893 | | | | 803 | |
| Additional paid-in capital | | | 2,578,043 | | | | 2,444,262 | |
| Accumulated deficit | | | (533,254 | ) | | | (451,865 | ) |
| Accumulated other comprehensive income | | | 164 | | | | 5 | |
| | | | | | | |
| | | | 2,045,846 | | | | 1,993,205 | |
| | | | | | | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 3,125,013 | | | $ | 3,054,035 | |
| | | | | | | |
14
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | (In thousands, except per share data) | |
| | | | | | | | | | | | | | | | | |
| Sales of metal | | $ | 118,564 | | | $ | 90,305 | | | $ | 307,871 | | | $ | 201,531 | |
| Production costs applicable to sales | | | (60,402 | ) | | | (59,693 | ) | | | (170,795 | ) | | | (133,263 | ) |
| Depreciation, depletion and amortization | | | (37,801 | ) | | | (27,591 | ) | | | (95,503 | ) | | | (54,282 | ) |
| | | | | | | | | | | | | |
| Gross profit | | | 20,361 | | | | 3,021 | | | | 41,573 | | | | 13,986 | |
| COSTS AND EXPENSES | | | | | | | | | | | | | | | | |
| Administrative and general | | | 5,963 | | | | 4,780 | | | | 19,758 | | | | 17,933 | |
| Exploration | | | 3,840 | | | | 2,362 | | | | 9,521 | | | | 8,632 | |
| Pre-development | | | 82 | | | | — | | | | 814 | | | | — | |
| | | | | | | | | | | | | |
| Total cost and expenses | | | 9,885 | | | | 7,142 | | | | 30,093 | | | | 26,565 | |
| | | | | | | | | | | | | |
| OPERATING INCOME (LOSS) | | | 10,476 | | | | (4,121 | ) | | | 11,480 | | | | (12,579 | ) |
| OTHER INCOME AND EXPENSE | | | | | | | | | | | | | | | | |
| Gain (loss) on debt extinguishments | | | (806 | ) | | | (2,947 | ) | | | (12,714 | ) | | | 35,430 | |
| Fair value adjustments, net | | | (19,107 | ) | | | (35,718 | ) | | | (65,881 | ) | | | (49,269 | ) |
| Interest and other income | | | (638 | ) | | | (1,245 | ) | | | (2,725 | ) | | | 822 | |
| Interest expense, net of capitalized interest | | | (9,951 | ) | | | (6,088 | ) | | | (21,402 | ) | | | (12,047 | ) |
| | | | | | | | | | | | | |
| Total other income and expense | | | (30,502 | ) | | | (45,998 | ) | | | (102,722 | ) | | | (25,064 | ) |
| | | | | | | | | | | | | |
| Loss from continuing operations before income taxes | | | (20,026 | ) | | | (50,119 | ) | | | (91,242 | ) | | | (37,643 | ) |
| Income tax benefit (provision) | | | (3,233 | ) | | | 13,428 | | | | 17,977 | | | | 17,067 | |
| | | | | | | | | | | | | |
| Loss from continuing operations | | | (23,259 | ) | | | (36,691 | ) | | | (73,265 | ) | | | (20,576 | ) |
| Loss from discontinued operations, net of income taxes | | | (251 | ) | | | (3,003 | ) | | | (6,029 | ) | | | (1,451 | ) |
| Gain (loss) on sale of discontinued operations, net of income taxes | | | 882 | | | | 22,411 | | | | (2,095 | ) | | | 22,411 | |
| | | | | | | | | | | | | |
| NET INCOME (LOSS) | | | (22,628 | ) | | | (17,283 | ) | | | (81,389 | ) | | | 384 | |
| Other comprehensive income, net of income taxes | | | 164 | | | | — | | | | 159 | | | | — | |
| | | | | | | | | | | | | |
| COMPREHENSIVE INCOME (LOSS) | | $ | (22,464 | ) | | $ | (17,283 | ) | | $ | (81,230 | ) | | $ | 384 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| BASIC AND DILUTED INCOME PER SHARE | | | | | | | | | | | | | | | | |
| Basic income per share: | | | | | | | | | | | | | | | | |
| Loss from continuing operations | | $ | (0.26 | ) | | $ | (0.48 | ) | | $ | (0.85 | ) | | $ | (0.29 | ) |
| Income (loss) from discontinued operations | | | 0.01 | | | | 0.25 | | | | (0.09 | ) | | | 0.30 | |
| | | | | | | | | | | | | |
| Net income (loss) | | $ | (0.25 | ) | | $ | (0.23 | ) | | $ | (0.94 | ) | | $ | 0.01 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Diluted income per share: | | | | | | | | | | | | | | | | |
| Loss from continuing operations | | $ | (0.26 | ) | | $ | (0.48 | ) | | $ | (0.85 | ) | | $ | (0.29 | ) |
| Income (loss) from discontinued operations | | | 0.01 | | | | 0.25 | | | | (0.09 | ) | | | 0.30 | |
| | | | | | | | | | | | | |
| Net income (loss) | | $ | (0.25 | ) | | $ | (0.23 | ) | | $ | (0.94 | ) | | $ | 0.01 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average number of shares of common stock | | | | | | | | | | | | | | | | |
| Basic | | | 89,236 | | | | 76,133 | | | | 86,489 | | | | 69,163 | |
| Diluted | | | 89,236 | | | | 76,133 | | | | 86,489 | | | | 69,163 | |
15
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | (In thousands) | |
| | | | | | | | | | | | | | | | | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | (22,628 | ) | | $ | (17,283 | ) | | $ | (81,389 | ) | | $ | 384 | |
| Add (deduct) non-cash items | | | | | | | | | | | | | | | | |
| Depreciation, depletion and amortization | | | 37,913 | | | | 28,647 | | | | 97,697 | | | | 59,086 | |
| Amortiztation of debt discount | | | 537 | | | | 4 | | | | 537 | | | | 504 | |
| Accretion of royalty obligation | | | 4,778 | | | | 5,227 | | | | 14,407 | | | | 9,086 | |
| Deferred income taxes | | | (7,879 | ) | | | (24,175 | ) | | | (34,109 | ) | | | (29,896 | ) |
| Loss (gain) on debt extinguishment | | | 806 | | | | 2,947 | | | | 12,714 | | | | (35,430 | ) |
| Fair value adjustments, net | | | 17,436 | | | | 33,255 | | | | 64,159 | | | | 45,820 | |
| Loss (gain) on foreign currency transactions | | | 2,144 | | | | 223 | | | | 3,966 | | | | (185 | ) |
| Share-based compensation | | | 1,960 | | | | 1,885 | | | | 3,969 | | | | 4,542 | |
| Loss (gain) from discontinued operations and other assets | | | (970 | ) | | | (32,212 | ) | | | 1,835 | | | | (32,291 | ) |
| Other non-cash charges | | | 629 | | | | 454 | | | | 702 | | | | 687 | |
| Changes in operating assets and liabilities: | | | | | | | | | | | | | | | | |
| Receivables and other current assets | | | (4,511 | ) | | | 1,855 | | | | (12,136 | ) | | | (7,145 | ) |
| Inventories | | | (22,980 | ) | | | (10,547 | ) | | | (27,888 | ) | | | (23,733 | ) |
| Accounts payable and accrued liabilities | | | 5,704 | | | | 38,658 | | | | (8,298 | ) | | | 55,594 | |
| | | | | | | | | | | | | |
| CASH PROVIDED BY OPERATING ACTIVITIES | | | 12,939 | | | | 28,938 | | | | 36,166 | | | | 47,023 | |
| | | | | | | | | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | | | | | | | | | | | | | | |
| Purchase of investments | | | (15 | ) | | | (6,525 | ) | | | (672 | ) | | | (15,104 | ) |
| Proceeds from sales of investments | | | 12,477 | | | | 11,237 | | | | 13,134 | | | | 31,247 | |
| Capital expenditures | | | (36,783 | ) | | | (54,370 | ) | | | (129,439 | ) | | | (174,849 | ) |
| Proceeds from sale of discontinued operations and other assets | | | 5,902 | | | | 55,053 | | | | 5,977 | | | | 56,877 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | | | (18,419 | ) | | | 5,395 | | | | (111,000 | ) | | | (101,829 | ) |
| | | | | | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | | | | | |
| Proceeds from sale of gold production royalty | | | — | | | | — | | | | — | | | | 75,000 | |
| Payments on gold production royalty | | | (11,302 | ) | | | (6,112 | ) | | | (29,836 | ) | | | (7,218 | ) |
| Proceeds from issuance of floating rate and senior term notes | | | — | | | | — | | | | 100,000 | | | | 20,368 | |
| Proceeds from gold lease facility | | | 11,915 | | | | — | | | | 16,432 | | | | 2,874 | |
| Payments on gold lease facility | | | — | | | | — | | | | (17,101 | ) | | | (1,627 | ) |
| Proceeds from bank borrowings | | | 10,755 | | | | — | | | | 45,565 | | | | — | |
| Payments on senior secured notes | | | (9,139 | ) | | | — | | | | (13,306 | ) | | | — | |
| Repayment of credit facility, long-term debt and capital leases | | | (10,035 | ) | | | (7,268 | ) | | | (22,931 | ) | | | (22,137 | ) |
| Payments of common stock and debt issuance costs | | | (22 | ) | | | (18 | ) | | | (2,202 | ) | | | (122 | ) |
| Proceeds from sale-leaseback transactions | | | — | | | | — | | | | 4,853 | | | | 12,511 | |
| Additions to restricted assets associated with the Kensington Term Facility | | | (297 | ) | | | — | | | | (1,880 | ) | | | — | |
| Other | | | 210 | | | | — | | | | 250 | | | | — | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES: | | | (7,915 | ) | | | (13,398 | ) | | | 79,844 | | | | 79,649 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | | | (13,395 | ) | | | 20,935 | | | | 5,010 | | | | 24,843 | |
| | | | | | | | | | | | | | | | | |
| Cash and cash equivalents at beginning of period | | | 41,187 | | | | 24,668 | | | | 22,782 | | | | 20,760 | |
| | | | | | | | | | | | | |
| Cash and cash equivalents at end of period | | $ | 27,792 | | | $ | 45,603 | | | $ | 27,792 | | | $ | 45,603 | |
| | | | | | | | | | | | | |
16
