Coeur d'Alene Mines Corporation
505 Front Avenue, P.O. Box I [GRAPHIC OMITTED]
Coeur d'Alene, ID 83816-0316
Telephone 208.667.3511
Facsimile 208.667.2213
Press Release Exhibit 99.1
- --------------------------------------------------------------------------------
CONTACT: Tony Ebersole, Investor Relations
Coeur d'Alene Mines Corporation, (208) 665-0335
COEUR REPORTS IMPROVED 3rd QUARTER
AND NINE MONTHS RESULTS
- Stronger financial results, improved cash flow -
- Ongoing reduction in cash costs per ounce -
- Successful South American exploration program increased by 35% -
COEUR D'ALENE, Idaho - October 23, 2003
Highlights
- ----------
* Third quarter silver production of 3.3 million ounces at average cash
cost of $3.04 per ounce
* Gold production of 31,000 ounces in the third quarter
* First nine months silver production of 10.7 million ounces at an average
cash cost of $3.24 per ounce
* Nine months gold production of 93,000 ounces
* Cerro Bayo/Martha mines produced 1.2 million silver ounces in recent
quarter, and 15,000 gold ounces, at cash costs of $1.18 per ounce/silver
* Nine months operating cash flow (before working capital changes) of
$5.0 million compared to $(13.2) million in 2002's comparable period
* Crusher relocation successfully completed at Rochester, on time and
within budget. Cash costs at Rochester have steadily declined during
the year with completion of project to $3.66 per ounce in 3Q
* $76.0 million raised in oversubscribed 23.7 million-share common stock
offering
* A total of $94.2 million in cash and short term investments at
September 30
* Total debt now just 8.7% of total capital, putting Coeur in strongest
financial position in close to a decade
* Standard & Poor's rating agency issues positive outlook for Coeur
* CIBC World Markets initiates analyst coverage
* Success in South America leads to 35% expansion of exploration budget
"Coeur continued to report stronger financial results in the third quarter and
first nine months compared to last year, fueled by consistent production,
reduced cash costs and increased metals prices," said Dennis E. Wheeler,
Chairman and Chief Executive Officer. "With the success of our recent equity
offering, Coeur is now in its best financial position in nearly a decade, with
no net debt and available liquidity approaching $100 million. Meanwhile, we are
moving ahead with final feasibility studies at our San Bartolome and Kensington
development projects, which we expect will significantly increase the diversity
of Coeur's asset base and future production and lower overall operating costs."
"Our South American mines - the Cerro Bayo and Martha - continued to contribute
strong production and cash flow, by increasing their silver equivalent ounces
over last year's third quarter and first nine months, at an extremely low
production cost. Because of our exploration success around these two new and
highly prospective properties, we have increased our exploration budget in South
America by 35 percent for the remainder of this year. We anticipate additional
high-grade reserve increases there by year-end."
"The major crusher relocation project was completed at Rochester, and we lowered
cash costs there to $3.66 per ounce of silver in the third quarter, a reduction
of 15 percent from the second quarter, and 43 percent below first quarter costs.
"Also, at Silver Valley, our oldest and most long-lived reserve, we have
initiated the long-term expansion plan designed to increase reserves and
production, and to lower operating costs. By 2006, we expect a record seven
million ounces of silver production from Silver Valley, with average cash costs
of below $4 per ounce," Mr. Wheeler added.
Financial Summary
- -----------------
Coeur d'Alene Mines Corporation (NYSE: CDE), the world's largest primary silver
producer, today reported third quarter 2003 metals sales of $23.4 million,
compared to $24.4 million in the same period last year, due primarily to the
temporary suspension of operations at Silver Valley during the quarter to
prepare the mine for its long-term expansion plan. For the first nine months of
2003, Company metals sales were $78.1 million, an increase of 29 percent from
$60.5 million reported during in the same period last year.
For the third quarter, Coeur realized an average silver price of $4.77 per ounce
compared to an average realized price during last year's third quarter of $4.65
per ounce. For its gold sales, Coeur realized an average price of $353 per ounce
during the third quarter compared to an average gold price of $315 per ounce
during the same period last year.
For the first nine months, Coeur realized an average silver price of $4.71 per
ounce compared to an average realized price during last year's period of $4.67
per ounce. For its gold sales, Coeur realized an average price of $341 per ounce
in the first nine months of this year compared to an average gold price of $306
per ounce during the same period last year.
Third quarter production totaled 3.3 million ounces of silver and 31,000 ounces
of gold, compared to 3.8 million ounces of silver and 34,000 ounces of gold in
last year's third quarter. Consolidated cash costs in the quarter were $3.04 per
ounce of silver, an increase of four percent from the last year's third quarter.
The recent quarter's cash costs represent a 10 percent decrease from cash costs
in the 2nd quarter of 2003.
First nine-months production totaled 10,671,000 ounces of silver, a seven
percent increase from last year's period, and gold production of 93,000 ounces,
up 27 percent from last year's period. Consolidated cash costs for the first
nine months were $3.24 per ounce of silver, a reduction of three percent from
last year's comparable period.
For the third quarter of 2003 the Company reported a net loss of $17.9 million,
or $0.10 per share, compared to a net loss of $12.3 million, or $0.14 per share
in the third quarter of 2002. This year's third quarter loss was impacted by
$12.5 million in charges for interest expense and charges related to the
2
early retirement of debt. Exclusive of these charges, the Company would have
reported a net loss of $5.4 million, or $0.03 per share.
For the first nine months of 2003, the Company's net loss was $53.5 million, or
$0.35 per share, compared to a loss of $35.1 million, or $0.51 per share for the
same period a year ago. This year's nine months period included $44.7 million in
charges for interest expense and losses related to the early retirement of debt
resulting from the issuance of common shares in excess of the original
conversion ratio, and a charge of $2.3 million related to a change in accounting
principle associated with reclamation accruals. Exclusive of these charges, the
Company would have reported a net loss of $6.5 million, or $0.04 per share in
this year's period.
During the first nine months of 2003, operating cash flow before working capital
changes improved to $5.0 million compared to $(13.2) million in 2002.
In the third quarter, the Company's cash position and balance sheet strengthened
to its best position in a decade with the successful completion of a 23.7
million common shares offering for $76.0 million of net proceeds. At September
30, 2003, cash and equivalents plus short-term investments, totaled $94.2
million. During the quarter, Coeur also eliminated $41.1 million in convertible
debt from its balance sheet, with the conversion of $29.8 million of its 9%
Senior Convertible Notes, the final conversion and/or redemption of $9.9 million
of its 13 3/8% Senior Convertible Notes, exchanges of $1.0 million of 6 3/8%
Convertible Subordinated Debentures, and $0.4 million of 7 1/4% Convertible
Subordinated Debentures. Total convertible debt at quarter-end was $18.7
million, or just 8.7 percent of capital.
Overview of Operations
- ----------------------
South America
Cerro Bayo (Chile)/Martha (Argentina)
* Third quarter production of 1,150,751 ounces of silver and
15,220 ounces of gold
* Low cash costs of $1.18 per ounce of silver during third quarter
* Nine months production: 3,775,953 ounces of silver and 52,173
ounces of gold
* Cash cost in the first nine months of $0.73 per ounce of silver
* 2003 exploration budget increased 35% to $3.5 million
During the third quarter, silver production increased 31 percent over last
year's third quarter to 1.2 million ounces. Gold production was consistent at
15,220 ounces, compared to 15,089 in last year's period. Cash operating costs in
the quarter were $1.18 per ounce of silver, compared to $0.91 in 2002's
comparable period.
For the nine months period, silver production more than tripled to 3,775,953
ounces and gold production grew two-and-a-half times to 52,173 ounces compared
to 1,141,891 ounces of silver and 21,000 ounces of gold produced in the first
nine months of 2002. Cash costs through the first nine months were $0.73 per
ounce of silver, versus $1.21 per ounce in the first nine months of 2002.
North America
- -------------
Rochester Mine (Nevada)
* Third quarter silver production of 1,717,947 ounces and 15,346
ounces of gold
3
* Cash costs of $3.66 per ounce of silver, a decrease of 15% from
the second quarter of this year, and 43% less than the first
quarter of this year
* Nine months silver production 4,160,993 ounces and 41,237 ounces
of gold
* Crusher relocation completed on schedule and within budget
Near the end of the third quarter, Rochester completed its major crusher
relocation project, on schedule and within budget. Measures taken to reduce
operating costs during the project effectively lowered cash costs in the third
quarter to $3.66 per ounce - a reduction of 15 percent from the second quarter
of this year, and 43 percent lower than the first quarter of this year. With the
installation of the new crusher, cash costs are expected to continue at their
lower, historical levels.
Rochester produced 1.7 million ounces of silver and 15,346 ounces of gold during
the third quarter, compared to 1.7 million ounces of silver and 18,885 ounces of
gold in 2003's comparable period. Cash costs in last year's third quarter were
$2.83 per ounce silver.
First nine months of production at Rochester was 4.2 million ounces of silver
and 41,237 ounces of gold at an average cash cost of $4.61 per ounce of silver.
This compared to 4.8 million ounces of silver and 52,440 ounces of gold at an
average cash cost of $3.11 a year ago.
Coeur Silver Valley - Galena Mine (Idaho)
* Temporary suspension of operations in the quarter as the mine
was prepared for expansion. Short-term impact on third quarter
production and costs.
* Third quarter silver production of 437,249 ounces versus 1.9
million ounces a year ago.
* Cash operating costs of $5.46 per ounce in quarter compared to
$4.54 per ounce in last year's third quarter.
* Nine months silver production of 2,733,716 ounces
* Long-range development program begins during the quarter
At Coeur Silver Valley, silver production was 0.4 million ounces in the
third quarter compared to 1.2 million ounces a year ago. The recent
quarter's production was impacted by the temporary suspension of operations
in the quarter, as maintenance work prepared the mine for start up of the
long range development program designed to increase production 40 percent
to 7 million ounces commencing in 2006, with estimated cash costs below
$4.00 per ounce. The early focus of this optimization work is the
exploration of a number of new high-grade silver veins located above the
5200 level, and extension of the more prolific vein systems at depth.
Expanded South American Exploration Program
- -------------------------------------------
Cerro Bayo
Successful drilling continued during the quarter on the Javiera Sur vein and the
new Veronica vein, where a recent thick, high-grade drill intercept recorded 27
feet of 0.77 ounces per ton gold equivalent. Both of these veins are located
near existing mine infrastructure at Cerro Bayo. Drilling thus far totals
106,000 feet in 270 holes using three core rigs. Due to the ongoing exploration
success in the area, the Cerro Bayo exploration budget was increased during the
third quarter by $400,000 for a total of $2.2 million for the entire year.
Exploration remains on track to meet the goal of discovering 267,000 ounces of
new gold equivalent resources.
4
Martha Mine and Santa Cruz Province
Exploration success at Martha has led to an increase in the exploration budget
there in the third quarter by $500,000, or 63 percent, to a total of $1.3
million for the year. Work now includes two full-time drill rigs and one reverse
circulation drill around the existing mine. Drilling continued to look for
extensions of the high-grade mineralization around the R4 Zone, an area of very
high-grade ore shoots, 600 feet east of the Martha mine and along the eastern
extension of the Martha vein. The proximity to the existing mine has the
potential to add these new ounces quickly and economically into production.
In addition, current exploration is delineating both shallow, open pit reserves
and a southeast extension of the R4 Zone. A new geologic model is being prepared
for R4 with this new information.
Hedging
- -------
Coeur does not currently have any of its silver production hedged. The Company
currently has 27,000 ounces of gold sold forward over the next 15 months at an
average price of $343 per ounce. In 2003, every 10 cent increase in silver price
adds approximately $1.5 million in free cash flow on an annualized basis.
Coeur d'Alene Mines Corporation is the country's largest silver producer, as
well as a significant, low-cost producer of gold. The Company has mining
interests in Nevada, Idaho, Alaska, Argentina, Chile and Bolivia.
Cautionary Note to U.S. Investors - The United States Securities and Exchange
Commission permits 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 the term "resources" in this press release which the SEC
guidelines strictly prohibit us from including in our filings with the SEC. U.S.
investors are urged to consider closely the disclosure in our Form 10-K and Form
10-Q for the quarter ended September30, 2003. You can review and obtain copies
of that filing from the SEC website at http://www.sec.gov/edgar.html.
This document contains numerous forward-looking statements relating to the
Company's silver and gold mining business. The United States Private Securities
Litigation Reform Act of 1995 provides a "safe harbor" for certain
forward-looking statements. 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, 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, and risks inherent in the ownership and operation of, or
investment in, mining properties or businesses in foreign countries. 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 these
forward-looking statements, whether as a result of new information, future
events or otherwise.
5
COEUR D'ALENE MINES CORPORATION
PRODUCTION STATISTICS
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- ------------------------------
2003 2002 2003 2002
-------------- --------------- ------------- -------------
ROCHESTER MINE
Silver ozs. 1,717,947 1,717,151 4,160,993 4,770,361
Gold ozs. 15,346 18,885 41,237 52,440
Cash Costs per oz./silver $3.66 $2.83 $4.61 $3.11
Full Costs per oz./silver $4.43 $3.44 $5.54 $3.87
GALENA MINE
Silver ozs. 437,249 1,188,262 2,733,716 4,045,253
Cash Costs per oz./silver $5.46 $4.54 $4.62 $4.20
Full Costs per oz./silver $5.91 $5.34 $4.96 $4.91
CERRO BAYO/MARTHA MINE (A)
Silver ozs. 1,150,751 881,691 3,775,953 1,141,891
Gold ozs. 15,220 15,089 52,173 21,000
Cash Costs per oz./silver $1.18 $0.91 $0.73 $1.21
Full Costs per oz./silver $2.41 $1.95 $2.48 $3.25
CONSOLIDATED PRODUCTION TOTALS
Silver ozs. 3,305,947 3,787,104 10,670,662 9,957,505
Gold ozs. 30,566 33,974 93,410 73,440
Cash Costs per oz./silver $3.04 $2.92 $3.24 $3.33
Full Costs per oz./silver $3.92 $3.69 $4.31 $4.22
CONSOLIDATED SALES TOTALS
Silver ozs. sold 3,144,852 3,544,409 10,911,567 9,569,566
Gold ozs. sold 29,258 30,472 97,287 65,992
Realized price per silver oz. $4.77 $4.65 $4.71 $4.67
Realized price per gold oz. $353 $ 315 $ 341 $ 306
(A) The Company commenced production in April 2002.
See reconciliation of non-GAAP cash costs to GAAP production costs under
"Cost and Expenses".
Note: "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 silver ounces produced by that property during that same period.
Management uses cash costs per ounce produced 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. By
calculating the cash costs from each of the Company's mines on the same unit
basis, management can easily determine the gross margin that each ounce of gold
and silver produced is generating.
"Cash Costs" are costs directly related to the physical activities of
producing silver and gold and include mining, processing and other plant costs,
deferred mining adjustments, 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 (primarily gold and copper) 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 set forth below:
6
Three months ended September 30, 2003
Rochester Silver Valley Cerro Bayo(1) Total
--------------- ------------------ --------------- ---------------
Production of Silver (ounces) 1,717,947 437,249 1,150,751 3,305,947
Cash Costs per ounce $ 3.66 $ 5.46 $ 1.18 $ 3.04
--------------- ------------------ --------------- ---------------
Total Cash Costs (thousands) $ 6,296 $ 2,387 $ 1,357 $ 10,040
Add/(Subtract):
Third Party Smelting Costs (234) (648) (1,946) (2,828)
By-Product Credit (2) 5,558 258 5,560 11,376
Deferred Stripping Adjustment (80) - - (80)
Change in Inventory (280) (476) 1,097 341
--------------- ------------------ --------------- ---------------
Production Costs $ 11,260 $ 1,521 $ 6,068 $ 18,849
=============== ================== =============== ===============
Three months ended September 30, 2002
Rochester Silver Valley Cerro Bayo(1) Total
---------------- ----------------- ---------------- ---------------
Production of Silver (ounces) 1,717,151 1,188,262 881,691 3,787,104
Cash Costs per ounce $ 2.83 $ 4.54 $ 0.91 $ 2.92
---------------- ----------------- ---------------- ---------------
Total Cash Costs (thousands) $ 4,860 $ 5,400 $ 800 $ 11,060
Add/Subtract:
Third Party Smelting Costs (307) (1,801) (708) (2,816)
By-Product Credit (2) 5,932 667 4,748 11,347
Deferred Stripping Adjustment 117 - - 117
Change in Inventory 3,651 506 549 4,706
---------------- ----------------- ---------------- ---------------
Production Costs $ 14,253 $ 4,772 $ 5,389 $ 24,414
================ ================= ================ ===============
(1) The Cerro Bayo mine commenced production in the second quarter of 2002.
(2) By-product credit for the value of metal sales other than silver, primarily
gold and copper.
Nine months ended September 30, 2003
Rochester Silver Valley Cerro Bayo(1) Total
--------------- ------------------ --------------- ---------------
Production of Silver (ounces) 4,160,993 2,733,716 3,775,953 10,670,662
Cash Costs per ounce $ 4.61 $ 4.62 $ 0.73 $ 3.24
--------------- ------------------ --------------- ---------------
Total Cash Costs (thousands) $ 19,196 $ 12,623 $ 2,770 $ 34,589
Add/(Subtract):
Third Party Smelting Costs (600) (3,530) (4,967) (9,097)
By-Product Credit (2) 14,616 1,583 18,503 34,702
Deferred Stripping Adjustment (241) - - (241)
Change in Inventory (4,112) (22) (79) (4,213)
--------------- ------------------ --------------- ---------------
Production Costs $ 28,859 $ 10,654 $ 16,227 $ 55,740
=============== ================== =============== ===============
Nine months ended September 30, 2002
Rochester Silver Valley Cerro Bayo(1) Total
-------------- ----------------- ----------------- --------------
Production of Silver (ounces) 4,770,361 4,045,253 1,141,891 9,957,505
Cash Costs per ounce $ 3.11 $ 4.20 $ 1.21 $ 3.33
-------------- ----------------- ----------------- --------------
Total Cash Costs (thousands) $ 14,836 $ 16,990 $ 1,382 $ 33,208
Add/(Subtract):
Third Party Smelting Costs (791) (5,811) (708) (7,310)
By-Product Credit 16,039 2,350 6,622 25,011
Deferred Stripping Adjustment 138 - - 138
Change in Inventory 10,332 523 (2,978) 7,877
-------------- ----------------- ----------------- --------------
roduction Costs $ 40,554 $ 14,052 $ 4,318 $ 58,924
============== ================= ================= ==============
(1) The Cerro Bayo mine commenced production in the second quarter of 2002.
(2) By-product credit for the value of metal sales other than silver, primarily
gold and copper.
7
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2003 2002
---- ----
ASSETS (In Thousands)
CURRENT ASSETS
Cash and cash equivalents $ 86,925 $ 9,093
Short-term investments 7,282 518
Receivables and prepaid expenses, net 10,747 7,185
Ore on leach pad 15,682 11,082
Metal and other inventory 14,668 14,846
---------- ---------
135,304 42,724
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 85,538 76,194
Less accumulated depreciation (51,923) (49,531)
----------- ----------
33,615 26,663
MINING PROPERTIES
Operational mining properties 111,511 92,149
Less accumulated depletion (88,099) (71,833)
----------- ----------
23,412 20,316
Non-producing and developmental properties 25,125 28,129
Mineral interests 20,125 18,825
---------- ---------
68,662 67,270
OTHER ASSETS
Non-current ore on leach pad 15,676 15,474
Restricted investments 8,710 13,108
Debt issuance costs, net 295 1,034
Marketable securities 556 915
Other 5,860 5,900
---------- ----------
31,097 36,431
---------- ---------
Total assets $ 268,678 $173,088
========== =========
8
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2003 2002
---- ----
(In Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 6,855 $ 5,962
Accrued liabilities 5,178 4,334
Accrued interest payable 396 1,610
Accrued salaries and wages 4,219 5,594
Current portion of remediation costs 1,201 926
13 3/8% Convertible Senior Subordinated Notes due December 2003 - 12,735
6 3/8% Convertible Subordinated Debentures due January 2004 4,876 -
Current portion of bank financing 6,265 4,918
--------- --------
28,990 36,079
LONG-TERM LIABILITIES
6 3/8% Convertible Subordinated Debentures due January 2004 - 55,132
7 1/4% Convertible Subordinated Debentures due October 2005 9,563 11,665
9% Convertible Senior Subordinated Notes due February 2007,
net of discount 4,245 -
Reclamation and mine closure 20,985 14,458
Other long-term liabilities 8,522 8,456
--------- --------
43,315 89,711
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common stock, par value $1.00 per share-authorized 250,000,000 shares,
issued 211,011,876 and 119,653,267 at September 30, 2003 and December
31, 2002
(1,059,211 shares held in treasury) 211,012 119,653
Additional paid in capital 532,404 420,863
Accumulated deficit (532,713) (479,207)
Shares held in treasury (13,190) (13,190)
Accumulated other comprehensive loss (1,140) (821)
---------- --------
196,373 47,298
--------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 268,678 $173,088
========== ========
9
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2003 2002 2003 2002
---- ---- ---- ----
(In Thousands, except per share data)
REVENUES
Sales of metal $ 23,375 $ 24,424 $ 78,108 $ 60,458
Interest and other 326 2,110 1,071 5,201
----------- ----------- ----------- -----------
Total revenues 23,701 26,534 79,179 65,659
COSTS and Expenses
Production 18,849 24,648 55,740 58,924
Depreciation and depletion 3,256 2,719 12,955 8,130
Administrative and general 2,776 1,155 8,241 5,724
Exploration 1,154 786 3,367 2,397
Pre-feasibility 463 518 1,229 2,300
Interest 6,703 7,583 10,726 17,431
Other holding costs 2,602 1,464 4,171 2,924
Loss on exchange and early retirement of debt 5,769 - 33,957 2,920
----------- ----------- ----------- -----------
Total cost and expenses 41,572 38,873 130,386 100,750
----------- ----------- ----------- -----------
NET LOSS FROM CONTINUING OPERATIONS BEFORE TAXES AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
(17,871) (12,339) (51,207) (35,091)
Income tax benefit - - 7 -
----------- ----------- ----------- ----------
NET LOSS BEFORE CUMULATIVE EFFECT IN CHANGE IN
ACCOUNTING PRINCIPLE (17,871) (12,339) (51,200) (35,091)
Cumulative effect of change in accounting principle
- - (2,306) -
----------- ----------- ------------ -----------
Net loss (17,871) (12,339) (53,506) (35,091)
Other comprehensive income (loss) 78 (574) (319) (1,051)
----------- ------------ ------------ ------------
COMPREHENSIVE LOSS $ (17,793) $ (12,913) $ (53,825) $ (36,142)
============ ============ ============ ============
BASIC AND DILUTED LOSS PER SHARE:
Weighted average number of shares of common stock
outstanding 183,102 87,742 153,679 69,354
=========== =========== ========== ===========
Net loss per common share before cumulative effect of
change in accounting principle $ (0.10) $ (0.14) $ (0.33) $ (0.51)
Cumulative effect of change in accounting principle per
share - - (0.02) -
----------- ----------- ----------- -----------
Net loss per common share $ (0.10) $ (0.14) $ (0.35) $ (0.51)
============ ========== =========== ===========
10
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three and Nine Months Ended September 30, 2003 and 2002
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2003 2002 2003 2002
------------- --------------- ------------ --------------
(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (17,871) $ (12,339) $ (53,506) $ (35,091)
Add (deduct) non-cash items:
Depreciation and depletion 3,256 2,719 12,955 8,130
Loss on early retirement of debt 5,769 - 33,957 2,920
Non-cash interest expense 7,088 4,235 8,191 9,623
Cumulative effect of change in accounting method - - 2,306 -
Other charges 357 294 1,089 1,212
Changes in Operating Assets and Liabilities:
Receivables and prepaid expenses (1,438) (1,758) (3,562) (2,193)
Inventories 612 4,914 (4,624) 6,288
Accounts payable and accrued liabilities 2,029 (338) (1,341) 1,416
------------ ------------- ------------ ------------
CASH USED IN OPERATING ACTIVITIES (198) (2,273) (4,535) (7,695)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments (9,303) (8,900) (82,256) (9,682)
Proceeds from sales of short-term investments 8,618 9,116 80,128 12,800
Expenditures on mining assets (7,391) (3,200) (15,102) (7,931)
Other 312 (193) 225 (209)
------------ ------------- ----------- -------------
CASH USED IN INVESTING ACTIVITIES (7,764) (3,177) (17,005) (5,022)
CASH FLOWS FROM FINANCING ACTIVITIES:
Retirement of debt (61) - (22,453) (9,427)
Proceeds from issuance of long-term debt,
net of issuance costs - (192) 33,268 13,858
Proceeds from issuance of common stock,
net of issuance costs 75,998 - 87,498 -
Bank Borrowings on working capital facility 6,265 - 22,868 -
Payments to Bank on working capital facility (6,810) - (21,714) -
Other (32) 904 (95) 789
------------- ------------ ------------ ------------
CASH PROVIDED BY FINANCING ACTIVITIES: 75,360 712 99,372 5,220
------------ ------------ ----------- ------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
67,398 (4,738) 77,832 (7,497)
Cash and cash equivalents at beginning of period 19,527 11,955 9,093 14,714
------------ ------------ ----------- ------------
Cash and cash equivalents at end of period $ 86,925 $ 7,217 $ 86,925 $ 7,217
============ ============ =========== ============
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In conjunction with the issuance of the 9% Convertible Senior
Subordinated Notes, the Company also issued 0.6 million shares of common stock
for partial payment of offering costs of $1.0 million.
The Company and each of the holders of the 9% Notes entered into an
Early Conversion Agreement. The amount of principal converted under the Early
Conversion Agreements was $32.6 million, and the common shares issued, including
interest, was approximately 27.5 million. The Company recorded a loss
on early retirement of debt of $4.2 million in the third quarter of 2003 in
conjunction with these transactions.
In addition, during the third quarter of 2003, the Company issued an
aggregate of 0.8 million shares of common stock for $1.0 million principal
amount of the Company's 6 3/8% Debentures, and an aggregate of 0.3 million
shares of common stock for $0.4 million principal amount of the Company's 7 1/4%
Debentures.
During the first nine months of 2003, holders of $12.7 million of the
Series I 13 3/8% Convertible Senior Subordinated Notes due December 31, 2003
(the "Series I 13 3/8% Notes") voluntarily converted such notes, in accordance
with their original terms, into approximately 9.6 million shares of common
stock, including payment for make whole provision for interest expense.
During the first nine months of 2003, the Company repurchased $27.9
million and $2.1 million principal amount of its outstanding 6 3/8% and 7 1/4%
Convertible Subordinated Debentures, respectively, in exchange for 18.5 million
shares of common stock and recorded a loss on exchange and early retirement of
debt of approximately $29.6 million, including 0.6 million shares of common
stock issued as payment for interest expense as part of the transaction.
During the third quarter of 2002, holders of $9.9 million of the Series
I 13 3/8% Notes voluntarily converted such notes into approximately 7.3 million
shares of Common Stock. In addition, 0.8 million shares of common stock were
issued as payment for $1.4 million of interest expense on the Series I 13 3/8%
Notes.
During the third quarter of 2002 holders of $14.1 million of Series II
13 3/8% Convertible Senior Subordinated Notes due December 31, 2003 (the "Series
II 13 3/8% Notes") voluntarily converted such notes into approximately 10.4
million shares of common stock. The Series I 13 3/8% Notes and the Series II 13
3/8% Notes are collectively referred to hereinafter as the "13 3/8% Notes." In
addition, 1.7 million shares of common stock were issued as payment for $2.8
million of interest expense on the Series II 13 3/8% Notes.
During the first nine months of 2002, the Company repurchased $13.7
million, $0.8 million and $0.3 million principal amount of its outstanding 6%,
6-3/8% and 7-1/4% Convertible Subordinated Debentures, respectively, in exchange
for 15.3 million shares of common stock and recorded a loss on retirement of
debt of approximately $2.9 million. In addition, holders of $25.9 million of the
Series I 13 3/8% Notes and $14.1 million of the Series II 13 3/8% Notes
voluntarily converted such Notes, under the terms of the indentures, into
approximately 29.6 million shares of common stock. The Company also issued 6.2
million shares of common stock as payment of interest expense on the 13 3/8%
Notes.
During the first nine months of 2003, the Company issued 1.2 million
shares of common stock in conjunction with its long-term incentive program.
12