CDE - Earnings call transcript Q4 2019

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Operator

Good morning. Welcome to the Coeur Mining Fourth Quarter 2019 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

to DePartout. conference like host to now Paul today, would turn over the your I ahead, go Please sir.

Paul DePartout

conference and Coeur and earnings Mining’s you fourth Thank good quarter full morning. year Welcome to call. XXXX

yesterday’s market results the release on slides and released available Our today’s are website. close press call were for our a copy and of after

review included I would of that actual comments XX-K. our include today everyone may our well and from results release, presentation which statements our press Factors as like our to the differ. release press the Please XXXX forward-looking in described remind some slides cautionary statements as and in Risk

I’ll Now, over Mitch. turn it to

Mitchell Krebs

the Tom metals our from with Paul, along and of our a with results good morning. Smith of off higher operations precious Terry handful reflect half me team. Slide on Whelan management Thanks, XXXX strong Starting X, today, X here are second a gold and members prices. primary and other

$XXX XXXX We revenue our saw to increase over million. XX%

grow XX% targets for and also our guidance year adjusted fourfold. our full successful and in Our G&A. were increased flow to CapEx We EBITDA cash achieving operating million $XXX

our of finish Looking remaining results year; sheet, some at include: to highlights consecutive programs. encouraging our solid of retirement of to exploration the from Slide including or positive Rochester; flow X/Xrd cash debt; silver million additional quarters recovery notable at over from free balance HPGR X improvements X, the our results $XXX over and

extent growth our resources, This most and metals. more to XX Looking categories exploration our year-over-year the since have and grown, reserves also reserves broadly at across which highlights XXXX. resources slide Slide year-end results highlights the our and in

far spending exploration, XX% the investment largest by in from results which company’s increase to and $XX the program by over to returns attractive XXXX in substantially our will we million, history. in be level plan roughly the Given our

ends all a had to second extent, Rochester Wharf and half disappointing to and, a had lesser XXXX, while Our Silvertip Palmarejo, great the Kensington operations of year.

flow that returns. that believe clearly assets paths we and solid of both these have defined cash forward However, strong to lead

Starting had will failed with in couple rates crusher, lower operating more second lost of Terry And last about time a to which replace placement this when led we we a half. secondary talk some during minutes. Rochester, summer the to

We of starting are sustainable now see a gives confidence from performance in recovery level our and HPGR, achieving results to crusher us plan. XXXX positive which

expected this impact month Management from in, yesterday. we decision Land by environmental final year expect receive of XX. the statement It’s The to for be was next published the largely XXXX. and later record to Bureau begin expansion is completed POA And This of late the mining this located of hard and cash the to operation, have company, mine Rochester the overstate life flow the world. long jurisdiction terms from expected and on an level on the in of entire will a impact production expansion over best in arguably,

and and to also company. expand a be we took active turning year-end, to more the zinc $XXX impairment flow lead decision and while million we non-cash the of consistent at Silvertip, retool suspend temporarily markets, for more resilient made a Now the mining cash activities, and source be and to to operation to stable processing charge then

And effort over commissioning up X made and a past progress. the efforts into of tremendous put ramping years. have We’ve amount Silvertip stabilization significant our

charges treatment ability flow. prices, achieve positive the challenge and lead in However, to the and have to escalation insurmountable become zinc operation’s an sharp falloff in spot cash

the life achieve the the extend the the of at hitting mill not to scale. are in we the We the operation foot our to value maximize to our of believe way pause expand and best investment is to gas. Although, taking we mine are Silvertip, accelerate benefits off exploration

million to We $X program kick expansion nearly last to of Silvertip’s our by and XX%. from off to invested XX%, increase in resources year’s year resources over ability resource comes success about expect saw the the drilling M&I plan resource next confidence program. the in our month. by increase double and inferred expand and this Our We investment

we’ll further for define to a was complete in us the our allowing to the restart pre-feasibility thinking. An have learned current operation strength. a apply our expand study but market the this lessons plan caused accelerate to parallel, of from In position and summer mill, to conditions always us works expansion Silvertip,

XXXX. well Silvertip exploration would as We our we’ll the results possible feasibility earliest by study and market conditions. anticipate that as prevailing late driven be And be at of restart in program the the

passing I XX, Slide environmental point best-in-class set of to and corporate approach health proactive and want call slides, Before to to initiatives which highlight our on a safety. out the Terry, starting governance

both Coeur Gold at Ensuring a daily we are thanks source important continued commodities commitment safe silver to use inputs products a for also manner. operating and to special will all on give that that to want for come. key ethical we to responsible I everyone in generations these be an for have their a basis. for and supply

XX% metrics. decreased in our we environmental frequency improved XXXX. performance by roughly And injury Our rates across numerous

it I’ll turn to Terry. Now over

Terry Smith

Mitch, you, everyone. morning, and good Thank

additional Palmarejo. year. our Mitch while summarize our XXXX results Silvertip and the Slides improved from La in averaged rates and X outlook for experienced fourth mines the production primary which throughput strong operations an both highlighted, Rochester with quarter. challenges XXX approximately to grades Starting As X results, Higher gold performance tons attributable Most Nación, and XXXX. in our in drove increase silver solid quarter. ore delivered and day provide during last X the fourth feed was per of throughput

longitudinal mined which recoveries both metals. of areas full and for proportion geotechnically-challenging through we the impacted some stopes, the and grades increase year, For

increase throughput roughly some we by the offset during Looking year. XXXX in grades plan see we to help to expect ahead, to XX% that lower

We during per ounces, were by feed over of increased from year higher per gold ton. a Switching over very to driven Gold year grams the Jualin prior XX% grades mine was roughly lowering material. showcasing while results, than multiyear at ton ounce that over or effort and XXX,XXX period. helped XX% million, to high-grade also discover, $XXX strong of average grade our Kensington. addition XX%. the XXXX to free develop higher to production unit or ore XX,XXX over produced XX.X record cash generate of average by costs grade The X.XX $XX.X per ounces an of flow ounce this largely

deposit. expect Kensington we lower ahead, Looking from slightly another year grades strong despite main

the Kensington’s Jualin will in XX% was production great total year with higher both to roughly helping deliver us also year nearly XX% At for for line Gold We of ranges. anticipate and the second XXXX production was production of Wharf, for in year. the costs the operation. account XX% full another year, half guidance

$XXX cash Wharf of million $XX its generated free X about since million during we operation, ago cumulative the acquired $XXX million. for total XXXX, to years bringing flow

we Additionally, as after in then. Wharf mine years, ounces early it XXX,XXX the producing life when XXXX, acquired is back same currently X since

ahead, similar but increase Looking will plan XXXX. our tons in year-over-year, expect production we additional levels strip to mine which

We operations. plan middle Turning second we the expect temporary by the crusher as unit on over the Rochester. our and a half a future had a year of site. XXXX of in will contingency We fail of our we for crushing implemented expansion. secondary crusher setback idle a during prosperous had long smaller We view to replacing commissioning be it with last and what

bottleneck desired up a which However, lower we unit ramp resulted levels, as stacking replacement became struggled to the to in rates.

production Our XXXX. and are an expecting stride throughput tons early its per we in in is of year, crusher hitting confidently the XX,XXX average day

our momentum the slower We as to start on inventories. metal build year anticipate leach we and restock a pad

be will late updated to quarter. plan in expect Rochester the report big We efforts for pick focus the an publish production our year. up the This we expanding a operation and during as on technical year second to

Silvertip. at finally, And

We potential of continue long-term conviction in strong have high-grade deposit. the to the

became generate we a However, an for expect X,XXX We the temporarily even correct growing cash focusing decision. to any us expanding arrive optimized and at not and given operations, decision and environment structure, the flow it lightly. cost mill day current analysis suspending After didn’t clear per this material market that the at while free was and zinc lead. discussion, resource the would consistent to tons on much

straightforward. be work mill the mine and already dewatering the engineering be and and the as expanding believe modernizing and the – the have flotation our ends will relatively ancillary circuits of majority the capacity plant the of on mill will front to focus We the Other upgraded The site will mill, will than back to infrastructure be throughput. handle throughput. more higher expansion support

pre-feasibility Mitch will study, into earlier. mentioned All of our be which incorporated

during I’ll and call suspension, we anticipate costs per million $XX to this of the to million of quarter the to the incur Tom. temporary year. holding $X over to first half pass total that, approximately $X During onetime million With costs

Thomas Whelan

off balance by start during to to sheet we Thanks, XXXX. the Terry. like made I’d highlighting our improvements

over year, retired during presented million As roughly we on $XXX of XX, debt a reduction. Slide XX% the

times over ending Driven year EBITDA, adjusted compared total end the our of liquidity an with X of $XX million increase XXXX. ratio undrawn at in million our debt at to of revolver the and XX% cash. increased and million also $XX by times reduction XXXX, dropped end We nearly by initiatives the an in $XXX year leverage to the X.X

Mexico total generated I’d XX% And U.S.-based XX% contributed Canada and perspective, Gold the respectively. like accounted X. XX% revenue to portfolio X%, from North our assets. XXXX. year, sales geographic Slide balanced our on a revenue operations precious of roughly showcased seen top-line These while in American highlight as during our under for of metals results and of our results just

detail looking Shifting on and Slide over into which to Silvertip and markets. X, goes current the zinc/lead at

of our impact for in consensus risen Both the dropped and for and respectively. deterioration adding have significantly lead charges months continued X XXXX zinc deterioration weeks. This in charges of recent over levels prices, the lead and XX% to well while just treatment have XX%, substantial prices severe cost past has our treatment In seen and have We amount have concentrates concentrates considerably. reducing operation. below zinc increased revenue

operations mine to zinc XXXX zinc in excluding forecast ramp some is supply Global as major to production. up expected China are increase

treatment the at XX% likely zinc be perhaps with concentrates higher. near to not will in zinc benchmark this annual Off-spec be at charges We least even in or or incur higher XXXX expect $XXX spot environment. treatment charges marketable

at in weak. and have spot be supply or lead at recycled half increase of have returned conference just On remains and demand, of continued We into expected to mine second for treatment or tepid lead charges $XXX secondary anticipate the Zinc Association XXXX availability International during the least a We’ve near fueled the from increasing charges in higher. zinc XXXX with XXXX. outlook to lead are treatment be the and annual and XX% lead sharp benchmark side, the

can However, unlike quickly. copper, both markets are turn small and

plan. redesign am note, potential positive about with larger the study excited pre-feasibility improve grades a recoveries very the concentrate to I On and a and

Before back call handing wanted is brief hedging program Slide on XX. update provide Mitch, I XXXX, over a our on the for to which to highlighted

since XXXX midpoint that ounce. of may layered just zero-cost production, of This program. an collars the we in based average You ounce total, ceiling our recall These have last for added or have floor hedged In of of this on average an with nearly to XXX,XXX we collars $X,XXX gold of XX% per some guidance. XXXX over ounces year. per $X,XXX

now I’ll Mitch. that, to the With back pass call

Mitchell Krebs

Tom. Thanks,

two, Looking And large financial Silvertip. see Number our project. one, results from PFS Rochester at and performance. top successful consistent three, strong and complete safety our Slide Number the exploration. health you HPGR five, in investment retool across to XX, further priorities and number expand deliver validating deliver improve efforts accelerate Number continue and year. on environmental already our our and Number the a operating operations. advance for our can expansion four, results

any go questions. let’s for that, open ahead With it and up

Operator

you. thank Yes,

question-and-answer [Operator comes will We the Instructions] Noble Capital question Reichman Mark session. the begin from Markets. now first with And

Mark Reichman

morning. Good

Mitchell Krebs

Hi, Mark.

Mark Reichman

the you on drill the curious to expect a permitting just you getting correct, additional was of number you memory were in XXXX. a I I still that larger step-out end permitting serves area. were Just And holes by quick And Crown quarter? some on at if question think second that Block, to the allow looking the whether of able limited drilling

Mitchell Krebs

and timing at Crown of drilling, and accelerate Still starting half year and in the Sterling, at the of second middle we’ll year. the throughout then the both our the

Mark Reichman

to this the Okay. cores Silvertip, investors Well, I’d on of look There really like so precious focus play, kind is got metals at you’ve expansion. and so on that. focused think I Rochester much and of attention

a of developing lot got potential Crown Sterling, with the You’ve Block.

just expansion? was little I could You’ve got you bit a Lincoln maybe Wilco, the just Hill. us curious on of timing the if update Rochester

the your pieces year, of I And really into thinking timing these supporting is what of on will end expansion? know that? then, that be at fit kind in the terms other technical how done when the of accelerate starts report the but to

Mitchell Krebs

Yeah, have The to of will driver pad POA that a pad current by allow IV is leach new the Stage Mitch completed XX, main sure. transition ensure for here, to That elements the of largely VI this the that from to-be-constructed planned key of leach Hi. It’s expansion. XXXX. Mark. end we Stage one smooth forms on

spent there’ll ready XXXX, XXXX ramp-up to of on and So, XX. by Stage on minimal have XXXX. POA is beginning the the be pad this capital in around that current year then nearing go the time we’re capacity the to IV leach then, And

to long company then and of us excited in life And as a of really deliver then cash of we flow backside what terms another cash and size flow. flow, overall really the production good as and terms are a in completion kind allows of then step-up on where will Rochester of company longevity take terms is and mine in that of cash

your does So, that answer question?

Mark Reichman

Crown what active and basis? does. in portfolio like a how and But integrate I – Hill Lincoln what’s how more the Wilco plays Sterling of Block you It well? expansion terms this all about the expectation guess into into developing on that as Rochester does little your and on kind then, of out

Mitchell Krebs

is thinking. our a element to Sequencing Definitely. huge

try all to don’t and once at You for reasons, want obviously. kinds everything do of

look I we part to and XX expansion. Lincoln assets POA to mentioned. the or drilling Hill, down you will advance Hill work wrote this which that Just continue be around X when at a to, our the year, adjacent and X mine to we plan there and engineering sits Rochester, become can will how Lincoln Rochester post of

minimal located. are you leach that X as be into to VI Stage grades, mining might this couple And grades the will recall, the what from than it’s where times given of capital a But Rochester. at are higher out plan miles get there, new pad like we’re gold the something only

So mine try can. we definitely soon ounces the to want as we’ll pull and into those as plan

higher distinct to Sterling So POA is much but likely Sterling into at goes focus there to of get into oxide, life, gold shorter be that expansion separate and probably hand X Crown, I X leach a smaller, heap that good one projects, sort those but capital kind glove of grade; the require Rochester. and where operation margin, production. won’t would with our XX in

that, take will capital in slot a where that’s few to likely clearly, larger more we a And XX for focus a bought Lincoln synergies. would drilling, Crown much years Alio a all of post obvious from we have the package you Whereas resource, standalone very project there. mentioned POA Wilco, when operational need our from standpoint. And Hill asset was the main funny, timing then, which Gold, it’s of

bit now quite large thinking But as a not have that synergies a quite price little attention of that operational or need sensitive, those more very become ounces as gold Lincoln higher But pay much of Hill. turn Wilco. drift a higher, But put something there It’s dust kind resource around a with near-term I little continuing of to start doesn’t kind and off to we’re bucket in the longer-term to we’ll to Wilco the growth. to have that’s going and would our there’s and resource to.

Mark Reichman

Very that. helpful. appreciate Thanks. Okay. really Great. I

Mitchell Krebs

Yeah, sure. Thanks for the question.

Operator

Instructions] with [Operator And Roth from question Capital next Reagor the comes you. Thank Partners. Joseph

Joseph Reagor

Thanks Good question. taking morning, for guys. the

Mitchell Krebs

Hi? Joe. Hi,

Joseph Reagor

Hi.

driving to seems what’s So kind like looking Is across treatment kind there a bit it working driver tax any like way of there? little the bit particular last higher year. the charges, – main of board cost little rates, Is cash it guidance, a It cost. at the seems thing that? its cost higher compared it’s

Mitchell Krebs

and you. ranges XXXX are any we good set with A to Overall, then in and Terry, And achievable. question. Yeah. then, asset you I’ll I’ll that a unique every Joe, its has guidance to feel enter start Clearly, trying Tom, flip rationale. own fill of it story we’re blanks. can

with Joe, caught throughout maybe can we that maybe question I’ll But that details year. Terry, let us each Joe, in. have eye deliver ranges And tell your your answered you something on can fill that into we’ve a Tom not? then And then the or and few if start

Thomas Whelan

Hey, But Palmarejo PRKW, and seeing go to Joe, grades. so Palmarejo, in as the order you a so would able same we’re we’ve I production. like the been first. drop see, to maintain

a is know, is there. et So that. an the of and diesel, answer best the to saw cetera. unit And process, handle cetera, inputs, kind of all in some mining of so cost last increase what but the will the grade I – was Again, year doing be same are Alberto bit team what the G&A we staying et of their

we’re is to of flat. got, see So year. riding stay again you estimate terms those – as in on have expecting there We’ve what has we we pretty what conservative Rochester mentioned, this lot a think a Rochester, I going. where Terry things

think you of And the what see I again, – that estimate. reflective in is the so cost

Again, Going a pretty to say, steady kind is would year-over-year. I of Kensington. Kensington

have than And So then years, of has a to the more but add issue wouldn’t probably little Terry one one me, there. strip one we’re at the Wharf highest highest years. much the of in that history is strip

else of Terry, – reason in an sort I don’t for uptick the it the miss did did I that’s know So cost. – what anything?

Terry Smith

you moving the big I captured Tom, pretty it Those think well. pieces, are

Mitchell Krebs

does that answer question? your Joe,

Joseph Reagor

of on Yeah. expansion. bigger a Yeah. the picture That kind helps. And then Rochester just

fund option financing to be for via that flow cash if, an what is not would the expectation there? that’s the plan think I some reason,

Mitchell Krebs

of of that you gold revenue XX-XXX the provides other big year, the of whole that, gold, That, question. the more and pretty seeming hit But as plan cash revolver whole available kind and to flow. year a XX. it. an And sudden, all firm mean, funding coming of with I terms and opens the this more and to work pretty a a XX% now have in be with POA we along up free that XX-XXX. good with go through from buoyant. allocate definitive between by of opportunity cash, along of And our view a to funding to we’ll comprehensive project updated get the Yeah, end CapEx up

here won’t crack we’ll can a And Joe, there if though, is we is, underpinning this how higher and Beyond of whether it’s leasing we’ll to or be level and help there If of we’ve that, see flow be this one. year of It in at then CapEx behind of shave we’ll it to this the we’re good a this Hopefully, and free what, one got still other our price. confidence remains. putting more lot from the gold – look to in that coming cash protection going streamline drivers, price first increase the – gold still taking from place see half then throughout any gap reduce. alternatives. gold

the So funding so that can source a rationale POA for of be XX. that that’s of little there, a sizable bit

more of the I get POA goes flow and more source confidence faster Rochester through far, as these silver funding own and cash to the year deliver be, largest operating think, XX. But and by we out higher Its recoveries. of will

Joseph Reagor

it I’ll over. Thanks. Okay. turn

Mitchell Krebs

Thanks, Okay. Joe.

Operator

for concludes the now conference this any And turn to you. I back Mitchell like Krebs session. remarks. over to question-and-answer Thank closing would the

Mitchell Krebs

it’s you results. with this everybody’s look appreciate again morning. and I our day, busy all go time speaking the through a we spring quarter in to first forward to hey, know Well, Okay. we’ll

So time. day. for have a your Thanks good

Operator

presentation. for has Thank The now you. conference you Thank today’s attending concluded.

disconnect may your You lines. now

Coeur Mining (CDE) 20 Feb 202019 Q4 Earnings call transcript