Earnings call transcript Q4 2022

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Operator

Good day and welcome to the Coeur Mining Fourth Quarter 2022 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. Please note, this event is being recorded.

I would now like to turn the conference over to Mitchell Krebs, President and CEO. ahead. go Please

Mitchell Krebs

thanks earnings and our quarter fourth Good for XXXX call. and morning, joining

begin, cautionary call our Before statements note three with please I our on highlights Mick, slide our I'll slide and Tom the on Aoife. main in turning language deck refer to filings to the SEC before website. start over today's forward-looking on and

to consecutive achieve guidance strongest Rochester silver to quarter on of with gold to Ongoing track and the infrastructure such third to costs. newly Rochester's year. increased was over mid-year. for helped production year we contributed Coeur's with expanded remains quarter solid definitely our easy enhancements and begin our the results sharply Both the where fourth was an as full The transition lower which to XX% quarter-over-quarter overall construction year driver not task operational year, completed last the year, finish the grades be last production main volatility. higher unprecedented

achieved year XX% expansion. and drivers terms objectives advance long-term. on to Rochester believe and the the is in project budget short-term, of we last month schedule. medium, In short, derisk that critical the company and value we for the important complete continue in are this The nearing We several remains and track

lives, details costs, minutes. mine our will provide investment We Tom that also extend a further free on fortified drive are production, the cash in few support to our existing positive assets in decrease which to balance levels of a sheet more elevated flow, to intended return increase and

drilling a last their got a life. Kensington to year multiyear its year team by In development the term, the approximately an early medium jump mind half and adding on program and at

lower further As we and Investor generating from solid optimistic our returns during in Kensington's higher about Day production from laid costs this life we're mine extending and investment. December, out

gold update resource reserves results mine the longer successfully and yesterday's reflects increased another year XX%, reserves which by want of from to while reserve on roughly term, I Year-over-year slide highlight increased the replacing our great X%. XX, Over approximately reserves. silver

past in business. Over $XXX a under-invested of equivalent component roughly years, million of this have time roughly we by in that during or critical many reserves net when invested time, our companies XX% nearly the the million exploration expanded Over have X depletion. gold ounces five have

results minutes. gold successes our provide In resources will on have million nearly or comments year-end some addition, equivalent increased and X exploration ounces approximately few XX%. in additional a and resource our our reserve Aoife

few a expansion, us Overall, can only that obviously as ahead look at free company not ramp but entire and positive thoughts objectives is to cash the flow. with across up achieve XXXX. post we construction our portfolio Just completion the quick back to the this the for to Rochester of transition execution, key year

We of anticipate XXXX two very different halves. will be comprised

first half, capital we to experience seasonal remain the operations. results high, During operating our pit expected from weaker two open intensity is while

relating quarter also interest driven XXXX tax compensation our half first The and first outflows payments. includes normal to

expected half, in Wharf after expected year XXXX. at lower by year the process of over strong is driven Rochester's Rochester. an Overall, as levels to year at ramp commissioning expected second increase intensity production year, half second XXXX to decline, expected capital production back up and to and the During last are stronger is begin by the sharply we bounce a and increase grade

and meaningful are strategy think An that silver. continues exclusively to by American remain up, of offers has that expansions key the have point and transformation sector, a impacts exposure sector closer To that to and strategy confident meaningful and for. a designed to us U.S.-centric what transformative business of and mix to that on North metals executing an that our closer multiyear everyone focus deliver growth unique our quickly investments and unrelenting working results, bringing is been in team this commitment on footprint, a is hard wrap pillars in generate the we leading growing contrarian to we exploration so

I'll that, turn over With to it Mick.

Michael Routledge

Thanks Mitch. by job start challenging great Mitch's done comments have on I'll the to amid circumstances. this deliver our last year echoing teams guidance

strategy, significant chairs With executing in the long-term consistently ability deliver value. people feel confident right the we to right the our in right

the environmental proud zero company. performance as and sustainably of, zero as best the Our health well to safety to over achievement drive journey to is teams a that journey as delivering to be history continue but of and get we not with in progressed harm exposures we in as quickly possible. What XXXX the the fantastic control to

Despite brief to six production a our uptick in fourth nice CAS led slide the range on of Higher of and silver challenges, production quarter year summary came to recap closer XXXX. in flow nearly with silver to as cash beginning Palmarejo. the of of the delivered high gold year. headwinds inflationary gold Turning free high and in and Full year million to gold guidance team throughput a all and for on end an long. these the fought and mill guidance end finished finish Palmarejo $XX grades

in volatile. a reflects easing costs, production our remain input Despite certain of Looking gains similar costs production, cost ahead, as anticipates in silver caution continued terms Palmarejo's gold of guidance overall higher. is for XXXX significantly XXXX while year gains

pad the half in in silver latter September its come year Rochester. gold of increases and the quarter we four production main silver difference surge Rochester high higher saw Moving due of exceed significantly fourth the in gold October and driven production made quarter. by in production in end the placed for guidance This the the and grades in began helping at were XX%-plus guidance. the to the grades that to The sequencing in its on breakthrough

quarter the attributable to gold versus sales. silver basis Fourth quarter adjusted high CAS previous and due for metal product a core down on were

turn mid-year, pervading the of X, transitional the the during nature begin Rochester There defer start crushing summer. leach year we guidance to the the will crushed we given elected XXXX, moving on ore parts ahead. of new through a plant have lot on in We we on Stage rock placing circuit XXXX and placing later be VI until February at cost Merrill-Crowe pad as QX

number area, well erection crusher the crushers of remains is proceeding. prins the non-schedule, as the is project visible work area. four The proceeding construction is clearly in XX corridor. slates HBGR [ph] above equipment above the tertiary demonstrate on the POA The budget, as installation secondary crusher in in The peak on steel and crushers the that levels corn door at crushing

and the first for milestones programming POA all hours plant well the Electrical to now the cladding, remains at with presentation of passed a The project X.X in has XXst in line highlights progress schedule. installation the for process cable and piping equipment of on the XX systems on I'm track XX. Slide factory PXX plant key project end XXXX, building unaware. incident. half as lost at pleased of our now January the million setting, completion XXXX process also complete. Merrill-Crowe without testing Mechanical are control are report that construction time

new a again, Once to job Turning by record reach a to all-time mill in great team the Kensington. throughput.

low of well Kensington guidance strong missing the XXXX levels a end continues asset. cost. make led there XXXX for bodes and and of of reflect to production just future mark leadership of the to guidance. production key through Challenging this New the similar most recoveries

With discussed a the development for be will of capital Kensington, up of at previously Main busy year future. strong to infusion the period this a set

of some setting its the overcame XXXX snowfalls expectations team the significant return for to anticipated rates more Wharf, flow with reflects typical ahead. guidance briefly ranges, XXXX gold production stronger Finishing stage range. cash within finish the high quarter CAS the the guidance similar end a in year in with to near

With that, the pass Tom. to call I'll over

Thomas Whelan

Thanks Mick.

before slide consolidated to review begin the on XXXX four. our and guidance results the balance Turning sheet. touching our of with I'll financial

expected, increase As Sterling gain hedges XX% of EBITDA a on the our from driven quarter results our were year from goal gains prices, and to along $XX the led fourth sale Higher our Crown. improved in million by production gold Coeur's highest with quarter-over-quarter. financial

which took some to of quarter. to prices hedging, $XX program downside our million protection net of million gold additional fourth XXXX short-term realized momentum silver in we the Subsequent add gains, for XXXX. of was $XX price and Speaking year-end, advantage provided of in

Inflation remains a headwind on our financial sector's performance.

in for slide demonstrates prices, seen pressure diesel key the cost five we a outlook While our some challenging our Accordingly, continues to moderation XXXX operating costs. on continued have buckets. assume year

to cost at committed exposure report am continued of XX million with million POA capital pleased now the I approximately decrease incurred. estimated and $XXX Coeur $XXX that capital to

of remaining be the approximately CapEx remains As Mitch on track incurred and the first during Mick half of the mentioned, on XX% project to expected the both year. budget with and

to Turning guidance. XXXX

cash Our approach flow have Investor year. guidance key and production, on Day our completion operating consistent already messages with tale Mick capital the as free and the inflection XX halves post XXXX point of POA this around of we remains hit POA December, costs, XX. Mitch two the

will risk of reduce the very overall within growth important NAV highlight additional I to we a which items couple deliver want guidance, company. expect for and the

which and allocated and mines. exploration value at mine reduce and underground to Palmarejo, extend have accretive for Kensington is We risk lives additional at mine development capital both expected

which Kensington has mine, us new permit sites during the these allowed this capacity significant tailings new year Palmarejo, accommodate which tailings X includes open be on a milestone. is capacity. XXXX. to POA lives, both Obtaining at the To mine pit, inside are tailings in program crucial permitted multiyear aggressive derisking investing old capacity at progress extended the that amendment the last At will environmental

operating slide macro about of the provides silver over potential for final tale inflation. gold halves $XXX We featuring several led to has take do, concern, of the XX Turning short-term coupled during sheet, of capital and financial remain a snapshot in months to total concerned intensity of however, to Rochester. cost and our balance of flexible liquidity position, sheet the overall actions few continued million. us balance two This environment with at good these our XXXX, our prices keep

our $XXX million, for a financing of million our recently strategy which Victoria we include revolving of in elements key position monetized capacity. has The facility, Gold credit remaining $XX

program ounces to per hedge downside ounce for place hedged approximately risk during gross a XXXX at commodity this $X,XXX proceeds gold million. million ounce, XXX,XXX protection of per hedging up $XX.XX capital $XXX head put Our we into at potential to ounces in new with ATM X.X designed price provide silver of of and and of intensity. We period

leave to will total initiatives key us enhance provide the industry-leading return to required transform These liquidity that the balance high feeling our deliver taken potential the company. that comfortable our will flexibility sheet growth

I'll to it now Aoife. turn over

Aoife McGrath

Tom. Thanks

in growth at said with reserves our to Mitch earlier, site. led XXXX exploration each As global successful in increase an

already to bearing key by plan few with described zones XX, XXXX. from a open at of our Looking growth majority reserves XXA, Investor and the is increasing fruit, The Kensington, we exploration expand XX%. XXB. this will these multiyear zones highlights. continue areas drill Day impressive and through These info in Kensington and December an came remain upper At

and with we the that along In and and addition geological to Elmira, and Johnson deposit both in of grades Detailed us for will we deposits Kensington, at increasing growth and beyond. deposit understanding vector resource XXXX zones. reserve to our Kensington, new higher this saw modeling help are opportunities hopeful this is all additions in show

also year-over-year. zinc indicated by XX%, high exploration we silver, our increasing notable At lead saw and and Silvertip resources with respectively growth XX% project, XX%, in measured grade

achievements. notable XXXX exploration following an the year was exciting for with

Silver extent of shown on to increasing Firstly, expanded amenable units, Mineralization This for meters is increased amount to vertical manto multiple the and in strike also was opportunity that column as along mineralization. approximately intersected more XX. drilling thereby the Southern the stratigraphic X,XXX opened chimneys. slide at XXX significantly stratigraphic mineralization up stack and multiple Zone meters

zone Secondly, discovery in beneath follow thirdly, manto chimney targets XXXX. for of And drilling the saddle new chimney generated new scout structures up in discovery zone. the the

see right expand a reserve We to future production, believe at to economics free enable mine, decision We are boost Silvertip continued long now how sufficient base cash is costs, compelling. the to Coeur's have a a is opportunity be once sufficiently proceed good Silvertip we on that to life potential reduce flow. growth to build and and visibility global

I'll to now pass Mitch. the call back

Mitchell Krebs

Thanks Aoife.

highlight to for want summarizes I clear our priorities Q&A, the to that moving XX slide XXXX. Before

new to at year. growth plan end successfully and company. the cusp I As front the a on this objectives, on delivering mentioned pivotal we in of execution remains outset, By these the XXXX for center reach the base of

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

Operator

We'll now session. begin Instructions] question-and-answer the [Operator

Michael Our Research first from Partners. question ahead. comes from Please Dudas Vertical go

Michael Dudas

Good morning everyone.

Mitchell Krebs

Hi, Mike.

Michael Dudas

consume know enough, I XXXX couldn't Mitch.

over seeing ramp about or you what's what's Rochester, guys what guys next is the -- that you Regarding the your point on are marketplace the completion the targets and hurdle will occur -- pinch construction the few what are today? within that months confidence talking

Mitchell Krebs

a Yeah. Good is of it's busy lot the parts -- a question. moving year with This out there.

together coming through pad, the here the focused or Stage that. on it the which second the first this complete. comes now of on is crusher start with half Merrill-Crowe second and the up then quarter, IV throughout All rock midsummer, stacking and half in it putting of next now We're ramping we year. leach

Mick, do that throughout you are of to bit other the moving some give little the on want year? detail parts there going a on of

Michael Routledge

Yeah. Exactly. Yeah.

up that commission throughout the so great And stacking the we'll plan. first middle stopping completed the when across But we're through now seeing to moved right year. we then, the in was start on pad as on of and six the metal of year per the to the we'll on the we'll then, from pad to That out and see half expect that that heat that February to now continue So, Merrill-Crowe. building of six, leach And inventory year inventory second four, schedule. leach X. a in four pad some pad metal of half come achievement we on milestone

covering From schedule. -- normal Keywood job any through reloading challenging went done still a on rest fully project track, track. the still perspective, And manpower and that the for man And we a the up and around on from we're although winter fantastic the continuing perspective Nevada at TIC have project that loading and of throughout the we're a on PXX stay attrition to and to we're get what the done project project project on year. [ph]

Mitchell Krebs

activities Just up ramps the started what set and that to should ensuring about for into about smoothly on around that, half The this a of into noticeably onto and that point more growth second deliver thing throughout and we as operational that around needs inflection plans XXXX. and to here ramp-up transition construction schedule in add flow year up head to cash Mike. quite go back everything has half that production readiness, the be less to schedule the us -- conversation

are where there So, the noticeable -- are shift in focus new it's where terms been what now. priorities the there's of and -- areas a the out

exciting to So, that's see.

Michael Dudas

is, positive Silvertip project thoughts getting My pretty structure, Rochester in is results. from you're That's you Any done? follow-up very to on Investor encouraging, how changes recognizing about Mitch. job just or Day discussed some thinking the one today? Timing

Mitchell Krebs

Yeah.

in we the there. You grow in. The year-over-year. we expand have really this POA up POA percentage said a there, confidence acquired and resource continuing lot it even is mentioned growth which the of year-over-year. it seen significantly costs it metals We've the one just in that as twofold, XXXX the right we since different Aoife year to minimizing and is priorities at Job are prioritize XX holding Silvertip XX execution.

be about year a to Targeting we a on bit smaller the that program bit last Aoife. as keep a couple will that expanding few to year. Aoife that little to we the that, confidence into bit is resource, the operation. compared a confidence in out that and as more think in that I to of priority things now compelling want justify that's thought It'll of up, would But you of some the We lot go maybe step do capital the case will being more that for so help us put a continue. a this say starting which and growing a can, more another a have that just together expansion business we confidence the have going years -- side a lot with that has a is, and

Aoife McGrath

we had up XXXX understanding -- mean, the Silvertip. really year developed. deposit I Yeah. there are We really in great our a of at

of this quite becoming important an at Zone moment. itself the is Silver part Southern story

we've open the over to strike meters. meters. extent date, And XXX is still extended -- So, extent along of X,XXX there mineralization it's vertical

Zone very itself It's a something well. that body, it's in a potentially chimney, up an tons ore to can is easier that Silver mining for scenario a add -- significantly there. that it's vertical as us Southern is the opening so So

we'll South, date of another a that's can we few last discovery mineralization, into. scout to zone. all In -- -- some been new that, down also under scheduling found addition kilometers year. to that, few manto on to And horizon did zone, the follow and holes the intersection over Tour horizontal we has way down more under sub extent all and which sub the years Ridge, to the zone we which And are expand chimneys a up we our this that scheduling some

Mitchell Krebs

this can have reduce in the So, get an flow, Mike, get Silvertip, JV. back have that the positive the we non-operating it way go we cash there. to that back we to some whether debt, at point free a where that's get business in business whether lens resource to to partner, expanding at which we meantime, POA point that or options XX case to partner, attractive is just bring then, and alone, case pull costs, drilling Silvertip need we to get think a then at JV, whether year point and a But lower strategic to financial a operating compelling partner about keep

that's we sit And the today. progression, of the as priorities so here kind and

Michael Dudas

everyone. Sounds very Thank your you. prudent, thoughts Appreciate Mitch.

Mitchell Krebs

Okay. Thanks Mike.

Operator

[Operator Instructions]

session. our the would for questions like turn closing are Mitchell Krebs in the no more to to over There any back concludes This conference I queue. question-and-answer remarks.

Mitchell Krebs

busy to good quarter look in Thanks reporting this everybody's all after period, hey, springtime. forward we Have time the with you Well, first day. during again. a talking and today the Okay. appreciate we

Operator

presentation. attending Thank you concluded. today's for now has Conference

now disconnect. You may

Coeur Mining (CDE) 23 Feb 232022 Q4 Earnings call transcript