Coeur Reports Fourth Quarter and Full Year 2017 Production and Sales Results and Provides 2018 Production Guidance

09-Jan-2018 9:02 AM



Quarterly Production Results (Graphic: Business Wire)

Quarterly Production Results (Graphic: Business Wire)
 

CHICAGO--()--Coeur Mining, Inc. (the "Company" or "Coeur") (NYSE: CDE) today announced record fourth quarter silver equivalent1 production of 11.7 million ounces, consisting of 4.5 million ounces of silver and 119,114 ounces of gold. Silver equivalent1 production increased 23% quarter-over-quarter and 17% year-over-year. Silver production increased 15% quarter-over-quarter and 17% year-over-year, while gold production increased 28% and 16%.

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Full-year 2017 silver equivalent1 production, also the highest in Company history, totaled 39.4 million ounces, which was 9% higher compared to 2016. Full-year silver production was 16.4 million ounces, 11% higher than in 2016 and at the high-end of the Company's guidance of 15.3 - 16.6 million ounces. Full-year gold production was 383,444 ounces, 7% higher than in 2016 and in-line with Company guidance of 367,000 - 392,000 ounces. Production growth was driven primarily by the Palmarejo mine, where 2017 silver equivalent1 production increased 64% compared to 2016.

In 2018, Coeur expects to produce 36.6 - 40.0 million silver equivalent1 ounces, consisting of 12.8 - 14.4 million ounces of silver, 355,000 - 375,000 ounces of gold, and 23.0 - 28.0 million pounds of both zinc and lead.

Metal sales for the fourth quarter of 4.6 million ounces of silver and 123,675 ounces of gold, or 12.0 million silver equivalent1ounces, were in-line with production. Full-year metal sales of 16.9 million ounces of silver and 410,715 ounces of gold, or 41.6 million silver equivalent1 ounces, reflects a reduction in inventory carried over from 2016.

Operations

Fourth quarter and full-year 2017 production and sales highlights for each of Coeur's operations are provided below.

Palmarejo, Mexico

2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 4Q 2016
Tons milled 1,498,421 389,524 413,086 335,428 360,383 1,078,888 287,569
Average silver grade (oz/t) 5.62 6.92 5.53 4.98 4.91 4.66 4.95
Average gold grade (oz/t) 0.09 0.10 0.08 0.08 0.09 0.08 0.09
Average recovery rate – Ag 86.0% 87.0% 83.6% 87.3% 86.5% 88.4% 89.1%
Average recovery rate – Au 90.0% 92.0% 83.1% 91.1% 93.7% 86.5% 90.4%
Ounces Produced
Silver (000's) 7,242 2,346 1,908 1,457 1,531 4,442 1,269
Gold 121,569 37.537 28,948 24,292 30,792 73,913 23,906
Silver equivalent1 (000's) 14,536 4,600 3,644 2,914 3,378 8,877 2,703
Ounces Sold
Silver (000's) 7,586 2,343 1,794 1,484 1,965 3,993 937
Gold 131,743 38,953 26,554 25,191 41,045 59,081 15,558
Silver equivalent1 (000's) 15,491 4,681 3,387 2,996 4,427 7,538 1,872
Silver equivalent1 (average spot) (000's) 17,301 5,331 3,809 3,324 4,837 8,305 2,042
  • Fourth quarter silver equivalent1 production increased 26% quarter-over-quarter and 70% year-over-year to 4.6 million ounces, while full-year 2017 silver equivalent1 production of 14.5 million ounces was above the high-end of the Company's guidance range and represented an increase of 64% over 2016
  • Fourth quarter silver and gold grades rose approximately 25%, quarter-over-quarter, while full-year 2017 silver and gold grades increased 21% and 12%, respectively, compared to 2016 due to mining of higher-grade zones at Independencia. Grades are expected to decrease gradually during the first quarter of 2018 due to mine sequencing
  • Higher recovery rates during the fourth quarter resulted from normalization of mill inventory levels
  • Fourth quarter silver and gold sales were in-line with production, while full-year sales were higher than production due to a reduction in inventory carried over from the fourth quarter of 2016
  • Gold sales during the quarter and year included 13,740 and 52,124 ounces, respectively, sold to Franco-Nevada at a price of $800 per ounce
  • Full-year 2018 production is expected to be 6.5 - 7.1 million ounces of silver and 110,000 - 115,000 ounces of gold, or 13.1 - 14.0 million silver equivalent1 ounces

Rochester, Nevada

2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 4Q 2016
Tons placed 16,440,270 4,171,451 4,262,011 4,493,100 3,513,708 19,555,998 3,878,487
Average silver grade (oz/t) 0.53 0.50 0.53 0.53 0.58 0.57 0.57
Average gold grade (oz/t) 0.003 0.003 0.004 0.003 0.002 0.003 0.002
Ounces Produced
Silver (000's) 4,714 1,361 1,070 1,156 1,127 4,564 1,277
Gold 51,051 18,995 10,955 10,745 10,356 50,751 14,231
Silver equivalent1 (000's) 7,777 2,500 1,727 1,801 1,749 7,609 2,131
Ounces Sold
Silver (000's) 4,931 1,457 1,050 1,135 1,289 4,584 1,205
Gold 54,642 20,002 10,390 10,658 13,592 49,320 12,988
Silver equivalent1 (000's) 8,210 2,658 1,674 1,774 2,104 7,543 1,984
Silver equivalent1 (average spot) (000's) 8,961 2,969 1,839 1,913 2,240 8,183 2,128
  • Fourth quarter silver equivalent1 production increased 45% quarter-over-quarter to 2.5 million ounces, with silver production increasing 27% to 1.4 million ounces and gold production rising 73% to 18,995 ounces. Higher production was driven by concurrent leaching of the Stage III and Stage IV pads as well as the timing of recoveries from the newly-expanded Stage IV leach pad. Gold production also benefited from the placement of higher gold grade ore during the third quarter and early fourth quarter
  • Full-year silver equivalent1 production of 7.8 million ounces was relatively unchanged year-over-year due to the completion of construction and commissioning of the Stage IV leach pad
  • Full-year 2018 production is expected to be 4.2 - 4.7 million ounces of silver and 45,000 - 50,000 ounces of gold, or 6.9 - 7.7 million silver equivalent1 ounces

Kensington, Alaska

2017

4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 4Q 2016
Tons milled 668,727 167,631 172,038 163,163 165,895 620,209 163,410
Average gold grade (oz/t) 0.18 0.22 0.17 0.17 0.17 0.21 0.22
Average recovery rate 93.5% 92.8% 94.1% 93.2% 94.0% 94.7% 94.4%
Gold ounces produced 115,094 34,932 27,541 26,424 26,197 124,331 33,688
Gold ounces sold 125,982 35,634 29,173 29,031 32,144 121,688 28,864
  • Fourth quarter gold production increased 27% quarter-over-quarter to 34,932 ounces, Kensington's highest quarterly production since the fourth quarter of 2013. This was primarily the result of mining the higher-grade Raven zone, which drove average grades 29% higher to 0.22 oz/ton
  • Full-year production of 115,094 ounces was below the Company guidance range due to lower-than-expected grades throughout the first nine months of the year
  • Full-year gold sales were higher than production due to reductions in inventory throughout the year, particularly in the first quarter
  • During the fourth quarter, mining of development ore continued at Jualin, where production is expected to accelerate throughout 2018 as the Company dewaters the mine area to facilitate more efficient drilling, development, and mining activities
  • Raven is expected to remain a supplemental source of higher-grade material throughout the year
  • 2018 gold production is expected to total 115,000 - 120,000 ounces

Wharf, South Dakota

2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 4Q 2016
Tons placed 4,560,441 1,124,785 1,150,308 993,167 1,292,181 4,268,105 1,178,803
Average gold grade (oz/t) 0.027 0.029 0.029 0.024 0.027 0.032 0.027
Ounces produced
Gold 95,372 27,292 25,849 21,358 20,873 109,175 30,675
Silver (000's) 64 16 15 13 20 105 32
Gold equivalent1 96,431 27,560 26,096 21,568 21,207 110,927 31,202
Ounces sold
Gold 98,237 28,975 23,855 21,314 24,093 108,042 29,698
Silver (000's) 74 16 14 11 33 95 30
Gold equivalent1 99,472 29,256 24,085 21,495 24,636 109,620 30,204
  • At Wharf, gold production in the fourth quarter increased 6% quarter-over-quarter to 27,292 ounces, attributable primarily to strong sustained crusher production and gold grades
  • For the full year, gold production decreased 13% to 95,372 ounces as a result of lower grades following completion of mining at the higher-grade Golden Reward deposit during the third quarter
  • Tons placed for the full year reached 4.6 million, up from 4.3 million in 2016 and 3.6 million in 2015
  • In 2018, the Company anticipates full-year production of 85,000 - 90,000 ounces of gold

San Bartolomé, Bolivia

2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 4Q 2016
Tons milled 1,509,708 342,103 365,554 417,784 384,267 1,666,787 368,131
Average silver grade (oz/t) 3.17 2.80 3.01 3.31 3.49 3.69 3.96
Average recovery rate 89.3% 84.8% 87.0% 92.8% 90.7% 88.8% 86.3%
Silver ounces produced (000's) 4,270 813 957 1,285 1,215 5,469 1,259
Silver ounces sold (000's) 4,241 744 951 1,398 1,148 5,411 1,218

Note: San Bartolomé also produced and sold 358 and 111 ounces of gold, respectively, during the fourth quarter

  • Lower fourth quarter and full-year silver production of 0.8 million and 4.3 million ounces, respectively, reflected persistent drought conditions in the Potosí region of Bolivia. In addition to restricting mill operations, water shortages have curtailed mining by third parties, from whom higher-grade ore is sourced
  • On December 22, 2017, Coeur announced plans to divest the San Bartolomé mine through the sale of its 100%-owned Bolivian subsidiary to Argentum Investments, AB. The Company’s 2018 production guidance of 0.6 million silver ounces reflects the anticipated closing of this transaction in the first quarter of 2018
  • Coeur will present San Bartolomé as discontinued operations when it reports fourth quarter and full-year 2017 financial results on February 7, 2018. The mine will be excluded from consolidated operating metrics and financial results, which reflect continuing operations, unless otherwise noted

2017 Production Results

Coeur's 2017 production results are shown below, along with its most recent production guidance as of October 25, 2017.

Silver (K oz) Gold (oz) Silver Equivalent1 (K oz)
Guidance Result Guidance Result Guidance Result
Palmarejo 6,500 - 7,000 7,242 110,000 - 120,000 121,569 13,100 - 14,200 14,536
Rochester 4,200 - 4,700 4,714 47,000 - 52,000 51,051 7,020 - 7,820 7,777
Kensington 120,000 - 125,000 115,094

7,200 - 7,500

6,906

Wharf 64 90,000 - 95,000 95,372 5,400 - 5,700 5,786
San Bartolomé 4,500 - 4,750 4,270 358 4,500 - 4,750 4,291
Endeavor 107 107 107 107
Total 15,307 - 16,557 16,397 367,000 - 392,000 383,444 37,327 - 40,077 39,403

2018 Production Guidance

The Company's full-year 2018 production guidance reflects the anticipated sale of San Bartolomé and the recommencement of production at Silvertip, both of which are expected to occur during the first quarter.

Silver

Gold Zinc Lead Silver Equivalent1
(K oz) (oz) (K lbs) (K lbs) (K oz)
Palmarejo 6,500 - 7,100 110,000 - 115,000 13,100 - 14,000
Rochester 4,200 - 4,700 45,000 - 50,000 6,900 - 7,700
Kensington 115,000 - 120,000 6,900 - 7,200
Wharf 85,000 - 90,000 5,100 - 5,400
San Bartolomé 600 600
Silvertip 1,500 - 2,000 23,000 - 28,000 23,000 - 28,000 4,030 - 5,080
Total 12,800 - 14,400 355,000 - 375,000 23,000 - 28,000 23,000 - 28,000 36,630 - 39,980

Financial Results and Conference Call

Coeur will report its fourth quarter and full-year 2017 financial results on February 7, 2018 after the New York Stock Exchange closes for trading. There will be a conference call on February 8, 2018 at 11:00 a.m. Eastern Time.

Dial-In Numbers: (855) 560-2581 (U.S.)
(855) 669-9657 (Canada)
(412) 542-4166 (International)
Conference ID: Coeur Mining

Hosting the call will be Mitchell J. Krebs, President and Chief Executive Officer of Coeur, who will be joined by Peter C. Mitchell, Senior Vice President and Chief Financial Officer, Frank L. Hanagarne, Jr., Senior Vice President and Chief Operating Officer, Hans Rasmussen, Senior Vice President of Exploration, and other members of management. A replay of the call will be available through February 22, 2018.

Replay numbers: (877) 344-7529 (U.S.)
(855) 669-9658 (Canada)
(412) 317-0088 (International)
Conference ID:

101 15 644

About Coeur

Coeur Mining, Inc. is a well-diversified, growing precious metals producer with six mines in the Americas employing approximately 2,300 people. Coeur’s wholly-owned operations include the Palmarejo silver-gold complex in Mexico, the Silvertip silver-zinc-lead mine in British Columbia, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska, the Wharf gold mine in South Dakota, and the San Bartolomé silver mine in Bolivia. In addition, the Company owns the La Preciosa project in Mexico, a silver-gold exploration stage project. Coeur conducts exploration activities in North America.

Cautionary Statement

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding anticipated production, grades, mining efficiencies, development efforts and operations at Kensington, the anticipated sale of the San Bartolomé mine, and timing for recommencement of production at Silvertip. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Coeur's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the risk that anticipated production levels are not attained, the risk that the sale of the San Bartolomé mine is not completed on a timely basis or at all, the risk that recommencement of production at Silvertip will be delayed, the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), changes in the market prices of gold, silver, zinc, and lead and a sustained lower price environment, the uncertainties inherent in Coeur's production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, ground conditions, grade variability, any future labor disputes or work stoppages, the uncertainties inherent in the estimation of gold and silver reserves, changes that could result from Coeur's future acquisition of new mining properties or businesses, reliance on third parties to operate certain mines where Coeur owns silver production and reserves and the absence of control over mining operations in which Coeur or its subsidiaries hold royalty or streaming interests and risks related to these mining operations including results of mining and exploration activities, environmental, economic and political risks of the jurisdiction in which the mining operations are located, the loss of any third-party smelter to which Coeur markets silver and gold, the effects of environmental and other governmental regulations, the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, Coeur's ability to raise additional financing necessary to conduct its business, make payments or refinance its debt, 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, and the Canadian securities regulators, including, without limitation, Coeur's most recent 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.

Christopher Pascoe, Coeur's Director, Technical Services and a qualified person under Canadian National Instrument 43-101, approved the scientific and technical information concerning Coeur's mineral projects in this news release. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as data verification procedures and 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, Canadian investors should refer to the Technical Reports for each of Coeur's properties as filed on SEDAR at sedar.com.

Notes

  1. Silver and gold equivalence assumes a 60:1 silver-to-gold ratio, except where noted as average spot prices. Please see the table below for average applicable spot prices and corresponding ratios. Silver and zinc equivalence assumes a 0.06:1 silver-to-zinc ratio. Silver and lead equivalence assumes a 0.05:1 silver-to-lead ratio.

Average Spot Prices

2017 4Q 2017 3Q 2017 2Q 2017 1Q 2017 2016 4Q 2016
Average Silver Spot Price Per Ounce

$

17.05

$ 16.73 $ 16.84 $ 17.21 $ 17.42 $ 17.14 $ 17.19
Average Gold Spot Price Per Ounce

$

1,257

$ 1,275 $ 1,278 $ 1,257 $ 1,219 $ 1,251 $ 1,222
Average Silver to Gold Spot Equivalence

74:1

76:1 76:1 73:1 70:1 73:1 71:1

Contacts

Coeur Mining, Inc.
Courtney Lynn, Vice President, Investor Relations and Treasurer
(312) 489-5800
www.coeur.com


 

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