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Coeur Reports Strong Second Quarter Financial And Operating Results; Provides Positive Update To 2012 Guidance

About Coeur

Coeur d'Alene Mines Corporation is the largest U.S.-based primary silver producer and a growing gold producer. The Company built and commenced production from three wholly-owned, long-lived mines between 2008 and 2010: the San Bartolomé silver mine in Bolivia, the Palmarejo silver-gold mine in Mexico and the Kensington gold mine in Alaska. Further production has commenced from a new heap leach pad at Coeur's long-time Rochester silver-gold mine in Nevada. The Company also owns and operates the Martha silver-gold mine in Argentina and owns a non-operating interest in a silver-base metal mine in Australia. Coeur conducts ongoing exploration activities near and within its operating properties in Argentina, Mexico, Alaska, Nevada and Bolivia. In addition, Coeur owns strategic minority shareholdings in seven silver and gold development companies in North and South America.

   

Table 6: Operating Statistics from Continuing Operations:

 
Three months ended

June 30,

Six months ended

June 30,

2012   2011 2012   2011

Silver Operations:

Palmarejo
Tons milled 489,924 414,719 1,018,467 813,459
Ore grade/Ag oz 5.74 7.30 5.94 6.65
Ore grade/Au oz 0.07 0.08 0.07 0.08
Recovery/Ag oz 84.2 % 78.3 % 80.2 % 75.8 %
Recovery/Au oz 92.0 % 95.2 % 92.6 % 91.5 %
Silver production ounces 2,365,484 2,370,536 4,848,298 4,100,303
Gold production ounces 31,258 33,389 62,338 61,148
Cash operating cost/oz $ (0.85 ) $ (3.68 ) $ (1.58 ) $ (0.10 )
Cash cost/oz $ (0.85 ) $ (3.68 ) $ (1.58 ) $ (0.10 )
Total production cost/oz $ 17.28 $ 14.16 $ 15.10 $ 18.48
San Bartolomé
Tons milled 391,005 378,640 769,109 766,308
Ore grade/Ag oz 4.26 5.24 4.43 5.11
Recovery/Ag oz 88.3 % 87.7 % 89.8 % 88.2 %
Silver production ounces 1,470,342 1,741,578 3,061,634 3,452,525
Cash operating cost/oz $ 11.05 $ 8.73 $ 10.62 $ 8.93
Cash cost/oz $ 12.04 $ 10.32 $ 11.76 $ 10.40
Total production cost/oz $ 14.89 $ 13.51 $ 14.44 $ 13.44
Martha
Tons milled 39,199 22,122 73,268 39,940
Ore grade/Ag oz 3.52 5.44 3.94 8.39
Ore grade/Au oz 0.003 0.01 0.004 0.01
Recovery/Ag oz 78.2 % 84.0 % 79.8 % 83.8 %
Recovery/Au oz 72.4 % 72.4 % 68.6 % 74.3 %
Silver production ounces 107,895 101,122 230,688 281,107
Gold production ounces 97 112 181 356
Cash operating cost/oz $ 55.07 $ 38.79 $ 50.50 $ 29.60
Cash cost/oz $ 56.21 $ 40.47 $ 51.39 $ 30.86
Total production cost/oz $ 62.30 $ 33.83 $ 56.74 $ 30.92
Rochester (A)
Tons milled 2,268,896 4,278,414
Ore grade/Ag oz 0.63 0.59
Ore grade/Au oz 0.005 0.005
Recovery/Ag oz 49.8 % 45.7 %
Recovery/Au oz 84.0 % 74.9 %
Silver production ounces 712,706 333,432 1,154,043 667,127
Gold production ounces 10,120 1,397 15,412 2,848
Cash operating cost/oz $ 9.83 $ 4.34 $ 15.00 $ 7.31
Cash cost/oz $ 11.45 $ 6.88 $ 16.54 $ 9.37
Total production cost/oz $ 14.66 $ 8.92 $ 20.02 $ 11.22
 
Three months ended

June 30,

Six months ended

June 30,

2012 2011 2012 2011
Endeavor
Tons milled 201,057 207,388 396,903 374,674
Ore grade/Ag oz 3.31 2.41 3.33 2.23
Recovery/Ag oz 36.1 % 42.9 % 36.9 % 43.5 %
Silver production ounces 240,168 214,613 488,126 363,795
Cash operating cost/oz $ 17.50 $ 20.04 17.07 $ 18.85
Cash cost/oz $ 17.50 $ 20.04 17.07 $ 18.85
Total production cost/oz $ 24.13 $ 24.07 23.70 $ 22.93

Gold Operation:

Kensington (B)
Tons milled 97,794 121,565 141,730 227,385
Ore grade/Au oz 0.23 0.23 0.22 0.23
Recovery/Au oz 94.2 % 93.0 % 94.0 % 92.7 %
Gold production ounces 21,572 25,758 29,016 49,434
Cash operating cost/oz $ 1,348 $ 924 $ 1,697 $ 955
Cash cost/oz $ 1,348 $ 924 $ 1,697 $ 955
Total production cost/oz $ 1,799 $ 1,308 $ 2,260 $ 1,345
CONSOLIDATED PRODUCTION TOTALS (B)
Total silver ounces 4,896,595 4,761,281 9,782,789

8,864,857

Total gold ounces 63,047 60,656 106,947

113,786

Silver Operations: (C)

Cash operating cost per oz - silver $ 6.41 $ 3.39 $ 6.35 $ 5.69
Cash cost per oz - silver $ 6.97 $ 4.19 $ 6.91 $ 6.46
Total production cost oz - silver $ 17.51 $ 14.42 $ 16.88 $ 16.55

Gold Operation: (D)

Cash operating cost per oz - gold $ 1,348 $ 924 $ 1,697 $ 954.78
Cash cost per oz - gold $ 1,348 $ 924 $ 1,697 $ 954.78
Total production cost per oz - gold $ 1,799 $ 1,308 $ 2,260 $ 1,345
CONSOLIDATED SALES TOTALS (E)
Silver ounces sold 5,601,953 4,133,283 9,892,001 7,792,436
Gold ounces sold 59,579 49,930 98,464 115,852
Realized price per silver ounce $ 29.28 $ 39.11 $ 30.72 $ 35.42
Realized price per gold ounce $ 1,610 $ 1,504 $ 1,646 $ 1,430
 

(A)

 

The Rochester mine recommenced production in the fourth quarter of 2011. The leach cycle at Rochester requires five to ten years to recover gold and silver contained in the ore. The Company estimates the ultimate recovery to be approximately 61% for silver and 92% for gold. However, ultimate recoveries will not be known until leaching operations cease, which is currently estimated for 2017. Current recovery may vary significantly from ultimate recovery. See Critical Accounting Policies and Estimates – Ore on Leach Pad in the Company’s Form 10-K for the year ended December 31, 2011.

(B)

Current production ounces and recoveries reflect final metal settlements of previously reported production ounces.

(C)

Amount includes by-product gold credits deducted in computing cash costs per ounce.

(D)

Amounts reflect Kensington per ounce statistics only.

(E)

Units sold at realized metal prices will not match reported metal sales due primarily to the effects on revenues of mark-to-market adjustments on embedded derivatives in the Company’s provisionally priced sales contracts.

 

Table 7: COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

   
June 30, 2012 December 31, 2011
ASSETS (In thousands, except share data)
CURRENT ASSETS
Cash and cash equivalents $ 199,397 $ 175,012
Short term investments 907 20,254
Receivables 70,443 83,497
Ore on leach pad 30,562 27,252
Metal and other inventory 145,144 132,781
Deferred tax assets 2,090 1,869
Restricted assets 456 60
Prepaid expenses and other   22,184     24,218  
471,183 464,943
NON-CURRENT ASSETS
Property, plant and equipment, net 693,026 687,676
Mining properties, net 1,945,763 2,001,027
Ore on leach pad, non-current portion 12,631 6,679
Restricted assets 29,134 28,911
Marketable securities 21,150 19,844
Receivables, non-current portion 45,352 40,314
Debt issuance costs, net 2,738 1,889
Deferred tax assets 132 263
Other   12,401     12,895  
TOTAL ASSETS $ 3,233,510   $ 3,264,441  
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable $ 66,991 $ 78,590
Accrued liabilities and other 8,321 13,126
Accrued income taxes 23,929 47,803
Accrued payroll and related benefits 18,119 16,240
Accrued interest payable 1,437 559
Current portion of debt and capital leases 82,708 32,602
Current portion of royalty obligation 63,269 61,721
Current portion of reclamation and mine closure 4,812 1,387
Deferred tax liabilities   53     53  
269,639 252,081
NON-CURRENT LIABILITIES
Long-term debt and capital leases 53,974 115,861
Non-current portion of royalty obligation 150,534 169,788
Reclamation and mine closure 30,531 32,371
Deferred tax liabilities 545,031 527,573
Other long-term liabilities   23,091     30,046  
803,161 875,639
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY

Common stock, par value $0.01 per share; authorized 150,000,000 shares, 89,901,675issued at June 30, 2012 and 89,655,124 issued at December 31, 2011

899 897
Additional paid-in capital 2,587,923 2,585,632
Accumulated deficit (417,885 ) (444,833 )
Accumulated other comprehensive loss   (10,227 )   (4,975 )
  2,160,710     2,136,721  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 3,233,510   $ 3,264,441  
 

Table 8: COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

   
Three months ended June 30, Six months ended June 30,
2012   2011 2012   2011
(In thousands, except share data)
Sales of metal $ 254,406 $ 231,090 $ 458,970 $ 430,714
Production costs applicable to sales (131,823 ) (77,102 ) (224,377 ) (169,576 )
Depreciation, depletion and amortization   (61,024 )   (57,641 )   (113,616 )   (107,682 )
Gross profit 61,559 96,347 120,977 153,456
COSTS AND EXPENSES
Administrative and general 8,594 1,827 16,190 14,058
Exploration 6,305 4,077 12,872 6,839
Loss on impairment and other   4,813         4,813      
Pre-development, care, maintenance and other   273     11,104     1,341     14,678  
Total cost and expenses   19,985     17,008     35,216     35,575  
OPERATING INCOME 41,574 79,339 85,761 117,881
OTHER INCOME AND EXPENSE
Loss on debt extinguishments (389 ) (856 )
Fair value adjustments, net 16,039 (12,432 ) (7,074 ) (17,700 )
Interest income and other, net (3,221 ) 2,763 1,786 4,664
Interest expense, net of capitalized interest   (7,557 )   (9,268 )   (14,227 )   (18,573 )
Total other income and expense, net   5,261     (19,326 )   (19,515 )   (32,465 )
Income before income taxes 46,835 60,013 66,246 85,416
Income tax provision   (23,862 )   (21,402 )   (39,298 )   (34,341 )
NET INCOME $ 22,973   $ 38,611   $ 26,948   $ 51,075  
BASIC AND DILUTED INCOME PER SHARE
Basic income per share:
Net income $ 0.26   $ 0.43   $ 0.30   $ 0.57  
Diluted income per share:
Net income $ 0.26   $ 0.43   $ 0.30   $ 0.57  
Weighted average number of shares of common stock
Basic 89,631 89,310 89,611 89,299
Diluted 89,733 89,712 89,777 89,683
 

Table 9: COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

   
Three months ended June 30, Six months ended June 30,
2012   2011 2012   2011
(In thousands) (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 22,973 $ 38,611 $ 26,948 $ 51,075
Add (deduct) non-cash items
Depreciation, depletion and amortization 61,024 57,641 113,616 107,682
Accretion of discount on debt and other assets, net 808 494 1,605 944
Accretion of royalty obligation 5,492 5,770 10,072 11,037
Deferred income taxes 9,690 4,223 17,368 10,093
Loss on debt extinguishment 389 856
Fair value adjustments, net (17,759 ) 13,933 4,018 20,593
Gain (loss) on foreign currency transactions 70 (848 ) 369 (737 )
Share-based compensation 1,033 (3,351 ) 3,170 4,804
(Gain) loss on sale of assets 264 (1,223 ) 264 (1,224 )
Loss on impairment 4,813 4,813
Other non-cash charges (40 ) 200 (40 ) 831
Changes in operating assets and liabilities:
Receivables and other current assets 10,319 (8,138 ) 7,365 (12,979 )
Prepaid expenses and other (2,857 ) 1,354 1,916 1,335
Inventories 3,097 (23,575 ) (21,625 ) (36,068 )
Accounts payable and accrued liabilities 14,276   25,585   (39,655 ) (11,392 )
CASH PROVIDED BY OPERATING ACTIVITIES 113,203   111,065   130,204   146,850  
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short term investments and marketable securities (6,831 ) (11,881 ) (7,866 ) (13,110 )
Proceeds from sales and maturities of short term investments 683 2,773 20,701 3,360
Capital expenditures (32,238 ) (25,764 ) (63,885 ) (41,681 )
Other 995   325   1,180   273  
CASH USED IN INVESTING ACTIVITIES (37,391 ) (34,547 ) (49,870 ) (51,158 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of notes and bank borrowings 27,500
Payments on long-term debt, capital leases, and associated costs (8,794 ) (16,704 ) (14,244 ) (34,099 )
Payments on gold production royalty (19,287 ) (17,441 ) (40,660 ) (32,059 )
Payments on gold lease facility (13,800 )
Additions to restricted assets associated with the Kensington Term Facility (1,325 )
Other (217 ) 30   (1,045 ) (1,197 )
CASH USED IN FINANCING ACTIVITIES (28,298 ) (34,115 ) (55,949 ) (54,980 )
INCREASE IN CASH AND CASH EQUIVALENTS 47,514 42,403 24,385 40,712
Cash and cash equivalents at beginning of period 151,883   64,427   175,012   66,118  
Cash and cash equivalents at end of period $ 199,397   $ 106,830   $ 199,397   $ 106,830  
 

Table 10: Operating Cash Flow Reconciliation

         
(in thousands) 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
 
Cash provided by operating activities $ 113,203 $ 17,002 $ 87,412 $ 181,911 $ 111,065
Changes in operating assets and liabilities:
Receivables and other current assets (10,319 ) 2,956 (8,904 ) 10,513 8,138
Prepaid expenses and other 2,857 (4,774 ) 8,839 8,697 (1,354 )
Inventories (3,097 ) 24,722 17,574 (23,234 ) 23,575
Accounts payable and accrued liabilities   (14,276 )   53,929     (7,452 )   (26,930 )   (25,585 )
Operating Cash Flow   $ 88,368     $ 93,835     $ 97,469     $ 150,957     $ 115,839  
 

Table 11: EBITDA Reconciliation

         
(in thousands) 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Net income (loss) $ 22,973 $ 3,975 $ 11,364 $ 31,060 $ 38,611
Income tax provision 23,862 15,436 52,390 27,606 21,402
Interest expense, net of capitalized interest 7,557 6,670 8,222 7,980 9,268
Interest and other income 3,221 (5,007 ) 4,697 6,610 (2,763 )
Fair value adjustments, net (16,039 ) 23,113 (19,035 ) 53,351 12,432
Loss on debt extinguishments 3,886 784 389
Depreciation and depletion   61,024     52,592     58,166     58,652     57,641  
EBITDA   $ 102,598     $ 96,779     $ 119,690     $ 186,043     $ 136,980  
 

Table 12: Adjusted Earnings Reconciliation

         
(in thousands) 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Net income (loss) $ 22,973 $ 3,975 $ 11,364 $ 31,060 $ 38,611
Share Based Compensation 1,033 2,137 2,861 457 (3,351 )
Deferred income tax provision 9,690 7,677 38,614 3,110 4,198
Interest expense, accretion of royalty obligation 5,492 4,580 5,523 4,990 5,770
Fair value adjustments, net (16,039 ) 23,113 (19,035 ) 53,351 12,432
Loss on impairment 4,813
Loss on debt extinguishments           3,886     784     389  
Adjusted Earnings (Loss)   $ 27,962     $ 41,482     $ 43,213     $ 93,752     $ 58,049  

Table 13: Results of Operations by Mine - Palmarejo

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of Metal $ 136.4 $ 123.7 $ 134.3 $ 166.9 $ 123.7
Production Costs $ 62.5 $ 45.9 $ 47.0 $ 64.1 $ 37.7
EBITDA $ 72.3 $ 76.5 $ 83.7 $ 100.4 $ 84.6
Operating Income $ 29.5 $ 38.8 $ 38.7 $ 61.6 $ 43.0
Operating Cash Flow $ 63.6 $ 81.4 $ 77.4 $ 91.2 $ 81.8
Capital Expenditures $ 11.2 $ 7.2 $ 12.1 $ 9.5 $ 10.3
Gross Profit $ 31.1 $ 40.1 $ 44.7 $ 61.6 $ 44.2
Gross Margin 22.8 % 32.4 % 33.3 % 36.9 % 35.7 %
 
  2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Underground Operations:
Tons Mined 162,820 158,030 191,966 143,010 144,614
Average Silver Grade (oz/t) 8.91 7.82 8.04 9.36 10.08
Average Gold Grade (oz/t) 0.14 0.11 0.11 0.13 0.14
Surface Operations:
Tons Mined 321,758 347,609 321,881 260,618 276,699
Average Silver Grade (oz/t) 4.14 5.32 5.88 6.56 5.85
Average Gold Grade (oz/t) 0.04 0.04 0.05 0.05 0.06
Processing:
Total Tons Milled 489,924 528,543 505,619 403,978 414,719
Average Recovery Rate – Ag 84.2 % 76.8 % 77.9 % 75.9 % 78.3 %
Average Recovery Rate – Au 92.0 % 93.3 % 92.4 % 93.6 % 95.2 %
Silver Production - oz (000's) 2,365 2,483 2,690 2,251 2,371
Gold Production - oz 31,258 31,081 34,108 29,815 33,389
Cash Operating Costs/Ag Oz $ (0.85 ) $ (2.27 ) $ (2.13 ) $ (1.16 ) $ (3.68 )
 

Table 14: Reconciliation of EBITDA for Palmarejo

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of metal $ 136.4 $ 123.7 $ 134.3 $ 166.9 $ 123.7
Production costs applicable to sales $ (62.5 ) (45.9 ) (47.0 ) (64.1 ) (37.8 )
Administrative and general $
Exploration $ (1.6 ) (1.3 ) (2.8 ) (2.2 ) (1.3 )
Care and maintenance and other $ (0.8 ) (0.2 )
Pre-development   $                  
EBITDA   $ 72.3     $ 76.5     $ 83.7     $ 100.4     $ 84.6  
 

Table 15: Operating Cash Flow for Palmarejo

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Cash provided by operating activities $ 90.5 $ 63.0 $ 70.9 $ 104.7 $ 62.9
Changes in operating assets and liabilities:
Receivables and other current assets $ (12.5 ) 5.4 5.7 (0.8 ) 8.9
Prepaid expenses and other $ 0.5 (1.9 ) (3.2 ) 3.4 (0.4 )
Inventories $ (11.5 ) 4.0 9.9 (16.2 ) 12.0
Accounts payable and accrued liabilities   $ (3.4 )   8.6     (5.9 )   0.1     (1.6 )
Operating Cash Flow   $ 63.6     $ 79.1     $ 77.4     $ 91.2     $ 81.8  
 

Table 16: Results of Operations by Mine - San Bartolomé

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of Metal $53.4 $41.4 $62.8 $102.8 $55.6
Production Costs $22.8 $13.6 $21.4 $30.1 $14.1
EBITDA $30.5 $27.7 $41.2 $72.5 $41.4
Operating Income $26.6 $23.5 $34.9 $66.7 $36.2
Operating Cash Flow $24.8 $20.8 $28.7 $49.6 $25.7
Capital Expenditures $7.8 $10.2 $6.5 $4.4 $3.3
Gross Profit $26.5 $23.5 $35.3 $66.7 $36.3
Gross Margin 49.6% 56.8% 56.2% 64.9% 65.3%
 
1Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Tons Milled 391,005 378,104 371,983 428,978 378,640
Average Silver Grade (oz/t) 4.3 4.6 5.4 5.4 5.2
Average Recovery Rate 88.3% 91.2% 90.5% 88.6% 87.7%
Silver Production (000's) 1,470 1,591 1,997 2,051 1,742
Cash Operating Costs/Ag Oz $11.05 $10.21 $9.18 $9.32 $8.73
 

Table 17: Reconciliation of EBITDA for San Bartolomé

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of metal $ 53.4 $ 41.4 $ 62.8 $ 102.8 $ 55.6
Production costs applicable to sales (22.8 ) (13.6 ) (21.4 ) (30.1 ) (14.1 )
Administrative and general
Exploration (0.1 ) (0.1 ) (0.1 ) (0.1 )
Care and maintenance and other (0.2 ) (0.1 )
Pre-development                    
EBITDA   $ 30.5     $ 27.7     $ 41.2     $ 72.5     $ 41.4  
 

Table 18: Operating Cash Flow for San Bartolomé

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Cash provided by (used in) operating activities $ 31.0 $ (27.4 ) $ 22.3 $ 78.1 $ 38.2
Changes in operating assets and liabilities:
Receivables and other current assets $ (0.7 ) 2.2 0.2 5.0 1.5
Prepaid expenses and other $ 4.4 (2.8 ) 4.6 0.2 (0.6 )
Inventories $ (3.4 ) 4.7 2.9 (7.2 ) 4.0
Accounts payable and accrued liabilities   $ (6.5 )   44.1     (1.3 )   (26.5 )   (17.4 )
Operating Cash Flow   $ 24.8     $ 20.8     $ 28.7     $ 49.6     $ 25.7  
 

Table 19: Results of Operations by Mine - Kensington

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of Metal $ 21.1 $ 10.4 $ 32.9 $ 44.2 $ 26.0
Production Costs $ 16.1 $ 17.1 $ 31.7 $ 24.3 $ 12.8
EBITDA $ 4.7 $ (6.9 ) $ 0.5 $ 19.6 $ 12.8
Operating Income/(Loss) $ (5.0 ) $ (13.6 ) $ (6.6 ) $ 10.3 $ 2.8
Operating Cash Flow $ 0.6 $ (7.8 ) $ (4.1 ) $ 14.5 $ 11.7
Capital Expenditures $ 9.3 $ 10.9 $ 12.0 $ 9.2 $ 7.4
Gross Profit/(Loss) $ (4.7 ) $ (13.3 ) $ (5.7 ) $ 10.3 $ 3.3
Gross Margin (22.3 )% (127.9 )% (17.3 )% 23.3 % 12.7 %
 
2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Tons Milled 97,794 43,936 71,700 116,255 121,565
Average Gold Grade (oz/t) 0.23 0.18 0.19 0.24 0.23
Average Recovery Rate 94.2 % 93.4 % 96.5 % 91.7 % 93 %
Gold Production 21,572 7,444 13,299 25,687 25,758
Cash Operating Costs/Ag Oz $ 1,348 $ 2,709 $ 1,807 $ 973 $ 924
 

Table 20: Reconciliation of EBITDA for Kensington

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of metal $ 21.1 $ 10.4 $ 32.9 $ 44.2 $ 26.0
Production costs applicable to sales (16.1 ) (17.1 ) (31.7 ) (24.3 ) (12.8 )
Administrative and general
Exploration (0.3 ) (0.2 ) (0.5 ) (0.3 ) (0.3 )
Care and maintenance and other (0.2 ) (0.1 )
Pre-development                    
EBITDA   $ 4.7     $ (6.9 )   $ 0.5     $ 19.6     $ 12.8  
 

Table 21: Operating Cash Flow for Kensington

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Cash provided by operating activities $ (12.5 ) $ 1.1 $ 9.3 $ 8.6 $ 7.6
Changes in operating assets and liabilities:
Receivables and other current assets $ 4.6 (10.3 ) (5.1 ) 5.0 (1.0 )
Prepaid expenses and other $ (0.5 ) (1.0 ) 0.5 1.3 0.2
Inventories $ 9.9 3.3 (10.1 ) (1.3 ) 8.0
Accounts payable and accrued liabilities   $ (0.9 )   (0.9 )   1.3     0.9     (3.1 )
Operating Cash Flow   $ 0.6     $ (7.8 )   $ (4.1 )   $ 14.5     $ 11.7  
 

Table 22: Results of Operations by Mine - Rochester

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of Metal $ 34.2 $ 18.8 $ 11.1 $ 17.5 $ 14.4
Production Costs $ 20.8 $ 9.6 $ 4.2 $ 11.4 $ 5.3
EBITDA $ 11.6 $ 7.2 $ 3.2 $ 2.7 $ (2.2 )
Operating Income/(Loss) $ 9.5 $ 5.5 $ 4.6 $ 2.1 $ (2.9 )
Operating Cash Flow $ 11.8 $ 7.2 $ 3.4 $ 2.7 $ (3.9 )
Capital Expenditures $ 2.9 $ 2.6 $ 7.7 $ 13.6 $ 4.2
Gross Profit $ 11.3 $ 7.6 $ 5.9 $ 5.5 $ 8.5
Gross Margin 33.0 % 40.4 % 53.2 % 31.4 % 59.0 %
 
2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Silver Production (000's) 713 441 373 352 333
Gold Production 10,120 5,292 1,993 1,435 1,397
Cash Operating Costs/Ag Oz $ 9.83 $ 23.35 $ 37.99 $ 36.71 $ 4.34
 

Table 23: Reconciliation of EBITDA for Rochester

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of metal $ 34.2 $ 18.8 $ 11.1 $ 17.5 $ 14.4
Production costs applicable to sales (20.8 ) (9.6 ) (4.2 ) (11.4 ) (5.3 )
Administrative and general
Exploration (1.1 ) (0.7 ) (1.5 ) (0.2 ) (0.3 )
Care and maintenance and other (0.7 ) (1.3 ) (2.2 ) (3.2 ) (11.0 )
Pre-development                    
EBITDA   $ 11.6     $ 7.2     $ 3.2     $ 2.7     $ (2.2 )
 

Table 24: Operating Cash Flow for Rochester

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Cash provided by (used in) operating activities $ 10.1 $ (7.1 ) $ (11.4 ) $ 0.9 $ (2.1 )
Changes in operating assets and liabilities:
Receivables and other current assets $ (0.1 ) 0.3 (0.2 ) 0.2
Prepaid expenses and other $ (1.0 ) 1.4 0.7 0.7 0.4
Inventories $ 3.9 11.2 14.2 5.9 0.6
Accounts payable and accrued liabilities   $ (1.1 )   1.4     0.1     (5.0 )   (2.8 )
Operating Cash Flow   $ 11.8     $ 7.2     $ 3.4     $ 2.7     $ (3.9 )
 

Table 25: Results of Operations by Mine - Martha

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of Metal $ 4.1 $ 3.6 $ 2.8 $ 6.0 $ 4.8
Production Costs $ 7.1 $ 3.7 $ 3.9 $ 8.1 $ 3.9
EBITDA $ (10.6 ) $ (3.7 ) $ (3.3 ) $ (3.8 ) $ (0.5 )
Operating Loss $ (11.3 ) $ (4.3 ) $ (3.0 ) $ (4.0 ) $ (0.4 )
Operating Cash Flow $ (5.5 ) $ (5.1 ) $ (5.0 ) $ (1.7 ) $ (0.9 )
Capital Expenditures $ 0.5 $ 0.7 $ 1.4 $ 1.1 $ 0.6
Gross Profit/(Loss) $ (3.7 ) $ (0.7 ) $ (1.7 ) $ (2.3 ) $ 1.8
Gross Margin (90.2 )% (19.4 )% (60.7 )% (38.3 )% 37.5 %
 
2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Total Tons Milled 39,199 34,069 37,141 24,086 22,122
Average Silver Grade (oz/t) 3.52 4.43 4.65 5.33 5.44
Average Gold Grade (oz/t) 0.01 0.01 0.01
Average Recovery Rate – Ag 78.2 % 81.4 % 75.2 % 92.3 % 84 %
Average Recovery Rate – Au 72.4 % 64.6 % 74.2 % 72.9 % 72.4 %
Silver Production (000's) 108 123 130 119 101
Cash Operating Costs/Ag Oz $ 55.07 $ 46.48 $ 33.75 $ 39.31 $ 38.79
 

Table 26: Reconciliation of EBITDA for Martha

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of metal $ 4.1 $ 3.6 $ 2.8 $ 6.0 $ 4.8
Production costs applicable to sales (7.1 ) (3.7 ) (3.9 ) (8.2 ) (3.8 )
Administrative and general
Exploration (2.8 ) (3.4 ) (2.1 ) (1.5 ) (1.5 )
Care and maintenance and other (4.8 ) (0.2 ) (0.1 ) (0.1 )
Pre-development                    
EBITDA   $ (10.6 )   $ (3.7 )   $ (3.3 )   $ (3.8 )   $ (0.5 )
 

Table 27: Operating Cash Flow for Martha

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Cash provided by (used in) operating activities $ (3.3 ) $ (7.1 ) $ (3.2 ) $ 0.2 $ (3.2 )
Changes in operating assets and liabilities:
Receivables and other current assets (0.6 ) 3.5 (0.9 ) 2.3 0.2
Prepaid expenses and other 0.1 (0.1 ) (0.3 ) 0.4 0.1
Inventories (2.3 ) 0.4 0.4 (3.3 ) 0.1
Accounts payable and accrued liabilities   0.6     (1.8 )   (1.0 )   (1.3 )   1.9  
Operating Cash Flow   $ (5.5 )   $ (5.1 )   $ (5.0 )   $ (1.7 )   $ (0.9 )
 

Table 28: Results of Operations by Mine - Endeavor

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of Metal $ 5.2 $ 6.7 $ 2.8 $ 6.2 $ 6.6
Production Costs $ 2.6 $ 2.7 $ 1.0 $ 3.2 $ 3.3
EBITDA $ 2.6 $ 4.0 $ 1.8 $ 3.0 $ 3.3
Operating Income $ 1.1 $ 2.3 $ 1.1 $ 2.1 $ 2.4
Operating Cash Flow $ 2.8 $ 3.5 $ 2.1 $ 1.3 $ 3.6
Capital Expenditures $ $ $ $ $
Gross Profit $ 1.1 $ 2.3 $ 1.1 $ 2.1 $ 2.4
Gross Margin 21.2 % 34.3 % 39.3 % 33.9 % 36.4 %
 
2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Silver Production (000's) 240 248 111 138 215
Cash Operating Costs/Ag Oz $ 17.50 $ 16.64 $ 14.74 $ 22.26 $ 20.04
 

Table 29: Reconciliation of EBITDA for Endeavor

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Sales of metal $ 5.2 $ 6.7 $ 2.8 $ 6.2 $ 6.6
Production costs applicable to sales (2.6 ) (2.7 ) (1.0 ) (3.2 ) (3.3 )
Administrative and general
Exploration
Care and maintenance and other
Pre-development                    
EBITDA   $ 2.6     $ 4.0     $ 1.8     $ 3.0     $ 3.3  
 

Table 30: Operating Cash Flow for Endeavor

         
in millions of US$ 2Q 2012   1Q 2012   4Q 2011   3Q 2011   2Q 2011
Cash provided by operating activities $ 3.6 $ 2.5 $ 2.1 $ 2.4 $ 2.5
Changes in operating assets and liabilities:
Receivables and other current assets (1.7 ) 1.7 (1.2 ) (1.4 ) 2.7
Prepaid expenses and other
Inventories 0.2 0.6 0.1 (0.9 )
Accounts payable and accrued liabilities   0.7     (1.3 )   1.1     1.2     (1.6 )
Operating Cash Flow   $ 2.8     $ 3.5     $ 2.1     $ 1.3     $ 3.6  
 

Table 31: Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs Three months ended June 30, 2012

             
(In thousands except ounces and per ounce costs) Palmarejo

San Bartolomé

Kensington Rochester Martha Endeavor Total
Total cash operating cost (Non-U.S. GAAP) $ (2,009 ) $ 16,249 $ 29,083 $ 7,008 $ 5,942 $ 4,204 $ 60,477
Royalties 1,457 510 124 2,091
Production taxes       641       641  
Total cash costs (Non-U.S. GAAP) $ (2,009 ) $ 17,706   $ 29,083   $ 8,159   $ 6,066   $ 4,204   $ 63,209  
Add/Subtract:
Third party smelting costs (2,820 ) (1,444 ) (1,449 ) (5,713 )
By-product credit 50,363 16,295 157 66,815
Other adjustments 124 117 7 229 26 503
Change in inventory 14,060 4,950 (10,165 ) (3,931 ) 2,297 (202 ) 7,009
Depreciation, depletion and amortization 42,741   4,070   9,719   2,060   631   1,592   60,813  

Production costs applicable to sales, including depreciation,depletion and amortization (U.S. GAAP)

$ 105,279   $ 26,843   $ 25,824   $ 22,812   $ 7,733   $ 4,145   $ 192,636  
Production of silver (ounces) 2,365,484 1,470,342 712,706 107,895 240,168 4,896,595
Cash operating cost per silver ounce $ (0.85 ) $ 11.05 $ $ 9.83 $ 55.07 $ 17.50 $ 6.41
Cash costs per silver ounce $ (0.85 ) $ 12.04 $ $ 11.45 $ 56.21 $ 17.50 $ 6.97
Production of gold (ounces) 21,572 21,572
Cash operating cost per gold ounce $ $ $ 1,348 $ $ $ $ 1,348
Cash cost per gold ounce $ $ $ 1,348 $ $ $ $ 1,348
 

Table 32: Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs Six months ended June 30, 2012

             
(In thousands except ounces and per ounce costs) Palmarejo

San Bartolomé

Kensington Rochester Martha Endeavor Total
Total cash operating cost (Non-U.S. GAAP) $ (7,652 ) $ 32,502 $ 49,251 $ 17,311 $ 11,649 $ 8,331 $ 111,392
Royalties 3,493 1,119 206 4,818
Production taxes       653       653  
Total cash costs (Non-U.S. GAAP) $ (7,652 ) $ 35,995   $ 49,251   $ 19,083   $ 11,855   $ 8,331   $ 116,863  
Add/Subtract:
Third party smelting costs (3,903 ) (3,418 ) (2,238 ) (9,559 )
By-product credit 102,889 25,252 298 128,439
Other adjustments 368 (77 ) 14 316 83 704
Change in inventory 12,793 463 (12,166 ) (14,335 ) 1,977 (803 ) (12,071 )
Depreciation, depletion and amortization 80,501   8,289   16,324   3,702   1,151   3,236   113,203  

Production costs applicable to sales, includingdepreciation, depletion and amortization (U.S. GAAP)

$ 188,899   $ 44,670   $ 49,520   $ 34,018   $ 11,946   $ 8,526   $ 337,579  
Production of silver (ounces) 4,848,298 3,061,634 1,154,043 230,688 488,126 9,782,789
Cash operating cost per silver ounce $ (1.58 ) $ 10.62 $ $ 15.00 $ 50.50 $ 17.07 $ 6.35
Cash costs per silver ounce $ (1.58 ) $ 11.76 $ $ 16.54 $ 51.39 $ 17.07 $ 6.91
Production of gold (ounces) 29,016 29,016
Cash operating cost per gold ounce $ $ $ 1,697 $ $ $ $ 1,697
Cash cost per gold ounce $ $ $ 1,697 $ $ $ $ 1,697
 

Table 33: Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs Three months ended June 30, 2011

             
(In thousands except ounces and per ounce costs) Palmarejo

San Bartolomé

Kensington Rochester Martha Endeavor Total
Total cash operating cost (Non-U.S. GAAP) $ (8,719 ) $ 15,211 $ 23,789 $ 1,446 $ 3,922 $ 4,301 $ 39,950
Royalties 2,760 578 170 3,508
Production taxes       268       268  
Total cash costs (Non-U.S. GAAP) $ (8,719 ) $ 17,971   $ 23,789   $ 2,292   $ 4,092   $ 4,301   $ 43,726  
Add/Subtract:
Third party smelting costs (3,375 ) (426 ) (1,018 ) (4,819 )
By-product credit 50,188 2,106 169 52,463
Other adjustments 552 376 19 97 76 1,120
Change in inventory (4,252 ) (4,221 ) (7,588 ) 846 (162 ) (10 ) (15,387 )

Depreciation, depletion and amortization

41,745   5,182   9,889   584   (748 ) 865   57,517  

Production costs applicable to sales, includingdepreciation, depletion and amortization (U.S. GAAP)

$ 79,514   $ 19,308   $ 22,734   $ 5,925   $ 3,001   $ 4,138   $ 134,620  
Production of silver (ounces) 2,370,536 1,741,578 333,432 101,122 214,613 4,761,281
Cash operating cost per silver ounce $ (3.68 ) $ 8.73 $ $ 4.34 $ 38.79 $ 20.04 $ 3.39
Cash costs per silver ounce $ (3.68 ) $ 10.32 $ $ 6.88 $ 40.47 $ 20.04 $ 4.19
Production of gold (ounces) 25,758 25,758
Cash operating cost per gold ounce $ $ $ 924 $ $ $ $ 924
Cash cost per gold ounce $ $ $ 924 $ $ $ $ 924
 

Table 34: Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs Three months ended March 31, 2012

             
(In thousands except ounces and per ounce costs) Palmarejo

San Bartolomé

Kensington Rochester Martha Endeavor Total
Total cash operating cost (Non-U.S. GAAP) $ (5,643 ) $ 16,253 $ 20,168 $ 10,303 $ 5,708 $ 4,127 $ 50,916
Royalties 2,036 609 82 2,727
Production taxes       12       12  
Total cash costs (Non-U.S. GAAP) $ (5,643 ) $ 18,289   $ 20,168   $ 10,924   $ 5,790   $ 4,127   $ 53,655  
Add/Subtract:
Third party smelting costs (1,083 ) (1,975 ) (788 ) (3,846 )
By-product credit 52,526 8,957 141 61,624
Other adjustments 244 (194 ) 7 87 57 201
Change in inventory (1,268 ) (4,487 ) (2,001 ) (10,403 ) (320 ) (601 ) (19,080 )
Depreciation, depletion and amortization 37,761   4,219   6,604   1,642   520   1,644   52,390  

Production costs applicable to sales, includingdepreciation, depletion and amortization (U.S. GAAP)

$ 83,620   $ 17,827   $ 23,695   $ 11,207   $ 4,213   $ 4,382   $ 144,944  
Production of silver (ounces) 2,482,814 1,591,292 441,337 122,793 247,958 4,886,194
Cash operating cost per silver ounce $ (2.27 ) $ 10.21 $ $ 23.35 $ 46.48 $ 16.64 $ 6.29
Cash costs per silver ounce $ (2.27 ) $ 11.49 $ $ 24.75 $ 47.15 $ 16.64 $ 6.85
Production of gold (ounces) 7,444 7,444
Cash operating cost per gold ounce $ $ $ 2,709 $ $ $ $ 2,709
Cash cost per gold ounce $ $ $ 2,709 $ $ $ $ 2,709
 

Table 35: Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs Six months ended June 30, 2011

             
(In thousands except ounces and per ounce costs) Palmarejo

San Bartolomé

Kensington Rochester Martha Endeavor Total
Total cash operating cost (Non-U.S. GAAP) $ (407 ) $ 30,825 $ 47,199 $ 4,875 $ 8,322 $ 6,859 $ 97,673
Royalties 5,064 908 353 6,325
Production taxes       468       468  
Total cash costs (Non-U.S. GAAP) $ (407 ) $ 35,889   $ 47,199   $ 6,251   $ 8,675   $ 6,859   $ 104,466  
Add/Subtract:
Third party smelting costs (6,025 ) (1,799 ) (1,581 ) (9,405 )
By-product credit 88,656 4,121 508 93,285
Other adjustments 773 188 19 138 172 1,290
Change in inventory (13,884 ) (7,833 ) 4,572 2,188 (4,196 ) (905 ) (20,058 )
Depreciation, depletion and amortization 75,411   10,325   19,254   1,098   (157 ) 1,483   107,414  

Production costs applicable to sales, includingdepreciation, depletion and amortization (U.S. GAAP)

$ 150,549   $ 38,569   $ 65,019   $ 13,796   $ 3,203   $ 5,856   $ 276,992  
Production of silver (ounces) 4,100,303 3,452,525 667,127 281,107 363,795 8,864,857
Cash operating cost per silver ounce $ (0.10 ) $ 8.93 $ $ 7.31 $ 29.60 $ 18.85 $ 5.69
Cash costs per silver ounce $ (0.10 ) $ 10.40 $ $ 9.37 $ 30.86 $ 18.85 $ 6.46
Production of gold (ounces) 49,434 49,434
Cash operating cost per gold ounce $ $ $ 955 $ $ $ $ 955
Cash cost per gold ounce $ $ $ 955 $ $ $ $ 955
 




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