“We expect 2013 to be a strong year for Coeur, supported by significant expected growth at Rochester, a full year of steady state operations at Kensington, and stable production at Palmarejo and San Bartolomé. We worked through operational challenges at Palmarejo and San Bartolomé in the fourth quarter and expect these operations to achieve sustainable production rates in 2013 and beyond.
“Production at Rochester is expected to increase 35% - 50% this year versus 2012 levels, which we anticipate will drive cash operating costs down and significantly increase the mine's cash flow. This expansion will require an investment of approximately $30 - $35 million in 2013 and we expect it will allow annual production of 4.5 - 5.0 million silver ounces and approximately 45,000 gold ounces to continue for at least seven years. We are enthusiastic about future opportunities to expand production at Rochester even further that could make this asset the second largest producer in our portfolio.
“We are pleased to see positive results at Kensington after taking six months to re-tool the operation to generate consistent performance. We will also invest approximately $20 million of capital at San Bartolomé in 2013 in order to boost annual production by 10% - 15% in 2014 and beyond. This investment is expected to generate a near triple digit rate of return."
Commenting on further 2013 goals, Mr. Krebs said, “For good reason, investors are demanding that mining companies demonstrate capital discipline, focus on true value creation, return capital to shareholders, and control costs in order to provide operating leverage to higher metals prices. Our organization is focusing on these priorities and on reducing the risks to our business in order to provide investors a compelling rationale to own our shares. Our key objectives in 2013 are:
- Achieve excellence in employee health and safety, environmental stewardship and community relations.
- Double our efforts to achieve operational consistency and reliability by improving planning, maintenance and execution of our key capital projects.
- Invest in accretive, high-return internal and external growth opportunities - including our own shares - in order to build net asset value and resources on a per share basis.
- Maximize free cash flow by containing operating costs, identifying revenue enhancement opportunities, proactively managing working capital.
- Continue strengthening our organizational structure and management.
- Maintain an aggressive approach toward investing in exploration, which served the Company well in 2012.”
Table 1: Financial Highlights (Unaudited)
|(All amounts in millions, except per share amounts, average realized prices and gold ounces sold)||
|Sales of Metal||$||205.9||$||246.9||(17||%)||$||895.5||$||1,021.2||(12||%)|
|Adjusted Earnings (1)||$||26.2||$||43.2||(39||%)||$||121.5||$||232.5||(48||%)|
|Adjusted Earnings Per Share (1)||$||0.29||$||0.48||(40||%)||$||1.36||$||2.60||(48||%)|
|Earnings Per Share||$||0.42||$||0.13||223||%||$||0.54||$||1.05||(49||%)|
|Operating Cash Flow (1)||$||79.2||$||97.5||(19||%)||$||338.7||$||454.4||(25||%)|
|Cash From Operating Activities||$||61.7||$||87.4||(29||%)||$||271.6||$||416.2||(35||%)|
|Cash, Cash Equivalents & Short-Term Investments||$||126.4||$||195.3||(35||%)||$||126.4||$||195.3||(35||%)|
|Total Debt (1) (net of debt discount)||$||48.1||$||121.5||(60||%)||$||48.1||$||121.5||(60||%)|
|Weighted Average Shares Issued & Outstanding||89.1||89.5||—||89.4||89.4||—|
|Average Realized Price Per Ounce - Silver||$||32.52||$||30.87||5||%||$||30.92||$||35.15||(12||%)|
|Average Realized Price Per Ounce - Gold||$||1,709||$||1,674||2||%||$||1,665||$||1,558||7||%|
|Silver Ounces Sold||3.6||5.1||(29||%)||18.0||19.1||(6||%)|
|Gold Ounces Sold||55,565||55,308||—||213,185||238,551||(11||%)|
EBITDA, operating cash flow, adjusted earnings and cash operating costs are non-GAAP measures. Please see tables in the Appendix for reconciliation to U.S. GAAP. Total debt includes short and long-term indebtedness and excludes capital leases and royalty obligations.
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