Coeur Mining, Inc. (the “Company” or “Coeur”) (NYSE: CDE, TSX: CDM) reported metal sales of $200.8 million, adjusted earnings 1 of $(23.4) million, or $(0.23) per share, and cash flow from operating activities of $26.8 million, or $0.27 per share, during the third quarter 2013. This compares to metal sales of $204.5 million, adjusted earnings 1 of $(34.6) million, or $(0.35) per share, and cash flow from operating activities of $63.3 million, or $0.63 per share, in the second quarter 2013.
The Company reaffirmed its 2013 full-year production guidance of 18.0-19.1 million ounces of silver and 250,000-258,000 ounces of gold. Coeur expects significantly higher production levels in the fourth quarter, particularly from the Rochester silver and gold mine in Nevada. Coeur is also maintaining its full-year cash operating cost 1 guidance of $9.50 - $10.50 per silver ounce and $950 - $1,000 per gold ounce at Kensington, which reflects continued progress in the Company's ongoing cost reduction efforts. The Company incurred $32.7 million in capital expenditures in the third quarter and reaffirmed its 2013 full-year capital expenditure guidance of $100-$110 million.
Third Quarter 2013 Highlights
- Gold production at Kensington increased 25% compared to the second quarter and cash operating costs declined 11% to $988 per gold ounce 1.
- Announced a 91.5% increase in silver reserves and 96.4% increase in gold reserves at Rochester in September 2013.
- Produced 4.2 million silver ounces and 63,766 gold ounces, a decrease of 9% and an increase of 5%, respectively, from the second quarter 2013. Metal sales were 4.9 million silver ounces and 76,466 gold ounces, a decrease of 7% and an increase of 21%, respectively, from the second quarter 2013.
- Net metal sales were $200.8 million, down 2% compared to the second quarter 2013 mostly due to declines of 8% and 6% in realized silver and gold prices, respectively, which averaged $21.06 per silver ounce and $1,329 per gold ounce in the third quarter 2013.
- Cash flow from operating activities was $26.8 million, or $0.27 per share, in the third quarter 2013 compared to $63.3 million, or $0.63 per share, during the second quarter 2013. Before changes in working capital, cash flow from operating activities was $37.3 million in the third quarter 2013 and $14.4 million in the second quarter 2013.
- Adjusted earnings 1 were $(23.4) million, or $(0.23) per share, compared with $(34.6) million, or $(0.35) per share, in the second quarter 2013. Net loss for the third quarter 2013 was $46.3 million, or $0.46 per share, compared with net loss of $35.0 million, or $0.35 per share, in the second quarter 2013.
- Companywide cash operating costs were $11.38 per silver ounce 1 in the third quarter 2013 and $9.66 per silver ounce 1 during the first nine months of 2013. Palmarejo's cash operating costs per silver ounce 1 dropped 14% in the third quarter compared to the second quarter. Higher production levels are expected to generate lower cash operating costs per silver ounce 1 in the fourth quarter, particularly at Rochester.
- Repurchased approximately $15.0 million of stock during the third quarter 2013. The Company has now completed approximately $47.5 million of its $100.0 million share repurchase program authorized by the Board of Directors in June of 2012.
- Rochester recognized for outstanding achievement in safety by the Nevada Mining Association.
- Palmarejo received the Industria Limpia (clean industry) certificate by the Federal Attorney for Environmental Protection (Profepa) in Mexico.
- Additional exploration drilling is underway at Palmarejo following positive results in the existing open pit and in the Las Animas-El Salto surface deposit located just south of Guadalupe. Drilling at Kensington during the third quarter also returned additional high-grade results at the Jualin area and the Ann zone.
Mitchell J. Krebs, Coeur's President and Chief Executive Officer, said, "Our third quarter operating performance demonstrates the progress we are making in maintaining operational consistency and executing on our strategic initiatives. We are pleased with the solid performance at Palmarejo, San Bartolomé, and Kensington during the third quarter, and with the early indications of our newly-completed expansion projects at Rochester. We expect a significant increase in fourth quarter production at Rochester as permitting issues delayed the leaching of fresh material, which began October 1. We have made further progress in our four-pronged strategy designed to maximize our net cash flow: (1) identifying and implementing revenue enhancement opportunities at existing operations; (2) reducing operating and non-operating costs; (3) reducing capital spending; and (4) effectively managing working capital."