Coeur Mining, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Coeur is transforming into a peer-leading precious metals producer with best-in-class silver exposure. Second quarter free cash flow $146 million, repaid revolving credit facility, updated full-year adjusted EBITDA to over $800M and free cash flow to over $400M.
• Key drivers: progress at Rochester and first full quarter contribution from Las Chispas. Las Chispas integration seamless, reoriented drilling delivering exciting exploration results. Rochester saw sizable jump in crushed tons in Q2.
• Exploration updates: Las Chispas had up to 8 rigs drilling, Palmarejo 7 rigs active with promising targets, Kensington 4 rigs with exceeded drilling pace, Wharf and Silvertip also had active drilling programs with encouraging results.

Segment Performance

• Las Chispas: Silver production nearly 1.5 million ounces, gold production 16,000 ounces, both ahead of annual guided levels. Integration seamless, delivering high-grade production at low costs with exciting exploration results from reoriented drilling.
• Palmarejo: Generated $42 million free cash flow, gold and silver production increased 18% and 6% QoQ respectively, highest tonnes milled in over a year. New Hidalgo access portal enhances flexibility and efficiency.
• Rochester: Silver and gold production increased 13% and 7% QoQ respectively, 50% and 79% YoY respectively. Crushed tons up 24% QoQ, expected strong second half to achieve full-year guidance.
• Kensington: Gold production up 17% QoQ, CAS per ounce down 9% QoQ, generated $20 million free cash flow. Multiyear capital investment program wrapped up, progress on new raise bore project.
• Wharf: Gold production up 18% QoQ, second highest in 2 years, generated $38 million free cash flow. Anticipates grade moderation but positioned for strong year.

Guidance

• Updated full-year adjusted EBITDA to over $800M and free cash flow to more than $400M. Reaffirmed 2025 production and cost guidance ranges. Second half free cash flow expected between $250M to $300M based on reconfirmed guidance and updated pricing of $3,200 for gold and $32 for silver.
• Full year 2025 gold and silver production levels expected to be year-over-year increases of 20% and 62% respectively.

Risks

• No specific risks detailed in the transcript, but generally includes potential commodity price fluctuations, operational challenges, and regulatory changes.

Q: Congrats on a great quarter. Talked about Silvertip acceleration and production growth drivers.

A: Mitch mentioned a 5-year time frame for Silvertip but noted potential to shave time off due to Canada's support for critical minerals projects. Brownfield exploration potential around existing sites (Wharf, Palmarejo, Kensington, Las Chispas) is a key growth driver. Michael added optimizing Rochester for continued performance.

Q: On free cash flow and taxes.

A: Tom discussed cash taxes, Mexico paying quarterly installments and onetime true-up, and mention of $630 million net operating losses being chewed through aggressively, with U.S. tax rate expected to remain 0 for now.

Q: On NCIB and Las Chispas exploration.

A: Mitch explained buyback program details, including discretionary and nondiscretionary components. Aoife and Mick discussed Las Chispas exploration, with focus on Babicanora Block, Las Chispas Block, and GAP Zone, highlighting promising results and mine life potential.