Coeur Mining, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Record Results: Second consecutive quarter of record results driven by higher realized prices, strong production levels, and solid cost management. Cash balance expected to exceed $500 million at year-end.
• SilverCrest Acquisition: Las Chispas operation in Mexico had consistent production, free cash flow increased 34%, and exploration update highlighted high-grade intercepts. Well-timed M&A up-tiered asset portfolio.
• Share Repurchase: Nearly 10% of initial $75 million share repurchase program completed; continue to evaluate repurchase activities.
• Rochester Progress: Team made progress toward steady state, with modifications to crusher corridor successful despite some downtime challenges.
• Safety/Environmental: Strong safety and environmental performance, among the best in company history.

Segment Performance

• Las Chispas: Silver production increased to 1.6 million ounces, gold production to 17,000 ounces, with free cash flow in Q3 at $66 million, a 34% increase from Q3 2024. It had another consistent quarter of production since the SilverCrest transaction closed in February.
• Palmarejo: Delivered $47 million of free cash flow during the quarter, with strong recoveries and mill throughput at highest in 6 quarters. Exploration activity increased in the East District.
• Rochester: Gold and silver production increased 3% and 13% respectively compared to Q2. Revised 2025 production and cost guidance due to downtime and expected timing of ounces from Stage 6.
• Kensington: Gold production increased for the third consecutive quarter, exceeding 27,000 ounces. Free cash flow was $31 million, its highest in over 6 years. Production guidance increased and cost per ounce range narrowed.
• Wharf: Achieved third consecutive quarter of increased production and lower cost applicable to sales. Quarterly gold production increased 16% to 28,000 ounces, leading to free cash flow of $54 million. Full year gold production guidance increased by 3,000 ounces.

Guidance

• Full year EBITDA expected to exceed $1 billion and free cash flow to top $550 million, higher than prior estimates.
• Fine-tuned full year production and cost guidance ranges. Narrower production guidance ranges increased midpoint of gold production guidance and decreased midpoint of silver production guidance. Las Chispas, Palmarejo, and Wharf ahead of plan; Rochester ounces pushed to 2026 due to lower than planned crush tons.
• Kensington's 2025 production guidance increased and cash per ounce range narrowed downward. Wharf's full year gold production guidance increased by 3,000 ounces, cash guidance down by $125 per gold ounce.

Risks

• Operational Downtime: Unplanned downtime at Rochester due to conveyor belt issues, but addressed and expected to be mitigated moving forward. Minor modifications and adjustments needed during ramp-up of operations.

Question and Answer

Q: Net of the guidance change and what's seen in the second half at the crusher, can you talk more about what's needed to get the operation up to full capacity?

A: Rochester did extended shutdowns in July to implement modifications on primary, secondary, and tertiary systems to improve uptime, size control, and productivity. Unplanned downtime with conveyor belt addressed in November, and trend is positive with better numbers moving forward.

Q: What should we be thinking about as far as next year and beyond now that there's a deferred tax asset?

A: Federal rate is 21%, states average around 3% for go-forward effective tax rate. Potential to pay U.S. income tax in 2026, a shift from previous 0 effective tax rate on U.S. earnings.

Q: Palmarejo and Las Chispas saw a bit of a drop in grade; any color on what drove that?

A: In underground mines, more ore is characterized during production. For Palmarejo, ran more historic stockpile through the mill, running 6% more tons, which helped adjust gains and clear view of stockpile at Las Chispas