Coeur Mining, Inc. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Business Overview: The company had a solid start to 2025 with fourth consecutive quarter of positive EPS and free cash flow. Eliminated nearly $130 million of debt and metal prepaid facilities. Set to accelerate debt reductions with production growth from five North American operations, aiming for full year adjusted EBITDA over $700M and free cash flow over $300M.
• Las Chispas Integration: Integration proceeding smoothly, with strong high-grade production at low cost. Exploration discovery in the gap zone between Babicanora and Las Chispas zones.
• Exploration: Strong start in 2025 with 21 rigs active, $77M to $93M exploration investment. Notable discovery of the Augusta vein at Las Chispas, and progress at Palmarejo, Silvertip.
• Financial Results: Q1 revenue $360M, adjusted EBITDA $149M, net income $33M, free cash flow $18M. Adjusted EBITDA margin increased to 41%. Monetization of $72M from SilverCrest finished goods and bullion balances.
• Balance Sheet: Strengthening balance sheet, repaid $85M on revolving credit facility, ending March with $78M cash, expecting year-end leverage ratio close to zero.

Segment Performance

• Las Chispas: Partial first quarter production of 74,000 ounces of silver and over 7,000 ounces of gold. Daily average mill production exceeded 1,300 tonnes per day. Gold per ounce for the period was $744 and silver per ounce was $8.38.
• Palmarejo: Gold production up 2% and silver production up 9% compared to the fourth quarter, driven by good productivity in Guadalupe.
• Rochester: Crusher performance improved, placed 7 million tons during the quarter, with commencement of an 8 million tonne stripping campaign.
• Kensington: Gold production increased by 6% compared to the first quarter a year ago, well positioned for positive free cash flow this year.
• Wharf: First quarter production slightly higher than the first quarter of last year, well positioned for a strong 2025.

Guidance

• Full year adjusted EBITDA is expected to exceed $700 million and free cash flow to be more than $300 million, with year-end leverage ratio close to zero.
• Rochester's crusher performance and recovery rates are tracking to guidance, with crush size expected to trend down for higher silver recoveries.
• Exploration investment will drive future growth and resource expansion to support production goals.

Risks

• No specific detailed risks highlighted, but general business and operational risks are implied in the normal course of mining operations.

Question and Answer

Q: Wayne Lam on Rochester tonnage, silver recoveries, and DTP material A: Mitch and Mick discussed Rochester's crusher performance, recovery rates tracking to model, and expected decline in DTP material as crusher availability improves Q: Joseph Reagor on Las Chispas inventory accounting A: Tom explained that Las Chispas inventory is marked-to-market, with no impact on free cash flow, and the inventory balance will gradually decrease as material is processed Q: Joseph Reagor on M&A and future plans A: Mitch stated the focus is on delivering current results, with evaluation of potential opportunities that fit the company's filters Q: Mick Siperco on Silvertip and Rochester metrics A: Mitch discussed Silvertip's assessment timeline, with an initial internal assessment expected in the third quarter, and Rochester's crusher run time as a key metric for optimization Q: Brian MacArthur on Las Chispas accounting and Silvertip capital return A: Mitchell explained inventory marking-to-market and potential for capital return to shareholders in the near term as free cash flow is generated