CHICAGO--(BUSINESS WIRE)--Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today provided an update on exploration at its high-grade Silvertip polymetallic exploration project in northern British Columbia. Coeur completed approximately 90,000 feet (28,000 meters) of drilling in 2023 over 92 holes, 62 of which were in the Southern Silver Zone. Since acquisition of the project in late 2017, the Company has drilled roughly 1.1 million feet (333,000 meters) over 1,244 holes. Highlights from surface a ...

A downtrend has been apparent in Coeur Mining (CDE) lately. While the stock has lost 10% over the past two weeks, it could witness a trend reversal as a hammer chart pattern was formed in its last trading session. This could mean that the bulls have been able to counteract the bears to help the stock find support.The formation of a hammer pattern is considered a technical indication of nearing a bottom with likely subsiding of selling pressure. But this is not the only factor that makes a bullish case for t ...

CHICAGO--(BUSINESS WIRE)--Coeur Mining, Inc.’s (“Coeur” or the “Company”) (NYSE: CDE) President and Chief Executive Officer, Mitchell J. Krebs, will participate in the TD Securities Global Mining Conference on Wednesday, January 24, 2024. The TD Securities Global Mining Conference is an invitation-only investment conference. Presentation materials will be made available on the Company’s website at www.coeur.com. About Coeur Coeur Mining, Inc. is a U.S.-based, well-diversified, growing precious metals pro ...

Financial Data and Key Metrics Changes - Quarterly revenue increased by 10% to $195 million, driven by total production of approximately 78,000 ounces of gold and 2.3 million ounces of silver [20] - Operating cash flow swung to a negative $2 million due to significant inventory buildup on the new leach pad at Rochester and timing of interest payments [7] - Adjusted EBITDA saw healthy increases compared to the prior quarter, primarily due to increased gold sales at Palmarejo and Kensington, leading to lower consolidated costs per ounce [46][48] Business Line Data and Key Metrics Changes - Gold production increased by 15%, while costs per gold ounce declined by 13%, contributing to a material increase in adjusted EBITDA [48] - At Palmarejo, gold production increased by 16% to nearly 27,000 ounces, aided by higher recoveries from Guadalupe [32] - Kensington's production guidance was refined to between 81,000 and 85,000 ounces due to earlier paste placement issues impacting full-year results [33] Market Data and Key Metrics Changes - Rochester is expected to become North America's largest open-pit heap leach operation, significantly increasing silver production at a time of rising demand for electronic applications and renewable power sources [23] - The company's hedging program locked in nearly 70% of fourth-quarter gold production at $1,977 per ounce and about 50% of silver production at $25.47 per ounce, mitigating price risk [12] Company Strategy and Development Direction - The company is focused on safely and efficiently ramping up production at Rochester, with a strong emphasis on reducing leverage levels as capital intensity decreases [16][25] - Over the past 3 to 5 years, the company has reinvested over $1 billion in exploration and expansions, aiming for sector-leading growth and a more conservative balance sheet [17] Management's Comments on Operating Environment and Future Outlook - Management expects strong fourth-quarter production to drive significant increases in operating cash flow across all sites, particularly at Rochester [7][9] - The company anticipates a transition to positive free cash flow and reduced leverage levels, which are seen as catalysts for share price improvement [4] Other Important Information - The company incurred $704 million in capital costs for the Rochester expansion, with approximately $60 million to $80 million remaining to be paid in the final quarter of the year [14] - The completion of the high compression tailings project at Palmarejo is expected to reduce overall water utilization by 16% [32] Q&A Session Summary Question: Concerns about thermal load on the pad during winter months - Management acknowledged potential for a slowdown in recoveries in Q1, with expectations for a pickup as the pad warms in Q2 [1] Question: Clarification on CapEx reported in cash flow statement - Management confirmed that the CapEx reported aligns with incurred costs, with elevated accounts payable expected to decrease in Q4 [42][43]

Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements Coeur reports the carrying value of metal and leach pad inventory at the lower of cost or net realizable value, with cost being determined using a weighted average cost method. During the first nine months of 2023, the cost of stock pile, leach pad and metal inventory at Rochester exceeded its net realizable value, which resulted in non-cash write down for the three and nine months ended September 30, 2023 of $8.9 million ($7.7 m ...

Financial Data and Key Metrics Changes - Quarterly revenue totaled $177 million, with production of approximately 68,000 ounces of gold and 2.4 million ounces of silver, underpinned by strong performances at Rochester and Wharf operations, offset by a weaker than planned quarter at Kensington [20][21] - Adjusted EBITDA was impacted by challenges at Kensington, but a strong second half is anticipated across all sites, including Kensington, leading to significantly higher EBITDA levels [15][30] - Operating cash flow swung to a positive $39 million compared to a negative $35 million during Q1, driven by solid operating performance at Palmarejo, Rochester, and Wharf, as well as favorable changes in working capital [32] Business Line Data and Key Metrics Changes - At Rochester, production decreased as expected compared to the first quarter, with better than anticipated production driven by positive residual ounce production from legacy leach pads [8][20] - Kensington faced challenges due to higher than expected water flows, impacting planned production, leading to a revised full year guidance of between 84,000 and 95,000 ounces of gold [30] - Wharf's results were slightly ahead of plan, benefiting from high-grade material and tons placed earlier in the year, with a new permit allowing for mining of the Boston expansion [13][20] Market Data and Key Metrics Changes - The strengthening peso created pressure on costs, resulting in approximately $5 million of additional costs at Palmarejo, while lower diesel costs decreased by 26% versus Q2 2022 [25][33] - The company has hedged almost 70% of its non-Franco-Nevada related second half gold production at $1,977 per ounce and approximately 50% of its second half silver production at $25.41 per ounce [53] Company Strategy and Development Direction - The company is focused on the safe and efficient commissioning and ramp-up of the expansion project at Rochester, while also aiming to deliver stronger performance at Kensington and generate results from the development and drilling program [36] - Significant multiyear investments in expansions and exploration at North American assets are expected to yield benefits for stockholders, including higher production, lower costs, and free cash flow [24][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a strong second half of the year, particularly at Rochester and Kensington, with expectations for improved performance and production levels [15][30] - The company is well-positioned to begin delivering the benefits of multiyear investments, with a constructive macro backdrop for both gold and silver [55] Other Important Information - The total project capital for Rochester is expected to come in between $710 million to $730 million, about 6% to 9% above the previously estimated $607 million [12] - The company completed an innovative financing of Canadian flow-through shares during the second quarter, raising just under $30 million at a 21% premium to the market price [53] Q&A Session Summary Question: Kensington's performance and future expectations - Management indicated that the challenges at Kensington were primarily due to inflow of water, not loss of grade, and similar grades are expected through the end of the year, with a majority of deferred ounces planned for 2024 [57] Question: Labor and productivity concerns for Rochester expansion - Management confirmed that they have the right number of people to start up the process plant and do not foresee productivity impacts due to access to labor [42][43] Question: Kensington's productivity in July and August - July showed significant improvement from June, with expectations for August to be better than July as water inflow issues were addressed [61] Question: Balance sheet and liquidity management - Management expressed confidence in managing liquidity levels through various levers, including the new ATM program and existing credit facilities, to support operations through the capital-intensive period [66][69]

Financial Performance & Guidance - Coeur's Q2 2023 metal sales included 67,090 ounces of gold and 2.3 million ounces of silver[127] - The company reaffirmed its silver production guidance and updated its gold production guidance for 2023[137] - Coeur maintained balance sheet flexibility with $415 million of potential liquidity[137, 195] - The company expects 2023 Palmarejo (co-product) gold costs to be $900-$1,050/oz and silver costs to be $1425-$1525/oz[201] - The company expects 2023 Kensington gold costs to be $1,650-$1,750/oz[201] - The company expects 2023 Wharf (by-product) gold costs to be $1,200-$1,350/oz[201] Rochester Expansion - The Rochester expansion project was ~97% complete as of July 31, 2023, with construction scheduled to be completed in Q3 2023[125, 151] - The Rochester expansion is expected to increase the mining rate from 65 ktpd to 155 ktpd by the end of 2024[167] Reserves and Resources (as of December 31, 2022) - Proven and Probable Reserves totaled 473,103,000 short tons with 3,077,000 ounces of gold and 238,236,000 ounces of silver[390] - Measured and Indicated Resources totaled 188,092,000 short tons with 3,094,000 ounces of gold and 181,897,000 ounces of silver[358] - Inferred Resources totaled 189,800,000 short tons with 1,820,000 ounces of gold and 85,375,000 ounces of silver[420]

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) [Item 1. Financial Statements and Supplementary Data](index=4&type=section&id=Item%201.%20Financial%20Statements%20and%20Supplementary%20Data) Presents Coeur Mining, Inc.'s unaudited condensed consolidated financial statements for June 30, 2023, detailing balance sheets, income, cash flow, and equity changes, with notes [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) Presents the Company's financial position as of June 30, 2023, compared to December 31, 2022, detailing assets, liabilities, and equity | ASSETS (In thousands) | June 30, 2023 | December 31, 2022 | | :-------------------- | :------------ | :---------------- | | **CURRENT ASSETS** | | | | Cash and cash equivalents | $56,845 | $61,464 | | Receivables | $29,615 | $36,333 | | Inventory | $64,523 | $61,831 | | Ore on leach pads | $108,768 | $82,958 | | Equity securities | $9,240 | $32,032 | | Prepaid expenses and other | $20,194 | $25,814 | | **Total Current Assets** | **$289,185** | **$300,432** | | **NON-CURRENT ASSETS** | | | | Property, plant and equipment and mining properties, net | $1,553,733 | $1,389,755 | | Ore on leach pads | $34,991 | $51,268 | | Restricted assets | $8,851 | $9,028 | | Equity securities | — | $12,120 | | Receivables | $20,888 | $22,023 | | Other | $64,456 | $61,517 | | **TOTAL ASSETS** | **$1,972,104**| **$1,846,143** | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | **CURRENT LIABILITIES** | | | | Accounts payable | $143,146 | $96,123 | | Accrued liabilities and other | $110,386 | $92,863 | | Debt | $21,110 | $24,578 | | Reclamation | $5,796 | $5,796 | | **Total Current Liabilities** | **$280,438** | **$219,360** | | **NON-CURRENT LIABILITIES** | | | | Debt | $448,276 | $491,355 | | Reclamation | $202,163 | $196,635 | | Deferred tax liabilities | $19,262 | $14,459 | | Other long-term liabilities | $33,203 | $35,318 | | **Total Non-Current Liabilities** | **$702,904** | **$737,767** | | **STOCKHOLDERS' EQUITY** | | | | Common stock | $3,502 | $2,957 | | Additional paid-in capital | $4,050,460 | $3,891,265 | | Accumulated other comprehensive income (loss) | $9,347 | $12,343 | | Accumulated deficit | $(3,074,547)$ | $(3,017,549)$ | | **Total Stockholders' Equity** | **$988,762** | **$889,016** | | **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | **$1,972,104**| **$1,846,143** | [Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29%20%28Unaudited%29) Details the Company's financial performance for the three and six months ended June 30, 2023 and 2022, including revenue, costs, and net income (loss) | (In thousands, except share data) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $177,235 | $204,123 | $364,533 | $392,527 | | Total costs and expenses | $181,989 | $202,388 | $385,376 | $389,190 | | Total other income (expense), net | $(17,792)$ | $(67,667)$ | $(15,581)$ | $(59,893)$ | | Income (loss) before income and mining taxes | $(22,546)$ | $(65,932)$ | $(36,424)$ | $(56,556)$ | | Income and mining tax (expense) benefit | $(9,866)$ | $(11,502)$ | $(20,574)$ | $(13,196)$ | | **NET INCOME (LOSS)** | **$(32,412)$** | **$(77,434)$** | **$(56,998)$** | **$(69,752)$** | | Other comprehensive income (loss) | $14,066 | $32,514 | $(2,996)$ | $27,756 | | **COMPREHENSIVE INCOME (LOSS)** | **$(18,346)$** | **$(44,920)$** | **$(59,994)$** | **$(41,996)$** | | Basic income (loss) per share | $(0.10)$ | $(0.28)$ | $(0.18)$ | $(0.26)$ | | Diluted income (loss) per share | $(0.10)$ | $(0.28)$ | $(0.18)$ | $(0.26)$ | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) Presents cash inflows and outflows from operating, investing, and financing activities for the three and six months ended June 30, 2023 and 2022 | (In thousands) | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(32,412)$ | $(77,434)$ | $(56,998)$ | $(69,752)$ | | Cash provided by (used in) operating activities | $39,397 | $22,644 | $4,394 | $16,217 | | Cash provided by (used in) investing activities | $(75,634)$ | $(72,536)$ | $(104,951)$ | $(126,678)$ | | Cash provided by (used in) financing activities | $25,861 | $50,741 | $95,296 | $127,468 | | Effect of exchange rate changes on cash and cash equivalents | $253 | $(13)$ | $652 | $259 | | Increase (decrease) in cash, cash equivalents and restricted cash | $(10,123)$ | $836 | $(4,609)$ | $17,266 | | Cash, cash equivalents and restricted cash at beginning of period | $68,683 | $74,719 | $63,169 | $58,289 | | Cash, cash equivalents and restricted cash at end of period | $58,560 | $75,555 | $58,560 | $75,555 | [Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Stockholders%27%20Equity%20%28Unaudited%29) Outlines changes in stockholders' equity for the six months ended June 30, 2023 and 2022, reflecting net income (loss), other comprehensive income (loss), and common stock transactions | (In thousands) | Common Stock Shares | Common Stock Par Value | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total | | :------------- | :------------------ | :--------------------- | :------------------------- | :------------------ | :-------------------------------------------- | :---- | | **Balances at December 31, 2022** | **295,698** | **$2,957** | **$3,891,265** | **$(3,017,549)$** | **$12,343** | **$889,016** | | Net income (loss) | — | — | — | $(24,586)$ | — | $(24,586)$ | | Other comprehensive income (loss) | — | — | — | — | $(17,062)$ | $(17,062)$ | | Common stock issued under "at the market" stock offering | 32,862 | 329 | 98,100 | — | — | 98,429 | | Common stock issued/canceled under long-term incentive plans, annual incentive plans, director fees and options, net | 2,482 | 24 | 715 | — | — | 739 | | **Balances at March 31, 2023** | **331,042** | **$3,310** | **$3,990,080** | **$(3,042,135)$** | **$(4,719)$** | **$946,536** | | Net income (loss) | — | — | — | $(32,412)$ | — | $(32,412)$ | | Other comprehensive income (loss) | — | — | — | — | 14,066 | 14,066 | | Common stock issued for the extinguishment of Senior Notes | 13,941 | 140 | 45,328 | — | — | 45,468 | | Common stock issued under Private Placement Offering | 5,276 | 53 | 12,603 | — | — | 12,656 | | Common stock issued/canceled under long-term incentive plans, annual incentive plans, director fees and options, net | (92) | (1) | 2,449 | — | — | 2,448 | | **Balances at June 30, 2023** | **350,167** | **$3,502** | **$4,050,460** | **$(3,074,547)$** | **$9,347** | **$988,762** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) Provides detailed explanations and additional information pertinent to the unaudited condensed consolidated financial statements [NOTE 1 - BASIS OF PRESENTATION](index=8&type=section&id=NOTE%201%20-%20BASIS%20OF%20PRESENTATION) Interim Condensed Consolidated Financial Statements are unaudited, prepared using management estimates, and should be read with the 2022 10-K - Interim financial statements are unaudited and prepared using management estimates, which may not predict full-year results. They should be read with the 2022 10-K[21](index=21&type=chunk) [NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%202%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Refers to significant accounting policies detailed in the 2022 10-K, with an update on ASU 2022-01 adoption for derivatives and hedging - The Company adopted ASU 2022-01 for derivatives and hedging effective January 1, 2023, which did not materially impact financial position, results, or cash flows[49](index=49&type=chunk) [NOTE 3 – SEGMENT REPORTING](index=8&type=section&id=NOTE%203%20%E2%80%93%20SEGMENT%20REPORTING) Details the Company's operating segments, including Palmarejo, Rochester, Kensington, Wharf mines, and the Silvertip exploration project - Operating segments include Palmarejo, Rochester, Kensington, and Wharf mines (gold/silver production), and the Silvertip exploration project (silver, zinc, lead discovery)[50](index=50&type=chunk) Segment Revenue and Net Income (Loss) for Three Months Ended June 30, 2023 (in thousands) | Segment | Gold sales | Silver sales | Metal sales | Net Income (loss) | | :-------- | :--------- | :----------- | :---------- | :---------------- | | Palmarejo | $35,296 | $37,432 | $72,728 | $11,253 | | Rochester | $12,638 | $16,463 | $29,101 | $(3,492)$ | | Kensington| $24,538 | $63 | $24,601 | $(23,041)$ | | Wharf | $48,883 | $1,922 | $50,805 | $17,956 | | Silvertip | — | — | — | $(4,482)$ | | Other | — | — | — | $(30,606)$ | | **Total** | **$121,355** | **$55,880** | **$177,235**| **$(32,412)$** | Segment Revenue and Net Income (Loss) for Six Months Ended June 30, 2023 (in thousands) | Segment | Gold sales | Silver sales | Metal sales | Net Income (loss) | | :-------- | :--------- | :----------- | :---------- | :---------------- | | Palmarejo | $75,903 | $79,132 | $155,035 | $23,019 | | Rochester | $28,685 | $34,316 | $63,001 | $(20,112)$ | | Kensington| $64,662 | $137 | $64,799 | $(28,650)$ | | Wharf | $79,206 | $2,492 | $81,698 | $21,973 | | Silvertip | — | — | — | $(13,777)$ | | Other | — | — | — | $(39,451)$ | | **Total** | **$248,456** | **$116,077** | **$364,533**| **$(56,998)$** | [NOTE 4 – RECEIVABLES](index=11&type=section&id=NOTE%204%20%E2%80%93%20RECEIVABLES) Receivables include trade, VAT, and income tax receivables, with the Avino note receivable fully paid in March 2023 Receivables (in thousands) | In thousands | June 30, 2023 | December 31, 2022 | | :------------- | :------------ | :---------------- | | **Current receivables:** | | | | Trade receivables | $2,818 | $6,302 | | VAT receivable | $14,803 | $10,741 | | Income tax receivable | $11,042 | $9,719 | | Avino note receivable | — | $4,926 | | Gold and silver forwards realized gains | $456 | $4,059 | | Other | $496 | $586 | | **Total Current Receivables** | **$29,615** | **$36,333** | | **Non-current receivables:** | | | | Other tax receivable | $6,859 | — | | Deferred cash consideration | — | $7,677 | | Contingent consideration | $14,029 | $14,346 | | **Total Non-Current Receivables** | **$20,888** | **$22,023** | | **Total receivables** | **$50,503** | **$58,356** | - The Avino note receivable was paid in full in March 2023[82](index=82&type=chunk) [NOTE 5 – INVENTORY AND ORE ON LEACH PADS](index=12&type=section&id=NOTE%205%20%E2%80%93%20INVENTORY%20AND%20ORE%20ON%20LEACH%20PADS) Inventory and ore on leach pads are reported at the lower of cost or net realizable value, with Rochester experiencing non-cash write-downs Inventory and Ore on Leach Pads (in thousands) | In thousands | June 30, 2023 | December 31, 2022 | | :------------- | :------------ | :---------------- | | **Inventory:** | | | | Concentrate | $2,062 | $2,869 | | Precious metals | $14,336 | $12,636 | | Supplies | $48,125 | $46,326 | | **Total Inventory** | **$64,523** | **$61,831** | | **Ore on Leach Pads:** | | | | Current | $108,768 | $82,958 | | Non-current | $34,991 | $51,268 | | **Total Ore on Leach Pads** | **$143,759** | **$134,226** | | Long-term Stockpile (included in Other) | $38,615 | $28,840 | | **Total Inventory and Ore on Leach Pads** | **$246,897** | **$224,897** | - Rochester mine recorded non-cash write-downs of **$2.1 million** for Q2 2023 and **$16.4 million** for the six months ended June 30, 2023, due to costs exceeding net realizable value, including a **$3.9 million** recovery of prior losses in Q2 2023[32](index=32&type=chunk) [NOTE 6 – INVESTMENTS](index=12&type=section&id=NOTE%206%20%E2%80%93%20INVESTMENTS) The Company makes strategic equity investments in mining companies, recognizing fair value changes in comprehensive income (loss) - In January 2023, the Company sold its remaining **6.0 million** shares of Victoria Gold for net proceeds of **$39.8 million**[86](index=86&type=chunk) - In May 2023, the Company sold **3.7 million** shares of Integra Resources Corporation for net proceeds of **$1.8 million**[63](index=63&type=chunk) Equity Securities at Fair Value (in thousands) | In thousands | Cost | Gross Unrealized Losses | Gross Unrealized Gains | Estimated Fair Value | | :------------- | :--- | :---------------------- | :--------------------- | :------------------- | | **At June 30, 2023** | | | | | | Avino Silver & Gold Mines Ltd | $13,720 | $(4,483)$ | — | $9,237 | | Other | $2,233 | $(2,230)$ | — | $3 | | **Equity securities** | **$15,953** | **$(6,713)$** | **—** | **$9,240** | | **At December 31, 2022** | | | | | | Victoria Gold Corp. | $70,560 | $(38,528)$ | — | $32,032 | | Integra Resources Corp. | $9,455 | $(7,115)$ | — | $2,340 | | Avino Silver & Gold Mines Ltd | $13,720 | $(4,199)$ | — | $9,521 | | Other | $2,233 | $(1,974)$ | — | $259 | | **Equity securities** | **$95,968** | **$(51,816)$** | **—** | **$44,152** | [NOTE 7 – DEBT](index=13&type=section&id=NOTE%207%20%E2%80%93%20DEBT) The Company's debt consists primarily of 2029 Senior Notes and a Revolving Credit Facility (RCF), with recent exchanges and amendments Debt (in thousands) | In thousands | June 30, 2023 Current | June 30, 2023 Non-Current | December 31, 2022 Current | December 31, 2022 Non-Current | | :------------- | :-------------------- | :------------------------ | :------------------------ | :---------------------------- | | 2029 Senior Notes, net | — | $321,869 | — | $369,212 | | Revolving Credit Facility | — | $80,000 | — | $80,000 | | Finance lease obligations | $21,110 | $46,407 | $24,578 | $42,143 | | **Total Debt** | **$21,110** | **$448,276** | **$24,578** | **$491,355** | - In Q2 2023, the Company exchanged **$48.5 million** of 2029 Senior Notes for **13.9 million** shares of common stock, resulting in a **$3.0 million** gain on debt extinguishment[64](index=64&type=chunk) - The Revolving Credit Facility (RCF) was amended on August 9, 2023, to modify financial covenants, allow exclusion of certain costs from Consolidated EBITDA calculation, increase interest rates on some borrowings, and restrict certain acquisitions through March 31, 2024, providing flexibility during the Rochester expansion[88](index=88&type=chunk) [NOTE 8 – RECLAMATION](index=14&type=section&id=NOTE%208%20%E2%80%93%20RECLAMATION) Reclamation and mine closure costs are estimated based on legal and regulatory requirements, with the asset retirement obligation increasing to **$208.0 million** Changes in Asset Retirement Obligations (in thousands) | In thousands | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Asset retirement obligation - Beginning | $205,380 | $184,322 | $202,431 | $181,888 | | Accretion | $4,073 | $3,529 | $8,066 | $6,992 | | Settlements | $(1,493)$ | $(1,449)$ | $(2,537)$ | $(2,478)$ | | **Asset retirement obligation - Ending** | **$207,960** | **$186,402** | **$207,960** | **$186,402** | [NOTE 9 - INCOME AND MINING TAXES](index=14&type=section&id=NOTE%209%20-%20INCOME%20AND%20MINING%20TAXES) The Company reported an income and mining tax expense of **$9.9 million** for Q2 2023 and **$20.6 million** for the six months ended June 30, 2023 - Q2 2023 income and mining tax expense was **$9.9 million**, with an effective tax rate of **(43.8)%**[93](index=93&type=chunk) - Six months ended June 30, 2023, income and mining tax expense was **$20.6 million**, with an effective tax rate of **(56.5)%**[201](index=201&type=chunk) Income and Mining Tax (Expense) Benefit by Jurisdiction (in thousands) | In thousands | Three Months Ended June 30, 2023 Income (loss) before tax | Three Months Ended June 30, 2023 Tax (expense) benefit | Six Months Ended June 30, 2023 Income (loss) before tax | Six Months Ended June 30, 2023 Tax (expense) benefit | | :------------- | :-------------------------------------------------------- | :----------------------------------------------------- | :------------------------------------------------------ | :----------------------------------------------------- | | United States | $(35,540)$ | $(2,264)$ | $(61,320)$ | $(3,282)$ | | Canada | $(4,410)$ | — | $(13,704)$ | — | | Mexico | $17,534$ | $(7,602)$ | $38,933$ | $(17,292)$ | | Other jurisdictions | $(130)$ | — | $(333)$ | — | | **Total** | **$(22,546)$** | **$(9,866)$** | **$(36,424)$** | **$(20,574)$** | [NOTE 10 – STOCK-BASED COMPENSATION](index=15&type=section&id=NOTE%2010%20%E2%80%93%20STOCK-BASED%20COMPENSATION) Stock-based compensation expense increased to **$2.7 million** for Q2 2023 and **$5.8 million** for the six months ended June 30, 2023 - Stock-based compensation expense for the three months ended June 30, 2023, was **$2.7 million**, up from **$2.3 million** in the prior year[97](index=97&type=chunk) - Stock-based compensation expense for the six months ended June 30, 2023, was **$5.8 million**, up from **$4.6 million** in the prior year[97](index=97&type=chunk) - As of June 30, 2023, **$12.4 million** of unrecognized stock-based compensation cost is expected to be recognized over a weighted-average remaining vesting period of **1.8 years**[97](index=97&type=chunk) [NOTE 11 – FAIR VALUE MEASUREMENTS](index=15&type=section&id=NOTE%2011%20%E2%80%93%20FAIR%20VALUE%20MEASUREMENTS) Fair value measurements are classified into a three-level hierarchy, reflecting varying degrees of observable inputs and management judgment - Fair value hierarchy prioritizes inputs: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[73](index=73&type=chunk) Fair Value Measurements at June 30, 2023 (in thousands) | In thousands | Total | Fair Value at Level 1 | Level 2 | Level 3 | | :------------- | :---- | :-------------------- | :------ | :------ | | **Assets:** | | | | | | Equity securities including warrants | $9,240 | $9,237 | $3 | — | | Provisional metal sales contracts | $36 | — | $36 | — | | Gold forwards | $3,399 | — | $3,399 | — | | Silver forwards | $5,949 | — | $5,949 | — | | **Total Assets** | **$18,624** | **$9,237** | **$9,387** | **—** | | **Liabilities:** | | | | | | Provisional metal sales contracts | $67 | — | $67 | — | - The sale of La Preciosa Deferred Consideration in May 2023 resulted in a **$12.3 million** loss, with the deferred cash consideration valued at **$0.8 million** (Level 2)[78](index=78&type=chunk)[104](index=104&type=chunk) - Contingent consideration from Sterling/Crown properties is valued at **$13.0 million** (Level 3) using a discounted cash flow model with significant unobservable inputs[78](index=78&type=chunk)[104](index=104&type=chunk) [NOTE 12 – DERIVATIVE FINANCIAL INSTRUMENTS & HEDGING ACTIVITIES](index=17&type=section&id=NOTE%2012%20%E2%80%93%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS%20%26%20HEDGING%20ACTIVITIES) The Company uses derivative instruments, primarily gold and silver forward contracts, to manage exposure to metal price fluctuations - The Company uses gold and silver forward contracts as cash flow hedges to manage metal price exposure, with **$9.3 million** of net after-tax gains in AOCI expected to be recognized in the next 12 months[119](index=119&type=chunk)[121](index=121&type=chunk) Derivative Cash Flow Hedge Instruments at June 30, 2023 | In thousands except average prices and notional ounces | 2023 | 2024 and Thereafter | | :----------------------------------------------------- | :-------- | :------------------ | | **Gold forwards** | | | | Average gold fixed price per ounce | $1,977 | — | | Notional ounces | 111,498 | — | | **Silver forwards** | | | | Average silver fixed price per ounce | $25.40 | — | | Notional ounces | 2,490,000 | — | - Provisional metal sales contracts contain embedded derivatives that are marked to market through earnings, resulting in a **$0.1 million** loss for Q2 2023[126](index=126&type=chunk)[329](index=329&type=chunk) [NOTE 13 – ADDITIONAL COMPREHENSIVE INCOME (LOSS) DETAIL](index=20&type=section&id=NOTE%2013%20%E2%80%93%20ADDITIONAL%20COMPREHENSIVE%20INCOME%20%28LOSS%29%20DETAIL) Provides a breakdown of "Other, net" expenses, primarily including Silvertip carrying costs, asset retirement accretion, and a significant loss on asset sales Pre-development, Reclamation, and Other Expenses (in thousands) | In thousands | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | COVID-19 | $21 | $318 | $77 | $1,290 | | Silvertip ongoing carrying costs | $4,609 | $4,754 | $10,789 | $10,913 | | Asset retirement accretion | $4,073 | $3,529 | $8,066 | $6,992 | | Other | $1,345 | $577 | $2,006 | $1,395 | | **Pre-development, reclamation, and other** | **$10,048** | **$9,178** | **$20,938** | **$20,590** | Other, Net Components (in thousands) | In thousands | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Foreign exchange (loss) gain | $627 | $(506)$ | $(527)$ | $(1,065)$ | | Loss on the sale of assets | $(12,631)$ | $621 | $(12,631)$ | $2,452 | | RMC bankruptcy distribution | $1,516 | — | $1,516 | — | | Other | $569 | $198 | $762 | $663 | | **Other, net** | **$(9,919)$** | **$313** | **$(10,880)$** | **$2,050** | [NOTE 14 – NET INCOME (LOSS) PER SHARE](index=20&type=section&id=NOTE%2014%20%E2%80%93%20NET%20INCOME%20%28LOSS%29%20PER%20SHARE) The Company reported a basic and diluted net loss per share of **$0.10** for Q2 2023 and **$0.18** for the six months ended June 30, 2023 Net Income (Loss) Per Share (in thousands, except per share amounts) | In thousands except per share amounts | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) available to common stockholders | $(32,412)$ | $(77,434)$ | $(56,998)$ | $(69,752)$ | | **Weighted average shares:** | | | | | | Basic | 333,082 | 278,040 | 317,105 | 268,884 | | Effect of stock-based compensation plans | — | — | — | — | | Diluted | 333,082 | 278,040 | 317,105 | 268,884 | | **Income (loss) per share:** | | | | | | Basic | $(0.10)$ | $(0.28)$ | $(0.18)$ | $(0.26)$ | | Diluted | $(0.10)$ | $(0.28)$ | $(0.18)$ | $(0.26)$ | - **2,005,184** and **1,672,213** common stock equivalents were excluded from diluted EPS for the three and six months ended June 30, 2023, respectively, as they were antidilutive[130](index=130&type=chunk) [NOTE 15 - SUPPLEMENTAL GUARANTOR INFORMATION](index=21&type=section&id=NOTE%2015%20-%20SUPPLEMENTAL%20GUARANTOR%20INFORMATION) Provides summarized financial information for Coeur Mining, Inc. (parent company) and its Subsidiary Guarantors, which fully guarantee the 2029 Senior Notes - The Subsidiary Guarantors (Coeur Alaska, Coeur Explorations, Coeur Rochester, Coeur South America, Wharf Resources, Coeur Capital, Sterling Intermediate Holdco, and Coeur Sterling Holdings LLC) fully and unconditionally guarantee the 2029 Senior Notes[169](index=169&type=chunk) Summarized Balance Sheet (in thousands) | In thousands | Coeur Mining, Inc. June 30, 2023 | Coeur Mining, Inc. December 31, 2022 | Guarantor Subsidiaries June 30, 2023 | Guarantor Subsidiaries December 31, 2022 | | :------------- | :------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Current assets | $30,195 | $73,692 | $163,663 | $137,432 | | Non-current assets | $412,636 | $445,778 | $1,152,139 | $991,213 | | Non-guarantor intercompany assets | $1,910 | $4,391 | — | — | | Current liabilities | $22,134 | $19,842 | $205,617 | $136,788 | | Non-current liabilities | $411,509 | $457,195 | $196,098 | $193,024 | | Non-guarantor intercompany liabilities | $64,108 | $58,257 | $1,658 | $1,594 | Summarized Statements of Income for Six Months Ended June 30, 2023 (in thousands) | In thousands | Coeur Mining, Inc. | Guarantor Subsidiaries | | :------------- | :----------------- | :--------------------- | | Revenue | — | $209,497 | | Gross profit (loss) | $(600)$ | $(10,067)$ | | Net income (loss) | $(56,998)$ | $(26,782)$ | [NOTE 16 – COMMITMENTS AND CONTINGENCIES](index=22&type=section&id=NOTE%2016%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) The Company faces ongoing litigation with the Mexican government regarding VAT refunds and has contract liabilities for metal sales prepayments - The Company is engaged in ongoing efforts to recover **$30.9 million** in VAT from the Mexican government, including initiating NAFTA arbitration proceedings[172](index=172&type=chunk) - Coeur Mexicana sells **50%** of Palmarejo gold production to Franco-Nevada under a gold stream agreement, with a remaining unamortized contract liability of **$7.2 million** at June 30, 2023[173](index=173&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - In June 2023, the Company received **$25.0 million** for the Kensington June 2023 Prepayment and **$10.0 million** each for Wharf and Rochester 2023 Prepayments, totaling **$45.0 million** in new metal sales prepayments[176](index=176&type=chunk) [NOTE 17 – ADDITIONAL BALANCE SHEET DETAIL AND SUPPLEMENTAL CASH FLOW INFORMATION](index=24&type=section&id=NOTE%2017%20%E2%80%93%20ADDITIONAL%20BALANCE%20SHEET%20DETAIL%20AND%20SUPPLEMENTAL%20CASH%20FLOW%20INFORMATION) Provides further detail on accrued liabilities and other, and reconciles cash, cash equivalents, and restricted cash Accrued Liabilities and Other (in thousands) | In thousands | June 30, 2023 | December 31, 2022 | | :------------- | :------------ | :---------------- | | Accrued salaries and wages | $22,486 | $29,868 | | Flow-through share premium received (including over-allotment) | $5,510 | — | | Deferred revenue | $45,548 | $25,736 | | Income and mining taxes | $6,040 | $7,874 | | Accrued operating costs | $8,630 | $6,241 | | Unrealized losses on derivatives | $67 | $10 | | Taxes other than income and mining | $2,791 | $3,318 | | Accrued interest payable | $8,044 | $8,256 | | Operating lease liabilities | $11,270 | $11,560 | | **Accrued liabilities and other** | **$110,386** | **$92,863** | Cash, Cash Equivalents and Restricted Cash (in thousands) | In thousands | June 30, 2023 | June 30, 2022 | | :------------- | :------------ | :------------ | | Cash and cash equivalents | $56,845 | $74,159 | | Restricted cash equivalents | $1,715 | $1,396 | | **Total cash, cash equivalents and restricted cash** | **$58,560** | **$75,555** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Provides management's perspective on the Company's financial condition and operational results, highlighting key performance drivers and strategic initiatives [Overview](index=25&type=section&id=Overview) Coeur reported Q2 2023 revenue of **$177.2 million**, **$39.4 million** operating cash flow, **$32.4 million** GAAP net loss, and **$22.2 million** Adjusted EBITDA Q2 2023 Key Financial Highlights (in millions) | Metric | Q2 2023 (in millions) | | :----- | :-------------------- | | Revenue | $177.2 | | Cash provided by operating activities | $39.4 | | GAAP Net Loss | $(32.4)$ | | GAAP Net Loss per diluted share | $(0.10)$ | | Adjusted EBITDA (non-GAAP) | $22.2 | | Adjusted Net Loss (non-GAAP) | $(20.2)$ | | Adjusted Net Loss per diluted share (non-GAAP) | $(0.06)$ | [Second Quarter Highlights](index=25&type=section&id=Second%20Quarter%20Highlights) Key Q2 2023 highlights include Rochester expansion nearing completion, strong production at Rochester and Wharf, and revised gold guidance - Rochester expansion is approximately **97% complete** as of July 31, with initial ounces expected next month and ramp-up through H2 2023 and early 2024. Total project cost is now estimated to be **6-9%** (**$40-$60 million**) higher than previous guidance[184](index=184&type=chunk) - Q2 gold production totaled **68,406 ounces** and silver production **2.4 million ounces**. Strong performance at Rochester and Wharf mitigated lower production at Kensington due to water flows and backfill issues[184](index=184&type=chunk) - Full-year 2023 silver production guidance is maintained at **10-12 million ounces**, while gold production guidance is revised down by approximately **5%** to **304,000-352,500 ounces** due to Kensington's Q2 performance[184](index=184&type=chunk) [Consolidated Financial Results](index=26&type=section&id=Consolidated%20Financial%20Results) Consolidated revenue decreased by **5%** for Q2 2023 and **7%** for the six months ended June 30, 2023, primarily due to lower ounces sold [Three Months Ended June 30, 2023 compared to Three Months Ended March 31, 2023](index=26&type=section&id=Three%20Months%20Ended%20June%2030%2C%202023%20compared%20to%20Three%20Months%20Ended%20March%2031%2C%202023) Q2 2023 revenue decreased by **$10.1 million (5%)** compared to Q1 2023, driven by lower gold and silver ounces sold, with net loss increasing to **$32.4 million** Consolidated Metal Sales (in thousands) | In thousands | Three Months Ended June 30, 2023 | March 31, 2023 | Increase (Decrease) | Percentage Change | | :------------- | :------------------------------- | :------------- | :------------------ | :---------------- | | Gold sales | $121,355 | $127,101 | $(5,746)$ | (5)% | | Silver sales | $55,880 | $60,197 | $(4,317)$ | (7)% | | **Metal sales** | **$177,235** | **$187,298** | **$(10,063)$** | **(5)%** | - Net loss increased to **$32.4 million** (Q2 2023) from **$24.6 million** (Q1 2023), primarily due to lower gold and silver ounces sold, unfavorable fair value adjustments on equity investments, and a **$12.3 million** loss on the sale of La Preciosa Deferred Consideration[194](index=194&type=chunk) - Costs applicable to sales decreased by **$13.4 million (9%)**, amortization decreased by **$3.1 million (14%)**, and general and administrative expenses decreased by **$2.3 million (19%)** QoQ[212](index=212&type=chunk)[213](index=213&type=chunk) [Six Months Ended June 30, 2023 compared to Six Months Ended June 30, 2022](index=28&type=section&id=Six%20Months%20Ended%20June%2030%2C%202023%20compared%20to%20Six%20Months%20Ended%20June%2030%2C%202022) For the six months ended June 30, 2023, revenue decreased by **$28.0 million (7%)** YoY, primarily due to lower gold and silver ounces sold, with net loss decreasing to **$57.0 million** Consolidated Metal Sales (in thousands) | In thousands | Six Months Ended June 30, 2023 | June 30, 2022 | Increase (Decrease) | Percentage Change | | :------------- | :------------------------------- | :------------ | :------------------ | :---------------- | | Gold sales | $248,456 | $276,076 | $(27,620)$ | (10)% | | Silver sales | $116,077 | $116,451 | $(374)$ | — % | | **Metal sales** | **$364,533** | **$392,527** | **$(27,994)$** | **(7)%** | - Net loss decreased to **$57.0 million** (H1 2023) from **$69.8 million** (H1 2022), driven by favorable changes in equity investment fair value, higher realized metal prices, and lower LCM adjustments, despite decreased gold/silver ounces sold and higher interest expense[203](index=203&type=chunk) - Costs applicable to sales increased by **$8.7 million (3%)**, general and administrative expenses increased by **$2.3 million (12%)**, and interest expense increased to **$14.3 million** from **$9.7 million** YoY[219](index=219&type=chunk)[220](index=220&type=chunk)[223](index=223&type=chunk) [2023 Guidance](index=30&type=section&id=2023%20Guidance) Coeur reiterated its 2023 production and cost guidance, with updates for Kensington's production and capital expenditures reflecting revised Rochester expansion costs 2023 Production Guidance (ounces) | | Previous Gold (oz) | Previous Silver (K oz) | Updated Gold (oz) | Updated Silver (K oz) | | :-------- | :----------------- | :--------------------- | :---------------- | :-------------------- | | Palmarejo | 100,000 - 112,500 | 6,500 - 7,500 | 100,000 - 112,500 | 6,500 - 7,500 | | Rochester | 35,000 - 50,000 | 3,500 - 4,500 | 35,000 - 50,000 | 3,500 - 4,500 | | Kensington| 100,000 - 112,500 | — | 84,000 - 95,000 | — | | Wharf | 85,000 - 95,000 | — | 85,000 - 95,000 | — | | **Total** | **320,000 - 370,000** | **10,000 - 12,000** | **304,000 - 352,500** | **10,000 - 12,000** | 2023 Capital, Exploration and G&A Guidance (in millions) | Metric | Previous ($M) | Updated ($M) | | :----- | :------------ | :----------- | | Capital Expenditures, Sustaining | $120 - $145 | $148 - $168 | | Capital Expenditures, Development | $200 - $235 | $230 - $264 | | Exploration, Expensed | $30 - $35 | $30 - $35 | | Exploration, Capitalized | $10 - $15 | $10 - $15 | | General & Administrative Expenses | $36 - $40 | $36 - $40 | 2023 Costs Applicable to Sales Guidance (per ounce) | | Gold ($/oz) Previous | Silver ($/oz) Previous | Gold ($/oz) Updated | Silver ($/oz) Updated | | :-------- | :------------------- | :--------------------- | :------------------ | :-------------------- | | Palmarejo (co-product) | $900 - $1,050 | $14.25 - $15.25 | $900 - $1,050 | $14.25 - $15.25 | | Rochester (co-product) | — | — | — | — | | Kensington| $1,500 - $1,700 | — | $1,650 - $1,750 | — | | Wharf (by-product) | $1,200 - $1,350 | — | $1,200 - $1,350 | — | [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Details the operational performance of each mine and the Silvertip exploration project, highlighting production volumes, grades, and costs [Palmarejo](index=32&type=section&id=Palmarejo) Palmarejo experienced decreased gold and silver production due to lower mill throughput and recoveries, leading to an **8%** decrease in revenue YoY - Six months ended June 30, 2023: Gold production decreased **14%** and silver production decreased **7%** YoY, primarily due to **9%** lower mill throughput and lower gold grades[260](index=260&type=chunk) - Revenue decreased by **$14.0 million (8%)** YoY, with **$21.7 million** due to lower volume, partially offset by **$7.7 million** from higher average realized prices[260](index=260&type=chunk) - Costs applicable to sales per gold ounce increased **22%** to **$975** and per silver ounce increased **15%** to **$14.57** YoY, driven by inflationary pressures and lower production[260](index=260&type=chunk)[322](index=322&type=chunk) [Rochester](index=33&type=section&id=Rochester) Rochester's gold and silver production increased YoY, with the expansion project **97%** complete but total costs projected to be **$40-$60 million** higher than previous guidance - Six months ended June 30, 2023: Gold production increased **1%** and silver production increased **7%** YoY, mainly due to timing of recoveries[234](index=234&type=chunk) - Rochester expansion project is approximately **97% complete** as of July 31, with **$660 million** incurred. Total project cost is now estimated to be **6-9%** (**$40-$60 million**) above the prior high-end of guidance (**$650-$670 million**)[264](index=264&type=chunk)[235](index=235&type=chunk) - Costs applicable to sales per gold and silver ounce decreased **7%** and **11%** respectively YoY, due to mix of sales, lower LCM adjustments, and lower diesel costs[234](index=234&type=chunk) [Kensington](index=34&type=section&id=Kensington) Kensington's gold production decreased significantly for Q2 2023 and H1 2023 due to lower grades and mine sequencing challenges, leading to higher costs - Q2 2023 gold production decreased **35%** QoQ due to **40%** lower grades, mine sequencing, stope extraction challenges, significant water inflows, and paste backfill issues[236](index=236&type=chunk) - Six months ended June 30, 2023: Gold production decreased **34%** YoY due to lower throughput, grades, and recoveries[237](index=237&type=chunk) - Costs applicable to sales per gold ounce increased **65%** QoQ to **$2,945** and **49%** YoY to **$2,235**, primarily due to lower production and higher outside service costs[236](index=236&type=chunk)[237](index=237&type=chunk)[322](index=322&type=chunk) [Wharf](index=34&type=section&id=Wharf) Wharf's gold production increased for Q2 2023 and H1 2023, driven by timing of recoveries and higher grades, leading to increased revenue - Q2 2023 gold production increased **66%** QoQ due to timing of recoveries, leading to a **64%** increase in revenue[238](index=238&type=chunk) - Six months ended June 30, 2023: Gold production increased **8%** YoY due to higher grades, resulting in a **13%** increase in revenue[239](index=239&type=chunk) - Costs applicable to sales per gold ounce decreased **30%** QoQ to **$1,031** due to higher production and lower operating costs, but increased **2%** YoY to **$1,199** due to higher diesel and consumable costs[238](index=238&type=chunk)[240](index=240&type=chunk)[322](index=322&type=chunk) [Silvertip](index=35&type=section&id=Silvertip) Silvertip remains a long-term exploration project focused on developing a new geological model, with significantly decreased capital expenditures in H1 2023 - Silvertip is focused on compiling, analyzing, and interpreting historical data to increase understanding of the geological context and mineralization system, with a new geological model expected by year-end 2023[272](index=272&type=chunk) - Capital expenditures at Silvertip totaled **$0.8 million** in H1 2023, a significant decrease from **$17.6 million** in the prior year, due to planned reductions in capital development expenditures[271](index=271&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The Company maintains liquidity through cash, its Revolving Credit Facility (RCF), and marketable securities, expecting to fund capital requirements through operating cash flows and financing - At June 30, 2023, the Company had **$58.6 million** in cash, cash equivalents, and restricted cash, and **$280.5 million** available under its **$390 million** RCF, totaling approximately **$346 million** in liquidity[273](index=273&type=chunk)[243](index=243&type=chunk) - The Company believes it has sufficient funding for the next 12 months and longer-term, using a combination of operating cash, equity financing, and RCF borrowings, underpinned by gold and silver hedging programs[246](index=246&type=chunk) - The RCF was amended in August 2023 to provide greater flexibility in financial covenants during the Rochester expansion, allow exclusion of certain costs from Consolidated EBITDA, increase interest rates on some borrowings, and restrict certain acquisitions[243](index=243&type=chunk) [Cash Provided by (Used in) Operating Activities](index=36&type=section&id=Cash%20Provided%20by%20%28Used%20in%29%20Operating%20Activities) Net cash provided by operating activities was **$39.4 million** for Q2 2023, a significant increase from Q1 2023, but decreased YoY for the six months ended June 30, 2023 - Net cash provided by operating activities was **$39.4 million** for Q2 2023, compared to net cash used of **$35.0 million** for Q1 2023, an increase of **$74.4 million**[278](index=278&type=chunk)[279](index=279&type=chunk) - The increase in Q2 2023 operating cash flow was driven by higher average realized gold/silver prices, **$45.0 million** in metal sales prepayments, and lower exploration costs[279](index=279&type=chunk) - Net cash provided by operating activities for the six months ended June 30, 2023, was **$4.4 million**, a decrease of **$11.8 million** from **$16.2 million** in the prior year, mainly due to lower gold/silver ounces sold and higher operating costs[278](index=278&type=chunk)[279](index=279&type=chunk) [Cash Provided by (Used in) Investing Activities](index=37&type=section&id=Cash%20Provided%20by%20%28Used%20in%29%20Investing%20Activities) Net cash used in investing activities increased to **$75.6 million** in Q2 2023 due to higher capital expenditures, but decreased YoY for the six months ended June 30, 2023 - Net cash used in investing activities was **$75.6 million** for Q2 2023, up from **$29.3 million** in Q1 2023, mainly due to increased capital expenditures of **$85.6 million**[309](index=309&type=chunk) - Capital expenditures for the six months ended June 30, 2023, were **$159.6 million**, primarily for Rochester expansion and underground development at Palmarejo and Kensington[309](index=309&type=chunk) - Net cash used in investing activities for the six months ended June 30, 2023, decreased to **$105.0 million** from **$126.7 million** in the prior year, benefiting from **$39.8 million** from Victoria Gold shares sale, **$7.0 million** from La Preciosa Deferred Consideration sale, and **$5.0 million** from Avino note receivable[309](index=309&type=chunk) [Cash Provided by Financing Activities](index=37&type=section&id=Cash%20Provided%20by%20Financing%20Activities) Net cash provided by financing activities was **$25.9 million** for Q2 2023, including RCF draws and flow-through share sales, and **$95.3 million** for the six months ended June 30, 2023 - Net cash provided by financing activities was **$25.9 million** for Q2 2023, including **$20.0 million** net draw under the RCF and **$13.1 million** from flow-through share sales[250](index=250&type=chunk) - For the six months ended June 30, 2023, net cash provided by financing activities was **$95.3 million**, primarily from **$98.4 million** in net proceeds from the March 2023 Equity Offering and **$13.1 million** from flow-through share sales[310](index=310&type=chunk) - In March 2023, the Company completed a **$100.0 million** 'at the market' equity offering, selling **32.9 million** shares for **$98.4 million** net proceeds[275](index=275&type=chunk) [Critical Accounting Policies and Accounting Developments](index=38&type=section&id=Critical%20Accounting%20Policies%20and%20Accounting%20Developments) This section refers to the critical accounting policies and estimates detailed in the 2022 10-K and Note 2 of this report - Critical accounting policies and estimates are detailed in the 2022 10-K and Note 2 of this report[282](index=282&type=chunk) [Other Liquidity Matters](index=38&type=section&id=Other%20Liquidity%20Matters) The Company may issue equity or repurchase debt to manage indebtedness and asserts indefinite reinvestment of Mexican earnings - The Company may issue equity or repurchase debt to reduce indebtedness, fund interest payments, or for general working capital, evaluating transactions based on market conditions and liquidity needs[283](index=283&type=chunk) - The Company asserts indefinite reinvestment of earnings from its Mexican operations, which is not expected to have a material impact on liquidity[252](index=252&type=chunk) [Non-GAAP Financial Performance Measures](index=38&type=section&id=Non-GAAP%20Financial%20Performance%20Measures) Provides reconciliations and explanations for non-GAAP financial measures used by management to evaluate operating performance - Non-GAAP financial measures are used to evaluate operating performance and are not substitutes for GAAP measures[284](index=284&type=chunk) [Adjusted Net Income (Loss)](index=38&type=section&id=Adjusted%20Net%20Income%20%28Loss%29) Adjusted Net Income (Loss) is a non-GAAP measure reflecting the underlying operating performance of the core mining business, with Q2 2023 adjusted net loss at **$20.2 million** - Adjusted net income (loss) reflects the underlying operating performance of the core mining business, allowing comparison to other mining companies[285](index=285&type=chunk) Adjusted Net Income (Loss) Reconciliation (in thousands) | In thousands except per share amounts | Three Months Ended June 30, 2023 | Three Months Ended March 31, 2023 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------ | :------------------------------- | :-------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(32,412)$ | $(24,586)$ | $(56,998)$ | $(69,752)$ | | Fair value adjustments, net | $3,922 | $(10,561)$ | $(6,639)$ | $52,205 | | Foreign exchange loss (gain) | $154 | $1,991 | $2,145 | $1,503 | | (Gain) loss on sale of assets and securities | $12,622 | $9 | $12,631 | $(2,452)$ | | RMC bankruptcy distribution | $(1,516)$ | — | $(1,516)$ | — | | Gain on debt extinguishment | $(2,961)$ | — | $(2,961)$ | — | | COVID-19 costs | $21 | $56 | $77 | $1,290 | | Other adjustments | $1,137 | $70 | $1,207 | $(179)$ | | Tax effect of adjustments | $(1,120)$ | $(37)$ | $(1,157)$ | $(9,502)$ | | **Adjusted net income (loss)** | **$(20,153)$** | **$(33,058)$** | **$(53,211)$** | **$(26,887)$** | | Adjusted net income (loss) per share, Basic | $(0.06)$ | $(0.11)$ | $(0.17)$ | $(0.10)$ | | Adjusted net income (loss) per share, Diluted | $(0.06)$ | $(0.11)$ | $(0.17)$ | $(0.10)$ | [EBITDA and Adjusted EBITDA](index=39&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) EBITDA and Adjusted EBITDA are non-GAAP measures used to assess operating performance and leverage, with Q2 2023 EBITDA at **$3.96 million** and Adjusted EBITDA at **$22.24 million** - EBITDA and Adjusted EBITDA are used to evaluate operating performance, plan operations, and assess leverage and liquidity[316](index=316&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (in thousands) | In thousands except per share amounts | Three Months Ended June 30, 2023 | Three Months Ended March 31, 2023 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :------------------------------------ | :------------------------------- | :-------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $(32,412)$ | $(24,586)$ | $(56,998)$ | $(69,752)$ | | Interest expense, net of capitalized interest | $6,912 | $7,389 | $14,301 | $9,738 | | Income tax provision (benefit) | $9,866 | $10,708 | $20,574 | $13,196 | | Amortization | $19,595 | $22,708 | $42,303 | $54,398 | | **EBITDA** | **$3,961** | **$16,219** | **$20,180** | **$7,580** | | Fair value adjustments, net | $3,922 | $(10,561)$ | $(6,639)$ | $52,205 | | Foreign exchange (gain) loss | $(627)$ | $1,154 | $527 | $1,065 | | Asset retirement obligation accretion | $4,073 | $3,993 | $8,066 | $6,992 | | Inventory adjustments and write-downs | $1,603 | $14,187 | $15,790 | $10,760 | | (Gain) loss on sale of assets and securities | $12,622 | $9 | $12,631 | $(2,452)$ | | RMC bankruptcy distribution | $(1,516)$ | — | $(1,516)$ | — | | Gain on debt extinguishment | $(2,961)$ | — | $(2,961)$ | — | | COVID-19 costs | $21 | $56 | $77 | $1,290 | | Other adjustments | $1,137 | $70 | $1,207 | $(179)$ | | **Adjusted EBITDA** | **$22,235** | **$25,127** | **$47,362** | **$77,261** | [Free Cash Flow](index=40&type=section&id=Free%20Cash%20Flow) Free Cash Flow, a non-GAAP measure, is calculated as cash provided by (used in) operating activities less capital expenditures, with Q2 2023 at negative **$46.2 million** - Free Cash Flow is used to analyze cash flows generated from operations and compare performance with competitors[317](index=317&type=chunk) Free Cash Flow Reconciliation (in thousands) | (Dollars in thousands) | Three Months Ended June 30, 2023 | Three Months Ended March 31, 2023 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------- | :------------------------------- | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash flow from operations | $39,397 | $(35,003)$ | $4,394 | $16,217 | | Capital expenditures | $85,581 | $74,048 | $159,629 | $142,658 | | **Free cash flow** | **$(46,184)$** | **$(109,051)$** | **$(155,235)$** | **$(126,441)$** | [Operating Cash Flow Before Changes in Working Capital](index=40&type=section&id=Operating%20Cash%20Flow%20Before%20Changes%20in%20Working%20Capital) This non-GAAP measure excludes changes in operating assets and liabilities from operating cash flow, providing a clearer view of cash generated from core operations - Operating Cash Flow Before Changes in Working Capital is used to analyze cash flows generated from operations, excluding the impact of changes in working capital[290](index=290&type=chunk) Operating Cash Flow Before Changes in Working Capital Reconciliation (in thousands) | (Dollars in thousands) | Three Months Ended June 30, 2023 | Three Months Ended March 31, 2023 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--------------------- | :------------------------------- | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash provided by (used in) operating activities | $39,397 | $(35,003)$ | $4,394 | $16,217 | | Changes in operating assets and liabilities: |

Financial Data and Key Metrics Changes - The company's first quarter results were slightly ahead of expectations, driven by strong performance at Palmarejo, Rochester, and Wharf operations, which offset a weaker quarter from Kensington mine [3] - Revenue was essentially flat compared to the first quarter of 2022 despite lower gold production, benefiting from stronger metals prices [19] - Total liquidity stood at $382 million, with a significant layer of downside price risk mitigation in place for the remainder of 2023 via metals hedges [21] Business Line Data and Key Metrics Changes - At Palmarejo, production exceeded expectations due to higher silver grades and strong contributions from La Nación, with overall operating costs decreasing by 10% on gold and 2% on silver [15] - Rochester's production was better than anticipated, driven by positive residual effects from previous solution breakthroughs, despite weather-related challenges [16] - Wharf's results were slightly ahead of plan, benefiting from higher grade material placed earlier in the year, with lower per ounce costs than anticipated [18] Market Data and Key Metrics Changes - The ongoing exploration success at Kensington and Silvertip added approximately 2 million gold equivalent ounces of reserves and over 4 million gold equivalent ounces of resources, representing increases of 34% in reserves and 60% in resources [5] - The company is currently experiencing a peak level of capital intensity at Rochester, with nearly $1 million per day being spent during the first half of 2023 [38] Company Strategy and Development Direction - The company is focused on completing the Rochester expansion and ramping up production in the second half of the year, which is expected to be a key inflection point [4][40] - There is a commitment to enhancing understanding of the Silvertip deposit while prioritizing the successful commissioning and ramp-up of Rochester [10][41] - The company is also investing in high-value exploration priorities, particularly at Kensington, to set up for higher returns in future periods [23] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter is typically the softest due to weather and one-time payments, but they remain on track to deliver on full-year guidance [3] - The company is assessing the impact of recent changes to the Mexican Mining Law, which may face legal challenges [6] - Management expressed optimism about easing costs among three of the four largest cost buckets, indicating potential moderation of inflation [37] Other Important Information - The company published its ESG report, highlighting its commitment to environmental, social, and governance practices [7] - The first quarter financial results included two one-time annual payments totaling $23 million, impacting overall financial results [20] Q&A Session Summary Question: What are the thoughts on cost applicable to sales at Rochester for the remainder of the year? - Management indicated that first-quarter results were in line with plans and guidance for costs would be issued alongside Q2 results, with expectations of noise in the next two quarters [26] Question: Will the third quarter be the strongest for Rochester? - Management confirmed that the third quarter is expected to be the highest production quarter due to the initial surge in ounces from newly stacked material [27][45] Question: What is the status of liquidity and any covenants attached to the facility? - Management reassured that there is ample room under the facility and cash on hand for the completion of Rochester, with key covenants being monitored [50] Question: What mitigation strategies are in place for Kensington's production challenges? - Management highlighted onboarding new development contractor groups to improve production and extend mine life, with expectations of catching up over the next two quarters [52][53]

Equity Securities The Company makes strategic investments in equity securities of silver and gold exploration, development and royalty and streaming companies. | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-----------------------------------------|-------|--------|-------|--------------------------------------|------------|------------------------|-------|------------------------| | In thousands \nEquity Securities | | Cost | | At March \nGross Unrealized Losses | 31, 2023 | Gross Unrealized Gain ...