Coeur Mining(US:CDE)2023-11-09 17:59Financial 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]