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Coeur Mining(CDE) - 2024 Q2 - Earnings Call Transcript
CDECoeur Mining(CDE)2024-08-08 17:46
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Financial Data and Key Metrics Changes - Coeur Mining reported a significant increase in quarterly adjusted EBITDA, which jumped 136% year-over-year, while the last twelve months (LTM) adjusted EBITDA increased 90% to 192million[3][11]−Thecompanyendedthequarterwithapproximately192 million [3][11] - The company ended the quarter with approximately 275 million drawn on its 400millionrevolvingcreditfacility,withnetdebttoEBITDAratiosimprovingtobelowthreetimesforthefirsttimeinovertwoyears[14]BusinessLineDataandKeyMetricsChanges−Rochester′ssilverproductionincreasedto973,000ouncesandgoldproductiontoover8,000ounces,bothdrivenbyenhancedcrushingandplacementoperations[7]−Palmarejocontinuedtoperformwell,deliveringabout25,000metersofgoldandnearly1.6millionouncesofsilver[8]−Kensingtonisexpectedtoreachafreecashflowinflectionpointinthesecondhalfofnextyear,withsignificantimprovementsinoperationalmetrics[4][9]−Wharf′sgoldproductionincreasedto22,000ounces,withadjustedcashcostsdecreasingby29400 million revolving credit facility, with net debt to EBITDA ratios improving to below three times for the first time in over two years [14] Business Line Data and Key Metrics Changes - Rochester's silver production increased to 973,000 ounces and gold production to over 8,000 ounces, both driven by enhanced crushing and placement operations [7] - Palmarejo continued to perform well, delivering about 25,000 meters of gold and nearly 1.6 million ounces of silver [8] - Kensington is expected to reach a free cash flow inflection point in the second half of next year, with significant improvements in operational metrics [4][9] - Wharf's gold production increased to 22,000 ounces, with adjusted cash costs decreasing by 29% to 822 per ounce [10] Market Data and Key Metrics Changes - Commodity prices in the second quarter were approximately 10% higher year-over-year, contributing to the improved financial performance [3] Company Strategy and Development Direction - The company aims to transition to positive free cash flow in the second half of the year, supported by the ramp-up of Rochester and stable operations across its U.S.-centric mines [2][5] - Coeur Mining is focusing on aggressive debt reduction following the anticipated increase in free cash flow [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve production guidance for 2024 across all operations, with a focus on optimizing operations and maximizing recoveries [11][12] - The acquisition of key concessions from Fresnillo is expected to provide new opportunities for higher-margin mine life extensions at Palmarejo [4][15] Other Important Information - The company is undertaking a significant thermal program at Silvertip, which includes various exploration strategies to identify larger ore bodies [17] - The Kensington multiyear program is progressing well, with ongoing exploration expected to enhance mine life [17] Q&A Session Summary Question: Can you provide more details on the cost guidance adjustment for Rochester? - Management explained that the adjustment was due to the timing of ounces placed on Stage VI, with no significant changes to the underlying inputs [19][20] Question: When can we expect to pull the first ounce from the newly acquired land near Palmarejo? - The first drilling is expected in early 2025, with potential ounces coming from the area around 2026 [22][24] Question: What is the company's long-term debt repayment strategy? - The company aims for a total debt-to-EBITDA ratio of one time and net debt to EBITDA of zero, with a focus on repaying the revolver as cash flow increases [25] Question: How is the Rochester crushing circuit performing? - The crushing circuit is performing well, with consistent throughput and expectations to achieve 7 million to 8 million tonnes per quarter for the remainder of the year [26][27]