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Coeur Mining(CDE) - 2024 Q4 - Earnings Call Transcript
CDECoeur Mining(CDE)2025-02-20 20:16
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Financial Data and Key Metrics Changes - In 2024, Coeur Mining, Inc. achieved over 1billioninrevenue,withadjustedEBITDAmorethandoublingto1 billion in revenue, with adjusted EBITDA more than doubling to 339 million compared to the prior year [5][26] - The company generated 85millioninfreecashflowandreduceddebtby85 million in free cash flow and reduced debt by 80 million, resulting in a net debt to EBITDA ratio of 1.6 times, down from 3.4 times a year ago [4][27] - Capital expenditures were cut in half to 183million,allowingforincreasedexplorationexpendituresofapproximately183 million, allowing for increased exploration expenditures of approximately 60 million [26] Business Line Data and Key Metrics Changes - Production from North American operations is expected to exceed 400,000 ounces of gold and over 18 million ounces of silver in 2025, representing increases of 20% and 62% year-over-year, respectively [5][12] - Rochester's silver production increased by 34% and gold production by 63% compared to the previous quarter, contributing over 12millioninfreecashflow[9][10]−Palmarejo′sgoldandsilverproductionincreasedby812 million in free cash flow [9][10] - Palmarejo's gold and silver production increased by 8% and 3% year-over-year, respectively, leading to a record free cash flow of 108 million [12][14] Market Data and Key Metrics Changes - The company anticipates record levels of EBITDA, earnings, and free cash flow in 2025, driven by higher production levels and commodity prices [6][29] - The addition of the Las Chispas operation is expected to enhance production and cash flow generation [28] Company Strategy and Development Direction - Coeur Mining is focused on becoming a larger scale, lower-cost silver and gold producer with a conservative balance sheet, following significant investments in recent years [4] - The company plans to aggressively pay down debt using free cash flow generated from operations and the recent acquisition of Silvercrest [6][29] - Exploration efforts are expected to continue, with a budget of approximately 85millionfor2025,aimedatbolsteringinferredresourcesforfutureconversion[23][24]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthecompany′spositioningfor2025,citingstrongfundamentalsforgoldandsilverandasolidplatformofoperations[34]−Thefirstquarterof2025isexpectedtobechallengingduetoone−timeoutflows,butabsentthese,freecashflowwouldhavebeenpositive[31][32]OtherImportantInformation−Thecompanyhasseensignificantincreasesingoldandsilverreservesduetoexplorationinvestments,withgoldreservesup2685 million for 2025, aimed at bolstering inferred resources for future conversion [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for 2025, citing strong fundamentals for gold and silver and a solid platform of operations [34] - The first quarter of 2025 is expected to be challenging due to one-time outflows, but absent these, free cash flow would have been positive [31][32] Other Important Information - The company has seen significant increases in gold and silver reserves due to exploration investments, with gold reserves up 26% and silver reserves up 30% over the past five years [7] - The successful ramp-up of the Rochester expansion and the acquisition of Las Chispas are key drivers for anticipated growth [6][28] Q&A Session Summary Question: Update on Las Chispas acquisition cash and bullion - The acquisition included 153 million in cash and 40millioninbullion,withabalancecloserto40 million in bullion, with a balance closer to 100 million at closing due to expenses [41] Question: Kensington cost per ounce increase and Rochester crush size issue - Kensington's costs are rising due to increased activity and sensitivity to ore grade, while Rochester's crush size issue was addressed by placing higher-grade material directly on the leach pad [43][44][53] Question: Rochester's winter production and leach kinetics - Production is expected to be back-weighted due to leach kinetics and weather conditions, with improvements anticipated as operations ramp up [60][64] Question: Rochester fragmentation and grind size - The company is targeting an 80% success rate for the five-eighths inch size fraction, with ongoing optimization efforts [67][68]