Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Coeur Mining Inc (CDE, Financial) reported a strong quarter with significant increases in production at its four operations, driven by higher gold and silver prices and reduced costs per ounce.
- The company achieved multiyear highs in quarterly revenue, adjusted EBITDA, net income, and free cash flow, allowing it to pay down $50 million of its revolving credit facility.
- The acquisition of SilverCrest Metals is expected to create a global leader in the silver industry, with anticipated 2025 production of over 21 million ounces of silver and 432,000 ounces of gold.
- Rochester operations showed continued momentum with a 20% increase in silver and gold production compared to the prior quarter, and significant cost reductions per tonne.
- The company reconfirmed its full-year guidance ranges, indicating another strong quarter ahead and further opportunities to reduce debt levels by year-end.
Negative Points
- Despite the positive results, the company still has a significant amount of debt, with $225 million drawn on its revolving credit facility at the end of the quarter.
- The integration of SilverCrest Metals requires regulatory approvals and shareholder votes, which could pose potential delays or challenges.
- The Rochester operation, while showing improvement, is still in the optimizing phase, which may impact short-term performance.
- The company’s cash balance of $77 million may limit its flexibility in the short term until the revolving credit facility is fully repaid.
- There is ongoing pressure to maintain and improve operational efficiencies, particularly in achieving targeted crush sizes at Rochester to enhance recoveries.
Q & A Highlights
Q: Is the reach cycle at Rochester matching the production expectations for the third quarter?
A: Mitchell Krebs, President and CEO, confirmed that the reach cycle is matching expectations. As the crush size is reduced to the target by year-end, recoveries are expected to improve. Michael Routledge, COO, added that the recoveries are tracking well on the recovery curve, and the focus is now on achieving the target crush size.
Q: What are the remaining steps to close the SilverCrest acquisition?
A: Mitchell Krebs stated that the remaining steps include shareholder votes for both companies around year-end and obtaining regulatory approval from Mexico, expected in the first quarter of 2025, which should allow for a late first-quarter close.
Q: How should we think about the cash balance in relation to debt repayment?
A: Mitchell Krebs mentioned that the cash balance will likely remain around $77 million as they prioritize repaying the revolver by mid-2025. After that, they expect to start building cash, especially after integrating Las Chispas.
Q: Can you provide more details on the progress at Rochester?
A: Michael Routledge highlighted that Rochester has seen a 20% increase in silver and gold production compared to the previous quarter. The focus is on optimizing operations, with significant progress in reducing per tonne costs and improving recovery rates.
Q: What are the financial highlights from the third quarter?
A: Thomas Whelan, CFO, reported a 15% increase in metal prices and a 12% decrease in operating costs per ounce, leading to $69 million in free cash flow and $126 million in adjusted EBITDA. The company is focused on reducing debt levels, with a $50 million reduction in the revolving credit facility.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
