Coeur Mining Inc (CDE) Q2 2024 Earnings Call Highlights: Record EBITDA Growth and Operational Gains

GuruFocus News
3 min read

In This Article:

  • Adjusted EBITDA: Increased 136% year-over-year; LTM adjusted EBITDA rose 90% to $192 million.

  • Silver Production (Rochester): Increased to 973,000 ounces in Q2.

  • Gold Production (Rochester): Increased to over 8,000 ounces in Q2.

  • Gold Production (Wharf): Increased to 22,000 ounces in Q2.

  • Adjusted Cash Costs (Wharf): Decreased 29% compared to Q1, to $822 per ounce.

  • Revolving Credit Facility: Approximately $275 million drawn on a $400 million facility.

  • Net Debt to EBITDA Ratio: Below three times for the first time in over two years.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Rochester's silver and gold production increased nearly 40% in the second quarter, indicating strong operational momentum.

  • Palmarejo generated strong free cash flow, contributing positively to the company's financial performance.

  • Coeur Mining Inc (NYSE:CDE) reported a 136% increase in quarterly adjusted EBITDA, showcasing significant financial improvement.

  • The company successfully closed the acquisition of key concessions from Fresnillo, enhancing its land package and future mining opportunities.

  • Coeur Mining Inc (NYSE:CDE) is on track to transition to positive free cash flow in the second half of the year, positioning it for aggressive debt reduction.

Negative Points

  • Rochester's cost guidance was adjusted due to timing issues with ounces placement, indicating operational challenges.

  • The company had to increase cost guidance at Rochester due to excess trucking capacity used for higher-cost material.

  • There were delays in the placement of ounces at Rochester, affecting initial production plans.

  • Increased capital expenditures were necessary at Rochester and Kensington, impacting short-term financial flexibility.

  • The timeline for extracting ounces from newly acquired land near Palmarejo is projected to be around 2026, indicating a delay in realizing potential benefits.

Q & A Highlights

Q: Can you provide more details on the cost guidance adjustment for Rochester and any changes in cost expectations? A: Mitchell Krebs, CEO, explained that the cost guidance adjustment was primarily due to the timing of ounces placed on Stage VI. The company took additional downtime to address ramp-up issues, affecting the timing of tons placed. Michael Routledge, COO, added that the ramp-up is progressing well, and they are optimizing operations to improve recoveries.

Q: When can we expect the first ounce from the newly acquired land near Palmarejo? A: Mitchell Krebs, CEO, stated that drilling is expected to start in early 2025, with potential production by 2026. The area is close to existing infrastructure, which should facilitate development. Aoife Mcgrath, SVP of Exploration, mentioned that re-logging of old core and mapping are underway, with drilling planned for next year.

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