cde-202203310000215466FALSE2022Q112/31http://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrenthttp://fasb.org/us-gaap/2021-01-31#OtherLiabilitiesNoncurrent0.5The following table summarizes restricted stock activity for the years ended March 31, 2022, 2021, and 2020:
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| Restricted Stock | | |
| Number of Shares | | Weighted Average Grant Date Fair Value | | | | |
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Outstanding at December 31, 2018 | 1,541,648 | | | $ | 7.14 | | | | | |
Granted | 1,586,590 | | | 4.90 | | | | | |
Vested | (797,025) | | | 6.36 | | | | | |
Canceled/Forfeited | (146,538) | | | 5.70 | | | | | |
Outstanding at December 31, 2019 | 2,184,675 | | | $ | 5.89 | | | | | |
Granted | 1,676,634 | | | 5.13 | | | | | |
Vested | (928,778) | | | 6.46 | | | | | |
Canceled/Forfeited | (207,807) | | | 5.36 | | | | | |
Outstanding at December 31, 2020 | 2,724,724 | | | $ | 5.26 | | | | | |
Granted | 932,442 | | | 8.88 | | | | | |
Vested | (1,179,857) | | | 5.53 | | | | | |
Canceled/Forfeited | (332,505) | | | 5.83 | | | | | |
Outstanding at December 31, 2021 | 2,144,804 | | | $ | 6.60 | | | | | |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________________________________
FORM 10-Q
___________________________________________
| | | | | |
☑ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended March 31, 2022
OR
| | | | | |
☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
Commission file number 001-08641
____________________________________________
COEUR MINING, INC.
(Exact name of registrant as specified in its charter)
____________________________________________
| | | | | | | | | | | | | | |
Delaware | | 82-0109423 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | | |
104 S. Michigan Ave. | | |
Suite 900 | Chicago, | Illinois | | 60603 |
(Address of principal executive offices) | | (Zip Code) |
(312) 489-5800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock (par value $.01 per share) | CDE | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.) Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | | | | | | | |
Large accelerated filer | | ☑ | Accelerated filer | | ☐ |
| | | | |
Non-accelerated filer | | ☐ | Smaller reporting company | | ☐ |
| | | | | |
| | | Emerging growth company | | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
The Company has 300,000,000 shares of common stock, par value of $0.01, authorized of which 280,806,345 shares were issued and outstanding as of May 2, 2022.
COEUR MINING, INC.
INDEX
| | | | | | | | |
| | Page |
Part I. | Financial Information | |
| | |
| Item 1. Financial Statements | |
| | |
| Condensed Consolidated Balance Sheets (Unaudited) | |
| | |
| Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) | |
| | |
| Condensed Consolidated Statements of Cash Flows (Unaudited) | |
| | |
| Condensed Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) | |
| | |
| Notes to Condensed Consolidated Financial Statements (Unaudited) | |
| | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| | |
| Consolidated Financial Results | |
| | |
| Results of Operations | |
| | |
| Liquidity and Capital Resources | |
| | |
| Non-GAAP Financial Performance Measures | |
| | |
| Item 3. Quantitative and Qualitative Disclosures about Market Risk | |
| | |
| Item 4. Controls and Procedures | |
| | |
Part II. | Other Information | |
| | |
| Item 1. Legal Proceedings | |
| | |
| Item 1A. Risk Factors | |
| | |
| Item 4. Mine Safety Disclosures | |
| | |
| Item 5. Other Information | |
| | |
| Item 6. Exhibits | |
| | |
Signatures | |
PART I
Item 1. Financial Statements and Supplementary Data
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| | | | | | | | | | | | | | |
| | March 31, 2022 | | December 31, 2021 |
ASSETS | Notes | In thousands, except share data |
CURRENT ASSETS | | | | |
Cash and cash equivalents | | $ | 73,330 | | | $ | 56,664 | |
| | | | |
Receivables | 4 | 29,221 | | | 32,417 | |
Inventory | 5 | 52,944 | | | 51,281 | |
Ore on leach pads | 5 | 89,406 | | | 81,128 | |
| | | | |
| | | | |
Prepaid expenses and other | | 14,340 | | | 13,847 | |
Assets held for sale | 19 | — | | | 54,240 | |
| | 259,241 | | | 289,577 | |
NON-CURRENT ASSETS | | | | |
Property, plant and equipment, net | | 337,455 | | | 319,967 | |
Mining properties, net | | 913,138 | | | 852,799 | |
Ore on leach pads | 5 | 73,133 | | | 73,495 | |
Restricted assets | | 9,254 | | | 9,138 | |
Equity securities | 6 | 161,894 | | | 132,197 | |
| | | | |
| | | | |
Other | | 63,086 | | | 57,249 | |
| | | | |
TOTAL ASSETS | | $ | 1,817,201 | | | $ | 1,734,422 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
CURRENT LIABILITIES | | | | |
Accounts payable | | $ | 103,266 | | | $ | 103,901 | |
Accrued liabilities and other | 18 | 82,438 | | | 87,946 | |
Debt | 7, 8 | 29,620 | | | 29,821 | |
| | | | |
Reclamation | 9 | 2,853 | | | 2,931 | |
| | | | |
Liabilities held for sale | 19 | — | | | 11,269 | |
| | 218,177 | | | 235,868 | |
NON-CURRENT LIABILITIES | | | | |
Debt | 7, 8 | 455,868 | | | 457,680 | |
| | | | |
Reclamation | 9 | 181,473 | | | 178,957 | |
Deferred tax liabilities | | 24,647 | | | 21,969 | |
Other long-term liabilities | | 37,062 | | | 39,686 | |
| | | | |
| | 699,050 | | | 698,292 | |
COMMITMENTS AND CONTINGENCIES | 17 | | | |
STOCKHOLDERS’ EQUITY | | | | |
Common stock, par value $0.01 per share; authorized 300,000,000 shares, 280,834,764 issued and outstanding at March 31, 2022 and 256,919,803 at December 31, 2021 | | 2,808 | | | 2,569 | |
Additional paid-in capital | | 3,834,896 | | | 3,738,347 | |
Accumulated other comprehensive income (loss) | | (5,970) | | | (1,212) | |
Accumulated deficit | | (2,931,760) | | | (2,939,442) | |
| | 899,974 | | | 800,262 | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 1,817,201 | | | $ | 1,734,422 | |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended March 31, |
| | | | | | 2022 | | 2021 | | |
| Notes | | | | | In thousands, except share data |
Revenue | 3 | | | | | $ | 188,404 | | | $ | 202,117 | | | |
COSTS AND EXPENSES | | | | | | | | | | |
Costs applicable to sales(1) | 3 | | | | | 133,267 | | | 108,147 | | | |
Amortization | | | | | | 26,433 | | | 29,937 | | | |
General and administrative | | | | | | 10,272 | | | 11,554 | | | |
Exploration | | | | | | 5,418 | | | 9,666 | | | |
| | | | | | | | | | |
Pre-development, reclamation, and other | 14 | | | | | 11,412 | | | 13,712 | | | |
Total costs and expenses | | | | | | 186,802 | | | 173,016 | | | |
OTHER INCOME (EXPENSE), NET | | | | | | | | | | |
Loss on debt extinguishment | | | | | | — | | | (9,173) | | | |
Fair value adjustments, net | 12 | | | | | 10,605 | | | (3,799) | | | |
Interest expense, net of capitalized interest | 8 | | | | | (4,568) | | | (4,910) | | | |
Other, net | 14 | | | | | 1,737 | | | 3,627 | | | |
Total other income (expense), net | | | | | | 7,774 | | | (14,255) | | | |
Income (loss) before income and mining taxes | | | | | | 9,376 | | | 14,846 | | | |
Income and mining tax (expense) benefit | 10 | | | | | (1,694) | | | (12,786) | | | |
| | | | | | | | | | |
| | | | | | | | | | |
NET INCOME (LOSS) | | | | | | $ | 7,682 | | | $ | 2,060 | | | |
OTHER COMPREHENSIVE INCOME (LOSS): | | | | | | | | | | |
Change in fair value of derivative contracts designated as cash flow hedges | | | | | | (5,218) | | | 27,357 | | | |
Reclassification adjustments for realized (gain) loss on cash flow hedges | | | | | | 460 | | | (2,721) | | | |
| | | | | | | | | | |
Other comprehensive income (loss) | | | | | | (4,758) | | | 24,636 | | | |
COMPREHENSIVE INCOME (LOSS) | | | | | | $ | 2,924 | | | $ | 26,696 | | | |
| | | | | | | | | | |
NET INCOME (LOSS) PER SHARE | 15 | | | | | | | | | |
Basic income (loss) per share: | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Basic | | | | | | $ | 0.03 | | | $ | 0.01 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Diluted | | | | | | $ | 0.03 | | | $ | 0.01 | | | |
(1) Excludes amortization.
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended March 31, |
| | | | | | 2022 | | 2021 | | |
| Notes | | | | | In thousands |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | | | |
Net income (loss) | | | | | | $ | 7,682 | | | $ | 2,060 | | | |
| | | | | | | | | | |
Adjustments: | | | | | | | | | | |
Amortization | | | | | | 26,433 | | | 29,937 | | | |
Accretion | | | | | | 3,463 | | | 2,905 | | | |
Deferred taxes | | | | | | (8,262) | | | 124 | | | |
Loss on debt extinguishment | 8 | | | | | — | | | 9,173 | | | |
Fair value adjustments, net | 12 | | | | | (13,744) | | | 3,799 | | | |
Stock-based compensation | 11 | | | | | 2,267 | | | 4,256 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Write-downs | 5 | | | | | 7,595 | | | — | | | |
Deferred revenue recognition | 17 | | | | | (315) | | | (8,346) | | | |
Other | | | | | | (1,340) | | | (2,328) | | | |
Changes in operating assets and liabilities: | | | | | | | | | | |
Receivables | | | | | | 9,100 | | | 999 | | | |
Prepaid expenses and other current assets | | | | | | (509) | | | (655) | | | |
Inventory and ore on leach pads | | | | | | (17,672) | | | (17,486) | | | |
Accounts payable and accrued liabilities | | | | | | (21,125) | | | (28,797) | | | |
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | | | | | | (6,427) | | | (4,359) | | | |
| | | | | | | | | | |
| | | | | | | | | | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | |
Capital expenditures | | | | | | (69,502) | | | (59,424) | | | |
| | | | | | | | | | |
Proceeds from the sale of assets | | | | | | 15,371 | | | 4,588 | | | |
| | | | | | | | | | |
Sale of investments | | | | | | — | | | 935 | | | |
| | | | | | | | | | |
Other | | | | | | (11) | | | (17) | | | |
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | | | | | | (54,142) | | | (53,918) | | | |
| | | | | | | | | | |
| | | | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | |
Issuance of common stock | 15 | | | | | 98,397 | | | — | | | |
Issuance of notes and bank borrowings, net of issuance costs | 8 | | | | | 85,000 | | | 367,493 | | | |
Payments on debt, finance leases, and associated costs | 7, 8 | | | | | (103,267) | | | (243,967) | | | |
| | | | | | | | | | |
Other | | | | | | (3,403) | | | (3,925) | | | |
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | | | | | | 76,727 | | | 119,601 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Effect of exchange rate changes on cash and cash equivalents | | | | | | 272 | | | (51) | | | |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | | | | | | 16,430 | | | 61,273 | | | |
| | | | | | | | | | |
| | | | | | | | | | |
Cash, cash equivalents and restricted cash at beginning of period | | | | | | 58,289 | | | 94,170 | | | |
Cash, cash equivalents and restricted cash at end of period | | | | | | $ | 74,719 | | | $ | 155,443 | | | |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
COEUR MINING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
In thousands | Common Stock Shares | | Common Stock Par Value | | Additional Paid-In Capital | | Accumulated Deficit | | Accumulated Other Comprehensive Income (Loss) | | Total |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Balances at December 31, 2021 | 256,919 | | | $ | 2,569 | | | $ | 3,738,347 | | | $ | (2,939,442) | | | $ | (1,212) | | | $ | 800,262 | |
Net income (loss) | — | | | — | | | — | | | 7,682 | | | — | | | 7,682 | |
Other comprehensive income (loss) | — | | | — | | | — | | | — | | | (4,758) | | | (4,758) | |
Common stock issued under "at the market" stock offering | 22,053 | | | 220 | | | 98,279 | | | — | | | — | | | 98,499 | |
Common stock issued/canceled under long-term incentive plans and director fees and options, net | 1,862 | | | 19 | | | (1,730) | | | — | | | — | | | (1,711) | |
Balances at March 31, 2022 | 280,834 | | | $ | 2,808 | | | $ | 3,834,896 | | | $ | (2,931,760) | | | $ | (5,970) | | | $ | 899,974 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
In thousands | Common Stock Shares | | Common Stock Par Value | | Additional Paid-In Capital | | Accumulated Deficit | | Accumulated Other Comprehensive Income (Loss) | | Total |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Balances at December 31, 2020 | 243,752 | | | $ | 2,438 | | | $ | 3,610,297 | | | $ | (2,908,120) | | | $ | (11,136) | | | $ | 693,479 | |
Net income (loss) | — | | | — | | | — | | | 2,060 | | | — | | | 2,060 | |
Other comprehensive income (loss) | — | | | — | | | — | | | — | | | 24,636 | | | 24,636 | |
Common stock issued/canceled under long-term incentive plans and director fees and options, net | (282) | | | (3) | | | 334 | | | — | | | — | | | 331 | |
Balances at March 31, 2021 | 243,470 | | | $ | 2,435 | | | $ | 3,610,631 | | | $ | (2,906,060) | | | $ | 13,500 | | | $ | 720,506 | |
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 1 - BASIS OF PRESENTATION
The interim condensed consolidated financial statements of Coeur Mining, Inc. and its subsidiaries (collectively, “Coeur” or the “Company”) are unaudited. In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. The results reported in these interim statements may not be indicative of the results which will be reported for the year ending December 31, 2022. The condensed consolidated December 31, 2021 balance sheet data was derived from audited consolidated financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 10-K”).
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant Accounting Policies
Please see Note 2 — Summary of Significant Accounting Policies contained in the 2021 10-K.
Use of Estimates
The Company's Consolidated Financial Statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). The preparation of the Company's Consolidated Financial Statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to metal prices and mineral reserves that are the basis for future cash flow estimates utilized in impairment calculations and units-of production amortization calculations, environmental, reclamation and closure obligations, estimates of recoverable silver and gold in leach pad inventories, estimates of fair value for certain reporting units and asset impairments, valuation allowances for deferred tax assets, and the fair value and accounting treatment of financial instruments, equity securities, asset acquisitions, the allocation of fair value to assets and liabilities assumed in connection with business combinations, and derivative instruments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results will differ from the amounts estimated in these financial statements.
Revenue Recognition
The Company’s gold stream agreement with a subsidiary of Franco-Nevada Corporation (“Franco-Nevada”) provided for a $22.0 million deposit paid by Franco-Nevada in exchange for the right and obligation, commencing in 2016, to purchase 50% of a portion of Palmarejo gold production at the lesser of $800 or market price per ounce. Because there is no minimum obligation associated with the deposit, it is not considered financing, and each shipment is considered to be a separate performance obligation. The streaming agreement represents a contract liability under ASC 606, which requires the Company to ratably recognize a portion of the deposit as revenue for each gold ounce delivered to Franco-Nevada. The remaining unamortized balance is included in Accrued liabilities and other and Other long-term liabilities on the Consolidated Balance Sheet. See Note 17 -- Commitments and Contingencies for additional detail.
The following table presents a roll forward of the Franco-Nevada contract liability balance:
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
In thousands | 2022 | | 2021 | | | | | | |
Opening Balance | $ | 8,150 | | | $ | 9,376 | | | | | | | |
Revenue Recognized | (315) | | | (346) | | | | | | | |
Closing Balance | $ | 7,835 | | | $ | 9,030 | | | | | | | |
In December 2021, the Company received a $15.0 million prepayment (the “December 2021 Prepayment”) for deliveries of gold concentrate from the Kensington mine pursuant to the Amended Sales Contract (as defined in Note 17). In March 2022, the Company exercised an option to receive a $10.0 million prepayment (the “March 2022 Prepayment). The Amended Sales Contract represents a contract liability under ASC 606, which requires the Company to recognize ratably a portion of the deposit as revenue for each gold ounce delivered to the customer. The remaining contract liability is included in Accrued liabilities and other on the Consolidated Balance Sheet. See Note 17 -- Commitments and Contingencies for additional detail.
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The following table presents a roll forward of the Amended Sales Contract liability balance:
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
In thousands | 2022 | | 2021 | | | | | | |
Opening Balance | $ | 15,016 | | | $ | 15,003 | | | | | | | |
Additions | 10,139 | | | 101 | | | | | | | |
Revenue Recognized | — | | | (8,000) | | | | | | | |
Closing Balance | $ | 25,155 | | | $ | 7,104 | | | | | | | |
Recently Issued Accounting Standards
In March 2022, the FASB issued ASU 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging—Portfolio Layer Method” which is intended to make amendments to the fair value hedge accounting previously issued in ASU 2017-12 “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”. The new standard is effective for reporting periods beginning after December 15, 2022. The standard introduced the portfolio layer method allowing multiple hedged layers of a single closed portfolio when applying fair value hedge accounting. The Company plans to adopt the new derivatives and hedging standards effective January 1, 2023 and does not expect the new derivatives and hedging standard to have a material effect on our financial position, results of operations or cash flows.
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 3 – SEGMENT REPORTING
The Company’s operating segments include the Palmarejo, Rochester, Kensington and Wharf mines and Silvertip development property. Except for the Silvertip development property, all operating segments are engaged in the discovery, mining, and production of gold and/or silver. The Silvertip development property, which suspended mining and processing activities in February 2020, is engaged in the discovery of silver, zinc and lead. Other includes the Sterling/Crown development properties, other mineral interests, strategic equity investments, corporate office, elimination of intersegment transactions, and other items necessary to reconcile to consolidated amounts.
Financial information relating to the Company’s segments is as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three Months Ended March 31, 2022 | Palmarejo | | Rochester | | Kensington | | Wharf | | Silvertip | | Other | | Total |
Revenue | | | | | | | | | | | | | |
Gold sales | $ | 40,074 | | | $ | 11,052 | | | $ | 44,059 | | | $ | 34,266 | | | $ | — | | | $ | — | | | $ | 129,451 | |
Silver sales | 42,999 | | | 15,317 | | | 245 | | | 392 | | | — | | | — | | | 58,953 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Metal sales | 83,073 | | | 26,369 | | | 44,304 | | | 34,658 | | | — | | | — | | | 188,404 | |
Costs and Expenses | | | | | | | | | | | | | |
Costs applicable to sales(1) | 43,225 | | | 32,275 | | | 36,910 | | | 20,857 | | | — | | | — | | | 133,267 | |
Amortization | 9,386 | | | 4,710 | | | 8,622 | | | 2,061 | | | 1,259 | | | 395 | | | 26,433 | |
Exploration | 1,610 | | | 1,942 | | | 402 | | | — | | | — | | | 1,464 | | | 5,418 | |
| | | | | | | | | | | | | |
Other operating expenses | 921 | | | 1,831 | | | 615 | | | 512 | | | 6,494 | | | 11,311 | | | 21,684 | |
Other income (expense) | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Fair value adjustments, net | — | | | — | | | — | | | — | | | — | | | 10,605 | | | 10,605 | |
Interest expense, net | (115) | | | (178) | | | (248) | | | (13) | | | (68) | | | (3,946) | | | (4,568) | |
Other, net(3) | (339) | | | (48) | | | 106 | | | 39 | | | (5) | | | 1,984 | | | 1,737 | |
Income and mining tax (expense) benefit | (12,075) | | | (35) | | | — | | | (993) | | | — | | | 11,409 | | | (1,694) | |
Net Income (loss) | $ | 15,402 | | | $ | (14,650) | | | $ | (2,387) | | | $ | 10,261 | | | $ | (7,826) | | | $ | 6,882 | | | $ | 7,682 | |
| | | | | | | | | | | | | |
Segment assets(2) | $ | 288,081 | | | $ | 618,481 | | | $ | 149,840 | | | $ | 91,527 | | | $ | 234,693 | | | $ | 127,015 | | | $ | 1,509,637 | |
Capital expenditures | $ | 13,611 | | | $ | 33,050 | | | $ | 7,924 | | | $ | 1,361 | | | $ | 11,859 | | | $ | 1,697 | | | $ | 69,502 | |
(1) Excludes amortization
(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests
(3) See Note 14 -- Additional Comprehensive Income (Loss) Detail for additional detail
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three Months Ended March 31, 2021 | Palmarejo | | Rochester | | Kensington | | Wharf | | Silvertip | | Other | | Total |
Revenue | | | | | | | | | | | | | |
Gold sales | $ | 37,567 | | | $ | 12,440 | | | $ | 54,466 | | | $ | 33,849 | | | $ | — | | | $ | — | | | $ | 138,322 | |
Silver sales | 42,778 | | | 20,317 | | | — | | | 700 | | | — | | | — | | | 63,795 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Metal sales | 80,345 | | | 32,757 | | | 54,466 | | | 34,549 | | | — | | | — | | | 202,117 | |
Costs and Expenses | | | | | | | | | | | | | |
Costs applicable to sales(1) | 33,988 | | | 24,033 | | | 31,394 | | | 18,732 | | | — | | | — | | | 108,147 | |
Amortization | 9,059 | | | 3,577 | | | 13,445 | | | 2,475 | | | 1,086 | | | 295 | | | 29,937 | |
Exploration | 1,693 | | | 472 | | | 1,109 | | | 67 | | | 2,932 | | | 3,393 | | | 9,666 | |
| | | | | | | | | | | | | |
Other operating expenses | 1,270 | | | 1,448 | | | 2,995 | | | 185 | | | 6,555 | | | 12,813 | | | 25,266 | |
Other income (expense) | | | | | | | | | | | | | |
Loss on debt extinguishment | — | | | — | | | — | | | — | | | — | | | (9,173) | | | (9,173) | |
Fair value adjustments, net | — | | | — | | | — | | | — | | | — | | | (3,799) | | | (3,799) | |
Interest expense, net | (187) | | | (222) | | | (232) | | | (37) | | | 45 | | | (4,277) | | | (4,910) | |
Other, net(3) | (665) | | | (61) | | | — | | | 24 | | | (102) | | | 4,431 | | | 3,627 | |
Income and mining tax (expense) benefit | (11,340) | | | (138) | | | (334) | | | (1,129) | | | — | | | 155 | | | (12,786) | |
Net Income (loss) | $ | 22,143 | | | $ | 2,806 | | | $ | 4,957 | | | $ | 11,948 | | | $ | (10,630) | | | $ | (29,164) | | | $ | 2,060 | |
| | | | | | | | | | | | | |
Segment assets(2) | $ | 306,648 | | | $ | 388,047 | | | $ | 162,727 | | | $ | 79,018 | | | $ | 169,328 | | | $ | 177,516 | | | $ | 1,283,284 | |
Capital expenditures | $ | 9,983 | | | $ | 30,177 | | | $ | 7,202 | | | $ | 1,481 | | | $ | 10,387 | | | $ | 194 | | | $ | 59,424 | |
(1) Excludes amortization
(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests
(3) See Note 14 -- Additional Comprehensive Income (Loss) Detail for additional detail
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
| | | | | | | | | | | |
| |
Assets | March 31, 2022 | | December 31, 2021 |
Total assets for reportable segments | $ | 1,509,637 | | | $ | 1,424,934 | |
Cash and cash equivalents | 73,330 | | | 56,664 | |
Other assets | 234,234 | | | 252,824 | |
Total consolidated assets | $ | 1,817,201 | | | $ | 1,734,422 | |
Geographic Information
| | | | | | | | | | | |
Long-Lived Assets | March 31, 2022 | | December 31, 2021 |
United States | $ | 774,536 | | | $ | 704,007 | |
Mexico | 247,218 | | | 244,758 | |
Canada | 228,715 | | | 223,876 | |
Other | 124 | | | 125 | |
Total | $ | 1,250,593 | | | $ | 1,172,766 | |
| | | | | | | | | | | | | | | | | |
Revenue | | | Three months ended March 31, |
| | | | 2022 | | 2021 | | |
United States | | | | | $ | 105,331 | | | $ | 121,772 | | | |
Mexico | | | | | 83,073 | | | 80,345 | | | |
| | | | | | | | | |
Total | | | | | $ | 188,404 | | | $ | 202,117 | | | |
NOTE 4 – RECEIVABLES
Receivables consist of the following:
| | | | | | | | | | | |
In thousands | March 31, 2022 | | December 31, 2021 |
Current receivables: | | | |
Trade receivables | $ | 7,080 | | | $ | 4,879 | |
VAT receivable | 8,293 | | | 18,415 | |
Income tax receivable | 8,827 | | | 8,418 | |
Avino note receivable | 4,709 | | | — | |
Other | 312 | | | 705 | |
| $ | 29,221 | | | $ | 32,417 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
NOTE 5 – INVENTORY AND ORE ON LEACH PADS
Inventory consists of the following:
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
| | | | | | | | | | | |
In thousands | March 31, 2022 | | December 31, 2021 |
Inventory: | | | |
Concentrate | $ | 1,943 | | | $ | 1,643 | |
Precious metals | 11,867 | | | 11,353 | |
Supplies | 39,134 | | | 38,285 | |
| $ | 52,944 | | | $ | 51,281 | |
Ore on Leach Pads: | | | |
Current | $ | 89,406 | | | $ | 81,128 | |
Non-current | 73,133 | | | 73,495 | |
| $ | 162,539 | | | $ | 154,623 | |
| | | |
Long-term Stockpile (included in Other) | $ | 18,142 | | | $ | 18,027 | |
| | | |
Total Inventory and Ore on Leach Pads | $ | 233,625 | | | $ | 223,931 | |
Coeur reports the carrying value of metal and leach pad inventory at the lower of cost or net realizable value, with cost being determined using a weighted average cost method. At the end of the first quarter of 2022, the cost of metal and leach pad inventory at Rochester exceeded its net realizable value which resulted in a non-cash write down of $8.6 million ($7.6 million was recognized in Costs Applicable to Sales and $1.0 million in Amortization).
NOTE 6 – INVESTMENTS
Equity Securities
The Company makes strategic investments in equity securities of silver and gold exploration, development and royalty and streaming companies.
| | | | | | | | | | | | | | | | | | | | | | | |
| At March 31, 2022 |
In thousands | Cost | | Gross Unrealized Losses | | Gross Unrealized Gains | | Estimated Fair Value |
Equity Securities | | | | | | | |
Victoria Gold Corp. | $ | 128,710 | | | $ | — | | | $ | 12,410 | | | $ | 141,120 | |
Integra Resources Corp. | 9,455 | | | (4,074) | | | — | | | 5,381 | |
Avino Silver & Gold Mines Ltd | 13,720 | | | (560) | | | — | | | 13,160 | |
Other | 2,233 | | | — | | | — | | | 2,233 | |
Equity securities | $ | 154,118 | | | $ | (4,634) | | | $ | 12,410 | | | $ | 161,894 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| At December 31, 2021 |
In thousands | Cost | | Gross Unrealized Losses | | Gross Unrealized Gains | | Estimated Fair Value |
Equity Securities | | | | | | | |
Victoria Gold Corp. | $ | 128,710 | | | $ | (4,499) | | | $ | — | | | $ | 124,211 | |
Integra Resources Corp. | 9,455 | | | (1,469) | | | — | | | 7,986 | |
Equity securities | $ | 138,165 | | | $ | (5,968) | | | $ | — | | | $ | 132,197 | |
Changes in the fair value of the Company’s investment in equity securities are recognized each period in the Consolidated Statement of Comprehensive Income (Loss) in Fair value adjustments, net. See Note 12 -- Fair Value Measurements for additional details.
On March 21, 2022, the Company closed the sale of its La Preciosa silver project. In connection with the closing of the transaction, the Company received 14,000,000 common shares of Avino Silver & Gold Mines Ltd. (“Avino”) (representing approximately 12.0% of Avino’s outstanding common shares). See Note 19 -- Dispositions for additional details on the sale.
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 7 – LEASES
Right of Use Assets and Liabilities
The following table summarizes quantitative information pertaining to the Company’s finance and operating leases.
| | | | | | | | | | | | | | | | | |
| Three months ended March 31, | | |
In thousands | 2022 | | 2021 | | | | | | |
Lease Cost | | | | | | | | | |
Operating lease cost | $ | 3,016 | | | $ | |