Coeur Mining's New Afton Ramp-Up and Non-Cash Impact Timing Clash With Prior Guidance

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $1.1B, a 27% increase quarter over quarter

Guidance:

• 2026 EBITDA expected to be approximately $2.3 billion.
• 2026 Free cash flow expected to be approximately $1.5 billion.
• Guidance reflects significantly lower assumed metals prices in the second half of 2026 and only nine months of contribution from New Afton and Rainy River.

Business Commentary:

Record Financial Performance:

• CORE recorded quarterly revenue of $1.1 billion, marking a 27% increase quarter-over-quarter and a significant milestone as it surpassed the $1 billion threshold for the first time.
• The surge in revenue was primarily driven by contributions from the recently acquired New Afton and Rainy River operations, despite facing challenges such as lower metal prices and inflationary pressures.

Cash Flow and Balance Sheet Strength:

• The company achieved record quarterly free cash flow of $388 million, an increase of 45% compared to the previous quarter.
• This robust cash flow led to an ending cash balance that exceeded $1 billion, strengthening the balance sheet and enabling increased investments in exploration and organic growth projects.

Production and Operational Developments:

• Rochester achieved a new quarterly record of 6.8 million metric tons crushed, marking a 15% increase over the prior quarter.
• Progress in crusher consistency and the completion of the Phase 2A leach pad expansion contributed to the strong performance, positioning the company for increased second-half silver production.

Guidance and Strategic Adjustments:

• New Afton's guidance was revised to reflect a slower ramp-up in underground production rates, with expectations to reach 16,000 tonnes per day early in the fourth quarter.
• The adjustments were due to the pace of cave growth and the need for disciplined cave draw management to ensure long-term productivity.

Shareholder Returns and Capital Management:

• CORE began active share repurchases under its expanded $750 million buyback program and paid its first dividend in 30 years.
• The company's strong financial position allows for continued capital returns while investing in growth projects to enhance returns on invested capital.

Sentiment Analysis:

Overall Tone: Positive

• Management stated 'record second quarter results,' 'balance sheet into a significant source of strength,' 'well-positioned...for a strong second half,' and 'leaving us well-positioned to deliver another record year in 2027.'

Q&A:

• Question from Wayne Lamb (TD Securities): Just want to understand the reset in the expectations for the new gold assets...starting with new Afton, what was the previously budgeted timeline to get to 16,000 tons per day?
  Response: The original plan was to reach 16,000 tons per day by end of Q2; the revised guidance now expects this by early Q4, roughly three months slower.

• Question from Wayne Lamb (TD Securities): ...on the prior timeline, on the ramp up to 5,000 tons a day, and maybe some color on the underground grades as well.
  Response: Underground mining rates at Rainy River are ramping up gradually, with a target of 5,000 tons per day by year-end, up from 2,300 tons in Q2. Underground grades are almost three times higher than open-pit grades.

• Question from Wayne Lamb (TD Securities): ...if you're chewing through more of the stockpiles at a faster rate, resulting in a greater non-cash impact...does that non-cash impact...go away at some point soon?
  Response: Yes, the remaining $38 million non-cash impact from the fair value uplift of acquired inventory is anticipated to flow through in Q3, after which it will be done.

• Question from Wayne Lamb (TD Securities): ...maybe just at Rochester. Can you just walk us through the expectations into the second half on the grades and recoveries?
  Response: Expectations are for higher grades and recoveries in the second half driven by consistent crusher performance and material close to fresh liner, leading to a dramatic improvement over the first half.

• Question from Cosmos Chiu (CIBC): ...as you talked about grades potentially coming back up later on during the year, is that going to help in terms of recovery?
  Response: Yes, as grades are expected to increase in the second half at New Afton, recoveries for both gold and copper should also increase.

• Question from Cosmos Chiu (CIBC): ...what kind of recovery rate are you assuming for the rest of 2026?
  Response: Recoveries are tracking well compared to the technical report, and an uptick is expected with the grade and throughput improvements in the second half.

• Question from Cosmos Chiu (CIBC): ...what were you expecting in Q2 for mining rates to have hit? ...What's kind of like that cadence of that increase?
  Response: The increase in underground mining rates to 5,000 tons per day by year-end is expected to be a steady, gradual ramp-up, not a straight line or parabolic.

• Question from Cosmos Chiu (CIBC): ...you did 2,300 tons per day in Q2. Is there any kind of internal targets I can share with us?
  Response: The 5,000-ton per day target is to be achieved by year-end, with a steady ramp-up expected from the July levels.

• Question from Cosmos Chiu (CIBC): ...you did 2,300 tons per day in Q2. ...What's kind of like that cadence of that increase?
  Response: The rate of increase is fairly linear and gradual, with 5,000 tons per day targeted by the end of the year.

• Question from Josh Woopsen (RBC Capital Markets): ...Would it be reasonable to think...the grades that were previously expected in 27 and 28...might be a little bit more smoothed out?
  Response: Management is currently rerunning plans to ensure cave balance; any impact on 2027 grades is not yet determined but will be addressed in the budgeting process.

• Question from Josh Woopsen (RBC Capital Markets): ...at Rainey, I believe the underground throughput...was closer to about 6,000 over the next two years. Is that still a reasonable ultimate target?
  Response: The focus for now is reaching 5,000 tons per day by year-end and carrying that into 2027, with further planning on the mix of underground versus open-pit to be determined.

• Question from Josh Woopsen (RBC Capital Markets): ...how is the company thinking about the cadence of the buyback through the approved period?
  Response: The buyback will be opportunistic during non-blackout periods, aggressive when the stock is undervalued, with no pressure to spend the full $750 million by a certain date.

• Question from Josh Woopsen (RBC Capital Markets): ...where would the company look to invest in growth that could start to be spent in 2027?
  Response: Growth investments will focus on high-return opportunities like brownfield exploration, advancing the K-Zone at New Afton, and potential mine life extensions at Rainy River.

• Question from Kevin O'Halloran (BMO Capital Markets): ...at Palmareo, can you just remind us what your goal is in terms of building out that resource inventory outside the area of influence?
  Response: The goal is to expand production outside the Franco-Nevada area of interest, with near-term opportunities at the Independencia Sur extension and longer-term potential in the Guasaparas area.

• Question from Kevin O'Halloran (BMO Capital Markets): ...at Las Chispas. You had higher throughput in Q2 and slightly lower grades...How should we be thinking about the production there going forward?
  Response: Production is expected to remain balanced and consistent, with a healthy stockpile inventory helping to manage grades and throughput predictably.

• Question from Eric Widmill (Scotiabank): ...Any updates there in terms of what's happening? I know you said study's ongoing...
  Response: A feasibility study for the K-Zone at New Afton is being prepared, with exploration expanding the footprint and showing strong grades.

• Question from Eric Widmill (Scotiabank): ...are you likely to see an update, you think, later this year or next year?
  Response: A pre-feasibility study for Silvertip is expected to be completed early in 2027, with potential for a feasibility study if results are attractive.

• Question from Brian MacArthur (Raymond James): ...for EBITDA...Should I think of this as 40-60 between Q3, Q4? ...For your CapEx in the back half of the year, is it evenly weighted?
  Response: Free cash flow is expected to be reasonably weighted between Q3 and Q4. CapEx is typically higher in Q3, and production steps up more significantly in Q4, driving free cash flow growth.

Contradiction Point 1

New Afton Mill Ramp-Up Timeline

It directly impacts expectations regarding the production timeline and delivery capabilities of a key asset, potentially influencing company revenue and investor expectations.

Wayne Lamb (TD Securities) - Wayne Lamb (TD Securities)

2026Q2: The revised guidance now expects this level to be achieved early in the fourth quarter, roughly three months slower. - Mick Quinn(CFO)

What caused the reset in expectations for the new gold assets after the first quarter of operation following the combined guidance? - Wayne Lam (TD Securities)

2026Q2: The revised timeline now expects this by early Q4 2026 (roughly three months slower). - Mitch Krebs(CFO)

Contradiction Point 2

Non-Cash Purchase Price Allocation Impact Schedule

It involves changes in financial forecasts, specifically regarding the timing of non-cash impacts, which are critical indicators for investors.

Wayne Lamb (TD Securities) - Wayne Lamb (TD Securities)

2026Q2: After Q3, this non-cash impact should be complete. - Tom McMillan(CFO)

Does faster stockpile depletion lead to a larger near-term non-cash impact on purchase price adjustments, and will this impact be temporary? - Brian MacArthur (Raymond James)

2026Q2: The non-cash purchase price allocation impact (~$38M) will flow through in Q3, providing cleaner results in Q4. - Mitch Krebs(CFO)

Contradiction Point 3

Non-Cash Impact of Purchased Stockpiles on Financials

It involves changes in financial forecasts, specifically regarding the timing of non-cash impacts, which are critical indicators for investors.

Wayne Lamb (TD Securities) - Wayne Lamb (TD Securities)

2026Q2: After Q3, this non-cash impact should be complete. - Mick Quinn(CFO) and Tom McMillan(CFO)

If faster stockpile depletion increases near-term non-cash purchase price adjustment impacts, will these impacts diminish soon? - Cosmos Chiu (CIBC)

2026Q1: For New Afton, this impact is largely behind them after the first 11 days of production. At Rainy River... This will create a continuing non-cash accounting impact on CAS through Q2 and Q3. - Tom McMillan(CFO)

Contradiction Point 4

Production Ramp-up Timeline at Rainy River

It directly impacts expectations regarding the production timeline and delivery capabilities of a key asset, potentially influencing company revenue and investor expectations.

Wayne Lamb (TD Securities) - Wayne Lamb (TD Securities)

2026Q2: The ramp-up timeline to 5,000 tonnes per day by year-end (vs. Q3 originally assumed) now reflects a more gradual increase. - Mick Quinn(CFO) and Tom McMillan(COO)

Can you provide details on the reset in expectations for new gold assets post first-quarter operations, the challenges faced by the underground contractor at Rain River this quarter, and the updated timeline for scaling up to 5,000 tons per day? - Joseph Reagor (ROTH Capital Partners)

2025Q4: The focus in 2026 is on sustaining throughput in the 6.2-7.2 million metric tons per quarter range and driving crush size down. - Michael Routledge(COO)

Contradiction Point 5

Capital Allocation Philosophy Regarding Buybacks

It involves a shift in company strategy, specifically regarding capital returns, which are crucial for understanding the company's priorities and can influence investor decisions.

Josh Woopsen (RBC Capital Markets) - Josh Woopsen (RBC Capital Markets)

2026Q2: The buyback program is opportunistic... during non-blackout periods, the company will be aggressive when the stock appears undervalued relative to their assessment of intrinsic value. - Mick Quinn(CFO)

How is the company approaching the cadence of buybacks during the approved period? - Joshua Wolfson (RBC Capital Markets)

2025Q4: A slight preference for buybacks is noted due to the flexibility they offer, but the company will benchmark against peers to ensure a balanced approach... - Mitchell J. Krebs(CEO)