Coeur Mining (CDE) 7 Nov 24 2024 Q3 Earnings call transcript

Coeur Mining, a leading precious metals producer, recently unveiled its third quarter 2024 financial results, highlighting a strong performance across its portfolio and setting the stage for a promising future. The company's robust results, driven by production increases, higher metal prices, and lower costs, underscore Coeur's strategic focus on operational excellence and financial discipline.

Strong Operational Performance and Financial Health

Coeur Mining reported double-digit increases in quarterly revenue, adjusted EBITDA, net income, and free cash flow, marking a significant milestone in the company's history. The strong results were attributed to a Goldilocks environment, characterized by higher gold and silver prices and lower cost per ounce, which combined to deliver a powerful one-two punch, leading to a free cash flow inflection point. The company's focus on optimizing its operations, particularly at its Rochester mine, has been instrumental in driving these impressive results.

Optimizing Operations and Strategic Expansion

The company's flagship operation, Rochester, achieved key operational metrics and is on track to meet its full year guidance ranges. Coeur is systematically optimizing Rochester to position it for long-term success, with a focus on reducing per tonne cost and enhancing mining flexibility and efficiency. This strategic approach is expected to set the stage for a very strong 2025. Additionally, Coeur's recent acquisition of SilverCrest Metals is set to create a global leader in the silver industry, further bolstering the company's position in the market.

Financial Strategy and Debt Repayment

Coeur Mining's financial health is reflected in its declining debt levels, with a net debt-to-EBITDA ratio below 2x for the first time in three years. The company is prioritizing debt repayment, focusing on its revolving credit facility, which has been reduced by $50 million. Coeur's financial strategy is centered on generating returns greater than its cost of capital, with plans to allocate free cash flow towards repaying debt, reinvesting in exploration, or returning capital to shareholders.

Looking Ahead

Coeur Mining's third quarter results paint a picture of a company on the right track, with operational excellence, strategic expansion, and financial discipline at the forefront. The company's focus on optimizing its operations, reducing costs, and enhancing efficiency is expected to continue driving strong performance. With the acquisition of SilverCrest Metals and the integration of Las Chispas, Coeur is poised to capitalize on the strong fundamentals of the precious metals market and create a global leader in the silver industry. As the company looks towards the future, it remains committed to delivering strong and safe operations, higher production, and positive free cash flow, setting the stage for a very strong 2025.