2021 ANNUAL REPORT
Protect. Develop. Deliver.
Company Overview
Quality
operations & projects
Stable
jurisdictions
Cash Flow
focused
Committed
community partner
Best-in-class
corporate governance
Coeur Mining (NYSE:CDE) is a well-diversified, growing gold and silver producer with
a focus on generating sustainable, high-quality cash flow from its North American
asset base
SILVERTIP
KENSINGTON
WHARF
ROCHESTER
STERLING/CROWN
CORPORATE OFFICE
PALMAREJO
Operating Mine
Development Project
Exploration Project
Key Differentiators
• U.S.-based and NYSE-
listed
• 62% of 2021 revenue
generated from U.S.
• High-impact organic
growth opportunities
•
Industry-leading
exploration investment
• Recognized for ESG1
programs & initiatives
• Attractive trading
liquidity
Palmarejo
Mexico
Rochester
Nevada
Kensington
Alaska
Wharf
South Dakota
Silvertip
British Columbia
A u
A g
A g
A u
A u
A u
A g
Z n
P b
2 Coeur Mining | 2021 Annual Report
(1) Environmental, social and governance.
Asset Overview
Palmarejo
Rochester
Kensington
Wharf
Silvertip
n
o
i
t
a
c
o
L
n
o
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r
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r
P
3
s
e
v
r
e
s
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3
s
e
c
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3
s
e
c
r
u
o
s
e
R
f
o
e
p
y
T
1
2
0
2
f
o
%
1
2
0
2
2
E
2
2
0
2
P
+
P
I
+
M
d
e
r
r
e
f
n
I
Chihuahua,
Mexico
Nevada,
United States
Alaska,
United States
South Dakota,
United States
British Columbia,
Canada
Underground
Open pit
Underground
Open pit
Underground
923
330
392
251
101
38%
16%
26%
20%
0%
109K oz Au
6.8M oz Ag
3.2M oz Ag
27K oz Au
121K oz Au
91K oz Au
100-110K oz Au
6.0-7.0M oz Ag
3.0-4.0M oz Ag
35-43K oz Au
110-120K oz Au
70-80K oz Au
884K oz Au
62.4M oz Ag
161.2M oz Ag
1,080K oz Au
261K oz Au
852K oz Au
1,047K oz Au
73.7M oz Ag
69.5M oz Ag
446K oz Au
983K oz Au
412K oz Au
246K oz Au
17.5M oz Ag
38.6M oz Ag
243K oz Au
455K oz Au
90K oz Au
-
-
14.6M oz Ag
296.1M lbs Zn
193.2M lbs Pb
26.3M oz Ag
589.4M lbs Zn
312.6M lbs Pb
17.8M oz Ag
442.3M lbs Zn
200.7M lbs Pb
(1) As of December 31, 2021.
(2) Guidance as published by Coeur on February 16, 2022.
(3) As of December 31, 2021. For additional information regarding mineral reserves and mineral resources, see Item 1 - Cautionary Note Regarding
Disclosure of Mineral Properties and Item 2 – Mineral Reserves and Mineral Resources in the Form 10-K included with this Annual Report.
Coeur Mining | 2021 Annual Report 3
Highlights
Financial Summary
($M, except per share figures and metal prices)
2021
2020
2019
Year ended December 31,
Key Financials
Revenue
General and administrative expenses
Exploration investment1
Net income (loss)
Cash flow from operating activities
Capital expenditures
Free cash flow2,3
Adjusted Financials
Adjusted net income (loss)2
Adjusted EBITDA2
Adjusted EBITDA margin2
Per Share Financials
Net income (loss) per share, diluted
Adjusted net income (loss) per share, diluted2
Average Spot Prices
Gold ($ per ounce)
Silver ($ per ounce)
Zinc ($ per pound)
Lead ($ per pound)
$832.8
$40.4
$71.1
($31.3)
$110.5
$309.8
($199.3)
($1.4)
$210.8
25%
($0.13)
($0.01)
$1,799
$25.14
$1.36
$1.00
$785.5
$33.7
$50.6
$25.6
$148.7
$99.3
$49.4
$59.0
$263.4
34%
$0.11
$0.24
$1,770
$20.55
$1.03
$0.83
$711.5
$34.5
$30.1
($346.9)
$91.9
$99.8
($7.9)
($54.6)
$173.9
24%
($1.59)
($0.25)
$1,393
$16.21
$1.16
$0.91
Reserve and Resource Summary
Proven + Probable Reserves4
Measured + Indicated Resources4
Inferred Resources4
3.1
2.5
238.2
3.4
285.0
589.4
2.7
422.3
152.9
296.1
1.7
171.6
312.6
193.2
-
6
1
0
2
1
2
0
2
-
6
1
0
2
1
2
0
2
Zinc
(M lbs)
Lead
(M lbs)
6
1
0
2
1
2
0
2
Gold
(M oz)
6
1
0
2
1
2
0
2
Silver
(M oz)
6
1
0
2
1
2
0
2
Gold
(M oz)
6
1
0
2
1
2
0
2
Silver
(M oz)
-
6
1
0
2
1
2
0
2
-
6
1
0
2
1
2
0
2
Zinc
(M lbs)
Lead
(M lbs)
1.0
91.2
59.3
200.7
6
1
0
2
1
2
0
2
Gold
(M oz)
6
1
0
2
1
2
0
2
Silver
(M oz)
-
6
1
0
2
1
2
0
2
-
6
1
0
2
1
2
0
2
Zinc
(M lbs)
Lead
(M lbs)
4 Coeur Mining | 2021 Annual Report
(1) Exploration investment includes expensed and capitalized exploration.
(2) See applicable non-GAAP reconciliation tables in Item 7 of the Form 10-K and on the inside back cover of this Annual Report.
(3) Free cash flow is defined as cash flow from operating activities less capital expenditures.
(4) For additional information regarding 2021 mineral reserves and mineral resources, see Item 1 - Cautionary Note Regarding Disclosure of Mineral
Properties and Item 2 – Mineral Reserves and Mineral Resources in the Form 10-K included with this Annual Report. For additional information
regarding 2016 mineral reserves and mineral resources, see https://www.coeur.com/_resources/pdfs/2021-Annual-Report-Reserve-and-Resource-
Appendix.pdf.
High-Impact Organic Growth
Coeur’s strategy is designed to reposition the Company as America’s premier,
growing precious metals company by investing in higher-return exploration,
expansion and optimization opportunities from a diversified, North American
asset base to generate attractive returns and cash flow over the long-term
y
t
i
l
i
b
a
t
n
u
o
c
c
A
Priorities
Purpose
“Why”
Culture
“How”
Organization
“Who”
Strategy
“What”
Execution
A
l
i
g
n
m
e
n
t
•
•
•
Leading the industry in
ESG
•
Executed largest
exploration program in
Company history in
2021
Allocating capital
according to Company’s
framework
•
•
Aligning organizational
structure and incentive
compensation
Focusing on high-impact
organic growth projects
Striving to achieve
higher returns, longer
mine lives and margin
expansion
Future Organic Growth Opportunities
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Higher
Sustained
Throughput
East Palmarejo
Exploration Targets
POA 11 Expansion
Higher Gold Grade
at East & West
Rochester
Expansion of North
Independencia
Deposit
Additional
Processing
Optimization
Sustained 2,000
tpd1
Processing Rates
Additional Mine Life
Extension
Optimized Mill
Expansion
Resource
Conversion Drilling
Higher
Crushing Rates
Leverage Growing,
High-Grade Deposit
Newly Identified
Exploration Targets
Automation
Ongoing Resource
Growth to the South
Automation
Automation
(1) Tons per day.
Coeur Mining | 2021 Annual Report 5
Letter to Stockholders
Dear Fellow Stockholders,
As we look back on another year of unprecedented global disruption and uncertainty, I am
proud of the way that our team came together to advance Coeur’s growth strategy while
remaining true to our core principles. The progress we achieved in 2021 as a team would
mean very little without the knowledge that we accomplished our objectives safely and to the
mutual benefit of all Coeur stakeholders. Our track record of responsibly delivering results
isn’t a matter of luck: our culture and mission demand it.
Our focus on responsible, disciplined capital allocation, portfolio
management and financial flexibility enabled us to respond to a
rapidly
changing market environment and finish 2021 well-
positioned to pursue our strategic initiatives. Our strategy of having
a North American asset base, with the majority of our revenue
coming from the U.S., continues to be validated as we see
increasing political
instability in many mining jurisdictions around
the world.
The demand for precious metals remained strong during the year.
Silver’s growing role as a key element of clean energy technologies
in the automotive and solar energy industries drove strong demand.
Gold’s traditional role as a safe haven investment amid global
uncertainty and its relative performance versus other asset classes
in periods of inflation should continue to underpin prices in the
year ahead.
Amid the challenging backdrop of
industrywide inflationary cost
pressures and global supply chain issues, we were proud to achieve
our 2021 consolidated production and cost guidance. A strong
finish to 2021 and continued strength in precious metals prices
during the year led to Coeur achieving its highest revenue in almost
a decade while operating cash flow and adjusted EBITDA1 totaled
$110 million and $211 million, respectively.
financial
As we move further into a year of significant capital investment for
the Company, we do so equipped with a solid balance sheet that
flexibility. We ended the year with
maximizes our
approximately $257 million of
including $57 million of
cash and $200 million of availability under our revolving credit
facility. An additional $132 million of equity investments on our
balance sheet, made up primarily of our 18% ownership of Victoria
Gold, further fortifies our overall financial position.
liquidity,
6 Coeur Mining | 2021 Annual Report
(1) See applicable non-GAAP reconciliation tables in Item 7 of the Form 10-K included with this Annual Report and on the inside back cover of this Annual
Report.
It is due in part to our intense focus on expanding Rochester that we elected to defer the
redevelopment and restart of our high-grade Silvertip silver-zinc-lead project
in British
Columbia. More importantly, continued exploration success at Silvertip continues to drive
significant growth of the overall mineral resource, prompting us to reconsider the optimal
size, scale and development timeline for a revitalized Silvertip operation. This work will
proceed throughout 2022 as we evaluate the best path forward for unlocking value at
Silvertip.
Successful exploration results were a common theme at Coeur in 2021, the result of our
largest-ever $71 million investment in exploration during the year. In addition to growing the
resource base at Silvertip, focused drilling programs extended mine life by over two years at
our Wharf mine in South Dakota while driving significant resource growth at our Palmarejo
mine in Mexico and Crown exploration project in southern Nevada. Strong results in the
Rochester area, including Nevada Packard, South Rochester and at Gold Ridge and Lincoln
Hill, are leading to a greater understanding of the district potential as the expansion project
progresses.
In the second year of the COVID-19 pandemic, we maintained our vigilant approach to
minimizing its impact on our workforce and our operations. This focus on employee health
was formally recognized by the National Institute for Occupational Safety and Health (NIOSH)
when Coeur received the 2021 Mine Safety and Health Technology Innovations Award for our
implementation of a comprehensive pandemic response plan to mitigate the spread of
COVID-19 at our worksites.
I would like to thank our Coeur colleagues across North America for their commitment to
realizing our goal of Pursuing a Higher Standard. The depth and diverse backgrounds of our
Board of Directors remain an invaluable source of expertise and counsel. To our
stockholders, thanks for your continued support.
Mitchell J. Krebs
President and Chief Executive Officer
PROTECT
PROTECT
DEVELOP
DEVELOP
DELIVER
DELIVER
Coeur Mining | 2021 Annual Report 7
ESG Overview
ESG Program
Coeur’s ESG program is built on the premise of Pursuing a Higher Standard and striving to uphold
three core values: (i)Protect people, places and planet, (ii) Develop quality resources, growth and
plans, and (iii) Deliver impactful results through teamwork. The Company’s purpose statement, We
Pursue a Higher Standard,
is the cornerstone of all strategic decision making, with health, safety,
environmental and corporate responsibility considerations embedded in the planning process as
Coeur looks into the future. We aim to be a leader among our peers,
integrating ESG factors
throughout our business, contributing to greater resilience over time.
Coeur’s Board of Directors and senior leadership continued to advance several key initiatives in
2021. ESG factors remain an important component of executive compensation, signified by tying 20%
of executives’ 2022 long-term performance share awards to achievement of our greenhouse gas
emissions net intensity reduction goal. The Company plans to publish our 2021 ESG Report (formerly
known as our “Responsibility Report”) during the second quarter of 2022 which will include progress
on our goals from last year and enhanced climate-related disclosures. The report will map to the
Sustainable Accounting Standards Board (SASB) reporting framework for the Metals and Mining
Industry, the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and
reference the United Nations Sustainable Development Goals (SDGs) and the Global Reporting
Initiative (GRI). To learn more about Coeur’s ESG initiatives, please visit the Company’s Responsibility
webpage at the following link: http://www.coeur.com/responsibility/responsibility-overview/1.
ESG Highlights
• Achieved zero permit exceedances in 2021 (component of our 2021 Annual
Incentive
Plan)
• Conducted an initial climate scenario analysis,
including a below two degree Celsius
Environment
scenario (expected to be disclosed in our 2021 ESG Report)
• Achieved an 11.8% reduction in three year rolling average employee and contractor total
reportable injury frequency rate (TRIFR) compared to 2020; TRIFR is a key safety metric
in the mining industry and a component of our Annual Incentive Plan
Social
People
•
•
Increased participation in Coeur Culture assessment by 29 percentage points compared
to 2019 (93% up from 64%)
Implemented 2021 milestones contributing to our community relations vision across all
sites,
including conducting risk and impact assessments and developing or enhancing
stakeholder engagement plans
Social
Communities
• Contributed over $1.3 million to communities in 2021
• Conducted a double materiality2 assessment integrating input from internal and external
stakeholders
• Further embedded ESG into Coeur’s process planning by bolstering our leadership and
Governance
appointing a Chief ESG Officer and Chief Compliance Officer
8 Coeur Mining | 2021 Annual Report
(1) The information on our website is not, and shall not be deemed to be, part of this Annual Report or incorporated into any other filings we make with
the SEC.
(2) References to “materiality” should not be construed as a characterization of the materiality or financial impact of that information with respect to the
Company.
Board of Directors
Robert E. Mellor
Chairman of the Board and
Chairman of Board of Directors of
Monro, Inc.
Mitchell J. Krebs
President and
Chief Executive Officer
Linda L. Adamany
Lead Director, Jefferies Financial Group
and member of the Board of Directors of
BlackRock Institutional Trust Company
Sebastian Edwards
Henry Ford II Professor of
International Business Economics
at the Anderson Graduate School
of Management (UCLA)
Randolph E. Gress
Retired Chairman and
Chief Executive Officer of
Innophos Holdings, Inc.
Eduardo Luna
Chairman of Rochester Resources Ltd.
and member of the Board of Directors
of Wheaton Precious Metals Corp.
Jessica L. McDonald
Member of the Board of Directors of
GFL Environmental Inc. and Hydro
One Limited
John H. Robinson
Chairman of Hamilton Ventures,
LLC and member of the Board of
Directors of Alliance Resource
Management GP, LLC
J. Kenneth Thompson
President and CEO of Pacific Star Energy, LLC,
Chairman of Pioneer Natural Resources
Company, Lead Director of the Board of
Directors of Tetra Tech, Inc. and member of
the Board of Directors of Alaska Air Group, Inc.
Executive Team
Executive Team
Mitchell J. Krebs
President and
Chief Executive Officer
Thomas S. Whelan
Senior Vice President and
Chief Financial Officer
Michael “Mick” Routledge
Senior Vice President and
Chief Operating Officer
Casey M. Nault
Senior Vice President,
General Counsel and Chief ESG Officer
Hans J. Rasmussen
Senior Vice President,
Exploration
Emilie C. Schouten
Senior Vice President,
Human Resources
Alim A. Visram
Vice President,
Corporate Development
Coeur Mining | 2021 Annual Report 9
Form 10-K
Coeur Mining | 2021 Annual Report 11
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
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 1-8641
COEUR MINING, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
104 S. Michigan Ave. Suite 900
Chicago IL
(Address of principal executive offices)
82-0109423
(I.R.S. Employer
Identification No.)
60603
(Zip Code)
Registrant’s telephone number, including area code: (312) 489-5800
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
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes x No ¨
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x
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 x 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 x No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the 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
Non-accelerated filer
☑
☐
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 has filed a report on and attestation to its management's assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the
registrant’s most recently completed second fiscal quarter.
$1,911,210,337
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
As of February 14, 2022, 256,818,363 shares of Common Stock, par value $0.01 per share
Certain information called for by Part III of the Form 10-K is incorporated by reference from the registrant’s definitive proxy
statement for the 2022 Annual Meeting of Stockholders which will be filed pursuant to Regulation 14A not later than 120 days after the end
of the fiscal year covered by this report.
DOCUMENTS INCORPORATED BY REFERENCE
COEUR MINING, INC.
FORM 10-K
INDEX
PART I
Item 1.
Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Properties
Item 3.
Legal Proceedings
Item 4. Mine Safety Disclosures
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Financial Statements and Supplementary Data
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
PART III
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
PART IV
Item 15. Exhibits, Financial Statement Schedules
Item 16. Form 10-K Summary
SIGNATURES
4
10
23
24
33
33
34
35
57
59
102
102
103
104
104
104
104
104
105
107
108
3
Item 1.
Business
GENERAL
PART I
Coeur Mining, Inc. (“Coeur”, “the Company”, or “we”), founded in 1928, is a precious metals producer with assets
located in the United States, Canada, and Mexico. Our common stock is listed on The New York Stock Exchange under the
symbol “CDE”.
Coeur’s strategy is to be a well-diversified, growing precious metals producer with a focus on generating sustainable,
high-quality cash flow and returns from a North American asset base. Our strategy is guided by our purpose statement, We
Pursue a Higher Standard, and three key principles: Protect our People, Places and Planet; Develop Quality Resources,
Growth and Plans; and Deliver Impactful Results Through Teamwork. We conduct our business with a proactive focus on
positively impacting the health, safety and socioeconomic status of our people and the communities in which we operate as well
as the environment.
Impacts of the COVID-19 Pandemic on our Business
The COVID-19 pandemic has caused and continues to cause global economic disruption and uncertainty. We are
closely monitoring the COVID-19 pandemic and related developments and remain focused on safeguarding the health of our
employees, families and the communities where we operate while minimizing business interruption. For a further discussion of
the risks, uncertainties and actions taken in response to COVID-19, refer to Item 1A "Risk Factors" and Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
OUR BUSINESS
Operating Segments
We produce and sell precious metals from the following operating segments:
•
•
•
•
•
The Palmarejo gold-silver complex, located in the State of Chihuahua in Northern Mexico, which has been in
operation since 2009. The processing facility at the Palmarejo complex is fed by the Guadalupe, Independencia and La
Nación underground mines. The Company also carries out exploration activities the Palmarejo property package.
The Rochester open pit heap leach silver-gold mine located in northwestern Nevada, which has been in operation since
1986. Coeur Rochester commenced a significant expansion project in 2020 (Plan of Operations Amendment No. 11, or
“POA 11”) consisting of construction of a new leach pad, crushing facility, process plant and related infrastructure,
which is expected to support an extended mine life. Coeur Rochester also acquired the Lincoln Hill, Gold Ridge, and
related exploration assets adjacent to its Rochester mine in 2018.
The Kensington underground gold mine located north of Juneau, Alaska, which began operations in 2010. Coeur
Alaska is in the process of amending its Plan of Operations (“POA 1”) to increase tailings and waste rock storage
capacity to support an expected longer mine life, reflecting positive exploration results, current metal prices, and
ongoing operational efficiencies.
The Wharf open pit heap leach gold mine located near Lead, South Dakota, which was acquired by Coeur in 2015.
The Silvertip underground silver-zinc-lead development project located in northern British Columbia, Canada, which
was acquired by Coeur in 2017. Silvertip commenced commercial production in 2018. In February 2020, we
announced a suspension of mining and processing activities at Silvertip. While mining activities are suspended, the
Company (i) is investing in exploration to potentially further expand the resource and extend the mine life, and (ii)
continues to work to pursue a mill expansion to improve the asset’s cost structure and its ability to deliver sustainable
cash flow.
In addition, the Company has interests in several precious metals exploration projects throughout North America,
including the wholly-owned Crown and Sterling projects in southern Nevada and the La Preciosa project in Mexico, other
mineral interests, strategic equity investments, among other items, which are included in “Other” for segment reporting
purposes. The Company has entered into an agreement to sell the La Preciosa project, which is expected to close in the first
quarter of 2022. At December 31, 2021 the La Preciosa project is classified as held for sale. For additional information see Note
3 - Segment Reporting and Note 22 - Assets and Liabilities Held for Sale in the notes to the Consolidated Financial Statements.
4
Metals Prices and Hedging Activities
The results of the Company and its operating segments are substantially dependent upon the market prices of gold and
silver, which fluctuate widely. The Company has in the past and may in the future enter into derivative contracts to protect the
selling price for certain anticipated gold and silver production and to manage risks associated with foreign currencies. For
additional information see “Item 1A – Risk Factors”, “Item 7A. Quantitative and Qualitative Disclosures About Market Risk”
and Note 16 – Derivative Financial Instruments in the notes to the Consolidated Financial Statements.
Metal Processing, Marketing and Sales
We produce gold and silver doré, as well as gold concentrate. The doré produced at the Palmarejo complex and
Rochester mine, as well as the concentrate product produced by the Wharf mine, is refined by a geographically diverse group of
third-party refiners into gold and silver bullion according to benchmark standards set by the London Bullion Market
Association, which regulates the acceptable requirements for bullion traded in the London precious metals markets. We then
sell gold and silver bullion to multi-national banks, bullion trading houses, and refiners across the globe. Our gold concentrate
product from the Kensington mine is sold under a variety of agreements with a geographically diverse group of third-party
smelters and traders, and the smelters and traders pay us for the metals recovered from the concentrates.
We believe that the loss of any one smelter, refiner, trader or third-party customer would not materially adversely
affect us due to the liquidity of the markets and current availability of alternative trading counterparties.
Commodities
We purchase materials and supplies from third parties to conduct our business, including electricity, fuel, chemical
reagents, explosives, steel and concrete. Prices for these commodities are volatile and can fluctuate due to conditions that are
difficult to predict, including global competition for resources, inflation, currency fluctuations, consumer or industrial demand
and other factors. For most of these commodities, we have existing alternate sources of supply or alternate sources of supply are
readily available. We continuously monitor supply and cost trends for these items.
GOVERNMENT REGULATION
General
Our business is subject to extensive federal, state, local and foreign laws governing the protection of the environment,
prospecting, development, production, mine closure, taxes, labor standards, occupational health, mine safety, toxic substances,
protection of endangered, protected or other specified species and other matters. The costs to comply with such regulatory
requirements are substantial and possible future legislation and regulations could cause additional expense, capital expenditures,
restrictions and delays in the development and continued operation of our properties, the extent of which cannot be predicted.
Expenditures for environmental compliance in 2022 are expected to range from $8.5 million to $9.5 million. We have reviewed
and considered current federal legislation relating to climate change and do not believe the legislation to have a material effect
on our operations. Future changes in U.S., Mexican or Canadian federal, state or provincial laws or regulations could have a
material adverse effect upon us and our results of operations. For additional information regarding key regulatory risks, please
see the section titled “Risk Factors” included in Item 1A.
Permitting
The Rochester, Kensington and Wharf mines and Crown and Sterling projects are subject to extensive U.S. federal and
state permitting laws and regulations. Mexico, where the Palmarejo complex and the La Preciosa project are located, and
Canada, where the Silvertip development property is located, have all adopted laws and guidelines for environmental permitting
that are similar to those in effect in the United States. The permitting process in each jurisdiction requires, among other things, a
thorough study to determine the baseline condition of the mining site and surrounding area, an environmental impact analysis,
and proposed mitigation measures to minimize and offset the environmental impact of mining operations. We have received all
permits required to operate and carry out the current scope of activities at the Palmarejo complex, Rochester, Kensington and
Wharf mines, and the Silvertip development property, and have received all permits necessary for the exploration activities
currently being conducted at our other properties. We are in the process of amending existing permits at our Palmarejo
complex, Wharf mine, Kensington mine, and the Crown and Sterling projects to support future planned activities. If we pursue
an expansion at Silvertip, it will require new or amended permits.
Maintenance of Mining Claims
All of the jurisdictions where we operate impose federal, state and/or provincial requirements for maintaining mining
claims (United States), mining concessions (Mexico) and mineral claims and mining leases (British Columbia), including fees,
reporting, and/or evidence of work, among other requirements. Our failure to comply with any of these requirements could
5
result in the loss of our ability to conduct mining activities in a particular location, which could have a material adverse impact
on our business.
HUMAN CAPITAL MANAGEMENT
Effective human capital management at Coeur is critical to achieving our strategic goals. We aim to be an employer of
choice by promoting safety first, proactively developing our people and fostering a diverse and inclusive culture. At December
31, 2021, we had approximately 2,105 employees (1,081 in the U.S., 101 in Canada and 923 in Mexico). Approximately 65%
of the employees of Coeur Mexicana are represented by a collective bargaining agreement.
Culture Assessment
We are focused on regular evaluation of our culture. In 2019 and again in 2021, we invited all employees to participate
in a culture assessment by completing an anonymous survey. Employee participation in 2021 was over 93%, which exceeded
industry benchmarks. Feedback was reviewed by the management team and our Board of Directors. The management team also
reviewed the results with employees at each of our operations through facilitated discussions to gain additional insight into the
feedback. We developed site-specific action plans to address feedback and monitor progress in the future. The results of the
assessment confirmed our belief that we have an ethical, safe, engaged and proud workforce and also highlighted areas for
improvement that are now being addressed.
Recruitment
We seek to recruit and retain employees at all levels who embody our purpose statement, We Pursue a Higher
Standard, through safe and ethical conduct. Our strong culture of teamwork and our reputation as a responsible company and an
engaged community member motivates new employee referrals. We have also created a series of partnership programs in local
communities to provide internships, scholarships and apprenticeships to build a pipeline of potential employees in the next
generation.
Diversity & Inclusion
Our President & CEO, Mitchell Krebs, is the first and only precious metals mining CEO to sign the CEO ACTION for
Diversity & Inclusion pledge. This pledge highlights Coeur’s continuing commitment to fostering a diverse and inclusive
workforce, evidenced by programs such as Coeur Heroes, which has provided approximately 100 career opportunities to
current and former U.S. Military personnel. Fifty percent of our independent Board members have indicated that they are
diverse, 12% of our employees are female, up from 10% in 2020. While we continue to work to increase our overall female
population, 66% of our female employees are supervisor or higher-level positions. In the US and Canada approximately 21% of
our workforce is non-white, up from 18% in 2020, Partnerships with organizations like the National Society of Black Engineers
and Women in Mining at their U.S. university chapters are providing further avenues for recruiting diverse talent.
Employee Development
We periodically solicit feedback on each member of our executive team through 360 assessments. We believe this
feedback is important to maintaining a strong culture by effectively assessing leadership performance and development,
increasing accountability, facilitating succession planning and identifying areas for improvement and change. We provide
opportunities for employees to participate in IMPACT Training, an intensive one-year training program we created for front-
line supervisors throughout our organizational structure to focus on leadership development and mining as a business. Through
IMPACT training, we have invested over 16,412 cumulative hours of leadership training and personal development in almost
189 employees.
Succession Planning
We conduct robust succession planning throughout the organization annually, by employing specific talent diagnostics
and skills development. High potential performers and diversity discussions, along with action plans, are reviewed with
leadership on a quarterly basis.
Our Board of Directors (the “Board”) oversees the recruitment, development, and retention of our senior executives.
Significant focus is placed on succession planning both for key executive roles and also deeper into the organization. In-depth
discussions occur multiple times per year in meetings of the Board, Compensation and Leadership Development Committee
and Nominating and Corporate Governance Committee, including in executive sessions to foster candid conversations.
Directors have regular and direct exposure to senior leadership and high-potential employees during Board and committee
meetings and through other informal meetings and events held during the year.
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Local Hire
Investing in local communities extends beyond financial support. Since 2018, we have hired an average of 60% of our
new hires from local communities. During 2021, we provided over 100 apprenticeships and internships and worked with
organizations such as By the Hand Club in Chicago to educate youth in our communities about career opportunities in mining.
Providing career opportunities to local community members and participating in community initiatives creates a closer
connection between our operations and local stakeholders and communities.
Rewards & Wellness
As part of our fundamental need to attract and retain talent, we regularly evaluate our compensation, benefits and
employee wellness offerings. We have determined that our average employee earns over 40% more than the average employee
in their local markets according to industry benchmarking. Over 93% of U.S. employees are enrolled in our medical benefit
plan, and over 90% of U.S. employees contribute to our 401(k) plan. Supplemental healthcare is provided above government
requirements in both Canada and Mexico. We were a leader in the mining industry by providing domestic partner benefits in
2017 and participation has increased 125% since introduction.
In addition, we have engaged a third-party mental health care provider for innovative care and counseling resources
throughout our footprint. This resource leverages technology and clinical best practices to assist our employees and their
families gain fast access to highly effective quality care when needed most. We are also developing a Total Worker Health
program, which is expected to be implemented by the end of 2022, that integrates protection from work-related safety and
health hazards with promotion of injury and illness-prevention efforts to advance worker well-being both physically and
mentally.
RESPONSIBILITY
At Coeur, we strive for best-in-class environmental performance while meeting the needs of today and respecting the
needs of future generations. As a precious metals producer, we have the unique opportunity to supply the raw materials that
play a key role in the clean energy transition. We work to protect our environment through an approach of responsible
production and a focus on best practices. On an ongoing basis, we conduct site-specific environmental risk reviews and utilize a
set of key performance indicators (“KPIs”) to evaluate performance results by mine. We believe that this systematic approach
leads to awareness, risk mitigation and a pursuit of continuous improvement. Comprehensive environmental management plans
in conjunction with topic-specific plans, such as waste management and storm water protection, at each site provide guidance
on how to implement our environmental initiatives and meet or exceed regulatory standards.
We recognize that the climate is changing, which may adversely affect the environment, our business and the
communities where we operate over the long-term. To that end, we are assessing the extent of these risks and potential
opportunities and are taking action to manage our climate-related risks as well as the potential impact we have on climate. For
example, we:
•
•
•
•
•
published an initial greenhouse gas (“GHG”) emissions intensity reduction target in 2021;
established a Climate Working Group in 2021 to lead climate strategy, including disclosure in-line with the Task Force
on Climate-related Financial Disclosures (“TCFD”), overseeing scenario analysis and incorporating results in business
planning and strategy;
are planning to build on our initial scenario analysis completed in 2021 with site-specific analysis and financial
modeling;
are planning to tie a meaningful portion of the regular performance share grant in 2022 to achievement of the
Company's GHG emissions net intensity reduction goal; and
are enhancing our climate-related reporting and disclosures.
AVAILABLE INFORMATION
We make available on our website (http://www.coeur.com) our Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and Proxy Statements, as well as Forms 3, 4 and 5 with respect to our common stock,
including any amendments to any of the foregoing, as soon as reasonably practicable after such reports are electronically filed
with the SEC. These filings are also available at http://www.sec.gov.
Copies of our Corporate Governance Guidelines, charters of the key committees of the Board of Directors (Audit,
Compensation and Leadership Development, Executive, Nominating and Corporate Governance, and Environmental, Health,
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Safety, and Corporate Responsibility Committees) and our Code of Business Conduct and Ethics, applicable to the Chief
Executive Officer, Chief Financial Officer and Chief Accounting Officer, among others, are also available on our website.
Information contained on our website is not a part of this report.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This report contains numerous forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) relating to our mining business, including anticipated mineral reserve
and resource estimates, exploration efforts and expenditures, development, expansion initiatives at Rochester, Kensington and
Silvertip, development of the Sterling/Crown and Lincoln Hill projects, expectations about timing of deliveries against the
Kensington prepayment, permitting, mill expansion and exploration plans and expectations for Silvertip, estimated production,
costs, capital expenditures, expenses, recoveries, metals prices, sufficiency of assets, ability to discharge liabilities, liquidity
management, financing needs, environmental compliance expenditures, environmental, social and governance (“ESG”) and
human capital management initiatives, risk management strategies, including hedging, capital resources and use, cash flow
maximization, mine life and other strategic initiatives. Such forward-looking statements are identified by the use of words such
as “believes,” “intends,” “expects,” “hopes,” “may,” “should,” “plan,” “projected,” “contemplates,” “anticipates” or similar
words and involve known and unknown risks, uncertainties and other factors which may cause Our actual results, performance,
or achievements to be materially different from any future results, performance, or achievements expressed or implied by the
forward-looking statements. Factors that could cause actual results to differ materially from those projected in the forward-
looking statements include: (i) the risk factors set forth below under Item 1A and in Management’s Discussion and Analysis of
Financial Condition and Results of Operations under Item 7; (ii) the risk that anticipated production, cost, expenditure and
expense levels are not attained; (iii) the risks and hazards inherent in the mining business (including risks inherent in
developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions);
(iv) changes in the market prices of gold, silver, zinc and lead and treatment and refining charges of gold, silver, zinc and lead,
and a sustained lower price or higher treatment and refining charge environment; (v) the impact of the COVID-19 pandemic,
including disruptions to operations, the need for heightened health and safety protocols to minimize exposure and transmission
risk, inflation, and disruptions to our vendors, suppliers and the communities where we operate; (vi) the uncertainties inherent
in our production, exploratory and developmental activities, including risks relating to permitting and regulatory delays
(including the impact of government shutdowns), ground conditions and grade and recovery variability; (vii) any future labor
disputes or work stoppages (involving us or our subsidiaries or third parties); (viii) the uncertainties inherent in the estimation
of gold, silver, zinc and lead mineral reserves and resources; (ix) changes that could result from any future acquisition of new
mining properties or businesses; (x) the loss of access to or insolvency of any third-party smelter to whom we market our
production; (xi) the effects of environmental and other governmental regulations and government shut-downs; (xii) the risks
inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries; and (xiii) our
ability to raise additional financing necessary to conduct our business, make payments or refinance our debt. Readers are
cautioned not to put undue reliance on forward-looking statements. We disclaim any intent or obligation to update publicly
these forward-looking statements, whether as a result of new information, future events or otherwise.
CAUTIONARY NOTE REGARDING DISCLOSURE OF MINERAL PROPERTIES
Mineral Reserves and Resources
We are subject to the reporting requirements of the Exchange Act and applicable Canadian securities laws, and as a
result we report our mineral reserves and mineral resources according to two different standards. U.S. reporting requirements,
are governed by Item 1300 of Regulation S-K (“S-K 1300”), as issued by the U.S. Securities and Exchange Commission
(“SEC”). Canadian reporting requirements for disclosure of mineral properties are governed by National Instrument 43-101
Standards of Disclosure for Mineral Projects (“NI 43-101”), as adopted from the definitions provided by the Canadian Institute
of Mining, Metallurgy and Petroleum. Both sets of reporting standards have similar goals in terms of conveying an appropriate
level of confidence in the disclosures being reported, but the standards embody slightly different approaches and definitions.
In our public filings in the U.S. and Canada and in certain other announcements not filed with the SEC, we disclose
proven and probable reserves and measured, indicated and inferred resources, each as defined in S-K 1300. The estimation of
measured resources and indicated resources involve greater uncertainty as to their existence and economic feasibility than the
estimation of proven and probable reserves, and therefore investors are cautioned not to assume that all or any part of measured
or indicated resources will ever be converted into S-K 1300-compliant reserves. The estimation of inferred resources involves
far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources, and
therefore it cannot be assumed that all or any part of inferred resources will ever be upgraded to a higher category. Therefore,
investors are cautioned not to assume that all or any part of inferred resources exist, or that they can be mined legally or
economically.
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Technical Report Summaries and Qualified Persons
The scientific and technical information concerning our mineral projects in this Form 10-K have been reviewed and
approved by “qualified persons” under S-K 1300, including our Director, Technical Services, Christopher Pascoe. For a
description of the key assumptions, parameters and methods used to estimate mineral reserves and mineral resources included
in this Form 10-K, as well as data verification procedures and a general discussion of the extent to which the estimates may be
affected by any known environmental, permitting, legal, title, taxation, sociopolitical, marketing or other relevant factors, please
review the Technical Report Summaries for each of the Company’s material properties which are included as exhibits to, and
incorporated by reference into, this Report.
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Item 1A.
Risk Factors
RISKS RELATED TO OUR INDUSTRY
Our results of operations, cash flows and operating costs are highly dependent upon the market prices of gold and silver,
and, if mining and processing operations at Silvertip resume, zinc and lead, and of key input commodities used in our
business, which are volatile and beyond our control.
Gold, silver, zinc and lead are actively traded commodities, and their prices are volatile. During the 12 months ended
December 31, 2021, the high and low price for each commodity are set forth in the following table:
Metal
Gold (per ounce)
Silver (per ounce)
Zinc (per pound)
Lead (per pound)
High Price for 2021
$1,943
$29.59
$1.74
$1.13
Date
January 4, 2021
February 1, 2021
October 15, 2021
August 18, 2021
Low Price for 2021
$1,684
$21.53
$1.15
$0.86
Date
March 30, 2021
September 30, 2021
February 2, 2021
March 17, 2021
Gold, silver, zinc and lead prices are affected by many factors beyond the Company’s control, including U.S. dollar
strength or weakness, speculation, global currency values, global and regional demand and production, political and economic
conditions and other factors. In addition, Exchange Traded Funds (“ETFs”), which have substantially facilitated the ability of
large and small investors to buy and sell precious metals and base metals, have become significant holders of gold, silver, zinc
and lead. Gold and silver prices are also affected by prevailing interest rates and returns on other asset classes, expectations
regarding inflation and governmental monetary decisions regarding central bank holdings.
Because we derive a significant portion of our revenues from sales of these metals, our results of operations and cash
flows will fluctuate as the prices of these metals change. A period of significant and sustained lower prices would materially
and adversely affect our results of operations and cash flows. In response to lower metal price and/or higher treatment and
refining charge environments, we may have to revise our operating plans, including reducing operating costs and capital
expenditures, terminating or suspending mining operations at one or more of our properties and discontinuing certain
exploration and development plans. These types of initiatives may not sufficiently offset reductions in revenues, and we may
continue to incur losses associated with sustained lower metals prices.
Operating costs at our mines are also affected by the price of input commodities, such as fuel, electricity, labor,
chemical reagents, explosives, steel and concrete. Prices for these input commodities are volatile and can fluctuate due to
conditions that are difficult to predict, including global competition for resources, inflation, currency fluctuations, consumer or
industrial demand and other factors. Continued volatility in the prices of commodities and other supplies we purchase could
lead to higher costs, which would adversely affect results of operations and cash flows.
Volatility in metals prices may also impact the price of our outstanding securities.
Although our results of operations and cash flow will reflect fluctuations in the prices of the metals we produce, short
term volatility in the prices of these metals due to speculation in the market may result in significant changes in the price of our
securities which may not be reflective of our operating performance or financial results. For example, the price of silver
increased 17% between January 27, 2021 and February 1, 2021, and then decreased by 8% on February 2, 2021. This swing in
the price of silver was seemingly attributable to a coordinated effort by market participants to drive up the price of silver and
did not reflect changes in the underlying fundamentals that typically drive changes in the price of silver, including supply and
demand. The price of our common stock increased by 44% and decreased by 19% during the same periods. The trading volume
for shares of our common stock also increased significantly during this period. This volatility in the price of our common stock
did not, in our view, reflect any significant change in our business or results of operations during the same period.
The estimation of mineral reserves and mineral resources is imprecise and depends upon subjective factors. Estimated
mineral reserves and mineral resources may not be realized in actual production. Our results of operations and financial
position may be adversely affected by inaccurate estimates.
The mineral reserve and mineral resource figures presented in our public filings are estimates made by our technical
personnel and independent mining consultants with whom we contract. Mineral reserve and mineral resource estimates are a
function of geological and engineering analyses that require us to make assumptions about production costs, recoveries and
gold, silver, zinc and lead market prices. Mineral reserve and mineral resource estimation is an imprecise and subjective
process. The accuracy of such estimates is a function of the quality of available data and of engineering and geological
interpretation, judgment and experience. Assumptions about gold, silver, zinc and lead market prices are subject to great
uncertainty as those prices fluctuate widely. Declines in the market prices of gold, silver, zinc or lead may render mineral
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reserves and mineral resources containing relatively lower grades of mineralization uneconomic to exploit, and we may be
required to reduce mineral reserve and mineral resource estimates, discontinue development or mining at one or more of our
properties or write down assets as impaired. Should we encounter mineralization or geologic formations at any of our mines or
projects different from those predicted, we may adjust our mineral reserve and mineral resource estimates and alter our mining
plans. Updates to our mining plans or new or updated technical or geological information may also impact anticipated metal
recovery rates. Any of these adjustments may adversely affect actual operating performance, production, financial condition,
results of operations and cash flows.
A significant delay or disruption in sales of concentrates or doré as a result of the unexpected disruption in services provided
by smelters or refiners or other third parties could have a material adverse effect on our results of operations.
We rely on refiners and smelters to refine and process and, in some cases, purchase, the gold and silver doré and gold,
silver, zinc and lead concentrate produced by our mines. Access to refiners and smelters on economical terms is critical to our
ability to sell our products to buyers and generate revenues. We have existing agreements with refiners and smelters, some of
which operate their refining or smelting facilities outside the United States. We believe we currently have contractual
arrangements with a sufficient number of refiners and smelters so that the loss of any one refiner or smelter would not
significantly or materially impact our operations or our ability to generate revenues. Nevertheless, services provided by a refiner
or smelter may be disrupted by new or increased tariffs, duties or other cross-border trade barriers, shipping delays, the
bankruptcy or insolvency of one or more refiners or smelters or the inability to agree on acceptable commercial or legal terms
with a refiner or smelter. Such an event or events may disrupt an existing relationship with a refiner or smelter or result in the
inability to create (or the necessity to terminate) a contractual relationship with a refiner or smelter, which may leave us with
limited, uneconomical or no access to refining or smelting services for short or long periods of time. Epidemics, pandemics or
natural disasters may also impact refiners, smelters or other third parties with whom we have contractual arrangements or have
an indirect effect on our ability to obtain refining, smelting or other third-party services.
Any delay or loss of access to refiners or smelters may significantly impact our ability to sell doré and concentrate
products and generate revenues. A default by a refiner or smelter on its contractual obligations to us or an insolvency event or
bankruptcy filing by a refiner or smelter may result in the loss of all or part of our doré or concentrate in the possession of the
refiner or smelter, and such a loss likely would not be insured by our insurance policies. We cannot ensure that alternative
refiners or smelters would be available or offer comparable terms if the need for them were to arise or that it would not
experience delays or disruptions in sales that would materially and adversely affect results of operations.
There are significant hazards associated with mining activities, some of which may not be fully covered by insurance.
The mining business is subject to risks and hazards, including environmental hazards, industrial accidents, the
encountering of unusual or unexpected geological formations, cave-ins, flooding, earthquakes and periodic interruptions due to
inclement or hazardous weather conditions or machine failure. These occurrences could result in damage to, or destruction of,
mineral properties or production facilities, personal injury or death, environmental damage, reduced production and delays in
mining, asset write-downs, monetary losses and possible legal liability.
We maintain insurance policies that protect against property loss and business interruption in amounts that we believe
are reasonable taking into account the nature of, and risks related to, our business and operations as well as the cost of policy
premiums. Such insurance is, however, subject to certain exclusions, and there is no guarantee that we will receive insurance
proceeds with respect to a particular event or loss. Insurance fully covering many environmental risks, including potential
liability for pollution or other hazards as a result of disposal of waste products occurring from exploration and production, is not
generally available. Any liabilities that we incur for these risks and hazards could be significant and could adversely affect
results of operations, cash flows and financial condition.
RISKS RELATED TO OUR OPERATIONS
Our future growth will depend upon our ability to expand existing mines and develop and start-up new mines, either
through exploration at existing properties or by acquisition of other mining companies or properties.
Because mines have limited lives based on proven and probable mineral reserves, our ability to achieve significant
additional growth in revenues and cash flows will depend upon success in further developing and expanding existing properties
and the opportunistic acquisition or development and start-up of new mining properties, such as the Silvertip development
property, the Sterling/Crown project and the Lincoln Hill project and related assets.
While initial development of the Palmarejo, Rochester, and Kensington mines has been substantially completed,
development work continues to expand these mines while leveraging existing infrastructure. Palmarejo completed open pit
mining several years ago and evolved to be an underground-only operation, developing new underground mining operations. At
Rochester, a crushing circuit using high pressure grinding roll (“HPGR”) technology was commissioned in 2019, and, in 2020,
we obtained permitting for, and began construction of POA 11, which is a significant additional expansion, including the
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construction of a new leach pad, a crushing facility equipped with two HPGR units and a prescreen, processing facilities and
related infrastructure to support the extension of Rochester’s mine life. At Kensington, we completed development and
commenced commercial production from a new deposit in 2018 and are currently seeking to amend our operating permit to
allow for an additional 10 years of mine life by providing for expanded tailings and waste rock storage, increased mill
throughput, enhanced infrastructure and other benefits (“POA 1”). Our ability to timely complete these and future mine
expansion and mine life extension projects is dependent on numerous factors, many of which are outside of our control,
including, among others, availability of funding on acceptable terms, timing of receipt of permits and approvals from regulatory
authorities, extreme weather events, obtaining materials and equipment and construction, engineering and other services at
favorable prices and terms, and disputes with third-party providers of materials, equipment or services. The construction
services related to POA 11 will be performed by contractors, which creates a risk of delays or additional costs to the project
resulting from, among other factors: inability to negotiate contracts with favorable pricing and terms; delays in performance of
the services; failure of a contractor to comply with applicable laws and regulations; termination of a contract by a contractor
before completion of the services; failure by a contractor to obtain necessary equipment or materials; mismanagement by a
contractor of its workforce; and insolvency or other financial difficulty encountered by a contractor which results in a delay in
services or termination of a contract with the contractor. Expected project benefits are based on estimates of a variety of key
factors, including mineral reserves and resources, grade, recovery rates, and operating costs among others. However, achieving
results in line with those estimates is subject to risks and uncertainties such as variability in grade, recovery rates and cost
inputs. In 2021, Rochester experienced lower than expected silver recovery rates from its HPGR-crushed ore, which negatively
impacted production, costs and cash flow. We cannot provide assurance that we will be able to successfully expand or extend
the lives of existing mining operations, and a completed project may not yield the anticipated operational or financial benefit,
such as expected availability, throughput, metal recovery rates, concentrate quality, unit costs, operating margin and/or cash
flows, any of which may have a material negative impact on returns on invested capital, operating costs or cash flows.
In addition, we acquired several mining properties in recent years, namely, the Sterling/Crown project, the Lincoln Hill
project and related assets and the Silvertip development property. We cannot guarantee that we will be able to successfully
develop and start-up new mining properties, restart mining and processing activities at the Silvertip development property or
acquire additional mining properties on favorable economic terms or at all.
We regularly evaluate and engage in discussions or negotiations regarding acquisition opportunities. Any transactions
that we contemplate or pursue would involve risks and uncertainties and would be subject to competition from other mining
companies. There can be no assurance with respect to the timing, likelihood or business effect of any possible transaction.
Our operations may be further disrupted, and our financial results may be adversely affected by the COVID-19 pandemic.
COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, poses a material
risk to our business and operations. If a significant portion of our workforce becomes unable to work or travel to our operations
due to illness or state or federal government restrictions (including travel restrictions and “shelter-in-place” and similar orders
restricting certain activities that may be issued or extended by authorities), we may be forced to reduce or suspend operations at
one or more of our mines, which could reduce production, limit exploration activities and development projects and impact
liquidity and financial results. In addition, we have implemented several initiatives to protect the health and safety of our
employees, contractors and communities during this pandemic, including COVID-19 testing, site access symptom checks,
contact tracing technology and procuring additional disinfectant and sanitation products and personal protective equipment for
our employees, among others, some of which have and may result in additional costs to us.
Illnesses or government restrictions, including the closure of national borders, related to COVID-19 also may disrupt
the supply of raw goods, equipment, supplies and services upon which our operations rely. We also continue to monitor
legislative initiatives in the U.S., Mexico and Canada related to COVID-19 to determine their potential impacts or benefits (if
any) to our business.
Third parties with whom we conduct business, including the refiners and smelters that, process and, in some cases,
purchase the gold and silver doré and gold, silver, zinc and lead concentrate produced by our mines, are also subject to these
risks and may be required to reduce or suspend operations, which could impact our ability to conduct our operations, advance
exploration, development and expansion projects, sell our products and generate revenues.
We may be subject to litigation if one or more employees or contractors contract COVID-19 at work or litigation
initiated by stockholders who view decisions by the Board of Directors or management as inconsistent with duties to the
Company under Delaware law or who may assert claims under federal securities laws. We understand that, as indicated by
sharp increases in average premiums for director and officer insurance policies in recent months, insurers expect increased
litigation relating to COVID-19.
The jurisdictions in which we operate have and may in the future continue to encounter financial difficulties resulting
from one or both of lower tax revenue and new and increased costs related to COVID-19. As a result, national, state or local
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governments may seek to raise existing taxes or introduce new taxes that affect our business, which may adversely affect our
business and financial results. For example, in Nevada, where the Rochester mine, Sterling/Crown project and Lincoln Hill
project are located, in response to a significant loss of tourism and gaming revenue during 2020, in June 2021 the Governor
signed into law a new excise tax on gross proceeds derived from mining gold and silver.
To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect
of heightening many of the other risks described in this “Risk Factors” section as well as those contained in the 2020 10-K,
such as those relating to our operations and indebtedness and financing. Because of the highly uncertain and dynamic nature of
events relating to the COVID-19 pandemic, it is not currently possible to estimate the full impact of the pandemic on our
business. However, these effects could have a material impact on our operations, and we will continue to monitor the
COVID-19 situation closely.
We may be unable to successfully integrate and may not realize the expected benefits of recent or future acquisitions.
There can be no assurance that the anticipated benefits of recent acquisitions (including the Silvertip development
property and the Sterling/Crown and Lincoln Hill projects) or any future acquisition, will be realized on the originally
anticipated timeline or at all. The success and the ability to realize the anticipated benefits of any acquisition will depend upon
our ability to effectively manage the integration, performance and operations of entities or properties we acquire. The process of
managing acquired businesses or assets may involve unforeseen challenges and may require a disproportionate amount of our
resources, which may divert focus and resources from other strategic opportunities and/or from operational matters during this
process. As an example, the ramp up of the Silvertip development property, acquired in late 2017, was slower and less
profitable than originally anticipated, due primarily to more significant mill availability and maintenance challenges than were
anticipated at the time Silvertip was acquired.
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In addition to the above, any acquisition would be accompanied by risks, including:
a significant change in macroeconomic conditions, including commodity prices, treatment and refining charges or stock
prices after we have committed to complete the transaction and established the purchase price or exchange ratio;
additional debt incurred or issued to fund some or all of acquisition consideration (as was the case with Silvertip and
Wharf), resulting in increased interest expense and other borrowing costs;
issuance of equity securities as acquisition consideration (which occurred in the Sterling/Crown, Lincoln Hill and Silvertip
project acquisitions), resulting in dilution of our existing stockholders;
a material ore body may prove to be below our expectations;
processing facilities may not operate as well as anticipated, and may require significant maintenance, downtime and capital
investment, such as the mill at Silvertip;
difficulties integrating and assimilating the operations and personnel of any acquired companies and supporting expanded
operations, realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise,
and maintaining uniform standards, policies and controls across the organization;
difficulties or loss of social license to operate resulting from failure of efforts to establish positive relationships and/or
agreements with local communities or local indigenous people; and
the acquired business or assets may have significant liabilities, such as environmental liabilities, or significant capital
expenditures that we failed to discover or have underestimated.
We cannot predict the impact of future acquisitions on the price of our common stock or assure that we will be able to
obtain necessary acquisition or development financing on acceptable terms or at all. Unprofitable acquisitions, or additional
liabilities, indebtedness or issuances of securities in connection with such acquisitions or any future mine development, may
negatively affect our results of operations.
Significant investment risks and operational costs are associated with exploration and development activities. These
risks and costs may result in lower economic returns and may adversely affect our business.
Our ability to sustain or increase current production levels depends in part on successful exploration and development
of new ore bodies and expansion of existing mining operations. Substantial expenditures are required to establish ore reserves,
to extract metals from ores and, in the case of new properties, to construct mining and processing facilities.
Our plans include several significant projects to construct or upgrade mining and processing facilities at our existing
mining operations, including the POA 11 expansion project at Rochester and the POA 1 planned mine life extension at
Kensington, and future plans to develop the Sterling/Crown and Lincoln Hill projects. These projects can take up to several
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months or years to complete, are complex and require significant capital expenditures. These projects are subject to significant
risks described in this Item, any of which may have a material negative impact on returns on invested capital, operating costs or
cash flows.
Mineral exploration involves many risks and is frequently unproductive. Even if mineral deposits are found, those
deposits may be insufficient in quantity and quality to return a profit from production, or it may take a number of years until
production is possible, during which time the economic viability of the project may change. Few properties that are explored
are ultimately developed into producing mines. The commercial viability of a mineral deposit, once developed, depends on a
number of factors, including: the particular attributes of the deposit, such as size, grade and proximity to infrastructure;
government regulations including taxes, royalties and land tenure; land use; importing and exporting of minerals; environmental
protection; mineral prices; and issuance and maintenance of necessary permits. Factors that affect adequacy of infrastructure
include: reliability of roads, bridges, power sources and water supply; unusual or infrequent weather phenomena; sabotage; and
government or other interference in the maintenance or provision of such infrastructure. All of these factors are highly cyclical.
The exact effect of these factors cannot be accurately predicted, but the combination may result in not receiving an adequate
return on invested capital.
In addition, exploration projects, such as the Sterling/Crown and Lincoln Hill projects may have no operating history
upon which to base estimates of future operating costs and capital requirements. Exploration project items such as estimates of
reserves, metal recoveries and cash operating costs are to a large extent based upon the interpretation of geologic data, obtained
from a limited number of drill holes and other sampling techniques, and feasibility studies. Estimates of operating costs are then
derived based upon anticipated tonnage and grades of ore to be mined and processed, the configuration of the ore body,
expected recovery rates of metals from the ore, comparable facility and equipment costs, anticipated climate conditions and
other factors. As a result, actual operating costs and economic returns of any and all exploration projects may materially differ
from the costs and returns estimated, and accordingly, our financial condition, results of operations and cash flows may be
negatively affected.
We may be required to write down certain long-lived assets, due to metal prices, operational challenges or other factors.
Such write- downs may adversely affect our results of operations and financial condition.
We review our long-lived assets for recoverability pursuant to the Financial Accounting Standard Board’s Accounting
Standards Codification Section 360. Under that standard, we review the recoverability of our long-lived assets, such as our
mining properties, upon a triggering event. Such review involves estimating the future undiscounted cash flows expected to
result from the use and eventual disposition of the asset. Impairment, measured by comparing an asset’s carrying value to its
fair value, must be recognized when the carrying value of the asset exceeds these cash flows. We conduct a review of the
financial performance of our mines in connection with the preparation of our financial statements for each reported period and
determine whether any triggering events are indicated.
For example, during the fourth quarter of 2019, we performed a comprehensive analysis of the Silvertip property and
determined that indicators of impairment existed, and we ultimately concluded that the carrying value of the long-lived assets
for the Silvertip property was impaired, and a non-cash impairment charge of $250.8 million was recorded during the fourth
quarter of 2019.
If there are further significant and sustained declines in relevant metal prices, or if we fail to control production and
operating costs or realize the mineable ore reserves at its mining properties, we may terminate or suspend mining operations at
one or more of its properties. These events could require a further write-down of the carrying value of our assets. Any such
actions would adversely affect our results of operations and financial condition.
We may record other types of charges in the future if we sell a property or asset for a price less than its carrying value
or have to increase reclamation liabilities in connection with the closure and reclamation of a property. Any additional write-
downs of mining properties or other assets could adversely affect our results of operations and financial condition.
Coeur is an international company and is exposed to political and social risks associated with its foreign operations.
A significant portion of our revenues are generated by operations outside the United States. Exploration, development,
production and closure activities in many countries are potentially subject to heightened political and social risks that are
beyond our control and could result in increased costs, capacity constraints and potential disruptions to our business. These
risks include the possible unilateral cancellation or forced renegotiation of contracts in which we, directly or indirectly, may
have an interest, unfavorable changes in foreign laws and regulations, royalty and tax increases (including taxes associated with
the import or export of goods), risks associated with the value-added tax (“VAT”) and income tax refund recovery and
collection process, erection of trade barriers, including tariffs and duties, claims by governmental entities or indigenous
communities, expropriation or nationalization of property and other risks arising out of foreign sovereignty over areas in which
our operations are conducted. As an example, as disclosed in Note 20 -- Commitments and Contingencies to the Consolidated
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Financial Statements, we are currently engaged in efforts to recover VAT paid to the Mexican government that is owed to
Coeur associated with Coeur Mexicana’s prior royalty agreement, including through ongoing litigation and potential
international arbitration. While the Company believes that it remains legally entitled to be refunded the full amount of the VAT
receivable and intends to rigorously continue its VAT recovery efforts, based on the continued failure to recover the VAT
receivable and recent unfavorable Mexican court decisions, the Company determined to write down the carrying value of the
VAT receivable of $26.0 million at September 2021. The right to import and export gold, silver, zinc and lead may depend on
obtaining certain licenses and quotas, which could be delayed or denied at the discretion of the relevant regulatory authorities,
or could become subject to new taxes, tariffs or duties imposed by U.S. or foreign jurisdictions, which could have a material
adverse effect on our business, financial condition, or future prospects. In addition, our rights under local law may be less
secure in countries where judicial systems are susceptible to manipulation and intimidation by government agencies, non-
governmental organizations or civic groups.
Any of these developments could require us to curtail or terminate operations at our mines, incur significant costs to
renegotiate contracts, meet newly-imposed environmental or other standards, pay greater royalties or higher prices for labor or
services and recognize higher taxes, or experience significant delays or obstacles in the recovery of VAT or income tax refunds
owed, which could materially and adversely affect financial condition, results of operations and cash flows.
Our operations outside the United States also expose us to economic and operational risks.
Our operations outside the United States also expose us to economic and operational risks. Local economic conditions,
as well as epidemics, pandemics or natural disasters, can cause shortages of skilled workers and supplies, increase costs and
adversely affect the security of operations. In addition, higher incidences of criminal activity and violence in the area of some of
our foreign operations, including drug cartel-related violence in Mexico, could adversely affect our ability to operate in an
optimal fashion and may impose greater risks of theft and greater risks as to personnel and property security. These conditions
could lead to lower productivity and higher costs, which would adversely affect results of operations and cash flows.
In addition, acts of civil disobedience are not uncommon in areas in Mexico where our operations or projects are
located. In recent years, many mining companies have been the targets of actions to restrict their legally-entitled access to
mining concessions or property. Such acts of civil disobedience often occur with no warning and can result in significant direct
and indirect costs. We cannot provide assurance that there will be no disruptions to site access in the future, which could
adversely affect our business.
We sell silver and gold doré, gold concentrate, and silver, zinc and lead concentrates in U.S. dollars, but we conduct
operations outside the United States in local currency. Currency exchange movements could also adversely affect our results of
operations.
Our success depends on developing and maintaining relationships with local communities and other stakeholders.
Our ongoing and future success depends on developing and maintaining productive relationships with the communities
surrounding our operations, including indigenous peoples who may have rights or may assert rights to certain of our properties,
and other stakeholders in our operating locations. We believe our operations can provide valuable benefits to surrounding
communities, in terms of direct employment, training and skills development and other benefits associated with ongoing
payment of taxes. In addition, we seek to maintain our partnerships and relationships with local communities, including
indigenous peoples, and stakeholders in a variety of ways, including in-kind contributions, volunteer time, sponsorships and
donations. Notwithstanding our ongoing efforts, local communities and stakeholders can become dissatisfied with our activities
or the level of benefits provided, which may result in legal or administrative proceedings, civil unrest, protests, direct action or
campaigns against us or our operations. Any such occurrences could materially and adversely affect our financial condition,
results of operations and cash flows.
Our mining assets are subject to geotechnical and hydrological risks, and a related incident could materially and adversely
impact our production, profitability and financial condition and the value of our common stock.
Our mining assets are subject to geotechnical and hydrological risks which could impact the structural integrity of our
mines, stockpiles, leach pads and tailings storage facilities. No assurances can be given that unanticipated adverse geotechnical
and hydrological conditions, such as landslides, pit wall failures or tailings dam instability will not occur in the future or that
such events will be detected in advance. Geotechnical and hydrological instabilities can be difficult to predict and are often
affected by risks and hazards outside of our control, such as severe weather and considerable rainfall, which may lead to
periodic floods, mudslides, wall instability and seismic activity, which may result in slippage of material.
Waste rock in the form of tailings generated as a by-product of processed ore is produced at the Kensington and
Palmarejo Mines. We place tailings into engineered containments, underground as structural backfill, and as a dry stack
material. In response to several recent tailings dam failures unrelated to our operations that have involved loss of life and
resulted in severe property and environmental ecosystem damage, we completed a comprehensive review of our tailings dams
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and operational practices to characterize our risk profile. We concluded that our tailings dams represent a low exposure risk
profile for several reasons, including that our tailings dams were constructed using construction methods recognized in the
industry as the most stable tailings dam design using high strength and chemically stable rock in construction. Our dams are
continuously monitored and inspected by internal resources as well as third-party industry qualified experts. The significant
dam failure events that have occurred in recent years may lead to regulatory governance changes stemming from updated laws,
regulation or guidance, which could result in increased operational and compliance costs if we need to make changes to existing
facilities. The failure of a tailings dam or tailings storage facility at one of our mine sites could result in severe, and in some
cases catastrophic, property and environmental damage and loss of life. Geotechnical or hydrological failures could result in
limited or restricted access to mine sites, suspension of operations, government investigations, lawsuits filed by parties who
suffer injuries or property damage from such events, increased monitoring costs, remediation costs, loss of mineral reserves and
resources and other impacts, which could have a material adverse effect on our results of operations and financial position as
well as the value of our common stock.
Our estimates of future production, costs, expenditures and financial results are imprecise, depend upon subjective factors,
may not be realized in actual production and such estimates speak only as of their respective dates.
We have in the past, and may in the future, provide estimates and projections of our future production, costs,
expenditures and financial results. Any such information is forward-looking. Neither our independent registered public
accounting firm nor any other independent expert or outside party compiles or examines these forward-looking statements and,
accordingly, do not express any opinion or any other form of assurance on these estimates and projections. Estimates and
projections are made by our management and technical personnel and are qualified by, and subject to the assumptions contained
or referred in the filing, release or presentation in which they are made, including assumptions about the availability,
accessibility, sufficiency and quality of mineralization, recovery rates, our costs of production, the market prices of gold, silver,
zinc and lead, our ability to sustain and increase production levels, the ability to produce and sell marketable concentrates and
doré and related treatment and refining charges, the sufficiency of our infrastructure, the performance of our personnel and
equipment, our ability to maintain and obtain mining interests and permits, the state of government and community relations,
and our compliance with existing and future laws and regulations. We sometimes state possible outcomes as high and low
ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to represent that actual
results could not fall outside of the suggested ranges. Actual results and experience may differ materially from these
assumptions. Any production, cost, expenditure or financial results estimates speak only as of the date on which they are made,
and we disclaim any intent or obligation to update such estimates, whether as a result of new information, future events or
otherwise. Accordingly, these forward-looking statements should be considered in the context in which they are made, and
undue reliance should not be placed on them.
Our use of derivative contracts to protect against market price volatility exposes us to risk of opportunity loss, mark- to-
market fair value adjustments, potential cash collateral calls and exposure to counterparty credit risk.
From time-to-time, we have in the past and in the future may enter into price risk management contracts to protect
against fluctuations in the price of gold, silver, zinc and lead, foreign currency rates and changes in the prices of fuel and other
input costs. These contracts could include forward sales or purchase contracts, futures contracts, purchased or sold put and call
options and other derivative instruments. In 2019, 2020 and 2021, we entered into price risk management contracts on a total of
483,700 ounces of expected gold production for 2020, 2021 and 2022 after a significant increase in gold prices during 2019 and
2020. We determined to implement these contracts to provide for a minimum level of revenue from the sales of the covered
gold ounces in order to mitigate the risk of not being able to fund all or a portion of the costs of several significant projects at
existing operations such as POA 11. As of December 31, 2021, contracts with respect to 132,000 ounces of gold were
outstanding. See Note 16 — Derivative Financial Instruments in the notes to the Consolidated Financial Statements.
The use of derivative instruments can expose us to risk of an opportunity loss and may also result in significant mark-
to-market fair value adjustments, which may require us to post cash or other collateral or have a material adverse impact on
reported financial results. Our exposure may be particularly acute for our derivative instruments accounted for as cash flow
hedges, because those contracts are cash net settled on a monthly basis. The ceiling on the gold ounces covered by the price risk
management contracts described above, representing the highest price we could realize for those ounces under outstanding
contracts, averages approximately $2,038 per ounce for 2022 production. The price ceiling may be lower than actual spot gold
prices at the time of sale under those contracts. On February 14, 2022, the closing price of gold was $1,866 per ounce. We are
exposed to credit risk with contract counterparties, including, but not limited to, sales contracts and derivative contracts. In the
event of nonperformance in connection with a contract, we could be exposed to a loss of value for that contract.
We are dependent upon information technology systems, which are subject to cybersecurity incidents, disruption, damage,
failure and other risks associated with implementation and integration.
Our information technology systems used in our operations are subject to disruption, damage or failure from a variety
of sources, including, without limitation, computer viruses, security breaches, cyberattacks, natural disasters and defects in
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design. Cybersecurity incidents, in particular, are evolving and include, but are not limited to, malicious software, attempts to
gain unauthorized access to data or machines and equipment, and other electronic security breaches that could lead to
disruptions in systems, unauthorized release of confidential or otherwise protected information, the corruption of data or the
disabling, misuse or malfunction of machines and equipment. Various measures have been implemented to manage our risks
related to information technology systems and network disruptions. However, given the unpredictability of the timing, nature
and scope of information or operational technology disruptions, we could potentially be subject to production downtimes,
operational delays, operating accidents, the compromising of confidential or otherwise protected information, destruction or
corruption of data, security breaches, other manipulation or improper use of our systems and networks or financial losses from
remedial actions, any of which could have a material adverse effect on cash flows, financial condition or results of operations.
We could also be adversely affected by system or network disruptions if new or upgraded information technology
systems are defective, not installed properly or not properly integrated into operations. Various measures have been
implemented to manage the risks related to the system implementation and modification, but system modification failures could
have a material adverse effect on our business, financial position and results of operations.
Our business depends on good relations with, and the retention and hiring of, employees.
We may experience labor disputes, work stoppages or other disruptions in production that could adversely affect our
business and results of operations. Labor disruptions may be used to advocate labor, political or social goals, particularly at
non-U.S. mines. For example, labor disruptions may occur in sympathy with strikes or labor unrest in other sectors of local
economies. We cannot assure that work stoppages, union organizing activities or other disruptions will not occur in the future.
Any such work stoppage or disruption could expose us to significant costs and have a material adverse effect on our business,
results of operations or financial condition.
We compete with other mining companies to attract and retain key executives, skilled labor, contractors and other
employees. We may be unable to continue to attract and retain skilled and experienced employees, which could have an adverse
effect on our competitive position or adversely impact our results of operations or financial condition.
Continuation of our mining operations is dependent on the availability of sufficient and affordable water supplies.
Our mining operations require significant quantities of water for mining, ore processing and related support facilities.
In particular, our properties in Mexico and Nevada are in areas where water is scarce and competition among users for
continuing access to water is significant. Continuous production and mine development is dependent on our ability to acquire
and maintain water rights and claims and to defeat claims adverse to current water uses in legal proceedings. Although each of
our operating mines currently has sufficient water rights and claims to cover its operational demands, we cannot predict the
potential outcome of pending or future legal proceedings relating to enforcement of water rights, claims and uses, or potential
pressure from other users of water, government agencies and officials, and/or non-governmental organizations to limit the
amount of water made available to or used for mining activities, regardless of legally valid water rights. Water shortages may
also result from weather or environmental and climate impacts outside of our control. Shortages in water supply could result in
production and processing interruptions. In addition, the scarcity of water in certain regions could result in increased costs to
obtain sufficient quantities of water to conduct our operations. The loss of some or all water rights, ongoing litigation to enforce
existing water rights, ongoing shortages of water to which we have rights and/or significantly higher costs to obtain sufficient
quantities of water could result in our inability to maintain production at current or expected levels, require us to curtail or shut
down mining operations and could prevent us from pursuing expansion or development opportunities, which could adversely
affect our results of operations and financial condition. Laws and regulations may be introduced in some jurisdictions in which
we operate which could also limit access to sufficient water resources, adversely affecting our existing operations or our
expansion or development plans.
We may not be able to recognize the benefits of deferred tax assets.
We have accrued deferred tax assets in various jurisdictions from past operating losses, however, we may not be able
to utilize part or all of these assets in the future. We recognize the expected future tax benefit from these assets only if it is
considered more likely than not that the tax benefit will be realized. Otherwise, a valuation allowance is applied against
deferred tax assets that are not more likely than not to be utilized. Assessing the recoverability of deferred tax assets requires
management to make significant estimates related to expectations of future taxable income, including application of existing tax
laws in each jurisdiction, assumptions about future metals prices, the macroeconomic environment and results of our
operations. To the extent that future cash flows and taxable income differ significantly from estimates, our ability to realize
deferred tax assets could be impacted. Additionally, future changes in tax laws could limit our ability to obtain the future
benefits represented by our deferred tax assets and annual limitations may impact the timeframe over which the net operating
loss carryforwards can be used, potentially impacting cash tax liabilities in a future period.
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RISKS RELATED TO INDEBTEDNESS AND FINANCING
Our future operating performance may not generate cash flows sufficient to meet debt payment obligations.
As of December 31, 2021, we had approximately $487.5 million of outstanding indebtedness. Our ability to make
scheduled debt payments on outstanding indebtedness will depend on future results of operations and cash flows. Our results of
operations and cash flows, in part, are subject to economic factors beyond our control, including the market prices of gold,
silver, zinc and lead, among other factors described in this Item. We may not be able to generate enough cash flow to meet
obligations and commitments under outstanding debt instruments.
If our cash flows from operations are insufficient to fund our debt service obligations, we could face substantial
liquidity problems and could be forced to reduce or delay investments and capital expenditures, dispose of material assets or
operations, seek additional debt or equity capital or restructure or refinance our indebtedness. We cannot predict whether we
would be able to refinance debt, issue equity or debt securities or dispose of assets to raise funds on a timely basis or on
satisfactory terms. In a rising interest rate environment, the costs of borrowing additional funds or refinancing outstanding
indebtedness would also be expected to increase. The agreements governing our outstanding indebtedness restrict our ability to
dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to
be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain
proceeds in an amount sufficient to meet any debt service obligations then due.
The terms of our debt impose restrictions on our operations.
The agreements governing our outstanding indebtedness include a number of significant negative covenants. These
covenants, among other things:
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limit our ability to obtain additional financing, repurchase outstanding equity or issue debt securities;
require us to meet certain financial covenants consisting of a consolidated net leverage ratio and a consolidated interest
coverage ratio;
require a portion of our cash flows to be dedicated to debt service payments instead of other purposes, which reduces
the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate
purposes;
limit our ability to sell, transfer or otherwise dispose of assets, enter into transactions with and invest capital in
affiliates, enter into agreements restricting our subsidiaries’ ability to pay dividends, consolidate, amalgamate, merge
or sell all or substantially all of our assets;
increase our vulnerability to general adverse economic and industry conditions;
limit our flexibility in planning for and reacting to changes in the industry in which we compete; and
place us at a disadvantage compared to other, less leveraged competitors.
A breach of any of these covenants could result in an event of default under the applicable agreement governing our
outstanding indebtedness that, if not cured or waived, could cause all amounts outstanding with respect to the debt to be due
and payable immediately. Acceleration of any debt could result in cross-defaults under our other debt instruments. Our inability
to meet any of these covenants may also result in a lender requiring us to agree to additional restrictive covenants which may,
among other things, limit our ability to fund our existing operations or incur additional indebtedness. Our assets and cash flow
may be insufficient to repay borrowings fully under all of our outstanding debt instruments if any of our debt instruments are
accelerated upon an event of default, which could force the Company into bankruptcy or liquidation.
Any downgrade in the credit ratings assigned to us or our debt securities could increase future borrowing costs, adversely
affect the availability of new financing and may result in increased collateral requirements under our existing surety bond
portfolio.
There can be no assurance that any rating currently assigned by Standard & Poor’s Rating Services or Moody’s
Investors Service to us or our debt securities will remain unchanged for any given period of time or that a rating will not be
lowered if, in that rating agency’s judgment, future circumstances relating to the basis of the rating so warrant. If we are unable
to maintain our outstanding debt and financial ratios at levels acceptable to the credit rating agencies, or should our business
prospects or financial results deteriorate, including as a result of declines in gold and silver prices or other factors beyond our
control, our ratings could be downgraded by the rating agencies. A downgrade by the rating agencies could adversely affect the
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value of our outstanding debt securities, our existing debt, and our ability to obtain new financing on favorable terms, if at all,
increase borrowing costs, and may result in increased collateral requirements under our existing surety bond portfolio, which in
turn may adversely affect our results of operations and financial position.
RISKS RELATED TO APPLICABLE LAWS AND REGULATIONS
We are subject to significant governmental regulations, including the U.S. Mine Safety and Health Act, the Health, Safety
and Reclamation Code for Mines under the British Columbia Mines Act and Relevant Sections of the Mexican Official
Regulations, and related costs and delays associated with compliance may negatively affect our business.
Mining activities are subject to extensive federal, state, local and foreign laws and regulations governing
environmental protection, natural resources, prospecting, development, production, post-closure reclamation, taxes, labor
standards and occupational health and safety laws and regulations, including mine safety, toxic substances and other matters.
The costs associated with compliance with such laws and regulations are substantial. Changes in existing laws, possible future
laws and regulations, or more restrictive interpretations of current laws and regulations by governmental authorities, could
cause additional expense, capital expenditures, restrictions on or suspensions of operations and delays in the development of
new properties.
U.S. surface and underground mines like the Kensington, Rochester and Wharf mines and Sterling/Crown project are
frequently inspected by the U.S. Mine Safety and Health Administration (“MSHA”), which inspections often lead to notices of
violation. Recently, MSHA has been conducting more frequent and more comprehensive inspections of mining operations in
general. Similar inspections are conducted in British Columbia, Canada, at the Silvertip development property and in Mexico at
the Palmarejo complex by the British Columbia Ministry of Energy, Mines and Petroleum Resources and the Mexican
Secretaria del Trabajo y Prevision Social (Secretary of Labor and Social Safety), respectively.
Failure to comply with applicable laws, regulations and permitting requirements may result in temporary or extended
shutdowns, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, which may
require corrective measures including the payment of fines or penalties, capital expenditures, installation of additional
equipment or remedial actions, any of which could have a material, adverse effect on our business and results of operations.
Compliance with environmental regulations and litigation based on environmental regulations could require significant
expenditures.
Environmental regulations mandate, among other things, the maintenance of air and water quality standards, land
development and land reclamation, and set forth limitations on the generation, transportation, storage and disposal of solid and
hazardous waste. Environmental legislation is evolving in a manner that may require stricter standards and enforcement,
increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a
heightened degree of responsibility for mining companies and their officers, directors and employees. We may incur
environmental costs that could have a material adverse effect on financial condition and results of operations. Any failure to
remedy an environmental problem could require us to suspend operations or enter into interim compliance measures pending
completion of the required remedy. The environmental standards that ultimately may be imposed at a mine site affect the cost of
remediation and could exceed the financial accruals that we have made for such remediation. The potential exposure may be
significant and could have a material adverse effect on our financial condition and results of operations.
Moreover, governmental authorities and private parties may bring lawsuits based upon damage to property and injury
to persons resulting from the environmental, health and safety impacts of prior and current operations, including operations
conducted by other mining companies many years ago at sites located on properties that we currently or formerly owned. These
lawsuits could lead to the imposition of substantial fines, remediation costs, penalties and other civil and criminal sanctions.
Substantial costs and liabilities, including for restoring the environment after the closure of mines, are inherent in our
operations. We cannot assure that any such law, regulation, enforcement or private claim would not have a material adverse
effect on our financial condition, results of operations or cash flows.
Some of the mining waste from our U.S. mines currently are exempt to a limited extent from the extensive set of EPA
regulations governing hazardous waste under the Resource Conservation and Recovery Act (“RCRA”). If the EPA were to
repeal this exemption, and designate these mining wastes as hazardous under RCRA, we would be required to expend
additional amounts on the handling of such wastes and to make significant expenditures to construct hazardous waste storage or
disposal facilities. Under the Mercury Export Ban Act of 2008 (“MEBA”), incidental elemental mercury generated at our
Rochester mine as part of the processing of ore may not be exported outside of the United States and is required to be stored in
a storage facility designated by the U.S. Department of Energy (“DOE”). Near the end of 2019, the DOE designated a facility
and issued a long-term management and storage fee rule; however, the facility designation process and fee was subjected to
legal challenges by us and other third parties. Following legal challenges by Coeur and others, the DOE agreed to vacate the
2019 rule and commence a new rule making process in 2021. The future rule could result in material cost being incurred to ship
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and store Coeur Rochester's mercury. In addition, if any of these wastes causes contamination in or damage to the environment
at a U.S. mining facility, that facility could be designated as a “Superfund” site under the Comprehensive Environmental
Response, Compensation, and Liability Act (“CERCLA”). Under CERCLA, any present owner or operator of a Superfund site
or the owner or operator at the time of contamination may be held jointly and severally liable regardless of fault and may be
forced to undertake extensive remedial cleanup action or to pay for the cleanup efforts. The owner or operator also may be
liable to federal, state and tribal/indigenous governmental entities for the cost of damages to natural resources, which could be
substantial. Additional regulations or requirements also are imposed on our tailings and waste disposal areas in Alaska under
the federal Clean Water Act (“CWA”), in Nevada under the Nevada Water Pollution Control Law which implements the CWA,
in South Dakota under the South Dakota Water Pollution Control Act and the Administrative Rules of the State of South
Dakota, in British Columbia (Canada) under the Health, Safety and Reclamation Code for Mines in British Columbia, the
British Columbia Environmental Management Act and the Canadian Metal and Diamond Mining Effluent Regulations, and in
Mexico under the General Law of Ecological Balance and Protection of the Environment (the "GLEBPE") and the regulations
under the GLEBPE related to environmental protection in impact assessment matters. In addition, proposed CERCLA
regulations requiring mining companies to obtain supplemental financial assurance could, if adopted, have a material adverse
effect on results of operations and cash flows.
Airborne emissions are subject to controls under air pollution statutes implementing the Clean Air Act in Nevada,
Alaska and South Dakota, and are regulated under the Environmental Management Act in British Columbia (Canada) and the
GLEBPE and the regulations under GLEBPE related to prevention and control of the pollution of the atmosphere in Mexico. In
addition, there are numerous legislative and regulatory initiatives related to climate change, reductions in greenhouse gas
emissions, or energy policy and adoption of these initiatives through legislative actions or administrative policy could have a
material adverse effect on results of operations and cash flows.
In addition, U.S. environmental conservation efforts could result in the withdrawal of certain federal lands from
mineral entry under the Mining Law, which could have the effect of restricting our current or future planned activities involving
our unpatented mining claims on the affected public lands.
We are required to obtain and renew governmental permits in order to conduct operations, a process which is often costly
and time-consuming. Our ability to obtain necessary government permits to expand operations or begin new operations may
be materially affected by third-party activists.
In the normal course of our business, we are required to obtain and renew governmental permits for exploration,
operations and expansion of existing operations and for the development of new projects, such as the permits recently obtained
for POA 11 at Rochester and the permitting effort currently underway for POA 1 at Kensington. Obtaining and renewing
governmental permits is a complex and time-consuming process. The timeliness and success of permitting efforts are
contingent upon many variables not within our control, including the interpretation of permit approval requirements
administered by the applicable permitting authority. We may not be able to obtain or renew permits that are necessary to our
operations or the cost and time required to obtain or renew permits may exceed our expectations. Any unexpected delays or
costs associated with the permitting process could delay the development or impede the operation of a mine, which in turn
could materially adversely affect our revenues and future growth. In addition, key permits and approvals may be revoked or
suspended or may be changed in a manner that adversely affects our operations.
Private parties such as environmental activists frequently attempt to intervene in the permitting process and to
persuade regulators to deny necessary permits or seek to overturn permits that have been issued. Obtaining the necessary
governmental permits is a complex and time-consuming process involving numerous jurisdictions and often involving public
hearings and costly undertakings. These third-party actions can materially increase the costs and cause delays in the permitting
process and could cause us to not proceed with the development or expansion of a mine. In addition, our ability to successfully
obtain key permits and approvals to explore for, develop, operate and expand mines and to conduct our operations will likely
depend on our ability to develop, operate, expand and close mines in a manner that is consistent with the creation of social and
economic benefits in the surrounding communities, which may or may not be required by law. Our ability to obtain permits and
approvals and to successfully operate in particular communities may be adversely impacted by real or perceived detrimental
events associated with our activities or those of other mining companies affecting the environment, human health and safety of
communities in which we operate.
If future permitting applications or amendments are not approved on a timely basis or at all, or if the permitting
process is delayed for any reason, including to address public comments, our plans for continued operations and future growth
could be materially adversely affected, which could have a material adverse effect on our financial condition and results of
operations.
20
Our business is subject to anti-bribery laws, a breach or violation of which could lead to civil and criminal fines and
penalties, loss of licenses or permits and reputational harm.
We operate in certain jurisdictions that have experienced governmental and private sector corruption. The U.S. Foreign
Corrupt Practices Act, as well as Canadian and Mexican anti-bribery laws generally prohibit companies and their intermediaries
from making improper payments for the purpose of obtaining or retaining business or other commercial advantage. Violations
of these laws, or allegations of such violations, could lead to civil and criminal fines and penalties, litigation, and loss of
operating licenses or permits, and may damage our reputation, which could have a material adverse effect on our business,
financial position and results of operations. Our Code of Business Conduct and Ethics and other corporate policies mandate
compliance with these anti-bribery laws; however, there can be no assurance that our internal control policies and procedures
always will protect us from recklessness, fraudulent behavior, dishonesty or other inappropriate acts or violations of laws
committed by our affiliates, employees or agents.
We are subject to litigation and may be subject to additional litigation in the future.
We are currently, and may in the future become, subject to other litigation, arbitration or proceedings with other
parties. If decided adversely to us, these legal proceedings, or others that could be brought against us in the future, could have a
material adverse effect on our financial position or prospects. In the event of a dispute arising at our foreign operations, we may
be subject to the exclusive jurisdiction of foreign courts or arbitral panels or may not be successful in subjecting foreign persons
to the jurisdiction of courts or arbitral panels in the United States. Our inability to enforce our rights and the enforcement of
rights on a prejudicial basis by foreign courts or arbitral panels could have an adverse effect on our results of operations and
financial position.
Disputes regarding our mining claims, concessions or surface rights to land in the vicinity of our mining projects could
adversely impact operations.
The validity of mining or exploration claims, concessions or rights, which constitute most of our property holdings, is
often uncertain and may be contested. We have used commercially reasonable efforts, in accordance with industry standards, to
investigate our title or claims to our various properties, however, no assurance can be given that applicable governments will
not revoke or significantly alter the conditions of the applicable exploration and mining claims, concessions or rights or that
such exploration and mining claims, concessions or rights will not be challenged by third parties. Although we have attempted
to acquire satisfactory title to undeveloped properties, in accordance with mining industry practice we do not generally obtain
title opinions until a decision is made to develop a property. As a result, some titles, particularly titles to undeveloped properties
may be defective. Defective title to any of our exploration and mining claims, concessions or rights could result in litigation,
insurance claims and potential losses affecting our business as a whole. There may be challenges to the title of any of the claims
comprising our projects that, if successful, could impair development and operations. A defect could result in us losing all or a
portion of our right, title, estate and interest in and to the properties to which the title defect relates.
In Mexico, while mineral rights are administered by the federal government through federally issued mining
concessions, federally recognized agrarian communities called ejidos control surface or surface access rights to the land. An
ejido may sell or lease lands directly to a private entity. While we have agreements or are in the process of negotiating
agreements with the ejidos that impact all of our projects in Mexico, some of these agreements may be subject to renegotiation
or legal challenges.
The Company’s effective tax rate could be volatile and materially change as a result of changes in tax laws, mix of earnings
and other factors.
We are subject to tax laws in the United States and numerous foreign jurisdictions. U.S. President Biden’s
administration (the “Administration”) has called for changes to fiscal and tax policies, which may include comprehensive tax
reform.
The Administration has previously proposed an increase in the U.S. corporate income tax rate from 21% to 28%,
doubling the rate of tax on certain earnings of foreign subsidiaries, a 15% minimum tax on worldwide book income, and other
various tax law changes. If any or all of these (or similar) proposals are enacted into law, in whole or in part, they could have a
negative impact on the Company’s effective tax rate.
Currently, the Company incurs losses in certain countries where it does not receive a financial statement benefit, and
the Company operates in countries which have different statutory rates. Consequently, changes in the mix and source of
earnings between countries could have a material impact on the Company’s overall effective tax rate.
In addition, new tax legislation in certain jurisdictions where we operate could negatively affect us. For example, in
Nevada, where the Rochester mine, Sterling/Crown project and Lincoln Hill project are located, in response to a significant loss
of tourism and gaming revenue during 2020, in June 2021 the Governor signed into law a new excise tax on gross proceeds
21
derived from mining gold and silver. In addition, there have been recent proposals by elected officials in Mexico for even more
significant increases in mining taxes, although it is unclear whether those proposals will result in legislation. It is difficult to
predict whether proposed changes to tax laws in the jurisdictions where we operate will be passed and if passed, the impact of
those changes on the Company. Any additional taxes imposed on us could adversely affect our financial condition.
RISKS RELATED TO OUR COMMON STOCK
We have the ability to issue additional equity securities, including in connection with an acquisition of other companies,
which would lead to dilution of our issued and outstanding common stock and may materially and adversely affect the price
of our common stock.
The issuance of additional equity securities or securities convertible into equity securities, whether to acquire new
companies or businesses or for other strategic benefits, would result in dilution of our existing stockholders’ equity ownership.
We are authorized to issue, without stockholder approval, 10.0 million shares of preferred stock in one or more series, to
establish the number of shares to be included in each series and to fix the designation, powers, preferences and relative
participating, optional, conversion and other special rights of the shares of each series as well as the qualification, limitations or
restrictions on each series. Any series of preferred stock could contain dividend rights, conversion rights, voting rights, terms of
redemption, redemption prices, liquidation preferences or other rights superior to the rights of holders of our common stock. If
we issue additional equity securities, the price of our common stock may be materially and adversely affected.
Holders of our common stock may not receive dividends.
We have not historically declared cash dividends on our common stock. Holders of our common stock are entitled to
receive only such dividends as our Board of Directors may declare out of funds legally available for such payments. We are
incorporated in Delaware and governed by the Delaware General Corporation Law. Delaware law allows a corporation to pay
dividends only out of surplus, as determined under Delaware law or, if there is no surplus, out of net profits for the fiscal year in
which the dividend was declared and for the preceding fiscal year. Under Delaware law, however, we cannot pay dividends out
of net profits if, after we pay the dividend, our capital would be less than the capital represented by the outstanding stock of all
classes having a preference upon the distribution of assets. Our ability to pay dividends will be subject to our future earnings,
capital requirements and financial condition, as well as our compliance with covenants related to existing or future indebtedness
and would only be declared in the discretion of our Board of Directors.
22
Item 1B.
Unresolved Staff Comments
None.
23
Item 2.
Properties
MINING OPERATIONS
The following description of the Company’s mining operations is qualified in its entirety by reference to the Technical Report
Summary for each of the operations included as exhibits to this Report and incorporated by reference into this Item 2.
Operating statistics for mining operations are presented in the section entitled “Operating Statistics” below.
Mexico — Palmarejo
The Palmarejo complex operated by our wholly-owned subsidiary, Coeur Mexicana, S.A. de C.V. (“Coeur Mexicana”)
consists of (1) the Palmarejo processing facility; (2) the Guadalupe underground mine, located about eight kilometers southeast
of the Palmarejo mine; (3) the Independencia underground mine, located approximately 800 meters northeast of the Guadalupe
underground mine, (4) the La Nación underground mine, located adjacent to the Independencia underground mine; and (5)
other nearby deposits and exploration targets. Access to the property is provided by air, rail, and all-weather paved and gravel
roads from the state capitol of Chihuahua.
Stage:
Location:
Mine Type:
Production
State of Chihuahua, Northern Mexico
Underground
Metals/Mineralization:
Silver and Gold, classified as epithermal deposits and are hosted in multiple veins, breccias, and
fractures
Product:
Ownership:
Land Position:
Mineral Tenure:
Doré
100%
67,279 net acres
71 wholly-owned mining concessions
24
Key Permit Conditions:
Other:
USA (Nevada) — Rochester
Authorizations are in place that regulate typical life of mine functions, including production
facilities and utilities, mining operations, tailings and waste rock storage, exploration, surface
disturbance, land use, vegetation and change in soil use, air emissions, water use, and
reclamation. Major authorizations were obtained through the completion of several MIAs
(Manifestación de Impacto Ambiental), permits associated with forestry vegetation disturbance
of change in soil use (Cambio de Uso de Suelo en Terrenos Forestales), and the required
authorizations from the National Water Commission (Comisión Nacional del Agua or
CONAGUA) for water use, effluent discharge, and to construct facilities in federal watersheds.
Operational standards and best management practices (BMPs) have been established to maintain
compliance with applicable regulatory standards and permits.
A portion of the Palmarejo complex is subject to a gold stream agreement with a subsidiary of
Franco Nevada Corporation and related property encumbrances
The Rochester mine, and associated heap leach facilities operated by our wholly-owned subsidiary, Coeur Rochester,
Inc. (“Coeur Rochester”), is an open pit silver and gold mine located in Pershing County, Nevada, approximately 13 miles
northeast of the city of Lovelock. The mine consists of the main Rochester deposit and the adjacent Nevada Packard deposit,
southwest of the Rochester mine. In November 2018, Coeur Rochester acquired the Lincoln Hill, Gold Ridge and Wilco
projects adjacent to Rochester from Alio Gold. The Rochester mine is fully supported with electricity, supplied by a local power
company. Ore is mined using conventional open pit methods, with gold and silver recovered by heap leaching of crushed open-
pit ore placed on pads located within the Rochester mining area.
Rochester is currently undergoing an expansion under Plan of Operations Amendment 11. The expansion project
includes the construction of a new leach pad, a crushing facility equipped with two high-pressure grinding roll units and a
prescreen, a Merrill-Crowe process plant, and related infrastructure to support the extension of Rochester’s mine life.
Stage:
Location:
Mine Type:
Production
Near Lovelock, Nevada (West-Central Nevada, USA)
Open Pit Heap Leach
Metals/Mineralization:
Product:
Ownership:
Land Position & Mineral
Tenure
Key Permit Conditions:
Other:
Silver and Gold; mineralization is hosted in folded and faulted volcanic rocks of the Rochester
Formation and overlying Weaver Formation. Silver and gold, consisting of silver sulfosalt
Doré
100%
Coeur Rochester lands, including the Lincoln Hill and related assets, consist of approximately
43,441 net acres
•
•
•
•
1,465 owned and 337 leased Federal unpatented lode claims and 6 owned federal
unpatented placer claims, appropriating approximately 29,938 net acres of public land;
23 patented lode claims, consisting of approximately 392 acres;
interests owned in approximately 6,929 gross acres of additional real property; and
Certain rights in and to approximately 6,182 acres, held either through lease, letter
agreement or license.
The Rochester Mine has in place and operates subject to all necessary environmental permits
and licenses from the appropriate local, state, and federal agencies for typical life of mine
functions involving exploration, the open pit mines, heap leach pads, processing infrastructure,
and all necessary support facilities. Operational standards and best management practices have
been established to maintain compliance with applicable regulatory standards and permits.
Major permits or approvals are in place from the U.S. Department of Interior Bureau of Land
Management, Nevada Division of Water Resources, the Nevada Division of Environmental
Protection, as well through other federal, state, and local entities. The environmental effects of
the operation were comprehensively evaluated through the National Environmental Policy Act
(NEPA) through Environmental Impact Statements. Monitoring programs are in place, and there
is an approved reclamation and closure plan that reflects current mining, mitigation, and site
facilities.
•
A security interest in the Rochester mine has been granted in favor of the lenders under
the RCF (as defined below)
Certain royalty interests have been granted with respect to the Rochester property
•
25
USA (Alaska) — Kensington
The Kensington underground gold mine and associated milling facilities operated by our wholly-owned subsidiary,
Coeur Alaska, Inc. (“Coeur Alaska”) are located on the east side of the Lynn Canal about 45 miles north-northwest of Juneau,
Alaska. The mine consists of the (i) Kensington Main deposit, (ii) Raven deposit, (iii) Jualin deposit, and (iv) other nearby
deposits and exploration targets. The mine is accessed by a horizontal tunnel and utilizes conventional and mechanized
underground mining methods. Ore is processed in a flotation mill that produces a concentrate that is sold to third-party smelters.
Power is supplied by on-site diesel generators. Access to the mine is by either a combination of road vehicles, boat, helicopter,
floatplane, or by boat direct from Juneau.
Kensington is currently undertaking a planned expansion under Plan of Operations Amendment 1, which would
increase tailings and waste rock storage capacity to support an expected longer mine life, reflecting positive exploration results,
improved metal prices and ongoing operational efficiencies.
Stage:
Location:
Mine Type:
Production
Juneau, Alaska (Southeast Alaska, USA)
Underground
Metals/Mineralization:
Product:
Ownership:
Land Position & Mineral
Tenure
Key Permit Conditions:
Other:
Gold; gold-bearing mesothermal, quartz, carbonate and pyrite vein swarms and discrete quartz-
pyrite veins hosted in Cretaceous-aged Jualin diorite. Most of the gold is contained in calaverite
Gold Concentrate
100%
•
•
•
•
The Kensington Group, totaling approximately 3,972 net acres, consists of 51 patented
lode and patented mill site claims comprising approximately 766 net acres, 291 Federal
unpatented lode claims covering approximately 3,141 net acres, and 13 State of Alaska
mining claims covering approximately 95 net acres.
The Jualin Group, totaling approximately 8,366 net acres, is comprised of 23 patented
lode and patented mill site claims covering approximately 388 net acres, 444 Federal
unpatented lode claims and 75 Federal unpatented mill site claims appropriating
approximately 7,814 net acres, a State of Alaska upland mining lease comprising
approximately 682 acres, one State of Alaska mining claim comprising approximately
three acres and four State-selected mining claims covering approximately 60 acres.
14 of the 23 patented lode claims cover private surface estate only. The mineral estate
to these 14 patented lode claims is owned by the State of Alaska, the mineral rights to
which are secured by a State of Alaska upland mining lease
The Company controls properties comprising the Jualin Group, under a lease
agreement with Hyak Mining Company, which is valid until August 5, 2035 and
thereafter, provided mining and production are actively occurring within and from the
leased premises.
The Kensington Mine has in place and operates subject to all necessary environmental permits
and licenses from the appropriate local, state, and federal agencies for typical life of mine
functions involving mine operations and production/processing facilities and infrastructure,
tailings and waste rock storage, exploration, surface disturbance, air emissions, water use,
marine transport, and reclamation. Operational standards and best management practices have
been established to maintain compliance with applicable regulatory standards and permits.
Major permits or approvals are in place from the U.S. Department of Agriculture National
Forest Service, U.S. Army Corps of Engineers, U.S. Fish and Wildlife Service, National
Oceanic and Atmospheric Administration, State of Alaska, as well through other federal, state,
and local entities. The environmental effects of the operation were comprehensively evaluated
through the National Environmental Policy Act (NEPA) through Environmental Impact
Statements. Monitoring programs are in place, and there is an approved reclamation and closure
plan that reflects current mining, mitigation, and site facilities.
•
•
A security interest in the Kensington mine has been granted in favor of the lenders
under the RCF
Certain royalty interests have been granted with respect to the Kensington property
USA (South Dakota) — Wharf
The Wharf mine operated by our wholly-owned subsidiaries, Wharf Resources (U.S.A.) Inc. (“Wharf”) and Golden
Reward Mining Limited Partnership (“Golden Reward”), is located in the northern Black Hills of western South Dakota,
approximately four miles southwest of the city of Lead, South Dakota. Access is established by paved road with power
supplied by a local power company.
26
Stage:
Location:
Mine Type:
Production
Lead, South Dakota, USA
Open Pit Heap Leach
Metals/Mineralization:
Gold and Silver by-product; a structurally controlled disseminated gold deposit
Product:
Ownership:
Electrolytic Cathodic Sludge
100%
Land Position & Mineral
Tenure
Key Permit Conditions:
Other:
•
•
The Wharf Group is comprised of 362 patented lode claims, 35 government lots, 123
subdivided lots, and 59 federal unpatented lode claims. These interests cover
approximately 3,585 net surface acres, 652 net mineral acres where both the
Precambrian and younger formations are owned or controlled, 3,243 net mineral acres
of non-Precambrian mineral estate, 1,603 net mineral acres of Precambrian mineral
estate and 287 net acres of federal unpatented lode claims.
The Golden Reward Group encompasses 218 patented lode claims, 14 government lots,
19 subdivided lots and 34 federal unpatented lode claims. The Golden Reward Group is
comprised of approximately 1,564 net acres of surface estate, 2,988 net mineral acres
of mineral estate where both the Precambrian and younger formations are owned or
controlled, 357 net mineral acres of Non-Precambrian mineral estate, 153 net mineral
acres of Precambrian mineral estate and 25 net acres of federal unpatented lode claims.
The Wharf Mine has in place and operates subject to all necessary environmental permits and
licenses from the appropriate local, state, and federal agencies for typical life of mine functions
involving exploration, the open pit mines, heap leach pads, processing infrastructure, and all
necessary support facilities. Operational standards and best management practices have been
established to maintain compliance with applicable state and federal regulatory standards and
permits. Major permits or approvals are in place from the South Dakota Department of
Agriculture and Natural Resources, Lawrence County, as well through other federal, state, and
local entities. Monitoring programs are in place, and there is an approved reclamation and
closure plan that reflects current mining, mitigation, and site facilities.
•
•
A security interest in the Wharf mine has been granted in favor of the lenders under the
RCF
Certain royalty interests have been granted with respect to the Wharf property
MINING PROJECTS
Canada (British Columbia) — Silvertip
The Silvertip silver-zinc-lead development property owned by our wholly-owned subsidiary, Coeur Silvertip Ltd.
(“Coeur Silvertip”), is an underground project located in northern British Columbia, Canada just south of the Yukon border.
The project is accessible via a 25-kilometer mine access road off the Alaska Highway.
Stage:
Location:
Mine Type:
Development
Northern British Columbia, Canada (10 miles south of the Yukon Territory Border)
Underground
Metals/Mineralization:
Silver, Zinc and Lead; carbonate-hosted massive sulfide deposit
Product:
Ownership:
Concentrate
100%
Land Position & Mineral
Tenure:
Other:
•
•
•
Sixty-six (66) contiguous mineral claims containing approximately 39,375 hectares
(97,298 acres) and two mining leases containing approximately 1,528 hectares (3,777
acres). In total, the Silvertip mine covers an area of approximately 40,904 hectares
(101,076 acres)
Suspended operating activities in February 2020; ongoing exploration and technical
work to evaluate and support a potential expansion and restart
Certain royalty interests have been granted with respect to the Silvertip property
USA (Nevada) – Sterling and Crown
The Sterling and Crown exploration properties are owned by the Company’s wholly-owned subsidiary, Coeur Sterling,
Inc. (“Coeur Sterling”) and are located in southern Nevada, The Sterling gold project is a past-producing open-pit and
underground heap leach gold mine located in the southern portion of the land package with major permits in place. The Crown
27
Block, which is located in the northern portion of the land package, includes four heap-leachable deposits, Daisy, Secret Pass,
SNA and C-Horst.
Stage:
Location:
Mine Type:
Exploration
Beatty, Nevada (approximately 115 miles north of Las Vegas, Nevada, USA)
Open Pit Heap Leach
Metals/Mineralization:
Gold
Product:
Ownership:
Electrolytic Cathodic Sludge
100%
Land Position & Mineral
Tenure
Other:
•
•
•
Approximately 37,254 net acres (15,076 hectares)
Coeur Sterling lands consist of 1,909 owned federal unpatented lode claims
appropriating approximately 36,904 net acres, and 30 leased federal unpatented lode
claims, appropriating approximately 620 net acres.
A security interest in the Sterling/Crown project has been granted in favor of the
lenders under the Company’s revolving credit facility
Mexico (Durango) – La Preciosa
The La Preciosa silver exploration-stage project owned by our wholly-owned subsidiary, Coeur La Preciosa Silver
Corp. (“Coeur La Preciosa”), is situated approximately 85 kilometers northeast of the city of Durango, within Durango State,
México. The Company has entered into an agreement to sell Coeur La Preciosa, which is expected to close in the first quarter of
2022.
OTHER PROPERTIES
The Company has interests in several exploration-stage properties in North America, as well as leased or owned real
property for office space.
OPERATING STATISTICS
Gold produced (oz.)
Silver produced (oz.)
2021
109,202
6,820,589
2021
Palmarejo
2020
110,608
6,269,206
Kensington
2020
2019
111,932
6,762,265
2021
27,051
3,158,017
2019
2021
Rochester
2020
27,147
3,174,529
Wharf
2020
2019
35,400
3,761,060
2019
Gold produced (oz.)
121,140
124,867
127,914
91,136
93,056
84,172
Silver produced (oz.)
Zinc produced (lb.)
Lead produced (lb.)
MINERAL RESERVES AND MINERAL RESOURCES
Internal Controls
2021
—
—
—
Silvertip
2020
139,287
2,459,756
2019
1,161,926
17,103,427
2,176,847
16,555,622
The company’s internal controls are designed to provide reasonable assurance that information and processes utilized
in assessing its exploration results as well as mineral resource and reserve estimation are reasonable and in line with industry
best practices. These internal controls include quality assurance and quality control (“QA/QC”) programs in the collection,
analysis, verification, storage, reporting and use of drillhole, assay, metallurgical and other technical and scientific information,
including the following:
•
•
•
Third-party fully certified labs are used for assays used in public disclosure or resource models ;
Drill programs include insertion of blank, duplicate, and certified reference materials;
QA/QC program with sufficient results for the analytical programs;
28
•
•
•
All core and reverse-circulation samples have been cataloged and stored in secure and designated areas on company
property;
Data is subject to validation, which includes checks on downhole surveys, collar coordinates, geological data, and
assay data;
Prior to use in mineral resource or mineral reserve estimation, the selected data to support estimation are downloaded
from the database into a project file and reviewed for improbable entries and high values;
• Written procedures and guidelines are used to support estimation methods and approaches;
•
•
Completion of annual technical statements on each mineral resource and mineral reserve estimate by qualified persons.
These technical statements include evaluation of modifying and technical factors, incorporate available reconciliation
data, and are based on a cashflow analysis;
Internal reviews of block models, mineral resources and mineral reserves using a “layered responsibility” approach
with Qualified Person involvement at the site and corporate levels;
Internal controls are discussed where required in the relevant chapters of the technical report summary. The following
sub-sections summarize the types of procedures, protocols, guidance and controls that Coeur has in place for its exploration and
mineral resource and reserve estimation efforts, and the type of risk assessments that are undertaken.
Exploration and Drilling
Coeur has the following internal controls protocols in place for exploration data:
• Written procedures and guidelines to support preferred sampling methods and approaches; periodic compliance
reviews of adherence to such written procedures and guidelines;
• Maintenance of a complete chain-of-custody, ensuring the traceability and integrity of the samples at all handling
stages from collection, transportation, sample preparation and analysis to long-term sample storage;
•
•
•
•
•
•
•
Geological logs are checked and verified, and there is a physical sign-off to attest to the validation protocol required;
Quality control checks on collar and downhole survey data for errors or significant deviations;
Third-party fully certified labs are used for assays used in public disclosure or resource models
Appropriate types of quality control samples are inserted into the sample stream at appropriate frequencies to assess
analytical data quality;
Regular inspection of analytical and sample preparation facilities by appropriately experienced Coeur personnel;
QA/QC data are regularly verified to ensure that outliers sample mix-ups, contamination, or laboratory biases during
the sample preparation and analysis steps are correctly identified, mitigated or remediated. Changes to database
entries are required be documented;
Database upload and verification procedures to ensure the accuracy and integrity of the data being entered into the
Project database(s). These are typically performed using software data-checking routines. Changes to database entries
are required to be documented. Data are subject to regular backups.
Mineral Resource and Mineral Reserve Estimates
Coeur has the following internal controls protocols in place for mineral resource and mineral reserve estimation:
•
Prior to use in mineral resource or mineral reserve estimation, the selected data to support estimation are downloaded
from the database into a project file and reviewed for improbable entries and high values;
• Written procedures and guidelines are used to support estimation methods and approaches;
•
•
Completion of annual technical statements on each mineral resource and mineral reserve estimate by qualified persons.
These technical statements include evaluation of modifying and technical factors, incorporate available reconciliation
data, and are based on a cashflow analysis;
Internal reviews of block models, mineral resources and mineral reserves using a “layered responsibility” approach
with Qualified Person involvement at the site and corporate levels;
29
Mexico
Palmarejo(4)
United States
Rochester(5)
Kensington(6)
Wharf(7)
Development of our mineral resource and mineral reserve estimates use tools and processes such as mine design,
scheduling and geostatistical tools that conform to industry best practices and are regularly reviewed and reconciled by internal
and external parties. There are internal and external audit processes for mineral resource and mineral reserve estimation.
Mineral resources and mineral reserves are estimates that contain inherent risk and depend upon geologic
interpretation and statistical inferences drawn from drilling and sampling analysis, which may prove to be unreliable. See Risk
Factors in Item 1A for additional information.
MINERAL RESERVES
Summary Gold Mineral Reserves at End of the Fiscal Year Ended December 31, 2021(1)(2)(3)(9)
Proven Mineral Reserves
Probable Mineral Reserves
Total Mineral Reserves
Tons
(000s)
Grade
(oz./ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./ton)
Ounces
(000s)
3,754
0.066
247
12,139
0.052
637
15,893
0.056
884
386,008
656
27,976
0.003
0.191
0.022
0.005
998
125
621
31,769
690
8,306
1,991
52,904
0.003
0.197
0.028
0.021
82
417,777
136
231
1,346
36,282
1,086
471,298
0.003
0.194
0.023
0.007
1,080
261
852
3,077
Total Gold Reserves
418,394
Summary Silver Mineral Reserves at End of the Fiscal Year Ended December 31, 2021(1)(2)(3)(9)
Proven Mineral Reserves
Probable Mineral Reserves
Total Mineral Reserves
Tons
(000s)
Grade
(oz./ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./ton)
Ounces
(000s)
3,754
4.39
16,480
12,139
3.78
45,875
15,893
3.92
62,355
386,008
0.39
149,652
31,769
0.36
11,593
417,777
0.39
161,245
186
12.01
2,233
1,618
389,948
0.43
168,365
45,526
7.67
1.53
12,403
1,804
8.11
14,636
69,871
435,474
0.55
238,236
Summary Zinc Mineral Reserves at End of the Fiscal Year Ended December 31, 2021(1)(2)(3)(9)
Proven Mineral Reserves
Probable Mineral Reserves
Total Mineral Reserves
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
186
10.1 %
37,647
1,618
8.0 % 258,418
1,804
8.2 % 296,065
Summary Lead Mineral Reserves at End of the Fiscal Year Ended December 31, 2021(1)(2)(3)(9)
Proven Mineral Reserves
Probable Mineral Reserves
Total Mineral Reserves
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
186
8.5 %
31,656
1,618
5.0 % 161,569
1,804
5.4 % 193,225
Mexico
Palmarejo(4)
United States
Rochester(5)
Canada
Silvertip(8)
Total Silver
Canada
Silvertip(8)
Canada
Silvertip(8)
(1) Certain definitions:
The term “reserve” means that part of a mineral deposit that can be economically and legally extracted or produced at the time of the reserve
determination. The term “proven (measured) reserves” means reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches,
workings or drill holes, grade and/or quality are computed from the results of detailed sampling; and (b) the sites for inspection, sampling and
measurements are spaced so closely and the geologic character is sufficiently defined that size, shape, depth and mineral content of reserves are well
established. The term “probable (indicated) reserves” means reserves for which quantity and grade and/or quality are computed from information similar
to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately
spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of
observation. The term “cutoff grade” means the lowest grade of mineralized material considered economic to process. Cutoff grades vary between
deposits depending upon prevailing economic conditions, mineability of the deposit, by-products, amenability of the mineralized material to silver or gold
extraction and type of milling or leaching facilities available.
(2) Assumed metal prices for 2021 Mineral Reserves were $20.00 per ounce of silver, $1,400 per ounce of gold, $1.15 per pound of zinc, $0.95 per pound of
lead.
30
(3) The Mineral Reserve estimates are current as of December 31, 2021, and are reported using the definitions in SK 1300 and were prepared by the
company’s technical staff.
(4) Mineral Reserve estimates use the following key input parameters: Assumption of conventional longhole underground mining; reported above a variable
gold equivalent cut-off grade that ranges from 1.94–2.51 g/t AuEq and an incremental development cut-off grade of 1.08 g/t AuEq; metallurgical recovery
assumption of 93.1% for gold and 81.9% for silver; mining dilution assumes 1 meter of hanging wall waste dilution; mining loss of 5% was applied;
variable mining costs that range from US$36.01–US$41.75/tonne, surface haulage costs of US$3.52/t, process costs of US$27.29/tonne, general and
administrative costs of US$11.00/tonne, and surface/auxiliary support costs of US$3.19/tonne. Excludes the impact of the Franco-Nevada gold stream
agreement at Palmarejo in calculation of Mineral Reserves.
(5) Mineral Reserve estimates are tabulated within a confining pit shell and use the following input parameters: Rochester oxide recovery Au = 85% and Ag
= 59%; Nevada Packard oxide recovery Au = 95% and Ag = 61%; with a net smelter return cutoff of $2.55/st oxide and US$2.65/st sulfide, where the
NSR is calculated as resource net smelter return (NSR) = silver grade (oz/ton) * silver recovery (%) * (silver price ($/oz) - refining cost ($/oz)) + gold
grade (oz/ton) * gold recovery (%) * (gold price ($/oz) - refining cost ($/oz)); variable pit slope angles that approximately average 43º over the life-of-
mine.
(6) Mineral Reserve estimates use the following key input parameters: assumption of conventional underground mining; gold price of $1400/oz; reported
above a gold cut-off grade of 0.143-0.201 oz/st Au; metallurgical recovery assumption of 95%; gold payability of 97.5%; mining dilution varies from
15-23%; mining loss of 5% was applied; variable mining costs that range from US$90.91–150.73/ton mined; process costs of US$46.93/ton processed;
general and administrative costs of US$38.83/ton processed; and concentrate refining and shipping costs of US$60.00/oz sold.
(7) Mineral Reserve estimate uses the following key input parameters: assumption of conventional open pit mining; reported above a gold cut-off grade of
0.010 oz/ton Au; metallurgical recovery assumption of 80%; royalty burden of US$56/oz Au; pit slope angles that vary from 34–50º; mining costs of
US$2.15/ton mined, rehandle costs of US$1.65/ton rehandled, process costs of US$10.34/ton processed (includes general and administrative costs).
(8) Underground Mineral Resource estimates are reported using a net smelter return (“NSR”) cutoff of US$130-160/tonne. Mineral Resources are reported
insitu using the following assumptions: The estimate use the following key input parameters: lead recovery of 87-88%, zinc recovery of 81-82% and
silver recovery of 88-89 %. Lead concentrate grade of 51-53%; zinc concentrate grade of 48-50%; mining dilution varies from 5-25%; mining loss of 5%
was applied; mining costs of US$68.77/tonne; processing costs of US$58.20/tonne and US$46.49/tonne, where the NSR ($/tonne) = tonnes x grade x
metal prices x metallurgical recoveries – royalties – TCRCs – transport costs over the life of the mine.
(9) Rounding of short tons, grades, and troy ounces, as required by reporting guidelines, may result in apparent differences between tons, grades, and
contained metal contents.
MINERAL RESOURCES
Summary Gold Mineral Resources at End of the Fiscal Year Ended December 31, 2021(1)(2)(3)(13)
Measured Mineral
Resources
Indicated Mineral
Resources
Measured + Indicated
Mineral Resources
Inferred Mineral
Resources
Tons
(000s)
Grade
(oz./
ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./
ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./
ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./
ton)
Ounces
(000s)
Mexico
Palmarejo Mine, Mexico(4)
La Preciosa Project, Mexico(10)
United States
Rochester Mine, USA(7)
Kensington Mine, USA(5)
Wharf Mine, USA(6)
Lincoln Hill Project, USA(11)
Sterling Project, USA(9)
Wilco Project, USA(12)
3,696
0.053
195
17,377
0.049
852
21,073
0.050
1,047
4,713
0.052
9,536
0.005
45
19,141
0.006
118
28,677
0.006
163
1,761
0.003
191,889
0.002
372
39,565
0.002
74
231,454
0.002
446
128,410
0.002
2,860
0.231
660
1,263
0.256
323
4,123
0.238
983
1,915
0.238
13,947
0.020
273
6,379
0.022
139
20,326
0.020
412
3,724
0.024
4,642
0.012
58
27,668
0.011
306
32,310
0.011
364
22,952
0.011
—
—
—
—
—
—
—
—
—
36,824
0.025
—
—
—
—
—
—
—
—
—
25,736
0.021
246
6
243
455
90
255
914
531
Total Gold
226,570
0.007
1,603
111,393
0.016
1,812
337,963
0.010
3,415
226,035
0.012
2,740
31
Summary Silver Mineral Resources at End of the Fiscal Year Ended December 31, 2021(1)(2)(3)13)
Measured Mineral
Resources
Indicated Mineral
Resources
Measured + Indicated
Mineral Resources
Inferred Mineral
Resources
Tons
(000s)
Grade
(oz./
ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./
ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./
ton)
Ounces
(000s)
Tons
(000s)
Grade
(oz./
ton)
Ounces
(000s)
Mexico
Palmarejo Mine, Mexico(4)
La Preciosa Project, Mexico(10)
United States
Rochester Mine, USA(7)
Lincoln Hill Project, USA(11)
Wilco Project, USA(12)
Canada
Silvertip Mine, Canada(8)
3,696
3.89
14,373
17,377
3.41
59,340
21,073
3.50
73,713
4,713
3.70
17,453
9,536
3.04
29,001
19,141
3.98
76,185
28,677
3.67
105,186
1,761
3.31
5,835
191,889
0.29
56,573
39,565
0.33
12,932
231,454
0.30
69,505
128,410
0.30
38,626
4,642
0.34
1,592
27,668
0.31
8,655
32,310
0.32
10,247
22,952
0.36
8,163
—
—
—
—
—
—
—
—
—
25,736
0.13
3,346
319
10.33
3,296
2,498
9.23
23,048
2,817
9.35
26,344
2,350
7.57
17,787
Total Silver
210,082
0.46
104,835
106,249
1.58
180,160
316,331
0.84
284,995
185,922
0.40
91,210
Summary Zinc Mineral Resources at End of the Fiscal Year Ended December 31, 2021(1)(2)(3)13)
Measured Mineral
Resources
Indicated Mineral
Resources
Measured + Indicated
Mineral Resources
Inferred Mineral
Resources
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
Canada
Silvertip Mine, Canada(8)
319
9.4 % 60,029
2,498
10.6 % 529,353
2,817
10.5 % 589,382
2,350
9.0 % 422,335
Summary Lead Mineral Resources at End of the Fiscal Year Ended December 31, 2021(1)(2)(3)(13)
Measured Mineral
Resources
Indicated Mineral
Resources
Measured + Indicated
Mineral Resources
Inferred Mineral
Resources
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
Tons
(000s)
Grade
(%)
Pounds
(000s)
319
6.6 % 41,939
2,498
5.4 % 270,643
2,817
5.6 % 312,582
2,350
4.3 % 200,725
Canada
Silvertip Mine, Canada(8)
(1) Certain definitions:
The term “resource” means that it is a concentration or occurrence of material of economic interest in or on the Earth’s crust in such form, grade or
quantity that there are reasonable prospects for economic extraction. Inferred, Indicated, and Measured resources are in order of increasing confidence
based on level of underlying geological evidence. The term ‘inferred resource’ is that part of a mineral resource for which quantity and grade or quality
are estimated on the basis of limited geological evidence and sampling. The term “limited geological evidence” means evidence that is only sufficient to
establish that geological and grade or quality continuity is more likely than not. The level of geological uncertainty associated an inferred mineral resource
is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of
economic viability and must have a reasonable expectation that the majority of inferred mineral resources could be upgraded to indicated or measured
mineral resources with continued exploration.
(2) Mineral Resource estimates are reported exclusive of mineral reserves, are current as of December 31, 2021, and are reported using definitions in SK
1300 and were prepared by the company’s technical staff.
(3) Assumed metal prices for 2021 estimated Mineral Resources were $22.00 per ounce of silver, $1,700 per ounce of gold, $1.30 per pound of zinc, $1.00
per pound of lead, unless otherwise noted.
(4) Mineral Resource estimates use the following key input parameters: Assumption of conventional longhole underground mining; reported above a variable
gold equivalent cut-off grade that ranges from 1.59-2.21 g/t AuEq; metallurgical recovery assumption of 93.1% for gold and 81.9% for silver; variable
mining costs that range from US$36.01–US$41.75/t, surface haulage costs of US$3.52/tonne, process costs of US$27.29/tonne, general and
administrative costs of US$11.00/tonne, and surface/auxiliary support costs of US$3.19/tonne. Excludes the impact of the Franco-Nevada gold stream
agreement at Palmarejo in calculation of Mineral Resources.
(5) Mineral Resource estimates use the following key input parameters: assumption of conventional longhole underground mining; reported above a variable
gold cut-off grade that ranges from 0.116–0.164 oz/ton Au; metallurgical recovery assumption of 95%; gold payability of 97.5%, variable mining costs
that range from US$90.91–150.73/ton mined, process costs of US$46.93/ton processed, general and administrative costs of US$38.83/ton processed. and
concentrate refining and shipping costs of US$60.00/oz sold.
(6) Mineral Resource estimate uses the following key input parameters: assumption of conventional open pit mining; reported above a gold cut-off grade of
0.010 oz/ton Au; metallurgical recovery assumption of 78.7% across all rock types; royalty burden of US$56/oz Au; pit slope angles that vary from 34–
50º; mining costs of $2.15/ton mined, rehandle costs of US$1.65/ton rehandled, process costs of US$10.34/ton processed (includes general and
administrative costs)
(7) Mineral Resource estimates are tabulated within confining pit shells that uses the following input parameters: oxide gold recovery of 77.7%-93.7% and
silver recovery with range of 59%-61%; sulfide gold recovery range of 15.2%-77.7% and silver recovery with range of 0.0%-59% with a net smelter
return cutoff of US$2.55–US$3.70/ton oxide and US$2.65/ton sulfide, where the NSR is calculated as resource net smelter return (NSR) = silver grade
(oz/ton) * silver recovery (%) * (silver price ($/oz) - refining cost ($/oz)) + gold grade (oz/ton) * gold recovery (%) * (gold price ($/oz) - refining cost ($/
oz)); and variable pit slope angles that approximately average 43º over the life-of-mine.
(8) Underground Mineral Resource estimates are reported using a net smelter return (“NSR”) cutoff of US$130/tonne. Mineral Resources are reported insitu
using the following assumptions: The estimate use the following key input parameters: lead recovery of 87-88%, zinc recovery of 81-82% and silver
recovery of 88-89 %. Lead concentrate grade of 51-53%; zinc concentrate grade of 48-50%; mining costs of US$68.77/tonne; processing costs of
32
US$58.20/tonne and US$46.49/tonne, where the NSR ($/tonne) = tonnes x grade x metal prices x metallurgical recoveries – royalties – TCRCs –
transport costs over the life of the mine.
(9) Open Pit Mineral Resource estimates are reported in-situ and are contained within a confining pit shell and use the following key input parameters:
reported above a gold cutoff of 0.007 ounces per ton; gold recoveries of 75-80%; mining costs of US$2.16/ton; process costs of US$2.70/ton; G&A costs
of $1.00/ton; variable pit slope angles of 39-52º over the life-of-mine.
(10) Open Pit Mineral Resource estimate is reported using a net smelter return (“NSR”) cutoff of US$23/tonne and Underground Mineral Resources are
reported using a NSR cut-off of $71/tonne. Mineral Resources are reported in-situ and contained within a conceptual measured, indicated and inferred
optimized pit shell or conceptual underground mining shapes using the following assumptions: silver price of US$20/oz, gold price of US$1,400/oz.
Average silver and gold recovery are 82% and 69%, respectively. Open pit mining cost is US$1.85/tonne, underground mining cost is US$47.96/tonne,
processing cost is US$17.53/tonne and G&A cost is US$5.54/tonne. Mineral resources include hanging and footwall dilution, and typical mining recovery
is estimated to be 95%. The technical and economic parameters are those that were used in the 2017 Resource Estimation. Based on the QPs review of the
estimate, there would be no material change to the mineral resources if a gold price of US$1,700/oz, a silver price of US$22/oz or economic parameters
were updated. Therefore the 2017 Mineral Resource report is considered current and is presented unchanged.
(11) Open Pit Mineral Resource estimate is reported in-situ and are contained within a confining pit shell and use the following key input parameters: reported
above an oxide gold equivalent cutoff of 0.15 ounces per ton and 0.20 oz ounces per ton assuming a silver to gold ratio of 60:1; gold recoveries of 64%;
silver recoveries of 59%; mining costs of US$3.10/ton; process costs of US$3.60/ton; general and administrative costs of $1.50/ton processed; average pit
slope angles of 45º over the life-of-mine. The technical and economic parameters are those that were used in the 2018 Resource Estimation. Based on the
QPs review of the estimate, there would be no material change to the Mineral Resource if a gold price of US$1,700/oz, a silver price of US$22/oz or
economic parameters were updated. Therefore the 2018 Mineral Resource is considered current and is presented unchanged.
(12) Open Pit Mineral Resource estimates are reported using an equivalent gold cutoff of 0.20 ounces per ton assuming a silver to gold ratio of 60:1. Resources
are reported in-situ and contained withed a conceptual measured, indicated and inferred optimized pit shell. Silver price of US$20/oz, gold price of
US$1,400/oz. Average oxide and sulfide gold recovery is 70%, average carbonaceous gold recovery is 50%. Average oxide and sulfide gold recovery is
60%. Average carbonaceous silver recovery is 50%. Open pit mining cost is US$1.50/ton, processing and processing and G&A cost is US$5.46/ton;
average pit slope angles of 50º. The technical and economic parameters are those that were used in the 2017 Resource Estimation. Based on the QPs
review of the estimate, there would be no material change to the mineral resources if a gold price of US$1,700/oz, a silver price of US$22/oz or economic
parameters were updated. Therefore the 2018 Mineral Resource report is considered current and is presented unchanged.
(13) Rounding of short tons, grades, and troy ounces, as required by reporting guidelines, may result in apparent differences between tons, grades, and
contained metal contents.
Item 3.
Legal Proceedings
See Note 20 -- Commitments and Contingencies in the notes to the Consolidated Financial Statements included herein.
Item 4.
Mine Safety Disclosures
Information pertaining to mine safety matters is reported in accordance with Section 1503(a) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act in Exhibit 95.1 attached to this Form 10-K.
33
PART II
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
The Company’s common stock is traded on the New York Stock Exchange under the ticker symbol CDE.
On February 14, 2022, there were 256,818,363 outstanding shares of the Company’s common stock which were held
by approximately 1,168 stockholders of record.
34
STOCK PERFORMANCE CHART
COMPARISON OF CUMULATIVE TOTAL RETURN
AMONG COEUR MINING, S&P 500 INDEX AND PEER GROUP INDEX
The following performance graph compares the performance of the Company’s common stock during the period
beginning December 31, 2016 and ending December 31, 2021 to the S&P 500 and a Peer Group Index consisting of the
following companies: Alamos Gold Inc., B2Gold Corp., Centerra Gold Inc., Eldorado Gold Corporation, Endeavor Mining
Corporation, First Majestic Silver Corp., Hecla Mining Company, Hochschild Mining plc, IAMGOLD Corporation, Kirkland
Lake Gold Ltd., New Gold, Inc., OceanaGold Corporation, Pan American Silver Corporation, Royal Gold, Inc., SSR Mining
Inc., and Yamana Gold Inc. (“Peer Group”). The Company formerly included Agnico-Eagle Mines Limited (“Agnico-Eagle”),
Royal Gold, Inc. (“Royal Gold”) and Tahoe Resources Inc. (“Tahoe”) in the Peer Group. Agnico-Eagle was removed due to
revenue size, Royal Gold was removed because it is not directly a mining company and Tahoe was acquired in 2021 by Pan
American Silver Corporation, which is part of the Company’s Peer Group. The Company added Kirkland Lake Gold Ltd. and
Endeavor Mining Corporation to the Peer Group in 2021.
The graph assumes a $100 investment in the Company's common stock and in each of the indexes at the beginning of
the period, and a reinvestment of dividends paid on such investments throughout the five-year period.
Coeur Mining
S&P 500 Index
Peer Group
Dec.
2016
Dec.
2017
Dec.
2018
Dec.
2019
Dec.
2020
Dec.
2021
100.0
100.0
100.0
82.51
121.83
110.91
49.17
116.49
127.92
88.89
153.17
274.91
113.86
181.35
321.13
55.45
233.41
280.29
35
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is
relevant to an assessment and understanding of the consolidated financial condition and results of operations of Coeur Mining,
Inc. and its subsidiaries (collectively the “Company”, “our”, or “we”). We use certain non-GAAP financial performance
measures in our MD&A. For a detailed description of these measures, please see “Non-GAAP Financial Performance
Measures” at the end of this Item. We provide Costs applicable to sales (“CAS”) allocation, referred to as the co-product
method, based on revenue contribution for Palmarejo, Rochester and Silvertip and based on the primary metal, referred to as the
by-product method, for Wharf. Revenue from secondary metal, such as silver at Wharf, is treated as a cost credit.
Overview
We are primarily a gold and silver producer with assets located in the United States, Canada and Mexico
2021 Highlights
For full year 2021, Coeur reported revenue of $832.8 million and cash flow from operating activities of $110.5
million. We reported GAAP net loss of $31.3 million, or $0.13 per diluted share. On an adjusted basis1, the Company reported
EBITDA of $210.8 million and net loss of $1.4 million or $0.01 per diluted share.
•
•
•
•
•
•
Solid fourth quarter production growth led to full-year production within guidance ranges – Gold and silver
production increased 2% and 6% quarter-over-quarter, respectively, to 88,946 ounces and 2.6 million ounces. Full-year
gold and silver production totaled 348,529 ounces and 10.1 million ounces, respectively, within the Company’s
consolidated production guidance range for both metals
Strong cost performance from primary gold operations – Full-year costs applicable to sales1 at Palmarejo, Kensington
and Wharf were within their guidance ranges for 2021 despite inflationary cost headwinds, leading to strong free cash
flow1 at each of these primary gold operations. During 2021, gold sales represented 70% of the Company’s total revenue
Largest exploration program in Company history extended mine lives and drove resource growth – Coeur increased
total exploration investment 41% year-over-year to $71 million in 2021, bringing its five-year cumulative investment in
exploration to nearly $240 million, which has led to significant increases in reserves and resources. From the 2021
program, mine life extensions at Palmarejo and Wharf as well as significant resource additions at Silvertip and Kensington
continue to lay the foundation for future organic growth
Updated capital and schedule estimates for Rochester expansion provide clarity – The Company estimates the total
capital for the Plan of Operations Amendment 11 (“POA 11”) will be approximately $520 million, which is in-line with
recent updates. Approximately $236 million has been incurred on the project as of December 31, 2021. In addition, Coeur
estimates the cost to incorporate pre-screens into the new crusher circuit and associated re-assessment of project
contingency to be approximately $70 - $80 million. Construction is expected to be completed mid-2023 with
commissioning to follow. Post-expansion, full-year production is expected to average roughly 8 million ounces of silver
and 76,250 ounces of gold with average free cash flow1 of $90 million from 2024 to 20344
Silvertip trade-off study underway – The Company commenced work to assess the economics of a potential larger
expansion and restart of its high-grade Silvertip silver-zinc-lead property in British Columbia. The review is evaluating the
potential to target a higher throughput to take advantage of the significant resource growth and on a timetable that would
sequence an expansion and restart following completion and commissioning of the Rochester expansion. Results from this
ongoing work are expected by the end of the year
Initial Technical Report Summaries filed under new SEC rules confirm strength and stability of Coeur’s multi-asset
portfolio – The Company today filed initial Technical Report Summaries pursuant to Item 1300 of SEC Regulation S-K.
Highlights from the reports include reserve-only based mine lives of 8 years at Palmarejo, 13 years at Rochester, 3 years at
Kensington and 8 years at Wharf
36
Selected Financial and Operating Results
In thousands
Financial Results:
Gold sales
Silver sales
Zinc sales
Lead sales
Consolidated Revenue
Net income (loss)
Net income (loss) per share, diluted
Adjusted net income (loss)(1)
Adjusted net income (loss) per share, diluted(1)
EBITDA(1)
Adjusted EBITDA(1)
Total debt(2)
Operating Results:
Gold ounces produced
Silver ounces produced
Zinc pounds produced
Lead pounds produced
Gold ounces sold
Silver ounces sold
Zinc pounds sold
Lead pounds sold
Average realized price per gold ounce
Average realized price per silver ounce
Average realized price per zinc pound, gross(3)
Average realized price per lead pound, gross(3)
(1)
(2)
(3)
(4)
Year Ended December 31,
2021
2020
2019
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
578,911 $
253,917 $
— $
— $
832,828 $
(31,322) $
(0.13) $
(1,393) $
(0.01) $
148,402 $
210,845 $
487,501 $
348,529
10,068,112
—
—
350,347
10,133,837
—
—
1,652 $
25.06 $
—
—
584,633 $
200,175 $
(662) $
1,315 $
493,347
191,478
12,806
13,871
785,461 $
711,502
25,627 $
(346,896)
0.11 $
59,013 $
0.24 $
214,767 $
263,365 $
275,501 $
(1.59)
(54,583)
(0.25)
(154,378)
173,854
295,497
355,678
9,698,236
2,459,756
2,176,847
356,251
9,628,429
3,203,446
2,453,485
1,641 $
20.79 $
NM(3) $
NM(3) $
359,418
11,748,734
17,103,427
16,555,622
367,650
11,914,567
18,154,521
16,487,847
1,342
16.07
0.71
0.84
See “Non-GAAP Financial Performance Measures.”
Includes finance leases. Net of debt issuance costs and premium received.
Due to the suspension of mining and processing activities these amounts are not meaningful.
Additional details for Rochester can be found in the Technical Report Summary filed by the Company with the U.S. Securities and Exchange
Commission on February 16, 2022 which is incorporated by reference into this Report.
Consolidated Financial Results
Year Ended December 31, 2021 compared to Year Ended December 31, 2020
Revenue
We sold 350,347 gold ounces and 10.1 million silver ounces, compared to 356,251 gold ounces, 9.6 million silver
ounces, 3.2 million zinc pounds and 2.5 million lead pounds in the prior year. Revenue increased by $47.4 million, or 6%, as a
result of a 1% and 21% increase in average realized gold and silver prices, respectively, and higher silver ounces sold (5%),
partially offset by lower gold ounces sold (2%). The increase in silver ounces sold was primarily due to higher mill throughput
at Palmarejo. Gold and silver accounted for 70% and 30% of 2021 sales revenue, respectively. This compares to gold and silver
accounting for 74% and 25% of 2020 sales revenue, respectively, with zinc and lead accounting for the remaining 2020 sales
revenue.
37
The following table summarizes consolidated metal sales:
In thousands
Gold sales
Silver sales
Zinc sales
Lead sales
Metal sales
Costs Applicable to Sales
Year ended December 31,
2021
2020
Increase
(Decrease)
Percentage
Change
$
578,911 $
584,633 $
253,917
200,175
—
—
(662)
1,315
$
832,828 $
785,461 $
(5,722)
53,742
662
(1,315)
47,367
(1) %
27 %
(100) %
(100) %
6 %
Costs applicable to sales increased $71.2 million, or 16%, primarily due to inflationary pressures related to employee-
related, maintenance and consumable costs at all operating sites, higher silver ounces sold primarily at Palmarejo, the Rochester
fourth quarter lower of cost or net realizable value (“LCM”) adjustment of $7.3 million, partially offset by the $13.8 million
favorable impact from foreign currency hedges. For a complete discussion of costs applicable to sales, see Results of
Operations below.
Amortization
Amortization decreased $3.1 million, or 2%, primarily due to longer assumed mine life based on year-end 2020
mineral reserve growth, partially offset by higher silver ounces sold.
Expenses
General and administrative expenses increased $6.7 million, or 20%, primarily due to higher compensation, travel and
outside service costs.
Exploration expense increased $8.5 million, or 20%, as the Company maintained its commitment to a higher-level of
exploration investment following the completion of the largest and most successful drilling campaign in Coeur’s history during
2020. The Company completed 746,900 feet (227,650 meters) of expansion drilling and 417,200 feet (127,175 meters) of infill
drilling in 2021 compared to 617,500 feet (188,225 meters) of expansion drilling and 165,700 feet (50,475 meters) of infill
drilling in 2020.
Pre-development, reclamation, and other expenses decreased $7.0 million, or 13%, stemming from lower costs
incurred in connection with the Company’s COVID-19 health and safety protocols, partially offset by full-year ongoing
carrying costs and absence of one-time 2020 costs associated with the suspension of mining and processing activities at
Silvertip.
The following table summarizes pre-development, reclamation, and other expenses:
Year ended December 31,
2021
2020
Increase
(Decrease)
Percentage
Change
In thousands
COVID-19
Silvertip ongoing carrying costs
Silvertip suspension costs
Gain on modification of right of use lease
Asset retirement accretion
Other
$
6,618 $
15,555 $
24,928
—
—
11,988
5,144
16,384
11,199
(4,051)
11,754
4,813
(8,937)
8,544
(11,199)
4,051
234
331
Pre-development, reclamation and other expense $
48,678 $
55,654 $
(6,976)
Other Income and Expenses
(57) %
52 %
(100) %
(100) %
2 %
7 %
(13) %
During the first quarter of 2021, the Company incurred a $9.2 million loss in connection with the tender and
redemption of the 2024 Senior Notes concurrent with the completed offering of the 2029 Senior Notes.
Fair value adjustments, net, decreased to a loss of $0.5 million compared to a gain of $7.6 million as a result of a
reduction in value of the Company’s equity investments. The estimated fair values of the Company’s equity investments in
Victoria Gold Corp. and Integra Resources Corp. (“Integra Resources”) were $124.2 million and $8.0 million, respectively, at
December 31, 2021.
38
Interest expense (net of capitalized interest of $11.1 million) decreased to $16.5 million from $20.7 million due to
higher capitalized interest associated with the POA 11 project at Rochester, and lower interest paid under the RCF, partially
offset by higher interest paid under the 2029 Senior Notes compared to the 2024 Senior Notes and higher interest paid under
finance lease obligations.
Other, net increased to a loss of $22.9 million compared to $5.9 million due to a write-down of a VAT receivable of
$26.0 million due to uncertain collectability, partially offset by an increase in gains on the sale of assets in 2021 and a one-time
fee of $3.8 million related to the novation of certain of the Company’s gold zero cost collars incurred in 2020. For additional
details on the VAT receivable write-down see Note 20 -- Commitments and Contingencies.
Income and Mining Taxes
The Company’s Income and mining tax (expense) benefit consisted of:
In thousands
Year Ended December 31,
2021
2020
Income and mining tax (expense) benefit at statutory rate
$
(764) $
(13,161)
State tax provision from continuing operations
Change in valuation allowance
Percentage depletion
Uncertain tax positions
U.S. and foreign permanent differences
Foreign exchange rates
Foreign inflation and indexing
Foreign tax rate differences
Mining, foreign withholding, and other taxes
Other, net
2,009
(28,615)
(152)
(17,522)
4,968
920
4,105
(384)
(1,087)
(4,901)
(12,599)
1,390
5,056
2,321
3,844
1,390
684
(3,971)
(17,457)
1,923
Income and mining tax (expense) benefit
$
(34,958) $
(37,045)
Income and mining tax expense of approximately $35.0 million resulted in an effective tax rate of 961.4% for 2021.
This compares to income tax expense of $37.0 million or effective tax rate of 59.1% for 2020. The comparability of the
Company’s income and mining tax (expense) benefit and effective tax rate for the reported periods was impacted by multiple
factors, primarily: (i) variations in our income before income taxes; (ii) geographic distribution of that income; (iii) mining
taxes; (iv) foreign exchange rates; (v) percentage depletion (vi) the impact of uncertain tax positions; and (vii) the non-
recognition of tax assets. Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period.
The following table summarizes the components of the Company’s income (loss) before tax and income and mining
tax (expense) benefit:
In thousands
United States
Canada
Mexico
Other jurisdictions
Year ended December 31,
2021
2020
Income (loss) before tax
Tax (expense) benefit
Income (loss) before tax
Tax (expense) benefit
$
$
(34,196) $
(52,299)
87,233
2,898
3,636 $
(6,142) $
1,224
(30,040)
—
(34,958) $
40,891 $
(68,730)
90,116
395
62,672 $
(9,361)
232
(27,949)
33
(37,045)
A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax
benefits will not be realized. The Company analyzes its deferred tax assets and, if it is determined that the Company will not
realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined
that the Company will ultimately be more likely than not able to realize all or a portion of the related benefits for which a
valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number
of factors that impact the Company’s ability to realize its deferred tax assets. For additional information, please see “Item 1A -
Risk Factors” in the 2021 10-K.
39
Net Income (Loss)
Net loss was $31.3 million, or $0.13 per diluted share, compared to net income of $25.6 million, or $0.11 per
share. The decrease in net income was driven by higher operating costs, a VAT write-down of $26.0 million, higher exploration
expense, a $9.2 million loss on debt extinguishment and higher income and mining taxes. This was partially offset by a 1% and
21% increase in average realized gold and silver prices, respectively and higher silver ounces sold (5%). Adjusted net loss was
$1.4 million, or $0.01 per diluted share, compared to an adjusted net income of $59.0 million, or $0.24 per share (see “Non-
GAAP Financial Performance Measures”).
Year Ended December 31, 2020 compared to Year Ended December 31, 2019
Revenue
Revenue increased by $74.0 million or 10%, as a result of a 22% and 29% increase in average realized gold and silver
prices, respectively, partially offset by lower gold and silver ounces sold (3% and 19%, respectively), recovery delays at
Rochester and the suspension of mining and processing activities at Silvertip in February. We sold 356,251 gold ounces, 9.6
million silver ounces, 3.2 million zinc pounds and 2.5 million lead pounds compared to 367,650 gold ounces, 11.9 million
silver ounces, 18.2 million zinc pounds and 16.5 million lead pounds in the prior year. Gold and silver accounted for 74% and
25% of 2020 sales revenue, respectively, with zinc and lead accounting for the remaining sales revenue. This compares to gold
and silver accounting for 69% and 27% of 2019 sales revenue.
The following table summarizes consolidated metal sales:
In thousands
Gold sales
Silver sales
Zinc sales
Lead sales
Metal sales
Costs Applicable to Sales
Year ended December 31,
2020
2019
Increase
(Decrease)
Percentage
Change
$
584,633 $
493,347 $
200,175
(662)
1,315
191,478
12,806
13,871
$
785,461 $
711,502 $
91,286
8,697
(13,468)
(12,556)
73,959
19 %
5 %
(105) %
(91) %
10 %
Costs applicable to sales decreased primarily due to the suspension at Silvertip and lower ounces sold at Palmarejo and
Rochester. For a complete discussion of costs applicable to sales, see Results of Operations below.
Amortization
Amortization decreased $47.5 million, or 27%, primarily due to the suspension at Silvertip, and longer assumed mine
life based on year-end 2019 reserve growth at Palmarejo and lower ounces sold at Palmarejo and Rochester.
Expenses
General and administrative expenses decreased $0.8 million, or 2%, primarily due to lower travel costs.
Exploration expense increased $20.1 million, or 89%, due to the Company’s multi-year exploration program. The
Company completed 617,500 feet (188,225 meters) of expansion drilling and 165,700 feet (50,475 meters) of infill drilling in
2020 compared to 342,500 (104,425 meters) of expansion drilling and 181,600 feet (55,350 meters) of infill drilling in 2019.
Pre-development, reclamation, and other expenses increased $37.2 million, or 202%, stemming from ongoing carrying
and suspension costs at Silvertip and incremental costs incurred to comply with the Company’s COVID-19 health and safety
protocols, partially offset by a gain resulting from the modification of a right of use lease at Silvertip.
40
The
following
table
summarizes
pre-development,
reclamation,
and
other
expenses:
Year ended December 31,
2020
2019
Increase
(Decrease)
Percentage
Change
In thousands
COVID-19
Silvertip ongoing carrying costs
Silvertip suspension costs
Gain on modification of right of use lease
Asset retirement accretion
Other
$
15,555 $
— $
16,384
11,199
(4,051)
11,754
4,813
—
—
—
12,154
6,267
Pre-development, reclamation and other expense $
55,654 $
18,421 $
Other Income and Expenses
15,555
16,384
11,199
(4,051)
(400)
(1,454)
37,233
100 %
100 %
100 %
100 %
(3) %
(23) %
202 %
Fair value adjustments, net, decreased to a gain of $7.6 million compared to $16.0 million as a result of changes in
value related to the Company’s equity investments, primarily Integra Resources and Metalla Royalty & Streaming Ltd.
("Metalla"), which had estimated fair values of $11.9 million and $1.0 million, respectively, at December 31, 2020.
Interest expense (net of capitalized interest of $1.5 million) decreased to $20.7 million from $24.8 million due to a
lower interest rate paid under the RCF and lower average balances of both the RCF and 2024 Senior Notes.
Other, net increased to a loss of $5.9 million compared to a loss of $3.2 million due to an increase in losses on the sale
of assets and a one-time fee of $3.8 million related to the novation of certain of the Company’s gold zero cost collars, partially
offset by a reduction in foreign exchange losses.
Income and Mining Taxes
The Company’s Income and mining tax (expense) benefit consisted of:
In thousands
Year ended December 31,
2020
2019
Income and mining tax (expense) benefit at statutory rate
$
(13,161) $
State tax provision from continuing operations
Change in valuation allowance
Percentage depletion
Uncertain tax positions
U.S. and foreign permanent differences
Foreign exchange rates
Foreign inflation and indexing
Foreign tax rate differences
Mining, foreign withholding, and other taxes
Other, net
(152)
(17,522)
5,056
2,321
3,844
1,390
684
(3,971)
(17,457)
1,923
Income and mining tax (expense) benefit
$
(37,045) $
75,185
1,243
(77,220)
820
2,358
2,272
(7,066)
(2,933)
19,729
(2,746)
(513)
11,129
Income and mining tax expense of approximately $37.0 million resulted in an effective tax rate of 59.1% for 2020.
This compares to income tax benefit of $11.1 million or effective tax rate of 3.1% for 2019. The comparability of the
Company’s income and mining tax (expense) benefit and effective tax rate for the reported periods was impacted by multiple
factors, primarily: (i) mining taxes; (ii) variations in our income before income taxes; (iii) geographic distribution of that
income; (iv) foreign exchange rates; (v) percentage depletion; (vi) the non-recognition of tax assets; and (vii) the impact of
uncertain tax positions. Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period.
41
The following table summarizes the components of the Company’s income (loss) before tax and income and mining
tax (expense) benefit:
In thousands
United States
Canada
Mexico
Other jurisdictions
Year ended December 31,
2020
2019
Income (loss) before tax
Tax (expense) benefit
Income (loss) before tax
Tax (expense) benefit
$
$
40,891 $
(68,730)
90,116
395
(9,361) $
232
(27,949)
33
(16,702) $
(365,781)
25,002
(544)
62,672 $
(37,045) $
(358,025) $
(5,446)
32,203
(15,625)
(3)
11,129
A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax
benefits will not be realized. The Company analyzes its deferred tax assets and, if it is determined that the Company will not
realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined
that the Company will ultimately be more likely than not able to realize all or a portion of the related benefits for which a
valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number
of factors that impact the Company’s ability to realize its deferred tax assets. For additional information, please see the section
titled “Risk Factors” included in Item 1A.
Net Income (Loss) from Continuing Operations
Net income from continuing operations was $25.6 million, or $0.11 per diluted share, compared to net loss of $346.9
million, or $1.59 per share. The increase in net income from continuing operations was driven by strong operating results at
Wharf and Palmarejo, a 22% and 29% increase in average realized gold and silver prices, respectively, lower operating costs at
Rochester and Silvertip, and an impairment of long-lived assets at Silvertip of $250.8 million in 2019. This was partially offset
by lower sales of gold and silver (3% and 19%, respectively), higher exploration expense, ongoing carrying and severance costs
at Silvertip and incremental costs associated with the Company’s COVID-19 health and safety protocols. Adjusted net income
was $59.0 million, or $0.24 per diluted share, compared to adjusted net loss of $54.6 million, or $0.25 per share (see “Non-
GAAP Financial Performance Measures”).
2022 Guidance Framework
2022 Production Guidance
Palmarejo
Rochester
Kensington
Wharf
Total
2022 Costs Applicable to Sales Guidance
Palmarejo (co-product)
Rochester (co-product)
Kensington
Wharf (by-product)
Gold
(oz)
Silver
(K oz)
100,000 - 110,000
6,000 - 7,000
35,000 - 43,000
3,000 - 4,000
110,000 - 120,000
70,000 - 80,000
315,000 - 353,000
—
—
9,000 - 11,000
Gold
($/oz)
Silver
($/oz)
$750 - $850
$13.50 - $14.50
$1,490 - $1,590
$20.75 - $22.75
$1,150 - $1,250
$1,225 - $1,325
—
—
42
2022 Capital, Exploration and G&A Guidance
Capital Expenditures, Sustaining
Capital Expenditures, Development
Exploration, Expensed
Exploration, Capitalized
General & Administrative Expenses
($M)
$115 - $140
$205 - $250
$18 - $23
$18 - $23
$42 - $46
Note: The Company’s guidance figures assume estimated prices of $1,800/oz gold and $24.00/oz silver as well as CAD of 1.25
and MXN of 20.00. Guidance figures exclude the impact of any metal sales or foreign exchange hedges.
Results of Operations
Palmarejo
Tons milled
Average gold grade (oz/t)
Average silver grade (oz/t)
Average recovery rate – Au
Average recovery rate – Ag
Gold ounces produced
Silver ounces produced
Gold ounces sold
Silver ounces sold
Costs applicable to sales per gold ounce(1)
Costs applicable to sales per silver ounce(1)
(1)
See Non-GAAP Financial Performance Measures.
Year Ended December 31,
2021
2,106,741
0.06
2020
1,751,525
0.07
2019
1,755,957
0.08
3.93
92.8 %
82.4 %
109,202
6,820,589
108,806
6,805,816
4.45
89.9 %
80.4 %
110,608
6,269,206
110,822
6,301,516
$
$
664
11.97
$
$
610
9.14
$
$
4.85
84.3 %
79.3 %
111,932
6,762,265
116,104
6,841,380
685
9.13
Year Ended December 31, 2021 compared to Year Ended December 31, 2020
Gold production decreased 1% as a result of lower gold grade, partially offset by higher mill throughput and
recoveries. Silver production increased 9% as a result of higher mill throughput and recoveries, partially offset by lower silver
grade. Metal sales were $320.3 million, or 38% of Coeur’s metal sales, compared with $286.6 million, or 36% of Coeur’s metal
sales. Revenue for the year ended December 31, 2021 increased by $33.7 million or 12%, of which $23.9 million was due to
higher average realized silver prices and $9.8 million was the result of a higher volume of silver sales. Costs applicable to sales
per gold and silver ounce increased 9% and 31%, respectively, due to the mix of gold and silver sales, and higher employee-
related, maintenance and consumable costs largely due to inflationary pressures, partially offset by the favorable impact of
foreign currency hedges ($13.8 million). Amortization decreased to $36.1 million due to longer assumed mine life based on
year-end 2020 mineral reserve growth. Capital expenditures increased to $36.5 million from $25.0 million due to higher
underground development and infill drilling activities.
43
Year Ended December 31, 2020 compared to Year Ended December 31, 2019
Gold and silver production decreased 1% and 7%, respectively, as a result of lower gold and silver grades, partially
offset by higher gold and silver recovery. In the second quarter, Palmarejo temporarily suspended active mining and processing
activities in accordance with a COVID-related government decree. After receiving guidance from the Mexican government in
May that the suspension decree did not apply to precious metals mining, production began ramping back up in June, increasing
steadily during the month as staffing levels returned to a pre-shutdown level. Despite the temporary suspension, Palmarejo’s
milled tons were in-line with the prior year. Metal sales were $286.6 million, or 36% of Coeur’s metal sales, compared with
$252.7 million, or 36% of Coeur’s metal sales. Revenue for the year ended December 31, 2020 increased by $33.9 million or
13%, of which $52.6 million was due to higher average realized gold and silver prices, partially offset by a decrease of $18.7
million due to a lower volume of gold and silver sales. Costs applicable to sales per gold ounce decreased 11% while costs
applicable to sales per silver ounce remained comparable due to higher revenue contribution from silver sales compared to gold.
Additionally, favorable foreign exchange rates and lower compensation and consumable costs contributed to an overall
favorable movement in costs applicable to sales. Amortization decreased to $44.9 million due to longer assumed mine life
based on year-end 2019 reserve growth and lower gold and silver ounces sold. Capital expenditures decreased to $25.5 million
from $32.7 million due to lower underground development and lower mining equipment expenditures.
Rochester
Tons placed
Average gold grade (oz/t)
Average silver grade (oz/t)
Gold ounces produced
Silver ounces produced
Gold ounces sold
Silver ounces sold
Costs applicable to sales per gold ounce(1)
Costs applicable to sales per silver ounce(1)
(1)
See Non-GAAP Financial Performance Measures.
Year ended December 31,
2021
2020
2019
13,687,536
15,696,565
10,582,518
0.002
0.42
27,051
3,158,017
27,697
3,241,624
0.002
0.52
27,147
3,174,529
26,257
3,054,139
$
$
1,801 $
25.10 $
1,377 $
16.35 $
0.003
0.46
35,400
3,761,060
36,052
3,844,556
1,251
14.34
Year Ended December 31, 2021 compared to Year Ended December 31, 2020
Gold and silver production remained comparable year over year. Metal sales were $130.8 million, or 16% of Coeur’s
metal sales, compared with $110.3 million, or 14% of Coeur’s metal sales. Revenue for the year ended December 31, 2021
increased by $20.6 million or 19%, of which $13.3 million was the result of higher average realized gold and silver prices and
$7.3 million was the result of a higher volume of gold and silver sales. Costs applicable to sales per gold and silver ounce
increased 31% and 54%, respectively, due to the mix of gold and silver sales, higher employee-related, maintenance and
consumable costs partially due to inflationary pressures, and a LCM adjustment of $7.3 million. Amortization increased to
$20.2 million due to higher equipment depreciation from recently placed-in service assets and an LCM adjustment of $1.1
million in the fourth quarter. Capital expenditures increased to $166.5 million from $37.5 million due to the commencement of
construction activities related to POA 11 in August 2020.
In the second half of 2021 the Company began seeing inflationary pressures on bids for remaining unawarded
contracts on the POA 11 expansion project at Rochester during the second half of 2021, most notably on two structural,
mechanical, piping, electrical and instrumentation (“SMPEI”) construction contracts for the Merrill-Crowe process plant and
crushing circuit, respectively. Coeur recently selected the general SMPEI contractor for construction of the Merrill-Crowe
process plant and crusher corridor based on a revised commercial approach from the previous lump-sum commercial model to a
single contract. SMPEI work under the initial contract is beginning to advance.
Coeur has also advanced work related to implementation of pre-screens as part of the POA 11 expansion project and
has elected to proceed with this scope change enhancement. As previously disclosed, the Company plans to integrate pre-
screens into the current crushing system at Rochester, which is expected to drive improved performance while providing
valuable operating experience and knowledge that can be applied to the new crushing circuit as part of the POA 11 expansion.
Coeur has commenced detailed engineering for pre-screens and intends to align construction of the pre-screens with the
completion of the crusher corridor. Installation of pre-screens on the existing crusher system is scheduled for the first half of
2022 with commissioning expected to begin around mid-year.
44
In connection with the items discussed above, the Company has conducted a comprehensive re-baselining of the
overall schedule and costs associated with the original scope of POA 11.
Coeur now estimates the total construction capital for POA 11 to be approximately $597 million, which includes the
10-15% previously announced potential cost escalation as well as $70 - $80 million related to pre-screen implementation and
additional project contingency to reflect ongoing COVID and schedule risk. As of December 31, 2021, the Company has
incurred approximately $236 million in the expansion and 61% of the capital is now committed (excluding the recently-
awarded SMPEI contract, which is expected to be formalized in the first quarter).
Excluding capital leases, Coeur forecasts capital expenditures related to POA 11 to be approximately $217 - $257
million and $131 - $171 million in 2022 and 2023, respectively. Additional details on expected production and capital
expenditures for Rochester can be found in the Technical Report Summary filed by the Company with the U.S. Securities and
Exchange Commission on February 16, 2022 which is incorporated by reference into this Report.
Year Ended December 31, 2020 compared to Year Ended December 31, 2019
Gold and silver production decreased 23% and 16%, respectively, due to the impact of dilution from stacking high-
pressure grinding roll (“HPGR”) crushed material on top of historic ore on the Stage IV leach pad and upset conditions in the
Merrill-Crowe process plant due to higher-than-expected fine particulates in pregnant solution from ore placed on newly
constructed inter-lift liners in the first nine months of 2020. Metal sales were $110.3 million, or 14% of Coeur’s metal sales,
compared with $112.0 million, or 16% of Coeur’s metal sales. Revenue for the year ended December 31, 2020 decreased by
$1.7 million or 2%, of which $33.8 million was the result of a lower volume of gold and silver sales, partially offset by an
increase of $32.1 million due to higher average realized gold and silver prices. Costs applicable to sales per gold and silver
ounce increased 10% and 14%, respectively, driven by higher cyanide and outside service costs and a change in the Company’s
recovery rate assumptions. Amortization decreased to $14.3 million due to lower ounces sold. Capital expenditures increased to
$37.5 million from $22.6 million due to the commencement of construction activities related to POA 11.
Kensington
Tons milled
Average gold grade (oz/t)
Average recovery rate
Gold ounces produced
Gold ounces sold
Costs applicable to sales per gold ounce(1)
(1) See Non-GAAP Financial Performance Measures.
Year ended December 31,
2021
667,560
0.19
93.2 %
121,140
122,181
1,086
$
2020
675,731
0.20
93.0 %
124,867
124,793
975
$
2019
658,378
0.21
91.0 %
127,914
130,495
917
$
Year Ended December 31, 2021 compared to Year Ended December 31, 2020
Gold production decreased 3% as a result of lower grade and lower mill throughput. Metal sales were $215.0 million,
or 26% of Coeur’s metal sales, compared to $216.5 million, or 28% of Coeur’s metal sales. Revenue for the year ended
December 31, 2021 decreased by $1.5 million or 1%, of which $4.6 million resulted from lower volume of gold sales, partially
offset by an increase of $3.1 million due to higher average realized gold prices. Costs applicable to sales per gold ounce
increased 11% due to lower production and higher employee-related, maintenance and consumable costs, partially due to
inflationary pressures. Amortization increased to $54.9 million primarily due to higher Jualin production, partially offset by
lower ounces sold. Capital expenditures increased to $27.5 million from $19.8 million due to higher infill drilling and
underground development.
Year Ended December 31, 2020 compared to Year Ended December 31, 2019
Gold production decreased 2% as a result of processing lower grade ore and COVID-19 response efforts that
temporarily impacted mine production in the first nine months of 2020. Metal sales were $216.5 million, or 28% of Coeur’s
metal sales, compared to $181.1 million, or 25% of Coeur’s metal sales. Revenue for the year ended December 31, 2020
increased by $35.4 million or 20%, of which $45.3 million was due to higher average realized gold prices, partially offset by a
decrease of $9.9 million due to a lower volume of gold sales. Costs applicable to sales per gold ounce increased 6% due to
lower production and higher compensation, outside service and maintenance costs, partially offset by lower diesel costs.
Amortization decreased to $49.5 million due to lower ounces sold. Capital expenditures decreased to $19.8 million from $23.5
million due to lower underground development.
45
Wharf
Tons placed
Average gold grade (oz/t)
Gold ounces produced
Silver ounces produced
Gold ounces sold
Silver ounces sold
Costs applicable to sales per gold ounce(1)
(1) See Non-GAAP Financial Performance Measures.
Year ended December 31,
2021
4,702,882
0.027
91,136
89,506
91,663
86,397
2020
4,710,875
0.027
93,056
115,214
94,379
113,790
$
997 $
923 $
2019
4,613,359
0.023
84,172
63,483
84,999
64,161
937
Year Ended December 31, 2021 compared to Year Ended December 31, 2020
Gold production decreased 2% driven by the timing of recoveries. Metal sales were $166.7 million, or 20% of Coeur’s
metal sales, compared to $170.2 million, or 22% of Coeur’s metal sales. Revenue for the year ended December 31, 2021
decreased by $3.5 million or 2%, of which $5.6 million resulted from a lower volume of gold sales, partially offset by an
increase of $2.1 million due to higher average realized gold and silver prices. Costs applicable to sales per gold ounce increased
8% due to higher equipment rental, diesel and employee-related costs partially due to inflationary pressures. Amortization
decreased to $11.0 million due to lower ounces sold. Capital expenditures were $8.1 million reflecting $4.0 million of infill
drilling.
Year Ended December 31, 2020 compared to Year Ended December 31, 2019
Gold production increased 11% driven by higher grade. Metal sales were $170.2 million, or 22% of Coeur’s metal
sales, compared to $121.4 million, or 17% of Coeur’s metal sales. Revenue for the year ended December 31, 2020 increased by
$48.8 million or 40%, of which $31.1 million was due to higher average realized gold and silver prices and $17.7 million was
the result of a higher volume of gold and silver sales. Costs applicable to sales per gold ounce decreased 2% due to higher
production and lower diesel costs. Amortization increased to $12.5 million due to higher ounces sold. Capital expenditures were
$2.4 million.
Silvertip
Silver ounces produced
Zinc pounds produced
Lead pounds produced
Silver ounces sold
Zinc pounds sold
Lead pounds sold
Costs applicable to sales per silver ounce(2)
Costs applicable to sales per zinc pound(2)
Costs applicable to sales per lead ounce(2)
(1) Due to the suspension of mining and processing activities these amounts are not meaningful.
(2) See Non-GAAP Financial Performance Measures.
$
$
$
Year Ended December 31,
2020 (1)
2021
—
—
—
—
—
—
—
—
—
139,287
2,459,756
2,176,847
158,984
3,203,446
2,453,485
NM (2) $
NM (2) $
NM (2) $
2019
1,161,926
17,103,427
16,555,622
1,164,470
18,154,521
16,487,847
31.92
2.34
1.76
46
Year Ended December 31, 2021
Silvertip suspended mining and processing activities, unrelated to COVID-19, in February 2020. Operational results in
the table above reflected performance prior to the suspension. Ongoing carrying and suspension costs are included in Pre-
development, reclamation, and other.
Coeur continues to generate positive results from ongoing exploration as the Company evaluates various opportunities
to enhance the economics of a potential expansion and restart of Silvertip.
The Company received preliminary capital estimates for an accelerated expansion and restart in late 2021, which were
higher than originally anticipated and reflect overall inflationary pressures as well as supply disruptions and labor market
tightness consistent with broader macroeconomic themes.
Capital expenditures increased to $70.1 million from $13.1 million due to planned early civil works construction,
higher infill drilling and underground development. For 2022, capital expenditures are expected to be approximately $15 - 25
million, primarily focusing on the economics of a potential expansion, including study work to evaluate additional opportunities
to enhance and restart and as well as continued underground development and infill drilling at the mine.
In June 2021, Silvertip repurchased from Silvertip Resources Investment Cayman Ltd. a net smelter returns royalty of
1.429% on the first 1,434,000 metric tonnes of mineral resources mined, and 1.00% thereafter for $7.0 million.
Liquidity and Capital Resources
At December 31, 2021, the Company had $58.3 million of cash, cash equivalents and restricted cash and $200.0
million available under the RCF. Cash and cash equivalents decreased $36.1 million in the year ended December 31, 2021, due
to higher capital expenditures related to POA 11 at Rochester and the potential expansion project at Silvertip coupled with
higher operating costs, lower gold ounces sold (2%), higher general and administrative and exploration costs, and the tender
and redemption of the 2024 Senior Notes for $238.3 million, including premiums. This was partially offset by a 1% and 21%
increase in average realized gold and silver prices, respectively, higher silver ounces sold (5%), $65.0 million drawn from the
RCF, and the net proceeds of $367.5 million from the issuance of the 2029 Senior Notes.
Since the start of the COVID-19 pandemic, the Company has completed various scenario planning analyses to
consider potential impacts of COVID-19 on its business, including volatility in commodity prices, temporary disruptions and/or
curtailments of operating activities (voluntary or involuntary). To provide additional flexibility to respond to potential downside
scenarios, the Company has been able to periodically draw and make repayments under its RCF subsequent to the start of the
COVID-19 pandemic. The RCF was amended in March 2021 to extend the maturity to March 2025 and to potentially allow the
Company to obtain one or more increases of the RCF in an aggregate amount of up to $100.0 million. At December 31, 2021,
the Company had $65.0 million drawn and $35.0 million in outstanding letters of credit under the RCF. The Company also
holds $132.0 million of equity securities including a 17.8% interest in Victoria Gold. Additionally, Coeur established a $100.0
million ATM Program in April 2020 as a means to proactively increase its financial flexibility in response to increased
volatility and uncertainty associated with COVID-19. At the date of this filing, the Company has yet to issue any shares of its
common stock under the ATM Program.
We currently believe we have sufficient sources of funding to meet our business requirements for the next twelve
months and long-term. We expect to use a combination of cash provided by operating activities, borrowings under our RCF and
additional capital leases to fund near term capital requirements, including those described in this Report for POA 11 and in our
2022 capital expenditure guidance. We also have additional potential sources of funding including proceeds from sales under
the ATM program, potential asset sales, and the monetization of our equity investments, including our investment in Victoria
Gold. Our longer-term plans contemplate the expansion and restart of Silvertip, as well as the continued exploration and
potential development of our other projects, such as Crown/Sterling and the Lincoln Hill area adjacent to Rochester.
Coeur now estimates the total construction capital for POA 11 to be approximately $597 million, which includes the
10-15% previously announced potential cost escalation as well as $70 - $80 million related to pre-screen implementation and
additional project contingency to reflect ongoing COVID and schedule risk. As of December 31, 2021, the Company has
incurred approximately $236 million in the expansion and 61% of the capital is now committed (excluding the recently-
awarded SMPEI contract, which is expected to be formalized in the first quarter).
Excluding capital leases, Coeur forecasts capital expenditures related to POA 11 to be approximately $217 - $257
million and $131 - $171 million in 2022 and 2023, respectively. Additional details on expected production and capital
expenditures for Rochester can be found in the Technical Report Summary filed by the Company with the U.S. Securities and
Exchange Commission on February 16, 2022 which is incorporated by reference into this Report.
47
We also have additional obligations as part of our ordinary course of business, beyond those committed for capital
expenditures and other purchase obligations and commitments for purchases of goods and services.
If and to the extent liquidity resources are insufficient to support short- and long-term expenditures, we may need to
incur additional indebtedness or issue additional equity securities, among other financing options, which may not be available
on acceptable terms or at all. This could have a material adverse impact on the Company, as discussed in more detail under Item
1A – Risk Factors.
Cash Provided by Operating Activities
Net cash provided by operating activities for the year ended December 31, 2021 was $110.5 million, compared to
$148.7 million for the year ended December 31, 2020. Adjusted EBITDA for the year ended December 31, 2021 was $210.8
million, compared to $263.4 million for the year ended December 31, 2020 (see “Non-GAAP Financial Performance
Measures”). Net cash provided by operating activities was impacted by the following key factors for the applicable periods:
In thousands
Year Ended December 31,
2021
2020
2019
Cash flow before changes in operating assets and liabilities
$
145,615 $
162,434 $
134,234
Changes in operating assets and liabilities:
Receivables
Prepaid expenses and other
Inventories
Accounts payable and accrued liabilities
(983)
489
(27,628)
(7,011)
(9,463)
(2,621)
(34,538)
32,897
Cash provided by operating activities
$
110,482 $
148,709 $
(2,739)
280
(62,998)
23,103
91,880
Net cash provided by operating activities decreased $38.2 million for the year ended December 31, 2021, primarily
due to lower gold ounces sold (2%), higher operating costs, exploration costs, and mining and income taxes at Palmarejo,
partially offset by a 1% and 21% increase in average realized gold and silver prices, respectively, and higher silver ounces sold
(5%). Revenue for the year ended December 31, 2021 increased by $47.4 million, of which $44.5 million was the result of
higher average realized gold and silver prices and $2.9 million was due to the higher volume of silver sales.
Net cash provided by operating activities increased $56.8 million in the year ended December 31, 2020 compared to
the year ended December 31, 2019, primarily due to a 22% and 29% increase in average realized gold and silver prices,
respectively, and lower metal inventory write-downs at Silvertip, partially offset by lower ounces sold of gold and silver (3%
and 19%, respectively). Revenue for the year ended December 31, 2020 increased by $74.0 million, of which $151.9 million
was the result of higher average realized gold and silver prices, partially offset by a decrease of $77.9 million due to lower
volume of gold and silver sales.
Cash Used in Investing Activities
Net cash used in investing activities in the year ended December 31, 2021 was $304.1 million compared to $65.7
million in the year ended December 31, 2020. Cash used in investing activities increased primarily due to construction activities
related to POA 11 at Rochester and the potential expansion at Silvertip in the current period and the impact of the net proceeds
of $19.4 million from the sale of Metalla Common Shares in the comparable period of 2020. The Company incurred capital
expenditures of $309.8 million in the year ended December 31, 2021 compared with $99.3 million in the year ended December
31, 2020. Capital expenditures in the year ended December 31, 2021 were primarily related to POA 11 construction activities at
Rochester, potential expansion expenditures at Silvertip and underground development at Palmarejo and Kensington. Capital
expenditures in the year ended December 31, 2020 were primarily related to POA 11 at Rochester, which commenced
construction activities during the third quarter, and underground development at Palmarejo and Kensington.
The Company is experiencing inflationary pressures, specifically with respect to building materials and fuel as well as
overall tightness in the construction market related to capital projects, most notably the POA 11 project at Rochester, and to
operating costs company-wide.
48
Net cash used in investing activities in the year ended December 31, 2020 was $65.7 million compared to $92.6
million in the year ended December 31, 2019. Cash used in investing activities decreased primarily due to the net proceeds of
$30.1 million from the sale of the Company’s equity investments. The Company had capital expenditures of $99.3 million in
the year ended December 31, 2020 compared with $99.8 million in the year ended December 31, 2019. Capital expenditures in
the year ended December 31, 2020 were primarily related to POA 11 at Rochester, which commenced construction activities
during the third quarter, and underground development at Palmarejo and Kensington. Capital expenditures in the year ended
December 31, 2019 were primarily related to underground development at Silvertip, Palmarejo, and Kensington, a new
thickener at Palmarejo, POA 11 and the new crushing circuit, including the HPGR unit at Rochester.
Cash Provided by (Used in) Financing Activities
Net cash provided by financing activities in the year ended December 31, 2021 was $158.1 million compared to net
cash used in financing activities of $46.5 million in the year ended December 31, 2020. During the year ended December 31,
2021, the Company received net proceeds of $367.5 million from the issuance of the 2029 Senior Notes, and drew $65.0
million, net, from the RCF, partially offset by the tender and redemption of the 2024 Senior Notes for $238.3 million, including
premiums. As of December 31, 2021, there was $65.0 million drawn under the RCF. During the year ended December 31,
2020, the Company fully repaid the $150.0 million drawn from the RCF during 2020, and paid contingent cash consideration of
$18.8 million associated with the Silvertip acquisition.
The Company secured a finance lease package for nearly $60 million during the year, a portion of which has been
funded as of December 31, 2021. The package is earmarked for planned equipment purchases for the POA 11 project in 2021
and 2022, and has an interest rate of 5.22%.
Net cash used in financing activities in the year ended December 31, 2020 was $46.5 million compared to $60.9
million in the year ended December 31, 2019. During the year ended December 31, 2020, the Company fully repaid the $150.0
million drawn from the RCF during 2020, and paid contingent cash consideration of $18.8 million associated with the Silvertip
acquisition. During the year ended December 31, 2019, the Company repaid $135.0 million, net, of outstanding amounts under
the RCF and paid contingent cash consideration of $18.7 million associated with the Silvertip acquisition, partially offset by net
proceeds of approximately $123.1 million from the sale of 30.9 million shares of its common stock.
Critical Accounting Policies and Accounting Developments
Listed below are the accounting policies that we believe are critical to our financial statements due to the degree of
uncertainty regarding the estimates and assumptions involved and the magnitude of the asset, liability, revenue, and expense
being reported. For a discussion of recent accounting pronouncements, see Note 2 -- Summary of Significant Accounting
Policies in the notes to the Consolidated Financial Statements.
Revenue Recognition
The Company produces doré and concentrate that is shipped to third-party refiners and smelters, respectively, for
processing. The Company enters into contracts to sell its metal to various third-party customers which may include the refiners
and smelters that process the doré and concentrate. The Company’s performance obligation in these transactions is generally the
transfer of metal to the customer.
In the case of doré shipments, the Company generally sells refined metal at market prices agreed upon by both parties.
The Company also has the right, but not the obligation, to sell a portion of the anticipated refined metal in advance of being
fully refined. When the Company sells refined metal or advanced metal, the performance obligation is satisfied when the metal
is delivered to the customer. Revenue and Costs Applicable to Sales are recorded on a gross basis under these contracts at the
time the performance obligation is satisfied.
Under the Company’s concentrate sales contracts with third-party smelters, metal prices are set on a specified future
quotational period, typically one to three months, after the shipment date based on market prices. When the Company sells gold
concentrate to the third-party smelters, the performance obligation is satisfied when risk of loss is transferred to the customer.
The contracts, in general, provide for provisional payment based upon provisional assays and historical metal prices. Final
settlement is based on the applicable price for the specified future quotational period and generally occurs three to six months
after shipment. The Company’s provisionally priced sales contain an embedded derivative that is required to be separated from
the host contract for accounting purposes. The host contract is the receivable from the sale of concentrates measured at the
forward price at the time of sale. The embedded derivative does not qualify for hedge accounting and is adjusted to fair value
through revenue each period until the date of final metal settlement.
The Company also sells concentrate under off-take agreements to third-party customers that are responsible for
arranging the smelting of the concentrate. Prices can either be fixed or based on a quotational period. The quotational period
49
varies by contract, but is generally a one-month period following the shipment of the concentrate. The performance obligation
is satisfied when risk of loss is transferred to the customer.
The Company recognizes revenue from concentrate sales, net of treatment and refining charges, when it satisfies the
performance obligation of transferring control of the concentrate to the customer.
For doré and off-take sales, the Company may incur a finance charge related to advance sales that is not considered
significant and, as such, is not considered a separate performance obligation. In addition, the Company has elected to treat
freight costs as a fulfillment cost under ASC 606 and not as a separate performance obligation.
The Company’s gold stream agreement with Franco-Nevada provided for a $20.0 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 stream 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.
Estimates
The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of
contingent assets and liabilities at the date of its financial statements, the reported amounts of revenue and expenses during the
reporting period, and mined reserves. There can be no assurance that actual results will not differ from those estimates. There
are a number of uncertainties inherent in estimating quantities of reserves, including many factors beyond the Company’s
control. Mineral reserve estimates are based upon engineering evaluations of samplings of drill holes and other openings. These
estimates involve assumptions regarding future silver and gold prices, mine geology, mining methods and the related costs to
develop and mine the reserves. Changes in these assumptions could result in material adjustments to the Company’s reserve
estimates. The Company uses reserve estimates in determining the units-of-production amortization and evaluating mine assets
for potential impairment. For a discussion of estimates and assumptions used by management that affect the reported amount of
assets and liabilities, disclosure of contingent assets and liabilities at the date of its financial statements, the reported amounts of
revenue and expenses during the reporting period, and mined reserves, see Note 2 -- Summary of Significant Accounting
Policies in the notes to the Consolidated Financial Statements.
Amortization
The Company amortizes its property, plant, and equipment, mining properties, and mine development using the units-
of-production method over the estimated life of the ore body generally based on its proven and probable reserves or the straight-
line method over the useful life, whichever is shorter. The accounting estimates related to amortization are critical accounting
estimates because (1) the determination of reserves involves uncertainties with respect to the ultimate geology of its reserves
and the assumptions used in determining the economic feasibility of mining those reserves and (2) changes in estimated proven
and probable reserves and asset useful lives can have a material impact on net income.
Impairment of Long-lived Assets
We review and evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate
that the related carrying amounts may not be recoverable. Asset impairment is considered to exist if the total estimated
undiscounted pretax future cash flows are less than the carrying amount of the asset. In estimating future cash flows, assets are
grouped at the lowest level for which there is identifiable cash flows that are largely independent of future cash flows from
other asset groups. An impairment loss is measured by discounted estimated future cash flows, and recorded by reducing the
asset's carrying amount to fair value. Future cash flows are estimated based on estimated quantities of recoverable minerals,
expected gold, silver, lead and zinc prices (considering current and historical prices, trends and related factors), production
levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans.
During 2019, the Company recorded a non-cash impairment charge of $250.8 million. The write-down was allocated
between Property, plant and equipment, net, Mining properties, net and Other non-current assets, in the amounts of $43.6
million, $201.5 million and $5.7 million, respectively.
Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization other
than proven and probable reserves are included when determining the fair value of mine site asset groups at acquisition and,
subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount
of gold, silver, lead and zinc that will be obtained after taking into account losses during ore processing and treatment.
Estimates of recoverable minerals from exploration stage mineral interests are risk adjusted based on management’s relative
confidence in such materials. The ability to achieve the estimated quantities of recoverable minerals from exploration stage
50
mineral interests involves further risks in addition to those risk factors applicable to mineral interests where proven and
probable reserves have been identified, due to the lower level of confidence that the identified mineral reserves and resources
could ultimately be mined economically. Assets classified as exploration potential have the highest level of risk that the
carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic
modeling.
Gold, silver, zinc and lead prices are volatile and affected by many factors beyond the Company’s control, including
prevailing interest rates and returns on other asset classes, expectations regarding inflation, speculation, currency values,
governmental decisions regarding precious metals stockpiles, global and regional demand and production, political and
economic conditions and other factors may affect the key assumptions used in the Company’s impairment testing. Various
factors could impact our ability to achieve forecasted production levels from proven and probable reserves. Additionally,
production, capital and reclamation costs could differ from the assumptions used in the cash flow models used to assess
impairment. Actual results may vary from the Company’s estimates and result in additional Impairment of Long-lived Assets.
Ore on Leach Pads
The heap leach process is a process of extracting silver and gold by placing ore on an impermeable pad and applying a
diluted cyanide solution that dissolves a portion of the contained silver and gold, which are then recovered in metallurgical
processes. The Company uses several integrated steps to scientifically measure the metal content of ore placed on the leach
pads. As the ore body is drilled in preparation for the blasting process, samples are taken of the drill residue which are assayed
to determine estimated quantities of contained metal. The Company then processes the ore through crushing facilities where the
output is again weighed and sampled for assaying. A metallurgical reconciliation with the data collected from the mining
operation is completed with appropriate adjustments made to previous estimates. The crushed ore is then transported to the
leach pad for application of the leaching solution. As the leach solution is collected from the leach pads, it is continuously
sampled for assaying. The quantity of leach solution is measured by flow meters throughout the leaching and precipitation
process. After precipitation, the product is converted to doré, which is the final product produced by the mine. The inventory is
stated at lower of cost or net realizable value, with cost being determined using a weighted average cost method.
The historical cost of the metal that is expected to be extracted within 12 months is classified as current. Ore on leach
pad is valued based on actual production costs incurred to produce and place ore on the leach pads, less costs allocated to
minerals recovered through the leach process.
The estimate of both the ultimate recovery expected over time and the quantity of metal that may be extracted relative
to the time the leach process occurs requires the use of estimates and relies upon laboratory testwork. Testwork consists of 60-
day leach columns from which the Company projects metal recoveries up to five years in the future. The quantities of metal
contained in the ore are estimated based upon actual weights and assay analysis. The rate at which the leach process extracts
gold and silver from the crushed ore is based upon laboratory column tests and actual experience occurring over more than 20
years of leach pad operations at the Rochester mine. The assumptions used by the Company to measure metal content during
each stage of the inventory conversion process includes estimated recovery rates based on laboratory testing and assaying. The
Company periodically reviews its estimates compared to actual experience and revises its estimates when appropriate. The
ultimate recovery will not be known until leaching operations cease. Variations between actual and estimated quantities
resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for
on a prospective basis. In 2020, the Company revised its recovery rate assumptions in line with the updated technical report for
Rochester filed in December 2020. This change resulted in an adjustment to the ending Ore on leach pads balance with the
resulting charges allocated between Costs Applicable to Sales and Amortization in the amounts of $7.2 million and $1.2
million, respectively. In June 2021, the Company updated the recovery rate assumption on the Stage IV leach pad at Rochester,
based on the historical performance of the leach pad since the third quarter of 2019. This change resulted in an adjustment to the
ending ore on leach pads balance with the resulting non-cash charges allocated between Costs Applicable to Sales and
Amortization in the amounts of $8.6 million and $2.2 million, respectively.
Reclamation
The Company recognizes obligations associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The fair value of a liability for an asset retirement obligation will be recognized in the period in which it
is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying amount of
the associated asset and this additional carrying amount is depreciated over the life of the asset. An accretion cost, representing
the increase over time in the present value of the liability, is recorded each period in Pre-development, Reclamation, and Other.
As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the liability is reduced. Future
remediation costs for inactive mines are accrued based on management’s best estimate at the end of each period of the
discounted costs expected to be incurred at the site. Such cost estimates include, where applicable, ongoing care and
maintenance and monitoring costs. Changes in estimates are reflected in earnings in the period an estimate is revised. See Note
12 -- Reclamation in the notes to the Consolidated Financial Statements for additional information.
51
Derivatives
The Company is exposed to various market risks, including the effect of changes in metal prices and interest rates, and
uses derivatives to manage financial exposures that occur in the normal course of business. The Company may elect to
designate certain derivatives as hedging instruments under U.S. GAAP.
The Company, from time to time, uses derivative contracts to protect the Company’s exposure to fluctuations in metal
prices. The Company has elected to designate these instruments as cash flow hedges of forecasted transactions at their
inception. Assuming normal market conditions, the change in the market value of such derivative contracts has historically
been, and is expected to continue to be, highly effective at offsetting changes in price movements of the hedged item. For
derivatives not designated as hedging instruments, the Company recognizes derivatives as either assets or liabilities on the
balance sheet and measures those instruments at fair value. Changes in the value of derivative instruments not designated as
hedging instruments are recorded each period in the Consolidated Statement of Comprehensive Income (Loss) in Fair value
adjustments, net or Revenue. Management applies judgment in estimating the fair value of instruments that are highly sensitive
to assumptions regarding commodity prices, market volatilities, and foreign currency exchange rates.
Income and Mining Taxes
The Company accounts for income taxes in accordance with the guidance of ASC 740. The Company’s annual tax rate
is based on income, statutory tax rates in effect and tax planning opportunities available to us in the various
jurisdictions in which the Company operates. Significant judgment is required in determining the annual tax expense, current
tax assets and liabilities, deferred tax assets and liabilities, and our future taxable income, both as a whole and in various tax
jurisdictions, for purposes of assessing our ability to realize future benefit from our deferred tax assets. Actual income taxes
could vary from these estimates due to future changes in income tax law, significant changes in the jurisdictions in which we
operate or unpredicted results from the final determination of each year’s liability by taxing authorities.
The Company’s deferred income taxes reflect the impact of temporary differences between the reported amounts of
assets and liabilities for financial reporting purposes and such amounts measured by tax laws and regulations. In evaluating the
realizability of the deferred tax assets, management considers both positive and negative evidence that may exist, such as
earnings history, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies
in each tax jurisdiction. A valuation allowance may be established to reduce our deferred tax assets to the amount that is
considered more likely than not to be realized through the generation of future taxable income and other tax planning strategies.
The Company has asserted indefinite reinvestment of earnings from its Mexican operations as determined by
management’s judgment about and intentions concerning the future operations of the Company. The Company does not record
a U.S. deferred tax liability for foreign earnings that meet the indefinite reversal criteria. Refer to Note 13 -- Income and Mining
Taxes for further discussion on our assertion.
The Company’s operations may involve dealing with uncertainties and judgments in the application of complex tax
regulations in multiple jurisdictions. The final taxes paid are dependent upon many factors, including negotiations with taxing
authorities in various jurisdictions and resolution of disputes arising from federal, state, and international tax audits. The
Company recognizes potential liabilities and records tax liabilities for anticipated tax audit issues in the United States and other
tax jurisdictions based on its estimate of whether, and the extent to which, additional taxes will be due. The Company adjusts
these reserves in light of changing facts and circumstances, such as the progress of a tax audit; however, due to the complexity
of some of these uncertainties, the ultimate resolution could result in a payment that is materially different from our current
estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period
which they are determined. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in
income tax expense.
Other Liquidity Matters
We believe that our liquidity and capital resources in the U.S. are adequate to fund our U.S. operations and corporate
activities. The Company has asserted indefinite reinvestment of earnings from its Mexican operations as determined by
management’s judgment about and intentions concerning the future operations of the Company. The Company does not believe
that the amounts reinvested will have a material impact on liquidity.
In order to reduce indebtedness, fund future cash interest payments and/or amounts due at maturity or upon redemption
and for general working capital purposes, from time-to-time we may (1) issue equity securities for cash in public or private
offerings or (2) repurchase certain of our debt securities for cash or in exchange for other securities, which may include secured
or unsecured notes or equity, in each case in open market or privately negotiated transactions. We evaluate any such
transactions in light of prevailing market conditions, liquidity requirements, contractual restrictions, and other factors. The
52
amounts involved may be significant and any debt repurchase transactions may occur at a substantial discount to the debt
securities’ face amount.
Non-GAAP Financial Performance Measures
Non-GAAP financial measures are intended to provide additional information only and do not have any standard
meaning prescribed by generally accepted accounting principles (“GAAP”). Unless otherwise noted, we present the Non-GAAP
financial measures in the tables below. These measures should not be considered in isolation or as a substitute for performance
measures prepared in accordance with GAAP.
Adjusted Net Income (Loss)
Management uses Adjusted net income (loss) to evaluate the Company’s operating performance, and to plan and
forecast its operations. The Company believes the use of Adjusted net income (loss) reflects the underlying operating
performance of our core mining business and allows investors and analysts to compare results of the Company to similar results
of other mining companies. Management’s determination of the components of Adjusted net income (loss) are evaluated
periodically and is based, in part, on a review of non-GAAP financial measures used by mining industry analysts. The tax effect
of adjustments are based on statutory tax rates and the Company’s tax attributes, including the impact through the Company’s
valuation allowance. The combined effective rate of tax adjustments may not be consistent with the statutory tax rates or the
Company’s effective tax rate due to jurisdictional tax attributes and related valuation allowance impacts which may minimize
the tax effect of certain adjustments and may not apply to gains and losses equally. Adjusted net income (loss) is reconciled to
Net income (loss) in the following table:
In thousands except per share amounts
Net income (loss)
(Income) loss from discontinued operations, net of tax
Fair value adjustments, net
Foreign exchange loss (gain)
(Gain) loss on sale of assets and securities
Impairment of long-lived assets
VAT write-off
Loss on debt extinguishment
Silvertip inventory write-down
Wharf inventory write-down
Silvertip suspension costs
Silvertip lease modification
Silvertip gain on contingent consideration
Novation
COVID-19 costs
Receivable write-down
Interest income on notes receivables
Tax effect of adjustments(1)
Adjusted net income (loss)
Adjusted net income (loss) per share - Basic
Adjusted net income (loss) per share - Diluted
Year Ended December 31,
2021
2020
2019
$
(31,322) $
25,627 $
(341,203)
—
543
1,994
(4,111)
—
25,982
9,173
—
—
—
—
—
—
6,618
—
—
(10,270)
—
(7,601)
(69)
2,484
—
—
—
13,717
3,323
7,164
(4,051)
(955)
3,819
15,555
—
—
—
$
$
$
(1,393) $
59,013 $
(0.01) $
(0.01) $
0.25 $
0.24 $
(5,693)
(16,030)
5,900
714
250,814
—
1,282
64,610
3,596
—
—
—
—
—
1,040
(198)
(19,415)
(54,583)
(0.25)
(0.25)
(1) For the year ended December 31, 2021, tax effect of adjustments of $10.3 million (-27%) is primarily related to the VAT write-off. For the year ended
December 31, 2019, tax effect of adjustments of $19.4 million (-6%) is primarily related to the write-down of Silvertip inventory.
53
EBITDA and Adjusted EBITDA
Management uses EBITDA to evaluate the Company’s operating performance, to plan and forecast its operations, and
assess leverage levels and liquidity measures. The Company believes the use of EBITDA reflects the underlying operating
performance of our core mining business and allows investors and analysts to compare results of the Company to similar results
of other mining companies. Adjusted EBITDA is a measure used in indenture governing the 2029 Senior Notes and the RCF to
determine our ability to make certain payments and incur additional indebtedness. EBITDA and Adjusted EBITDA do not
represent, and should not be considered an alternative to, Net income (Loss) or Cash Flow from Operations as determined under
GAAP. Other companies may calculate Adjusted EBITDA differently and those calculations may not be comparable to our
presentation. Adjusted EBITDA is reconciled to Net income (loss) in the following table:
In thousands except per share amounts
Net income (loss)
(Income) loss from discontinued operations, net of tax
Interest expense, net of capitalized interest
Income tax provision (benefit)
Amortization
EBITDA
Fair value adjustments, net
Foreign exchange (gain) loss
Asset retirement obligation accretion
Inventory adjustments and write-downs
(Gain) loss on sale of assets and securities
Impairment of long-lived assets
VAT write-off
Loss on debt extinguishment
Silvertip inventory write-down
Silvertip suspension costs
Silvertip lease modification
Silvertip gain on contingent consideration
COVID-19 costs
Novation
Wharf inventory write-down
Receivable write-down
Interest income on notes receivables
Adjusted EBITDA
Free Cash Flow
Year Ended December 31,
2021
2020
2019
$
(31,322) $
25,627 $
(341,203)
—
16,451
34,958
128,315
148,402
543
2,779
11,988
9,471
(4,111)
—
25,982
9,173
—
—
—
—
6,618
—
—
—
—
—
20,708
37,045
131,387
214,767
(7,601)
2,245
11,754
1,144
2,484
—
—
—
13,717
7,164
(4,051)
(955)
15,555
3,819
3,323
—
—
(5,693)
24,771
(11,129)
178,876
(154,378)
(16,030)
4,346
12,154
5,904
714
250,814
—
1,282
64,610
—
—
—
—
—
3,596
1,040
(198)
$
210,845 $
263,365 $
173,854
Management uses Free Cash Flow as a non-GAAP measure to analyze cash flows generated from operations. Free
Cash Flow is Cash Provided By (used in) Operating Activities less Capital expenditures as presented on the Consolidated
Statements of Cash Flows. The Company believes Free Cash Flow is also useful as one of the bases for comparing the
Company’s performance with its competitors. Although Free Cash Flow and similar measures are frequently used as measures
of cash flows generated from operations by other companies, the Company’s calculation of Free Cash Flow is not necessarily
comparable to such other similarly titled captions of other companies.
The following table sets forth a reconciliation of Free Cash Flow, a non-GAAP financial measure, to Cash Provided
By (used in) Operating Activities, which the Company believes to be the GAAP financial measure most directly comparable to
Free Cash Flow.
54
(Dollars in thousands)
Cash flow from operations
Capital expenditures
Free cash flow
Year Ended December 31,
2021
2020
2019
$
$
110,482 $
148,709 $
309,781
99,279
(199,299) $
49,430 $
91,880
99,772
(7,892)
Operating Cash Flow Before Changes in Working Capital
Management uses Operating Cash Flow Before Changes in Working Capital as a non-GAAP measure to analyze cash
flows generated from operations. Operating Cash Flow Before Changes in Working Capital is Cash Provided By (used in)
Operating Activities excluding the change in Receivables, Prepaid expenses and other, Inventories and Accounts payable and
accrued liabilities as presented on the Consolidated Statements of Cash Flows. The Company believes Operating Cash Flow
Before Changes in Working Capital is also useful as one of the bases for comparing the Company’s performance with its
competitors. Although Operating Cash Flow Before Changes in Working Capital and similar measures are frequently used as
measures of cash flows generated from operations by other companies, the Company’s calculation of Operating Cash Flow
Before Changes in Working Capital is not necessarily comparable to such other similarly titled captions of other companies.
The following table sets forth a reconciliation of Operating Cash Flow Before Changes in Working Capital, a non-
GAAP financial measure, to Cash Provided By (used in) Operating Activities, which the Company believes to be the GAAP
financial measure most directly comparable to Operating Cash Flow Before Changes in Working Capital.
(Dollars in thousands)
Cash provided by (used in) operating activities
Changes in operating assets and liabilities:
Receivables
Prepaid expenses and other
Inventories
Accounts payable and accrued liabilities
Operating cash flow before changes in working capital
$
Costs Applicable to Sales
Year Ended December 31,
2021
2020
2019
$
110,482 $
148,709 $
91,880
983
(489)
27,628
7,011
145,615 $
9,463
2,621
34,538
(32,897)
162,434 $
2,739
(280)
62,998
(23,103)
134,234
Management uses CAS to evaluate the Company’s current operating performance and life of mine performance from
discovery through reclamation. We believe these measures assist analysts, investors and other stakeholders in understanding the
costs associated with producing gold, silver, zinc and lead, assessing our operating performance and ability to generate free cash
flow from operations and sustaining production. These measures may not be indicative of operating profit or cash flow from
operations as determined under GAAP. Management believes that allocating CAS to gold, silver, zinc and lead based on gold,
silver, zinc and lead metal sales relative to total metal sales best allows management, analysts, investors and other stakeholders
to evaluate the operating performance of the Company. Other companies may calculate CAS differently as a result of reflecting
the benefit from selling non-silver metals as a by-product credit, converting to silver equivalent ounces, and differences in
underlying accounting principles and accounting frameworks such as in International Financial Reporting Standards.
55
Year Ended December 31, 2021
In thousands (except metal sales, per ounce and per pound
amounts)
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including amortization (U.S. GAAP)
$
189,717
$
151,427
$
187,998
$
104,617
Amortization
Costs applicable to sales
(36,062)
(20,187)
(54,933)
(11,038)
$
153,655
$
131,240
$
133,065
$
93,579
$
$
4,797
(4,797)
—
$
$
638,556
(127,017)
511,539
Metal Sales
Gold ounces
Silver ounces
Zinc pounds
Lead pounds
Costs applicable to sales
Gold ($/oz)
Silver ($/oz)
Zinc ($/lb)
Lead ($/lb)
108,806
27,697
122,181
6,805,816
3,241,624
—
91,663
86,397
$
$
664
11.97
$
$
1,801
25.10
$
1,086
$
997
350,347
10,133,837
—
—
—
—
—
—
—
—
$
$
$
Year Ended December 31, 2020
In thousands (except metal sales, per ounce and per pound
amounts)
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including amortization (U.S. GAAP)
$
170,077
$
100,418
$
171,204
$
102,108
Amortization
Costs applicable to sales
(44,873)
(14,306)
(49,477)
(12,473)
$
125,204
$
86,112
$
121,727
$
89,635
$
$
26,580
(8,923)
17,657
$
$
570,387
(130,052)
440,335
Metal Sales
Gold ounces
Silver ounces
Zinc pounds
Lead pounds
Costs applicable to sales
Gold ($/oz)
Silver ($/oz)
Zinc ($/lb)
Lead ($/lb)
110,822
26,257
124,793
6,301,516
3,054,139
94,379
113,790
158,984
3,203,446
2,453,485
356,251
9,628,429
3,203,446
2,453,485
$
$
610
9.14
$
$
1,377
16.35
$
975
$
923
NM (1)
NM (1)
NM (1)
(1) Due to the suspension of mining and processing activities these amounts are not meaningful.
56
Year Ended December 31, 2019
In thousands (except metal sales, per ounce and per pound
amounts)
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Total
Costs applicable to sales, including amortization (U.S. GAAP)
$
201,306
$
118,246
$
170,194
Amortization
Costs applicable to sales
(59,379)
(18,041)
(50,592)
$
141,927
$
100,205
$
119,602
$
$
92,969
$
145,496
(12,280)
(36,738)
80,689
$
108,758
$
$
728,211
(177,030)
551,181
Metal Sales
Gold ounces
Silver ounces
Zinc pounds
Lead pounds
Costs applicable to sales
Gold ($/oz)
Silver ($/oz)
Zinc ($/lb)
Lead ($/lb)
116,104
36,052
130,495
6,841,380
3,844,556
84,999
64,161
1,164,470
18,154,521
16,487,847
367,650
11,914,567
18,154,521
16,487,847
$
$
685
9.13
$
$
1,251
14.34
$
917
$
937
$
$
$
31.92
2.34
1.76
Reconciliation of Costs Applicable to Sales for 2022 Guidance
In thousands (except metal sales, per ounce or per pound
amounts)
Costs applicable to sales, including amortization (U.S. GAAP)
Amortization
Costs applicable to sales
By-product credit
Adjusted costs applicable to sales
Palmarejo
Rochester
Kensington
Wharf
$
$
$
211,800
$
(34,183)
177,617
$
—
148,540
$
(20,094)
128,446
$
—
185,494
$
(48,763)
136,731
$
—
177,617
$
128,446
$
136,731
$
Metal Sales
Gold ounces
Silver ounces
Revenue Split
Gold
Silver
Adjusted costs applicable to sales
Gold ($/oz)
Silver ($/oz)
105,255
6,501,289
38,912
3,405,155
116,502
49%
51%
46%
54%
100%
100%
$750 - $850
$13.50 - $14.50
$1,490 - $1,590
$20.75 - $22.75
$1,150 - $1,250
$1,225 - $1,325
106,175
(8,378)
97,797
(1,802)
95,995
75,261
75,093
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to various market risks as a part of its operations and engages in risk management strategies
to mitigate these risks. The Company continually evaluates the potential benefits of engaging in these strategies based on
current market conditions. The Company does not actively engage in the practice of trading derivative instruments for profit.
Additional information about the Company’s derivative financial instruments may be found in Note 16 -- Derivative Financial
Instruments in the notes to the Consolidated Financial Statements. This discussion of the Company’s market risk assessments
contains “forward looking statements”. For additional information regarding forward-looking statements and risks and
uncertainties that could impact the Company, please refer to Item 2 of this Report - Cautionary Statement Concerning Forward-
Looking Statements. Actual results and actions could differ materially from those discussed below.
Gold, Silver, Zinc and Lead Prices
Gold, silver, zinc and lead prices may fluctuate widely due to numerous factors, such as U.S. dollar strength or
weakness, demand, investor sentiment, inflation or deflation, and global mine production. The Company’s profitability and cash
flow may be significantly impacted by changes in the market price of gold, silver, zinc and lead.
57
Hedging
To mitigate the risks associated with metal price fluctuations, the Company may enter into option contracts to hedge
future production. The Company had outstanding Asian put and call option contracts in net-zero-cost collar contracts on
132,000 ounces of gold at December 31, 2021 that settle monthly through December 2022. The Company is targeting to hedge
up to 70% of expected gold production through 2022 in order to protect cash flow during a period of elevated capital
expenditures, and may in the future layer on additional hedges as circumstances warrant. The weighted average strike prices on
the put and call contracts are $1,630 and $2,038 per ounce of gold, respectively. The contracts are generally net cash settled
and, if the price of gold at the time of the expiration is between the put and call prices, would expire at no cost to the Company.
These Asian put and call option contracts expose us to (i) credit risk in the form of non-performance by counterparties for
contracts in which the contract price exceeds the spot price of a commodity, (ii) price risk to the extent that the spot price
exceeds the contract price for quantities of our production covered under contract positions; and (iii) liquidity risk to the extent
counterparties exercise rights to cash collateral for out-of-money hedges under applicable instruments. To reduce counter-party
credit exposure, the Company enters into contracts with institutions management deems credit-worthy and limits credit
exposure to each institution. The Company does not anticipate non-performance by any of its counterparties. For additional
information, please see the section titled “Risk Factors” in the 2021 10-K and part II, Item 1A of this report.
At December 31, 2021, the fair value of the put and call zero cost collars contracts was a liability of $1.2 million. For
the year ended December 31, 2021 the Company recognized a loss of $0.9 million related to expired options in Revenue and the
remaining outstanding options were included in accumulated other comprehensive income (loss). A 10% increase in the price of
gold at December 31, 2021 would result in a realized loss of $1.7 million and 10% decrease would result in a realized gain of
$2.3 million. As of December 31, 2021, the closing price of gold was $1,806 per ounce. As of February 14, 2022, the closing
price of gold was $1,866 per ounce.
Provisional Metal Sales
The Company enters into sales contracts with third-party smelters and refiners which, in some cases, provide for a
provisional payment based upon preliminary assays and quoted metal prices. The provisionally priced sales contracts contain an
embedded derivative that is required to be separated from the host contract. Depending on the difference between the price at
the time of sale and the final settlement price, embedded derivatives are recorded as either a derivative asset or liability. The
embedded derivatives do not qualify for hedge accounting and, as a result, are marked to the market gold and silver price at the
end of each period from the provisional sale date to the date of final settlement. The mark-to-market gains and losses are
recorded in earnings. At December 31, 2021, the Company had outstanding provisionally priced sales of 16,393 ounces of gold
at an average price of $1,798. Changes in gold prices resulted in provisional pricing mark-to-market loss of $0.5 million during
the year ended December 31, 2021. A 10% change in realized gold prices would cause revenue to vary by $2.9 million.
Foreign Currency
The Company operates, or has mineral interests, in several foreign countries including Canada, Mexico, and New
Zealand, which exposes it to foreign currency exchange rate risks. Foreign currency exchange rates are influenced by world
market factors beyond the Company’s control such as supply and demand for U.S. and foreign currencies and related monetary
and fiscal policies. Fluctuations in local currency exchange rates in relation to the U.S. dollar may significantly impact
profitability and cash flow.
Foreign Exchange Hedging
To manage foreign currency risk, the Company may enter into foreign currency forward exchange contracts. In 2020,
the Company entered into foreign currency forward contracts to manage this risk and designated these instruments as cash flow
hedges of forecasted foreign denominated transactions. The Company had no outstanding foreign currency forward exchange
contracts at December 31, 2021.
Interest Rates
Interest Rate Hedging
We may use financial instruments to manage exposures to changes in interest rates on loans, which exposes us to
credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract.
When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair
value of a derivative contract is negative, we owe the counterparty and, therefore, it does not pose credit risk. We seek to
minimize the credit risk in derivative instruments by entering into transactions with what we believe are high-quality
counterparties. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest
rates. The Company had no outstanding interest rate swaps at December 31, 2021.
58
Investment Risk
Equity Price Risk
We are exposed to changes in the fair value of our investments in equity securities. For the year ended December 31,
2021, the Company recognized unrealized losses of $11.2 million in Fair value adjustments, net due to decreases in the stock
price of those equity securities. At December 31, 2021, the fair value of the equity securities was $132.2 million. A 10% change
in realized equity prices would result in an unrealized gain or loss of $13.2 million.
Item 8.
Financial Statements and Supplementary Data
59
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Coeur Mining, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Coeur Mining, Inc. (a Delaware corporation) and
subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of comprehensive income
(loss), changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and
the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in
all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations
and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles
generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in
the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”), and our report dated February 16, 2022 expressed an unqualified opinion.
Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that
are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and
we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on
the accounts or disclosures to which they relate.
Ore on Leach Pads – Rochester mine
As described further in Notes 2 and 6 to the consolidated financial statements, the Company’s ore on leach pads balance of
$154 million which includes the Rochester mine for a total of $130 million at December 31, 2021. This is a current balance of
$58 million and a non-current balance of $72 million. The measurement and valuation of the ore on leach pads balance involves
significant management estimates and assumptions related to the measure of metal content of ore placed on the leach pads,
including recovery rates and ore grades. The balance is determined based on actual production costs incurred to produce and
place ore on the leach pads, less costs allocated to minerals recovered through the leach process. The historical cost of metal
expected to be extracted within twelve months is classified as current on the balance sheet. We identified the measurement and
valuation for the ore on leach pads for
the Rochester mine as a critical audit matter.
The principal considerations for our determination that Rochester’s ore on leach pads is a critical audit matter are that certain
management assumption are complex and have a higher degree of estimation uncertainty that changes in these assumptions
60
could have a significant impact on the balance. In turn, auditing Rochester’s ore on leach pads requires significant auditor
judgement.
Our audit procedures related to Rochester’s ore on leach pads included the following, among others.
• We obtained and tested Rochester’s 2021 roll forward of the estimated ounces and costs added to, recovered from, and
the resulting ending amounts of ounces and costs of the ore on leach pads balance, including testing of certain
assumptions, such as recovery rates and ore grades.
•
For the roll forward of estimated ounces, we assessed the completeness and accuracy of mining production
information, including tests of daily tonnage processed.
• We evaluated management’s laboratory procedures related to assay testing used to estimate ore grade.
• We evaluated the Company’s use of specialists and their qualifications and experience related to their input on the
recovery rates, including the updated recovery rates, and ore grades estimates used by management in its calculation of
ore on leach pads.
• We assessed the estimated timing of recoveries, which management uses in classifying current and non-current
portions of the ore on leach pads balance.
• We tested the effectiveness of management’s controls over mining production information, estimating the recovery
rates, ore grades, and inventory roll forward related to recording Rochester’s balance of ore on leach pads.
/s/ Grant Thornton LLP
We have served as the Company’s auditor since 2016.
Chicago, Illinois
February 16, 2022
61
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Coeur Mining, Inc.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Coeur Mining, Inc. (a Delaware corporation) and subsidiaries
(the “Company”) as of December 31, 2021, based on criteria established in the 2013 Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on
criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2021, and our
report dated February 16, 2022 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report
on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control
over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk
that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Grant Thornton LLP
Chicago, Illinois
February 16, 2022
62
COEUR MINING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
Notes
In thousands, except share data
December 31, 2021
December 31, 2020
$
56,664 $
CURRENT ASSETS
Cash and cash equivalents
Receivables
Inventory
Ore on leach pads
Prepaid expenses and other
Assets held for sale
NON-CURRENT ASSETS
Property, plant and equipment, net
Mining properties, net
Ore on leach pads
Restricted assets
Equity securities
Receivables
Other
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable
Accrued liabilities and other
Debt
Reclamation
Liabilities held for sale
NON-CURRENT LIABILITIES
Debt
Reclamation
Deferred tax liabilities
Other long-term liabilities
5
6
6
22
8
9
6
7
5, 17
$
$
21
10,11
12
22
10,11
12
COMMITMENTS AND CONTINGENCIES
20
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share; authorized 300,000,000
shares, 256,919,803 issued and outstanding at December 31, 2021
and 243,751,283 at December 31, 2020
Additional paid-in capital
Accumulated other comprehensive income (loss)
Accumulated deficit
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
32,417
51,281
81,128
13,847
54,240
289,577
319,967
852,799
73,495
9,138
132,197
—
57,249
92,794
23,484
51,210
74,866
27,254
—
269,608
230,139
716,790
81,963
9,492
12,943
26,447
56,595
1,734,422 $
1,403,977
103,901 $
87,946
29,821
2,931
11,269
235,868
457,680
178,957
21,969
39,686
698,292
90,577
119,158
22,074
2,299
—
234,108
253,427
136,975
34,202
51,786
476,390
2,569
3,738,347
(1,212)
(2,939,442)
800,262
1,734,422 $
2,438
3,610,297
(11,136)
(2,908,120)
693,479
1,403,977
The accompanying notes are an integral part of these Consolidated Financial Statements.
63
COEUR MINING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Revenue
COSTS AND EXPENSES
Costs applicable to sales(1)
Amortization
General and administrative
Exploration
Impairment of long-lived assets
Pre-development, reclamation, and other
Total costs and expenses
OTHER INCOME (EXPENSE), NET
Loss on debt extinguishment
Fair value adjustments, net
Interest expense, net of capitalized interest
Other, net
Total other income (expense), net
Income (loss) before income and mining taxes
Income and mining tax (expense) benefit
Income (loss) from continuing operations
Income (loss) from discontinued operations
NET INCOME (LOSS)
OTHER COMPREHENSIVE INCOME (LOSS):
Change in fair value of derivative contracts designated as cash
flow hedges
Reclassification adjustments for realized (gain) loss on cash
flow hedges
Unrealized gain (loss) on debt and equity securities
Other comprehensive income (loss)
COMPREHENSIVE INCOME (LOSS)
NET INCOME (LOSS) PER SHARE
Basic income (loss) per share:
Net income (loss) from continuing operations
Net income (loss) from discontinued operations
Basic
Diluted income (loss) per share:
Net income (loss) from continuing operations
Net income (loss) from discontinued operations
Diluted
(1) Excludes amortization.
Year Ended December 31,
2021
2020
2019
Notes
In thousands, except share data
$
832,828 $
785,461 $
711,502
511,539
128,315
40,399
51,169
—
48,678
780,100
(9,173)
(543)
(16,451)
(22,925)
(49,092)
3,636
(34,958)
(31,322) $
—
440,335
131,387
33,722
42,643
—
55,654
703,741
—
7,601
(20,708)
(5,941)
(19,048)
62,672
(37,045)
551,181
178,876
34,493
22,527
250,814
18,421
1,056,312
(1,281)
16,030
(24,771)
(3,193)
(13,215)
(358,025)
11,129
25,627 $
(346,896)
—
5,693
(31,322) $
25,627 $
(341,203)
$
$
22,783
(12,434)
(136)
(12,859)
—
9,924
1,434
—
(11,000)
—
59
(77)
$
(21,398) $
14,627 $
(341,280)
3
3
17
11
15
11
17
13
23
18
$
$
$
$
(0.13) $
—
(0.13) $
(0.13) $
—
(0.13) $
0.11 $
—
0.11 $
0.11 $
—
0.11 $
(1.59)
0.03
(1.56)
(1.59)
0.03
(1.56)
The accompanying notes are an integral part of these Consolidated Financial Statements.
64
COEUR MINING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
(Income) loss from discontinued operations
Adjustments:
Amortization
Accretion
Deferred taxes
Loss on debt extinguishment
Fair value adjustments, net
Stock-based compensation
Gain on modification of right of use lease
Impairment of long-lived assets
Write-downs
Deferred revenue recognition
Other
Changes in operating assets and liabilities:
Receivables
Prepaid expenses and other current assets
Inventory and ore on leach pads
Accounts payable and accrued liabilities
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
Proceeds from the sale of assets
Purchase of investments
Sale of investments
Proceeds from notes receivable
Other
Year Ended December 31,
2021
Notes
2020
In thousands
2019
$
(31,322) $
25,627 $
(341,203)
—
—
(5,693)
11
15
14
4
20
128,315
12,897
(10,932)
9,173
543
13,660
—
—
38,596
(16,226)
911
(983)
489
(27,628)
(7,011)
110,482
(309,781)
6,824
(1,955)
935
—
(99)
131,387
11,984
(7,283)
—
(7,634)
8,548
(4,051)
—
16,821
(16,702)
3,737
(9,463)
(2,621)
(34,538)
32,897
148,709
(99,279)
5,529
(2,500)
30,831
—
(252)
178,876
12,147
(36,817)
1,281
(16,030)
9,189
—
250,814
69,246
(1,857)
14,281
(2,739)
280
(62,998)
23,103
91,880
(99,772)
1,033
(5,023)
2,109
7,168
1,919
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
(304,076)
(65,671)
(92,566)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock
Issuance of notes and bank borrowings, net of issuance costs
Payments on debt, finance leases, and associated costs
Silvertip contingent consideration
Other
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
Effect of exchange rate changes on cash and cash equivalents
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS
AND RESTRICTED CASH
Cash, cash equivalents and restricted cash at beginning of
period
18
11
10,11
20
—
592,493
(430,101)
—
(4,256)
158,136
(423)
(35,881)
94,170
—
150,000
(175,984)
(18,750)
(1,801)
(46,535)
649
37,152
57,018
Cash, cash equivalents and restricted cash at end of period
$
58,289 $
94,170 $
The accompanying notes are an integral part of these Consolidated Financial Statements.
123,059
60,000
(221,854)
(18,697)
(3,404)
(60,896)
531
(61,051)
118,069
57,018
65
COEUR MINING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
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, 2018
203,310 $
2,033 $ 3,443,082 $ (2,592,544) $
(59) $
852,512
Net income (loss)
Other comprehensive income (loss)
Common stock issued for the extinguishment
of Senior Notes
Common stock issued under "at the market"
stock offering
Common stock issued for Silvertip contingent
consideration payment
Common stock issued/canceled under long-
term incentive plans and director fees and
options, net
—
—
4,453
—
—
45
—
—
21,246
30,850
309
122,523
953
1,963
8
20
5,965
5,656
(341,203)
—
—
—
—
—
—
(77)
—
—
—
—
(341,203)
(77)
21,291
122,832
5,973
5,676
Balances at December 31, 2019
241,529 $
2,415 $ 3,598,472 $ (2,933,747) $
(136) $
667,004
Net income (loss)
Other comprehensive income (loss)
Common stock issued for Silvertip contingent
consideration payment
Common stock issued/canceled under long-
term incentive plans and director fees and
options, net
—
—
878
1,345
—
—
9
14
—
—
5,286
6,539
25,627
—
25,627
—
—
—
(11,000)
(11,000)
—
—
5,295
6,553
Balances at December 31, 2020
243,752 $
2,438 $ 3,610,297 $ (2,908,120) $
(11,136) $
693,479
Net income (loss)
Other comprehensive income (loss)
Common stock issued for investment
Common stock issued/canceled under long-
term incentive plans and director fees and
options, net
—
—
12,786
381
—
—
128
3
—
—
118,649
9,401
(31,322)
—
—
—
9,924
(31,322)
9,924
118,777
—
9,404
Balances at December 31, 2021
256,919 $
2,569 $ 3,738,347 $ (2,939,442) $
(1,212) $
800,262
The accompanying notes are an integral part of these Consolidated Financial Statements.
66
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 1 - THE COMPANY
Coeur Mining, Inc. (“Coeur” or the “Company”) is primarily a gold and silver producer with assets in the United States,
Mexico and Canada. Coeur was incorporated as an Idaho corporation in 1928 under the name Coeur d’Alene Mines
Corporation and on May 16, 2013, changed its state of incorporation from the State of Idaho to the State of Delaware and
changed its name to Coeur Mining, Inc. Coeur’s corporate headquarters are in Chicago, Illinois.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Risks and uncertainties
As a mining company, the revenue, profitability and future rate of growth of the Company are substantially dependent
on the prevailing prices for gold, silver, zinc and lead. The prices of these metals are volatile and affected by many factors
beyond the Company’s control, including prevailing interest rates and returns on other asset classes, expectations regarding
inflation, speculation, currency values, governmental decisions regarding precious metals stockpiles, global and regional
demand and production, political and economic conditions and other factors. A substantial or extended decline in commodity
prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows, access to
capital and the quantities of reserves that the Company can economically produce. Further, the carrying value of the Company’s
property, plant and equipment, net; mining properties, net; inventories and ore on leach pads are particularly sensitive to the
outlook for commodity prices. A decline in the Company’s price outlook from current levels could result in material
impairment charges related to these assets.
Use of Estimates
The Company's Consolidated Financial Statements have been prepared in accordance with United States Generally
Accepted Accounting Principles. 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.
Principles of Consolidation
The Consolidated Financial Statements include the wholly-owned subsidiaries of the Company, the most significant of
which are Coeur Mexicana S.A. de C.V., Coeur Rochester, Inc., Coeur Alaska, Inc., Wharf Resources (U.S.A.), Inc., and Coeur
Silvertip Holdings Ltd. All intercompany balances and transactions have been eliminated.
Cash and Cash Equivalents
Cash and cash equivalents include all highly-liquid investments with an original maturity of three months or less. The
Company minimizes its credit risk by investing its cash and cash equivalents with major U.S. and international banks and
financial institutions located principally in the United States with a minimum credit rating of A1, as defined by Standard &
Poor’s. The Company’s management believes that no concentration of credit risk exists with respect to the investment of its
cash and cash equivalents. At certain times, amounts on deposit may exceed federal deposit insurance limits.
Receivables
Trade receivables and other receivable balances are reported at outstanding principal amounts, net of an allowance for
doubtful accounts, if deemed necessary. Management evaluates the collectability of receivable account balances to determine
the allowance, if any. Management considers the other party's credit risk and financial condition, as well as current and
projected economic and market conditions, in determining the amount of the allowance. Receivable balances are written off
when management determines that the balance is uncollectible.
Ore on Leach Pads
The heap leach process extracts silver and gold by placing ore on an impermeable pad and applying a diluted cyanide
solution that dissolves a portion of the contained silver and gold, which are then recovered in metallurgical processes.
67
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The Company uses several integrated steps to scientifically measure the metal content of ore placed on the leach pads.
As the ore body is drilled in preparation for the blasting process, samples are taken of the drill residue which are assayed to
determine estimated quantities of contained metal. The Company then processes the ore through crushing facilities where the
output is again weighed and sampled for assaying. A metallurgical reconciliation with the data collected from the mining
operation is completed with appropriate adjustments made to previous estimates. The crushed ore is then transported to the
leach pad for application of the leaching solution. As the leach solution is collected from the leach pads, it is continuously
sampled for assaying. The quantity of leach solution is measured by flow meters throughout the leaching and precipitation
process. After precipitation, the product is converted to doré at the Rochester mine and a form of gold concentrate at the Wharf
mine, representing the final product produced by each mine. The inventory is stated at lower of cost or net realizable value, with
cost being determined using a weighted average cost method.
The historical cost of metal expected to be extracted within 12 months is classified as current and the historical cost of
metals contained within the broken ore expected to be extracted beyond 12 months is classified as non-current. Ore on leach
pads is valued based on actual production costs incurred to produce and place ore on the leach pad, less costs allocated to
minerals recovered through the leach process.
The estimate of both the ultimate recovery expected over time and the quantity of metal that may be extracted relative
to the time the leach process occurs requires the use of estimates, which are inherently inaccurate due to the nature of the
leaching process. The quantities of metal contained in the ore are based upon actual weights and assay analysis. The rate at
which the leach process extracts gold and silver from the crushed ore is based upon laboratory testing and actual experience of
more than 20 years of leach pad operations at the Rochester mine and 30 years of leach pad operations at the Wharf mine. The
assumptions used by the Company to measure metal content during each stage of the inventory conversion process includes
estimated recovery rates based on laboratory testing and assaying. The Company periodically reviews its estimates compared to
actual experience and revises its estimates when appropriate. The ultimate recovery will not be known until leaching operations
cease. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result
in write-downs to net realizable value are accounted for on a prospective basis. As of December 31, 2021, the Company’s
estimated recoverable ounces of gold and silver on the leach pads were 43,699 and 4.9 million, respectively. In 2020, the
Company revised its recovery rate assumptions in line with the updated technical report for Rochester filed in December 2020.
This change resulted in an adjustment to the ending Ore on leach pads balance with the resulting charges allocated between
Costs Applicable to Sales and Amortization in the amounts of $7.2 million and $1.2 million, respectively. In June 2021, the
Company updated the recovery rate assumption on the Stage IV leach pad at Rochester, based on the historical performance of
the leach pad since the third quarter of 2019. This change resulted in an adjustment to the ending ore on leach pads balance with
the resulting non-cash charges allocated between Costs Applicable to Sales and Amortization in the amounts of $8.6 million
and $2.2 million, respectively.
Metal and Other Inventory
Inventories include concentrate, doré, and operating materials and supplies. The classification of inventory is
determined by the stage at which the ore is in the production process. All inventories are stated at the lower of cost or net
realizable value, with cost being determined using a weighted average cost method. Concentrate and doré inventory includes
product at the mine site and product held by refineries. Metal inventory costs include direct labor, materials, depreciation,
depletion and amortization as well as overhead costs relating to mining activities.
Property, Plant, and Equipment
Expenditures for new facilities, assets acquired pursuant to finance leases, new assets or expenditures that extend the
useful lives of existing facilities are capitalized and depreciated using the straight-line method at rates sufficient to depreciate
such costs over the shorter of estimated productive lives of such facilities, lease term, or the useful life of the individual assets.
Productive lives range from 7 to 30 years for buildings and improvements and 3 to 10 years for machinery and equipment.
Certain mining equipment is depreciated using the units-of-production method based upon estimated total proven and probable
reserves.
Mining Properties and Mine Development
Capitalization of mine development costs begins once all operating permits have been secured, mineralization is
classified as proven and probable reserves and a final feasibility study has been completed. Mine development costs include
engineering and metallurgical studies, drilling and other related costs to delineate an ore body, the removal of overburden to
initially expose an ore body at open pit surface mines and the building of access ways, shafts, lateral access, drifts, ramps and
other infrastructure at underground mines. Costs incurred before mineralization are classified as proven and probable reserves
and are capitalized if a project is in pre-production phase or expensed and classified as Exploration or Pre-development if the
project is not yet in pre-production. Mine development costs are amortized using the units-of-production method over the
estimated life of the ore body generally based on recoverable ounces to be mined from proven and probable reserves. Interest
68
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
expense allocable to the cost of developing mining properties and to construct new facilities is capitalized until assets are ready
for their intended use.
Drilling and related costs incurred at the Company’s operating mines are expensed as incurred in Exploration, unless
the Company can conclude with a high degree of confidence, prior to the commencement of a drilling program, that the drilling
costs will result in the conversion of a mineral resource into mineral reserve. The Company’s assessment is based on the
following factors: results from previous drill programs; results from geological models; results from a mine scoping study
confirming economic viability of the resource; and preliminary estimates of mine inventory, ore grade, cash flow and mine life.
In addition, the Company must have all permitting and/or contractual requirements necessary to have the right to and/or control
of the future benefit from the targeted ore body. The costs of a drilling program that meet these criteria are capitalized as mine
development costs. Drilling and related costs of approximately $19.9 million and $8.0 million at December 31, 2021 and 2020,
respectively, were capitalized.
The cost of removing overburden and waste materials to access the ore body at an open pit mine prior to the
production phase are referred to as “pre-stripping costs.” Pre-stripping costs are capitalized during the development of an open
pit mine. Stripping costs incurred during the production phase of a mine are variable production costs that are included as a
component of inventory to be recognized in Costs applicable to sales in the same period as the revenue from the sale of
inventory.
Mineral Interests
Significant payments related to the acquisition of land and mineral rights are capitalized. Prior to acquiring such land
or mineral rights, the Company generally makes a preliminary evaluation to determine that the property has significant potential
to develop an economic ore body. The time between initial acquisition and full evaluation of a property’s potential is variable
and is determined by many factors including: location relative to existing infrastructure, the property’s stage of development,
geological controls and metal prices. If a mineable ore body is discovered, such costs are amortized when production begins
using the units-of-production method based on recoverable ounces to be mined from proven and probable reserves. If no
mineable ore body is discovered, such costs are expensed in the period in which it is determined the property has no future
economic value.
Impairment of Long-lived Assets
We review and evaluate our long-lived assets for impairment whenever events or changes in circumstances indicate
that the related carrying amounts may not be recoverable. Asset impairment is considered to exist if the total estimated
undiscounted pretax future cash flows are less than the carrying amount of the asset. In estimating future cash flows, assets are
grouped at the lowest level for which there is identifiable cash flows that are largely independent of future cash flows from
other asset groups. An impairment loss is measured by discounted estimated future cash flows, and recorded by reducing the
asset's carrying amount to fair value. Future cash flows are estimated based on estimated quantities of recoverable minerals,
expected gold, silver, lead and zinc prices (considering current and historical prices, trends and related factors), production
levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans.
Existing proven and probable reserves and value beyond proven and probable reserves, including mineralization other
than proven and probable reserves are included when determining the fair value of mine site asset groups at acquisition and,
subsequently, in determining whether the assets are impaired. The term “recoverable minerals” refers to the estimated amount
of gold, silver, lead and zinc that will be obtained after taking into account losses during ore processing and treatment.
Estimates of recoverable minerals from exploration stage mineral interests are risk adjusted based on management’s relative
confidence in such materials. The ability to achieve the estimated quantities of recoverable minerals from exploration stage
mineral interests involves further risks in addition to those risk factors applicable to mineral interests where proven and
probable reserves have been identified, due to the lower level of confidence that the identified mineral resources could
ultimately be mined economically. Assets classified as exploration potential have the highest level of risk that the carrying
value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling.
During the fourth quarter of 2019, the Company performed a comprehensive analysis of its Silvertip property and
determined that indicators of impairment existed, primarily as a result of continued deterioration in zinc and lead market
conditions as well as ongoing challenges related to the processing facility. As a result of the impairment indicators, a
recoverability test was performed and the Company concluded that the long-lived assets for the Silvertip property was impaired.
A non-cash impairment charge of $250.8 million was recorded during the fourth quarter of 2019. The write-down was allocated
between Property, plant and equipment, net, Mining properties, net and Other non-current assets, in the amounts of
$43.6 million, $201.5 million and $5.7 million, respectively. See Note 4 -- Impairment of Long-lived Assets and 16 -- Fair
Value Measurements for additional detail of the impairment and assumptions used in the determination of the fair value of the
long-lived assets tested for impairment.
69
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Properties Held for Sale
In determining whether to classify a property as held for sale, the Company considers whether: (i) management has
committed to a plan to sell the property; (ii) the investment is available for immediate sale, in its present condition; (iii) the
Company has initiated a program to locate a buyer; (iv) the Company believes that the sale of the property is probable; (v) the
Company has received a significant non-refundable deposit for the purchase of the property; (vi) the Company is actively
marketing the property for sale at a price that is reasonable in relation to its estimated fair value; and (vii) actions required for
the Company to complete the plan indicate that it is unlikely that any significant changes will be made to the plan. If all of the
above criteria are met, the Company classifies the property as held for sale.
At September 30, 2021, the La Preciosa project met the held for sale criteria. However, considering that the La
Preciosa project was not an operating mine and does not represent a strategic shift, the Company determined that the expected
disposal of the La Preciosa project does not represent a strategic shift that had a major effect on the entity's results and
operations, therefore, the applicable assets, liabilities for the current period presented are classified on the Consolidated Balance
Sheets as held for sale. However, the applicable assets, liabilities for the prior period and the operating results for all periods
presented are not presented separately as held for sale.
Restricted Assets
The Company, under the terms of its self-insurance and bonding agreements with certain banks, lending institutions
and regulatory agencies, is required to collateralize certain portions of its obligations. The Company has collateralized these
obligations by assigning certificates of deposit that have maturity dates ranging from three months to a year, to the respective
institutions or agencies. At December 31, 2021 and 2020, the Company held certificates of deposit and cash under these
agreements of $9.1 million and $9.5 million, respectively. The ultimate timing of the release of the collateralized amounts is
dependent on the timing and closure of each mine and repayment of the facility. In order to release the collateral, the Company
must seek approval from certain government agencies responsible for monitoring the mine closure status. Collateral could also
be released to the extent the Company is able to secure alternative financial assurance satisfactory to the regulatory agencies.
The Company believes there is a reasonable probability that the collateral will remain in place beyond a twelve-month period
and has therefore classified these investments as long-term.
Leases
We determine if an arrangement is, or contains, a lease at the inception date. Operating leases are included in Other
assets, non-current with the related liabilities included in Accrued liabilities and Other and Other long-term liabilities. Assets
under finance leases, which primarily represent property and equipment, are included in Property, plant and equipment, net,
with the related liabilities included in debt, current and debt, non-current on the Consolidated Balance Sheet.
Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our
obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the lease
commencement date based on the estimated present value of lease payments over the lease term. We use our estimated
incremental borrowing rate in determining the present value of lease payments. Variable components of the lease payments
such as maintenance costs are expensed as incurred and not included in determining the present value. Our lease terms include
options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is
recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components which
are accounted for as a single lease component. See Note 10 -- Leases for additional information related to the Company’s
operating and finance leases.
Reclamation
The Company recognizes obligations for the expected future retirement of tangible long-lived assets and other
associated asset retirement costs. The fair value of a liability for an asset retirement obligation will be recognized in the period
in which it is incurred if a reasonable estimate of fair value can be made. The fair value of the liability is added to the carrying
amount of the associated asset and this additional carrying amount is depreciated over the life of the asset. An accretion cost,
representing the increase over time in the present value of the liability, is recorded each period in Pre-development,
reclamation, and other. As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the
liability is reduced. Future remediation costs for inactive mines are accrued based on management’s best estimate at the end of
each period of the discounted costs expected to be incurred at the site. Such cost estimates include, where applicable, ongoing
care and maintenance and monitoring costs. Changes in estimates are reflected prospectively in the period an estimate is
revised. See Note 12 -- Reclamation for additional information.
70
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Foreign Currency
The assets and liabilities of the Company’s foreign subsidiaries are measured using U.S. dollars as their functional
currency. Revenues and expenses are remeasured at the average exchange rate for the period. Foreign currency gains and losses
are included in the determination of net income or loss.
Derivative Financial Instruments
The Company is exposed to various market risks, including the effect of changes in metal prices, foreign exchange
rates and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of business. The
Company may elect to designate certain derivatives as hedging instruments under U.S. GAAP.
The Company, from time to time, uses derivative contracts to protect the Company’s exposure to fluctuations in metal
prices and foreign exchange rates. The Company has elected to designate these instruments as cash flow hedges of forecasted
transactions at their inception. Assuming normal market conditions, the change in the market value of such derivative contracts
has historically been, and is expected to continue to be, highly effective at offsetting changes in price movements of the hedged
item. The effective portions of cash flow hedges are recorded in accumulated other comprehensive income (loss) until the
hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of metal sales revenue are
recognized as a component of Revenue in the same period as the related sale is recognized. Deferred gains and losses associated
with cash flow hedges of foreign currency transactions are recognized as a component of Costs Applicable to Sales or Pre-
development, Reclamation and Other in the same period the related expenses are incurred.
For derivatives not designated as hedging instruments, the Company recognizes derivatives as either assets or
liabilities on the balance sheet and measures those instruments at fair value. Changes in the value of derivative instruments not
designated as hedging instruments are recorded each period in the Consolidated Statement of Comprehensive Income (Loss) in
Fair value adjustments, net or Revenue. Management applies judgment in estimating the fair value of instruments that are
highly sensitive to assumptions regarding commodity prices, market volatilities, and foreign currency exchange rates. See Note
16 -- Derivative Financial Instruments and Hedging Activities for additional information.
Stock-based Compensation
The Company estimates the fair value of stock options using the Black-Scholes option pricing model and stock
appreciation rights (“SARs”) awards using market comparison. Stock options granted are accounted for as equity-based awards
and SARs are accounted for as liability-based awards. The value of the SARs is remeasured at each reporting date. The
Company estimates forfeitures of stock-based awards based on historical data and periodically adjusts the forfeiture rate. The
adjustment of the forfeiture rate is recorded as a cumulative adjustment in the period the forfeiture estimate is changed.
Compensation costs related to stock based compensation are included in General and administrative expenses, Costs applicable
to sales, and Property, plant, and equipment, net as deemed appropriate.
The fair value of restricted stock is based on the Company's stock price on the date of grant. The fair value of
performance leverage stock units with market conditions is determined using a Monte Carlo simulation model. Stock based
compensation expense related to awards with a market or performance condition is generally recognized over the vesting period
of the award utilizing the graded vesting method, while all other awards are recognized on a straight-line basis. The Company's
estimates may be impacted by certain variables including, but not limited to, stock price volatility, employee stock option
exercise behaviors, additional stock option grants, estimates of forfeitures, the Company's performance, and related tax impacts.
See Note 14 -- Stock-Based Compensation for additional information.
Income and Mining Taxes
The Company uses an asset and liability approach which results in the recognition of deferred tax liabilities and assets
for the expected future tax consequences or benefits of temporary differences between the financial reporting basis and the tax
basis of assets and liabilities, as well as operating loss and tax credit carryforwards, using enacted tax rates in effect in the years
in which the differences are expected to reverse.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some
portion or all of its deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance has
been provided for the portion of the Company’s net deferred tax assets for which it is more likely than not that they will not be
realized.
Revenue Recognition
The Company produces doré and concentrate that is shipped to third-party refiners and smelters, respectively, for
processing. The Company enters into contracts to sell its metal to various third-party customers which may include the refiners
71
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
and smelters that process the doré and concentrate. The Company’s performance obligation in these transactions is generally the
transfer of metal to the customer.
In the case of doré shipments, the Company generally sells refined metal at market prices agreed upon by both parties.
The Company also has the right, but not the obligation, to sell a portion of the anticipated refined metal in advance of being
fully refined. When the Company sells refined metal or advanced metal, the performance obligation is satisfied when the metal
is delivered to the customer. Revenue and Costs Applicable to Sales are recorded on a gross basis under these contracts at the
time the performance obligation is satisfied.
Under the Company’s concentrate sales contracts with third-party smelters, metal prices are set on a specified future
quotational period, typically one to three months, after the shipment date based on market prices. When the Company sells gold
concentrate to the third-party smelters, the performance obligation is satisfied when risk of loss is transferred to the customer.
The contracts, in general, provide for provisional payment based upon provisional assays and historical metal prices. Final
settlement is based on the applicable price for the specified future quotational period and generally occurs three to six months
after shipment. The Company’s provisionally priced sales contain an embedded derivative that is required to be separated from
the host contract for accounting purposes. The host contract is the receivable from the sale of concentrates measured at the
forward price at the time of sale. The embedded derivative does not qualify for hedge accounting and is adjusted to fair value
through revenue each period until the date of final metal settlement.
The Company also sells concentrate under off-take agreements to third-party customers that are responsible for
arranging the smelting of the concentrate. Prices can either be fixed or based on a quotational period. The quotational period
varies by contract, but is generally a one-month period following the shipment of the concentrate. The performance obligation
is satisfied when risk of loss is transferred to the customer.
The Company recognizes revenue from concentrate sales, net of treatment and refining charges, when it satisfies the
performance obligation of transferring control of the concentrate to the customer.
For doré and off-take sales, the Company may incur a finance charge related to advance sales that is not considered
significant and, as such, is not considered a separate performance obligation. In addition, the Company has elected to treat
freight costs as a fulfillment cost under ASC 606 and not as a separate performance obligation.
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 20 -- Commitments and Contingencies for additional detail.
The following table presents a rollforward of the Franco-Nevada contract liability balance:
In thousands
Opening Balance
Revenue Recognized
Closing Balance
Year Ended December 31,
2021
2020
2019
$
$
9,376 $
(1,226)
8,150 $
11,061 $
(1,685)
9,376 $
12,918
(1,857)
11,061
In December 2020, the Company received a $15.0 million prepayment (the “December 2020 Prepayment”) for
deliveries of gold concentrate from the Kensington mine pursuant to the Amended Sales Contract (as defined in Note 21). In the
first half of 2021, the Kensington mine delivered $15.0 million of gold concentrate to the counterparty in satisfaction of this
prepayment obligation. The Amended Sales Contract was further amended effective June 2021, to include options for Coeur to
receive up to two additional prepayments of up to $15.0 million each for deliveries of gold concentrate from the Kensington
mine, and Coeur exercised the option to receive the first $15.0 million prepayment in June 2021 (the “June 2021 Prepayment”),
of which $15.0 million in gold ounces were delivered in the second half 2021. In December 2021, the Company exercised the
option to receive the second $15.0 million prepayment (the “December 2021 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 20 -- Commitments and Contingencies for additional detail.
72
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The following table presents a rollforward of the Amended Sales Contract liability balance:
In thousands
Opening Balance
Additions
Revenue Recognized
Closing Balance
Year Ended December 31,
2021
2020
2019
$
$
15,003 $
15,009 $
30,013
(30,000)
15,016 $
30,177
(30,183)
15,003 $
—
40,009
(25,000)
15,009
Recently Adopted Accounting Standards
In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No.
2019-12 (“ASU 2019-12”) “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740)” which is intended to
simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general
principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be
effective for interim and annual periods beginning after December 15, 2020 (January 1, 2021 for the Company). Early adoption
is permitted. The adoption of the new standard did not have a material impact on the Company’s consolidated net income,
financial position or cash flows.
73
NOTE 3 – SEGMENT REPORTING
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The Company’s operating segments include the Palmarejo, Rochester, Kensington, Wharf and Silvertip mines. 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 and La Preciosa projects, 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):
Year Ended December 31, 2021
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Other
Total
Revenue
Gold sales
Silver sales
Metal sales
Costs and Expenses
Costs applicable to sales(1)
Amortization
Exploration
Other operating expenses
Other income (expense)
Loss on debt extinguishment
Fair value adjustments, net
Interest expense, net
Other, net(3)
Income and mining tax (expense) benefit
$
150,098 $
49,659 $
214,635 $
164,519 $
— $
— $
578,911
170,176
320,274
153,655
36,062
8,561
4,443
—
—
(592)
(28,197)
(29,730)
81,163
130,822
131,240
20,187
6,016
5,886
—
—
(1,034)
(357)
559
370
215,005
133,065
54,933
6,656
6,299
—
—
(704)
(150)
(414)
2,208
166,727
93,579
11,038
143
1,786
—
—
(145)
1,650
(4,799)
—
—
—
4,797
15,287
25,031
—
—
1,276
(1,465)
1,478
—
—
—
1,298
14,506
45,632
(9,173)
(543)
(15,252)
5,594
(2,052)
253,917
832,828
511,539
128,315
51,169
89,077
(9,173)
(543)
(16,451)
(22,925)
(34,958)
Net Income (loss)
Segment assets(2)
Capital expenditures
$
$
$
59,034 $
(33,339) $
12,784 $
56,887 $
(43,826) $
(82,862) $
(31,322)
294,893 $
559,283 $
142,926 $
87,579 $
230,617 $
109,636 $ 1,424,934
36,539 $
166,548 $
27,522 $
8,072 $
70,069 $
1,031 $
309,781
(1) Excludes amortization
(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests
(3) See Note 18 -- Additional Comprehensive Income (Loss) Detail for additional detail
Year Ended December 31, 2020
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Other
Total
Revenue
Gold sales
Silver sales
Zinc sales
Lead sales
Metal sales
Costs and Expenses
Costs applicable to sales(1)
Amortization
Exploration
Other operating expenses
Other income (expense)
Fair value adjustments, net
Interest expense, net
Other, net
Income and mining tax (expense) benefit
$
154,056 $
46,337 $
216,497 $
167,743 $
— $
— $
584,633
132,525
63,916
—
—
—
—
—
—
—
2,504
—
—
286,581
110,253
216,497
170,247
125,204
44,873
6,955
7,927
—
(918)
(5,273)
(28,029)
86,112
14,306
3,303
5,144
—
(1,142)
(2,718)
(863)
121,727
49,477
8,568
12,012
—
(1,017)
(18)
(1,244)
89,635
12,473
905
838
—
(182)
(69)
(6,644)
1,230
(662)
1,315
1,883
17,657
8,923
12,228
23,123
—
(672)
1,793
—
—
—
—
—
—
1,335
10,684
40,332
7,601
(16,777)
344
(265)
200,175
(662)
1,315
785,461
440,335
131,387
42,643
89,376
7,601
(20,708)
(5,941)
(37,045)
Net Income (loss)
Segment assets(2)
Capital expenditures
$
$
$
67,402 $
(3,335) $
22,434 $
59,501 $
(58,927) $
(61,448) $
25,627
305,291 $
346,986 $
169,414 $
75,047 $
157,529 $
177,886 $ 1,232,153
25,511 $
37,542 $
19,825 $
2,447 $
13,144 $
810 $
99,279
(1) Excludes amortization
(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests
74
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Year Ended December 31, 2019
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Other
Total
Revenue
Gold sales
Silver sales
Zinc sales
Lead sales
Metal sales
Costs and Expenses
Costs applicable to sales(1)
Amortization
Exploration
Write-downs
Other operating expenses
Other income (expense)
Loss on debt extinguishment
Fair value adjustments, net
Interest expense, net
Other, net
$
141,669 $
50,225 $
181,111 $
120,342 $
111,032
61,799
—
—
—
—
—
—
—
1,072
—
—
— $
17,575 $
12,806
13,871
252,701
112,024
181,111
121,414
44,252
141,927
59,379
5,658
—
4,591
—
—
(444)
(4,798)
(14,257)
100,205
18,041
657
—
4,572
—
—
119,602
50,592
5,588
—
1,248
—
—
(1,015)
(1,333)
(378)
(709)
(704)
—
80,689
12,280
272
—
2,832
—
—
(100)
89
(3,041)
108,758
36,738
2,469
250,814
1,216
—
—
(1,137)
(557)
32,084
— $
493,347
—
—
—
—
—
1,846
7,883
—
38,455
(1,281)
16,030
(20,742)
3,155
(2,948)
191,478
12,806
13,871
711,502
551,181
178,876
22,527
250,814
52,914
(1,281)
16,030
(24,771)
(3,193)
11,129
Income and mining tax (expense) benefit
Income (loss) from continuing
operations
Income (loss) from discontinued
operations
Segment assets(2)
Capital expenditures
$
$
$
$
21,647 $
(13,553) $
2,044 $
22,289 $
(325,353) $
(53,970) $
(346,896)
— $
— $
— $
—
— $
5,693 $
5,693
319,292 $
284,878 $
194,076 $
84,765
164,125 $
168,647 $ 1,215,783
32,658 $
22,592 $
23,513 $
2,220
17,504 $
1,285 $
99,772
(1) Excludes amortization
(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests
Assets
Total assets for reportable segments
Cash and cash equivalents
Other assets
Total consolidated assets
Geographic Information
Long-Lived Assets
United States
Mexico
Canada
Other
Total
Revenue
United States
Mexico
Canada
Total
December 31, 2021
$
1,424,934 $
56,664
252,824
1,734,422 $
December 31, 2020
1,232,153
92,794
79,030
1,403,977
$
December 31, 2021
$
704,007 $
244,758
223,876
125
1,172,766 $
December 31, 2020
503,818
293,436
149,018
657
946,929
$
Year ended December 31,
2021
2020
2019
$
$
512,554 $
496,997 $
320,274
—
832,828 $
286,581
1,883
785,461 $
414,549
252,701
44,252
711,502
75
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The Company's doré, as well as the concentrate product produced by the Wharf mine, is refined into gold and silver
bullion according to benchmark standards set by the London Bullion Market Association, which regulates the acceptable
requirements for bullion traded in the London precious metals markets. The Company then sells its gold and silver bullion to
multi-national banks, bullion trading houses, and refiners across the globe. The Company had seven trading counterparties at
December 31, 2021. The Company's sales of doré or concentrate product produced by the Palmarejo, Rochester, and Wharf
mines amounted to approximately 74%, 72%, and 68%, of total metal sales for the years ended December 31, 2021, 2020, and
2019, respectively.
The Company's gold concentrate product from the Kensington mine and the zinc and lead concentrates from the
Silvertip development property are sold under a variety of agreements with smelters and traders, and the smelters and traders
pay the Company for the metals recovered from the concentrates. The Company’s sales of concentrate produced by the
Kensington and Silvertip development property amounted to approximately 26%, 28%, and 32% of total metal sales for the
years ended December 31, 2021, 2020, and 2019, respectively.
The Company believes that the loss of any one smelter, refiner, trader or third-party customer would not have a
material adverse effect on the Company due to the liquidity of the markets and current availability of alternative trading
counterparties.
The following table indicates customers that represent 10% or more of total sales of metal for at least one of the years
December 31, 2021, 2020, and 2019 (in millions):
Customer
2021
2020
2019
Segments reporting revenue
Year ended December 31,
Asahi
Ocean Partners
Toronto Dominion Bank
Techemet Metal Trading
Argor-Heraeus
$ 323.8 $ 272.1 $ 341.0 Palmarejo, Kensington, Rochester, Wharf
176.4
161.0
149.7 Palmarejo, Kensington, Silvertip
61.9
62.2
23.3
88.6
81.8
79.9
35.1 Rochester
9.4 Rochester, Wharf
23.1 Palmarejo
NOTE 4 – IMPAIRMENT OF LONG-LIVED ASSETS
In 2019, the Company performed a comprehensive analysis of its Silvertip property and determined that indicators of
impairment existed, primarily as a result of further deterioration in zinc and lead market conditions as well as processing
facility-related challenges. As a result, a non-cash impairment charge of $250.8 million was recorded in 2019. The write-down
was allocated between Property, plant and equipment, net, Mining properties, net and Other non-current assets, $43.6 million,
$201.5 million and $5.7 million, respectively. See Note 15 -- Fair Value Measurements for additional detail of the assumptions
used in the determination of the fair value of the long-lived assets tested for impairment.
76
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 5 – RECEIVABLES
Receivables consist of the following:
In thousands
Current receivables:
Trade receivables
VAT receivable
Income tax receivable
Other
Non-current receivables:
VAT receivable(1)
Other
Total receivables
December 31, 2021
December 31, 2020
$
$
$
$
4,879 $
18,415
8,418
705
32,417 $
— $
—
—
32,417 $
3,293
17,080
530
2,581
23,484
26,447
—
26,447
49,931
(1) Represents VAT that was paid to the Mexican government associated with Coeur Mexicana’s prior royalty agreement with a subsidiary of Franco-Nevada
Corporation. While the Company continues to pursue recovery from the Mexican government (including through ongoing litigation and potential international
arbitration), the Company wrote down the carrying value of the receivable at September 30, 2021. See Note 20 -- Commitments and Contingencies for
additional detail.
NOTE 6 – INVENTORY AND ORE ON LEACH PADS
Inventory consists of the following:
In thousands
Inventory:
Concentrate
Precious metals
Supplies
Ore on Leach Pads:
Current
Non-current
Long-term Stockpile (included in Other)
Total Inventory and Ore on Leach Pads
December 31, 2021
December 31, 2020
$
$
$
$
$
$
1,643 $
11,353
38,285
51,281 $
81,128 $
73,495
154,623 $
2,909
14,788
33,513
51,210
74,866
81,963
156,829
18,027 $
5,664
223,931 $
213,703
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 fourth quarter of 2021, the cost of metal and leach
pad inventory at Rochester exceeded its net realizable value which resulted in a non-cash write down of $8.4 million
(approximately $7.3 million was recognized in Costs Applicable to Sales and $1.1 million in Amortization).
77
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 7 – INVESTMENTS
Equity Securities
The Company makes strategic investments in equity securities of silver and gold exploration, development and royalty
and streaming companies.
In thousands
Equity Securities
Victoria Gold Corp.
Integra Resources Corp.
Equity securities
In thousands
Equity Securities
Metalla Royalty & Streaming Ltd.
Integra Resources Corp.
Other
Equity securities
At December 31, 2021
Gross
Unrealized
Losses
Gross
Unrealized
Gains
Estimated
Fair Value
Cost
128,710 $
9,455
138,165 $
(4,499) $
(1,469)
(5,968) $
— $
—
— $
124,211
7,986
132,197
At December 31, 2020
Gross
Unrealized
Losses
Gross
Unrealized
Gains
Estimated
Fair Value
Cost
166 $
7,500
2
7,668 $
— $
—
(1)
(1) $
875 $
4,401
—
5,276 $
1,041
11,901
1
12,943
$
$
$
$
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 15 -- Fair Value
Measurements for additional details.
On January 4, 2021, the Company completed the sale of 83,556 shares of common stock of Metalla Royalty &
Streaming Ltd. (“Metalla”) (“Metalla Common Shares”) at an average price (net of commission) of $11.19 per Metalla
Common Share for net proceeds of $0.9 million, resulting in a realized gain of $0.8 million.
On May 10, 2021, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Orion
Co-VI Ltd. (“Orion”). Pursuant to the Exchange Agreement, Orion sold 11,067,714 common shares of Victoria Gold Corp., a
British Columbia company (“Victoria”) (representing approximately 17.8% of Victoria’s outstanding common shares) to the
Company. As consideration for the purchase of Victoria shares, Coeur issued 12,785,485 shares of its common stock
(approximately 4.9% of issued and outstanding shares) to Orion.
On June 9, 2021, the Company purchased 265,312 shares of common of Integra Resources Corp. (“Integra”) at a price
of $3.30 per share for a total of $0.9 million. On September 16, 2021, the Company purchased an additional 423,213 shares of
common stock in Integra at a price of $2.55 per share for a total of $1.1 million. Following completion of the transactions,
Coeur owned approximately 5.9% of issued and outstanding Integra Common Shares.
NOTE 8 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
In thousands
Land
Facilities and equipment
Assets under finance leases
Accumulated amortization(1)
Construction in progress
Property, plant and equipment, net
December 31, 2021
$
8,480 $
December 31, 2020
10,584
659,676
100,530
770,790
668,089
115,652
792,221 $
(620,303)
171,918 $
148,049
319,967 $
(579,644)
191,146
38,993
230,139
$
$
$
(1) Includes $63.9 million and $60.3 million of accumulated amortization related to assets under finance leases at December 31, 2021 and December 31, 2020,
respectively.
78
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 9 – MINING PROPERTIES
Mining properties consist of the following (in thousands):
December 31, 2021
Mine development
Palmarejo
Rochester
Kensington
Wharf
Silvertip
Sterling
Other
Total
$ 307,698 $ 437,833 $ 382,492 $ 49,045 $ 67,805 $
3,861 $
— $ 1,248,734
Accumulated amortization
(211,187)
(158,805)
(302,582)
(24,358)
(11,685)
(1,515)
96,511
279,028
79,910
24,687
56,120
Mineral interests
629,303
19,098
Accumulated amortization
(532,155)
—
97,148
19,098
—
—
—
48,062
114,036
(34,818)
(24,828)
—
13,244
89,208
95,499
2,346
95,499
—
—
—
—
—
(710,132)
538,602
905,998
(591,801)
314,197
Mining properties, net
$ 193,659 $ 298,126 $ 79,910 $ 37,931 $ 145,328 $ 97,845 $
— $ 852,799
In June 2021, Silvertip repurchased from Silvertip Resources Investment Cayman Ltd. a net smelter returns royalty of
1.429% on the first 1,434,000 metric tonnes of mineral resources mined, and 1.00% thereafter for consideration of $7.0 million.
December 31, 2020
Palmarejo Rochester Kensington Wharf
Silvertip
Sterling
La
Preciosa
Other
Total
Mine development
$ 280,184 $ 270,648 $ 360,201 $ 33,578 $ 48,589 $
4,107 $
— $
— $ 997,307
—
—
(650,831)
346,476
946,226
(575,911)
Accumulated amortization (194,898) (157,526) (264,014)
(22,547)
(10,747)
(1,099)
85,286
113,122
96,187
11,031
37,842
3,008
—
—
Mineral interests
629,303
18,541
Accumulated amortization (518,866)
—
110,437
18,541
—
—
—
48,062
105,736
95,499
49,085
(32,217)
(24,828)
—
—
15,845
80,908
95,499
49,085
—
370,315
Mining properties, net
$ 195,723 $ 131,663 $ 96,187 $ 26,876 $ 118,750 $ 98,507 $ 49,085 $
— $ 716,790
NOTE 10 – LEASES
Right of Use Assets and Liabilities
The following table summarizes quantitative information pertaining to the Company’s finance and operating leases.
In thousands
Lease Cost
Operating lease cost
Short-term operating lease cost
Finance Lease Cost:
Amortization of leased assets
Interest on lease liabilities
Total finance lease cost
Year ended December 31,
2021
2020
2019
$
$
$
$
12,585 $
12,036 $
11,219 $
8,055 $
21,685 $
23,921 $
4,632
3,634
26,317 $
27,555 $
11,585
12,975
21,293
4,150
25,443
79
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Supplemental cash flow information related to leases was as follows:
In thousands
Other Information
Cash paid for amounts included in the measurement of lease
liabilities:
Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases
Year ended December 31,
2021
2020
2019
$
$
$
24,009 $
4,632 $
31,544 $
21,348 $
3,634 $
25,984 $
24,560
4,150
25,975
Supplemental balance sheet information related to leases was as follows:
In thousands
Operating Leases
Other assets, non-current
Accrued liabilities and other
Other long-term liabilities
Total operating lease liabilities
Finance Leases
Property and equipment, gross
Accumulated depreciation
Property and equipment, net
Debt, current
Debt, non-current
Total finance lease liabilities
Weighted Average Remaining Lease Term
Weighted-average remaining lease term - finance leases
Weighted-average remaining lease term - operating leases
Weighted Average Discount Rate
Weighted-average discount rate - finance leases
Weighted-average discount rate - operating leases
December 31, 2021
December 31, 2020
$
$
$
$
$
$
30,987
$
11,301
18,660
29,961
115,597
(63,879)
51,718
29,821
24,407
54,228
$
$
$
$
$
1.62
3.17
5.08 %
5.20 %
40,511
12,410
27,433
39,843
104,433
(60,272)
44,161
22,074
25,837
47,911
1.36
4.00
5.37 %
5.18 %
Minimum future lease payments under finance and operating leases with terms longer than one year are as follows:
As of December 31, 2021 (In thousands)
2022
2023
2024
2025
2026
Thereafter
Total
Less: imputed interest
Net lease obligation
Operating leases
Finance leases
$
11,574 $
10,868
8,812
213
220
946
32,632 $
(2,671)
29,961 $
$
$
25,657
15,836
8,404
6,839
3,309
—
60,045
(5,817)
54,228
80
NOTE 11 – DEBT
In thousands
2029 Senior Notes, net(1)
2024 Senior Notes, net(2)
Revolving Credit Facility(3)
Finance lease obligations
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2021
December 31, 2020
Current
Non-Current
Current
Non-Current
$
$
— $
368,273 $
—
—
29,821
29,821 $
—
65,000
24,407
457,680 $
— $
—
—
22,074
22,074 $
—
227,590
—
25,837
253,427
(1) Net of unamortized debt issuance costs of $6.7 million and $0.0 million at December 31, 2021 and December 31, 2020, respectively.
(2) Net of unamortized debt issuance costs of $0.0 million and $2.4 million at December 31, 2021 and December 31, 2020, respectively.
(3) Unamortized debt issuance costs of $2.4 million and $1.5 million at December 31, 2021 and December 31, 2020, respectively, included in Other Non-
Current Assets.
2029 Senior Notes
In March 2021, the Company completed an offering of $375.0 million in aggregate principal amount of senior notes in
a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended, for net
proceeds of approximately $367.5 million (the “2029 Senior Notes”). The 2029 Senior Notes are governed by an Indenture
dated as of March 1, 2021 (the “Indenture”), among the Company, as issuer, certain of the Company's subsidiaries named
therein, as guarantors thereto (the “Guarantors”), and The Bank of New York Mellon, as trustee (the “Trustee”). The 2029
Senior Notes bear interest at a rate of 5.125% per year from the date of issuance. Interest on the 2029 Senior Notes is payable
semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2021. The 2029 Senior Notes
will mature on February 15, 2029 and are fully and unconditionally guaranteed by the Guarantors.
At any time prior to February 15, 2024, the Company may redeem all or part of the 2029 Senior Notes upon not less
than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof,
plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if
any, thereon, to the date of redemption. In addition, the Company may redeem some or all of the 2029 Senior Notes on or after
February 15, 2024, at redemption prices set forth in the Indenture, together with accrued and unpaid interest. At any time prior
to February 15, 2024, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate
principal amount of the 2029 Senior Notes, including any permitted additional 2029 Senior Notes, at a redemption price equal
to 105.125% of the principal amount.
The Indenture contains covenants that, among other things, limit the Company’s ability under certain circumstances to
incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem capital stock, prepay, redeem
or repurchase certain debt, make loans and investments, create liens, sell, transfer or otherwise dispose of assets, enter into
transactions with affiliates, enter into agreements restricting the Company's subsidiaries' ability to pay dividends and impose
conditions on the Company’s ability to engage in mergers, consolidations and sales of all or substantially all of its assets. The
Indenture also contains certain “Events of Default” (as defined in the Indenture) customary for indentures of this type. If an
Event of Default has occurred and is continuing, the Trustee or the holders of not less than 25% in aggregate principal amount
of the 2029 Senior Notes then outstanding may, and the Trustee at the request of the holders of not less than 25% in aggregate
principal amount of the 2029 Senior Notes then outstanding shall, declare all unpaid principal of, premium, if any, and accrued
interest on all the 2029 Senior Notes to be due and payable.
2024 Senior Notes
Concurrent with the offering of the 2029 Senior Notes, the Company commenced a cash tender offer (the “Tender
Offer”) to purchase the outstanding $230.0 million in aggregate principal amount of its 5.875% Senior Notes due 2024 (the
“2024 Senior Notes”). The Tender Offer was made on the terms and subject to the conditions set forth in the Offer to Purchase
dated February 22, 2021. The Tender Offer expired at 5:00 p.m., New York City time, on February 26, 2021 (the “Expiration
Time”). Holders of the 2024 Senior Notes who tendered (and did not validly withdraw) their notes at or prior to the Expiration
Time were entitled to receive in cash $1,029.38 per $1,000 principal amount of 2024 Senior Notes validly tendered (and not
validly withdrawn) and accepted for purchase by the Company in the Tender Offer, plus accrued and unpaid interest on such
2024 Senior Notes. $102.8 million aggregate principal amount of the 2024 Senior Notes were validly tendered and purchased
by the Company on March 1, 2021. In accordance with the terms of the indenture governing the 2024 Senior Notes, the
remaining $127.2 million aggregate principal amount of the 2024 Senior Notes were redeemed on March 31, 2021 at the
redemption price specified in the indenture governing the 2024 Senior Notes ($1,029.38 per $1,000 principal amount redeemed,
plus accrued and unpaid interest). The Company recorded a loss of $9.2 million as a result of the extinguishment of the 2024
Senior Notes.
81
Revolving Credit Facility
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
In September 2017, the Company, as borrower, and certain subsidiaries of the Company, as guarantors, entered into a
$200.0 million senior secured revolving credit facility (“RCF”) pursuant to a credit agreement, dated as of September 29, 2017
(as subsequently amended, the “Credit Agreement”), by and among the Company, as borrower, certain subsidiaries of the
Company, as guarantors, Bank of America, N.A., as administrative agent and Bank of America, N.A., Royal Bank of Canada,
Bank of Montreal, Chicago Branch, the Bank of Nova Scotia and ING Capital LLC, as lenders (the “Credit Agreement”) with
an original term of four years. Loans under the RCF bear interest at a rate equal to either a base rate plus a margin ranging from
1.00% to 1.75% or an adjusted LIBOR rate plus a margin ranging from 2.00% to 2.75%, as selected by the Company, in each
case, with such margin determined in accordance with a pricing grid based upon the Company’s consolidated net leverage ratio
as of the end of the applicable period. In October 2018, the Company entered into an amendment to the Credit Agreement to
increase the RCF by $50.0 million from $200.0 million to $250.0 million and extend the term by approximately one year to
October 2022. In April and August of 2019, the Company entered into amendments to the Credit Agreement to, among other
items, modify the financial covenants to provide greater flexibility in 2019. On December 14, 2020, the Company entered into
an amendment to the Credit Agreement to increase the RCF from $250.0 million to $300.0 million and to include ING Capital
LLC as an incremental lender on the RCF. On March 1, 2021, the Company entered into a fifth amendment to the Credit
Agreement to, among other things, (i) extend the maturity date of the RCF to March 2025 and (ii) permit the Company to obtain
one or more increases of the RCF, which is currently in the amount of $300.0 million, in an aggregate amount of up to
$100.0 million in incremental loans and commitments, subject to certain conditions, including obtaining commitments from
relevant lenders to provide such increase.
The RCF is secured by substantially all of the assets of the Company and its U.S. subsidiaries, including the land,
mineral rights and infrastructure at the Kensington, Rochester and Wharf mines and the Sterling/Crown project as well as a
pledge of the shares and other equity interests of certain of the Company’s subsidiaries. The Credit Agreement contains
representations and warranties and affirmative and negative covenants that are usual and customary, including representations,
warranties, and covenants that, among other things, restrict the ability of the Company and its subsidiaries to incur additional
debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage
in asset sales and make dividends and distributions. The Credit Agreement requires the Company to meet certain financial
covenants consisting of a consolidated net leverage ratio and a consolidated interest coverage ratio. Obligations under the RCF
may be accelerated upon the occurrence of certain customary events of default.
At December 31, 2021, the Company had $65.0 million drawn at an interest rate of 2.4% and $35.0 million in
outstanding letters of credit under the RCF.
Finance Lease Obligations
From time-to-time, the Company acquires mining equipment and facilities under finance lease agreements. In the year
ended December 31, 2021, the Company entered into new lease financing arrangements primarily for mining equipment at
Rochester and Kensington. Coeur secured a finance lease package for nearly $60 million during the year, a portion of which has
been funded as of December 31, 2021. The package is earmarked for planned equipment purchases for POA 11 in 2021 and
2022, and has an interest rate of 5.22%. All finance lease obligations are recorded, upon lease inception, at the present value of
future minimum lease payments. See Note 10 -- Leases for additional qualitative and quantitative disclosures related to finance
leasing arrangements.
Interest Expense
In thousands
2024 Senior Notes
2029 Senior Notes
Revolving Credit Facility
Finance lease obligations
Amortization of debt issuance costs
Accretion of Silvertip contingent consideration
Other debt obligations
Capitalized interest
Total interest expense, net of capitalized interest
Year Ended December 31,
2021
2020
2019
$
$
2,591 $
16,016
2,296
4,632
1,726
—
303
(11,113)
16,451 $
13,513 $
—
3,165
3,634
1,525
—
344
(1,473)
20,708 $
14,586
—
5,358
4,150
1,491
396
580
(1,790)
24,771
82
NOTE 12 – RECLAMATION
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Reclamation and mine closure costs are based principally on legal and regulatory requirements. Management estimates
costs associated with reclamation of mining properties. On an ongoing basis, management evaluates its estimates and
assumptions, and future expenditures could differ from current estimates. The estimated reclamation and mine closure costs
were discounted using credit adjusted, risk-free interest rates ranging from 6.9% to 10.1%. The asset retirement obligation
increased in 2021 due to overall inflationary impacts, increased reclamation and mine closure costs at Rochester associated with
work completed to date for POA 11 and additional costs at Wharf and Rochester associated with the existing open pit and leach
pad operations.
Changes to the Company’s asset retirement obligations for its operating sites are as follows:
In thousands
Asset retirement obligation - Beginning
Accretion
Additions and changes in estimates
Settlements
Asset retirement obligation - Ending
Year Ended December 31,
2021
2020
$
$
137,120 $
11,815
34,016
(3,845)
179,106 $
134,398
11,574
(6,132)
(2,720)
137,120
The Company accrued $2.8 million and $2.2 million at each of December 31, 2021 and December 31, 2020,
respectively, for reclamation liabilities related to former mining activities, which are included in Reclamation.
NOTE 13 – INCOME AND MINING TAXES
The components of Income (loss) before income taxes are below:
In thousands
United States
Foreign
Total
Year Ended December 31,
2021
2020
2019
$
$
(34,196) $
40,890 $
37,832
21,782
3,636 $
62,672 $
(16,702)
(341,323)
(358,025)
The components of the consolidated Income and mining tax (expense) benefit from continuing operations are below:
In thousands
Current:
United States
United States — State mining taxes
United States — Foreign withholding tax
Canada
Mexico
Other
Deferred:
United States
United States — State mining taxes
Canada
Mexico
Other
Income tax (expense) benefit
Year Ended December 31,
2021
2020
2019
$
25 $
226 $
(5,691)
(862)
—
(8,384)
(800)
232
(334)
(4,001)
(1,598)
119
(31,175)
(36,066)
(19,619)
—
33
(3)
(651)
1,037
1,224
1,135
—
(34,958) $
(49)
(354)
—
8,117
—
(37,045) $
236
251
32,084
3,994
—
11,129
$
The Company’s Income and mining tax benefit (expense) differed from the amounts computed by applying the United
States statutory corporate income tax rate for the following reasons:
83
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
In thousands
Year Ended December 31,
2021
2020
2019
Income and mining tax (expense) benefit at statutory rate
$
(764) $
(13,161) $
State tax provision from continuing operations
2,009
(152)
75,185
1,243
Change in valuation allowance
Percentage depletion
Uncertain tax positions
U.S. and foreign permanent differences
Foreign exchange rates
Foreign inflation and indexing
Foreign tax rate differences
Mining, foreign withholding, and other taxes
Other, net
(28,615)
(17,522)
(77,220)
4,968
920
4,105
(384)
(1,087)
(4,901)
(12,599)
1,390
5,056
2,321
3,844
1,390
684
(3,971)
(17,457)
1,923
820
2,358
2,272
(7,066)
(2,933)
19,729
(2,746)
(513)
11,129
Income and mining tax (expense) benefit
$
(34,958) $
(37,045) $
At December 31, 2021 and 2020, the significant components of the Company’s deferred tax assets and liabilities are
below:
In thousands
Deferred tax liabilities:
Inventory
Royalty and other long-term debt
Foreign subsidiaries - unremitted earnings
Deferred tax assets:
Net operating loss carryforwards
Mineral properties
Property, plant, and equipment
Mining royalty tax
Capital loss carryforwards
Asset retirement obligation
Unrealized foreign currency loss and other
Accrued expenses
Tax credit carryforwards
Valuation allowance
Net deferred tax liabilities
Year Ended December 31,
2021
2020
—
1,495
—
1,495 $
5
1,094
99
1,198
267,944 $
241,985
$
$
6,525
13,161
8,147
15,404
39,262
1,013
20,589
26,594
398,639
(430,053)
(31,414)
$
32,909 $
1,907
10,841
7,447
17,341
38,761
3,386
16,849
29,809
368,326
(401,304)
(32,978)
34,176
A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax
benefits will not be realized. The Company analyzes its deferred tax assets and, if it is determined that the Company will not
realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined
that the Company will ultimately be more likely than not able to realize all or a portion of the related benefits for which a
valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number
of factors that impact the Company’s ability to realize its deferred tax assets. Based upon this analysis, the Company has
recorded valuation allowances as follows:
84
In thousands
U.S.
Canada
Mexico
New Zealand
Other
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Year Ended December 31,
2021
2020
$
228,942 $
165,561
13,277
21,822
451
215,396
146,611
15,885
22,740
672
$
430,053 $
401,304
The Company has the following tax attribute carryforwards at December 31, 2021, by jurisdiction:
In thousands
U.S.
Canada
Mexico
New
Zealand
Other
Total
Regular net operating losses
$ 466,708 $ 392,061 $
44,257 $
77,764 $
919 $ 981,709
Expiration years
Capital losses
Foreign tax credits
2022-2038
2028-2041
2022-2031
Indefinite
2022-2026
56,534
21,614
—
—
—
—
—
—
—
—
56,534
21,614
The majority of the U.S. capital losses will expire in 2022. Foreign tax credits expire if unused beginning in 2022.
The utilization of U.S. net operating loss carryforwards, tax credit carryforwards, and recognized built-in losses may
be subject to limitation under the rules regarding a change in stock ownership as determined by the Internal Revenue Code and
state tax laws. Section 382 of the Internal Revenue Code of 1986, as amended, imposes annual limitations on the utilization of
net operating loss carryforwards, tax credit carryforwards, and certain built-in losses upon an ownership change as defined
under that Section. Generally, an ownership change may result from transactions that increase the aggregate ownership of
certain shareholders in the Company’s stock by more than 50 percentage points over a three-year testing period. If the Company
experiences an ownership change, an annual limitation would be imposed on certain of the Company’s tax attributes, including
net operating losses and certain other losses, credits, deductions or tax basis. Management has determined that the Company
experienced ownership changes during 2002, 2003, 2007, and 2015 for purposes of Section 382. Based on management’s
calculations, the Company does not expect any of its U.S. tax attributes to expire unused as a result of the Section 382 annual
limitations. However, the annual limitations may impact the timeframe over which the net operating loss carryforwards can be
used, potentially impacting cash tax liabilities in a future period. The U.S. federal tax credits and state net operating losses may
potentially be limited as well. We continue to maintain a full valuation allowance on our US net deferred tax assets since it is
more likely than not that the related tax benefits will not be realized.
The Company may also experience ownership changes in the future as a result of subsequent shifts in our stock
ownership. As a result, if the Company earns U.S. federal taxable income, it may be limited in the ability to (1) recognize
current deductions on built-in loss assets and (2) offset this income with our pre-change net operating loss carryforwards and
other tax credit carryforwards, which may be subject to limitations, potentially resulting in increased future tax liability to us.
Under the Tax Cuts and Jobs Act of 2017 (“TCJA”), federal net operating losses incurred in 2018 and in future years may be
carried forward indefinitely, but the deductibility of such federal net operating losses is limited to 80% of future taxable income.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act suspended the 80% limitation on losses incurred in 2018
and in future years, for tax years beginning before January 1, 2021. The Company does not expect this to impact its net
operating loss usage.
The Company intends to indefinitely reinvest earnings from Mexican operations.
85
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
A reconciliation of the beginning and ending amount related to unrecognized tax benefits is below (in thousands):
Unrecognized tax benefits at December 31, 2019
Gross increase to current period tax positions
Gross increase to prior period tax positions
Reductions in unrecognized tax benefits resulting from a lapse of the applicable statute of limitations
Unrecognized tax benefits at December 31, 2020
Gross increase to current period tax positions
Gross increase to prior period tax positions
Reductions in unrecognized tax benefits resulting from a lapse of the applicable statute of limitations
Unrecognized tax benefits at December 31, 2021
$ 2,706
—
(122)
(1,861)
$
723
—
—
(428)
$
295
At December 31, 2021, 2020, and 2019, $0.3 million, $0.7 million, and $2.7 million, respectively, of these gross
unrecognized benefits would, if recognized, decrease the Company’s effective tax rate.
The Company operates in numerous countries around the world and is subject to, and pays annual income taxes under,
the various income tax regimes in the countries in which it operates. The Company has historically filed, and continues to file,
all required income tax returns and paid the taxes reasonably determined to be due. The tax rules and regulations in many
countries are highly complex and subject to interpretation. From time to time, the Company is subject to a review of its historic
income tax filings and, in connection with such reviews, disputes can arise with the taxing authorities over the interpretation or
application of certain rules to the Company’s business conducted within the country involved.
The Company files income tax returns in various U.S. federal and state jurisdictions, in all identified foreign
jurisdictions, and various others. The statute of limitations remains open from 2017 for the US federal jurisdiction and from
2013 for certain other foreign jurisdictions. As a result of statutes of limitations that will begin to expire within the next 12
months in various jurisdictions and possible settlement of audit-related issues with taxing authorities in various jurisdictions
with respect to which none of these issues are individually significant, the Company believes that it is reasonably possible that
the total amount of its unrecognized income tax liability will decrease between $0.5 million and $1.0 million in the next 12
months.
The Company classifies interest and penalties associated with uncertain tax positions as a component of income tax
expense and recognized interest and penalties of $0.4 million, $1.1 million, and $2.3 million at December 31, 2021, 2020, and
2019, respectively.
NOTE 14 – STOCK-BASED COMPENSATION
The Company has stock incentive plans for executives and eligible employees. Stock awards include restricted stock,
performance shares and stock options. Stock-based compensation expense for the years ended December 31, 2021, 2020, and
2019 was $13.7 million, $8.5 million and $9.3 million, respectively. At December 31, 2021, there was $9.4 million of
unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting
period of 1.5 years.
Restricted Stock
Restricted stock granted under the Company’s incentive plans are accounted for based on the market value of the
underlying shares on the date of grant and generally vest in equal installments annually over three years. Restricted stock
awards are accounted for as equity awards. Holders of restricted stock are entitled to vote the shares and to receive any
dividends declared on the shares.
The following table summarizes restricted stock activity for the years ended December 31, 2021, 2020, and 2019:
86
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Restricted Stock
Number of
Shares
1,541,648 $
1,586,590
(797,025)
(146,538)
2,184,675 $
1,676,634
(928,778)
(207,807)
2,724,724 $
932,442
(1,179,857)
(332,505)
2,144,804 $
Weighted
Average
Grant Date
Fair Value
7.14
4.90
6.36
5.70
5.89
5.13
6.46
5.36
5.26
8.88
5.53
5.83
6.60
Outstanding at December 31, 2018
Granted
Vested
Canceled/Forfeited
Outstanding at December 31, 2019
Granted
Vested
Canceled/Forfeited
Outstanding at December 31, 2020
Granted
Vested
Canceled/Forfeited
Outstanding at December 31, 2021
At December 31, 2021, there was $4.4 million of unrecognized compensation cost related to restricted stock awards to
be recognized over a weighted-average period of 1.3 years.
Performance Shares
Performance shares granted under the Company’s incentive plans are accounted for as equity awards at fair value
using a Monte Carlo simulation valuation model. Performance shares granted during and subsequent to 2018 will vest at the end
of a three-year service period if internal performance metrics are met, with the number of shares vesting impacted by the
inclusion of a modifier based upon a relative stockholder return metric. The relative stockholder return metric is included in the
determination of the grant date fair value of the performance shares; however, the recognition of compensation cost for
performance share awards is based on the results of the internal performance metrics. Performance shares granted prior to 2018
vested at the end of the three-year service period if relative stockholder return and internal performance metrics were met. The
existence of a market condition required recognition of compensation cost for the performance share awards over the requisite
period regardless of whether the relative stockholder return metric was met.
The following table summarizes performance shares activity for the years ended December 31, 2021, 2020, and 2019:
Outstanding at December 31, 2018
Granted (1)
Vested
Canceled/Forfeited (1)
Outstanding at December 31, 2019
Granted (2)
Vested
Canceled/Forfeited (2)
Outstanding at December 31, 2020
Granted (3)
Vested
Canceled/Forfeited (3)
Outstanding at December 31, 2021
87
Performance Shares
Number of
Shares
Weighted
Average
Grant Date
Fair Value
1,538,315 $
946,000
(969,903)
(300,267)
1,214,145 $
1,343,953
(54,132)
(168,864)
2,335,102 $
602,933
(143,312)
(404,710)
2,390,013 $
4.05
4.71
1.77
1.84
6.93
3.95
11.47
10.71
4.83
10.13
7.39
6.12
5.80
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(1) Includes 207,264 additional shares granted and 300,267 shares cancelled in connection with the vesting of the 2016 award in 2019 due to above-target and
below target performance, respectively, in accordance with the terms of the award.
(2) Includes 6,226 additional shares granted and 143,808 shares cancelled in connection with the vesting of the 2017 award in 2020 due to above-target and
below target performance, respectively, in accordance with the terms of the award.
(3) Includes 1,421 additional shares granted and 141,894 shares cancelled in connection with the vesting of the 2018 award in 2021 due to above-target and
below target performance, respectively, in accordance with the terms of the award.
At December 31, 2021, there was $5.0 million of unrecognized compensation cost related to performance shares to be
recognized over a weighted average period of 1.7 years.
Stock Options and Stock Appreciation Rights
Stock options and stock appreciation rights (SARs) granted under the Company’s incentive plans generally vest over
three years and are exercisable over a period not to exceed ten years from the grant date. The exercise price of stock options is
equal to the fair market value of the shares on the date of the grant. The value of each stock option award is estimated using the
Black-Scholes option pricing model. Stock options are accounted for as equity awards and SARs are accounted for as liability
awards and remeasured at each reporting date. SARs, when vested, provide the participant the right to receive cash equal to the
excess of the market price of the shares over the exercise price when exercised.
The following table summarizes stock option and SAR activity for the years ended December 31, 2021, 2020, and
2019:
Outstanding at December 31, 2018
Exercised
Canceled/forfeited
Expired
Outstanding at December 31, 2019
Exercised
Canceled/forfeited
Expired
Outstanding at December 31, 2020
Exercised
Canceled/forfeited
Expired
Outstanding at December 31, 2021
Stock Options
SARs
Weighted
Average
Exercise
Price
Shares
Weighted
Average
Exercise
Price
Shares
319,086 $
13.53
42,152 $
14.14
(11,055)
(11,519)
(4,733)
291,779 $
(30,401)
(39,105)
5.57
9.31
10.00
14.05
5.57
12.77
—
—
—
—
(9,870)
32,282 $
10.00
15.40
—
—
—
—
—
—
(32,282)
15.40
222,273 $
15.44
(57,721)
(16,455)
(16,844)
131,253 $
7.74
18.45
27.45
16.91
—
—
—
—
—
—
—
—
—
—
The following table summarizes outstanding stock options as of December 31, 2021.
Range of
Exercise Price
$ 0.00-$10.00
$10.00-$20.00
$20.00-$30.00
Outstanding
Vested and expected to vest
Exercisable
Weighted
Average
Exercise
Price
Weighted
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic Value
(in thousands)
Number
Outstanding
54,330 $
14,634 $
62,289 $
131,253 $
131,253 $
131,253 $
7.49
16.28
25.27
16.91
16.91
16.91
4.4
0.9
0.7
2.3 $
2.3 $
2.3 $
NA
NA
NA
—
—
—
The total intrinsic value of options exercised for the year ended December 31, 2021 was $0.1 million. Cash received
from options exercised for the year ended December 31, 2021 was $0.4 million for which there was no related tax benefit. The
grant date fair value for stock options vested during the years ended December 31, 2021, 2020, and 2019 was nil.
88
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 15 – FAIR VALUE MEASUREMENTS
In thousands
Unrealized gain (loss) on equity securities
Realized gain (loss) on equity securities
Interest rate swap, net
Exchange agreement embedded derivative
Fair value adjustments, net
Year Ended December 31,
2021
2020
2019
$
$
(11,244) $
768
—
9,933
(543) $
(11,539) $
15,348
19,140
—
—
7,601 $
860
(178)
—
16,030
Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure
fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1), secondary priority to quoted prices in inactive markets or observable inputs (Level 2), and the lowest priority to
unobservable inputs (Level 3).
The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis
(at least annually) by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the
lowest level of input that is significant to the fair value measurement:
In thousands
Assets:
Equity securities
Provisional metal sales contracts
Liabilities:
Gold zero cost collars
Provisional metal sales contracts
In thousands
Assets:
Equity and debt securities
Foreign currency forward exchange contracts
Provisional metal sales contracts
Liabilities:
Gold zero cost collars
Provisional metal sales contracts
Fair Value at December 31, 2021
Total
Level 1
Level 2
Level 3
132,197 $
86
132,283 $
132,197 $
—
132,197 $
— $
86
86 $
1,212 $
162
1,374 $
— $
—
— $
1,212 $
162
1,374 $
Fair Value at December 31, 2020
Total
Level 1
Level 2
Level 3
12,943 $
13,747
481
27,171 $
24,883 $
67
24,950 $
12,943 $
—
—
12,943 $
— $
—
— $
— $
13,747
481
14,228 $
24,883 $
67
24,950 $
—
—
—
—
—
—
—
—
—
—
—
—
—
$
$
$
$
$
$
$
$
The Company’s investments in equity securities are recorded at fair market value in the financial statements based
primarily on quoted market prices. Such instruments are classified within Level 1 of the fair value hierarchy.
The Company’s foreign currency forward exchange contracts are valued using pricing models with inputs derived
from observable market data, including forward market prices and other unobservable inputs. The Company’s gold zero cost
collars are valued using pricing models with inputs derived from observable market data, including forward market prices, yield
curves, credit spreads. The Company’s provisional metal sales contracts include concentrate and certain doré sales contracts
that are valued using pricing models with inputs derived from observable market data, including forward market prices. The
model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified
within Level 2 of the fair value hierarchy.
89
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
As described in Note 7 - Investments, the Exchange Agreement provided that Orion may be entitled to additional
Coeur shares in the event Coeur acquires Victoria in the future for a higher per share consideration, subject to the terms and
conditions of the Exchange Agreement. The Company determined that the potential for additional share consideration in the
Exchange Agreement represents an embedded derivative that requires bifurcation. The obligation to deliver additional Coeur
shares pursuant to the Exchange Agreement expired on October 31, 2021. The accounting treatment of derivative financial
instruments required that the Company record the fair value of the embedded derivative as of the inception date of the
Exchange Agreement and adjust the fair value as of each subsequent balance sheet date. The fair value of the outstanding
embedded derivative was determined using a pricing model with inputs derived from observable market data, including stock
prices, stock price volatility and risk-free rates and other unobservable inputs such as Monte Carlo simulations and probabilities
of Coeur being contractually obligated to make a payment.
In October 2017, the Company acquired the Silvertip mine from shareholders of JDS Silver Holdings Ltd (the
“Silvertip Acquisition”). The consideration for the Silvertip Acquisition included two $25.0 million contingent payments,
which were payable in cash and common stock upon reaching a future permitting milestone and resource declaration milestone,
respectively. The fair value of the Silvertip contingent consideration was estimated based on an estimated discount rate of 2.5%
for the contingent permitting payment and 2.9% for the contingent resource declaration payment and was classified within
Level 3 of the fair value hierarchy. During 2019, the Company paid the $25.0 million due for the permitting milestone in the
form of cash and common stock, and in the first quarter of 2020, the Company paid the remaining $25.0 million due for the
resource declaration milestone in the form of cash and common stock.
No assets or liabilities were transferred between fair value levels in the year ended December 31, 2021.
The following tables present the changes in the fair value of the Company's Level 3 financial assets and liabilities in
the year ended December 31, 2021 and 2020.
In thousands
Liabilities:
Exchange agreement embedded
derivative
In thousands
Liabilities:
Balance at the
beginning of the
period
Initial valuation
Revaluation
Settlements
Balance at the
end of the
period
December 31, 2021
$
— $
9,933 $
(9,933) $
— $
—
Balance at the
beginning of the
period
Initial valuation
Revaluation
Settlements
Balance at the
end of the
period
December 31, 2020
Silvertip contingent consideration
$
25,000 $
— $
— $
(25,000) $
—
The fair value of financial assets and liabilities carried at book value in the financial statements at December 31, 2021
and December 31, 2020 is presented in the following table:
In thousands
Liabilities:
2029 Senior Notes(1)
Revolving Credit Facility(2)
Book Value
Fair Value
Level 1
Level 2
Level 3
December 31, 2021
$ 368,273 $ 337,384 $
— $ 337,384 $
$
65,000 $
65,000 $
— $
65,000 $
—
—
(1) Net of unamortized debt issuance costs of $6.7 million
(2) Unamortized debt issuance costs of $2.4 million included in Other Non-Current Assets.
In thousands
Liabilities:
2024 Senior Notes(1)
Revolving Credit Facility(2)
Book Value
Fair Value
Level 1
Level 2
Level 3
December 31, 2020
$ 227,590 $ 229,874 $
— $
$
— $
— $ 229,874 $
— $
— $
—
—
(1) Net of unamortized debt issuance costs of $2.4 million.
(2) Unamortized debt issuance costs of $1.5 million included in Other Non-Current Assets.
90
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The fair value of the 2029 Senior Notes was estimated using quoted market prices. The fair value of the RCF
approximates book value as the liability is secured, has a variable interest rate, and lacks significant credit concerns.
NOTE 16 – DERIVATIVE FINANCIAL INSTRUMENTS & HEDGING ACTIVITIES
The Company is exposed to various market risks, including the effect of changes in metal prices, foreign currency
exchange rates and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of
business. The Company does not hold or issue derivatives for trading or speculative purposes.
The Company may elect to designate certain derivatives as hedging instruments under U.S. GAAP. The Company
formally documents all relationships between designated hedging instruments and hedged items as well as its risk management
objectives and strategies for undertaking hedge transactions. This process includes linking all derivatives designated as hedges
to either recognized assets or liabilities or forecasted transactions and assessing, both at inception and on an ongoing basis, the
effectiveness of the hedging relationships.
Derivatives Not Designated as Hedging Instruments
Exchange Agreement Embedded Derivative
The Exchange Agreement provided that Orion may be entitled to additional Coeur shares in the event Coeur acquires
Victoria in the future for a higher per share consideration, subject to the terms and conditions of the Exchange Agreement. The
Company determined that the potential for additional share consideration in the Exchange Agreement represents an embedded
derivative that requires bifurcation. The obligation to deliver additional Coeur shares pursuant to the Exchange Agreement
expired on October 31, 2021. The accounting treatment of derivative financial instruments required that the Company record
the fair value of the embedded derivative as of the inception date of the Exchange Agreement and adjust the fair value as of
each subsequent balance sheet date. The obligation to deliver additional Coeur shares pursuant to the Exchange Agreement
expired on October 31, 2021.
Provisional Metal Sales
The Company enters into sales contracts with third-party smelters, refiners and off-take customers which, in some
cases, provide for a provisional payment based upon preliminary assays and quoted metal prices. The provisionally priced sales
contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The
host contract is the receivable recorded at the forward price at the time of sale. The embedded derivatives do not qualify for
hedge accounting and are marked to market through earnings each period until final settlement.
At December 31, 2021, the Company had the following derivative instruments that settle as follows:
In thousands except average prices and notional ounces
2022
2023 and Thereafter
Provisional gold sales contracts
Average gold price per ounce
Notional ounces
$
$
29,481 $
1,798 $
16,393
—
—
—
The following summarizes the classification of the fair value of the derivative instruments:
In thousands
Provisional metal sales contracts
In thousands
Provisional metal sales contracts
December 31, 2021
Prepaid expenses and other
Accrued liabilities and other
$
86 $
162
December 31, 2020
Prepaid expenses and other
Accrued liabilities and other
$
481 $
67
91
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The following represent mark-to-market gains (losses) on derivative instruments in the year ended December 31, 2021,
2020, and 2019, respectively (in thousands):
Financial statement line
Revenue
Derivative
Provisional metal sales contracts
Fair value adjustments, net Exchange agreement embedded derivative
Fair value adjustments, net
Interest rate swaps
Year Ended December 31,
2021
2020
2019
(490) $
959 $
9,933
—
—
—
9,443 $
959 $
337
—
(178)
159
$
$
Derivatives Designated as Cash Flow Hedging Strategies
To protect the Company’s exposure to fluctuations in metal prices the Company entered into Asian (or average value)
put and call option contracts in net-zero-cost collar arrangements. The contracts are net cash settled monthly and, if the price of
gold at the time of expiration is between the put and call prices, would expire at no cost to the Company. If the price of gold at
the time of expiration is lower than the put prices or higher than the call prices, it would result in a realized gain or loss,
respectively. The Company has elected to designate these instruments as cash flow hedges of forecasted transactions at their
inception.
To protect the Company’s exposure to fluctuations in foreign currency exchange rates for subsidiaries whose
functional currency is U.S dollar and are exposed to forecasted transaction denominated in the Mexican Peso and the Canadian
Dollar, in March 2020, the Company entered into foreign currency forward exchange contracts to manage this risk and
designated these instruments as cash flow hedges of forecasted foreign denominated transactions. The Company has elected to
designate these instruments as cash flow hedges of forecasted transactions at their inception. As of December 31, 2021, there
were no outstanding foreign currency forward exchange contracts.
At December 31, 2021, the Company had the following derivative cash flow hedge instruments that settle as follows:
In thousands except average prices and notional ounces
2022
2023 and Thereafter
Gold put options
Average gold strike price per ounce
Notional ounces
Gold call options
Average gold strike price per ounce
Notional ounces
$
$
1,630 $
132,000
2,038 $
132,000
—
—
—
—
The effective portions of cash flow hedges are recorded in accumulated other comprehensive income (loss) (“AOCI”)
until the hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of metal sales
revenue are recognized as a component of Revenue in the same period as the related sale is recognized. Deferred gains and
losses associated with cash flow hedges of foreign currency transactions are recognized as a component of Costs Applicable to
Sales or Pre-development, Reclamation and Other in the same period the related expenses are incurred.
At inception, the Company performed an assessment of the forecasted transactions and the hedging instruments and
determined that the hedging relationships are considered perfectly effective. Future assessments are performed to verify that
critical terms of the hedging instruments and the forecasted transactions continue to match, and the forecasted transactions
remain probable, as well as an assessment of any adverse developments regarding the risk of the counterparties defaulting on
their commitments. There have been no such changes in critical terms or adverse developments.
As of December 31, 2021, the Company had $1.2 million of net after-tax loss in AOCI related to losses from cash flow
hedge transactions, of which $1.2 million of net after-tax losses is expected to be recognized in its Consolidated Statement of
Comprehensive Income (Loss) during the next 12 months. Actual amounts ultimately reclassified to net income are dependent
on the price of gold for metal contracts.
92
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
The following summarizes the classification of the fair value of the derivative instruments designated as cash flow
hedges:
In thousands
Gold zero cost collars
In thousands
Gold zero cost collars
Foreign currency forward exchange contracts
December 31, 2021
Prepaid expenses and other
Accrued liabilities and other
$
— $
1,212
December 31, 2020
Prepaid expenses and other
Accrued liabilities and other
$
$
— $
13,747
13,747 $
24,883
—
24,883
The following table sets forth the pre-tax gains (losses) on derivatives designated as cash flow hedges that have been
included in AOCI and the Consolidated Statement of Comprehensive Income (Loss) for the year ended December 31, 2021,
2020, and 2019, respectively (in thousands).
Amount of Gain (Loss) Recognized in AOCI
Gold zero cost collars
Foreign currency forward exchange contracts
Amount of (Gain) Loss Reclassified From AOCI to Earnings
Gold zero cost collars
Foreign currency forward exchange contracts
Year Ended December 31,
2021
2020
2019
$
$
$
$
22,733 $
(32,345) $
50
19,911
22,783 $
(12,434) $
938 $
(13,797)
(12,859) $
7,598 $
(6,164)
1,434 $
(136)
—
(136)
—
—
—
Credit Risk
The credit risk exposure related to any derivative instrument is limited to the unrealized gains, if any, on outstanding
contracts based on current market prices. To reduce counter-party credit exposure, the Company enters into contracts with
institutions management deems credit-worthy and limits credit exposure to each institution. The Company does not anticipate
non-performance by any of its counterparties.
93
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 17 – ADDITIONAL COMPREHENSIVE INCOME (LOSS) DETAIL
Pre-development, reclamation, and other consists of the following:
In thousands
COVID-19
Silvertip ongoing carrying costs
Silvertip suspension costs
Gain on modification of right of use lease
Asset retirement accretion
Other
Pre-development, reclamation and other
Other, net consists of the following:
In thousands
Foreign exchange gain (loss)
Gain (loss) on sale of assets
VAT write-down
Gold zero cost collars novation fee
Gain (loss) on sale of Manquiri NSR consideration
RMC receivable write-down
Gain (loss) on Silvertip contingent consideration
Interest income on notes receivable
Other
Other, net
Year Ended December 31,
2021
2020
2019
$
6,618 $
24,928
—
—
11,988
5,144
48,678 $
$
15,555 $
16,384
11,199
(4,051)
11,754
4,813
55,654 $
—
—
—
—
12,154
6,267
18,421
Year Ended December 31,
2021
2020
2019
$
$
(2,779) $
4,111
(25,982)
—
—
—
—
—
1,725
(22,925) $
(2,245) $
(2,849)
—
(3,819)
365
—
955
—
1,652
(5,941) $
(4,346)
(714)
—
—
133
(1,040)
—
198
2,576
(3,193)
NOTE 18 – NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the
weighted average number of the Company’s common stock outstanding during the period. Diluted net income (loss) per share
reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or
converted into common stock.
For the years ended December 31, 2021, 2020 and 2019, there were 634,419, 389,629 and 1,137,726 common stock
equivalents, respectively, related to equity-based awards were not included in the diluted earnings per share calculation as the
shares would be antidilutive.
94
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
In thousands except per share amounts
2021
2020
2019
Year ended December 31,
Net income (loss) available to common stockholders
Income (loss) from continuing operations
Income (loss) from discontinued operations
Weighted average shares:
Basic
Effect of stock-based compensation plans
Diluted
Income (loss) per share:
Income (loss) from continuing operations
Income (loss) from discontinued operations
Basic
Diluted income (loss) per share:
Income (loss) from continuing operations
Income (loss) from discontinued operations
Diluted
$
$
$
$
$
$
(31,322) $
25,627 $
(346,896)
—
—
5,693
(31,322) $
25,627 $
(341,203)
250,044
—
250,044
240,803
1,746
242,549
218,812
—
218,812
(0.13) $
—
(0.13) $
(0.13) $
—
(0.13) $
0.11 $
—
0.11 $
0.11 $
—
0.11 $
(1.59)
0.03
(1.56)
(1.59)
0.03
(1.56)
On April 23, 2020, the Company entered into an ATM Equity Offering Sales Agreement (the “Sales Agreement”) with
BofA Securities, Inc. and RBC Capital Markets, LLC as sales agents (the “Sales Agents”) and filed a prospectus supplement for
the sale of its common stock, par value $0.01 per share, by way of an “at the market” offering having an aggregate offering
price of up to $100,000,000 (the “ATM Program”). Sales under the ATM Program, if any, will be made pursuant to the terms of
the Sales Agreement. At December 31, 2021, the Company had not sold any shares of its common stock under the ATM
Program.
NOTE 19 - SUPPLEMENTAL GUARANTOR INFORMATION
The following summarized financial information is presented to satisfy disclosure requirements of Rule 13-01 of
Regulation S-X resulting from the guarantees by Coeur Alaska, Inc., Coeur Explorations, Inc., Coeur Rochester, Inc., Coeur
South America Corp., Wharf Resources (U.S.A.), Inc. and its subsidiaries, Coeur Capital, Inc., Coeur Sterling, Inc., Sterling
Intermediate Holdco, Inc., and Coeur Sterling Holdings LLC (collectively, the “Subsidiary Guarantors”) of the 2029 Senior
Notes. The following schedules present summarized financial information of (a) Coeur, the parent company and (b) the
Subsidiary Guarantors (collectively the “Obligor Group”). The summarized financial information of the Obligor Group is
presented on a combined basis with intercompany balances and transactions between entities in the Obligor Group eliminated.
The Obligor Group’s amounts due from, amounts due to and transactions with certain wholly-owned domestic and foreign
subsidiaries of the Company have been presented in separate line items, if they are material. Each of the Subsidiary Guarantors
is 100% owned by Coeur and the guarantees are full and unconditional and joint and several obligations. There are no
restrictions on the ability of Coeur to obtain funds from the Subsidiary Guarantors by dividend or loan.
95
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
SUMMARIZED BALANCE SHEET
DECEMBER 31, 2021
ASSETS
Coeur Mining, Inc.
Guarantor
Subsidiaries
In thousands
CURRENT ASSETS
Cash and cash equivalents
Receivables
Ore on leach pads
Inventory
Prepaid expenses and other
NON-CURRENT ASSETS
Property, plant and equipment, net
Mining properties, net
Ore on leach pads
Restricted assets
Equity and debt securities
Net investment in subsidiaries
Other
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable
Other accrued liabilities
Debt
Reclamation
NON-CURRENT LIABILITIES
Debt
Reclamation
Deferred tax liabilities
Other long-term liabilities
Intercompany payable (receivable)
STOCKHOLDERS’ EQUITY
Common stock
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income (loss)
$
2,499 $
(14)
—
—
8,660
11,145
1,476
—
—
1,496
132,197
794,254
47,317
16,126
5,607
81,128
24,954
813
128,628
188,721
514,397
73,495
206
—
56,623
53,511
$
987,885 $
1,015,581
$
1,624 $
16,729
—
—
18,353
463,318
—
751
3,266
(298,065)
169,270
2,569
3,738,347
(2,939,442)
(1,212)
800,262
59,463
45,676
23,608
1,561
130,308
53,166
125,695
7,422
20,826
286,655
493,764
19,356
340,701
31,452
—
391,509
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
987,885 $
1,015,581
96
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
SUMMARIZED BALANCE SHEET
DECEMBER 31, 2020
ASSETS
Coeur Mining, Inc.
Guarantor
Subsidiaries
In thousands
CURRENT ASSETS
Cash and cash equivalents
Receivables
Ore on leach pads
Inventory
Prepaid expenses and other
NON-CURRENT ASSETS
Property, plant and equipment, net
Mining properties, net
Ore on leach pads
Restricted assets
Equity and debt securities
Net investment in subsidiaries
Other
TOTAL ASSETS
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable
Other accrued liabilities
Debt
Reclamation
NON-CURRENT LIABILITIES
Debt
Reclamation
Deferred tax liabilities
Other long-term liabilities
Intercompany payable (receivable)
STOCKHOLDERS’ EQUITY
Common stock
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income (loss)
$
12,727 $
381
—
—
20,872
33,980
1,946
—
—
1,482
12,943
514,705
198,587
$
763,643 $
$
1,978 $
36,183
—
—
38,161
227,592
—
100
3,629
(199,318)
32,003
2,438
3,610,297
(2,908,120)
(11,136)
693,479
28,515
3,631
74,866
27,223
1,375
135,610
148,640
353,818
81,963
206
—
72,785
51,528
844,550
52,177
46,023
14,506
1,584
114,290
33,321
93,349
8,457
29,916
176,914
341,957
20,401
340,700
27,202
—
388,303
844,550
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
763,643 $
97
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
SUMMARIZED STATEMENTS OF INCOME
YEAR ENDED DECEMBER 31, 2021
In thousands
Revenue
Gross profit (loss)
Income (loss) from continuing operations
Net income (loss)
NOTE 20 – COMMITMENTS AND CONTINGENCIES
Mexico Litigation Matters
Coeur Mining, Inc.
Guarantor
Subsidiaries
$
$
$
$
— $
(714) $
(31,324) $
(31,324) $
512,553
67,941
3,204
3,204
As of December 31, 2021, $26.0 million is due from the Mexican government associated with VAT that was paid
under Coeur Mexicana, S.A. de C.V.’s (“Coeur Mexicana’s”) prior royalty agreement with a subsidiary of Franco-Nevada
Corporation, which was terminated in 2016. Coeur Mexicana applied for and initially received VAT refunds associated with the
royalty payments in the normal course; however, in 2011 the Mexican tax authorities began denying Coeur Mexicana’s VAT
refunds based on the argument that VAT was not legally due on the royalty payments. Accordingly, Coeur Mexicana began to
request refunds of the VAT as undue payments, which the Mexican tax authorities also denied. The Company has since been
engaged in ongoing efforts to recover the VAT from the Mexican government (including through litigation and potential
arbitration as well as refiling VAT refund requests). Despite a favorable ruling from Mexican tax courts in this matter in 2018,
litigation has continued at the administrative, appeals court and supreme court levels, most of which has been determined
unfavorably to Coeur (including during 2021) based on interpretations of applicable law and prior court decisions which the
Company and its counsel believe are contrary to legal precedent, conflicting and erroneous. While the Company believes that it
remains legally entitled to be refunded the full amount of the VAT receivable and intends to rigorously continue its VAT
recovery efforts, based on the continued failure to recover the VAT receivable and recent unfavorable Mexican court decisions,
the Company determined to write down the carrying value of the VAT receivable at September 30, 2021. Coeur Mexicana may
still elect to initiate an arbitration proceeding under Chapter 11 of the North American Free Trade Agreement, or NAFTA.
Outcomes in NAFTA arbitration and the process for recovering funds even if there is a successful outcome in NAFTA
arbitration can be lengthy and unpredictable.
In addition, ongoing litigation with the Mexican government associated with enforcement of water rights in Mexico, if
unsuccessful, may impact Coeur Mexicana’s ability to access new sources of water to provide sufficient supply for its
operations at Palmarejo and, if material, may have a material adverse impact on the Company’s operations and financial results.
Palmarejo Gold Stream
Coeur Mexicana sells 50% of Palmarejo gold production (excluding production from certain properties acquired in
2015) to a subsidiary of Franco-Nevada Corporation (“Franco-Nevada”) under a gold stream agreement for the lesser of $800
or spot price per ounce. In 2016, Coeur Mexicana received a $22.0 million deposit toward future deliveries under the gold
stream agreement. In accordance with generally accepted accounting principles, although Coeur Mexicana has satisfied its
contractual obligation to repay the deposit to Franco-Nevada, the deposit is accounted for as deferred revenue and is recognized
as revenue on a units-of-production basis as ounces are sold to Franco-Nevada. At December 31, 2021 the remaining
unamortized balance was $8.2 million, which is included in Accrued liabilities and other and Other long-term liabilities on the
Consolidated Balance Sheet.
Kensington Prepayment
In June 2019, Coeur entered into a transaction with an existing metal sales counterparty whereby it amended its
existing sales and purchase contract for gold concentrate from its Kensington mine (the “Amended Sales Contract”). From time
to time, the Amended Sales Contract has been further amended to allow for additional prepayments, the latest occurring in July
2021, with an effective date as of June 28, 2021, to include options for Coeur to receive up to two additional prepayments of up
to $15.0 million. In December 2020, Coeur exercised an option to receive the $15.0 million December 2020 Prepayment. In the
first half of 2021, the Kensington mine delivered $15.0 million in satisfaction of the December 2020 Prepayment. In June 2021,
Coeur exercised an option to receive the $15.0 million June 2021 Prepayment, and delivered $15.0 million against that
$15.0 million in the second half of 2021. In December 2021, the Company exercised the option to receive the $15.0 million
December 2021 Prepayment. The remaining deliveries of $15.0 million under the December 2021 Prepayment are recognized
as a deferred revenue liability and are presented in Accrued liabilities and other on the Consolidated Balance Sheet. Under the
98
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
relevant terms of the Amended Sales Contract, Coeur maintains its exposure to the price of gold and expects to recognize the
remaining value of the accrued liability by December 31, 2022.
POA 11 Expansion Project
In the second half of 2021 the Company began seeing inflationary pressures on bids for remaining unawarded
contracts on the POA 11 expansion project at Rochester during the second half of 2021, most notably on two structural,
mechanical, piping, electrical and instrumentation (“SMPEI”) construction contracts for the Merrill-Crowe process plant and
crushing circuit, respectively. Coeur recently selected the general SMPEI contractor for construction of the Merrill-Crowe
process plant and crusher corridor based on a revised commercial approach from the previous lump-sum commercial model to a
single contract. SMPEI work under the initial contract is beginning to advance.
Coeur has also advanced work related to implementation of pre-screens as part of the POA 11 expansion project and
has elected to proceed with this scope change enhancement. As previously disclosed, the Company plans to integrate pre-
screens into the current crushing system at Rochester, which is expected to drive improved performance while providing
valuable operating experience and knowledge that can be applied to the new crushing circuit as part of the POA 11 expansion.
Coeur has commenced detailed engineering for pre-screens and intends to align construction of the pre-screens with the
completion of the crusher corridor. Installation of pre-screens on the existing crusher system is scheduled for the first half of
2022 with commissioning expected to begin around mid-year.
In connection with the items discussed above, the Company has conducted a comprehensive re-baselining of the
overall schedule and costs associated with the original scope of POA 11.
Coeur now estimates the total construction capital for POA 11 to be approximately $597 million, which includes the
10-15% previously announced potential cost escalation as well as $70 - $80 million related to pre-screen implementation and
additional porject contingency to reflect ongoing COVID and schedule risk. As of December 31, 2021, the Company has
incurred approximately $236 million in the expansion and 61% of the capital is now committed (excluding the recently-
awarded SMPEI contract, which is expected to be formalized in the first quarter).
Excluding capital leases, Coeur forecasts capital expenditures related to POA 11 to be approximately $217 -
$257 million and $131 - $171 million in 2022 and 2023, respectively. Additional details on expected production and capital
expenditures for Rochester can be found in the Technical Report Summary filed by the Company with the U.S. Securities and
Exchange Commission on February 16, 2022.
Other Commitments and Contingencies
As part of its ongoing business and operations, the Company and its affiliates are required to provide surety bonds,
bank letters of credit, bank guarantees and, in some cases, cash as financial support for various purposes, including
environmental remediation, reclamation, collateral for gold hedges and other general corporate purposes. As of December 31,
2021 and December 31, 2020, the Company had surety bonds totaling $315.1 million and $311.9 million, respectively, in place
as financial support for future reclamation and closure costs. The obligations associated with these instruments are generally
related to performance requirements that the Company addresses through its ongoing operations and from time-to-time, the
Company may be required to post collateral, including cash or letters of credit which reduce availability under its revolving
credit facility, to support these instruments. As the specific requirements are met, the beneficiary of the associated instrument
cancels and/or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with
long-lived assets and will remain outstanding until closure. The Company believes it is in compliance with all applicable
bonding obligations and will be able to satisfy future bonding requirements through existing or alternative means, as they arise.
99
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 21 – ADDITIONAL BALANCE SHEET DETAIL AND SUPPLEMENTAL CASH FLOW INFORMATION
Accrued liabilities and other consist of the following:
In thousands
Accrued salaries and wages
Deferred revenue (1)
Income and mining taxes
Accrued operating costs
Unrealized losses on derivatives
Taxes other than income and mining
Accrued interest payable
Operating lease liabilities
December 31, 2021
December 31, 2020
$
28,408 $
16,093
13,856
5,592
1,374
3,284
8,038
11,301
30,457
16,425
26,118
3,327
24,950
3,616
1,855
12,410
119,158
Accrued liabilities and other
(1) See Note 20 -- Commitments and Contingencies for additional details on deferred revenue liabilities
$
87,946 $
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the
statement of financial position that total the same such amounts shown in the statement of cash flows in the year ended
December 31, 2021 and 2020:
In thousands
Cash and cash equivalents
Restricted cash equivalents
Total cash, cash equivalents and restricted cash shown in the statement of cash flows
December 31, 2021
December 31, 2020
$
$
56,664 $
1,625
58,289 $
92,794
1,376
94,170
Non-cash financing and investing activities:
Finance lease obligations
Capital expenditures, not yet paid
Non-cash extinguishment of senior notes
Non-cash Silvertip contingent consideration
Non-cash acquisition of Victoria Gold Corp common stock
Other cash flow information:
Interest paid
Income and mining taxes paid
NOTE 22 – ASSET AND LIABILITIES HELD FOR SALE
Year ended December 31,
2021
2020
2019
37,860 $
5,283 $
16,615
40,904 $
30,682 $
8,188
— $
— $
— $
20,009
5,295 $
5,973
118,777 $
— $
—
19,655 $
20,634 $
57,200 $
35,600 $
24,428
33,700
$
$
$
$
$
$
$
On October 27, 2021, the Company entered into a definitive agreement (the “Agreement”) to sell its La Preciosa
project located in the State of Durango, Mexico to Avino Silver & Gold Mines Ltd. (“Avino”). The transaction is subject to
customary closing conditions, including required regulatory approvals and expected to close in the first quarter of 2022.
Under the Agreement, Avino will acquire the La Preciosa project from Coeur for the following consideration:
•
•
•
$15.0 million upon closing of the transaction,
$5.0 million promissory note that matures prior to the first anniversary of the transaction closing,
Equity consideration of 14.0 million units, payable on closing, each consisting of one share of Avino common
stock and one half of one common share purchase warrant of Avino common stock, priced at a 25% premium
to the 20-day volume weighted average price prior to announcement,
100
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
•
•
•
Deferred cash consideration of approximately $8.8 million to be paid no later than the first anniversary of
initial production from any portion of the La Preciosa project,
Contingent payments of $0.25 per silver equivalent ounce (subject to an inflationary adjustment) on any new
mineral reserves discovered and declared outside of the current resource area at the La Preciosa project, up to
a maximum payment of $50.0 million, and
Two royalties covering the La Preciosa land package, including (i) a 1.25% net smelter returns royalty on
properties covering the Gloria and Abundancia areas of the La Preciosa project and (ii) a 2.00% gross value
royalty on all areas of the La Preciosa project other than the Gloria and Abundancia areas, offset by the
amount of any new mineral reserve contingent payments made to Coeur.
The Company classified the La Preciosa project as held for sale as of December 31, 2021 and the associated assets and
liabilities are classified separately on the consolidated balance sheets. The major classes of assets and liabilities associated with
the La Preciosa project as of December 31, 2021 are as follows:
In thousands
Cash and cash equivalents
Receivables
Prepaid expenses and other
Property, plant and equipment, net
Mining properties, net
Other
TOTAL ASSETS
Accounts payable
Deferred tax liabilities
TOTAL LIABILITIES
December 31, 2021
$
$
$
$
234
1,211
1,338
1,626
49,085
746
54,240
311
10,958
11,269
NOTE 23 – DISCONTINUED OPERATIONS
In December 2017, the Company and certain of its subsidiaries entered into a definitive agreement (as amended, the
“Manquiri Agreement”) to sell all of the outstanding capital stock of Empresa Minera Manquiri S.A. (“Manquiri”), which is the
operator of the San Bartolomé mine and processing facility (the “Manquiri Divestiture”). On February 28, 2018, the Manquiri
Divestiture was completed, and, in accordance with the Manquiri Agreement, the capital stock in Manquiri was sold to Ag-
Mining Investments, AB, a privately-held Swedish company (the “Buyer”), in exchange for, among other items, (A) 2.0% net
smelter returns royalty on all metals processed through the San Bartolomé mine’s processing facility (the “NSR”) and (B)
promissory notes payable by the Buyer with an aggregate principal amount equal to $27.6 million (the “Manquiri Notes
Receivable”). In September 2018, the Company entered into the Letter Agreement with the Buyer pursuant to which the total
aggregate principal amount of the Manquiri Notes Receivable was reduced to $25.0 million, and the Buyer made a concurrent
cash payment of $15.0 million to the Sellers in respect of the Manquiri Notes Receivable. In addition, the Company also agreed
to forgo any rights to any value added tax refunds collected or received by Manquiri.
On February 28, 2019, the parties executed a letter agreement (the “February Letter Agreement”), which amended
certain terms of the Manquiri Agreement. Pursuant to the February Letter Agreement, the Buyer agreed to accelerate repayment
of the remaining aggregate $6.0 million owed under the Manquiri Notes Receivable, which was received. As of the date of the
entry into the February Letter Agreement, the remaining obligations under the Manquiri Agreement (including post-closing
indemnification obligations) terminated. The Company recorded a $5.7 million gain on the sale Manquiri following the release
of the indemnification liability (associated with termination of post-closing indemnification obligations) pursuant to the
February Letter Agreement.
In January 2020, the Buyer purchased the NSR from Coeur by making a payment to Coeur of $4.5 million. Coeur
recorded a gain of $0.4 million following the payment.
101
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A.
Controls and Procedures
(a) Disclosure Controls and Procedures
The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information
required to be disclosed by it in its periodic reports filed with the SEC is recorded, processed, summarized and reported, within
the time periods specified in the SEC’s rules and forms, and to ensure that such information is accumulated and communicated
to the Company’s management, including its Chief Executive Officer, and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure. Based on an evaluation of the Company’s disclosure controls and procedures
conducted by the Company’s Chief Executive Officer and Chief Financial Officer, such officers concluded that the Company’s
disclosure controls and procedures were effective and operating at a reasonable assurance level as of December 31, 2021.
(b) Management’s Report on Internal Control Over Financial Reporting
The management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting. The Securities Exchange Act of 1934 defines internal control over financial reporting in Rule 13a-15(f) and
15d-15(f) as a process designed by, or under the supervision of, the Company’s principal executive and principal financial
officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles and includes those policies and procedures that:
•
•
•
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements
in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of the Company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition
of the Company’s assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as
of December 31, 2021. In making this assessment, the Company’s management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based
upon its assessment, management concluded that, as of December 31, 2021, the Company’s internal control over financial
reporting was effective.
The effectiveness of internal control over financial reporting as of December 31, 2021 has been audited by Grant
Thornton LLP, an independent registered public accounting firm, as stated in their report which is included herein.
(c) Changes in Internal Control Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting during the most recently
completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over
financial reporting.
102
Item 9B.
Other Information
In accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and the Company’s insider
trading policy: (i) Mitchell J. Krebs, the Company’s President and Chief Executive Office, entered into an amended selling plan
on November 5, 2021, and (ii) a family trust associated with John Robinson, a member of the Board of Directors of the
Company, entered into a selling plan on November 11, 2021. Under Mr. Krebs’s selling plan, between December 2021 and
September 2022, Mr. Krebs will sell up to a total of 200,000 shares of the Company’s common stock so long as the market
price of the common stock is higher than the minimum threshold price specified in the plan. Under Mr. Robinson’s family trust
selling plan, between December 2021 and December 2022, the trust will sell up to a total of 90,000 shares of the Company’s
common stock so long as the market price of the common stock is higher than the minimum threshold prices specified in the
plan.
Rule 10b5-1 permits an insider to implement a written prearranged trading plan entered into at a time when the insider
is not aware of any material nonpublic information about the Company and allows the insider to trade on a one-time or
regularly scheduled basis regardless of any material nonpublic information about the Company thereafter received by the
insider.
103
PART III
Item 10.
Directors, Executive Officers and Corporate Governance
Pursuant to General Instruction G(3) of Form 10-K, the information called for by this item regarding directors is
hereby incorporated by reference from the Company’s definitive proxy statement for the 2022 Annual Meeting of Stockholders
filed pursuant to Regulation 14A, or an amendment hereto, to be filed not later than 120 days after the end of the fiscal year
covered by this report under the captions “Proposal No. 1: Election of Directors”, “Information about Executive Officers”,
“Corporate Governance Guidelines and Code of Business Conduct and Ethics” and “Audit Committee Report”.
Item 11.
Executive Compensation
Pursuant to General Instruction G(3) of Form 10-K, the information called for by this item is hereby incorporated by
reference from the Company’s definitive proxy statement for the 2022 Annual Meeting of Stockholders filed pursuant to
Regulation 14A, or an amendment hereto, to be filed not later than 120 days after the end of the fiscal year covered by this
report under the captions “Compensation Discussion and Analysis,” “2021 Summary Compensation Table,” “2021 Grants of
Plan-Based Awards,” “Outstanding Equity Awards at 2021 Year End,” “2021 Option Exercises and Stock Vested,” “Pension
Benefits and Nonqualified Deferred Compensation,” “Director Compensation” and “Compensation Committee Report.”
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Pursuant to General Instruction G(3) of Form 10-K, certain information called for by this item is hereby incorporated
by reference from the Company’s definitive proxy statement for the 2022 Annual Meeting of Stockholders filed pursuant to
Regulation 14A, or an amendment hereto, to be not later than 120 days after the end of the fiscal year covered by this report
under the caption “Share Ownership.”
Equity Compensation Plan Information
The following table sets forth information as of December 31, 2021 regarding the Company’s equity compensation
plans.
Plan category
Equity compensation plans approved by security holders
Equity compensation plans not approved by security holders
Total
Number of shares to
be
issued upon exercise of
outstanding options,
warrants and rights
Weighted-average
exercise
price of outstanding
options,
warrants and rights
(a)
(b)
131,253 $
—
131,253 $
16.91
—
16.91
Number of shares
remaining
available for future
issuance
under equity
compensation
plans (excluding
securities reflected in
column (a) (1)
(c)
17,713,873
—
17,713,873
(1) Amounts include 2,390,013 performance shares that cliff vest three years after the date of grant if certain market and performance criteria are met, if
the recipient remains an employee of the Company and subject to approval of the Compensation Committee of the Board of Directors.
Item 13.
Certain Relationships and Related Transactions, and Director Independence
Pursuant to General Instruction G(3) of Form 10-K, the information called for by this item is hereby incorporated by
reference from the Company’s definitive proxy statement for the 2022 Annual Meeting of Stockholders filed pursuant to
Regulation 14A, or an amendment hereto, to be filed not later than 120 days after the end of the fiscal year covered by this
report under the captions “Related Person Transactions”, “Meeting Attendance”, “Committees of the Board of Directors”, and
“Director Independence”.
Item 14.
Principal Accountant Fees and Services
Pursuant to General Instruction G(3) of Form 10-K, the information called for by this item is hereby incorporated by
reference from the Company’s definitive proxy statement for the 2022 Annual Meeting of Stockholders filed pursuant to
Regulation 14A, or an amendment hereto, to be filed not later than 120 days after the end of the fiscal year covered by this
report under the captions “Audit and Non-Audit Fees” and “Audit Committee Policies and Procedures for Pre-Approval of
Independent Auditor Services.” The Company’s independent registered public accounting firm is Grant Thornton, LLP,
Chicago, Illinois, PCAOB ID Number: 248
104
Item 15.
Exhibits
PART IV
3.1
3.2
3.3
3.4
4.1
4.2
4.3
4.4
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
Delaware Certificate of Conversion of the Registrant, effective as of May 16, 2013 (Incorporated herein by
reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K12B filed on May 16, 2013 (File No.
001-08641)).
Delaware Certificate of Incorporation of the Registrant, effective as of May 16, 2013 (Incorporated herein by
reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K12B filed on May 16, 2013 (File No.
001-08641)).
Certificate of Amendment to Certificate of Incorporation, effective as of May 12, 2015 (Incorporated herein by
reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-8 filed on May 13, 2015 (File No.
333-204142)).
Amended and Restated Bylaws effective March 8, 2019 (incorporated herein by reference to Exhibit 3.1 to the
Registrants Current Report on Form 8-K filed on March 11, 2019 (File No. 001-08641)).
Description of Coeur Mining, Inc. securities registered under Section 12 of the Exchange Act (Incorporated
herein by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K filed on February 19, 2020
(File No. 001-08641)).
Form of Common Stock Share Certificate of the Registrant. (Incorporated herein by reference to Exhibit 4.1 to
the Registrant’s Current Report on Form 8-K12B filed on May 16, 2013 (File No. 001-08641)).
Indenture, dated May 31, 2017, among Coeur Mining, Inc., as issuer, certain subsidiaries of Coeur Mining, Inc.,
as guarantors thereto, and The Bank of New York Mellon, as trustee (Incorporated by reference to Exhibit 4.1 to
the Registrant’s Current Report on Form 8-K filed on May 31, 2017 (File No. 001-08641)).
Indenture, dated March 1, 2021, among Coeur Mining, Inc., as issuer, certain subsidiaries of Coeur Mining, Inc.,
as guarantors thereto, and The Bank of New York Mellon, as trustee. (Incorporated herein by reference to Exhibit
4.1 to the Registrant’s Current Report on Form 8-K filed on March 1, 2021 (File No. 001-08641)).
401k Plan of the Registrant. (Incorporated by reference to Exhibit 10(pp) to the Registrant’s Annual Report on
Form 10-K filed on March 29, 1995 (File No. 001-08641)).*
Amended Mining Lease, effective as of August 5, 2005, between Hyak Mining Company, Inc. and Coeur Alaska,
Inc. (Incorporated herein by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q filed on
August 12, 2005 (File No. 001-08641)).
Form of Indemnification Agreement (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current
Report on Form 8-K filed on May 16, 2013 (File No. 001-08641)).
Amended and Restated Executive Severance Policy of the Registrant (Incorporated by reference to Exhibit 10.7 to
the Registrant’s Annual Report on Form 10-K filed on February 7, 2018 (File No. 001-08641)).*
Offer letter dated February 15, 2013 from the Registrant to Casey M. Nault. (Incorporated herein by reference to
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on May 7, 2014 (File No. 001-08641)).*
Amended and Restated Employment Agreement dated February 5, 2018 between the Registrant and Mitchell J.
Krebs (Incorporated by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K filed on
February 7, 2018 (File No. 001-08641)).*
Offer letter dated August 24, 2013 from the Registrant to Hans Rasmussen (Incorporated by reference to Exhibit
10.10 to the Registrant’s Annual Report on Form 10-K filed on February 7, 2018 (File No. 001-08641)).*
Coeur Mining, Inc. 2015 Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K filed on May 13, 2015 (File No. 001-08641)).*
Annual Incentive Plan Summary of the Registrant (Incorporated herein by reference to Exhibit 10.30 to the
Registrant’s Annual Report on Form 10-K filed on February 9, 2017 (File No. 001-08641)).*
Officer Severance Policy of the Registrant (Incorporated herein by reference to Exhibit 10.31 to the Registrant’s
Annual Report on Form 10-K filed on February 9, 2017 (File No. 001-08641)).*
Nonqualified Deferred Compensation Plan of the Registrant (Incorporated herein by reference to Exhibit 10.32 to
the Registrant’s Annual Report on Form 10-K filed on February 9, 2017 (File No. 001-08641)).*
Credit Agreement, dated September 29, 2017, by and among Coeur Mining, Inc., certain subsidiaries of Coeur
Mining, Inc., as guarantors, the lenders party thereto and Bank of America, N.A., as administrative agent
(Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on October
2, 2017 (File No. 001-08641)).
First Amendment to Credit Agreement, dated October 29, 2018, by and among Coeur Mining, Inc., certain
subsidiaries of Coeur Mining, Inc., as guarantors, the lenders party thereto and Bank of America, N.A., as
administrative agent (Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on
Form 10-Q filed on October 31, 2018 (File No. 001-08641)).
105
10.14
10.15
10.16
10.17
10.18
10.19
10.20
10.21
10.22
10.23
10.24
10.25
10.26
10.27
10.28
10.29
10.30
10.31
10.32
Coeur Mining, Inc. 2018 Long-Term Incentive Plan (Incorporated herein by reference to Exhibit 99.1 to the
Registrant’s Registration Statement on Form S-8 filed on May 8, 2018 (File No. 333-224751)).*
Form of Performance Share Agreement under the Coeur Mining, Inc. 2018 Long-Term Incentive Plan
(Incorporated herein by reference to Exhibit 99.2 to the Registrant’s Registration Statement on Form S-8 filed on
May 8, 2018 (File No. 333-224751)).*
Form of Incentive Stock Option Award Agreement under the Coeur Mining, Inc. 2018 Long-Term Incentive Plan
(Incorporated herein by reference to Exhibit 99.3 to the Registrant’s Registration Statement on Form S-8 filed on
May 8, 2018 (File No. 333-224751)).*
Form of Nonqualified Stock Option Award Agreement under the Coeur Mining, Inc. 2018 Long-Term Incentive
Plan (Incorporated herein by reference to Exhibit 99.4 to the Registrant’s Registration Statement on Form S-8
filed on May 8, 2018 (File No. 333-224751)).*
Form of Cash-Settled Stock Appreciation Rights Award Agreement under the Coeur Mining, Inc. 2018 Long-
Term Incentive Plan (Incorporated herein by reference to Exhibit 99.5 to the Registrant’s Registration Statement
on Form S-8 filed on May 8, 2018 (File No. 333-224751)).*
Form of Performance Unit Agreement under the Coeur Mining, Inc. 2018 Long-Term Incentive Plan
(Incorporated herein by reference to Exhibit 99.6 to the Registrant’s Registration Statement on Form S-8 filed on
May 8, 2018 (File No. 333-224751)).*
Form of Restricted Stock Award Agreement under the Coeur Mining, Inc. 2018 Long-Term Incentive Plan
(Incorporated herein by reference to Exhibit 99.7 to the Registrant’s Registration Statement on Form S-8 filed on
May 8, 2018 (File No. 333-224751)).*
Offer Letter dated December 12, 2018, between Coeur Mining, Inc. and Thomas S. Whelan (Incorporated herein
by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 13, 2018 (File
No. 001-08641)).*
Second Amendment to Credit Agreement, dated April 30, 2019, by and among Coeur Mining, Inc., certain
subsidiaries of Coeur Mining, Inc., as guarantors, the lenders party thereto and Bank of America, N.A., as
administrative agent (Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Quarterly Report filed
on Form 10-Q on May 1, 2019 (File No. 001-8641)).
Third Amendment to Credit Agreement, dated August 6, 2019, by and among Coeur Mining, Inc., certain
subsidiaries of Coeur Mining, Inc., as guarantors, the lenders party thereto and Bank of America, N.A., as
administrative agent (Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on
filed Form 10-Q on August 7, 2019 (File No. 001-08641)).
Form of Restricted Stock Unit Agreement under the Coeur Mining, Inc. 2018 Long-Term Incentive Plan
(Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K filed on
February 19, 2020 (File No. 001-08641)).*
ATM Equity Offering Sales Agreement, dated as of April 23, 2020, by and among Coeur Mining, Inc., BofA
Securities, Inc. and RBC Capital Markets, LLC (Incorporated herein by reference to Exhibit 1.1 to the
Registrant’s Current Report on Form 8-K filed on April 23, 2020 (File No. 001-08641)).
Offer Letter dated April 28, 2020 from the Company to Michael Routledge (Incorporated herein by reference to
Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on October 28, 2020 (File No.
001-08641)).*
First Incremental Facility Amendment, dated December 14, 2020, by and among Coeur Mining, Inc., certain
subsidiaries of Coeur Mining, Inc., as guarantors, certain of the lenders party thereto and Bank of America, N.A.,
as administrative agent (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on
Form 8-K filed on December 16, 2020 (File. No. 001-08641)).
Clawback and Forfeiture Policy Effective December 8, 2020 (Incorporated herein by reference to Exhibit 10.28 to
the Registrant’s Annual Report on Form 10-K filed on February 17, 2021 (File. No. 001-08641)).**
Fifth Amendment to Credit Agreement, dated March 1, 2021, by and among Coeur Mining, Inc., certain
subsidiaries of Coeur Mining, Inc., as guarantors, certain of the lenders party thereto and Bank of America, N.A.,
as administrative agent. (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on
Form 8-K filed on March 1, 2021 (File No. 001-08641)).
Share Exchange Agreement, dated May 10, 2021, between Coeur Mining, Inc. and Orion Co-VI Ltd.
(Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on May
10, 2021 (File No. 001-08641)).
Support Agreement, dated May 10, 2021, between Coeur Mining, Inc. and Orion Co-VI Ltd. (Incorporated herein
by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on May 10, 2021 (File No.
001-08641)).
Amended and Restated Coeur Mining, Inc. 2018 Long-Term Incentive Plan, effective as of May 11, 2021.
(Incorporated herein by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on May
14, 2021 (File No. 001-08641)).**
106
10.33
21
23.1
31.1
31.2
32.1
32.2
95.1
96.1
96.2
96.3
96.4
Separation and Release of Claims Agreement dated September 7, 2021, between Coeur Mining, Inc. and Terrence
F. Smith (Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed
on September 10, 2021 (File No. 001-08641)).**
List of subsidiaries of the Registrant. (Filed herewith).
Consent of Grant Thornton LLP, Independent Registered Public Accounting Firm (Filed herewith).
Certification of the CEO (Filed herewith).
Certification of the CFO (Filed herewith).
CEO Section 1350 Certification (Filed herewith).
CFO Section 1350 Certification (Filed herewith).
Mine Safety Disclosure (Filed herewith).
Technical Report Summary for the Palmarejo Mine (Incorporated herein by reference to exhibit 96.1 to the
Registrant’s Current Report on Form 8-K filed on February 16, 2022 (File. No. 001-08641)).
Technical Report Summary for the Rochester Mine (Incorporated herein by reference to exhibit 96.2 to the
Registrant’s Current Report on Form 8-K filed on February 16, 2022 (File. No. 001-08641)).
Technical Report Summary for the Kensington Mine (Incorporated herein by reference to exhibit 96.3 to the
Registrant’s Current Report on Form 8-K filed on February 16, 2022 (File. No. 001-08641)).
Technical Report Summary for the Wharf Mine (Incorporated herein by reference to exhibit 96.4 to the
Registrant’s Current Report on Form 8-K filed on February 16, 2022 (File. No. 001-08641)).
101.INS XBRL Instance Document*
101.SCH XBRL Taxonomy Extension Schema*
101.CAL XBRL Taxonomy Extension Calculation Linkbase*
101.DEF XBRL Taxonomy Extension Definition Linkbase*
101.LAB XBRL Taxonomy Extension Label Linkbase*
101.PRE XBRL Taxonomy Extension Presentation Linkbase*
104
Cover Page Interactive Data File (formatted as Inline XBRL and included in Exhibit 101).
* The following financial information from Coeur Mining, Inc.'s Annual Report on Form 10-K for the year ended December
31, 2021, formatted in XBRL (Extensible Business Reporting Language): Consolidated Balance Sheets, Consolidated
Statements of Comprehensive Income (Loss), Consolidated Statements of Cash Flows and Consolidated Statement of Changes
in Stockholders' Equity.
** Management contract or compensatory plan or arrangement.
Item 16.
Form 10-K Summary
None.
107
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Date: February 16, 2022
COEUR MINING, INC.
(Registrant)
By:
/s/ Mitchell J. Krebs
Mitchell J. Krebs
(Director, President, and Chief Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
/s/ Mitchell J. Krebs______________________
Mitchell J. Krebs
Director, President, and Chief Executive Officer
(Principal Executive Officer)
February 16, 2022
/s/ Thomas S. Whelan_____________________
Thomas S. Whelan
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
February 16, 2022
/s/ Ken Watkinson______________________
Ken Watkinson
Vice President, Corporate Controller and Chief
Accounting Officer (Principal Accounting Officer)
February 16, 2022
February 16, 2022
February 16, 2022
February 16, 2022
February 16, 2022
February 16, 2022
February 16, 2022
February 16, 2022
February 16, 2022
/s/ Linda L. Adamany_____________________
Linda L. Adamany
/s/ Sebastian Edwards_____________________
Sebastian Edwards
/s/ Randolph E. Gress_____________________
Randolph E. Gress
/s/ Eduardo Luna_______________________
Eduardo Luna
/s/ Jessica L. McDonald___________________
Jessica L. McDonald
/s/ Robert E. Mellor______________________
Robert E. Mellor
/s/ John H. Robinson______________________
John H. Robinson
/s/ J. Kenneth Thompson___________________
J. Kenneth Thompson
Director
Director
Director
Director
Director
Director
Director
Director
108
Stockholder Information
Corporate Information
Stockholder Inquiries
Coeur Mining, Inc.
104 S. Michigan Ave., Suite 900
Chicago, IL 60603
+1 (312) 489-5800
www.coeur.com
Please direct inquiries, stockholder requests for assistance, and copies
of Coeur’s Annual Report or SEC Form 10-K to:
Jeff Wilhoit
Director, Investor Relations
+1 (312) 489-5800
investors@coeur.com
For current news releases and
Company news, visit Coeur’s
website at www.coeur.com
Market Information
Transfer Agent and Registrar Common Stock
Coeur’s Common Stock is listed on the New York
Stock Exchange under the trading symbol “CDE”.
Questions on dividends, stock transfers or issuance of certificates, and
IRS Form 1099 should be directed to Coeur’s transfer agent:
Computershare Trust Company, N.A.
P.O. Box 505000
Louisville, KY 40233-5000
+1 (800) 359-8554 (U.S. and Canada)
+1 (201) 680-6578 (International)
www.computershare.com/investor
To submit an online inquiry, visit
www-us.computershare.com/investor/contact
2021
$210,845
$832,828
25%
2020
$263,365
$785,461
34%
2019
$173,854
$711,502
24%
Non-GAAP Reconciliation of Adjusted EBITDA Margin
($ thousands)
Adjusted EBITDA
Revenue
Adjusted EBITDA Margin
Cautionary Statements
in developing large-scale mining projects, environmental hazards,
This Report contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including
statements involving strategic priorities and company strategies, expectations regarding environmental, social and governance (“ESG”)
initiatives, goals and targets, anticipated production, costs and expenses, exploration and development efforts, operations,
expectations and initiatives at Palmarejo, Rochester, Kensington, Wharf and Silvertip including the POA 11 expansion project and the
reserve and resource estimates, and growth. Such
potential expansion and restart of Silvertip and timing thereof, mineral
forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause Coeur's actual results,
performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by
the forward-looking statements. Such factors include, among others, the risk that the strategies, initiatives and expectations described
in this presentation are not achieved on a timely basis or at all, the risks and hazards inherent in the mining business (including risks
industrial accidents, weather, or geologically related
inherent
conditions), changes in the market prices of gold, silver, zinc, and lead, and a sustained lower price or higher treatment and refining
charge environment, the uncertainties inherent in Coeur's production, exploratory and developmental activities, including risks relating
to permitting and regulatory delays (including the impact of government shutdowns), ground conditions, grade variability and recovery,
any future labor disputes, or work stoppages, the uncertainties inherent in the estimation of mineral reserves and resources, changes
that could result from Coeur's future acquisition of new mining properties or businesses, the loss or insolvency of any third-party
smelter to which Coeur markets its production,
including impacts to workforce,
equipment and materials availability,
inflationary pressures, continued access to financing sources, government orders that may
require temporary suspension of operations at one or more of our sites and effects on our suppliers or the refiners and smelters to
whom the Company markets its production and the communities where the Company operates, the effects of environmental and other
governmental regulations and government shut-downs, the risks inherent in the ownership or operation of or investment in mining
properties or businesses in foreign countries, Coeur's ability to raise additional financing necessary to conduct its business, make
payments or refinance its debt as well as other uncertainties and risk factors set out in filings made from time to time with the United
States Securities and Exchange Commission, and the Canadian securities regulators, including, without limitation, Coeur's most recent
report on Form 10-K. Actual results, developments, and timetables could vary significantly from the estimates presented. Readers are
cautioned not to put undue reliance on forward looking statements. Coeur disclaims any intent or obligation to update publicly such
forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, Coeur undertakes no
obligation to comment on analyses, expectations, or statements made by third parties in respect of Coeur,
its financial or operating
results or its securities.
the COVID-19 pandemic,
the potential effects of
Coeur Mining | 2021 Annual Report
Coeur Mining, Inc.
104 S. Michigan Ave., Suite 900
Chicago, IL 60603
+1 (312) 489-5800
www.coeur.com
NYSE: CDE
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