Coeur Mining : Reports Third Quarter 2014 Results

NEWS RELEASE                  

Coeur Reports Third Quarter 2014 Results

Costs applicable to sales guidance reduced again

5% reduction in all-in sustaining costs per silver equivalent ounce¹

Chicago, Illinois - November 5, 2014 - Coeur Mining, Inc. (the "Company" or "Coeur") (NYSE: CDE) reported third quarter 2014 revenue of $170.9 million, adjusted net loss¹ of $23.5 million, and cash flow from operating activities of $31.3 million, the highest level in more than a year. The Company realized average prices of $19.46 per silver ounce and $1,260 per gold ounce during the quarter, each 1% lower than the second quarter of 2014.

For the second time this year, Coeur is lowering its 2014 costs applicable to sales guidance to reflect further success in its efforts to reduce operating costs. The Company now estimates full-year costs applicable to sales will be $470 - $480 million (previously revised down to $490 - $510 million from $500 - $530 million). The Company is also meaningfully lowering its guidance for general and administrative expenses from $43 - $48 million to $40 - $42 million and amortization expense from $190 million to $170 million. Coeur is raising its exploration guidance from $23 - $28 million to $29 - $31 million (including capitalized drilling) due mainly to positive drill results at Kensington, reflecting the Company's success-based approach toward funding its exploration efforts. Coeur is maintaining its 2014 production outlook of 17.0 - 18.0 million silver ounces and 229,000 - 244,000 gold ounces as well as its full-year guidance for capital expenditures ($65 - $80 million).

Third Quarter Highlights

• Silver equivalent production was 8.2 million ounces, a 1% increase compared with the second quarter
• Silver production was 4.3 million ounces, a 4% decrease compared with the second quarter
• Gold production was 64,989 ounces, a 6% increase compared with the second quarter
• All-in sustaining costs per silver equivalent ounce¹ decreased 5% from the second quarter to $18.86
• Costs applicable to sales per silver equivalent ounce increased 3% from the second quarter to $14.71 per silver equivalent ounce¹ partly due to a $1.6 million inventory adjustment² at Palmarejo, which represents $0.26 per silver equivalent ounce¹ on a consolidated basis
• Kensington's costs applicable to sales per gold ounce declined 7% to $937, which included an inventory adjustment² equal to $48 per gold ounce
• General and administrative expenses were $8.5 million, down 9% from the second quarter
• Cash flow from operating activities was $31.3 million, compared to $30.5 million in the second quarter
• Net income was $3.5 million, or $0.03 per share
• Adjusted net loss¹ was $23.5 million, or $0.23 per share
• Cash, cash equivalents, and short-term investments were $295.4 million at September 30, 2014, down $21.4 million from the second quarter due to the repurchase of $12.6 million of Coeur's 7.875% Senior Notes due 2021 (cash outlay of $12.4 million) and the acquisition of two royalties totaling $13.8 million

"Silver and gold prices ended the quarter 18% and 8%, respectively, lower than at the start, which represents a challenge for the entire precious metals industry," said Mitchell J. Krebs, Coeur's President and Chief Executive Officer. "Our team remains focused on operating consistently and efficiently, on reducing our operating and non-operating costs, and on repositioning our mines to achieve strong, long-term free cash flow in the current price environment.

"Our strong liquidity position provides us with flexibility and the ability to invest in high-return, value-creating expansion opportunities that are expected to reduce unit costs at our Palmarejo, Rochester, and Kensington mines. In addition, our exploration initiatives are successfully identifying higher-grade mineralization at these same operations, which we expect to be a key component of the Company's future production and cash flow profile."

Financial Highlights (Unaudited)

Financial Results

Third quarter revenue increased $6.3 million, or 4%, compared with the second quarter to $170.9 million due to a 20% increase in gold ounces sold, partially offset by a 7% decline in silver ounces sold and slightly lower metal prices. Coeur realized average silver and gold prices of $19.46 per ounce and $1,260 per ounce, respectively, compared with realized average prices of $19.60 per ounce and $1,277 per ounce, respectively, in the second quarter. Gold contributed 51% of metal sales and silver contributed 49% during the third quarter.

General and administrative expenses were $8.5 million in the third quarter, down 9% from the second quarter. Cash flow from operating activities was $31.3 million in the third quarter, up slightly from $30.5 million in the second quarter. Capital expenditures of $16.8 million were 9% higher than the second quarter but 49% below the third quarter of 2013 and continue to track significantly below 2013 levels.

Net income was $3.5 million, or $0.03 per share, in the third quarter of 2014. Coeur's adjusted net loss¹ was $23.5 million, or $0.23 per share, in the third quarter of 2014, compared with an adjusted net loss¹ of $27.9 million, or $0.27 per share, in the second quarter. The third quarter adjusted net loss¹ excludes an $18.8 million foreign exchange gain on deferred taxes, a $13.0 million favorable fair value adjustment, $2.4 million in stock-based compensation expense, and $1.4 million accretion of the Palmarejo royalty obligation. Fair value adjustments are primarily driven by changes to gold and silver prices, which adjust the estimated future liabilities for the Palmarejo gold production royalty and the Rochester 3.4% net smelter returns royalty.

Operations

Highlights of the third quarter 2014 results for each of the Company's operating segments are provided below.

Palmarejo, Mexico

• Guadalupe development is progressing well, with approximately 1,450 meters of development completed as of October 31, 2014, which is approximately 50% ahead of plan. Coeur expects to begin mining approximately 500 tons per day from Guadalupe before year-end and anticipates achieving average production levels of 1,500 tons per day in the third quarter of 2015
• Cash flow from operating activities was $20.2 million in the third quarter, below the $27.4 million generated in the second quarter mainly due to fewer ounces sold and slightly higher unit costs. Costs applicable to sales per silver equivalent ounce¹ of $15.22 includes an inventory adjustment² to net realizable value of $0.53 per silver equivalent ounce
• Capital expenditures of $5.9 million in the third quarter increased 5% from the second quarter. The majority of capital spending during the quarter was related to development work at Guadalupe

Rochester, Nevada

• Silver-equivalent production increased 12% from the second quarter and cash flow from operating activities of $8.2 million reached the highest level in nearly two years
• Third quarter costs applicable to sales per silver equivalent ounce¹ were $14.80, down 6% from the second quarter due to lower crushing and leaching costs
• Capital expenditures were $4.2 million during the third quarter, up slightly from the second quarter but continuing to track significantly below year-ago levels

Kensington, Alaska

• Costs applicable to sales per gold ounce declined 7% from the second quarter to $937 including an inventory adjustment² to net realizable value of $48 per ounce. The strong cost performance was mainly due to a 28% increase in average head grade to 0.23 ounces per ton
• Cash flow from operating activities of $17.0 million was the highest since Coeur began operating the mine
• Capital expenditures of $3.6 million declined 10% from the second quarter, reaching the lowest level in more than a year
• Coeur recently announced high-grade drill results from Kensington and anticipates releasing a new mine plan in early 2015, which is expected to reflect higher-grade production, lower unit costs, and higher cash flow over the life of the mine

San Bartolomé, Bolivia

• Production, grades, recovery rates, and costs remain relatively stable at San Bartolomé

Coeur Capital

• Coeur owns a 100% silver stream at the Endeavor mine in New South Wales, Australia up to a total of 20.0 million payable ounces. At September 30, 2014, the Company has received 5.3 million ounces
• On July 2, 2014, Coeur acquired a pre-existing 3% net smelter royalty on the La Preciosa silver-gold project for $12.0 million
• On September 2, 2014, Coeur paid $1.8 million for an additional 1.25% net smelter returns royalty on International Northair Mines Ltd.'s La Cigarra silver project and now holds a 2.5% net smelter returns royalty on the project

Downside Price Protection

The Company's downside metal price protection program uses put spreads to protect 25% - 40% of expected future production against a sharp decrease in metal prices, while selling intra-quarter, out-of-the-money call options when appropriate to offset the net cost of the put spreads. Put spreads for the fourth quarter of 2014 cover 1.25 million ounces of expected quarterly silver production and 25,000 ounces of expected quarterly gold production. Put spreads for the first quarter of 2015 cover 1.25 million ounces of expected silver production and 24,000 ounces of expected gold production. All put options purchased have a strike price of $18/ounce and $1,200/ounce for silver and gold, respectively. All put options sold have a strike price of $16/ounce and $1,050/ounce for silver and gold, respectively.

Exploration

Costs associated with exploration activities for the third quarter of 2014 were $6.6 million (expensed) for discovery of new silver and gold mineralization and $1.0 million (capitalized) for definition and expansion of mineralized material, for a total of $7.6 million. Coeur's exploration program used 11 drill rigs during the third quarter: four drills at Palmarejo, five at Kensington, and two at Rochester. This work resulted in completion of over 125,921 feet (38,381 meters) of combined core and reverse circulation drilling.

On October 6, Coeur announced high-grade drill results from Kensington, including at the nearby Jualin zone. Drilling has encountered high-grade gold in Kensington South (Zones 10 and 20) immediately beneath current production areas, located approximately 100 - 200 feet away from current mine development. Several holes have returned grades greater than 1.0 oz/ton gold. Drilling activity in Jualin Veins 4 and 5 has encountered several multi-ounce gold intercepts. Underground development at Jualin is planned for 2015. See the press release dated October 6, 2014 for further detail and the full drill results at Kensington.

2014 Production Outlook

Coeur's 2014 total silver and gold production guidance is unchanged as shown below.

Conference Call Information

Coeur will conduct a conference call and webcast at www.coeur.com to discuss the Company's third quarter results on November 6, 2014 at 11:00 a.m. Eastern time.

            Dial-In Numbers:        (877) 768-0708 (U.S. and Canada)
                                                (660) 422-4718 (International)

            Conference ID:            716 78 102

A replay of the call will be available on Coeur's website through November 20, 2014.

            Replay Numbers:        (855) 859-2056 (U.S. and Canada)
                                                (404) 537-3406 (International)
           
            Conference ID:            716 78 102

About Coeur
Coeur Mining is the largest U.S.-based primary silver producer and a significant gold producer with four precious metals mines in the Americas employing nearly 2,000 people. Coeur produces from its wholly owned operations: the Palmarejo silver-gold mine in Mexico, the San Bartolomé silver mine in Bolivia, the Rochester silver-gold mine in Nevada and the Kensington gold mine in Alaska. The Company also has a non-operating interest in the Endeavor mine in Australia in addition to net smelter royalties on the Cerro Bayo mine in Chile, the El Gallo complex in Mexico, and the Zaruma mine in Ecuador. In addition, the Company has two silver-gold feasibility stage projects - the La Preciosa project in Mexico and the Joaquin project in Argentina. The Company also conducts ongoing exploration activities in Alaska, Argentina, Bolivia, Mexico, and Nevada. The Company owns strategic investment positions in several silver and gold development companies with projects in North and South America.

Cautionary Statement
This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding anticipated production, costs, capital and exploration expenditures, amortization, exploration and development efforts including the impact of discovery of new mineralization, the new mine plan at Kensington, Guadalupe development, expansion opportunities, grades, cash flow, and initiatives to create value, lower costs, operate more consistently and efficiently, achieve strong long-term free cash flow, and minimize exposure to declining metal prices. Such 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 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), changes in the market prices of gold and silver and a sustained lower price environment, the uncertainties inherent in Coeur's production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, ground conditions, grade variability, any future labor disputes or work stoppages, the uncertainties inherent in the estimation of gold and silver reserves and resources, changes that could result from Coeur's future acquisition of new mining properties or businesses, reliance on third parties to operate certain mines where Coeur owns silver production and reserves and the absence of control over mining operations in which Coeur or its subsidiaries hold royalty or streaming interests and risks related to these mining operations including results of mining and exploration activities, environmental, economic and political risks of the jurisdiction in which the mining operations are located, the loss of access to any third-party smelter to which Coeur markets silver and gold, the effects of environmental and other governmental regulations, 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 reports on Form 10-K and Form 10-Q. 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.

W. David Tyler, Coeur's Vice President, Technical Services and a qualified person under Canadian National Instrument 43-101, supervised the preparation of the scientific and technical information concerning Coeur's mineral projects in this news release. Mineral resources are in addition to mineral reserves and do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be considered for estimation of mineral reserves, and there is no certainty that the inferred mineral resources will be realized. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, 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, socio-political, marketing or other relevant factors, please see the Technical Reports for each of Coeur's properties as filed on SEDAR at www.sedar.com.

Non-U.S. GAAP Measures

We supplement the reporting of our financial information determined under United States generally accepted accounting principles (U.S. GAAP) with certain non-U.S. GAAP financial measures, including adjusted net income (loss), costs applicable to sales per silver equivalent ounce, and all-in sustaining costs. We believe that these adjusted measures provide meaningful information to assist management, investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring operations because they exclude items that may not be indicative of, or are unrelated to our core operating results, and provide a better baseline for analyzing trends in our underlying businesses. We believe adjusted net income (loss), costs applicable to sales per silver equivalent ounce, and all-in sustaining costs are important measures in assessing the Company's overall financial performance.

Notes

1. Adjusted net income (loss), all-in sustaining costs, and costs applicable to sales per silver equivalent ounce are non-GAAP measures. Please see tables in the Appendix for the reconciliation to U.S. GAAP. Silver equivalence calculated using a 60:1 silver to gold ratio.
2. Costs applicable to sales for the third quarter of 2014 included adjustments of $1.6 million and $1.8 million at Palmarejo and Kensington, respectively, to reduce the carrying value of inventory to net realizable value.
3. Includes capital leases. Net of debt discount.
4. Free cash flow is defined as cash flow from operating activities less capital expenditures and royalty payments.

For Additional Information:

Bridget Freas, Director, Investor Relations
(312) 489-5819

Donna Mirandola, Director, Corporate Communications
(312) 489-5842

www.coeur.com

Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)

Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows

Coeur Mining, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

Adjusted Net Income Reconciliation

Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent Ounce
for Three Months Ended September 30, 2014

Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent Ounce
for Three Months Ended June 30, 2014

Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent Ounce
for Three Months Ended March 31, 2014

Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent Ounce
for Three Months Ended December 31, 2013

Reconciliation of Non-U.S. GAAP Costs Applicable to Sales per Silver Equivalent Ounce
for Three Months Ended September 30, 2013