Coeur Mining, Inc. 10-K

Item 2. Properties MINING PROPERTIES Coeur Mining’s significant production and development properties are described below. Operating statistics 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. The Palmarejo complex is located in the state of Chihuahua, Mexico. Access to the property is provided by air, rail, and all-weather paved and gravel roads from the state capitol of Chihuahua. The Palmarejo complex consists of 71 wholly-owned mining concessions, covering approximately 67,296 acres (27,233 hectares) of land. In total, the Palmarejo complex covers over 105 square miles. All mining concessions owned by Coeur Mexicana are valid until at least 2029. The Palmarejo complex is located on the western flank of the Sierra Madre Occidental, a mountain range that comprises the central spine of northern Mexico. The north-northwest trending Sierra Madre Occidental is composed of a relatively flat-lying sequence of Tertiary volcanic rocks that forms a volcanic plateau, cut by numerous igneous intrusive rocks. This volcanic plateau is deeply incised in the Palmarejo mine area, forming steep-walled canyons. The Sierra Madre Occidental gives way to the west to an extensional terrain that represents the southward continuation of the Basin and Range Province of the western United States, and then to the coastal plain of western Mexico. The gold and silver deposits at the Palmarejo complex, typical of many of the other gold and silver deposits in the Sierra Madre, are classified as epithermal deposits and are hosted in multiple veins, breccias, and fractures. These geologic structures trend generally northwest to southeast and dip either southwest or northeast. The dip on the structures ranges from about 45 degrees to 70 degrees. In the mineralized portions of the structures, gold and silver are zoned from top to bottom with higher silver values occurring in the upper parts of the deposit and higher gold values in the lower parts, sometimes accompanied by base metal mineralization, though local variations are common. The Palmarejo complex contains a number of 25 mineralized zones or areas of interest. The most important of these to date is the Palmarejo zone in the north of the mining concessions, which covers the old Palmarejo gold-silver mine formed at the intersection of the northwest-southeast trending La Prieta and La Blanca gold-and-silver bearing structures. In addition to the Palmarejo zone, other mineralized vein and alteration systems in the district area have been identified all roughly sub-parallel to the Palmarejo zone. The most significant of these additional targets are the Guadalupe (including Animas), Independencia, and La Patria vein systems in the southern part of the property, which are currently under development (Guadalupe and Independencia) and exploration (La Patria) by the Company. A portion of the Palmarejo complex is subject to a gold stream agreement with a subsidiary of Franco-Nevada Corporation (“Franco-Nevada”) pursuant to which Coeur Mexicana sells 50% of applicable gold production for the lesser of $800 or spot price per ounce. USA (Nevada) — Rochester 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. Based upon actual operating experience and metallurgical testing, the Company estimates 20 year recovery rates for crushed ore between 57.3% and 68.9% for silver and 87.9% and 94.9% for gold, depending on the ore being leached and pad placement. Coeur Rochester lands, including the Lincoln Hill and related assets, consist of approximately 43,541 net acres, which encompasses 1,465 owned and 337 leased Federal unpatented lode claims, appropriating approximately 30,038 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 Federal unpatented lode claims are maintained via annual filings and timely payment of claim maintenance fees to the BLM, which acts as administrator of the claims. At Rochester, 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 minerals, argentite, silver-bearing tetrahedrite and minor native gold, are contained in zones of multiple quartz veins and veinlets (vein, vein swarms and stockworks) with variable amounts of pyrite. Coeur Rochester is obligated to pay a net smelter returns royalty to the prior owner when the average quarterly market price of silver equals or exceeds $23.60 per ounce, indexed for inflation up to a maximum rate of 5%, on the condition that the Rochester mine achieves positive cash flow for the applicable year. If cash flow is negative in any calendar year, the maximum royalty payable is $250,000. A security interest in the Rochester mine has been granted in favor of the lenders under the Company’s revolving credit facility. 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 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. Waste material is deposited in an impoundment facility on the property. 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. Coeur Alaska controls two contiguous property groups: the Kensington Group and Jualin Group. The Kensington Group, totaling approximately 4,002 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 7,729 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 70 acres. 14 of the 23 patented lode claims cover private surface estate 26 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 Federal unpatented lode and Federal unpatented mill site claims are maintained via annual filings and timely payment of claim maintenance fees to the BLM, which acts as administrator of the claims. State of Alaska mining claims and upland mining leases are maintained via fees and filings to the Alaska Department of Natural Resources, Division of Mining, Land and Water and the Juneau Recorder’s Office. Real property taxes are paid annually to the City and Borough of Juneau for the patented lode claims. Private lease payments are paid annually and all leases are in good standing. The Kensington ore deposit consists of multiple 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 (AuTe 2 ) that occurs in association with native gold as inclusions in and interstitial to pyrite grains and in microfractures in pyrite. A security interest in the Kensington mine has been granted in favor of the lenders under the Company’s revolving credit facility. USA (South Dakota) — Wharf The Wharf mine is located in the northern Black Hills of western South Dakota, approximately four miles south and west of the city of Lead, South Dakota. Access is established by paved road with power supplied by a local power company. Coeur acquired the Wharf mine in 2015 and owns all of the issued and outstanding equity interests in Wharf Resources (U.S.A.) Inc. (“Wharf”) and its wholly-owned subsidiary, Golden Reward Mining Limited Partnership (“Golden Reward”), the owners of the Wharf mine. There are two contiguous property groups located at the Wharf mine; the Wharf Group and the Golden Reward Group, owned or controlled by Wharf and Golden Reward. The Wharf Group is generally described as the northern and western portions of the project, while the Golden Reward Group is generally described as the southern and eastern portion of the project. 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 federal unpatented lode claims are maintained by the timely annual payment of claim maintenance fees, payable to the BLM. The patented lands are private land and therefore not subject to federal claim maintenance requirements. However, as private land, they are subject to property taxes assessed by Lawrence County, South Dakota, which may be paid semi-annually. The Wharf mine is a structurally controlled disseminated gold deposit, hosted by Paleozoic sedimentary rocks and Tertiary alkalic intrusive rocks. Mining has occurred at Wharf for over 30 years as an open pit heap leach operation. Host rocks are sandstones of the upper and lower members of the Cambrian Deadwood Formation and Tertiary alkalic intrusive sills. Alteration styles as well as age dates in the deposit demonstrate both lithological and structural control, which are completely unrelated to the nearby gold deposits at the Homestake Gold Mine in Lead, South Dakota. Wharf and Golden Reward are obligated to pay a sliding scale production royalty to Royal Gold, Inc. The royalty encumbers the majority of the land comprising the Wharf Group, together with a small portion of the lands encompassing the Golden Reward Group, and wholly excludes the Precambrian Mineral Estate. The sliding scale provides for a 2.0% royalty on the gross value less state severance taxes with a monthly average PM LBMA Gold Price of $500 or more per ounce. Wharf and Golden Reward are also obligated to pay a 1.6125% non-participating royalty to Donald D. Valentine, et al, and a 1.00% non-participating royalty to Metalla America, Ltd. on gold that is produced from ores mined and delivered to heap leach pads or recovered from tailings. This royalty encumbers the mineral estate, including the Precambrian Mineral Estate, of much of the lands comprising the Wharf Group, together with a small portion of the lands encompassing the Golden Reward Group. Wharf holds a right of first refusal to purchase this royalty upon any proposed transfer by the royalty holder. A security interest in the Wharf mine has been granted in favor of the lenders under the Company’s revolving credit facility. 27 Canada (British Columbia) — Silvertip The Silvertip mine, operated by our wholly-owned subsidiary Coeur Silvertip Holdings Ltd. (“Coeur Silvertip”) is located in British Columbia, Canada and consists of 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). All mineral claims are valid for one year after recording. To maintain a claim, the recorded holder must, on or before the expiry date of the claim, either perform exploration and development work on that claim (or contiguous block of claims) and register such work online, or register a payment instead of exploration and development work. Silvertip maintains two mining leases which are also subject to the Mineral Tenure Act regulations. Coeur Silvertip’s mining leases cover 1,528.79 hectares (3,777.72 acres). Mining leases are held by making an annual rental payment of CAD$20 per hectare. The mining leases expire 30 years after the grant date, and all leases held by Coeur Silvertip are valid until 2045 or later. The Silvertip mine is a carbonate-hosted massive sulfide deposit. Economic mineralization occurs at the top of the McDame limestone, at or near the contact with the upper Earn Group sediments. Mineable massive sulfides form gently plunging tubes or cape-shaped mantos up to about 20 meters thick and 30 meters wide, and in places extend for at least 200 meters. Discordant, high-angle chimney feeders are also present and have been the target of recent underground exploration. Geologic contact between the massive sulfide and the host limestone can be sharp and easy to see in both drill core and underground mining. Mineralization consists of pyrite, pyrrhotite, sphalerite and argentiferous galena. Additionally, silver-bearing phases can include pyrargyrite-proustite, boulangerite-jamesonite and tetrahedrite (freibergite). The mineralizing event is assumed to be Late Cretaceous, which is consistent with other ore deposits in a belt that extends through the Yukon to southern Alaska. Coeur Silvertip is obligated to pay a 2.5% net smelter returns royalty payable to Maverix Metals, Inc. on all mineral products produced from the Silvertip mine. Coeur Silvertip is also obligated to pay to Silvertip Resources Investment Cayman Ltd. a net smelter returns royalty of 1.429% on the first 1,434,000 metric tonnes of mineralized material mined, and 1.00% thereafter, on all mineral leases that underlie the Silvertip mine and that were in existence at April 11, 2016. Coeur Silvertip has entered into formal agreements with the Kaska Nation and the Tahltan Nation, pursuant to which the Company provides various types of benefits to these First Nations, including financial payments, employment opportunities and business development opportunities, in consideration of their ongoing support for the Silvertip mine. NEAR-MINE EXPLORATION Exploration expense from continuing operations was $42.6 million, $22.5 million, and $25.4 million in 2020, 2019 and 2018, respectively. Capitalized drilling from continuing operations was $8.0 million in 2020 and $7.5 million in 2019. Coeur’s exploration program completed over 783,200 feet (238,700 meters) of combined core and reverse circulation drilling in 2020. Mexico - Palmarejo In 2020, exploration expense of $7.0 million was incurred, related to mapping, sampling, drill target generation, and drilling new silver and gold mineralization (131,100 feet or 39,950 meters). Expensed expansion drilling focused primarily on extensions of the Guadalupe and Independencia underground deposits, including La Bavisa and Hidalgo zones in the Independencia deposit, and the northern extension of Independencia deposit. Capitalized drilling of $4.0 million related to conversion drilling in the Guadalupe deposit, including Las Animas, Zapata and La Patria zones, and in the Independencia deposit, including La Bavisa zone, for a total of 94,900 feet or 28,900 meters. In 2019, exploration expense of $5.6 million was incurred, related to mapping, sampling, drill target generation, and drilling new silver and gold mineralization (100,700 feet or 30,675 meters). Expensed expansion drilling focused primarily on extensions of the Guadalupe and Independencia mines, including La Nación, Zapata, Colorado Sur, La Bavisa, Hidalgo and Barrera veins. Capitalized drilling of $4.5 million related to conversion drilling in the Guadalupe and Independencia (99,800 feet or 30,400 meters). In 2021, the Company expects to incur between $8.5 million to $9.5 million of expansion drilling expense focused on discovery and expansion of mineralization three zones that are portions of the Independencia deposit; the Hidalgo zone located northwest of the Independencia deposit; the La Bavisa vein located at approximately 2000 feet (600 meters) east-northeast of the Independencia deposit; and, several new targets that have been identified by our geologic team north of La Prieta/La Blanca deposits. Additionally, the Company is planning between $4.6 million to $5.6 million of infill resource conversion drilling in various zones of the Guadalupe and Independencia deposits. 28 USA (Nevada) - Rochester In 2020, expensed expansion drilling was $3.3 million and capitalized conversion drilling was $1.8 million. Expansion drilling consisted of 25,600 feet (7,800 meters) of reverse circulation and core drilling, including directional core technology implemented to test the East Rochester mineralization under the Stage I and Stage II leach pads. Capitalized conversion drilling consisted of 26,000 feet (7,925 meters) ) of reverse circulation drilling, focused on infill mainly within the Rochester Pit. In 2019, expensed expansion drilling was $0.7 million and capitalized conversion drilling was $1.2 million. Expansion drilling consisted of 9,300 feet (2,825 meters) of reverse circulation drilling testing the Lincoln Hill mineralization. Capitalized conversion drilling consisted of 7,100 feet (2,175 meters) of core drilling, focused on infill within the Rochester Pit and within the East Rochester mineralization. In 2021, the Company expects to incur between $5.9 million and $6.9 million of expansion drilling expense testing several targets, including East Rochester, East Packard, Lincoln Hill, Independencia Hill and Gold Ridge. Additionally, between $2.6 million and $3.6 million in conversion drilling is planned to infill the main pit at Rochester and portions of East Rochester. USA (Alaska) - Kensington In 2020, exploration expense of $8.6 million, which consisted of 124,300 feet (37,875 meters), was focused on the expansion and discovery of the underground Elmira, Johnson, Cookhouse, Jualin, Eureka, upper Kensington Zone 30 and Northern Belle veins, as well as upper Raven, Jennifer, Big Lake and upper Johnson veins, during the summer surface drilling program. A total of $1.6 million of conversion drilling, which consisted of 31,800 feet (9,700 meters), was focused on Elmira and Eureka, with limited drilling within the Kensington Main ore body. In 2019, exploration expense of $5.6 million, which consisted of 91,000 feet (27,750 meters), was focused on the expansion and discovery of the underground Raven, Elmira, Johnson, Eureka, Bear, Ophir, Jualin #2 and Jualin #5 veins, and Comet-Seward veins from surface drill platforms, as well as limited expansion drilling of the Raven vein and Kensington Main. A total of $2.0 million of conversion drilling, which consisted of 36,600 feet (11,175 meters), was focused on Elmira, Raven and Kensington Main Zone 30. In 2021, the Company expects to incur between $8.7 million and $9.7 million of expansion drilling expense related to continued expansion of at upper Elmira, upper Raven and the new Johnson Vein, and between $1.6 million and $2.6 million of conversion drilling at Elmira, Raven, Jennifer, Northern Belle, Eureka and upper Kensington Zone 30. USA (South Dakota) - Wharf In 2020, exploration expense of $0.9 million was incurred, consisting of 24,700 feet (7,525 meters) all focused on expansion drilling/diligence at the Richmond Hill project/purchase option. In 2019, 3,200 feet (975 meters) of expansion drilling at the Richmond Hill project was completed due to the late season start to the program. In 2021, the Company expects to incur between $4.3 million and $5.3 million of infill conversion drilling in the Portland Ridge and Flossie zones of the Wharf deposit. Canada (British Columbia) - Silvertip In 2020, expansion drilling expense was $12.2 million consisting of 200,800 feet (61,225 meters), focused on near-mine resource expansion and larger step-out drilling to test the edges of the mineralized system, specifically north, east and south of the Discovery zone. The drilling led to discovery at the new Keda, Tour Ridge and Camp Creek zones. In 2019, expansion drilling expense was $2.5 million consisting of 50,700 feet (15,475 meters), focused on Discovery North, East and South zones, east of the Silvertip Underground Mine. Limited conversion drilling was completed, consisting of 7,800 feet (2,375 meters). In 2021, the Company expects to incur between $10.1 million and $11.1 million of expansion drilling expense around the current mineralization at the Discovery North, East and South zones, the 65 Zone, as well as the new Keda, Tour Ridge and Camp Creek zones. Larger step out scout drill tests will be completed at Tiger Terrace while the Company expands its search for a variety of new targets in the district. The Company also expects to incur between $3.1 million and $4.1 million of capitalized infill resource conversion drilling in various portions of the Discovery zone, 65 zone and the new Camp Creek zone later in the year. 29 ADVANCED-STAGE EXPLORATION PROPERTIES USA (Nevada) — Sterling/Crown Project In 2020, expansion drilling expense was $8.9 million and capitalized conversion drilling was $0.5 million. Expensed expansion drilling consisted of 111,000 feet (33,850 meters) testing areas around the Sterling/Crown Project mineralization at Crown Block, including Daisy, Secret Pass and SNA, and discovery of the new C-Horst zone. Capitalized conversion drilling consisted of 13,000 feet (3,950 meters) within the Sterling Mine area. In 2019, expansion drilling expense was $4.8 million and capitalized conversion drilling was $0.8 million. Expensed expansion drilling consisted of 78,400 feet (23,900 meters) testing areas around the Sterling/Crown Project mineralization at Daisy, Secret Pass and SNA. Capitalized conversion drilling consisted of 30,300 feet (9,225 meters) within the Sterling Mine area. In 2021, the Company plans to spend between $9.9 million and $10.9 million on expansion drilling in the Crown Block, including expansion at C-Horst, SNA and Daisy zones, and several new scout targets identified in 2020 that are located south of the new C-Horst zone. EARLY-STAGE EXPLORATION PROPERTIES In 2020, the Company invested $0.5 million in greenfields exploration, completing project submittal analysis and regional exploration compilations with a focus on projects in the USA, Mexico and Canada compared to $1.8 million in 2019. In 2021, the Company plans to spend between $0.9 million and $1.9 million on greenfields, early-stage exploration projects near Kensington, Alaska and Silvertip, BC with a focus on future mill-feed projects. Included in this budget will be funds for submittal analysis and regional exploration compilations. OPERATING STATISTICS Palmarejo Rochester 2020 2019 2018 2020 2019 2018 Ore tons milled/placed 1,751,525 1,755,957 1,382,471 15,696,565 10,582,518 16,169,807 Ore grade gold (oz./ton) 0.07 0.08 0.10 0.002 0.003 0.004 Ore grade silver (oz./ton) 4.45 4.85 6.49 0.52 0.46 0.52 Recovery/Au oz. (%) 89.9 % 84.3 % 88.9 % — — — Recovery/Ag oz. (%) 80.4 % 79.3 % 83.8 % — — — Gold produced (oz.) 110,608 111,932 122,722 27,147 35,400 54,388 Silver produced (oz.) 6,269,206 6,762,265 7,516,390 3,174,529 3,761,060 5,037,983 Costs applicable to sales per gold ounce (1) $ 610 $ 685 $ 561 $ 1,377 $ 1,251 $ 941 Costs applicable to sales per silver ounce (1) $ 9.14 $ 9.13 $ 7.64 $ 16.35 $ 14.34 $ 11.54 Kensington Wharf 2020 2019 2018 2020 2019 2018 Ore tons milled/placed 675,731 658,378 641,058 4,710,875 4,613,359 4,923,774 Ore grade gold (oz./ton) 0.20 0.21 0.18 0.027 0.023 0.022 Recovery/Au oz. (%) 93.0 % 91.0 % 92.3 % — — — Gold produced (oz.) (2) 124,867 127,914 105,570 93,056 84,172 76,840 Costs applicable to sales per gold ounce (1) $ 975 $ 917 $ 1,055 $ 923 $ 937 $ 879 Silvertip 2020 2019 2018 Silver produced (oz.) (3) 139,287 1,161,926 182,254 Zinc produced (lb.) (3) 2,459,756 17,103,427 4,181,033 Lead produced (lb.) (3) 2,176,847 16,555,622 2,072,013 Costs applicable to sales per silver ounce (1) NM (4) $ 31.92 $ 55.91 Costs applicable to sales per zinc pound (1) NM (4) $ 2.34 $ 3.34 Costs applicable to sales per lead ounce (1) NM (4) $ 1.76 $ 3.23 (1) See Non-GAAP Financial Performance Measures (2) Excludes 8,208 ounces of gold which are excluded from the production numbers presented for 2018, unless otherwise noted. (3) Excludes 0.2 million ounces of silver, 2.6 million pounds of zinc, 1.8 million pounds of lead which are excluded from the production numbers presented for 2018, unless otherwise noted. (4) Due to the temporary suspension of mining and processing activities at Silvertip these amounts are not meaningful. 30 OPERATING STATISTICS OF DISCONTINUED OPERATIONS San Bartolomé 2020 2019 2018 Ore tons milled — — 221,171 Ore grade silver (oz./ton) — — 3.36 Recovery/Ag oz. (%) — — 86.5 Silver produced (oz.) — — 643,078 Costs applicable to sales per silver ounce (1) $ — $ — $ 16.99 (1) See Non-GAAP Financial Performance Measures PROVEN AND PROBABLE RESERVES Gold Reserves at December 31, 2020 (1)(2)(3) Proven Reserves Probable Reserves Proven and Probable Reserves Tons (000s) Grade (oz./ton) Ounces (000s) Tons (000s) Grade (oz./ton) Ounces (000s) Tons (000s) Grade (oz./ton) Ounces (000s) Metallurgical Recovery Palmarejo (4) 4,040 0.067 270 11,297 0.051 579 15,337 0.055 849 95% Rochester (5) 396,867 0.003 1,047 62,554 0.003 172 459,421 0.003 1,219 92% Kensington (6) 814 0.195 159 862 0.200 172 1,676 0.197 331 95% Wharf (7) 19,181 0.024 462 9,186 0.028 258 28,367 0.025 720 79% Total Gold 420,902 1,938 83,899 1,181 504,801 3,119 Silver Reserves at December 31, 2020 (1)(2)(3) Proven Reserves Probable Reserves Proven and Probable Reserves Tons (000s) Grade (oz./ton) Ounces (000s) Tons (000s) Grade (oz./ton) Ounces (000s) Tons (000s) Grade (oz./ton) Ounces (000s) Metallurgical Recovery Palmarejo (4) 4,040 4.29 17,344 11,297 3.72 42,057 15,337 3.87 59,401 84% Rochester (5) 396,867 0.41 162,645 62,554 0.37 22,863 459,421 0.40 185,508 69% Silvertip (8) 186 12.01 2,233 1,618 7.67 12,403 1,804 8.11 14,636 81% Total Silver 401,093 182,222 75,469 77,323 476,562 259,545 Zinc Reserves at December 31, 2020 (1)(2)(3) Proven Reserves Probable Reserves Proven and Probable Reserves Tons (000s) Grade (%) Pounds (000s) Tons (000s) Grade (%) Pounds (000s) Tons (000s) Grade (%) Pounds (000s) Metallurgical Recovery Silvertip (8) 186 10.14 37,647 1,618 7.98 258,418 1,804 8.21 296,065 82% Lead Reserves at December 31, 2020 (1)(2)(3) Proven Reserves Probable Reserves Proven and Probable Reserves Tons (000s) Grade (%) Pounds (000s) Tons (000s) Grade (%) Pounds (000s) Tons (000s) Grade (%) Pounds (000s) Metallurgical Recovery Silvertip (8) 186 8.53 31,656 1,618 4.99 161,569 1,804 5.36 193,225 88% Gold Reserves at December 31, 2019 (1)(2)(3) Proven Reserves Probable Reserves Proven and Probable Reserves Tons (000s) Grade (oz./ton) Ounces (000s) Tons (000s) Grade (oz./ton) Ounces (000s) Tons (000s) Grade (oz./ton) Ounces (000s) Metallurgical Recovery Palmarejo (4) 1,093 0.093 102 10,576 0.056 591 11,669 0.059 693 90% Rochester (5) 249,815 0.003 710 13,577 0.002 27 263,392 0.003 737 92% Kensington (6) 898 0.200 180 779 0.239 186 1,677 0.218 366 95% Wharf (7) 23,436 0.024 571 7,530 0.026 197 30,966 0.025 768 79% Total Gold 275,242 1,563 32,462 1,001 307,704 2,564 31 Silver Reserves at December 31, 2019 (1)(2)(3) Proven Reserves Probable Reserves Proven and Probable Reserves Tons (000s) Grade (oz./ton) Ounces (000s) Tons (000s) Grade (oz./ton) Ounces (000s) Tons (000s) Grade (oz./ton) Ounces (000s) Metallurgical Recovery Palmarejo (4) 1,093 5.17 5,649 10,576 4.24 44,843 11,669 4.33 50,492 84% Rochester (5) 249,815 0.45 112,286 13,577 0.38 5,187 263,392 0.45 117,473 70% Silvertip (8) 176 11.31 1,990 1,636 7.94 12,986 1,812 8.26 14,976 81% Total Silver 251,084 119,925 25,789 63,016 276,873 182,941 Zinc Reserves at December 31, 2019 (1)(2)(3) Proven Reserves Probable Reserves Proven and Probable Reserves Tons (000s) Grade (%) Pounds (000s) Tons (000s) Grade (%) Pounds (000s) Tons (000s) Grade (%) Pounds (000s) Metallurgical Recovery Silvertip (8) 176 9.84 34,577 1,636 7.97 260,847 1,812 8.15 295,424 82% Lead Reserves at December 31, 2019 (1)(2)(3) Proven Reserves Probable Reserves Proven and Probable Reserves Tons (000s) Grade (%) Pounds (000s) Tons (000s) Grade (%) Pounds (000s) Tons (000s) Grade (%) Pounds (000s) Metallurgical Recovery Silvertip (8) 176 8.07 28,366 1,636 5.14 168,096 1,812 5.42 196,462 88% (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 2020 Mineral Reserves were $17.00 per ounce of silver, $1,400 per ounce of gold, $1.15 per pound of zinc, $0.95 per pound of lead. Assumed metal prices for 2019 Mineral Reserves were $17.00 per ounce of silver, $1,350 per ounce of gold, $1.15 per pound zinc, $0.95 per pound lead. Mineral Reserves exclude the impact of the stream agreement at Palmarejo. (3) Mineral reserve estimates were prepared by the Company’s technical staff. (4) The cutoff grade for mineral reserves is 0.055 to 0.059 oz/ton Au. (5) The cutoff grade for mineral reserves is $2.65 to $3.70 net smelter return. (6) The cutoff grade for mineral reserves is 0.137 to 0.207 oz/ton Au. (7) The cutoff grade for mineral reserves is 0.012 oz/ton Au. (8) The cutoff grade for mineral reserves is $130 to $160 net smelter return. 32 MINERALIZED MATERIAL Mineralized Material at December 31, 2020 (1)(2)(3)(4) Tons (000s) Gold Grade (oz./ton) Silver Grade (oz./ton) Lead Grade (percent) Zinc Grade (percent) Palmarejo Mine, Mexico (5) 13,431 0.046 3.81 — — Kensington Mine, USA (6) 3,594 0.231 — — — Wharf Mine, USA (7) 25,710 0.024 — — — Rochester Mine, USA (8) 298,020 0.002 0.24 — — Silvertip Mine, Canada (9) 2,344 — 7.44 4.62 9.43 La Preciosa Project, Mexico (10) 28,677 0.006 3.67 — — Lincoln Hill Project, USA (11) 32,310 0.011 0.32 — — Total Mineralized Material 404,086 Mineralized Material at December 31, 2019 (1)(2)(3)(4) Tons (000s) Gold Grade (oz./ton) Silver Grade (oz./ton) Lead Grade (percent) Zinc Grade (percent) Palmarejo Mine, Mexico (5) 8,764 0.048 3.94 — — Kensington Mine, USA (6) 3,226 0.236 — — — Wharf Mine, USA (7) 11,557 0.029 — — — Rochester Mine, USA (8) 236,345 0.002 0.35 — — Silvertip Mine, Canada (9) 1,716 — 6.75 4.19 8.89 La Preciosa Project, Mexico (10) 28,677 0.006 3.67 — — Lincoln Hill Project, USA (11) 32,310 0.011 0.32 — — Total Mineralized Material 322,595 (1) Assumed metal prices for 2020 estimated mineralized material were $20.00 per ounce of silver, $1,600 per ounce of gold, $1.30 per pound of zinc, $1.00 per pound of lead, except Lincoln Hill and Wilco at $1,350 per ounce of gold and $22.00 per ounce of silver, and La Preciosa at $1,500 per ounce of gold and $20.00 per ounce of silver. Assumed metal prices for 2019 estimated mineralized material were $20.00 per ounce of silver, $1,500 per ounce of gold, $1.30 per pound zinc, $1.05 per pound lead, except Lincoln Hill and Wilco at $1,350 per ounce gold and $22.00 per ounce silver, and Sterling at $1,200 per ounce of gold. (2) Estimated with mining cost parameters and initial metallurgical test results. (3) Mineralized material estimates were completed by the Company’s technical staff, except for La Preciosa, which was completed by an external consultant supervised by technical company staff. (4) Estimated using 3-dimensional geologic modeling and geostatistical evaluation of the exploration drill data. Mineralized material is reported exclusive of reserves. “Mineralized material” as used in this Annual Report on Form 10-K, although permissible under Guide 7, does not indicate “reserves” by SEC standards. There is no certainty that any part of the reported mineralized material will ever be confirmed or converted into Guide 7 compliant “reserves”. (5) Cutoff grades for mineralized material is 3.00 to 3.50 oz/ton AuEq. (6) The cutoff grade for mineralized material is 0.12 to 0.20 oz/ton Au. (7) The cutoff grade for mineralized material is 0.010 oz/ton Au. (8) The cutoff grade for mineralized material is 5.55 to 5.60 oz/ton AuEq. (9) The cutoff grade for mineralized material is $100 to $120 net smelter return. (10) The cutoff grade for mineralized material is $10 net smelter return (11) The cutoff grade for mineralized material is 0.15 to 0.20 oz/ton AuEq.