Item 1A -- Risk Factors of the 2020 10-K sets forth information relating to important risks and uncertainties that could materially adversely affect the Company’s business, financial condition or operating results.
−Removed: Those risk factors have been supplemented and updated in the Forms 10-Q filed for the quarterly period ended March 31, 2020 (the “First Quarter 10-Q”) and the quarterly period ended June 30, 2020 (the “Second Quarter 10-Q”) and in this Form 10-Q.
−Removed: Except as supplemented and updated below and in the First Quarter 10-Q and the Second Quarter 10-Q, the risk factors set forth in the 2019 10-K remain current.
+Added: Those risk factors have been supplemented and updated in this Form 10-Q.
+Added: Except as supplemented and updated below, the risk factors set forth in the 2020 10-K remain current.
Additional risks and uncertainties that the Company does not presently know or that it currently deems immaterial also may impair our business operations.
−Removed: Our operations may be further disrupted, and our financial results may be adversely affected by the novel coronavirus pandemic.
−Removed: The 2019 novel strain of coronavirus causing a contagious respiratory disease known as 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.
−Removed: 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 and limit exploration activities and development projects and impact liquidity and financial results.
−Removed: 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, contact tracing technology and procuring additional personal protective equipment for our employees, among others, some of which may result in additional costs to the Company.
−Removed: For example, we continue to require all employees who travel to the Kensington mine to submit to a 7-day quarantine and testing protocol in Juneau, Alaska before traveling to the mine.
−Removed: We believe this is an important step to protect the health and safety of all workers who stay at the Kensington camp, although it has required changes to worker scheduling and is expected to result in higher labor costs due to additional overtime pay and pay during the quarantine period.
−Removed: 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.
−Removed: We also continue to monitor legislative initiatives in the U.S., Mexico and Canada to provide relief to businesses impacted by COVID-19 to determine their potential impacts or benefits (if any) to our business.
−Removed: Early in the second quarter of 2020, we temporarily suspended active mining and processing activities at the Palmarejo complex in the State of Chihuahua, Mexico, in accordance with a government decree in response to COVID-19, and we began taking steps to restart active mining, processing and exploration activities at Palmarejo in accordance with updated guidance from the government approximately 45 days later.
−Removed: In addition, as a result of several reported positive COVID-19 cases at our Kensington mine outside of Juneau, Alaska, during the third quarter of 2020, we experienced a minor short-term production impact associated with this situation, which adversely impacted cash flows, financial condition and results of operations.
−Removed: The refiners and smelters upon which the Company relies to refine and process and, in some cases, purchase the gold and silver doré and gold, silver, zinc and lead concentrate produced by the Company’s mines, are also subject to these risks and may be required to reduce or suspend operations, which could impact the Company’s ability to sell its products to buyers and generate revenues.
−Removed: For example, in the first quarter of 2020, Argor-Heraeus, a Swiss refiner which provides refining services to several of our mines, announced that it was temporarily suspending operations in response to a government order.
−Removed: Following the temporary suspension, Argor-Heraeus recommenced operations.
−Removed: We may be subject to litigation if one or more employees 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.
−Removed: 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.
−Removed: 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 and those set forth under the caption “Risk Factors” in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2019 and in Item 1A of Part II of our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, such as those relating to
−Removed: our operation and indebtedness and financing.
−Removed: Because of the highly uncertain and dynamic nature of events relating to the COVID-19 pandemic, it is not currently possible to estimate the impact of the pandemic on our business.
−Removed: However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.
+Added: Coeur is an international company and is exposed to political and social risks associated with its foreign operations.
+Added: A significant portion of our revenues are generated by operations outside the United States.
+Added: 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.
+Added: 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.
+Added: As an example, as disclosed in Note 17 -- Commitments and Contingencies to the Consolidated 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.
+Added: In addition, in April 2021 the legislation that limits outsourcing by companies in Mexico of certain services received congressional approval and is expected to be enacted into law as early as the second quarter of 2021.
+Added: The law is expected to result in increased costs to our operations in Mexico, including additional tax expense, increased compensation to certain employees and costs associated with restructuring our Mexican subsidiaries and employment arrangements to comply with the new law.
+Added: 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.
+Added: or foreign jurisdictions, which could have a material adverse effect on our business, financial condition, or future prospects.
+Added: 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.
+Added: 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.
Mine Safety Disclosures
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