What changed in this filing

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Item 1. Financial Statements

2021-07-28 compared with 2021-04-28 · 260 added, 122 removed, 742 unchanged (34% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

ASSETS Notes In thousands, except share data

31 unchanged sentences

Common stock, par value $ 0.01 per share;

authorized 300,000,000 shares, 243,469,002 issued and outstanding at March 31, 2021 and 243,751,283 at December 31, 2020

authorized 300,000,000 shares, 257,046,847 issued and outstanding at June 30, 2021 and 243,751,283 at December 31, 2020

Additional paid-in capital 3,732,296 3,610,297

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Notes In thousands, except share data

18 unchanged sentences

OTHER COMPREHENSIVE INCOME (LOSS):

Change in fair value of derivative contracts designated as cash flow hedges, net of tax of $ 0 and $ 22 for the three months ended March 31, 2021 and 2020, respectively.

Change in fair value of derivative contracts designated as cash flow hedges ( 2,982 ) ( 7,097 ) 24,376 ( 6,891 )

Reclassification adjustments for realized (gain) loss on cash flow hedges ( 3,061 ) ( 679 ) ( 5,783 ) ( 679 )

9 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Notes In thousands

20 unchanged sentences

Proceeds from the sale of assets 968 9 5,556 4,515

Purchase of investments ( 876 ) — ( 876 ) —

Sale of investments — 19,802 935 19,802

27 unchanged sentences

Balances at March 31, 2021 243,470 $ 2,435 $ 3,610,631 $ ( 2,906,060 ) $ 13,500 $ 720,506

Net income (loss) — — — 32,146 — 32,146

Other comprehensive income (loss) — — — — ( 6,043 ) ( 6,043 )

Common stock issued for investment 12,786 128 118,649 118,777

Common stock issued/canceled under long-term incentive plans and director fees and options, net 792 7 3,016 — — 3,023

Balances at June 30, 2021 257,048 $ 2,570 $ 3,732,296 $ ( 2,873,914 ) $ 7,457 $ 868,409

In thousands Common

11 unchanged sentences

Balances at March 31, 2020 243,586 $ 2,436 $ 3,603,785 $ ( 2,945,647 ) $ 70 $ 660,644

Net income (loss) — — — ( 1,209 ) — ( 1,209 )

Other comprehensive income (loss) — — — — ( 7,776 ) ( 7,776 )

Common stock issued/canceled under long-term incentive plans and director fees and options, net 146 1 2,197 — — 2,198

Balances at June 30, 2020 243,732 $ 2,437 $ 3,605,982 $ ( 2,946,856 ) $ ( 7,706 ) $ 653,857

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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Accordingly, actual results will differ from the amounts estimated in these financial statements.

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.

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.

In June 2021, the Company updated the

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

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.

Revenue Recognition

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The following table presents a rollforward of the Franco-Nevada contract liability balance:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

In thousands 2021 2020 2021 2020

2 unchanged sentences

Closing Balance $ 8,775 $ 10,389 $ 8,775 $ 10,389

In December 2020, the Company received a $ 15.0 million prepayment (the “December 2020 Prepayment” as defined in Note 17) for deliveries of gold concentrate from the Kensington mine pursuant to the Amended Sales Contract (as defined in Note 17).

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 17).

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 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 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”).

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.

2 unchanged sentences

The following table presents a rollforward of the Amended Sales Contract liability balance:

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

In thousands 2021 2020 2021 2020

17 unchanged sentences

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.

In June 2021, Silvertip repurchased from Silvertip Resources Investment Cayman Ltd.

for consideration of $7.0 million a net smelter returns royalty of 1.429% on the first 1,434,000 metric tonnes of mineralized material mined, and 1.00% thereafter.

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 Coeur’s business and operations and the Company expects costs associated with its COVID-19 mitigation and response efforts at each of its operations to continue.

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Financial information relating to the Company’s segments is as follows (in thousands):

Three Months Ended March 31, 2021 Palmarejo Rochester Kensington Wharf Silvertip Other Total

Three Months Ended June 30, 2021 Palmarejo Rochester Kensington Wharf Silvertip Other Total

Gold sales $ 41,232 $ 14,026 $ 48,807 $ 42,093 $ — $ — $ 146,158

8 unchanged sentences

Other income (expense)

Loss on debt extinguishment — — — — — ( 9,173 ) ( 9,173 )

Fair value adjustments, net — — — — — 37,239 37,239

11 unchanged sentences

Notes to Consolidated Financial Statements

Three Months Ended March 31, 2020 Palmarejo Rochester Kensington Wharf Silvertip Other Total

Three months ended June 30, 2020 Palmarejo Rochester Kensington Wharf Silvertip Other Total

Gold sales $ 23,669 $ 8,982 $ 55,177 $ 40,074 $ — $ — $ 127,902

10 unchanged sentences

Other income (expense)

Fair value adjustments, net — — — — — 10,067 10,067

Interest expense, net ( 311 ) ( 300 ) ( 214 ) ( 50 ) ( 220 ) ( 4,670 ) ( 5,765 )

Other, net ( 1,651 ) ( 25 ) ( 36 ) ( 6 ) 424 1,415 121

Income and mining tax (expense) benefit ( 3,384 ) — ( 474 ) ( 1,701 ) ( 255 ) 2,970 ( 2,844 )

Income (loss) from continuing operations $ 2,447 $ ( 4,087 ) $ 5,122 $ 13,066 $ ( 13,664 ) $ ( 4,093 ) $ ( 1,209 )

Segment assets (2)

$ 307,215 $ 307,221 $ 180,290 $ 84,881 $ 159,995 $ 169,273 $ 1,208,875

Capital expenditures $ 4,533 $ 5,803 $ 3,909 $ 265 $ 1,949 $ 223 $ 16,682

(1) Excludes amortization

(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests

Six Months Ended June 30, 2021 Palmarejo Rochester Kensington Wharf Silvertip Other Total

Gold sales $ 78,799 $ 26,466 $ 103,273 $ 75,942 $ — $ — $ 284,480

Silver sales 86,580 44,376 — 1,539 — — 132,495

Metal sales 165,379 70,842 103,273 77,481 — — 416,975

Costs and Expenses

Costs applicable to sales (1)

75,906 62,064 60,597 42,175 — — 240,742

Amortization 17,330 10,083 26,155 5,469 2,271 602 61,910

Exploration 3,527 1,408 2,414 143 6,527 8,093 22,112

Other operating expenses 2,723 2,892 5,268 710 12,519 24,359 48,471

Other income (expense)

Loss on debt extinguishment — — — — — ( 9,173 ) ( 9,173 )

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(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests

Assets March 31, 2021 December 31, 2020

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Six Months Ended June 30, 2020 Palmarejo Rochester Kensington Wharf Silvertip Other Total

Gold sales $ 65,316 $ 17,648 $ 106,843 $ 65,700 $ — $ — $ 255,507

Silver sales 46,993 22,400 — 633 1,230 $ — 71,256

Zinc sales — — — — ( 662 ) — ( 662 )

Lead sales — — — — 1,315 — 1,315

Metal sales 112,309 40,048 106,843 66,333 1,883 — 327,416

Costs and Expenses

Costs applicable to sales (1)

54,799 35,292 60,889 40,295 17,657 — 208,932

Amortization 20,445 5,916 24,775 5,625 6,576 701 64,038

Exploration 2,395 2,064 4,349 105 3,153 6,175 18,241

Other operating expenses 3,901 2,459 3,850 324 11,854 20,378 42,766

Other income (expense)

Fair value adjustments, net — — — — — 1,248 1,248

Interest expense, net ( 466 ) ( 568 ) ( 523 ) ( 101 ) ( 479 ) ( 8,756 ) ( 10,893 )

Other, net ( 1,698 ) ( 78 ) 35 ( 19 ) 1,554 2,208 2,002

Income and mining tax (expense) benefit ( 1,097 ) ( 43 ) ( 474 ) ( 2,176 ) ( 255 ) 5,140 1,095

Net Income (loss) $ 27,508 $ ( 6,372 ) $ 12,018 $ 17,688 $ ( 36,537 ) $ ( 27,414 ) $ ( 13,109 )

Segment assets (2)

$ 307,215 $ 307,221 $ 180,290 $ 84,881 159,995 $ 169,273 $ 1,208,875

Capital expenditures $ 11,613 $ 10,861 $ 8,717 $ 674 6,565 $ 460 $ 38,890

(1) Excludes amortization

(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests

Assets June 30, 2021 December 31, 2020

Total assets for reportable segments $ 1,339,442 $ 1,232,153

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Geographic Information

Long-Lived Assets March 31, 2021 December 31, 2020

Long-Lived Assets June 30, 2021 December 31, 2020

United States $ 579,603 $ 503,818

3 unchanged sentences

Total $ 1,059,253 $ 946,929

Revenue Three months ended March 31,

Revenue Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

United States $ 129,824 $ 116,279 $ 251,596 $ 213,224

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Receivables consist of the following:

In thousands March 31, 2021 December 31, 2020

In thousands June 30, 2021 December 31, 2020

Current receivables:

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See Note 17 -- Commitments and Contingencies for additional detail.

The $0.8 million decrease in the three months ended March 31, 2021 is attributable to a weaker Mexican Peso.

The $0.2 million increase in the six months ended June 30, 2021 is attributable to a stronger Mexican Peso.

NOTE 5 – INVENTORY AND ORE ON LEACH PADS

Inventory consists of the following:

In thousands March 31, 2021 December 31, 2020

In thousands June 30, 2021 December 31, 2020

Concentrate $ 4,351 $ 2,909

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Equity Securities

The Company makes strategic investments in equity and debt securities of silver and gold exploration, development and royalty and streaming companies.

At March 31, 2021

The Company makes strategic investments in equity securities of silver and gold exploration, development and royalty and streaming companies.

At June 30, 2021

In thousands Cost Gross

1 unchanged sentence

Equity Securities

Victoria Gold Corp.

$ 128,710 $ — $ 36,033 164,743

Integra Resources Corp.

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Equity securities $ 7,668 $ ( 1 ) $ 5,276 $ 12,943

Changes in the fair value of the Company’s investment in equity securities are recognized each period in the Condensed Consolidated Statement of Comprehensive Income (Loss) in Fair value adjustments, net .

See Note 12 -- 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 for a realized gain of $ 0.8 million.

(“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.

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.

The Exchange Agreement provides 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 pursuant to the terms of the Exchange Agreement represents an embedded derivative that requires bifurcation.

The obligation to deliver additional Coeur shares pursuant to the Exchange Agreement expires on October 31, 2021.

The accounting treatment of derivative financial instruments requires 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.

See Note 12 -- Fair Value Measurements and Note 13 -- Derivative Financial Instruments for additional details.

NOTE 7 – LEASES

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The following table summarizes quantitative information pertaining to the Company’s finance and operating leases.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

In thousands 2021 2020 2021 2020

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Total finance lease cost $ 6,057 $ 7,344 $ 12,534 $ 14,862

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Supplemental cash flow information related to leases was as follows:

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

In thousands 2021 2020 2021 2020

4 unchanged sentences

Financing cash flows from finance leases $ 9,365 $ 5,713 $ 15,028 $ 11,614

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Supplemental balance sheet information related to leases was as follows:

In thousands March 31, 2021 December 31, 2020

In thousands June 30, 2021 December 31, 2020

Operating Leases

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Minimum future lease payments under finance and operating leases with terms longer than one year are as follows:

As of March 31, 2021 (In thousands)

As of June 30, 2021 (In thousands)

Operating leases Finance leases

3 unchanged sentences

2024 8,887 4,282

2025 213 2,732

Thereafter 1,165 696

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Net lease obligation $ 34,533 $ 46,442

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 8 – DEBT

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

In thousands Current Non-Current Current Non-Current

6 unchanged sentences

$ 28,876 $ 385,370 $ 22,074 $ 253,427

(1) Net of unamortized debt issuance costs of $ 7.4 million and $ 0.0 million at March 31, 2021 and December 31, 2020, respectively.

(2) Net of unamortized debt issuance costs of $ 0.0 million and $ 2.4 million at March 31, 2021 and December 31, 2020, respectively.

(3) Unamortized debt issuance costs of $ 2.7 million and $ 1.5 million at March 31, 2021 and December 31, 2020, respectively, included in Other Non-Current Assets .

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

(1) Net of unamortized debt issuance costs of $ 7.2 million and $ 0.0 million at June 30, 2021 and December 31, 2020, respectively.

(2) Net of unamortized debt issuance costs of $ 0.0 million and $ 2.4 million at June 30, 2021 and December 31, 2020, respectively.

(3) Unamortized debt issuance costs of $ 2.7 million and $ 1.5 million at June 30, 2021 and December 31, 2020, respectively, included in Other Non-Current Assets .

2029 Senior Notes

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The Company recorded a loss of $ 9.2 million as a result of the extinguishment of the 2024 Senior Notes.

Revolving Credit Facility

On March 1, 2021, the Company entered into a fifth amendment (the “Amendment”) to its credit agreement, dated as of September 29, 2017 (as previously 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 Amendment, among other things, (i) extended the maturity date of the senior secured revolving credit facility (“Revolving Credit Facility” or “RCF”) provided under the Credit Agreement to March 2025 and (ii) permits 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.

Coeur Mining, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements

At March 31, 2021, the Company had no borrowings and $ 35.0 million in outstanding letters of credit und er the RCF.

At March 31, 2021, the interest rate on the principal of the RCF was 2.4 %.

Revolving Credit Facility

At June 30, 2021, the Company had no borrowings and $ 35.0 million in outstanding letters of credit und er the RCF.

Finance Lease Obligations

From time-to-time, the Company acquires mining equipment and facilities under finance lease agreements.

In the three months ended March 31, 2021, the Company entered into new lease financing arrangements primarily for mining equipment at Rochester and Kensington .

In the six months ended June 30, 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 quarter, a portion of which has been funded as of June 30, 2021.

The package is earmarked for planned equipment purchases for the project in 2021 and 2022, and has an interest rate of 5.20%.

All finance lease obligations are recorded, upon lease inception, at the present value of future minimum lease payments.

1 unchanged sentence

Interest Expense

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

In thousands 2021 2020 2021 2020

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Changes to the Company’s asset retirement obligations for its operating sites are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

In thousands 2021 2020 2021 2020

3 unchanged sentences

Asset retirement obligation - Ending $ 141,205 $ 138,904 $ 141,205 $ 138,904

The Company accrued $ 2.1 million and $ 1.9 million at each of March 31, 2021 and March 31, 2020, respectively, for reclamation liabilities related to former mining activities, which are included in Reclamation.

The Company accrued $ 2.0 million and $ 1.9 million at each of June 30, 2021 and June 30, 2020, respectively, for reclamation liabilities related to former mining activities, which are included in Reclamation.

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 10 - INCOME AND MINING TAXES

The following table summarizes the components of Income and mining tax (expense) benefit for the three months ended March 31, 2021 and 2020 by significant jurisdiction:

Three months ended March 31,

In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit

The following table summarizes the components of Income and mining tax (expense) benefit for the three and six months ended June 30, 2021 and 2020 by significant jurisdiction:

Three months ended June 30, Six months ended June 30,

2021 2020 2021 2020

In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit

United States $ 29,647 $ ( 7,228 ) $ 12,546 $ 827 $ 21,116 $ ( 8,853 ) $ 1,540 $ 91

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$ 47,486 $ ( 15,340 ) $ 1,635 $ ( 2,844 ) $ 62,332 $ ( 28,126 ) $ ( 14,204 ) $ 1,095

During the first quarter of 2021, the Company reported estimated income and mining tax expense of approximately $ 12.8 million, resulting in an effective tax rate of 86.1 %.

This compares to income tax expense of $ 3.9 million for an effective

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

tax rate of 24.9 % during the first quarter of 2020.

During the second quarter of 2021, the Company reported estimated income and mining tax expense of approximately $ 15.3 million, resulting in an effective tax rate of 32.3 %.

This compares to income tax expense of 2.8 million for an effective tax rate of 173.9% during the second quarter of 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:

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As a result of statutes of limitation that will begin to expire within the next twelve months in various jurisdictions and possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will decrease between $ 0.5 million and $ 1.5 million in the next twelve months.

At March 31, 2021 and December 31, 2020, the Company had $ 0.3 million and $ 0.7 million of total gross unrecognized tax benefits, respectively, that, if recognized, would positively impact the Company’s effective income tax rate.

At June 30, 2021 and December 31, 2020, the Company had $ 0.3 million and $ 0.7 million of total gross unrecognized tax benefits, respectively, that, if recognized, would positively impact the Company’s effective income tax rate.

The Company’s continuing practice is to recognize potential interest and/or penalties related to unrecognized tax benefits as part of its income tax expense.

At March 31, 2021 and December 31, 2020, the amount of accrued income-tax-related interest and penalties was $ 0.3 million and $ 1.1 million, respectively.

At June 30, 2021 and December 31, 2020, the amount of accrued income-tax-related interest and penalties was $ 0.4 million and $ 1.1 million, respectively.

NOTE 11 – STOCK-BASED COMPENSATION

1 unchanged sentence

Stock awards include performance shares, restricted stock and stock options.

Stock-based compensation expense in the three months ended March 31, 2021 and 2020 was $ 4.3 million and $ 2.0 million, respectively.

At March 31, 2021, there was $ 7.0 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 1.5 years.

The following table summarizes the grants awarded during the three months ended March 31, 2021:

Stock-based compensation expense in the three and six months ended June 30, 2021 was $ 3.3 million and $ 7.5 million, respectively, compared to $ 2.3 million and $ 4.3 million in the three and six months ended June 30, 2020.

At June 30, 2021, there was $ 15.6 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 1.7 years.

The following table summarizes the grants awarded during the six months ended June 30, 2021:

Grant date Restricted

3 unchanged sentences

February 24, 2021 5,000 $ 10.40 — $ —

May 12, 2021 893,329 $ 9.40 593,577 $ 10.19

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 12 – FAIR VALUE MEASUREMENTS

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

In thousands 2021 2020 2021 2020

1 unchanged sentence

Realized gain (loss) on equity securities — 12,340 769 12,340

Exchange agreement embedded derivative 664 — 664 —

Fair value adjustments, net $ 37,239 $ 10,067 $ 33,440 $ 1,248

1 unchanged sentence

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).

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

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:

Fair Value at March 31, 2021

Fair Value at June 30, 2021

In thousands Total Level 1 Level 2 Level 3

Equity securities $ 174,370 $ 174,370 $ — $ —

Gold zero cost collars

4,056 — 4,056 —

Foreign currency forward exchange contracts

2 unchanged sentences

$ 182,042 $ 174,370 $ 7,672 $ —

Gold zero cost collars

$ 78 $ — $ 78 $ —

Exchange agreement embedded derivative 9,269 — — 9,269

Provisional metal sales contracts 420 — 420 —

$ 9,767 $ — $ 498 $ 9,269

Fair Value at December 31, 2020

15 unchanged sentences

Such instruments are classified within Level 2 of the fair value hierarchy.

No assets or liabilities were transferred between fair value levels in the three months ended March 31, 2021.

The fair value of financial assets and liabilities carried at book value in the financial statements at March 31, 2021 and December 31, 2020 is presented in the following table:

March 31, 2021

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

As described in Note 6 - Investments , the Exchange Agreement provides 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 expires on October 31, 2021.

The fair value of the outstanding embedded derivatives 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.

As the model inputs are estimated based on observable and unobservable data, the Company classifies this embedded derivative in Level 3 of the fair value hierarchy, a change in these unobservable inputs may result in a significantly higher or lower fair value measurement.

No assets or liabilities were transferred between fair value levels in the six months ended June 30, 2021.

The following tables present the changes in the fair value of the Company's Level 3 financial assets and liabilities in the three and six months ended June 30, 2021.

Three Months Ended June 30, 2021

In thousands Balance at the beginning of the period Initial valuation Revaluation Settlements Balance at the

Exchange agreement embedded derivative $ — $ 9,933 $ ( 664 ) $ — $ 9,269

Six Months Ended June 30, 2021

In thousands Balance at the beginning of the period Initial valuation Revaluation Settlements Balance at the

Exchange agreement embedded derivative $ — $ 9,933 $ ( 664 ) $ — $ 9,269

The fair value of financial assets and liabilities carried at book value in the financial statements at June 30, 2021 and December 31, 2020 is presented in the following table:

June 30, 2021

In thousands Book Value Fair Value Level 1 Level 2 Level 3

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(2) Unamortized debt issuance costs of $ 2.7 million included in Other Non-Current Assets .

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

December 31, 2020

9 unchanged sentences

NOTE 13 – DERIVATIVE FINANCIAL INSTRUMENTS & HEDGING ACTIVITIES

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

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.

9 unchanged sentences

The embedded derivatives do not qualify for hedge accounting and are marked to market through earnings each period until final settlement.

At March 31, 2021, the Company had the following derivative instruments that settle as follows:

Exchange Agreement Embedded Derivative

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 expires on October 31, 2021.

At June 30, 2021, the Company had the following derivative instruments that settle as follows:

In thousands except average prices and notional ounces 2021 2022 and Thereafter

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The following summarizes the classification of the fair value of the derivative instruments:

March 31, 2021

June 30, 2021

In thousands Prepaid expenses and other Accrued liabilities and other

Provisional metal sales contracts $ 137 $ 420

Exchange agreement embedded derivative — 9,269

$ 137 $ 9,689

December 31, 2020

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Provisional metal sales contracts $ 481 $ 67

The following represent mark-to-market gains (losses) on derivative instruments in the three months ended March 31, 2021 and 2020, respectively (in thousands):

Three Months Ended March 31,

The following represent mark-to-market gains (losses) on derivative instruments in the three and six months ended June 30, 2021 and 2020, respectively (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Financial statement line Derivative 2021 2020 2021 2020

Revenue Provisional metal sales contracts $ ( 137 ) $ 713 $ ( 697 ) $ 1,213

Fair value adjustments, net Exchange agreement embedded derivative 664 — 664 —

$ 527 $ 713 $ ( 33 ) $ 1,213

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

Coeur Mining, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

gold at the time of expiration is between the put and call prices, would expire at no cost to the Company.

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.

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The Company has elected to designate these instruments as cash flow hedges of forecasted transactions at their inception.

At March 31, 2021, the Company had the following derivative cash flow hedge instruments that settle as follows:

At June 30, 2021, the Company had the following derivative cash flow hedge instruments that settle as follows:

In thousands except average prices and notional ounces 2021 2022 and Thereafter

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There have been no such changes in critical terms or adverse developments.

As of March 31, 2021, the Company had $ 13.5 million of net after-tax gain in AOCI related to losses from cash flow hedge transactions, of which $ 10.4 million of net after-tax gains is expected to be recognized in its Consolidated Statement of Comprehensive Income (Loss) during the next 12 months.

As of June 30, 2021, the Company had $ 7.5 million of net after-tax gain in AOCI related to losses from cash flow hedge transactions, of which $ 7.4 million of net after-tax gains 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 and the Canadian and Mexican exchange rates for foreign currency contracts.

The following summarizes the classification of the fair value of the derivative instruments designated as cash flow hedges:

March 31, 2021

June 30, 2021

In thousands Prepaid expenses and other Accrued liabilities and other

1 unchanged sentence

Foreign currency forward exchange contracts 7,535 —

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

December 31, 2020

3 unchanged sentences

$ 13,747 $ 24,883

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

The following table sets forth the pre-tax gains (losses) on derivatives designated as cash flow hedges that have been included in Accumulated Other Comprehensive Income (“AOCI”) and the Consolidated Statement of Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020, respectively (in thousands).

Three Months Ended March 31,

The following table sets forth the pre-tax gains (losses) on derivatives designated as cash flow hedges that have been included in Accumulated Other Comprehensive Income (“AOCI”) and the Consolidated Statement of Comprehensive Income (Loss) for the three and six months ended June 30, 2021 and 2020, respectively (in thousands).

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Amount of Gain (Loss) Recognized in AOCI

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The Company does not anticipate non-performance by any of its counterparties.

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 14 – ADDITIONAL COMPREHENSIVE INCOME (LOSS) DETAIL

Pre-development, reclamation, and other consists of the following:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

In thousands 2021 2020 2021 2020

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Other, net consists of the following:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

In thousands 2021 2020 2021 2020

7 unchanged sentences

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

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 three and six months ended June 30, 2021, there were 1,553,030 and 1,558,030 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.

Similarly, 1,816,332 and 3,205,676 common stock equivalents were excluded in the diluted earnings per share calculation for the three and six months ended June 30, 2020, respectively.

Coeur Mining, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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 three months ended March 31, 2021 and 2020, there were 112,610 and 1,712,033 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.

Three months ended March 31,

Three months ended June 30, Six months ended June 30,

In thousands except per share amounts 2021 2020 2021 2020

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Sales under the ATM Program, if any, will be made pursuant to the terms of the Sales Agreement.

At March 31, 2021, the Company had not elected to sell any shares of its common stock under the ATM Program.

At June 30, 2021, the Company had not elected to sell any shares of its common stock under the ATM Program.

NOTE 16 - SUPPLEMENTAL GUARANTOR INFORMATION

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SUMMARIZED BALANCE SHEET

MARCH 31, 2021

JUNE 30, 2021

In thousands Coeur Mining, Inc.

85 unchanged sentences

SUMMARIZED STATEMENTS OF INCOME

THREE MONTHS ENDED MARCH 31, 2021

SIX MONTHS ENDED JUNE 30, 2021

In thousands Coeur Mining, Inc.

8 unchanged sentences

NOTE 17 – COMMITMENTS AND CONTINGENCIES

Mexico VAT Litigation

Included in non-current receivables as of March 31, 2021 are $ 25.6 million due from the Mexican government associated with VAT that was paid under Coeur Mexicana’s prior royalty agreement with a subsidiary of Franco-Nevada Corporation, which was terminated in 2016.

Under the royalty agreement, Coeur 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 the Company’s VAT refunds based on the argument that VAT was not legally due on the royalty payments.

Accordingly, Coeur began to request refunds of the VAT as undue payments, which the Mexican tax authorities also denied.

Mexico Litigation Matters

Included in non-current receivables as of June 30, 2021 are $ 26.6 million 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.

Under the royalty agreement, 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 continues, some of which has been determined unfavorably to the Company based on interpretations of applicable law and prior court decisions which the Company and its counsel believe are erroneous and which are now under appeal.

While the Company believes that it remains legally entitled to be refunded the full amount of the VAT receivable, the Company may continue to experience delays or obstacles in the recovery of VAT and it is possible that some or all of the VAT receivable may not ultimately be recovered as outcomes in Mexican tax courts and the process for recovering funds even if there is a successful outcome in litigation can be unpredictable.

The continued failure to recover the VAT receivable may result in the Company recording a reserve against some or all of this amount, which, if material, may have a material adverse impact on the Company’s financial statements.

Some of this litigation has been determined unfavorably to Coeur Mexicana based on interpretations of applicable law and prior court decisions which the Company and its counsel believe are erroneous and which are now under appeal.

In the event Coeur Mexicana is unsuccessful with these appeals, Coeur Mexicana may elect to initiate an arbitration proceeding under Chapter 11 of the North American Free Trade Agreement, or NAFTA.

While the Company believes that it remains legally entitled to be refunded the full amount of the VAT receivable, Coeur Mexicana may continue to experience delays or obstacles in the recovery of VAT and it is possible that some or all of the VAT receivable may not ultimately be recovered as outcomes in Mexican courts or NAFTA arbitration and the process for recovering funds even if there is a successful outcome in litigation or 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, S.A.

(“Coeur Mexicana”), a subsidiary of Coeur, 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.

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 March 31, 2021 the remaining unamortized balance was $ 9.0 million, which is included in Accrued liabilities and other and Other long-term liabilities on the Consolidated Balance Sheet.

At June 30, 2021 the remaining unamortized balance was $ 8.8 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 June 2020 to include options for Coeur to receive up to two additional prepayments of up to $15.0 million.

In December 2020, Coeur exercised the option to receive the second $ 15.0 million prepayment (the “December 2020 Prepayment”).

In the first quarter of 2021, the Kensington mine delivered $ 8.0 million under the December 2020 Prepayment.

The remaining deliveries of $ 7.1 million under the December 2020 Prepayment are recognized as a deferred revenue liability and are presented in Accrued liabilities and other on the Consolidated Balance Sheet.

Under the 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 June 30, 2021.

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.

The remaining deliveries of $ 15.0 million under the June 2021 Prepayment are recognized as a deferred revenue liability and are presented in Accrued liabilities and other on the Consolidated Balance Sheet.

Under the 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, 2021.

Silvertip Contingent Consideration

During the first quarter of 2020, the Company made a payment of $ 25.0 million in the form of $ 18.8 million in cash and 0.9 million shares of common stock to satisfy a contingent consideration payment due in conjunction with the acquisition of the Company’s Silvertip property.

During the first half of 2020, the Company made a payment of $ 25.0 million in the form of $ 18.8 million in cash and 0.9 million shares of common stock to satisfy a contingent consideration payment due in conjunction with the acquisition of the Company’s Silvertip property.

For more details, please see Note 21 -- Commitments and Contingencies in the 2020 10-K.

1 unchanged sentence

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 March 31, 2021 and December 31, 2020, the Company had surety bonds totaling $ 312.0 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, 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.

As of June 30, 2021 and December 31, 2020, the Company had surety bonds totaling $ 312.3 million and $ 311.9 million, respectively, in place as

Coeur Mining, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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.

financial support for future reclamation and closure costs.

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.

NOTE 18 – ADDITIONAL BALANCE SHEET DETAIL AND SUPPLEMENTAL CASH FLOW INFORMATION

Accrued liabilities and other consist of the following:

In thousands March 31, 2021 December 31, 2020

In thousands June 30, 2021 December 31, 2020

Accrued salaries and wages $ 21,473 $ 30,457

Deferred revenue (1)

15,991 16,425

Income and mining taxes 11,407 26,118

Exchange agreement embedded derivative 9,269 —

Accrued operating costs 7,563 3,327

5 unchanged sentences

(1) See Note 17 -- Commitments and Contingencies for additional details on deferred revenue liabilities

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 three months ended March 31, 2021 and 2020:

In thousands March 31, 2021 March 31, 2020

In thousands June 30, 2021 June 30, 2020

Cash and cash equivalents $ 124,075 $ 70,924

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements