Coeur Mining, Inc. 10-Q

Item 1. Financial Statements and Supplementary Data COEUR MINING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, 2021 December 31, 2020 ASSETS Notes In thousands, except share data CURRENT ASSETS Cash and cash equivalents $ 124,075 $ 92,794 Receivables 4 22,867 23,484 Inventory 5 54,471 51,210 Ore on leach pads 5 81,773 74,866 Prepaid expenses and other 20,949 27,254 304,135 269,608 NON-CURRENT ASSETS Property, plant and equipment, net 272,558 230,139 Mining properties, net 786,695 716,790 Ore on leach pads 5 73,487 81,963 Restricted assets 9,274 9,492 Equity securities 6 174,370 12,943 Receivables 4, 17 26,642 26,447 Other 60,847 56,595 TOTAL ASSETS $ 1,708,008 $ 1,403,977 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 107,362 $ 90,577 Accrued liabilities and other 18 89,311 119,158 Debt 8 28,876 22,074 Reclamation 9 2,299 2,299 227,848 234,108 NON-CURRENT LIABILITIES Debt 8 385,370 253,427 Reclamation 9 140,936 136,975 Deferred tax liabilities 39,598 34,202 Other long-term liabilities 45,847 51,786 611,751 476,390 COMMITMENTS AND CONTINGENCIES 17 STOCKHOLDERS’ EQUITY Common stock, par value $ 0.01 per share; authorized 300,000,000 shares, 257,046,847 issued and outstanding at June 30, 2021 and 243,751,283 at December 31, 2020 2,570 2,438 Additional paid-in capital 3,732,296 3,610,297 Accumulated other comprehensive income (loss) 7,457 ( 11,136 ) Accumulated deficit ( 2,873,914 ) ( 2,908,120 ) 868,409 693,479 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,708,008 $ 1,403,977 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 4 COEUR MINING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Notes In thousands, except share data Revenue 3 $ 214,858 $ 154,249 $ 416,975 $ 327,416 COSTS AND EXPENSES Costs applicable to sales (1) 3 132,595 90,015 240,742 208,932 Amortization 31,973 27,876 61,910 64,038 General and administrative 10,467 8,616 22,021 17,536 Exploration 12,446 11,855 22,112 18,241 Pre-development, reclamation, and other 12,738 18,675 26,450 25,230 Total costs and expenses 200,219 157,037 373,235 333,977 OTHER INCOME (EXPENSE), NET Loss on debt extinguishment 8 — — ( 9,173 ) — Fair value adjustments, net 12 37,239 10,067 33,440 1,248 Interest expense, net of capitalized interest 8 ( 5,093 ) ( 5,765 ) ( 10,003 ) ( 10,893 ) Other, net 14 701 121 4,328 2,002 Total other income (expense), net 32,847 4,423 18,592 ( 7,643 ) Income (loss) before income and mining taxes 47,486 1,635 62,332 ( 14,204 ) Income and mining tax (expense) benefit 10 ( 15,340 ) ( 2,844 ) ( 28,126 ) 1,095 NET INCOME (LOSS) $ 32,146 $ ( 1,209 ) $ 34,206 $ ( 13,109 ) OTHER COMPREHENSIVE INCOME (LOSS): 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 ) Other comprehensive income (loss) ( 6,043 ) ( 7,776 ) 18,593 ( 7,570 ) COMPREHENSIVE INCOME (LOSS) $ 26,103 $ ( 8,985 ) $ 52,799 $ ( 20,679 ) NET INCOME (LOSS) PER SHARE 15 Basic $ 0.13 $ ( 0.01 ) $ 0.14 $ ( 0.05 ) Diluted $ 0.13 $ ( 0.01 ) $ 0.14 $ ( 0.05 ) (1) Excludes amortization. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 5 COEUR MINING, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Notes In thousands CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 32,146 $ ( 1,209 ) $ 34,206 $ ( 13,109 ) Adjustments: Amortization 31,973 27,876 61,910 64,038 Accretion 2,965 2,908 5,870 5,755 Deferred taxes 5,100 ( 1,545 ) 5,224 ( 7,032 ) Loss on debt extinguishment 8 — — 9,173 — Fair value adjustments, net 12 ( 37,239 ) ( 10,067 ) ( 33,440 ) ( 1,248 ) Stock-based compensation 11 3,256 2,287 7,512 4,300 Gain on modification of right of use lease — — — ( 4,051 ) Write-downs — 5,208 — 15,589 Deferred revenue recognition 17 ( 7,255 ) ( 8,134 ) ( 15,601 ) ( 15,682 ) Other 496 ( 913 ) ( 1,832 ) ( 2,005 ) Changes in operating assets and liabilities: Receivables 961 ( 1,536 ) 1,960 ( 2,349 ) Prepaid expenses and other current assets 1,328 1,081 673 735 Inventory and ore on leach pads 3,259 ( 8,056 ) ( 14,227 ) ( 29,981 ) Accounts payable and accrued liabilities 21,069 2,047 ( 7,728 ) ( 13,004 ) CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 58,059 9,947 53,700 1,956 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 78,223 ) ( 16,682 ) ( 137,647 ) ( 38,890 ) 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 Other ( 13 ) ( 183 ) ( 30 ) ( 200 ) CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES ( 78,144 ) 2,946 ( 132,062 ) ( 14,773 ) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of notes and bank borrowings, net of issuance costs 8 — 100,000 367,493 150,000 Payments on debt, finance leases, and associated costs 7, 8 ( 9,611 ) ( 95,713 ) ( 253,578 ) ( 101,614 ) Silvertip contingent consideration 17 — — — ( 18,750 ) Other ( 233 ) 141 ( 4,158 ) ( 1,832 ) CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ( 9,844 ) 4,428 109,757 27,804 Effect of exchange rate changes on cash and cash equivalents ( 56 ) 929 ( 107 ) 303 INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 29,985 ) 18,250 31,288 15,290 Cash, cash equivalents and restricted cash at beginning of period 155,443 54,058 94,170 57,018 Cash, cash equivalents and restricted cash at end of period $ 125,458 $ 72,308 $ 125,458 $ 72,308 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 6 COEUR MINING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED) In thousands Common Stock Shares Common Stock Par Value Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Balances at December 31, 2020 243,752 $ 2,438 $ 3,610,297 $ ( 2,908,120 ) $ ( 11,136 ) $ 693,479 Net income (loss) — — — 2,060 — 2,060 Other comprehensive income (loss) — — — — 24,636 24,636 Common stock issued/canceled under long-term incentive plans and director fees and options, net ( 282 ) ( 3 ) 334 — — 331 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 Stock Shares Common Stock Par Value Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Balances at December 31, 2019 241,529 $ 2,415 $ 3,598,472 $ ( 2,933,747 ) $ ( 136 ) $ 667,004 Net income (loss) — — — ( 11,900 ) — ( 11,900 ) Other comprehensive income (loss) — — — — 206 206 Common stock issued for Silvertip contingent consideration payment 878 9 5,286 — — 5,295 Common stock issued/canceled under long-term incentive plans and director fees and options, net 1,179 12 27 — — 39 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. 7 Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements NOTE 1 - BASIS OF PRESENTATION The interim condensed consolidated financial statements of Coeur Mining, Inc. and its subsidiaries (collectively, “Coeur” or the “Company”) are unaudited. In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. The results reported in these interim statements may not be indicative of the results which will be reported for the year ending December 31, 2021. The condensed consolidated December 31, 2020 balance sheet data was derived from audited consolidated financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 10-K”). NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant Accounting Policies Please see Note 2 -- Summary of Significant Accounting Policies contained in the 2020 10-K. Use of Estimates The Company's Consolidated Financial Statements have been prepared in accordance with United States Generally Accepted Accounting Principles. The preparation of the Company's Consolidated Financial Statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and reported amounts of revenues and expenses during the reporting period. The more significant areas requiring the use of management estimates and assumptions relate to metal prices and mineral reserves that are the basis for future cash flow estimates utilized in impairment calculations and units-of production amortization calculations, environmental, reclamation and closure obligations, estimates of recoverable silver and gold in leach pad inventories, estimates of fair value for certain reporting units and asset impairments, valuation allowances for deferred tax assets, and the fair value and accounting treatment of financial instruments, equity securities, asset acquisitions, the allocation of fair value to assets and liabilities assumed in connection with business combinations, and derivative instruments. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results will differ from the amounts estimated in these financial statements. 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 8 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 The Company’s gold stream agreement with a subsidiary of Franco-Nevada Corporation (“Franco-Nevada”) provided for a $ 22.0 million deposit paid by Franco-Nevada in exchange for the right and obligation, commencing in 2016, to purchase 50 % of a portion of Palmarejo gold production at the lesser of $ 800 or market price per ounce. Because there is no minimum obligation associated with the deposit, it is not considered financing, and each shipment is considered to be a separate performance obligation. The streaming agreement represents a contract liability under ASC 606, which requires the Company to ratably recognize a portion of the deposit as revenue for each gold ounce delivered to Franco-Nevada. The remaining unamortized balance is included in Accrued liabilities and other and Other long-term liabilities on the Consolidated Balance Sheet. See Note 17 -- Commitments and Contingencies for additional detail. The following table presents a rollforward of the Franco-Nevada contract liability balance: Three Months Ended June 30, Six Months Ended June 30, In thousands 2021 2020 2021 2020 Opening Balance $ 9,030 $ 10,505 $ 9,376 $ 11,061 Revenue Recognized ( 255 ) ( 116 ) ( 601 ) ( 672 ) 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”) 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. The remaining contract liability is included in Accrued liabilities and other on the Consolidated Balance Sheet. See Note 17 -- Commitments and Contingencies for additional detail. The following table presents a rollforward of the Amended Sales Contract liability balance: Three Months Ended June 30, Six Months Ended June 30, In thousands 2021 2020 2021 2020 Opening Balance $ 7,104 $ 8,018 $ 15,003 $ 15,010 Additions 14,900 15,006 15,001 15,006 Revenue Recognized ( 7,000 ) ( 8,018 ) ( 15,000 ) ( 15,010 ) Closing Balance $ 15,004 $ 15,006 $ 15,004 $ 15,006 Recently Adopted Accounting Standards In December 2019, the FASB issued ASU 2019-12, “Income Taxes - Simplifying the Accounting for Income Taxes (Topic 740)” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020 (January 1, 2021 for the Company). Early adoption is permitted. The adoption of the new standard did not have a material impact on the Company’s consolidated net income, financial position or cash flows. 9 Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements NOTE 3 – SEGMENT REPORTING The Company’s operating segments include the Palmarejo, Rochester, Kensington, Wharf and Silvertip mines. Except for the Silvertip mine, all operating segments are engaged in the discovery, mining, and production of gold and/or silver. The Silvertip mine, which temporarily suspended mining and processing activities in February 2020, is engaged in the discovery, mining, and production of silver, zinc and lead. Other includes the Sterling/Crown and La Preciosa projects, other mineral interests, strategic equity investments, corporate office, elimination of intersegment transactions, and other items necessary to reconcile to consolidated amounts. 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. Incremental costs associated with the Company’s COVID-19 health and safety protocols are recorded in Pre-development, reclamation, and other expenses in our Consolidated Statement of Comprehensive Income (Loss) and are included in Other operating expenses in the table below. 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 the Company’s operating segments. However, these effects could have a material impact on our operations, and Coeur will continue to monitor the COVID-19 situation closely. Financial information relating to the Company’s segments is as follows (in thousands): Three Months Ended June 30, 2021 Palmarejo Rochester Kensington Wharf Silvertip Other Total Revenue Gold sales $ 41,232 $ 14,026 $ 48,807 $ 42,093 $ — $ — $ 146,158 Silver sales 43,802 24,059 — 839 — — 68,700 Metal sales 85,034 38,085 48,807 42,932 — — 214,858 Costs and Expenses Costs applicable to sales (1) 41,918 38,031 29,203 23,443 — — 132,595 Amortization 8,271 6,506 12,710 2,994 1,185 307 31,973 Exploration 1,834 936 1,305 76 3,595 4,700 12,446 Other operating expenses 1,453 1,444 2,273 525 5,964 11,546 23,205 Other income (expense) Fair value adjustments, net — — — — — 37,239 37,239 Interest expense, net ( 149 ) ( 480 ) ( 142 ) ( 46 ) 181 ( 4,457 ) ( 5,093 ) Other, net ( 371 ) ( 92 ) ( 42 ) 628 ( 237 ) 815 701 Income and mining tax (expense) benefit ( 7,559 ) ( 33 ) ( 707 ) ( 1,294 ) — ( 5,747 ) ( 15,340 ) Net Income (loss) $ 23,479 $ ( 9,437 ) $ 2,425 $ 15,182 $ ( 10,800 ) $ 11,297 $ 32,146 Segment assets (2) $ 307,287 $ 435,257 $ 158,456 $ 77,436 $ 189,489 $ 171,517 $ 1,339,442 Capital expenditures $ 9,795 $ 42,272 $ 6,045 $ 1,402 $ 18,525 $ 184 $ 78,223 (1) Excludes amortization (2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests 10 Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements Three months ended June 30, 2020 Palmarejo Rochester Kensington Wharf Silvertip Other Total Revenue Gold sales $ 23,669 $ 8,982 $ 55,177 $ 40,074 $ — $ — $ 127,902 Silver sales 14,301 11,661 — 385 — — 26,347 Zinc sales — — — — — — — Lead sales — — — — — — — Metal sales 37,970 20,643 55,177 40,459 — — 154,249 Costs and Expenses Costs applicable to sales (1) 18,825 18,336 30,382 22,472 — — 90,015 Amortization 7,270 3,012 12,853 3,181 1,231 329 27,876 Exploration 903 1,844 2,577 101 2,902 3,528 11,855 Other operating expenses 3,179 1,213 3,519 ( 118 ) 9,480 10,018 27,291 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 Revenue 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 ) Fair value adjustments, net — — — — — 33,440 33,440 Interest expense, net ( 336 ) ( 702 ) ( 374 ) ( 83 ) 226 ( 8,734 ) ( 10,003 ) Other, net ( 1,036 ) ( 153 ) ( 42 ) 652 ( 339 ) 5,246 4,328 Income and mining tax (expense) benefit ( 18,899 ) ( 171 ) ( 1,041 ) ( 2,423 ) — ( 5,592 ) ( 28,126 ) Net Income (loss) $ 45,622 $ ( 6,631 ) $ 7,382 $ 27,130 $ ( 21,430 ) $ ( 17,867 ) $ 34,206 Segment assets (2) $ 307,287 $ 435,257 $ 158,456 $ 77,436 $ 189,489 $ 171,517 $ 1,339,442 Capital expenditures $ 19,778 $ 72,449 $ 13,247 $ 2,883 $ 28,912 $ 378 $ 137,647 (1) Excludes amortization (2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests 11 Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements Six Months Ended June 30, 2020 Palmarejo Rochester Kensington Wharf Silvertip Other Total Revenue 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 Cash and cash equivalents 124,075 92,794 Other assets 244,491 79,030 Total consolidated assets $ 1,708,008 $ 1,403,977 Geographic Information Long-Lived Assets June 30, 2021 December 31, 2020 United States $ 579,603 $ 503,818 Mexico 297,390 293,436 Canada 182,133 149,018 Other 127 657 Total $ 1,059,253 $ 946,929 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 Mexico 85,034 37,970 165,379 112,309 Canada — — — 1,883 Total 214,858 $ 154,249 $ 416,975 $ 327,416 12 Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements NOTE 4 – RECEIVABLES Receivables consist of the following: In thousands June 30, 2021 December 31, 2020 Current receivables: Trade receivables $ 5,882 $ 3,293 Value added tax (“VAT”) receivable 15,395 17,080 Income tax receivable 646 530 Other 944 2,581 $ 22,867 $ 23,484 Non-current receivables: VAT receivable (1) $ 26,642 $ 26,447 26,642 26,447 Total receivables $ 49,509 $ 49,931 (1) Represents VAT that was paid to the Mexican government associated with Coeur Mexicana’s prior royalty agreement with a subsidiary of Franco-Nevada Corporation. The Company continues to pursue recovery from the Mexican government (including through ongoing litigation). See Note 17 -- Commitments and Contingencies for additional detail. 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 June 30, 2021 December 31, 2020 Inventory: Concentrate $ 4,351 $ 2,909 Precious metals 13,198 14,788 Supplies 36,922 33,513 54,471 51,210 Ore on Leach Pads: Current 81,773 74,866 Non-current 73,487 81,963 155,260 156,829 Long-term Stockpile (included in Other ) $ 14,523 $ 5,664 Total Inventory and Ore on Leach Pads $ 224,254 $ 213,703 NOTE 6 – INVESTMENTS Equity Securities 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 Unrealized Losses Gross Unrealized Gains Estimated Fair Value Equity Securities Victoria Gold Corp. $ 128,710 $ — $ 36,033 164,743 Integra Resources Corp. 8,376 — 1,249 9,625 Other 2 — — 2 Equity securities $ 137,088 $ — $ 37,282 $ 174,370 13 Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements At December 31, 2020 In thousands Cost Gross Unrealized Losses Gross Unrealized Gains Estimated Fair Value Equity Securities Metalla Royalty & Streaming Ltd. $ 166 $ — $ 875 $ 1,041 Integra Resources Corp. 7,500 — 4,401 11,901 Other 2 ( 1 ) — 1 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, resulting in a realized gain of $ 0.8 million. On May 10, 2021, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Orion Co-VI Ltd. (“Orion”). Pursuant to the Exchange Agreement, Orion sold 11,067,714 common shares of Victoria Gold Corp., a British Columbia company (“Victoria”) (representing approximately 17.8 % of Victoria’s outstanding common shares) to the Company. As consideration for the purchase of Victoria shares, Coeur issued 12,785,485 shares of its common stock (approximately 4.9 % of issued and outstanding shares) to Orion. 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 Right of Use Assets and Liabilities The following table summarizes quantitative information pertaining to the Company’s finance and operating leases. Three months ended June 30, Six months ended June 30, In thousands 2021 2020 2021 2020 Lease Cost Operating lease cost $ 3,180 $ 2,855 $ 6,331 $ 5,902 Short-term operating lease cost $ 2,054 $ 2,310 $ 5,099 $ 3,828 Finance Lease Cost: Amortization of leased assets $ 5,039 $ 6,424 $ 10,927 $ 12,937 Interest on lease liabilities 1,018 920 1,607 1,925 Total finance lease cost $ 6,057 $ 7,344 $ 12,534 $ 14,862 14 Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements Supplemental cash flow information related to leases was as follows: Three months ended June 30, Six months ended June 30, In thousands 2021 2020 2021 2020 Other Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,234 $ 5,480 $ 11,635 $ 10,351 Operating cash flows from finance leases $ 1,018 $ 920 $ 1,607 $ 1,925 Financing cash flows from finance leases $ 9,365 $ 5,713 $ 15,028 $ 11,614 Supplemental balance sheet information related to leases was as follows: In thousands June 30, 2021 December 31, 2020 Operating Leases Other assets, non-current $ 35,436 $ 40,511 Accrued liabilities and other $ 11,604 $ 12,410 Other long-term liabilities 22,929 27,433 Total operating lease liabilities $ 34,533 $ 39,843 Finance Leases Property and equipment, gross $ 99,756 $ 104,433 Accumulated depreciation ( 53,290 ) ( 60,272 ) Property and equipment, net $ 46,466 $ 44,161 Debt, current $ 28,876 $ 22,074 Debt, non-current 17,566 25,837 Total finance lease liabilities $ 46,442 $ 47,911 Weighted Average Remaining Lease Term Weighted-average remaining lease term - finance leases 1.51 1.36 Weighted-average remaining lease term - operating leases 3.59 4.00 Weighted Average Discount Rate Weighted-average discount rate - finance leases 5.33 % 5.37 % Weighted-average discount rate - operating leases 5.19 % 5.18 % Minimum future lease payments under finance and operating leases with terms longer than one year are as follows: As of June 30, 2021 (In thousands) Operating leases Finance leases 2021 $ 6,284 $ 12,024 2022 11,019 20,621 2023 10,432 11,115 2024 8,887 4,282 2025 213 2,732 Thereafter 1,165 696 Total $ 38,000 $ 51,470 Less: imputed interest ( 3,467 ) ( 5,028 ) Net lease obligation $ 34,533 $ 46,442 15 Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements NOTE 8 – DEBT June 30, 2021 December 31, 2020 In thousands Current Non-Current Current Non-Current 2029 Senior Notes, net (1) $ — $ 367,804 $ — $ — 2024 Senior Notes, net (2) — — — 227,590 Revolving Credit Facility (3) — — — — Finance lease obligations 28,876 17,566 22,074 25,837 $ 28,876 $ 385,370 $ 22,074 $ 253,427 (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 In March 2021, the Company completed an offering of $ 375.0 million in aggregate principal amount of senior notes in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended, for net proceeds of approximately $ 367.5 million (the “2029 Senior Notes”). The 2029 Senior Notes are governed by an Indenture dated as of March 1, 2021 (the “Indenture”), among the Company, as issuer, certain of the Company's subsidiaries named therein, as guarantors thereto (the “Guarantors”), and The Bank of New York Mellon, as trustee (the “Trustee”). The 2029 Senior Notes bear interest at a rate of 5.125 % per year from the date of issuance. Interest on the 2029 Senior Notes is payable semi-annually in arrears on February 15 and August 15 of each year, commencing on August 15, 2021. The 2029 Senior Notes will mature on February 15, 2029 and are fully and unconditionally guaranteed by the Guarantors. At any time prior to February 15, 2024, the Company may redeem all or part of the 2029 Senior Notes upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem some or all of the 2029 Senior Notes on or after February 15, 2024, at redemption prices set forth in the Indenture, together with accrued and unpaid interest. At any time prior to February 15, 2024, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2029 Senior Notes, including any permitted additional 2029 Senior Notes, at a redemption price equal to 105.125 % of the principal amount. The Indenture contains covenants that, among other things, limit the Company’s ability under certain circumstances to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem capital stock, prepay, redeem or repurchase certain debt, make loans and investments, create liens, sell, transfer or otherwise dispose of assets, enter into transactions with affiliates, enter into agreements restricting the Company's subsidiaries' ability to pay dividends and impose conditions on the Company’s ability to engage in mergers, consolidations and sales of all or substantially all of its assets. The Indenture also contains certain “Events of Default” (as defined in the Indenture) customary for indentures of this type. If an Event of Default has occurred and is continuing, the Trustee or the holders of not less than 25% in aggregate principal amount of the 2029 Senior Notes then outstanding may, and the Trustee at the request of the holders of not less than 25% in aggregate principal amount of the 2029 Senior Notes then outstanding shall, declare all unpaid principal of, premium, if any, and accrued interest on all the 2029 Senior Notes to be due and payable. 2024 Senior Notes Concurrent with the offering of the 2029 Senior Notes, the Company commenced a cash tender offer (the “Tender Offer”) to purchase the outstanding $ 230.0 million in aggregate principal amount of its 5.875 % Senior Notes due 2024 (the “2024 Senior Notes”). The Tender Offer was made on the terms and subject to the conditions set forth in the Offer to Purchase dated February 22, 2021. The Tender Offer expired at 5:00 p.m., New York City time, on February 26, 2021 (the “Expiration Time”). Holders of the 2024 Senior Notes who tendered (and did not validly withdraw) their notes at or prior to the Expiration Time were entitled to receive in cash $ 1,029.38 per $1,000 principal amount of 2024 Senior Notes validly tendered (and not validly withdrawn) and accepted for purchase by the Company in the Tender Offer, plus accrued and unpaid interest on such 2024 Senior Notes. $ 102.8 million aggregate principal amount of the 2024 Senior Notes were validly tendered and purchased by the Company on March 1, 2021. In accordance with the terms of the indenture governing the 2024 Senior Notes, the remaining $ 127.2 million aggregate principal amount of the 2024 Senior Notes were redeemed on March 31, 2021 at the redemption price specified in the indenture governing the 2024 Senior Notes ($ 1,029.38 per $1,000 principal amount redeemed, plus accrued and unpaid interest). The Company recorded a loss of $ 9.2 million as a result of the extinguishment of the 2024 Senior Notes. 16 Coeur Mining, Inc. and Subsidiaries Notes to Consolidated Financial Statements 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. 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 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. See Note 7 -- Leases for additional qualitative and quantitative disclosures related to finance leasing arrangements. Interest Expense Three Months Ended June 30, Six Months Ended June 30, In thousands 2021 2020 2021 2020 2024 Senior Notes $ — $ 3,378 $ 2,591 $ 6,756 2029 Senior Notes 4,804 — 6,406 — Revolving Credit Facility 450 1,204 930 1,753 Finance lease obligations 1,018 920 1,607 1,925 Amortization of debt issuance costs 487 390 891 771 Other debt obligations 118 181 175 216 Capitalized interest ( 1,784 ) ( 308 ) ( 2,597 ) ( 528 ) Total interest expense, net of capitalized interest $ 5,093 $ 5,765 $ 10,003 $ 10,893 NOTE 9 – RECLAMATION Reclamation and mine closure costs are based principally on legal and regulatory requirements. Management estimates costs associated with reclamation of mining properties. On an ongoing basis, management evaluates its estimates and assumptions, and future expenditures could differ from current estimates. Changes to the Company’s asset retirement obligations for its operating sites are as follows: Three Months Ended June 30, Six Months Ended June 30, In thousands 2021 2020 2021 2020 Asset retirement obligation - Beginning $ 139,354 $ 136,628 $ 137,120 $ 134,543 Accretion 2,922 2,863 5,785 5,667 Settlements ( 1,071 ) ( 587 ) ( 1,700 ) ( 1,306 ) Asset retirement obligation - Ending $ 141,205 $ 138,904 $ 141,205 $ 138,904 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. 17 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 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 Canada ( 12,979 ) — ( 15,621 ) 217 ( 25,763 ) — ( 41,650 ) 232 Mexico 30,827 ( 8,112 ) 4,805 ( 3,888 ) 63,741 ( 19,273 ) 26,163 743 Other jurisdictions ( 9 ) — ( 95 ) — 3,238 — ( 257 ) 29 $ 47,486 $ ( 15,340 ) $ 1,635 $ ( 2,844 ) $ 62,332 $ ( 28,126 ) $ ( 14,204 ) $ 1,095 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: (i) mining taxes; (ii) variations in our income before income taxes; (iii) geographic distribution of that income; (iv) foreign exchange rates; (v) percentage depletion; (vi) the non-recognition of tax assets; and (vii) the impact of uncertain tax positions. Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period. A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. The Company analyzes its deferred tax assets and, if it is determined that the Company will not realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined that the Company ultimately will be more likely than not able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of factors that impact the Company’s ability to realize its deferred tax assets. For additional information, please see the section titled “Risk Factors” in the 2020 10-K. The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The statute of limitations remains open from 2016 forward for the U.S. federal jurisdiction and from 2011 forward for certain other foreign jurisdictions. 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 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 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 The Company has stock incentive plans for executives, directors and eligible employees. Stock awards include performance shares, restricted stock and stock options. 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 stock Grant date fair value of restricted stock Performance shares Grant date fair value of performance shares February 24, 2021 5,000 $ 10.40 — $ — May 12, 2021 893,329 $ 9.40 593,577 $ 10.19 18 Coeur Mining, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements NOTE 12 – FAIR VALUE MEASUREMENTS Three Months Ended June 30, Six Months Ended June 30, In thousands 2021 2020 2021 2020 Unrealized gain (loss) on equity securities $ 36,575 $ ( 2,273 ) $ 32,007 $ ( 11,092 ) 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 Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1), secondary priority to quoted prices in inactive markets or observable inputs (Level 2), and the lowest priority to unobservable inputs (Level 3). The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement: Fair Value at June 30, 2021 In thousands Total Level 1 Level 2 Level 3 Assets: Equity securities $ 174,370 $ 174,370 $ — $ — Foreign currency forward exchange contracts 7,535 — 7,535 — Provisional metal sales contracts 137 — 137 — $ 182,042 $ 174,370 $ 7,672 $ — Liabilities: 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 In thousands Total Level 1 Level 2 Level 3 Assets: Equity and debt securities $ 12,943 $ 12,943 $ — $ — Foreign currency forward exchange contracts 13,747 — 13,747 — Provisional metal sales contracts 481 — 481 — $ 27,171 $ 12,943 $ 14,228 $ — Liabilities: Gold zero cost collars $ 24,883 $ — $ 24,883 $ — Provisional metal sales contracts 67 — 67 — $ 24,950 $ — $ 24,950 $ — The Company’s investments in equity securities are recorded at fair market value in the financial statements based primarily on quoted market prices. Such instruments are classified within Level 1 of the fair value hierarchy. The Company’s foreign currency forward exchange contracts are valued using pricing models with inputs derived from observable market data, including forward market prices and other unobservable inputs. The Company’s gold zero cost collars are valued using pricing models with inputs derived from observable market data, including forward market prices, yield curves, credit spreads. The Company’s provisional metal sales contracts include concentrate and certain doré sales contracts that are valued using pricing models with inputs derived from observable market data, including forward market prices. The model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy. 19 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 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. 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 end of the period Liabilities: 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 end of the period Liabilities: 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 Liabilities: 2029 Senior Notes (1) $ 367,804 $ 365,044 $ — $ 365,044 $ — Revolving Credit Facility (2) $ — $ — $ — $ — $ — (1) Net of unamortized debt issuance costs of $ 7.2 million (2) Unamortized debt issuance costs of $ 2.7 million included in Other Non-Current Assets . December 31, 2020 In thousands Book Value Fair Value Level 1 Level 2 Level 3 Liabilities: 2024 Senior Notes (1) $ 227,590 $ 229,874 $ — $ 229,874 $ — Revolving Credit Facility (2) $ — $ — $ — $ — $ — (1) Net of unamortized debt issuance costs of $ 2.4 million. (2) Unamortized debt issuance costs of $ 1.5 million included in Other Non-Current Assets . The fair value of the 2024 Senior Notes was estimated using quoted market prices. The fair value of the RCF approximates book value as the liability is secured, has a variable interest rate, and lacks significant credit concerns. NOTE 13 – DERIVATIVE FINANCIAL INSTRUMENTS & HEDGING ACTIVITIES 20 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. The Company does not hold or issue derivatives for trading or speculative purposes. The Company may elect to designate certain derivatives as hedging instruments under U.S. GAAP. The Company formally documents all relationships between designated hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking hedge transactions. This process includes linking all derivatives designated as hedges to either recognized assets or liabilities or forecasted transactions and assessing, both at inception and on an ongoing basis, the effectiveness of the hedging relationships. Derivatives Not Designated as Hedging Instruments Provisional Metal Sales The Company enters into sales contracts with third-party smelters, refiners and off-take customers which, in some cases, provide for a provisional payment based upon preliminary assays and quoted metal prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable recorded at the forward price at the time of sale. The embedded derivatives do not qualify for hedge accounting and are marked to market through earnings each period until final settlement. Exchange Agreement Embedded Derivative 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 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. 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 Provisional gold sales contracts $ 26,614 $ — Average gold price per ounce $ 1,858 $ — Notional ounces 14,324 — The following summarizes the classification of the fair value of the derivative instruments: 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 In thousands Prepaid expenses and other Accrued liabilities and other Provisional metal sales contracts $ 481 $ 67 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 21 Coeur Mining, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements To protect the Company’s exposure to fluctuations in metal prices the Company entered into Asian (or average value) put and call option contracts in net-zero-cost collar arrangements. The contracts are net cash settled monthly and, if the price of gold at the time of expiration is between the put and call prices, would expire at no cost to the Company. If the price of gold at the time of expiration is lower than the put prices or higher than the call prices, it would result in a realized gain or loss, respectively. The Company has elected to designate these instruments as cash flow hedges of forecasted transactions at their inception. To protect the Company’s exposure to fluctuations in foreign currency exchange rates for subsidiaries whose functional currency is U.S dollar and are exposed to forecasted transaction denominated in the Mexican Peso and the Canadian Dollar, in March 2020, the Company entered into foreign currency forward exchange contracts to manage this risk and designated these instruments as cash flow hedges of forecasted foreign denominated transactions. The Company has elected to designate these instruments as cash flow hedges of forecasted transactions at their inception. 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 Gold put options Average gold strike price per ounce $ 1,600 $ 1,630 Notional ounces 79,350 132,000 Gold call options Average gold strike price per ounce $ 1,882 $ 2,038 Notional ounces 79,350 132,000 Foreign currency forward exchange contracts - Mexican Peso Average Mexican Peso exchange rate $ 25.28 $ — Notional US dollar $ 30,000 $ — The effective portions of cash flow hedges are recorded in accumulated other comprehensive income (loss) (“AOCI”) until the hedged item is recognized in earnings. Deferred gains and losses associated with cash flow hedges of metal sales revenue are recognized as a component of Revenue in the same period as the related sale is recognized. Deferred gains and losses associated with cash flow hedges of foreign currency transactions are recognized as a component of Costs Applicable to Sales or Pre-development, Reclamation and Other in the same period the related expenses are incurred. At inception, the Company performed an assessment of the forecasted transactions and the hedging instruments and determined that the hedging relationships are considered perfectly effective. Future assessments are performed to verify that critical terms of the hedging instruments and the forecasted transactions continue to match, and the forecasted transactions remain probable, as well as an assessment of any adverse developments regarding the risk of the counterparties defaulting on their commitments. There have been no such changes in critical terms or adverse developments. As of 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: June 30, 2021 In thousands Prepaid expenses and other Accrued liabilities and other Gold zero cost collars $ — $ 78 Foreign currency forward exchange contracts 7,535 — $ 7,535 $ 78 22 Coeur Mining, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements December 31, 2020 In thousands Prepaid expenses and other Accrued liabilities and other Gold zero cost collars $ — $ 24,883 Foreign currency forward exchange contracts 13,747 — $ 13,747 $ 24,883 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 Gold zero cost collars $ ( 4,571 ) $ ( 14,490 ) $ 23,976 $ ( 14,349 ) Foreign currency forward exchange contracts 1,589 7,393 400 7,458 $ ( 2,982 ) $ ( 7,097 ) $ 24,376 $ ( 6,891 ) Amount of (Gain) Loss Reclassified From AOCI to Earnings Gold zero cost collars $ 437 $ — $ 828 $ — Foreign currency forward exchange contracts ( 3,498 ) ( 679 ) ( 6,611 ) ( 679 ) $ ( 3,061 ) $ ( 679 ) $ ( 5,783 ) $ ( 679 ) Credit Risk The credit risk exposure related to any derivative instrument is limited to the unrealized gains, if any, on outstanding contracts based on current market prices. To reduce counter-party credit exposure, the Company enters into contracts with institutions management deems credit-worthy and limits credit exposure to each institution. The Company does not anticipate non-performance by any of its counterparties. 23 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 June 30, Six Months Ended June 30, In thousands 2021 2020 2021 2020 COVID-19 $ 2,315 $ 6,108 $ 5,319 $ 6,380 Silvertip ongoing carrying costs 6,447 5,183 13,368 7,792 Silvertip temporary suspension costs — 3,829 — 7,338 Gain on modification of right of use lease — — — ( 4,051 ) Asset retirement accretion 2,965 2,908 5,870 5,755 Other 1,011 647 1,893 2,016 Pre-development, reclamation and other $ 12,738 $ 18,675 $ 26,450 $ 25,230 Other, net consists of the following: Three Months Ended June 30, Six Months Ended June 30, In thousands 2021 2020 2021 2020 Foreign exchange gain (loss) $ ( 499 ) $ 10 $ ( 1,272 ) $ ( 66 ) Gain (loss) on sale of assets 621 9 4,674 18 Gain (loss) on sale of Manquiri NSR consideration — — — 365 Gain (loss) on Silvertip contingent consideration — — — 955 Other 579 102 926 730 Other, net $ 701 $ 121 $ 4,328 $ 2,002 NOTE 15 – NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of the Company’s common stock outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the 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. 24 Coeur Mining, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements Three months ended June 30, Six months ended June 30, In thousands except per share amounts 2021 2020 2021 2020 Net income (loss) available to common stockholders $ 32,146 $ ( 1,209 ) $ 34,206 $ ( 13,109 ) Weighted average shares: Basic 249,066 240,945 245,253 240,600 Effect of stock-based compensation plans 3,066 — 3,240 — Diluted 252,132 240,945 248,493 240,600 Income (loss) per share: Basic $ 0.13 $ ( 0.01 ) $ 0.14 $ ( 0.05 ) Diluted (1) $ 0.13 $ ( 0.01 ) $ 0.14 $ ( 0.05 ) On April 23, 2020, the Company entered into an ATM Equity Offering Sales Agreement (the “Sales Agreement”) with BofA Securities, Inc. and RBC Capital Markets, LLC as sales agents (the “Sales Agents”) and filed a prospectus supplement for the sale of its common stock, par value $0.01 per share, by way of an “at the market” offering having an aggregate offering price of up to $ 100,000,000 (the “ATM Program”). Sales under the ATM Program, if any, will be made pursuant to the terms of the Sales Agreement. At 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 The following summarized financial information is presented to satisfy disclosure requirements of Rule 13-01 of Regulation S-X resulting from the guarantees by Coeur Alaska, Inc., Coeur Explorations, Inc., Coeur Rochester, Inc., Coeur South America Corp., Wharf Resources (U.S.A.), Inc. and its subsidiaries, Coeur Capital, Inc., Coeur Sterling, Inc., Sterling Intermediate Holdco, Inc., and Coeur Sterling Holdings LLC (collectively, the “Subsidiary Guarantors”) of the 2029 Senior Notes. The following schedules present summarized financial information of (a) Coeur, the parent company and (b) the Subsidiary Guarantors (collectively the “Obligor Group”). The summarized financial information of the Obligor Group is presented on a combined basis with intercompany balances and transactions between entities in the Obligor Group eliminated. The Obligor Group’s amounts due from, amounts due to and transactions with certain wholly-owned domestic and foreign subsidiaries of the Company have been presented in separate line items, if they are material. Each of the Subsidiary Guarantors is 100% owned by Coeur and the guarantees are full and unconditional and joint and several obligations. There are no restrictions on the ability of Coeur to obtain funds from the Subsidiary Guarantors by dividend or loan. 25 Coeur Mining, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements SUMMARIZED BALANCE SHEET JUNE 30, 2021 In thousands Coeur Mining, Inc. Guarantor Subsidiaries ASSETS CURRENT ASSETS Cash and cash equivalents $ 10,609 $ 42,809 Receivables 371 6,337 Ore on leach pads — 81,773 Inventory — 30,214 Prepaid expenses and other 15,177 937 26,157 162,070 NON-CURRENT ASSETS Property, plant and equipment, net 2,011 168,054 Mining properties, net — 410,124 Ore on leach pads — 73,487 Restricted assets 1,489 206 Equity and debt securities 174,370 — Net investment in subsidiaries 602,617 64,010 Other 201,420 54,738 TOTAL ASSETS $ 1,008,064 $ 932,689 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 4,256 $ 62,127 Other accrued liabilities 22,267 43,690 Debt — 21,037 Reclamation — 1,584 26,523 128,438 NON-CURRENT LIABILITIES Debt 367,804 36,567 Reclamation — 95,687 Deferred tax liabilities 5,345 8,630 Other long-term liabilities 3,569 25,070 Intercompany payable (receivable) ( 263,586 ) 240,016 113,132 405,970 STOCKHOLDERS’ EQUITY Common stock 2,570 19,356 Additional paid-in capital 3,732,296 340,700 Accumulated deficit ( 2,873,914 ) 38,225 Accumulated other comprehensive income (loss) 7,457 — 868,409 398,281 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,008,064 $ 932,689 26 Coeur Mining, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements SUMMARIZED BALANCE SHEET DECEMBER 31, 2020 In thousands Coeur Mining, Inc. Guarantor Subsidiaries ASSETS CURRENT ASSETS Cash and cash equivalents $ 12,727 $ 28,515 Receivables 381 3,631 Ore on leach pads — 74,866 Inventory — 27,223 Prepaid expenses and other 20,872 1,375 33,980 135,610 NON-CURRENT ASSETS Property, plant and equipment, net 1,946 148,640 Mining properties, net — 353,818 Ore on leach pads — 81,963 Restricted assets 1,482 206 Equity and debt securities 12,943 — Net investment in subsidiaries 514,705 72,785 Other 198,587 51,528 TOTAL ASSETS $ 763,643 $ 844,550 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable $ 1,978 $ 52,177 Other accrued liabilities 36,183 46,023 Debt — 14,506 Reclamation — 1,584 38,161 114,290 NON-CURRENT LIABILITIES Debt 227,592 33,321 Reclamation — 93,349 Deferred tax liabilities 100 8,457 Other long-term liabilities 3,629 29,916 Intercompany payable (receivable) ( 199,318 ) 176,914 32,003 341,957 STOCKHOLDERS’ EQUITY Common stock 2,438 20,401 Additional paid-in capital 3,610,297 340,700 Accumulated deficit ( 2,908,120 ) 27,202 Accumulated other comprehensive income (loss) ( 11,136 ) — 693,479 388,303 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 763,643 $ 844,550 27 Coeur Mining, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements SUMMARIZED STATEMENTS OF INCOME SIX MONTHS ENDED JUNE 30, 2021 In thousands Coeur Mining, Inc. Guarantor Subsidiaries Revenue $ — $ 251,595 Gross profit (loss) $ ( 313 ) $ 44,766 Income (loss) from continuing operations $ 34,206 $ 9,976 Net income (loss) $ 34,206 $ 9,976 28 Coeur Mining, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements NOTE 17 – COMMITMENTS AND CONTINGENCIES 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). 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. 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 condition. In addition, ongoing litigation with the Mexican government associated with enforcement of water rights in Mexico, if unsuccessful, may impact Coeur Mexicana’s ability to access new sources of water to provide sufficient supply for its operations at Palmarejo and, if material, may have a material adverse impact on the Company’s operations and financial results. Palmarejo Gold Stream Coeur Mexicana sells 50 % of Palmarejo gold production (excluding production from certain properties acquired in 2015) to a subsidiary of Franco-Nevada Corporation (“Franco-Nevada”) under a gold stream agreement for the lesser of $ 800 or spot price per ounce. In 2016, Coeur Mexicana received a $ 22.0 million deposit toward future deliveries under the gold stream agreement. In accordance with generally accepted accounting principles, although Coeur Mexicana has satisfied its contractual obligation to repay the deposit to Franco-Nevada, the deposit is accounted for as deferred revenue and is recognized as revenue on a units-of-production basis as ounces are sold to Franco-Nevada. At 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 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 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. Other Commitments and Contingencies As part of its ongoing business and operations, the Company and its affiliates are required to provide surety bonds, bank letters of credit, bank guarantees and, in some cases, cash as financial support for various purposes, including environmental remediation, reclamation, collateral for gold hedges and other general corporate purposes. As of June 30, 2021 and December 31, 2020, the Company had surety bonds totaling $ 312.3 million and $ 311.9 million, respectively, in place as 29 Coeur Mining, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Statements financial support for future reclamation and closure costs. The obligations associated with these instruments are generally related to performance requirements that the Company addresses through its ongoing operations and from time-to-time, the Company may be required to post collateral, including cash or letters of credit which reduce availability under its revolving credit facility, to support these instruments. As the specific requirements are met, the beneficiary of the associated instrument cancels and/or returns the instrument to the issuing entity. Certain of these instruments are associated with operating sites with long-lived assets and will remain outstanding until closure. The Company believes it is in compliance with all applicable bonding obligations and will be able to satisfy future bonding requirements through existing or alternative means, as they arise. NOTE 18 – ADDITIONAL BALANCE SHEET DETAIL AND SUPPLEMENTAL CASH FLOW INFORMATION Accrued liabilities and other consist of the following: 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 Unrealized losses on derivatives 498 24,950 Taxes other than income and mining 4,325 3,616 Accrued interest payable 7,181 1,855 Operating lease liabilities 11,604 12,410 Accrued liabilities and other $ 89,311 $ 119,158 (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 and six months ended June 30, 2021 and 2020: In thousands June 30, 2021 June 30, 2020 Cash and cash equivalents $ 124,075 $ 70,924 Restricted cash equivalents 1,383 1,384 Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 125,458 $ 72,308 30