What changed in this filing

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Item 1. Financial Statements

2021-10-27 compared with 2021-07-28 · 178 added, 137 removed, 865 unchanged (27% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

ASSETS Notes In thousands, except share data

5 unchanged sentences

Prepaid expenses and other 17,846 27,254

Assets held for sale 19 54,478 —

307,437 269,608

14 unchanged sentences

Reclamation 9 2,299 2,299

Liabilities held for sale 19 11,477 —

242,533 234,108

8 unchanged sentences

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

authorized 300,000,000 shares, 256,928,852 issued and outstanding at September 30, 2021 and 243,751,283 at December 31, 2020

Additional paid-in capital 3,734,948 3,610,297

7 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

31 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

56 unchanged sentences

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

Net income (loss) — — — ( 54,768 ) — ( 54,768 )

Other comprehensive income (loss) — — — — ( 2,553 ) ( 2,553 )

Common stock issued/canceled under long-term incentive plans and director fees and options, net ( 119 ) ( 1 ) 2,652 — — 2,651

Balances at September 30, 2021 256,929 $ 2,569 $ 3,734,948 $ ( 2,928,682 ) $ 4,904 $ 813,739

In thousands Common

15 unchanged sentences

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

Net income (loss) — — — 26,856 — 26,856

Other comprehensive income (loss) — — — — ( 18,606 ) ( 18,606 )

Common stock issued/canceled under long-term incentive plans and director fees and options, net 13 — 2,120 — — 2,120

Balances at September 30, 2020 243,745 $ 2,437 $ 3,608,102 $ ( 2,920,000 ) $ ( 26,312 ) $ 664,227

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

51 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

In thousands 2021 2020 2021 2020

4 unchanged sentences

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 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”), of which $ 7.5 million in gold ounces were delivered in the third quarter of 2021.

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:

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

Three Months Ended September 30, Nine Months Ended September 30,

In thousands 2021 2020 2021 2020

18 unchanged sentences

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.

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

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.

3 unchanged sentences

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

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

Gold sales $ 33,237 $ 9,923 $ 51,881 $ 52,689 $ — $ — $ 147,730

11 unchanged sentences

Other, net (3)

( 26,868 ) ( 99 ) ( 62 ) 460 ( 124 ) ( 25 ) ( 26,718 )

Income and mining tax (expense) benefit ( 10,702 ) 1,108 ( 65 ) ( 2,014 ) — 5,273 ( 6,400 )

5 unchanged sentences

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

(3) See Note 14 -- Additional Comprehensive Income (Loss) Detail for additional detail

Coeur Mining, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements

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

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

Gold sales $ 39,416 $ 12,860 $ 52,357 $ 62,499 $ — $ — $ 167,132

13 unchanged sentences

Other, net (3)

( 1,168 ) ( 2,502 ) ( 34 ) 7 451 ( 3,066 ) ( 6,312 )

Income and mining tax (expense) benefit ( 6,841 ) ( 143 ) ( 380 ) ( 2,630 ) 21 ( 3,140 ) ( 13,113 )

5 unchanged sentences

(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

(3) See Note 14 -- Additional Comprehensive Income (Loss) Detail for additional detail

Nine Months Ended September 30, 2021 Palmarejo Rochester Kensington Wharf Silvertip Other Total

Gold sales $ 112,036 $ 36,389 $ 155,154 $ 128,631 $ — $ — $ 432,210

12 unchanged sentences

Other, net (3)

( 27,904 ) ( 252 ) ( 104 ) 1,112 ( 463 ) 5,221 ( 22,390 )

Income and mining tax (expense) benefit ( 29,601 ) 937 ( 1,106 ) ( 4,437 ) — ( 319 ) ( 34,526 )

5 unchanged sentences

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

(3) See Note 14 -- Additional Comprehensive Income (Loss) Detail for additional detail

Coeur Mining, Inc.

1 unchanged sentence

Notes to Consolidated Financial Statements

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

Nine months ended September 30, 2020 Palmarejo Rochester Kensington Wharf Silvertip Other Total

Gold sales $ 104,732 $ 30,508 $ 159,200 $ 128,199 $ — $ — $ 422,639

13 unchanged sentences

Other, net (3)

( 2,866 ) ( 2,580 ) 1 ( 12 ) 2,005 ( 858 ) ( 4,310 )

Income and mining tax (expense) benefit ( 7,938 ) ( 186 ) ( 854 ) ( 4,806 ) ( 234 ) 2,000 ( 12,018 )

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

Income (loss) from continuing operations $ 50,534 $ ( 1,413 ) $ 13,767 $ 45,975 $ ( 47,210 ) $ ( 47,906 ) $ 13,747

Segment assets (2)

3 unchanged sentences

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

Assets June 30, 2021 December 31, 2020

(3) See Note 14 -- Additional Comprehensive Income (Loss) Detail for additional detail

Assets September 30, 2021 December 31, 2020

Total assets for reportable segments $ 1,327,344 $ 1,232,153

3 unchanged sentences

Geographic Information

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

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

United States $ 633,241 $ 503,818

3 unchanged sentences

Total $ 1,081,103 $ 946,929

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

Revenue Three months ended September 30, Nine months ended September 30,

2021 2020 2021 2020

8 unchanged sentences

Receivables consist of the following:

In thousands June 30, 2021 December 31, 2020

In thousands September 30, 2021 December 31, 2020

Current receivables:

Trade receivables $ 4,425 $ 3,293

Value added tax (“VAT”) receivable 15,395 17,080

VAT receivable 17,365 17,080

Income tax receivable 216 530

3 unchanged sentences

VAT receivable (1)

$ 26,642 $ 26,447

26,642 26,447

Total receivables $ 22,956 $ 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).

While the Company continues to pursue recovery from the Mexican government (including through ongoing litigation and potential international arbitration), the Company wrote down the carrying value of the receivable at September 30, 2021.

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

In thousands September 30, 2021 December 31, 2020

Concentrate $ 2,740 $ 2,909

9 unchanged sentences

Total Inventory and Ore on Leach Pads $ 222,075 $ 213,703

Coeur reports the carrying value of metal and leach pad inventory at the lower of cost or net realizable value, with cost being determined using a weighted average cost method.

At the end of the third quarter of 2021, the cost of metal and leach pad inventory at Rochester exceeded its net realizable value which resulted in a non-cash write down of $ 6.0 million (approximately $ 5.3 million was recognized in Costs Applicable to Sales and $ 0.7 million in Amortization).

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 6 – INVESTMENTS

1 unchanged sentence

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

At June 30, 2021

At September 30, 2021

In thousands Cost Gross

7 unchanged sentences

Equity securities $ 138,167 $ ( 949 ) $ 2,522 $ 139,740

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

At December 31, 2020

23 unchanged sentences

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,

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Three months ended September 30, Nine months ended September 30,

In thousands 2021 2020 2021 2020

5 unchanged sentences

Total finance lease cost $ 6,974 $ 5,036 $ 19,509 $ 19,358

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,

Three months ended September 30, Nine months ended September 30,

In thousands 2021 2020 2021 2020

5 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

In thousands June 30, 2021 December 31, 2020

In thousands September 30, 2021 December 31, 2020

Operating Leases

17 unchanged sentences

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)

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

As of September 30, 2021 (In thousands)

Operating leases Finance leases

8 unchanged sentences

Net lease obligation $ 31,833 $ 54,388

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 8 – DEBT

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

In thousands Current Non-Current Current Non-Current

6 unchanged sentences

$ 31,384 $ 411,042 $ 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 .

(1) Net of unamortized debt issuance costs of $ 7.0 million and $ 0.0 million at September 30, 2021 and December 31, 2020, respectively.

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

(3) Unamortized debt issuance costs of $ 2.5 million and $ 1.5 million at September 30, 2021 and December 31, 2020, respectively, included in Other Non-Current Assets .

2029 Senior Notes

10 unchanged sentences

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.

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

2024 Senior Notes

6 unchanged sentences

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

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

Revolving Credit Facility

1 unchanged sentence

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.

At September 30, 2021, the Company had $ 20.0 million drawn at an interest rate of 2.3 % 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.

In the nine months ended September 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 September 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%.

2 unchanged sentences

Interest Expense

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

Three Months Ended September 30, Nine Months Ended September 30,

In thousands 2021 2020 2021 2020

7 unchanged sentences

Total interest expense, net of capitalized interest $ 3,237 $ 5,096 $ 13,240 $ 15,989

Coeur Mining, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

NOTE 9 – RECLAMATION

3 unchanged sentences

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,

Three Months Ended September 30, Nine Months Ended September 30,

In thousands 2021 2020 2021 2020

3 unchanged sentences

Asset retirement obligation - Ending $ 142,783 $ 140,898 $ 142,783 $ 140,898

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

The Company accrued $ 2.0 million and $ 2.2 million at each of September 30, 2021 and December 31, 2020, respectively, for reclamation liabilities related to former mining activities, which are included in Reclamation.

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,

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

Three months ended September 30, Nine months ended September 30,

2021 2020 2021 2020

5 unchanged sentences

$ ( 48,368 ) $ ( 6,400 ) $ 39,969 $ ( 13,113 ) $ 13,964 $ ( 34,526 ) $ 25,765 $ ( 12,018 )

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.

During the third quarter of 2021, the Company reported estimated income and mining tax expense of approximately $ 6.4 million, resulting in an effective tax rate of ( 13.2 )%.

This compares to income tax expense of $ 13.1 million for an effective tax rate of 32.8% during the third 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;

(i) variations in our income before income taxes;

(ii) geographic distribution of that income;

(iii) mining taxes;

(iv) foreign exchange rates;

13 unchanged sentences

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.

At September 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

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

part of its income tax expense.

At September 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 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:

Stock-based compensation expense in the three and nine months ended September 30, 2021 was $ 2.7 million and $ 10.2 million, respectively, compared to $ 2.0 million and $ 6.3 million in the three and nine months ended September 30, 2020.

At September 30, 2021, there was $ 11.9 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 1.6 years.

The following table summarizes the grants awarded during the nine months ended September 30, 2021:

Grant date Restricted

4 unchanged sentences

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

In thousands 2021 2020 2021 2020

7 unchanged sentences

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

Fair Value at September 30, 2021

In thousands Total Level 1 Level 2 Level 3

Equity securities $ 139,740 $ 139,740 $ — $ —

Gold zero cost collars

1,560 — 1,560 —

Foreign currency forward exchange contracts

2 unchanged sentences

$ 144,695 $ 139,740 $ 4,955 $ —

Gold zero cost collars

$ 78 $ — $ 78 $ —

Exchange agreement embedded derivative $ — $ — $ — $ —

1 unchanged sentence

$ 255 $ — $ 255 $ —

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Fair Value at December 31, 2020

15 unchanged sentences

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

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.

2 unchanged sentences

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.

The fair value of the outstanding embedded derivative 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

As of September 30, 2021, the fair value of the exchange agreement embedded derivative was $ 0 .

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

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

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

Three Months Ended September 30, 2021

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

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

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

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

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

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

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

September 30, 2021

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

16 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.

3 unchanged sentences

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.

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Derivatives Not Designated as Hedging Instruments

9 unchanged sentences

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

As of September 30, 2021, the fair value of the exchange agreement embedded derivative was $0.

At September 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

3 unchanged sentences

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

June 30, 2021

September 30, 2021

In thousands Prepaid expenses and other Accrued liabilities and other

Provisional metal sales contracts $ 51 $ 255

Exchange agreement embedded derivative — 9,269

$ 137 $ 9,689

December 31, 2020

1 unchanged sentence

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,

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

Three Months Ended September 30, Nine Months Ended September 30,

Financial statement line Derivative 2021 2020 2021 2020

3 unchanged sentences

Derivatives Designated as Cash Flow Hedging Strategies

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.

4 unchanged sentences

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:

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

At September 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

14 unchanged sentences

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.

As of September 30, 2021, the Company had $ 4.9 million of net after-tax gain in AOCI related to losses from cash flow hedge transactions, of which $ 4.6 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

September 30, 2021

In thousands Prepaid expenses and other Accrued liabilities and other

1 unchanged sentence

Foreign currency forward exchange contracts 3,344 —

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

December 31, 2020

3 unchanged sentences

$ 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,

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 AOCI and the Consolidated Statement of Comprehensive Income (Loss) for the three and nine months ended September 30, 2021 and 2020, respectively (in thousands).

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

10 unchanged sentences

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

In thousands 2021 2020 2021 2020

7 unchanged sentences

Other, net consists of the following:

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

Three Months Ended September 30, Nine Months Ended September 30,

In thousands 2021 2020 2021 2020

1 unchanged sentence

Gain (loss) on sale of assets ( 92 ) ( 2,476 ) 4,582 ( 2,458 )

VAT write-down ( 25,982 ) — ( 25,982 ) —

Gold zero cost collars novation fee — ( 3,819 ) — ( 3,819 )

Gain (loss) on sale of Manquiri NSR consideration — — — 365

2 unchanged sentences

Other, net $ ( 26,718 ) $ ( 6,312 ) $ ( 22,390 ) $ ( 4,310 )

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.

Coeur Mining, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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

NOTE 15 – 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 nine months ended September 30, 2021, there were 1,513,288 and 1,489,158 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, 182,803 and 1,722,014 common stock equivalents were excluded in the diluted earnings per share calculation for the three and nine months ended September 30, 2020, respectively.

Three months ended September 30, Nine months ended September 30,

In thousands except per share amounts 2021 2020 2021 2020

10 unchanged sentences

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.

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

NOTE 16 - SUPPLEMENTAL GUARANTOR INFORMATION

10 unchanged sentences

SUMMARIZED BALANCE SHEET

JUNE 30, 2021

SEPTEMBER 30, 2021

In thousands Coeur Mining, Inc.

85 unchanged sentences

SUMMARIZED STATEMENTS OF INCOME

SIX MONTHS ENDED JUNE 30, 2021

NINE MONTHS ENDED SEPTEMBER 30, 2021

In thousands Coeur Mining, Inc.

9 unchanged sentences

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.

As of September 30, 2021, $26.0 million is 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;

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.

1 unchanged sentence

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.

Despite a favorable ruling from Mexican tax courts in this matter in 2018, litigation has continued at the administrative, appeals court and supreme court levels, most of which has been determined unfavorably to Coeur (including as recently as the third quarter of 2021) based on interpretations of applicable law and prior court decisions which the Company and its counsel believe are contrary to legal precedent, conflicting and erroneous.

While the Company believes that it remains legally entitled to be refunded the full amount of the VAT receivable and intends to rigorously continue its VAT recovery efforts, based on the continued failure to recover the VAT receivable and recent unfavorable Mexican court decisions, the Company determined to write down the carrying value of the VAT receivable at September 30, 2021.

The write down of $ 26.0 million is presented in Other, net on the Condensed Consolidated Statement of Comprehensive Income (Loss).

Coeur Mexicana may still elect to initiate an arbitration proceeding under Chapter 11 of the North American Free Trade Agreement, or NAFTA.

Outcomes in NAFTA arbitration and the process for recovering funds even if there is a successful outcome in 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.

3 unchanged sentences

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.

At September 30, 2021 the remaining unamortized balance was $ 8.5 million, which is included in Accrued liabilities and other and Other long-term liabilities on the Consolidated Balance Sheet.

Kensington Prepayment

3 unchanged sentences

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.

In June 2021, Coeur exercised an option to receive the $ 15.0 million June 2021 Prepayment, and delivered $ 7.5 million against that $ 15.0 million in the third quarter of 2021.

The remaining deliveries of $ 7.6 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

As of September 30, 2021 and December 31, 2020, the Company had surety bonds totaling $ 314.5 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 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

Coeur Mining, Inc.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

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.

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.

2 unchanged sentences

Accrued liabilities and other consist of the following:

In thousands June 30, 2021 December 31, 2020

In thousands September 30, 2021 December 31, 2020

Accrued salaries and wages $ 28,788 $ 30,457

Deferred revenue (1)

15,991 16,425

Income and mining taxes 14,078 26,118

Exchange agreement embedded derivative 9,269 —

Accrued operating costs 8,468 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 and six months ended June 30, 2021 and 2020:

In thousands June 30, 2021 June 30, 2020

In thousands September 30, 2021 September 30, 2020

Cash and cash equivalents $ 85,020 $ 77,148

1 unchanged sentence

Total cash, cash equivalents and restricted cash shown in the statement of cash flows $ 86,791 $ 78,528

Coeur Mining, Inc.

and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 19 – ASSET AND LIABILITIES HELD FOR SALE

On October 27, 2021, the Company entered into a definitive agreement (the “Agreement”) to sell its La Preciosa project located in the State of Durango, Mexico to Avino Silver & Gold Mines Ltd.

The transaction is subject to customary closing conditions, including required regulatory approvals and expected to close in the first quarter of 2022.

Under the Agreement, Avino will acquire the La Preciosa project from Coeur for the following consideration:

• $ 15.0 million upon closing of the transaction,

• $ 5.0 million promissory note that matures prior to the first anniversary of the transaction closing,

• Equity consideration of 14.0 million units, payable on closing, each consisting of one share of Avino common stock and one half of one common share purchase warrant of Avino common stock, priced at a 25 % premium to the 20 day volume weighted average price prior to announcement,

• Deferred cash consideration of approximately $ 8.8 million to be paid no later than the first anniversary of initial production from any portion of the La Preciosa project,

• Contingent payments of $ 0.25 per silver equivalent ounce (subject to an inflationary adjustment) on any new mineral reserves discovered and declared outside of the current resource area at the La Preciosa project, up to a maximum payment of $ 50.0 million, and

• Two royalties covering the La Preciosa land package, including (i) a 1.25 % net smelter returns royalty on properties covering the Gloria and Abundancia areas of the La Preciosa project and (ii) a 2.00 % gross value royalty on all areas of the La Preciosa project other than the Gloria and Abundancia areas, offset by the amount of any new mineral reserve contingent payments made to Coeur.

The Company classified the La Preciosa project as held for sale as of September 30, 2021 and the associated assets and liabilities are classified separately on the consolidated balance sheets.

The major classes of assets and liabilities associated with the La Preciosa project as of September 30, 2021 are as follows:

In thousands September 30, 2021

Cash and cash equivalents $ 393

Receivables 1,219

Prepaid expenses and other 1,338

Property, plant and equipment, net 1,633

Mining properties, net 49,085

TOTAL ASSETS $ 54,478

Accounts payable $ 321

Deferred tax liabilities 11,156

TOTAL LIABILITIES $ 11,477

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