Coeur Mining, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Coeur Mining, Inc. and its subsidiaries (collectively the “Company”, “our”, or “we”). We use certain non-GAAP financial performance measures in our MD&A. For a detailed description of these measures, please see “Non-GAAP Financial Performance Measures” at the end of this Item. We provide Costs applicable to sales (“CAS”) split, referred to as the co-product method, based on revenue contribution for Palmarejo, Rochester and Silvertip and based on the primary metal, referred to as the by-product method, for Wharf. Revenue from secondary metal, such as silver at Wharf, is treated as a cost credit. 31 Overview We are primarily a gold and silver producer with five mines located in the United States, Mexico and Canada and several exploration projects in North America. Third Quarter Highlights For the quarter, Coeur reported revenue of $208.0 million and cash flow from operating activities of $21.8 million. We reported GAAP net loss of $54.8 million, or $0.21 per diluted share. On an adjusted basis 1 , the Company reported EBITDA of $48.8 million and net loss of $2.6 million, or $0.01 per diluted share. For the nine months ended September 30, 2021, Coeur reported revenue of $624.9 million and cash flow from operating activities of $75.5 million. We reported GAAP net loss of $20.6 million, or $0.08 per diluted share. On an adjusted basis 1 , the Company reported EBITDA of $167.4 million and net income of $10.5 million or $0.04 per diluted share. • Solid production results and stronger fourth quarter expected to result in full-year production levels within 2021 guidance ranges – Third quarter gold and silver production totaled 87,083 and 2.5 million ounces, respectively. Production levels are expected to increase during the fourth quarter and finish the year within the Company’s guidance range of 322,500 - 367,500 ounces of gold and 9.7 - 12.2 million ounces of silver • Second consecutive quarterly exploration record – Coeur achieved another quarterly exploration record by investing approximately $20.0 million and drilling roughly 326,500 feet (99,500 meters) from up to 27 drill rigs at six locations. The Company continues to generate meaningful new discoveries and identify future growth opportunities from the largest exploration program in its history • Strong quarterly results at Wharf – Wharf’s gold production increased 17% quarter-over-quarter to 28,157 ounces, leading to $24.9 million and $23.9 million of operating and free cash flow 1 , respectively - the second highest quarterly cash flow figures since Coeur’s acquisition of the operation in early 2015. Cumulative operating and free cash flow 1 since the acquisition for approximately $99.5 million now totals $319.6 million and $290.7 million, respectively, implying a current internal rate of return of approximately 43% • Rochester expansion now 42% complete; seeking to mitigate inflationary pressures on remaining unawarded work packages – Coeur achieved several key milestones at its Rochester expansion project during the quarter while also continuing to incorporate learnings from ongoing test work and operating activities to maximize future operating flexibility and de-risk the expansion. The Company currently estimates a likely 10% - 15% increase in the project’s overall total capital estimate due to the impact of inflationary pressures on the four remaining unawarded packages • Re-adjusting timing and scale of Silvertip expansion due to exploration success and current inflationary environment – The Company has elected to assess the potential for a larger-scale expansion of Silvertip given ongoing exploration success and the potential benefits of a larger-scale operation. Additionally, recently-received preliminary capital estimates targeting a smaller, accelerated expansion and re-start were higher than anticipated, reflecting current inflationary pressures, supply and labor disruptions, and schedule constraints. A potentially larger-scale expansion and restart is expected to follow the completion of the ongoing Rochester expansion project • Strategic sale of La Preciosa silver project to Avino Silver & Gold – Coeur has entered into a definitive agreement (the “Agreement”) with Avino Silver & Gold Mines Ltd. (“Avino”) (TSX/NYSE American: ASM) to sell its La Preciosa silver project, which is located near Avino’s existing operation in the State of Durango, Mexico for fixed consideration of approximately $34.7 million and contingent consideration of up to an additional $58.8 million for total potential consideration of up to $93.4 million plus two royalties that collectively cover the entire La Preciosa land package. The combination of equity ownership, contingent payments and royalties provides exposure to future upside potential • Maintaining balance sheet flexibility to support ongoing investments – The Company ended the third quarter with total liquidity of approximately $330.0 million, including $85.0 million of cash and $245.0 million of available capacity under its $300.0 million revolving credit facility (“RCF”) 32 Selected Financial and Operating Results Three Months Ended September 30, Nine Months Ended September 30, In thousands 2021 2020 2021 2020 Financial Results: Gold sales $ 147,730 $ 167,132 $ 432,210 $ 422,639 Silver sales $ 60,239 $ 62,596 $ 192,734 $ 133,852 Zinc sales $ — $ — $ — $ (662) Lead sales $ — $ — $ — $ 1,315 Consolidated Revenue $ 207,969 $ 229,728 $ 624,944 $ 557,144 Net income (loss) $ (54,768) $ 26,856 $ (20,562) $ 13,747 Net income (loss) per share, diluted $ (0.22) $ 0.11 $ (0.08) $ 0.06 Adjusted net income (loss) (1) $ (2,608) $ 38,248 $ 10,493 $ 39,932 Adjusted net income (loss) per share, diluted (1) $ (0.01) $ 0.16 $ 0.04 $ 0.17 EBITDA (1) $ (14,169) $ 77,281 $ 120,076 $ 138,008 Adjusted EBITDA (1) $ 48,807 $ 90,777 $ 167,411 $ 179,381 Total debt (2) $ 442,426 $ 298,720 $ 442,426 $ 343,109 Operating Results: Gold ounces produced 87,083 95,995 259,583 259,301 Silver ounces produced 2,462,395 2,565,349 7,452,931 6,862,177 Zinc pounds produced — — — 2,459,756 Lead pounds produced — — — 2,176,847 Gold ounces sold 89,804 95,283 261,417 258,851 Silver ounces sold 2,491,003 2,591,779 7,509,409 6,913,585 Zinc pounds sold — — — 3,203,446 Lead pounds sold — — — 2,453,485 Average realized price per gold ounce $ 1,645 $ 1,754 $ 1,653 $ 1,633 Average realized price per silver ounce $ 24.18 $ 24.15 $ 25.67 $ 19.36 Average realized price per zinc pound, gross (3) $ — $ — $ — NM Average realized price per lead pound, gross (3) $ — $ — $ — NM (1) See “Non-GAAP Financial Performance Measures.” (2) Includes finance leases. Net of debt issuance costs and premium received. (3) Due to the temporary suspension of mining and processing activities these amounts are not meaningful. Consolidated Financial Results Three Months Ended September 30, 2021 compared to Three Months Ended September 30, 2020 Revenue Revenue decreased by $21.8 million, or 9%, as a result of a 6% decrease in average realized gold prices, and lower gold and silver ounces sold (6% and 4%, respectively). We sold 89,804 gold ounces and 2.5 million silver ounces, compared to 95,283 gold ounces and 2.6 million silver ounces in the prior year. Gold and silver accounted for 71% and 29% of third quarter 2021 sales revenue, respectively. This compares to gold and silver accounting for 73% and 27% of third quarter 2020 sales revenue, respectively. 33 The following table summarizes consolidated metal sales: Three months ended September 30, Increase (Decrease) Percentage Change In thousands 2021 2020 Gold sales $ 147,730 $ 167,132 $ (19,402) (12) % Silver sales 60,239 62,596 (2,357) (4) % Metal sales $ 207,969 $ 229,728 $ (21,759) (9) % Costs Applicable to Sales Costs applicable to sales increased $21.6 million, or 19%, primarily due to higher operating costs at Palmarejo, Rochester, Kensington and Wharf partially due to increased maintenance and consumable costs and lower of cost or market (“LCM”) adjustment of $5.3 million at Rochester, partially offset by the favorable impact of foreign currency hedges. For a complete discussion of costs applicable to sales, see Results of Operations below. Amortization Amortization decreased $1.3 million, or 4%, primarily due lower ounces sold and longer assumed mine life based on year-end 2020 mineral reserve growth at Palmarejo. Expenses General and administrative expenses increased $1.0 million, or 13%, primarily due to higher travel and outside service costs. Exploration expense increased $2.6 million, or 20%, attributable to acceleration of drilling activity at Rochester and Kensington as well as the continuation of expansion and infill programs across the rest of the Company’s portfolio. The Company completed 243,500 feet (74,225 meters) of expansion drilling and 82,900 feet (25,275 meters) of infill drilling in the third quarter of 2021 compared to 217,768 feet (66,376 meters) of expansion drilling and 39,114 feet (11,922 meters) of infill drilling in the third quarter of 2020 Pre-development, reclamation, and other expenses decreased $4.5 million, or 30%, stemming from lower costs incurred in connection with the Company’s COVID-19 health and safety protocols. The following table summarizes pre-development, reclamation, and other expenses: Three months ended September 30, Increase (Decrease) Percentage Change In thousands 2021 2020 COVID-19 $ 617 $ 4,037 $ (3,420) (85) % Silvertip ongoing carrying costs 5,589 3,913 1,676 43 % Silvertip temporary suspension costs — 2,768 (2,768) (100) % Asset retirement accretion 3,027 2,968 59 2 % Other 1,273 1,345 (72) (5) % Pre-development, reclamation and other expense $ 10,506 $ 15,031 $ (4,525) (30) % Other Income and Expenses Fair value adjustments, net, decreased to a loss of $26.4 million compared to a gain of $2.2 million as a result of reduction in value related to the Company’s equity investments, partially offset by a gain of $9.3 million related to a fair value adjustment to the Exchange Agreement embedded derivative liability. The estimated fair values of the Company’s equity investments in Victoria and Integra were $131.2 million and $8.5 million, respectively, at September 30, 2021. For additional details on the Exchange Agreement embedded derivative see Note 12 -- Fair Value Measurements and Note 13 -- Derivative Financial Instruments. Interest expense (net of capitalized interest of $4.4 million) decreased to $3.2 million from $5.1 million due to higher capitalized interest associated with the POA 11 project at Rochester, and lower interest paid under the RCF, partially offset by higher interest paid under the 2029 Senior Notes compared to the 2024 Senior Notes and higher interest paid under finance lease obligations. Other, net increased to a loss of $26.7 million compared to $6.3 million due to a write-down of a VAT receivable of $26.0 million due to uncertain collectability, partially offset by a one-time fee of $3.8 million related to the novation of certain 34 of the Company’s gold zero cost collars incurred in 2020. For additional details on the VAT receivable write-down, see Note 17 -- Commitments and Contingencies. Income and Mining Taxes During the third quarter of 2021, income and mining tax expense of approximately $6.4 million resulted in an effective tax rate of (13.2)% for 2021. This compares to income tax expense of $13.1 million or effective tax rate of 32.8% for 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) variations in our income before income taxes; (ii) geographic distribution of that income; (iii) mining taxes; (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. The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit: Three months ended September 30, 2021 2021 2020 In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit United States $ (30,247) $ 4,078 $ 24,592 $ (6,003) Canada (13,879) — (12,895) — Mexico (4,138) (10,478) 28,320 (7,110) Other jurisdictions (104) — (48) — $ (48,368) $ (6,400) $ 39,969 $ (13,113) 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 will ultimately 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 “Item 1A - Risk Factors” in the 2020 10-K. Net Income (Loss) Net loss was $54.8 million, or $0.21 per diluted share, compared to net income of $26.9 million, or $0.11 per share. The decrease in net income was driven by a 6% decrease in average realized gold prices, lower gold and silver ounces sold (6% and 4%, respectively), higher operating costs, a VAT write-down of $26.0 million, and unfavorable changes in value related to the Company’s equity investments. This was partially offset by lower costs incurred in connection with the Company’s COVID-19 health and safety protocols and a gain of $9.3 million related to a fair value adjustment to the Exchange Agreement embedded derivative liability. Adjusted net loss was $2.6 million, or $0.01 per diluted share, compared to adjusted net income of $38.2 million, or $0.16 per share (see “Non-GAAP Financial Performance Measures”). Nine Months Ended September 30, 2021 compared to Nine Months Ended September 30, 2020 Revenue Revenue increased by $67.8 million, or 12%, as a result of a 1% and 33% increase in average realized gold and silver prices, respectively, and higher gold and silver ounces sold (1% and 9%, respectively). In 2020, production was impacted by the temporary suspension of active mining operations at Palmarejo due to a government decree in response to COVID-19. We sold 261,417 gold ounces and 7.5 million silver ounces, compared to 258,851 gold ounces, 6.9 million silver ounces, 3.2 million zinc pounds and 2.5 million lead pounds in the prior year. Gold and silver accounted for 69% and 31% of 2021 sales revenue, respectively. This compares to gold and silver accounting for 76% and 23% of 2020 sales revenue, respectively, with zinc and lead accounting for the remaining 2020 sales revenue. 35 The following table summarizes consolidated metal sales: Nine months ended September 30, Increase (Decrease) Percentage Change In thousands 2021 2020 Gold sales $ 432,210 $ 422,639 $ 9,571 2 % Silver sales 192,734 133,852 58,882 44 % Zinc sales — (662) 662 (100) % Lead sales — 1,315 (1,315) (100) % Metal sales $ 624,944 $ 557,144 $ 67,800 12 % Costs Applicable to Sales Costs applicable to sales increased $53.4 million, or 17%, primarily due to higher ounces sold resulting from the 2020 temporary suspension of active mining operations at Palmarejo in 2020, increased maintenance and consumable costs, the Rochester LCM adjustment of $5.3 million and a non-cash inventory charge of $8.6 million related to a change in the Company’s recovery rate assumption on the Stage IV leach pad at Rochester, partially offset by the favorable impact from foreign currency hedges. For a complete discussion of costs applicable to sales, see Results of Operations below. Amortization Amortization decreased $3.4 million, or 4%, primarily due to the 2020 temporary suspension of active mining operations at Palmarejo and Silvertip and longer assumed mine life based on year-end 2020 mineral reserve growth at Palmarejo, partially offset by higher ounces sold. Expenses General and administrative expenses increased $5.5 million, or 22%, primarily due to higher employee incentive compensation, travel and outside service costs. Exploration expense increased $6.4 million, or 21%, as the Company maintained its commitment to a higher-level of exploration investment following the completion of the largest and most successful drilling campaign in Coeur’s history during 2020. The Company completed 556,800 feet (169,725 meters) of expansion drilling and 346,500 feet (105,625 meters) of infill drilling in the nine months of 2021 compared to 477,454 feet (145,528 meters) of expansion drilling and 122,686 feet (37,395 meters) of infill drilling in the nine months of 2020. Pre-development, reclamation, and other expenses decreased $3.3 million, or 8%, stemming from lower costs incurred in connection with the Company’s COVID-19 health and safety protocols and one-time costs at Silvertip including a $2.1 million write down of obsolete supply inventory in 2020, partially offset by full-year ongoing carrying costs at Silvertip and a gain resulting from the modification of a right of use lease at Silvertip in 2020. The following table summarizes pre-development, reclamation, and other expenses: Nine months ended September 30, Increase (Decrease) Percentage Change In thousands 2021 2020 COVID-19 $ 5,937 $ 10,418 $ (4,481) (43) % Silvertip ongoing carrying costs 18,957 11,704 7,253 62 % Silvertip temporary suspension costs — 10,107 (10,107) (100) % Gain on modification of right of use lease — (4,051) 4,051 (100) % Asset retirement accretion 8,898 8,724 174 2 % Other 3,164 3,359 (195) (6) % Pre-development, reclamation and other expense $ 36,956 $ 40,261 $ (3,305) (8) % Other Income and Expenses During the first quarter of 2021, the Company incurred a $9.2 million loss in connection with the tender and redemption of the 2024 Senior Notes concurrent with the completed offering of the 2029 Senior Notes. Fair value adjustments, net, increased to a gain of $7.0 million compared to a gain of $3.5 million as a result of a gain of $9.3 million related to a fair value adjustment to the Exchange Agreement embedded derivative liability, partially offset by reduction in value of the Company’s equity investments. The estimated fair values of the Company’s equity investments in Victoria and Integra were $131.2 million and $8.5 million, respectively, at September 30, 2021. For additional details on the 36 Exchange Agreement embedded derivative see Note 12 -- Fair Value Measurements and Note 13 -- Derivative Financial Instruments. Interest expense (net of capitalized interest of $7.0 million) decreased to $13.2 million from $16.0 million due to higher capitalized interest associated with the POA 11 project at Rochester, and lower interest paid under the RCF, partially offset by higher interest paid under the 2029 Senior Notes compared to the 2024 Senior Notes and higher interest paid under finance lease obligations. Other, net increased to a loss of $22.4 million compared to $4.3 million due to a write-down of a VAT receivable of $26.0 million due to uncertain collectability, partially offset by an increase in gains on the sale of assets in 2021 and a one-time fee of $3.8 million related to the novation of certain of the Company’s gold zero cost collars incurred in 2020. For additional details on the VAT receivable write-down see Note 17 -- Commitments and Contingencies. Income and Mining Taxes During the first nine months of 2021, income and mining tax expense of approximately $34.5 million resulted in an effective tax rate of 247.3% for 2021. This compares to income tax expense of $12.0 million or effective tax rate of 46.6% for 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) variations in our income before income taxes; (ii) geographic distribution of that income; (iii) foreign exchange rates; (iv) the impact of uncertain tax positions; (v) mining taxes; (vi) percentage depletion and (vii) the non-recognition of tax assets. Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period. The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit: Nine months ended September 30, 2021 2020 In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit United States $ (9,131) $ (4,775) $ 26,132 $ (5,913) Canada (39,643) — (54,544) 232 Mexico 59,603 (29,751) 54,483 (6,366) Other jurisdictions 3,135 — (306) 29 $ 13,964 $ (34,526) $ 25,765 $ (12,018) 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 will ultimately 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 “Item 1A - Risk Factors” in the 2020 10-K. Net Income (Loss) Net loss was $20.6 million, or $0.08 per diluted share, compared to net income of $13.7 million, or $0.06 per share. The decrease in net income was driven by higher operating costs, a VAT write-down of $26.0 million, higher exploration expense, a $9.2 million loss on debt extinguishment, 9 months of ongoing carrying costs at Silvertip, reduction in value related to the Company’s equity investments and higher income and mining taxes. This was partially offset by a 1% and 33% increase in average realized gold and silver prices, respectively, higher sales of gold and silver (1% and 9%, respectively), and lower operating costs at Silvertip. Adjusted net income was $10.5 million, or $0.04 per diluted share, compared to $39.9 million, or $0.17 per share (see “Non-GAAP Financial Performance Measures”). 37 Results of Operations Palmarejo Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Tons milled 517,363 492,474 1,519,126 1,241,677 Average gold grade (oz/t) 0.050 0.070 0.060 0.070 Average silver grade (oz/t) 3.86 4.37 3.95 4.52 Average recovery rate – Au 93.7 % 91.3 % 93.9 % 90.3 % Average recovery rate – Ag 85.5 % 82.8 % 82.9 % 80.0 % Gold ounces produced 24,254 29,296 80,454 76,097 Silver ounces produced 1,707,518 1,783,524 4,977,337 4,485,549 Gold ounces sold 24,897 27,252 81,100 75,463 Silver ounces sold 1,714,617 1,765,371 4,991,932 4,534,802 Costs applicable to sales per gold ounce (1) $ 705 $ 603 $ 666 $ 637 Costs applicable to sales per silver ounce (1) $ 12.52 $ 10.09 $ 12.20 $ 9.03 (1) See Non-GAAP Financial Performance Measures. Three Months Ended September 30, 2021 compared to Three Months Ended September 30, 2020 Gold and silver production decreased 17% and 4%, respectively, as a result of lower gold and silver grades, partially offset by higher mill throughout and recoveries. Metal sales were $74.6 million, or 36% of Coeur’s metal sales, compared with $81.8 million, or 36% of Coeur’s metal sales. Revenue for the three months ended September 30, 2021 decreased by $7.1 million or 9%, of which $4.4 million was the result of a lower volume of gold and silver sales and $2.7 million was due to lower average realized gold and silver prices. Costs applicable to sales per gold and silver ounce increased 17% and 24%, respectively, due to the mix of gold and silver sales, lower production, and higher maintenance and consumable costs, partially offset by the favorable impact of foreign currency hedges. Amortization decreased to $8.7 million due to lower ounces sold and longer assumed mine life based on year-end 2020 mineral reserve growth. Capital expenditures increased to $8.5 million from $5.0 million due to higher underground development and infill drilling activities. Nine Months Ended September 30, 2021 compared to Nine Months Ended September 30, 2020 Gold and silver production increased 6% and 11%, respectively, as a result of the government-mandated COVID-19-related temporary suspension of active mining operations at Palmarejo in 2020 and higher mill throughput and recoveries, partially offset by lower gold and silver grades. Metal sales were $240.0 million, or 38% of Coeur’s metal sales, compared with $194.1 million, or 35% of Coeur’s metal sales. Revenue for the nine months ended September 30, 2021 increased by $46.0 million or 24%, of which $26.5 million was the result of higher average realized gold and silver prices, and $19.5 million was due to a higher volume of gold and silver sales. Costs applicable to sales per gold and silver ounce increased 5% and 35%, respectively, due to the mix of gold and silver sales, lower gold and silver grades, and higher maintenance and consumable costs, partially offset by the favorable impact from foreign currency hedges. Amortization decreased to $26.1 million due to a longer anticipated mine life based on year-end 2020 reserve growth, partially offset by higher ounces sold. Capital expenditures increased to $28.3 million from $16.6 million attributable to higher underground development at the La Nacion deposit and the impact of the 2020 temporary suspension on underground development and infill drilling activities. 38 Rochester Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Tons placed 3,427,078 4,523,767 9,863,772 11,695,676 Average gold grade (oz/t) 0.002 0.002 0.002 0.002 Average silver grade (oz/t) 0.43 0.49 0.42 0.52 Gold ounces produced 6,051 6,462 20,187 17,557 Silver ounces produced 738,554 739,886 2,400,539 2,155,577 Gold ounces sold 5,559 6,834 20,311 17,585 Silver ounces sold 758,214 785,887 2,441,429 2,141,803 Costs applicable to sales per gold ounce (1) $ 1,994 $ 1,118 $ 1,707 $ 1,299 Costs applicable to sales per silver ounce (1) $ 27.15 $ 14.58 $ 24.19 $ 14.73 (1) See Non-GAAP Financial Performance Measures. Three Months Ended September 30, 2021 compared to Three Months Ended September 30, 2020 Gold production decreased 6%, while silver production remained comparable, despite the placement of over-liner material on the new Stage VI leach pad, which impacted the Company’s ability to stack and leach material on the Stage IV leach pad. Metal sales were $28.3 million, or 14% of Coeur’s metal sales, compared with $32.1 million, or 14% of Coeur’s metal sales. Revenue for the three months ended September 30, 2021 decreased by $3.8 million or 12%, of which $2.9 million was the result of a lower volume of gold and silver sales and $0.9 million was due to lower average realized gold and silver prices. Costs applicable to sales per gold and silver ounce increased 78% and 86%, respectively, resulting from higher maintenance and consumable costs, and a LCM adjustment of $5.3 million. Amortization increased to $4.7 million due to higher equipment depreciation from recently placed-in service assets. Capital expenditures increased to $40.1 million from $9.8 million due to the commencement of construction activities related to POA 11 in August 2020. Nine Months Ended September 30, 2021 compared to Nine Months Ended September 30, 2020 Gold and silver production increased 15% and 11%, respectively, due to the timing of recoveries associated with the restocking of leach pad inventory after the commissioning of the high-pressure grinding roll in 2019, which adversely impacted 2020 gold and silver production. Metal sales were $99.2 million, or 16% of Coeur’s metal sales, compared with $72.2 million, or 13% of Coeur’s metal sales. Revenue for the nine months ended September 30, 2021 increased by $27.0 million or 37%, of which $14.4 million was the result of higher average realized gold and silver prices and $12.6 million was the result of a higher volume of gold and silver sales. Costs applicable to sales per gold and silver ounce increased 31% and 64%, respectively, due to the mix of gold and silver sales, and higher maintenance and consumable costs. Additionally, there was a LCM adjustment of $5.3 million and a non-cash inventory charge of $8.6 million related to a change in the Company’s recovery rate assumption on the Stage IV leach pad. Amortization increased to $14.8 million due to higher ounces sold and higher equipment depreciation from recently placed-in service assets. Capital expenditures increased to $112.5 million from $20.6 million due to the commencement of construction activities related to POA 11 in August 2020. Overall progress under the current scope, POA 11 was approximately 42% complete at the end of the third quarter. As part of ongoing efforts to optimize and de-risk the project, the Company has identified a potential opportunity to enhance future operating flexibility by incorporating pre-screens into the flowsheet for the newly constructed crushing circuit. While the Company completes detailed engineering related to this opportunity, Coeur intends to install pre-screens on the existing crusher system during the first half of 2022. If the Company determines that pre-screens are a value-accretive scope change to the project, Coeur currently estimates that commissioning and ramp-up of the new crushing circuit could be extended by three to six months. Historic rain amounts were experienced at Rochester in late October 2021. The Company is currently assessing any impacts to operations and the POA 11 project. 39 Kensington Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Tons milled 160,596 163,276 499,265 496,095 Average gold grade (oz/t) 0.19 0.18 0.19 0.20 Average recovery rate 93.0 % 93.7 % 92.9 % 93.0 % Gold ounces produced 28,621 26,797 87,624 91,877 Gold ounces sold 29,902 27,815 88,293 92,963 Costs applicable to sales per gold ounce (1) $ 1,156 $ 1,134 $ 1,078 $ 994 (1) See Non-GAAP Financial Performance Measures. Three Months Ended September 30, 2021 compared to Three Months Ended September 30, 2020 Gold production increased 7% as a result of higher grade, partially offset by lower mill throughput. Metal sales were $51.9 million, or 25% of Coeur’s metal sales, compared to $52.4 million, or 23% of Coeur’s metal sales. Revenue for the three months ended September 30, 2021 decreased by $0.5 million or 1%, of which $4.1 million resulted from lower average realized gold prices, partially offset by an increase of $3.6 million due to a higher volume of gold sales. Costs applicable to sales per gold ounce increased slightly due to higher diesel and employee-related costs, partially offset by higher production. Amortization increased to $12.8 million due to higher ounces sold. Capital expenditures increased to $6.3 million from $5.3 million due to higher infill drilling and underground development. Nine Months Ended September 30, 2021 compared to Nine Months Ended September 30, 2020 Gold production decreased 5% as a result of lower grade, partially offset by higher mill throughput. Metal sales were $155.2 million, or 25% of Coeur’s metal sales, compared to $159.2 million, or 29% of Coeur’s metal sales. Revenue for the nine months ended September 30, 2021 decreased by $4.0 million or 3%, of which $8.2 million resulted from lower volume of gold sales, partially offset by an increase of $4.2 million due to higher average realized gold prices. Costs applicable to sales per gold ounce increased 8% due to lower production and higher diesel, employee-related and maintenance costs. Amortization increased to $38.9 million primarily due to higher Jualin production, partially offset by lower ounces sold. Capital expenditures increased to $19.5 million from $14.1 million due to higher infill drilling and underground development. Wharf Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Tons placed 1,489,169 1,315,542 3,628,693 3,663,228 Average gold grade (oz/t) 0.025 0.025 0.028 0.028 Gold ounces produced 28,157 33,440 71,318 73,770 Silver ounces produced 16,323 41,939 75,055 81,764 Gold ounces sold 29,446 33,382 71,713 72,840 Silver ounces sold 18,172 40,521 76,048 77,996 Costs applicable to sales per gold ounce (1) $ 973 $ 805 $ 966 $ 914 (1) See Non-GAAP Financial Performance Measures. 40 Three Months Ended September 30, 2021 compared to Three Months Ended September 30, 2020 Gold production decreased 16% driven by the timing of recoveries. Metal sales were $53.1 million, or 26% of Coeur’s metal sales, compared to $63.5 million, or 28% of Coeur’s metal sales. Revenue for the three months ended September 30, 2021 decreased by $10.4 million or 16%, of which $7.6 million was due to a lower volume of gold and silver sales and $2.8 million resulted from lower average realized gold and silver prices. Costs applicable to sales per gold ounce increased 21% due to higher employee-related and diesel costs. Amortization decreased to $3.2 million due to lower ounces sold. Capital expenditures were $1.0 million. Nine Months Ended September 30, 2021 compared to Nine Months Ended September 30, 2020 Gold production decreased 3% driven by the timing of recoveries. Metal sales were $130.6 million, or 21% of Coeur’s metal sales, compared to $129.8 million, or 23% of Coeur’s metal sales. Revenue for the nine months ended September 30, 2021 increased by $0.8 million or 1%, of which $2.8 million resulted from higher average realized gold and silver prices, partially offset by a decrease of $2.0 million due to a lower volume of gold and silver sales. Costs applicable to sales per gold ounce increased 6% due to higher equipment rental, diesel and employee-related costs, partially offset by a $3.3 million inventory write-down related to lower expected recoveries from leach pads 4 and 5 in 2020. Amortization decreased to $8.6 million due to lower ounces sold. Capital expenditures were $3.9 million. Silvertip Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Silver ounces produced — — — 139,287 Zinc pounds produced — — — 2,459,756 Lead pounds produced — — — 2,176,847 Silver ounces sold — — — 158,984 Zinc pounds sold — — — 3,203,446 Lead pounds sold — — — 2,453,485 Costs applicable to sales per silver ounce (2) $ — $ — $ — NM (1) Costs applicable to sales per zinc pound (2) $ — $ — $ — NM (1) Costs applicable to sales per lead ounce (2) $ — $ — $ — NM (1) (1) Due to the temporary suspension of mining and processing activities these amounts are not meaningful. (2) See Non-GAAP Financial Performance Measures. Nine Months Ended September 30, 2021 compared to Nine Months Ended September 30, 2020 Silvertip temporarily suspended mining and processing activities, unrelated to COVID-19, in February 2020. Operational results in the table above reflect performance prior to the temporary suspension. Ongoing carrying and temporary suspension costs are included in Pre-development, reclamation, and other. The Company continues to generate positive results from ongoing exploration and confirmatory metallurgical test work. Given these drilling results, the enhanced understanding of the Silvertip deposit and the potential to significantly expand mineralized material with continued drilling, Coeur is now assessing the opportunity to significantly enhance the economics of a potential expansion and restart by re-evaluating the overall scope, including higher throughput, staging options, delivery timeline and commercial approach to the project. Coeur anticipates this ongoing review, current macroeconomic conditions impacting capital estimates and continued exploration investment will result in the Company sequencing a potential Silvertip expansion and restart following the completion of the POA 11 expansion at Rochester. Coeur believes the benefits of this sequencing includes (i) allowing for an acute focus on successful completion of the Rochester expansion, and (ii) maximizing balance sheet flexibility. In June 2021, Silvertip repurchased from Silvertip Resources Investment Cayman Ltd. a net smelter returns royalty of 1.429% on the first 1,434,000 metric tonnes of mineralized material mined, and 1.00% thereafter for $7.0 million. Liquidity and Capital Resources At September 30, 2021, the Company had $86.8 million of cash, cash equivalents and restricted cash and $245.0 million available under its RCF. Cash and cash equivalents decreased $7.8 million in the nine months ended September 30, 41 2021, due to higher capital expenditures related to POA 11 at Rochester and the potential expansion project at Silvertip coupled with higher general and administrative and exploration costs, and the tender and redemption of the 2024 Senior Notes for $238.3 million, including premiums. This was partially offset by a 1% and 33% increase in average realized gold and silver prices, respectively, higher gold and silver ounces sold (1% and 9%, respectively), $20.0 million drawn from the RCF, and the net proceeds of $367.5 million from the issuance of the 2029 Senior Notes. Since the start of the COVID-19 pandemic, the Company has completed various scenario planning analyses to consider potential impacts of COVID-19 on its business, including volatility in commodity prices, temporary disruptions and/or curtailments of operating activities (voluntary or involuntary). To provide additional flexibility to respond to potential downside scenarios, the Company has been able to periodically draw and make repayments under its RCF subsequent to the start of the COVID-19 pandemic. At September 30, 2021, the Company had $20.0 million drawn and $35.0 million in outstanding letters of credit under the RCF, which was amended in March 2021 to allow the Company to obtain one or more increases of the RCF in an aggregate amount of up to $100.0 million and extend the maturity to March 2025. Additionally, Coeur established a $100.0 million ATM Program in April 2020 as a means to proactively increase its financial flexibility in response to increased volatility and uncertainty associated with COVID-19. At the date of this filing, the Company has yet to issue any shares of its common stock under the ATM Program and intends to maintain the program during the POA 11 construction. Cash Provided by Operating Activities Net cash provided by operating activities for the three months ended September 30, 2021 was $21.8 million, compared to $79.5 million for the three months ended September 30, 2020. Net cash provided by operating activities for the nine months ended September 30, 2021 was $75.5 million, compared to $81.4 million for the nine months ended September 30, 2020. Adjusted EBITDA for the three months ended September 30, 2021 was $48.8 million, compared to $90.8 million for the three months ended September 30, 2020. Adjusted EBITDA for the nine months ended September 30, 2021 was $167.4 million, compared to $179.4 million for the nine months ended September 30, 2020 (see “Non-GAAP Financial Performance Measures”). Net cash provided by operating activities was impacted by the following key factors for the applicable periods: Three Months Ended September 30, Nine Months Ended September 30, In thousands 2021 2020 2021 2020 Cash flow before changes in operating assets and liabilities $ 34,804 $ 57,378 $ 107,826 $ 103,933 Changes in operating assets and liabilities: Receivables (944) (1,497) 1,016 (3,846) Prepaid expenses and other (80) (1,921) 593 (1,186) Inventories (3,820) (3,066) (18,047) (33,047) Accounts payable and accrued liabilities (8,114) 28,570 (15,842) 15,566 Cash provided by operating activities $ 21,846 $ 79,464 $ 75,546 $ 81,420 Net cash provided by operating activities decreased $57.6 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to a 6% decrease in average realized gold prices, and lower gold and silver ounces sold (6% and 4%, respectively), higher mining and income tax at Palmarejo, and the timing of interest payments. Revenue for the three months ended September 30, 2021 decreased by $21.8 million, of which $11.5 million was the result of the lower volume of gold and silver sales and $10.3 million was due to lower average realized gold prices. Net cash provided by operating activities decreased $5.9 million for the nine months ended September 30, 2021, primarily due to higher exploration costs, and higher mining and income tax at Palmarejo, partially offset by a 1% and 33% increase in average realized gold and silver prices, respectively, and higher gold and silver ounces sold (1% and 9%, respectively), and a reduction in operating costs at Silvertip due to the temporary suspension in 2020. Revenue for the nine months ended September 30, 2021 increased by $67.8 million, of which $48.3 million was the result of higher average realized gold and silver prices and $19.5 million was due to the higher volume of gold and silver sales. 42 Cash Provided by (Used in) Investing Activities Net cash used in investing activities in the three months ended September 30, 2021 was $72.3 million compared to $24.8 million in the three months ended September 30, 2020. Cash used in investing activities increased primarily due to construction activities related to POA 11 at Rochester and the potential expansion at Silvertip. The Company incurred capital expenditures of $71.3 million in the three months ended September 30, 2021 compared with $23.0 million in the three months ended September 30, 2020. Capital expenditures in the three months ended September 30, 2021 were primarily related to POA 11 construction activities at Rochester, potential expansion expenditures at Silvertip and underground development at Palmarejo and Kensington. Capital expenditures in the three months ended September 30, 2020 were primarily related to the commencement of POA 11 construction activities at Rochester and underground development at Palmarejo and Kensington. Net cash used in investing activities in the nine months ended September 30, 2021 was $204.4 million compared to $39.6 million in the nine months ended September 30, 2020. Cash used in investing activities increased primarily due to construction activities related to POA 11 at Rochester and the potential expansion at Silvertip in the current period and the impact of the net proceeds of $19.4 million from the sale of Metalla Common Shares in the comparable period of 2020. The Company incurred capital expenditures of $208.9 million in the nine months ended September 30, 2021 compared with $61.9 million in the nine months ended September 30, 2020. Capital expenditures in the nine months ended September 30, 2021 were primarily related to POA 11 construction activities at Rochester, potential expansion expenditures at Silvertip and underground development at Palmarejo and Kensington. Capital expenditures in the nine months ended September 30, 2020 were primarily related to POA 11 at Rochester, which commenced construction activities during the third quarter, and underground development at Palmarejo and Kensington. The Company has started to experience inflationary pressures, specifically with respect to building materials and fuel as well as overall tightness in the construction market related to capital projects, most notably the POA 11 project at Rochester and to operating costs company-wide. Cash Provided by (Used in) Financing Activities Net cash provided by financing activities in the three months ended September 30, 2021 was $12.0 million compared to net cash used in financing activities of $48.4 million in the three months ended September 30, 2020. During the three months ended September 30, 2021, the Company drew $20.0 million from the RCF. During the three months ended September 30, 2020, the Company repaid $40.0 million under the RCF. Net cash provided by financing activities in the nine months ended September 30, 2021 was $121.8 million compared to net cash used in financing activities of $20.6 million in the nine months ended September 30, 2020. During the nine months ended September 30, 2021, the Company received net proceeds of $367.5 million from the issuance of the 2029 Senior Notes, and drew $20.0 million from the RCF, partially offset by the tender and redemption of the 2024 Senior Notes for $238.3 million, including premiums. During the nine months ended September 30, 2020, the Company drew $20.0 million, net, from the RCF, and paid cash contingent consideration of $18.8 million associated with the Silvertip acquisition. The Company 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 POA 11 project in 2021 and 2022, and has an interest rate of 5.20%. Critical Accounting Policies and Accounting Developments Please see Note 2 -- Summary of Significant Accounting Policies contained in the 2020 10-K and in Note 2 - Summary of Significant Accounting Policies contained in this Report for the Company’s critical accounting policies and estimates. Other Liquidity Matters We believe that our liquidity and capital resources in the U.S. are adequate to fund our U.S. operations and corporate activities. The Company has asserted indefinite reinvestment of earnings from its Mexican operations as determined by management’s judgment about and intentions concerning the future operations of the Company. The Company does not believe that the amounts reinvested will have a material impact on liquidity. In order to reduce indebtedness, future cash interest payments and/or amounts due at maturity or upon redemption and for general working capital purposes, from time-to-time we may (1) issue equity securities for cash in public or private offerings or (2) repurchase certain of our debt securities for cash or in exchange for other securities, which may include secured or unsecured notes or equity, in each case in open market or privately negotiated transactions. We evaluate any such transactions in light of prevailing market conditions, liquidity requirements, contractual restrictions, and other factors. The 43 amounts involved may be significant and any debt repurchase transactions may occur at a substantial discount to the debt securities’ face amount. Non-GAAP Financial Performance Measures Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles (“GAAP”). Unless otherwise noted, we present the Non-GAAP financial measures in the tables below. These measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP. Adjusted Net Income (Loss) Management uses Adjusted net income (loss) to evaluate the Company’s operating performance, and to plan and forecast its operations. The Company believes the use of Adjusted net income (loss) reflects the underlying operating performance of our core mining business and allows investors and analysts to compare results of the Company to similar results of other mining companies. Management’s determination of the components of Adjusted net income (loss ) are evaluated periodically and is based, in part, on a review of non-GAAP financial measures used by mining industry analysts. The tax effect of adjustments are based on statutory tax rates and the Company’s tax attributes, including the impact through the Company’s valuation allowance. The combined effective rate of tax adjustments may not be consistent with the statutory tax rates or the Company’s effective tax rate due to jurisdictional tax attributes and related valuation allowance impacts which may minimize the tax effect of certain adjustments and may not apply to gains and losses equally. Adjusted net income (loss) is reconciled to Net income (loss) in the following table: Three Months Ended September 30, Nine Months Ended September 30, In thousands except per share amounts 2021 2020 2021 2020 Net income (loss) $ (54,768) $ 26,856 $ (20,562) $ 13,747 Fair value adjustments, net 26,440 (2,243) (7,000) (3,491) Foreign exchange loss (gain) 388 1,233 1,849 (4,761) (Gain) loss on sale of assets and securities 92 2,476 (4,582) 2,093 VAT write-off 25,982 — 25,982 — Loss on debt extinguishment — — 9,172 — Silvertip inventory write-down 271 1,232 271 13,717 Wharf inventory write-down — — — 3,323 Silvertip temporary suspension costs — 838 — 6,073 Silvertip lease modification — — — (4,051) Silvertip gain on contingent consideration — — — (955) Novation — 3,819 — 3,819 COVID-19 costs 617 4,037 5,937 10,418 Tax effect of adjustments (1) (1,630) — (574) — Adjusted net income (loss) $ (2,608) $ 38,248 $ 10,493 $ 39,932 Adjusted net income (loss) per share - Basic $ (0.01) $ 0.16 $ 0.04 $ 0.17 Adjusted net income (loss) per share - Diluted $ (0.01) $ 0.16 $ 0.04 $ 0.17 (1) For the three and nine months ended September 30, 2021, tax effect of adjustments of $1.6 million (-3%) and $0.6 million (-2%) are primarily related to the fair value adjustments on the Company’s equity investments. EBITDA and Adjusted EBITDA Management uses EBITDA to evaluate the Company’s operating performance, to plan and forecast its operations, and assess leverage levels and liquidity measures. The Company believes the use of EBITDA reflects the underlying operating performance of our core mining business and allows investors and analysts to compare results of the Company to similar results of other mining companies. Adjusted EBITDA is a measure used in indenture governing the 2029 Senior Notes and the RCF to determine our ability to make certain payments and incur additional indebtedness. EBITDA and Adjusted EBITDA do not represent, and should not be considered an alternative to, Net income (Loss) or Cash Flow from Operations as determined under GAAP. Other companies may calculate Adjusted EBITDA differently and those calculations may not be comparable to our presentation. Adjusted EBITDA is reconciled to Net income (loss) in the following table: 44 Three Months Ended September 30, Nine Months Ended September 30, In thousands except per share amounts 2021 2020 2021 2020 Net income (loss) $ (54,768) $ 26,856 $ (20,562) $ 13,747 Interest expense, net of capitalized interest 3,237 5,096 13,240 15,989 Income tax provision (benefit) 6,400 13,113 34,526 12,018 Amortization 30,962 32,216 92,872 96,254 EBITDA (14,169) 77,281 120,076 138,008 Fair value adjustments, net 26,440 (2,243) (7,000) (3,491) Foreign exchange (gain) loss 1,028 599 2,299 665 Asset retirement obligation accretion 3,027 2,968 8,898 8,724 Inventory adjustments and write-downs 5,519 (230) 6,358 1,038 (Gain) loss on sale of assets and securities 92 2,476 (4,582) 2,093 VAT write-off 25,982 — 25,982 — Loss on debt extinguishment — — 9,172 — Silvertip inventory write-down 271 1,232 271 13,717 Silvertip temporary suspension costs — 838 — 6,073 Silvertip lease modification — — — (4,051) Silvertip gain on contingent consideration — — — (955) COVID-19 costs 617 4,037 5,937 10,418 Wharf inventory write-down — — — 3,323 Adjusted EBITDA $ 48,807 $ 90,777 $ 167,411 $ 179,381 Free Cash Flow Management uses Free Cash Flow as a non-GAAP measure to analyze cash flows generated from operations. Free Cash Flow is Cash Provided By (used in) Operating Activities less Capital expenditures as presented on the Consolidated Statements of Cash Flows. The Company believes Free Cash Flow is also useful as one of the bases for comparing the Company’s performance with its competitors. Although Free Cash Flow and similar measures are frequently used as measures of cash flows generated from operations by other companies, the Company’s calculation of Free Cash Flow is not necessarily comparable to such other similarly titled captions of other companies. The following table sets forth a reconciliation of Free Cash Flow, a non-GAAP financial measure, to Cash Provided By (used in) Operating Activities , which the Company believes to be the GAAP financial measure most directly comparable to Free Cash Flow. Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2021 2020 2021 2020 Cash flow from operations $ 21,846 $ 79,464 $ 75,546 $ 81,420 Capital expenditures 71,266 22,996 208,913 61,886 Free cash flow $ (49,420) $ 56,468 $ (133,367) 19,534 Operating Cash Flow Before Changes in Working Capital Management uses Operating Cash Flow Before Changes in Working Capital as a non-GAAP measure to analyze cash flows generated from operations. Operating Cash Flow Before Changes in Working Capital is Cash Provided By (used in) Operating Activities excluding the change in Receivables , Prepaid expenses and other , Inventories and Accounts payable and accrued liabilities as presented on the Consolidated Statements of Cash Flows. The Company believes Operating Cash Flow Before Changes in Working Capital is also useful as one of the bases for comparing the Company’s performance with its competitors. Although Operating Cash Flow Before Changes in Working Capital and similar measures are frequently used as measures of cash flows generated from operations by other companies, the Company’s calculation of Operating Cash Flow Before Changes in Working Capital is not necessarily comparable to such other similarly titled captions of other companies. 45 The following table sets forth a reconciliation of Operating Cash Flow Before Changes in Working Capital, a non-GAAP financial measure, to Cash Provided By (used in) Operating Activities , which the Company believes to be the GAAP financial measure most directly comparable to Operating Cash Flow Before Changes in Working Capital. Three Months Ended September 30, Nine Months Ended September 30, (Dollars in thousands) 2021 2020 2021 2020 Cash provided by (used in) operating activities $ 21,846 $ 79,464 $ 75,546 $ 81,420 Changes in operating assets and liabilities: Receivables 944 1,536 (1,016) 2,349 Prepaid expenses and other 80 (1,081) (593) (735) Inventories 3,820 8,056 18,047 29,981 Accounts payable and accrued liabilities 8,114 (2,047) 15,842 13,004 Operating cash flow before changes in working capital $ 34,804 $ 85,928 $ 107,826 $ 126,019 Costs Applicable to Sales Management uses CAS to evaluate the Company’s current operating performance and life of mine performance from discovery through reclamation. We believe these measures assist analysts, investors and other stakeholders in understanding the costs associated with producing gold, silver, zinc and lead, assessing our operating performance and ability to generate free cash flow from operations and sustaining production. These measures may not be indicative of operating profit or cash flow from operations as determined under GAAP. Management believes that allocating CAS to gold, silver, zinc and lead based on gold, silver, zinc and lead metal sales relative to total metal sales best allows management, analysts, investors and other stakeholders to evaluate the operating performance of the Company. Other companies may calculate CAS differently as a result of reflecting the benefit from selling non-silver metals as a by-product credit, converting to silver equivalent ounces, and differences in underlying accounting principles and accounting frameworks such as in International Financial Reporting Standards. Three Months Ended September 30, 2021 In thousands (except metal sales, per ounce and per pound amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $ 47,763 $ 36,340 $ 47,362 $ 32,237 $ 1,258 $ 164,960 Amortization (8,747) (4,671) (12,786) (3,158) (1,258) (30,620) Costs applicable to sales $ 39,016 $ 31,669 $ 34,576 $ 29,079 $ — $ 134,340 Metal Sales Gold ounces 24,897 5,559 29,902 29,446 89,804 Silver ounces 1,714,617 758,214 18,172 — 2,491,003 Zinc pounds — — Lead pounds — — Costs applicable to sales Gold ($/oz) $ 705 $ 1,994 $ 1,156 $ 973 Silver ($/oz) $ 12.52 $ 27.15 $ — Zinc ($/lb) $ — Lead ($/lb) $ — 46 Three Months Ended September 30, 2020 In thousands (except metal sales, per ounce and per pound amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $ 46,163 $ 22,382 $ 43,053 $ 31,887 $ 1,185 $ 144,670 Amortization (11,912) (3,278) (11,523) (4,000) (1,185) (31,898) Costs applicable to sales $ 34,251 $ 19,104 $ 31,530 $ 27,887 $ — $ 112,772 Metal Sales Gold ounces 27,252 6,834 27,815 33,382 95,283 Silver ounces 1,765,371 785,887 40,521 — 2,591,779 Zinc pounds — — Lead pounds — — Costs applicable to sales Gold ($/oz) $ 603 $ 1,118 $ 1,134 $ 805 Silver ($/oz) $ 10.09 $ 14.58 $ — Zinc ($/lb) $ — Lead ($/lb) $ — Nine Months Ended September 30, 2021 In thousands (except metal sales, per ounce and per pound amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $ 140,999 $ 108,487 $ 134,114 $ 79,881 $ 3,529 $ 467,010 Amortization (26,077) (14,754) (38,941) (8,627) (3,529) (91,928) Costs applicable to sales $ 114,922 $ 93,733 $ 95,173 $ 71,254 $ — $ 375,082 Metal Sales Gold ounces 81,100 20,311 88,293 71,713 261,417 Silver ounces 4,991,932 2,441,429 76,048 — 7,509,409 Zinc pounds — — Lead pounds — — Costs applicable to sales Gold ($/oz) $ 666 $ 1,707 $ 1,078 $ 966 Silver ($/oz) $ 12.20 $ 24.19 $ — Zinc ($/lb) $ — Lead ($/lb) $ — Nine Months Ended September 30, 2020 In thousands (except metal sales, per ounce and per pound amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $ 121,407 $ 63,590 $ 128,717 $ 77,807 $ 25,418 $ 416,939 Amortization (32,357) (9,194) (36,298) (9,625) (7,761) (95,235) Costs applicable to sales $ 89,050 $ 54,396 $ 92,419 $ 68,182 $ 17,657 $ 321,704 Metal Sales Gold ounces 75,463 17,585 92,963 72,840 258,851 Silver ounces 4,534,802 2,141,803 77,996 158,984 6,913,585 Zinc pounds 3,203,446 3,203,446 Lead pounds 2,453,485 2,453,485 Costs applicable to sales Gold ($/oz) $ 637 $ 1,299 $ 994 $ 914 Silver ($/oz) $ 9.03 $ 14.73 NM (1) Zinc ($/lb) NM (1) Lead ($/lb) NM (1) (1) Due to the temporary suspension of mining and processing activities these amounts are not meaningful. 47 Cautionary Statement Concerning Forward-Looking Statements This report contains numerous forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) relating to the Company’s gold, silver, zinc and lead mining business, including statements regarding operations at the Company’s mines, exploration and development efforts, strategies, expectations regarding the Rochester POA 11 expansion project, the Silvertip mine's potential expansion and restart, supply and labor disruption, inflation, expectations regarding the sale of the La Preciosa project, COVID-19 planning, response and mitigation efforts, hedging strategies, realization of deferred tax assets, expectations about the recovery of VAT in Mexico, timing of completion of obligations under the Amended Sales Contract at Kensington, liquidity management, financing plans, risk management strategies, capital allocation and anticipated production, costs, and expenses. Such forward-looking statements are identified by the use of words such as “believes,” “intends,” “expects,” “hopes,” “may,” “should,” “plan,” “projected,” “contemplates,” “anticipates” or similar words. Actual results could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ materially from those projected in the forward-looking statements include (i) the risk factors set forth in Part II, Item 1A of this report and in “Risk Factors” section of the 2020 10-K, and the risks set forth in this MD&A and Item 3 of this report, (ii) the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), (iii) changes in the market prices of gold, silver, zinc and lead and a sustained lower price or higher treatment and refining charge environment, (iv) the uncertainties inherent in the Company’s production, exploratory and developmental activities, including risks relating to permitting and regulatory delays (including the impact of government shutdowns), ground conditions and grade variability, (v) any future labor disputes or work stoppages (involving the Company and its subsidiaries or third parties), (vi) the uncertainties inherent in the estimation of mineral reserves and mineralized material, (vii) changes that could result from the Company’s future acquisition of new mining properties or businesses, (viii) the loss of access to any third-party smelter to whom the Company markets its production, (ix) the potential effects of the COVID-19 pandemic, including impacts to workforce, equipment and materials availability, inflationary pressures, continued access to financing sources, government orders that may require temporary suspension of operations at one or more of our sites and effects on our suppliers or the refiners and smelters to whom the Company markets its production, (x) the effects of environmental and other governmental regulations, (xi) the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, and (xii) the Company’s ability to raise additional financing necessary to conduct its business, make payments or refinance its debt. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.