What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-16 compared with 2021-02-17 · 243 added, 253 removed, 516 unchanged (49% of the section changed)

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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.

We provide Costs applicable to sales (“CAS”) allocation, 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.

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.

We are primarily a gold and silver producer with assets located in the United States, Canada and Mexico

2021 Highlights

For the full year, Coeur reported revenue of $785.5 million and cash flow from operating activities of $148.7 million.

We reported GAAP net income from continuing operations of $25.6 million, or $0.11 per diluted share.

On an adjusted basis 1 , the Company reported EBITDA of $263.4 million and net income from continuing operations of $59.0 million, or $0.24 per diluted share.

• Strong second half drove solid full-year 2020 financial results - Revenue, operating cash flow and adjusted EBITDA 1 increased 10%, 62% and 51%, respectively, in 2020.

Additionally, we generated $49.4 million of free cash flow 1 during the year.

These notable year-over-year improvements reflect strong operational performance and the benefit of higher precious metals prices during the second half of 2020

• Solid production in-line with full-year guidance ranges - Coeur successfully achieved its consolidated and site-level production guidance for both gold and silver.

Gold production in the fourth quarter remained strong at 96,377 ounces, bringing the full-year total to 355,678 ounces.

Silver production increased 11% quarter-over-quarter to approximately 2.8 million ounces, largely due to a 38% improvement at Rochester, which helped to drive full-year production to roughly 9.7 million ounces

• Maintained cost and capital discipline - Substantially all of our site-level unit costs were below or within full-year guidance ranges, reflecting prudent cost management during 2020.

Additionally, consolidated figures for capital expenditures, exploration, and general and administrative expenses were also below or within full-year guidance ranges

• Rochester expansion project expected to reposition operation as cornerstone asset - Late in the fourth quarter, Coeur published an updated technical report for its Rochester mine in Nevada which reflects significant reserve growth and the benefits of a larger-scale expansion project.

The 18-year, reserve-based mine plan has an expected after-tax net asset value of $634 million with an anticipated internal rate of return of 31%

• Largest exploration program in Company history led to strong reserve growth - We completed the largest exploration program in its history during 2020, increasing its investment by 68% to $50.6 million and drilling approximately 783,200 feet (238,700 meters).

Proven and probable gold and silver reserves increased 22% and 42%, respectively, while measured and indicated mineralized material were higher across all metals for the second consecutive year.

Additionally, strong drilling results at Silvertip helped to significantly expand zinc and lead mineralized material, marking the largest and most successful exploration program in the history of the project

• C ontinued enhancing balance sheet and increasing financial flexibility - Coeur ended the year with $92.8 million of cash and cash equivalents, 20% and 67% higher quarter-over-quarter and year-over-year, respectively.

The Company also increased the aggregate capacity of the RCF from $250.0 million to $300.0 million and repaid the remaining outstanding borrowings under the facility.

Total debt 3 at the end of the year was $275.5 million, compared to $295.5 million at the end of 2019

For full year 2021, Coeur reported revenue of $832.8 million and cash flow from operating activities of $110.5 million.

We reported GAAP net loss of $31.3 million, or $0.13 per diluted share.

On an adjusted basis 1 , the Company reported EBITDA of $210.8 million and net loss of $1.4 million or $0.01 per diluted share.

• Solid fourth quarter production growth led to full-year production within guidance ranges – Gold and silver production increased 2% and 6% quarter-over-quarter, respectively, to 88,946 ounces and 2.6 million ounces.

Full-year gold and silver production totaled 348,529 ounces and 10.1 million ounces, respectively, within the Company’s consolidated production guidance range for both metals

• Strong cost performance from primary gold operations – Full-year costs applicable to sales 1 at Palmarejo, Kensington and Wharf were within their guidance ranges for 2021 despite inflationary cost headwinds, leading to strong free cash flow 1 at each of these primary gold operations.

During 2021, gold sales represented 70% of the Company’s total revenue

• Largest exploration program in Company history extended mine lives and drove resource growth – Coeur increased total exploration investment 41% year-over-year to $71 million in 2021, bringing its five-year cumulative investment in exploration to nearly $240 million, which has led to significant increases in reserves and resources.

From the 2021 program, mine life extensions at Palmarejo and Wharf as well as significant resource additions at Silvertip and Kensington continue to lay the foundation for future organic growth

• Updated capital and schedule estimates for Rochester expansion provide clarity – The Company estimates the total capital for the Plan of Operations Amendment 11 (“POA 11”) will be approximately $520 million, which is in-line with recent updates.

Approximately $236 million has been incurred on the project as of December 31, 2021.

In addition, Coeur estimates the cost to incorporate pre-screens into the new crusher circuit and associated re-assessment of project contingency to be approximately $70 - $80 million.

Construction is expected to be completed mid-2023 with commissioning to follow.

Post-expansion, full-year production is expected to average roughly 8 million ounces of silver and 76,250 ounces of gold with average free cash flow 1 of $90 million from 2024 to 2034 4

• Silvertip trade-off study underway – The Company commenced work to assess the economics of a potential larger expansion and restart of its high-grade Silvertip silver-zinc-lead property in British Columbia.

The review is evaluating the potential to target a higher throughput to take advantage of the significant resource growth and on a timetable that would sequence an expansion and restart following completion and commissioning of the Rochester expansion.

Results from this ongoing work are expected by the end of the year

• Initial Technical Report Summaries filed under new SEC rules confirm strength and stability of Coeur’s multi-asset portfolio – The Company today filed initial Technical Report Summaries pursuant to Item 1300 of SEC Regulation S-K.

Highlights from the reports include reserve-only based mine lives of 8 years at Palmarejo, 13 years at Rochester, 3 years at Kensington and 8 years at Wharf

Selected Financial and Operating Results

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In thousands 2021 2020 2019

Financial Results from Continuing Operations:

Financial Results:

Gold sales $ 578,911 $ 584,633 $ 493,347

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$ 487,501 $ 275,501 $ 295,497

Operating Results from Continuing Operations:

Operating Results:

Gold ounces produced 348,529 355,678 359,418

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Average realized price per silver ounce $ 25.06 $ 20.79 $ 16.07

Average realized price per zinc pound, gross NM (3)

$ 0.71 $ 0.83

Average realized price per lead pound, gross NM (3)

$ 0.84 $ 0.80

Financial and Operating Results from Discontinued Operations:

Income (loss) from discontinued operations $ — $ 5,693 $ 550

Silver ounces produced — — 643,078

Gold ounces produced — — 78

Silver ounces sold — — 704,479

Gold ounces sold — — 292

Average realized price per zinc pound, gross (3)

Average realized price per lead pound, gross (3)

(1) See “Non-GAAP Financial Performance Measures.”

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Net of debt issuance costs and premium received.

(3) Due to the temporary suspension of mining and processing activities at Silvertip these amounts are not meaningful.

(3) Due to the suspension of mining and processing activities these amounts are not meaningful.

(4) Additional details for Rochester can be found in the Technical Report Summary filed by the Company with the U.S.

Securities and Exchange Commission on February 16, 2022 which is incorporated by reference into this Report.

Consolidated Financial Results

Year Ended December 31, 2021 compared to Year Ended December 31, 2020

Revenue increased by $74.0 million or 10%, as a result of a 22% and 29% increase in average realized gold and silver prices, respectively, partially offset by lower gold and silver ounces sold (3% and 19%, respectively), recovery delays at Rochester and the temporary suspension of mining and processing activities at Silvertip in February.

We sold 356,251 gold ounces, 9.6 million silver ounces, 3.2 million zinc pounds and 2.5 million lead pounds compared to 367,650 gold ounces, 11.9 million silver ounces, 18.2 million zinc pounds and 16.5 million lead pounds in the prior year.

Gold and silver accounted for 74% and 25% of 2020 sales revenue, respectively, with zinc and lead accounting for the remaining sales revenue.

This compares to gold and silver accounting for 69% and 27% of 2019 sales revenue.

We sold 350,347 gold ounces and 10.1 million silver ounces, compared to 356,251 gold ounces, 9.6 million silver ounces, 3.2 million zinc pounds and 2.5 million lead pounds in the prior year.

Revenue increased by $47.4 million, or 6%, as a result of a 1% and 21% increase in average realized gold and silver prices, respectively, and higher silver ounces sold (5%), partially offset by lower gold ounces sold (2%).

The increase in silver ounces sold was primarily due to higher mill throughput at Palmarejo.

Gold and silver accounted for 70% and 30% of 2021 sales revenue, respectively.

This compares to gold and silver accounting for 74% and 25% of 2020 sales revenue, respectively, with zinc and lead accounting for the remaining 2020 sales revenue.

The following table summarizes consolidated metal sales:

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Costs Applicable to Sales

Costs applicable to sales decreased primarily due to the temporary suspension at Silvertip and lower ounces sold at Palmarejo and Rochester.

Costs applicable to sales increased $71.2 million, or 16%, primarily due to inflationary pressures related to employee-related, maintenance and consumable costs at all operating sites, higher silver ounces sold primarily at Palmarejo, the Rochester fourth quarter lower of cost or net realizable value (“LCM”) adjustment of $7.3 million, partially offset by the $13.8 million favorable impact from foreign currency hedges.

For a complete discussion of costs applicable to sales, see Results of Operations below.

Amortization decreased $47.5 million, or 27%, primarily due to the temporary suspension at Silvertip, and longer assumed mine life based on year-end 2019 reserve growth at Palmarejo and lower ounces sold at Palmarejo and Rochester.

General and administrative expenses decreased $0.8 million, or 2%, primarily due to lower travel costs.

Exploration expense increased $20.1 million, or 89%, as a result of the decision to implement the largest drilling program in Company history.

The Company completed 617,500 feet (188,225 meters) of expansion drilling and 165,700 feet (50,475 meters) of infill drilling in 2020 compared to 342,500 (104,425 meters) of expansion drilling and 181,600 feet (55,350 meters) of infill drilling in 2019.

Pre-development, reclamation, and other expenses increased $37.2 million, or 202%, stemming from ongoing carrying and temporary suspension costs at Silvertip and incremental costs incurred to comply with the Company’s COVID-19 health and safety protocols, partially offset by a gain resulting from the modification of a right of use lease at Silvertip.

Amortization decreased $3.1 million, or 2%, primarily due to longer assumed mine life based on year-end 2020 mineral reserve growth, partially offset by higher silver ounces sold.

General and administrative expenses increased $6.7 million, or 20%, primarily due to higher compensation, travel and outside service costs.

Exploration expense increased $8.5 million, or 20%, 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 746,900 feet (227,650 meters) of expansion drilling and 417,200 feet (127,175 meters) of infill drilling in 2021 compared to 617,500 feet (188,225 meters) of expansion drilling and 165,700 feet (50,475 meters) of infill drilling in 2020.

Pre-development, reclamation, and other expenses decreased $7.0 million, or 13%, stemming from lower costs incurred in connection with the Company’s COVID-19 health and safety protocols, partially offset by full-year ongoing carrying costs and absence of one-time 2020 costs associated with the suspension of mining and processing activities at Silvertip.

The following table summarizes pre-development, reclamation, and other expenses:

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Silvertip ongoing carrying costs 24,928 16,384 8,544 52 %

Silvertip temporary suspension costs 11,199 — 11,199 100 %

Silvertip suspension costs — 11,199 (11,199) (100) %

Gain on modification of right of use lease — (4,051) 4,051 (100) %

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Other Income and Expenses

Fair value adjustments, net, decreased to a gain of $7.6 million compared to $16.0 million as a result of changes in value related to the Company’s equity investments, primarily Integra Resources Corp.

("Integra Resources") and Metalla Royalty & Streaming Ltd.

("Metalla"), which had estimated fair values of $11.9 million and $1.0 million, respectively, at December 31, 2020.

Interest expense (net of capitalized interest of $1.5 million) decreased to $20.7 million from $24.8 million due to a lower interest rate paid under the RCF and lower average balances of both the RCF and 2024 Senior Notes.

Other, net increased to a loss of $5.9 million compared to a loss of $3.2 million due to an increase in losses on the sale of assets and a one-time fee of $3.8 million related to the novation of certain of the Company’s gold zero cost collars, partially offset by a reduction in foreign exchange losses.

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, decreased to a loss of $0.5 million compared to a gain of $7.6 million as a result of a reduction in value of the Company’s equity investments.

The estimated fair values of the Company’s equity investments in Victoria Gold Corp.

and Integra Resources Corp.

(“Integra Resources”) were $124.2 million and $8.0 million, respectively, at December 31, 2021.

Interest expense (net of capitalized interest of $11.1 million) decreased to $16.5 million from $20.7 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 $22.9 million compared to $5.9 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 20 -- Commitments and Contingencies.

Income and Mining Taxes

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Income and mining tax expense of approximately $35.0 million resulted in an effective tax rate of 961.4% for 2021.

This compares to income tax benefit of $11.1 million or effective tax rate of 3.1% for 2019.

This compares to income tax expense of $37.0 million or effective tax rate of 59.1% 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) 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;

(v) percentage depletion;

(vi) the non-recognition of tax assets;

and (vii) the impact of uncertain tax positions.

(v) percentage depletion (vi) the impact of uncertain tax positions;

and (vii) the non-recognition of tax assets.

Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period.

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There are a number of factors that impact the Company’s ability to realize its deferred tax assets.

For additional information, please see the section titled “Risk Factors” included in Item 1A.

Net Income (Loss) from Continuing Operations

Net income from continuing operations was $25.6 million, or $0.11 per diluted share, compared to net loss of $346.9 million, or $1.59 per share.

The increase in net income from continuing operations was driven by strong operating results at Wharf and Palmarejo, a 22% and 29% increase in average realized gold and silver prices, respectively, lower operating costs at Rochester and Silvertip, and an impairment of long-lived assets at Silvertip of $250.8 million in 2019.

This was partially offset by lower sales of gold and silver (3% and 19%, respectively), higher exploration expense, ongoing carrying and severance costs at Silvertip and incremental costs associated with the Company’s COVID-19 health and safety protocols.

Adjusted net income was $59.0 million, or $0.24 per diluted share, compared to adjusted net loss of $54.6 million, or $0.25 per share (see “Non-GAAP Financial Performance Measures”).

For additional information, please see “Item 1A - Risk Factors” in the 2021 10-K.

Net Income (Loss)

Net loss was $31.3 million, or $0.13 per diluted share, compared to net income of $25.6 million, or $0.11 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 and higher income and mining taxes.

This was partially offset by a 1% and 21% increase in average realized gold and silver prices, respectively and higher silver ounces sold (5%).

Adjusted net loss was $1.4 million, or $0.01 per diluted share, compared to an adjusted net income of $59.0 million, or $0.24 per share (see “Non-GAAP Financial Performance Measures”).

Year Ended December 31, 2020 compared to Year Ended December 31, 2019

Revenue increased by $85.6 million as a result of a 5% increase in gold ounces sold, combined with a 10% increase in average realized gold prices and the inclusion of full-year sales from the Jualin deposit at Kensington and Silvertip, partially offset by 4% fewer silver ounces sold.

The Company sold 367,650 gold ounces, 11.9 million silver ounces, 18.2 million zinc pounds and 16.5 million lead pounds compared to 350,508 gold ounces, 12.4 million silver ounces, 4.4 million zinc lead pounds and 2.6 million lead pounds in the prior year.

Gold contributed 69% of sales, silver contributed 27%, zinc contributed 2% and lead contributed 2%, compared to 68% of sales from gold, 31% from silver, 1% from zinc and less than 1% from lead.

Revenue increased by $74.0 million or 10%, as a result of a 22% and 29% increase in average realized gold and silver prices, respectively, partially offset by lower gold and silver ounces sold (3% and 19%, respectively), recovery delays at Rochester and the suspension of mining and processing activities at Silvertip in February.

Gold and silver accounted for 74% and 25% of 2020 sales revenue, respectively, with zinc and lead accounting for the remaining sales revenue.

This compares to gold and silver accounting for 69% and 27% of 2019 sales revenue.

The following table summarizes consolidated metal sales:

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Costs Applicable to Sales

Costs applicable to sales increased primarily due to higher sales volume at Kensington, the inclusion of full-year sales from the Jualin deposit at Kensington and Silvertip, a $64.6 million write-down of inventory at Silvertip and higher unit costs at Palmarejo, Rochester and Wharf, primarily due to lower production.

Costs applicable to sales decreased primarily due to the suspension at Silvertip and lower ounces sold at Palmarejo and Rochester.

For a complete discussion of costs applicable to sales, see Results of Operations below.

Amortization increased $50.4 million, or 39%, resulting from the inclusion of full-year sales at Silvertip and higher sales at Kensington.

General and administrative expenses increased $3.1 million, or 10%, primarily due to higher employee related expenses and legal fees.

Exploration expense decreased $2.9 million, or 11%, as a result of lower near-mine exploration costs at Palmarejo, Kensington and Silvertip as well as lower greenfields explorations expense in the United States and Mexico, partially offset by exploration expense at the Sterling/Crown project located in southern Nevada.

The Company completed 342,500 (104,425 meters) of expansion drilling and 181,600 feet (55,350 meters) of infill drilling in 2019 compared to 342,100 feet (104,275 meters) of expansion drilling and 349,675 feet (106,575 meters) of infill drilling in 2018.

Pre-development, reclamation, and other expenses decreased $1.6 million, or 8%, stemming from a $3.4 million write-down of property, plant and equipment at Rochester in 2018.

Impairment of long-lived assets totaled $250.8 million in 2019.

During the fourth quarter of 2019, the Company performed a comprehensive analysis of its Silvertip property and determined that indicators of impairment existed, primarily as a result of continued deterioration in zinc and lead market conditions as well as ongoing operating challenges primarily related to the processing facility.

As a result of the impairment indicators, a recoverability test was performed and the Company concluded that the carrying value of the long-lived assets for the Silvertip property was impaired.

Amortization decreased $47.5 million, or 27%, primarily due to the suspension at Silvertip, and longer assumed mine life based on year-end 2019 reserve growth at Palmarejo and lower ounces sold at Palmarejo and Rochester.

General and administrative expenses decreased $0.8 million, or 2%, primarily due to lower travel costs.

Exploration expense increased $20.1 million, or 89%, due to the Company’s multi-year exploration program.

Pre-development, reclamation, and other expenses increased $37.2 million, or 202%, stemming from ongoing carrying and suspension costs at Silvertip and incremental costs incurred to comply with the Company’s COVID-19 health and safety protocols, partially offset by a gain resulting from the modification of a right of use lease at Silvertip.

The following table summarizes pre-development, reclamation, and other expenses:

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In thousands 2020 2019

COVID-19 $ 15,555 $ — $ 15,555 100 %

Silvertip ongoing carrying costs 16,384 — 16,384 100 %

Silvertip suspension costs 11,199 — 11,199 100 %

Gain on modification of right of use lease (4,051) — (4,051) 100 %

Asset retirement accretion 11,754 12,154 (400) (3) %

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Other Income and Expenses

The Company incurred a $1.3 million loss in connection with the exchange of $20.0 million in aggregate principal amount of its 2024 Senior Notes (as defined in Note 12 -- Debt) for approximately 4.5 million shares of common stock.

Fair value adjustments, net, increased to a gain of $16.0 million from a gain of $3.6 million as a result of favorable fair value adjustments and realized gains related to the Company’s equity investment in Metalla, which has an estimated fair value of $28.2 million at December 31, 2019.

Interest expense (net of capitalized interest of $1.8 million) remained comparable at $24.8 million.

("Metalla"), which had estimated fair values of $11.9 million and $1.0 million, respectively, at December 31, 2020.

Income and Mining Taxes

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Income and mining tax (expense) benefit $ (37,045) $ 11,129

Income and mining tax benefit of approximately $11.1 million results in an effective tax rate of 3.1% for 2019.

Income and mining tax expense of approximately $37.0 million resulted in an effective tax rate of 59.1% for 2020.

This compares to income tax benefit of $11.1 million or effective tax rate of 3.1% for 2019.

The Company’s effective tax rate is impacted by multiple factors as illustrated above.

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) the non-recognition of tax assets;

(ii) mining taxes;

(iii) variations in our income before income taxes;

(iv) geographic distribution of that income and (v) foreign exchange rates.

(i) mining taxes;

(ii) variations in our income before income taxes;

(iii) geographic distribution of that income;

(iv) foreign exchange rates;

(v) percentage depletion;

(vi) the non-recognition of tax assets;

and (vii) the impact of uncertain tax positions.

Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period.

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$ 62,672 $ (37,045) $ (358,025) $ 11,129

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) the non-recognition of tax assets;

(ii) mining taxes;

(iii) variations in our income before income taxes;

(iv) geographic distribution of that income and (v) foreign exchange rates.

Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period.

A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized.

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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”.

For additional information, please see the section titled “Risk Factors” included in Item 1A.

Net Income (Loss) from Continuing Operations

Net loss from continuing operations was $346.9 million, or $1.59 per share, compared to net loss of $49.0 million, or $0.26 per share.

The decrease in net income from continuing operations was driven by an impairment of long-lived assets at Silvertip of $250.8 million, higher operating costs at Silvertip, which included a write-down of $64.6 million at Silvertip of metal inventory as a result of lower than expected production levels, and lower production at Rochester due to reduced placement rates caused by the planned commissioning of the new crusher configuration in the second half of 2019.

This was partially offset by favorable fair value adjustments and realized gains related to the Company’s equity investment in Metalla and strong operating results at Kensington.

Adjusted net loss was $54.6 million, or $0.25 per share, compared to $2.2 million, or $0.01 per share (see “Non-GAAP Financial Performance Measures”).

Net Income (loss) from Discontinued Operations

In respect of the San Bartolomé mine and processing facility’s (which was divested by the Company in February 2018, the “Manquiri Divestiture”) operating results, income increased $5.1 million.

In February 2019, the Company recorded an adjustment to the gain from the Manquiri Divestiture following the release of a liability associated with the Company’s post-closing indemnification obligations which were extinguished at that time.

Net income from continuing operations was $25.6 million, or $0.11 per diluted share, compared to net loss of $346.9 million, or $1.59 per share.

Adjusted net income was $59.0 million, or $0.24 per diluted share, compared to adjusted net loss of $54.6 million, or $0.25 per share (see “Non-GAAP Financial Performance Measures”).

2022 Guidance Framework

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General & Administrative Expenses $42 - $46

The Company’s guidance figures assume $1,850/oz gold and $24.00/oz silver as well as CAD of 1.27 and MXN of 19.50.

The Company’s guidance figures assume estimated prices of $1,800/oz gold and $24.00/oz silver as well as CAD of 1.25 and MXN of 20.00.

Guidance figures exclude the impact of any metal sales or foreign exchange hedges.

Results of Continuing Operations

Results of Operations

Year Ended December 31,

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Year Ended December 31, 2021 compared to Year Ended December 31, 2020

Gold production decreased 1% as a result of lower gold grade, partially offset by higher mill throughput and recoveries.

Silver production increased 9% as a result of higher mill throughput and recoveries, partially offset by lower silver grade.

Metal sales were $320.3 million, or 38% of Coeur’s metal sales, compared with $286.6 million, or 36% of Coeur’s metal sales.

Revenue for the year ended December 31, 2021 increased by $33.7 million or 12%, of which $23.9 million was due to higher average realized silver prices and $9.8 million was the result of a higher volume of silver sales.

Costs applicable to sales per gold and silver ounce increased 9% and 31%, respectively, due to the mix of gold and silver sales, and higher employee-related, maintenance and consumable costs largely due to inflationary pressures, partially offset by the favorable impact of foreign currency hedges ($13.8 million).

Amortization decreased to $36.1 million due to longer assumed mine life based on year-end 2020 mineral reserve growth.

Capital expenditures increased to $36.5 million from $25.0 million due to higher underground development and infill drilling activities.

Year Ended December 31, 2020 compared to Year Ended December 31, 2019

Gold and silver production decreased 1% and 7%, respectively, as a result of lower gold and silver grades, partially offset by higher gold and silver recovery.

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Metal sales were $286.6 million, or 36% of Coeur’s metal sales, compared with $252.7 million, or 36% of Coeur’s metal sales.

Revenue for the year ended December 31, 2020 increased by $33.9 million or 13%, of which $52.6 million was due to higher average realized gold and silver prices, partially offset by a decrease of $18.7 million due to a lower volume of gold and silver sales.

Costs applicable to sales per gold ounce decreased 11% while costs applicable to sales per silver ounce remained comparable due to higher revenue contribution from silver sales compared to gold.

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Capital expenditures decreased to $25.5 million from $32.7 million due to lower underground development and lower mining equipment expenditures.

Precious metals mining is considered an essential business activity in Mexico.

The Company is maintaining its rigorous health and safety protocols at Palmarejo aimed at limiting the exposure and transmission of COVID-19.

Year Ended December 31, 2019 compared to Year Ended December 31, 2018

Gold and silver production decreased 9% and 10% in line with Company guidance, respectively, resulting from lower gold and silver grades and lower gold and silver recoveries, partially offset by higher mined tons from Guadalupe, Independencia and the new La Nación underground mine, which began production in the third quarter of 2019.

Metal sales were $252.7 million, or 36% of Coeur’s metal sales, compared with $245.8 million, or 40% of Coeur’s metal sales.

Lower production and higher consumable costs resulted in a 22% and 20% increase in costs applicable to sales per gold and silver ounce, respectively.

Amortization decreased to $59.4 million due to lower ounces sold.

Capital expenditures increased to $32.7 million from $29.4 million due to higher infrastructure expenditures at La Nación.

Year ended December 31,

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Year Ended December 31, 2021 compared to Year Ended December 31, 2020

Gold and silver production decreased 23% and 16%, respectively, due to the impact of dilution from stacking high-pressure grinding roll (“HPGR”) crushed material on top of historic ore on the Stage IV leach pad and upset conditions in the Merrill-Crowe process plant due to higher-than-expected fine particulates in pregnant solution from ore placed on newly constructed inter-lift liners in the first nine months of 2020.

Gold and silver production remained comparable year over year.

Metal sales were $130.8 million, or 16% of Coeur’s metal sales, compared with $110.3 million, or 14% of Coeur’s metal sales.

Costs applicable to sales per gold and silver ounce increased 10% and 14%, respectively, driven by higher cyanide and outside service costs and a change in the Company’s recovery rate assumptions, in line with the updated technical report for Rochester filed in December 2020.

Amortization decreased to $14.3 million due to lower ounces sold.

Capital expenditures increased to $37.5 million from $22.6 million due to the commencement of construction activities related to POA 11.

Mining remains an essential business in Nevada.

The Company implemented and continues to maintain strong health and safety protocols, aimed at limiting the exposure to, and transmission of, COVID-19.

Revenue for the year ended December 31, 2021 increased by $20.6 million or 19%, of which $13.3 million was the result of higher average realized gold and silver prices and $7.3 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 54%, respectively, due to the mix of gold and silver sales, higher employee-related, maintenance and consumable costs partially due to inflationary pressures, and a LCM adjustment of $7.3 million.

Amortization increased to $20.2 million due to higher equipment depreciation from recently placed-in service assets and an LCM adjustment of $1.1 million in the fourth quarter.

Capital expenditures increased to $166.5 million from $37.5 million due to the commencement of construction activities related to POA 11 in August 2020.

In the second half of 2021 the Company began seeing inflationary pressures on bids for remaining unawarded contracts on the POA 11 expansion project at Rochester during the second half of 2021, most notably on two structural, mechanical, piping, electrical and instrumentation (“SMPEI”) construction contracts for the Merrill-Crowe process plant and crushing circuit, respectively.

Coeur recently selected the general SMPEI contractor for construction of the Merrill-Crowe process plant and crusher corridor based on a revised commercial approach from the previous lump-sum commercial model to a single contract.

SMPEI work under the initial contract is beginning to advance.

Coeur has also advanced work related to implementation of pre-screens as part of the POA 11 expansion project and has elected to proceed with this scope change enhancement.

As previously disclosed, the Company plans to integrate pre-screens into the current crushing system at Rochester, which is expected to drive improved performance while providing valuable operating experience and knowledge that can be applied to the new crushing circuit as part of the POA 11 expansion.

Coeur has commenced detailed engineering for pre-screens and intends to align construction of the pre-screens with the completion of the crusher corridor.

Installation of pre-screens on the existing crusher system is scheduled for the first half of 2022 with commissioning expected to begin around mid-year.

In connection with the items discussed above, the Company has conducted a comprehensive re-baselining of the overall schedule and costs associated with the original scope of POA 11.

Coeur now estimates the total construction capital for POA 11 to be approximately $597 million, which includes the 10-15% previously announced potential cost escalation as well as $70 - $80 million related to pre-screen implementation and additional project contingency to reflect ongoing COVID and schedule risk.

As of December 31, 2021, the Company has incurred approximately $236 million in the expansion and 61% of the capital is now committed (excluding the recently-awarded SMPEI contract, which is expected to be formalized in the first quarter).

Excluding capital leases, Coeur forecasts capital expenditures related to POA 11 to be approximately $217 - $257 million and $131 - $171 million in 2022 and 2023, respectively.

Additional details on expected production and capital expenditures for Rochester can be found in the Technical Report Summary filed by the Company with the U.S.

Securities and Exchange Commission on February 16, 2022 which is incorporated by reference into this Report.

Year Ended December 31, 2020 compared to Year Ended December 31, 2019

Gold and silver production decreased 35% and 25%, respectively, due to lower placement rates caused by the planned commissioning of the new crushing circuit in the second half of 2019, unplanned downtime, and lower gold and silver grades.

Metal sales were $110.3 million, or 14% of Coeur’s metal sales, compared with $112.0 million, or 16% of Coeur’s metal sales.

Costs applicable to sales per gold and silver ounce increased 33% and 24%, respectively, due to a one-time charge associated with the operation’s power costs, lower production and planned mining equipment maintenance, partially offset by lower crushing costs.

Revenue for the year ended December 31, 2020 decreased by $1.7 million or 2%, of which $33.8 million was the result of a lower volume of gold and silver sales, partially offset by an increase of $32.1 million due to higher average realized gold and silver prices.

Costs applicable to sales per gold and silver ounce increased 10% and 14%, respectively, driven by higher cyanide and outside service costs and a change in the Company’s recovery rate assumptions.

Amortization decreased to $14.3 million due to lower ounces sold.

Capital expenditures increased to $22.6 million from $9.9 million due to the commissioning of the new crushing circuit, including the HPGR unit, and POA 11 expansion related capital expenditures.

Capital expenditures increased to $37.5 million from $22.6 million due to the commencement of construction activities related to POA 11.

Year ended December 31,

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Year Ended December 31, 2021 compared to Year Ended December 31, 2020

Gold production decreased 3% as a result of lower grade and lower mill throughput.

Metal sales were $215.0 million, or 26% of Coeur’s metal sales, compared to $216.5 million, or 28% of Coeur’s metal sales.

Revenue for the year ended December 31, 2021 decreased by $1.5 million or 1%, of which $4.6 million resulted from lower volume of gold sales, partially offset by an increase of $3.1 million due to higher average realized gold prices.

Costs applicable to sales per gold ounce increased 11% due to lower production and higher employee-related, maintenance and consumable costs, partially due to inflationary pressures.

Amortization increased to $54.9 million primarily due to higher Jualin production, partially offset by lower ounces sold.

Capital expenditures increased to $27.5 million from $19.8 million due to higher infill drilling and underground development.

Year Ended December 31, 2020 compared to Year Ended December 31, 2019

Gold production decreased 2% as a result of processing lower grade ore and COVID-19 response efforts that temporarily impacted mine production in the first nine months of 2020.

Metal sales were $216.5 million, or 28% of Coeur’s metal sales, compared to $181.1 million, or 25% of Coeur’s metal sales.

Revenue for the year ended December 31, 2020 increased by $35.4 million or 20%, of which $45.3 million was due to higher average realized gold prices, partially offset by a decrease of $9.9 million due to a lower volume of gold sales.

Costs applicable to sales per gold ounce increased 6% due to lower production and higher compensation, outside service and maintenance costs, partially offset by lower diesel costs.

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Capital expenditures decreased to $19.8 million from $23.5 million due to lower underground development.

Mining continues to be considered an essential business in Alaska.

Rotational schedules remain extended from 14 days to 28 days in response to concerns related to COVID-19.

All employees are required to quarantine and undergo a testing protocol prior to starting their 21-day rotation.

Year Ended December 31, 2019 compared to Year Ended December 31, 2018

Gold production increased 21% due to higher ore feed from the high-grade Jualin deposit.

The Jualin ore feed, which drove the 17% increase in gold grade, together with lower contractor costs led to a 13% decrease in costs applicable to sales per gold ounce.

Metal sales were $181.1 million, or 25% of Coeur’s metal sales, compared to $132.9 million, or 21% of Coeur’s metal sales.

Amortization increased to $50.6 million due to a significantly higher number of ounces sold.

Capital expenditures decreased to $23.5 million from $44.7 million due to lower underground development at Kensington, Jualin and Raven, infill drilling and mining equipment expenditures.

Year ended December 31,

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Year Ended December 31, 2021 compared to Year Ended December 31, 2020

Gold production increased 11% driven by higher grade.

Gold production decreased 2% driven by the timing of recoveries.

Metal sales were $166.7 million, or 20% of Coeur’s metal sales, compared to $170.2 million, or 22% of Coeur’s metal sales.

Costs applicable to sales per gold ounce decreased 2% due to higher production and lower diesel costs.

Amortization increased to $12.5 million due to higher ounces sold.

Capital expenditures were $2.4 million.

South Dakota’s public order mandating the closure of all public-facing businesses does not include Wharf.

The Company implemented and continues to maintain strong health and safety protocols aimed at limiting exposure to, and transmission of, COVID-19 at Wharf.

Revenue for the year ended December 31, 2021 decreased by $3.5 million or 2%, of which $5.6 million resulted from a lower volume of gold sales, partially offset by an increase of $2.1 million due to higher average realized gold and silver prices.

Costs applicable to sales per gold ounce increased 8% due to higher equipment rental, diesel and employee-related costs partially due to inflationary pressures.

Amortization decreased to $11.0 million due to lower ounces sold.

Capital expenditures were $8.1 million reflecting $4.0 million of infill drilling.

Year Ended December 31, 2020 compared to Year Ended December 31, 2019

Gold production increased 10% largely driven by the stacking of higher-grade ore, partially offset by the impact of inclement weather, which diluted leach pad solutions, during the first half of 2019.

Gold production increased 11% driven by higher grade.

Metal sales were $170.2 million, or 22% of Coeur’s metal sales, compared to $121.4 million, or 17% of Coeur’s metal sales.

Costs applicable to sales per gold ounce increased 7% due to a $3.6 million inventory write-down related to lower expected recoveries from leach pad 1 and higher processing costs during the first half of 2019.

Revenue for the year ended December 31, 2020 increased by $48.8 million or 40%, of which $31.1 million was due to higher average realized gold and silver prices and $17.7 million was the result of a higher volume of gold and silver sales.

Costs applicable to sales per gold ounce decreased 2% due to higher production and lower diesel costs.

Amortization increased to $12.5 million due to higher ounces sold.

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Year Ended December 31,

2021 2020 (1)

Silver ounces produced — 139,287 1,161,926

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Costs applicable to sales per silver ounce (2)

$ 31.92 $ 55.91

Costs applicable to sales per zinc pound (2)

$ 2.34 $ 3.34

Costs applicable to sales per lead ounce (2)

$ 1.76 $ 3.23

(1) Operational results in the table above reflect performance prior to the temporary suspension of mining and processing activities in February 2020.

(1) Due to the suspension of mining and processing activities these amounts are not meaningful.

(2) See Non-GAAP Financial Performance Measures.

(3) Due to the temporary suspension of mining and processing activities these amounts are not meaningful.

Year Ended December 31, 2020 compared to Year Ended December 31, 2019

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 advance its pre-feasibility work for Silvertip.

Notably, the Company developed a new flowsheet that would help support a potential expansion to a throughput rate of 1,750 tonnes per day.

The Company is now progressing the project through a more comprehensive front-end engineering and design phase, focusing on advancing engineering through detailed design to further de-risk capital estimates and enhance schedule certainty with respect to a potential restart or increase certainty for project delivery.

Mining is considered an essential service in the Province of British Columbia.

The Company implemented and continues to maintain strong health and safety protocols, aimed at limiting the exposure to, and transmission of, COVID-19 at the site and in the surrounding communities.

Year Ended December 31, 2019 compared to Year Ended December 31, 2018

Metal sales were $44.3 million compared to $8.9 million.

Costs applicable to sales per ounce were impacted by a $64.6 million write-down of metal inventory as a result of higher than expected maintenance costs and lower than expected production levels, grades and recovery rates.

As a result of the impairment indicators, a recoverability test was performed and the Company concluded that the carrying value of the long-lived assets for the Silvertip property was impaired.

A non-cash impairment charge of $250.8 million was recorded during the fourth quarter of 2019.

Amortization was $36.7 million.

Capital expenditures decreased to $17.5 million from $52.9 million due to preproduction capitalization, construction of the 220-person camp in 2018 and lower conversion drilling in 2019.

Year Ended December 31, 2021

Silvertip suspended mining and processing activities, unrelated to COVID-19, in February 2020.

Operational results in the table above reflected performance prior to the suspension.

Ongoing carrying and suspension costs are included in Pre-development, reclamation, and other.

Coeur continues to generate positive results from ongoing exploration as the Company evaluates various opportunities to enhance the economics of a potential expansion and restart of Silvertip.

The Company received preliminary capital estimates for an accelerated expansion and restart in late 2021, which were higher than originally anticipated and reflect overall inflationary pressures as well as supply disruptions and labor market tightness consistent with broader macroeconomic themes.

Capital expenditures increased to $70.1 million from $13.1 million due to planned early civil works construction, higher infill drilling and underground development.

For 2022, capital expenditures are expected to be approximately $15 - 25 million, primarily focusing on the economics of a potential expansion, including study work to evaluate additional opportunities to enhance and restart and as well as continued underground development and infill drilling at the mine.

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 mineral resources mined, and 1.00% thereafter for $7.0 million.

Liquidity and Capital Resources

At December 31, 2020, the Company had $94.2 million of cash, cash equivalents and restricted cash and $265.0 million available under its revolving credit facility (“RCF”).

Cash and cash equivalents increased $37.1 million in the year ended December 31, 2020, due to a 22% and 29% increase in average realized gold and silver prices, respectively, strong operational results from Wharf, proceeds from the sale of shares of Metalla common stock, partially offset by lower ounces sold at Palmarejo, Rochester and Kensington, ongoing carrying costs at Silvertip and payment of the cash portion of the contingent consideration of $18.8 million associated with the Silvertip acquisition.

Early in the second quarter, the Company 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 throughout 2020.

At December 31, 2020, the Company had no borrowings and $35.0 million in outstanding letters of credit under the RCF.

Additionally, Coeur established the $100.0 million ATM Program during the second quarter as a means to proactively increase its financial flexibility in response to increased volatility and uncertainty associated with COVID-19.

At December 31, 2021, the Company had $58.3 million of cash, cash equivalents and restricted cash and $200.0 million available under the RCF.

Cash and cash equivalents decreased $36.1 million in the year ended December 31, 2021, due to higher capital expenditures related to POA 11 at Rochester and the potential expansion project at Silvertip coupled with higher operating costs, lower gold ounces sold (2%), 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 21% increase in average realized gold and silver prices, respectively, higher silver ounces sold (5%), $65.0 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.

The RCF was amended in March 2021 to extend the maturity to March 2025 and to potentially allow the Company to obtain one or more increases of the RCF in an aggregate amount of up to $100.0 million.

At December 31, 2021, the Company had $65.0 million drawn and $35.0 million in outstanding letters of credit under the RCF.

The Company also holds $132.0 million of equity securities including a 17.8% interest in Victoria Gold.

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.

Cash Provided by Operating Activities from Continuing Operations

We currently believe we have sufficient sources of funding to meet our business requirements for the next twelve months and long-term.

We expect to use a combination of cash provided by operating activities, borrowings under our RCF and additional capital leases to fund near term capital requirements, including those described in this Report for POA 11 and in our 2022 capital expenditure guidance.

We also have additional potential sources of funding including proceeds from sales under the ATM program, potential asset sales, and the monetization of our equity investments, including our investment in Victoria Gold.

Our longer-term plans contemplate the expansion and restart of Silvertip, as well as the continued exploration and potential development of our other projects, such as Crown/Sterling and the Lincoln Hill area adjacent to Rochester.

Excluding capital leases, Coeur forecasts capital expenditures related to POA 11 to be approximately $217 - $257 million and $131 - $171 million in 2022 and 2023, respectively.

Additional details on expected production and capital expenditures for Rochester can be found in the Technical Report Summary filed by the Company with the U.S.

Securities and Exchange Commission on February 16, 2022 which is incorporated by reference into this Report.

We also have additional obligations as part of our ordinary course of business, beyond those committed for capital expenditures and other purchase obligations and commitments for purchases of goods and services.

If and to the extent liquidity resources are insufficient to support short- and long-term expenditures, we may need to incur additional indebtedness or issue additional equity securities, among other financing options, which may not be available on acceptable terms or at all.

This could have a material adverse impact on the Company, as discussed in more detail under Item 1A – Risk Factors.

Cash Provided by Operating Activities

Net cash provided by operating activities for the year ended December 31, 2021 was $110.5 million, compared to $148.7 million for the year ended December 31, 2020.

Adjusted EBITDA from continuing operations for the year ended December 31, 2020 was $263.4 million, compared to $173.9 million for the year ended December 31, 2019 (see “Non-GAAP Financial Performance Measures”).

Adjusted EBITDA for the year ended December 31, 2021 was $210.8 million, compared to $263.4 million for the year ended December 31, 2020 (see “Non-GAAP Financial Performance Measures”).

Net cash provided by operating activities was impacted by the following key factors for the applicable periods:

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Accounts payable and accrued liabilities (7,011) 32,897 23,103

Cash provided by (used in) continuing operating activities $ 148,709 $ 91,880 $ 20,108

Cash provided by operating activities $ 110,482 $ 148,709 $ 91,880

Net cash provided by operating activities decreased $38.2 million for the year ended December 31, 2021, primarily due to lower gold ounces sold (2%), higher operating costs, exploration costs, and mining and income taxes at Palmarejo, partially offset by a 1% and 21% increase in average realized gold and silver prices, respectively, and higher silver ounces sold (5%).

Revenue for the year ended December 31, 2021 increased by $47.4 million, of which $44.5 million was the result of higher average realized gold and silver prices and $2.9 million was due to the higher volume of silver sales.

Net cash provided by operating activities increased $56.8 million in the year ended December 31, 2020 compared to the year ended December 31, 2019, primarily due to a 22% and 29% increase in average realized gold and silver prices, respectively, and lower metal inventory write-downs at Silvertip, partially offset by lower ounces sold of gold and silver (3% and 19%, respectively).

Revenue for the year ended December 31, 2020 increased by $74.0 million, of which $151.9 million was the result of higher average realized gold and silver prices, partially offset by a decrease of $77.9 million due to lower volume of gold and silver sales.

Net cash provided by operating activities increased $71.8 million in the year ended December 31, 2019 compared to the year ended December 31, 2018, primarily due to 5% higher sales of gold at 10% higher average realized prices, the prepayment for deliveries of concentrate from Kensington of $15.0 million, the timing of payments for accounts payables across the company and lower income and mining tax payments at Palmarejo in 2019 as compared to 2018, partially offset by lower than anticipated production at Silvertip that resulted in a $64.6 million write-down of metals inventory.

Revenue for the year ended December 31, 2019 increased $85.6 million, of which $48.4 million was due primarily to higher average realized gold and silver prices and $37.2 million was due primarily to higher volume of gold, zinc and lead sales.

Cash Used in Investing Activities from Continuing Operations

Cash Used in Investing Activities

Net cash used in investing activities in the year ended December 31, 2021 was $304.1 million compared to $65.7 million in the year ended December 31, 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 $309.8 million in the year ended December 31, 2021 compared with $99.3 million in the year ended December 31, 2020.

Capital expenditures in the year ended December 31, 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 year ended December 31, 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 is experiencing 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.

Net cash used in investing activities in the year ended December 31, 2020 was $65.7 million compared to $92.6 million in the year ended December 31, 2019.

Cash used in investing activities decreased primarily due to the net proceeds of $30.1 million from the sale of the Company’s equity investments.

2 unchanged sentences

Capital expenditures in the year ended December 31, 2019 were primarily related to underground development at Silvertip, Palmarejo, and Kensington, a new thickener at Palmarejo, POA 11 and the new crushing circuit, including the HPGR unit at Rochester.

Net cash used in investing activities in the year ended December 31, 2019 was $92.6 million compared to $102.0 million in the year ended December 31, 2018.

Cash used in investing activities decreased primarily due lower capital expenditures, partially offset by receipt of $19.0 million of proceeds under the Manquiri Notes Receivable (as defined in Note 22 -- Discontinued Operations) in 2018.

The Company had capital expenditures of $99.8 million in the year ended December 31, 2019 compared with $140.8 million in the year ended December 31, 2018.

Capital expenditures in the year ended December 31, 2019 are described above.

Capital expenditures in the year ended December 31, 2018 were primarily related to pre-production capital spending and the new 220-person camp at Silvertip, mining equipment at Kensington and underground development at Silvertip, Palmarejo and Kensington.

Cash Used in Financing Activities from Continuing Operations

Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities in the year ended December 31, 2021 was $158.1 million compared to net cash used in financing activities of $46.5 million in the year ended December 31, 2020.

During the year ended December 31, 2021, the Company received net proceeds of $367.5 million from the issuance of the 2029 Senior Notes, and drew $65.0 million, net, from the RCF, partially offset by the tender and redemption of the 2024 Senior Notes for $238.3 million, including premiums.

As of December 31, 2021, there was $65.0 million drawn under the RCF.

During the year ended December 31, 2020, the Company fully repaid the $150.0 million drawn from the RCF during 2020, and paid contingent cash consideration of $18.8 million associated with the Silvertip acquisition.

The Company secured a finance lease package for nearly $60 million during the year, a portion of which has been funded as of December 31, 2021.

The package is earmarked for planned equipment purchases for the POA 11 project in 2021 and 2022, and has an interest rate of 5.22%.

Net cash used in financing activities in the year ended December 31, 2020 was $46.5 million compared to $60.9 million in the year ended December 31, 2019.

During the year ended December 31, 2020, the Company fully repaid the $150.0 million drawn from the RCF during 2020, and paid cash contingent consideration of $18.8 million associated with the Silvertip acquisition.

As of December 31, 2020, there were no borrowings outstanding under the RCF.

During the year ended December 31, 2019, the Company repaid $135.0 million, net, of outstanding amounts under the RCF and paid cash contingent consideration of $18.7 million associated with the Silvertip acquisition, partially offset by net proceeds of approximately $123.1 million from the sale of 30.9 million shares of its common stock.

Net cash used in financing activities in the year ended December 31, 2019 increased to $60.9 million compared to $5.2 million in the year ended December 31, 2018.

During the year ended December 31, 2018, the Company drew $35.0 million, net, from the RCF to repay a debt obligation of Silvertip and to finance working capital and general corporate purposes.

Contractual Obligations

The following table summarizes the Company’s contractual obligations at December 31, 2020 and the effect such obligations are expected to have on its liquidity and cash flow in future periods.

Payments Due by Period

Contractual Obligations Total Less Than

1 Year 1-3 Years 3-5 Years More Than

Long-term debt obligations:

2024 Senior Notes $ 230,000 $ — $ 230,000 $ — $ —

Revolving Credit Facility (1)

Interest on debt 47,145 14,490 32,655 — —

277,145 14,490 262,655 — —

Finance lease obligations (2)

52,338 23,958 26,580 1,800 —

Operating lease obligations:

Hyak mining lease (Kensington mine) 600 300 300 — —

Operating leases 44,190 12,602 21,396 9,025 1,167

44,790 12,902 21,696 9,025 1,167

Other long-term obligations:

Reclamation and mine closure (3)

331,992 2,299 16,588 79,493 233,612

Severance payments (4)

7,871 — — — 7,871

Unrecognized tax benefits (5)

1,365 — — — —

Other long-term obligations 23,653 1,965 3,930 2,842 14,916

364,881 4,264 20,518 82,335 256,399

Total $ 739,154 $ 55,614 $ 331,449 $ 93,160 $ 257,566

(1) The Company had $265.0 million available under the RCF, net of $35.0 million in letters of credit outstanding as of December 31, 2020.

(2) The Company has entered into various finance lease agreements for commitments primarily over the next five years.

(3) Reclamation and mine closure amounts represent the Company’s estimate of the cash flows associated with its legal obligation to reclaim mining properties.

This amount will decrease as reclamation work is completed.

Amounts shown on the table are undiscounted.

(4) Accrued government-mandated severance at the Palmarejo complex.

(5) The Company is unable to reasonably estimate the timing of recognition of unrecognized tax benefits beyond 2020 due to uncertainties in the timing of the effective settlement of tax positions.

Environmental Compliance Expenditures

For the years ended December 31, 2020, 2019, and 2018, the Company spent $8.8 million, $8.2 million, and $7.9 million, respectively, in connection with routine environmental compliance activities at its operating properties.

The Company estimates that environmental compliance expenditures during 2021 will be between $8.2 million and $9.2 million.

Future environmental compliance expenditures will be determined by governmental regulations and the overall scope of the Company’s operating and development activities.

During the year ended December 31, 2019, the Company repaid $135.0 million, net, of outstanding amounts under the RCF and paid contingent cash consideration of $18.7 million associated with the Silvertip acquisition, partially offset by net proceeds of approximately $123.1 million from the sale of 30.9 million shares of its common stock.

Critical Accounting Policies and Accounting Developments

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In the case of doré shipments, the Company generally sells refined metal at market prices agreed upon by both parties.

The Company also has the right, but not the obligation, to sell a portion of the anticipated refined metal in advance of being

fully refined.

The Company also has the right, but not the obligation, to sell a portion of the anticipated refined metal in advance of being fully refined.

When the Company sells refined metal or advanced metal, the performance obligation is satisfied when the metal is delivered to the customer.

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The Company also sells concentrate under off-take agreements to third-party customers that are responsible for arranging the smelting of the concentrate.

Prices can be either be fixed or based on a quotational period.

The quotational period varies by contract, but is generally a one-month period following the shipment of the concentrate.

Prices can either be fixed or based on a quotational period.

The quotational period

varies by contract, but is generally a one-month period following the shipment of the concentrate.

The performance obligation is satisfied when risk of loss is transferred to the customer.

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The Company uses reserve estimates in determining the units-of-production amortization and evaluating mine assets for potential impairment.

For a discussion of estimates and assumptions used by management that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities at the date of its financial statements, the reported amounts of revenue and expenses during the reporting period, and mined reserves, see Note 2 -- Summary of Significant Accounting Policies in the notes to the Consolidated Financial Statements.

The Company amortizes its property, plant, and equipment, mining properties, and mine development using the units-of-production method over the estimated life of the ore body generally based on its proven and probable reserves or the straight-line method over the useful life, whichever is shorter.

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An impairment loss is measured by discounted estimated future cash flows, and recorded by reducing the asset's carrying amount to fair value.

Future cash flows are estimated based on estimated quantities of recoverable minerals,

expected gold, silver, lead and zinc prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans.

Future cash flows are estimated based on estimated quantities of recoverable minerals, expected gold, silver, lead and zinc prices (considering current and historical prices, trends and related factors), production levels, operating costs, capital requirements and reclamation costs, all based on life-of-mine plans.

During 2019, the Company recorded a non-cash impairment charge of $250.8 million.

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Estimates of recoverable minerals from exploration stage mineral interests are risk adjusted based on management’s relative confidence in such materials.

The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those risk factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material could ultimately be mined economically.

The ability to achieve the estimated quantities of recoverable minerals from exploration stage

mineral interests involves further risks in addition to those risk factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineral reserves and resources could ultimately be mined economically.

Assets classified as exploration potential have the highest level of risk that the carrying value of the asset can be ultimately realized, due to the still lower level of geological confidence and economic modeling.

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This change resulted in an adjustment to the ending Ore on leach pads balance with the resulting charges allocated between Costs Applicable to Sales and Amortization in the amounts of $7.2 million and $1.2 million, respectively.

In June 2021, the Company updated the recovery rate assumption on the Stage IV leach pad at Rochester, based on the historical performance of the leach pad since the third quarter of 2019.

This change resulted in an adjustment to the ending ore on leach pads balance with the resulting non-cash charges allocated between Costs Applicable to Sales and Amortization in the amounts of $8.6 million and $2.2 million, respectively.

The Company recognizes obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs.

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Changes in estimates are reflected in earnings in the period an estimate is revised.

See Note 12 -- Reclamation in the notes to the Consolidated Financial Statements for additional information.

The Company is exposed to various market risks, including the effect of changes in metal prices and interest rates, and uses derivatives to manage financial exposures that occur in the normal course of business.

32 unchanged sentences

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.

In order to reduce indebtedness, fund 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 amounts involved may be significant and any debt repurchase transactions may occur at a substantial discount to the debt securities’ face amount.

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 of our continuing operations in the tables below.

For additional information regarding our discontinued operations, see Note 22 -- to the Consolidated Financial Statements.

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.

14 unchanged sentences

Impairment of long-lived assets — — 250,814

VAT write-off 25,982 — —

Loss on debt extinguishment 9,173 — 1,282

Silvertip inventory write-down — 13,717 64,610

Wharf inventory write-down — 3,323 3,596

Loss on debt extinguishment — 1,282 —

Silvertip temporary suspension costs 7,164 — —

Silvertip suspension costs — 7,164 —

Silvertip lease modification — (4,051) —

4 unchanged sentences

Interest income on notes receivables — — (198)

Manquiri sale consideration write-down — — 18,599

Rochester in-pit crusher write-down — — 3,441

Mexico inflation adjustment — — (1,939)

Transaction costs — — 5

Tax effect of adjustments (1)

3 unchanged sentences

Adjusted net income (loss) per share - Diluted $ (0.01) $ 0.24 $ (0.25)

(1) For the year ended December 31, 2021, tax effect of adjustments of $10.3 million (-27%) is primarily related to the VAT write-off.

For the year ended December 31, 2019, tax effect of adjustments of $19.4 million (-6%) is primarily related to the write-down of Silvertip inventory.

(2) For the year ended December 31, 2018, tax effect of adjustments of $9.8 million (-20%) is primarily related to the write-down of Silvertip start-up costs.

EBITDA and Adjusted EBITDA

19 unchanged sentences

Impairment of long-lived assets — — 250,814

VAT write-off 25,982 — —

Loss on debt extinguishment 9,173 — 1,282

Silvertip inventory write-down — 13,717 64,610

Silvertip temporary suspension costs 7,164 — —

Silvertip suspension costs — 7,164 —

Silvertip lease modification — (4,051) —

3 unchanged sentences

Wharf inventory write-down — 3,323 3,596

Loss on debt extinguishment — 1,282 —

Receivable write-down — — 1,040

Interest income on notes receivables — — (198)

Manquiri sale consideration write-down — — 18,599

Rochester in-pit crusher write-down — — 3,441

Mexico inflation adjustment — — (1,939)

Transaction costs — — 5

Adjusted EBITDA $ 210,845 $ 263,365 $ 173,854

1 unchanged sentence

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 of Continuing Operations less Capital expenditures from continuing operations as presented on the Consolidated Statements of Cash Flows.

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 of Continuing Operations , which the Company believes to be the GAAP financial measure most directly comparable to Free Cash Flow.

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.

Year Ended December 31,

(Dollars in thousands) 2021 2020 2019

Cash flow from continuing operations $ 148,709 $ 91,880 $ 20,108

Capital expenditures from continuing operations 99,279 99,772 140,787

Cash flow from operations $ 110,482 $ 148,709 $ 91,880

Capital expenditures 309,781 99,279 99,772

Free cash flow $ (199,299) $ 49,430 $ (7,892)

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.

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.

Year Ended December 31,

(Dollars in thousands) 2021 2020 2019

Cash provided by (used in) operating activities $ 110,482 $ 148,709 $ 91,880

Changes in operating assets and liabilities:

Receivables 983 9,463 2,739

Prepaid expenses and other (489) 2,621 (280)

Inventories 27,628 34,538 62,998

Accounts payable and accrued liabilities 7,011 (32,897) (23,103)

Operating cash flow before changes in working capital $ 145,615 $ 162,434 $ 134,234

Costs Applicable to Sales

16 unchanged sentences

Gold ($/oz) $ 664 $ 1,801 $ 1,086 $ 997

Silver ($/oz) $ 9.14 $ 16.35 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.

Silver ($/oz) $ 11.97 $ 25.10 $ —

Zinc ($/lb) $ —

Lead ($/lb) $ —

Year Ended December 31, 2020

10 unchanged sentences

Gold ($/oz) $ 610 $ 1,377 $ 975 $ 923

Silver ($/oz) $ 9.13 $ 14.34 $ 31.92

Zinc ($/lb) $ 2.34

Lead ($/lb) $ 1.76

Silver ($/oz) $ 9.14 $ 16.35 NM (1)

Zinc ($/lb) NM (1)

Lead ($/lb) NM (1)

(1) Due to the suspension of mining and processing activities these amounts are not meaningful.

Year Ended December 31, 2019

14 unchanged sentences

Reconciliation of Costs Applicable to Sales for 2022 Guidance

In thousands (except metal sales, per ounce and per pound amounts) Palmarejo Rochester Kensington Wharf

In thousands (except metal sales, per ounce or per pound amounts) Palmarejo Rochester Kensington Wharf

Costs applicable to sales, including amortization (U.S.

9 unchanged sentences

Silver 51% 54%

Costs applicable to sales

Adjusted costs applicable to sales

Gold ($/oz) $750 - $850 $1,490 - $1,590 $1,150 - $1,250 $1,225 - $1,325

1 unchanged sentence

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-K

Item 7. Management’s Discussion and Analysis