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”) allocation, referred to as the co-product method, based on revenue contribution for Palmarejo and Rochester 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. Overview We are primarily a gold and silver producer with operating assets located in the United States and Mexico and an exploration project in Canada. First Quarter Highlights For the quarter, Coeur reported revenue of $187.3 million and cash used in operating activities of $35.0 million. We reported GAAP net loss of $24.6 million, or $0.08 per diluted share. On a non-GAAP adjusted basis 1 , the Company reported EBITDA of $25.1 million and net loss of $33.1 million or $0.11 per diluted share. • First quarter production stronger than expected and in-line with 2023 guidance – Solid performances at Palmarejo, Rochester and Wharf offset lower production levels at Kensington, leading to total production of 69,039 ounces of gold and 2.5 million ounces of silver. Production levels are expected to increase during the second half of the year due to mine plan sequencing as well as the anticipated ramp-up and commissioning of the Rochester expansion • Rochester expansion remains on-track for mid-year construction completion – Coeur began stacking ore on the new Stage VI leach pad and achieved mechanical completion of the new Merrill-Crowe process plant ahead of schedule during the first quarter. As of March 31, 2023, the project was 82% complete and approximately $634 million of the estimated project capital had been committed, of which $560 million had been incurred • Balance sheet well-positioned to support remaining Rochester expansion capital requirements – The Company ended the quarter with total liquidity of approximately $382 million, including $67 million of cash, $300 million of available capacity under its $390 million revolving credit facility (“RCF”) and $15 million of marketable securities. The Company further bolstered its hedging program with approximately 158,000 ounces of gold hedged at an average price of $1,968 per ounce and roughly 3.7 million ounces of silver hedged at an average price of $25.04 per ounce in 2023 • Exploration success continues at Silvertip and Kensington – The deepest hole ever drilled at Silvertip targeting a magnetic anomaly and potential heat source was successfully completed during the quarter showing occurrences of intrusive porphyry and higher temperature mineralogy. Silvertip continues to impress with its high silver, zinc and lead grades as well as signs of other critical minerals such as indium, germanium and gallium contained in the deposit. At Kensington, drilling indicates that new mineralized zones identified in Upper Kensington continue, suggesting promising potential for further mine life increases 24 Selected Financial and Operating Results Three Months Ended In thousands March 31, 2023 December 31, 2022 March 31, 2022 Financial Results (In thousands): Gold sales $ 127,101 $ 157,620 $ 129,451 Silver sales $ 60,197 $ 52,496 $ 58,953 Consolidated Revenue $ 187,298 $ 210,116 $ 188,404 Net income (loss) $ (24,586) $ 49,089 $ 7,682 Net income (loss) per share, diluted $ (0.08) $ 0.17 $ 0.03 Adjusted net income (loss) (1) $ (33,058) $ (17,451) $ (13,782) Adjusted net income (loss) per share, diluted (1) $ (0.11) $ (0.06) $ (0.05) EBITDA (1) $ 16,219 $ 84,936 $ 40,377 Adjusted EBITDA (1) $ 25,127 $ 35,799 $ 41,527 Total debt (2) $ 494,086 $ 515,933 $ 485,488 Operating Results: Gold ounces produced 69,039 87,727 75,409 Silver ounces produced 2,534,883 2,471,509 2,479,442 Gold ounces sold 70,866 88,189 75,211 Silver ounces sold 2,588,919 2,482,640 2,450,282 Average realized price per gold ounce $ 1,794 $ 1,787 $ 1,721 Average realized price per silver ounce $ 23.25 $ 21.15 $ 24.06 (1) See “Non-GAAP Financial Performance Measures.” (2) Includes finance leases. Net of debt issuance costs and premium received. Consolidated Financial Results Three Months Ended March 31, 2023 compared to Three Months Ended December 31, 2022 Revenue We sold 70,866 gold ounces and 2.6 million silver ounces, compared to 88,189 gold ounces and 2.5 million silver ounces. Revenue decreased by $22.8 million, or 11%, as a result of a 20% decrease in gold ounces sold, partially offset by a 4% increase in silver ounces sold and a 10% increase in average realized silver prices, which benefited from the favorable impact of silver hedges realized gains. Average realized gold prices remained comparable as higher gold spot prices resulted in lower realized gains from gold hedges. The decrease in gold ounces sold was primarily due to timing of recoveries at Rochester and Wharf, and lower mill throughput and grades at Kensington. The increase in silver ounces sold was primarily due to higher grades at Palmarejo, partially offset by the timing of recoveries at Rochester. Gold and silver represented 68% and 32% of first quarter 2023 sales revenue, respectively, compared to 75% and 25% of fourth quarter 2022 sales revenue, respectively. The following table summarizes consolidated metal sales: Three Months Ended Increase (Decrease) Percentage Change In thousands March 31, 2023 December 31, 2022 Gold sales $ 127,101 $ 157,620 $ (30,519) (19) % Silver sales 60,197 52,496 7,701 15 % Metal sales $ 187,298 $ 210,116 $ (22,818) (11) % Costs Applicable to Sales Costs applicable to sales decreased $6.3 million, or 4%, primarily due to lower gold ounces sold, partially offset by increased lower of cost or net realizable value (“LCM”) adjustments at Rochester. For a complete discussion of costs applicable to sales, see Results of Operations below. 25 Amortization Amortization decreased $5.4 million primarily due to lower gold ounces sold and longer assumed mine lives at Palmarejo, Rochester, Kensington and Wharf driven by recent successful investments in exploration. Expenses General and administrative expenses increased $1.9 million, or 19%, primarily due to higher non-cash employee incentive and stock-based compensation costs. Exploration expense decreased $2.9 million, or 38% driven by a decrease in drilling activity as a result of the ramp down of projects in the fourth quarter of 2022 to prioritize the completion of the Rochester expansion project in 2023. Pre-development, reclamation, and other expenses decreased $0.6 million, or 5%, stemming from lower operating costs at noncore asset locations and lower costs incurred in connection with the Company’s COVID-19 health and safety protocols, partially offset by higher ongoing carrying costs at Silvertip, and higher asset retirement accretion. The following table summarizes pre-development, reclamation, and other expenses: Three Months Ended Increase (Decrease) Percentage Change In thousands March 31, 2023 December 31, 2022 COVID-19 $ 56 $ 155 $ (99) (64) % Silvertip ongoing carrying costs 6,180 5,422 758 14 % Asset retirement accretion 3,993 3,643 350 10 % Other 661 2,228 (1,567) (70) % Pre-development, reclamation and other expense $ 10,890 $ 11,448 $ (558) (5) % Other Income and Expenses Fair value adjustments, net, increased to a gain of $10.6 million compared to a $1.4 million loss as a result of an increase in value of the Company’s equity investments. For additional details on the Company’s equity investments see Note 6 -- Investments. Interest expense (net of capitalized interest of $2.1 million) decreased to $7.4 million from $8.2 million due to lower interest paid under the RCF attributable to lower average debt levels, and higher capitalized interest. Other, net decreased to a loss of $1.0 million compared to a gain of $64.8 million in three months ended December 31, 2022, as a result of the $62.2 million gain recognized in connection with the sale of the Sterling/Crown exploration properties in the fourth quarter of 2022. Income and Mining Taxes Income and mining tax expense of approximately $10.7 million resulted in an effective tax rate of (77.2)% for the three months ended March 31, 2023. This compares to income tax benefit of $0.4 million for an effective tax rate of 0.9% for the three months ended December 31, 2022. 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 sale of non-core assets; (ii) the non-recognition of tax assets; (iii) variations in our income before income taxes; (iv) geographic distribution of that income; (v) mining taxes; (vi) foreign exchange rates; (vii) percentage depletion; and (viii) the impact of uncertain tax positions. Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period. 26 The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit: Three Months Ended March 31, Three Months Ended December 31, 2023 2022 In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit United States $ (25,780) $ (1,018) $ 46,786 $ 4,786 Canada (9,294) — (9,390) (30) Mexico 21,399 (9,690) 12,469 (4,335) Other jurisdictions (203) — (1,197) — $ (13,878) $ (10,708) $ 48,668 $ 421 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”. Net Income (Loss) Net loss was $24.6 million, or $0.08 per diluted share, compared to net income of $49.1 million, or $0.17 per diluted share. The increase in net loss was driven by a $62.2 million gain on the sale of the Sterling/Crown exploration properties in fourth quarter of 2022, a 20% decrease in gold ounces sold, lower realized gains from gold hedges and higher income and mining taxes. This was partially offset by a 4% increase in silver ounces sold, 10% increase in average realized silver prices, lower exploration costs and favorable changes in the fair value of the Company’s equity investments. Adjusted net loss was $33.1 million, or $0.11 per diluted share, compared to $17.5 million, or $0.06 per diluted share (see “Non-GAAP Financial Performance Measures”). Three Months Ended March 31, 2023 compared to Three Months Ended March 31, 2022 Revenue We sold 70,866 gold ounces and 2.6 million silver ounces, compared to 75,211 gold ounces and 2.5 million silver ounces. Revenue decreased by $1.1 million, or 1%, as a result of a 6% decrease in gold ounces sold and a 3% decrease in average realized silver prices, partially offset by a 6% increase in silver ounces sold and a 4% increase in average realized gold prices driven by higher realized gains from gold hedges. The decrease in gold ounces sold was primarily due to lower mill throughput and grades at Palmarejo, lower mill throughput and recoveries at Kensington, and lower grades and lower tons placed during the fourth quarter of 2022 at Wharf, partially offset by higher grades and the timing of recoveries at Rochester. The increase in silver ounces sold was primarily due to timing of recoveries at Rochester. Gold and silver represented 68% and 32% of first quarter 2023 sales revenue, respectively, compared to gold and silver representing 69% and 31% of first quarter 2022 sales revenue, respectively. The following table summarizes consolidated metal sales: Three Months Ended Increase (Decrease) Percentage Change In thousands March 31, 2023 March 31, 2022 Gold sales $ 127,101 $ 129,451 $ (2,350) (1) % Silver sales 60,197 58,953 1,244 2 % Metal sales $ 187,298 $ 188,404 $ (1,106) (1) % Costs Applicable to Sales Costs applicable to sales increased $19.8 million, or 15%, primarily due to higher operating costs partially impacted by continued inflationary pressures relating to diesel and consumable costs, and increased LCM adjustments at Rochester. For a complete discussion of costs applicable to sales, see Results of Operations below. 27 Amortization Amortization decreased $3.7 million primarily due to lower gold ounces sold and longer assumed mine lives at Palmarejo, Rochester, Kensington and Wharf driven by recent successful investments in exploration. Expenses General and administrative expenses increased $1.8 million, or 18%, primarily due to higher non-cash employee incentive and stock-based compensation costs. Exploration expense decreased $0.8 million, or 14%, driven by reduced drilling activity. Pre-development, reclamation, and other expenses decreased $0.5 million, or 5%, stemming from lower costs incurred in connection with the Company’s COVID-19 health and safety protocols and lower operating costs at noncore asset locations, partially offset by higher asset retirement accretion. The following table summarizes pre-development, reclamation, and other expenses: Three Months Ended March 31, Increase (Decrease) Percentage Change In thousands 2023 2022 COVID-19 $ 56 $ 972 $ (916) (94) % Silvertip ongoing carrying costs 6,180 6,159 21 — % Asset retirement accretion 3,993 3,463 530 15 % Other 661 818 (157) (19) % Pre-development, reclamation and other expense $ 10,890 $ 11,412 $ (522) (5) % Other Income and Expenses Fair value adjustments, net, remained comparable at a gain of $10.6 million. For additional details on the Company’s equity investments see Note 6 -- Investments. Interest expense (net of capitalized interest of $2.1 million) increased to $7.4 million from $4.6 million due to higher interest paid under the RCF attributable to higher average debt levels, and lower capitalized interest. Other, net decreased to a loss of $1.0 million compared to a gain of $1.7 million, as a result of higher foreign exchange losses and lower gains on the sale of assets. Income and Mining Taxes Income and mining tax expense of approximately $10.7 million resulted in an effective tax rate of (77.2)% for 2023. This compares to income tax expense of $1.7 million for an effective tax rate of 18.1% for 2022. 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 sale of non-core assets; (ii) variations in our income before income taxes; (iii) geographic distribution of that income; (iv) mining taxes; (v) foreign exchange rates; (vi) the impact of uncertain tax positions; (vii) percentage depletion; and (viii) the non-recognition of tax assets. Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period. 28 The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit: Three months ended March 31, 2023 2022 In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit United States $ (25,780) $ (1,018) $ (10,130) $ (1,199) Canada (9,294) — (7,525) — Mexico 21,399 (9,690) 27,033 (495) Other jurisdictions (203) — (2) — $ (13,878) $ (10,708) $ 9,376 $ (1,694) 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”. Net Income (Loss) Net loss was $24.6 million, or $0.08 per diluted share, compared to net income of $7.7 million, or $0.03 per diluted share. The increase in net loss was driven by a 6% decrease in gold ounces sold, 3% decrease in average realized silver prices, higher operating costs, including increased LCM adjustments at Rochester, higher interest expense and income and mining taxes. This was partially offset by a 6% increase in silver ounces sold, 4% increase in average realized gold prices and lower exploration costs. Adjusted net loss was $33.1 million, or $0.11 per diluted share, compared to $13.8 million, or $0.05 per diluted share (see “Non-GAAP Financial Performance Measures”). 29 Results of Operations Palmarejo Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Tons milled 533,606 554,247 565,211 Average gold grade (oz/t) 0.052 0.051 0.056 Average silver grade (oz/t) 4.02 3.16 3.87 Average recovery rate – Au 90.1 % 92.4 % 90.6 % Average recovery rate – Ag 81.7 % 85.0 % 83.0 % Gold ounces produced 25,118 25,935 28,931 Silver ounces produced 1,752,430 1,489,061 1,812,530 Gold ounces sold 25,970 25,252 28,242 Silver ounces sold 1,795,159 1,490,443 1,796,028 CAS per gold ounce (1) $ 930 $ 1,025 $ 735 CAS per silver ounce (1) $ 14.00 $ 14.20 $ 12.51 (1) See Non-GAAP Financial Performance Measures. Three Months Ended March 31, 2023 compared to Three Months Ended December 31, 2022 Gold production decreased 3% and silver production increased 18% a result of 2% and 27% higher gold and silver grades, partially offset by 4% lower mill throughput and lower recoveries. Metal sales were $82.3 million, or 45% of Coeur’s metal sales, compared with $69.6 million, or 33% of Coeur’s metal sales. Revenue increased by $12.7 million or 18%, of which $8.2 million was due to higher volume of gold and silver production and $4.5 million was due to higher average realized gold and silver prices. Costs applicable to sales per gold and silver ounce decreased 9% and 1%, respectively, due to the mix of gold and silver sales and lower consumable costs, partially offset by higher employee-related costs. Amortization increased to $8.7 million due to higher sales, partially offset by longer assumed mine life. Capital expenditures increased to $10.2 million from $8.1 million due to higher expenditures related to the open pit backfill project and mining equipment purchases. Three Months Ended March 31, 2023 compared to Three Months Ended March 31, 2022 Gold and silver production decreased 13% and 3%, respectively as a result of 6% lower mill throughput, 7% lower gold grades, and lower recoveries, partially offset by 4% higher silver grades. Metal sales were $82.3 million, or 45% of Coeur’s metal sales, compared with $83.1 million, or 44% of Coeur’s metal sales. Revenue decreased by $0.8 million or 1%, of which $3.6 million was due to a lower volume of gold and silver production, partially offset by an increase of $2.8 million due to higher average realized gold prices. Costs applicable to sales per gold and silver ounce increased 27% and 12%, respectively, due to the mix of gold and silver sales, lower production, higher employee-related and consumable costs primarily due to inflationary pressures. Amortization decreased to $8.7 million due to lower sales and longer assumed mine life. Capital expenditures decreased to $10.2 million from $13.6 million due to lower infill drilling activities. 30 Rochester Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Tons placed (1) 2,456,586 2,754,118 4,377,873 Average gold grade (oz/t) 0.003 0.003 0.003 Average silver grade (oz/t) 0.45 0.68 0.34 Gold ounces produced 8,155 11,589 6,066 Silver ounces produced 761,346 972,699 655,176 Gold ounces sold 8,349 11,646 5,928 Silver ounces sold 769,804 974,810 638,116 CAS per gold ounce (2) $ 2,413 $ 1,973 $ 2,287 CAS per silver ounce (2) $ 29.51 $ 21.75 $ 29.34 (1) During the three months ended, March 31, 2023, 1,405,499 and 1,051,087 tons were placed on Stage IV and Stage VI leach pads, respectively. During the three months ended, December 31, 2022, 2,754,118 and 0 tons were placed on Stage IV and Stage VI leach pads, respectively. During the three months ended, March 31, 2022, 4,101,586 and 276,287 tons were placed on Stage IV and Stage VI leach pads, respectively. (2) See Non-GAAP Financial Performance Measures. Three Months Ended March 31, 2023 compared to Three Months Ended December 31, 2022 Gold production decreased 30% and silver production decreased 22%, as a result of lower tons placed, lower gold and silver grades and timing of recoveries primarily due to Rochester preparing to move away from the legacy leach pad to the new Stage VI leach pad associated with the Rochester expansion. Approximately 43% of the tons placed in the first quarter of 2023 were placed onto the new Stage VI leach pad, which is expected to begin production in the third quarter of 2023. Metal sales were $33.9 million, or 18% of Coeur’s metal sales, compared with $42.6 million, or 20% of Coeur’s metal sales. Revenue decreased by $8.7 million, or 20%, of which $11.1 million was due to a lower volume of gold and silver production, partially offset by an increase of $2.4 million due to higher average realized gold and silver prices. Costs applicable to sales per gold and silver ounce increased 22% and 36%, respectively, due to the mix of gold and silver sales and lower recoverable gold and silver placed and a higher LCM adjustment of $13.1 million compared to $8.0 million in the prior period. Amortization decreased to $5.2 million due to lower gold and silver ounces sold. Capital expenditures decreased to $52.0 million from $92.3 million due to timing of payments related to the Rochester expansion project. Three Months Ended March 31, 2023 compared to Three Months Ended March 31, 2022 Gold production increased 34% and silver production increased 16%, primarily due to higher gold grades and the timing of recoveries. Metal sales were $33.9 million, or 18% of Coeur’s metal sales, compared with $26.4 million, or 14% of Coeur’s metal sales. Revenue increased by $7.5 million, or 29%, of which $7.7 million was due to a higher volume of gold and silver production, partially offset by a decrease of $0.2 million due to lower average realized silver prices. Costs applicable to sales per gold and silver ounce increased 6% and 1%, respectively, due to the mix of gold and silver sales and higher LCM adjustments of $13.1 million compared to $7.6 million in the prior period, driven by higher employee-related, maintenance, and consumable costs primarily due to inflationary pressures. Amortization increased to $5.2 million due to higher equipment depreciation from recent equipment purchases. Capital expenditures increased to $52.0 million from $33.1 million due to timing of payments related to the Rochester expansion project. As of March 31, 2023, the Company had committed approximately $634 million of capital since inception of the Rochester expansion project, approximately $560 million of the estimated project cost had been incurred and the project was 82% complete. The Company estimates the total capital cost for the project will likely be around the high end of the $650 - $670 million guidance range, which primarily reflects the impacts of extreme winter weather on construction productivity during the first quarter. Mechanical completion remains on target for mid-2023 with ramp-up and commissioning expected to take place during the second half of the year. The Company expects capital expenditures related to the Rochester expansion to be approximately $197 - $207 million during 2023, with roughly 70% incurred during the first half of the year. Coeur achieved several key milestones at the Rochester expansion during the quarter. Notably, the Company began placing ore on the new Stage VI leach pad on February 1 and achieved mechanical completion of the Merrill-Crowe process plant on March 31, ahead of its second quarter target completion date. Coeur also energized the 63-kilovolt power system and achieved mechanical completion of the crusher corridor electrical substation. 31 In addition to achieving mechanical completion ahead of schedule, progress on the Merrill-Crowe plant included (i) completion of the leach recirculation system which will deliver solution to the Stage VI leach pad, (ii) advancement of pre-commissioning of power and process systems, and (iii) completion of control systems programming and acceptance testing. Coeur also continued to make solid progress on the crusher corridor with the start of steel erection and equipment setting for the pre-screen and further advancement of concrete work in the primary crusher area. Other work on the crusher corridor included (i) stacker steel and conveyor erection at the primary, secondary and tertiary stockpiles, (ii) topping out of the steel erection at both the secondary and tertiary crushers, (iii) continuation of piping and electrical installation across the crusher corridor, and (iv) completion of control systems programming with acceptance testing now well advanced. Kensington Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Tons milled 153,337 183,410 165,968 Average gold grade (oz/t) 0.15 0.18 0.14 Average recovery rate 91.2 % 92.4 % 95.3 % Gold ounces produced 20,296 30,335 22,646 Gold ounces sold 20,902 30,863 22,834 CAS per gold ounce (1) $ 1,785 $ 1,269 $ 1,616 (1) See Non-GAAP Financial Performance Measures. Three Months Ended March 31, 2023 compared to Three Months Ended December 31, 2022 Gold production decreased 33% as a result of 17% lower grades, 16% lower mill throughput primarily due to challenges with mine sequencing and stope extraction as well as lower grades. Metal sales were $40.2 million, or 21% of Coeur’s metal sales, compared to $58.8 million, or 28% of Coeur’s metal sales. Revenue decreased by $18.6 million, or 32%, of which $19.1 million resulted from a lower volume of gold production, partially offset by an increase of $0.5 million due to higher average realized gold prices. Costs applicable to sales per gold ounce increased 41% due to lower production. Amortization decreased to $5.8 million primarily due to lower ounces sold and longer assumed mine life. Capital expenditures increased to $10.7 million from $7.7 million due to higher infill drilling and underground development. Three Months Ended March 31, 2023 compared to Three Months Ended March 31, 2022 Gold production decreased 10% as a result of 8% lower throughput primarily due to challenges with mine sequencing and stope extraction as well as lower recoveries. Metal sales were $40.2 million, or 21% of Coeur’s metal sales, compared to $44.3 million, or 24% of Coeur’s metal sales. Revenue decreased by $4.1 million, or 9%, of which $3.7 million resulted from a lower volume of gold production and $0.4 million was due to lower average realized gold prices. Costs applicable to sales per gold ounce increased 11% due to lower production. Amortization decreased to $5.8 million primarily due to lower ounces sold and longer assumed mine life. Capital expenditures increased to $10.7 million from $7.9 million due to higher infill drilling and underground development. Wharf Three Months Ended March 31, 2023 December 31, 2022 March 31, 2022 Tons placed 1,156,794 975,994 1,127,569 Average gold grade (oz/t) 0.032 0.024 0.025 Gold ounces produced 15,470 19,868 17,766 Silver ounces produced 21,107 9,749 11,736 Gold ounces sold 15,645 20,428 18,207 Silver ounces sold 23,956 17,387 16,138 CAS per gold ounce (1) $ 1,468 $ 1,398 $ 1,124 (1) See Non-GAAP Financial Performance Measures. 32 Three Months Ended March 31, 2023 compared to Three Months Ended December 31, 2022 Gold production decreased 22% driven by lower grades and lower tons placed in 2022. Metal sales were $30.9 million, or 16% of Coeur’s metal sales, compared to $39.1 million, or 19% of Coeur’s metal sales. Revenue decreased by $8.2 million, or 21%, of which $9.1 million was due to a lower gold production, partially offset by an increase of $0.9 million due to higher average realized gold prices. Costs applicable to sales per gold ounce increased 5% due to lower production partially offset by lower operating costs. Amortization decreased to $1.4 million due to lower ounces sold. Capital expenditures were $0.1 million. Three Months Ended March 31, 2023 compared to Three Months Ended March 31, 2022 Gold production decreased 13% driven by lower grades and lower tons placed in 2022. Metal sales were $30.9 million, or 16% of Coeur’s metal sales, compared to $34.7 million, or 18% of Coeur’s metal sales. Revenue decreased by $3.8 million, or 11%, of which $4.8 million was due to a lower volume of gold production, partially offset by an increase of $1.0 million due to higher average realized gold prices. Costs applicable to sales per gold ounce increased 31% due to lower production and higher diesel and other consumable costs primarily due to inflationary pressures. Amortization decreased to $1.4 million due to lower ounces sold. Capital expenditures were $0.1 million. Silvertip Three Months Ended March 31, 2023 Ongoing carrying costs at Silvertip totaled $6.2 million in the first three months of 2023 and in the prior year. Capital expenditures in the first three months of 2023 totaled $0.7 million compared to $11.9 million in the prior year due to planned reduction in capital development expenditures. Since acquisition, exploration at Silvertip has been consistently successful, with measured and indicated resource tonnage increasing from approximately 2.6 million tons to 7.1 million tons as of December 31, 2017 and 2022, respectively. Multiple new zones have been discovered, providing a clear path to potentially significant resource growth for the foreseeable future. In addition, the full geochemical and metal zonation of the deposit will be studied including the critical minerals indium, germanium and gallium that are present in the orebody. The Company anticipates a slower overall timeline to advance the Silvertip project, with the primary focus on growth and understanding of the overall deposit. Consistent with Silvertip’s status as a long-term exploration project, the Company has reclassified its mineral reserves to measured and indicated resources as of year-end 2022. Coeur plans to focus on compiling, analyzing and interpreting historical data during the first half of the year to increase the understanding of the geological context and mineralization system. Significant work on logging, data collection, analysis and interpretation is ongoing as part of this effort. A new detailed geological model will be compiled to support year-end reserve and resource calculations at the end of 2023. Liquidity and Capital Resources At March 31, 2023, the Company had $68.7 million of cash, cash equivalents and restricted cash and $300.5 million available under the RCF. Future borrowing under the RCF may be subject to certain financial covenants. Cash and cash equivalents increased $5.5 million in the three months ended March 31, 2023, due to net proceeds of $98.4 million from the sale of 32.9 million shares of its common stock in the March 2023 Equity Offering, $39.8 million received from the sale of the remaining 6.0 million shares of common stock of Victoria Gold (“Victoria Gold Common Shares”), $5.0 million received from the Avino note receivable, a 10% increase in average realized silver prices and 4% increase in silver ounces sold, partially offset by a 20% decrease in gold ounces sold, and $74.0 million of capital expenditures primarily related to the Rochester expansion project and higher costs at our operations due to continued inflationary pressures. In 2022, the Company entered into two amendments to the RCF to, among other things, increase the maximum principal amount of the RCF by $90.0 million in incremental loans and commitments to an aggregate of $390.0 million and to modify the financial covenants to provide greater flexibility under the consolidated net leverage ratio requirement through the December 31, 2023 test date. For more details, please see Note 10 -- Debt contained in the 2022 10-K. At March 31, 2023, the Company had $60.0 million drawn, $29.5 million in outstanding letters of credit and $300.5 million available under the RCF. On January 17, 2023, the Company completed the sale of its remaining 6.0 million Victoria Gold Common Shares at a price of $6.70 per Victoria Gold Common Share, for net proceeds of $39.8 million. At March 31, 2023, the Company held $14.9 million of equity securities. 33 In March 2023, the Company completed a $100.0 million “at the market” offering of its common stock, par value $0.01 per share (the “March 2023 Equity Offering”). The Company sold a total of 32,861,580 shares of common stock in the March 2023 Equity Offering at an average price of $3.04 per share, raising net proceeds (after sales commissions) of $98.4 million. The Company had outstanding forward contracts on 157,998 ounces of gold and 2,400,000 ounces of silver at March 31, 2023 that settle monthly through December 2023. The Company is targeting to hedge up to 70% of expected gold production and 50% of expected silver production for 2023 in order to protect cash flow during a period of elevated capital expenditures and may in the future layer on additional hedges as circumstances warrant. In April and May 2023, the Company added 1.3 million ounces of silver forward contracts that settle monthly through December 2023. Taking into account the additional silver hedges added in April and May 2023, the weighted average fixed price on the forward contracts is $1,968 per ounce of gold and $25.04 per ounce of silver. We currently believe we have sufficient sources of funding to meet our business requirements for the next 12 months and longer-term. We expect to use a combination of cash provided by operating activities under-pinned by our gold and silver hedging programs, sales of non-core investments, and borrowings under our RCF depending on future commodity prices to fund near term capital requirements, including those described in this report for the Rochester expansion project and in our 2023 capital expenditure guidance. Our longer-term plans contemplate the expansion and restart of Silvertip, as well as the continued exploration to extend mine lives at all of our operating sites. As of March 31, 2023, the Company committed approximately $634 million of capital since inception of the project, approximately $560 million of the estimated project cost had been incurred and the project was 82% complete. The Company estimates the total capital cost for the project will likely be around the high end of the $650 - $670 million guidance range, which primarily reflects the impacts of extreme winter weather on construction productivity during the first quarter. Mechanical completion remains on target for mid-2023 with ramp-up and commissioning expected to take place during the second half of the year. The Company expects capital expenditures related to the Rochester expansion to be approximately $197 - $207 million during 2023, with roughly 70% incurred during the first half of the year. In April 2023, the Company exchanged $9.5 million in aggregate principal amount plus accrued interest of 2029 Senior Notes for 2,155,141 shares of common stock. 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 in the 2022 10-K and Part II, Item 1A of this Report. Cash Provided by (Used in) Operating Activities Net cash used in operating activities for the three months ended March 31, 2023 was $35.0 million, compared to net cash provided by operating activities of $28.5 million for the three months ended December 31, 2022 and net cash used in operating activities of $6.4 million for three months ended March 31, 2022. Adjusted EBITDA for the three months ended March 31, 2023 was $25.1 million, compared to $35.8 million for the three months ended December 31, 2022 and $41.5 million for the three months ended March 31, 2022 (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 In thousands March 31, 2023 December 31, 2022 March 31, 2022 Cash flow before changes in operating assets and liabilities $ 6,223 $ 19,638 $ 23,779 Changes in operating assets and liabilities: Receivables 3,050 353 9,100 Prepaid expenses and other (496) (699) (509) Inventories (17,635) (8,798) (17,672) Accounts payable and accrued liabilities (26,145) 18,022 (21,125) Cash provided by (used in) operating activities $ (35,003) $ 28,516 $ (6,427) Net cash provided by operating activities decreased $63.5 million for the three months ended March 31, 2023 compared to the three months ended December 31, 2022, primarily as a result of 20% decrease gold ounces sold, receipt of 34 $25.0 million of prepaid revenue in the fourth quarter of 2022, the timing of interest payments, and higher mining and income taxes at Palmarejo, partially offset by a 4% increase in silver ounces sold, 10% increase in average realized silver prices, and lower exploration costs. Revenue for the three months ended March 31, 2023 compared to the three months ended December 31, 2022 decreased by $22.8 million, of which $28.6 million was due to the lower volume of gold sales, partially offset by $5.8 million as the result of higher average realized silver prices. Net cash used in operating activities increased $28.6 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily due to a 6% decrease in gold ounces sold and a 3% decrease in average realized silver prices, timing of VAT collections at Palmarejo in 2022, receipt of $10.0 million of prepaid revenue in the first quarter of 2022 and higher operating costs, partially offset by a 6% increase in silver ounces sold, 4% increase in average realized gold prices, the favorable impact of realized gains from gold and silver hedges, and lower exploration costs. Revenue for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 decreased by $1.1 million, of which $4.6 million was due to a lower volume of gold sales, partially offset by $3.5 million as the result of higher average realized gold prices. Cash Provided by (Used in) Investing Activities Net cash used in investing activities in the three months ended March 31, 2023 was $29.3 million compared to net cash provided by investing activities of $36.7 million in the three months ended December 31, 2022. Cash provided by investing activities decreased primarily due to receipt of net proceeds of $150.2 million from the sale of the Sterling/Crown exploration properties in the fourth quarter of 2022, partially offset by net proceeds of $39.8 million received from the sale of its remaining Victoria Gold Common Shares, $5.0 million received from the collection of amounts due under the promissory note issued in connection with the sale of the La Preciosa project, and decrease in capital expenditures due to the timing of payments related to POA 11 construction activities at Rochester. The Company incurred capital expenditures of $74.0 million in the three months ended March 31, 2023 compared with $113.1 million in the three months ended December 31, 2022 primarily related to POA 11 construction activities at Rochester and underground development at Palmarejo and Kensington in both periods. Net cash used in investing activities in the three months ended March 31, 2023 was $29.3 million compared to $54.1 million in the three months ended March 31, 2022. Cash used in investing activities decreased primarily due to net proceeds of $39.8 million received from the sale of its remaining Victoria Gold Common Shares, and $5.0 million received from the sale of the La Preciosa project, partially offset by an increase in capital expenditures. The Company incurred capital expenditures of $74.0 million in the three months ended March 31, 2023 compared with $69.5 million in the three months ended March 31, 2022 primarily related to POA 11 construction activities at Rochester and underground development at Palmarejo and Kensington in both periods. Cash Provided by (Used in) Financing Activities Net cash provided by financing activities in the three months ended March 31, 2023 was $69.4 million compared to net cash used in financial activities of $79.2 million in the three months ended December 31, 2022. During the three months ended March 31, 2023, the Company repaid $20.0 million, net, under the RCF and received net proceeds of $98.4 million from the sale of 32.9 million shares of its common stock in the March 2023 Equity Offering. During the three months ended December 31, 2022, the Company received net proceeds of $49.2 million the sale of 14.8 million shares of its common stock in the December 2022 Equity Offering, partially offset by the net repayment of $120.0 million under the RCF. Net cash provided by financing activities in the three months ended March 31, 2023 was $69.4 million compared to $76.7 million in the three months ended March 31, 2022. During the three months ended March 31, 2023, the Company repaid $20.0 million, net, under the RCF and received net proceeds of $98.4 million from the sale of 32.9 million shares of its common stock in the March 2023 Equity Offering. During the three months ended March 31, 2022, the Company received net proceeds of $98.4 million from the sale of 22.1 million shares of its common stock in the March 2022 Equity Offering, partially offset by the net repayment of $10.0 million under the RCF. Critical Accounting Policies and Accounting Developments See Note 2 - Summary of Significant Accounting Policies contained in the 2022 10-K and 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 35 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, 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. 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 In thousands except per share amounts March 31, 2023 December 31, 2022 March 31, 2022 Net income (loss) $ (24,586) $ 49,089 $ 7,682 Fair value adjustments, net (10,561) 1,396 (10,605) Foreign exchange loss (gain) 1,991 458 990 (Gain) loss on sale of assets and securities 9 (62,064) (1,831) RMC bankruptcy distribution — (1,651) — COVID-19 costs 56 155 972 Other adjustments 70 782 — Tax effect of adjustments (1) (37) (5,616) (10,990) Adjusted net income (loss) $ (33,058) $ (17,451) $ (13,782) Adjusted net income (loss) per share, Basic $ (0.11) $ (0.06) $ (0.05) Adjusted net income (loss) per share, Diluted $ (0.11) $ (0.06) $ (0.05) 36 (1) For the three months ended March 31, 2023, tax effect of adjustments of $37 (0.3%) is primarily related to the fair value adjustments on the Company’s equity investments and LCM adjustment recorded at Rochester. For the three months ended December 31, 2022, tax effect of adjustments of $5.6 million (9%) is primarily related to the fair value adjustments on the Company’s equity investments and the derecognition of deferred tax liabilities related to the sale of La Preciosa and the Sterling /Crown exploration properties . For the three months ended March 31, 2022, tax effect of adjustments of $11.0 million (96%) is primarily related to the derecognition of deferred tax liabilities related to the sale of Proyectos Mineros La Preciosa, S.A. de C.V. 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 the 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: Three Months Ended In thousands except per share amounts March 31, 2023 December 31, 2022 March 31, 2022 Net income (loss) $ (24,586) $ 49,089 $ 7,682 Interest expense, net of capitalized interest 7,389 8,191 4,568 Income tax provision (benefit) 10,708 (421) 1,694 Amortization 22,708 28,077 26,433 EBITDA 16,219 84,936 40,377 Fair value adjustments, net (10,561) 1,396 (10,605) Foreign exchange (gain) loss 1,154 (123) 559 Asset retirement obligation accretion 3,993 3,643 3,463 Inventory adjustments and write-downs 14,187 8,725 8,592 (Gain) loss on sale of assets and securities 9 (62,064) (1,831) RMC bankruptcy distribution — (1,651) — COVID-19 costs 56 155 972 Other adjustments 70 782 — Adjusted EBITDA $ 25,127 $ 35,799 $ 41,527 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 Condensed 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 (Dollars in thousands) March 31, 2023 December 31, 2022 March 31, 2022 Cash flow from operations $ (35,003) $ 28,516 $ (6,427) Capital expenditures 74,048 113,094 69,502 Free cash flow $ (109,051) $ (84,578) $ (75,929) 37 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. Three Months Ended (Dollars in thousands) March 31, 2023 December 31, 2022 March 31, 2022 Cash provided by (used in) operating activities $ (35,003) $ 28,516 $ (6,427) Changes in operating assets and liabilities: Receivables (3,050) (353) (9,100) Prepaid expenses and other 496 699 509 Inventories 17,635 8,798 17,672 Accounts payable and accrued liabilities 26,145 (18,022) 21,125 Operating cash flow before changes in working capital $ 6,223 $ 19,638 $ 23,779 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 and silver, 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 and silver based on gold and silver 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 March 31, 2023 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) $ 57,984 $ 48,083 $ 43,226 $ 24,953 $ 1,221 $ 175,467 Amortization (8,719) (5,218) (5,844) (1,409) (1,221) (22,411) Costs applicable to sales $ 49,265 $ 42,865 $ 37,382 $ 23,544 $ — $ 153,056 Metal Sales Gold ounces 25,970 8,349 20,902 15,645 70,866 Silver ounces 1,795,159 769,804 — 23,956 — 2,588,919 Costs applicable to sales Gold ($/oz) $ 930 $ 2,413 $ 1,785 $ 1,468 Silver ($/oz) $ 14.00 $ 29.51 $ — 38 Three Months Ended December 31, 2022 In thousands (except metal sales, per ounce or per pound amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $ 55,325 $ 50,211 $ 49,887 $ 30,716 $ 1,133 $ 187,272 Amortization (8,281) (6,034) (10,672) (1,748) (1,133) (27,868) Costs applicable to sales $ 47,044 $ 44,177 $ 39,215 $ 28,968 $ — $ 159,404 Metal Sales Gold ounces 25,252 11,646 30,863 20,428 88,189 Silver ounces 1,490,443 974,810 — 17,387 — 2,482,640 Costs applicable to sales Gold ($/oz) $ 1,025 $ 1,973 $ 1,269 $ 1,398 Silver ($/oz) $ 14.20 $ 21.75 $ — Three Months Ended March 31, 2022 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) $ 52,611 $ 36,985 $ 45,532 $ 22,918 $ 1,259 $ 159,305 Amortization (9,386) (4,710) (8,622) (2,061) (1,259) (26,038) Costs applicable to sales $ 43,225 $ 32,275 $ 36,910 $ 20,857 $ — $ 133,267 Metal Sales Gold ounces 28,242 5,928 22,834 18,207 75,211 Silver ounces 1,796,028 638,116 — 16,138 — 2,450,282 Costs applicable to sales Gold ($/oz) $ 735 $ 2,287 $ 1,606 $ 1,124 Silver ($/oz) $ 12.51 $ 29.34 $ — 39 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 and silver mining business, including statements regarding operations and activities at the Company’s properties, exploration and development efforts, mine lives, strategies, expectations regarding the Rochester POA 11 expansion project (including future LCM adjustments), the Silvertip mine's potential expansion and restart, including timing thereof, inflation, hedging strategies, realization of deferred tax assets, expectations about the recovery of unduly paid 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, expenses, and cash flow. 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 2022 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 and silver 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), mining law changes, ground conditions and grade and recovery 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 resources, (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 or refiner 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.