What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-09 compared with 2023-05-10 · 256 added, 186 removed, 318 unchanged (58% of the section changed)

7 unchanged sentences

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.

Second Quarter Highlights

For the quarter, Coeur reported revenue of $177.2 million and cash provided by operating activities of $39.4 million.

We reported GAAP net loss of $32.4 million, or $0.10 per diluted share.

On a non-GAAP adjusted basis 1 , the Company reported EBITDA of $22.2 million and net loss of $20.2 million or $0.06 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

For the six months ended June 30, 2023, Coeur reported revenue of $364.5 million and cash provided by operating activities of $4.4 million.

We reported GAAP net loss of $57.0 million, or $0.18 per diluted share.

On a non-GAAP adjusted basis 1 , the Company reported EBITDA of $47.4 million and net loss of $53.2 million or $0.17 per diluted share.

• Rochester expansion approximately 97% complete as of July 31 – Solution is now circulating through the completed Stage VI leach pad and Merrill-Crowe process plant, with initial ounces expected to be recovered next month.

Construction completion of the new three-stage crushing circuit is anticipated this quarter.

Ramp-up of the expanded operation is set to occur over the remainder of 2023 and into early 2024, leading to expected significant production growth and materially lower costs.

The estimated ultimate cost to complete the expansion is expected to be approximately 6 - 9%, or $40 - $60 million, higher than the prior high-end of guidance.

The Company has incurred approximately $660 million of total project costs through the end of July.

• Second quarter operating strength at Rochester and Wharf offset lower production at Kensington – Gold and silver production for the quarter totaled 68,406 ounces and 2.4 million ounces, respectively.

Stronger production at Rochester and Wharf offset a weaker quarter at Kensington due to excessive water flows and paste backfill issues, which delayed the timing of production from certain stopes

• Full-year silver production guidance maintained;

gold production guidance revised to reflect lower outlook at Kensington – 2023 silver production is expected to be 10 - 12 million ounces.

2023 gold production expected to be 304,000 - 352,500 ounces, approximately 5% lower than prior full-year gold production guidance, after taking Kensington’s lower than anticipated second quarter production into account

• Balance sheet flexibility maintained to support remaining capital investments – Coeur ended the quarter with total liquidity of approximately $346 million including $57 million of cash, $280 million of available capacity under its $390 million revolving credit facility (“RCF”), and $9 million of marketable securities

• State of South Dakota approves Boston Expansion at Wharf - Coeur has received a state mine permit from the South Dakota Board of Minerals and Environment allowing for a fifty-acre expansion of mining operations at Wharf, which is expected to add significant certainty to Wharf’s current eight-year mine life

Selected Financial and Operating Results

Three Months Ended

In thousands March 31, 2023 December 31, 2022 March 31, 2022

Three Months Ended Six Months Ended

In thousands June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Financial Results (In thousands):

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Consolidated Financial Results

Three Months Ended March 31, 2023 compared to Three Months Ended December 31, 2022

Three Months Ended June 30, 2023 compared to Three Months Ended March 31, 2023

We sold 67,090 gold ounces and 2.3 million silver ounces, compared to 70,866 gold ounces and 2.6 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.

Revenue decreased by $10.1 million, or 5%, as a result of a 5% and 10% decrease in gold and silver ounces sold, respectively, partially offset by a 1% and 3% increase in average realized gold and silver prices, respectively.

The decrease in gold ounces sold was primarily due to lower mill throughput at Palmarejo, timing of recoveries and placement of ore tons on the new Stage VI leach pad at Rochester, and lower grades at Kensington, partially offset by timing of recoveries at Wharf.

The decrease in silver ounces sold was primarily due to lower mill throughput at Palmarejo and timing of recoveries and placement of ore tons on the new Stage VI leach pad at Rochester.

Gold and silver represented 68% and 32% of second quarter 2023 sales revenue, respectively, compared to 68% and 32% of first quarter 2023 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

In thousands June 30, 2023 March 31, 2023

Gold sales $ 121,355 $ 127,101 $ (5,746) (5) %

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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.

Costs applicable to sales decreased $13.4 million, or 9%, primarily due to lower gold and silver ounces sold and a decreased 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.

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.

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.

Amortization decreased $3.1 million, or 14% primarily due to lower gold and silver ounces sold.

General and administrative expenses decreased $2.3 million, or 19%, primarily due to lower employee incentive related costs.

Exploration expense decreased $1.7 million, or 37% driven by increased Canadian mining exploration tax credits associated with expenditures at the Silvertip exploration project.

Pre-development, reclamation, and other expenses decreased $0.8 million, or 8%, stemming from lower ongoing carrying costs at Silvertip.

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

In thousands June 30, 2023 March 31, 2023

COVID-19 $ 21 $ 56 $ (35) (63) %

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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.

During the second quarter of 2023, the Company incurred a $3.0 million gain in connection with the exchange of $48.5 million in aggregate principal amount plus accrued interest of 2029 Senior Notes for 13.9 million shares of common stock.

Fair value adjustments, net, decreased to a loss of $3.9 million compared to a gain of $10.6 million as a result of a decrease 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.

Interest expense (net of capitalized interest of $3.2 million) decreased to $6.9 million from $7.4 million due to lower interest payable following the extinguishment of $48.5 million in 2029 Senior Notes, and higher capitalized interest, partially offset by higher interest paid under the RCF due to increasing interest rates.

Other, net decreased to a loss of $9.9 million compared to $1.0 million as a result of the $12.3 million loss recognized from the sale of the deferred cash consideration, two royalties and contingent consideration received in connection with the sale of the La Preciosa Deferred Consideration.

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.

Income and mining tax expense of approximately $9.9 million resulted in an effective tax rate of (43.8)% for the three months ended June 30, 2023.

This compares to income tax expense of $10.7 million for an effective tax rate of (77.2)% for the three months ended March 31, 2023.

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.

(i) variations in our income before income taxes;

(ii) geographic distribution of that income;

(iii) mining taxes;

(iv) the sale of non-core assets;

(v) foreign exchange rate;

(vi) percentage depletion;

and (vii) the impact of uncertain tax positions.

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

The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit:

Three Months Ended March 31, Three Months Ended December 31,

Three Months Ended June 30, Three Months Ended March 31,

In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit

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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.

Net loss was $32.4 million, or $0.10 per diluted share, compared to $24.6 million, or $0.08 per diluted share.

The increase in net loss was driven by a 5% and 10% decrease in gold and silver ounces sold, respectively, unfavorable changes in the fair value of the Company’s equity investments, and a $12.3 million loss on the sale of the La Preciosa Deferred Consideration.

This was partially offset by a $3.0 million gain from extinguishment of $48.5 million in aggregate principal of 2029 Senior Notes, a 1% and 3% increase in average realized gold and silver prices, and lower exploration costs.

Adjusted net loss was $20.2 million, or $0.06 per diluted share, compared to $33.1 million, or $0.11 per diluted share (see “Non-GAAP Financial Performance Measures”).

Three Months Ended March 31, 2023 compared to Three Months Ended March 31, 2022

Six Months Ended June 30, 2023 compared to Six Months Ended June 30, 2022

We sold 137,956 gold ounces and 4.9 million silver ounces, compared to 159,997 gold ounces and 5.0 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.

Revenue decreased by $28.0 million, or 7%, as a result of a 14% and 1% decrease in gold and silver ounces sold, respectively, partially offset by a 4% and 1% increase in average realized gold and silver prices, respectively.

The decrease in gold ounces sold was primarily due to lower mill throughput and grades at Palmarejo and lower mill throughput and recoveries at Kensington, partially offset by timing of recoveries at Rochester and Wharf, and higher grades at Wharf.

The decrease in silver ounces sold was primarily due to lower mill throughput at Palmarejo, partially offset by the timing of recoveries and higher grades at Rochester.

Gold and silver represented 68% and 32% of 2023 sales revenue, respectively, compared to gold and silver representing 70% and 30% of 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

Six Months Ended Increase (Decrease) Percentage Change

In thousands June 30, 2023 June 30, 2022

Gold sales $ 248,456 $ 276,076 $ (27,620) (10) %

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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.

Costs applicable to sales increased $8.7 million, or 3%, primarily due to higher operating costs partially impacted by continued inflationary pressures relating to diesel and consumable costs.

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

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.

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.

Amortization decreased $12.1 million primarily due to lower gold ounces sold and longer assumed mine lives at Palmarejo, Rochester, Kensington and Wharf driven by prior year’s successful investments in exploration.

General and administrative expenses increased $2.3 million, or 12%, primarily due to higher employee incentive related costs.

Exploration expense decreased $3.1 million, or 29%, driven by increased Canadian mining exploration tax credits associated with expenditures at the Silvertip exploration project.

Pre-development, reclamation, and other expenses increased $0.3 million, or 2%, stemming from higher asset retirement accretion, partially offset by lower costs incurred in connection with the Company’s COVID-19 health and safety protocols.

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

Three Months Ended March 31, Increase (Decrease) Percentage Change

Six Months Ended June 30, Increase (Decrease) Percentage Change

In thousands 2023 2022

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Other Income and Expenses

Fair value adjustments, net, remained comparable at a gain of $10.6 million.

Fair value adjustments, net, increased to a gain of $6.6 million compared to a $52.2 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) 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.

Interest expense (net of capitalized interest of $5.3 million) increased to $14.3 million from $9.7 million due to higher interest paid under the RCF attributable to higher average debt levels and interest rates, and lower capitalized interest.

Other, net decreased to a loss of $10.9 million compared to a gain of $2.1 million, as a result of the $12.3 million loss recognized from the sale of the La Preciosa Deferred Consideration.

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.

During the first half of 2023, income and mining tax expense of approximately $20.6 million resulted in an effective tax rate of (56.5)% for 2023.

This compares to income tax expense of $13.2 million for an effective tax rate of (23.3)% for 2022.

10 unchanged sentences

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,

Six Months Ended June 30,

In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit

9 unchanged sentences

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.

Net loss was $57.0 million, or $0.18 per diluted share, compared to $69.8 million, or $0.26 per diluted share.

The decrease in net loss was driven by favorable changes in the fair value of the Company’s equity investments, a 4% and 1% increase in average realized gold and silver prices, respectively, decreased LCM adjustments at Rochester and lower exploration costs.

This was partially offset by a 14% and 1% decrease in gold and silver ounces sold, respectively, higher losses on the sale of assets, interest expense and income and mining taxes.

Adjusted net loss was $53.2 million, or $0.17 per diluted share, compared to $26.9 million, or $0.10 per diluted share (see “Non-GAAP Financial Performance Measures”).

2023 Guidance

Coeur reiterated its 2023 production and cost guidance other than (i) updating production and costs at Kensington and (ii) modifying capital expenditures to reflect the updated estimate to complete the Rochester expansion.

2023 Production Guidance

Previous Updated

Gold Silver Gold Silver

(oz) (K oz) (oz) (K oz)

Palmarejo 100,000 - 112,500 6,500 - 7,500 100,000 - 112,500 6,500 - 7,500

Rochester 35,000 - 50,000 3,500 - 4,500 35,000 - 50,000 3,500 - 4,500

Kensington 100,000 - 112,500 — 84,000 - 95,000 —

Wharf 85,000 - 95,000 — 85,000 - 95,000 —

Total 320,000 - 370,000 10,000 - 12,000 304,000 - 352,500 10,000 - 12,000

2023 Costs Applicable to Sales Guidance

Previous Updated

Gold Silver Gold Silver

($/oz) ($/oz) ($/oz) ($/oz)

Palmarejo (co-product) $900 - $1,050 $14.25 - $15.25 $900 - $1,050 $14.25 - $15.25

Rochester (co-product) — — — —

Kensington $1,500 - $1,700 — $1,650 - $1,750 —

Wharf (by-product) $1,200 - $1,350 — $1,200 - $1,350 —

The Company expects second half 2023 CAS at Rochester to be similar to actual first half 2023 CAS as Coeur completes and ramps up the expansion project.

2023 Capital, Exploration and G&A Guidance

Previous Updated

Capital Expenditures, Sustaining $120 - $145 $148 - $168

Capital Expenditures, Development $200 - $235 $230 - $264

Exploration, Expensed $30 - $35 $30 - $35

Exploration, Capitalized $10 - $15 $10 - $15

General & Administrative Expenses $36 - $40 $36 - $40

The Company’s previous guidance figures assume estimated prices of $1,800/oz gold and $23.00/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.

The Company’s updated guidance figures assume estimated prices of $1,900/oz gold and $23.00/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 Operations

Three Months Ended

March 31, 2023 December 31, 2022 March 31, 2022

Three Months Ended Six Months Ended

June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Tons milled 472,622 533,606 1,006,228 1,104,811

12 unchanged sentences

(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.

Three Months Ended June 30, 2023 compared to Three Months Ended March 31, 2023

Gold and silver production decreased 8% as a result of 11% lower mill throughput, partially offset by 8% and 2% higher gold and silver grades, respectively.

Metal sales were $72.7 million, or 41% of Coeur’s metal sales, compared with $82.3 million, or 45% 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

Revenue decreased by $9.6 million or 12%, of which $11.6 million was due to a lower volume of gold and silver production, partially offset by an increase of $2.0 million due to higher average realized gold and silver prices.

Costs applicable to sales per gold and silver ounce increased 11% and 9%, respectively, due to higher consumable costs and higher employee-related costs.

Amortization decreased to $8.0 million due to lower sales.

Capital expenditures increased to $11.9 million from $10.2 million due to higher expenditures related to the open pit backfill project and underground development.

Six Months Ended June 30, 2023 compared to Six Months Ended June 30, 2022

Gold and silver production decreased 14% and 7%, respectively as a result of 9% lower mill throughput, 2% lower gold grades, and lower recoveries, partially offset by 4% higher silver grades.

Metal sales were $155.0 million, or 43% of Coeur’s metal sales, compared with $169.0 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.

Revenue decreased by $14.0 million or 8%, of which $21.7 million was due to a lower volume of gold and silver production, partially offset by an increase of $7.7 million due to higher average realized gold and silver prices.

Costs applicable to sales per gold and silver ounce increased 22% and 15%, respectively, due to the mix of gold and silver sales, lower production, higher employee-related and consumable costs primarily due to inflationary pressures.

1 unchanged sentence

Capital expenditures decreased to $22.1 million from $23.7 million due to lower infill drilling activities.

Three Months Ended

March 31, 2023 December 31, 2022 March 31, 2022

Three Months Ended Six Months Ended

June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Tons placed (1)

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$ 21.39 $ 29.51 $ 25.42 $ 28.71

(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.

(1) During the three months ended June 30, 2023, 258,736 and 2,432,104 tons were placed on Stage IV and Stage VI leach pads, respectively.

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 six months ended June 30, 2023, 1,664,235 and 3,483,192 tons were placed on Stage IV and Stage VI leach pads, respectively.

During the six months ended June 30, 2022, 8,338,045 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.

Three Months Ended June 30, 2023 compared to Three Months Ended March 31, 2023

Gold and silver production decreased 23% and 10%, respectively, as a result of the timing of recoveries primarily due to Rochester preparing to transition from the legacy Stage IV leach pad to the new Stage VI leach pad associated with the Rochester expansion.

Approximately 90% of the tons placed in the second 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 $29.1 million, or 16% of Coeur’s metal sales, compared with $33.9 million, or 18% of Coeur’s metal sales.

Revenue decreased by $4.8 million, or 14%, of which $5.4 million was due to a lower volume of gold and silver production, partially offset by an increase of $0.6 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.

Costs applicable to sales per gold and silver ounce decreased 28% due to a lower LCM adjustment of $1.6 million compared to $13.1 million in the prior period and lower cyanide and outside service costs.

Amortization decreased to $3.6 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.

Capital expenditures increased to $61.5 million from $52.0 million due to timing of payments related to the Rochester expansion project.

Six Months Ended June 30, 2023 compared to Six Months Ended June 30, 2022

Gold and silver production increased 1% and 7%, respectively, primarily due to the timing of recoveries.

Metal sales were $63.0 million, or 17% of Coeur’s metal sales, compared with $56.9 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.

Revenue increased by $6.1 million, or 11%, of which $5.0 million was due to a higher volume of gold and silver production, and $1.1 million due to higher average realized gold and silver prices.

Costs applicable to sales per gold and silver ounce decreased 7% and 11%, respectively, due to the mix of gold and silver sales, lower LCM adjustments of $14.7 million compared to $16.8 million in the prior period, and lower diesel costs, partially offset by higher employee-related, and maintenance costs.

Amortization decreased to $8.9 million due to longer assumed mine life.

Capital expenditures increased to $113.4 million from $80.0 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.

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.

Three Months Ended

March 31, 2023 December 31, 2022 March 31, 2022

At the end of July, the project was approximately 97% complete and the Company had incurred $660 million of the total project costs.

Coeur expects to achieve mechanical completion of the crusher corridor in the third quarter, with ramp-up anticipated throughout the second half of 2023 and into early 2024.

The Company also updated its estimate for the expected ultimate cost to complete the expansion, which reflects additional contractor hours required to offset the loss of approximately thirty days due to extreme weather and lower than planned productivity rates driven by a lack of qualified skilled labor.

Together with ongoing inflationary impacts and required construction re-work to address issues from previously completed engineering designs, the Company expects the total cost for the project to be approximately 6 - 9%, or $40 - $60 million above the high end of Coeur’s previous guidance range of $650 - $670 million.

Three Months Ended Six Months Ended

June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Tons milled 152,907 153,337 306,244 341,690

6 unchanged sentences

(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.

Three Months Ended June 30, 2023 compared to Three Months Ended March 31, 2023

Gold production decreased 35% as a result of 40% lower grades due to challenges with mine sequencing and stope extraction driven by significant water inflows from spring runoff and paste backfill issues.

Metal sales were $24.6 million, or 14% of Coeur’s metal sales, compared to $40.2 million, or 21% 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.

Revenue decreased by $15.6 million, or 39%, of which $14.1 million resulted from a lower volume of gold production, and $1.5 million due to lower average realized gold prices.

Costs applicable to sales per gold ounce increased 65% due to lower production and higher outside service costs.

Amortization decreased to $4.8 million primarily due to lower ounces sold.

Capital expenditures increased to $11.7 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.

Six Months Ended June 30, 2023 compared to Six Months Ended June 30, 2022

Gold production decreased 34% as a result of 10% lower throughput primarily due to challenges with mine sequencing and stope extraction as well as lower grades and recoveries.

Metal sales were $64.8 million, or 18% of Coeur’s metal sales, compared to $94.6 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.

Revenue decreased by $29.8 million, or 31%, of which $30.9 million resulted from a lower volume of gold production, partially offset by an increase of $1.1 million due to higher average realized gold prices.

Costs applicable to sales per gold ounce increased 49% due to lower production.

1 unchanged sentence

Capital expenditures increased to $22.4 million from $16.8 million due to higher infill drilling and underground development.

Three Months Ended

March 31, 2023 December 31, 2022 March 31, 2022

Three Months Ended Six Months Ended

June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Tons placed 1,041,846 1,156,794 2,198,640 2,177,784

7 unchanged sentences

(1) See Non-GAAP Financial Performance Measures.

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.

Three Months Ended June 30, 2023 compared to Three Months Ended March 31, 2023

Gold production increased 66% driven by timing of recoveries.

Metal sales were $50.8 million, or 29% of Coeur’s metal sales, compared to $30.9 million, or 16% 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.

Revenue increased by $19.9 million, or 64%, of which $19.8 million was due to a higher gold production, and $0.1 million due to higher average realized gold prices.

Costs applicable to sales per gold ounce decreased 30% due to higher production and lower operating costs.

Amortization increased to $1.8 million due to higher ounces sold.

Capital expenditures were $0.2 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.

Six Months Ended June 30, 2023 compared to Six Months Ended June 30, 2022

Gold production increased 8% driven by higher grades.

Metal sales were $81.7 million, or 22% of Coeur’s metal sales, compared to $72.1 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.

Revenue increased by $9.6 million, or 13%, of which $7.4 million

was due to a higher volume of gold production, and $2.2 million due to higher average realized gold prices.

Costs applicable to sales per gold ounce increased 2% due to higher diesel and other consumable costs primarily due to inflationary pressures.

Amortization decreased to $3.2 million due to longer assumed mine life.

Capital expenditures were $0.3 million.

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.

Six Months Ended June 30, 2023

Ongoing carrying costs at Silvertip totaled $10.8 million in the first half of 2023 and $10.9 million in 2022.

Capital expenditures in the first half of 2023 totaled $0.8 million compared to $17.6 million in the prior year due to planned reduction in capital development expenditures.

Since acquisition, exploration at Silvertip has been consistently successful, with demonstrated resource growth.

Multiple new zones have been discovered, providing a path to potentially significant resource expansion.

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 ore body.

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.

Consistent with Silvertip’s status as a long-term exploration project, the Company reclassified its mineral reserves to measured and indicated resources as of year-end 2022.

Coeur focused 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.

A new detailed geological model will be compiled to support year-end 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.

At June 30, 2023, the Company had $58.6 million of cash, cash equivalents and restricted cash and $280.5 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.

Cash and cash equivalents decreased $4.6 million in the six months ended June 30, 2023, due to 14% and 1% decrease in gold and silver ounces sold, respectively, $159.6 million of capital expenditures primarily related to the Rochester expansion project and higher costs at our operations due to continued inflationary pressures, partially offset by 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”), and net proceeds of $18.2 million from the sale of 5.3 million shares of its common stock in the Private Placement Offering (excludes 3 million over-allotment shares issued subsequent to quarter end).

Additionally, the Company received net proceeds of $7.0 million from the sale of the deferred cash consideration, two royalties and contingent consideration received in connection with the sale of the La Preciosa project, $5.0 million received from the Avino note receivable, net proceeds of $1.8 million from the sale of remaining common stock of Integra Resources Corporation, and a 1% and 3% increase in average realized gold and silver prices, respectively.

At June 30, 2023, the Company had $80.0 million drawn, $29.5 million in outstanding letters of credit and $280.5 million available under the RCF.

On August 9, 2023, the Company entered into an amendment (the “August Amendment”) to the RCF.

The August Amendment, among other things, (1) modifies the financial covenants to provide greater flexibility during the final stages of the Rochester expansion under (a) the consolidated net leverage and consolidated senior secured leverage ratios at September 30, 2023 through the March 31, 2024, with the ratios returning to the previous levels at June 30, 2024 and (b) the consolidated interest coverage ratio at June 30 through September 30, 2023, with the ratio returning to the previous level at December 31, 2023, (2) allows up to $50 million, through June 30, 2024, stepping down to $40 million in September 31, 2024, $30 million in December 31, 2024 and $15 million thereafter, for integration costs or costs associated with establishing new facilities and certain costs associated with LCM adjustments at Rochester to be excluded from the calculation of Consolidated EBITDA for purposes of the RCF, (3) increases the interest rate on certain borrowings through June 30, 2024, and (4) restricts certain acquisitions through March 31, 2024.

In January 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 June 30, 2023, the Company held $9.2 million of equity securities.

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.

In June 2023, the Company sold a total of 5,276,154 shares its common stock (“Private Placement Offering”) issued as “flow-through shares” as defined in subsection 66(15) of the Income Tax Act (Canada) (the “FT Shares”), raising a net proceeds of $18.2 million, of which $5.1 million represents net proceeds received in excess of the Company’s average price (“FT Premium Liability”).

The proceeds of the issuance of FT Shares will be used by the Company for certain qualifying “Canadian Exploration Expenditures” (as such term is defined in the Income Tax Act (Canada)).

The Company granted an over-allotment option of up to 3,000,000 additional flow-through shares, which was exercised in full and closed on July 20, 2023.

The over-allotment option raised net proceeds of $10.5 million, including an additional $2.7 million of FT Premium Liability.

The Company had outstanding forward contracts on 111,498 ounces of gold and 2.5 million ounces of silver at June 30, 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.

The weighted average fixed price on the forward contracts is $1,977 per ounce of gold and $25.40 per ounce of silver.

In the second quarter of 2023, the Company exchanged $48.5 million in aggregate principal amount plus accrued interest of 2029 Senior Notes for 13.9 million shares of common stock.

We currently believe we have sufficient sources of funding to meet our business requirements for the next twelve 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, additional equity financing, 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.

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.

At the end of July, the project was approximately 97% complete and the Company had incurred $660 million of the total project costs.

Coeur expects to achieve mechanical completion of the crusher corridor in the third quarter, with ramp-up anticipated throughout the second half of 2023 and into early 2024.

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.

2 unchanged sentences

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 for the three months ended June 30, 2023 was $39.4 million, compared to net cash used in operating activities of $35.0 million for the three months ended March 31, 2023.

Net cash provided by operating activities for the six months ended June 30, 2023 was $4.4 million, compared to $16.2 million for the six months ended June 30, 2022.

Adjusted EBITDA for the three months ended June 30, 2023 was $22.2 million, compared to $25.1 million for the three months ended March 31, 2023.

Adjusted EBITDA for the six months ended June 30, 2023 was $47.4 million, compared to $77.3 million for the six months ended June 30, 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

Three Months Ended Six Months Ended

In thousands June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Cash flow before changes in operating assets and liabilities $ (6,920) $ 6,223 $ (697) $ 53,552

5 unchanged sentences

Cash provided by (used in) operating activities $ 39,397 $ (35,003) $ 4,394 $ 16,217

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

$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.

Net cash provided by operating activities increased $74.4 million for the three months ended June 30, 2023 compared to the three months ended March 31, 2023, primarily as a result of a 1% and 3% increase in average realized gold and silver prices, respectively, receipt of $45.0 million of metal sales prepayments in the second quarter of 2023, the timing of interest payments and lower exploration costs, partially offset by 5% and 10% decrease in gold and silver ounces sold.

Revenue for the three months ended June 30, 2023 compared to the three months ended March 31, 2023 decreased by $10.1 million, of which $12.8 million was due to the lower volume of gold and silver sales, partially offset by $2.8 million as the result of higher average realized gold and silver prices.

Net cash provided by operating activities decreased $11.8 million for the six months ended June 30, 2023 compared to the six months ended June 30, 2022, primarily due to a 14% and 1% decrease in gold and silver ounces sold, respectively, higher operating and costs, partially offset by a 4% and 1% increase in average realized gold and silver prices, respectively, receipt of $45.0 million of prepayments in the second quarter of 2023 and lower exploration costs.

Revenue for the six months ended June 30, 2023 compared to the six months ended June 30, 2022 decreased by $28.0 million, of which $41.3 million was due to a lower volume of gold and silver sales, partially offset by $13.3 million as the result of higher average realized gold and silver 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.

Net cash used in investing activities in the three months ended June 30, 2023 was $75.6 million compared to $29.3 million in the three months ended March 31, 2023.

Cash used in investing activities increased primarily due to higher capital expenditures partially offset by net proceeds of $7.0 million received from the sale of the La Preciosa Deferred Consideration, and net proceeds of $1.8 million from the sale of remaining common stock of Integra Resources Corporation.

The Company incurred capital expenditures of $85.6 million in the three months ended June 30, 2023 compared with $74.0 million in the three months ended March 31, 2023 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 six months ended June 30, 2023 was $105.0 million compared to $126.7 million in the six months ended June 30, 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, net proceeds of $7.0 million received from the sale of the La Preciosa Deferred Consideration, $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 net proceeds of $1.8 million from the sale of remaining common stock of Integra Resources Corporation, partially offset by an increase in capital expenditures and the receipt of net proceeds of $15.3 million from the sale of the La Preciosa project in 2022.

The Company incurred capital expenditures of $159.6 million in the six months ended June 30, 2023 compared with $142.7 million in the six months ended June 30, 2022 primarily related to POA 11 construction activities at Rochester and underground development at Palmarejo and Kensington in both periods.

Cash Provided by Financing Activities

Net cash provided by financing activities in the three months ended June 30, 2023 was $25.9 million compared to $69.4 million in the three months ended March 31, 2023.

During the three months ended June 30, 2023, the Company drew $20.0 million, net, under the RCF, and received net proceeds of $13.1 million from the sale of 5.3 million shares of its common stock issued as the FT Shares.

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.

Net cash provided by financing activities in the six months ended June 30, 2023 was $95.3 million compared to $127.5 million in the six months ended June 30, 2022.

During the six months ended June 30, 2023, the Company 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, and received net proceeds of $13.1 million from the sale of 5.3 million shares of its common stock issued as the FT Shares.

During the six

months ended June 30, 2022, the Company drew $50.0 million, net, under the RCF, and the Company received net proceeds of $98.3 million from the sale of 22.1 million shares of its common stock in the March 2022 Equity Offering.

Critical Accounting Policies and Accounting Developments

4 unchanged sentences

operations and corporate activities.

The Company has asserted indefinite reinvestment of earnings from its Mexican operations as determined by

management’s judgment about and intentions concerning the future operations of the Company.

The Company has asserted indefinite reinvestment of earnings from its Mexican operations as determined by management’s judgment about and intentions concerning the future operations of the Company.

The Company does not believe that the amounts reinvested will have a material impact on liquidity.

13 unchanged sentences

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

Three Months Ended Six Months Ended

In thousands except per share amounts June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Net income (loss) $ (32,412) $ (24,586) $ (56,998) $ (69,752)

3 unchanged sentences

RMC bankruptcy distribution (1,516) — (1,516) —

Gain on debt extinguishment (2,961) — (2,961) —

COVID-19 costs 21 56 77 1,290

5 unchanged sentences

Adjusted net income (loss) per share, Diluted $ (0.06) $ (0.11) $ (0.17) $ (0.10)

(1) For the three months ended June 30, 2023, tax effect of adjustments of $1.1 million (-9%) is primarily related to fair value adjustments on the Company’s equity investments, loss on the sale of the La Preciosa Deferred Consideration and LCM adjustment recorded at Rochester.

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.

For the six months ended June 30, 2023, tax effect of adjustments of $1.2 million (-41%) is primarily related to the fair value adjustments on the Company’s equity investments, loss on the sale of the La Preciosa Deferred Consideration and LCM adjustment recorded at Rochester.

For the six months ended June 30, 2022, tax effect of adjustments of $9.5 million (-19%) is primarily related to the de-recognition of deferred tax liabilities related to the sale of La Preciosa and the fair value adjustments on the Company’s equity investments.

EBITDA and Adjusted EBITDA

5 unchanged sentences

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

Three Months Ended Six Months Ended

In thousands except per share amounts June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Net income (loss) $ (32,412) $ (24,586) $ (56,998) $ (69,752)

9 unchanged sentences

RMC bankruptcy distribution (1,516) — (1,516) —

Gain on debt extinguishment (2,961) — (2,961) —

COVID-19 costs 21 56 77 1,290

7 unchanged sentences

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

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Cash flow from operations $ 39,397 $ (35,003) $ 4,394 $ 16,217

7 unchanged sentences

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

Three Months Ended Six Months Ended

(Dollars in thousands) June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Cash provided by (used in) operating activities $ 39,397 $ (35,003) $ 4,394 $ 16,217

11 unchanged sentences

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 June 30, 2023

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) $ 54,608 $ 29,717 $ 43,950 $ 29,634 $ 1,021 $ 158,930

Amortization (8,017) (3,649) (4,801) (1,805) (1,021) (19,293)

Costs applicable to sales $ 46,591 $ 26,068 $ 39,149 $ 27,829 $ — $ 139,637

Gold ounces 22,207 6,493 13,273 25,117 — 67,090

Silver ounces 1,560,743 694,657 — 82,013 — 2,337,413

Costs applicable to sales

Gold ($/oz) $ 1,028 $ 1,726 $ 2,945 $ 1,031

Silver ($/oz) $ 15.22 $ 21.39 $ —

Three Months Ended March 31, 2023

9 unchanged sentences

Silver ($/oz) $ 14.00 $ 29.51 $ —

Three Months Ended December 31, 2022

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

Six Months Ended June 30, 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.

7 unchanged sentences

Silver ($/oz) $ 14.57 $ 25.42 $ —

Three Months Ended March 31, 2022

Six Months Ended June 30, 2022

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

5 unchanged sentences

Silver ounces 3,650,723 1,320,793 — 21,966 — 4,993,482

Zinc pounds — —

Lead pounds — —

Costs applicable to sales

1 unchanged sentence

Silver ($/oz) $ 12.64 $ 28.71 $ —

Zinc ($/lb) $ —

Lead ($/lb) $ —

Reconciliation of Costs Applicable to Sales for Updated 2023 Guidance

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

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

GAAP) $ 233,198 $ 183,769 $ 118,406

Amortization (37,547) (26,764) (6,319)

Costs applicable to sales $ 195,651 $ 157,005 $ 112,087

By-product credit — — (745)

Adjusted costs applicable to sales $ 195,651 $ 157,005 $ 111,342

Gold ounces 104,618 90,673 88,732

Silver ounces 6,784,929 163,607

Revenue Split

Gold 50% 100% 100%

Adjusted costs applicable to sales

Gold ($/oz) $900 - $1,050 $1,650 - $1,750 $1,500 - $1,700

Silver ($/oz) $14.25 - $15.25 —

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.

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 expansion project (including future LCM adjustments), the tax treatment of the FT Shares and the risk that related exploration efforts at Silvertip will not occur on a timely basis or at all, inflation, hedging strategies, realization of deferred tax assets, expectations about the recovery of unduly paid VAT in Mexico, timing of completion of obligations under prepayment agreements, 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.

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 the Q1 2023 10-Q 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.

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-Q

Item 2. Management’s Discussion and Analysis