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. Third Quarter Highlights For the quarter, Coeur reported revenue of $313.5 million and cash provided by operating activities of $111.1 million. We reported GAAP net income of $48.7 million, or $0.12 per diluted share. On a non-GAAP adjusted basis 1 , the Company reported EBITDA of $126.0 million and net income of $47.2 million, or $0.12 per diluted share. For the nine months ended September 30, 2024, Coeur reported revenue of $748.6 million and cash provided by operating activities of $110.4 million. We reported GAAP net income of $21.0 million, or $0.05 per diluted share. On a non-GAAP adjusted basis 1 , the Company reported EBITDA of $222.8 million and net income of $24.7 million or $0.06 per diluted share. • Strong production increases and lower costs across the portfolio – Higher production at all four operations drove a 21% increase in gold production and 15% increase in silver production, totaling 94,993 and 3.0 million ounces of gold and silver, respectively. Costs applicable to sales per gold and silver ounce both declined 12% compared to the prior quarter, leading to margins more than double the prior period. Based on strong year-to-date production and cost performance, the Company reaffirmed its full-year guidance ranges • Robust quarterly financial performance driven by higher production and metals prices – Revenue of $313 million and adjusted EBITDA 1 of $126 million increased 41% and 140% quarter-over-quarter, respectively. Operating cash flow totaled $111 million and free cash flow reached $69 million during the quarter, their highest levels in over a decade. Net income was $49 million and Adjusted EBITDA 1 over the last twelve months (“LTM”) increased 2.5x to $287 million compared to a year ago • Rochester remains on-track to achieve year-end throughput and production guidance – The recently expanded Rochester silver and gold operation placed approximately 7.1 million tons under leach during the quarter leading to production of 1.2 million ounces of silver and 9,690 ounces of gold, representing quarter-over-quarter increases of 19% and 21%, respectively. The Company has reaffirmed full-year Rochester production guidance ranges and expects approximately 7.0 - 8.0 million tons to be placed under leach in the fourth quarter • Announced acquisition of SilverCrest to create leading global silver company – On October 4, 2024, Coeur announced an agreement to acquire SilverCrest Metals Inc. (“SilverCrest”) in an all-stock transaction with an implied value of approximately $1.7 billion as of the announcement date. The acquisition is anticipated to close in the first quarter of 2025 and is expected to materially enhance the Company’s cost and cash flow profile and immediately accelerate the Company’s balance sheet de-leveraging initiative • Debt reduction initiative underway – During the third quarter, the Company reduced its outstanding revolving credit facility (“RCF”) balance by $50 million to $225 million, leading to total liquidity of $222 million, including $77 million of cash, and a net debt to EBITDA ratio below 2.0x for the first time in three years 25 Selected Financial and Operating Results Three Months Ended Nine Months Ended September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Financial Results: (in thousands, except per share amounts) Gold sales $ 223,772 $ 154,085 $ 529,626 $ 387,959 Silver sales $ 89,704 $ 67,941 $ 218,936 $ 171,157 Consolidated Revenue $ 313,476 $ 222,026 $ 748,562 $ 559,116 Net income (loss) $ 48,739 $ 1,426 $ 21,048 $ (78,107) Net income (loss) per share, diluted $ 0.12 $ 0.00 $ 0.05 $ (0.24) Adjusted net income (loss) (1) $ 47,157 $ (3,405) $ 24,729 $ (71,829) Adjusted net income (loss) per share, diluted (1) $ 0.12 $ (0.01) $ 0.06 $ (0.22) EBITDA (1) $ 121,052 $ 49,705 $ 197,908 $ 35,454 Adjusted EBITDA (1) $ 126,041 $ 52,407 $ 222,785 $ 78,012 Total debt (2) $ 605,183 $ 629,327 $ 605,183 $ 512,241 Operating Results: Gold ounces produced 94,993 78,696 254,433 216,062 Silver ounces produced 3,020,566 2,637,950 8,243,276 7,200,410 Gold ounces sold 96,913 76,932 255,261 215,971 Silver ounces sold 3,004,501 2,592,727 8,197,663 7,140,067 Average realized price per gold ounce $ 2,309 $ 2,003 $ 2,075 $ 1,796 Average realized price per silver ounce $ 29.86 $ 26.20 $ 26.71 $ 23.97 (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 September 30, 2024 compared to Three Months June 30, 2024 Revenue We sold 96,913 gold ounces and 3.0 million silver ounces, compared to 76,932 gold ounces and 2.6 million silver ounces. Revenue increased by $91.5 million, or 41%, as a result of a 15% and 14% increase in average realized gold and silver prices, respectively, and a 26% and 16% increase in gold and silver ounces sold, respectively. The Company benefited from higher gold and silver spot prices. The increase in gold ounces sold was due to higher gold production at all sites, specifically higher grade and recovery rates at Palmarejo, the successful completion of the ramp-up of the new three-stage crusher and increased production from the new leach pad at Rochester, and higher tons and grade placed on pads at Wharf. The increase in silver ounces sold was due to higher grade and recovery at Palmarejo and the successful completion of the ramp-up of the new three-stage crusher and increased production from the new leach pad at Rochester. Gold and silver represented 71% and 29% of third quarter 2024 sales revenue, respectively, compared to 69% and 31% of second quarter 2024 sales revenue, respectively. The following table summarizes consolidated metal sales: Three Months Ended Increase (Decrease) Percentage Change In thousands September 30, 2024 June 30, 2024 Gold sales $ 223,772 $ 154,085 $ 69,687 45 % Silver sales 89,704 67,941 21,763 32 % Metal sales $ 313,476 $ 222,026 $ 91,450 41 % Costs Applicable to Sales Costs applicable to sales increased $12.0 million, or 8%, primarily due to higher gold and silver ounces sold at all sites. For a complete discussion of costs applicable to sales, see Results of Operations below. 26 Amortization Amortization increased $5.3 million, or 19%, and resulted primarily from higher gold and silver ounces sold at all sites. Expenses General and administrative expenses decreased $0.3 million, or 2%, primarily due to lower employee incentive related costs. Exploration expense increased $6.7 million, or 52%, driven by the continued surface drilling at Silvertip and higher investment at Palmarejo and Wharf. Pre-development, reclamation, and other expenses remained comparable to the second quarter of 2024. The following table summarizes pre-development, reclamation, and other expenses: Three Months Ended Increase (Decrease) Percentage Change In thousands September 30, 2024 June 30, 2024 Silvertip ongoing carrying costs $ 1,675 $ 2,055 $ (380) (18) % Loss on sale of assets 176 640 (464) (73) % Asset retirement accretion 4,233 4,154 79 2 % Transaction costs 976 — 976 100 % Other 1,523 1,741 (218) (13) % Pre-development, reclamation and other expense $ 8,583 $ 8,590 $ (7) — % Other Income and Expenses Interest expense (net of capitalized interest of $0.3 million) remained comparable at $13.3 million. Other, net decreased to a gain of $3.4 million compared to $5.1 million primarily due to the receipt of the $1.2 million distribution from the Republic Metal Corporation bankruptcy proceedings (the “RMC Bankruptcy Distribution”) during the second quarter of 2024. Income and Mining Taxes Income and mining tax expense of approximately $25.8 million resulted in an effective tax rate of 34.6% for three months ended September 30, 2024. This compares to income tax expense of $7.2 million for an effective tax rate of 83.4% for three months ended June 30, 2024. The comparability of the Company’s income and mining tax (expense) benefit and effective tax rate for the reported periods was impacted by multiple factors, primarily: (i) mining taxes; (ii) variations in our income before income taxes; (iii) geographic distribution of that income; (iv) percentage depletion; (v) foreign exchange rates; and (vi) the impact of uncertain tax positions. Therefore, the effective tax rate will fluctuate, sometimes significantly, period to period. The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit: Three Months Ended September 30, Three Months Ended June 30, 2024 2024 In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit United States $ 41,389 $ (4,463) $ (4,660) $ 1,677 Canada (12,186) (394) (9,628) (258) Mexico 45,499 (20,960) 22,948 (8,608) Other jurisdictions (146) — (45) — $ 74,556 $ (25,817) $ 8,615 $ (7,189) 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”. 27 Net Income Net income was $48.7 million, or $0.12 per diluted share, compared to $1.4 million, or $0.00 per diluted share. The increase in net income was driven by a 15% and 14% increase in average realized gold and silver prices, respectively, and a 26% and 16% increase in gold and silver ounces sold, respectively. This was partially offset by higher exploration and income and mining taxes expense. Adjusted net income was $47.2 million, or $0.12 per diluted share, compared to adjusted net loss of $3.4 million, or $0.01 per diluted share (see “Non-GAAP Financial Performance Measures”). Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023 Revenue We sold 255,261 gold ounces and 8.2 million silver ounces, compared to 215,971 gold ounces and 7.1 million silver ounces. Revenue increased by $189.4 million, or 34%, as a result of an 18% and 15% increase in gold and silver ounces sold, respectively, and a 16% and 11% increase in average realized gold and silver prices, respectively. The Company benefited from the higher gold and silver spot prices that were partially offset by realized losses from gold and silver hedges in the first half of 2024 compared to realized gains in the prior year. The Company’s hedge program was concluded as of June 30, 2024. The increase in gold and silver ounces sold was primarily due to higher gold and silver grades and higher recoveries at Palmarejo, higher mill throughput and grades at Kensington and higher tons placed, grade and timing of recoveries at Wharf. Additionally, Rochester produced higher gold and silver ounces following the successful commissioning and ramp-up of the new three stage crusher at Rochester in 2024 and increased production from the new leach pad. Gold and silver represented 71% and 29% of 2024 sales revenue, respectively, compared to 69% and 31% of 2023 sales revenue, respectively. The following table summarizes consolidated metal sales: Nine Months Ended September 30, Increase (Decrease) Percentage Change In thousands 2024 2023 Gold sales $ 529,626 $ 387,959 $ 141,667 37 % Silver sales 218,936 171,157 47,779 28 % Metal sales $ 748,562 $ 559,116 $ 189,446 34 % Costs Applicable to Sales Costs applicable to sales increased $6.9 million, or 2%, primarily due to higher gold and silver ounces sold, partially offset by the favorable impact of the increase in estimated recoverable ounces on the legacy leach pad and lower adjustments for lower of cost or market (“LCM”) at Rochester. For a complete discussion of costs applicable to sales, see Results of Operations below. Amortization Amortization increased $23.3 million, or 36%, primarily due to higher gold and silver ounces sold and the commencement of production of the new leach pad in mid-September 2023 and the three-stage crushing circuit in March 2024 at Rochester, partially offset by lower LCM adjustments at Rochester. Expenses General and administrative expenses increased $5.2 million, or 17%, primarily due to higher employee incentive, outside service and legal costs. Exploration expense increased $22.9 million, or 115%, as a result of planned drilling activity at Palmarejo, Kensington, Wharf and Silvertip. Pre-development, reclamation, and other expenses increased $5.5 million, or 18%, stemming from the Kensington royalty settlement of $6.8 million and higher losses on the sale of assets, partially offset by lower ongoing carrying costs at Silvertip. The following table summarizes pre-development, reclamation, and other expenses: 28 Nine Months Ended September 30, Increase (Decrease) Percentage Change In thousands 2024 2023 Silvertip ongoing carrying costs $ 6,091 $ 13,569 $ (7,478) (55) % Loss on sale of assets 4,352 331 4,021 1,215 % Asset retirement accretion 12,463 12,219 244 2 % Kensington royalty settlement 6,750 — 6,750 100 % Transaction costs 976 — 976 100 % Other 4,769 3,830 939 25 % Pre-development, reclamation and other expense $ 35,401 $ 29,949 $ 5,452 18 % Other Income and Expenses During the nine months ended September 30, 2024, the Company recognized a $0.4 million gain in connection with the exchange of $5.9 million in aggregate principal amount plus accrued interest of 2029 Senior Notes for 1.8 million shares of common stock compared to $3.7 million recognized during the nine months ended September 30, 2023. The Company did not have fair value adjustments, net, in the first nine months of 2024 following the sale of the Company’s equity investments in 2023. Interest expense (net of capitalized interest of $0.7 million) increased to $39.4 million from $21.7 million due to higher interest paid under the RCF attributable to higher average debt levels, and lower capitalized interest, partially offset by lower interest paid under the 2029 Senior Notes. Other, net increased to a gain of $11.3 million compared to a loss of $10.1 million as a result of the recognition of the FT Premium Liability income of $5.2 million following the renouncement of Silvertip exploration expenditures and the $12.3 million loss recognized from the sale of the La Preciosa Deferred Consideration in 2023. Income and Mining Taxes During the nine months of 2024, income and mining tax expense of approximately $49.0 million resulted in an effective tax rate of 70.0% for 2024. This compares to income tax expense of $26.7 million for an effective tax rate of (51.9)% for 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) variations in our income before income taxes; (ii) geographic distribution of that income; (iii) mining taxes; (iv) foreign exchange rates; (v) the sale of non-core assets; (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: Nine Months Ended September 30, 2024 2023 In thousands Income (loss) before tax Tax (expense) benefit Income (loss) before tax Tax (expense) benefit United States $ 7,498 $ (6,605) $ (83,994) $ (4,847) Canada (30,720) (766) (23,049) — Mexico 93,651 (41,659) 56,045 (21,824) Other jurisdictions (351) — (438) — $ 70,078 $ (49,030) $ (51,436) $ (26,671) 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”. 29 Net Income (Loss) Net income was $21.0 million, or $0.05 per diluted share, compared to a net loss of $78.1 million, or $0.24 per diluted share. The increase in net income was driven by a 18% and 15% increase in gold and silver ounces sold, respectively, a 16% and 11% increase in average realized gold and silver prices, respectively, lower ongoing costs at Silvertip, the recognition of the FT Premium Liability income of $5.2 million, lower LCM adjustments at Rochester, and the $12.3 million loss recognized from the sale of the La Preciosa Deferred Consideration in 2023. This was partially offset by the Kensington royalty settlement of $6.8 million, higher exploration, general and administrative, interest expense and income and mining tax expense, and favorable changes in the fair value of the Company’s equity investments in the first nine months of 2023. Adjusted net income was $24.7 million, or $0.06 per diluted share, compared to adjusted net loss of $71.8 million, or $0.22 per diluted share (see “Non-GAAP Financial Performance Measures”). 2024 Guidance Production during the third quarter was in-line with Coeur’s expectations, leading the Company to reaffirm 2024 production and cost guidance. The below exploration expense guidance excludes $15 - $20 million of underground mine development and support costs associated with Silvertip 2024 Production Guidance Gold Silver (oz) (K oz) Palmarejo 95,000 - 103,000 5,900 - 6,700 Rochester 37,000 - 50,000 4,800 - 6,600 Kensington 92,000 - 106,000 — Wharf 86,000 - 96,000 — Total 310,000 - 355,000 10,700 - 13,300 2024 Costs Applicable to Sales Guidance Gold Silver ($/oz) ($/oz) Palmarejo (co-product) $950 - $1,150 $15.50 - $16.50 Second Half 2024 Rochester (co-product) $1,500 - $1,700 $18.00 - $20.00 Kensington $1,525 - $1,725 — Wharf (by-product) $950 - $1,050 — 2024 Capital, Exploration and G&A Guidance ($M) Capital Expenditures, Sustaining $124 - $158 Capital Expenditures, Development $36 - $42 Exploration, Expensed $40 - $50 Exploration, Capitalized $15 - $20 General & Administrative Expenses $36 - $40 Note: The Company’s guidance figures assume estimated prices of $2,300/oz gold and $27.00/oz silver as well as CAD of 1.25 and MXN of 17.00. Guidance figures exclude the impact of any metal sales or foreign exchange hedges 30 Results of Operations Palmarejo Three Months Ended Nine Months Ended September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Tons milled 413,463 429,561 1,343,771 1,507,950 Average gold grade (oz/t) 0.070 0.066 0.069 0.054 Average silver grade (oz/t) 5.15 4.49 4.63 3.93 Average recovery rate – Au 94.8 % 89.9 % 93.5 % 91.7 % Average recovery rate – Ag 85.6 % 82.8 % 84.1 % 83.9 % Gold ounces produced 27,549 25,467 86,176 75,204 Silver ounces produced 1,823,269 1,596,138 5,237,704 4,970,343 Gold ounces sold 28,655 24,313 86,430 74,195 Silver ounces sold 1,860,976 1,542,395 5,199,839 4,889,877 CAS per gold ounce (1) $ 828 $ 1,012 $ 902 $ 950 CAS per silver ounce (1) $ 12.75 $ 15.32 $ 13.84 $ 15.01 (1) See Non-GAAP Financial Performance Measures. Three Months Ended September 30, 2024 compared to Three Months Ended June 30, 2024 Gold and silver production increased 8% and 14%, respectively, as a result of a 6% and 15% increase in gold and silver grades, respectively, and higher gold and silver recovery rates, partially offset by a 4% decrease in mill throughput due to mine sequencing. Metal sales were $110.4 million, or 35% of Coeur’s metal sales, compared with $83.2 million, or 37% of Coeur’s metal sales. Revenue increased by $27.1 million, or 33%, of which $17.8 million was due to higher volume of gold and silver production, and $9.3 million was due to higher average realized gold and silver prices. Costs applicable to sales per gold and silver ounce decreased 18% and 17%, respectively, due to higher production and lower operating costs that benefited from favorable foreign exchange rates. Amortization increased by $1.1 million to $12.0 million due to an 18% and 21% increase in gold and silver ounces sold, respectively. Capital expenditures increased to $8.0 million from $5.9 million due to equipment expenditures and higher underground development focused on Hidalgo. Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023 Gold and silver production increased 15% and 5%, respectively, as a result of a 28% and 18% increase in gold and silver grades, respectively, and higher gold and silver recoveries, partially offset by an 11% decrease in mill throughput. Metal sales were $290.0 million, or 39% of Coeur’s metal sales, compared with $232.3 million, or 42% of Coeur’s metal sales. Revenue increased by $57.7 million, or 25%, of which $29.7 million was due to a higher volume of gold and silver production and $28.0 million was due to higher average realized gold and silver prices. Costs applicable to sales per gold and silver ounce decreased 5% and 8%, respectively, due to higher production and lower operating costs that benefited from favorable foreign exchange rates. Amortization increased by $9.7 million to $35.4 million due to a 16% and 6% increase in gold and silver ounces sold. Capital expenditures decreased to $20.7 million from $32.8 million due to lower expenditures related to the open pit backfill project, underground development and equipment. 31 Rochester Three Months Ended Nine Months Ended September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Tons placed (1) 7,064,623 5,102,800 15,302,994 8,634,599 Average gold grade (oz/t) 0.002 0.002 0.002 0.003 Average silver grade (oz/t) 0.57 0.59 0.56 0.46 Gold ounces produced 9,690 8,006 23,451 18,928 Silver ounces produced 1,155,156 973,057 2,827,403 2,051,737 Gold ounces sold 9,186 8,150 23,521 19,274 Silver ounces sold 1,098,407 985,269 2,818,930 2,070,544 CAS per gold ounce (2) $ 1,759 $ 1,844 $ 1,797 $ 2,219 CAS per silver ounce (2) $ 21.17 $ 21.95 $ 21.57 $ 27.38 (1) During the three months ended September 30, 2024, 7.1 million tons of ore were placed on the new leach pad. During the three months ended June 30, 2024, 4.3 million and 0.8 million tons of ore were placed on the new leach pad and legacy leach pad, respectively. During the nine months ended September 30, 2024, 13.3 million and 2.0 million tons of ore were placed on the new leach pad and legacy leach pad, respectively. During the nine months ended September 30, 2023, 6.2 million and 2.4 million tons of ore were placed on the new leach pad and legacy leach pads, respectively. (2) See Non-GAAP Financial Performance Measures. Three Months Ended September 30, 2024 compared to Three Months Ended June 30, 2024 Gold and silver production increased 21% and 19%, respectively, driven by the successful completion of the ramp-up of the new three-stage crusher at the end of the second quarter and increased production from the new leach pad. Metal sales were $56.0 million, or 18% of Coeur’s metal sales, compared with $42.8 million, or 19% of Coeur’s metal sales. Revenue increased by $13.2 million, or 31%, of which $7.2 million was due to higher average realized gold and silver prices and $6.0 million was attributable to a higher volume of gold and silver production. Costs applicable to sales per gold and silver ounce decreased 5% and 4%, respectively, as a result of the increase in tons placed on the new leach pad, partially offset by higher operating costs. Amortization increased by $1.7 million to $10.2 million due to higher gold and silver ounces sold. Capital expenditures decreased to $10.1 million from $27.5 million due to ramp up activities and timing of payments related to the Rochester expansion project in the second quarter. Commissioning of Rochester’s new three-stage crushing circuit and truck load-out facility was completed on March 7, 2024 leading to declaration of commercial production and $528 million of construction in process placed into service in the first quarter of 2024. The Company successfully completed the ramp-up of all three stages of the crushing circuit by the end the second quarter by achieving throughput rates of over 88,000 tons per day. Ore tons placed increased 38% quarter-over-quarter to 7.1 million tons, including approximately 6.4 million tons through the new crushing circuit and placed on the new leach pad. Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023 Gold and silver production increased 24% and 38%, respectively, due to the successful completion of the ramp-up of the new three-stage crusher at the end of the second quarter and increased production from the new leach pad. Metal sales were $128.6 million, or 17% of Coeur’s metal sales, compared with $86.6 million, or 15% of Coeur’s metal sales. Revenue increased by $41.9 million, or 48%, of which $29.6 million was due to a higher volume of gold and silver production, and $12.3 million resulting from higher average realized gold and silver prices. Costs applicable to sales per gold and silver ounce decreased 19% and 21%, respectively, due to the favorable impact of an increase in estimated recoverable ounces on the legacy leach pad in the first quarter of 2024, an increase in tons placed on the new stage 6 leach pad and a reduction in LCM adjustments compared to the prior year. Amortization increased by $12.4 million to $25.4 million due to higher gold and silver ounces sold, the commencement of production from the new stage 6 leach pad in mid-September 2023 and the three-stage crushing circuit in March 2024. Capital expenditures decreased to $58.9 million from $197.8 million due to reduced spending related to the Rochester expansion project. 32 Kensington Three Months Ended Nine Months Ended September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Tons milled 165,916 182,043 515,398 474,194 Average gold grade (oz/t) 0.16 0.14 0.15 0.13 Average recovery rate 90.4 % 92.3 % 91.2 % 91.7 % Gold ounces produced 24,104 23,202 68,740 58,103 Gold ounces sold 24,800 23,539 69,522 58,691 CAS per gold ounce (1) $ 1,537 $ 1,732 $ 1,699 $ 1,953 (1) See Non-GAAP Financial Performance Measures. Three Months Ended September 30, 2024 compared to Three Months Ended June 30, 2024 Gold production increased 4% as a result of higher grade, partially offset by a 9% decrease in mill throughput and lower recovery rates. Metal sales were $62.2 million, or 20% of Coeur’s metal sales, compared to $51.1 million, or 23% of Coeur’s metal sales. Revenue increased by $11.1 million, or 22%, of which $8.0 million was due to higher average realized gold prices and $3.1 million resulting from a higher volume of gold production. Costs applicable to sales per gold ounce decreased 11% due to higher production and lower operating costs. Amortization increased by $1.2 million to $7.6 million primarily due to an increase in gold ounces sold. Capital expenditures increased to $20.0 million from $16.5 million reflecting continued investment associated with the multi-year underground development and exploration program designed to extend and enhance the mine life, which began in 2022 and is expected to be completed in 2025, as well as underground development and tailings dam expansion expenditures. Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023 Gold production increased 18% as a result of 15% higher grade and 9% higher mill throughput. Metal sales were $156.7 million, or 21% of Coeur’s metal sales, compared to $111.3 million, or 20% of Coeur’s metal sales. Revenue increased by $45.4 million, or 41%, of which $24.4 million resulting from a higher volume of gold production, and $21.0 million due to higher average realized gold prices. Costs applicable to sales per gold ounce decreased 13% due to higher production, partially offset by higher operating costs partially driven by higher royalties. Amortization increased by $2.2 million to $19.7 million primarily due to the increase in gold ounces sold, partially offset the favorable impact of a longer assumed mine life. Capital expenditures increased to $49.7 million from $38.2 million reflecting continued investment associated with the multi-year underground development and exploration program designed to extend and enhance the mine life, which began in 2022 and is expected to be completed in 2025. Wharf Three Months Ended Nine Months Ended September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Tons placed 1,424,649 1,162,437 3,839,041 3,452,907 Average gold grade (oz/t) 0.046 0.032 0.034 0.026 Gold ounces produced 33,650 22,021 76,066 63,827 Silver ounces produced 42,141 68,755 178,169 178,330 Gold ounces sold 34,272 20,930 75,788 63,811 Silver ounces sold 45,118 65,063 178,894 179,646 CAS per gold ounce (1) $ 888 $ 829 $ 945 $ 1,224 (1) See Non-GAAP Financial Performance Measures. 33 Three Months Ended September 30, 2024 compared to Three Months Ended June 30, 2024 Gold production increased 53% driven by higher tons placed and grade, and timing of recoveries. Metal sales were $85.0 million, or 27% of Coeur’s metal sales, compared to $45.0 million, or 20% of Coeur’s metal sales. Revenue increased by $40.0 million, or 89%, of which $32.0 million was due to a higher gold production and $8.0 million attributable to higher average realized gold prices. Costs applicable to sales per gold ounce increased 7% due to higher operating costs driven by higher royalties, partially offset by higher tons and grade placed on the pads. Amortization increased to $2.4 million driven by increased gold ounces sold. Capital expenditures were $2.8 million. Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023 Gold production increased 19% driven by higher tons placed, grade and timing of recoveries. Metal sales were $173.3 million, or 23% of Coeur’s metal sales, compared to $128.8 million, or 23% of Coeur’s metal sales. Revenue increased by $44.4 million, or 35%, of which $26.6 million was due to a higher gold production and $17.8 million was due to higher average realized gold prices. Costs applicable to sales per gold ounce decreased 23% due to higher tons and grade placed on the pads. Amortization remained comparable at $4.9 million due to higher tons and grade placed on the pads, partially offset by the favorable impact of a longer assumed mine life. Capital expenditures were $4.2 million. Silvertip Nine Months Ended September 30, 2024 compared to Nine Months Ended September 30, 2023 Exploration expense totaled $21.1 million in the first nine months of 2024 as the Company continued to focus on increasing the mineral resources at Silvertip, which were supported by 376 meters of underground mine development. Ongoing carrying costs at Silvertip totaled $6.1 million in the first nine months of 2024 compared to $13.6 million in 2023. Capital expenditures in the first nine months of 2024 totaled $1.9 million. Liquidity and Capital Resources At September 30, 2024, the Company had $78.7 million of cash, cash equivalents and restricted cash and $145.4 million available under the RCF. Future borrowing under the RCF may be subject to certain financial covenants. Cash and cash equivalents increased $15.3 million in the nine months ended September 30, 2024 due to an 18% and 15% increase in gold and silver ounces sold, respectively, a 16% and 11% increase in average realized gold and silver prices, respectively, the net proceeds of $23.7 million from the sale of 7.7 million shares of common stock in the Private Placement Offering (as defined below), and net draws of $50.0 million under the RCF. This was partially offset by $135.5 million of capital expenditures primarily related to the completion of the Rochester expansion project, and the initial payment of $10.0 million due at closing for the $25.0 million acquisition of mining concessions at Palmarejo. On February 21, 2024, the Company entered into an agreement to extend and enhance its RCF (the “February 2024 Amendment”). The February 2024 Amendment, among other things, (1) extends the term of the RCF by approximately two years so that it now matures in February 2027, (2) increases the RCF by $10 million from $390 million to $400 million, (3) adds Fédération Des Caisses Desjardins Du Québec and National Bank of Canada as lenders on the RCF, (4) permits the Company to obtain one or more increases of the RCF in an aggregate amount of up to $100 million in incremental loans and commitments, subject to certain conditions, including obtaining commitments from relevant lenders to provide such increase, (5) allows for unencumbered domestic cash to be included in the calculation of the consolidated net leverage ratio, and (6) allows up to $15 million of non-capitalized underground mine development costs related to Silvertip to be excluded from the calculation of Consolidated EBITDA for purposes of the RCF. In March 2024, the Company completed the sale of 7,704,725 shares of 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 net proceeds of approximately $23.7 million, of which $0.9 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)), in conducting an exploration and mineral resource evaluation program on the Silvertip property in British Columbia and Yukon to determine the existence, location, extent, and quality of the silver, lead, and zinc on the Silvertip property. The Company had no outstanding forward contracts at September 30, 2024 following the final settlement in June 2024. The Company has no current plans to implement new hedges but may in the future add new hedges as circumstances warrant. During the nine months ended September 30, 2024, the Company exchanged $5.9 million in aggregate principal amount of 2029 Senior Notes plus accrued interest for 1.8 million shares of its common stock. 34 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 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 our 2024 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. Our long-term target leverage of Net Debt to the Last Twelve Months Adjusted EBITDA is 0.0 times Adjusted EBITDA . Our current leverage ratio is 1.8 times Adjusted EBITDA as of September 30, 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. If and to the extent liquidity resources are insufficient to support short- and long-term expenditures, we may need to incur additional indebtedness or issue additional equity securities, among other financing options, which may not be available on acceptable terms or at all. This could have a material adverse impact on the Company, as discussed in more detail under “Item 1A – Risk Factors”. Cash Provided by Operating Activities Net cash provided by operating activities for the three months ended September 30, 2024 was $111.1 million, compared to $15.2 million for the three months ended June 30, 2024. Net cash provided by operating activities for the nine months ended September 30, 2024 was $110.4 million, compared to $2.0 million for nine months ended September 30, 2023. Adjusted EBITDA for the three months ended September 30, 2024 was $126.0 million, compared to $52.4 million for three months ended June 30, 2024. Adjusted EBITDA for the nine months ended September 30, 2024 was $222.8 million, compared to $78.0 million for the nine months ended September 30, 2023 (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 Nine Months Ended In thousands September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Cash flow before changes in operating assets and liabilities $ 86,932 $ 27,482 $ 83,807 $ 13,490 Changes in operating assets and liabilities: Receivables 1,616 3,180 (520) 1,659 Prepaid expenses and other (352) 4,176 3,185 764 Inventories (14,320) (19,774) (53,788) (54,993) Accounts payable and accrued liabilities 37,187 185 77,757 41,091 Cash provided by (used in) operating activities $ 111,063 $ 15,249 $ 110,441 $ 2,011 Net cash provided by operating activities increased $95.8 million for the three months ended September 30, 2024 compared to the three months ended June 30, 2024, primarily as a result of a 26% and 16% increase in gold and silver ounces sold, respectively, a 15% and 14% increase in average realized gold and silver prices, respectively, timing of account payable payments at Palmarejo, a $25.0 million prepayment received at Kensington, and the receipt of exploration credit refunds at Silvertip, partially offset by higher prepaid insurance, timing of interest payments, and higher exploration expense. Revenue for the three months ended September 30, 2024 compared to the three months ended June 30, 2024 increased by $91.5 million, of which $58.4 million resulting from higher volume of gold and silver sales, and $33.0 million was due to higher average realized gold and silver prices. Net cash provided by operating activities increased $108.4 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to a 18% and 15% increase in gold and silver ounces sold, respectively, a 16% and 11% increase in average realized gold and silver prices, respectively, and an additional $25.0 million prepayment received at Kensington, partially offset higher exploration, general and administrative, and interest expense. Revenue for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 increased by $189.4 million, of which $109.7 million was due to higher volume of gold sales, and $79.7 million as the result of higher average gold and silver prices. 35 Cash Used in Investing Activities Net cash used in investing activities in the three months ended September 30, 2024 was $52.0 million compared to $51.6 million in the three months ended June 30, 2024. Cash used in investing activities increased due to the initial payment of $10.0 million due at closing for the $25.0 million acquisition of mining concessions at Palmarejo, partially offset by lower capital expenditures. The Company incurred capital expenditures of $42.0 million in the three months ended September 30, 2024 compared with $51.4 million in the three months ended June 30, 2024 primarily related to ramp-up activities and timing of payments related to the Rochester expansion project at Rochester and underground development at Palmarejo and Kensington in both periods. Net cash used in investing activities in the nine months ended September 30, 2024 was $145.7 million compared to $217.1 million in the nine months ended September 30, 2023. Cash used in investing activities decreased due to net proceeds of $39.8 million received from the sale of the Company’s 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 sale of the La Preciosa project in 2023, and lower capital expenditures, partially offset by the initial payment of $10.0 million due at closing for the $25.0 million acquisition of mining concessions at Palmarejo. The Company incurred capital expenditures of $135.5 million in the nine months ended September 30, 2024 compared with $271.9 million in the nine months ended September 30, 2023 primarily related to expansion construction and ramp-up activities at Rochester and underground development and exploration at Palmarejo and Kensington in both periods. Cash Provided by (Used in) Financing Activities Net cash used in financing activities in the three months ended September 30, 2024 was $56.0 million compared to net cash provided by financing activities of $43.3 million in the three months ended June 30, 2024. During the three months ended September 30, 2024, the Company repaid $50.0 million, net, to the RCF. During the three months ended June 30, 2024, the Company drew $50.0 million, net, from the RCF. Net cash provided by financing activities in the nine months ended September 30, 2024 was $51.2 million compared to $206.5 million in the nine months ended September 30, 2023. During the nine months ended September 30, 2024, the Company received net proceeds of $23.7 million from the sale of 7.7 million shares of its common stock in the Private Placement Offering, and drew $50.0 million, net, from the RCF. During the nine months ended September 30, 2023, the Company drew $60.0 million, net, under the RCF, received aggregate net proceeds of $147.7 million from the sale of 54.6 million shares of its common stock in the March 2023 Equity Offering, and received net proceeds of $20.9 million from the sale of 8.3 million shares of its common stock in the Private Placement Offering. Critical Accounting Policies and Accounting Developments See Note 2 -- Summary of Significant Accounting Policies contained in the 2023 10-K and Note 2 -- Summary of Significant Accounting Policies contained in this Report for the Company’s critical accounting policies and estimates. Ore on Leach Pads The heap leach process extracts silver and gold by placing ore on an impermeable pad and applying a diluted cyanide solution that dissolves a portion of the contained silver and gold, which are then recovered in metallurgical processes. The Company uses several integrated steps to scientifically measure the metal content of ore placed on the leach pads. As the ore body is drilled in preparation for the blasting process, samples are taken of the drill residue which are assayed to determine estimated quantities of contained metal. The Company then processes the ore through crushing facilities where the output is again weighed and sampled for assaying. A metallurgical reconciliation with the data collected from the mining operation is completed with appropriate adjustments made to previous estimates. The crushed ore is then transported to the leach pad for application of the leaching solution. As the leach solution is collected from the leach pads, it is continuously sampled for assaying. The quantity of leach solution is measured by flow meters throughout the leaching and precipitation process. After precipitation, the product is converted to doré at the Rochester mine and a form of gold electrolytic cathodic sludge at the Wharf mine, representing the final product produced by each mine. The inventory is stated at lower of cost or net realizable value, with cost being determined using a weighted average cost method. The historical cost of metal expected to be extracted within 12 months is classified as current and the historical cost of metals contained within the broken ore expected to be extracted beyond 12 months is classified as non-current. Ore on leach pads is valued based on actual production costs incurred to produce and place ore on the leach pad, less costs allocated to minerals recovered through the leach process. 36 The estimate of both the ultimate recovery expected over time and the quantity of metal that may be extracted relative to the time the leach process occurs requires the use of estimates, which are inherently inaccurate due to the nature of the leaching process. The quantities of metal contained in the ore are based upon actual weights and assay analysis. The rate at which the leach process extracts gold and silver from the crushed ore is based upon laboratory testing and actual experience of more than 20 years of leach pad operations at the Rochester mine and 30 years of leach pad operations at the Wharf mine. The assumptions used by the Company to measure metal content during each stage of the inventory conversion process includes estimated recovery rates based on laboratory testing and assaying. The Company periodically reviews its estimates compared to actual experience and revises its estimates when appropriate. The ultimate recovery will not be known until leaching operations cease. Variations between actual and estimated quantities resulting from changes in assumptions and estimates that do not result in write-downs to net realizable value are accounted for on a prospective basis. In the first quarter of 2024, the Company completed a review of the estimated recoverable ounces of gold and silver on its leach pads and determined that as a result of longer expected leach time and favorable recoveries relative to previous estimates that the estimated recoverable gold and silver on the Rochester legacy (Stages 2, 3 and 4) leach pads supported an upward revision. An additional 6,000 ounces of gold and 900,000 ounces of silver were added to the legacy leach pads in the first quarter of 2024. There are five reusable heap leach pads (load/offload) used at Wharf. Each pad goes through an approximate 24-month process of loading of ore, leaching and offloading which includes a neutralization and denitrification process. During the leaching cycle of each pad, revised estimated recoverable ounces for each of the pads may result in an upward or downward revision from time to time, which have not historically been significant. The updated recoverable ounce estimate is considered a change in estimate and was accounted for prospectively. As of September 30, 2024, the Company’s estimated recoverable ounces of gold and silver on the leach pads were 48,175 and 6.7 million, respectively. 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 a partial indefinite reinvestment of earnings from its Mexican operations as determined by management’s judgment about, and intentions concerning, the future operations of the Company. The Company does not believe that the amounts reinvested will have a material impact on liquidity. In order to reduce indebtedness, 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: 37 Three Months Ended Nine Months Ended In thousands except per share amounts September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Net income (loss) $ 48,739 $ 1,426 $ 21,048 $ (78,107) Fair value adjustments, net — — — (4,629) Foreign exchange loss (gain) (2,247) (2,950) (4,713) 2,149 (Gain) loss on sale of assets and securities 176 640 4,352 12,650 RMC bankruptcy distribution — (1,199) (1,199) (1,516) (Gain) loss on debt extinguishment — 21 (417) (3,735) Transaction costs 976 — 976 — Other adjustments 81 104 5,644 2,739 Tax effect of adjustments (1) (568) (1,447) (962) (1,380) Adjusted net income (loss) $ 47,157 $ (3,405) $ 24,729 $ (71,829) Adjusted net income (loss) per share, Basic $ 0.12 $ (0.01) $ 0.06 $ (0.22) Adjusted net income (loss) per share, Diluted $ 0.12 $ (0.01) $ 0.06 $ (0.22) (1) For the three months ended September 30, 2024, tax effect of adjustments of $0.6 million (-46%) are primarily related to nonrecurring expenses at Palmarejo. For the three months ended June 30, 2024, tax effect of adjustments of $1.4 million 333% are primarily related to the RMC Bankruptcy Distribution. For the nine months ended September 30, 2024, tax effect of adjustments of $1.0 million (-10%) are primarily related to the RMC Bankruptcy Distribution, Kensington royalty settlement, nonrecurring expenses at Palmarejo, and LCM adjustment recorded at Rochester. For the nine months ended September 30, 2023, tax effect of adjustments of $1.4 million (-25%) are 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. 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: 38 Three Months Ended Nine Months Ended In thousands except per share amounts September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Net income (loss) $ 48,739 $ 1,426 $ 21,048 $ (78,107) (Income) loss from discontinued operations, net of tax — — — — Interest expense, net of capitalized interest 13,280 13,162 39,389 21,703 Income tax provision (benefit) 25,817 7,189 49,030 26,671 Amortization 33,216 27,928 88,441 65,187 EBITDA 121,052 49,705 197,908 35,454 Fair value adjustments, net — — — (4,629) Foreign exchange (gain) loss (1,708) (2,089) (3,432) 107 Asset retirement obligation accretion 4,233 4,154 12,463 12,219 Inventory adjustments and write-downs 1,231 1,071 6,490 24,723 (Gain) loss on sale of assets and securities 176 640 4,352 12,650 RMC bankruptcy distribution — (1,199) (1,199) (1,516) (Gain) loss on debt extinguishment — 21 (417) (3,735) Transaction costs 976 — 976 — Other adjustments 81 104 5,644 2,739 Adjusted EBITDA $ 126,041 $ 52,407 $ 222,785 $ 78,012 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. Consolidated Three Months Ended Nine Months Ended (Dollars in thousands) September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Cash flow from operations $ 111,063 $ 15,249 $ 110,441 $ 2,011 Capital expenditures 41,980 51,405 135,468 271,902 Free cash flow $ 69,083 $ (36,156) $ (25,027) $ (269,891) 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 Condensed 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. 39 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 Nine Months Ended (Dollars in thousands) September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Cash provided by (used in) operating activities $ 111,063 $ 15,249 $ 110,441 $ 2,011 Changes in operating assets and liabilities: Receivables (1,616) (3,180) 520 (1,659) Prepaid expenses and other 352 (4,176) (3,185) (764) Inventories 14,320 19,774 53,788 54,993 Accounts payable and accrued liabilities (37,187) (185) (77,757) (41,091) Operating cash flow before changes in working capital $ 86,932 $ 27,482 $ 83,807 $ 13,490 Net Debt and Leverage Ratio Management defines Net Debt , a non-GAAP financial measure, as Total Debt , less Cash and Cash Equivalents . We define Leverage Ratio , a non-GAAP financial measure, as the ratio of Net Debt to the Last Twelve Months Adjusted EBITDA . Management believes Net Debt and Leverage Ratio are important measures to monitor our financial flexibility and evaluate the strength of our Condensed Consolidated Balance Sheets. Net Debt and Leverage Ratio have limitations as analytical tools and may vary from similarly titled measures used by other companies. Net Debt and Leverage Ratio should not be considered in isolation or as a substitute for an analysis of our results prepared and presented in accordance with GAAP. The following table presents a reconciliation of Total Debt , the most directly comparable financial measure calculated in accordance with GAAP, to Net Debt for each of the periods presented. Three Months Ended Nine Months Ended (Dollars in thousands) September 30, 2024 June 30, 2024 September 30, 2024 September 30, 2023 Total debt $ 605,183 $ 629,327 $ 605,183 $ 512,241 Cash and cash equivalents (76,916) (74,136) (76,916) (53,223) Net debt $ 528,267 $ 555,191 $ 528,267 $ 459,018 Net debt $ 528,267 $ 555,191 $ 528,267 $ 459,018 Last Twelve Months Adjusted EBITDA $ 287,079 $ 191,686 $ 287,079 $ 113,809 Leverage ratio 1.8 $ 2.9 $ 1.8 $ 4.0 40 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 IFRS Accounting Standards. Three Months Ended September 30, 2024 In thousands (except metal sales and per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $ 59,439 $ 49,640 $ 45,711 $ 34,198 $ 794 $ 189,782 Amortization (11,984) (10,231) (7,612) (2,419) (794) (33,040) Costs applicable to sales $ 47,455 $ 39,409 $ 38,099 $ 31,779 $ — $ 156,742 Metal Sales Gold ounces 28,655 9,186 24,800 34,272 — 96,913 Silver ounces 1,860,976 1,098,407 — 45,118 — 3,004,501 Costs applicable to sales Gold ($/oz) $ 828 $ 1,759 $ 1,537 $ 888 Silver ($/oz) $ 12.75 $ 21.17 $ — Three Months Ended June 30, 2024 In thousands (except metal sales and per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $ 59,070 $ 45,225 $ 47,166 $ 20,181 $ 790 $ 172,432 Amortization (10,843) (8,570) (6,445) (1,067) (790) (27,715) Costs applicable to sales $ 48,227 $ 36,655 $ 40,721 $ 19,114 $ — $ 144,717 Metal Sales Gold ounces 24,313 8,150 23,539 20,930 — 76,932 Silver ounces 1,542,395 985,269 — 65,063 — 2,592,727 Costs applicable to sales Gold ($/oz) $ 1,012 $ 1,844 $ 1,732 $ 829 Silver ($/oz) $ 15.32 $ 21.95 $ — Nine Months Ended September 30, 2024 In thousands (except metal sales and per ounce amounts) Palmarejo Rochester Kensington Wharf Silvertip Total Costs applicable to sales, including amortization (U.S. GAAP) $ 185,405 $ 128,497 $ 137,762 $ 81,187 $ 2,436 $ 535,287 Amortization (35,429) (25,434) (19,653) (4,879) (2,436) (87,831) Costs applicable to sales $ 149,976 $ 103,063 $ 118,109 $ 76,308 $ — $ 447,456 Metal Sales Gold ounces 86,430 23,521 69,522 75,788 — 255,261 Silver ounces 5,199,839 2,818,930 — 178,894 — 8,197,663 Costs applicable to sales Gold ($/oz) $ 902 $ 1,797 $ 1,699 $ 945 Silver ($/oz) $ 13.84 $ 21.57 $ — 41 Nine Months Ended September 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. GAAP) $ 169,675 $ 112,508 $ 132,356 $ 87,201 $ 3,161 $ 504,901 Amortization (25,760) (13,043) (17,539) (4,802) (3,161) (64,305) Costs applicable to sales $ 143,915 $ 99,465 $ 114,817 $ 82,399 $ — $ 440,596 Metal Sales Gold ounces 74,195 19,274 58,691 63,811 215,971 Silver ounces 4,889,877 2,070,544 — 179,646 — 7,140,067 Costs applicable to sales Gold ($/oz) $ 950 $ 2,219 $ 1,953 $ 1,224 Silver ($/oz) $ 15.01 $ 27.38 $ — Reconciliation of Costs Applicable to Sales for Updated 2024 Guidance In thousands (except metal sales and per ounce amounts) Palmarejo Rochester (1) Kensington Wharf Costs applicable to sales, including amortization (U.S. GAAP) $ 261,913 $ 147,456 $ 195,337 $ 102,091 Amortization (46,953) (42,237) (28,757) (5,694) Costs applicable to sales $ 214,960 $ 105,219 $ 166,580 $ 96,397 By-product credit — — 16 (5,328) Adjusted costs applicable to sales $ 214,960 $ 105,219 $ 166,596 $ 91,069 Metal Sales Gold ounces 104,260 28,170 100,500 91,040 Silver ounces 6,652,590 3,197,910 205,600 Revenue Split Gold 51% 43% 100% 100% Silver 49% 57% Adjusted costs applicable to sales Gold ($/oz) $950 - $1,150 $1,500 - $1,700 $1,525 - $1,725 $950 - $1,050 Silver ($/oz) $15.50 - $16.50 $18.00 - $20.00 (1) Cost guidance for Rochester reflects the second half of 2024. Reconciliation of Costs Applicable to Sales for Previous 2024 Guidance In thousands (except metal sales and per ounce amounts) Palmarejo Rochester (1) Kensington Wharf Costs applicable to sales, including amortization (U.S. GAAP) $ 258,870 $ 129,322 $ 199,980 $ 108,330 Amortization (37,130) (36,990) (33,530) (6,330) Costs applicable to sales $ 221,740 $ 92,332 $ 166,450 $ 102,000 By-product credit — — — (2,550) Adjusted costs applicable to sales $ 221,740 $ 92,332 $ 166,450 $ 99,450 Metal Sales Gold ounces 100,350 28,130 103,790 90,000 Silver ounces 6,516,830 3,927,890 105,920 Revenue Split Gold 51% 38% 100% 100% Silver 49% 62% Adjusted costs applicable to sales Gold ($/oz) $1,075 - $1,275 $1,200 - $1,400 $1,525 - $1,725 $1,100 - $1,200 Silver ($/oz) $16.50 - $17.50 $14.00 - $16.00 (1) Cost guidance for Rochester reflects the second half of 2024. 42 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, 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, expectations regarding the planned acquisition of SilverCrest Metals, Inc. including impact on production, cash flow, financial condition and timing of closing, if at all, 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 2023 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 a future pandemic, equipment and materials availability, and inflationary pressures, (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, (xii) breaches or lapses in the security of technology systems on which the Company relies, which could compromise the data stored within them, as well as failure to comply with ever-evolving global privacy and security regulatory obligations, (xiii) the Company’s ability to raise additional financing necessary to conduct its business, make payments or refinance its debt, and (xiv) the risk that the planned acquisition of SilverCrest Metals Inc. will not occur or achieve the expected benefits to the Company. 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. No Offer or Solicitation Communications in the news release do not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Important Additional Information In connection with the Transaction, Coeur and SilverCrest intend to file materials with the Securities and Exchange Commission (the “SEC”) and on SEDAR+, as applicable. Coeur intends to file a definitive proxy statement on Schedule 14A (the “Proxy Statement”) with the SEC in connection with the solicitation of proxies to obtain Coeur stockholder approval of (A) the issuance of shares of common stock of Coeur in connection with the Transaction (the “Stock Issuance”) and (B) the amendment of the Coeur certificate of incorporation to increase the number of authorized shares of Coeur common stock (the “Charter Amendment”), and SilverCrest intends to file a notice of the SilverCrest shareholder meeting and accompanying management information circular (the “Circular”) with the Toronto Stock Exchange and on SEDAR+ and with the SEC in connection with the solicitation of proxies to obtain SilverCrest shareholder approval of the Transaction. After the Proxy Statement is cleared by the SEC, Coeur intends to mail a definitive Proxy Statement to the stockholders of Coeur. This communication is not a substitute for the Proxy Statement, the Circular or for any other document that Coeur or SilverCrest may file with the SEC or on SEDAR+ and/or send to Coeur stockholders and/or SilverCrest’s shareholders in connection with the Transaction. INVESTORS AND SECURITY HOLDERS OF COEUR AND SILVERCREST ARE URGED TO CAREFULLY AND THOROUGHLY READ THE PROXY STATEMENT AND THE CIRCULAR, RESPECTIVELY, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY COEUR AND/OR SILVERCREST WITH THE SEC OR ON SEDAR+, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT COEUR, SILVERCREST, THE TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS. 43 Stockholders of Coeur and shareholders of SilverCrest will be able to obtain free copies of the Proxy Statement and the Circular, as each may be amended from time to time, and other relevant documents filed by Coeur and/or SilverCrest with the SEC or on SEDAR+ (when they become available) through the website maintained by the SEC at www.sec.gov or on SEDAR+ at www.sedarplus.ca, as applicable. Copies of documents filed with the SEC by Coeur will be available free of charge from Coeur’s website at www.coeur.com under the “Investors” tab or by contacting Coeur’s Investor Relations Department at (312) 489-5800 or investors@coeur.com. Copies of documents filed with the SEC or on SEDAR+ by SilverCrest will be available free of charge from SilverCrest’s website at www.silvercrestmetals.com under the “Investors” tab or by contacting SilverCrest’s Investor Relations Department at (604) 694-1730 ext. 104. Participants in the Solicitation Coeur, SilverCrest and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Coeur’s stockholders and SilverCrest’s shareholders in connection with the Transaction. Information regarding the executive officers and directors of Coeur is included in its definitive proxy statement for its 2024 annual meeting under the headings “Proposal No. 1 – Election of Directors”, “Information about our Executive Officers”, “Compensation Discussion and Analysis”, and “Director Compensation”, which was filed with the SEC on April 4, 2024 and is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/215466/000114036124017966/ny20018623x1_def14a.htm. Information regarding the directors and certain executive officers of SilverCrest is included in its information circular and proxy statement for its 2024 annual meeting under the headings “Compensation of Executive Officers and Directors” and “Compensation Discussion and Analysis”, which was filed on SEDAR+ on April 18, 2024 and is available at https://www.silvercrestmetals.com/_resources/agm/2024-Information-Circular.pdf?v=093009. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Proxy Statement, the Circular and other materials when they are filed with the SEC or on SEDAR+ in connection with the Transaction. Free copies of these documents may be obtained as described in the paragraphs above.