Q3 2024 Earnings Summary
- Rochester mine's production and recoveries are tracking as expected, with improvements anticipated as the crush size is optimized to the target 5/8 inch by the end of the year. The company is regularly achieving 100,000 tonnes per day, and recoveries are expected to improve, leading to momentum towards the end of 2024 and into 2025.
- The acquisition of SilverCrest Metals is progressing smoothly, with shareholder votes for both companies expected around year-end and regulatory approval from Mexico anticipated in the first quarter. The transaction is expected to close in late first quarter, positioning Coeur Mining as a global leader in the silver industry.
- Coeur Mining is prioritizing debt repayment and expects to fully repay its revolving credit facility by mid-2025. After repayment, the company anticipates building up cash, enhancing its financial position and providing opportunities for reinvestment or returning capital to shareholders.
- Coeur Mining's cash balance will remain around $77 million while prioritizing debt repayment until mid-2025, potentially limiting financial flexibility in the near term.
- The Rochester mine is not yet achieving optimal performance, as it has not reached the targeted crush size, leading to lower recoveries that may impact production and revenues until improvements are realized.
- The SilverCrest acquisition faces potential delays and uncertainties due to remaining shareholder approvals and the need for Mexican regulatory approval expected in the first quarter of 2025, which could affect the timing of expected benefits from the acquisition.
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SilverCrest Acquisition
Q: What are the remaining steps to close the SilverCrest deal?
A: Management outlined three key steps to finalize the SilverCrest acquisition: both companies will hold shareholder votes around year-end; they expect to obtain approval from Mexico in the first quarter; together, these should enable a late first-quarter close. -
Rochester Production Tracking
Q: Is Rochester's production matching internal models?
A: Management confirmed that production at Rochester is tracking expectations. As they reduce the crush size to the target by year-end, recoveries are expected to improve. Currently, they are focusing on stabilizing operations and are regularly hitting 100,000 tonnes per day, anticipating continued recovery improvements into 2025. -
Cash and Debt Repayment
Q: How should we view the $77 million cash balance regarding debt repayment?
A: Management indicated that the cash balance of about $77 million is expected to stay at that level as they prioritize repaying the revolver in the first half of next year. By midyear, once the revolver is fully repaid, they expect cash to start building as they integrate Las Chispas and will reassess their cash position then.