PRECIOUS METALS

Coeur bolsters balance sheet for expansion plan

Coeur bolsters its balance sheet to provide funding clarity for Rochester expansion

CEO Mitchell Krebs in Denver

CEO Mitchell Krebs in Denver

"Nearly 80% of [the Rochester plan of operations amendment 11's] construction budget has been committed, and recently-announced liquidity enhancements have provided the funding and flexibility to support our priority of delivering POA 11 according to plan," Coeur's president and CEO Mitchell J Krebs said.

Coeur's moves to improve its liquidity included an increase to its gold hedging programme to provide a downside price shield, an expanded revolving credit facility to $390 million, and a $100 million at-the-market equity offering.

Coeur's plan is for the three actions to securing funding clarity for the Rochester expansion which, once completed, is expected to generate strong free cash flow.

The company has spent about $283 million towards the expansion and committed around $477 million of capital since the project's inception, which represents 80% of the re-baselined cost estimate of $597 million.

Canaccord Genuity Capital Markets analyst Dalton Baretto said shoring up its balance sheet was an important move for the miner as CG views liquidity concerns to have weighed heavily on Coeur's share price this year.

He said, a 21% fall in Coeur's share price compares to the intermediate producer group experiencing an average 2% drop while the senior group has averaged a 16% rise.

The expansion is on track for completion mid-next year, Coeur said.

Meanwhile, Coeur's Q1 production was 75,409 ounces of gold and 2.5 million oz of silver. CG said gold and silver production were above their forecasts of 73,000oz and 2.26 million oz, respectively.

Coeur's 2022 production guidance stands at 100,000-110,000 oz Au and 6.0 million-7.0 million oz Ag.

"The company reported GAAP net income from continuing operations of $8 million, or $0.03 per share. On an adjusted basis, Coeur reported EBITDA of $42 million, cash flow from operating activities before changes in working capital of $24 million and a net loss from continuing operations of $14 million, or $0.05 per share,' Coeur said.

NYSE-listed Coeur's share price was quoted as $3.87 on May 5.

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