Coeur's Inflection Point: A New Era for the Silver Producer
The past quarter has been a transformative period for Coeur Mining, marking an inflection point in its nearly 100-year history. Chairman, President and CEO Mitchell Krebs highlighted this milestone during the company's recent conference call, citing significant investments that have repositioned Coeur as a larger-scale, lower-cost silver and gold producer with a more conservative balance sheet.
The second half of last year saw the company generate $85 million in free cash flow, reduce debt by $80 million, achieve nearly $90 million in earnings, successfully ramp up its Rochester expansion, and announce the acquisition of Silvercrest. These accomplishments culminated in full-year 2024 adjusted EBITDA more than doubling to $339 million compared to the prior year.
As Coeur enters 2025, it is well-positioned to deliver record results and become a true global leader among silver companies at an opportune time. The company expects production levels from its five North American operations to reach over 400,000 ounces of gold and over 18 million ounces of silver this year, representing 20% and 62% increases over last year's levels, respectively.
The key drivers behind this expected record year include the first full-year post-expansion performance of Rochester, 10.5 months of operation at the newly acquired Las Chispas mine, steady performance from other operations, and higher prices. This combination is expected to lead to record levels of EBITDA, earnings, and free cash flow, which can be used aggressively to pay down debt and leave Coeur with a peer-leading balance sheet by year-end.
Additionally, the company's news release on Tuesday covering year-end 2024 reserves and resources showcased its strengthening pipeline of mineral inventory. Over the past five years, Coeur has invested $285 million in exploration, resulting in a 26% increase in gold reserves, a 30% increase in silver reserves, and material increases in both gold and silver resources.
The sharp resource increases at Palmarejo and Wharf are notable examples of this. Palmarejo's inferred resources jumped by 75% year-over-year, while Wharf's M&I resources doubled, and its inferred resources tripled year-over-year, giving Coeur a high level of confidence in delivering meaningful mine life extensions at these two operations in coming years.
Michael Routledge provided further color on the company's portfolio performance during the conference call. He highlighted great results at Wharf and Palmarejo and continued growth at Rochester since its start-up less than a year ago, with the newly expanded operation trending positively and delivering within targeted levels of tons placed during the quarter.
At Rochester, mining, crushing, and recoveries have shown strong sequential improvement even as periodic pauses took place to address planned modifications and typical start-up work. Placement of high-grade backfill material contributed to pad placement rates during the quarter, but presented a slightly lower-than-planned silver production in the quarter.
Looking ahead, 2025 production guidance for Rochester includes 7 million to 8.3 million ounces of silver and 60,000 to 75,000 ounces of gold, representing year-over-year increases of 75% and 72%, respectively."
