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-- KEY HIGHLIGHTS --
COEUR D'ALENE, Idaho, Nov. 9 /PRNewswire-FirstCall/ -- Coeur d'Alene Mines Corporation (NYSE: CDE; TSX: CDM), the world's largest primary silver producer and a growing gold producer, today reported net income of $3.5 million, or $0.01 per share, for the third quarter of 2005, compared to a net loss of $18.1 million, or $0.08 per share, for the year-ago period. Results for the year-ago period included $14.9 million of non-recurring pre-tax expenses.
Revenue for the third quarter of 2005 was $44.1 million, an increase of 41 percent as compared to $31.3 million in the year-ago period.
For the first nine months of 2005, the Company reported a net loss of $0.0 million, or $0.00 per share, compared to a net loss of $25.1 million, or $0.12 per share, for the same period of 2004. Revenues were $120.8 million for the first nine months of 2005, an increase of 38 percent as compared to $87.4 million in the year-ago period.
In commenting on the third-quarter performance relative to the year-ago period, Dennis E. Wheeler, Chairman, President and Chief Executive Officer, said "The Company reported sharply improved financial results in large measure because consolidated cash production costs per ounce declined by 18 percent while shipments and price realizations for both silver and gold increased. In addition, our recent Australian acquisitions began to make a positive contribution during the quarter. Moreover, we have seen encouraging results from our efforts to reduce overhead costs, with third-quarter G&A expenses continuing to decline and representing a 23 percent reduction from those of the first quarter of this year. Also, with the commencement of construction at the Kensington gold mine (in July 2005) and at the San Bartolome silver mine (in late 2004) the Company's pre-development expenses in the third quarter of 2005 declined to zero as compared to $3.1 million in the year-ago period."
Wheeler added, "We are starting to see the value accreting to Coeur stockholders from our strategy to significantly increase our low-cost production ounces, reserves, cash flow and resulting earnings."
Wheeler also noted that the company's third-quarter acquisition of the silver production and reserves at the Broken Hill mine in Australia has been nominated by the Mining Journal for "deal of year." The annual award seeks to recognize the transaction that has "most captured the imagination of the financial community." The $36 million transaction boosted Coeur's annual silver production by an average of 2.3 million ounces, or approximately 17 percent, and provided 15 million ounces of contained silver reserves. Wheeler said, "With an estimated cash production cost in the range of $2.75 per ounce, the deal represents another step in Coeur's continuing transformation to a lower-cost asset base."
The company currently expects full-year silver production to be approximately 14 million ounces at a consolidated cash cost of approximately $4.30 per ounce. The Company currently expects full-year gold production to be approximately 130,000 ounces.
Third-Quarter Operating Highlights Relative to Year-Ago Quarter
-- Cerro Bayo (Chile) -- silver and gold production were up 23 percent and
16 percent, respectively, due to higher-grade ore. Silver cash cost
declined sharply to $0.37 per ounce due to an increase in the gold by-
product credit. The increased by-product credit reflected higher gold
production and higher gold prices. Mine revenues also benefited from
the increased shipping frequency associated with a new customer.
-- Martha (Argentina) -- Silver production was up almost 80 percent due to
higher-grade ore. As was the case with Cerro Bayo, silver cash cost
per ounce declined due to an increase in the gold by-product credit and
increased production.
-- Endeavor -- (Australia) Coeur's share of production from this recently
acquired asset was more than 220,000 ounces of silver at a cash cost of
$1.95 per ounce.
-- Broken Hill (Australia) -- Coeur's share of production from this asset,
which was acquired during the third quarter, was approximately 83,000
ounces at a cash cost of $2.69 per ounce.
-- Rochester (Nevada) -- Silver and gold production were up 29 percent and
23 percent, respectively, due to improved solution grades in flow from
the leach pad. Silver cash cost per ounce declined largely as a result
of the increased volume and the increased benefit of the gold by-
product credit.
-- Galena (Idaho) -- Silver production was down 41 percent due to lower
than expected ore grades and shorter strike lengths in two mining
areas. Although such factors periodically affect nearly all deep
underground narrow-vein mines, the company is engaged in an ongoing
exploration program to identify more productive mining areas at Galena.
Low production levels resulted in higher cash costs per ounce.
Third-Quarter Exploration Highlights
The company invested $2.9 million in exploration during the quarter, with activity at all its properties, but most notably at Cerro Bayo and Kensington. At Cerro Bayo exploration discovered a new vein, termed Marcela Sur, situated nearly 1,000 meters west of the Lucero and Javiera veins being mined presently. This new vein is covered by up to 70 meters of barren sediment cover, which poses positive implications for additional blind discoveries across the district. At Kensington (Alaska), underground drilling designed to expand known reserves commenced in earnest in the third quarter. A total of 10,700 feet of core drilling from underground position focused on zones 41 and 35 where initial results have been positive. Follow-up drilling is underway at both sites.
Coeur d'Alene Mines Corporation is the world's largest primary silver producer and a growing gold producer. The Company has mining interests in Alaska, Argentina, Australia, Bolivia, Chile, Nevada, and Idaho.
Investor Contact
Scott Lamb
Vice President of Investor Relations
208-665-0777
Conference Call Information
Coeur d'Alene Mines Corporation will hold a conference call to discuss the Company's third quarter 2005 results at 1 p.m. Eastern time on November 9, 2005. To listen live via telephone, call 800-289-0529 (US and Canada) or 913-981-5523 (International). The conference call and presentation will also be web cast on the Company's web site http://www.coeur.com/. A replay of the call will be available through November 14, 2005. The replay dial-in numbers are 888-203-1112 (US and Canada) and (719) 457-0820 (International) and the access code is 9754740.
Cautionary Statement
Company press releases may contain numerous forward-looking statements within the meaning of securities legislation in the United States and Canada relating to the Company's silver and gold mining business. Such statements are subject to numerous assumptions and uncertainties, many of which are outside the Company's control. Operating, exploration and financial data, and other statements in this document are based on information the Company believes reasonable, but involve significant uncertainties as to future gold and silver prices, costs, ore grades, estimation of gold and silver reserves, mining and processing conditions, currency exchange rates, and the completion and/or updating of mining feasibility studies, changes that could result from the Company's future acquisition of new mining properties or businesses, the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions), regulatory and permitting matters, risks inherent in the ownership and operation of, or investment in, mining properties or businesses in foreign countries, as well as other uncertainties and risk factors set out in the Company's filings from time to time with the SEC and the Ontario Securities Commission, including, without limitation, the Company's reports on Form 10-K and Form 10-Q. Actual results and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise.
Donald J. Birak, Coeur's Senior Vice President of Exploration, is the qualified person, per Canadian National Instrument 43-101, responsible for the preparation of the scientific and technical information in this document. Mr. Birak has reviewed the available data and procedures and believes the calculation of reserves was conducted in a professional and competent manner.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
(In Thousands, except per share data)
REVENUES
Sales of metal $42,047 $30,211 $115,454 $86,242
Interest and other 2,052 1,056 5,350 1,142
Total revenues 44,099 31,267 120,804 87,384
COSTS and Expenses
Production 27,591 19,014 71,569 52,328
Depreciation and
depletion 4,838 4,862 14,372 14,481
Administrative and
general 4,233 3,553 14,611 11,194
Exploration 2,887 2,983 9,350 7,003
Pre-development -- 3,117 6,052 8,768
Interest 737 662 1,869 2,257
Litigation settlement -- -- 1,600 --
Other holding costs 79 262 586 1,606
Merger expenses -- 14,894 -- 14,894
Total costs
and expenses 40,365 49,347 120,009 112,531
INCOME (LOSS) FROM
OPERATIONS BEFORE
TAXES 3,734 (18,080) 795 (25,147)
Income tax provision (281) -- (813) --
Net INCOME (loss) 3,453 (18,080) (18) (25,147)
Other comprehensive
income (loss) 134 333 255 (526)
COMPREHENSIVE INCOME
(LOSS) $3,587 $(17,747) $237 $(25,673)
BASIC AND DILUTED
NET INCOME (LOSS)
PER SHARE:
Net income (loss) $0.01 $(0.08) $0.00 $(0.12)
Weighted average number
of shares of common
stock outstanding
Basic 241,683 213,261 240,572 213,217
Diluted 242,477 213,261 240,572 213,217
COEUR D'ALENE MINES CORPORATION
PRODUCTION STATISTICS
Three Months Ended Nine Months Ended
September 30, September 30,
2005 2004 2005 2004
ROCHESTER MINE
Silver ozs. 1,708,950 1,324,127 4,053,531 3,951,428
Gold ozs. 21,436 17,432 49,840 44,912
Cash costs
per oz./silver $3.64 $4.23 $5.56 $4.78
Full costs
per oz./silver $5.07 $6.22 $7.49 $6.59
GALENA MINE
Silver ozs. 459,805 785,296 1,729,801 2,647,240
Gold ozs. 60 77 205 267
Cash costs
per oz./silver $8.39 $6.16 $7.60 $5.30
Full costs
per oz./silver $9.47 $6.77 $8.47 $5.84
CERRO BAYO (A)
Silver ozs. 742,825 606,069 2,093,964 1,978,764
Gold ozs. 16,744 14,482 46,711 35,721
Cash costs
per oz./silver $0.37 $1.63 $0.33 $2.31
Full costs
per oz./silver $1.86 $3.70 $1.97 $4.45
MARTHA MINE (A)
Silver ozs. 569,873 317,720 1,555,054 1,216,117
Gold ozs. 726 403 1,933 1,644
Cash costs
per oz./silver $4.24 $5.38 $4.52 $3.79
Full costs
per oz./silver $4.62 $6.34 $4.91 $4.68
ENDEAVOR MINE (B)
Silver ozs. 220,613 -- 279,078 --
Cash costs
per oz./silver $1.95 -- $1.94 --
Full costs
per oz./silver $3.19 -- $3.18 --
BROKEN HILL MINE (C)
Silver ozs. 83,010 -- 83,010 --
Cash costs
per oz./silver $2.69 -- $2.69 --
Full costs
per oz./silver $4.62 -- $4.62 --
CONSOLIDATED
PRODUCTION TOTALS
Silver ozs. 3,785,076 3,033,212 9,794,438 9,793,549
Gold ozs. 38,966 32,394 98,689 82,544
Cash costs
per oz./silver $3.54 $4.33 $4.51 $4.30
Full costs
per oz./silver $4.78 $5.88 $5.92 $5.72
CONSOLIDATED SALES
TOTALS
Silver ozs. sold 3,614,629 2,810,653 10,454,763 9,405,311
Gold ozs. sold 38,303 26,406 107,516 74,268
Realized price
per silver oz. $7.26 $6.74 $7.12 $6.67
Realized price
per gold oz. $452 $406 $436 $399
(A) Beginning in the first quarter of 2005, the Company segregated
operating statistics to conform to current year presentation.
(B) On May 23, 2005, the Company acquired all of the silver production and
reserves contained at the Endeavor mine in Australia, which is owned and
operated by CBH Resources Ltd. ("CBH"), for $38.5 million. Production
totals represent Coeur's share of the silver production in the three and
nine months ended September 30, 2005.
(C) On September 8, 2005, the Company acquired all of the silver
production and reserves, up to 17.2 million payable ounces, contained at
the Broken Hill mine in Australia which is owned and operated by Perilya
Broken Hill Ltd. ("PBH") for $36.0 million. Coeur's share of the silver
from September 8, 2005 to September 30, 2005 was 83,010 ounces at a cash
cost of $2.69 per ounce, representing Coeur's agreed upon operating cost
contribution including smelting and refining charges.
Note: "Cash Costs per Ounce" are calculated by dividing the cash costs computed for each of the Company's mining properties for a specified period by the amount of gold ounces or silver ounces produced by that property during that same period. Management uses cash costs per ounce produced as a key indicator of the profitability of each of its mining properties. Gold and silver are sold and priced in the world financial markets on a US dollar per ounce basis. By calculating the cash costs from each of the Company's mines on the same unit basis, management can easily determine the gross margin that each ounce of gold and silver produced is generating.
"Cash Costs" are costs directly related to the physical activities of producing silver and gold and include mining, processing and other plant costs, deferred mining adjustments, third-party refining and smelting costs, marketing expense, on-site general and administrative costs, royalties, in- mine drilling expenditures that are related to production and other direct costs. Sales of by-product metals (primarily gold and copper) are deducted from the above in computing cash costs. Cash costs exclude depreciation, depletion and amortization, corporate general and administrative expense, exploration, interest, and pre-feasibility costs and accruals for mine reclamation. Cash costs are calculated and presented using the "Gold Institute Production Cost Standard" applied consistently for all periods presented.
Total cash costs per ounce is a non-GAAP measurement and investors are cautioned not to place undue reliance on it and are urged to read all GAAP accounting disclosures presented in the consolidated financial statements and accompanying footnotes. In addition, see the reconciliation of "cash costs" to production costs under "Costs and Expenses" set forth below:
The following tables present a reconciliation between cash costs per ounce and GAAP production costs reported in the Statement of Operations:
THREE MONTHS ENDED SEPTEMBER 30, 2005
Rochester Galena Cerro
Bayo
Production of Silver
(ounces) 1,708,950 459,805 742,825
Cash Costs per ounce $3.64 $8.39 $0.37
Total Cash Costs (thousands) $6,217 $3,859 $273
Add/(Subtract):
Third Party Smelting Costs (281) (745) (1,126)
By-Product Credit 9,476 596 7,350
Deferred Stripping and
other adjustments (54) -- 10
Change in Inventory (3,326) 3 2,005
Production Costs $12,032 $3,713 $8,512
Broken
Martha Endeavor Hill Total
Production of
Silver (ounces) 569,873 220,613 83,010 3,785,076
Cash Costs per ounce $4.24 $1.95 $2.69 $3.54
Total Cash Costs
(thousands) $2,415 $430 $223 $13,417
Add/(Subtract):
Third Party
Smelting Costs (336) (234) (70) (2,792)
By-Product Credit 320 -- -- 17,742
Deferred Stripping
and other adjustments 174 -- -- 130
Change in Inventory 410 2 -- (906)
Production Costs $2,983 $198 $153 $27,591
THREE MONTHS ENDED SEPTEMBER 30, 2004
Cerro
Rochester Galena Bayo
Production of Silver
(ounces) 1,324,127 785,296 606,069
Cash Costs per ounce $4.23 $6.16 $1.63
Total Cash Costs (thousands) $5,602 $4,840 $988
Add/(Subtract):
Third Party Smelting Costs (234) (1,238) (974)
By-Product Credit 7,007 846 5,809
Deferred Stripping and
other adjustments (100) -- 48
Change in Inventory (4,439) (584) (451)
Production Costs $7,836 $3,864 $5,420
Broken
Martha Endeavor Hill Total
Production of Silver
(ounces) 317,720 -- -- 3,033,212
Cash Costs per ounce $5.38 -- -- $4.33
Total Cash Costs
(thousands) $1,711 -- -- $13,141
Add/(Subtract):
Third Party Smelting
Costs (169) -- -- (2,615)
By-Product Credit 162 -- -- 13,824
Deferred Stripping
and other adjustments (40) -- -- (92)
Change in Inventory 230 -- -- (5,244)
Production Costs $1,894 $19,014
NINE MONTHS ENDED SEPTEMBER 30, 2005
Rochester Galena Cerro
Bayo
Production of Silver
(ounces) 4,053,531 1,729,801 2,093,964
Cash Costs per ounce $5.56 $7.60 $0.33
Total Cash Costs (thousands) $22,536 $13,149 $691
Add/(Subtract):
Third Party Smelting Costs (687) (2,877) (3,152)
By-Product Credit 21,637 2,224 20,150
Deferred Stripping and
other adjustments (256) -- --
Change in Inventory (14,499) (321) 5,271
Production Costs $28,731 $12,175 $22,960
Broken
Martha Endeavor Hill Total
Production of Silver
(ounces) 1,555,054 279,078 83,010 9,794,438
Cash Costs per ounce $4.52 $1.94 $2.69 $4.51
Total Cash Costs
(thousands) $7,030 $541 $223 $44,170
Add/(Subtract):
Third Party
Smelting Costs (903) (292) (70) (7,981)
By-Product Credit 834 -- -- 44,845
Deferred Stripping
and other adjustments -- -- -- (256)
Change in Inventory 376 (36) -- (9,209)
Production Costs $7,337 $213 $153 $71,569
NINE MONTHS ENDED SEPTEMBER 30, 2004
Rochester Galena Cerro
Bayo
Production of Silver
(ounces) 3,951,428 2,647,240 1,978,764
Cash Costs per ounce $4.78 $5.30 $2.14
Total Cash Costs (thousands) $18,900 $14,039 $4,566
Add/(Subtract):
Third Party Smelting Costs (655) (3,919) (3,432)
By-Product Credit 17,969 2,559 14,319
Deferred Stripping and
other adjustments (302) -- 38
Change in Inventory (12,239) 315 (3,971)
Production Costs $23,673 $12,994 $11,520
Broken
Martha Endeavor Hill Total
Production of
Silver (ounces) 1,216,117 -- -- 9,793,549
Cash Costs per ounce $3.79 -- -- $4.30
Total Cash Costs
(thousands) $4,605 -- -- $42,110
Add/(Subtract):
Third Party
Smelting Costs (655) -- -- (8,661)
By-Product Credit 658 -- -- 35,505
Deferred Stripping
and other adjustments (94) -- -- (358)
Change in Inventory (373) -- -- (16,268)
Production Costs $4,141 $52,328
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2005 2004
(In Thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $216,062 $273,079
Short-term investments 41,418 48,993
Receivables 23,575 10,634
Ore on leach pad 13,902 15,046
Metal and other inventory 17,681 17,639
Deferred tax assets 1,330 2,592
Prepaid expenses and other 4,476 3,727
318,444 371,710
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 98,260 85,070
Less accumulated depreciation (57,537) (54,154)
40,723 30,916
MINING PROPERTIES
Operational mining properties 125,404 121,344
Less accumulated depletion (107,101) (100,079)
18,303 21,265
Mineral interests 71,722 20,125
Non-producing and development properties 45,499 26,071
135,524 67,461
OTHER ASSETS
Non-current ore on leach pad 39,870 28,740
Restricted cash and cash equivalents 17,116 10,847
Debt issuance costs, net 5,530 5,757
Deferred tax assets 3,128 1,811
Other 9,110 8,535
74,754 55,690
TOTAL ASSETS $569,445 $525,777
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2005 2004
(In Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $11,740 $8,389
Accrued liabilities and other 7,777 5,306
Accrued interest payable 469 1,035
Accrued salaries and wages 6,020 6,379
Current portion of remediation costs 460 1,041
26,466 22,150
LONG-TERM LIABILITIES
1 1/4% Convertible Senior Notes due
January 2024 180,000 180,000
Reclamation and mine closure 24,848 23,670
Other long-term liabilities 7,744 6,503
212,592 210,173
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common Stock, par value $1.00 per share-
authorized 500,000,000 shares, issued
250,883,651 and 241,028,303 shares in
2005 and 2004 (1,059,211 shares held in
treasury) 250,884 241,028
Additional paid-in capital 656,650 629,809
Accumulated deficit (561,927) (561,908)
Shares held in treasury (13,190) (13,190)
Accumulated other comprehensive loss (2,030) (2,285)
330,387 293,454
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $569,445 $525,777
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
2005 2004 2005 2004
(In Thousands)
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $3,453 $(18,080) $(18) $(25,147)
Add (deduct) non-cash
items:
Depreciation and
depletion 4,838 4,862 14,372 14,481
Deferred taxes (175) -- (55) --
Unrealized (gain)
loss on embedded
derivative (646) (1,395) (725) 362
Amortization of
restricted stock
compensation 313 321 887 994
Amortization of debt
issuance costs 76 76 227 332
Amortization of
premium and/or
discounts 115 370 702 1,197
Other charges 155 (76) 423 38
Changes in Operating
Assets and Liabilities:
Receivables (774) 3,277 (12,907) 1,211
Prepaid expenses and
other (371) (74) (1,093) (388)
Inventories (1,063) (7,406) (10,028) (16,954)
Accounts payable and
accrued liabilities (2,054) 11,175 440 9,812
CASH PROVIDED BY
(USED IN) OPERATING
ACTIVITIES 3,867 (6,950) (7,775) (14,062)
CASH FLOWS FROM
INVESTING ACTIVITIES:
Capital expenditures (58,320) (2,732) (85,154) (5,858)
Purchases of
short-term
investments (11,502) (1,107) (34,419) (59,950)
Proceeds from sales
of short-term
investments 13,019 10,521 35,207 23,232
Other (19) 41 95 278
CASH PROVIDED BY
(USED) IN INVESTING
ACTIVITIES (56,822) 6,723 (84,271) (42,298)
CASH FLOWS FROM
FINANCING ACTIVITIES:
Retirement of
long-term debt (147) -- (208) (9,561)
Retirement of
building loan -- -- -- (1,200)
Proceeds from
issuance of
subordinated notes -- -- -- 180,000
Debt issuance costs -- -- -- (6,089)
Proceeds from
issuance of
common stock (net) 35,949 -- 35,397 --
Bank Borrowings on
working capital
facility -- -- -- 6,056
Payments to Bank
on working capital
facility -- -- -- (8,423)
Common stock
repurchased -- -- -- (793)
Other (65) 1,424 (160) 9
CASH PROVIDED BY
FINANCING
ACTIVITIES: 35,737 1,424 35,029 159,999
INCREASE (DECREASE)
IN CASH AND CASH
EQUIVALENTS (17,218) 1,197 (57,017) 103,639
Cash and cash
equivalents at
beginning of period 233,280 164,859 273,079 62,417
Cash and cash
equivalents at
end of period $216,062 $166,056 $216,062 $166,056
DATASOURCE: Coeur d'Alene Mines Corporation
CONTACT: Scott Lamb, Vice President of Investor Relations of Coeur
d'Alene Mines Corporation, +1-208-665-0777
Web site: http://www.coeur.com/