Executive Summary / Key Takeaways

• Coeur Mining is undergoing a significant transformation, transitioning from a period of heavy investment to becoming a larger-scale, lower-cost, and growing precious metals producer with a rapidly strengthening balance sheet.
• The successful ramp-up of the expanded Rochester mine and the strategic acquisition of the high-grade Las Chispas operation are converging with favorable metal prices to drive expected record financial results in 2025.
• First Quarter 2025 results demonstrated this momentum, with significant increases in revenue, net income, and adjusted EBITDA, alongside substantial debt reduction, positioning the company for accelerated free cash flow generation.
• Management forecasts record full-year 2025 adjusted EBITDA exceeding $700 million and free cash flow over $300 million, enabling aggressive debt repayment targeting a near-zero net leverage ratio by year-end.
• Ongoing exploration success across the portfolio, particularly at Palmarejo and Silvertip, provides a fertile pipeline for future growth and mine life extensions, complementing the near-term operational improvements.

Setting the Scene: A Producer Reshaped Amidst Shifting Sands

Coeur Mining, Inc. stands as a diversified precious metals producer with operating assets strategically located across North America in the United States and Mexico, complemented by a promising exploration project in Canada. The company's core business revolves around the discovery, mining, and production of gold, silver, and other related metals like zinc and lead. For years, Coeur embarked on a period of substantial capital investment aimed at modernizing and expanding its operational footprint. This strategic pivot was designed to reposition the company as a larger, more efficient, and lower-cost producer, capable of capitalizing on favorable market dynamics.

Within the competitive landscape, Coeur operates as a mid-tier producer, competing against larger, more established players like Newmont Corporation (NEM) and Barrick Gold Corporation (GOLD), as well as other mid-tier and junior producers such as Hecla Mining Company (HL) and Agnico Eagle Mines Limited (AEM). While larger peers often benefit from economies of scale and potentially lower operating costs per ounce due to higher-grade deposits or more advanced technological integration, Coeur differentiates itself through its diversified portfolio spanning multiple metals and jurisdictions. This provides investors with a unique blend of exposure, particularly to silver, where it holds a notable position in certain North American segments.

However, this mid-tier positioning also presents challenges. Compared to giants like Newmont and Barrick, Coeur's overall scale and financial efficiency metrics, such as net profit margins (10.24% TTM for CDE vs. NEM's ~18% and GOLD's ~18% in 2024) and return on invested capital, have historically lagged. Its debt-to-equity ratio (0.19 TTM) is currently competitive, but the prior investment phase necessitated higher leverage. Against peers like Hecla, which boasts strong expertise in silver and lean operations, Coeur's cost structure in certain segments can be higher, although its broader metal exposure offers a different risk profile. Indirect competition from alternative investments and advancements in metal recycling also pose potential long-term pressures on demand for newly mined supply.

Central to Coeur's operational strategy, particularly at its large-scale Rochester and Wharf mines, is the application of heap leach technology. This process involves placing crushed ore on impermeable pads and applying a solution to dissolve and recover contained metals. The efficiency of this method is significantly influenced by factors like ore grade, recovery rates, and crucially, the particle crush size. At the expanded Rochester operation, optimizing the 3-stage crushing circuit is a primary focus. Achieving the targeted 7/8 inch crush size is expected to enhance recovery rates over time. While the company has demonstrated the ability to achieve finer crush sizes (approaching 75% hitting 5/8 inch in late 2024), ongoing work aims to improve crusher availability and consistency. The strategic use of direct-to-pad (DTP) material at Rochester, while having a slightly larger size fraction, provides the tangible benefit of adding profitable tons beyond the crusher's permitted capacity, contributing to overall production volume. The company's R&D efforts extend to exploration, utilizing tools like high-resolution geophysics at Palmarejo to better identify subsurface targets and completing a new geological model at Silvertip to refine targeting and planning. These technological and operational approaches are fundamental to Coeur's ability to maximize metal recovery, manage costs, and define future reserves, directly impacting its competitive standing and financial performance.

A Consequential Year and Accelerating Momentum

The year 2024 marked a pivotal moment for Coeur, signaling the beginning of the anticipated inflection point. The second half of the year saw the company achieve sustained positive free cash flow, a direct result of the successful ramp-up of the expanded Rochester operation and consistent performance across the portfolio. This momentum carried into the first quarter of 2025, which, despite being anticipated as the lightest production quarter and including several one-time outlays, showcased the earnings power of the reshaped company.

First Quarter 2025 results highlighted this acceleration. Revenue surged to $360.1 million, a substantial 69% increase compared to the first quarter of 2024 and an 18% rise from the preceding fourth quarter. This growth was fueled by a combination of higher sales volumes, significantly boosted by the inclusion of the newly acquired Las Chispas operation, and robust increases in average realized metal prices (gold up 41% year-over-year, silver up 36% year-over-year). The impact on profitability was dramatic, with the company swinging from a net loss of $29.1 million in Q1 2024 to net income of $33.4 million in Q1 2025. Adjusted EBITDA, a key measure of operational performance, more than tripled year-over-year to $148.9 million, driving the adjusted EBITDA margin to 41%, double that of the prior year period.

Operational performance in Q1 2025 reflected the evolving portfolio. Consolidated gold production increased 7% year-over-year to 86,766 ounces, while silver production jumped a significant 44% to 3.73 million ounces. The Las Chispas acquisition, completed on February 14, 2025, immediately contributed 9,607 gold ounces and 923,723 silver ounces sold in the post-acquisition period, adding $58 million in revenue. However, the preliminary purchase price allocation (PPA) for Las Chispas resulted in a $27 million impact on inventory valuation, leading to higher reported costs applicable to sales for the segment in the quarter.

Rochester, the focus of recent major investment, continued its ramp-up. While Q1 2025 production was slightly down quarter-over-quarter due to the timing of recoveries from higher DTP placement in Q4 2024, it showed substantial year-over-year growth (gold production up 132%, silver production up 84%). The team placed 7 million tons on the leach pad, with crushed tons increasing to 5.5 million. Costs applicable to sales per ounce at Rochester decreased year-over-year, reflecting the benefits of increased scale. Palmarejo delivered a solid quarter, with production up quarter-over-quarter, though lower year-over-year. Kensington saw gold production increase 6% year-over-year, and Wharf maintained comparable production levels.

Strengthening Balance Sheet and Accelerating Free Cash Flow

The strategic objective of strengthening the balance sheet is rapidly coming to fruition, significantly aided by the cash and bullion acquired with SilverCrest (SIL) and accelerating operational cash flow. At March 31, 2025, Coeur held $79.4 million in cash and cash equivalents, with $260.9 million available under its revolving credit facility (RCF).

Cash flow generation saw a marked improvement. Net cash provided by operating activities reached $67.6 million in Q1 2025, a significant turnaround from net cash used of $15.9 million in Q1 2024. Free cash flow for the quarter was $17.6 million. Management highlighted that Q1 included approximately $130 million in one-time and quarter-specific outlays. Excluding these and the $72 million monetization of acquired bullion and inventory, free cash flow would have been around $76 million, demonstrating the underlying cash-generating power.

This improved cash flow is being strategically deployed for debt reduction. In Q1 2025, the company repaid $85 million net on the RCF, reducing the outstanding balance to $110 million. Additionally, $42 million in metals sales prepayments were closed out. This aggressive deleveraging has dramatically improved the company's leverage profile, with the Net Debt to Last Twelve Months Adjusted EBITDA ratio falling to 0.9x at March 31, 2025, down sharply from 1.6x at the end of 2024 and 3.2x a year prior. The company expects the remaining RCF balance to be fully repaid by the third quarter of 2025, potentially sooner if metal prices remain elevated. This debt reduction is anticipated to halve interest expense compared to the $51 million incurred in 2024, further boosting profitability and cash flow.

Looking ahead, management is confident in the company's ability to fund its business requirements, expecting to use operating cash flow for near-term capital needs. The long-term target is a Net Debt to Adjusted EBITDA ratio of 0.0x. With accelerating cash flows, the company is actively evaluating returning capital to shareholders, evidenced by the recently authorized $75 million share repurchase program effective through May 2026.

Outlook: Record Performance and Future Growth Potential

Coeur has reaffirmed its 2025 guidance, projecting a year of record performance driven by the full contribution from the expanded Rochester and the inclusion of Las Chispas. Total gold production is expected to be between 380,000 and 440,000 ounces, a 20% increase from 2024 (at the midpoint). Silver production is forecast at 16.7 to 20.25 million ounces, representing a substantial 62% increase (at the midpoint).

This production growth is expected to translate into significant financial gains. Management anticipates full-year 2025 adjusted EBITDA will exceed $700 million and free cash flow will surpass $300 million, based on guidance assumptions of $2,700/oz gold and $30.00/oz silver. They specifically project averaging $75 million to $100 million in free cash flow per quarter for the remainder of 2025. This robust cash flow generation is the engine for achieving the year-end leverage target near zero.

Cost guidance for 2025 reflects the portfolio changes and ongoing optimization. Adjusted Costs Applicable to Sales (CAS) per gold ounce are guided at $850-$950 for Las Chispas, $950-$1150 for Palmarejo, $1250-$1450 for Rochester, $1700-$1900 for Kensington, and $1250-$1350 for Wharf. Silver CAS per ounce ranges are also provided for co-product mines. Capital expenditures are guided at $132-$156 million for sustaining and $55-$69 million for development. Expensed exploration is set at $67-$77 million, excluding $17-$22 million in underground development costs at Silvertip.

Beyond 2025, the company's exploration programs are focused on extending mine lives and defining future growth. At Palmarejo, recent acquisition of Fresnillo claims provides access to prospective ground outside the Franco-Nevada (FNV) stream, with drilling planned for early 2025 on the near-term Independencia Sur block. Ongoing geophysics and structural studies indicate high prospectivity across the district's mineralized belts. Kensington's multi-year development program is successfully adding reserves and is expected to wind down in mid-2025, positioning the mine for sustained free cash flow. Wharf is exploring two new targets, North Forty and Juno, with the potential to materially extend its mine life. At Silvertip, the company tripled its land package in Q1 2025 and is advancing exploration with a new geological model and large step-out drilling, targeting a go/no-go construction decision within approximately five years, with an internal initial assessment kicking off in mid-2025.

Risks and Considerations

While the outlook is positive, investors should be mindful of inherent risks. Commodity price volatility remains a primary factor influencing revenue, profitability, and asset values. Operational risks, including permitting and regulatory delays, ground conditions, and variability in ore grades and recovery rates, can impact production and costs. The ongoing litigation with the Mexican government regarding VAT recovery, despite favorable rulings, remains unresolved and unpredictable. Estimates for reclamation and mine closure costs are subject to change. Furthermore, the ability to successfully integrate the Las Chispas operation and realize anticipated synergies is crucial. While the balance sheet is strengthening, the need for potential future financing could expose the company to market conditions.

Conclusion

Coeur Mining is navigating a transformative period, marked by the successful execution of its multi-year investment strategy and the strategic integration of a high-grade asset. The first quarter of 2025 provided a clear glimpse into the earnings and cash flow potential of the expanded portfolio, demonstrating significant top-line growth, profitability improvement, and rapid balance sheet deleveraging. With reaffirmed 2025 guidance pointing towards record production, EBITDA, and free cash flow, Coeur is poised to achieve its target of a near-zero net leverage ratio by year-end. The combination of operational optimization, particularly at Rochester, the accretive contribution from Las Chispas, ongoing exploration upside, and a favorable metal price environment positions Coeur for a compelling year. The potential for returning capital to shareholders adds another layer to the investment thesis, signaling management's confidence in the company's accelerating financial strength and focus on enhancing per share value.