Coeur Mining, Inc. (CDE) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals strong financial performance with record free cash flow from multiple mines, effective cost management, and significant growth in reserves and resources. The Q&A highlights management's strategic focus on exploration and capital returns, with a preference for buybacks. Despite some uncertainties regarding exploration timelines and tax guidance, the overall sentiment is positive, supported by high metal prices and optimistic guidance. Given the company's mid-cap status, the stock price is likely to see a moderate positive reaction.
Key Financial Performance
Silver Production Record full year silver production increased 57% year-over-year, driven by the Rochester expansion, the acquisition of SilverCrest, and consistent performance from other North American operations.
Gold Production Record full year gold production increased 23% year-over-year, attributed to the Rochester expansion, the acquisition of SilverCrest, and consistent performance from other North American operations.
EBITDA Full year record EBITDA increased 200% to over $1 billion, compared to $142 million two years ago, driven by operational improvements and acquisitions.
Free Cash Flow Full year free cash flow increased to $666 million from negative $9 million in 2024, reflecting operational improvements and higher production.
Net Income Net income increased tenfold to a record $586 million, attributed to higher production and operational efficiencies.
Year-End Cash Year-end cash increased more than 10x to $554 million, reflecting improved cash flow and operational performance.
Rochester Silver Production Rochester's full year silver production increased 40% year-over-year, driven by operational improvements and the new crusher train.
Rochester Gold Production Rochester's full year gold production increased 54% year-over-year, attributed to operational improvements and the new crusher train.
Las Chispas Free Cash Flow Las Chispas generated $286 million of free cash flow in 10.5 months, attributed to strong operational performance and successful integration.
Palmarejo Free Cash Flow Palmarejo generated $63 million of free cash flow in Q4, driven by strong grades, recoveries, and operational efficiency.
Kensington Free Cash Flow Kensington generated $51 million of free cash flow in Q4, its best result ever, due to high tonnes milled and gold grade.
Wharf Free Cash Flow Wharf generated $62.3 million of free cash flow in Q4, despite a fire in the tertiary crusher area, due to strong operational performance.
Adjusted Cost per Ounce (Gold) Adjusted cost per ounce for gold was $1,207, reflecting strong cost management and operational efficiency.
Adjusted Cost per Ounce (Silver) Adjusted cost per ounce for silver was $17.29, reflecting strong cost management and operational efficiency.
Exploration Reserves Growth Reserves grew by 10% year-over-year, driven by successful exploration programs, particularly at Wharf and Palmarejo.
Inferred Resources Growth Inferred resources grew by 40% year-over-year, led by significant increases at Wharf (216%), Palmarejo (86%), and Rochester (30%).
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Operating Highlights
Record silver and gold production: Silver production increased by 57% and gold production by 23% year-over-year, driven by the Rochester expansion and the acquisition of SilverCrest.
Las Chispas contribution: Generated $286 million in free cash flow in 10.5 months, becoming the top cash flow generator.
Exploration investments: Increased reserves by 10% and inferred resources by 40%, with significant contributions from Wharf and Palmarejo.
New Gold acquisition: Expected to close in the first half of 2026, adding two Canadian operations, reducing costs, and enhancing geographic footprint.
Revenue composition: Silver is expected to contribute 42% of total 2026 revenue, up from 35% in 2025.
Operational efficiencies: Rochester achieved record quarterly crush tons and placed tons, with significant improvements in silver and gold production.
Cost management: Adjusted cost per ounce for gold and silver was $1,207 and $17.29, respectively, enabling strong margin expansion.
Capital allocation: Focused on generating strong returns on invested capital and deploying excess cash for long-term value.
Exploration investment increase: Planned 47% increase in exploration investments for 2026 to drive ROIC and extend mine life.
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Risk or Challenges
Fire in tertiary crusher at Wharf: A fire in the mine's tertiary crusher caused damage to conveyor belts, ancillary equipment, and electrical systems. Temporary mobile crushing units were mobilized, but repairs are expected to take until the second quarter of 2026, potentially impacting production efficiency and costs.
Lower grades at Rochester in early 2026: Grades at Rochester are expected to be lower in the first half of 2026, which could impact production levels and financial performance during this period.
Integration risks with New Gold acquisition: The integration of New Gold's Canadian operations poses risks related to operational alignment, cost management, and achieving expected synergies. Any delays or challenges could impact the company's strategic objectives.
Seasonal cash flow challenges in Q1: Operating cash flow is seasonally low in the first quarter due to significant year-end payments, including Mexican taxes and annual incentive plans, which could strain liquidity temporarily.
Silvertip project uncertainties: The Silvertip project is still in the evaluation phase, with uncertainties around transitioning to a pre-feasibility study and the project's future viability, which could impact long-term strategic planning.
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Guidance & Outlook
2026 Production Guidance: The company expects a 10% year-over-year increase in silver production, driven by a full year of production at Las Chispas and improved performance at Rochester. Silver is projected to contribute approximately 42% of total 2026 revenue based on current prices and guidance midpoint.
New Gold Transaction: The acquisition of New Gold's two Canadian operations is expected to close in the first half of 2026. This will reduce the company's cost profile, enhance its geographic footprint, and position it as a leading North American senior producer. The combined company is projected to generate approximately $3 billion of EBITDA and $2 billion of free cash flow annually based on consensus commodity prices from October 2025.
Exploration Investment: Exploration investment is expected to increase to $120 million to $136 million in 2026, focusing on high-return opportunities across the portfolio. This includes reserve conversion at Wharf, aggressive exploration at Palmarejo, and continued exploration at Las Chispas and Silvertip.
Rochester Performance: Rochester is expected to deliver stronger results in 2026, with silver and gold production projected to increase substantially compared to 2025. The mine will focus on achieving consistent quarterly crush tonnes and completing the next phase of the leach pad 6 expansion.
Wharf Mine Life Extension: Recent exploration and technical work have nearly doubled Wharf's mine life, with additional upside potential from a larger resource pipeline. Repairs to the tertiary crusher are expected to be completed in the second quarter of 2026, with production weighted towards the second half of the year.
Silvertip Project: The company plans to advance the Silvertip project with a potential transition into a pre-feasibility study. Higher silver prices and continued drilling success could support adding to the company's future silver profile.
Capital Return Strategy: Following the New Gold transaction, the company plans to update its capital return strategy, focusing on disciplined capital allocation and maximizing long-term shareholder value.
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Shareholder Return Plan
Share Buyback Program: We made some progress on our $75 million buyback program that we announced during the second quarter. We were fairly limited in our ability to execute the buyback program during the second half of the year due to trading restrictions related to the New Gold transaction. This limitation will end upon the closing of the transaction when we intend to announce a robust update to our return of capital strategy.
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Key Q&A
Q:What caused the changes in reserve grades at Las Chispas, and when will the grade profile normalize?
A:The changes in reserve grades at Las Chispas reflect a more conservative approach to modeling after taking over operations in February. This approach aligns with practices at other mines and was based on due diligence findings that grades were overestimated and tonnes underestimated. The mine grades have been ahead of reserves since the start-up, and normalization of the grade profile is expected going forward as operations align with planned levels.
Q:Are the maiden resources at East Palmarejo outside of the Franco stream, and when could they be brought into production?
A:Yes, the maiden resources at East Palmarejo are outside the Franco-Nevada gold stream area of interest. Nearer-term opportunities include the Independencia Sur extension, which could be developed in the next few years. Exploration efforts are focused on expanding resources further east, which could lead to a potential stand-alone operation or additional ore sources in the future.
Q:What is the breakdown of the $400 million to $500 million cash tax guidance for this year between Mexico and other operations?
A:Approximately 80% of the taxes will be in Mexico, with the remaining 20% in the United States. The U.S. taxes are due to limitations on tax pools, which shelter most but not all net income. The guidance assumes partial depletion of tax pools over time.
Q:What is the company's preference between dividends and buybacks for capital returns?
A:The company has a slight preference for buybacks due to their flexibility but is also considering dividends. A clearer path for capital returns will be announced after the closing of the New Gold transaction.
Q:How is the company planning to allocate exploration budgets for the New Gold assets?
A:The company plans to allocate additional capital to exploration at both New Gold sites, particularly at Rainy River, focusing on regional opportunities. However, this will be done after the closing and integration of the transaction to ensure continuity and alignment.
Q:What is the status of recoveries at Rochester, and will the economics of the project need reassessment?
A:Recoveries at Rochester are tracking the model for the current product size. As the crush size progresses to P80 5/8, recoveries, especially for silver, are expected to improve. The focus is on achieving sustainable throughput levels and improving crush sizes, so no reassessment of project economics is currently needed.
Q:Will the company consider hedging gold and silver prices given recent high prices?
A:The company does not plan to hedge gold and silver prices at this time, preferring to remain unhedged and focus on cost control to retain full exposure to market prices.
Q:What is the status of U.S. tax pools, and how long will they last?
A:The U.S. tax pools have decreased from $630 million to $530 million year-over-year, with approximately $100 million used last year. At current profitability levels, the pools are expected to last about two more years, with some limitations allowing only 80% of income to be sheltered.
Q:What is the outlook for production under the Franco stream at Palmarejo?
A:For the near future, virtually all production at Palmarejo will be subject to the Franco stream. However, exploration efforts are focused on finding resources outside the stream area, which could reduce the percentage of production under the stream over time.
Q:Review of Unclear Management Responses
A:Management avoided providing a clear timeline for when the transition of production at Palmarejo from the Franco stream area to other areas might occur. Additionally, they did not provide specific details on the breakdown of exploration budgets for the New Gold assets or the exact timing for increasing exploration investments.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Gold transaction
La
New Afton
New Gold
Rainy River
Slide job
achievement
aim
basis
buyback program
close
closing New
closing transaction
contributor
crusher area
damage
doubling life
end reserve
future
gold production
highlight
improvement
integration planning
month contribution
ounce cash
peer
reserve resource
resiliency
return capital
site
stage
success exploration
tonne ton
yesterday
CDE Transcript
Coeur Mining, Inc. (CDE) Q4 2025 Earnings Call Transcript
Positive2-19
The earnings call reveals strong financial performance with record free cash flow from multiple mines, effective cost management, and significant growth in reserves and resources. The Q&A highlights management's strategic focus on exploration and capital returns, with a preference for buybacks. Despite some uncertainties regarding exploration timelines and tax guidance, the overall sentiment is positive, supported by high metal prices and optimistic guidance. Given the company's mid-cap status, the stock price is likely to see a moderate positive reaction.
Coeur Mining, Inc. (CDE) Q3 2025 Earnings Call Transcript
Positive10-30
The earnings call indicates strong financial performance, with increased free cash flow, reduced net debt, and improved production metrics. Positive guidance for 2025, along with robust cost management and strategic focus on growth, enhances the outlook. The Q&A session addressed operational issues as normal ramp-up processes and maintained confidence in achieving guidance. Despite some vague responses, the overall sentiment is positive, supported by a market cap that suggests moderate stock price movement.
Coeur Mining, Inc. (CDE) Q2 2025 Earnings Call Transcript
Positive8-7
The earnings call reveals strong financial performance with increased gold and silver production, decreased costs, and significant debt reduction. The company is also focusing on production growth and exploration, with positive cash flow and strategic plans like the NCIB. Despite some unclear responses in the Q&A, particularly about taxes, the overall sentiment is positive due to robust operational results and strategic initiatives. Given the mid-cap status of the company, a 2% to 8% stock price increase is expected in the short term.
Coeur Mining, Inc. (CDE) Q1 2025 Earnings Call Transcript
Positive5-8
The earnings call highlights strong financial performance with increased revenue and EBITDA, significant debt reduction, and positive free cash flow projections. The Q&A section reveals confidence in hitting guidance and operational improvements. Despite some risks like supply chain challenges and regulatory issues, the company's proactive debt management and shareholder value focus are positive indicators. Given the company's market cap of $2.2 billion, these factors suggest a positive stock price movement of 2% to 8% over the next two weeks.
CDE Slides
CDE Report
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