þ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 82-0109423 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
PO Box I, 505 Front Ave. Coeur d’Alene, Idaho | 83816 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | þ | Accelerated filer | ¨ | ||
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Page No. | ||
Part I. | ||
Item 1. | Financial Statements (Unaudited) | |
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II. | ||
Item 1. | ||
Item 1A. | ||
Item 4. | ||
Item 6. |
June 30, 2013 | December 31, 2012 | |||||||||
ASSETS | Notes | (In thousands, except share data) | ||||||||
CURRENT ASSETS | ||||||||||
Cash and cash equivalents | $ | 249,531 | $ | 125,440 | ||||||
Investments | 5 | — | 999 | |||||||
Receivables | 6 | 64,607 | 62,438 | |||||||
Ore on leach pad | 28,880 | 22,991 | ||||||||
Metal and other inventory | 7 | 148,286 | 170,670 | |||||||
Deferred tax assets | 13 | 2,620 | 2,458 | |||||||
Restricted assets | 660 | 396 | ||||||||
Prepaid expenses and other | 17,945 | 20,790 | ||||||||
512,529 | 406,182 | |||||||||
NON-CURRENT ASSETS | ||||||||||
Property, plant and equipment, net | 9 | 660,333 | 683,860 | |||||||
Mining properties, net | 10 | 2,357,689 | 1,991,951 | |||||||
Ore on leach pad | 26,861 | 21,356 | ||||||||
Restricted assets | 24,468 | 24,970 | ||||||||
Marketable securities | 5 | 16,008 | 27,065 | |||||||
Receivables | 6 | 38,539 | 48,767 | |||||||
Debt issuance costs, net | 11,890 | 3,713 | ||||||||
Deferred tax assets | 13 | 969 | 955 | |||||||
Other | 17,430 | 12,582 | ||||||||
TOTAL ASSETS | $ | 3,666,716 | $ | 3,221,401 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES | ||||||||||
Accounts payable | $ | 57,446 | $ | 57,482 | ||||||
Accrued liabilities and other | 9,369 | 10,002 | ||||||||
Accrued income taxes | 8,662 | 27,108 | ||||||||
Accrued payroll and related benefits | 15,576 | 21,306 | ||||||||
Accrued interest payable | 10,237 | 478 | ||||||||
Debt and capital leases | 11 | 5,485 | 55,983 | |||||||
Royalty obligations | 11,16 | 44,605 | 65,104 | |||||||
Reclamation and mine closure | 12 | 473 | 668 | |||||||
Deferred tax liabilities | 13 | 121 | 121 | |||||||
151,974 | 238,252 | |||||||||
NON-CURRENT LIABILITIES | ||||||||||
Debt and capital leases | 11 | 306,578 | 3,460 | |||||||
Royalty obligations | 11,16 | 86,304 | 141,879 | |||||||
Reclamation and mine closure | 12 | 35,708 | 34,670 | |||||||
Deferred tax liabilities | 13 | 711,550 | 577,488 | |||||||
Other long-term liabilities | 23,110 | 27,372 | ||||||||
1,163,250 | 784,869 | |||||||||
COMMITMENTS AND CONTINGENCIES (Notes 11, 12, 13, 16, 17 and 20) | ||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||
Common stock, par value $0.01 per share; authorized 150,000,000 shares, issued and outstanding 101,567,355 at June 30, 2013 and 90,342,338 at December 31, 2012 | 1,016 | 903 | ||||||||
Additional paid-in capital | 2,770,953 | 2,601,254 | ||||||||
Accumulated deficit | (418,926 | ) | (396,156 | ) | ||||||
Accumulated other comprehensive loss | (1,551 | ) | (7,721 | ) | ||||||
2,351,492 | 2,198,280 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 3,666,716 | $ | 3,221,401 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Notes | (In thousands, except share data) | ||||||||||||||||
Sales of metal | $ | 204,525 | $ | 254,406 | $ | 376,322 | $ | 458,970 | |||||||||
Production costs applicable to sales | (142,924 | ) | (131,823 | ) | (231,708 | ) | (224,377 | ) | |||||||||
Depreciation, depletion and amortization | (57,653 | ) | (61,024 | ) | (108,089 | ) | (113,616 | ) | |||||||||
Gross profit | 3,948 | 61,559 | 36,525 | 120,977 | |||||||||||||
COSTS AND EXPENSES | |||||||||||||||||
General and administrative | 15,026 | 8,594 | 25,253 | 16,190 | |||||||||||||
Exploration | 6,774 | 6,305 | 13,615 | 12,872 | |||||||||||||
Litigation settlement | 20 | 32,046 | — | 32,046 | — | ||||||||||||
Loss on impairment and other | 86 | 4,813 | 205 | 4,813 | |||||||||||||
Pre-development, care, maintenance and other | 973 | 273 | 5,458 | 1,341 | |||||||||||||
Total cost and expenses | 54,905 | 19,985 | 76,577 | 35,216 | |||||||||||||
OPERATING INCOME (LOSS) | (50,957 | ) | 41,574 | (40,052 | ) | 85,761 | |||||||||||
OTHER INCOME AND EXPENSE | |||||||||||||||||
Fair value adjustments, net | 4,16 | 66,754 | 16,039 | 84,550 | (7,074 | ) | |||||||||||
Other than temporary impairment of marketable securities | 5 | (17,192 | ) | — | (17,227 | ) | — | ||||||||||
Interest income and other, net | 419 | (3,221 | ) | 4,275 | 1,786 | ||||||||||||
Interest expense, net of capitalized interest | 11 | (10,930 | ) | (7,557 | ) | (20,662 | ) | (14,227 | ) | ||||||||
Total other income and expense, net | 39,051 | 5,261 | 50,936 | (19,515 | ) | ||||||||||||
Income (loss) before income taxes | (11,906 | ) | 46,835 | 10,884 | 66,246 | ||||||||||||
Income tax provision | 13 | (23,134 | ) | (23,862 | ) | (33,654 | ) | (39,298 | ) | ||||||||
NET INCOME (LOSS) | $ | (35,040 | ) | $ | 22,973 | $ | (22,770 | ) | $ | 26,948 | |||||||
INCOME (LOSS) PER SHARE | |||||||||||||||||
Basic | 3 | $ | (0.35 | ) | $ | 0.26 | $ | (0.24 | ) | $ | 0.30 | ||||||
Diluted | 3 | $ | (0.35 | ) | $ | 0.26 | $ | (0.24 | ) | $ | 0.30 | ||||||
Weighted average number of shares | |||||||||||||||||
Basic | 3 | 99,833 | 89,631 | 94,918 | 89,611 | ||||||||||||
Diluted | 3 | 99,833 | 89,733 | 94,918 | 89,777 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
Notes | 2013 | 2012 | 2013 | 2012 | |||||||||||
(In thousands) | |||||||||||||||
Net income (loss) | $ | (35,040 | ) | $ | 22,973 | $ | (22,770 | ) | $ | 26,948 | |||||
OTHER COMPREHENSIVE INCOME (LOSS) net of tax: | |||||||||||||||
Unrealized loss on available for sale securities | 4,5 | (7,491 | ) | (5,676 | ) | (11,057 | ) | (5,252 | ) | ||||||
Reclassification adjustments for losses included in net income(A) | 4,5 | 17,192 | — | 17,227 | — | ||||||||||
Other comprehensive income (loss) | 9,701 | (5,676 | ) | 6,170 | (5,252 | ) | |||||||||
COMPREHENSIVE INCOME (LOSS) | $ | (25,339 | ) | $ | 17,297 | $ | (16,600 | ) | $ | 21,696 |
(In thousands, except per share data) | Notes | Common Stock Shares | Common Stock Par Value | Additional Paid- In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total | |||||||||||||||||
Balances at December 31, 2012 | 90,342 | $ | 903 | $ | 2,601,254 | $ | (396,156 | ) | $ | (7,721 | ) | $ | 2,198,280 | |||||||||||
Net income (loss) | — | — | — | (22,770 | ) | — | (22,770 | ) | ||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | 6,170 | 6,170 | ||||||||||||||||||
Common stock issued for the acquisition of Orko Silver Corp. | 8 | 11,573 | 116 | 173,247 | — | — | 173,363 | |||||||||||||||||
Warrants issued for the acquisition of Orko Silver Corp. | 8 | — | — | 5,777 | — | — | 5,777 | |||||||||||||||||
Common stock share buy back | (655 | ) | (7 | ) | (12,550 | ) | — | — | (12,557 | ) | ||||||||||||||
Common stock issued/cancelled under long-term incentive plans and director fees and options, net | 14 | 307 | 4 | 3,225 | — | 3,229 | ||||||||||||||||||
Balances at June 30, 2013 | $ | 101,567 | $ | 1,016 | $ | 2,770,953 | $ | (418,926 | ) | $ | (1,551 | ) | $ | 2,351,492 |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Notes | (In thousands) | (In thousands) | ||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||
Net income (loss) | $ | (35,040 | ) | $ | 22,973 | $ | (22,770 | ) | $ | 26,948 | ||||||
Add (deduct) non-cash items | ||||||||||||||||
Depreciation, depletion and amortization | 57,653 | 61,024 | 108,089 | 113,616 | ||||||||||||
Accretion of discount on debt and other assets, net | 484 | 808 | 1,531 | 1,605 | ||||||||||||
Accretion of royalty obligation | 16 | 4,139 | 5,492 | 7,809 | 10,072 | |||||||||||
Deferred income taxes | 13 | 12,123 | 9,690 | 19,548 | 17,368 | |||||||||||
Fair value adjustments, net | 4 | (65,754 | ) | (17,759 | ) | (81,795 | ) | 4,018 | ||||||||
Loss on foreign currency transactions | 148 | 70 | (317 | ) | 369 | |||||||||||
Litigation settlement | 20 | 22,046 | — | 22,046 | — | |||||||||||
Share-based compensation | 14 | 1,617 | 1,033 | 2,713 | 3,170 | |||||||||||
Loss on sale of assets | (264 | ) | 264 | (1,132 | ) | 264 | ||||||||||
Other than temporary impairment of marketable securities | 5 | 17,192 | — | 17,227 | — | |||||||||||
Loss on impairment | 86 | 4,813 | 205 | 4,813 | ||||||||||||
Other non-cash charges | — | (40 | ) | — | (40 | ) | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Receivables and other current assets | 6 | 4,401 | 10,319 | 8,647 | 7,365 | |||||||||||
Prepaid expenses and other | 2,930 | (2,857 | ) | 411 | 1,916 | |||||||||||
Inventories | 7 | 31,483 | 3,097 | 10,990 | (21,625 | ) | ||||||||||
Accounts payable and accrued liabilities | 10,094 | 14,276 | (16,930 | ) | (39,655 | ) | ||||||||||
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 63,338 | 113,203 | 76,272 | 130,204 | ||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
Purchase of short term investments and marketable securities | (683 | ) | (6,831 | ) | (5,332 | ) | (7,866 | ) | ||||||||
Proceeds from sales and maturities of short term investments | 1,522 | 683 | 6,344 | 20,701 | ||||||||||||
Capital expenditures | 19 | (27,201 | ) | (32,238 | ) | (40,028 | ) | (63,885 | ) | |||||||
Acquisition of Orko Silver Corporation | 8 | (101,648 | ) | — | (113,214 | ) | — | |||||||||
Other | 254 | 995 | 1,209 | 1,180 | ||||||||||||
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (127,756 | ) | (37,391 | ) | (151,021 | ) | (49,870 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||
Proceeds from issuance of notes and bank borrowings | 11 | — | — | 300,000 | — | |||||||||||
Payments on long-term debt, capital leases, and associated costs | 11 | (1,857 | ) | (8,794 | ) | (57,197 | ) | (14,244 | ) | |||||||
Payments on gold production royalty | 11 | (15,480 | ) | (19,287 | ) | (30,929 | ) | (40,660 | ) | |||||||
Share repurchases | — | — | (12,557 | ) | — | |||||||||||
Other | (25 | ) | (217 | ) | (477 | ) | (1,045 | ) | ||||||||
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | (17,362 | ) | (28,298 | ) | 198,840 | (55,949 | ) | |||||||||
INCREASE IN CASH AND CASH EQUIVALENTS | (81,780 | ) | 47,514 | 124,091 | 24,385 | |||||||||||
Cash and cash equivalents at beginning of period | 331,311 | 151,883 | 125,440 | 175,012 | ||||||||||||
Cash and cash equivalents at end of period | $ | 249,531 | $ | 199,397 | $ | 249,531 | $ | 199,397 |
• | For items reclassified out of accumulated other comprehensive income (AOCI) and into net income in their entirety, the effect of the reclassification on each affected net income line item; and |
• | For AOCI reclassification items that are not reclassified in their entirety into net income, a cross reference to other required U.S. GAAP disclosures. |
Three months ended June 30, 2013 | Six months ended June 30, 2013 | ||||||||||||||||||||
Income (Numerator) | Shares (Denominator) | Per-Share Amount | Income (Numerator) | Shares (Denominator) | Per-Share Amount | ||||||||||||||||
Basic EPS | |||||||||||||||||||||
Net income (loss) available to common stockholders | $ | (35,040 | ) | 99,833 | $ | (0.35 | ) | $ | (22,770 | ) | 94,918 | $ | (0.24 | ) | |||||||
Effect of Dilutive Securities | |||||||||||||||||||||
Equity awards | — | — | — | — | |||||||||||||||||
Diluted EPS | |||||||||||||||||||||
Net income (loss) available to common stockholders | $ | (35,040 | ) | 99,833 | $ | (0.35 | ) | $ | (22,770 | ) | 94,918 | $ | (0.24 | ) | |||||||
Three months ended June 30, 2013 | Six months ended June 30, 2012 | ||||||||||||||||||||
Income (Numerator) | Shares (Denominator) | Per-Share Amount | Income (Numerator) | Shares (Denominator) | Per-Share Amount | ||||||||||||||||
Basic EPS | |||||||||||||||||||||
Net income (loss) available to common stockholders | $ | 22,973 | 89,631 | $ | 0.26 | $ | 26,948 | 89,611 | $ | 0.30 | |||||||||||
Effect of Dilutive Securities | |||||||||||||||||||||
Equity awards | — | 102 | — | 166 | |||||||||||||||||
Diluted EPS | |||||||||||||||||||||
Net income (loss) available to common stockholders | $ | 22,973 | 89,733 | $ | 0.26 | $ | 26,948 | 89,777 | $ | 0.30 |
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; |
Level 2 | Quoted market prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and |
Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
Fair Value at June 30, 2013 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Marketable equity securities | $ | 16,008 | $ | 16,008 | $ | — | $ | — | |||||||
Gold put and call options | 2,358 | — | 2,358 | — | |||||||||||
$ | 18,366 | $ | 16,008 | $ | 2,358 | $ | — | ||||||||
Liabilities: | |||||||||||||||
Palmarejo royalty obligation embedded derivative | $ | 52,359 | $ | — | $ | 52,359 | $ | — | |||||||
Rochester NSR royalty obligation | 22,046 | — | 22,046 | — | |||||||||||
Other derivative instruments, net | 2,554 | — | 2,554 | — | |||||||||||
$ | 76,959 | $ | — | $ | 76,959 | $ | — |
Fair Value at December 31, 2012 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Short term investments | $ | 999 | $ | 999 | $ | — | $ | — | |||||||
Marketable securities | 27,065 | 27,065 | — | — | |||||||||||
Other derivative instruments, net | 943 | — | 943 | — | |||||||||||
$ | 29,007 | $ | 28,064 | $ | 943 | $ | — | ||||||||
Liabilities: | |||||||||||||||
Royalty obligation embedded derivative | $ | 145,098 | $ | — | $ | 145,098 | $ | — | |||||||
Put and call options | 9,299 | — | 9,299 | — | |||||||||||
$ | 154,397 | $ | — | $ | 154,397 | $ | — |
Fair Value at June 30, 2013 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Liabilities: | |||||||||||||||
3.25% Convertible Senior Notes due 2028 | $ | 5,153 | $ | 5,153 | $ | — | $ | — | |||||||
7.875% Senior Notes due 2021 | $ | 295,689 | $ | 295,689 | $ | — | $ | — | |||||||
Palmarejo Gold Production Royalty Obligation | $ | 75,645 | $ | — | $ | 75,645 | $ | — |
Fair Value at December 31, 2012 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Liabilities: | |||||||||||||||
3.25% Convertible Senior Notes due 2028 | $ | 48,220 | $ | 48,220 | $ | — | $ | — | |||||||
Palmarejo Gold Production Royalty Obligation | $ | 90,617 | $ | — | $ | 90,617 | $ | — |
Investments in marketable securities | |||||||||||||||
Adjusted Cost | Gross Unrealized Losses | Gross Unrealized Gains | Estimated Fair Value | ||||||||||||
Marketable securities at June 30, 2013 | $ | 17,608 | $ | (1,799 | ) | $ | 199 | $ | 16,008 | ||||||
Marketable securities at December 31, 2012 | $ | 34,786 | $ | (10,443 | ) | $ | 2,722 | $ | 27,065 |
June 30, 2013 | December 31, 2012 | ||||||
Receivables - current | |||||||
Accounts receivable - trade | $ | 9,664 | $ | 8,701 | |||
Refundable income tax | 1,807 | 9,331 | |||||
Refundable value added tax | 48,186 | 40,020 | |||||
Accounts receivable - other | 4,950 | 4,386 | |||||
$ | 64,607 | $ | 62,438 | ||||
Receivables - non-current | |||||||
Refundable value added tax | $ | 38,539 | $ | 48,767 |
June 30, 2013 | December 31, 2012 | ||||||
Concentrate and doré inventory | $ | 80,306 | $ | 91,130 | |||
Supplies | 67,980 | 79,540 | |||||
Metal and other inventory | $ | 148,286 | $ | 170,670 |
Common shares issued (11,572,918 at $14.98) | $ | 173,363 | |
Cash | 99,059 | ||
Warrants (1,588,768 valued at $3.64 per warrant) | 5,777 | ||
Transaction advisory fees and other acquisition costs | 17,642 | ||
Total purchase price | 295,841 | ||
Current liabilities | 2,616 | ||
Deferred income taxes | 114,339 | ||
Total liabilities assumed | 116,955 | ||
Total Consideration | $ | 412,796 |
Cash | $ | 3,487 | |
Other current assets | 635 | ||
Mineral interests | 408,352 | ||
Other assets | 322 | ||
Total assets acquired | $ | 412,796 |
June 30, 2013 | December 31, 2012 | ||||||
Land | $ | 1,888 | $ | 2,010 | |||
Buildings and improvements | 593,989 | 581,286 | |||||
Machinery and equipment | 379,912 | 360,199 | |||||
Capitalized leases for machinery, equipment, buildings, and land | 22,445 | 35,129 | |||||
998,234 | 978,624 | ||||||
Accumulated depreciation and amortization | (353,533 | ) | (313,067 | ) | |||
644,701 | 665,557 | ||||||
Construction in progress | 15,632 | 18,303 | |||||
$ | 660,333 | $ | 683,860 |
June 30, 2013 | Palmarejo | San Bartolomé | Kensington | Rochester | Endeavor | La Preciosa | Joaquin | Total | |||||||||||||||||||||||
Mining properties | $ | 162,855 | $ | 70,360 | $ | 338,907 | $ | 120,350 | $ | — | $ | — | $ | — | $ | 692,472 | |||||||||||||||
Accumulated depletion | (94,647 | ) | (20,305 | ) | (60,310 | ) | (101,353 | ) | — | — | — | (276,615 | ) | ||||||||||||||||||
68,208 | 50,055 | 278,597 | 18,997 | — | — | — | 415,857 | ||||||||||||||||||||||||
Mineral interests | 1,660,580 | 26,643 | — | — | 44,033 | 408,352 | 93,429 | 2,233,037 | |||||||||||||||||||||||
Accumulated depletion | (266,499 | ) | (8,037 | ) | — | — | (16,669 | ) | — | — | (291,205 | ) | |||||||||||||||||||
1,394,081 | 18,606 | — | — | 27,364 | 408,352 | 93,429 | 1,941,832 | ||||||||||||||||||||||||
Non-producing and development properties | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total mining properties | $ | 1,462,289 | $ | 68,661 | $ | 278,597 | $ | 18,997 | $ | 27,364 | $ | 408,352 | $ | 93,429 | $ | 2,357,689 |
December 31, 2012 | Palmarejo | San Bartolomé | Kensington | Rochester | Endeavor | Joaquin | Other | Total | |||||||||||||||||||||||
Mining properties | $ | 155,722 | $ | 70,322 | $ | 333,619 | $ | 114,973 | $ | — | $ | — | $ | 11,416 | $ | 686,052 | |||||||||||||||
Accumulated depletion | (82,037 | ) | (18,439 | ) | (46,649 | ) | (100,437 | ) | — | — | (11,416 | ) | (258,978 | ) | |||||||||||||||||
73,685 | 51,883 | 286,970 | 14,536 | — | — | — | 427,074 | ||||||||||||||||||||||||
Mineral interests | 1,658,389 | 26,642 | — | — | 44,033 | 93,429 | — | 1,822,493 | |||||||||||||||||||||||
Accumulated depletion | (235,795 | ) | (7,338 | ) | — | — | (14,625 | ) | — | — | (257,758 | ) | |||||||||||||||||||
1,422,594 | 19,304 | — | — | 29,408 | 93,429 | — | 1,564,735 | ||||||||||||||||||||||||
Non-producing and development properties | — | — | — | — | — | — | 142 | 142 | |||||||||||||||||||||||
Total mining properties | $ | 1,496,279 | $ | 71,187 | $ | 286,970 | $ | 14,536 | $ | 29,408 | $ | 93,429 | $ | 142 | $ | 1,991,951 |
June 30, 2013 | December 31, 2012 | ||||||||||||||
Current | Non-Current | Current | Non-Current | ||||||||||||
3.25% Convertible Senior Notes due 2028 | $ | — | $ | 5,334 | $ | 48,081 | $ | — | |||||||
7.875% Senior Notes due 2021 | — | 300,000 | — | — | |||||||||||
Capital lease obligations | 5,485 | 1,244 | 7,902 | 3,460 | |||||||||||
$ | 5,485 | $ | 306,578 | $ | 55,983 | $ | 3,460 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||
3.25% Convertible Senior Notes due 2028 | $ | 43 | $ | 395 | $ | 380 | $ | 791 | |||||
7.875% Senior Notes due 2021 | 5,906 | — | 10,041 | — | |||||||||
Revolving Credit Facility | 133 | — | 258 | — | |||||||||
Kensington Term Facility (terminated in 2012) | — | 906 | — | 1,880 | |||||||||
Capital lease obligations | 98 | 265 | 266 | 608 | |||||||||
Other debt obligations | 72 | 162 | 268 | 230 | |||||||||
Accretion of Palmarejo gold production royalty obligation | 4,107 | 5,559 | 8,170 | 10,663 | |||||||||
Amortization of debt issuance costs | 539 | 251 | 1,064 | 508 | |||||||||
Accretion of debt discount | — | 629 | 576 | 1,241 | |||||||||
Capitalized interest | 32 | (610 | ) | (361 | ) | (1,694 | ) | ||||||
Total interest expense, net of capitalized interest | $ | 10,930 | $ | 7,557 | $ | 20,662 | $ | 14,227 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Asset retirement obligation - Beginning | $ | 35,197 | $ | 33,434 | $ | 34,457 | $ | 32,714 | |||||||
Accretion | 758 | 742 | 1,500 | 1,466 | |||||||||||
Addition and changes in estimates | — | 335 | — | 335 | |||||||||||
Settlements | (377 | ) | (1 | ) | (379 | ) | (5 | ) | |||||||
Asset retirement obligation | $ | 35,578 | $ | 34,510 | $ | 35,578 | $ | 34,510 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
United States | $ | (790 | ) | $ | (388 | ) | $ | (3,277 | ) | $ | (3,525 | ) | |||
Mexico | (15,798 | ) | (12,052 | ) | (19,471 | ) | (15,750 | ) | |||||||
Bolivia | (4,556 | ) | (10,889 | ) | (8,884 | ) | (18,578 | ) | |||||||
Other jurisdictions | (1,990 | ) | (533 | ) | (2,022 | ) | (1,445 | ) | |||||||
Income tax provision from continuing operations | $ | (23,134 | ) | $ | (23,862 | ) | $ | (33,654 | ) | $ | (39,298 | ) |
Grant date | Restricted stock | Grant date fair value of restricted stock | Stock options | Grant date fair value of stock options | Performance shares | Grant date fair value of performance shares | ||||||||||||||
January 2, 2013 | 1,805 | $ | 25.20 | — | $ | — | — | $ | — | |||||||||||
January 22, 2013 | 47,994 | $ | 23.90 | 77,715 | $ | 14.77 | 95,991 | $ | 27.41 | |||||||||||
February 4, 2013 | 18,668 | $ | 22.63 | 17,692 | $ | 14.00 | 21,828 | $ | 25.96 | |||||||||||
April 1, 2013 | 157,142 | $ | 18.51 | 73,290 | $ | 11.39 | 28,662 | $ | 21.23 | |||||||||||
May 21, 2013 | 111,193 | $ | 13.66 | — | $ | — | — | $ | — |
Award Type | Number of Units | Weighted Average Exercise Price | ||||
Options | 926 | $ | 20.80 | |||
Stock Appreciation Rights | 3,846 | $ | 15.40 |
SARs | |||
Weighted average fair value | $ | 4.05 |
Options Exercisable | Weighted Average Exercise Price | SARs Exercisable | Weighted Average Exercise Price | |||||||||
256,336 | $ | 32.92 | 65,019 | $ | 14.21 |
2013 | 2014 | 2015 | Thereafter | ||||||||||||
Palmarejo gold production royalty | $ | 14,750 | $ | 24,895 | $ | 24,691 | $ | 20,069 | |||||||
Average gold price in excess of minimum contractual deduction | $ | 502 | $ | 498 | $ | 492 | $ | 490 | |||||||
Notional ounces | 29,389 | 50,004 | 50,004 | 40,985 | |||||||||||
Mexican peso forward purchase contracts | $ | 20,700 | $ | 12,000 | $ | — | $ | — | |||||||
Average rate (MXP/$) | $ | 12.90 | $ | 12.21 | $ | — | $ | — | |||||||
Mexican peso notional amount | 267,119 | 146,460 | — | — | |||||||||||
Mexican peso put options purchased | $ | — | $ | 6,000 | $ | — | $ | — | |||||||
Average strike price (MXP/$) | $ | — | $ | 12.50 | $ | — | $ | — | |||||||
Mexico peso notional amount | — | 75,000 | — | — | |||||||||||
Mexican peso call options sold | $ | — | $ | 6,000 | $ | — | $ | — | |||||||
Average strike price (MXP/$) | $ | — | $ | 15.50 | $ | — | $ | — | |||||||
Mexico peso notional amount | — | 93,000 | — | — | |||||||||||
Silver concentrate sales agreements | $ | 7,249 | $ | — | $ | — | $ | — | |||||||
Average silver price | $ | 23.92 | $ | — | $ | — | $ | — | |||||||
Notional ounces | 302,990 | — | — | — | |||||||||||
Gold concentrates sales agreements | $ | 22,252 | $ | — | $ | — | $ | — | |||||||
Average gold price | $ | 1,427 | $ | — | $ | — | $ | — | |||||||
Notional ounces | 15,589 | — | — | — | |||||||||||
Gold put options purchased | $ | 720 | $ | 720 | $ | — | $ | — | |||||||
Average gold strike price | $ | 936 | $ | 979 | $ | 1,010 | $ | — | |||||||
Notional ounces | 20,000 | 47,000 | 30,000 | — | |||||||||||
Gold call options sold | $ | — | $ | 720 | $ | — | $ | — | |||||||
Average gold strike price | $ | 2,000 | $ | 1,934 | $ | 2,000 | $ | — | |||||||
Notional ounces | 10,000 | 47,000 | 30,000 | — |
June 30, 2013 | |||||||||||||||||||
Prepaid expenses and other | Other long-term assets | Accrued liabilities and other | Current portion of royalty obligation | Non-current portion of royalty obligation | |||||||||||||||
Foreign exchange contracts Peso | $ | 12 | $ | — | $ | 1,457 | $ | — | $ | — | |||||||||
Palmarejo gold production royalty | — | — | — | 17,759 | 34,600 | ||||||||||||||
Put and call options, net | 50 | 2,308 | — | — | — | ||||||||||||||
Concentrate sales contracts | 20 | — | 1,128 | — | — | ||||||||||||||
$ | 82 | $ | 2,308 | $ | 2,585 | $ | 17,759 | $ | 34,600 |
December 31, 2012 | |||||||||||||||||||
Prepaid expenses and other | Accrued liabilities and other | Other long- term Liabilities | Current portion of royalty obligation | Non-current portion of royalty obligation | |||||||||||||||
Forward foreign exchange contracts Peso | $ | 376 | $ | 300 | $ | — | $ | — | $ | — | |||||||||
Palmarejo gold production royalty | — | — | — | 41,146 | 103,952 | ||||||||||||||
Put and call options, net | — | 2,025 | 7,274 | — | — | ||||||||||||||
Concentrate sales contracts | 1,030 | 163 | — | — | — | ||||||||||||||
$ | 1,406 | $ | 2,488 | $ | 7,274 | $ | 41,146 | $ | 103,952 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||
Financial statement line | Derivative | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Sales of metal | Concentrate sales contracts | $ | (667 | ) | $ | (877 | ) | $ | (2,422 | ) | $ | 459 | |||||
Production costs applicable to sales | Forward foreign exchange contracts | 203 | (1,151 | ) | 830 | (1,934 | ) | ||||||||||
Fair value adjustments, net | Foreign exchange contracts MXN Peso | (2,260 | ) | 83 | (1,522 | ) | 2,773 | ||||||||||
Fair value adjustments, net | Forward foreign exchange contracts Canadian dollar | 1,598 | — | — | — | ||||||||||||
Fair value adjustments, net | Silver ounces receivable | — | (337 | ) | — | 22 | |||||||||||
Fair value adjustments, net | Palmarejo gold royalty | 61,066 | 14,105 | 75,494 | (11,505 | ) | |||||||||||
Fair value adjustments, net | Put and call options | 6,350 | 2,187 | 10,577 | 1,636 | ||||||||||||
$ | 66,290 | $ | 14,010 | $ | 82,957 | $ | (8,549 | ) |
Customer | Three months ended June 30, | Three months ended June 30, | Segments reporting sales of metal | |||||||
2013 | 2012 | |||||||||
Valcambi | $ | 27.2 | $ | 148.3 | Palmarejo, San Bartolomé | |||||
Auramet | 44.1 | 19.9 | San Bartolomé, Kensington | |||||||
Toronto Dominian Bank | 34.5 | 18.3 | Palmarejo, Rochester | |||||||
International Commodities | 25.7 | 7.0 | Palmarejo, San Bartolomé, Rochester |
Customer | Six months ended June 30, | Six months ended June 30, | Segments reporting sales of metal | |||||||
2013 | 2012 | |||||||||
Valcambi | $ | 39.4 | $ | 256.2 | Palmarejo, San Bartolomé | |||||
Auramet | 68.9 | 33.5 | San Bartolomé, Kensington | |||||||
Johnson Mathey | 44.8 | 0.9 | San Bartolomé, Rochester | |||||||
International Commodities | 40.4 | 23.8 | Palmarejo, San Bartolomé, Rochester |
Three months ended June 30, 2013 | Palmarejo Mine | San Bartolomé Mine | Kensington Mine | Rochester Mine | Martha Mine | Endeavor Mine | La Preciosa | Other | Total | ||||||||||||||||||||||||||
Sales of metals | $ | 86,217 | $ | 49,236 | $ | 30,851 | $ | 34,903 | $ | (161 | ) | $ | 3,479 | $ | — | $ | — | $ | 204,525 | ||||||||||||||||
Productions costs applicable to sales | (55,218 | ) | (32,815 | ) | (30,154 | ) | (23,054 | ) | — | (1,683 | ) | — | — | (142,924 | ) | ||||||||||||||||||||
Depreciation and depletion | (35,557 | ) | (4,941 | ) | (13,261 | ) | (2,324 | ) | (113 | ) | (1,220 | ) | (2 | ) | (235 | ) | (57,653 | ) | |||||||||||||||||
Gross profit | (4,558 | ) | 11,480 | (12,564 | ) | 9,525 | (274 | ) | 576 | (2 | ) | (235 | ) | 3,948 | |||||||||||||||||||||
Exploration expense | 3,189 | 27 | 563 | 512 | 603 | — | 690 | 1,190 | 6,774 | ||||||||||||||||||||||||||
Loss on impairment | — | — | — | — | 86 | — | — | — | 86 | ||||||||||||||||||||||||||
Other operating expenses | — | — | 134 | 34,177 | 861 | — | — | 12,873 | 48,045 | ||||||||||||||||||||||||||
OPERATING INCOME | (7,747 | ) | 11,453 | (13,261 | ) | (25,164 | ) | (1,824 | ) | 576 | (692 | ) | (14,298 | ) | (50,957 | ) | |||||||||||||||||||
Interest and other income, net | (428 | ) | 683 | 150 | — | (177 | ) | — | (11 | ) | (16,990 | ) | (16,773 | ) | |||||||||||||||||||||
Interest expense, net | (4,190 | ) | (14 | ) | (95 | ) | (5 | ) | (1 | ) | — | — | (6,625 | ) | (10,930 | ) | |||||||||||||||||||
Fair value adjustments, net | 61,066 | — | 6,350 | — | — | — | — | (662 | ) | 66,754 | |||||||||||||||||||||||||
Income tax expense | (17,282 | ) | (4,506 | ) | — | — | (117 | ) | 85 | — | (1,314 | ) | (23,134 | ) | |||||||||||||||||||||
Net income | $ | 31,419 | $ | 7,616 | $ | (6,856 | ) | $ | (25,169 | ) | $ | (2,119 | ) | $ | 661 | $ | (703 | ) | $ | (39,889 | ) | $ | (35,040 | ) | |||||||||||
Segment assets (A) | $ | 1,860,240 | $ | 286,325 | $ | 485,215 | $ | 122,917 | $ | 6,757 | $ | 30,226 | $ | 409,458 | $ | 103,464 | $ | 3,304,602 | |||||||||||||||||
Capital expenditures (B) | $ | 9,166 | $ | 3,159 | $ | 7,406 | $ | 6,596 | $ | 10 | $ | — | $ | 735 | $ | 129 | $ | 27,201 |
A. | Segment assets consist of receivables, prepaids, inventories, property, plant and equipment, and mining properties |
B. | Balance represents cash flow amounts |
Three months ended June 30, 2012 | Palmarejo Mine | San Bartolomé Mine | Kensington Mine | Rochester Mine | Martha Mine | Endeavor Mine | Other | Total | |||||||||||||||||||||||
Sales of metals | $ | 136,365 | $ | 53,383 | $ | 21,124 | $ | 34,153 | $ | 4,149 | $ | 5,232 | $ | — | $ | 254,406 | |||||||||||||||
Productions costs applicable to sales | (62,538 | ) | (22,773 | ) | (16,106 | ) | (20,751 | ) | (7,102 | ) | (2,553 | ) | — | (131,823 | ) | ||||||||||||||||
Depreciation and depletion | (42,748 | ) | (4,070 | ) | (9,719 | ) | (2,060 | ) | (704 | ) | (1,592 | ) | (131 | ) | (61,024 | ) | |||||||||||||||
Gross profit | 31,079 | 26,540 | (4,701 | ) | 11,342 | (3,657 | ) | 1,087 | (131 | ) | 61,559 | ||||||||||||||||||||
Exploration expense | 1,624 | (70 | ) | 274 | 1,135 | 2,763 | — | 579 | 6,305 | ||||||||||||||||||||||
Loss on impairment | — | — | — | — | 4,813 | — | — | ||||||||||||||||||||||||
Other operating expenses | — | 25 | 16 | 692 | 81 | — | 8,053 | 8,867 | |||||||||||||||||||||||
OPERATING INCOME | 29,455 | 26,585 | (4,991 | ) | 9,515 | (11,314 | ) | 1,087 | (8,763 | ) | 41,574 | ||||||||||||||||||||
Interest and other income, net | (4,720 | ) | 631 | — | 239 | (494 | ) | — | 1,123 | (3,221 | ) | ||||||||||||||||||||
Interest expense | (5,672 | ) | (36 | ) | (901 | ) | (7 | ) | (1 | ) | — | (940 | ) | (7,557 | ) | ||||||||||||||||
Fair value adjustments, net | 14,105 | — | 2,187 | — | — | — | (253 | ) | 16,039 | ||||||||||||||||||||||
Income tax benefit (expense) | (11,967 | ) | (10,889 | ) | — | — | (28 | ) | — | (978 | ) | (23,862 | ) | ||||||||||||||||||
Net income | $ | 21,201 | $ | 16,291 | $ | (3,705 | ) | $ | 9,747 | $ | (11,837 | ) | $ | 1,087 | $ | (9,811 | ) | $ | 22,973 | ||||||||||||
Segment assets (A) | $ | 1,954,084 | $ | 289,428 | $ | 518,611 | $ | 94,677 | $ | 13,070 | $ | 33,228 | $ | 16,654 | $ | 2,919,752 | |||||||||||||||
Capital expenditures (B) | $ | 11,174 | $ | 7,800 | $ | 9,324 | $ | 2,946 | $ | 529 | $ | — | $ | 465 | $ | 32,238 |
A. | Segment assets consist of receivables, prepaids, inventories, property, plant and equipment, and mining properties |
B. | Balance represents cash flow amounts |
Six months ended June 30, 2013 | Palmarejo Mine | San Bartolomé Mine | Kensington Mine | Rochester Mine | Martha Mine | Endeavor Mine | La Preciosa | Other | Total | ||||||||||||||||||||||||||
Sales of metals | $ | 143,643 | $ | 82,377 | $ | 70,126 | $ | 74,377 | $ | (662 | ) | $ | 6,461 | $ | — | $ | 376,322 | ||||||||||||||||||
Productions costs applicable to sales | (81,937 | ) | (48,494 | ) | (53,718 | ) | (44,557 | ) | — | (3,003 | ) | — | 1 | (231,708 | ) | ||||||||||||||||||||
Depreciation and depletion | (64,507 | ) | (9,696 | ) | (26,647 | ) | (4,505 | ) | (229 | ) | (2,044 | ) | (2 | ) | (459 | ) | (108,089 | ) | |||||||||||||||||
Gross profit | (2,801 | ) | 24,187 | (10,239 | ) | 25,315 | (891 | ) | 1,414 | (2 | ) | (458 | ) | 36,525 | |||||||||||||||||||||
Exploration expense | 5,170 | 79 | 1,235 | 996 | 1,587 | — | 690 | 3,858 | 13,615 | ||||||||||||||||||||||||||
Loss on impairment | — | — | — | — | 205 | — | — | — | 205 | ||||||||||||||||||||||||||
Other operating expenses | — | 3,722 | 210 | 34,321 | 1,906 | — | — | 22,598 | 62,757 | ||||||||||||||||||||||||||
OPERATING INCOME | (7,971 | ) | 20,386 | (11,684 | ) | (10,002 | ) | (4,589 | ) | 1,414 | (692 | ) | (26,914 | ) | (40,052 | ) | |||||||||||||||||||
Interest and other income, net | 1,514 | 1,288 | 281 | 57 | 746 | — | (11 | ) | (16,827 | ) | (12,952 | ) | |||||||||||||||||||||||
Interest expense, net | (7,928 | ) | (46 | ) | (354 | ) | (11 | ) | — | — | — | (12,323 | ) | (20,662 | ) | ||||||||||||||||||||
Fair value adjustments, net | 75,494 | — | 10,577 | — | — | — | — | (1,521 | ) | 84,550 | |||||||||||||||||||||||||
Income tax expense | (20,816 | ) | (8,834 | ) | (1 | ) | — | (44 | ) | 84 | — | (4,043 | ) | (33,654 | ) | ||||||||||||||||||||
Net income | $ | 40,293 | $ | 12,794 | $ | (1,181 | ) | $ | (9,956 | ) | $ | (3,887 | ) | $ | 1,498 | $ | (703 | ) | $ | (61,628 | ) | $ | (22,770 | ) | |||||||||||
Segment assets (A) | $ | 1,860,240 | $ | 286,325 | $ | 485,215 | $ | 122,917 | $ | 6,757 | $ | 30,226 | $ | 409,458 | $ | 103,464 | $ | 3,304,602 | |||||||||||||||||
Capital expenditures (B) | $ | 14,480 | $ | 3,616 | $ | 10,736 | $ | 9,894 | $ | 10 | $ | — | $ | 735 | $ | 557 | $ | 40,028 |
A. | Segment assets consist of receivables, prepaids, inventories, property, plant and equipment, and mining properties |
B. | Balance represents cash flow amounts |
Six months ended June 30, 2012 | Palmarejo Mine | San Bartolomé Mine | Kensington Mine | Rochester Mine | Martha Mine | Endeavor Mine | Other | Total | |||||||||||||||||||||||
Sales of metals | $ | 260,087 | $ | 94,759 | $ | 31,500 | $ | 52,911 | $ | 7,767 | $ | 11,946 | $ | — | $ | 458,970 | |||||||||||||||
Productions costs applicable to sales | (108,397 | ) | (36,381 | ) | (33,197 | ) | (30,317 | ) | (10,795 | ) | (5,290 | ) | — | (224,377 | ) | ||||||||||||||||
Depreciation and depletion | (80,517 | ) | (8,289 | ) | (16,324 | ) | (3,702 | ) | (1,300 | ) | (3,236 | ) | (248 | ) | (113,616 | ) | |||||||||||||||
Gross profit | 71,173 | 50,089 | (18,021 | ) | 18,892 | (4,328 | ) | 3,420 | (248 | ) | 120,977 | ||||||||||||||||||||
Exploration expense | 2,945 | — | 496 | 1,844 | 6,174 | — | 1,413 | 12,872 | |||||||||||||||||||||||
Loss on impairment | — | — | — | — | 4,813 | — | — | 4,813 | |||||||||||||||||||||||
Other operating expenses | — | 30 | 35 | 2,033 | 279 | — | 15,154 | 17,531 | |||||||||||||||||||||||
OPERATING INCOME | 68,228 | 50,059 | (18,552 | ) | 15,015 | (15,594 | ) | 3,420 | (16,815 | ) | 85,761 | ||||||||||||||||||||
Interest and other income, net | (139 | ) | 726 | — | 288 | (570 | ) | — | 1,481 | 1,786 | |||||||||||||||||||||
Interest expense, net | (10,481 | ) | (36 | ) | (1,793 | ) | (15 | ) | (1 | ) | — | (1,901 | ) | (14,227 | ) | ||||||||||||||||
Fair value adjustments, net | (11,505 | ) | — | 1,636 | — | — | — | 2,795 | (7,074 | ) | |||||||||||||||||||||
Income tax expense | (15,511 | ) | (18,578 | ) | — | — | (239 | ) | — | (4,970 | ) | (39,298 | ) | ||||||||||||||||||
Net income | $ | 30,592 | $ | 32,171 | $ | (18,709 | ) | $ | 15,288 | $ | (16,404 | ) | $ | 3,420 | $ | (19,410 | ) | $ | 26,948 | ||||||||||||
Segment assets (A) | $ | 1,954,084 | $ | 289,428 | $ | 518,611 | $ | 94,677 | $ | 13,070 | $ | 33,228 | $ | 16,654 | $ | 2,919,752 | |||||||||||||||
Capital expenditures (B) | $ | 18,344 | $ | 18,007 | $ | 20,202 | $ | 5,585 | $ | 1,188 | $ | — | $ | 559 | $ | 63,885 |
A. | Segment assets consist of receivables, prepaids, inventories, property, plant and equipment, and mining properties |
B. | Balance represents cash flow amounts |
June 30, 2013 | December 31, 2012 | ||||||
Assets | |||||||
Total assets for reportable segments | $ | 3,304,602 | $ | 2,974,056 | |||
Cash and cash equivalents | 249,531 | 125,440 | |||||
Short term investments | — | 999 | |||||
Other assets | 112,583 | 120,906 | |||||
Total consolidated assets | $ | 3,666,716 | $ | 3,221,401 |
June 30, 2013 | December 31, 2012 | ||||||
Long Lived Assets: | |||||||
United States | $ | 503,105 | $ | 514,687 | |||
Australia | 27,364 | 29,408 | |||||
Argentina | 94,964 | 95,134 | |||||
Bolivia | 235,781 | 240,905 | |||||
Mexico | 2,156,808 | 1,795,677 | |||||
Total | $ | 3,018,022 | $ | 2,675,811 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenues: | |||||||||||||||
United States | $ | 65,754 | $ | 55,277 | $ | 144,502 | $ | 84,411 | |||||||
Mexico | 86,217 | 136,365 | 143,643 | 260,087 | |||||||||||
Bolivia | 49,236 | 53,383 | 82,377 | 94,759 | |||||||||||
Australia | 3,479 | 5,232 | 6,462 | 11,946 | |||||||||||
Argentina | (161 | ) | 4,149 | (662 | ) | 7,767 | |||||||||
Total | $ | 204,525 | $ | 254,406 | $ | 376,322 | $ | 458,970 |
Item 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | The average price of silver (Handy & Harman) and gold (London Gold PM) for the three months ended June 30, 2013 was $23.19 and $1,415 per ounce, respectively, compared to $29.45 and $1,609 per ounce, respectively, for the three months ended June 30, 2012. The closing market price of silver and gold on August 7, 2013 was $19.58 per ounce and $1,283 per ounce, respectively. |
• | Net cash provided by operating activities for the second quarter of 2013 was $63.3 million, compared to $113.2 million during the second quarter of 2012. The reduction was primarily the result of lower silver ounces sold and lower silver and gold prices, partially offset by higher gold ounces sold. |
• | The Company spent $27.2 million on capital expenditures in the second quarter of 2013, which is $5.0 million lower than the same time period last year. Capital expenditures in the second quarter were primarily related to drilling and development of the Guadalupe satellite underground mine; underground development at Palmarejo, underground development at Kensington, and the stage 3 leach pad, metal removal system, and crusher at Rochester. |
• | On April 16, 2013 the Company completed the acquisition of Orko Silver Corporation and holds the La Preciosa silver and gold project in Durango, Mexico. |
• | The Company’s ratio of current assets to current liabilities was 3.37 to 1 at June 30, 2013, compared to 1.70 to 1 at December 31, 2012. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Silver Operations: | |||||||||||||||
Palmarejo | |||||||||||||||
Tons milled | 570,322 | 489,924 | 1,143,492 | 1,018,467 | |||||||||||
Ore grade/Ag oz | 4.69 | 5.74 | 4.17 | 5.94 | |||||||||||
Ore grade/Au oz | 0.06 | 0.07 | 0.05 | 0.07 | |||||||||||
Recovery/Ag oz(E) | 76.5 | % | 84.2 | % | 77.5 | % | 80.2 | % | |||||||
Recovery/Au oz(E) | 81.2 | % | 92.0 | % | 84.9 | % | 92.6 | % | |||||||
Silver production ounces | 2,044,967 | 2,365,484 | 3,691,365 | 4,848,298 | |||||||||||
Gold production ounces | 28,191 | 31,258 | 51,157 | 62,338 | |||||||||||
Cash operating cost/oz | $ | 3.25 | $ | (0.85 | ) | $ | 2.78 | $ | (1.58 | ) | |||||
Cash cost/oz | $ | 3.25 | $ | (0.85 | ) | $ | 2.78 | $ | (1.58 | ) | |||||
Total production cost/oz | $ | 20.63 | $ | 17.28 | $ | 20.41 | $ | 15.10 | |||||||
San Bartolomé | |||||||||||||||
Tons milled | 424,310 | 391,005 | 799,295 | 769,109 | |||||||||||
Ore grade/Ag oz | 3.98 | 4.26 | 4.03 | 4.43 | |||||||||||
Recovery/Ag oz(E) | 90.3 | % | 88.3 | % | 90.5 | % | 89.8 | % | |||||||
Silver production ounces | 1,523,262 | 1,470,342 | 2,914,361 | 3,061,634 | |||||||||||
Cash operating cost/oz | $ | 12.89 | $ | 11.05 | $ | 13.07 | $ | 10.62 | |||||||
Cash cost/oz | $ | 13.80 | $ | 12.04 | $ | 14.05 | $ | 11.76 | |||||||
Total production cost/oz | $ | 17.21 | $ | 14.89 | $ | 17.65 | $ | 14.44 | |||||||
Martha | |||||||||||||||
Tons milled | — | 39,199 | — | 73,268 | |||||||||||
Ore grade/Ag oz | — | 3.52 | — | 3.94 | |||||||||||
Ore grade/Au oz | — | 0.003 | — | 0.004 | |||||||||||
Recovery/Ag oz(E) | — | % | 78.2 | % | — | % | 79.8 | % | |||||||
Recovery/Au oz(E) | — | % | 72.4 | % | — | % | 68.6 | % | |||||||
Silver production ounces | — | 107,895 | — | 230,688 | |||||||||||
Gold production ounces | — | 97 | — | 181 | |||||||||||
Cash operating cost/oz | $ | — | $ | 55.07 | $ | — | $ | 50.50 | |||||||
Cash cost/oz | $ | — | $ | 56.21 | $ | — | $ | 51.39 | |||||||
Total production cost/oz | $ | — | $ | 62.30 | $ | — | $ | 56.74 | |||||||
Rochester | |||||||||||||||
Tons milled | 2,457,423 | 2,268,896 | 4,897,180 | 4,278,414 | |||||||||||
Ore grade/Ag oz | 0.58 | 0.63 | 0.5488 | 0.59 | |||||||||||
Ore grade/Au oz | 0.003 | 0.005 | 0.003 | 0.005 | |||||||||||
Recovery/Ag oz(F) | 59.7 | % | 49.8 | % | 55.5 | % | 45.7 | % | |||||||
Recovery/Au oz(F) | 141.4 | % | 84.0 | % | 123.5 | % | 74.9 | % | |||||||
Silver production ounces | 843,845 | 712,706 | 1,491,434 | 1,154,043 | |||||||||||
Gold production ounces | 9,404 | 10,120 | 18,146 | 15,412 | |||||||||||
Cash operating cost/oz | $ | 14.75 | $ | 9.83 | $ | 14.23 | $ | 15.00 | |||||||
Cash cost/oz | $ | 15.39 | $ | 11.45 | $ | 15.76 | $ | 16.54 | |||||||
Total production cost/oz | $ | 18.15 | $ | 14.66 | $ | 18.78 | $ | 20.02 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Endeavor | |||||||||||||||
Tons milled | 198,517 | 201,057 | 393,035 | 396,903 | |||||||||||
Ore grade/Ag oz | 2.73 | 3.31 | 2.17 | 3.33 | |||||||||||
Recovery/Ag oz(E) | 40.9 | % | 36.1 | % | 43.4 | % | 36.9 | % | |||||||
Silver production ounces | 221,268 | 240,168 | 371,012 | 488,126 | |||||||||||
Cash operating cost/oz | $ | 10.62 | $ | 17.50 | $ | 13.31 | 17.07 | ||||||||
Cash cost/oz | $ | 10.62 | $ | 17.50 | $ | 13.31 | 17.07 | ||||||||
Total production cost/oz | $ | 16.13 | $ | 24.13 | $ | 18.82 | 23.70 | ||||||||
Gold Operation: | |||||||||||||||
Kensington | |||||||||||||||
Tons milled | 127,987 | 97,794 | 257,044 | 141,730 | |||||||||||
Ore grade/Au oz | 0.18 | 0.23 | 0.19 | 0.22 | |||||||||||
Recovery/Au oz(E) | 98.2 | % | 94.2 | % | 97.1 | % | 94.0 | % | |||||||
Gold production ounces | 23,162 | 21,572 | 48,368 | 29,016 | |||||||||||
Cash operating cost/oz | $ | 1,115 | $ | 1,348 | $ | 1,083 | $ | 1,697 | |||||||
Cash cost/oz | $ | 1,115 | $ | 1,348 | $ | 1,083 | $ | 1,697 | |||||||
Total production cost/oz | $ | 1,687 | $ | 1,799 | $ | 1,634 | $ | 2,260 | |||||||
CONSOLIDATED PRODUCTION TOTALS (A) | |||||||||||||||
Total silver ounces | 4,633,342 | 4,896,595 | 8,468,172 | 9,782,789 | |||||||||||
Total gold ounces | 60,757 | 63,047 | 117,671 | 106,947 | |||||||||||
Silver Operations:(B) | |||||||||||||||
Cash operating cost per oz - silver | $ | 8.86 | $ | 6.41 | $ | 8.80 | $ | 6.35 | |||||||
Cash cost per oz - silver | $ | 9.28 | $ | 6.97 | $ | 9.41 | $ | 6.91 | |||||||
Total production cost oz - silver | $ | 18.84 | $ | 17.51 | $ | 19.11 | $ | 16.88 | |||||||
Gold Operation:(C) | |||||||||||||||
Cash operating cost per oz - gold | $ | 1,115 | $ | 1,348 | $ | 1,083 | $ | 1,697 | |||||||
Cash cost per oz - gold | $ | 1,115 | $ | 1,348 | $ | 1,083 | $ | 1,697 | |||||||
Total production cost per oz - gold | $ | 1,687 | $ | 1,799 | $ | 1,634 | $ | 2,260 | |||||||
CONSOLIDATED SALES TOTALS (D) | |||||||||||||||
Silver ounces sold | 5,228,270 | 5,601,953 | 8,304,805 | 9,892,001 | |||||||||||
Gold ounces sold | 63,389 | 59,579 | 115,315 | 98,464 | |||||||||||
Realized price per silver ounce | $ | 22.86 | $ | 29.28 | $ | 25.61 | $ | 30.72 | |||||||
Realized price per gold ounce | $ | 1,416 | $ | 1,610 | $ | 1,512 | $ | 1,646 |
(A) | Current production reflects final metal settlements of previously reported production ounces. |
(B) | Amount includes gold by-product credits in computing cash costs per ounce. |
(C) | Amounts reflect Kensington statistics only. |
(D) | Units sold at realized metal prices will not match reported metal sales due primarily to the effects on revenues of mark-to-market adjustments on embedded derivatives in the Company’s provisionally priced sales contracts. |
(E) | Recoveries are affected by timing inherent in the leaching process and reflect final metal settlements of previously reported production. |
(F) | Recoveries at Rochester are affected by residual leaching on Stage IV and timing differences inherent in the heap leaching process. |
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs Three months ended June 30, 2013 | ||||||||||||||||||||||||||||
(In thousands except ounces and per ounce costs) | Palmarejo | San Bartolomé | Kensington | Rochester | Martha | Endeavor | Total | |||||||||||||||||||||
Total cash operating cost (Non-U.S. GAAP) | $ | 6,639 | $ | 19,636 | $ | 25,819 | $ | 12,450 | $ | (16 | ) | $ | 2,350 | $ | 66,878 | |||||||||||||
Royalties | — | 1,383 | — | — | — | — | 1,383 | |||||||||||||||||||||
Production taxes | — | — | — | 538 | — | — | 538 | |||||||||||||||||||||
Total cash costs (Non-U.S. GAAP) | $ | 6,639 | $ | 21,019 | $ | 25,819 | $ | 12,988 | $ | (16 | ) | $ | 2,350 | $ | 68,799 | |||||||||||||
Add/Subtract: | ||||||||||||||||||||||||||||
Third party smelting costs | — | — | (2,449 | ) | — | 16 | (831 | ) | (3,264 | ) | ||||||||||||||||||
By-product credit | 39,828 | — | — | 13,391 | — | — | 53,219 | |||||||||||||||||||||
Other adjustments | 7 | 256 | — | — | — | — | 263 | |||||||||||||||||||||
Change in inventory | 8,735 | 11,541 | 6,784 | (3,325 | ) | — | 164 | 23,899 | ||||||||||||||||||||
Depreciation, depletion and amortization | 35,543 | 4,941 | 13,261 | 2,325 | — | 1,220 | 57,290 | |||||||||||||||||||||
Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP) | $ | 90,752 | $ | 37,757 | $ | 43,415 | $ | 25,379 | $ | — | $ | 2,903 | $ | 200,206 | ||||||||||||||
Production of silver (ounces) | 2,044,967 | 1,523,262 | — | 843,845 | — | 221,268 | 4,633,342 | |||||||||||||||||||||
Cash operating cost per silver ounce | $ | 3.25 | $ | 12.89 | $ | — | $ | 14.75 | $ | — | $ | 10.62 | $ | 8.86 | ||||||||||||||
Cash costs per silver ounce | $ | 3.25 | $ | 13.80 | $ | — | $ | 15.39 | $ | — | $ | 10.62 | $ | 9.28 | ||||||||||||||
Production of gold (ounces) | — | — | 23,162 | — | — | — | 23,162 | |||||||||||||||||||||
Cash operating cost per gold ounce | $ | — | $ | — | $ | 1,115 | $ | — | $ | — | $ | — | $ | 1,115 | ||||||||||||||
Cash cost per gold ounce | $ | — | $ | — | $ | 1,115 | $ | — | $ | — | $ | — | $ | 1,115 |
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs Three months ended June 30, 2012 | ||||||||||||||||||||||||||||
(In thousands except ounces and per ounce costs) | Palmarejo | San Bartolomé | Kensington | Rochester | Martha | Endeavor | Total | |||||||||||||||||||||
Total cash operating cost (Non-U.S. GAAP) | $ | (2,009 | ) | $ | 16,249 | $ | 29,083 | $ | 7,008 | $ | 5,942 | $ | 4,204 | $ | 60,477 | |||||||||||||
Royalties | — | 1,457 | — | 510 | 124 | — | 2,091 | |||||||||||||||||||||
Production taxes | — | — | — | 641 | — | — | 641 | |||||||||||||||||||||
Total cash costs (Non-U.S. GAAP) | $ | (2,009 | ) | $ | 17,706 | $ | 29,083 | $ | 8,159 | $ | 6,066 | $ | 4,204 | $ | 63,209 | |||||||||||||
Add/Subtract: | ||||||||||||||||||||||||||||
Third party smelting costs | — | — | (2,820 | ) | — | (1,444 | ) | (1,449 | ) | (5,713 | ) | |||||||||||||||||
By-product credit | 50,363 | — | — | 16,295 | 157 | — | 66,815 | |||||||||||||||||||||
Other adjustments | 124 | 117 | 7 | 229 | 26 | — | 503 | |||||||||||||||||||||
Change in inventory | 14,060 | 4,950 | (10,165 | ) | (3,931 | ) | 2,297 | (202 | ) | 7,009 | ||||||||||||||||||
Depreciation, depletion and amortization | 42,741 | 4,070 | 9,719 | 2,060 | 631 | 1,592 | 60,813 | |||||||||||||||||||||
Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP) | $ | 105,279 | $ | 26,843 | $ | 25,824 | $ | 22,812 | $ | 7,733 | $ | 4,145 | $ | 192,636 | ||||||||||||||
Production of silver (ounces) | 2,365,484 | 1,470,342 | — | 712,706 | 107,895 | 240,168 | 4,896,595 | |||||||||||||||||||||
Cash operating cost per silver ounce | $ | (0.85 | ) | $ | 11.05 | $ | — | $ | 9.83 | $ | 55.07 | $ | 17.50 | $ | 6.41 | |||||||||||||
Cash costs per silver ounce | $ | (0.85 | ) | $ | 12.04 | $ | — | $ | 11.45 | $ | 56.21 | $ | 17.50 | $ | 6.97 | |||||||||||||
Production of gold (ounces) | — | — | 21,572 | — | — | — | 21,572 | |||||||||||||||||||||
Cash operating cost per gold ounce | $ | — | $ | — | $ | 1,348 | $ | — | $ | — | $ | — | $ | 1,348 | ||||||||||||||
Cash cost per gold ounce | $ | — | $ | — | $ | 1,348 | $ | — | $ | — | $ | — | $ | 1,348 |
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs Six months ended June 30, 2013 | ||||||||||||||||||||||||||||
(In thousands except ounces and per ounce costs) | Palmarejo | San Bartolomé | Kensington | Rochester | Martha | Endeavor | Total | |||||||||||||||||||||
Total cash operating cost (Non-U.S. GAAP) | $ | 10,257 | $ | 38,101 | $ | 52,401 | $ | 21,219 | $ | 17 | $ | 4,938 | $ | 126,933 | ||||||||||||||
Royalties | — | 2,835 | — | 1,025 | — | — | 3,860 | |||||||||||||||||||||
Production taxes | — | — | — | 1,264 | — | — | 1,264 | |||||||||||||||||||||
Total cash costs (Non-U.S. GAAP) | $ | 10,257 | $ | 40,936 | $ | 52,401 | $ | 23,508 | $ | 17 | $ | 4,938 | $ | 132,057 | ||||||||||||||
Add/Subtract: | ||||||||||||||||||||||||||||
Third party smelting costs | — | — | (5,715 | ) | — | (17 | ) | (1,751 | ) | (7,483 | ) | |||||||||||||||||
By-product credit | 77,092 | — | — | 27,679 | — | — | 104,771 | |||||||||||||||||||||
Other adjustments | 611 | 810 | — | — | — | — | 1,421 | |||||||||||||||||||||
Change in inventory | (6,031 | ) | 6,746 | 7,032 | (6,630 | ) | — | (183 | ) | 934 | ||||||||||||||||||
Depreciation, depletion and amortization | 64,478 | 9,697 | 26,647 | 4,505 | — | 2,044 | 107,371 | |||||||||||||||||||||
Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP) | $ | 146,407 | $ | 58,189 | $ | 80,365 | $ | 49,062 | $ | — | $ | 5,048 | $ | 339,071 | ||||||||||||||
Production of silver (ounces) | 3,691,365 | 2,914,361 | — | 1,491,434 | — | 371,012 | 8,468,172 | |||||||||||||||||||||
Cash operating cost per silver ounce | $ | 2.78 | $ | 13.07 | $ | — | $ | 14.23 | $ | — | $ | 13.31 | $ | 8.80 | ||||||||||||||
Cash costs per silver ounce | $ | 2.78 | $ | 14.05 | $ | — | $ | 15.76 | $ | — | $ | 13.31 | $ | 9.41 | ||||||||||||||
Production of gold (ounces) | — | — | 48,368 | — | — | — | 48,368 | |||||||||||||||||||||
Cash operating cost per gold ounce | $ | — | $ | — | $ | 1,083 | $ | — | $ | — | $ | — | $ | 1,083 | ||||||||||||||
Cash cost per gold ounce | $ | — | $ | — | $ | 1,083 | $ | — | $ | — | $ | — | $ | 1,083 |
Reconciliation of Non-U.S. GAAP Cash Costs to U.S. GAAP Production Costs Six months ended June 30, 2012 | ||||||||||||||||||||||||||||
(In thousands except ounces and per ounce costs) | Palmarejo | San Bartolomé | Kensington | Rochester | Martha | Endeavor | Total | |||||||||||||||||||||
Total cash operating cost (Non-U.S. GAAP) | $ | (7,652 | ) | $ | 32,502 | $ | 49,251 | $ | 17,311 | $ | 11,649 | $ | 8,331 | $ | 111,392 | |||||||||||||
Royalties | — | 3,493 | — | 1,119 | 206 | — | 4,818 | |||||||||||||||||||||
Production taxes | — | — | — | 653 | — | — | 653 | |||||||||||||||||||||
Total cash costs (Non-U.S. GAAP) | $ | (7,652 | ) | $ | 35,995 | $ | 49,251 | $ | 19,083 | $ | 11,855 | $ | 8,331 | $ | 116,863 | |||||||||||||
Add/Subtract: | ||||||||||||||||||||||||||||
Third party smelting costs | — | — | (3,903 | ) | — | (3,418 | ) | (2,238 | ) | (9,559 | ) | |||||||||||||||||
By-product credit | 102,889 | — | — | 25,252 | 298 | — | 128,439 | |||||||||||||||||||||
Other adjustments | 368 | (77 | ) | 14 | 316 | 83 | — | 704 | ||||||||||||||||||||
Change in inventory | 12,793 | 463 | (12,166 | ) | (14,335 | ) | 1,977 | (803 | ) | (12,071 | ) | |||||||||||||||||
Depreciation, depletion and amortization | 80,501 | 8,289 | 16,324 | 3,702 | 1,151 | 3,236 | 113,203 | |||||||||||||||||||||
Production costs applicable to sales, including depreciation, depletion and amortization (U.S. GAAP) | $ | 188,899 | $ | 44,670 | $ | 49,520 | $ | 34,018 | $ | 11,946 | $ | 8,526 | $ | 337,579 | ||||||||||||||
Production of silver (ounces) | 4,848,298 | 3,061,634 | — | 1,154,043 | 230,688 | 488,126 | 9,782,789 | |||||||||||||||||||||
Cash operating cost per silver ounce | $ | (1.58 | ) | $ | 10.62 | $ | — | $ | 15.00 | $ | 50.50 | $ | 17.07 | $ | 6.35 | |||||||||||||
Cash costs per silver ounce | $ | (1.58 | ) | $ | 11.76 | $ | — | $ | 16.54 | $ | 51.39 | $ | 17.07 | $ | 6.91 | |||||||||||||
Production of gold (ounces) | — | — | 29,016 | — | — | — | 29,016 | |||||||||||||||||||||
Cash operating cost per gold ounce | $ | — | $ | — | $ | 1,697 | $ | — | $ | — | $ | — | $ | 1,697 | ||||||||||||||
Cash cost per gold ounce | $ | — | $ | — | $ | 1,697 | $ | — | $ | — | $ | — | $ | 1,697 |
Three months ended June 30, 2013 | Six months ended June 30, 2013 | |||||||||||
Palmarejo | Rochester | Palmarejo | Rochester | |||||||||
Total cash operating costs | $46,467 | $25,841 | $87,348 | $48,898 | ||||||||
Total cash costs | $46,467 | $26,379 | $87,348 | $51,187 | ||||||||
Revenue | ||||||||||||
Silver | 54% | 55% | 56% | 55% | ||||||||
Gold | 46% | 45% | 44% | 45% | ||||||||
Ounces produced | ||||||||||||
Silver | 2,044,967 | 843,845 | 3,691,365 | 1,491,434 | ||||||||
Gold | 28,191 | 9,404 | 51,157 | 18,146 | ||||||||
Total cash operating costs per ounce | ||||||||||||
Silver | $12.24 | $16.99 | $13.22 | $18.06 | ||||||||
Gold | $761 | $1,223 | $753 | $1,210 | ||||||||
Total cash costs per ounce | ||||||||||||
Silver | $12.24 | $17.34 | $13.22 | $18.91 | ||||||||
Gold | $761 | $1,249 | $753 | $1,267 |
Three months ended June 30, 2012 | Six months ended June 30, 2012 | |||||||||||
Palmarejo | Rochester | Palmarejo | Rochester | |||||||||
Total cash operating costs | $48,354 | $23,303 | $95,237 | $42,564 | ||||||||
Total cash costs | $48,354 | $24,454 | $95,237 | $44,336 | ||||||||
Revenue | ||||||||||||
Silver | 58% | 55% | 59% | 61% | ||||||||
Gold | 42% | 45% | 41% | 39% | ||||||||
Ounces produced | ||||||||||||
Silver | 2,365,484 | 712,706 | 4,848,298 | 1,154,043 | ||||||||
Gold | 31,258 | 10,120 | 62,338 | 15,412 | ||||||||
Total cash operating costs per ounce | ||||||||||||
Silver | $11.89 | $17.99 | $11.61 | $22.40 | ||||||||
Gold | $647 | $1,036 | $625 | $1,084 | ||||||||
Total cash costs per ounce | ||||||||||||
Silver | $11.89 | $18.87 | $11.61 | $23.34 | ||||||||
Gold | $647 | $1,087 | $625 | $1,129 |
• | Exploration for discovery of new mineralization was conducted around the Palmarejo surface and underground mine area on new targets generated in 2012 and early 2013. The most significant results received in the quarter were the footwall and depth extension of the Tucson-Chapotillo area. Results are pending from many other targets drilled in the quarter. |
• | Drilling to upgrade the confidence of, and expand the size of, known mineralized zones was performed around the current Palmarejo mine area at the 108 Zone, 76 Surface, Tucson-Chapotillo and the Inter-Clavos zone. These areas were drilled from both surface and underground platforms. Favorable results were obtained from 108. In addition, similar drilling was completed at the Las Animas zone of the Guadalupe deposit. Finally, the first drilling from underground positions started on Guadalupe Norte. |
• | Exploration work to discover new mineralization continued this quarter. As part of this work, surface drilling began on the Jualin area (small, historic mine area south of main Kensington). This drilling targeted the #4 vein, a zone of auriferous quartz and sulfide veining situated about 1,500 feet (460 meters) due south of the mill facility. |
• | Exploration to define and expand known mineralized zones focused on the southern margins of lower Zone 10 and Zone 50 in main Kensington as well as the northern extent of lower Zone 10. |
• | In addition, underground drilling was conducted on the Ann target and the upper extension of Zone 10 at main Kensington. Finally, drifting and drill station construction continued this quarter. This new development heading will be used in the coming months to facilitate drilling of the Kensington South and other targets. |
• | Drilling was performed to expand and define grades and tons of existing stockpiled material in the second quarter. The drilling returned favorable results from the Limerick, South, and North areas. Results from 23 new drill holes were received this quarter. Results from hole LMD13-061 with 120 feet grading 0.67 ounces per short ton (oz/t) of silver and 40 feet of 1.52 oz/t of silver from Limerick and SRD13-109 in the South stockpile which returned 70 feet grading 0.38 oz/t silver and 150 feet grading 0.56 oz/t of silver. |
• | In the second quarter, drilling was completed on the West, South, and Limerick stockpiles along with Rochester Backfill areas. Drilling is also planned for the Charlie Setback stockpiles during 2013. This work, along with further sampling to twin existing |
Three months ended June 30, | |||||||
2013 | 2012 | ||||||
United States | $ | (790 | ) | $ | (388 | ) | |
Mexico | (15,798 | ) | (12,052 | ) | |||
Bolivia | (4,556 | ) | (10,889 | ) | |||
Other jurisdictions | (1,990 | ) | (533 | ) | |||
Income tax provision | $ | (23,134 | ) | $ | (23,862 | ) |
Six months ended June 30, | |||||||
2013 | 2012 | ||||||
United States | $ | (3,277 | ) | $ | (3,525 | ) | |
Mexico | (19,471 | ) | (15,750 | ) | |||
Bolivia | (8,884 | ) | (18,578 | ) | |||
Other jurisdictions | (2,022 | ) | (1,445 | ) | |||
Income tax provision from continuing operations | $ | (33,654 | ) | $ | (39,298 | ) |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(In thousands) | (In thousands) | ||||||||||||||
CASH PROVIDED BY OPERATING ACTIVITIES | $ | 63,338 | $ | 113,203 | $ | 76,272 | $ | 130,204 | |||||||
Changes in operating assets and liabilities: | |||||||||||||||
Receivables and other current assets | (4,401 | ) | (10,319 | ) | (8,647 | ) | (7,365 | ) | |||||||
Prepaid expenses and other | (2,930 | ) | 2,857 | (411 | ) | (1,916 | ) | ||||||||
Inventories | (31,483 | ) | (3,097 | ) | (10,990 | ) | 21,625 | ||||||||
Accounts payable and accrued liabilities | (10,094 | ) | (14,276 | ) | 16,930 | 39,655 | |||||||||
Operating cash flow (Non GAAP) | $ | 14,430 | $ | 88,368 | $ | 73,154 | $ | 182,203 |
Exhibits | ||
3.1 | Certificate of Conversion of Coeur Mining, Inc., effective as of May 16, 2013 (Incorporated herein by reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K12B filed on May 16, 2013). | |
3.2 | Certificate of Incorporation of Coeur Mining, Inc., effective as of May 16, 2013 (Incorporated herein by reference to Exhibit 3.2 to the Registrant's Current Report on Form 8-K12B filed on May 16, 2013). | |
3.3 | Bylaws of Coeur Mining, Inc., effective as of May 16, 2013 (Incorporated herein by reference to Exhibit 3.3 to the Registrant's Current Report on Form 8-K12B filed on May 16, 2013). | |
4.1 | Warrant Agreement dated as of April 16, 2013, by and among Coeur d'Alene Mines Corporation, Computershare Trust Company, N.A. and Computershare, Inc., as Warrant Agent (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on April 16, 2013). | |
4.2 | Form of Common Stock Share Certificate of Coeur Mining, Inc. (Incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K12B filed on May 16, 2013). | |
4.3 | Form of Warrant Certificate of Coeur Mining, Inc. (Incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K12B filed on May 16, 2013). | |
10.1 | Offer letter dated February 4, 2013 from the Company to Peter Mitchell (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on May 9, 2013). | |
10.2 | Form of Indemnification Agreement (Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on May 16, 2013). | |
14.1 | Code of Business Conduct and Ethics (Incorporated herein by reference to Exhibit 14.1 to the Registrant's Current Report on Form 8-K filed on May 16, 2013). | |
31.1 | Certification of the CEO | |
31.2 | Certification of the CFO | |
32.1 | Certification of the CEO (18 U.S.C. Section 1350) | |
32.2 | Certification of the CFO (18 U.S.C. Section 1350) | |
95.1 | Mine Safety Disclosure Exhibit | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Schema Document | |
101.CAL | XBRL Calculation Linkbase Document | |
101.DEF | Definition Linkbase Document | |
101.LAB | XBRL Labels Linkbase Document | |
101.PRE | XBRL Presentation Linkbase Document |
Coeur Mining, Inc. | ||
(Registrant) | ||
Dated | August 8, 2013 | /s/ Mitchell J. Krebs |
MITCHELL J. KREBS | ||
President and Chief Executive Officer (Principal Executive Officer) | ||
Dated | August 8, 2013 | /s/ Peter C. Mitchell |
PETER C. MITCHELL | ||
Senior Vice President and Chief Financial Officer (Principal Financial Officer) | ||
Dated | August 8, 2013 | /s/ Mark Spurbeck |
MARK SPURBECK | ||
Vice President, Finance (Principal Accounting Officer) |
Date: | August 8, 2013 | By: | /s/ Mitchell J. Krebs | |
Mitchell J. Krebs |
Date: | August 8, 2013 | By: | /s/ Peter C. Mitchell | |
Peter C. Mitchell |
/s/ Mitchell J. Krebs |
Mitchell J. Krebs |
August 8, 2013 |
/s/ Peter C. Mitchell |
Peter C. Mitchell |
August 8, 2013 |
Mine or Operating Name | Section 104 S&S Citations (#) | Section 104 (b) Orders (#) | Section 104 (d) Citations and Orders (#) | Section 110 (b) (2) Violations (#) | Section 107 (a) Orders (#) | Total Dollar Value of MSHA Assessments Proposed ($) (1) | Total Number of Mining Related Fatalities (#) | Received Notice of Pattern of Violations Under Section 104(e) (Yes/No) | Received Notice of Potential to Have Pattern Under Section 104(e) (Yes/No) | Legal Actions Pending as of Last Day of Period (#) | Legal Actions Initiated During Period (#) | Legal Actions Resolved During Period (#) |
Kensington | 5 | — | — | — | — | $4,337 | — | NO | NO | 10(2) | 2 | 2 |
Rochester | 1 | — | — | — | — | $6,483 | — | NO | NO | — | — | 1 |
Totals | 6 | — | — | — | — | $10,820 | — | NO | NO | 13 | 2 | 3 |
1. | The total dollar value of the Proposed Assessments includes all assessments received during the second quarter of 2013. |
2. | The ten legal actions pending are penalty proceedings, some of which have corresponding contest proceedings which are all consolidated dockets. |
Mining Properties
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Jun. 30, 2013
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Mining Properties [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MINING PROPERTIES | MINING PROPERTIES Mining properties consist of the following (in thousands):
Operational Mining Properties Palmarejo Mine: Palmarejo is located in the State of Chihuahua in northern Mexico, and its principal silver and gold properties are collectively referred to as the “Palmarejo mine.” The Palmarejo mine commenced production in April 2009. San Bartolomé Mine: The San Bartolomé mine is a silver mine located near the city of Potosi, Bolivia. The mineral rights for the San Bartolomé project are held through long-term joint venture/lease agreements with several local independent mining co-operatives and the Bolivian state owned mining organization, (“COMIBOL”). The Company commenced commercial production at San Bartolomé in June 2008. Kensington Mine: The Kensington mine is an underground gold mine and consists of the Kensington and adjacent Jualin properties located on the east side of the Lynn Canal about 45 miles north-northwest of Juneau, Alaska. The Company commenced commercial production in July of 2010. Rochester Mine: The Company has conducted operations at the Rochester mine, located in Western Nevada, since September 1986. The mine utilizes the heap-leaching process to extract both silver and gold from ore mined using open pit methods. Rochester’s primary product is silver with gold produced as a by-product. Martha Mine: The Martha mine is an underground silver mine located in Argentina. The Martha mine ceased active mining operations in September 2012 and is included in "other" in the tables above. Mineral Interests Endeavor Mine: In May 2005, CDE Australia Pty Ltd ("CDE Australia"), a wholly-owned subsidiary of Coeur acquired the silver production and reserves, up to a maximum 17.7 million payable ounces, contained at the Endeavor mine in Australia, which is owned and operated by Cobar Operations Pty. Limited, a wholly-owned subsidiary of CBH Resources Ltd. In March 2006, CDE Australia entered into an amended agreement under which it owns all silver production and reserves up to a total of 20.0 million payable ounces. CDE Australia began realizing reductions in revenues in the fourth quarter of 2008 as a result of a silver price sharing provision that was part of the purchase agreement. CDE Australia has received approximately 4.5 million payable ounces to date and the current ore reserve contains approximately 4.1 million payable ounces based on current metallurgical recovery and current smelter contract terms. Joaquin Project: The Joaquin project is located in the Santa Cruz province of southern Argentina. The Company commenced exploration of this large property located north of the Company's Martha silver mine in November 2007 and acquired 100% in December 2012. Since that time, the Company has defined silver and gold mineralization in two deposits at Joaquin, La Negra and La Morocha, collectively referred to as the "Joaquin Project," and has recently commenced work on detailed drilling and other technical, economic and environmental programs. La Preciosa Project: On April 16, 2013, the Company completed its acquisition of Orko Silver Corporation (“Orko”), which holds the La Preciosa silver-gold project in Durango, Mexico. |
Condensed Consolidated Statements of Operations (Loss) (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Statement of Other Comprehensive Income [Abstract] | ||||
Sales of metal | $ 204,525 | $ 254,406 | $ 376,322 | $ 458,970 |
Production costs applicable to sales | (142,924) | (131,823) | (231,708) | (224,377) |
Depreciation, depletion and amortization | (57,653) | (61,024) | (108,089) | (113,616) |
Gross profit | 3,948 | 61,559 | 36,525 | 120,977 |
COSTS AND EXPENSES | ||||
Administrative and general | 15,026 | 8,594 | 25,253 | 16,190 |
Exploration | 6,774 | 6,305 | 13,615 | 12,872 |
Litigation settlement | 32,046 | 0 | 32,046 | 0 |
Loss on impairment | 86 | 4,813 | 205 | 4,813 |
Pre-development, care, maintenance and other | 973 | 273 | 5,458 | 1,341 |
Total cost and expenses | 54,905 | 19,985 | 76,577 | 35,216 |
OPERATING INCOME | (50,957) | 41,574 | (40,052) | 85,761 |
OTHER INCOME AND EXPENSE | ||||
Fair value adjustments, net | 66,754 | 16,039 | 84,550 | (7,074) |
Other than temporary impairment of marketable securities | (17,192) | 0 | (17,227) | 0 |
Interest income and other | 419 | (3,221) | 4,275 | 1,786 |
Interest expense, net of capitalized interest | (10,930) | (7,557) | (20,662) | (14,227) |
Total other income and expense | 39,051 | 5,261 | 50,936 | (19,515) |
Income before income taxes | (11,906) | 46,835 | 10,884 | 66,246 |
Income tax provision | (23,134) | (23,862) | (33,654) | (39,298) |
Net income | $ (35,040) | $ 22,973 | $ (22,770) | $ 26,948 |
Basic income per share: | ||||
Net income | $ (0.35) | $ 0.26 | $ (0.24) | $ 0.30 |
Diluted income per share: | ||||
Net income | $ (0.35) | $ 0.26 | $ (0.24) | $ 0.30 |
Weighted average number of shares of common stock | ||||
Basic | 99,833 | 89,631 | 94,918 | 89,611 |
Diluted | 99,833 | 89,733 | 94,918 | 89,777 |
Earnings Per Share
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the three and six months ended June 30, 2013, 1,202,100 shares of common stock equivalents related to equity-based awards have not been included in the diluted per share calculation as the shares would be antidilutive. For the three and six months ended June 30, 2012, 632,213 shares of common stock equivalents related to equity-based awards have not been included in the diluted per share calculation as the shares would be antidilutive. The 3.25% Convertible Senior Notes were not included in the computation of diluted earnings per share for the three and six months ended June 30, 2013 and 2012 because there is no excess value upon conversion over the principal amount of the Notes. The effect of potentially dilutive stock outstanding as of June 30, 2013 and 2012 are as follows (in thousands, except per share data):
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Commitments and Contingencies
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6 Months Ended |
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Labor Union Contracts The Company maintains one labor agreement with Sindicato de la Empresa Minera Manquiri at the San Bartolomé mine in Bolivia. The labor agreement, which became effective October 11, 2007, does not have a fixed term. As of June 30, 2013, approximately 10.2% of the Company’s worldwide labor force was covered by collective bargaining agreements. Termination Benefits As part of the March 2013 decision to relocate the Company's headquarters office to Chicago, the Company established a one-time termination benefit program to retain current employees during the transition. The program provides for a one-time stay-bonus as well as severance and medical benefits equal to two weeks per year of service. At June 30, 2013, the total benefit expected to be incurred under this plan is approximately $1.7 million. The liability is recognized ratably over the service period to June 30, 2014. The Company does not have a written severance plan for any of its operations, including those operations located in Chile, Argentina, Bolivia and Mexico. However, laws in these foreign jurisdictions require payment of certain minimum statutory termination benefits. Accordingly, in situations where minimum statutory termination benefits must be paid to the affected employees, the Company records employee severance costs in accordance with U.S. GAAP. The Company has accrued obligations for post-employment benefits in these locations of approximately $7.3 million and $7.6 million at June 30, 2013 and December 31, 2012, respectively. Kensington Production Royalty On July 7, 1995, Coeur, through its wholly-owned subsidiary, Coeur Alaska, Inc., acquired the 50% ownership interest of Echo Bay Exploration Inc., or Echo Bay, giving Coeur 100% ownership of the Kensington property. Coeur Alaska is obligated to pay Echo Bay, a subsidiary of Kinross Gold Corporation, a scaled net smelter return royalty on 1.0 million ounces of future gold production after Coeur Alaska recoups the $32.5 million purchase price and its construction and development expenditures incurred after July 7, 1995 in connection with placing the property into commercial production. The royalty ranges from 1% at gold prices of $400 per ounce to a maximum of 2.5% at gold prices above $475 per ounce, with the royalty to be capped at 1.0 million ounces of production. No royalty has been paid to date. Rochester Production Royalty The Company acquired the Rochester property from ASARCO, a subsidiary of Grupo Mexico SA de CV, in 1983. The Company is obligated to pay a net smelter royalty interest to ASARCO when the market price of silver equals or exceeds $23.60 per ounce up to a maximum rate of 5%. Royalty expense was nil and $0.5 million, respectively for the three months ended June 30, 2013 and 2012, respectively. Royalty expense was $1.0 million and $1.1 million, respectively for the six months ended June 30, 2013 and 2012, respectively. Rochester 3.4% NSR Royalty In connection with the Company's settlement of all disputes regarding competing mining claims located on or adjacent to the property encompassed by the Company's Rochester gold and silver mine, the Company granted a 3.4% NSR royalty to a third party on up to 39.4 million silver equivalent ounces sold from the Rochester mine beginning January 1, 2014. Payments on the royalty obligation will occur quarterly reducing the carrying amount of the royalty liability and changes in silver and gold prices will result in the recognition of mark-to-market gains or losses in Fair value adjustments, net in the consolidated statement of operations. Palmarejo Gold Production Royalty On January 21, 2009, Coeur Mexicana entered into a gold production royalty transaction with Franco-Nevada Corporation under which Franco-Nevada purchased a royalty covering 50% of the life of mine gold to be produced from its Palmarejo silver and gold mine in Mexico. The royalty agreement provides for a minimum obligation to be paid monthly on a total of 400,000 ounces of gold, or 4,167 ounces per month over an initial eight year period. As of June 30, 2013, a total of 170,382 ounces of gold remain outstanding under the minimum royalty obligation. |
Significant Customers (Details Textual)
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3 Months Ended | |
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Jun. 30, 2013
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Mar. 31, 2012
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Significant Customers (Textual) [Abstract] | ||
Approximate percentage of sales of metals to counterparties companies related to metal sales | 74.00% | 92.00% |
Approximate percentage of sales of silver concentrates to third party smelters related to metal sales | 26.00% | 8.00% |
Debt and Capital Lease Obligations (Details Textual) (USD $)
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3 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||||||||
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Jun. 30, 2013
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Jun. 30, 2012
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Mar. 31, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Dec. 31, 2012
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Jun. 30, 2013
Call Option [Member]
oz
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Dec. 31, 2012
Call Option [Member]
oz
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Jun. 30, 2013
Put Option [Member]
oz
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Dec. 31, 2012
Put Option [Member]
oz
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Jun. 30, 2013
3.25% Convertible Senior Notes due March 2028 [Member]
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Jun. 30, 2012
3.25% Convertible Senior Notes due March 2028 [Member]
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Jun. 30, 2013
3.25% Convertible Senior Notes due March 2028 [Member]
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Jun. 30, 2012
3.25% Convertible Senior Notes due March 2028 [Member]
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Feb. 12, 2013
3.25% Convertible Senior Notes due March 2028 [Member]
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Dec. 31, 2012
3.25% Convertible Senior Notes due March 2028 [Member]
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Jun. 30, 2013
7.875% Senior Notes due 2021 [Member]
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Jun. 30, 2012
7.875% Senior Notes due 2021 [Member]
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Jun. 30, 2013
7.875% Senior Notes due 2021 [Member]
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Jun. 30, 2012
7.875% Senior Notes due 2021 [Member]
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Jan. 29, 2013
7.875% Senior Notes due 2021 [Member]
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Dec. 31, 2012
7.875% Senior Notes due 2021 [Member]
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Jun. 30, 2013
Kensington Term Facility [Member]
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Jun. 30, 2012
Kensington Term Facility [Member]
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Jun. 30, 2013
Kensington Term Facility [Member]
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Jun. 30, 2012
Kensington Term Facility [Member]
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Debt and capital lease obligations (Textual) [Abstract] | ||||||||||||||||||||||||||
Interest rate on notes | 3.25% | 3.25% | 3.25% | 7.875% | 7.875% | 7.875% | ||||||||||||||||||||
Principal amount of bank loan | $ 5,300,000 | $ 5,300,000 | $ 48,700,000 | $ 300,000,000 | ||||||||||||||||||||||
Debt Instrument, Repurchased Face Amount | 43,300,000 | 43,300,000 | ||||||||||||||||||||||||
Current | 5,485,000 | 5,485,000 | 55,983,000 | 0 | 0 | 48,081,000 | 0 | 0 | 0 | |||||||||||||||||
Carrying value of the equity component | 10,900,000 | 10,900,000 | 10,900,000 | |||||||||||||||||||||||
Interest expense | 43,000 | 395,000 | 380,000 | 791,000 | ||||||||||||||||||||||
Interest Expense, Debt | 5,906,000 | 0 | 10,041,000 | 0 | 0 | 906,000 | 0 | 1,880,000 | ||||||||||||||||||
Accretion of Debt Discount | 0 | 629,000 | 576,000 | 1,241,000 | ||||||||||||||||||||||
Accretion expense | 4,139,000 | 5,492,000 | 7,809,000 | 10,072,000 | ||||||||||||||||||||||
Long-term debt and capital leases | 306,578,000 | 306,578,000 | 3,460,000 | 5,334,000 | 5,334,000 | 0 | 300,000,000 | 300,000,000 | 0 | |||||||||||||||||
Borrowing under term facility | 100,000,000 | 100,000,000 | ||||||||||||||||||||||||
Line of Credit Facility, Increase, Additional Borrowings | 50,000,000 | |||||||||||||||||||||||||
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | 0.10% | |||||||||||||||||||||||||
Line of Credit Facility, Commitment Fee Amount | 0.1 | 0.3 | ||||||||||||||||||||||||
Line of Credit Facility, Amount Outstanding | 0 | 0 | ||||||||||||||||||||||||
Gold under collars protection | 87,000 | 97,000 | 97,000 | 122,000 | ||||||||||||||||||||||
Weighted average call feature of each collar | 1,964.20 | 1,967.89 | ||||||||||||||||||||||||
Weighted average put feature of each collar | 979.79 | 967.86 | ||||||||||||||||||||||||
Additional Long term debt and capital lease obligations(Textual) [Abstract] | ||||||||||||||||||||||||||
Accretion expense on royalty obligation discount | 4,100,000 | 5,600,000 | 8,170,000 | 10,663,000 | ||||||||||||||||||||||
Remaining Minimum Obligation Under Royalty Agreements | 56,500,000 | 56,500,000 | 61,900,000 | |||||||||||||||||||||||
Current portion of minimum obligation under royalty agreement | 23,900,000 | 23,900,000 | 24,000,000 | |||||||||||||||||||||||
Expensed Interest | 10,930,000 | 7,557,000 | 20,662,000 | 14,227,000 | ||||||||||||||||||||||
Capitalized interest | $ (32,000) | $ 610,000 | $ 361,000 | $ 1,694,000 |
Debt and Capital Lease Obligations
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT AND CAPITAL LEASE OBLIGATIONS | DEBT AND CAPITAL LEASE OBLIGATIONS The current and non-current portions of long-term debt and capital lease obligations as of June 30, 2013 and December 31, 2012 are as follows (in thousands):
3.25% Convertible Senior Notes due 2028 Per the indenture governing the 3.25% Convertible Senior Notes due 2028 (the “Convertible Notes”), the Company announced on February 13, 2013 that it was offering to repurchase all of its outstanding 3.25% Convertible Senior Notes due 2028. As of February 12, 2013, there was $48.7 million aggregate principal amount of Convertible Notes outstanding. The Company repurchased $43.3 million in aggregate principal amount, leaving a balance of $5.3 million at June 30, 2013. 7.875% Senior Notes due 2021 On January 29, 2013, the Company completed an offering of $300 million in aggregate principal amount of 7.875% Senior Notes due 2021 (the “Notes”) in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). As of June 30, 2013, the outstanding balance of Notes was $300 million. Revolving Credit Facility On August 1, 2012, Coeur Alaska, Inc. and Coeur Rochester, Inc. (the “Borrowers”), each a wholly-owned subsidiary of the Company, entered into a new Credit Agreement (the “Credit Agreement”) by and among the Company, the Borrowers, the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent. The Credit Agreement provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $100.0 million, which principal amount may be increased, subject to receiving additional commitments therefor, by up to $50.0 million. There is a commitment fee of 0.10% on the unused portion of the line. The unused line fee for the three and six months ended June 30, 2013 was $0.1 and $0.3 million, respectively and was charged to interest expense. As of June 30, 2013, no amounts were outstanding under the Revolving Credit Facility. Palmarejo Gold Production Royalty Obligation The Company recognized accretion expense on the Palmarejo gold production royalty obligation for the three months ended June 30, 2013 and 2012 of $4.1 million and $5.6 million, respectively. As of June 30, 2013 and December 31, 2012, the remaining minimum obligation under the royalty agreement was $56.5 million and $61.9 million, of which $23.9 million and $24.0 million were current, respectively. Interest Expense The Company expenses interest incurred on its various debt instruments as a cost of operating its properties. For the three and six months ended June 30, 2013, the Company expensed interest of $10.9 million and $20.7 million, respectively. For the three and six months ended June 30, 2012, the Company expensed interest of $7.6 and $14.2 million, respectively. Interest expense is made up of the following (in thousands):
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Investments (Details) (USD $)
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3 Months Ended | 6 Months Ended | |||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Dec. 31, 2012
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Schedule of Available-for-sale Securities [Line Items] | |||||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent | $ 9,701,000 | $ (5,676,000) | $ 6,170,000 | $ (5,252,000) | |
Investment in Marketable Securities (Textual) [Abstract] | |||||
Other comprehensive unrealized gain | 17.2 | ||||
Marketable Securities, Unrealized Gain (Loss) | (7,491,000) | (5,676,000) | (11,057,000) | (5,252,000) | |
Short term investments | 0 | 0 | 999,000 | ||
Marketable securities [Member]
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Available-for-sale Securities | |||||
Available-for-sale Securities, Amortized Cost | 17,608,000 | 17,608,000 | 34,786,000 | ||
Available-for-sales Securities, Gross Unrealized Losses | (1,799,000) | (1,799,000) | (10,443,000) | ||
Available-for-sale Securities, Gross Unrealized Gains | 199,000 | 199,000 | 2,722,000 | ||
Available-for-sale Securities, Estimated Fair Value | $ 16,008,000 | $ 16,008,000 | $ 27,065,000 |
Reclamation and Mine Closure (Details) (USD $)
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3 Months Ended | 6 Months Ended | |||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Dec. 31, 2012
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Asset retirement obligation | |||||
Asset retirement obligation - Beginning | $ 35,197,000 | $ 33,434,000 | $ 34,457,000 | $ 32,714,000 | |
Accretion | 758,000 | 742,000 | 1,500,000 | 1,466,000 | |
Addition and changes in estimates | 0 | 335,000 | 0 | 335,000 | |
Settlements | (377,000) | (1,000) | (379,000) | (5,000) | |
Asset retirement obligation - March 31 | 35,578,000 | 34,510,000 | 35,578,000 | 34,510,000 | |
Reclamation and Mine Closure (Textual) [Abstract] | |||||
Accrued reclamation liabilities | $ 600,000 | $ 600,000 | $ 900,000 |
Reclamation and Mine Closure (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation | Changes to the Company’s asset retirement obligations for active mining sites are as follows (in thousands):
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Litigation and Other Events
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6 Months Ended |
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Jun. 30, 2013
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Commitments and Contingencies Disclosure [Abstract] | |
LITIGATION AND OTHER EVENTS | LITIGATION AND OTHER EVENTS Sites Related to Callahan Mining Corporation In 1991, the Company acquired all of the outstanding common stock of Callahan Mining Corporation. Since then, the Company has received requests for information or notices of potential liability from state or federal agencies with regard to Callahan's operations at sites in Idaho, Maine, Colorado and Washington. The Company did not make any decisions with respect to generation, transport or disposal of hazardous waste at these sites. Therefore, the Company believes that it is not liable for any potential cleanup costs either directly as an operator or indirectly as a parent. To date, none of these agencies have made any claims against the Company or Callahan for cleanup costs. The Company anticipates that further agency interaction may be possible with respect to three of these sites, discussed below. Callahan operated a mine and mill in Brooksville, Maine from 1968 until 1972 and subsequently disposed of the property. In 2000, the U.S. Environmental Protection Agency, or EPA, made a formal request to the Company for information regarding the site. The site was placed on the National Priorities List on September 5, 2002, and the Maine Department of Transportation, a partial owner of the property, signed a consent order in 2005. In January 2009, the EPA and the State of Maine made additional formal requests to the Company for information relating to the site, to which the Company responded. The first phase of cleanup at the site began in April 2011. The Van Stone Mine in Stevens County, Washington consists of several parcels and was mined from 1926 until 1993. Callahan sold its parcel in 1990. In February 2010, the State of Washington Department of Ecology notified Callahan Mining Corporation that it, among others, is a potentially liable person (PLP) under Washington law. Asarco LLC ("Asarco"), an affiliate of American Smelting and Refining Company, which developed the mill on the site in 1951, settled for $3.5 million. Another potentially liable person, Vaagen Brothers, signed a consent order which allows access to the site for a Remedial Investigation and Feasibility Study. Neither the Company nor Callahan Mining Corporation has received any further notices from the Washington Department of Ecology. On June 5, 2012, Asarco filed a lawsuit in the U.S. District Court for the Eastern District of Washington against five named defendants, including Callahan Mining Corporation, seeking contribution for the $3.5 million settlement. Callahan Mining Corporation filed a response and defense to the lawsuit on December 11, 2012 and does not believe it has any liability to Asarco. The Court has set a trial date for April 28, 2014. On January 23, 2013, the Court entered an Order dismissing one of the five named defendants from the lawsuit as a result of the parties reaching a settlement. Callahan controlled the Akron Mine located in Gunnison County, Colorado under lease and option agreements with several owners from 1937-1960. In December 2003, the United States Forest Service (“USFS”) made a formal request for information to the Company for information regarding the site, to which the Company responded. In February 2007, the USFS made a formal request for information to Callahan for information regarding the site, to which Callahan responded. In April 2013, the USFS made a formal request for information to the Company regarding the site, to which the Company responded on June 10, 2013. Bolivian Temporary Restriction on Mining above 4,400 Meters On October 14, 2009, the Bolivian state-owned mining organization, COMIBOL, announced by resolution that it was temporarily suspending mining activities above the elevation of 4,400 meters above sea level while stability studies of Cerro Rico mountain are undertaken. The Company holds rights to mine above this elevation under valid contracts with COMIBOL as well as under authorized contracts with local mining cooperatives that hold their rights under contract themselves with COMIBOL. The Company temporarily adjusted its mine plan to confine mining activities to the ore deposits below 4,400 meters above sea level and timely notified COMIBOL of the need to lift the restriction. The Cooperative Reserva Fiscal, with which the Company has one of those contracts, subsequently interpreted the COMIBOL resolution and determined that the Huacajchi deposit was not covered by such resolution. In March 2010, the Cooperative Reserva Fiscal notified COMIBOL that, based on its interpretation, it was resuming mining of high grade material above the 4,400 meter level in the Huacajchi deposit. In December 2011, the Cooperative Reserva Fiscal sent a similar notification to COMIBOL with respect to a further area above the 4,400 meter level known as Huacajchi Sur. Based on these notifications and on the absence of any objection from COMIBOL, the Company resumed mining operations at the San Bartolomé mine on the Huacajchi deposit and Huacajchi Sur. Mining in other areas above the 4,400 meter level continues to be suspended. The partial suspension may reduce production until the Company is able to resume mining above 4,400 meters generally. It is uncertain at this time how long the suspension will remain in place. In addition, it is possible that COMIBOL may decide that the Company's operations at the Huacajchi deposit or Huacajchi Sur are subject to the COMIBOL resolution, which may force the Company to cease mining at such deposits. If COMIBOL objects to the Company mining at the Huacajchi deposit or Huacajchi Sur or if the other restrictions are not lifted, the Company may need to write down the carrying value of the asset. It is also uncertain if any new mining or investment policies or shifts in political attitude may affect mining in Bolivia. Unpatented Mining Claims Dispute at Rochester in Nevada On December 5, 2011, Coeur Rochester filed a lawsuit in the Sixth Judicial District Court of Nevada against Rye Patch Gold Corp and Rye Patch Gold US, Inc. seeking a declaratory judgment as to Coeur Rochester's ownership of 447 unpatented mining claims covering approximately 8,600 acres of federal lands in and surrounding the Coeur Rochester mine operation. On December 5, 2011, Rye Patch Gold US, Inc. filed a similar action asserting its interest in the claims in the Second Judicial District Court of Nevada. The Rye Patch action was subsequently moved to the Sixth Judicial Court and consolidated with Coeur Rochester's pending action. The dispute stemmed from competing asserted interests in the mining claims between Coeur Rochester and Rye Patch following Coeur Rochester's inadvertent failure to pay annual mining claim maintenance fees. On June 24, 2013, Coeur Rochester entered into a Settlement Agreement and Mutual Release (the “Settlement Agreement”) with Rye Patch. The closing of the transactions contemplated by the Settlement Agreement (the “Closing”) occurred on June 27, 2013. At the Closing, in accordance with the terms of the Settlement Agreement, all disputes among Coeur Rochester and Rye Patch regarding the competing unpatented mining claims were mutually released and Coeur Rochester and Rye Patch agreed to take necessary actions to cause all pending litigation involving the parties associated with the competing claims to be dismissed with prejudice. In addition, Coeur Rochester acquired all Rye Patch mining claims in dispute with those of Coeur Rochester, in exchange for (1) a $10 million cash payment, (2) the granting to Rye Patch of a 3.4% net smelter returns royalty on up to 39.4 million silver equivalent ounces produced and sold from the Rochester Mine beginning January 1, 2014, payable in cash on a quarterly basis, which had an estimated fair value of $22.0 million, and (3) granting Rye Patch an option to acquire CRI's federal patented mining claim called “Blue Bird” (which option was timely exercised by Rye Patch and the transfer of the “Blue Bird” claim to Rye Patch occurred on July 11, 2013). Appeal of Plan of Operations Amendment at Rochester in Nevada The Rochester property is also the subject of an administrative appeal filed by Great Basin Resource Watch (“GBRW”) with the Interior Board of Land Appeals (“IBLA”). This appeal challenges the decision of the U.S. Bureau of Land Management (“BLM”) to approve a plan of operations amendment permitting resumed mining in the existing mine pit and construction of a new heap leach pad. GBRW asserts that the National Environmental Policy Act (“NEPA”) required an Environmental Impact Statement for the plan of operations amendment, as opposed to the Environmental Assessment (“EA”) that was prepared. GBRW further alleges that BLM violated the Federal Land Policy & Management Act (“FLPMA”) by failing to avoid unnecessary and undue degradation of public lands. Because GBRW did not seek a stay of BLM's decision, operations are proceeding as approved. Coeur was granted intervenor status in the appeal and is actively participating in its resolution. The BLM and Coeur assert that the EA complies with NEPA and that BLM complied with FLPMA by, among other things, requiring mitigation of any possible future effects on water quality. BLM filed a Supplemental Briefing on March 1, 2012 regarding additional analysis conducted by the BLM further supporting and strengthening BLM and Coeur's positions that the EA complies with NEPA. The Company cannot predict whether this will result in further briefing with the IBLA, when the IBLA will rule on the appeal or what impact, if any, an adverse ruling may have on Rochester's operations. |
Segment Reporting
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | SEGMENT REPORTING The operating segments are managed separately because each segment represents a distinct use of company resources and a separate contribution to the Company’s cash flows. The Company’s reportable operating segments include the Palmarejo, San Bartolomé, Martha, Rochester, Kensington and Endeavor mining properties and the La Preciosa exploration property. All operating segments are engaged in the discovery and/or mining of gold and silver and generate the majority of their revenues from the sale of these precious metal concentrates and/or refined precious metals. Through September 2012, the Martha mine sold precious metal concentrates, typically under long-term contracts, to trading partners located in the United States and Switzerland. The Company ceased active mining operations at the Martha mine in September of 2012. The Kensington mine sells precious metals and concentrates, typically under long-term contracts to smelters in China, Japan, and Germany. Refined gold and silver produced by the Rochester, Palmarejo, and San Bartolomé mines are principally sold on a spot basis to precious metals trading banks such as International Commodities, Mitsui, Mitsubishi, Standard Bank, TD Securities, Valcambi and Auramet. Concentrates produced at the Endeavor mine are sold to Nyrstar (formerly Zinifex), an Australian smelter. The Company’s exploration programs, other than the La Preciosa project, are reported in its other segment. The other segment also includes the corporate headquarters, elimination of intersegment transactions and other items necessary to reconcile to consolidated amounts. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies above. The Company evaluates performance and allocates resources based on profit or loss before interest, income taxes, depreciation and amortization, unusual and infrequent items and extraordinary items. Financial information relating to the Company’s segments is as follows (in thousands):
Geographic Information
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Fair Value Measurements (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
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Dec. 31, 2012
Silver ounces received from Mandalay [Member]
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Jun. 30, 2013
Royalty obligation embedded derivative [Member]
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Dec. 31, 2012
Royalty obligation embedded derivative [Member]
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Dec. 31, 2012
Put and call options [Member]
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Jun. 30, 2013
Rochester NSR royalty obligation [Member]
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Jun. 30, 2013
Other derivative instrument [Member]
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Dec. 31, 2012
Short-term Deposit [Member]
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Jun. 30, 2013
Marketable securities [Member]
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Dec. 31, 2012
Marketable securities [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 1 [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 1 [Member]
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Dec. 31, 2012
Fair Value, Inputs, Level 1 [Member]
Silver ounces received from Mandalay [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 1 [Member]
Royalty obligation embedded derivative [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 1 [Member]
Royalty obligation embedded derivative [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 1 [Member]
Put and call options [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 1 [Member]
Rochester NSR royalty obligation [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 1 [Member]
Other derivative instrument [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 1 [Member]
Short-term Deposit [Member]
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Jun. 30, 2013
Fair Value, Inputs, Level 1 [Member]
Marketable securities [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 1 [Member]
Marketable securities [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 2 [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 2 [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 2 [Member]
Silver ounces received from Mandalay [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 2 [Member]
Royalty obligation embedded derivative [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 2 [Member]
Royalty obligation embedded derivative [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 2 [Member]
Put and call options [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 2 [Member]
Rochester NSR royalty obligation [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 2 [Member]
Other derivative instrument [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 2 [Member]
Short-term Deposit [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 2 [Member]
Marketable securities [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 2 [Member]
Marketable securities [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 3 [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 3 [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 3 [Member]
Silver ounces received from Mandalay [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 3 [Member]
Royalty obligation embedded derivative [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 3 [Member]
Royalty obligation embedded derivative [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 3 [Member]
Put and call options [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 3 [Member]
Rochester NSR royalty obligation [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 3 [Member]
Other derivative instrument [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 3 [Member]
Short-term Deposit [Member]
|
Jun. 30, 2013
Fair Value, Inputs, Level 3 [Member]
Marketable securities [Member]
|
Dec. 31, 2012
Fair Value, Inputs, Level 3 [Member]
Marketable securities [Member]
|
Jun. 30, 2013
Convertible Senior Notes Due March 2028 [Member]
|
Dec. 31, 2012
Convertible Senior Notes Due March 2028 [Member]
|
Jun. 30, 2013
7.875% Senior Notes due 2021 [Member]
|
Jan. 29, 2013
7.875% Senior Notes due 2021 [Member]
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Short-term Deposits | $ 999 | $ 999 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||||||||||||||||
Restricted certificates of deposits | 16,008 | 27,065 | 16,008 | 27,065 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||
Derivative Asset, Fair Value | 2,358 | 943 | 0 | 0 | 2,358 | 943 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||
Total assets | 18,366 | 29,007 | 16,008 | 28,064 | 2,358 | 943 | 0 | 0 | ||||||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Derivative fair value of derivative liability | 52,359 | 145,098 | 9,299 | 22,046 | 2,554 | 0 | 0 | 0 | 0 | 0 | 52,359 | 145,098 | 9,299 | 22,046 | 2,554 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||||||||||||
Total liabilities | $ 76,959 | $ 154,397 | $ 0 | $ 0 | $ 76,959 | $ 154,397 | $ 0 | $ 0 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | 3.25% | 7.875% | 7.875% |
Acquisition of Orko Silver Corporation/La Preciosa Mineral Interests (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Total consideration paid for the asset acquisition (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets Acquired Through Business Combination at Fair Value | Estimated fair value of the assets acquired (in thousands):
|
Share-Based Compensation Plans (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of new grants | The following table summarizes the new grants issued during the six months ended June 30, 2013:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of stock option and SAR's activity | The following options and stock appreciation rights were exercised during the six months ended June 30, 2013:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average fair value of SAR's, performance units and RSU's outstanding | The following shows the weighted average fair value of SARs outstanding at June 30, 2013:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options and SAR's exercisable | The following table shows the options and SARs exercisable at June 30, 2013:
|
Receivables (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Receivables - current portion | ||
Accounts Receivable - Trade | $ 9,664 | $ 8,701 |
Refundable income tax | 1,807 | 9,331 |
Refundable value added tax | 48,186 | 40,020 |
Accounts Receivable - Other | 4,950 | 4,386 |
Receivables, net current portion | 64,607 | 62,438 |
Receivables - non-current portion | ||
Refundable value added tax | 38,539 | 48,767 |
Allowance for doubtful accounts receivable | $ 0 | $ 0 |
Investments (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | The following table summarizes the Company’s available-for-sale securities on hand as of June 30, 2013 and December 31, 2012 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale securities, continuous unrealized loss position, fair value |
Derivative Financial Instruments and Fair Value of Financial Instruments (Details Textual)
|
3 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
USD ($)
oz
|
Dec. 31, 2012
USD ($)
oz
|
Jun. 30, 2013
MXN
|
Dec. 31, 2012
MXN
|
Jun. 30, 2013
Call Option [Member]
oz
|
Dec. 31, 2012
Call Option [Member]
oz
|
Jun. 30, 2013
Put Option [Member]
oz
|
Dec. 31, 2012
Put Option [Member]
oz
|
Jun. 30, 2013
Franco-Nevada warrant [Member]
USD ($)
|
Mar. 31, 2012
Franco-Nevada warrant [Member]
USD ($)
|
Jun. 30, 2013
Franco-Nevada warrant [Member]
USD ($)
|
Jun. 30, 2012
Franco-Nevada warrant [Member]
USD ($)
|
Dec. 31, 2012
Franco-Nevada warrant [Member]
USD ($)
|
Jun. 30, 2013
Gold call options sold [Member]
|
Jun. 30, 2013
Gold Call Options Expired [Member]
oz
|
Jun. 30, 2013
Gold Call Options Expired [Member]
oz
|
Jun. 30, 2013
Gold put options expired [Member] [Member]
USD ($)
oz
|
Jun. 30, 2013
Gold put options expired [Member] [Member]
USD ($)
oz
|
Jun. 30, 2013
Palmarejo gold production royalty [Member]
oz
|
Dec. 31, 2012
Palmarejo gold production royalty [Member]
|
Jan. 21, 2009
Palmarejo gold production royalty [Member]
|
Jun. 30, 2013
Forward foreign exchange contracts [Member]
Mexican peso forward purchase contracts [Member]
USD ($)
|
Jun. 30, 2012
Forward foreign exchange contracts [Member]
Mexican peso forward purchase contracts [Member]
USD ($)
|
Mar. 31, 2012
Forward foreign exchange contracts [Member]
Mexican peso forward purchase contracts [Member]
USD ($)
|
Jun. 30, 2013
Forward foreign exchange contracts [Member]
Mexican peso forward purchase contracts [Member]
USD ($)
|
Jun. 30, 2012
Forward foreign exchange contracts [Member]
Mexican peso forward purchase contracts [Member]
USD ($)
|
Dec. 31, 2012
Forward foreign exchange contracts [Member]
Mexican peso forward purchase contracts [Member]
USD ($)
|
Jun. 30, 2013
Forward foreign exchange contracts [Member]
Canadian Dollar Forward Exchange Contract [Member]
USD ($)
|
Jun. 30, 2013
Silver [Member]
Cerro Bayo Mine [Member]
USD ($)
|
Jun. 30, 2013
Commodity [Member]
USD ($)
|
Mar. 31, 2012
Commodity [Member]
USD ($)
|
Jun. 30, 2013
Commodity [Member]
USD ($)
|
Jun. 30, 2012
Commodity [Member]
USD ($)
|
Dec. 31, 2012
Commodity [Member]
USD ($)
|
Jun. 30, 2013
Maximum [Member]
Palmarejo gold production royalty [Member]
oz
|
Jun. 30, 2013
Mexican Peso To United States Dollar [Member]
MXN
|
Mar. 31, 2013
Canadian Dollar To United States Dollar [Member]
|
|
Derivative [Line Items] | |||||||||||||||||||||||||||||||||||||
Life of Mine Production, Percentage | 50.00% | ||||||||||||||||||||||||||||||||||||
Additional Derivative Financial Instruments and Fair Value of Financial Instruments (Textual) [Abstract] | |||||||||||||||||||||||||||||||||||||
Payment made for gold on the end of royalty obligation | 4,167 | ||||||||||||||||||||||||||||||||||||
Percentage of Gold Production | 50.00% | ||||||||||||||||||||||||||||||||||||
Derivative Average Gold Price in Excess of Minimum Contractual Deduction Rate | $ 400 | ||||||||||||||||||||||||||||||||||||
Annual Inflation Compounding Adjustment | 1.00% | ||||||||||||||||||||||||||||||||||||
Royalty Guarantees, Commitments, Amount | 400,000 | ||||||||||||||||||||||||||||||||||||
Total gold remain outstanding | 170,382 | 170,382 | |||||||||||||||||||||||||||||||||||
Fair Value Assumptions, Risk Free Interest Rate | 7.00% | 4.20% | |||||||||||||||||||||||||||||||||||
Derivative, Average Forward Price | 1,243 | 1,694 | |||||||||||||||||||||||||||||||||||
Fair value liability of the embedded derivative | 52,300,000 | 52,300,000 | 145,100,000 | ||||||||||||||||||||||||||||||||||
Company recognized Mark to Market loss | 69,200,000 | 25,100,000 | 92,700,000 | 12,700,000 | |||||||||||||||||||||||||||||||||
Realized losses on settlement of the liabilities | 8,100,000 | 11,000,000 | 17,200,000 | 24,200,000 | |||||||||||||||||||||||||||||||||
Weighted average exchange rate | 13.11 | 12.65 | 1.0 | ||||||||||||||||||||||||||||||||||
Fair value of foreign exchange contracts | 1,400,000 | 1,400,000 | 0 | ||||||||||||||||||||||||||||||||||
Weighted Average Strike Price of Put Options | 12,500 | ||||||||||||||||||||||||||||||||||||
Mark-to-market gains and losses on forward foreign exchange contract | 0 | 100,000 | 0 | 2,800,000 | 0 | ||||||||||||||||||||||||||||||||
Mark-to-market Realized gains on forward foreign exchange contract | 200,000 | 1,200,000 | 800,000 | 1,900,000 | |||||||||||||||||||||||||||||||||
Notional amount of foreign currency derivatives | 6,000 | 32,700,000 | 32,700,000 | 0 | |||||||||||||||||||||||||||||||||
Weighted Average Strike Price of Call Options Written | 15,500 | ||||||||||||||||||||||||||||||||||||
Gold under collars protection | 87,000 | 97,000 | 97,000 | 122,000 | |||||||||||||||||||||||||||||||||
Weighted Average Put Feature of Each Collar | 979.79 | 967.86 | |||||||||||||||||||||||||||||||||||
Weighted Average Call Feature of Each Collar | 1,964.20 | 1,967.89 | |||||||||||||||||||||||||||||||||||
Contract expiration date | 3 years | ||||||||||||||||||||||||||||||||||||
Derivative, Nonmonetary Notional Amount Expired | 5,000 | 10,000 | 12,500 | 25,000 | |||||||||||||||||||||||||||||||||
Derivative fair value of derivative liability | 9,300,000 | 9,300,000 | 2,400,000 | ||||||||||||||||||||||||||||||||||
Realized loss from transaction | 500,000 | 0 | |||||||||||||||||||||||||||||||||||
Average strike price | 2,000.00 | 921.60 | 921.60 | ||||||||||||||||||||||||||||||||||
Unrealized gain | 6,900,000 | 11,700,000 | 4,500,000 | 4,700,000 | |||||||||||||||||||||||||||||||||
Fair value of the contract | 2,358,000 | 0 | |||||||||||||||||||||||||||||||||||
Derivative Financial Instruments and Fair Value of Financial Instruments (Textual) [Abstract] | |||||||||||||||||||||||||||||||||||||
Outstanding provisionally priced sales consists of silver | 0 | 400,000 | |||||||||||||||||||||||||||||||||||
Outstanding provisionally priced sales consists of Gold | 15,589 | 11,957 | |||||||||||||||||||||||||||||||||||
Outstanding provisionally priced sales | 0 | 33,200,000 | |||||||||||||||||||||||||||||||||||
Fair value of gold and silver including embedded derivative | $ 34,100,000 |
Litigation and Other Events (Mining Claims) (Details) (Settlement of Mining Claims [Member], USD $)
In Millions, unless otherwise specified |
0 Months Ended | 6 Months Ended |
---|---|---|
Jun. 24, 2013
|
Jun. 30, 2013
|
|
Settlement of Mining Claims [Member]
|
||
Loss Contingencies [Line Items] | ||
Cash payment | $ 10 | |
NSR royalty percentage | 3.40% | 3.40% |
NSR royalty maximum amount | 39.4 | 39.4 |
NSR royalty fair value | $ 22.0 |
Derivative Financial Instruments and Fair Value of Financial Instruments (Details 2) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fair value adjustments | $ 66,754 | $ 16,039 | $ 84,550 | $ (7,074) |
Fair value adjustments, net | 66,290 | 14,010 | 82,957 | (8,549) |
Concentrate Sales Contracts [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Sales of Metals | (667) | (877) | (2,422) | 459 |
Forward foreign exchange contract [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Production costs applicable to sales | 203 | (1,151) | 830 | (1,934) |
Fair value adjustments | 1,598 | 0 | 0 | 0 |
Forward foreign exchange contracts MXN peso [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fair value adjustments | (2,260) | 83 | ||
Gold Lease Facility [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fair value adjustments | (1,522) | 2,773 | ||
Silver Ounces Receivables [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fair value adjustments | 0 | (337) | 0 | 22 |
Palmarejo gold production royalty [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fair value adjustments | 61,066 | 14,105 | 75,494 | (11,505) |
Put and call options [Member]
|
||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Fair value adjustments | $ 6,350 | $ 2,187 | $ 10,577 | $ 1,636 |
Significant Customers Significant Customers (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Significant Customers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Significant Customers | OTE 18 – SIGNIFICANT CUSTOMERS The Company markets its doré to credit worthy bullion trading houses, market makers and members of the London Bullion Market Association, industrial companies and sound financial institutions. The refined metals are sold to end users for use in electronic circuitry, jewelry, silverware, pharmaceutical products, and the technology industry. The Company currently has nine trading counterparties (International Commodities, Mitsui, Mitsubishi, Standard Bank, TD Securities, Valcambi, Johnson Matthey, Toronto Dominion Bank, and Auramet) and the sales of metals to these companies amounted to approximately 74% and 92% of total metal sales for the six months ended June 30, 2013 and 2012, respectively. Generally, the loss of a single bullion trading counterparty would not adversely affect the Company due to the liquidity of the markets and the availability of alternative trading counterparties. Sales of silver and gold concentrates to third parties (Nyrstar, Aurubis, Sumitomo, Trafigura, Johnson Matthey, and China National Gold) amounted to approximately 26% and 8% of total metal sales for the six months ended June 30, 2013, and 2012, respectively. The loss of any one smelting and refining client may have a material adverse effect if alternate smelters and refiners are not available. The Company believes there is sufficient global capacity available to address the loss of any one smelter. The following table indicates customers that represent 10% or more of total sales of metal for the three months ended June 30, 2013 and 2012 (in millions):
The following table indicates customers that represent 10% or more of total sales of metal for the six months ended June 30, 2013 and 2012 (in millions):
|
Segment Reporting (Details 1) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Mar. 31, 2013
|
Dec. 31, 2012
|
Jun. 30, 2012
|
Mar. 31, 2012
|
Dec. 31, 2011
|
||||
---|---|---|---|---|---|---|---|---|---|---|
Assets | ||||||||||
Cash and cash equivalents | $ 249,531 | $ 331,311 | $ 125,440 | $ 199,397 | $ 151,883 | $ 175,012 | ||||
Short term investments | 0 | 999 | ||||||||
Other assets | 112,583 | 120,906 | ||||||||
TOTAL ASSETS | 3,666,716 | 3,221,401 | ||||||||
Reportable Segment [Member]
|
||||||||||
Assets | ||||||||||
Total assets for reportable segments | 3,304,602 | 2,974,056 | ||||||||
TOTAL ASSETS | $ 3,304,602 | [1] | $ 2,919,752 | [1] | ||||||
|
Significant Customers
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Significant Customers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SIGNIFICANT CUSTOMERS | OTE 18 – SIGNIFICANT CUSTOMERS The Company markets its doré to credit worthy bullion trading houses, market makers and members of the London Bullion Market Association, industrial companies and sound financial institutions. The refined metals are sold to end users for use in electronic circuitry, jewelry, silverware, pharmaceutical products, and the technology industry. The Company currently has nine trading counterparties (International Commodities, Mitsui, Mitsubishi, Standard Bank, TD Securities, Valcambi, Johnson Matthey, Toronto Dominion Bank, and Auramet) and the sales of metals to these companies amounted to approximately 74% and 92% of total metal sales for the six months ended June 30, 2013 and 2012, respectively. Generally, the loss of a single bullion trading counterparty would not adversely affect the Company due to the liquidity of the markets and the availability of alternative trading counterparties. Sales of silver and gold concentrates to third parties (Nyrstar, Aurubis, Sumitomo, Trafigura, Johnson Matthey, and China National Gold) amounted to approximately 26% and 8% of total metal sales for the six months ended June 30, 2013, and 2012, respectively. The loss of any one smelting and refining client may have a material adverse effect if alternate smelters and refiners are not available. The Company believes there is sufficient global capacity available to address the loss of any one smelter. The following table indicates customers that represent 10% or more of total sales of metal for the three months ended June 30, 2013 and 2012 (in millions):
The following table indicates customers that represent 10% or more of total sales of metal for the six months ended June 30, 2013 and 2012 (in millions):
|
Basis of Presentation
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Basis of Presentation: The Company’s unaudited interim condensed consolidated financial statements have been prepared under United States Generally Accepted Accounting Principles (“U.S. GAAP”) and applicable rules of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and include the accounts of Coeur Mining, Inc. and its consolidated subsidiaries (“Coeur” or the “Company”). All significant intercompany transactions and balances have been eliminated during consolidation. The Company has evaluated all activity that took place after June 30, 2013 and determined there are no subsequent events that need to be disclosed. Certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Form 10-K for the year ended December 31, 2012. The condensed consolidated balance sheet as of December 31, 2012, included herein, was derived from the audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the Company’s consolidated financial position as of June 30, 2013 and December 31, 2012 and the Company’s consolidated results of operations and cash flows for the three and six months ended June 30, 2013 and 2012. The results for the three and six months ended June 30, 2013 are not necessarily indicative of the results to be expected for the year ending December 31, 2013. All references to June 30, 2013 or to the three and six months ended June 30, 2013 and 2012 in the notes to the condensed consolidated financial statements are unaudited. Use of Estimates: The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. The most significant areas requiring the use of management’s estimates and assumptions relate to recoverable ounces from proven and probable reserves that are the basis of future cash flow estimates and units-of-production depreciation and amortization calculations; useful lives utilized for depreciation, depletion and amortization; estimates of future cash flows for long lived assets; estimates of recoverable gold and silver ounces in ore on leach pads; the amount and timing of reclamation and remediation costs; valuation allowance for deferred tax assets; and other employee benefit liabilities. |
Fair Value Measurements
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. As required by accounting guidance, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement (in thousands):
The Company’s short-term investments are readily convertible to cash and, therefore, these investments are classified within Level 1 of the fair value hierarchy. The Company’s marketable equity securities are recorded at fair market value in the financial statements based on quoted market prices, which are accessible at the measurement date for identical assets. Such instruments are classified within Level 1 of the fair value hierarchy. The Company’s gold put and call options, Palmarejo royalty obligation embedded derivative, Rochester NSR royalty obligation, and other derivative instruments, net, which relate to the concentrate sales contracts and foreign exchange contracts, are valued using pricing models, which require inputs that are derived from observable market data, including contractual terms, forward market prices, yield curves and credit spreads. The model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy. The Company had no Level 3 financial assets and liabilities as of June 30, 2013 or December 31, 2012. Financial assets and liabilities that are not measured at fair value at June 30, 2013 and December 31, 2012 are set forth below (in thousands):
The fair value of the Company's 7.875% Senior Notes due 2021 was moved to Level 1 as a result of the availability of active market transactions to establish fair value. |
Summary of Significant Accounting Policies
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6 Months Ended | ||||||||
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Jun. 30, 2013
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Accounting Policies [Abstract] | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Recently Adopted Accounting Pronouncements: In December, 2011, the FASB issued ASU 2011-11, "Balance Sheet (Topic 201): Disclosures about Offsetting Assets and Liabilities." This ASU adds certain additional disclosure requirements about financial instruments and derivative instruments that are subject to netting arrangements. ASU 2011-11 is effective for fiscal years, and interim periods within those years, beginning January 1, 2013, with retrospective application required. The adoption of ASU 2011-11 had no effect on the Company's financial position, results of operations or cash flows. Effective January 1, 2013, the Company adopted ASU 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This ASU adds the following disclosure requirements:
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Derivative Financial Instruments and Fair Value of Financial Instruments (Tables)
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Jun. 30, 2013
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative instruments Settlement | As of June 30, 2013, the Company had the following derivative instruments that settle in each of the years indicated in the table (in thousands except average prices, ounces and notional data):
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Fair value of the derivative instruments | The following summarizes the classification of the fair value of the derivative instruments as of June 30, 2013 and December 31, 2012 (in thousands):
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Gain losses on derivative instruments | The following represent mark-to-market gains (losses) on derivative instruments for the three months ended June 30, 2013 and 2012 (in thousands):
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Summary of Significant Accounting Policies (Policies)
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6 Months Ended | ||||||||
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Jun. 30, 2013
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Accounting Policies [Abstract] | |||||||||
Use of Estimates | Use of Estimates: The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in its condensed consolidated financial statements and accompanying notes. The most significant areas requiring the use of management’s estimates and assumptions relate to recoverable ounces from proven and probable reserves that are the basis of future cash flow estimates and units-of-production depreciation and amortization calculations; useful lives utilized for depreciation, depletion and amortization; estimates of future cash flows for long lived assets; estimates of recoverable gold and silver ounces in ore on leach pads; the amount and timing of reclamation and remediation costs; valuation allowance for deferred tax assets; and other employee benefit liabilities. |
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements: In December, 2011, the FASB issued ASU 2011-11, "Balance Sheet (Topic 201): Disclosures about Offsetting Assets and Liabilities." This ASU adds certain additional disclosure requirements about financial instruments and derivative instruments that are subject to netting arrangements. ASU 2011-11 is effective for fiscal years, and interim periods within those years, beginning January 1, 2013, with retrospective application required. The adoption of ASU 2011-11 had no effect on the Company's financial position, results of operations or cash flows. Effective January 1, 2013, the Company adopted ASU 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income." This ASU adds the following disclosure requirements:
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Receivables (Tables)
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Jun. 30, 2013
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables | Receivables consist of the following (in thousands):
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Litigation and Other Events (Details) (USD $)
In Millions, unless otherwise specified |
1 Months Ended | |||
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Feb. 28, 2010
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Jun. 30, 2013
site
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Oct. 14, 2009
m
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Dec. 05, 2011
Rochester [Member]
acre
claim
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Litigation and Other Events (Textual) [Abstract] | ||||
Settlement Amount Under Law | $ 3.5 | |||
Maximum height for temporary restriction on mining | 4,400 | |||
Litigation and Other Events (Additional) (Textual) | ||||
Number Of Operation Sites, Possible Further Federal Or State Agency Interaction | 3 | |||
Number of Unpatented Mining Claims | 447 | |||
Approximate Area of Federal Lands Covering for Unpatented Mining Claims | 8,600 |
Debt and Capital Lease Obligations (Table)
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Jun. 30, 2013
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long term debt and capital lease obligations | The current and non-current portions of long-term debt and capital lease obligations as of June 30, 2013 and December 31, 2012 are as follows (in thousands):
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Interest expenses incurred for various debt instruments | For the three and six months ended June 30, 2013, the Company expensed interest of $10.9 million and $20.7 million, respectively. For the three and six months ended June 30, 2012, the Company expensed interest of $7.6 and $14.2 million, respectively. Interest expense is made up of the following (in thousands):
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Segment Reporting (Details 2) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Dec. 31, 2012
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Long Lived Assets | |||||
Long Lived Assets, Total | $ 3,018,022 | $ 3,018,022 | $ 2,675,811 | ||
Revenues | |||||
Total Revenue | 204,525 | 254,406 | 376,322 | 458,970 | |
UNITED STATES
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Long Lived Assets | |||||
Long Lived Assets in Entity's Country of Domicile | 503,105 | 503,105 | 514,687 | ||
Revenues | |||||
Total Revenue | 65,754 | 55,277 | 144,502 | 84,411 | |
AUSTRALIA
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Long Lived Assets | |||||
Long Lived Assets in Individual Foreign Countries | 27,364 | 27,364 | 29,408 | ||
Revenues | |||||
Total Revenue | 3,479 | 5,232 | 6,462 | 11,946 | |
ARGENTINA
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Long Lived Assets | |||||
Long Lived Assets in Individual Foreign Countries | 94,964 | 94,964 | 95,134 | ||
Revenues | |||||
Total Revenue | (161) | 4,149 | (662) | 7,767 | |
BOLIVIA
|
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Long Lived Assets | |||||
Long Lived Assets in Individual Foreign Countries | 235,781 | 235,781 | 240,905 | ||
Revenues | |||||
Total Revenue | 49,236 | 53,383 | 82,377 | 94,759 | |
MEXICO
|
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Long Lived Assets | |||||
Long Lived Assets in Individual Foreign Countries | 2,156,808 | 2,156,808 | 1,795,677 | ||
Revenues | |||||
Total Revenue | $ 86,217 | $ 136,365 | $ 143,643 | $ 260,087 |