Coeur Reports 4th Quarter Profit and 2004 Results
- $13.0 million net income in 4th quarter -
- Strong quarterly silver and gold production -
- Aggressive exploration program increases silver reserves 12%-
- San Bartolome construction underway -
COEUR D'ALENE, Idaho, March 14 /PRNewswire-FirstCall/ -- Coeur d'Alene Mines Corporation (NYSE: CDE; TSX: CDM), the world's largest primary silver producer and a growing gold producer, today reported results for the fourth quarter and full year 2004.
Highlights
Fourth Quarter
-- Net income of $13.0 million, or $0.05 per diluted share, compared with a loss of $12.9 million, or $0.06 per share, in the fourth quarter of 2003. Results for the quarter include operating income of $1.8 million, $2.1 million related to cumulative reduction in depletion and income taxes for the year and $9.1 million of tax benefits associated with the expected utilization of past net operating losses.
-- Revenue of $46.1 million, an increase of 48% over reported revenue of $31.2 million in the fourth quarter of 2003.
-- Silver production of 4.3 million ounces, up 23% from a year ago and 43% from last quarter.
-- Fourth quarter gold production of 47,055 ounces, up 80% from 2003's fourth quarter and 46% from last quarter.
-- Average cash cost declined 36% to $2.22 per ounce of silver, compared to $3.47 in 2003's comparable period and 49% lower than last quarter.
-- Cash, cash equivalents and short-term investments of $322.1 million at December 31, 2004.
-- Coeur shares commenced trading on the Toronto Stock Exchange (TSX:CDM) further enhancing the Company's leading liquidity position among silver producers.
Full Year 2004
-- Revenue of $133.5 million, up 21% from the previous year
-- Full year silver production of 14.1 million ounces compared to 14.2 million ounces in 2003
-- Full year gold production of 129,332 ounces, up 8% from 2003's level of 119,518 ounces.
-- Average cash cost per ounce of $3.66, compared to $3.27 the previous year.
-- Total silver reserves increased 12% above last year's reserve levels, to 196 million ounces - reserve levels more than doubled at Cerro Bayo and Martha as a result of the expanded exploration program, further extending mine life.
2005 Outlook
-- San Bartolome construction has commenced, commercial production expected in 2006.
-- Revised Record of Decision ("ROD") for Kensington for the Final Environmental Impact Statement ("FSEIS") issued by the U.S. Forest Service. Final permits expected in the first half of 2005.
-- Exploration program expanded in 2005
"With continued strong silver and gold production, Coeur reported substantial profit in the fourth quarter of 2004, finishing the year in strong fashion," said Dennis E. Wheeler, Chairman, President and Chief Executive Officer of Coeur. "We are seeing the successful completion of Coeur's strategy to shift to new low-cost mines, significantly expand exploration spending to develop new low-cost ore reserves and improve our operations capability. We believe this focus on exploiting our vast exploration potential and low discovery costs at or near our existing low-cost operations will further strengthen our position as the premier silver investment.
"Our young mines in South America, Cerro Bayo and Martha, had excellent fourth quarter and full year results, with strong metals production and low operating costs -- $0.60 per ounce of silver (net of gold production credits) in the fourth quarter and $2.07 per ounce for the full year -- as well as exploration results which exceeded our expectations and continued to extend mine life. We will continue our expanded exploration program there in 2005," Mr. Wheeler added.
"Construction has commenced at our San Bartolome silver project, with an excellent construction and operating team in place. San Bartolome is expected to produce approximately eight million ounces of production annually which will increase the Company's total silver production by 56%. Production is expected to begin in 2006, with anticipated strong cash flow at existing silver prices. We are pursuing optimization of the project to further reduce capital expenditures and operating costs. Our cash liquidity position is strong, with $322 million in cash, cash equivalents and short-term investments at year-end, which will help fund our growth projects, including San Bartolome and Kensington, and gives us great flexibility to look for new opportunities to expand company production, reserves and cash flow," Mr. Wheeler said.
Financial Summary
Coeur d'Alene Mines Corporation today reported fourth quarter 2004 revenue of $46.1 million, an increase of 48% over reported revenue of $31.2 million in the fourth quarter of 2003.
During the fourth quarter of 2004, the Company reported net income of $13.0 million, or $0.05 per diluted share, compared to a net loss of $12.9 million, or $0.06 per share, in the fourth quarter of 2003. The fourth quarter of 2004 included $2.8 million of exploration expense related to the Company's successful program which has increased our silver reserves, and $2.7 million in pre-development costs for the development of the San Bartolome and Kensington mines. Results for the quarter included operating income of $1.8 million, the effect of a cumulative reduction in depletion expense and income taxes for the year of $2.1 million and a $9.1 million benefit for income taxes associated with the expected utilization of past net operating losses.
For the fourth quarter of 2004, Coeur realized an average silver price of $7.08 per ounce compared to an average realized silver price during the previous year's fourth quarter of $5.12 per ounce. For its gold sales, Coeur realized an average price of $427 per ounce during the fourth quarter of 2004 compared to an average gold price of $365 per ounce during the same period last year.
For the full year 2004, the Company reported revenue of $133.5 million, up 21% from the $110.5 million reported in the previous year. The increase was due primarily to increased gold production and higher metals prices.
For the full year 2004, the Company reported a net loss of $12.2 million, or $0.06 per share, compared to a net loss of $66.2 million, or $0.39 per share in 2003. Results for the year also included the effect of a cumulative reduction in depletion expense and income taxes of $2.1 million and a $9.1 million benefit for income taxes associated with the expected utilization of past net operating losses. The 2004 year included $11.4 million in pre-development costs related to the San Bartolome and Kensington projects and $15.7 million in one-time business development expenses. Absent these items, the company would have reported a profit of $14.9 million. 2004's expenses also included $11.1 million of exploration expense.
The previous year's loss included a $41.6 million loss on the early retirement of debt, a $2.3 million loss for the cumulative effect of change in accounting principle, and an additional interest payment of $7.0 million triggered by the early retirement of debt.
For the full year 2004, Coeur realized an average silver price of $6.82 per ounce compared to an average realized price during the previous year of $4.89 per ounce. For its gold sales, Coeur realized an average price of $410 per ounce during 2004 compared to an average gold price of $345 per ounce during the same period last year.
In 2004, Coeur completed a public underwriting of $180 million of 11/4% Convertible Senior Notes due January 2024 and the underwriting of 26.6 million common shares, which increased the Company's cash, cash equivalents and short-term investments to $322 million at December 31, 2004.
The market prices of silver (Handy & Harman) and gold (London Final) on March 11, 2005 was $7.58 and $443.70 per ounce, respectively.
Coeur does not hedge any of its silver or gold production.
The Company expects to rely on SEC Rule 12b-25 for a brief delay in the filing of its Form 10-K for the year ended December 31, 2004 in order to complete the preparation of its newly required management's report on internal control over financial reporting and the attestation report of its outside auditor relating thereto. Although it is possible such reports may cite one or more material weaknesses in the Company's internal control over financial reporting at year-end, the adjustments called for by such matters are reflected in the financial data set forth in this press release and will be reflected in the audited financial statements, and the Company expects to receive an unqualified report of its outside auditor relating to the financial statements.