Good morning. Welcome to the Coeur Mining Fourth Quarter 2019 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to your host today, Paul DePartout. Please go ahead, sir.

Thank you and good morning. Welcome to Coeur Mining’s fourth quarter and full year 2019 earnings conference call. Our results were released after yesterday’s market close and a copy of the press release and slides for today’s call are available on our website. I would like to remind everyone that our press release, slides and some of our comments today include forward-looking statements from which actual results may differ. Please review the cautionary statements included in our press release and presentation as well as the Risk Factors described in our 2019 10-K. Now, I’ll turn it over to Mitch.

Thanks, Paul, and good morning. Tom Whelan and Terry Smith are here with me today, along with a handful of other members of the management team. Starting off on Slide 4, our 2019 results reflect a strong second half from our 3 primary gold operations and higher precious metals prices. We saw our 2019 revenue increase 14% to over $700 million. Our adjusted EBITDA grow 11% to $174 million and our operating cash flow increased fourfold. We were also successful in achieving our full year guidance targets for CapEx and G&A. Looking at Slide 3, some additional highlights include: 3 consecutive quarters of positive free cash flow to finish the year; encouraging silver recovery results from HPGR at Rochester; notable improvements to our balance sheet, including the retirement of over $160 million or over 1/3rd of our remaining debt; and solid results from our exploration programs. Looking more broadly at our exploration results and our year-end reserves and resources, Slide 13 highlights the year-over-year growth across most categories in metals. This slide also highlights the extent to which our reserves and resources have grown, since 2015. Given the attractive returns and results from our investment in exploration, we plan to substantially increase our spending level in 2020 by over 60% to roughly $50 million, which will by far be the largest program in the company’s history. Our Palmarejo, Kensington and Wharf operations all had a great second half of 2019, while Silvertip and, to a lesser extent, Rochester had disappointing ends to the year. However, we believe that both of these assets have clearly defined paths forward that lead to strong cash flow and solid returns. Starting with Rochester, we lost some operating time last summer when we had to replace a failed secondary crusher, which led to lower placement…

Thank you, Mitch, and good morning, everyone. As Mitch highlighted, our 3 primary gold operations delivered strong results, while our Rochester and Silvertip mines both experienced challenges last year. Slides 5 and 6 summarize our performance in 2019 and provide an outlook for 2020. Starting with Palmarejo. Higher throughput rates and improved silver grades drove solid production results during the fourth quarter. Most of the increase in throughput was attributable to additional ore feed from La Nación, which averaged approximately 700 tons per day in the fourth quarter. For the full year, we mined through some geotechnically-challenging areas and increase the proportion of longitudinal stopes, which impacted grades and recoveries for both metals. Looking ahead, we plan to increase throughput by roughly 10% in 2020 to help offset some lower grades that we expect to see during the year. Switching over to Kensington. 2019 was a year of very strong results, showcasing our multiyear effort to discover, develop and mine higher grade material. Gold production increased over 20% during the year to roughly 128,000 ounces, largely driven by average gold grades that were over 15% higher than the prior period. We produced over 18,000 ounces from Jualin at an average grade of 0.36 ounce per ton or 12.3 grams per ton. The addition of this high-grade ore feed helped to generate record free cash flow of $33.5 million, while also lowering unit costs by $140 per ounce or 13%. Looking ahead, we expect another strong year despite slightly lower grades from Kensington main deposit. We also anticipate Jualin will account for roughly 20% to 25% of Kensington’s total production for the year. At Wharf, 2019 was another great year for the operation. Gold production was nearly 60% higher in the second half of the year, helping us deliver both production…

Thanks, Terry. I’d like to start off by highlighting the improvements we made to our balance sheet during 2019. As presented on Slide 15, we retired over $160 million of debt during the year, roughly a 36% reduction. We also increased liquidity by over $75 million in 2019, ending the year with an undrawn $250 million revolver and $56 million of cash. Driven by our debt reduction initiatives and an 11% increase in adjusted EBITDA, our total leverage ratio at the end of the year dropped to 1.7 times compared to nearly 3 times at the end of 2018. I’d like to highlight our top-line results as seen on Slide 7. Gold sales accounted for roughly 70% of our revenue in 2019. And from a geographic perspective, our U.S.-based operations generated just under 60% of total revenue during the year, while Mexico and Canada contributed 36% and 6%, respectively. These results showcased our balanced portfolio of North American precious metals assets. Shifting over to Silvertip and looking at Slide 9, which goes into detail on the current and zinc/lead markets. We have seen continued deterioration in prices, while treatment charges for our concentrates have risen considerably. Both zinc and lead prices have dropped well below 2020 consensus levels in recent weeks. In just the past 3 months treatment charges for our zinc and lead concentrates have increased over 15% and 35%, respectively. This severe deterioration has impact of significantly reducing revenue and adding substantial amount of cost to the operation. Global zinc mine supply excluding China is forecast to increase in 2020 as some major zinc operations are expected to ramp up production. We expect the annual zinc benchmark to be at or near $300 in 2020 with spot treatment charges at least 10% higher. Off-spec zinc concentrates will likely…

Thanks, Tom. Looking at Slide 17, you can see our top priorities for the year. Number one, continue validating HPGR and accelerate the Rochester expansion project. Number two, deliver results from our large investment in exploration. Number three, complete a successful PFS and advance our efforts to retool and expand Silvertip. Number four, deliver consistent operating and financial results across our operations. And number five, further improve on our already strong environmental health and safety performance. With that, let’s go ahead and open it up for any questions.

Yes, thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from Mark Reichman with Noble Capital Markets.

Good morning.

Hi, Mark.

Just a quick question on the Crown Block, I think permitting limited the number of step-out holes that you were able to drill in 2019. And if memory serves correct, you were looking at getting some additional permitting to allow drilling on a larger area. And I was just curious whether you still expect that by the end of the second quarter?

Still the timing and we’ll accelerate then our drilling, both at Crown and at Sterling, starting in the middle of the year and throughout the second half of the year.

Okay. Well, so much attention is focused on the Silvertip, and I think investors really look at cores of precious metals play, so I’d kind of like to focus on that. There and you’ve got this Rochester expansion. You’ve got a lot of potential with Sterling, developing the Crown Block. You’ve got Wilco, Lincoln Hill. I was just curious if you could just maybe update us a little bit on the timing of the Rochester expansion? I know the technical report will be done at the end of the year, but kind of what your thinking is in terms of when the timing really starts to accelerate on that? And then, how these other pieces fit into supporting that expansion?

Yeah, sure. It’s Mitch here, Mark. Hi. The main driver is to ensure that we have POA 11, largely completed by end of 2022. That will allow for a smooth transition from the current Stage IV leach pad on to the new to-be-constructed Stage VI leach pad that forms one of the key elements of this planned expansion. So, there’ll be minimal capital this year spent on POA 11. And then the ramp-up is in 2021 and 2022, to have that ready to go then, by the time we’re nearing capacity on the current Stage IV leach pad around the beginning of 2023. And then on the backside of completion is where we really are excited as a company in terms of what Rochester will then deliver in terms of production and cash flow, good long mine life and really allows us to kind of take another step-up overall as a company in terms of size and then cash flow and longevity of that cash flow. So, does that answer your question?

It does. But what about – how does like in terms of developing out Lincoln Hill and then, what’s your expectation on how you integrate Sterling and the Crown Block and Wilco into the portfolio on a little more active basis? I guess that all kind of plays into this Rochester expansion as well?

Definitely. Sequencing is a huge element to our thinking. You don’t want to try and do everything at once for all kinds of reasons, obviously. Just to, I wrote down the 3 or 4 assets that you mentioned. Lincoln Hill, which sits adjacent to Rochester, we will be drilling there this year, and we will look to continue to advance our engineering work and around how and when Lincoln Hill can become a part of the mine plan at Rochester post POA 11 expansion. But given the minimal capital to get that into the plan out there, it’s only a couple of miles from where this new Stage VI leach pad will be located. And the grades, as you might recall, are gold grades are something like 4 times higher than what we’re mining at Rochester. So we’ll definitely want to try and pull those ounces into the mine plan as soon as we can. So that one sort of goes hand in glove with the POA 11 expansion and our focus there at Rochester. Sterling and Crown, I would separate those 2 into 2 distinct projects, where Sterling is likely to be a smaller, but probably higher grade; shorter life, but good margin, gold oxide, heap leach kind of operation that won’t require much capital to get into production. Whereas Crown will take a few more years of drilling, that’s where we likely have a much larger resource, a standalone capital project there. And that, very clearly, would need to slot in post POA 11 from a timing standpoint. And then, you mentioned Wilco, which it’s funny, when we bought the asset package from Alio Gold, our main focus was Lincoln Hill for all of the obvious operational synergies. But with gold now continuing to drift higher and higher, those Wilco resource ounces start to become something that we’re going to have to turn a little and pay a little bit more attention to. It’s not quite as near-term or doesn’t have quite the operational synergies as a Lincoln Hill. But there’s a large resource there that’s very price sensitive, and we’ll need to kind of dust off our thinking around Wilco. But I would put that in the bucket of much kind of longer-term growth.

Okay. Great. I really appreciate that. Very helpful. Thanks.

Yeah, sure. Thanks for the question.

Thank you. [Operator Instructions] And the next question comes from Joseph Reagor with Roth Capital Partners.

Good morning, guys. Thanks for taking the question.

Hi, Joe. Hi?

Hi. So looking at the cost – cash cost guidance, it seems like it’s kind of working its way higher a little bit compared to last year. Is there any particular thing driving that? Is it treatment charges, tax rates, what’s the main driver there? It seems like kind of across the board a little bit higher cost.

Yeah. A good question. I’ll start and then Tom, I’ll flip it to you. And then, Terry, you can fill in any blanks. Clearly, Joe, every asset has its own unique story and rationale. Overall, we’re trying to enter 2020 with a set of guidance ranges that we feel are achievable. And something that we can deliver into throughout the year. But I’ll let Tom start with a few details on each that have ranges that maybe caught your eye Joe, and then Terry, fill in. And then Joe, maybe you can tell us if we’ve answered your question or not?

Hey, Joe, so I would like to go and order PRKW, so Palmarejo first. Palmarejo, we’re seeing a drop in the grades. But as you see, we’ve been able to maintain the same production. So the unit cost of mining process, G&A are all staying the same but the grade is kind of the answer there. And I know, Alberto and team will be doing their best to handle that. Again, what is – what we saw last year was a bit of an increase in some of the inputs, so diesel, et cetera, et cetera. So we’re expecting those to stay flat. Rochester, again I think what we – what you have there is a pretty conservative estimate in terms of where we see things going. We’ve got, as Terry has mentioned, a lot riding on Rochester this year. And so again, I think that is reflective of the – what you see in the cost estimate. Going to Kensington. Again, I would say, Kensington is kind of a pretty steady year-over-year. So that wouldn’t have much to add there. And then the one issue at Wharf is we’re in probably one of the highest strip years, Terry has a little more history than me, but one of the highest strip years. So that’s sort of the reason for an uptick in the cost. Terry, I don’t know what else – did it – did I miss anything?

Those are the big moving pieces, Tom, I think you captured it pretty well.

Joe, does that answer your question?

Yeah. Yeah. That helps. And then just kind of a bigger picture on the Rochester expansion. I think the expectation is to fund that via cash flow if, for some reason, that’s not an option what would be the financing plan there?

Yeah, good question. And as we work through this year and firm up CapEx and get an updated 43-101 that provides a more comprehensive view of the whole project by the end of the year, along with that, we’ll have a more definitive kind of funding plan to go along with that 43-100. But you hit it. I mean, between the cash, the revolver and free cash flow. And with 70% of our revenue coming from gold, and gold now seeming to be pretty buoyant. That, all of a sudden, opens up a whole other pretty big opportunity in terms of available funding to allocate to POA 11. Beyond that, then we’ll look it – whether it’s leasing or we’ll still – we’re still going to be taking a good crack at this CapEx here throughout the first half of the year to see how we can shave and streamline and reduce. And then we’ll see what, if any gap remains. Hopefully, there won’t be one. If there is, we’ve got a lot of other alternatives. It is one of the drivers, though, Joe, behind putting more of this price protection in place underpinning this gold to help increase our confidence level in that free cash flow coming from gold and from this higher gold price. So that’s a little bit of the rationale there, so that that can be a sizable source of funding for POA 11. But as Rochester goes through the year and we get more and more confidence out of these higher and faster silver recoveries. Its own operating cash flow will be, I think, by far, the largest source of funding to deliver POA 11.

Okay. Thanks. I’ll turn it over.

Okay. Thanks, Joe.

Thank you. And this concludes the question-and-answer session. I would now like to turn the conference back over to Mitchell Krebs for any closing remarks.

Okay. Well, hey, we appreciate everybody’s time this morning. I know it’s a busy day, and we’ll look forward to speaking with you all again in the spring to go through our first quarter results. So have a good day. Thanks for your time.

Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.