Coeur Reports 4th Quarter Profit and 2004 Results - $13.0 million
net income in 4th quarter - 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. Overview of Operations South
America Cerro Bayo (Chile)/Martha (Argentina) -- At Cerro Bayo,
silver reserves, giving effect to 2004 production, are 316% over
prior year reserve levels to 6.1 million ounces, and gold reserves
are 372% over prior year reserve levels to 116,000 ounces. -- At
Martha, 2004 year-end silver reserves nearly tripled to 3.9 million
ounces, extending mine life through at least mid-2006. -- Expanded
exploration program continuing in 2005. Discovery costs in 2004
were $0.25 per ounce. -- 1.7 million ounces of silver and 22,511
ounces of gold produced during the fourth quarter. -- Fourth
quarter cash costs of $0.60 per ounce of silver. -- Full year 2004
production of 4.9 million ounces of silver and 59,876 ounces of
gold. -- Cash costs of $2.07 per ounce of silver for the year. Both
gold and silver production at Cerro Bayo increased in the fourth
quarter from the third quarter 2004, resulting in significantly
lower cash costs of $0.60 per ounce of silver (net of gold
by-product credit) during the fourth quarter. Production from Cerro
Bayo continued to include ores from five different vein systems,
including high-grade ounces from the Javiera and Cerro Bayo
systems. During the quarter, mining at Martha included ores from
the recently developed R-4 Deep and Mina Martha Deep zones, with
higher-grade silver ores contributing to increased silver
production in the fourth quarter. The ores from Cerro Bayo and
Martha are combined and processed together at the Cerro Bayo plant.
Silver reserve levels are 316% over prior year at Cerro Bayo and
290% at Martha in 2004, giving effect to 2004 production, further
extending mine lives. The Company's expanded 2004 drilling program
at Cerro Bayo more than tripled silver and gold reserve levels,
after giving effect to 2004 production, to 6.1 million ounces of
silver, and 116,000 ounces of gold. The 2004 drilling program
continued the exploration and delineation of the multiple Cerro
Bayo deposits and resulted in the discovery of the Lourdes Norte
and Mercedes veins under post-mineral gravel cover and of the new
Celia Este and Myriam veins which are located proximal to existing
veins. Discovery of additional covered veins and veins proximal to
existing infrastructure will be a significant part of future
exploration at Cerro Bayo. In 2004, approximately $4.1 million was
spent for exploration and over 250,000 feet of core drilling was
completed. The discovery cost of new reserves at Cerro Bayo, all of
which were added near existing infrastructure, has averaged
approximately $0.25(1) per silver equivalent ounce. In 2005, Coeur
expects to spend $3.9 million for exploration at Cerro Bayo,
representing the second year of a three-year exploration plan
designed to support at least three years of production. The
exploration potential to discover additional high grade veins
within the entire Cerro Bayo trend, which is 2.5 miles east-west by
6 miles north-south, is considered to be excellent. At Martha in
Argentina, year-end silver reserves nearly tripled to 3.9 million
ounces, giving effect to 2004 production, extending mine life
through at least mid-2006. The work last year successfully
discovered extensions of high-grade ore along the strike of the
Martha vein within the mine itself, and several new high-grade ore
shoots at the nearby R-4 Zone. The discovery cost of new reserves
has been approximately $0.21(2) per silver equivalent ounce. Martha
remains among the highest-grade silver mines in the world. The
extension of the reserves at Martha has far surpassed the
parameters upon which the acquisition of this property was based.
The Company believes there is excellent potential to discover
additional silver resources on properties within the 450 square
miles it controls in the Santa Cruz Province, which includes the
Martha mine. Accordingly, Coeur has increased its exploration
budget at Martha to $2.7 million for 2005, an increase of 58% over
2004 levels. The current exploration program continues to focus on
extensions of high grade ore shoots known to exist on the property
and two drill rigs are operating full time. (1) Since January 2002.
Silver equivalent ounces = silver ounces + (gold ounces x (gold
price/silver price)) Prices used in year-end 2004 reserves: $390
gold, $6.00 silver. (2) Since acquisition in 2002. Silver
equivalent ounces = silver ounces + (gold ounces x (gold
price/silver price)) Prices used in year-end 2004 reserves: $390
gold, $6.00 silver. North America Rochester Mine (Nevada) --
Average cash cost in fourth quarter of $1.97 per ounce of silver.
-- Average 2004 cash costs of $3.93, reduced 16% from $4.67 per
ounce a year ago. -- 1.7 million ounces of silver in the fourth
quarter, up 21% from last year's fourth quarter and up 30% from the
third quarter, 2004. -- Fourth quarter gold production of 24,544
ounces, more than double last year's fourth quarter production, and
41% higher than the third quarter 2004. -- Full year 2004
production of 69,456 ounces of gold, up 33% from 2003, and 5.7
million ounces of silver, slightly higher compared to the previous
year. Gold production levels accelerated at Rochester in the fourth
quarter due to leaching of higher-grade gold ores placed on the pad
earlier in 2004 and the completion of the new Stage IV leaching
areas, which have allowed for a higher than normal production rate.
Due to the higher gold production in 2004, average full year cash
costs were reduced by 16% from the previous year. Coeur Silver
Valley - Galena Mine (Idaho) -- Fourth quarter silver production of
874,573 ounces. -- Average cash cost during quarter of $5.94 per
ounce of silver. -- Full year silver production of 3.5 million
ounces of silver. -- Full year average cash costs of $5.46 per
ounce of silver. During 2004 at Silver Valley, drilling at the
Galena mine succeeded in defining approximately 3.0 million new
ounces. Overall, reserves decreased at Galena due to production,
higher operating costs and external smelter and refinery costs,
which resulted in an overall increase in the ore reserve cutoff
grade. Exploration and development work continued during the year
with the target of developing additional resources with an eventual
annual production target of 7.0 million ounces. In 2004, $1.6
million was spent on exploration activities at the Galena mine, on
seven exploration targets for testing, and added four additional
targets in the year. New mineralization was discovered at the 4000
Level of the Polaris Fault and the 2400 Upper Country Silver Vein.
Definition drilling also commenced at the 4300 to 4600 vein target.
Initial drilling on the Deep Coeur target intersected an extension
of the 483 vein in five of eight holes with thin, high-grade silver
(0.9 feet at 51.3 ounces of silver per ton) intersected in one
hole. In addition, Coeur geologists believe that geologic
conditions similar to those at the Galena mine may extend into the
adjacent Caladay property providing future exploration
opportunities. Development Projects San Bartolome - Bolivia
Construction activities commenced at San Bartolome in the fourth
quarter of 2004, with a targeted construction start-up in 2006.
Named as General Manager for the wholly-owned Coeur subsidiary to
operate San Bartolome was Americo Villafuerte, who has managed
mining operations for major mines throughout South America for both
large U.S. and other international mining firms. Coeur has
assembled an international team with a combined 120 years of mining
construction and engineering expertise to build the open pit mining
operation and processing facility. Construction is currently
expected to cost approximately $135 million, with production
startup in 2006. Optimization is ongoing to lower capital
expenditures and operating costs. Initial average annual production
from San Bartolome of approximately 8 million ounces of silver is
expected during the first five years of production at an
anticipated cash operating cost of $3.50 per ounce, designed to
generate significant cash flow for the Company. The mine has an
initial estimated mine life of 15 years. Kensington - Alaska During
the fourth quarter, the Kensington gold project received the Record
of Decision ("ROD") for the Final Supplemental Environmental Impact
Statement ("FSEIS") by the U.S. Forest Service, a major permitting
milestone. An appeal to the ROD was filed February 8th with the
U.S. Forest Service, which has a 45 day period to respond. The
Company believes the appeal is without merit. With receipt of
remaining permits, the Company Board of Directors could make a
construction decision in the first half of 2005. The construction
of Kensington is expected to take eighteen months, with production
startup commencing during 2006. During 2005, Coeur plans to
commence a drilling program at Kensington designed to define
300,000 to 400,000 ounces of new gold reserves., thereby
significantly increasing the initial mine life from the current
level of ten years and to identify higher grade sections of the
deposit that might be mined in the earlier years of the operation.
The program is expected to cost approximately $2.6 million.
Kensington is initially expected to produce approximately 100,000
ounces of gold annually over its planned ten to fifteen year mine
life. Initial direct capital cost is estimated at $91.5 million and
per ounce operating costs are projected at approximately $220.
Coeur d'Alene Mines Corporation is the world's largest primary
silver producer, as well as a significant, low-cost producer of
gold. The Company has mining interests in Nevada, Idaho and Alaska
in the United States, Argentina, Chile and Bolivia in South America
and Tanzania in Africa. COEUR D'ALENE MINES CORPORATION PRODUCTION
STATISTICS Three Months Ended Twelve Months Ended December 31,
December 31, 2004 2003 2004 2003 ROCHESTER MINE Silver ozs.
1,717,646 1,424,392 5,669,074 5,585,385 Gold ozs. 24,544 11,126
69,456 52,363 Cash Costs per oz./silver $1.97 $4.82 $3.93 $4.67
Full Costs per oz./silver $3.53 $5.70 $5.66 $5.58 GALENA MINE
Silver ozs. 874,573 1,001,947 3,521,813 3,735,663 Cash Costs per
oz./silver $5.94 $4.76 $5.46 $4.66 Full Costs per oz./silver $6.55
$5.20 $6.02 $5.03 CERRO BAYO/MARTHA Silver ozs. 1,749,380 1,092,901
4,944,261 4,868,854 Gold ozs. 22,511 14,982 59,876 67,155 Cash
Costs per oz./silver $0.60 $0.52 $2.07 $0.60 Full Costs per
oz./silver $1.12 $2.19 $3.33 $2.53 CONSOLIDATED TOTALS Silver ozs.
4,341,599 3,519,240 14,135,148 14,189,902 Gold ozs. 47,055 26,108
129,332 119,518 Cash Costs per oz./silver $2.22 $3.47 $3.66 $3.27
Full Costs per oz./silver $3.17 $4.47 $4.94 $4.39 Silver ozs. sold
3,942,239 3,996,513 13,263,330 14,894,210 Gold ozs. sold 42,588
29,655 115,996 126,942 Average realized silver price/oz. (restated)
(A) $7.08 $5.12 $6.82 $4.89 Average realized gold price/oz.
(restated) (A) $427 $365 $410 $345 (A) Historically, the Company
has recorded revenue from concentrate sales agreements based on the
gold and silver prices prevailing at the time risk of loss and
title to the concentrate passes to third-party smelters (at the
lower of month-end spot price or the average monthly price for that
month). The final settlement price is not fixed until a later date
(typically one to three months after shipment) based upon quoted
metal prices by an established metal exchange as set forth in each
contract, at such date. The Company's provisionally priced sales
contain an embedded derivative that is required to be separated
from the host contract for accounting purposes. The host contract
is the receivable from the sale of concentrates measured at the
forward price at the time of sale. The embedded derivative does not
qualify for hedge accounting. The embedded derivative is recorded
as a derivative asset, in prepaid expenses and other or, a
derivative liability on the balance sheet and is adjusted to fair
value through revenue each period until the date of final gold and
silver settlement. The Company has corrected the error in valuing
these embedded derivatives on the financial statements for the
three and twelve month periods ending December 31, 2004. In
addition, the restatement resulted in an increase in the realized
price of silver of $0.06 per ounce and a decrease in the realized
price of gold of $6.00 per ounce for the fourth quarter of 2004.
For the year ended December 31, 2003, the restatement resulted in
an increase in the realized price of silver of $0.02 per ounce and
in increase in the realized price of gold of $1.00 per ounce. "Cash
Costs per Ounce" are calculated by dividing the cash costs computed
for each of the Company's mining properties for a specified period
by the amount of gold ounces or silver ounces produced by that
property during that same period. Management uses cash costs per
ounce as a key indicator of the profitability of each of its mining
properties. Gold and silver are sold and priced in the world
financial markets on a US dollar per ounce basis. By calculating
the cash costs from each of the Company's mines on the same unit
basis, management can easily determine the gross margin that each
ounce of gold and silver produced is generating. "Cash Costs" are
costs directly related to the physical activities of producing
silver and gold, and include mining, processing and other plant
costs, third-party refining and smelting costs, marketing expense,
on-site general and administrative costs, royalties, in-mine
drilling expenditures that are related to production and other
direct costs. Sales of by-product metals are deducted from the
above in computing cash costs. Cash costs exclude depreciation,
depletion and amortization, corporate general and administrative
expense, exploration, interest, and pre-feasibility costs and
accruals for mine reclamation. Cash costs calculated and presented
using the "Gold Institute Production Cost Standard" applied
consistently for all periods presented. Total cash costs per ounce
is a non-GAAP measurement and you are cautioned not to place undue
reliance on it and are urged to read all GAAP accounting
disclosures presented in the consolidated financial statements and
accompanying footnotes. In addition, see the reconciliation of
"cash costs" to production costs set forth below. Year ended
December 31, 2004 (In thousands except ounces and per ounce costs)
Cerro Bayo/ Rochester Galena Martha Total Production of Silver
(ounces) 5,669,074 3,521,813 4,944,261 14,135,148 Cash Costs per
ounce $3.93 $5.46 $2.07 $3.66 Total Cash Costs (000's) $22,287
$19,231 $10,228 $51,746 Add/Subtract: Third Party Smelting Costs
(923) (5,499) (6,250) (12,672) By-Product Credit 28,646 3,766
24,796 57,208 Deferred Stripping Adjustment (403) 523 110 (292)
Change in Inventory (13,380) 756 (3,576) (16,200) Production Costs
(GAAP) $36,227 $18,255 $25,308 $79,790 Year ended December 31, 2003
(In thousands except ounces and per ounce costs) Cerro Bayo/
Rochester Galena Martha Total Production of Silver (ounces)
5,585,385 3,735,663 4,868,854 14,189,902 Cash Costs per ounce $4.67
$4.66 $0.60 $3.27 Total Cash Costs (000's) $26,062 $17,392 $2,911
$46,365 Add/Subtract: Third Party Smelting Costs (811) (4,939)
(4,675) (10,425) By-Product Credit 18,980 2,256 24,383 45,619
Deferred Stripping Adjustment (322) -- -- (322) Change in Inventory
(5,149) (165) 1,938 (3,376) Production Costs (GAAP) $38,760 $14,544
$24,557 $77,861 Three Months Ended December 31, 2004 (In thousands
except ounces and per ounce costs) Cerro Bayo/ Rochester Galena
Martha Total Production of Silver (ounces) 1,717,646 874,573
1,749,380 4,341,599 Cash Costs per ounce $1.97 $5.94 $0.60 $2.22
Total Cash Costs $3,386 $5,192 $1,058 $9,636 Add/Subtract: Third
Party Smelting Costs (267) (1,581) (2,163) (4,011) By-Product
Credit 10,678 1,207 9,818 21,703 Deferred Stripping Adjustment
(101) 1 51 (49) Change in Inventory (1,141) 441 883 183 Production
Costs (GAAP) $12,555 $5,260 $9,647 $27,462 Three Months Ended
December 31, 2003 (In thousands except ounces and per ounce costs)
Cerro Bayo/ Rochester Galena Martha Total Production of Silver
(ounces) 1,424,392 1,001,947 1,092,901 3,519,240 Cash Costs per
ounce $4.82 $4.76 $0.52 $3.47 Total Cash Costs $6,866 $4,769 $563
$12,198 Add/Subtract: Third Party Smelting Costs (211) (1,409)
(904) (2,524) By-Product Credit 4,364 673 5,880 10,917 Deferred
Stripping Adjustment (80) -- -- (80) Change in Inventory (1,036)
(144) 2,790 1,610 Production Costs (GAAP) $9,903 $3,889 $8,329
$22,121 CONSOLIDATED BALANCE SHEETS COEUR D'ALENE MINES CORPORATION
AND SUBSIDIARIES (Unaudited) December 31, 2004 2003 ASSETS (In
Thousands) Restated CURRENT ASSETS Cash and cash equivalents
$273,079 $62,417 Short-term investments 48,993 19,265 Receivables
10,634 8,103 Ore on leach pad 15,046 17,388 Metal and other
inventory 17,639 12,535 Deferred tax assets 5,336 -- Prepaid
expenses and other 3,727 3,067 374,454 122,775 PROPERTY, PLANT AND
EQUIPMENT Property, plant and equipment 85,070 87,546 Less
accumulated depreciation (54,154) (52,868) 30,916 34,678 MINING
PROPERTIES Operational mining properties 121,344 114,018 Less
accumulated depletion (100,079) (90,245) 21,265 23,773 Mineral
interests 20,125 20,125 Non-producing and development properties
26,071 25,121 67,461 69,019 OTHER ASSETS Non-current ore on leach
pad 28,740 14,705 Restricted cash and cash equivalents 10,847 8,710
Debt issuance costs, net 5,757 87 Marketable securities 34 19
Deferred tax assets 3,730 -- Other 8,501 9,474 57,609 32,995 TOTAL
ASSETS $530,440 $259,467 CONSOLIDATED BALANCE SHEETS COEUR D'ALENE
MINES CORPORATION AND SUBSIDIARIES (Unaudited) December 31, 2004
2003 (In Thousands) Restated LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES Accounts payable $8,389 $7,772 Accrued
liabilities and other 5,192 5,218 Accrued interest payable 1,035
120 Accrued salaries and wages 6,379 5,705 Current portion of
remediation costs 1,041 1,278 Current portion of bank financing 114
2,367 22,150 22,460 LONG-TERM LIABILITIES 1 1/4% Convertible Senior
Notes due January 2024 180,000 -- 7 1/4% Convertible Subordinated
Debentures due October 2005 -- 9,563 Reclamation and mine closure
23,670 20,934 Other long-term liabilities 6,503 9,032 210,173
39,529 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common
Stock, par value $1.00 per share-authorized 500,000,000 shares,
issued 241,028,303 and 214,195,186 in 2004 and 2003 (1,059,211
shares held in treasury) 241,028 214,195 Additional paid-in capital
629,809 542,900 Accumulated deficit (557,245) (545,050) Shares held
in treasury (13,190) (13,190) Accumulated other comprehensive loss
(2,285) (1,377) 298,117 197,478 TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $530,440 $259,467 CONSOLIDATED STATEMENTS OF OPERATIONS
COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES FOR THE THREE AND
TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2003 (Unaudited) 3 Months
Ended 12 Months Ended December 31, December 31, 2004 2003 2004 2003
(In thousands except for per share data) (Restated) (Restated)
REVENUES Sales of metal $44,002 $30,277 $130,245 $108,522 Interest
and other 2,064 948 3,205 2,019 Total revenues 46,066 31,225
133,450 110,541 COSTS and Expenses Production 27,462 22,121 79,790
77,861 Depreciation and depletion 4,319 3,672 18,800 16,627
Administrative and general 4,556 4,023 14,497 12,264 Exploration
2,812 1,580 11,068 4,947 Pre-development 2,681 738 11,449 1,967
Interest 574 2,126 2,831 12,851 Write-down of mining properties and
other 377 2,222 1,983 6,393 Merger expenses 781 -- 15,675 -- Loss
on exchange and early retirement of debt -- 7,607 -- 41,564 Total
cost and expenses 43,562 44,089 156,093 174,474 NET INCOME (LOSS)
FROM CONTINUING OPERATIONS 2,504 (12,864) (22,643) (63,933) Income
tax benefit 10,448 -- 10,448 7 NET INCOME (LOSS) BEFORE CUMULATIVE
CHANGE IN ACCOUNTING PRINCIPLE 12,952 (12,864) (12,195) (63,926)
Cumulative effect of change in accounting principle -- -- --
(2,306) NET INCOME (LOSS) 12,952 (12,864) (12,195) (66,232) Other
comprehensive loss (382) (237) (908) (556) COMPREHENSIVE INCOME
(LOSS) $12,570 $(13,101) $(13,103) $(66,788) BASIC INCOME (LOSS)
PER SHARE: Net income (loss) before cumulative effect of accounting
change $0.06 $(0.06) $(0.06) $(0.38) Cumulative effect of
accounting change -- -- -- (0.01) Net income (loss) $0.06 $(0.06)
$(0.06) $(0.39) DILUTED INCOME (LOSS) PER SHARE: Net income (loss)
before cumulative effect of accounting change $0.05 $(0.06) $(0.06)
$(0.38) Cumulative effect of accounting change -- -- -- (0.01) Net
income (loss) $0.05 $(0.06) $(0.06) $(0.39) Weighted average common
shares outstanding: Basic 224,163 211,232 215,969 168,186 Diluted
248,747 211,232 215,969 168,186 CONSOLIDATED STATEMENTS OF CASH
FLOWS COEUR D'ALENE MINES CORPORATION AND SUBSIDIARIES FOR THE
THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2004 AND 2003
(Unaudited) 3 Months Ended 12 Months Ended December 31, December
31, 2004 2003 2004 2003 (In thousands) (Restated) (Restated) CASH
FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $12,952
$(12,864) $(12,195) $(66,232) Add (deduct) noncash items:
Depreciation and depletion 4,319 3,672 18,800 16,627 Deferred
income taxes (9,066) -- (9,066) -- Loss (gain) on early retirement
of debt -- 7,607 -- 41,564 Cumulative effective of change in
accounting principle -- -- -- 2,306 Interest expense on Convertible
Senior Subordinated Notes paid in Common Stock -- -- -- 8,191
Unrealized loss (gain) on embedded derivative 520 (757) 881 (411)
Amortization of restricted stock compensation 143 390 1,137 911
Amortization of debt issuance costs 76 320 408 697 Amortization of
premium and/or discount 331 447 1,527 760 Other charges 5 -- (7)
(19) (Gain) loss on sale of assets (61) -- (11) -- Gain on sale of
short-term investment -- 63 -- (40) Changes in Operating Assets and
Liabilities: Receivables (3,742) (2,490) (2,532) (2,738) Prepaid
expenses and other (107) (46) (486) (3,844) Inventories 156 1,398
(16,798) (3,226) Accounts payable and accrued liabilities (10,045)
1,668 (239) 328 CASH USED IN OPERATING ACTIVITIES (4,519) (592)
(18,581) (5,126) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of
short-term investments (3,670) (17,527) (63,619) (99,782) Proceeds
from sales of short-term investments 6,632 6,040 29,864 86,168
Proceeds from sale of assets 68 370 329 370 Capital expenditures
(4,656) (4,812) (10,514) (19,914) Other 137 (421) 153 (196) CASH
USED IN INVESTING ACTIVITIES (1,489) (16,350) (43,787) (33,354)
CASH FLOWS FROM FINANCING ACTIVITIES: Retirement of long-term debt
-- (17,264) (9,561) (39,717) Proceeds from issuance of common
stock, net of issuance costs 113,111 13,326 112,604 100,810
Proceeds from issuance of long-term debt -- -- 180,000 33,280
Payments of debt issuance costs -- -- (6,089) -- Bank Borrowings on
working capital facility -- 7,917 6,056 30,785 Payments to bank on
working capital facility -- (11,512) (8,422) (33,226) Other (80)
(33) (1,558) (128) CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES:
113,031 (7,566) 273,030 91,804 INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 107,023 (24,508) 210,662 53,324 Cash and cash
equivalents at beginning of period 166,056 86,925 62,417 9,093 Cash
and cash equivalents at end of period $273,079 $62,417 $273,079
$62,417 During the year ending December 31, 2003, holders of $12.7
million principal amount of the Series I 13 3/8% Convertible Senior
Subordinated Notes due December 31, 2003 (the "Series I 13 3/8%
Notes") voluntarily converted such notes into approximately 9.4
million shares of common stock. In addition, 0.2 million shares of
common stock were issued as payment for $0.3 million of interest
expense on the Series I 13 3/8% Notes. During the year ending
December 31, 2003 the Company exchanged $32.6 million, $27.9
million and $2.1 million principal amount of its outstanding 9%
Senior convertible Notes and 6-3/8% and 7-1/4% Convertible
Subordinated Debentures, respectively, for 40.9 million shares of
common stock and recorded a loss of approximately $33.9 million. In
addition, 5.1 million shares of common stock were issued as payment
for $8.1 million of interest expense on these Notes and Debentures.
Proven Reserves (Year-end 2004) Short Grade (ounces/ton) Ounces
(000s) Property Location Tons (000s) Silver Gold Silver Gold
Rochester Nevada, USA 21,453 0.87 0.01 18,662 195 Silver Valley
Idaho, USA 395 18.58 -- 7,346 -- Cerro Bayo Chile 336 7.53 0.13
2,533 43 Martha Argentina 15 51.90 0.07 801 1 San Bartolome Bolivia
-- -- -- -- -- Kensington Alaska, USA -- -- -- -- -- 22,200 29,342
239 Probable Reserves (Year-end 2004) Short Grade (ounces/ton)
Ounces (000s) Property Location Tons (000s) Silver Gold Silver Gold
Rochester Nevada, USA 2,545 0.81 0.01 2,069 18 Silver Valley Idaho,
USA 322 19.15 -- 6,172 -- Cerro Bayo Chile 526 6.80 0.14 3,576 73
Martha Argentina 42 74.70 0.08 3,129 4 San Bartolome Bolivia 46,176
3.29 -- 151,882 -- Kensington Alaska, USA 4,206 -- 0.25 -- 1,050
53,817 166,828 1,144 Measured Resource (Year-end 2004) Short Grade
(ounces/ton) Ounces (000s) Property Location Tons (000s) Silver
Gold Silver Gold Rochester Nevada, USA 26,205 8.81 0.01 21,216 144
Silver Valley Idaho, USA 577 11.10 -- 6,407 -- Cerro Bayo Chile 643
5.74 0.10 3,691 65 Martha Argentina 21 53.72 0.06 1,125 1 San
Bartolome Bolivia -- -- -- -- -- Kensington Alaska, USA -- -- -- --
-- 27,446 32,439 210 Indicated Resource (Year-end 2004) Short Grade
(ounces/ton) Ounces (000s) Property Location Tons (000s) Silver
Gold Silver Gold Rochester Nevada, USA 8,551 0.96 0.01 8,243 41
Silver Valley Idaho, USA 553 11.93 -- 6,603 -- Cerro Bayo Chile
1,598 3.3 0.07 5,271 111 Martha Argentina 20 38 0.05 754 1 San
Bartolome Bolivia 70 2.29 -- 160 -- Kensington Alaska, USA 617 --
0.44 -- 269 11,409 21,031 422 Inferred Resource (Year-end 2004)
Short Grade (ounces/ton) Ounces (000s) Property Location Tons
(000s) Silver Gold Silver Gold Rochester Nevada, USA 308 1.73 0.00
533 1 Silver Valley Idaho, USA 1,038 10.28 -- 10,674 -- Cerro Bayo
Chile 1,588 4.70 0.08 7,462 133 Martha Argentina 33 60.99 0.06
2,017 2 San Bartolome Bolivia 1,096 3.52 -- 3,851 -- Kensington
Alaska, USA 2,499 -- 0.23 -- 584 6,562 24,537 720 Resources are
exclusive of reserves. Proven Reserves (Year-end 2003) Short Grade
(ounces/ton) Ounces (000s) Property Location Tons (000s) Silver
Gold Silver Gold Rochester Nevada, USA 29,912 0.90 0.01 27,041 265
Silver Valley Idaho, USA 368 22.25 -- 8,193 -- Cerro Bayo Chile 293
8.12 0.15 2,376 45 Martha Argentina 10 94.03 0.10 901 1 San
Bartolome Bolivia -- -- -- -- -- Kensington Alaska, USA -- -- -- --
-- 30,583 38,510 311 Probable Reserves (Year-end 2003) Short Grade
(ounces/ton) Ounces (000s) Property Location Tons (000s) Silver
Gold Silver Gold Rochester Nevada, USA 2,651 0.96 0.01 2,555 18
Silver Valley Idaho, USA 348 20.79 -- 7,239 -- Cerro Bayo Chile 352
8.52 0.14 3,001 49 Martha Argentina 7 68.56 0.07 448 0.5 San
Bartolome Bolivia 35,274 3.48 -- 122,816 -- Kensington Alaska, USA
4,113 -- 0.24 -- 1,003 42,745 136,060 1,070 Measured Resource
(Year-end 2003) Short Grade (ounces/ton) Ounces (000s) Property
Location Tons (000s) Silver Gold Silver Gold Rochester Nevada, USA
33,238 0.76 0.01 25,216 184 Silver Valley Idaho, USA 607 10.77 --
6,539 -- Cerro Bayo Chile 170 11.00 0.17 1,867 29 Martha Argentina
1 94.61 0.05 73 0.04 San Bartolome Bolivia -- -- -- -- --
Kensington Alaska, USA -- -- -- -- -- 34,016 33,695 213 Indicated
Resource (Year-end 2003) Short Grade (ounces/ton) Ounces (000s)
Property Location Tons (000s) Silver Gold Silver Gold Rochester
Nevada, USA 6,954 0.82 0.01 5,721 38 Silver Valley Idaho, USA 576
11.65 -- 6,709 -- Cerro Bayo Chile 2,520 3.75 0.08 9,455 212 Martha
Argentina 2 99.17 0.05 208 0.1 San Bartolome Bolivia -- -- -- -- --
Kensington Alaska, USA 617 -- 0.44 -- 269 10,669 22,093 519
Inferred Resource (Year-end 2003) Short Grade (ounces/ton) Ounces
(000s) Property Location Tons (000s) Silver Gold Silver Gold
Rochester Nevada, USA 135 1.85 0.00 252 0.3 Silver Valley Idaho,
USA 1,096 10.87 -- 11,914 -- Cerro Bayo Chile 786 6.95 0.12 5,461
91 Martha Argentina 21 75.61 0.09 1,567 1.8 San Bartolome Bolivia
262 3.77 -- 990 -- Kensington Alaska, USA 2,499 -- 0.23 -- 584
4,799 20,184 677 Resources are exclusive of reserves. The Company's
fourth quarter earnings conference call and web cast will be held
on March 14, 2005 beginning at 1:00 p.m. Eastern time. To
participate: Dial-In Number: (800) 611-1148 (US and Canada) (612)
332-0228 (International) Host: Dennis E. Wheeler The conference
call will also be simultaneously carried on our web site at
http://www.coeur.com/ under Investor Relations/Presentations and
will be archived for a limited time. Investor Contact Tony Ebersole
Director of Investor Relations Telephone: (800) 523-1535 Email:
Cautionary Statement This document contains numerous
forward-looking statements within the meaning of securities
legislation in the United States and Canada relating to the
Company's silver and gold mining business. Such statements are
subject to numerous assumptions and uncertainties, many of which
are outside the Company's control. Operating, exploration and
financial data, and other statements in this document are based on
information the Company believes reasonable, but involve
significant uncertainties as to future gold and silver prices,
costs, ore grades, estimation of gold and silver reserves, mining
and processing conditions, currency exchange rates, and the
completion and/or updating of mining feasibility studies, changes
that could result from the Company's future acquisition of new
mining properties or businesses, the risks and hazards inherent in
the mining business (including environmental hazards, industrial
accidents, weather or geologically related conditions), regulatory
and permitting matters, risks inherent in the ownership and
operation of, or investment in, mining properties or businesses in
foreign countries, as well as other uncertainties and risk factors
set out in the Company's filings from time to time with the SEC and
the Ontario Securities Commission, including, without limitation,
the Company's reports on Form 10-K and Form 10-Q. Actual results
and timetables could vary significantly from the estimates
presented. Readers are cautioned not to put undue reliance on
forward-looking statements. The Company disclaims any intent or
obligation to update publicly these forward-looking statements,
whether as a result of new information, future events or otherwise.
Donald J. Birak, Coeur's Senior Vice President of Exploration is
the qualified person responsible for the preparation of the
scientific and technical information in this press release. Mr.
Birak has reviewed the available data and procedures and believes
the calculation of reserves was conducted in a professional and
competent manner. DATASOURCE: Coeur d'Alene Mines Corporation
CONTACT: Tony Ebersole, Director of Investor Relations of Coeur
d'Alene Mines Corporation, 800-523-1535, or Web site:
http://www.coeur.com/
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