Can you share some of Coeur Mining’s key milestones in recent years?

Over the past decade, Coeur Mining has undergone a series of changes in terms of organization and composition of assets. The company has undertaken strategic decisions to de-risk the business. First, we have expanded our gold production to help offset the volatility of the silver market. Second, we have condensed our geographical footprint. We used to operate in Latin America and have exploration offices in Tanzania, but now we operate entirely within North America with a focus on the US. We are increasingly committed to our work in Nevada, which has been part of the company since the mid 1980s and which we expect will continue to become more of a focal point in the future.

What is Coeur Mining’s exploration strategy? 

Coeur Mining has greatly accelerated its level of investment in exploration over the past five years. Within an extractive industry, every day that you mine you deplete your asset base. Unless you invest in replacing what you mine, by definition you are shrinking your business. We invest not only to replace what we mine but also to expand our resource base to drive a longer mine life. When a company has invested hundreds of millions of dollars into mining infrastructure and worked to create a good climate within the local economy, it is advantageous to build upon this base rather than start anew. We believe the best way to do so is by continuing to drill around existing infrastructure, and we allocate 85% of our exploration investment into the areas surrounding our existing operations.

What expansion efforts has Coeur Mining undertaken at Rochester?

The Rochester mine, located in northern Nevada, is in the middle of a transformational project. Originally a gold and silver mine in the mid-1980s, we are expanding the infrastructure to twice its current capacity to increase growth. By combining our commitment to exploration with larger infrastructure that enables us to capture the economies of scale, we are seeking stronger business outcomes. At Rochester, production levels of silver are expected to go from 4 million oz/y to 8 million oz/y and gold from 35,000 oz/y to 80,000 oz/y. We are investing approximately US$500 million to build a new leach pad, processing plant and crusher circuit. Once completed, we predict the mine will have a cash flow of around US$100 million per year.

How do you think investors are reacting to the current cycle in minerals prices?

There is currently a disconnect between where metals prices are and how mining company share prices are trading, and I believe there are a few explanations. First, the broader economy has seen such a bull market that investors continue to chase returns elsewhere. Second, there is a lack of conviction among investors in the sustainability of these prices. Third, there is a larger question of relevance from the perspective of investors seeking exposure to precious metals. Whereas 15 years ago, one of the most efficient ways to gain this exposure was to buy the shares of a gold or silver mining company, nowadays there are other options with different risk profiles for investors. As an industry we need to reinvent ourselves into becoming more investable, attractive businesses. For example, Coeur Mining sees exploration as a huge differentiator because your shares of an ETF or your bar of gold will not grow overnight by themselves, but we can drill holes in the ground and create new ounces through our exploration efforts to create significant value for our stockholders.

What is Coeur going to look like 10 years from now?

Coeur Mining will continue to focus on the US and Canada, with a particular emphasis on Nevada. We have the expansion plans at Rochester, but we have also consolidated and more than doubled our land position surrounding the mine to increase growth. We believe the northern part of the state will continue to be the cornerstone of our business. In the south of Nevada, we have an exploration property called Crown, that we acquired in late 2018, located within a strategic position in the heart of one of the most dynamic exploration districts in the state. I believe we will eventually have a second operation in southern Nevada in addition to Rochester.