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Here’s What Drove Coeur Mining’s Free Cash Flow Year-to-Date

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FCF generation

Coeur Mining’s (CDE) management is focused on generating significant FCF (free cash flow). For 3Q17, however, the company didn’t generate any positive FCF. In 2Q17, Coeur generated negative FCF of 8.2 million. YTD (year-to-date), the company has generated FCF of $23.1 million.

Drivers for FCF

Below are the major drivers of FCF generation by CDE in 3Q17 and year-to-date:

  • CDE’s Palmarejo mine has been the major driver behind FCF generation. The mine has generated $64.9 million of FCF YTD, including $13 million in 3Q17.
  • Rochester, Nevada, on the other hand, generated negative FCF of $8.1 million in 3Q17, bringing YTD FCF to -$27.9 million. The company expects the mine to generate positive FCF in 4Q17 on the back of higher production and lower capital expenditures.
  • Kensington, Alaska, also generated negative FCF of $0.8 million, leading to a total negative FCF of $3.4 million in the first nine months of the year. The new diesel generators are expected to deliver fuel savings of $1.5 million annually, which might improve the FCF situation at this mine going forward.
  • Wharf, Dakota, generated positive FCF of $11.9 million in 3Q17, bringing the YTD total to $26.9 million. Since CDE acquired Wharf in February 2015 for $99 million, the mine has generated a cumulative FCF of $113.3 million.

FCF for peers

Coeur’s peers (SIL), including Pan American Silver (PAAS), Hecla Mining (HL), First Majestic Silver (AG), and Tahoe Resources (TAHO), are also generating positive adjusted FCF. Most of them are looking at FCF growth if the precious metals price environment keeps looking good in 2017.

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