Latest / Kitco MINING / Coeur Mining Shifts From Acquisitions to Cash Flow and Shareholder Returns | Mitch Krebs

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Coeur Mining Shifts From Acquisitions to Cash Flow and Shareholder Returns | Mitch Krebs · Kitco MINING

• 0:00
  SPEAKER_00: Kitco Mining on-site coverage of Mining Forum Americas is presented by Metalla Royalty and Streaming.
• 0:11
  SPEAKER_02: A growing North American precious metals and now copper producer.
• 0:14
  SPEAKER_02: Hello and welcome to Kitco Mining with me, Paul Harris, here with the 2026 Mining Forum Americas in Colorado Springs.
• 0:21
  SPEAKER_02: Joining me now is Mitch Krebs, president and CEO of Core Mining.
• 0:25
  SPEAKER_02: Mitch, welcome back to Kitco.
• 0:26
  SPEAKER_02: Thanks, Paul.
• 0:27
  SPEAKER_02: Good to see you.
• 0:28
  SPEAKER_02: Good to see you too.
• 0:29
  SPEAKER_02: Always exciting because you keep doing good transactions.
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  SPEAKER_02: You've now got 77 wholly owned operations following the closure of the new gold transaction, which added the new Afton and Rainey River assets or mines in Canada.
• 0:44
  SPEAKER_02: Let's start on a sort of broad question, Mitch.
• 0:47
  SPEAKER_02: Where is core mining within its overall growth plan today?
• 0:51
  SPEAKER_01: Sorry, ask that again.
• 0:52
  SPEAKER_02: Where is core mining in its overall growth plan today?
• 0:55
  SPEAKER_01: Yeah, well, we have added a lot in the last few years, and that started with some organic um investments in exploration, expansions, followed by the Silvercrest transaction in 2024, and as you said, then the new gold transaction.
• 1:09
  SPEAKER_01: So we've added a lot in a short amount of time.
• 1:12
  SPEAKER_01: So we're now very much in the digestion and delivery mode.
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  SPEAKER_01: You know, we need to execute on this bigger platform, generate the kind of cash flow that we're capable of, which this year should be close to$2.3 billion of EBITDA, close to a billion and a half of free cash flow.
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  SPEAKER_01: You know, it was just three years ago, our EBIT DAW was$140 million in total for the year.
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  SPEAKER_01: And our free cash flow that year was minus$300 million for all of 2023.
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  SPEAKER_01: And we ended that year with$60 million of cash in the bank.
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  SPEAKER_01: Now we're over a billion dollars of cash and growing.
• 1:47
  SPEAKER_01: So we're we're very much now into the capital allocation phase, um, reinvesting back into this expanded platform, returning capital back to shareholders, and building up a good cash buffer.
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  SPEAKER_01: So we've got a lot of uh flexibility going forward.
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  SPEAKER_02: Yeah, what's the sort of plan going forward?
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  SPEAKER_02: Because at several of these assets you still have considerable organic upside potential.
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  SPEAKER_02: How are you planning to unlock that?
• 2:10
  SPEAKER_01: Yeah, well, we have the financial flexibility.
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  SPEAKER_01: Now it's about sequencing this organic growth pipeline that we have.
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  SPEAKER_01: And you can start at Rainy River, for example.
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  SPEAKER_01: There's a lot of potential there at the on the open pit side of the equation.
• 2:24
  SPEAKER_01: Um, the mine plan currently contemplates open pit mining um fading away in like 2029.
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  SPEAKER_01: And and uh this that's a mine that has a 25,000 ton a day mill that we look to fill for as long as we can from more open pit mining well into the future.
• 2:40
  SPEAKER_01: So that's a great place to start.
• 2:42
  SPEAKER_01: There's a lot of value to unlock there over at New Afton.
• 2:45
  SPEAKER_01: You know, we're just ramping up this new C zone.
• 2:48
  SPEAKER_01: Um, and on the heels of that will be the K Zone.
• 2:52
  SPEAKER_01: We just put out more exploration results last week that shows K Zone is growing bigger and bigger.
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  SPEAKER_01: It's probably going to be bigger than the C zone.
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  SPEAKER_01: So adding that onto the mine life at New Afton is gonna extend that mine life well out into the 2040s.
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  SPEAKER_01: We have the Silver Tip project up in northern BC, which is a source of primary silver growth for us.
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  SPEAKER_01: So sequencing that out and allocating this cash flow in a way that keeps our CapEx profile smooth, our free cash flow profile smooth, and keeps building on that return on invested capital metric.
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  SPEAKER_01: Last year we had a peer leading 26% ROIC.
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  SPEAKER_01: So hopefully, as we deploy this capital, we can keep building more free cash flow per share and keep moving that ROIC higher.
• 3:36
  SPEAKER_02: I want to sort of dig into that a little bit more if I may, Mitch, because uh prior to these transactions, uh I think it would be fair to say that core mining was, you know, a middle-of-the-road performer.
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  SPEAKER_02: Uh, you bought two stunning assets, transformative transactions, Silvercrest and Newgold.
• 3:51
  SPEAKER_02: How are the company's performance and your target metrics, how are they improving having incorporated these assets?
• 3:59
  SPEAKER_01: Yeah, it's it's night and day.
• 4:01
  SPEAKER_01: Start with the balance sheet.
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  SPEAKER_01: You know, it was not that long ago that we had a very over-levered balance sheet because we were we were using it to fund a lot of this organic investment in exploration and expansions.
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  SPEAKER_01: You know, the three knocks on this company historically was bad balance sheet, high costs, short lives.
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  SPEAKER_01: And we have knocked all of those right on the head, and and we're the opposite of that on all three of those now.
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  SPEAKER_01: Our balance sheet's a source of strength.
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  SPEAKER_01: It's going to be one of the strongest in the sector as we go forward and keep generating all this cash flow.
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  SPEAKER_01: Our costs now put us at one of the lower cost companies among our peers.
• 4:38
  SPEAKER_01: And our mine lives, our resources have grown by 65% over the last five years.
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  SPEAKER_01: We've been really aggressive on the exploration side of the equation to change that narrative about short mine lives.
• 4:49
  SPEAKER_01: And that leads to all kinds of people.
• 4:50
  SPEAKER_02: I know you you had a massive team at the Precious Metal Summit last week.
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  SPEAKER_02: Oh, good.
• 4:54
  SPEAKER_02: Yeah, good.
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  SPEAKER_02: I know they were.
• 4:56
  SPEAKER_02: Yeah, yeah.
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  SPEAKER_02: Um talk about the balance sheet.
• 4:58
  SPEAKER_02: Um, you mentioned that how the balance sheet has improved considerably.
• 5:01
  SPEAKER_02: Um, your cash balance have passed a billion dollars for the first time.
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  SPEAKER_02: That's a number of companies in the space are getting to that level or more.
• 5:09
  SPEAKER_02: And so we we're starting to perhaps get to the luxury problem of having a lazy balance sheet with too much cash.
• 5:14
  SPEAKER_02: You seem to be addressing that because your board authorized a$750 million uh share buyback.
• 5:21
  SPEAKER_02: So it seems you're very intent on, in addition to the investment, the capital investment, giving excess cash back to shareholders.
• 5:27
  SPEAKER_02: Talk us through that thinking.
• 5:28
  SPEAKER_02: Yeah.
• 5:29
  SPEAKER_01: We're trying to strike the right balance between reinvesting and driving you know the business ahead and making it a better business, um, returning capital back.
• 5:38
  SPEAKER_01: Like you said, we have a$750 million buyback program.
• 5:41
  SPEAKER_01: Uh, we initiated that in May.
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  SPEAKER_01: We've done about$220 million of that so far.
• 5:47
  SPEAKER_01: And the third thing is building up a cash buffer.
• 5:50
  SPEAKER_01: I think it's okay to have a strong cash balance.
• 5:54
  SPEAKER_01: You know, uh I've been in the industry 30 years, you've been in the industry a long time.
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  SPEAKER_01: Plan for the bad times when times are good.
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  SPEAKER_01: You know, building up a good cash buffer now really puts you in a position then the next time things are um bad, you can be aggressive and you can lean in and take advantage of times like that to build an even better business.
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  SPEAKER_01: And so that's how we're setting up the company now.
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  SPEAKER_01: This is not the kind of company we ever have been in the company's almost hundred-year history.
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  SPEAKER_01: So we're trying to strike that right balance between those three priorities.
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  SPEAKER_02: And you also recently inaugurated a semi-annual dividend for the first time in what 30 years.
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  SPEAKER_02: Um, although it does seem you're prioritizing buybacks over dividend payments.
• 6:39
  SPEAKER_02: What's the thinking there?
• 6:40
  SPEAKER_01: Yeah, buybacks are flexible.
• 6:42
  SPEAKER_01: We can be opportunistic when we think the stock's underperforming.
• 6:45
  SPEAKER_01: Um, but we also wanted to eliminate any reason for somebody to not own our stock.
• 6:50
  SPEAKER_01: So putting in an initial dividend, it's not big, but it's a place to start.
• 6:55
  SPEAKER_01: It checks that box, and it's something that we can grow over time and deliver some good dividend growth, which could attract some other other shareholders.
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  SPEAKER_01: So we we're definitely prioritizing the buyback approach to returning capital just because of the flexibility that it provides.
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  SPEAKER_01: Okay.
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  SPEAKER_02: Now, in addition with the uh the uh the new gold acquisition, you got new afternoon and that obviously brought copper production to the companies, so more than 11 million pounds there.
• 7:20
  SPEAKER_02: Um, how what what's your view on copper as a genuine diversification from the typical gold-silver?
• 7:27
  SPEAKER_02: Or or do you really want to see it as a you know much smaller byproduct contribution?
• 7:32
  SPEAKER_01: Yeah, we're very mindful of our metals mix.
• 7:34
  SPEAKER_01: I think this year in 2026, gold will be about 65% of our revenue, silver will be about 30% of our revenue, and copper will be 5% of our revenue.
• 7:43
  SPEAKER_01: We always want to make sure we're maintaining good silver exposure for our investors.
• 7:48
  SPEAKER_01: That means you know anywhere between 25 and 50 percent of our revenue coming from from silver.
• 7:54
  SPEAKER_01: Um and and the copper is just an added benefit coming from from New Afton.
• 7:59
  SPEAKER_01: You know, we'd like to keep that base metals contribution to our revenue mix of you know less than 15 or 20 percent.
• 8:06
  SPEAKER_01: Um, assuming we move ahead with that silver tip project in northern British Columbia down the road.
• 8:11
  SPEAKER_01: It's a primary silver mine, but it has zinc and lead, so that could bring in some additional base metals along with that copper.
• 8:17
  SPEAKER_01: But you know, who doesn't want a little copper exposure these days?
• 8:20
  SPEAKER_01: And there's a lot of the same demand fundamentals for copper that exist for silver on the electrification themes, so it really makes makes for a nice revenue mix between the three the three metals.
• 8:30
  SPEAKER_02: It is a good compliment.
• 8:31
  SPEAKER_02: Now you have about uh almost a billion dollars on drawn on your revolving credit facility and over two billion dollars in total liquidity.
• 8:38
  SPEAKER_01: Is more strategic MA on the cards?
• 8:41
  SPEAKER_01: You know, you always have to have um opportunities on your radar screen.
• 8:45
  SPEAKER_01: We're but right now we're not looking up at the radar screen, we're looking down on execution and delivery of everything that we've now uh put together here.
• 8:54
  SPEAKER_01: 2026 is really the initial year of all of the all of these pieces being in place.
• 8:59
  SPEAKER_01: And and for Rainy River in New Afton, it's only nine months this year.
• 9:02
  SPEAKER_01: So 2027 will be much more of a steady state year.
• 9:05
  SPEAKER_01: We want to execute and deliver, and then re-weaponize hopefully that strong multiple that we've historically had as more of a known as a silver company.
• 9:14
  SPEAKER_01: And then to the extent that we can find opportunities down the road to add further high-quality assets still in North America, maintain that revenue mix between the three metals.
• 9:24
  SPEAKER_01: You know, we'll we'll look at that down the road.
• 9:26
  SPEAKER_01: But in the near term, uh no more external growth, um, at least for now.
• 9:31
  SPEAKER_02: Okay, we're running out of time, Mitchell.
• 9:33
  SPEAKER_02: So your team wants to sort of pull you away.
• 9:34
  SPEAKER_02: So let's end with what are some of the key catalysts our viewers can expect to see out of coal mining over the next 12 months?
• 9:40
  SPEAKER_01: Yeah, so 2026 is very much of a back half weighted year.
• 9:44
  SPEAKER_01: If for no other reason, Rainy River and New Afton, we only got those in the second quarter of this year.
• 9:49
  SPEAKER_01: So it's very much of a back half weighted year, and I'd say between the third quarter and fourth quarter, the fourth quarter is going to be the much bigger quarter.
• 9:56
  SPEAKER_01: So see, you know, watching our second half performance, seeing us hit that kind of lower end of our full year guidance for 2026, get into 2027 and start seeing that cash build up, see us continue to return capital back to shareholders, and then start having some steady um news on some of these organic growth levers at New Afton, at Rainy River.
• 10:17
  SPEAKER_01: We've got great stuff happening at Palmareo down in Mexico, and then see where the silver tip project goes.
• 10:22
  SPEAKER_01: We're currently doing a PFS now.
• 10:24
  SPEAKER_02: Well, it seems to be a very exciting time for core mining.
• 10:27
  SPEAKER_02: Mitch Krebs, thank you very much for joining me today.
• 10:29
  SPEAKER_02: Thanks for having me, Paul.
• 10:30
  SPEAKER_02: And we have a lot more to come from the 2026 Mining Forum Americas here in Beaver Creek.
• 10:35
  SPEAKER_02: So stay tuned and hit that subscribe button.
• 10:37
  SPEAKER_02: I'm Paul Harris, and this is Kitco Mining.
• 10:40
  SPEAKER_00: Kitco Mining on site coverage of Mining Forum Americas is presented by Metalla Royalty and streaming.