Coeur Mining, Inc. - Quarter Report: 2017 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

___________________________________________

FORM 10-Q

___________________________________________



þ	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2017



¨	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number 001-08641

____________________________________________

COEUR MINING, INC.

(Exact name of registrant as specified in its charter)

____________________________________________



Delaware		82-0109423
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

104 S. Michigan Ave., Suite 900 Chicago, Illinois		60603
(Address of principal executive offices)		(Zip Code)

(312) 489-5800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.) Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	þ	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	¨

		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The Company has 300,000,000 shares of common stock, par value of $0.01, authorized of which 181,451,398 shares were issued and outstanding as of July 24, 2017.

COEUR MINING, INC.

INDEX



		Page
Part I.	Financial Information

	Item 1. Financial Statements

	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)	3

	Condensed Consolidated Statements of Cash Flows (Unaudited)	4

	Condensed Consolidated Balance Sheets	5

	Condensed Consolidated Statement of Changes in Stockholders’ Equity	6

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

	Consolidated Financial Results	30

	Results of Operations	34

	Liquidity and Capital Resources	38

	Non-GAAP Financial Performance Measures	41

	Item 3. Quantitative and Qualitative Disclosures about Market Risk	47

	Item 4. Controls and Procedures	48

Part II.	Other Information	48

	Item 1. Legal Proceedings	48

	Item 1A. Risk Factors	48

	Item 4. Mine Safety Disclosures	49

	Item 5. Other Information	49

	Item 6. Exhibits	51

Signatures		51

PART I

Item 1. Financial Statements

COEUR MINING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)



		Three months ended June 30,						Six months ended June 30,
		2017			2016			2017			2016
	Notes	In thousands, except share data
Revenue	3	$	173,354		$	182,007		$	379,492		$	330,394
COSTS AND EXPENSES
Costs applicable to sales⁽¹⁾	3	125,621			100,465			258,333			202,020
Amortization		32,946			37,505			73,050			65,470
General and administrative		7,042			7,400			17,175			15,676
Exploration		7,813			2,233			13,065			3,963
Write-downs		—			—			—			4,446
Pre-development, reclamation, and other		4,366			4,364			8,947			8,568
Total costs and expenses		177,788			151,967			370,570			300,143
OTHER INCOME (EXPENSE), NET
Loss on debt extinguishment	17	(9,342		)	—			(9,342		)	—
Fair value adjustments, net	10	336			(3,579		)	(864		)	(12,274		)
Interest expense, net of capitalized interest	17	(3,749		)	(10,875		)	(7,335		)	(21,995		)
Other, net	7	4,136			(1,857		)	25,275			(543		)
Total other income (expense), net		(8,619		)	(16,311		)	7,734			(34,812		)
Income (loss) before income and mining taxes		(13,053		)	13,729			16,656			(4,561		)
Income and mining tax (expense) benefit	8	2,098			768			(8,948		)	(1,338		)
NET INCOME (LOSS)		$	(10,955	)	$	14,497		$	7,708		$	(5,899	)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Unrealized gain (loss) on equity securities, net of tax of ($1,164) and ($2,174) for the three and six months June 30, 2016, respectively		(18		)	2,103			(2,200		)	3,146
Reclassification adjustments for impairment of equity securities		305			20			426			20
Reclassification adjustments for realized (gain) loss on sale of equity securities		(203		)	(314		)	1,268			273
Other comprehensive income (loss)		84			1,809			(506		)	3,439
COMPREHENSIVE INCOME (LOSS)		$	(10,871	)	$	16,306		$	7,202		$	(2,460	)

NET INCOME (LOSS) PER SHARE	9
Basic		$	(0.06	)	$	0.09		$	0.04		$	(0.04	)

Diluted		$	(0.06	)	$	0.09		$	0.04		$	(0.04	)

(1) Excludes amortization.

The accompanying notes are an integral part of these condensed consolidated financial statements.

COEUR MINING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



		Three months ended June 30,						Six months ended June 30,
		2017			2016			2017			2016
	Notes	In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)		$	(10,955	)	$	14,497		7,708			(5,899		)
Adjustments:
Amortization		32,946			37,505			73,050			65,470
Accretion		2,593			2,848			5,107			6,017
Deferred taxes		(4,844		)	(15,170		)	(3,469		)	(17,275		)
Loss on debt extinguishment		9,342			—			9,342			—
Fair value adjustments, net	10	(336		)	3,579			864			12,274
Stock-based compensation	5	2,235			2,307			5,542			5,222
Gain on sale of the Joaquin project		—			—			(21,138		)	—
Write-downs		—			—			—			4,446
Other		(3,624		)	1,930			(5,822		)	494
Changes in operating assets and liabilities:
Receivables		(1,916		)	(12,402		)	11,190			(8,921		)
Prepaid expenses and other current assets		3,612			(898		)	(687		)	381
Inventory and ore on leach pads		(997		)	(7,686		)	13,295			(15,508		)
Accounts payable and accrued liabilities		1,223			19,429			(10,432		)	5,855
CASH PROVIDED BY OPERATING ACTIVITIES		29,279			45,939			84,550			52,556
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(37,482		)	(23,288		)	(61,461		)	(45,460		)
Proceeds from the sale of assets		436			7,293			15,455			11,302
Purchase of investments		(8,948		)	(92		)	(9,964		)	(99		)
Sale of investments		898			648			10,918			1,645
Other		(61		)	(1,446		)	(1,607		)	(2,919		)
CASH USED IN INVESTING ACTIVITIES		(45,157		)	(16,885		)	(46,659		)	(35,531		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		—			73,071			—			73,071
Issuance of notes and bank borrowings	17	244,958			—			244,958			—
Payments on debt, capital leases, and associated costs	17	(188,931		)	(6,712		)	(192,157		)	(12,683		)
Gold production royalty payments		—			(10,461		)	—			(19,592		)
Other		(473		)	(448		)	(3,720		)	(728		)
CASH PROVIDED BY FINANCING ACTIVITIES		55,554			55,450			49,081			40,068
Effect of exchange rate changes on cash and cash equivalents		329			(302		)	884			(216		)
INCREASE IN CASH AND CASH EQUIVALENTS		40,005			84,202			87,856			56,877
Cash and cash equivalents at beginning of period		210,033			173,389			162,182			200,714
Cash and cash equivalents at end of period		$	250,038		$	257,591		$	250,038		$	257,591

The accompanying notes are an integral part of these condensed consolidated financial statements.

COEUR MINING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS



		June 30, 2017 (Unaudited)			December 31, 2016
ASSETS	Notes	In thousands, except share data
CURRENT ASSETS
Cash and cash equivalents		$	250,038		$	162,182
Receivables	13	69,656			60,431
Inventory	14	67,895			106,026
Ore on leach pads	14	75,699			64,167
Prepaid expenses and other		18,563			17,981
		481,851			410,787
NON-CURRENT ASSETS
Property, plant and equipment, net	15	227,738			216,796
Mining properties, net	16	550,247			558,455
Ore on leach pads	14	69,954			67,231
Restricted assets	12	19,294			17,597
Equity securities	12	11,872			4,488
Receivables	13	15,140			30,951
Other		18,552			12,604
TOTAL ASSETS		$	1,394,648		$	1,318,909
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	58,800		$	53,335
Accrued liabilities and other		41,250			42,743
Debt	17	13,014			12,039
Royalty obligations	10	—			4,995
Reclamation	4	3,599			3,522
		116,663			116,634
NON-CURRENT LIABILITIES
Debt	17	271,766			198,857
Royalty obligations	10	—			4,292
Reclamation	4	99,541			95,804
Deferred tax liabilities		75,388			74,798
Other long-term liabilities		53,779			60,037
		500,474			433,788
STOCKHOLDERS’ EQUITY
Common stock, par value $0.01 per share; authorized 300,000,000 shares, issued and outstanding 181,441,769 at June 30, 2017 and 180,933,287 at December 31, 2016		1,814			1,809
Additional paid-in capital		3,316,407			3,314,590
Accumulated other comprehensive income (loss)		(2,994		)	(2,488		)
Accumulated deficit		(2,537,716		)	(2,545,424		)
		777,511			768,487
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	1,394,648		$	1,318,909

The accompanying notes are an integral part of these condensed consolidated financial statements.

COEUR MINING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY



In thousands	Common Stock Shares	Common Stock Par Value		Additional Paid-In Capital		Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Total
Balances at December 31, 2016	180,933	$	1,809	$	3,314,590	$	(2,545,424	)	$	(2,488	)	$	768,487
Net income (loss)	—	—		—		7,708			—			7,708
Other comprehensive income (loss)	—	—		—		—			(506		)	(506		)
Common stock issued under stock-based compensation plans, net	509	5		1,817		—			—			1,822
Balances at June 30, 2017 (Unaudited)	181,442	$	1,814	$	3,316,407	$	(2,537,716	)	$	(2,994	)	$	777,511

The accompanying notes are an integral part of these condensed consolidated financial statements.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 1 - BASIS OF PRESENTATION

The interim condensed consolidated financial statements of Coeur Mining, Inc. and its subsidiaries (collectively, “Coeur” or the “Company”) are unaudited. In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. The results reported in these interim statements may not be indicative of the results which will be reported for the year ending December 31, 2017. The condensed consolidated December 31, 2016 balance sheet data was derived from audited consolidated financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the “2016 10-K”).

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recent Accounting Standards

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) - Clarifying the Definition of a Business,” which clarifies the definition of a business to assist entities in the evaluation of acquisitions and disposals of assets or businesses. These changes become effective for the Company’s fiscal year beginning January 1, 2018. The Company is currently evaluating the potential impact of implementing these changes on the Company’s consolidated financial position, results of operations, and cash flows.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash,” which will require entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. These changes become effective for the Company’s fiscal year beginning January 1, 2018. The Company is currently evaluating the potential impact of implementing these changes on the Company’s consolidated financial position, results of operations, and cash flows.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments,” which provides guidance on presentation and classification of certain cash receipts and payments in the statement of cash flows. These changes become effective for the Company’s fiscal year beginning January 1, 2018. The Company is currently evaluating this standard and does not expect this ASU to materially impact the Company’s consolidated net income, financial position or cash flows.

In March 2016, the FASB issued ASU 2016-09, “Improvements to Employee Share-Based Payment Accounting,” which amends several aspects of the accounting for share-based payment transaction, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. These changes became effective for the Company’s fiscal year beginning January 1, 2017, and the Company’s adoption had no impact on the Company’s consolidated financial position, results of operations, and cash flows.

In February 2016, the FASB issued ASU 2016-02, “Leases,” which will require lessees to recognize assets and liabilities for the rights and obligations created by most leases on the balance sheet. These changes become effective for the Company’s fiscal year beginning January 1, 2019. Modified retrospective adoption for all leases existing at, or entered into after, the date of initial application, is required with an option to use certain transition relief. The Company is currently evaluating the potential impact of implementing these changes on the Company’s consolidated financial position, results of operations, and cash flows.

In July 2015, the FASB issued ASU 2015-11, “Simplifying the Measurement of Inventory,” which provides a revised, simpler measurement for inventory to be measured at the lower of cost and net realizable value. These changes become effective for the Company’s fiscal year beginning January 1, 2018. The Company is currently evaluating the potential impact of implementing these changes on the Company’s consolidated financial position, results of operations, and cash flows.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”, which has subsequently been amended several times. The new standard provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition. These changes become effective for the Company’s fiscal year beginning January 1, 2018. The Company has substantially completed its analysis of the new standard and reviewed potential impacts from timing of when control is transferred to customers, variable consideration on concentrate sales and classification of refining fees. The Company does not expect this ASU to materially impact the Company’s consolidated net income, financial position or cash flows.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 3 – SEGMENT REPORTING

The Company’s operating segments include the Palmarejo complex, and the Rochester, Kensington, Wharf, and San Bartolomé mines. All operating segments are engaged in the discovery, mining, and production of gold and/or silver. Other includes the La Preciosa project, other mineral interests, strategic equity investments, corporate office, elimination of intersegment transactions, and other items necessary to reconcile to consolidated amounts. The Company eliminated Coeur Capital as a standalone reportable segment in the first quarter of 2017 and has classified the operating performance, segment assets, and capital expenditures of the Endeavor silver stream and other remaining non-core assets in Other. All prior period amounts have been adjusted to conform to the current presentation.

Financial information relating to the Company’s segments is as follows (in thousands):



Three months ended June 30, 2017	Palmarejo			Rochester			Kensington			Wharf			San Bartolomé			Other			Total
Revenue
Metal sales	$	53,235		$	32,791		$	35,567		$	27,013		$	23,814		$	934		$	173,354
Costs and Expenses
Costs applicable to sales⁽¹⁾	33,894			24,161			27,988			15,768			23,392			418			125,621
Amortization	14,431			4,938			8,347			2,549			2,212			469			32,946
Exploration	3,124			315			1,980			3			—			2,391			7,813
Other operating expenses	310			831			350			632			298			8,987			11,408
Other income (expense)
Loss on debt extinguishment	—			—			—			—			—			(9,342		)	(9,342		)
Fair value adjustments, net	—			336			—			—			—			—			336
Interest expense, net	(102		)	(133		)	(113		)	(17		)	(5		)	(3,379		)	(3,749		)
Other, net	(498		)	2,344			(57		)	336			92			1,919			4,136
Income and mining tax (expense) benefit	(3,229		)	44			—			(1,060		)	245			6,098			2,098
Net income (loss)	$	(2,353	)	$	5,137		$	(3,268	)	$	7,320		$	(1,756	)	$	(16,035	)	$	(10,955	)
Segment assets⁽²⁾	$	397,254		$	241,381		$	207,103		$	104,311		$	62,864		$	83,338		$	1,096,251
Capital expenditures	$	11,202		$	13,816		$	8,649		$	1,471		$	375		$	1,969		$	37,482

(1) Excludes amortization

(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests



Three months ended June 30, 2016	Palmarejo			Rochester			Kensington			Wharf			San Bartolomé			Other			Total
Revenue
Metal sales	$	48,272		$	35,761		$	36,469		$	34,005		$	25,185		$	505		$	180,197
Royalties	—			—			—			—			—			1,810			1,810
	48,272			35,761			36,469			34,005			25,185			2,315			182,007
Costs and Expenses
Costs applicable to sales⁽¹⁾	22,865			21,721			22,611			14,342			18,645			281			100,465
Amortization	14,765			5,437			9,808			5,128			1,853			514			37,505
Exploration	562			188			977			—			—			506			2,233
Write-downs	—			—			—			—			—			—			—
Other operating expenses	278			700			257			688			1,076			8,765			11,764
Other income (expense)
Loss on debt extinguishment	—			—			—			—			—			—			—
Fair value adjustments, net	(840		)	(2,687		)	—			—			—			(52		)	(3,579		)
Interest expense, net	(425		)	(181		)	(34		)	(27		)	(7		)	(10,201		)	(10,875		)
Other, net	(4,360		)	(3,860		)	1			204			411			5,747			(1,857		)
Income and mining tax (expense) benefit	3,153			8			—			(352		)	848			(2,889		)	768
Net income (loss)	$	7,330		$	995		$	2,783		$	13,672		$	4,863		$	(15,146	)	$	14,497
Segment assets⁽²⁾	$	427,938		$	207,764		$	196,403		$	113,821		$	83,814		$	84,219		$	1,113,959
Capital expenditures	$	8,863		$	3,885		$	7,536		$	1,511		$	1,317		$	176		$	23,288

(1) Excludes amortization

(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements



Six months ended June 30, 2017	Palmarejo			Rochester			Kensington			Wharf			San Bartolomé			Other			Total
Revenue
Metal sales	$	130,939		$	71,770		$	73,531		$	57,264		$	44,398		$	1,590		$	379,492
Costs and Expenses
Costs applicable to sales⁽¹⁾	76,895			50,600			56,431			32,088			41,614			705			258,333
Amortization	34,581			10,754			17,525			5,660			3,623			907			73,050
Exploration	4,755			459			2,819			3			—			5,029			13,065
Other operating expenses	611			1,641			695			1,251			1,050			20,874			26,122
Other income (expense)
Loss on debt extinguishment	—			—			—			—			—			(9,342		)	(9,342		)
Fair value adjustments, net	—			(864		)	—			—			—			—			(864		)
Interest expense, net	(227		)	(250		)	(153		)	(36		)	(12		)	(6,657		)	(7,335		)
Other, net	(127		)	2,312			(865		)	425			371			23,159			25,275
Income and mining tax (expense) benefit	(14,415		)	(454		)	—			(2,017		)	214			7,724			(8,948		)
Net income (loss)	$	(672	)	$	9,060		$	(4,957	)	$	16,634		$	(1,316	)	$	(11,041	)	$	7,708
Segment assets⁽²⁾	$	397,254		$	241,381		$	207,103		$	104,311		$	62,864		$	83,338		$	1,096,251
Capital expenditures	$	17,432		$	24,384		$	14,170		$	2,358		$	763		$	2,354		$	61,461

(1) Excludes amortization

(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests



Six months ended June 30, 2016	Palmarejo			Rochester			Kensington			Wharf			San Bartolomé			Other			Total
Revenue
Metal sales	$	78,085		$	65,743		$	72,212		$	61,934		$	46,463		$	2,396		$	326,833
Royalties	—			—			—			—			—			3,561			3,561
	78,085			65,743			72,212			61,934			46,463			5,957			330,394
Costs and Expenses
Costs applicable to sales⁽¹⁾	43,903			44,206			47,029			29,803			36,142			937			202,020
Amortization	22,054			10,750			18,157			9,179			3,607			1,723			65,470
Exploration	1,363			297			930			—			—			1,373			3,963
Write-downs	—			—			—			—			—			4,446			4,446
Other operating expenses	593			1,381			509			1,181			1,367			19,213			24,244
Other income (expense)
Loss on debt extinguishment	—			—			—			—			—			—			—
Fair value adjustments, net	(5,704		)	(4,936		)	—			—			—			(1,634		)	(12,274		)
Interest expense, net	(1,159		)	(352		)	(77		)	(27		)	(10		)	(20,370		)	(21,995		)
Other, net	(5,595		)	(3,857		)	(19		)	214			726			7,988			(543		)
Income and mining tax (expense) benefit	3,251			(415		)	—			(236		)	(723		)	(3,215		)	(1,338		)
Net income (loss)	$	965		$	(451	)	$	5,491		$	21,722		$	5,340		$	(38,966	)	$	(5,899	)
Segment assets⁽²⁾	$	427,938		$	207,764		$	196,403		$	113,821		$	83,814		$	84,219		$	1,113,959
Capital expenditures	$	17,678		$	7,174		$	15,626		$	2,921		$	1,838		$	223		$	45,460

(1) Excludes amortization

(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests



Assets	June 30, 2017		December 31, 2016
Total assets for reportable segments	$	1,096,251	$	1,122,038
Cash and cash equivalents	250,038		162,182
Other assets	48,359		34,689
Total consolidated assets	$	1,394,648	$	1,318,909

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Geographic Information



Long-Lived Assets	June 30, 2017		December 31, 2016
Mexico	$	375,536	$	397,697
United States	365,519		338,897
Bolivia	29,918		31,539
Australia	2,684		2,983
Argentina	228		10,228
Other	5,601		5,564
Total	$	779,486	$	786,908



Revenue	Three months ended June 30,				Six months ended June 30,
Revenue	2017		2016		2017		2016
United States	$	95,371	$	106,236	$	202,565	$	199,890
Mexico	53,235		48,489		130,939		79,011
Bolivia	23,814		25,185		44,398		46,463
Australia	934		504		1,590		2,395
Other	—		1,593		—		2,635
Total	$	173,354	$	182,007	$	379,492	$	330,394

NOTE 4 – RECLAMATION

Reclamation and mine closure costs are based principally on legal and regulatory requirements. Management estimates costs associated with reclamation of mining properties. On an ongoing basis, management evaluates its estimates and assumptions, and future expenditures could differ from current estimates.

Changes to the Company’s asset retirement obligations for operating sites are as follows:



	Three months ended June 30,						Six months ended June 30,
In thousands	2017			2016			2017			2016
Asset retirement obligation - Beginning	$	99,240		$	83,974		$	97,380		$	82,072
Accretion	2,397			2,009			4,735			3,968
Additions and changes in estimates	—			(130		)	—			121
Settlements	(510		)	(308		)	(988		)	(616		)
Asset retirement obligation - Ending	$	101,127		$	85,545		$	101,127		$	85,545

The Company has accrued $2.0 million and $1.9 million at June 30, 2017 and December 31, 2016, respectively, for reclamation liabilities related to former mining activities, which are included in Reclamation.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 5 – STOCK-BASED COMPENSATION

The Company has stock incentive plans for executives and eligible employees. Stock awards include performance shares, restricted stock and stock options. Stock-based compensation expense for the three and six months ended June 30, 2017 was $2.2 million and $5.5 million, respectively, compared to $2.3 million and $5.2 million for the three and six months ended June 30, 2016, respectively. At June 30, 2017, there was $8.9 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 1.6 years.

The following table summarizes the grants awarded during the six months ended June 30, 2017:



Grant date	Restricted stock	Grant date fair value of restricted stock		Stock options	Grant date fair value of stock options		Performance shares	Grant date fair value of performance shares
January 18, 2017	236,581	$	11.47	—	$	—	316,213	$	11.58
March 7, 2017	539,858	$	7.60	14,820	$	3.91	—	$	—

The following options and stock appreciation rights were exercisable during the six months ended June 30, 2017:



Award Type	Number of Exercised Units	Weighted Average Exercised Price		Number of Exercisable Units	Weighted Average Exercisable Price
Stock options	16,400	$	1.81	462,181	$	13.74
Stock appreciation rights	—	$	—	42,152	$	14.14

NOTE 6 – RETIREMENT SAVINGS PLAN

The Company has a 401(k) retirement savings plan that covers all eligible U.S. employees. Eligible employees may elect to contribute up to 75% of base salary, subject to ERISA limitations. The Company generally makes matching contributions equal to 100% of the employee’s contribution up to 4% of the employee’s salary. The Company may also provide an additional contribution based on an eligible employee’s salary. Total plan expenses recognized for the three and six months ended June 30, 2017 were $1.8 million and $3.9 million, respectively, compared to $0.9 million and $1.9 million for the three and six months ended June 30, 2016, respectively. In addition, the Company has a deferred compensation plan for employees whose benefits under the 401(k) plan are limited by federal regulations.

NOTE 7 - OTHER, NET

Other, net consists of the following:



	Three months ended June 30,						Six months ended June 30,
In thousands	2017			2016			2017			2016
Foreign exchange gain (loss)	$	1,000		$	(5,656	)	$	2,442		$	(5,819	)
Gain (loss) on sale of assets and investments	513			3,126			(1,552		)	4,211
Gain on sale of the Joaquin project	—			—			21,138			—
Gain on repurchase of the Rochester royalty obligation	2,332			—			2,332			—
Impairment of equity securities	(305		)	(20		)	(426		)	(20		)
Other	596			693			1,341			1,085
Other, net	$	4,136		$	(1,857	)	$	25,275		$	(543	)

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 8 - INCOME AND MINING TAXES

The following table summarizes the components of Income and mining tax (expense) benefit for the three and six months ended June 30, 2017 and 2016 by significant jurisdiction:



	Three months ended June 30,											Six months ended June 30,
	2017						2016					2017						2016
In thousands	Income (loss) before tax			Tax (expense) benefit			Income (loss) before tax		Tax (expense) benefit			Income (loss) before tax			Tax (expense) benefit			Income (loss) before tax			Tax (expense) benefit
United States	$	(6,493	)	$	1,588		$	119	$	(1,810	)	$	14,221		$	(377	)	$	(9,242	)	$	(2,342	)
Argentina	(129		)	945			4,453		(1,793		)	(457		)	2,070			3,438			(250		)
Mexico	(2,195		)	(4,766		)	3,353		4,316			6,455			(14,689		)	(4,155		)	4,333
Bolivia	(2,001		)	245			4,016		848			(1,530		)	214			6,062			(722		)
Other jurisdictions	(2,235		)	4,086			1,788		(793		)	(2,033		)	3,834			(664		)	(2,357		)
	$	(13,053	)	$	2,098		$	13,729	$	768		$	16,656		$	(8,948	)	$	(4,561	)	$	(1,338	)

The Company’s effective tax rate is impacted by recurring and nonrecurring items. These items include foreign exchange rates on deferred tax balances, mining taxes, uncertain tax positions, and a full valuation allowance on deferred tax assets related to losses in the United States and certain foreign jurisdictions. Changes in currency rates increased income and mining tax expense by $3.0 million and $8.6 million for the three and six months ended June 30, 2017, predominately due to the strength of the Mexican Peso. Also, favorable operating results at Palmarejo contributed to higher income and mining tax expense. The Company’s consolidated effective income and mining tax rate is a function of the combined effective tax rates and foreign exchange rates in the jurisdictions in which it operates. Variations in the jurisdictional mix of income and loss and foreign exchange rates result in significant fluctuations in our consolidated effective tax rate.

A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. The Company analyzes its deferred tax assets and, if it is determined that the Company will not realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined that the Company will ultimately be more likely than not able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of factors that impact the Company’s ability to realize its deferred tax assets. For additional information, please see the sections titled “Risk Factors” set forth in the 2016 10-K.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The statute of limitations remains open from 2012 forward for the U.S. federal jurisdiction and from 2009 forward for certain other foreign jurisdictions. As a result of statutes of limitation that will begin to expire within the next twelve months in various jurisdictions and possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will decrease between $1.5 million and $2.5 million in the next twelve months.

At June 30, 2017 and December 31, 2016, the Company had $17.4 million and $19.6 million of total gross unrecognized tax benefits, respectively. If recognized, these unrecognized tax benefits would positively impact the Company’s effective income tax rate. The Company’s continuing practice is to recognize potential interest and/or penalties related to unrecognized tax benefits as part of its income tax expense. At June 30, 2017 and December 31, 2016, the amount of accrued income-tax-related interest and penalties was $8.4 million and $8.7 million, respectively.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 9 – NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock.

For the three and six months ended June 30, 2017, 852,176 and 1,426,480 common stock equivalents, respectively, related to equity-based awards were not included in the diluted earnings per share calculation as the shares would be antidilutive. Similarly, 439,721 and 1,600,669 common stock equivalents were excluded from the diluted earnings per share calculation for the three and six months ended June 30, 2016, respectively.

The 3.25% Convertible Senior Notes (“Convertible Notes”) were not included in the computation of diluted net income (loss) per share for the three and six months ended June 30, 2016 because there is no excess value upon conversion over the principal amount of the Convertible Notes. The outstanding Convertible Notes were redeemed in the third quarter of 2016.



	Three months ended June 30,					Six months ended June 30,
In thousands except per share amounts	2017			2016		2017		2016
Net income (loss) available to common stockholders	$	(10,955	)	$	14,497	$	7,708	$	(5,899	)
Weighted average shares:
Basic	179,241			153,972		179,071		152,110
Effect of stock-based compensation plans	—			3,928		4,049		—
Diluted	179,241			157,900		183,120		152,110
Income (loss) per share:
Basic	$	(0.06	)	$	0.09	$	0.04	$	(0.04	)
Diluted	$	(0.06	)	$	0.09	$	0.04	$	(0.04	)

NOTE 10 – FAIR VALUE MEASUREMENTS



	Three months ended June 30,					Six months ended June 30,
In thousands	2017		2016			2017			2016
Rochester royalty obligation	$	336	$	(878	)	$	(864	)	$	(5,756	)
Palmarejo royalty obligation embedded derivative	—		$	(2,687	)	$	—		(4,936		)
Silver and gold options	—		(14		)	—			(1,582		)
Fair value adjustments, net	$	336	$	(3,579	)	$	(864	)	$	(12,274	)

Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1), secondary priority to quoted prices in inactive markets or observable inputs (Level 2), and the lowest priority to unobservable inputs (Level 3).

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:



	Fair Value at June 30, 2017
In thousands	Total		Level 1		Level 2		Level 3
Assets:
Equity securities	$	11,872	$	11,614	$	—	$	258
Other derivative instruments, net	4		—		4		—
	$	11,876	$	11,614	$	4	$	258
Liabilities:
Other derivative instruments, net	$	169	$	—	$	169	$	—

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements



	Fair Value at December 31, 2016
In thousands	Total		Level 1		Level 2		Level 3
Assets:
Equity securities	$	4,488	$	4,209	$	—	$	279
	$	4,488	$	4,209	$	—	$	279
Liabilities:
Rochester royalty obligation	9,287		—		—		9,287
Other derivative instruments, net	762		—		762		—
	$	10,049	$	—	$	762	$	9,287

The Company’s investments in equity securities are recorded at fair market value in the financial statements based primarily on quoted market prices. Such instruments are classified within Level 1 of the fair value hierarchy. Quoted market prices are not available for certain equity securities; these securities are valued using pricing models, which require the use of observable and unobservable inputs, and are classified within Level 3 of the fair value hierarchy.

The Company’s other derivative instruments, net, relate to concentrate and certain doré sales contracts valued using pricing models, which require inputs that are derived from observable market data, including contractual terms, forward market prices, yield curves, credit spreads, and other unobservable inputs. The model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy.

In May 2017, the Company repurchased the Rochester royalty obligation for $5.0 million in cash. The Company recorded a pre-tax gain of $2.3 million on this repurchase which is included in Other, net. The fair value of the Rochester royalty obligation was estimated based on observable market data including contractual terms, forward silver and gold prices, yield curves, and credit spreads, as well as the Company’s current mine plan which is considered a significant unobservable input. Therefore, the Company classified this obligation as a Level 3 financial liability.

No assets or liabilities were transferred between fair value levels in the six months ended June 30, 2017.

The following tables present the changes in the fair value of the Company's Level 3 financial assets and liabilities for the six months ended June 30, 2017:



	Three Months Ended June 30, 2017
In thousands	Balance at the beginning of the period		Revaluation			Settlements			Gain on settlement			Balance at the end of the period
Assets:
Equity securities	$	279	$	(21	)	$	—		$	—		$	258
Liabilities:
Rochester royalty obligation	$	9,277	$	(336	)	$	(6,609	)	(2,332		)	$	—



	Six Months Ended June 30, 2017
In thousands	Balance at the beginning of the period		Revaluation			Settlements			Gain on settlement			Balance at the end of the period
Assets:
Equity securities	$	279	$	(21	)	$	—		$	—		$	258
Liabilities:
Rochester royalty obligation	$	9,287	$	864		$	(7,819	)	(2,332		)	$	—

The fair value of financial assets and liabilities carried at book value in the financial statements at June 30, 2017 and December 31, 2016 is presented in the following table:



	June 30, 2017
In thousands	Book Value		Fair Value		Level 1		Level 2		Level 3
Liabilities:
5.875% Senior Notes due 2024⁽¹⁾	$	244,827	$	238,497	$	—	$	238,497	$	—


(1)	Net of unamortized debt issuance costs of $5.2 million.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements



	December 31, 2016
In thousands	Book Value		Fair Value		Level 1	Level 2		Level 3
Liabilities:
7.875% Senior Notes due 2021⁽¹⁾	$	175,991	$	184,373	—	$	184,373	—


(1)	Net of unamortized debt issuance costs and premium received of $2.0 million.

The fair value of the 5.875% Senior Notes due 2024 (the “2024 Senior Notes”) and the 7.875% Senior Notes due 2021 (the “2021 Senior Notes”) were estimated using quoted market prices.

NOTE 11 – DERIVATIVE FINANCIAL INSTRUMENTS

Palmarejo Gold Production Royalty

In January 2009, the Company's subsidiary, Coeur Mexicana, S.A. de C.V. (“Coeur Mexicana”), entered into a gold production royalty agreement with a subsidiary of Franco-Nevada Corporation that covered 50% of the life of mine production from the Palmarejo mine and legacy adjacent properties. The royalty transaction included a minimum obligation of 4,167 gold ounces per month and terminated upon delivery of 400,000 gold ounces, which occurred in July 2016.

The price volatility associated with the minimum royalty obligation was considered an embedded derivative. The Company was required to recognize the change in fair value of the remaining minimum obligation due to changing gold prices. For the three and six months ended June 30, 2016, the mark-to-market adjustment associated with the change were losses of $0.9 million and $5.8 million, respectively. Payments on the royalty obligation decreased the carrying amount of the minimum obligation and the derivative liability. For the three and six months ended June 30, 2016, realized losses on settlement of the liabilities were $4.3 million and $7.3 million, respectively. The mark-to-market adjustments and realized losses are included in Fair value adjustments, net.

Provisional Silver and Gold Sales

The Company enters into sales contracts with third-party smelters and refiners which, in some cases, provide for a provisional payment based upon preliminary assays and quoted metal prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable recorded at the forward price at the time of sale. The embedded derivatives do not qualify for hedge accounting and are marked to market through earnings each period until final settlement. Changes in silver and gold prices resulted in provisional pricing mark-to-market losses of $0.8 million and gains of $0.6 million in the three and six months ended June 30, 2016, respectively, compared to gains of $0.6 million and $1.2 million in the three and six months ended June 30, 2016, respectively.

At June 30, 2017, the Company had the following provisionally priced sales that settle as follows:



In thousands except average prices and notional ounces	2017		Thereafter

Provisional silver sales contracts	$	1,994	$	—
Average silver price	$	16.85	$	—
Notional ounces	118,361		—

Provisional gold sales contracts	$	41,176	$	—
Average gold price	$	1,263	$	—
Notional ounces	32,602		—

Silver and Gold Options

During three and six months ended June 30, 2016, the Company had realized losses of $0.1 million and $1.6 million, from settled option contracts. At June 30, 2017, the Company had no outstanding gold and silver options contracts.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

The following summarizes the classification of the fair value of the derivative instruments:



	June 30, 2017
In thousands	Prepaid expenses and other		Accrued liabilities and other		Current portion of royalty obligation		Non-current portion of royalty obligation
Provisional silver and gold sales contracts	$	4	$	169	$	—	$	—



	December 31, 2016
In thousands	Prepaid expenses and other	Accrued liabilities and other	Current portion of royalty obligation	Non-current portion of royalty obligation
Provisional silver and gold sales contracts	—	762	—	—

The following represent mark-to-market gains (losses) on derivative instruments for the three and six months ended June 30, 2017 and 2016 (in thousands):



		Three months ended June 30,						Six months ended June 30,
Financial statement line	Derivative	2017			2016			2017			2016
Revenue	Provisional silver and gold sales contracts	$	(775	)	$	597		$	597		$	1,163
Fair value adjustments, net	Palmarejo gold production royalty	336			(878		)	(864		)	(5,756		)
Fair value adjustments, net	Silver and gold options	—			(14		)	—			(1,582		)
		$	(439	)	$	(295	)	$	(267	)	$	(6,175	)

Credit Risk

The credit risk exposure related to any derivative instrument is limited to the unrealized gains, if any, on outstanding contracts based on current market prices. To reduce counter-party credit exposure, the Company enters into contracts with institutions management deems credit-worthy and limits credit exposure to each institution. The Company does not anticipate non-performance by any of its counterparties.

NOTE 12 – INVESTMENTS

Equity Securities

The Company makes strategic investments in equity securities of silver and gold exploration and development companies. These investments are classified as available-for-sale and are measured at fair value in the financial statements with unrealized gains and losses recorded in Other comprehensive income (loss).



	At June 30, 2017
In thousands	Cost		Gross Unrealized Losses			Gross Unrealized Gains		Estimated Fair Value
Almaden Minerals, Ltd.	$	3,125	$	—		$	461	$	3,586
Northern Empire Resources Corp.	2,999		—			41		3,040
Rockhaven Resources, Ltd.	2,064		(197		)	—		1,867
Kootenay Silver, Inc.	1,291		—			—		1,291
Other	1,518		(45		)	615		2,088
Equity securities	$	10,997	$	(242	)	$	1,117	$	11,872



	At December 31, 2016
In thousands	Cost		Gross Unrealized Losses		Gross Unrealized Gains		Estimated Fair Value
Kootenay Silver, Inc.	$	2,645	$	—	$	—	$	2,645
Silver Bull Resources, Inc.	233		—		783		1,016
Other	229		—		598		827
Equity securities	$	3,107	$	—	$	1,381	$	4,488

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

The Company performs a quarterly assessment on each of its equity securities with unrealized losses to determine if the security is other than temporarily impaired. The Company recorded pre-tax other-than-temporary impairment losses of $0.3 million and $0.4 million in the three and six months ended June 30, 2017, respectively, in Other, net. No impairment losses were recorded in the three and six months ended June 30, 2016, in Other, net. The following table summarizes unrealized losses on equity securities for which other-than-temporary impairments have not been recognized and the fair values of those securities, aggregated by the length of time the individual securities have been in a continuous unrealized loss position, at June 30, 2017:



	Less than twelve months					Twelve months or more				Total
In thousands	Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value
Equity securities	$	(242	)	$	2,083	$	—	$	—	$	(242	)	$	2,083

Restricted Assets

The Company, under the terms of its self-insurance and bonding agreements with certain banks, lending institutions and regulatory agencies, is required to collateralize certain portions of its asset retirement obligations. The Company has collateralized these obligations by assigning certificates of deposit that have maturity dates ranging from three months to a year to the applicable institutions or agencies. At June 30, 2017 and December 31, 2016, the Company held certificates of deposit and cash under these agreements of $19.3 million and $17.6 million, respectively. The ultimate timing of the release of the collateralized amounts is dependent on the timing and closure of each mine and repayment of the obligation. In order to release the collateral, the Company must seek approval from certain government agencies responsible for monitoring the mine closure status. Collateral could also be released to the extent the Company is able to secure alternative financial assurance satisfactory to the regulatory agencies. The Company believes the collateral will remain in place beyond a twelve-month period and has therefore classified these investments as long-term.

NOTE 13 – RECEIVABLES

Receivables consist of the following:



In thousands	June 30, 2017		December 31, 2016
Current receivables:
Trade receivables	$	13,291	$	10,669
Income tax receivable	5,957		1,038
Value added tax receivable	49,135		46,083
Other	1,273		2,641
	$	69,656	$	60,431
Non-current receivables:
Value added tax receivable	$	15,140	$	19,293
Income tax receivable	—		11,658
	15,140		30,951
Total receivables	$	84,796	$	91,382

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 14 – INVENTORY AND ORE ON LEACH PADS

Inventory consists of the following:



In thousands	June 30, 2017		December 31, 2016
Inventory:
Concentrate	$	10,746	$	17,994
Precious metals	18,957		47,228
Supplies	38,192		40,804
	$	67,895	$	106,026
Ore on leach pads:
Current	$	75,699	$	64,167
Non-current	69,954		67,231
	$	145,653	$	131,398
Total inventory and ore on leach pads	$	213,548	$	237,424

NOTE 15 – PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:



In thousands	June 30, 2017			December 31, 2016
Land	$	9,417		$	7,878
Facilities and equipment	655,366			650,480
Assets under capital leases	64,221			54,968
	729,004			713,326
Accumulated amortization ⁽¹⁾	(538,260		)	(524,806		)
	190,744			188,520
Construction in progress	36,994			28,276
Property, plant and equipment, net	$	227,738		$	216,796

(1) Includes $19.6 million of accumulated amortization related to assets under capital leases.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 16 – MINING PROPERTIES

Mining properties consist of the following (in thousands):



June 30, 2017	Palmarejo			Rochester			Kensington			Wharf				San Bartolomé			La Preciosa		Other			Total
Mine development	$	185,416		$	181,199		$	286,801		$	37,818			$	39,423		$	—	$	—		$	730,657
Accumulated amortization	(139,170		)	(141,026		)	(165,193		)	(13,476		)		(33,094		)	—		—			(491,959		)
	46,246			40,173			121,608			24,342				6,329			—		—			238,698
Mineral interests	629,303			—			—			45,837				12,868			49,085		41,272			778,365
Accumulated amortization	(404,134		)	—			—			(21,176		)	—	(11,839		)	—		(29,667		)	(466,816		)
	225,169			—			—			24,661				1,029			49,085		11,605			311,549
Mining properties, net	$	271,415		$	40,173		$	121,608		$	49,003			$	7,358		$	49,085	$	11,605		$	550,247



December 31, 2016	Palmarejo			Rochester			Kensington			Wharf			San Bartolomé			La Preciosa		Joaquin		Other			Total
Mine development	$	174,890		$	165,230		$	271,175		$	37,485		$	39,184		$	—	$	—	$	—		$	687,964
Accumulated amortization	(134,995		)	(138,244		)	(154,744		)	(11,699		)	(32,192		)	—				—			(471,874		)
	39,895			26,986			116,431			25,786			6,992			—		—		—			216,090
Mineral interests	629,303			—			—			45,837			12,868			49,085		10,000		37,272			784,365
Accumulated amortization	(381,686		)	—			—			(19,249		)	(11,695		)	—		—		(29,370		)	(442,000		)
	247,617			—			—			26,588			1,173			49,085		10,000		7,902			342,365
Mining properties, net	$	287,512		$	26,986		$	116,431		$	52,374		$	8,165		$	49,085	$	10,000	$	7,902		$	558,455

In February 2017, the Company sold the Joaquin silver-gold exploration project for consideration of $27.4 million and a 2.0% NSR royalty on the Joaquin project, which is included in Other. The Company recognized a $21.1 million pre-tax gain on this sale, included in Other, net on the Consolidated Statements of Comprehensive Income.

In June 2017, the Company entered into a Share and Asset Purchase Agreement with Metalla Royalty & Streaming Ltd. to sell the Endeavor silver stream and our remaining portfolio of royalties for total consideration of $13.0 million. The transaction is expected to close in the third quarter of 2017, subject to customary closing conditions. Current and prior period amounts are included in Other.

NOTE 17 – DEBT



	June 30, 2017				December 31, 2016
In thousands	Current		Non-Current		Current		Non-Current
2024 Senior Notes, net⁽¹⁾	$	—	$	244,827	$	—	$	—
2021 Senior Notes, net⁽²⁾	—		—		—		175,991
Capital lease obligations	13,014		26,939		12,039		22,866
	$	13,014	$	271,766	$	12,039	$	198,857

⁽¹⁾Net of unamortized debt issuance costs $5.2 million at June 30, 2017.

⁽²⁾Net of unamortized debt issuance costs and premium received of $2.0 million at December 31, 2016.

5.875% Senior Notes due 2024

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem some or all of the 2024 Senior Notes on or after June 1, 2020, at redemption prices set forth in the Indenture, together with accrued and unpaid interest. At any time prior to June 1, 2020, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2024 Senior Notes, including any permitted additional 2024 Senior Notes, at a redemption price equal to 105.875% of the principal amount. The Indenture contains covenants that, among other things, limit the Company’s ability under certain circumstances to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem capital stock, prepay, redeem or repurchase certain debt, make loans and investments, create liens, sell, transfer or otherwise dispose of assets, enter into transactions with affiliates, enter into agreements restricting the Company's subsidiaries' ability to pay dividends and impose conditions on the Company’s ability to engage in mergers, consolidations and sales of all or substantially all of its assets. The Indenture also contains certain “Events of Default” (as defined in the Indenture) customary for indentures of this type. If an Event of Default has occurred and is continuing, the Trustee or the holders of not less than 25% in aggregate principal amount of the 2024 Senior Notes then outstanding may, and the Trustee at the request of the holders of not less than 25% in aggregate principal amount of the 2024 Senior Notes then outstanding shall, declare all unpaid principal of, premium, if any, and accrued interest on all the 2024 Senior Notes to be due and payable.

In connection with the sale of the 2024 Senior Notes, the Company entered into a Registration Rights Agreement, dated as of May 31, 2017 (the “Registration Rights Agreement”), with the Guarantors and the initial purchaser of the 2024 Senior Notes. Under the Registration Rights Agreement, the Company and the Guarantors have agreed, to (i) file a registration statement (the “Exchange Offer Registration Statement”) with the United States Securities and Exchange Commission (the “SEC”) with respect to a registered offer (the “Exchange Offer”) to exchange the 2024 Senior Notes for new notes of the Company having terms substantially identical in all material respects to the 2024 Senior Notes (the “Exchange Notes”), (ii) to use their commercially reasonable efforts to cause the Exchange Offer to be completed on or prior to November 27, 2017 and (iii) to commence the Exchange Offer and use their commercially reasonable efforts to issue on or prior to 35 business days, or longer, if required by applicable securities laws, after the date on which the Exchange Offer Registration Statement was declared effective by the SEC, the Exchange Notes in exchange for all 2024 Senior Notes tendered prior thereto in the Exchange Offer.

7.875% Senior Notes due 2021

Concurrent with the offering of the 2024 Senior Notes, the Company commenced a cash tender offer (the “Tender Offer”) to purchase the outstanding $178.0 million in aggregate principal amount of its 2021 Senior Notes. The Tender Offer was made on the terms and subject to the conditions set forth in the Offer to Purchase dated May 19, 2017. The Tender Offer expired at 5:00 p.m., New York City time, on May 25, 2017 (the “Expiration Time”). Holders of the 2021 Senior Notes who tendered (and did not validly withdraw) their notes at or prior to the Expiration Time were entitled to receive in cash $1,043.88 per $1,000 principal amount of 2021 Senior Notes validly tendered (and not validly withdrawn) and accepted for purchase by the Company in the Tender Offer, plus accrued and unpaid interest on such 2021 Senior Notes. $118.1 million aggregate principal amount of the 2021 Senior Notes were validly tendered and purchased by the Company on May 31, 2017. In accordance with the terms of the indenture governing the 2021 Senior Notes, the remaining $59.9 million aggregate principal amount of the Notes were redeemed on June 30, 2017 at the redemption price specified in the indenture governing the 2021 Senior Notes ($1,039.38 per $1,000 principal amount redeemed, plus accrued and unpaid interest). The Company recorded a loss of $9.3 million as a result of the extinguishment of the 2021 Senior Notes.

Lines of Credit

At June 30, 2017, the Company’s subsidiary that holds the San Bartolomé mine had an available line of credit for $12.0 million that matures in June 30, 2018, bearing interest at 6.0% per annum, which is secured by machinery and equipment. There was no outstanding balance at June 30, 2017.

Capital Lease Obligations

From time to time, the Company acquires mining equipment under capital lease agreements. In the six months ended June 30, 2017, the Company entered into new lease financing arrangements primarily for diesel generators at Kensington and mining equipment at Rochester. All capital lease obligations are recorded, upon lease inception, at the present value of future minimum lease payments.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Interest Expense



	Three months ended June 30,						Six months ended June 30,
In thousands	2017			2016			2017			2016
2024 Senior Notes	$	1,265		$	—		$	1,265		$	—
2021 Senior Notes	2,717			7,457			6,221			14,913
Term Loan due 2020	—			2,258			—			4,521
Capital lease obligations	383			416			689			680
Accretion of Palmarejo gold production royalty obligation	—			397			—			1,162
Amortization of debt issuance costs	172			631			338			1,262
Accretion of debt premium	(28		)	(91		)	(71		)	(182		)
Other debt obligations	14			21			30			56
Capitalized interest	(774		)	(214		)	(1,137		)	(417		)
Total interest expense, net of capitalized interest	$	3,749		$	10,875		$	7,335		$	21,995

NOTE 18 - SUPPLEMENTAL GUARANTOR INFORMATION

The following Consolidating Financial Statements are presented to satisfy disclosure requirements of Rule 3-10 of Regulation S-X resulting from the guarantees by Coeur Alaska, Inc., Coeur Explorations, Inc., Coeur Rochester, Inc., Coeur South America Corp., Wharf Resources (U.S.A.), Inc. and its subsidiaries, and Coeur Capital, Inc. (collectively, the “Subsidiary Guarantors”) of the 2024 Senior Notes. The following schedules present Consolidating Financial Statements of (a) Coeur, the parent company; (b) the Subsidiary Guarantors; and (c) certain wholly-owned domestic and foreign subsidiaries of the Company (collectively, the “Non-Guarantor Subsidiaries”). Each of the Subsidiary Guarantors is 100% owned by Coeur and the guarantees are full and unconditional and joint and several obligations. There are no restrictions on the ability of Coeur to obtain funds from the Subsidiary Guarantors by dividend or loan.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED JUNE 30, 2017



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	95,371		$	77,983		$	—		$	173,354
COSTS AND EXPENSES
Costs applicable to sales⁽¹⁾	—			67,916			57,705			—			125,621
Amortization	298			15,835			16,813			—			32,946
General and administrative	6,960			(4		)	86			—			7,042
Exploration	395			3,217			4,201			—			7,813
Pre-development, reclamation, and other	598			1,890			1,878			—			4,366
Total costs and expenses	8,251			88,854			80,683			—			177,788
OTHER INCOME (EXPENSE), NET
Loss on debt extinguishments	(9,342		)	—			—			—			(9,342		)
Fair value adjustments, net	—			336			—			—			336
Other, net	2,000			2,477			1,071			(1,412		)	4,136
Interest expense, net of capitalized interest	(3,377		)	(264		)	(1,520		)	1,412			(3,749		)
Total other income (expense), net	(10,719		)	2,549			(449		)	—			(8,619		)
Loss before income and mining taxes	(18,970		)	9,066			(3,149		)	—			(13,053		)
Income and mining tax (expense) benefit	3,395			(938		)	(359		)	—			2,098
Total loss after income and mining taxes	(15,575		)	8,128			(3,508		)	—			(10,955		)
Equity income (loss) in consolidated subsidiaries	4,620			1,139			(238		)	(5,521		)	—
NET INCOME (LOSS)	$	(10,955	)	$	9,267		$	(3,746	)	$	(5,521	)	$	(10,955	)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Unrealized gain (loss) on marketable securities, net of tax	(18		)	(469		)	—			469			(18		)
Reclassification adjustments for impairment of equity securities, net of tax	305			305			—			(305		)	305
Reclassification adjustments for realized gain (loss) on sale of equity securities, net of tax	(203		)	(203		)	—			203			(203		)
Other comprehensive income (loss)	84			(367		)	—			367			84
COMPREHENSIVE INCOME (LOSS)	$	(10,871	)	$	8,900		$	(3,746	)	$	(5,154	)	$	(10,871	)

(1) Excludes amortization.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

THREE MONTHS ENDED JUNE 30, 2016



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	106,207		$	75,800		$	—		$	182,007
COSTS AND EXPENSES
Costs applicable to sales⁽¹⁾	—			58,674			41,791			—			100,465
Amortization	413			20,374			16,718			—			37,505
General and administrative	7,096			203			101			—			7,400
Exploration	479			1,249			505			—			2,233
Write-downs	—			—			—			—			—
Pre-development, reclamation, and other	934			1,446			1,984			—			4,364
Total costs and expenses	8,922			81,946			61,099			—			151,967
OTHER INCOME (EXPENSE), NET
Fair value adjustments, net	(53		)	(2,686		)	(840		)	—			(3,579		)
Other, net	1,341			(2,193		)	143			(1,148		)	(1,857		)
Interest expense, net of capitalized interest	(10,241		)	(243		)	(1,539		)	1,148			(10,875		)
Total other income (expense), net	(8,953		)	(5,122		)	(2,236		)	—			(16,311		)
Income (Loss) before income and mining taxes	(17,875		)	19,139			12,465			—			13,729
Income and mining tax (expense) benefit	(248		)	(1,595		)	2,611			—			768
Income (Loss) after income and mining taxes	(18,123		)	17,544			15,076			—			14,497
Equity income (loss) in consolidated subsidiaries	32,620			(674		)	—			(31,946		)	—
NET INCOME (LOSS)	$	14,497		$	16,870		$	15,076		$	(31,946	)	$	14,497
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Unrealized gain (loss) on equity securities, net of tax	2,103			2,103			—			(2,103		)	2,103
Reclassification adjustments for impairment of equity securities, net of tax	20			20			—			(20		)	20
Reclassification adjustments for realized loss on sale of equity securities, net of tax	(314		)	(314		)	—			314			(314		)
Other comprehensive income (loss)	1,809			1,809			—			(1,809		)	1,809
COMPREHENSIVE INCOME (LOSS)	$	16,306		$	18,679		$	15,076		$	(33,755	)	$	16,306

(1) Excludes amortization.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED JUNE 30, 2017



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash provided by (used in) operating activities	$	(5,005	)	$	14,844		$	24,961		$	(5,521	)	29,279

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(989		)	(23,937		)	(12,556		)	—			(37,482		)
Proceeds from the sale of long-lived assets	1			443			(8		)	—			436
Purchase of investments	(8,948		)	—			—			—			(8,948		)
Sales and maturities of investments	—			898			—			—			898
Other	—			—			(61		)	—			(61		)
Investments in consolidated subsidiaries	(550		)	823			240			(513		)	—
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(10,486		)	(21,773		)	(12,385		)	(513		)	(45,157		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of notes and bank borrowings	244,958			—			—			—			244,958
Payments on debt, capital leases, and associated costs	(185,538		)	(2,021		)	(1,372		)	—			(188,931		)
Net intercompany financing activity	(6,680		)	10,886			(10,240		)	6,034			—
Other	(473		)	—			—			—			(473		)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	52,267			8,865			(11,612		)	6,034			55,554
Effect of exchange rate changes on cash and cash equivalents	—			—			329			—			329
NET CHANGE IN CASH AND CASH EQUIVALENTS	36,776			1,936			1,293			—			40,005
Cash and cash equivalents at beginning of period	67,102			45,976			96,955			—			210,033
Cash and cash equivalents at end of period	$	103,878		$	47,912		$	98,248		$	—		$	250,038

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED JUNE 30, 2016



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash provided by (used in) operating activities	$	25,384		$	31,117		$	21,384		$	(31,946	)	45,939

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(88		)	(12,932		)	(10,268		)	—			(23,288		)
Proceeds from the sale of long-lived assets	—			41			7,252			—			7,293
Purchase of investments	(92		)	—			—			—			(92		)
Sales and maturities of investments	—			648			—			—			648
Other	(1,601		)	196			(41		)	—			(1,446		)
Investments in consolidated subsidiaries	(24,352		)	15,981			—			8,371			—
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(26,133		)	3,934			(3,057		)	8,371			(16,885		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock	73,071			—			—			—			73,071
Payments on debt, capital leases, and associated costs	(250		)	(5,673		)	(789		)	—			(6,712		)
Gold production royalty payments	—			—			(10,461		)	—			(10,461		)
Net intercompany financing activity	(5,222		)	(5,720		)	(12,633		)	23,575			—
Other	(448		)	—			—			—			(448		)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	67,151			(11,393		)	(23,883		)	23,575			55,450
Effect of exchange rate changes on cash and cash equivalents	—			1			(303		)	—			(302		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	66,402			23,659			(5,859		)	—			84,202
Cash and cash equivalents at beginning of period	61,401			29,889			82,099			—			173,389
Cash and cash equivalents at end of period	$	127,803		$	53,548		$	76,240		$	—		$	257,591

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

SIX MONTHS ENDED JUNE 30, 2017



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	202,565		$	176,927		$	—		$	379,492
COSTS AND EXPENSES
Costs applicable to sales⁽¹⁾	—			139,118			119,215			—			258,333
Amortization	622			33,939			38,489			—			73,050
General and administrative	17,066			20			89			—			17,175
Exploration	731			4,944			7,390			—			13,065
Pre-development, reclamation, and other	773			3,671			4,503			—			8,947
Total costs and expenses	19,192			181,692			169,686			—			370,570
OTHER INCOME (EXPENSE), NET
Loss on debt extinguishments	(9,342		)	—			—			—			(9,342		)
Fair value adjustments, net	—			(864		)	—			—			(864		)
Other, net	17,222			7,935			2,944			(2,826		)	25,275
Interest expense, net of capitalized interest	(6,656		)	(439		)	(3,066		)	2,826			(7,335		)
Total other income (expense), net	1,224			6,632			(122		)	—			7,734
Loss before income and mining taxes	(17,968		)	27,505			7,119			—			16,656
Income and mining tax (expense) benefit	4,983			(3,372		)	(10,559		)	—			(8,948		)
Total loss after income and mining taxes	(12,985		)	24,133			(3,440		)	—			7,708
Equity income (loss) in consolidated subsidiaries	20,693			1,209			(305		)	(21,597		)	—
NET INCOME (LOSS)	$	7,708		$	25,342		$	(3,745	)	$	(21,597	)	$	7,708
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Unrealized gain (loss) on marketable securities, net of tax	(2,200		)	(748		)	—			748			(2,200		)
Reclassification adjustments for impairment of equity securities, net of tax	426			426			—			(426		)	426
Reclassification adjustments for realized gain (loss) on sale of equity securities, net of tax	1,268			(572		)	—			572			1,268
Other comprehensive income (loss)	(506		)	(894		)	—			894			(506		)
COMPREHENSIVE INCOME (LOSS)	$	7,202		$	24,448		$	(3,745	)	$	(20,703	)	$	7,202

(1) Excludes amortization.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)

SIX MONTHS ENDED JUNE 30, 2016



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	200,161		$	130,233		$	—		$	330,394
COSTS AND EXPENSES
Costs applicable to sales⁽¹⁾	—			121,038			80,982			—			202,020
Amortization	836			38,233			26,401			—			65,470
General and administrative	15,176			221			279			—			15,676
Exploration	1,102			1,433			1,428			—			3,963
Write-downs	—			—			4,446			—			4,446
Pre-development, reclamation, and other	1,386			2,862			4,320			—			8,568
Total costs and expenses	18,500			163,787			117,856			—			300,143
OTHER INCOME (EXPENSE), NET
Fair value adjustments, net	(1,635		)	(4,935		)	(5,704		)	—			(12,274		)
Other, net	1,679			61			(110		)	(2,173		)	(543		)
Interest expense, net of capitalized interest	(20,496		)	(456		)	(3,216		)	2,173			(21,995		)
Total other income (expense), net	(20,452		)	(5,330		)	(9,030		)	—			(34,812		)
Income (Loss) before income and mining taxes	(38,952		)	31,044			3,347			—			(4,561		)
Income and mining tax (expense) benefit	(457		)	(1,902		)	1,021			—			(1,338		)
Income (Loss) after income and mining taxes	(39,409		)	29,142			4,368			—			(5,899		)
Equity income (loss) in consolidated subsidiaries	33,510			(5,153		)	—			(28,357		)	—
NET INCOME (LOSS)	$	(5,899	)	$	23,989		$	4,368		$	(28,357	)	$	(5,899	)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Unrealized gain (loss) on equity securities, net of tax	3,146			3,079			—			(3,079		)	3,146
Reclassification adjustments for impairment of equity securities, net of tax	20			20			—			(20		)	20
Reclassification adjustments for realized loss on sale of equity securities, net of tax	273			(695		)	—			695			273
Other comprehensive income (loss)	3,439			2,404			—			(2,404		)	3,439
COMPREHENSIVE INCOME (LOSS)	$	(2,460	)	$	26,393		$	4,368		$	(30,761	)	$	(2,460	)

(1) Excludes amortization.

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2017



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries				Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash provided by (used in) operating activities	$	(9,820	)	$	32,027		52,577	$	83,940		$	(21,597	)	84,550

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(1,308		)	(40,912		)	52,577	(19,241		)	—			(61,461		)
Proceeds from the sale of long-lived assets	8,917			6,594			52,577	(56		)	—			15,455
Purchase of investments	(9,964		)	—			52,577	—			—			(9,964		)
Sales and maturities of investments	9,157			1,761			52,577	—			—			10,918
Other	(1,486		)	—			52,577	(121		)	—			(1,607		)
Investments in consolidated subsidiaries	(13,004		)	753			52,577	307			11,944			—
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(7,688		)	(31,804		)		(19,111		)	11,944			(46,659		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of notes and bank borrowings	244,958			—			52,577	—			—			244,958
Payments on debt, capital leases, and associated costs	(185,538		)	(3,895		)	52,577	(2,724		)	—			(192,157		)
Net intercompany financing activity	7,638			1,561			52,577	(18,852		)	9,653			—
Other	(3,720		)	—			52,577	—			—			(3,720		)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	63,338			(2,334		)		(21,576		)	9,653			49,081
Effect of exchange rate changes on cash and cash equivalents	—			—				884			—			884
NET CHANGE IN CASH AND CASH EQUIVALENTS	45,830			(2,111		)		44,137			—			87,856
Cash and cash equivalents at beginning of period	58,048			50,023				54,111			—			162,182
Cash and cash equivalents at end of period	$	103,878		$	47,912			$	98,248		$	—		$	250,038

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2016



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash provided by (used in) operating activities	$	(3,258	)	$	52,577		$	31,594		$	(28,357	)	52,556

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(134		)	(25,722		)	(19,604		)	—			(45,460		)
Proceeds from the sale of long-lived assets	—			4,041			7,261			—			11,302
Purchase of investments	(99		)	—			—			—			(99		)
Sales and maturities of investments	500			1,145			—			—			1,645
Other	(3,139		)	302			(82		)	—			(2,919		)
Investments in consolidated subsidiaries	(20,932		)	24,160			—			(3,228		)	—
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES	(23,804		)	3,926			(12,425		)	(3,228		)	(35,531		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock	73,071			—			—			—			73,071
Payments on debt, capital leases, and associated costs	(500		)	(6,503		)	(5,680		)	—			(12,683		)
Gold production royalty payments	—			—			(19,592		)	—			(19,592		)
Net intercompany financing activity	(13,101		)	(30,685		)	12,201			31,585			—
Other	(728		)	—			—			—			(728		)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	58,742			(37,188		)	(13,071		)	31,585			40,068
Effect of exchange rate changes on cash and cash equivalents	—			5			(221		)	—			(216		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	31,680			19,320			5,877			—			56,877
Cash and cash equivalents at beginning of period	96,123			34,228			70,363			—			200,714
Cash and cash equivalents at end of period	$	127,803		$	53,548		$	76,240		$	—		$	257,591

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATING BALANCE SHEET

JUNE 30, 2017



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	103,878		$	47,912		$	98,248		$	—		$	250,038
Receivables	54			13,527			56,075			—			69,656
Ore on leach pads	—			75,699			—			—			75,699
Inventory	—			35,099			32,796			—			67,895
Prepaid expenses and other	6,696			2,366			9,501			—			18,563
	110,628			174,603			196,620			—			481,851
NON-CURRENT ASSETS
Property, plant and equipment, net	3,908			146,826			77,004			—			227,738
Mining properties, net	4,000			210,785			335,462			—			550,247
Ore on leach pads	—			69,954			—			—			69,954
Restricted assets	11,711			226			7,357			—			19,294
Equity securities	9,930			1,942			—			—			11,872
Receivables	—			—			15,140			—			15,140
Net investment in subsidiaries	274,908			12,858			(861		)	(286,905		)	—
Other	211,384			10,186			8,366			(211,384		)	18,552
TOTAL ASSETS	$	626,469		$	627,380		$	639,088		$	(498,289	)	$	1,394,648

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,599		$	24,168		$	33,033		$	—		$	58,800
Other accrued liabilities	5,638			12,299			23,313			—			41,250
Debt	—			7,338			5,676			—			13,014
Reclamation	—			2,749			850			—			3,599
	7,237			46,554			62,872			—			116,663
NON-CURRENT LIABILITIES
Debt	244,827			22,163			216,160			(211,384		)	271,766
Reclamation	—			77,743			21,798			—			99,541
Deferred tax liabilities	5,304			6,137			63,947			—			75,388
Other long-term liabilities	2,390			4,758			46,631			—			53,779
Intercompany payable (receivable)	(410,800		)	336,771			74,029			—			—
	(158,279		)	447,572			422,565			(211,384		)	500,474
STOCKHOLDERS’ EQUITY
Common stock	1,814			250			193,175			(193,425		)	1,814
Additional paid-in capital	3,316,407			182,611			1,809,559			(1,992,170		)	3,316,407
Accumulated deficit	(2,537,716		)	(46,225		)	(1,849,083		)	1,895,308			(2,537,716		)
Accumulated other comprehensive income (loss)	(2,994		)	(3,382		)	—			3,382			(2,994		)
	777,511			133,254			153,651			(286,905		)	777,511
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	626,469		$	627,380		$	639,088		$	(498,289	)	$	1,394,648

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2016



In thousands	Coeur Mining, Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	58,048		$	50,023		$	54,111		$	—		$	162,182
Receivables	12			6,865			53,554			—			60,431
Ore on leach pads	—			64,167			—			—			64,167
Inventory	—			49,393			56,633			—			106,026
Prepaid expenses and other	3,803			1,459			12,719			—			17,981
	61,863			171,907			177,017			—			410,787
NON-CURRENT ASSETS
Property, plant and equipment, net	3,222			139,885			73,689			—			216,796
Mining properties, net	—			195,791			362,664			—			558,455
Ore on leach pads	—			67,231			—			—			67,231
Restricted assets	10,170			226			7,201			—			17,597
Equity securities	—			4,488			—			—			4,488
Receivables	—			—			30,951			—			30,951
Net investment in subsidiaries	273,056			11,650			—			(284,706		)	—
Other	221,381			9,263			3,344			(221,384		)	12,604
TOTAL ASSETS	$	569,692		$	600,441		$	654,866		$	(506,090	)	$	1,318,909

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,153		$	24,921		$	26,261		$	—		$	53,335
Other accrued liabilities	12,881			13,664			16,198			—			42,743
Debt	—			6,516			5,523			—			12,039
Royalty obligations	—			4,995			—			—			4,995
Reclamation	—			2,672			850			—			3,522
	15,034			52,768			48,832			—			116,634
NON-CURRENT LIABILITIES
Debt	175,991			15,214			229,036			(221,384		)	198,857
Royalty obligations	—			4,292			—			—			4,292
Reclamation	—			75,183			20,621			—			95,804
Deferred tax liabilities	13,810			6,179			54,809			—			74,798
Other long-term liabilities	1,993			4,750			53,294			—			60,037
Intercompany payable (receivable)	(405,623		)	336,813			68,810			—			—
	(213,829		)	442,431			426,570			(221,384		)	433,788
STOCKHOLDERS’ EQUITY
Common stock	1,809			250			197,913			(198,163		)	1,809
Additional paid-in capital	3,314,590			181,009			1,864,261			(2,045,270		)	3,314,590
Accumulated deficit	(2,545,424		)	(73,529		)	(1,882,710		)	1,956,239			(2,545,424		)
Accumulated other comprehensive income (loss)	(2,488		)	(2,488		)	—			2,488			(2,488		)
	768,487			105,242			179,464			(284,706		)	768,487
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	569,692		$	600,441		$	654,866		$	(506,090	)	$	1,318,909

Coeur Mining, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

NOTE 19 – COMMITMENTS AND CONTINGENCIES

Labor Union Contract

The Company maintains a labor agreement with Sindicato de Trabajadores Mineros de la Empresa Manquiri S.A. at the San Bartolomé mine in Bolivia. The San Bartolomé mine labor agreement, which became effective January 28, 2010, is currently active and does not have a fixed term. At June 30, 2017, approximately 10% of the Company’s global labor force was covered by this collective bargaining agreement. The Company cannot predict whether this agreement will be renewed on similar terms or at all, whether future labor disruptions will occur or, if disruptions do occur, how long they will last.

Palmarejo Gold Stream

Effective August 2016, Coeur Mexicana sells 50% of Palmarejo gold production (excluding production from the Paramount properties acquired in 2015) to a subsidiary of Franco-Nevada Corporation under a gold stream agreement for the lesser of $800 or spot price per ounce. In 2015, Coeur Mexicana received a $22.0 million deposit toward future deliveries under the gold stream agreement.

Bolivian Temporary Restriction on Mining above 4,400 Meters

In October 2009, the Bolivian state-owned mining organization, COMIBOL, announced by resolution that it was temporarily suspending mining activities above the elevation of 4,400 meters above sea level while stability studies of Cerro Rico mountain are undertaken. The Company holds rights to mine above this elevation under valid contracts with COMIBOL. The stability studies have been completed and officially submitted to the Bolivian mining technical authorities. Accordingly, the COMIBOL suspension has expired in accordance with the terms of the resolution. The Company is not currently mining above the 4,400 meter level.

If COMIBOL decides to affirmatively adopt a new resolution to restrict access above the 4,400 meter level, the Company may need to further write down the carrying value of the asset. While a portion of the Company’s proven and probable reserves relate to material above the 4,400 meter level at San Bartolomé, so long as operations remain suspended, there is a risk that silver may not be produced from this material at expected levels or at all, particularly given the remaining anticipated mine life of this asset. It is also uncertain if any new mining or investment policies or shifts in political attitude may affect mining in Bolivia.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Coeur Mining, Inc. and its subsidiaries (collectively the “Company”, “our”, or “we”). We use certain non-GAAP financial performance measures in our MD&A. For a detailed description of these measures, please see “Non-GAAP Financial Performance Measures” at the end of this item.

We provide certain operational and financial data on a silver equivalent basis, converting gold to silver at a historical 60:1 ratio of silver ounces to gold ounces, unless otherwise noted. We also provide realized silver equivalent data determined by average spot silver and gold prices during the relevant period.

Overview

We are a gold and silver producer with mines located in the United States, Mexico, and Bolivia and exploration projects in the United States and Mexico. The Palmarejo complex, and Rochester, Kensington, Wharf, and San Bartolomé mines constitute our principal sources of revenue.

The Company's strategy is to discover, acquire, develop and operate low-cost silver and gold mines that produce long-term cash flow, provide opportunities for growth through continued exploration, and generate superior and sustainable returns for stockholders. Management focuses on maximizing net cash flow through identifying and implementing revenue enhancement opportunities, reducing operating and non-operating costs, exercising consistent capital discipline, and efficient working capital management.

Second Quarter Highlights


•	Production of 8.9 million silver equivalent ounces, consisting of 4.0 million silver ounces and 82,819 gold ounces


•	Sales of 9.3 million silver equivalent ounces, consisting of 4.1 million silver ounces and 86,194 gold ounces


•	Net loss of $11.0 million ($0.06 per share) and adjusted net loss of $2.5 million ($0.01 per share) (see “Non-GAAP Financial Performance Measures”)


•	Costs applicable to sales were $13.15 per silver equivalent ounce ($12.23 per average spot silver equivalent ounce) and $866 per gold equivalent ounce (see “Non-GAAP Financial Performance Measures”)


•	All-in sustaining costs were $17.83 per silver equivalent ounce ($15.90 per average spot silver equivalent ounce) (see “Non-GAAP Financial Performance Measures”)


•	Operating cash flow of $29.3 million and adjusted EBITDA of $33.4 million (see “Non-GAAP Financial Performance Measures”)


•	Issued $250.0 million of 5.875% Senior Notes due 2024 (the “2024 Senior Notes”)


•	Repurchased $178.0 million of our 7.875% Senior Notes due 2021 (the “2021 Senior Notes”)


•	Cash and cash equivalents of $250.0 million at June 30, 2017


•	Announced the sale of the Endeavor Silver Stream and our remaining portfolio of royalties for total consideration of $13.0 million. The transaction is expected to close in the third quarter of 2017, subject to customary closing conditions

Selected Financial and Operating Results



	Three months ended June 30,					Six months ended June 30,
	2017			2016		2017		2016
Metal sales	$	173,354		$	180,197	$	379,492	$	326,833
Net income (loss)	$	(10,955	)	$	14,497	$	7,708	$	(5,899	)
Net income (loss) per share, diluted	$	(0.06	)	$	0.09	$	0.04	$	(0.04	)
Adjusted net income (loss)⁽¹⁾	$	(2,517	)	$	16,948	$	4,469	$	6,490
Adjusted net income (loss) per share, diluted⁽¹⁾	$	(0.01	)	$	0.11	$	0.02	$	0.04
EBITDA⁽¹⁾	$	23,642		$	62,109	$	97,041	$	82,904
Adjusted EBITDA⁽¹⁾	$	33,354		$	72,041	$	89,899	$	108,413
Silver ounces produced	3,974,982			4,029,976		7,907,358		7,402,450
Gold ounces produced	82,819			92,727		171,037		170,799
Silver equivalent ounces produced	8,944,122			9,593,596		18,169,578		17,650,390
Silver ounces sold	4,086,828			3,973,475		8,560,540		7,502,977
Gold ounces sold	86,194			88,543		197,068		167,634
Silver equivalent ounces sold	9,258,455			9,286,033		20,384,641		17,561,045
Average realized price per silver ounce	$	16.98		$	17.38	$	17.31	$	16.34
Average realized price per gold ounce	$	1,206		$	1,255	$	1,174	$	1,218
Costs applicable to sales per silver equivalent ounce⁽¹⁾	$	13.15		$	10.82	$	12.18	$	11.53
Costs applicable to sales per average spot silver equivalent ounce⁽¹⁾	$	12.23		$	10.00	$	11.33	$	10.58
Costs applicable to sales per gold equivalent ounce⁽¹⁾	$	866		$	649	$	825	$	688
All-in sustaining costs per silver equivalent ounce⁽¹⁾	$	17.83		$	14.92	$	16.29	$	15.56
All-in sustaining costs per average spot silver equivalent ounce⁽¹⁾	$	15.90		$	13.04	$	14.67	$	13.37


(1)	See “Non-GAAP Financial Performance Measures.”

Consolidated Financial Results

Three Months Ended June 30, 2017 compared to Three Months Ended June 30, 2016

Net Income (Loss)

Net loss was $11.0 million ($0.06 per share) compared to Net income of $14.5 million ($0.09 per share). The Net loss is primarily due to a $9.3 million loss on debt extinguishment, lower average realized silver and gold prices and higher all-in sustaining costs per silver equivalent ounce, partially offset by lower interest expense and a $2.3 million gain on the repurchase the Rochester royalty obligation.

Revenue

Metal sales decreased due to lower gold production and a decrease in average realized silver and gold prices of 2% and 4%, respectively. The Company sold 4.1 million silver ounces and 86,194 gold ounces, compared to sales of 4.0 million silver ounces and 88,543 gold ounces. Gold contributed 60% of sales and silver contributed 40%, compared to 62% of sales from gold and 38% from silver. Metal sales from North American operations provided 85.7% of consolidated revenue, compared to 85.0%.

Costs Applicable to Sales

Costs applicable to sales increased due to lower production and higher mining and processing costs. For a complete discussion of costs applicable to sales, see Results of Operations below.

Amortization

Amortization decreased $4.6 million, or 12%, primarily due to lower production and increased life of mine reserves at Wharf.

Expenses

General and administrative expenses decreased 5% due to lower legal and professional service costs.

Exploration expense increased $5.6 million, due to the Company’s expansion of drilling activities at Palmarejo, Kensington and Rochester as well as regional exploration with a focus on projects in Nevada and Chihuahua, Mexico.

Pre-development, reclamation, and other expenses remained comparable at $4.4 million.

Other Income and Expenses

During the second quarter of 2017, the Company incurred a $9.3 million loss in connection with the repurchase of the 2021 7.875% Senior Notes concurrent with the completed offering of the 2024 5.875% Senior Notes.

Non-cash fair value adjustments, net, were a gain of $0.3 million compared to a loss of $3.6 million, primarily due to the termination of the Palmarejo gold production royalty (in the third quarter of 2016) and the lesser impact of changes in future metal prices on the Rochester royalty obligation which was repurchased and terminated in May 2017.

Interest expense (net of capitalized interest of $0.8 million) decreased to $3.7 million from $10.9 million, primarily due to lower debt levels and a lower interest rate on the 2024 Senior Notes.

Other, net increased by $6.0 million, primarily due to a $2.3 million gain on the repurchase of the Rochester royalty obligation and foreign exchange gains.

Income and Mining Taxes

During the second quarter of 2017, the Company reported estimated income and mining tax benefit of approximately $2.1 million resulting in an effective tax rate of 16.1%. This compares to estimated income and mining tax benefit of $0.8 million for an effective tax rate of (5.6%) during the second quarter of 2016.

The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit:



	Three months ended June 30,
	2017						2016
In thousands	Income (loss) before tax			Tax (expense) benefit			Income (loss) before tax		Tax (expense) benefit
United States	$	(6,493	)	$	1,588		$	119	$	(1,810	)
Argentina	(129		)	945			4,453		(1,793		)
Mexico	(2,195		)	(4,766		)	3,353		4,316
Bolivia	(2,001		)	245			4,016		848
Other jurisdictions	(2,235		)	4,086			1,788		(793		)
	$	(13,053	)	$	2,098		$	13,729	$	768

The Company’s effective tax rate is impacted by recurring and nonrecurring items. These items include foreign exchange rates on deferred tax balances, mining taxes, uncertain tax positions, and a full valuation allowance on deferred tax assets related to losses in the United States and certain foreign jurisdictions. During the second quarter of 2017, changes in currency rates increased income and mining tax expense by $3.0 million, predominately due to the strength of the Mexican Peso. Favorable operating results at Palmarejo continued to contribute to higher income and mining tax expense. The Company’s consolidated effective income and mining tax rate is a function of the combined effective tax rates and foreign exchange rates in the jurisdictions in which it operates. Variations in the jurisdictional mix of income and loss and foreign exchange rates result in significant fluctuations in our consolidated effective tax rate.

A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related benefits will not be realized. The Company analyzes its deferred tax assets and if it is determined that the Company will not realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined that the Company will ultimately be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of risk factors that could impact the Company’s ability to realize its deferred tax assets.

Six Months Ended June 30, 2017 compared to Six Months Ended June 30, 2016

Net Income (Loss)

Net income was $7.7 million ($0.04 per share) compared to Net loss of $5.9 million ($0.04 per share). The increase in Net income is primarily due to a $21.1 million gain on the sale of the Joaquin project, less unfavorable fair value adjustments, higher silver and gold production, higher average realized silver prices and lower interest expense, partially offset by lower average realized gold prices, higher all-in sustaining costs per silver equivalent ounce and a $9.3 million loss incurred in connection with the repurchase of the 2021 Senior Notes.

Revenue

Metal sales increased due to higher silver and gold production, a reduction in metal inventory and a 6% increase in average realized silver prices, partially offset by a 4% decrease in average realized gold prices. The Company sold 8.6 million silver ounces and 197,068 gold ounces, compared to sales of 7.5 million silver ounces and 167,634 gold ounces. Gold contributed 61% of sales and silver contributed 39%, compared to 62% of sales from gold and 38% from silver. Royalty revenue was lower due to the Company’s divestiture of non-core royalty assets throughout 2016 and the first half of 2017. Metal sales from North American operations provided 87.9% of revenue, compared to 84.4%.

Costs Applicable to Sales

Costs applicable to sales increased due to higher silver equivalent ounces sold and higher mining and processing costs. For a complete discussion of costs applicable to sales, see Results of Operations below.

Amortization

Amortization increased $7.6 million, or 12%, primarily due to higher silver and gold ounces sold, partially offset by higher life of mine reserves at Wharf.

Expenses

General and administrative expenses increased 10% due to higher compensation, severance and professional service costs.

Exploration expense increased $9.1 million, due to the Company’s expansion of drilling activities at Palmarejo, Kensington and Rochester as well as regional exploration with a focus on projects in Nevada and Chihuahua, Mexico.

Pre-development, reclamation, and other expenses increased 4% to $8.9 million as a result of additional work at La Preciosa.

Other Income and Expenses

During the first half of 2017, the Company incurred a $9.3 million loss in connection with the repurchase of the 2021 7.875% Senior Notes concurrent with the completed offering of the 2024 5.875% Senior Notes.

Non-cash fair value adjustments, net, were a loss of $0.9 million compared to a loss of $12.3 million, primarily due to the termination of the Palmarejo gold production royalty (in the third quarter of 2016) and the lesser impact of changes in future metal prices on the Rochester royalty obligation which was repurchased and terminated in May 2017.

Interest expense (net of capitalized interest of $1.1 million) decreased to $7.3 million from $22.0 million, primarily due to lower debt levels and a lower interest rate on the 2024 Senior Notes compared to the 2021 Senior Notes.

Other, net increased by $25.8 million, primarily due to a $21.1 million gain on the sale of the Joaquin project in Argentina and a $2.3 million gain on the repurchase of the Rochester royalty obligation.

Income and Mining Taxes

During the first half of 2017, the Company reported estimated income and mining tax expense of approximately $8.9 million resulting in an effective tax rate of 53.7%. This compares to estimated income and mining tax expense of $1.3 million for an effective tax rate of (29.3%) during the first half of 2016.

The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit:



	Six months ended June 30,
	2017						2016
In thousands	Income (loss) before tax			Tax (expense) benefit			Income (loss) before tax			Tax (expense) benefit
United States	$	14,221		$	(377	)	$	(9,242	)	$	(2,342	)
Argentina	(457		)	2,070			3,438			(250		)
Mexico	6,455			(14,689		)	(4,155		)	4,333
Bolivia	(1,530		)	214			6,062			(722		)
Other jurisdictions	(2,033		)	3,834			(664		)	(2,357		)
	$	16,656		$	(8,948	)	$	(4,561	)	$	(1,338	)

The Company’s effective tax rate is impacted by recurring and nonrecurring items. These items include foreign exchange rates on deferred tax balances, mining taxes, uncertain tax positions, and a full valuation allowance on deferred tax assets related to losses in the United States and certain foreign jurisdictions. During the first half of the year, changes in currency rates increased income and mining tax expense by $8.6 million, predominately due to the strength of the Mexican Peso. During the first half of the year, favorable operating results at Palmarejo contributed to higher income and mining tax expense. The Company’s consolidated effective income and mining tax rate is a function of the combined effective tax rates and foreign exchange rates in the jurisdictions in which it operates. Variations in the jurisdictional mix of income and loss and foreign exchange rates result in significant fluctuations in our consolidated effective tax rate.

2017 Outlook

The Company revised its full-year 2017 production guidance to reflect higher expected gold production at Wharf due to higher mining and crushing rates, lower expected silver production at the San Bartolomé mine due to persistent drought conditions, and the pending sale of the Endeavor silver stream, under which production and any associated sales began accruing to the buyer as of June 1, 2017. Cost guidance has been updated to reflect revised production levels.

2017 Production Outlook



(silver and silver equivalent ounces in thousands)	Silver	Gold	Silver Equivalent¹
Palmarejo	6,500 - 7,000	110,000 - 120,000	13,100 - 14,200
Rochester	4,200 - 4,700	47,000 - 52,000	7,020 - 7,820
San Bartolomé	5,000 - 5,400	—	5,000 - 5,400
Endeavor	105	—	105
Kensington	—	120,000 - 125,000	7,200 - 7,500
Wharf	—	90,000 - 95,000	5,400 - 5,700
Total	15,805 - 17,205	367,000 - 392,000	37,825 - 40,725

2017 Cost Outlook



(dollars in millions, except per ounce amounts)	Previous Guidance	Revised Guidance
CAS per AgEqOz¹ – Palmarejo	$10.00 - $10.50	$10.00 - $10.50
CAS per AgEqOz¹ – Rochester	$11.50 - $12.00	$11.50 - $12.00
CAS per AgOz¹ – San Bartolomé	$14.00 - $14.50	$15.75 - $16.25
CAS per AuOz¹ – Kensington	$800 - $850	$800 - $850
CAS per AuEqOz¹ – Wharf	$775 - $825	$700 - $750
Capital Expenditures	$109 - $129	$109 - $129
General and Administrative Expenses	$28 - $32	$28 - $32
Exploration Expense	$29 - $31	$29 - $31
AISC per AgEqOz¹	$15.75 - $16.25	$15.75 - $16.25


(1)	See “Non-GAAP Financial Performance Measures.”

Results of Operations

The Company produced 4.0 million ounces of silver and 82,819 ounces of gold in the three months ended June 30, 2017, compared to 4.0 million ounces of silver and 92,727 ounces of gold in the three months ended June 30, 2016. Gold production decreased 11% due to lower tons placed at Rochester and lower gold grade at Wharf, Kensington and Palmarejo, partially offset by higher mill throughput and recovery at Palmarejo.

The Company produced 7.9 million ounces of silver and 171,037 ounces of gold in the six months ended June 30, 2017, compared to 7.4 million ounces of silver and 170,799 ounces of gold in the six months ended June 30, 2016. Silver production increased 7% due to higher mill throughput and grade at Palmarejo and timing of leach pad recoveries at Rochester, partially offset by lower mill throughput and silver grade at San Bartolomé.

Costs applicable to sales were $13.15 per silver equivalent ounce ($12.23 per average spot silver equivalent ounce) and $866 per gold equivalent ounce in the three months ended June 30, 2017 compared to $10.82 per silver equivalent ounce ($10.00 per average spot silver equivalent ounce) and $649 per gold equivalent ounce in the three months ended June 30, 2016. Costs applicable to sales per silver equivalent ounce increased 22% in the three months ended June 30, 2017 due to higher unit costs at Palmarejo, Rochester and San Bartolomé. Costs applicable to sales per gold equivalent ounce increased 33% in the three months ended June 30, 2017 due to higher unit costs at Kensington and Wharf.

Costs applicable to sales were $12.18 per silver equivalent ounce ($11.33 per average spot silver equivalent ounce) and $825 per gold equivalent ounce in the six months ended June 30, 2017 compared to $11.53 per silver equivalent ounce ($10.58 per average spot silver equivalent ounce) and $688 per gold equivalent ounce in the six months ended June 30, 2016. Costs applicable to sales per silver equivalent ounce increased 6% in the six months ended June 30, 2017 due to higher unit costs at Palmarejo, Rochester and San Bartolomé. Costs applicable to sales per gold equivalent ounce increased 20% in the six months ended June 30, 2017 due to higher unit costs at Kensington and Wharf.

All-in sustaining costs were $17.83 per silver equivalent ounce ($15.90 per average spot silver equivalent ounce) in the three months ended June 30, 2017, compared to $14.92 per silver equivalent ounce ($13.04 per average spot silver equivalent ounce) in the three months ended June 30, 2016. The 20% increase in all-in sustaining costs per silver equivalent ounce in 2017 was primarily due to higher costs applicable to sales and higher exploration expense, partially offset by lower general and administrative expense and lower sustaining capital.

All-in sustaining costs were $16.29 per silver equivalent ounce ($14.67 per average spot silver equivalent ounce) in the six months ended June 30, 2017, compared to $15.56 per silver equivalent ounce ($13.37 per average spot silver equivalent ounce) in the six months ended June 30, 2016. The 5% increase in all-in sustaining costs per silver equivalent ounce in 2017 was primarily due to higher costs applicable to sales and higher general and administrative and exploration expense, partially offset by lower sustaining capital.

Palmarejo



	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Tons milled	335,428		270,142		695,811		516,675
Silver ounces produced	1,456,821		1,307,097		2,987,362		2,240,466
Gold ounces produced	24,292		18,731		55,084		33,399
Silver equivalent ounces produced	2,914,341		2,430,957		6,292,402		4,244,406
Costs applicable to sales per silver equivalent oz⁽¹⁾	$	11.31	$	9.14	$	10.36	$	10.44
Costs applicable to sales per average spot silver equivalent oz⁽¹⁾	$	10.20	$	8.20	$	9.40	$	9.23


(1)	See Non-GAAP Financial Performance Measures.

Three Months Ended June 30, 2017 compared to Three Months Ended June 30, 2016

Silver equivalent production increased 20% due to higher mining rates from Independencia, partially offset by lower silver grade. Metal sales were $53.2 million, or 31% of Coeur’s metal sales, compared with $48.3 million, or 27% of Coeur’s metal sales. Costs applicable to sales per ounce increased 24% as a result of higher waste tons mined, backfill costs, equipment maintenance and consumable costs. Amortization remained comparable at $14.4 million. Capital expenditures were $11.2 million as the Company continues underground development at Guadalupe and Independencia.

Six Months Ended June 30, 2017 compared to Six Months Ended June 30, 2016

Silver equivalent production increased 48% due to higher mining rates from Guadalupe and Independencia and higher silver and gold grades, partially offset by lower silver recovery. Metal sales were $130.9 million, or 35% of Coeur’s metal sales, compared with $78.1 million, or 24% of Coeur’s metal sales. Costs applicable to sales per ounce remained comparable. Amortization increased to $34.6 million compared to $22.1 million, primarily due to higher production from Guadalupe and Independencia. Capital expenditures remained comparable at $17.4 million.

Rochester



	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Tons placed	4,493,100		6,402,013		8,006,808		10,776,472
Silver ounces produced	1,156,341		1,197,013		2,283,663		2,125,915
Gold ounces produced	10,745		13,940		21,101		24,401
Silver equivalent ounces produced	1,801,041		2,033,413		3,549,723		3,589,975
Costs applicable to sales per silver equivalent oz⁽¹⁾	$	13.62	$	11.36	$	13.05	$	11.98
Costs applicable to sales per average spot silver equivalent oz⁽¹⁾	$	12.63	$	10.30	$	12.17	$	10.75


(1)	See Non-GAAP Financial Performance Measures.

Three Months Ended June 30, 2017 compared to Three Months Ended June 30, 2016

Silver equivalent production decreased 11% due to lower tons placed, partially offset by the timing of recoveries. Metal sales were $32.8 million, or 19% of Coeur’s metal sales, compared with $35.8 million, or 20% of Coeur’s metal sales. Costs applicable to sales per silver equivalent ounce increased 20% due to higher waste tons mined and higher blasting and processing costs. Amortization decreased to $4.9 million compared to $5.4 million due to lower production. Capital expenditures increased to $13.8 million compared to $3.9 million due to the stage IV leach pad expansion.

Six Months Ended June 30, 2017 compared to Six Months Ended June 30, 2016

Silver equivalent production was consistent. Metal sales were $71.8 million, or 19% of Coeur’s metal sales, compared with $65.7 million, or 20% of Coeur’s metal sales. Costs applicable to sales per silver equivalent ounce increased 9% due to higher waste tons mined and higher blasting, processing, and maintenance costs. Amortization remained comparable at $10.8 million. Capital expenditures increased to $24.4 million compared to $7.2 million due to the stage IV leach pad expansion.

Kensington



	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Tons milled	163,163		157,117		329,058		316,477
Gold ounces produced	26,424		32,210		52,621		64,183
Costs applicable to sales/oz⁽¹⁾	$	964	$	749	$	922	$	761


(1)	See Non-GAAP Financial Performance Measures.

Three Months Ended June 30, 2017 compared to Three Months Ended June 30, 2016

Gold production decreased 18% due to lower grades mined as a result of mine sequencing, partially offset by higher mill throughput. Metal sales were $35.6 million, or 21% of Coeur’s metal sales, compared to $36.5 million, or 20% of Coeur’s metal sales. Costs applicable to sales per ounce were 29% higher, primarily due to lower production and higher contract services. Amortization was $8.3 million compared to $9.8 million due to lower production, partially offset by higher amortizable mining properties and equipment. Capital expenditures increased to $8.6 million compared to $7.5 million, due to more underground mine development.

Six Months Ended June 30, 2017 compared to Six Months Ended June 30, 2016

Gold production decreased 18% due to lower grades mined as a result of mine sequencing, partially offset by higher mill throughput. Metal sales were $73.5 million, or 19% of Coeur’s metal sales, compared to $72.2 million, or 22% of Coeur’s metal sales. Costs applicable to sales per ounce were 21% higher, primarily due to lower production and higher contract services and other mining costs. Amortization was $17.5 million compared to $18.2 million due to lower production, mostly offset by higher amortizable mining properties and equipment. Capital expenditures decreased to $14.2 million compared to $15.6 million, due to less underground mine development.

Wharf



	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Tons placed	993,167		915,631		2,285,348		1,890,294
Gold ounces produced	21,358		27,846		42,231		48,816
Silver ounces produced	12,587		35,201		32,652		48,180
Gold equivalent ounces produced⁽¹⁾	21,568		28,433		42,775		49,619
Costs applicable to sales per gold equivalent oz⁽¹⁾	$	734	$	535	$	696	$	597


(1)	See Non-GAAP Financial Performance Measures.

Three Months Ended June 30, 2017 compared to Three Months Ended June 30, 2016

Gold equivalent production decreased 24% due to fewer high-grade tons placed from the Golden Reward deposit. Metal sales were $27.0 million, or 16% of Coeur’s metal sales, compared to $34.0 million, or 19% of Coeur’s metal sales. Costs applicable to sales per gold equivalent ounce increased 37% due to lower production, timing of pad unload, and higher blasting and crushing costs. Amortization was $2.5 million compared to $5.1 million due to lower production and higher life of mine reserves. Capital expenditures remained comparable at $1.5 million.

Six Months Ended June 30, 2017 compared to Six Months Ended June 30, 2016

Gold equivalent production decreased 14% due to lower grade, partially offset by higher tons placed. Metal sales were $57.3 million, or 15% of Coeur’s metal sales, compared to $61.9 million, or 19% of Coeur’s metal sales. Costs applicable to sales per gold equivalent ounce increased 17% due to lower production and higher blasting and crushing costs. Amortization was $5.7 million compared to $9.2 million due to lower production and higher life of mine reserves. Capital expenditures remained comparable at $2.4 million.

San Bartolomé



	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Tons milled	417,784		440,441		802,051		848,247
Silver ounces produced	1,284,561		1,457,944		2,499,068		2,839,857
Costs applicable to sales/oz⁽¹⁾	$	16.73	$	13.14	$	16.34	$	12.89


(1)	See Non-GAAP Financial Performance Measures.

Three Months Ended June 30, 2017 compared to Three Months Ended June 30, 2016

Silver production decreased 12% due to lower high-grade ore purchases and mill throughput due to continued drought conditions, partially offset by higher recoveries. Silver sales were $23.8 million, or 14% of Coeur’s metal sales, compared with $25.2 million, or 14% of Coeur’s metal sales. Costs applicable to sales per ounce increased due to lower production and higher processing costs. Amortization remained comparable at $2.2 million due to lower life of mine reserves. Capital expenditures were $0.4 million compared to $1.3 million.

Six Months Ended June 30, 2017 compared to Six Months Ended June 30, 2016

Silver production decreased 12% due to lower high-grade ore purchases and mill throughput due to drought conditions, partially offset by higher recoveries. Silver sales were $44.4 million, or 12% of Coeur’s metal sales, compared with $46.5 million, or 14% of Coeur’s metal sales. Costs applicable to sales per ounce increased due to lower production and higher processing costs. Amortization remained comparable at $3.6 million due to lower life of mine reserves. Capital expenditures were $0.8 million compared to $1.8 million.

Endeavor Silver Stream



	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017	2016
Tons milled	88,565		37,521		133,905	124,384
Silver ounces produced	64,672		32,721		104,613	148,032
Costs applicable to sales/oz⁽¹⁾	$	7.06	$	7.94	7.12	5.93


(1)	See Non-GAAP Financial Performance Measures.

In June 2017, the Company entered into a Share and Asset Purchase Agreement with Metalla Streaming & Royalty Ltd. to sell the Endeavor silver stream. The transaction is expected to close in the third quarter of 2017, subject to customary closing conditions. Reported production and financial results include operations through May 2017, as the buyer is entitled to production and any associated sales subject to the stream agreement after June 1, 2017 under the terms of the sale agreement.

Three Months Ended June 30, 2017 compared to Three Months Ended June 30, 2016

Silver production at Endeavor increased due to higher mining and mill throughput rates. Costs applicable to sales per ounce decreased due to the impact of lower silver prices on the Company’s silver price sharing agreement with the Endeavor mine operator. Amortization was $0.2 million compared to $0.1 million due to higher production.

Six Months Ended June 30, 2017 compared to Six Months Ended June 30, 2016

Silver production at Endeavor decreased due to lower grades. Costs applicable to sales per ounce increased due to the impact of higher silver prices on the Company’s silver price sharing agreement with the Endeavor mine operator. Amortization was $0.3 million compared to $0.9 million due to lower production and lower amortizable mining properties.

Liquidity and Capital Resources

Cash Provided by Operating Activities

Net cash provided by operating activities for the three and six months ended June 30, 2017 was $29.3 million and $84.6 million, respectively, compared to net cash provided by operating activities of $45.9 million and $52.6 million, respectively, for the three and six months ended June 30, 2016 and was impacted by the following key factors:



	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Consolidated silver equivalent ounces sold	9,258,455			9,286,033			20,384,641			17,561,045
Average realized price per consolidated silver equivalent ounce	$	18.72		$	19.41		$	18.62		$	18.61
Costs applicable to sales per consolidated silver equivalent ounce ⁽¹⁾	(13.57		)	(10.82		)	(12.67		)	(11.50		)
Operating margin per consolidated silver equivalent ounce	$	5.15		$	8.59		$	5.95		$	7.11


(1)	See Non-GAAP Financial Performance Measures.



	Three months ended June 30,						Six months ended June 30,
In thousands	2017			2016			2017			2016
Cash flow before changes in operating assets and liabilities	$	27,357		$	47,496		$	71,184		$	70,749
Changes in operating assets and liabilities:
Receivables	(1,916		)	(12,402		)	11,190			(8,921		)
Prepaid expenses and other	3,612			(898		)	(687		)	381
Inventories	(997		)	(7,686		)	13,295			(15,508		)
Accounts payable and accrued liabilities	1,223			19,429			(10,432		)	5,855
CASH PROVIDED BY OPERATING ACTIVITIES	$	29,279		$	45,939		$	84,550		$	52,556

Cash provided by operating activities decreased $16.7 million for the three months ended June 30, 2017 compared to the three months ended June 30, 2016 due to lower silver equivalent ounces sold, lower average realized prices and higher costs applicable to sales per consolidated silver equivalent ounce, partially offset by favorable working capital adjustments. Metal sales for the three months ended June 30, 2017 decreased $6.8 million, with $0.9 million due to lower silver equivalent ounces sold and $5.9 million due to lower average realized prices. The $1.9 million working capital decrease in the three months ended June 30, 2017 was primarily due to an increase in accounts payable partially offset by an increase in receivables, compared to the $1.6 million working capital increase in the three months ended June 30, 2016 due to an increase in trade receivables and inventories, partially offset by an increase in accounts payable.

Cash provided by operating activities increased $32.0 million for the six months ended June 30, 2017 compared to the six months ended June 30, 2016 due to higher silver equivalent ounces sold and favorable working capital adjustments, partially offset by higher costs applicable to sales per consolidated silver equivalent ounce. Metal sales for six months ended June 30, 2017

increased $52.7 million, with $52.9 million due to higher silver equivalent ounces sold, partially offset by $0.2 million due to lower average realized prices. The $13.4 million working capital decrease in the six months ended June 30, 2017 was primarily due to the reduction in precious metal inventory and receivables, compared to the $18.2 million working capital increase in the six months ended June 30, 2016, primarily due to an increase in inventories and receivables, partially offset by an increase in accounts payable.

Cash Used in Investing Activities

Net cash used in investing activities in the three months ended June 30, 2017 was $45.2 million compared to $16.9 million in the three months ended June 30, 2016, primarily due to higher capital expenditures, the purchase of strategic equity investments, and the sales of non-core assets in 2016. The Company had capital expenditures of $37.5 million in the three months ended June 30, 2017 compared with $23.3 million in the three months ended June 30, 2016. Capital expenditures in the three months ended June 30, 2017 were primarily related to underground development at Palmarejo and Kensington, and the Stage IV leach pad expansion at Rochester. Capital expenditures in the three months ended June 30, 2016 were primarily related to underground development at Palmarejo and Kensington.

Net cash used in investing activities in the six months ended June 30, 2017 was $46.7 million compared to $35.5 million in the six months ended June 30, 2016, primarily due to higher capital expenditures and the purchase of strategic equity investments, partially offset by the proceeds from the sale of the Joaquin project. The Company had capital expenditures of $61.5 million in the six months ended June 30, 2017 compared with $45.5 million in the six months ended June 30, 2016. Capital expenditures in the six months ended June 30, 2017 were primarily related to underground development at Palmarejo and Kensington, and the Stage IV leach pad expansion at Rochester. Capital expenditures in the six months ended June 30, 2016 were primarily related to underground development at Palmarejo and Kensington.

Cash Provided by Financing Activities

Net cash provided by financing activities in the three months ended June 30, 2017 remained comparable with the three months ended June 30, 2016 at $55.6 million. During the three months ended June 30, 2017, the Company received net proceeds of approximately $245.0 million from the issuance of the 2024 Senior Notes, partially offset by the repurchase of the 2021 Senior Notes for $185.5 million, including premiums. In addition, the Company made payments of $10.5 million under the Palmarejo gold production royalty obligation that terminated in July 2016. Coeur Mexicana now sells 50% of Palmarejo gold production (excluding production from Independencia Este, acquired in the 2015 Paramount transaction) for the lesser of $800 or spot price per ounce under a gold stream agreement.

Net cash provided by financing activities in the six months ended June 30, 2017 was $49.1 million compared to $40.1 million in the six months ended June 30, 2016. During the six months ended June 30, 2017, the Company received net proceeds of approximately $245.0 million from the issuance of the 2024 Senior Notes, partially offset by the repurchase of the 2021 Senior Notes for $185.5 million, including premiums. Payments of $19.6 million were made in 2016 under the Palmarejo gold production royalty that terminated in July 2016. Coeur Mexicana now sells 50% of Palmarejo gold production (excluding production from Independencia Este, acquired in 2015 Paramount transaction) for the lesser of $800 or spot price per ounce under a gold stream agreement.

In May 2017, the Company completed an offering of $250.0 million in aggregate principal amount of 2024 Senior Notes in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended for net proceeds of approximately $245.0 million. The 2024 Senior Notes are governed by an Indenture dated as of May 31, 2017 (the “Indenture”), among the Company, as issuer, certain of the Company's subsidiaries named therein, as guarantors thereto (the “Guarantors”), and the Bank of New York Mellon, as trustee. The 2024 Senior Notes bear interest at a rate of 5.875% per year from the date of issuance. Interest on the 2024 Senior Notes is payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2017. The 2024 Senior Notes will mature on June 1, 2024 and are fully and unconditionally guaranteed by the Guarantors. At any time prior to June 1, 2020, the Company may redeem all or part of the 2024 Senior Notes upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a make-whole premium as of the date of redemption, plus (iii) accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem some or all of the 2024 Senior Notes on or after June 1, 2020, at redemption prices set forth in the Indenture, together with accrued and unpaid interest. At any time prior to June 1, 2020, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the 2024 Senior Notes, including any permitted additional 2024 Senior Notes, at a redemption price equal to 105.875% of the principal amount. The Indenture contains covenants that, among other things, limit the Company’s ability under certain circumstances to incur additional indebtedness, pay dividends or make other distributions or repurchase or redeem capital stock, prepay, redeem or repurchase certain debt, make loans and investments, create liens, sell, transfer or otherwise dispose of assets, enter into transactions with affiliates, enter into agreements restricting the Company's subsidiaries' ability to pay dividends and impose conditions on the Company’s ability to engage in mergers, consolidations and sales of all or substantially all of its assets. The Indenture also contains certain “Events of Default” (as defined in the Indenture) customary for indentures of this type. If an

Event of Default has occurred and is continuing, the Trustee or the holders of not less than 25% in aggregate principal amount of the 2024 Senior Notes then outstanding may, and the Trustee at the request of the holders of not less than 25% in aggregate principal amount of the 2024 Senior Notes then outstanding shall, declare all unpaid principal of, premium, if any, and accrued interest on all the 2024 Senior Notes to be due and payable.

Concurrent with the offering of the 2024 Senior Notes, the Company commenced a cash tender offer (the “Tender Offer”) to purchase the outstanding $178.0 million in aggregate principal amount of its 2021 Senior Notes. The Tender Offer was made on the terms and subject to the conditions set forth in the Offer to Purchase dated May 19, 2017. The Tender Offer expired at 5:00 p.m., New York City time, on May 25, 2017 (the “Expiration Time”). Holders of the 2021 Senior Notes who tendered (and did not validly withdraw) their notes at or prior to the Expiration Time were entitled to receive in cash $1,043.88 per $1,000 principal amount of 2021 Senior Notes validly tendered (and not validly withdrawn) and accepted for purchase by the Company in the Tender Offer, plus accrued and unpaid interest on such 2021 Senior Notes. $118.1 million aggregate principal amount of the 2021 Senior Notes were validly tendered and purchased by the Company on May 31, 2017. In accordance with the terms of the indenture governing the 2021 Senior Notes, the remaining $59.9 million aggregate principal amount of the Notes that were not tendered were redeemed on June 30, 2017 at the redemption price specified in the indenture governing the 2021 Senior Notes ($1,039.38 per $1,000 principal amount redeemed, plus accrued and unpaid interest). The Company recorded a loss of $9.3 million as a result of the extinguishment of the 2021 Senior Notes.

Other Liquidity Matters

We believe that our liquidity and capital resources from U.S. operations are adequate to fund our U.S. operations and corporate activities. The Company has asserted indefinite reinvestment of earnings from its Mexican operations as determined by management’s judgment about and intentions concerning the future operations of the Company. The Company does not believe that the amounts reinvested will have a material impact on liquidity.

Critical Accounting Policies and Accounting Developments

Please see Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES contained in the Company’s Form

10-K for the year ended December 31, 2016 (the “2016 10-K”) for the Company’s critical accounting policies and estimates. Those critical accounting policies and estimates have been supplemented and updated in this Form 10-Q.

Non-GAAP Financial Performance Measures

Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles (“GAAP”). These measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.

Adjusted Net Income (Loss)

Management uses Adjusted net income (loss) to evaluate the Company’s operating performance, and to plan and forecast its operations. The Company believes the use of Adjusted net income (loss) reflects the underlying operating performance of our core mining business and allows investors and analysts to compare results of the Company to similar results of other mining companies. Management’s determination of the components of Adjusted net income (loss) are evaluated periodically and are based, in part, on a review of non-GAAP financial measures used by mining industry analysts. The tax effect of adjustments are based on statutory tax rates and the Company’s tax attributes, including the impact through the Company’s valuation allowance. The combined effective rate of tax adjustments may not be consistent with the statutory tax rates or the Company’s effective tax rate due to jurisdictional tax attributes and related valuation allowance impacts which may minimize the tax effect of certain adjustments and may not apply to gains and losses equally. Adjusted net income (loss) is reconciled to Net income (loss) in the table below:



	Three months ended June 30,						Six months ended June 30,
In thousands except per share amounts	2017			2016			2017			2016
Net income (loss)	$	(10,955	)	$	14,497		$	7,708		$	(5,899	)
Fair value adjustments, net	(336		)	3,579			864			12,274
Impairment of marketable securities	305			20			426			20
Write-downs	—			—			—			4,446
Gain on sale of Joaquin project	—			—			(21,138		)	—
(Gain) loss on sale of assets and securities	(513		)	(3,126		)	1,552			(4,211		)
Gain on repurchase of Rochester royalty	(2,332		)	—			(2,332		)	—
Loss on debt extinguishment	9,342			—			9,342			—
Transaction costs	—			792			—			1,172
Foreign exchange loss (gain)	1,972			(2,810		)	6,240			(3,933		)
Tax effect of adjustments⁽¹⁾	—			3,996			1,807			2,621
Adjusted net income (loss)	$	(2,517	)	$	16,948		$	4,469		$	6,490

Adjusted net income (loss) per share - Basic	$	(0.01	)	$	0.11		$	0.02		$	0.04
Adjusted net income (loss) per share - Diluted	$	(0.01	)	$	0.11		$	0.02		$	0.04


(1)	For the three months ended June 30, 2016, tax effect of adjustments of $4.0 million (-316%) is primarily related to the tax gain on the sale of an asset, partially offset by losses on other asset sales where no tax benefit was recognized and tax benefit from fair value adjustment.

For the six months ended June 30, 2017, tax effect of adjustments of $1.8 million (-16%) is primarily related to a taxable gain on the sale of the Joaquin project. For the six months ended June 30, 2016, tax effect of adjustments of $2.6 million (-19%) is primarily related to a taxable gain on the sale of assets and the tax valuation allowance impact from an asset write-down, partially offset by tax benefit from fair value adjustments.

EBITDA and Adjusted EBITDA

Management uses EBITDA to evaluate the Company’s operating performance, to plan and forecast its operations, and assess leverage levels and liquidity measures. The Company believes the use of EBITDA reflects the underlying operating performance of our core mining business and allows investors and analysts to compare results of the Company to similar results of other mining companies. Adjusted EBITDA is a measure used in the Indenture to determine our ability to make certain payments and incur additional indebtedness. EBITDA and Adjusted EBITDA do not represent, and should not be considered an alternative to, Net income (Loss) or Cash Flow from Operations as determined under GAAP. Other companies may calculate Adjusted EBITDA differently and those calculations may not be comparable to our presentation. Adjusted EBITDA is reconciled to Net income (loss) in the table below:



	Three months ended June 30,						Six months ended June 30,
In thousands except per share amounts	2017			2016			2017			2016
Net income (loss)	$	(10,955	)	$	14,497		$	7,708		$	(5,899	)
Interest expense, net of capitalized interest	3,749			10,875			7,335			21,995
Income tax provision (benefit)	(2,098		)	(768		)	8,948			1,338
Amortization	32,946			37,505			73,050			65,470
EBITDA	23,642			62,109			97,041			82,904
Fair value adjustments, net	(336		)	3,579			864			12,274
Impairment of equity securities	305			20			426			20
Foreign exchange (gain) loss	(1,000		)	5,655			(2,349		)	5,820
Gain on sale of Joaquin project	—			—			(21,138		)	—
(Gain) loss on sale of assets and securities	(513		)	(3,126		)	1,552			(4,211		)
Gain on repurchase of Rochester royalty	(2,332		)	—			(2,332		)	—
Loss on debt extinguishment	9,342			—			9,342			—
Transaction costs	—			792			—			1,172
Asset retirement obligation accretion	2,450			2,066			4,841			4,125
Inventory adjustments and write-downs	1,796			946			1,652			1,863
Write-downs	—			—			—			4,446
Adjusted EBITDA	$	33,354		$	72,041		$	89,899		$	108,413

Costs Applicable to Sales and All-in Sustaining Costs

Management uses Costs applicable to sales (“CAS”) and All-in sustaining costs (“AISC”) to evaluate the Company’s current operating performance and life of mine performance from discovery through reclamation. We believe these measures assist analysts, investors and other stakeholders in understanding the costs associated with producing silver and gold, assessing our operating performance and ability to generate free cash flow from operations and sustaining production. These measures may not be indicative of operating profit or cash flow from operations as determined under GAAP. Management believes converting the benefit from selling gold into silver equivalent ounces best allows management, analysts, investors and other stakeholders to evaluate the operating performance of the Company. Other companies may calculate CAS and AISC differently as a result of reflecting the benefit from selling non-silver metals as a by-product credit rather than converting to silver equivalent ounces, differences in the determination of sustaining capital expenditures, and differences in underlying accounting principles and accounting frameworks such as in International Financial Reporting Standards.

Three Months Ended June 30, 2017



	Silver										Gold						Total
In thousands except per ounce amounts	Palmarejo		Rochester		San Bartolomé		Endeavor		Total		Kensington		Wharf		Total
Costs applicable to sales, including amortization (U.S. GAAP)	$	48,325	$	29,099	$	25,604	$	586	$	103,614	$	36,335	$	18,317	$	54,652	$	158,266
Amortization	14,431		4,938		2,212		168		21,749		8,347		2,549		10,896		32,645
Costs applicable to sales	$	33,894	$	24,161	$	23,392	$	418	$	81,865	$	27,988	$	15,768	$	43,756	$	125,621
Silver equivalent ounces sold	2,995,623		1,774,000		1,398,038		59,234		6,226,895								9,258,455
Gold equivalent ounces sold											29,031		21,495		50,526
Costs applicable to sales per ounce	$	11.31	$	13.62	$	16.73	$	7.06	$	13.15	$	964	$	734	$	866	$	13.57

Costs applicable to sales per average spot ounce	$	10.20	$	12.63					$	12.23							$	12.10

Costs applicable to sales																	$	125,621
Treatment and refining costs																	1,288
Sustaining capital⁽¹⁾																	17,569
General and administrative																	7,042
Exploration																	7,813
Reclamation																	4,096
Project/pre-development costs																	1,677
All-in sustaining costs																	$	165,106
Silver equivalent ounces sold																	6,226,895
Kensington and Wharf silver equivalent ounces sold																	3,031,560
Consolidated silver equivalent ounces sold																	9,258,455
All-in sustaining costs per silver equivalent ounce																	$	17.83

Consolidated silver equivalent ounces sold (average spot)																	10,384,025
All-in sustaining costs per average spot silver equivalent ounce																	$	15.90


(1)	Excludes development capital for Jualin, Guadalupe South Portal and Rochester expansion permitting.

Three Months Ended June 30, 2016



	Silver										Gold
In thousands except per ounce amounts	Palmarejo		Rochester		San Bartolomé		Endeavor		Total		Kensington		Wharf		Total		Total
Costs applicable to sales, including amortization (U.S. GAAP)	$	37,630	$	27,158	$	20,498	$	365	$	85,651	$	32,419	$	19,470	$	51,889	$	137,540
Amortization	14,765		5,437		1,853		84		22,139		9,808		5,128		14,936		37,075
Costs applicable to sales	$	22,865	$	21,721	$	18,645	$	281	$	63,512	$	22,611	$	14,342	$	36,953	$	100,465
Silver equivalent ounces sold	2,502,442		1,911,885		1,418,455		35,411		5,868,193								9,286,033
Gold equivalent ounces sold											30,178		26,786		56,964
Costs applicable to sales per ounce	$	9.14	$	11.36	$	13.14	$	7.94	$	10.82	$	749	$	535	$	649	$	10.82

Costs applicable to sales per average spot ounce	$	8.20	$	10.30					$	10.00							$	9.45

Costs applicable to sales																	$	100,465
Treatment and refining costs																	1,128
Sustaining capital⁽¹⁾																	21,019
General and administrative																	7,400
Exploration																	2,233
Reclamation																	4,170
Project/pre-development costs																	2,098
All-in sustaining costs																	$	138,513
Silver equivalent ounces sold																	5,868,193
Kensington and Wharf silver equivalent ounces sold																	3,417,840
Consolidated silver equivalent ounces sold																	9,286,033
All-in sustaining costs per silver equivalent ounce																	$	14.92

Consolidated silver equivalent ounces sold (average spot)																	10,622,163
All-in sustaining costs per average spot silver equivalent ounce																	$	13.04


(1)	Excludes development capital for Jualin, Guadalupe, Independencia and Rochester crushing capacity expansion.

Six Months Ended June 30, 2017



	Silver										Gold						Total
In thousands except per ounce amounts	Palmarejo		Rochester		San Bartolomé		Endeavor		Total		Kensington		Wharf		Total
Costs applicable to sales, including amortization (U.S. GAAP)	$	111,476	$	61,354	$	45,237	$	986	$	219,053	$	73,956	$	37,748	$	111,704	$	330,757
Amortization	34,581		10,754		3,623		281		49,239		17,525		5,660		23,185		72,424
Costs applicable to sales	$	76,895	$	50,600	$	41,614	$	705	$	169,814	$	56,431	$	32,088	$	88,519	$	258,333
Silver equivalent ounces sold	7,422,969		3,878,209		2,546,044		98,999		13,946,221								20,384,641
Gold equivalent ounces sold											61,175		46,132		107,307
Costs applicable to sales per ounce	$	10.36	$	13.05	$	16.34	$	7.12	$	12.18	$	922	$	696	$	825	$	12.67

Costs applicable to sales per average spot ounce	$	9.40	$	12.17					$	11.33							$	11.41

Costs applicable to sales																	$	258,333
Treatment and refining costs																	2,904
Sustaining capital⁽¹⁾																	29,169
General and administrative																	17,175
Exploration																	13,065
Reclamation																	7,915
Project/pre-development costs																	3,566
All-in sustaining costs																	$	332,127
Silver equivalent ounces sold																	13,946,221
Kensington and Wharf silver equivalent ounces sold																	6,438,420
Consolidated silver equivalent ounces sold																	20,384,641
All-in sustaining costs per silver equivalent ounce																	$	16.29

Consolidated silver equivalent ounces sold (average spot)																	22,639,877
All-in sustaining costs per average spot silver equivalent ounce																	$	14.67


(1)	Excludes development capital for Jualin, Guadalupe South Portal and Rochester expansion permitting.

Six Months Ended June 30, 2016



	Silver										Gold
In thousands except per ounce amounts	Palmarejo		Rochester		San Bartolomé		Endeavor		Total		Kensington		Wharf		Total		Total
Costs applicable to sales, including amortization (U.S. GAAP)	$	65,957	$	54,956	$	39,749	$	1,320	$	161,982	$	65,186	$	38,982	$	104,168	$	266,150
Amortization	22,054		10,750		3,607		383		36,794		18,157		9,179		27,336		64,130
Costs applicable to sales	$	43,903	$	44,206	$	36,142	$	937	$	125,188	$	47,029	$	29,803	$	76,832	$	202,020
Silver equivalent ounces sold	4,204,732		3,691,261		2,802,846		158,106		10,856,945								17,561,045
Gold equivalent ounces sold											61,827		49,908		111,735
Costs applicable to sales per ounce	$	10.44	$	11.98	$	12.89	$	5.93	$	11.53	$	761	$	597	$	688	$	11.50

Costs applicable to sales per average spot ounce	$	9.23	$	10.75					$	10.58							$	9.88

Costs applicable to sales																	$	202,020
Treatment and refining costs																	2,286
Sustaining capital⁽¹⁾																	37,729
General and administrative																	15,676
Exploration																	3,963
Reclamation																	7,931
Project/pre-development costs																	3,655
All-in sustaining costs																	$	273,260
Silver equivalent ounces sold																	10,856,945
Kensington and Wharf silver equivalent ounces sold																	6,704,100
Consolidated silver equivalent ounces sold																	17,561,045
All-in sustaining costs per silver equivalent ounce																	$	15.56

Consolidated silver equivalent ounces sold (average spot)																	20,438,295
All-in sustaining costs per average spot silver equivalent ounce																	$	13.37


(1)	Excludes development capital for Jualin, Guadalupe, Independencia and Rochester crushing capacity expansion.

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce for Revised 2017 Guidance



	Silver										Gold
In thousands except per ounce amounts	Palmarejo		Rochester		San Bartolomé		Endeavor		Total Silver		Kensington		Wharf		Total Gold		Total Combined
Costs applicable to sales, including amortization (U.S. GAAP)	$	228,500	$	113,550	$	92,300	$	1,038	$	435,388	$	136,600	$	82,200	$	218,800	$	654,188
Amortization	76,500		22,550		8,300		281		107,631		29,100		13,200		42,300		149,931
Costs applicable to sales	$	152,000	$	91,000	$	84,000	$	757	$	327,757	$	107,500	$	69,000	$	176,500	$	504,257
Silver equivalent ounces sold	14,900,000		7,800,000		5,200,000		105,000		28,005,000								41,505,000
Gold equivalent ounces sold											130,000		95,000		225,000
Costs applicable to sales per ounce guidance	$10.00 - $10.50		$11.50 - $12.00		$15.75 - $16.25						$800 - $850		$700 - $750


Costs applicable to sales																	$	504,257
Treatment and refining costs																	4,500
Sustaining capital, including capital lease payments																	77,000
General and administrative																	30,000
Exploration																	30,000
Reclamation																	15,000
Project/pre-development costs																	6,000
All-in sustaining costs																	$	666,757
Silver equivalent ounces sold																	28,005,000
Kensington and Wharf silver equivalent ounces sold																	13,500,000
Consolidated silver equivalent ounces sold																	41,505,000
All-in sustaining costs per silver equivalent ounce guidance																	$15.75 - $16.25

Reconciliation of All-in Sustaining Costs per Silver Equivalent Ounce for Previous 2017 Guidance



	Silver										Gold
In thousands except per ounce amounts	Palmarejo		Rochester		San Bartolomé		Endeavor		Total Silver		Kensington		Wharf		Total Gold		Total Combined
Costs applicable to sales, including amortization (U.S. GAAP)	$	211,000	$	108,380	$	102,000	$	3,750	$	425,130	$	130,500	$	83,800	$	214,300	$	639,430
Amortization	69,200		19,860		18,500		—		107,560		29,100		11,500		40,600		148,160
Costs applicable to sales	$	141,800	$	88,520	$	83,500	$	3,750	$	317,570	$	101,400	$	72,300	$	173,700	$	491,270
Silver equivalent ounces sold	14,000,000		7,680,000		5,900,000		380,000		27,960,000								40,800,000
Gold equivalent ounces sold											124,000		90,000		214,000
Costs applicable to sales per ounce guidance	$10.00 - $10.50		$11.50 - $12.00		$14.00 - $14.50						$800 - $850		$775 - $825


Costs applicable to sales																	$	491,270
Treatment and refining costs																	4,300
Sustaining capital, including capital lease payments																	82,000
General and administrative																	30,000
Exploration																	30,000
Reclamation																	14,000
Project/pre-development costs																	5,700
All-in sustaining costs																	$	657,270
Silver equivalent ounces sold																	27,960,000
Kensington and Wharf silver equivalent ounces sold																	12,840,000
Consolidated silver equivalent ounces sold																	40,800,000
All-in sustaining costs per silver equivalent ounce guidance																	$15.75 - $16.25

Cautionary Statement Concerning Forward-Looking Statements

This report contains numerous forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) relating to the Company’s gold and silver mining business, including statements regarding strategies to produce long-term cash flow, provide opportunities for growth through continued exploration, generate superior and sustainable returns for stockholders, maximize net cash flow, reduce operating and non-operating costs, demonstrate consistent capital discipline, efficiently manage working capital, and statements regarding tax positions, anticipated production, costs and expenses, the anticipated closing of the sale of the Endeavor silver stream, drought conditions in Bolivia, efforts to mitigate risks associated with gold and silver price and foreign currency fluctuations and the adequacy of liquidity and capital resources. Such forward-looking statements are identified by the use of words such as “believes,” “intends,” “expects,” “hopes,” “may,” “should,” “plan,” “projected,” “contemplates,” “anticipates” or similar words. Actual results could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ materially from those projected in the forward-looking statements include (i) the risk factors set forth in the “Risk Factors” section of the 2016 10-K and in this Report, and the risks and uncertainties discussed in this MD&A, (ii) the risk that the sale of the Endeavor silver stream does not close on a timely basis or at all, (iii) the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), (iv) changes in the market prices of gold and silver and a sustained lower price environment, including any resulting impact on cash flows, (v) the uncertainties inherent in the Company’s production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, ground conditions and grade variability, (vi) any future labor disputes or work stoppages (involving the Company and its subsidiaries or third parties), (vii) the uncertainties inherent in the estimation of gold and silver reserves and mineralized material, (viii) changes that could result from the Company’s future acquisition of new mining properties or businesses, (ix) the loss of access to any third-party smelter to which the Company markets silver and gold, (x) the effects of environmental and other governmental regulations, (xi) the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, (xii) the political risks and uncertainties associated with operations in Bolivia; and (xiii) the Company’s ability to raise additional financing necessary to conduct its business, make payments or refinance its debt. 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to various market risks as a part of its operations and engages in risk management strategies to mitigate these risks. The Company continually evaluates the potential benefits of engaging in these strategies based on current market conditions. The Company does not actively engage in the practice of trading derivative instruments for profit. Additional information about the Company’s derivative financial instruments may be found in Note 11 -- Derivative Financial Instruments in the notes to the condensed consolidated financial statements. This discussion of the Company’s market risk assessments contains “forward looking statements”. For additional information regarding forward-looking statements and risks and uncertainties that could impact the Company, please refer to Item 2 of this Report - Cautionary Statement Concerning Forward-Looking Statements. Actual results and actions could differ materially from those discussed below.

Gold and Silver Price

Gold and silver prices may fluctuate widely due to numerous factors, such as U.S. dollar strength or weakness, demand, investor sentiment, inflation or deflation, and global mine production. The Company’s profitability and cash flow may be significantly impacted by changes in the market price of gold and silver.

Gold and Silver Hedging

To mitigate the risks associated with gold and silver price fluctuations, the Company may enter into option contracts to hedge future production. The Company had no outstanding gold and silver option contracts at June 30, 2017.

Provisional Silver and Gold Sales

The Company enters into sales contracts with third-party smelters and refiners which, in some cases, provide for a provisional payment based upon preliminary assays and quoted metal prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract. Depending on the difference between the price at the time of sale and the final settlement price, embedded derivatives are recorded as either a derivative asset or liability. The embedded derivatives do not qualify for hedge accounting and, as a result, are marked to the market gold and silver price at the end of each period from the provisional sale date to the date of final settlement. The mark-to-market gains and losses are recorded in earnings. Changes in silver and gold prices resulted in provisional pricing mark-to-market losses of $0.8 million and gains of $0.6 million in the three and six months ended June 30, 2016, respectively, compared to gains of $0.6 million and $1.2 million in the three and six months ended June 30, 2016, respectively.

At June 30, 2017, the Company had outstanding provisionally priced sales of 0.1 million ounces of silver and 32,602 ounces of gold at prices of $16.85 and $1,263, respectively. A 10% change in realized silver price would cause revenue to vary by $0.2 million and a 10% change in realized gold price would cause revenue to vary by $4.1 million.

Foreign Currency

The Company operates, or has mineral interests, in several foreign countries including Australia, Bolivia, Chile, Mexico, Argentina, Ecuador, and New Zealand, which exposes it to foreign currency exchange rate risks. Foreign currency exchange rates are influenced by world market factors beyond the Company’s control such as supply and demand for U.S. and foreign currencies and related monetary and fiscal policies. Fluctuations in local currency exchange rates in relation to the U.S. dollar may significantly impact profitability and cash flow.

Foreign Exchange Hedging

To manage foreign currency risk, the Company may enter into foreign exchange forward and/or option contracts when the Company believes such contracts would be beneficial. The Company had no outstanding foreign exchange contracts at June 30, 2017.


Item 4.	Controls and Procedures


(a)	Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature, can provide only reasonable assurance regarding management’s control objectives. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events. Based upon the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective and operating to provide reasonable assurance that information required to be disclosed by it in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.


(b)	Management’s Report on Internal Control Over Financial Reporting

Based on an evaluation by the Company’s Chief Executive Officer and Chief Financial Officer, such officers concluded

that there was no change in the Company’s internal control over financial reporting during the three months ended June 30, 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

Item 1. Legal Proceedings

For a discussion of legal proceedings, see Note 19 -- Commitments and Contingencies in the notes to the Consolidated Financial Statements included herein.

Item 1A. Risk Factors

Item 1A - Risk Factors of the 2016 10-K sets forth information relating to important risks and uncertainties that could materially adversely affect the Company's business, financial condition or operating results. Those risk factors have been supplemented and updated in this Form 10-Q. Additional risks and uncertainties that the Company does not presently know or that it currently deems immaterial also may impair our business operations.

The Company’s estimates of future production, costs, and financial results are imprecise, depend upon subjective factors, may not be realized in actual production and such estimates speak only as of their respective dates.

The Company has in the past, and may in the future, provide estimates and projections of its future production, costs and financial results. Any such information is forward-looking. Neither the Company’s independent registered public accounting firm nor any other independent expert or outside party compiles or examines these forward-looking statements and, accordingly, no such person expresses any opinion or any other form of assurance with respect thereto. These forward-looking statements are prepared by the Company’s management and technical personnel and are qualified by, and subject to, the assumptions and the other information contained or referred to in the filing, release or presentation in which they are made, including assumptions about the availability, accessibility, sufficiency and quality of mineralized material, the Company’s costs of production, the market prices of silver and gold, the Company’s ability to sustain and increase production levels, the sufficiency of its infrastructure, the performance of its personnel and equipment, its ability to maintain and obtain mining interests and permits, the state of government and community relations, and its compliance with existing and future laws and regulations. The Company sometimes states possible outcomes as high and low ranges which are intended to provide a sensitivity analysis as variables are changed but are not intended to represent that actual results could not fall outside of the suggested ranges. Actual results and experience may differ materially from these assumptions. Any such production, cost, or financial results estimates speak only as of the date on which they are made, and the Company disclaims any intent or obligation to update such estimates, whether as a result of new information, future events or otherwise. Accordingly, these forward-looking statements should be considered in the context in which they are made and undue reliance should not be placed on them.

The Company’s future operating performance may not generate cash flows sufficient to meet debt payment obligations.

As of June 30, 2017, the Company had approximately $284.8 million of outstanding indebtedness. The Company’s ability to make scheduled debt payments on outstanding indebtedness will depend on future results of operations and cash flows. The

Company’s results of operations and cash flows, in part, are subject to economic factors beyond its control, including the market prices of silver and gold. The Company may not be able to generate enough cash flow to meet obligations and commitments under outstanding debt instruments. If the Company cannot generate sufficient cash flow from operations to service debt, it may need to further refinance debt, dispose of assets or issue equity to obtain the necessary funds.

If the Company’s cash flows and capital resources are insufficient to fund its debt services obligations, the Company could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance its indebtedness. The Company cannot predict whether it would be able to refinance debt, issue equity or dispose of assets to raise funds on a timely basis or on satisfactory terms. In a rising interest rate environment, the costs of borrowing additional funds or refinancing outstanding indebtedness would also be expected to increase. The agreements governing the Company’s outstanding indebtedness restrict the Company’s ability to dispose of assets and use the proceeds from those dispositions and may also restrict its ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. The Company may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. If the Company raises additional funds by issuing equity securities or securities convertible into equity securities, holders of its common stock could experience significant dilution of their ownership interest, and these securities could have rights senior to those of the holders of common stock.

The terms of the Company’s debt impose restrictions on its operations.

The agreements governing the Company’s outstanding indebtedness include a number of significant negative covenants. These covenants, among other things:


•	limit the Company’s ability to obtain additional financing, repurchase outstanding equity or issue debt securities;


•	require a portion of the Company’s cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;


•	limit the Company’s ability to sell, transfer or otherwise dispose of assets, enter into transactions with affiliates, enter into agreements restricting our subsidiaries’ ability to pay dividends, consolidate, amalgamate, merger or sell all or substantially all of the Company’s assets;


•	increase our vulnerability to general adverse economic and industry conditions;


•	limit the Company’s flexibility in planning for and reacting to changes in the industry in which we compete; and


•	place the Company at a disadvantage compared to other, less leveraged competitors.

A breach of any of these covenants could result in an event of default under the applicable agreement governing the Company’s outstanding indebtedness that, if not cured or waived, could cause all amounts outstanding with respect to the debt to be due and payable immediately. Acceleration of any debt could result in cross-defaults under the Company’s other debt instruments. The Company’s assets and cash flow may be insufficient to repay borrowings fully under all of its outstanding debt instruments if any of its debt instruments are accelerated upon an event of default, which could force the Company into bankruptcy or liquidation.

Item 4. Mine Safety Disclosures

Information pertaining to mine safety matters is reported in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act in Exhibit 95.1 attached to this Form 10-Q.

Item 5. Other Information

In accordance with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, and the Company’s insider trading policy, the transactions listed below were entered into by certain executive officers of the Company for diversification purposes. After giving effect to the transactions, each such executive officer would remain in compliance with the Company's executive stock ownership guidelines.


•	Peter C. Mitchell, the Company’s Senior Vice President and Chief Financial Officer, entered into a selling plan effective May 4, 2017. Under the selling plan, between August 31, 2017 and May 27, 2018, Mr. Mitchell will sell a total of 40,000 shares of the Company’s common stock so long as the market price of the common stock is higher than a minimum threshold price specified in the plan.


•	Frank L. Hanagarne, Jr., the Company’s Senior Vice President and Chief Operating Officer, entered into a selling plan effective June 7, 2017. Under the selling plan, between July 28, 2017 and June 30, 2018, Mr. Hanagarne will sell a total

of 50,061 shares of the Company’s common stock so long as the market price of the common stock is higher than a minimum threshold price specified in the plan.

•

Casey M. Nault, the Company’s Senior Vice President, General Counsel & Secretary, cancelled his previously reported selling plan effective March 6, 2017 and entered into a new selling plan effective June 12, 2017. Under the new selling plan, between July 28, 2017 and December 12, 2017, Mr. Nault will sell a total of 60,000 shares of the Company’s common stock so long as the market price of the common stock is higher than a minimum threshold price specified in the plan.

Rule 10b5-1 permits an insider to implement a written prearranged trading plan entered into at a time when the insider is not aware of any material nonpublic information about the Company and allows the insider to trade on a one-time or regularly scheduled basis regardless of any material nonpublic information about the Company thereafter received by the insider.

On June 1, 2017, Coeur Alaska, Inc., a wholly-owned subsidiary of the Company and the operator of the Kensington mine, received an imminent danger order under section 107(a) of the Federal Mine Safety and Health Act of 1977, in response to anonymous allegations made to the Mine Safety and Health Administration. Following an investigation, the government determined no violation under 107(a) occurred and, accordingly, the order was vacated on June 26, 2017.

Item 6. Exhibits



4.1	Indenture, dated May 31, 2017, among Coeur Mining, Inc., as issuer, certain subsidiaries of Coeur Mining, Inc., as guarantors thereto, and The Bank of New York Mellon, as trustee (Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on May 31, 2017 (File No. 001-08641)).
4.2	Registration Rights Agreement, dated May 31, 2017, among Coeur Mining, Inc., certain subsidiaries of Coeur Mining, Inc., and Goldman Sachs & Co. LLC (Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed on May 31, 2017 (File No. 001-08641)).
31.1	Certification of the CEO (Filed herewith).
31.2	Certification of the CFO (Filed herewith).
32.1	CEO Section 1350 Certification (Filed herewith).
32.2	CFO Section 1350 Certification (Filed herewith).
95.1	Mine Safety Disclosure (Filed herewith).
101.INS	XBRL Instance Document**
101.SCH	XBRL Taxonomy Extension Schema**
101.CAL	XBRL Taxonomy Extension Calculation Linkbase**
101.DEF	XBRL Taxonomy Extension Definition Linkbase**
101.LAB	XBRL Taxonomy Extension Label Linkbase**
101.PRE	XBRL Taxonomy Extension Presentation Linkbase**

* Management contract or compensatory plan or arrangement.

** The following financial information from Coeur Mining, Inc.’s Quarterly Report on Form 10-Q for the three and six months ended June 30, 2017, formatted in XBRL (Extensible Business Reporting Language): Condensed Consolidated Statements of Comprehensive Income (Loss), Condensed Consolidated Statements of Cash Flows, Condensed Consolidated Balance Sheets, and Condensed Consolidated Statement of Changes in Stockholders’ Equity.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		COEUR MINING, INC.
		(Registrant)

Dated	July 26, 2017	/s/ Mitchell J. Krebs
		MITCHELL J. KREBS
		President and Chief Executive Officer (Principal Executive Officer)

Dated	July 26, 2017	/s/ Peter C. Mitchell
		PETER C. MITCHELL
		Senior Vice President and Chief Financial Officer (Principal Financial Officer)

Dated	July 26, 2017	/s/ Mark Spurbeck
		MARK SPURBECK
		Vice President, Finance and Chief Accounting Officer (Principal Accounting Officer)