EX-99.1
2
proformafinancialstatement.htm
EXHIBIT 99.1
Exhibit
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On February 28, 2018, Coeur Mining, Inc. (the "Company" or "Coeur") completed the previously announced sale (the "Transaction") of its subsidiary Empresa Minera Manquiri S.A., a Bolivian sociedad anónima ("Manquiri") to Ag-Mining Investments, AB (formerly NewCo 4714 Sweden AB under change of name to Argentum Investment AB) (the "Buyer"). Manquiri operates the San Bartolomé mine and processing facility near Potosì, Bolivia. The Company, Coeur South America Corp., a Delaware corporation ("CSA"), Coeur Explorations, Inc., an Idaho corporation ("CEE" and together with CSA and Coeur, the "Sellers") completed the sale of 100% of the issued and outstanding shares of Manquiri in exchange for: (A) a 2.0% net smelter returns royalty on all metals processed through the San Bartolomé mine's processing facility (commencing on the closing of the Transaction), (B) all value added tax refunds collected or received by Manquiri for any period ending on or before the closing date of the Transaction (net of reasonable collection expenses) and (C) promissory notes payable to the Sellers by the Buyer with an aggregate principal amount equal to $27.6 million, as adjusted to reflect Manquiri's cash and cash equivalents as of the closing of the Transaction (the "Notes"). The Notes shall be repaid in equal monthly installments beginning on October 1, 2018 with a maturity date of September 1, 2019.
The following unaudited pro forma condensed consolidated financial statements are based upon the historical financial statements for the Company, adjusted to reflect the sale of Manquiri.
1
Coeur Mining, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations (Unaudited)
Year Ended December 31, 2017
Consolidated Company (a)
Manquiri Adjustments
Pro Forma
Consolidated Company
In thousands, except per share data
Revenue
$
709,598
$
-
$
709,598
COSTS AND EXPENSES
-
Costs applicable to sales(1)
440,260
-
440,260
Amortization
146,549
-
146,549
General and administrative
33,616
-
33,616
Exploration
30,311
-
30,311
Pre-development, reclamation, and other
18,936
-
18,936
Total costs and expenses
669,672
-
669,672
OTHER INCOME (EXPENSE), NET
Loss on debt extinguishment
(9,342
)
-
(9,342
)
Fair value adjustments, net
(864
)
-
(864
)
Interest expense, net of capitalized interest
(16,440
)
-
(16,440
)
Other, net
26,643
1,872
(b)
28,515
Total other income (expense), net
(3
)
1,872
1,869
Income (loss) before income and mining taxes
39,923
1,872
41,795
Income and mining tax (expense) benefit
(28,998
)
-
(28,998
)
Income (loss) from continuing operations
$
10,925
$
1,872
$
12,797
Net income (loss) from continuing operations per common share, basic
$
0.06
$
0.07
Net income (loss) from continuing operations per common share, diluted
$
0.06
$
0.07
Weighted average number of shares of common stock
Basic
180,096
180,096
Diluted
184,144
184,144
(1) Excludes amortization.
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
2
Coeur Mining, Inc. and Subsidiaries
Pro Forma Condensed Consolidated Balance Sheet (Unaudited)
Year Ended December 31, 2017
Consolidated Company (c)
Manquiri Adjustments
Pro Forma
Consolidated Company
ASSETS
In thousands, except share data
CURRENT ASSETS
Cash and cash equivalents
$
192,032
$
1,050
(d)
$
193,082
Receivables
19,069
10,424
(e)
29,493
Inventory
58,230
-
58,230
Ore on leach pads
73,752
-
73,752
Prepaid expenses and other
15,053
-
15,053
Assets held for sale
91,421
(91,421
) (f)
-
449,557
(79,947
)
369,610
NON-CURRENT ASSETS
Property, plant and equipment, net
254,737
-
254,737
Mining properties, net
829,569
8,140
(g)
837,709
Ore on leach pads
65,393
-
65,393
Restricted assets
20,847
-
20,847
Equity and debt securities
34,837
-
34,837
Receivables
28,750
28,303
(e)
57,053
Other
17,485
-
17,485
TOTAL ASSETS
$
1,701,175
$
(43,504
)
$
1,657,671
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
$
48,592
$
-
$
48,592
Accrued liabilities and other
94,930
5,520
(h)
100,450
Debt
30,753
-
30,753
Reclamation
3,777
-
3,777
Liabilities held for sale
50,677
(50,677
) (f)
-
228,729
(45,157
)
183,572
NON-CURRENT LIABILITIES
Debt
380,569
-
380,569
Reclamation
117,055
-
117,055
Deferred tax liabilities
105,148
-
105,148
Other long-term liabilities
54,697
-
54,697
657,469
-
657,469
STOCKHOLDERS' EQUITY
Common stock, par value $0.01 per share; authorized 300,000,000 shares, issued and outstanding 185,637,724 at December 31, 2017
1,856
-
1,856
Additional paid-in capital
3,357,345
-
3,357,345
Accumulated other comprehensive income (loss)
2,519
-
2,519
Accumulated deficit
(2,546,743
)
1,653
(i)
(2,545,090
)
814,977
1,653
816,630
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,701,175
$
(43,504
)
$
1,657,671
See accompanying notes to the unaudited pro forma condensed consolidated financial statements.
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Coeur Mining, Inc. and Subsidiaries
Notes to Pro Forma Condensed Consolidated Financial Statements (Unaudited)
1) BASIS OF PRESENTATION
The unaudited pro forma financial information is presented to illustrate the effect of the sale of Manquiri on the Company's historical financial position and operating results. The unaudited pro forma condensed consolidated balance sheet is as of December 31, 2017 and is based upon our historical statements after giving effect to the sale of Manquiri as if it had occurred on December 31, 2017. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2017 is based upon our historical statements after giving effect to the sale of Manquiri as if it had occurred on January 1, 2017. The unaudited pro forma financial information should be read in conjunction with the historical consolidated financial statements and notes thereto of the Company contained in the Annual Report on Form 10-K for the year ended December 31, 2017.
The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not intended to represent or be indicative of our consolidated results of operations or financial position that would have been reported had the sale of Manquiri been completed as of the dates presented, and should not be taken as representation of our future consolidated results of operations or financial condition. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances; however, actual amounts could differ.
2) PRO FORMA ADJUSTMENTS
The pro forma adjustments are based on the Company's preliminary estimates and assumptions that are subject to change. The following adjustments have been reflected in the unaudited pro forma combined financial information:
Adjustments to the pro forma condensed consolidated statement of operations
(a) Reflects the Company's historical consolidated statement of operations for year ended December 31, 2017 as reported in the Company's Form 10-K as of December 31, 2017.
(b) Reflects the interest income resulting from the interest on the value added tax refunds and Notes, which the Company received in conjunction with the sale of Manquiri.
Adjustments to the pro forma condensed consolidated balance sheet
(c) Reflects the Company's condensed historical consolidated balance sheet as of December 31, 2017 as reported in the Company's Form 10-K as of December 31, 2017.
(d) Reflects cash settlement in advance of the sale of Manquiri.
(e) Reflects the estimated aggregate fair value of the value added tax refunds and Notes, which the Company received in conjunction with the sale of Manquiri. The amounts to be received are classified as either short-term or long-term depending on when they are expected to be collected by the Company.
(f) Reflects Manquiri's assets and liabilities, which were classified as held for sale as of December 31, 2017 as reported in the Company's Form 10-K as of December 31, 2017.
(g) Reflects the estimated aggregate fair value of the 2.0% net smelter returns royalty, which the Company received in conjunction with the sale of Manquiri.
(h) Reflects the Company's estimated indemnification obligation pursuant to the terms of the Transaction.
(i) This adjustment reflects the estimated gain of $1.7 million arising from the transaction as of February 28, 2018. This estimated gain has not been reflected in the pro forma consolidated statement of operations as it is considered to be nonrecurring in nature. No adjustment has been made to the sale proceeds to give effect to any potential post-closing adjustments under the terms of the Transaction.
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EX - 99 . 1 2 proformafinancialstatement . htm EXHIBIT 99 . 1 Exhibit Exhibit 99 . 1 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS On February 28 , 2018 , Coeur Mining , Inc . ( the " Company " or " Coeur " ) completed the previously announced sale ( the " Transaction " ) of its subsidiary Empresa Minera Manquiri S . A . , a Bolivian sociedad anónima ( " Manquiri " ) to Ag - Mining Investments , AB ( formerly NewCo 4714 Sweden AB under change of name to Argentum Investment AB ) ( the " Buyer " ) . Manquiri operates the San Bartolomé mine and processing facility near Potosì , Bolivia . The Company , Coeur South America Corp . , a Delaware corporation ( " CSA " ) , Coeur Explorations , Inc . , an Idaho corporation ( " CEE " and together with CSA and Coeur , the " Sellers " ) completed the sale of 100 % of the issued and outstanding shares of Manquiri in exchange for : ( A ) a 2 . 0 % net smelter returns royalty on all metals processed through the San Bartolomé mine 's processing facility ( commencing on the closing of the Transaction ) , ( B ) all value added tax refunds collected or received by Manquiri for any period ending on or before the closing date of the Transaction ( net of reasonable collection expenses ) and ( C ) promissory notes payable to the Sellers by the Buyer with an aggregate principal amount equal to $ 27.6 million , as adjusted to reflect Manquiri 's cash and cash equivalents as of the closing of the Transaction ( the " Notes " ) . The Notes shall be repaid in equal monthly installments beginning on October 1 , 2018 with a maturity date of September 1 , 2019 . The following unaudited pro forma condensed consolidated financial statements are based upon the historical financial statements for the Company , adjusted to reflect the sale of Manquiri . 1 Coeur Mining , Inc . and Subsidiaries Pro Forma Condensed Consolidated Statements of Operations ( Unaudited ) Year Ended December 31 , 2017 Consolidated Company ( a ) Manquiri Adjustments Pro Forma Consolidated Company In thousands , except per share data Revenue $ 709,598 $ - $ 709,598 COSTS AND EXPENSES - Costs applicable to sales ( 1 ) 440,260 - 440,260 Amortization 146,549 - 146,549 General and administrative 33,616 - 33,616 Exploration 30,311 - 30,311 Pre - development , reclamation , and other 18,936 - 18,936 Total costs and expenses 669,672 - 669,672 OTHER INCOME ( EXPENSE ) , NET Loss on debt extinguishment ( 9,342 ) - ( 9,342 ) Fair value adjustments , net ( 864 ) - ( 864 ) Interest expense , net of capitalized interest ( 16,440 ) - ( 16,440 ) Other , net 26,643 1,872 ( b ) 28,515 Total other income ( expense ) , net ( 3 ) 1,872 1,869 Income ( loss ) before income and mining taxes 39,923 1,872 41,795 Income and mining tax ( expense ) benefit ( 28,998 ) - ( 28,998 ) Income ( loss ) from continuing operations $ 10,925 $ 1,872 $ 12,797 Net income ( loss ) from continuing operations per common share , basic $ 0 . 06 $ 0 . 07 Net income ( loss ) from continuing operations per common share , diluted $ 0 . 06 $ 0 . 07 Weighted average number of shares of common stock Basic 180,096 180,096 Diluted 184,144 184,144 ( 1 ) Excludes amortization . See accompanying notes to the unaudited pro forma condensed consolidated financial statements . 2 Coeur Mining , Inc . and Subsidiaries Pro Forma Condensed Consolidated Balance Sheet ( Unaudited ) Year Ended December 31 , 2017 Consolidated Company ( c ) Manquiri Adjustments Pro Forma Consolidated Company ASSETS In thousands , except share data CURRENT ASSETS Cash and cash equivalents $ 192,032 $ 1,050 ( d ) $ 193,082 Receivables 19,069 10,424 ( e ) 29,493 Inventory 58,230 - 58,230 Ore on leach pads 73,752 - 73,752 Prepaid expenses and other 15,053 - 15,053 Assets held for sale 91,421 ( 91,421 ) ( f ) - 449,557 ( 79,947 ) 369,610 NON - CURRENT ASSETS Property , plant and equipment , net 254,737 - 254,737 Mining properties , net 829,569 8,140 ( g ) 837,709 Ore on leach pads 65,393 - 65,393 Restricted assets 20,847 - 20,847 Equity and debt securities 34,837 - 34,837 Receivables 28,750 28,303 ( e ) 57,053 Other 17,485 - 17,485 TOTAL ASSETS $ 1,701,175 $ ( 43,504 ) $ 1,657,671 LIABILITIES AND STOCKHOLDERS ' EQUITY CURRENT LIABILITIES Accounts payable $ 48,592 $ - $ 48,592 Accrued liabilities and other 94,930 5,520 ( h ) 100,450 Debt 30,753 - 30,753 Reclamation 3,777 - 3,777 Liabilities held for sale 50,677 ( 50,677 ) ( f ) - 228,729 ( 45,157 ) 183,572 NON - CURRENT LIABILITIES Debt 380,569 - 380,569 Reclamation 117,055 - 117,055 Deferred tax liabilities 105,148 - 105,148 Other long - term liabilities 54,697 - 54,697 657,469 - 657,469 STOCKHOLDERS ' EQUITY Common stock , par value $ 0.01 per share ; authorized 300,000,000 shares , issued and outstanding 185,637,724 at December 31 , 2017 1,856 - 1,856 Additional paid - in capital 3,357,345 - 3,357,345 Accumulated other comprehensive income ( loss ) 2,519 - 2,519 Accumulated deficit ( 2,546,743 ) 1,653 ( i ) ( 2,545,090 ) 814,977 1,653 816,630 TOTAL LIABILITIES AND STOCKHOLDERS ' EQUITY $ 1,701,175 $ ( 43,504 ) $ 1,657,671 See accompanying notes to the unaudited pro forma condensed consolidated financial statements . 3 Coeur Mining , Inc . and Subsidiaries Notes to Pro Forma Condensed Consolidated Financial Statements ( Unaudited ) 1 ) BASIS OF PRESENTATION The unaudited pro forma financial information is presented to illustrate the effect of the sale of Manquiri on the Company 's historical financial position and operating results . The unaudited pro forma condensed consolidated balance sheet is as of December 31 , 2017 and is based upon our historical statements after giving effect to the sale of Manquiri as if it had occurred on December 31 , 2017 . The unaudited pro forma condensed consolidated statement of operations for the year ended December 31 , 2017 is based upon our historical statements after giving effect to the sale of Manquiri as if it had occurred on January 1 , 2017 . The unaudited pro forma financial information should be read in conjunction with the historical consolidated financial statements and notes thereto of the Company contained in the Annual Report on Form 10 - K for the year ended December 31 , 2017 . The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not intended to represent or be indicative of our consolidated results of operations or financial position that would have been reported had the sale of Manquiri been completed as of the dates presented , and should not be taken as representation of our future consolidated results of operations or financial condition . The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances ; however , actual amounts could differ . 2 ) PRO FORMA ADJUSTMENTS The pro forma adjustments are based on the Company 's preliminary estimates and assumptions that are subject to change . The following adjustments have been reflected in the unaudited pro forma combined financial information : Adjustments to the pro forma condensed consolidated statement of operations ( a ) Reflects the Company ' s historical consolidated statement of operations for year ended December 31 , 2017 as reported in the Company 's Form 10 - K as of December 31 , 2017 . ( b ) Reflects the interest income resulting from the interest on the value added tax refunds and Notes , which the Company received in conjunction with the sale of Manquiri . Adjustments to the pro forma condensed consolidated balance sheet ( c ) Reflects the Company 's condensed historical consolidated balance sheet as of December 31 , 2017 as reported in the Company 's Form 10 - K as of December 31 , 2017 . ( d ) Reflects cash settlement in advance of the sale of Manquiri . ( e ) Reflects the estimated aggregate fair value of the value added tax refunds and Notes , which the Company received in conjunction with the sale of Manquiri . The amounts to be received are classified as either short - term or long - term depending on when they are expected to be collected by the Company . ( f ) Reflects Manquiri 's assets and liabilities , which were classified as held for sale as of December 31 , 2017 as reported in the Company 's Form 10 - K as of December 31 , 2017 . ( g ) Reflects the estimated aggregate fair value of the 2 . 0 % net smelter returns royalty , which the Company received in conjunction with the sale of Manquiri . ( h ) Reflects the Company 's estimated indemnification obligation pursuant to the terms of the Transaction . ( i ) This adjustment reflects the estimated gain of $ 1.7 million arising from the transaction as of February 28 , 2018 . This estimated gain has not been reflected in the pro forma consolidated statement of operations as it is considered to be nonrecurring in nature . No adjustment has been made to the sale proceeds to give effect to any potential post - closing adjustments under the terms of the Transaction . 4