Coeur Mining (CDE) Q1 FY26 earnings call: guidance and Q&A

Clarification on the $200 million in Q1 specific and one-time items impacting free cash flow, specifically if they are non-recurring in Q2, Q3, and Q4.

Mitch Krebs confirmed that Mexican tax payments, interest, and Rochester property tax are recurring Q1 items, while incentive payments are variable. Tom Whelan added that interest on notes occurs in Q1 and Q3, and transaction costs were one-time. The majority are Q1 specific or one-time.

“Yes, each first quarter, you're really not going to get away from the Mexican tax payments, the interest and the Rochester property tax. The others were onetime.”

asked by Cosmos Chiu · answered by Mitchell J. Krebs

Inquiring about the utilization of the $750 million share buyback program and whether it will be used in 2026, considering it hasn't been used yet.

Mitch Krebs stated that the company has been constrained by blackouts due to the New Gold transaction but looks forward to becoming active in the share repurchase program starting in Q2 FY26 after the blackouts lift.

“Absolutely, we look forward to enacting that enhanced repurchase program. We've been constrained with blackouts from the New Gold transaction from first quarter. Those now will lift after today. So we look forward to becoming more active here starting in the second quarter and beyond on that repurchase program.”

asked by Cosmos Chiu · answered by Mitchell J. Krebs

Seeking to understand the high Cost of Sales (CAS) at New Afton and Rainy River due to purchase price accounting, and how it will evolve in Q2, Q3, and Q4, especially concerning inventory drawdowns.

Tom Whelan explained that New Afton's impact is largely in the rearview mirror as inventory was flushed. Rainy River, however, inherited a 2 million tonne stockpile and 30,000 ounces of gold in finished goods, leading to continued CAS impact through Q2 and Q3 as these inventories are monetized at fair market value. He emphasized it's a non-cash accounting matter not affecting free cash flow.

“So that's well over $400 million of fair value of gold. And so as I mentioned, we're finalizing that purchase price allocation exercise here in the second quarter as we're allowed to. So $65 million of that flowed through. So there'll be a continuing impact through Q2 and Q3.”

asked by Cosmos Chiu · answered by Thomas Whelan

Questioned the significant jump in deferred income tax from $300 million to $3.15 billion on the balance sheet, assuming it's related to New Gold's deferred income tax and if the change in notes impacts it.

Tom Whelan confirmed the increase is due to the purchase price accounting for New Gold, where acquired mineral interests and equipment are recorded at high accounting values while their tax basis remains New Gold's original. This difference, multiplied by the Canadian tax rate, creates the deferred tax liability, which will reverse over approximately 10 years. He clarified it's not hidden taxes but an accounting rule.

“So that liability is going to reverse over time, similar to what we saw out at Las as Chispas last year, where we had a large tax liability, and that's just going to reverse slowly but surely as the accounting values and the book values get closer and closer. But that will take literally 10 years to reverse out.”

asked by Joseph Reagor · answered by Thomas Whelan

Asked for clarification on how restructuring the New Gold debt helps the company's tax structure, specifically if it's a U.S. or Canadian tax benefit.

Tom Whelan explained that the obligor exchange novates the 2032 New Gold bonds from the Canadian entity to the U.S. entity, providing a tax shelter against U.S. income. This also simplifies rating agency assessments and provides full financial flexibility for capital returns.

“What that does is it will novate the 2032 New Gold bonds out of the Canadian entity and into the U.S. entity. So we'll get that tax shelter in the -- against our U.S. income.”

asked by Brian MacArthur · answered by Thomas Whelan