Document
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 March 31, 2018
OR
 ¨   
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
____________________________________________ 
a021914coeurminingrpmshsmb24.jpg
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 186,116,975 shares were issued and outstanding as of April 23, 2018.


COEUR MINING, INC.
INDEX
 
 
Page
Part I.
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
 
 
 
 
Condensed Consolidated Statements of Cash Flows (Unaudited)
 
 
 
 
Condensed Consolidated Balance Sheets
 
 
 
 
Condensed Consolidated Statement of Changes in Stockholders’ Equity
 
 
 
 
Notes to Condensed Consolidated Financial Statements (Unaudited)
 
 
 
 
 
 
 
 
Consolidated Financial Results
 
 
 
 
Results of Operations
 
 
 
 
Liquidity and Capital Resources
 
 
 
 
Non-GAAP Financial Performance Measures
 
 
 
 
 
 
 
 
 
 
 
Part II.
 
 
 
 
 
 
 
 
Item 1A. Risk Factors
 
 
 
 
 
 
 
 
Item 5. Other Information
 
 
 
 
Item 6. Exhibits
 
 
 
Signatures



2

PART I
Item 1.        Financial Statements

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
 
 
 
Three months ended March 31,
 
 
2018
 
2017
 
Notes
In thousands, except share data
Revenue
3
$
163,267

 
$
185,554

COSTS AND EXPENSES
 
 
 
 
Costs applicable to sales(1)
3
99,340

 
114,490

Amortization
 
30,777

 
38,693

General and administrative
 
8,804

 
10,125

Exploration
 
6,683

 
5,252

Pre-development, reclamation, and other
 
4,225

 
3,837

Total costs and expenses
 
149,829

 
172,397

OTHER INCOME (EXPENSE), NET
 
 
 
 
Fair value adjustments, net
10
4,987

 
(1,200
)
Interest expense, net of capitalized interest
18
(5,965
)
 
(3,579
)
Other, net
7
180

 
20,799

Total other income (expense), net
 
(798
)
 
16,020

Income (loss) before income and mining taxes
 
12,640

 
29,177

Income and mining tax (expense) benefit
8
(11,949
)
 
(10,878
)
Income (loss) from continuing operations
 
$
691

 
$
18,299

Income (loss) from discontinued operations
21
550

 
364

NET INCOME (LOSS)
 
$
1,241

 
$
18,663

OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
 
 
 
 
Unrealized gain (loss) on debt and equity securities
 
(278
)
 
(2,182
)
Reclassification adjustments for impairment of equity securities
 
—

 
121

Reclassification adjustments for realized (gain) loss on sale of equity securities
 
—

 
1,471

Other comprehensive income (loss)
 
(278
)
 
(590
)
COMPREHENSIVE INCOME (LOSS)
 
$
963

 
$
18,073

 
 
 
 
 
NET INCOME (LOSS) PER SHARE
9
 
 
 
Basic income (loss) per share:
 
 
 
 
Net income (loss) from continuing operations
 
$
0.00

 
$
0.10

Net income (loss) from discontinued operations
 
0.00

 
0.00

Basic(2)
 
$
0.01

 
$
0.10

Diluted income (loss) per share:
 
 
 
 
Net income (loss) from continuing operations
 
$
0.00

 
$
0.10

Net income (loss) from discontinued operations
 
0.00

 
0.00

Diluted(2)
 
$
0.01

 
$
0.10

(1) Excludes amortization.
(2) Due to rounding, the sum of net income per share from continuing operations and discontinued operations may not equal net income per share.
The accompanying notes are an integral part of these condensed consolidated financial statements.

3

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
Three months ended March 31,
 
 
2018
 
2017
 
Notes
In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
Net income (loss)
 
$
1,241

 
$
18,663

(Income) loss from discontinued operations
 
(550
)
 
(364
)
Adjustments:
 
 
 
 
Amortization
 
30,777

 
38,693

Accretion
 
3,318

 
2,240

Deferred taxes
 
454

 
2,584

Fair value adjustments, net
10
(4,987
)
 
1,200

Stock-based compensation
5
2,786

 
3,307

Gain on sale of the Joaquin project
 
—

 
(21,138
)
Other
 
401

 
(1,895
)
Changes in operating assets and liabilities:
 
 
 
 
Receivables
 
(1,691
)
 
5,680

Prepaid expenses and other current assets
 
(5,635
)
 
(4,906
)
Inventory and ore on leach pads
 
(8,708
)
 
15,171

Accounts payable and accrued liabilities
 
(1,865
)
 
(15,299
)
CASH PROVIDED BY OPERATING ACTIVITIES OF CONTINUING OPERATIONS
 
15,541

 
43,936

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS
 
(2,690
)
 
11,335

CASH PROVIDED BY OPERATING ACTIVITIES
 
12,851

 
55,271

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
Capital expenditures
 
(42,345
)
 
(23,591
)
Proceeds from the sale of assets
 
60

 
15,019

Purchase of investments
 
(361
)
 
(1,016
)
Sale of investments
 
1,619

 
10,020

Other
 
(65
)
 
(14
)
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES OF CONTINUING OPERATIONS
 
(41,092
)
 
418

CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS
 
(28,470
)
 
(388
)
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
 
(69,562
)
 
30

CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
Issuance of notes and bank borrowings, net of issuance costs
18
15,000

 
—

Payments on debt, capital leases, and associated costs
18
(18,449
)
 
(3,206
)
Other
 
(4,606
)
 
(3,247
)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES OF CONTINUING OPERATIONS
 
(8,055
)
 
(6,453
)
CASH USED IN FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS
 
(22
)
 
(20
)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
 
(8,077
)
 
(6,473
)
Effect of exchange rate changes on cash and cash equivalents
 
557

 
555

INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
 
(64,231
)
 
49,383

Less net cash provided by (used in) discontinued operations(1)
 
(32,930
)
 
5,527

 
 
(31,301
)
 
43,856

Cash, cash equivalents and restricted cash at beginning of period
 
203,402

 
126,601

Cash, cash equivalents and restricted cash at end of period
 
$
172,101

 
$
170,457

(1) Less net cash provided by (used in) discontinued operations includes the following cash transactions: net subsidiary payments to parent company of $1,748 and $5,400 during the three months ended March 31, 2018 and 2017, respectively.

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

4

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
March 31, 2018 (unaudited)
 
December 31, 2017
ASSETS
Notes
In thousands, except share data
CURRENT ASSETS
 
 
 
 
Cash and cash equivalents
 
$
159,643

 
$
192,032

Receivables
14
35,864

 
19,069

Inventory
15
61,723

 
58,230

Ore on leach pads
15
75,584

 
73,752

Prepaid expenses and other
 
18,203

 
15,053

Assets held for sale
21
—

 
91,421

 
 
351,017

 
449,557

NON-CURRENT ASSETS
 
 
 
 
Property, plant and equipment, net
16
266,157

 
254,737

Mining properties, net
17
843,821

 
829,569

Ore on leach pads
15
67,430

 
65,393

Restricted assets
13
22,116

 
20,847

Equity and debt securities
13
37,317

 
34,837

Receivables
14
55,428

 
28,750

Other
 
18,649

 
17,485

TOTAL ASSETS
 
$
1,661,935

 
$
1,701,175

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
Accounts payable
 
$
44,864

 
$
48,592

Accrued liabilities and other
22
105,149

 
94,930

Debt
18
17,040

 
30,753

Reclamation
4
3,777

 
3,777

Liabilities held for sale
21
—

 
50,677

 
 
170,830

 
228,729

NON-CURRENT LIABILITIES
 
 
 
 
Debt
18
396,984

 
380,569

Reclamation
4
119,154

 
117,055

Deferred tax liabilities
 
105,224

 
105,148

Other long-term liabilities
 
55,432

 
54,697

 
 
676,794

 
657,469

STOCKHOLDERS’ EQUITY
 
 
 
 
Common stock, par value $0.01 per share; authorized 300,000,000 shares, 186,176,237 issued and outstanding at March 31, 2018 and 185,637,724 at December 31, 2017
 
1,862

 
1,856

Additional paid-in capital
 
3,355,710

 
3,357,345

Accumulated other comprehensive income (loss)
 
(363
)
 
2,519

Accumulated deficit
 
(2,542,898
)
 
(2,546,743
)
 
 
814,311

 
814,977

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
1,661,935

 
$
1,701,175


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


5

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, 2017
185,638

 
$
1,856

 
$
3,357,345

 
$
(2,546,743
)
 
$
2,519

 
$
814,977

Net income (loss)
—

 
—

 
—

 
1,241

 
—

 
1,241

Reclassification of unrealized gain (loss) on equity securities for ASU 2016-01
—

 
—

 
—

 
2,604

 
(2,604
)
 
—

Other comprehensive income (loss)
—

 
—

 
—

 
—

 
(278
)
 
(278
)
Common stock issued under stock-based compensation plans, net
538

 
6

 
(1,635
)
 
—

 
—

 
(1,629
)
Balances at March 31, 2018 (Unaudited)
186,176

 
$
1,862

 
$
3,355,710

 
$
(2,542,898
)
 
$
(363
)
 
$
814,311

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

6
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, 2018. The condensed consolidated December 31, 2017 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, 2017 (the “2017 10-K”).

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
On January 1, 2018, the Company adopted the updated revenue guidance applicable under ASC 606 - Revenue from Contracts with Customers. The new guidance creates a five-step framework to determine revenue recognition:

1.
Identify the contract with the customer
2.
Identify the performance obligations
3.
Determine the transaction price
4.
Allocate the transaction price to the performance obligations
5.
Recognize revenue when (or as) the entity satisfies a performance obligation
    
The Company produces doré and concentrate that is shipped to third-party refiners and smelters, respectively, for processing. The Company enters into contracts to sell its metal to various third-party customers which may include the refiners and smelters that process the doré and concentrate. The Company’s performance obligation in these transactions is generally the transfer of metal to the customer.

In the case of doré shipments, the company generally sells refined metal at market prices agreed upon by both parties. The Company also has the right, but not the obligation, to sell a portion of the anticipated refined metal in advance of being fully refined. When the Company sells refined metal or advanced metal, the performance obligation is satisfied when the metal is delivered to the customer. Revenue and Costs Applicable to Sales are recorded on a gross basis under these contracts at the time the performance obligation is satisfied.

Under the Company’s concentrate sales contracts with third-party smelters, metal prices are set on a specified future quotational period, typically one to three months, after the shipment date based on market prices. When the Company sells gold concentrate to the third-party smelters, the performance obligation is satisfied when the concentrate is loaded onto the third-party shipping vessel. The contracts, in general, provide for provisional payment based upon provisional assays and historical metal prices. Final settlement is based on the applicable price for the specified future quotational period and generally occurs three to six months after shipment. The Company’s provisionally priced sales contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable from the sale of concentrates measured at the forward price at the time of sale. The embedded derivative does not qualify for hedge accounting and is adjusted to fair value through revenue each period until the date of final metal settlement.

The Company also sells concentrate under off-take agreements to third-party customers that are responsible for arranging the smelting of the concentrate. Prices are can either be fixed or based on a quotational period. The quotational period varies by contract, but is generally a one-month period following the shipment of the concentrate. The performance obligation is satisfied when the concentrate is loaded onto the third-party shipping vessel. The off-take agreement allows for the Company to sell concentrate in advance of shipment and results in the customer taking ownership of the concentrate prior to shipment.

For doré and off-take sales, the Company may incur a finance charge related to advance sales that is not considered significant and, as such, is not considered a separate performance obligation. In addition, the Company has elected to treat freight costs as a fulfillment cost under ASC 606 and not as a separate performance obligation.

The Company’s streaming agreement with a subsidiary of Franco-Nevada Corporation (“Franco-Nevada”) commenced in 2016 with a $20.0 million deposit paid by Franco-Nevada in exchange for the right and obligation to purchase 50% of a portion of Palmarejo gold production at the lesser of $800 or market price per ounce. Because there is no minimum obligation associated with this deposit, it is not considered financing, and each shipment is considered to be a separate performance obligation. The

7
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

streaming agreement represents a contract liability under ASC 606, which requires the Company to ratably recognize a portion of the deposit as revenue for each gold ounce delivered to Franco-Nevada.

The following table presents a rollforward of the Franco-Nevada contract liability balance:
 
Three months ended March 31,
In thousands
2018
 
2017
Opening Balance
$
14,883

 
$
19,281

Revenue Recognized
(543
)
 
$
(1,629
)
Closing Balance
$
14,340

 
$
17,652


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 became effective for the Company’s fiscal year beginning January 1, 2018 and did not materially impact the Company’s consolidated net income, financial position or 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 became effective for the Company’s fiscal year beginning January 1, 2018 and resulted in the inclusion of restricted cash equivalents on the Consolidated Statements of Cash Flows of $12.5 million at March 31, 2018 and $9.8 million at March 31, 2017.
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 became effective for the Company’s fiscal year beginning January 1, 2018 and did not materially impact the Company’s consolidated net income, financial position or 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 January 2016, the FASB issued ASU 2016-01, “Recognition and Measurement of Financial Assets and Financial Liabilities,” which requires entities to measure equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. This new guidance also updates certain disclosure requirements for these investments. These changes became effective for the Company’s fiscal year beginning January 1, 2018, and resulted in a reclassification of $2.6 million of unrealized holding gains and losses and deferred income taxes related to investments in equity securities from Accumulated other comprehensive income (loss) to Accumulated deficit in the Consolidated Balance Sheets on that date. Unrealized holding gains and losses related to investments in equity securities are now recognized in Fair value adjustments, net in the Consolidated Statements of Comprehensive Income (Loss).
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 became effective for the Company’s fiscal year beginning January 1, 2018 and did not materially impact the Company’s consolidated net income, financial position or cash flows.
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”, which has subsequently been amended several times, to update revenue guidance under the newly-created ASC 606. 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 became effective under the modified retrospective method of adoption for the Company’s fiscal year beginning January 1, 2018 and did not materially impact the Company’s consolidated net income, financial position or cash flows.
    

8
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 Silvertip mines. Except for the Silvertip mine, which was acquired in the fourth quarter of 2017, all operating segments are engaged in the discovery, mining, and production of gold and/or silver. Silvertip is engaged in the discovery, mining, and production of silver, zinc and lead. 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 determined that the disposition of Empresa Minera Manquiri S.A., a Bolivian Sociedad anonima (“Manquiri”), which operates the San Bartolomé mine, represents a strategic shift to a North America-focused mining portfolio and has a significant effect on the entity's results and operations; therefore, the results of operations are presented as discontinued operations for all periods presented.
Financial information relating to the Company’s segments is as follows (in thousands):
Three months ended March 31, 2018
Palmarejo
 
Rochester
 
Silvertip
 
Kensington
 
Wharf
 
Other
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
Metal sales
$
70,037

 
$
33,497

 
$
—

 
$
36,300

 
$
23,433

 
$
—

 
$
163,267

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
 


Costs applicable to sales(1)
31,096

 
24,305

 
—

 
28,630

 
15,309

 
—

 
99,340

Amortization
16,325

 
4,831

 
—

 
6,717

 
2,657

 
247

 
30,777

Exploration
3,970

 
33

 
—

 
1,590

 
10

 
1,080

 
6,683

Other operating expenses
731

 
884

 
20

 
321

 
665

 
10,408

 
13,029

Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value adjustments, net
—

 
—

 
—

 
—

 
—

 
4,987

 
4,987

Interest expense, net
(119
)
 
(98
)
 
(410
)
 
(243
)
 
(12
)
 
(5,083
)
 
(5,965
)
Other, net
(2,144
)
 
(40
)
 
362

 
(37
)
 
(21
)
 
2,060

 
180

Income and mining tax (expense) benefit
(12,443
)
 
(371
)
 
835

 
—

 
(639
)
 
669

 
(11,949
)
Income (loss) from continuing operations
$
3,209


$
2,935

 
$
767


$
(1,238
)

$
4,120


$
(9,102
)

$
691

Income (loss) from discontinued operations
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
550

 
$
550

Segment assets(2)
$
377,146

 
$
245,881

 
$
361,212

 
$
215,244

 
$
104,805

 
$
119,922

 
$
1,424,210

Capital expenditures
$
9,293

 
$
2,633

 
$
18,629

 
$
11,364

 
$
344

 
$
82

 
$
42,345

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


Three months ended March 31, 2017
Palmarejo
 
Rochester
 
Kensington
 
Wharf
 
Other
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
Metal sales
$
77,704

 
$
38,979

 
$
37,964

 
$
30,251

 
$
656

 
$
185,554

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
43,001

 
26,439

 
28,443

 
16,320

 
287

 
114,490

Amortization
20,150

 
5,816

 
9,178

 
3,111

 
438

 
38,693

Exploration
1,631

 
144

 
839

 
—

 
2,638

 
5,252

Other operating expenses
301

 
810

 
345

 
619

 
11,887

 
13,962

Other income (expense)
 
 
 
 
 
 
 
 


 
 
Fair value adjustments, net
—

 
(1,200
)
 
—

 
—

 
—

 
(1,200
)
Interest expense, net
(125
)
 
(117
)
 
(40
)
 
(19
)
 
(3,278
)
 
(3,579
)
Other, net
1,794

 
(32
)
 
(808
)
 
89

 
19,756

 
20,799

Income and mining tax (expense) benefit
(12,245
)
 
(498
)
 
—

 
(957
)
 
2,822

 
(10,878
)
Income (loss) from continuing operations
$
2,045


$
3,923


$
(1,689
)

$
9,314


$
4,706

 
$
18,299

Income (loss) from discontinued operations
$
—

 
$
—

 
$
—

 
$
—

 
$
364

 
$
364

Segment assets(2)
$
401,623

 
$
227,526

 
$
204,987

 
$
104,673

 
$
84,402

 
$
1,023,211

Capital expenditures
$
6,230

 
$
10,568

 
$
5,521

 
$
887

 
$
385

 
$
23,591

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


9
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

Assets
March 31, 2018

December 31, 2017
Total assets for reportable segments
$
1,424,210

 
$
1,344,553

Cash and cash equivalents
159,643

 
192,032

Other assets
78,082


164,590

Total consolidated assets
$
1,661,935


$
1,701,175



Geographic Information
Long-Lived Assets
March 31, 2018

December 31, 2017
Mexico
$
364,047

 
$
370,188

United States
384,578

 
377,768

Canada
350,556

 
331,440

Other
10,797

 
4,910

Total
$
1,109,978


$
1,084,306

 
Revenue
Three months ended March 31,
2018
 
2017
United States
$
93,230

 
$
107,194

Mexico
70,037

 
77,704

Australia
—

 
656

Total
$
163,267


$
185,554

    

10
Coeur Mining, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

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 March 31,
In thousands
2018
 
2017
Asset retirement obligation - Beginning
$
118,799

 
$
86,754

Accretion
2,545

 
2,064

Settlements
(496
)
 
(421
)
Asset retirement obligation - Ending
$
120,848

 
$
88,397

The Company has accrued $2.1 million and $2.0 million at March 31, 2018 and December 31, 2017, respectively, for reclamation liabilities related to former mining activities, which are included in Reclamation.

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 months ended March 31, 2018 and 2017 was $2.8 million and $3.3 million, respectively. At March 31, 2018, there was $4.8 million of unrecognized stock-based compensation cost which is expected to be recognized over a weighted-average remaining vesting period of 1.4 years.
The following table summarizes the grants awarded during the three months ended March 31, 2018:
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
March 5, 2018
 
31,887

 
$
7.84

 
—

 
$
—

 
—

 
$
—


The following options and stock appreciation rights were exercisable during the three months ended March 31, 2018:
Award Type
 
Number of 
Exercised Units
 
Weighted Average
Exercised Price
 
Number of Exercisable Units
 
Weighted Average
Exercisable Price
Stock options
 
93,920

 
$
1.81

 
397,651

 
$
14.39

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 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 months ended March 31, 2018 and 2017 were $1.2 million and $2.1 million. 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 March 31,
In thousands
2018
 
2017
Foreign exchange gain (loss)
$
(670
)
 
$
1,206

Loss on sale of assets and investments
(574
)
 
(2,066
)
Gain on sale of the Joaquin project
—

 
21,138

Other
1,424

 
521

Other, net
$
180

 
$
20,799



11
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 months ended March 31, 2018 and 2017 by significant jurisdiction:

 
Three months ended March 31,
 
2018
 
2017
In thousands
Income (loss) before tax
Tax (expense) benefit
 
Income (loss) before tax
Tax (expense) benefit
United States
$
1,187

$
517

 
$
20,653

$
(1,827
)
Argentina
254

10

 
(328
)
1,124

Mexico
13,126

(13,222
)
 
8,650

(9,923
)
Other jurisdictions
(1,927
)
746


202

(252
)
 
$
12,640

$
(11,949
)
 
$
29,177

$
(10,878
)
    
The Company’s 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 the consolidated effective tax rate, along with 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. Fluctuations in foreign exchange rates on deferred tax balances increased income and mining tax expense by $3.6 million and $5.6 million for the three months ended March 31, 2018 and 2017, respectively, predominately due to the strengthening of the Mexican Peso. Additionally, favorable operating results at Palmarejo contributed to higher income and mining tax expense in Mexico.
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 2017 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 2014 forward for the U.S. federal jurisdiction and from 2008 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 March 31, 2018 and December 31, 2017, the Company had $3.9 million and $4.3 million of total gross unrecognized tax benefits, respectively that, if recognized, 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 March 31, 2018 and December 31, 2017, the amount of accrued income-tax-related interest and penalties was $4.2 million and $4.8 million, respectively.


12
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 months ended March 31, 2018 and 2017, 496,064 and 1,368,685 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.
 
Three months ended March 31,
In thousands except per share amounts
2018
 
2017
Net income (loss) available to common stockholders:
 
 
 
Income (loss) from continuing operations
$
691

 
$
18,299

Income (loss) from discontinued operations
550

 
364

 
$
1,241

 
$
18,663

 
 
 
 
Weighted average shares:
 
 
 
Basic
184,367

 
178,898

Effect of stock-based compensation plans
3,254

 
4,170

Diluted
187,621


183,068

 
 
 
 
Basic income (loss) per share:
 
 
 
Income (loss) from continuing operations
$
0.00

 
$
0.10

Income (loss) from discontinued operations
0.00

 
0.00

Basic(1)
$
0.01


$
0.10

 
 
 
 
Diluted income (loss) per share:
 
 
 
Income (loss) from continuing operations
$
0.00

 
$
0.10

Income (loss) from discontinued operations
0.00

 
0.00

Diluted(1)
$
0.01


$
0.10

(1) Due to rounding, the sum of net income per share from continuing operations and discontinued operations may not equal net income per share.

NOTE 10 – FAIR VALUE MEASUREMENTS
 
Three months ended March 31,
In thousands
2018
 
2017
Rochester royalty obligation
$
—

 
$
(1,200
)
Unrealized gain (loss) on equity securities
4,842

 
—

Zinc options
145

 
—

Fair value adjustments, net
$
4,987

 
$
(1,200
)
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).

13
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

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 March 31, 2018
In thousands
Total
 
Level 1
 
Level 2
 
Level 3  
Assets:
 
 
 
 
 
 
 
Equity and debt securities
$
37,317

 
$
31,003

 
$
—

 
$
6,314

Other derivative instruments, net
552

 
—

 
552

 
—

 
$
37,869

 
$
31,003

 
$
552

 
$
6,314

Liabilities:
 
 
 
 
 
 
 
Silvertip contingent consideration
$
48,289

 
$
—

 
$
—

 
$
48,289

Other derivative instruments, net
125

 
—

 
125

 
—

 
$
48,414

 
$
—

 
$
125

 
$
48,289

 
 
Fair Value at December 31, 2017
In thousands
Total
 
Level 1
 
Level 2
 
Level 3  
Assets:
 
 
 
 
 
 
 
Equity and debt securities
$
34,837

 
$
27,946

 
$
—

 
$
6,891

Other derivative instruments, net
251

 
—

 
251

 
—

 
$
35,088

 
$
27,946

 
$
251

 
$
6,891

Liabilities:
 
 
 
 
 
 
 
Silvertip contingent consideration
$
47,965

 
$
—

 
$
—

 
$
47,965

Other derivative instruments, net
222

 
—

 
222

 
—

 
$
48,187

 
$
—

 
$
222

 
$
47,965

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 debt 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, include concentrate and certain doré sales contracts, as well as zinc hedges, which are valued using pricing models with inputs 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 July 2017, the Company sold the Endeavor Silver Stream and remaining non-core royalties to Metalla Royalty & Streaming Ltd. (“Metalla”) for total consideration of $13.0 million, including a $6.7 million convertible debenture. The convertible debenture matures June 30, 2027, bears interest at a rate of 5% payable semi-annually, and is convertible into Metalla shares in connection with future equity financings or asset acquisitions by Metalla at the then-current price to maintain the Company’s approximate 19.9% ownership. The fair value of the convertible debenture is estimated based on observable market data including yield curves and credit spreads. Therefore, the Company classifies the convertible debenture in Level 3 of the fair value hierarchy.
In October 2017, the Company acquired the Silvertip mine from shareholders of JDS Silver Holdings Ltd.The consideration for the Silvertip mine includes two $25.0 million contingent payments, which are payable in cash and common stock upon reaching a future permitting milestone in 2018 and resource declaration milestone in 2019, respectively. The fair value of the Silvertip contingent consideration is estimated based on an estimated discount rate of 2.5% for the contingent permitting payment and 2.9% for the contingent resource declaration payment and is classified within Level 3 of the fair value hierarchy.

14
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

No assets or liabilities were transferred between fair value levels in the three months ended March 31, 2018.
The following tables present the changes in the fair value of the Company's Level 3 financial assets and liabilities for the three months ended March 31, 2018:
 
Three Months Ended March 31, 2018
In thousands
Balance at the beginning of the period
 
Revaluation
 
Settlements
 
Accretion
 
Balance at the
end of the
period
Assets:
 
 
 
 
 
 
 
 
 
Equity and debt securities
$
6,891

 
$
(278
)
 
$
(299
)
 
$
—

 
$
6,314

Liabilities:
 
 
 
 
 
 
 
 
 
Silvertip contingent consideration
$
47,965

 
$
—

 
$
—

 
$
324

 
$
48,289

The fair value of financial assets and liabilities carried at book value in the financial statements at March 31, 2018 and December 31, 2017 is presented in the following table:
 
March 31, 2018
In thousands
Book Value
 
Fair Value
 
Level 1
 
Level 2
 
Level 3  
Assets:
 
 
 
 
 
 
 
 
 
Manquiri Notes Receivable
$
39,887

 
$
39,887

 
$
—

 
$
—

 
$
39,887

Liabilities:
 
 

 
 
 
 
 
 
5.875% Senior Notes due 2024(1)
$
245,280

 
$
244,520

 
$
—

 
$
244,520

 
$
—

Revolving Credit Facility(2)
$
115,000

 
$
115,000

 
$
—

 
$
115,000

 
$
—

(1) Net of unamortized debt issuance costs of $4.7 million.
(2) Unamortized debt issuance costs of $1.8 million included in Other Non-Current Assets.
 
December 31, 2017
In thousands
Book Value
 
Fair Value
 
Level 1
 
Level 2
 
Level 3  
Liabilities:
 
 
 
 
 
 
 
 
 
5.875% Senior Notes due 2024(1)
$
245,088

 
$
243,913

 
$
—

 
$
243,913

 
$
—

Revolving Credit Facility(2)
$
100,000

 
$
100,000

 
$
—

 
$
100,000

 
$
—

(1) Net of unamortized debt issuance costs of $4.9 million.
(2) Unamortized debt issuance costs of $1.9 million included in Other Non-Current Assets.
The fair value of the Manquiri Notes Receivable approximates book value due to no significant change in interest rates since the sale of Manquiri; see Note 21 -- Discontinued Operations for additional detail. The fair value of the 5.875% Senior Notes due 2024 (the “2024 Senior Notes”) was estimated using quoted market prices. The fair value of the Revolving Credit Facility approximates book value as the liability is secured, has a variable interest rate, and lacks significant credit concerns.

NOTE 11 – DERIVATIVE FINANCIAL INSTRUMENTS
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 gains of $0.3 million and $1.2 million in the three months ended March 31, 2018 and 2017, respectively.
Zinc Options
At March 31, 2018, the Company has outstanding Asian (or average value) put and call option contracts in net-zero-cost collar arrangements on a volume of 300 metric tons of zinc per month commencing in April 2018 and ending in December 2018. The weighted average strike prices on the put and call contracts are $3,000 and $4,050 per metric ton, respectively. The contracts are generally net cash settled and, if the price of zinc at the time of the expiration is between the put and call prices, would expire

15
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

at no cost to the Company. At March 31, 2018, the fair market value of the put and call zero cost collar contracts was a net asset of $0.1 million.
During the three months ended March 31, 2018, the Company had recorded unrealized gains of $0.1 million related to outstanding options which were included in Fair value adjustments, net. At March 31, 2017, the Company had no outstanding options contracts.
At March 31, 2018, the Company had the following derivative instruments that settle as follows:
In thousands except average prices and notional ounces
2018
 
Thereafter
 
 
 
 
Provisional silver sales contracts
$
831

 
$
—

Average silver price per ounce
$
16.66

 
$
—

Notional ounces
49,853

 
—

 
 
 
 
Provisional gold sales contracts
$
59,332

 
$
—

Average gold price per ounce
$
1,317

 
$
—

Notional ounces
45,051

 
—

 
 
 
 
Zinc put options purchased
$
8,100

 
$
—

Average zinc strike price per metric ton
$
3,000

 
$
—

Notional metric tons
2,700

 
—

 
 
 
 
Zinc call options sold
$
(10,935
)
 
$
—

Average zinc strike price per metric ton
$
4,050

 
$
—

Notional metric tons
2,700

 
—

The following summarizes the classification of the fair value of the derivative instruments:
 
March 31, 2018
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
$
407

 
$
125

 
$
—

 
$
—

Zinc options
145

 
—

 
—

 
—

 
$
552

 
$
125

 
$
—

 
$
—

 
December 31, 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
$
251

 
$
222

 
$
—

 
$
—

The following represent mark-to-market gains (losses) on derivative instruments for the three months ended March 31, 2018 and 2017, respectively (in thousands):
 
 
Three months ended March 31,
Financial statement line
Derivative
2018
 
2017
Revenue
Provisional silver and gold sales contracts
$
253

 
$
1,212

Fair value adjustments, net
Zinc options
145

 
—

 
 
$
398

 
$
1,212

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.


16
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

NOTE 12 – ACQUISITIONS

In October 2017, the Company completed the acquisition of JDS Silver Holdings Ltd. and its wholly-owned subsidiary JDS Silver Inc. (together, “JDS Silver”) which, following the closing of the acquisition, were amalgamated with a subsidiary of Coeur to form Coeur Silvertip Holdings Ltd., which owns the underground Silvertip silver-zinc-lead mine in northern British Columbia, Canada. JDS Silver was purchased for approximately $153.2 million in cash and $36.0 million in Coeur common stock. In addition, the Company recorded $47.7 million of contingent consideration payable in cash and common stock upon reaching future permitting and resource declaration milestones. The cash consideration was funded with $100.0 million of borrowing under the Facility (as defined in Note 18 -- Debt) and cash on hand. Upon closing, the Company issued approximately 4.2 million Coeur shares to former shareholders of JDS Silver Holdings Ltd. The acquisition aligns with the Company’s strategic shift to a North America-focused mining portfolio.
The transaction was accounted for as a business combination, which requires that assets acquired and liabilities assumed be recognized at their respective fair values at the acquisition date. The acquisition is not significant to the Company’s results of operations, individually or in the aggregate, because the Silvertip mine is in pre-production. As there are no significant differences from the Company’s historical results of operations, no pro forma financial information is provided.
The allocation of purchase price to the acquired assets and liabilities assumed is preliminary as of March 31, 2018 and subsequent adjustments may result in changes to mineral interest and other carrying amounts initially assigned based on the preliminary fair value analysis. The principal remaining items to be valued are property, plant and equipment and mining properties, which will be finalized as management continues to review the valuation methodologies used to estimate the fair value of these assets. The preliminary purchase price allocation is as follows (in thousands):
Common shares issued (4,191,679 at $8.59)
$
36,007

Cash
153,194

Contingent consideration
47,705

Total purchase price(1)
$
236,906

Assets:
 
Receivables and other assets
$
6,828

Property, plant, and equipment
29,943

Mining properties, net
288,464

 
325,235

Liabilities:
 
Accounts payable and accrued liabilities
13,077

Asset retirement obligation
6,982

Debt and capital lease
20,149

Deferred income taxes
48,121

 
88,329

Net assets acquired
$
236,906

(1) Purchase price has been adjusted for restricted cash acquired due to the adoption of ASU 2016-01.
            

17
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

NOTE 13 – INVESTMENTS
Equity and Debt Securities
The Company makes strategic investments in equity and debt securities of silver and gold exploration and development companies.
 
At March 31, 2018
In thousands
Cost
 
Gross
Unrealized
Losses
 
Gross
Unrealized
Gains
 
Estimated
Fair Value
Equity Securities
 
 
 
 
 
 
 
Metalla Royalty & Streaming Ltd.
$
6,294

 
$
—

 
$
2,837

 
$
9,131

Corvus Gold Inc.
3,582

 
—

 
6,844

 
10,426

Almaden Minerals, Ltd.
2,067

 
(727
)
 
—

 
1,340

Northern Empire Resources Corp.
4,489

 
—

 
2,999

 
7,488

Rockhaven Resources, Ltd.
2,064

 
(596
)
 
—

 
1,468

Other
1,190

 
(155
)
 
115

 
1,150

Equity securities
$
19,686

 
$
(1,478
)
 
$
12,795

 
$
31,003

 
 
 
 
 
 
 
 
Debt Securities
 
 
 
 
 
 
 
Metalla Royalty & Streaming Ltd.
$
6,677

 
$
(363
)
 
$
—

 
$
6,314

 
 
 
 
 
 
 
 
Equity and debt securities
$
26,363

 
$
(1,841
)
 
$
12,795

 
$
37,317


 
At December 31, 2017
In thousands
Cost
 
Gross
Unrealized
Losses
 
Gross
Unrealized
Gains
 
Estimated
Fair Value
Equity Securities
 
 
 
 
 
 
 
Metalla Royalty & Streaming Ltd.
$
6,294

 
$
—

 
$
1,354

 
$
7,648

Corvus Gold Inc.
3,582

 
—

 
4,518

 
8,100

Almaden Minerals, Ltd.
3,125

 
(235
)
 
—

 
2,890

Northern Empire Resources Corp.
4,489

 
—

 
1,077

 
5,566

Rockhaven Resources, Ltd.
2,064

 
(193
)
 
—

 
1,871

Kootenay Silver, Inc.
738

 
—

 
1

 
739

Other
1,479

 
(453
)
 
405

 
1,431

Equity securities
$
21,771

 
$
(881
)
 
$
7,355

 
$
28,245

 
 
 
 
 
 
 
 
Debt Securities
 
 
 
 
 
 
 
Metalla Royalty & Streaming Ltd.
$
6,677

 
$
(85
)
 
$
—

 
$
6,592

 
 
 
 
 
 
 
 
Equity and debt securities
$
28,448

 
$
(966
)
 
$
7,355

 
$
34,837


The following table presents the disaggregated gain (loss) on equity securities recognized in Income (loss) from continuing operations on the Condensed Consolidated Statements of Comprehensive Income:
 
Three months ended March 31,
In thousands
2018
 
2017
Net gain (loss)
$
4,529

 
$
(1,471
)
Less: Realized (gain) loss
313

 
1,471

Unrealized gain (loss)
$
4,842

 
$
—




18
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

The Company performs a quarterly assessment on its debt securities with unrealized losses to determine if the securities are other than temporarily impaired. The following table summarizes unrealized losses on debt 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 March 31, 2018:

 
Less than twelve months
 
Twelve months or more
 
Total
In thousands
Unrealized Losses
Fair Value
 
Unrealized Losses
Fair Value
 
Unrealized Losses
Fair Value
Debt securities
363

6,314

 
—

—

 
363

6,314

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 March 31, 2018 and December 31, 2017, the Company held certificates of deposit and cash equivalents under these agreements of $22.1 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 14 – RECEIVABLES
Receivables consist of the following:
In thousands
March 31, 2018
 
December 31, 2017
Current receivables:
 
 
 
Trade receivables
$
3,840

 
$
5,883

Income tax receivable
48

 
7

Value added tax receivable
14,482

 
10,982

Manquiri note receivable
15,840

 
—

Other
1,654

 
2,197

 
$
35,864

 
$
19,069

Non-current receivables:
 
 
 
Value added tax receivable
$
31,381

 
$
28,750

Manquiri note receivable
24,047

 
—

 
55,428

 
28,750

Total receivables
$
91,292

 
$
47,819


The increase in receivables is due to the recognition of Manquiri notes receivable as consideration for the sale of San Bartolomé. See Note 21 -- Discontinued Operations for additional detail.


19
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

NOTE 15 – INVENTORY AND ORE ON LEACH PADS
Inventory consists of the following:
In thousands
March 31, 2018
 
December 31, 2017
Inventory:
 
 
 
Concentrate
$
11,062

 
$
6,831

Precious metals
17,783

 
18,803

Supplies
32,878

 
32,596

 
61,723

 
58,230

Ore on leach pads:
 
 
 
Current
75,584

 
73,752

Non-current
67,430

 
65,393

 
143,014

 
139,145

Total inventory and ore on leach pads
$
204,737

 
$
197,375


NOTE 16 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following:
In thousands
March 31, 2018
 
December 31, 2017
Land
$
9,107

 
$
9,408

Facilities and equipment
559,276

 
554,160

Assets under capital leases
88,720

 
82,753

 
657,103

 
646,321

Accumulated amortization (1)
(456,374
)
 
(448,001
)
 
200,729

 
198,320

Construction in progress
65,428

 
56,417

Property, plant and equipment, net
$
266,157

 
$
254,737

(1) Includes $29.0 million and $28.2 million of accumulated amortization related to assets under capital leases at March 31, 2018 and December 31, 2017, respectively.


20
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements

NOTE 17 – MINING PROPERTIES
Mining properties consist of the following (in thousands):
March 31, 2018
Palmarejo
 
Rochester
 
Silvertip
 
Kensington
 
Wharf
 
La Preciosa
 
Other
 
Total
Mine development
$
220,141

 
$
194,390

 
$
70,626

 
$
307,996

 
$
40,688

 
$
—

 
$
—

 
$
833,841

Accumulated amortization
(151,102
)
 
(146,245
)
 
—

 
(182,555
)
 
(16,456
)
 
—

 
—

 
(496,358
)
 
69,039

 
48,145

 
70,626

 
125,441

 
24,232

 
—

 
—

 
337,483

Mineral interests
629,303

 
—

 
245,116

 
—

 
45,837

 
49,085

 
7,102

 
976,443

Accumulated amortization
(445,327
)
 
—

 
—

 
—

 
(24,655
)
—

—

 
(123
)
 
(470,105
)
 
183,976

 
—

 
245,116

 
—

 
21,182

 
49,085

 
6,979

 
506,338

Mining properties, net
$
253,015

 
$
48,145

 
$
315,742

 
$
125,441

 
$
45,414

 
$
49,085

 
$
6,979

 
$
843,821

December 31, 2017
Palmarejo
 
Rochester
 
Silvertip
 
Kensington
 
Wharf
 
La Preciosa
 
Total
Mine development
$
214,383

 
$
193,881

 
$
57,214

 
$
298,749

 
$
40,618

 
$
—

 
$
804,845

Accumulated amortization
(146,598
)
 
(144,390
)
 
—

 
(178,632
)
 
(15,748
)
 
—

 
(485,368
)
 
67,785

 
49,491

 
57,214

 
120,117

 
24,870

 
—

 
319,477

Mineral interests
629,303

 
—

 
245,116

 
—

 
45,837

 
49,085

 
969,341

Accumulated amortization
(435,215
)
 
—

 
—

 
—

 
(24,034
)
—

—

 
(459,249
)
 
194,088

 
—

 
245,116

 
—

 
21,803

 
49,085

 
510,092

Mining properties, net
$
261,873

 
$
49,491

 
$
302,330