Michael Siperco 00:06
Welcome to Innovators and Ideas, an audio series from RBC Capital Markets, where we engage with visionary leaders shaping the future. I'm your host. Michael Siperco, Director of Global Mining Research, and today we're coming to you from RBC’s Global Mining and Materials Conference in New York City, speaking to Mitch Krebs, President and CEO of Coeur Mining, a U.S. based mining company that explores, develops and produces both silver and gold.
Michael Siperco 00:32
Mitch, thanks so much for joining us today and giving us the opportunity to hear what you think about how Coeur has gone through a significant transformation over the last while, and what the outlook is. So, maybe to the first question, including the expansion of Rochester and the acquisition of Las Chispas, which closed earlier this year, how do you define Coeur’s purpose today, and what principles have guided your leadership through these changes?
Mitchell Krebs 00:58
Yeah, thanks for having me, Mike, good to be here. This is a company that goes back almost 100 years, and we've been on this path of really burning the place down to the ground and rebuilding it stud by stud over the last 10 or 15 years, and trying to do it in a way that we're always setting the bar higher for, not only for ourselves, but for the industry, whether it's in safety or environmental or just overall execution, performance. Pursuing a higher standard has really been a mantra for us, going back 15 years, and our principles have never changed. It's always been the three main things, you'll see it everywhere you look on our materials or in our office, and that's protect, develop and deliver. You know, we want to protect our people, protect the planet, protect the places where we operate. We want to develop our people. We want to develop better resources and planning, and we want to deliver results. So those have been some of our guiding principles that we've been following now, as we've transformed this company to where we are today.
Michael Siperco 01:55
And obviously that's been through a period of change on the macro side of things, and silver and gold markets have had very diverging narratives in 2025. As you say, as one of the most significant silver focused producers in the U.S. and globally, with strong gold exposure as well, how are these dynamics influencing how you operate and how you allocate capital across the portfolio?
Mitchell Krebs 02:20
Yeah gold has really been on a run. Silver has been in a little bit of a back seat, although it's coming on strong, which is often the way things go in the almost 30 years that I've been in this industry. You know, when we look at investing or allocating capital, we really look at everything through a return on invested capital lens. So, we have much more of a ROIC lens than we do on “Which metal are we investing in?” We also think about balance. Mining is a risky business, so anything we can do to mitigate risk, makes a lot of sense for our business and for our shareholders and so having balance across the metals. So, in our case, 60% or so of our revenue comes from gold, the balance comes from silver. By mine, we've got five operations, pretty equally balanced across those five operations, so that inevitably, if there's a hiccup somewhere, because it is mining at the end of the day, to have a portfolio of mines where you can offset that hiccup over here with some outperformance over there, that's a good way of mitigating risk. And then, just by geography, we're in three jurisdictions, the U.S., Mexico and Canada, having balance across jurisdictions like that is also a way of mitigating risk.
Michael Siperco 03:34
In terms of how external factors influence your business, what macro or regulatory shifts do you see as having the greatest impact on Coeur and maybe more in general, on U.S.-based mining companies over the next few years, and what are you doing to address that or mitigate it?
Mitchell Krebs 03:51
Yeah, I tell you, in the U.S., we have a very pro-mining administration. We actually, in all three of our jurisdictions right now, have very supportive administrations in the U.S., in Mexico and in Canada. Very supportive of resource development. I think in the U.S., you know, maybe we're going to see some permit streamlining. It's a very cumbersome, duplicative process in the U.S. And I think hopefully we can see some better certainty and a more streamlined process. I think that we might see some progress there. I think on the regulatory side, we're already seeing some rollback of what have been some pretty unrealistic standards in all kinds of areas of mining and extractive businesses. We're so reliant on other countries, many of whom are not our best friends, for the metals and minerals that we require, especially if in the U.S. we're going to reshore back all these supply chains. You know, at the beginning of all those supply chains are the minerals and metals that you need to go into all that manufacturing. And so, there's just been a real awakening of how important it is to have a robust mining industry here in the United States. I think that's been one of the biggest changes that I've seen here in the early days of the current administration in the US.
Michael Siperco 05:04
Drilling down now on your business and the outlook for Coeur. With the Rochester expansion essentially complete and free cash flow, guided for Q2, how are you thinking about near-term capital allocation between debt repayment, cash return, reinvestment in assets and potential further acquisitions?
Mitchell Krebs 05:25
Yeah, we're undergoing a rapid and very pronounced change in the business as we speak. Two years ago, our EBITDA as a company was $101 million and our free cash flow was negative $300 million. Now this year, our EBITDA should be over $700 million, and our free cash flow should be over $350 million. So, it's a massive shift that's underway, and these higher prices are just magnifying that inflection point. We flipped over into positive free cash flow in the second half of last year, positive EPS, now, four quarters in a row. We are now starting that deleveraging process of the balance sheet. A lot of heavy investment over the last five years or so by this company has left us with a balance sheet that needs to be repaired, and that's happening really quickly. So deleveraging is at the top of the list. Reinvesting back into exploration. You know, we have these large land positions around each of our operations. In fact, we've more than doubled our land holdings around our mines over the last decade so that we can continue to reinvest back into the ground, add more reserves and resources and take advantage of that existing infrastructure at our mines. So, we'll keep reinvesting in exploration and we'll start returning capital back to shareholders. We just announced a share buyback program of $75 million which was well received, and our investors are really pleased to see us now returning capital back to them. So those are some of the priorities as we think ahead about what we're going to be doing with this free cash flow.
Michael Siperco 06:57
We talked about the growth from Rochester post expansion and now on Coeur’s acquisition of SilverCrest and Les Chispas, I think it's fair to say that it's changed the trajectory of the company, immediately boosting production, cash flow and improving the balance sheet. Do you see similar opportunities out there? And what criteria do you really focus on when it comes to meeting your investment criteria and finding these types of opportunities?
Mitchell Krebs 07:25
Yeah, the short answer to your first question is, no, we don't see other opportunities out there with similar characteristics. For us, SilverCrest represented two key things. One is the Las Chispas asset itself is truly unique in terms of its grade profile, in terms of the cash flow and the quality of ounces that are being produced there, but SilverCrest also brought a pristine balance sheet with it, so it allowed us to really bolster our balance sheet and even further accelerate this deleveraging process that we are undertaking. We've seen other companies now be acquired. It really leaves a real shortage of any smaller silver producing companies out there. For us, it's all about getting better, bigger is secondary, but getting better. Are costs coming down? Are we a better business as a result of any kind of external opportunity and on a per share basis? Are we generating a return from doing these kind of external opportunities, and are we up tiering the overall quality of the assets that we operate?
Michael Siperco 08:28
Mitch, how is Coeur approaching operational innovation, whether through process improvement, automation or sustainability-linked initiatives. Where do you see the biggest opportunity for impact, not just for Coeur but overall for miners?
Mitchell Krebs 08:42
About five years ago, we established an operational excellence group, and that effort has really gained a lot of momentum since that time. They're constantly as a group, working with our operations to identify and validate new opportunities to boost productivity or efficiency or reduce costs. I probably see the biggest opportunity on the automation front. One aspect of our business over the last five years has been the amount we have invested in exploration. We've invested almost $300 million in exploration over the last five years. And what that's done is allowed our mine lives to be extended quite significantly, and with a longer mine life, then you can look at some of these automation opportunities through a lens again, of having a robust return on investment, but you need that mine life in order to justify some of this potential capital to go to more of an automated approach in places like Rochester out in Nevada, or Wharf out in South Dakota. So, those are efforts now that are getting a lot of focus internally, really, on the back of that investment that we've been making in exploration over the last few years.
Michael Siperco 09:51
Over your tenure, Coeur has navigated several major cycles, and you've rebuilt the portfolio through both M&A and internal reinvestment. When you think back on how that's evolved, what's been most important to you in terms of building a resilient culture and a leadership team from the top?
Mitchell Krebs 10:09
Yeah, it has been an incredible journey. And when I set out on this journey in 2011, I never thought it would have the twists and turns, and frankly, I didn't think it would take as long as it has to really get ourselves squared away. I think when we really started to click, is probably five or six years ago when we really sort of established that North Star, as far as a strategic direction, where we're trying to go and why, and then getting a team around me of superstars who have bought into that direction, and then, frankly, getting out of their way. You know, a lot of the kind of leadership, organizational behavior, stuff that you read about is really, I think, been the secret sauce for our success. We've become a very resilient bunch. I mean, doing all of this during a period of time where prices do what they do. You know, the roller coaster, the cyclicality of a business like this. It's kind of like trying to change a tire on a car as you're going down the highway at 70 miles an hour. It's not for the faint of heart. But I couldn't be prouder of where we are today, and to see the results now are really gratifying.
Michael Siperco 11:14
So, after the last few years of substantial change, both in the macro environment and at Coeur specifically, when you look ahead to what's next, what milestones or strategic shifts, if any, should investors watch for to understand where the company is headed and how Coeur plans to keep delivering through the next cycle?
Mitchell Krebs 11:36
Yeah, we're into this free cash flow phase. The runway ahead is clear. We needed to just stay focused on that and deliver, be boring and predictable. And I think we're going to see a lot of positives come out of that. You know, just bigger picture. Anything we can do to try and continue to become a more durable, more resilient business. And I think for us now, we're becoming a lot more resilient, a lot more durable, so that we can withstand future price declines, which you know there will be, and so just being sure that we can be more opportunistic and not just look to survive those periods of time. Those are things that, you know, I'm thinking about. In probably the next five years, we'll hopefully have a project of ours up in northern British Columbia, called Silvertip, in a position to be a go or no-go investment decision for us. So that could be the next kind of leg up in growth for our company that could bring in a whole additional source of silver, along with zinc and lead. So, you know, you could watch our actions there at Silvertip and bringing that along to hopefully become that next future leg of growth a bit down the road, but between now and then, it's about free cash flow and trying to keep building a better business.
Michael Siperco 12:47
Mitch, thanks so much for joining us, sharing your thoughts on Coeur, on the sector. Very much appreciated.
Mitchell Krebs 12:53
Thanks for having me. Enjoyed it. Thanks, Mike.
Michael Siperco 12:54
Thanks again for listening to Innovators and Ideas, brought to you by RBC Capital Markets. This episode was recorded on June 12, 2025. Subscribe now to get insights delivered straight to your inbox on the economy markets and industry trends at rbccm.com/insights.
Disclaimer 13:15
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