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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


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

For the quarterly period ended September 30, 2003.

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 1-8641

COEUR D’ALENE MINES CORPORATION


(Exact name of registrant as specified in its charter)
     
Idaho   82-0109423
 
(State or other jurisdiction of   (I.R.S. Employer Identification No.)
incorporation or organization)    
     
PO Box I,    
505 Front Ave.    
Coeur d’Alene, Idaho   83816
 
(Address of principal executive offices)   (Zip Code)

(208) 667-3511

(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 [X] NO [  ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 under the Exchange Act). YES [X] NO[  ]

Applicable only to corporate issuers: Indicate the number of shares outstanding of each of Issuer’s classes of common stock, as of the latest practicable date: Common stock, par value $1.00, of which 209,956,369 shares were issued and outstanding as of October 21, 2003.

 

TABLE OF CONTENTS

CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
CONSOLIDATED STATEMENTS OF CASH FLOWS
Notes to Consolidated Financial Statements
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1

Table of Contents

COEUR D’ALENE MINES CORPORATION

INDEX

                 
            Page No.
           
PART I.
   Financial Information        
Item 1.
   Financial Statements        
 
   Consolidated Balance Sheets – September 30, 2003 and December 31, 2002     3  
 
   Consolidated Statements of Operations and Comprehensive Loss – Three and Nine Months Ended September 30, 2003 and 2002     5  
 
   Consolidated Statements of Cash Flows – Three and Nine Months Ended September 30, 2003 and 2002     6  
 
   Notes to Consolidated Financial Statements     7  
Item 2.
   Management’s Discussion and Analysis of Financial Condition and Results of Operations     19  
Item 3.
   Quantitative and Qualitative Disclosures about Market Risk     44  
Item 4.
   Controls and Procedures     45  
PART II.
   Other Information     45  
Item 6.
   Exhibits and Reports on Form 8-K     45  
Signatures
         47  

2

Table of Contents

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

                     
        September 30,   December 31,
        2003   2002
       
 
        (In Thousands)
ASSETS
                
CURRENT ASSETS
                
 
Cash and cash equivalents
   $ 86,925     $ 9,093  
 
Short-term investments
     7,282       518  
 
Receivables and prepaid expenses, net
     10,747       7,185  
 
Ore on leach pad
     15,682       11,082  
 
Metal and other inventory
     14,668       14,846  
 
    
     
 
 
     135,304       42,724  
PROPERTY, PLANT AND EQUIPMENT
                
 
Property, plant and equipment
     85,538       76,194  
 
Less accumulated depreciation
     (51,923 )     (49,531 )
 
    
     
 
 
     33,615       26,663  
MINING PROPERTIES
                
 
Operational mining properties
     111,511       92,149  
 
Less accumulated depletion
     (88,099 )     (71,833 )
 
    
     
 
 
     23,412       20,316  
 
Non-producing and developmental properties
     25,125       28,129  
 
Mineral interests
     20,125       18,825  
 
    
     
 
 
     68,662       67,270  
OTHER ASSETS
                
 
Non-current ore on leach pad
     15,676       15,474  
 
Restricted investments
     8,710       13,108  
 
Debt issuance costs, net
     295       1,034  
 
Marketable securities
     556       915  
 
Other
     5,860       5,900  
 
    
     
 
 
     31,097       36,431  
 
    
     
 
   
TOTAL ASSETS
   $ 268,678     $ 173,088  
 
 
    
     
 

See notes to consolidated financial statements.

3

Table of Contents

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

                   
      September 30,   December 31,
      2003   2002
     
 
      (In Thousands)
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
CURRENT LIABILITIES
                
 
Accounts payable
   $ 6,855     $ 5,962  
 
Accrued liabilities
     5,178       4,334  
 
Accrued interest payable
     396       1,610  
 
Accrued salaries and wages
     4,219       5,594  
 
Current portion of remediation costs
     1,201       926  
 
13 3/8% Convertible Senior Subordinated Notes due December 2003
     —       12,735  
 
6 3/8% Convertible Subordinated Debentures due January 2004
     4,876       —  
 
Current portion of bank financing
     6,265       4,918  
 
    
     
 
 
     28,990       36,079  
LONG-TERM LIABILITIES
                
 
6 3/8% Convertible Subordinated Debentures due January 2004
     —       55,132  
 
7 1/4% Convertible Subordinated Debentures due October 2005
     9,563       11,665  
 
9% Convertible Senior Subordinated Notes due February 2007, net of discount
     4,245       —  
 
Reclamation and mine closure
     20,985       14,458  
 
Other long-term liabilities
     8,522       8,456  
 
    
     
 
 
     43,315       89,711  
COMMITMENTS AND CONTINGENCIES
                
SHAREHOLDERS’ EQUITY
                
 
Common stock, par value $1.00 per share-authorized 250,000,000 shares, issued 211,011,876 and 119,653,267 at September 30, 2003 and December 31, 2002 (1,059,211 shares held in treasury)
     211,012       119,653  
 
Additional paid in capital
     532,404       420,863  
 
Accumulated deficit
     (532,713 )     (479,207 )
 
Shares held in treasury
     (13,190 )     (13,190 )
 
Accumulated other comprehensive loss
     (1,140 )     (821 )
 
    
     
 
 
     196,373       47,298  
 
    
     
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 268,678     $ 173,088  
 
 
    
     
 

See notes to consolidated financial statements.

4

Table of Contents

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES

                                   
      Three Months   Nine Months
      Ended September 30,   Ended September 30,
     
 
      2003   2002   2003   2002
     
 
 
 
      (In Thousands, except per share data)
REVENUES
                                
Sales of metal
   $ 23,375     $ 24,424     $ 78,108     $ 60,458  
Interest and other
     326       2,110       1,071       5,201  
 
    
     
     
     
 
 
Total revenues
     23,701       26,534       79,179       65,659  
COSTS AND EXPENSES
                                
Production
     18,849       24,648       55,740       58,924  
Depreciation and depletion
     3,256       2,719       12,955       8,130  
Administrative and general
     2,776       1,155       8,241       5,724  
Exploration
     1,154       786       3,367       2,397  
Pre-feasibility
     463       518       1,229       2,300  
Interest
     6,703       7,583       10,726       17,431  
Other holding costs
     2,602       1,464       4,171       2,924  
Loss on exchange and early retirement of debt
     5,769       —       33,957       2,920  
 
    
     
     
     
 
 
Total cost and expenses
     41,572       38,873       130,386       100,750  
 
    
     
     
     
 
NET LOSS FROM CONTINUING OPERATIONS BEFORE TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
     (17,871 )     (12,339 )     (51,207 )     (35,091 )
Income tax benefit
     —       —       7       —  
 
    
     
     
     
 
NET LOSS BEFORE CUMULATIVE EFFECT IN CHANGE IN ACCOUNTING PRINCIPLE
     (17,871 )     (12,339 )     (51,200 )     (35,091 )
Cumulative effect of change in accounting principle
     —       —       (2,306 )     —  
 
    
     
     
     
 
NET LOSS
     (17,871 )     (12,339 )     (53,506 )     (35,091 )
Other comprehensive income (loss)
     78       (574 )     (319 )     (1,051 )
 
    
     
     
     
 
COMPREHENSIVE LOSS
   $ (17,793 )   $ (12,913 )   $ (53,825 )   $ (36,142 )
 
    
     
     
     
 
BASIC AND DILUTED LOSS PER SHARE:
                                
Weighted average number of shares of common stock outstanding
     183,102       87,742       153,679       69,354  
 
    
     
     
     
 
Net loss per common share before cumulative effect of change in accounting principle
   $ (0.10 )   $ (0.14 )   $ (0.33 )   $ (0.51 )
Cumulative effect of change in accounting principle per share
     —       —       (0.02 )     —  
 
    
     
     
     
 
Net loss per common share
   $ (0.10 )   $ (0.14 )   $ (0.35 )   $ (0.51 )
 
    
     
     
     
 

See notes to consolidated financial statements.

5

Table of Contents

COEUR D’ALENE MINES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three and Nine Months Ended September 30, 2003 and 2002
(Unaudited)

                                   
      Three Months Ended September 30,   Nine Months Ended September 30,
     
 
      2003   2002   2003   2002
     
 
 
 
      (In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
                                
Net loss
   $ (17,871 )   $ (12,339 )   $ (53,506 )   $ (35,091 )
Add (deduct) non-cash items:
                                
 
Depreciation and depletion
     3,256       2,719       12,955       8,130  
 
Loss on early retirement of debt
     5,769       —       33,957       2,920  
 
Non-cash interest expense
     7,088       4,235       8,191       9,623  
 
Cumulative effect of change in accounting method
     —       —       2,306       —  
 
Other charges
     357       294       1,089       1,212  
Changes in Operating Assets and Liabilities:
                                
 
Receivables and prepaid expenses
     (1,438 )     (1,758 )     (3,562 )     (2,193 )
 
Inventories
     612       4,914       (4,624 )     6,288  
 
Accounts payable and accrued liabilities
     2,029       (338 )     (1,341 )     1,416  
 
    
     
     
     
 
 
CASH USED IN OPERATING ACTIVITIES
     (198 )     (2,273 )     (4,535 )     (7,695 )
CASH FLOWS FROM INVESTING ACTIVITIES:
                                
 
Purchases of short-term investments
     (9,303 )     (8,900 )     (82,256 )     (9,682 )
 
Proceeds from sales of short-term investments
     8,618       9,116       80,128       12,800  
 
Expenditures on mining assets
     (7,391 )     (3,200 )     (15,102 )     (7,931 )
 
Other
     312       (193 )     225       (209 )
 
    
     
     
     
 
 
CASH USED IN INVESTING ACTIVITIES
     (7,764 )     (3,177 )     (17,005 )     (5,022 )
CASH FLOWS FROM FINANCING ACTIVITIES:
                                
 
Retirement of debt
     (61 )     —       (22,453 )     (9,427 )
 
Proceeds from issuance of long-term debt, net of issuance costs
     —       (192 )     33,268       13,858  
 
Proceeds from issuance of common stock, net of issuance costs
     75,998       —       87,498       —  
 
Bank Borrowings on working capital facility
     6,265       —       22,868       —  
 
Payments to Bank on working capital facility
     (6,810 )     —       (21,714 )     —  
 
Other
     (32 )     904       (95 )     789  
 
    
     
     
     
 
 
CASH PROVIDED BY FINANCING ACTIVITIES:
     75,360       712       99,372       5,220  
 
    
     
     
     
 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
     67,398       (4,738 )     77,832       (7,497 )
 
Cash and cash equivalents at beginning of period
     19,527       11,955       9,093       14,714  
 
    
     
     
     
 
 
Cash and cash equivalents at end of period
   $ 86,925     $ 7,217     $ 86,925     $ 7,217  
 
    
     
     
     
 

See notes to consolidated financial statements.

6

Table of Contents

Coeur d’Alene Mines Corporation
and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)

NOTE A - BASIS OF PRESENTATION

          The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three- and nine-month periods ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ended December 31, 2003.

          The balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Coeur d’Alene Mines Corporation (“Coeur” or the “Company”) Annual Report on Form 10-K for the year ended December 31, 2002.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES