Bridget Freas - Director, IR Mitchell Krebs - President & CEO Frank Hanagarne - SVP & COO.

Michael Dudas - Sterne, Agee Joseph Reagor - ROTH Capital Partners Chris Thompson - Raymond James Craig Johnston - Scotiabank Chris Terry - Deutsche Bank.

Good day and welcome to the Coeur Mining Third Quarter 2015 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Bridget Freas. Please go ahead..

Welcome everyone to our third quarter 2015 earnings conference call. There are slides available on our website to accompany today's remarks. Please review the cautionary statements and the risk factors in our latest 10-K and 10-Q for risks and uncertainties that could cause actual results to differ from any forward-looking statements made today.

Mitch, please go ahead..

Thanks, Bridget and good morning, everybody. The earnings release we put out yesterday and the slides that go along with the call are both pretty self-explanatory and they both reflect what we think is a very solid quarter of performance by the company.

So far this year we've held about 100 individual meetings with existing stockholders, potential investors, and with the analysts that cover the company, and it seems like there have been about four main takeaways we consistently hear.

The first one is, that many are surprised to hear about the changes we've made to this company and almost everyone supports and applauds the strategy that we are pursuing to revamp the company. The second takeaway is that many people say they want to see more evidence of our ability to actually execute the strategy.

The third thing is a lot of people say they are concerned about the debt on our balance sheet. And then the fourth, some express concern about the company's liquidity and how it would hold up that silver and gold prices remain weak.

For anyone who has been following us over the past couple of years, and been listening to what we've been saying we do and comparing that to what we're actually doing, the third quarter should help validate a lot of things. These results should also go a long way toward addressing each of those investor takeaways I mentioned.

For those wanting to see more evidence of our ability to execute our strategy there is plenty to point to from the third quarter.

Take our costs for example, if someone can show us a precious metals mining company that is reducing costs quarter-over-quarter and year-over-year more than us, please tell us who it is, our costs for silver equivalent ounce dropped 15% year-over-year, and that's using a 60:1 ratio to calculate equivalent ounces.

If you use average realized prices to calculate equivalent ounces like most other companies, our costs were $11 an ounce in the third quarter compared to around $14 an ounce a year ago.

On an all-in sustaining basis our cost declined 9% from the second quarter and dropped 17% year-over-year to just over $15 per silver equivalent ounce based on a 60:1 ratio. Using average realized prices to calculate equivalent ounces our all-in sustaining costs were $13.14 per silver equivalent ounce in the third quarter.

If you go back to last year 2014 full year, our all-in sustaining costs were $19.27 per ounce using that 60:1 ratio, and they were $18.34 using average realized prices to calculate equivalent ounces. Just drop one layer down for a second, let's look at Palmarejo where we all know we have a lot of things going on there this year.

We bumped up our 2015 full-year production guidance and we dropped our cost guidance range for the full year. We started the year with cost guidance of $16.25 to $17.75 per silver equivalent ounce at Palmarejo.

And now we're expecting that full year cost number to end up between $14 and $14.50 an ounce which is a reflection of how great the team at Palmarejo is doing and what we consider to be a big transitional year for the operation.

Compared to the second quarter, Palmarejo's costs were down 14% and compared to last year's third quarter costs were down a whopping 21%. We expect costs to decline further as we continue the transition to higher grade mining in two new underground deposits.

The first one is Guadalupe, where we achieved an average mining rate of more than 1,700 tons per day in the third quarter and we expect to hit the 2,000 tons per day level by year-end. And remember, we only started mining Guadalupe a little less than a year ago.

And the second new underground deposit at Palmarejo is Independencia which was consolidated through the April acquisition with Paramount Gold and Silver, and is located only about 800 meters away from Guadalupe. There are two parts to Independencia, Este and O-Este which is East and West.

The east part is the part of the deposit that Paramount controls and the west part is the much smaller part of the deposit located on our side of the old property boundary. Putting together the two pieces made a ton of sense for obvious reasons and allows us to unlock value sooner from our part of the deposit.

The twin declines we are driving over to the Independencia deposit from Guadalupe are on-schedule. We plan to start mining from there early next year and we will process the ore then back at the existing Palmarejo processing facility.

There are three things we love about Independencia Este, number one is, its grades are about 17% higher than Guadalupe. The second is, it's not subject to the existing Franco-Nevada gold stream, so margins are expected to get an extra boost from that. And number three is, we're expected to get a lot bigger from further drilling.

And you probably saw we filed a new updated 43-101 technical report yesterday for Palmarejo which reflects this scenario of underground mining from Guadalupe in Independencia.

And I remember having these quarterly conference calls a couple of years ago when a big concern people had was whether Palmarejo had more than a couple of years of remaining reserves.

Now since that time reserves are up almost 20% despite lower prices and what we've mined since then and the average grade of silver is 32% higher and the average gold grade is 48% higher.

As you can see from the technical report in the press release we've put out late yesterday, production is expected to be higher, the mine life is now much longer, costs are expected to be significantly lower, and cash flows are anticipated to be much, much higher over the next seven years, even when using much lower silver and gold price assumptions.

This is all very exciting but it's still early days at Palmarejo in terms of the drilling we still need to do at both, Guadalupe-Independencia and in that 800 meter gap in between those two deposits. Now turning over to Rochester out in Nevada for a couple of minutes.

The investments we've made there over the last couple of years to scale up the mine are driving double-digit production growth and costs that are lower by double-digits.

We've dropped our full year guidance there as well down to $12.25 to $12.75 an ounce this year which means we are on-track for about 10% to 15% reduction in unit costs there compared to last year.

And we expect Rochester to produce about 4.7 million to 5 million ounces of silver and anywhere between 55,000 and 65,000 ounces of gold, and that will be about 15% to 30% higher than last year.

The permits allowing us to construct a new leach pad out there in 2017 are moving ahead according to schedule, and they are expected to be obtained in early 2016.

Another important expansion initiative out of Rochester has been increasing the crushing rates from the existing in-pit crusher unit, that's now complete and that will give us a small kick here at the end of 2015 and should make a big difference in 2016 and beyond.

If you just look at the slides that we've posted for this call and look at Slide 12 that summarizes Rochester and the costs on a per ton basis going back over the last four quarters or so, and you can see the trends there. They are doing a really great job out there at Rochester and hopefully there will be more to come going forward.

Just for a couple of minutes we'll talk about Kensington up in Alaska. You'll note the cost did bump up there a bit in the third quarter but the trend has been a good one. And we reduced the cost guidance there also for the full year.

We came into the year with guidance on costs for Kensington of $900 to $975 an ounce and now we see the full year coming in somewhere in the low $800s and that would be over $100 an ounce lower than they were last year. The big story at Kensington is the nearby high grade Jualin deposit where development got going in early August.

They are now about 700 feet in and we'll start drilling Jualin from underground this winter to hopefully expand it and better define the one vein out of five that contains no resources that carrying average grade that's 3X the grade of Kensington's current reserves.

And then finally, last but not least the Wharf in South Dakota, that operation is really coming on strong in the second half of the year. We reduced our full year cost guidance there too for the full year down to $700 to $750 an ounce. You'll note maybe that Wharf was the biggest generator of cash flow of any of our mines in the third quarter.

And if you look at those same slides in the slide provided if you go along with the call, I think it's Slide 14, show worst cost per ton, those are definitely heading down and in the right direction as well.

Since we acquired work in February from Gold Corp for about $100 million, we've announced a 39% increase in reserves, we've extended the mine life, we increased the annual production profile in the mine plan and we generated nearly $20 million in free cash flow over the last two quarters. So not a bad acquisition at all.

Regarding that investor takeaway relating to concerns over the leverage we have on the balance sheet, we did announce yesterday in the earnings release that we're reducing our total debt by about $54 million, which is about 10%.

The company has about $433 million of publicly traded unsecured notes 7%, 8% interest that have been trading at a huge discount to par, going back to about July. And so we took advantage of the opportunity just presented to take a big bite of our outstanding debt at a 24% discount.

Now we don't like using shares to eliminate debt but with about $4.5 million of annual interest savings and with an opportunity to retire $54 million of debt. At $0.76 on the dollar it was too good of an opportunity to pass up and that makes our stockholders better off.

As a result of this, net debt is expected to drop 16% percent down to $287 million.

And when you compare that net debt level to our EBITDA which has been running between $30 million and $35 million a quarter the last two quarters, we believe our credit leverage ratios are heading in the right direction, especially given that we expect EBITDA to keep growing, and the fact that 98% of our remaining debt doesn't mature for another four to five years.

The last investor takeaway I mentioned earlier relates to liquidity concerns. Now we all know metals prices in the third quarter were the lowest we've seen in about six years but yet our company's cash balance data about the same compared to the end of June at around $206 million. So I'd say we're doing a really good job of managing our liquidity.

And as I've said now for about the past 18 months our investments in these different initiatives that reminds design to drive down our cost structure are the heaviest through the middle of next year at which point we expect cash to start to build. So there you have it, good results.

There is one other piece of investor feedback from all those meetings we've had this year that I didn't mention, and that is that this company appears to be nearing a pretty significant inflection point. And I totally agree with that piece of feedback, we definitely are.

And as that point draws near we anticipate putting up more quarters like the third quarter and keep doing what we're doing. At some point equity markets will notice the long-term value that is being created for stockholders of this company.

Until then we'll stay focused on the things we can control on executing our strategy, on continually improving the business, on carefully managing our liquidity, and on being opportunistic when we think it's in our stockholders best interest. We believe that inflection point is right around the corner and we definitely can't wait to get there.

And now, we'd be happy to take any questions you might have..

[Operator Instructions] Our first question comes from Michael Dudas of Sterne, Agee. Please go ahead..

Good morning gentlemen, Bridget..

Hi, Mike..

Hi. Mitch. First on the Palmarejo release.

Maybe you or Frank talk about like what really surprised you in the work that you did relative to what you had thought? And I guess on top of that, some of the - when we can expect some of those drilling results that you talk about the kind of tighten up the two different zones?.

Yes, I'll just make one plug and then the Frank, I'll turn it over to you. We are going to have a host of teaching up in Toronto next - I think next week to sit down and spend some time going through the technical report because there are a lot of changes, lot of moving parts in what has been a very dynamic asset for us.

And included in that will be a good overview of the exploration results that we've been having and how that kind of fits into the longer term profile and priorities at Palmarejo. But Frank, do you want to answer Mike's question about big surprises or….

Sure. Mike this is Frank. The things that I thought were very good surprises in our work related to the technical report or how well the research itself stood up to lower prices.

We've got a range of prices that we tested sensitivity on and even at close to spot prices today, it's a very strong resource producing good grades from both Guadalupe and Independencia, looking forward over the next seven and part of an eight year.

That's something that really instills a good sense of confidence in the fact that we've improved our resource model down there through more focused drilling and better applied engineering and quality controls. And it makes for a pretty good life of mine at this point.

The cost also are well within - were pretty close to what we expected but I can tell you in the process of developing this technical or capital was reduced substantially as we continue to optimize the development meters that were going to go into both mines and so on.

So I feel like it's pretty reasonable capital over the while as well, and my virtual fact will be running an underground mine. Underground mining unit costs are higher than they are in the open pit but the volumes and materials are moved much slower.

So it will be a significant reduction going forward, and bulk dollars being spent as we operate every day..

Thanks. I'll look forward to the details next week. On Wharf, I hope you can find a few more acquisitions like what you did with Wharf.

But maybe if you talk a little bit about some of the positive cost divergences that you're seeing there and the sustainability of such?.

I can take that one as well and they just continue the performance they have although you do see a slight reduction in this most recent quarter benefiting at work from lower fuel prices and lower maintenance costs, so is a big theme there. We were able to get through this most recent quarter and then save quite a bit of money on maintenance.

In fact, if I were just to make a comment about our cost and general across all of our mines, the general things that we see here, significant labor reductions in Mexico at Palmarejo. We are benefiting from some reduction in cost on fuel, we're seeing tremendous power cost savings in Mexico at time as well.

Our haulage cost are down substantially at both Palmarejo and Rochester due to some pretty strategic re-routing of haul roads and a reduction in the amount of ways it has to be moved to Palmarejo. Now we've been real focused on maintenance this year and we're starting to see the benefits of that at each one of our mines..

That hard work is really showing, paying off. My final quick question if you Mitch is, I know you may have a bunch of investors and ounce as such but you've also done some travel relative to the silver industry.

You have a couple of thoughts on what your expectations, what you're seeing out there? Some trends, positive or negative relative to silver offtake?.

Yes, I think a big takeaway on the supply side for silver is after about a dozen years of continual increases every year and where our mine supply, that trend is now reversing itself.

And over the next five or ten years we're expecting to see silver supply - global silver supply come down pretty extensively and obviously that's a combination of existing mines depleting our reserves, no new projects to speak off and built, unless exploration going into the ground, so fewer new discoveries.

So that's a big trend I think on the supply side but that's positive and that - I guess all that surprising just given what's happened in silver prices over the last few years. On the demand side, you guys have probably all read about the tightness in, like coins, that's been a big attention and headline grabber.

It just seems like there is a nearly insatiable appetite for silver eagles and even - whether it's in Canada, Austria, Perth, all these meant on allocation now for metal and for coin sales.

I'd say one of the bigger trends on the industrial demand side which makes up about 60% of total demand for silver now is solar panels, have become a real interesting component of the overall demand picture. When we go back a decade and it is less than a million ounces of silver than that went into solar panels each year.

And this year that's scheduled to be about 65 million or 70 million ounces of silver going into those panels themselves. And if you believe what China, India, and even with the clean power plan here proposed by the Obama administration in our transition here in the U.S. to more renewable sources of power.

You add up all those new Gigawatts of PV installations and each new gigawatt consumes about 2.8 million ounces of silver.

You start doing the math and you can really quickly get to a point where solar becomes kind of like what 35 millimeter film used to be for silver where it was kind of solid one-third of total demand each year, year-in and year-out. So that's been an interesting one that I've learned a lot more about here over the last few months..

Thanks. Mitch, I appreciate it..

Our next question comes from Joseph Reagor of ROTH Capital Partners. Please go ahead..

Morning guys and congrats on a great quarter..

Hey Joe, thanks..

So couple questions on the cost front, I guess you guys discussed a lot about how costs have come down but I guess maybe for our benefits, can you provide a little bit more color as to what you guys have done to reduce costs? I know that you guys have been against essentially high-grading your minds, now because obviously that room is a long-term view on them.

But maybe some of the other things you guys have done to take it cost down as well as you have?.

Yes, I'll start and anybody else here can chime in. I think of cost Joe, in four or five different buckets, one being - what are the things outside our control that are - have been kind of gummies for us that will obviously take but we really haven't done anything to earn them. And in that category are things like Frank mentioned, diesel.

Mexican peso has been a good tailwind although most companies seem to have more international operations and we do most of our operations here in the U.S. So we don't have as much of an FX benefit as maybe some.

The second benefit - sorry, the second bucket of cost that I think about are sort of just like the dollar, hard dollar savings, and those have been in areas like labor. Frank mentioned, our headcount at Palmarejo as we've transition and keep transitioning away from the open pit has come down a lot.

The maintenance cost Frank mentioned, the power at Palmarejo which is a huge component of the of our cost, freights up at Kensington, those kind of things that are just pure dollar savings and while those are great and we've definitely been aggressively pursuing those, those have limits, you can't couple it quarter-in and quarter-out forever.

And that's where I get more excited about the other two or three buckets; the first being coming from grade, the next one coming from scale, and then the third one coming from processing related enhancements, and that's really for us the next wave of - that's going to deliver cost reductions for us.

For us grade for example; we haven't even gotten into Independencia yet and that's where some of that real grade kick is going to come home at Palmarejo and really drive those costs down even further.

In terms of scale, we're just invested like I mentioned in expanding that pressure capacity out of Rochester, that higher scale and the volume efficiencies that come along with things like that, that's going to be another - give us another wave of opportunity on the cost front.

And then, Frank and his team on the processing side - when you look at those Palmarejo recoveries in the third quarter, that stems from a lot of hard work, a lot of effort, there is some more tweaks to be done in 2016, 2017 that can give us some more benefit there.

We're looking at some opportunities at San Bartolomé to improve recoveries to the addition of some oxygen into the processing plant there to hopefully boost recoveries, and that's - I mean those are the sweet - kinds of kickers to cost in terms of more capital or no capital, every 2%, 3%, 4%, 5% on recoveries makes a huge, huge difference in terms of unit costs and cash flows.

Frank, I probably just stole 100% of your thunder there..

Yes. I don't know what more to say..

Does that help, Joe? Does that give you the kind of color you are hoping to get?.

Yes. That is very helpful. Kind of like following on one of your points there, the Palmarejo recovery improvements, looking at the report filed overnight, it seems to suggest recovery rates of roughly like 86%, 87% for silver and gold going forward which are kind of somewhat in line with what you guys got in Q3.

My thought would be, though, that the report was worked on before the improvements in Q3.

So could those estimates that are in the filed report be a bit light and be more driven by great improvement than they were by processing improvement?.

Joe, what you will find, you need to go in and look in Section 22 in our economic analysis and you will see that for the years 2017 and beyond, we bumped those recovery rates up.

Between now and 2017 - well, for 2016, we kept the recoveries pretty close to where we're at right now because we've actually - we're going to be putting some capital into our process plant in the area of the Merrill-Crowe'rea that is going to raise the recovery up, but it doesn't actually become effective until rather late next year.

So we will start to see the benefits of that in 2017 and beyond. So you will see our gold and silver recoveries ratcheting up in 2017 and beyond, roughly 2% to 3% above where we're at right now..

Another thing I was thinking of, listening to Frank, is that is a 6000 ton a day processing facility down there and as we transition to lower grade, higher tons, the retention time in that process down there is only going to help as well as relating to recoveries.

And the cleaner ore coming out of Guadalupe is definitely a help when thinking about the recovery rates going forward..

Okay. And then, one final one. Could you just give us an update on what you guys are thinking as far as M&A? On the last call, you said you thought you were pretty much done with it for the time being.

Have you seen any interesting opportunities come across that might make you change that course of action and look to make some other investments or do you think all of your investing right now is going to be into your own properties?.

Where we come at that from is what we have inside our Company right now should derive a tripling of our EBITDA over not very long and I don't want us to distract ourselves away from delivering that. That is the best way to drive value for the Company and its stockholders.

But, that said, if an opportunity came along that could kind of accelerate that ramp-up in cash flow and reduce our costs and improve - or enhance our overall portfolio in some way, we need to take a look at those. I would say, the level of inbounds that we're getting on M&A has picked up probably more on the earlier stage stuff.

The companies that don't have production or cash flow and have a cash balance that is getting closer and closer to zero and those kinds of companies are interested in doing something. For us, that doesn't necessarily achieve those objectives and enhance our strategy at all.

So it has to be a pretty special opportunity like Wharf and those - there's not a lot of those out there. I think this flow of non-core assets out of the majors is probably about run its course. I don't think there is going to be a ton of that continuing into 2016. So we will keep going.

The bar is set high as far as what we consider and keep our priority on everything that we have going on because our plate is pretty full..

Our next question comes from Chris Thompson of Raymond James. Please go ahead..

I have a number of quick questions, just on the operations. We will start off with Palmarejo.

Can you give us a little bit of color as to the status of the open pit there? Are you going to squeeze another quarter out of this or do you definitely see this shutting down by the end of this year?.

This is Frank. Yes, we're still planning on seeing the open pit come to a close at the end of December this year. At this point, we're mining in the Tucson Chapa TL [ph] area. It is what I would describe as a slot cut now part of the pit, very narrow.

It has become so narrow that we have had to go away from using 777 haul trucks and our direct shovels to - the mining equipment that was used over Guadalupe earlier this year, these 740 articulating capital - Caterpillar trucks and single loader operation in there. So it is definitely - we're getting down to the bottom.

Starting I guess go back about six months ago, we nearly had three benches to mine through. We're on the second one now and the third one is signed at the end of the year..

Just moving on, then, to Rochester. Looking at the grades at Rochester - the silver grades here plus 20 gram per ton, better than what you have delivered year to date.

Again, do you see that sort of extending through to next year? What should we be modeling as far as the silver grades?.

The grades have been pretty good this year. They will be roughly equivalent next year, maybe declining towards the later end of next year, all tied to the mine plan and the different benches that we will be on, but it is going to hold fairly close to where we're at..

And then on to Kensington very quickly, the unit costs at Kensington, our records show they are slightly higher this quarter than they were previously in previous quarters of the year.

Is this something we should be modeling, mainly using the Q3 as a good sort of representation of what we should be looking at as far as unit costs for the remainder of next the year and into next?.

Chris, costs went up slightly in the third quarter due to a number of different - several major component rebuilds that were required on the underground mining fleet at Kensington. So those are done. Those are behind us. We will start the new cycle where we move forward without that happening.

So it will come up again in some future quarter, but we're good through the end of the year and a good ways into next year before we have to do more of that..

And then, finally, at Wharf, Frank, going [indiscernible] obviously, we're seeing sort of that layering in with effect to - as far as good grades in that.

Just remind us again, what is the mine plan for that Golden Reward? When do you see that wrapping up and can we expect this sort of contribution on a quarter by quarter basis into next year?.

No. We resumed mining in Golden Reward in August right after we had completed a re-line on Pad #5 at Wharf and started to load that pad. We're mining Golden Reward very close - come close up to the Thanksgiving holiday where we have to back out of there then because it is going to start to snow and the ski season is going to begin and so on.

So we will be back in there to mine the residual probably in the late second quarter next year and we will get it finished up by midyear next year..

Our next question comes from Craig Johnston of Scotiabank. Please go ahead..

I will keep it quick. There has been a lot of questions so far, but just on Palmarejo, revision of guidance for 2015, even with that revision, it seems like you are being relatively conservative. Just wondering if you could speak to expectations for Q4 and then maybe even into next year..

Yes. This is Frank. I will take that one. We're expecting - first of all, we have had a good year because of some bonus grade that has come out of the open pit in some of these ventures that we're mining to complete the open pit. We have also had some very good grade come out of the underground workings at Palmarejo.

Now, that is scheduled to come to a close with Palmarejo underground at some point next year. But, the open pit will be done in December. We're expecting to see some good ounces come out of that open pit in November and then very strongly in December, but then the open pit will be down at that point.

We have also had the - our production performance is fueled to a large degree by this most recent ramp-up at Guadalupe. Our tons are going up and we have been producing some very good silver and decent gold rates over there. So it all adds up.

We continue into next year to ramp up Guadalupe, so those benefits will continue and bring up the open pit to a close by the end of this year and then continue to mine underground at Palmarejo through at least midyear next year..

It is Mitch. Just one thought to add to that. You think about the fourth quarter probably being pretty similar to the third quarter, but then the real break comes as we, like Frank said, we end the open pit and then there will be a step down in that tonnage. Like Frank said, we will have some underground from the old Palmarejo.

The bulk of the ore coming out of the Guadalupe - the bulk of the ore going to the mill in 2016 will be Guadalupe and around that 2000 tons a day. And then, the big X-factor becomes Independencia then as we get going there from a standing start early next year and ramp that up throughout the year.

So it will be a very different looking year next year compared to this year which is kind of all part of this transition that we've talked about and seem to be doing a really good job of executing. And Frank and his team there have done a great job.

I would say we're ahead of plan there as far as the mining rate and - out of Guadalupe and everything that is going on as it relates to getting over to Independencia is going really well, too. So they are juggling a lot of balls down there and the team is doing a really good job keeping them all in the air..

And just on the technical report, I know we all understand that technical reports are a moment in time and they are always changing and mine plans are changing.

Can you just give us a sense of how much of the technical report you think is not written in stone but more of an absolute? Maybe is it 2016 or do you even see potential changes to your mine plan in 2016 depending on your drilling results and what you see as you go deeper?.

I think the big changes that we will see in - you know, you figure that technical report plan is a good base where there is real opportunity as I see it and as we, I think, all see it is probably first and foremost in Guadalupe and drilling deeper there and then further to the south and east and having some of that really nice grade - much higher grade inferred and even some stuff that is not inferred yet getting that drilled out and into the mine plan at those kind of grades is really, to me, the biggest change or extra to that base plan that is reflected in the TR.

I would say, then, a close second to that would be a somewhat similar theme over in Independencia where that is open depth in both to the North and West, as well as a bit to the South and East.

There is a bit of a gap in there between what used to be the Paramount piece of Independencia and our part of Independencia that we're really looking forward to drilling out and hopefully flow that in.

And then, the stuff that Hans will talk more about up in Toronto next week, in terms of some additional structure and in between those two deposits, in between Guadalupe and Independencia, that probably a little bit later down the road in 2018 and beyond, but both, I think, are going to be, become then another very prevalent piece of the mix as we think about what that mine looks like in a seven-year kind of four on for the next 10 or 20 years, hopefully..

Okay. No, that makes sense. Thanks, guys.

And then, just on corporate G&A with the guidance being lowered to $33 million to $35 million, thoughts on guidance going into 2016 and beyond? Are these the levels you want them to be at or could you see them going even lower?.

Well, we keep squeezing. The topic of very frequent conversation around here and kind of like one of my comments I made earlier about there is some kind of cost where there is a limit.

And also I feel like there is - you have to be careful what you ask for in G&A because you can cut too far and really do harm to the business in terms of the ability to manage and mitigate risk and do the solid planning and execution like we're seeing at this Company.

Is there more to go on G&A here? Yes, but if you go back two years and start at $55 million and now be guiding to, what is it, $33 million, I think we're doing a really good job there.

We have not shied away from being very forward leaning on G&A and we're taking that same attitude into the budgeting process here as we start getting real serious about what 2016 looks like for G&A..

Our next question comes from Chris Terry of Deutsche Bank. Please go ahead..

Well done on a good quarter operation. I just had two more high-level questions.

Just in terms of the debt for equity that you have just accomplished, if there was more of those type of situations that become available, would you be interested in doing more of that or does it really depend on where commodity prices track from here? And then the second question I had was just around heading into 2016 and 2017, I think in a previous presentation you had some quite broad guidance on silver and equivalent ounces for 2016 and 2017 that relates to the technical report in the last day.

How has that changed at all or would that still be the relevant guidance? Thanks..

Peter, do you want to start with the-?.

Yes. Certainly, in terms of our equity for debt exchange 389, we're able to do it as a result of securing a waiver from our Term Loan B lenders and that the amount of that waiver was $100 million.

So we would be able to do it in the future, but it is going to be very opportunity driven, certainly predicated on pricing as you highlight predominant metal prices where we're in that regard and we would evaluate it on a case-by-case basis specifically..

And as far as the outlook that we gave in terms of production earlier this year and how that has changed at all with the technical report, we're not updating or revising any outlooks right now.

We will likely do that in the early part of next year and kind of refresh that outlook as it relates to both production and the cost and the cash flow, kind of that three-year outlook that we have put out. I would say, obviously, we're ahead of plan on a lot of these things, especially on the costs.

You look at where we're relative to some of those ranges in that three-year outlook and we're already there, to a certain extent, on 2016. So we will carry that through into an update that we will likely do in the first couple of months of 2016..

This concludes our question and answer session. I would now like to turn the conference back over to Mitch Krebs for any closing remarks..

Well, thanks for your time and questions. Good quarter. We will keep doing more, hopefully and look forward to talking to you early in 2016. Thanks, again, for your time..

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines. Have a great day..