| COEUR D’ALENE MINES CORPORATION |
| (Exact name of Registrant as specified in its charter) |
| Idaho | 1-8641 | 84-0109423 |
| (State or Other Jurisdiction of | (Commission File Number) | (I.R.S. Employer |
| Incorporation) | Identification No.) |
| 400 Coeur d’Alene Mines Bldg., 505 Front Avenue, | 83814 |
| Coeur d’Alene, Idaho | (Zip Code) |
| (Address of Principal Executive Office) |
Registrant’s telephone number, including area code: (208) 667-3511
| Not Applicable | |
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [_] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [_] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [_] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [_] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
On June 1, 2006, Coeur d’Alene Mines Corporation (the “Company”) completed the sale of 100% of the shares of its wholly-owned subsidiary, Coeur Silvery Valley (“CSV”), to U.S. Silver Corporation for a total of $15 million in cash. The Stock Purchase Agreement provides for a post-closing working capital adjustment that is expected to be finalized in July 2006. The Company expects that any resulting adjustment to the purchase price will not be material in amount. The Company anticipates that the transaction will result in a one-time pre-tax gain of approximately $12 million in the quarter ended June 30, 2006.
CSV owned and operated the Galena underground silver mine and owned the adjacent Coeur underground silver mine. In addition, CSV owned the Caladay Property that adjoins the Galena Mine and had operating control of several contiguous exploration properties in the Coeur d’Alene Silver Mining District of Idaho. CSV’s property consisted of 6,131 acres of Company-owned fee land, patented mining claims and unpatented claims in addition to 4,800 acres of leased claims.
There is no material relationship, other than with respect to the transaction, between U.S. Silver Corporation and the Company or any of its affiliates, or any director or officer of the Company or any associate of any such director or officer.
Reference is made to Item 9.01(b) below for the pro forma financial information required pursuant to Article 11 of Regulation S-X.
| Item 9.01. | Financial Statements and Exhibits. |
(b) Pro Forma Financial Information:
The following unaudited financial information reflects the pro forma consolidated statements of operations for the three months ended March 31, 2006 and the year ended December 31, 2005 and the related pro forma consolidated balance sheet as of March 31, 2006 giving effect to the sale of Coeur Silver Valley, Inc. (“CSV”). The unaudited pro forma consolidated statement of operations for the three months ended March 31, 2006 and the year ended December 31, 2005 gives effect to the sale. The unaudited pro forma consolidated balance sheet as of March 31, 2006 assumes the sale occurred on March 31, 2006. The pro forma information is based on the historical financial statements of the Company after giving effect to the sale and are not necessarily indicative of the financial position or results of operations of the Company that would have actually occurred had the transaction been completed as of the date of, or as of the beginning of the periods presented. The pro forma consolidated financial statements have been prepared based on preliminary estimates. The pro forma financial information should be read in conjunction with the Company’s historical financial statements included in its Form 10-K for the year ended December 31, 2005.
COEUR D’ALENE
MINES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF
MARCH 31, 2006
(Unaudited)
| Sale of Coeur | |||||||||||
| As Reported |
Silver Valley (A) |
Pro Forma | |||||||||
| ASSETS | (In Thousands) | ||||||||||
CURRENT ASSETS |
|||||||||||
| Cash and cash equivalents | $ | 347,651 | $ | 15,000 | $ | 362,651 | |||||
| Short-term investments | 26,690 | -- | 26,690 | ||||||||
| Receivables | 23,038 | -- | 23,038 | ||||||||
| Ore on leach pad | 27,743 | -- | 27,743 | ||||||||
| Metal and other inventories | 12,986 | -- | 12,986 | ||||||||
| Deferred tax assets | 2,678 | -- | 2,678 | ||||||||
| Prepaid expenses and other | 6,388 | -- | 6,388 | ||||||||
| Assets of operations held for sale (Note D) | 15,877 | (15,877 | ) | -- | |||||||
| 463,051 | (877 | ) | 462,174 | ||||||||
PROPERTY, PLANT AND EQUIPMENT | |||||||||||
| Property, plant and equipment | 109,049 | -- | 109,049 | ||||||||
| Less accumulated depreciation | (59,852 | ) | -- | (59,852 | ) | ||||||
| 49,197 | -- | 49,197 | |||||||||
MINING PROPERTIES | |||||||||||
| Operational mining properties | 122,650 | -- | 122,650 | ||||||||
| Less accumulated depletion | (107,794 | ) | -- | (107,794 | ) | ||||||
| 14,856 | -- | 14,856 | |||||||||
Mineral interests | 72,201 | -- | 72,201 | ||||||||
| Less accumulated depletion | (3,860 | ) | -- | (3,860 | ) | ||||||
| 68,341 | -- | 68,341 | |||||||||
| Non-producing and development properties | 89,886 | -- | 89,886 | ||||||||
| 173,083 | -- | 173,083 | |||||||||
| OTHER ASSETS | |||||||||||
| Ore on leach pad, non-current portion | 31,316 | -- | 31,316 | ||||||||
| Restricted cash and cash equivalents | 17,041 | -- | 17,041 | ||||||||
| Debt issuance costs, net | 5,378 | -- | 5,378 | ||||||||
| Deferred tax assets | 2,837 | -- | 2,837 | ||||||||
| Other | 7,666 | -- | 7,666 | ||||||||
| 64,238 | -- | 64,238 | |||||||||
| TOTAL ASSETS | $ | 749,569 | $ | (877 | ) | $ | 748,692 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
COEUR D’ALENE
MINES CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF
MARCH 31, 2006
(Unaudited)
| Sale of Coeur | |||||||||||
| As Reported |
Silver Valley (A) |
Pro Forma | |||||||||
| (In thousands except per share data) | |||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||
CURRENT LIABILITIES | |||||||||||
| Accounts payable | $ | 12,426 | $ | -- | $ | 12,426 | |||||
| Other current liabilities | 6,604 | -- | 6,604 | ||||||||
| Accrued interest payable | 469 | -- | 469 | ||||||||
| Accrued salaries and wages | 4,864 | -- | 4,864 | ||||||||
| Current taxes payable | 1,716 | -- | 1,716 | ||||||||
| Liabilities of operations held for sale | 12,816 | (12,816 | ) | -- | |||||||
| 38,895 | (12,816 | ) | 26,079 | ||||||||
| LONG-TERM LIABILITIES | |||||||||||
| 11/4% Convertible Senior Notes due January 2024 | 180,000 | -- | 180,000 | ||||||||
| Reclamation and mine closure | 24,301 | -- | 24,301 | ||||||||
| Other long-term liabilities | 4,286 | -- | 4,286 | ||||||||
| 208,587 | -- | 208,587 | |||||||||
| COMMITMENTS AND CONTINGENCIES | |||||||||||
SHAREHOLDERS' EQUITY | |||||||||||
| Common Stock, par value $1.00 per share; authorized 500,000,000 | |||||||||||
| shares, issued 278,869,045 shares in 2006 (1,059,211 shares | |||||||||||
| held in treasury) | 278,869 | -- | 278,869 | ||||||||
| Additional paid-in capital | 775,611 | -- | 775,611 | ||||||||
| Accumulated deficit | (537,369 | ) | 9,720 | (527,649 | ) | ||||||
| Shares held in treasury | (13,190 | ) | -- | (13,190 | ) | ||||||
| Accumulated other comprehensive loss | (1,834 | ) | 2,219 | 385 | |||||||
| 502,087 | 11,939 | 514,026 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 749,569 | $ | (877 | ) | $ | 748,692 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
COEUR D'ALENE MINES
CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED MARCH 31, 2006
(Unaudited)
| As Reported |
Sale of Coeur Silver Valley (B) |
Pro Forma | |||||||||
REVENUES |
|||||||||||
Sales of metal |
$ | 44,854 | -- | $ | 44,854 | ||||||
COSTS AND EXPENSES | |||||||||||
| Production costs applicable to sales | 20,099 | -- | 20,099 | ||||||||
| Depreciation and depletion | 6,318 | -- | 6,318 | ||||||||
| Administrative and general | 5,090 | -- | 5,090 | ||||||||
| Exploration | 1,968 | -- | 1,968 | ||||||||
| Total cost and expenses | 33,475 | -- | 33,475 | ||||||||
| OTHER INCOME AND EXPENSE | |||||||||||
| Interest and other income | 2,521 | -- | 2,521 | ||||||||
| Interest expense, net of capitalized interest | (521 | ) | -- | (521 | ) | ||||||
| Total other income and expense | 2,000 | -- | 2,000 | ||||||||
Income (loss) from continuing operations before income taxes | 13,379 | -- | 13,379 | ||||||||
| Income tax benefit (provision) | 347 | -- | 347 | ||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS | 13,726 | -- | 13,726 | ||||||||
| Income (loss) from discontinued operations, net of income | |||||||||||
| taxes | 612 | (612 | ) | -- | |||||||
| NET INCOME (LOSS) | 14,338 | (612 | ) | 13,726 | |||||||
| Other comprehensive income (loss) | 4 | -- | 4 | ||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 14,342 | $ | (612 | ) | $ | 13,730 | ||||
| BASIC AND DILUTED INCOME (LOSS) PER SHARE | |||||||||||
| Basic income (loss) per share: | |||||||||||
| Income (loss) from continuing operations | $ | 0.06 | $ | -- | $ | 0.06 | |||||
| Income (loss) from discontinued operations | -- | -- | -- | ||||||||
| Net income (loss) | $ | 0.06 | $ | -- | $ | 0.06 | |||||
| Diluted income (loss) per share: | |||||||||||
| Income (loss) from continuing operations | $ | 0.05 | $ | -- | $ | 0.05 | |||||
| Income (loss) from discontinued operations | -- | -- | -- | ||||||||
| Net income (loss) | $ | 0.05 | $ | -- | $ | 0.05 | |||||
| Weighted average number of shares of common stock | |||||||||||
| Basic | 252,485 | 252,485 | |||||||||
| Diluted | 277,383 | 277,383 | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
COEUR D'ALENE MINES
CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
YEAR ENDED DECEMBER 31, 2005
(Unaudited)
| As Reported |
Sale of Coeur Silver Valley (B) |
Pro Forma | |||||||||
| (In Thousands, except per share data) | |||||||||||
| REVENUES | |||||||||||
| Sales of metal | $ | 172,336 | $ | (16,052 | ) | $ | 156,284 | ||||
COSTS AND EXPENSES | |||||||||||
| Production costs applicable to sales | 104,930 | (16,698 | ) | 88,232 | |||||||
| Depreciation and depletion | 20,885 | (1,996 | ) | 18,889 | |||||||
| Administrative and general | 19,417 | -- | 19,417 | ||||||||
| Exploration | 11,914 | (1,361 | ) | 10,553 | |||||||
| Pre-development | 6,057 | -- | 6,057 | ||||||||
| Write-down of mining properties and other holding costs | 1,379 | (172 | ) | 1,207 | |||||||
| Litigation settlement | 1,600 | -- | 1,600 | ||||||||
| Total cost and expenses | 166,182 | (20,227 | ) | 145,955 | |||||||
| OTHER INCOME AND EXPENSE | |||||||||||
| Interest and other income | 8,365 | 20 | 8,385 | ||||||||
| Interest expense, net of capitalized interest | (2,485 | ) | -- | (2,485 | ) | ||||||
| Total other income and expense | 5,880 | 20 | 5,900 | ||||||||
| INCOME (LOSS) FROM CONTINUING OPERATIONS | 12,034 | 4,195 | 16,229 | ||||||||
| Income tax (provision) benefit | (1,483 | ) | -- | (1,483 | ) | ||||||
| NET INCOME (LOSS) | 10,551 | 4,195 | 14,746 | ||||||||
| Other comprehensive income (loss) | 447 | 1,982 | 2,429 | ||||||||
| COMPREHENSIVE INCOME (LOSS) | $ | 10,998 | $ | 6,177 | $ | 17,175 | |||||
| BASIC AND DILUTED INCOME (LOSS) PER SHARE | |||||||||||
| Basic income (loss) per share: | |||||||||||
| Net income (loss) | $ | 0.04 | $ | 0.02 | $ | 0.06 | |||||
| Diluted income (loss) per share: | |||||||||||
| Net income (loss) | $ | 0.04 | $ | 0.02 | $ | 0.06 | |||||
| Weighted average number of shares of common stock | |||||||||||
| Basic | 242,915 | 242,915 | |||||||||
| Diluted | 243,683 | 243,683 | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
NOTE TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Pro Forma Adjustments. |
| The accompanying pro forma consolidated statements of operations for the year ended December 31, 2005 and for the three months ended March 31, 2006 reflect the sale of Coeur Silver Valley. The pro forma consolidated balance sheet as of March 31, 2006 gives pro forma effect of the sale as if it occurred on March 31, 2006. Actual reported results may vary from those contained in the pro forma disclosure. These pro forma financial statements include the following pro forma adjustments: |
| (A) Reduction of assets and liabilities as a result of the sale. |
| (B) Reduction of the revenues and expenses as a result of the sale. |
| The estimated investment income from the cash proceeds have not been included as pro forma adjustments. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| COEUR D'ALENE MINES CORPORATION | |
| (Registrant) | |
Dated: June 7, 2006 |
By: /s/ James A. Sabala |
| James A. Sabala | |
| Executive Vice President and | |
| Chief Financial Officer |