Coeur Mining Inc (CDE) Q4 2020 Earnings Call Transcript

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Coeur Mining Inc (CDE -0.52%)
Q4 2020 Earnings Call
Feb 18, 2021, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to Coeur Mining Fourth Quarter 2020 Financial Results Conference Call. [Operator Instructions]

Now, I'd like to turn the call over to Mr. Paul DePartout, Director of Investor Relations. Please go ahead.

Paul DePartout -- Director of Investor Relations

Thank you, and good morning. Welcome to Coeur Mining's fourth quarter and full year earnings conference call. Our results were released after yesterday's market close. And a copy of the press release and slides are available on our website. I would like to remind everyone that our press release, slides and some of our comments today include forward-looking statements from which actual results may differ. Please review the cautionary statements included in our press release and presentation, as well as the risk factors described in our 2020 10-K.

Now, I'll turn it over to Mitch, Mick and Tom.

Mitchell J. Krebs -- President and Chief Executive Officer

Thanks, Paul, and good morning, everyone. 2020 was quite the year. Obviously, COVID-19 was the main headline for everyone and of course we were no exception. COVID had a big impact on the first half of our year by sharply driving down prices and forcing a government-mandated shutdown in Mexico, which impacted us at our Palmarejo mine. Of course, prices have strengthened considerably since their April lows and Mexico allowed mining to resume in the second quarter. And together with solid production and effective cost and balance sheet management, we delivered a strong second half of 2020, which Mick and Tom will talk more about shortly.

I first want to take a minute to recognize our people for how they've risen to the occasion over the past 12 months. We've asked a lot of everyone and our entire organization has responded incredibly well to the challenges. I can't help but have immense pride for how well our culture has served us, the talent we've attracted, the ESG leadership we've established and the overall performance we delivered during such an unprecedented year. So thank you to everyone. Now starting off on Slide 3 and 4. There were a lot of highlights and accomplishments last year that led to adjusted EBITDA jumping over 50%, to $263 million and free cash flow climbing to $49 million. For starters, we achieved production guidance at all of our sites and unit costs were at or below full year guidance ranges at each of our primary gold operations.

Palmarejo's results were truly remarkable, the way they ramped back up mid-year and really never looked back. And Kensington and Wharf also had fantastic years with both operations breaking their previous free cash flow records. Rochester finished the year much stronger than it started, with fourth quarter silver production increasing nearly 40%, and gold production up almost 50% quarter-over-quarter. And just to add a bit more color on Rochester, the big highlight last year was kicking off the expansion and providing the details of this project late in the year. The updated mine plan reflects a reserves-only 18-year mine life with an NPV of $634 million and an anticipated IRR of 31%.

Production rates are also expected to double, driving average free cash flow to over $100 million per year. Until this expansion is completed late next year, Rochester will remain in a state of transition while we balance near-term performance with gathering and applying key learnings to ensure Rochester's long-term success. During this time, we'll also remain focused on further expanding Rochester's silver and gold reserves beyond the 58% and 65% growth we saw last year. That's a good segue to the highlights from our $50 million exploration investment that we made last year, which are summarized on Slides 10 and 11 and were included in our press release we issued yesterday morning. It was the largest drilling program in our history, and it was wildly successful. Gold reserves grew by over 20%, and silver reserves increased by over 40% to the highest levels in Company history.

We've now dramatically increased our overall average mine life from just over seven years in 2015 to well over 12 years currently. And with over $65 million allocated to exploration this year, we expect to see this number extend out even further. These investments in exploration rank among our most attractive capital allocation priorities and should help drive higher returns on invested capital going forward. On top of our reserve success, we made a new discovery in Southern Nevada called C-Horst, located in the Crown district, which has the potential to become a significant asset for the Company. We included several recent drill holes in yesterday's release from C-Horst, including one that was over 216 meters, averaging just about 1 gram per ton of oxide gold. An aggressive drilling program has already begun at C-Horst this year. And we plan to invest approximately $10 million to continue growing this new discovery.

Another big success from last year's exploration program was the substantial resource growth at Silvertip in British Columbia. With only around half of the assays back at the end of the year, total resource tons increased over 40% and we more than tripled the strike length of the high-grade deposit to over 3.5 kilometers. We plan to invest roughly $14 million in exploration at Silvertip this year, aimed at further expanding the resource and beginning to convert some of this material to reserves. I'm sticking with Silvertip for a minute. We ended 2020 feeling confident in the resource and in our ability to continue expanding Silvertip's mine life with further drilling. We also have identified and expect to lock down the flow sheet for a straightforward 1,750 ton a day process plant that can reliably deliver consistent recoveries and generate high-quality concentrates.

The team is now focused on optimizing capital costs, the mine plan and operating costs to incorporate everything we learned from last year's PFS. We're also working through how best to slot in a potential expansion and restart to maximize the likelihood of success without distracting us from our Rochester expansion. Our goal is to end the year with a solid, compelling business case to justify a decision to move forward at silver tip. Our three-year outlook reflects strong returns and a step change in production and cash flow. If you didn't get a chance to listen to our Investor Day in December, I encourage you to go to our website, look at the materials or watch the replay to find out more about our culture, strategy and outlook.

Before passing the call to Mick, I want to quickly highlight Slides 18 and 19 which provide a good high-level overview of our deep-rooted community relationships. We strive to maintain strong relations with all of our partner communities and other local stakeholders with the goal of a mutual long-term prosperity.

With that, I'll turn it over to Mick.

Michael Routledge -- Senior Vice President and Chief Operating Officer

Thanks, Mitch. Wow, what a great quarter and a strong finish to the year. Before diving into the operational highlights, I want to take the opportunity to thank our workforce for the progress made in health and safety performance and their ongoing dedication and commitment to pursuing a higher standard. Building on our momentum, we expect to deliver another strong year from our operations in 2021.

Now taking a look at Slide 6 and 7 and beginning with Palmarejo. Strong results during the second half helped us finish the year on a high note, despite being down for roughly 45 days in the second quarter. Full-year gold production finished above the high end of its guidance range, while silver production was in line with expectations. Additionally, the team did an excellent job balancing operating and financial results during the year which resulted in the unit costs for both gold and silver to come in below the low end of their guidance ranges. Together, these great accomplishments helped to generate nearly $93 million of free cash flow; Palmarejo's largest free cash flow year since 2017. Looking at the year ahead, we plan to increase our mining and throughput rates to help offset some lower grades and expect Palmarejo to have another great year in 2021.

Turning over to Rochester. We're going to see positive results from our revised stacking plan, which leverages inter-lift liners to maximize the placement of HPGR-crushed ore on shallower portions of the leach pad. This strategy directly led to higher production during the second half of 2020, helping us to achieve the low end of our production guidance for both silver and gold. Unit costs came in slightly higher than expected, largely due to additional cyanide dosing as well as higher metallurgical outside services costs for modeling the test work and the consultant support, we used to drive the improvement program in the second half. Going forward, we are continuing to focus on performance enhancements and driving sustained improvements in our results.

Before moving on, I want to quickly highlight two important items for Rochester in 2021. We plan to swap out the existing secondary crusher in the second quarter to further optimize gradiation of crushed material at higher throughput rates. This will give us the opportunity to dial in the new unit before it goes into the expanded crusher corridor as part of POA 11. We also plan to begin crushing over liner material for the new Stage VI leach pad during the second half of the year and we have solid plans for both of these projects to mitigate some of the operational impacts. It's important to remember that we are effectively using inter-lift liners and the existing crushing circuit as a full-scale test bed to optimize performance, helping to derisk our ability to achieve the expected results from the expansion in the coming years.

Switching over to Kensington. 2020 was an excellent year for the operation. The team's diligent focus and efforts helped us achieve our full year production and cost guidance, which led to a record $60 million of free cash flow. We expect another strong performance from Kensington in 2021, aided by the inclusion of Eureka and Elmira into the operation's production profile. Lastly, at Wharf, the team did a great job accomplishing their goals for the year, and achieved guidance by producing over 93,000 ounces of gold at an average cost around $890 per ounce. More importantly, Wharf generated $73 million of free cash flow, shattering its previous record by over 25%. Looking ahead, we plan to move some additional tons during 2021. While this is expected to result in marginally higher costs, we anticipate Wharf will have another great free cash flow year.

With that, I'll pass the call over to Tom. Tom?

Thomas S. Whelan -- Senior Vice President and Chief Financial Officer

Thanks, Mick. Slide 5 highlights our fantastic financial results. As Mitch and Mick mentioned, strong performances from Palmarejo, Kensington and Wharf, along with higher realized prices led to significant improvements in our annual financial results. Margin expansion from top line growth and prudent cost management helped us generate over $260 million in adjusted EBITDA and nearly $150 million in operating cash flow. Both metrics were over 50% higher year over year. These results showcase the power of our portfolio, especially during the second half of 2020 when our assets generated $86 million of free cash flow. The strong second half more than offset the slower start to the year, leading to nearly $50 million of free cash flow in 2020, our highest annual figure since 2017.

Looking ahead, as highlighted on Slide 15, we issued our 2021 guidance consistent with our recent Investor Day outlook. These guidance ranges signal another solid year of operating cash flow and EBITDA. I do want to flag that we are anticipating a relatively weaker first quarter, driven by, one, our mine plans, production profile and buildup of inventories on our leach pad; secondly, timing of tax payments in Mexico combined to be roughly $30 million to $35 million of cash outflow; and third, annual incentive payouts across the Company.

Turning over to Slide 13, I wanted to emphasize a few key takeaways from our balance sheet. We bolstered our financial flexibility during the fourth quarter by fully repaying our revolving credit facility borrowings and expanding the capacity of the revolver to $300 million. Together with our significantly improved cash position, this led to nearly $360 million of liquidity at the end of the year. Looking at our leverage levels, both total debt and net debt-to-EBITDA decreased steadily during 2020. Particularly, our key leverage metric, net debt-to-EBITDA was cut in half year-over-year ending 2020 at 0.7 times. We are targeting a net debt-to-EBITDA ratio of under 2 times, while maintaining at least $100 million of liquidity over the next two years as we complete major construction at Rochester. By using a combination of cash on hand, operating cash flow and debt capacity, we are confident in our game plan, leaving us very well positioned to fund this phase of significant capital investment.

I'll now pass the call back to Mitch.

Mitchell J. Krebs -- President and Chief Executive Officer

Thanks, Tom. Slide 14 shows our top priorities for 2021. And by following this road map, we believe we can deliver solid results over the short, medium and long term from our balanced portfolio of North American precious metals assets.

With that, let's go ahead and open it up for any questions.

Questions and Answers:

Operator

We'll now begin the question-and-answer session. [Operator Instructions] First question comes from Michael Dudas, Vertical Research Partners. Please go ahead.

Michael Dudas -- Vertical Research Partners -- Analyst

Enjoying the winter land out there in Chicago?

Mitchell J. Krebs -- President and Chief Executive Officer

Hey, Mike. Yeah, we are a hardy bunch here.

Michael Dudas -- Vertical Research Partners -- Analyst

Of course, we are hardy over here in the North East as well. So anyway, couple of questions. First, maybe you could -- maybe Mick can address a little bit on the 2021 cost guidance for the mines. You did a good job of improving in the second half of last year. And I guess there's some conservatism there, but some of the drivers, I know some grade issues at some of the mines. Is there also like a general inflation, labor, some catch-up costs that you didn't have in 2020 that are going to flow through '21? Just to get a little sense of that and how that may play through the year as you roll out?

Mitchell J. Krebs -- President and Chief Executive Officer

Yes. I'll start there on that one and turn it over to Mick. I think, a couple of things come to mind. For example, at Wharf, there was some waste stripping in 2020 that didn't get done due to some labor availability challenges relating to COVID. So we'll be doing some of that here in 2021. And so I know that's a factor in Wharf's costs here this year. Mick, do you want to maybe pick up from there and cover any other? Sort of give Mike some color on the cost guidance at each of the assets?

Michael Routledge -- Senior Vice President and Chief Operating Officer

Certainly. And overall, that cost position for 2021 is driven by the life of mine plans. So there is some changes to 2020, but a few adjustments. We moved a lot of run-of-mine material in 2020 at Rochester. And we're going to do a little bit of that again in 2021. And then there's a little bit of some adjustment with the optimization program that we have around getting the best out of life heap leach pad. So the cyanide costs are going to up a little bit higher at Rochester as we increase the -- from about GBP1.50 per ton to GBP2.5 per ton for whale on the heap leach. So they're the main drivers at Rochester. At Kensington, there's a few bits and bobs there. Really, it's across the board. There's a little adjustment on royalty and management fees, a little bit of G&A. But then we're pushing the throughput at Kensington as well to maximize the benefits of that operation. So the processing costs will be a little bit higher. As Mitch said, on Wharf, we're moving a little bit of catch-up material and stripping at Wharf to make sure that we're well ahead. We don't anticipate any impact on the production for Wharf for 2021. We should be able to move that material as per the plan. So overall, bits and pieces across the piece, not too many concerns. And obviously, we'll always look to optimize those costs through 2021. But at the moment, yes, a good distribution and nothing particularly significant

Ch Overlap].

Michael Dudas -- Vertical Research Partners -- Analyst

And then Palmarejo, just more of a grade-driven denominator, right, on the interphases?

Michael Routledge -- Senior Vice President and Chief Operating Officer

Yeah, exactly. We're going to process a lot more tons at Palmarejo. And there's a drop as per the life of mine plan in grid at Palmarejo and the team there is doing a fantastic job at increasing the production rates to more than compensate for that in 2021.

Mitchell J. Krebs -- President and Chief Executive Officer

Does that help Mike?

Michael Dudas -- Vertical Research Partners -- Analyst

Yeah, helps a lot. Thank you for that, Mick. And my follow-up would be on Rochester, your capex guide of $155 million to $195 million. So certainly is it the sense of how quickly you move through some of the projects that you have that's going to generate even more or less spending this year? Is it just like robbing '22 into '21? Or how does that play through? Or is there any more of just productivity or cost issues that might flow into that, how that number flows through relative to the long-term outlook on getting Rochester started up?

Mitchell J. Krebs -- President and Chief Executive Officer

Yeah. So you're right. Rochester is -- the expansion is upon us. Major construction activity started off on schedule on January 15. And most of the spend will be wrapped up late next year. Tom, do you want to talk maybe a little bit about the shape of the spending as we see it this year and next year at Rochester?

Thomas S. Whelan -- Senior Vice President and Chief Financial Officer

Yeah. So two items. I mean, we have -- as you can appreciate with a big large capital project like this, we are well down the path and committed to spending a lot of this money. Construction contracts have been signed, procurement has been made, etc., etc. Again, you'll see a significant ramp-up here in the first quarter versus the fourth quarter. And then the real spending kicks in, in Q2, Q3, Q4. And just the one item I'd want to note is on that capex guidance, that is net of some planned capital leases that we intend to have, to help fund the overall Rochester capital spend.

Michael Dudas -- Vertical Research Partners -- Analyst

That makes sense. And Tom, can you remind me what the contingency that you guys have set forth in that budget overall?

Thomas S. Whelan -- Senior Vice President and Chief Financial Officer

Yeah. $32 million.

Michael Dudas -- Vertical Research Partners -- Analyst

Great. Terrific. Thanks, gentlemen.

Mitchell J. Krebs -- President and Chief Executive Officer

Yeah, thanks, Mike.

Michael Routledge -- Senior Vice President and Chief Operating Officer

Cheers.

Operator

Thank you. And the next question is from Ryan Thompson, BMO. Please go ahead.

Ryan Thompson -- BMO -- Analyst

Hey, guys. Good morning. Thanks for the update.

Mitchell J. Krebs -- President and Chief Executive Officer

Hey, Ryan.

Ryan Thompson -- BMO -- Analyst

Hey, Mitch. Just a couple of questions. Maybe I'll start with Wharf. And just on the reserve and resource update that you guys put out yesterday morning. It looks like there was a pretty good uptick in measured and indicated both tons and ounces. Can you just talk a little bit about that increase and what sort of needs to be done to get that material into the mine plan?

Mitchell J. Krebs -- President and Chief Executive Officer

Yeah, I'll start, and then I'll turn it over to you, Hans. And then Mick, if you have anything to add on Wharf. We expanded the boundary there at Wharf, which allowed us to bring in that material, Ryan, that you mentioned. Probably takes -- it will take some time on the permitting, community consultation to get that ultimately into reserves, but we're optimistic about that. I think the -- probably the quicker opportunity to pull in some additional mine life in reserves, it's probably -- is where we're focusing our infill budget at Wharf this year, which is by far our biggest program ever since we've owned Wharf. Hans, do you want to talk a little bit about that and just what we're doing at Wharf on the exploration front?

Hans Rasmussen -- Senior Vice President, Exploration

Yeah. Ryan, the -- what Mitch mentioned with the boundary affects the Green Mountain pit and it looks like a big number because our M&I was quite small at Wharf and we did no drilling, so not really much added to convert. So ended up being about 230,000 ounces or so that were added as a result of that move of the boundary. But yeah, we're expecting to spend about $4.5 million on this infill program. We already started in the winter, which is also a new precedent for Wharf. It should finish in August. And what that does is, it gives us a jump-start on the Portland Ridge flossy area. And if things go well with the drilling, the modeling and the permitting, we should be able to start laying back in February next year. That's why we jumped on that right away.

Ryan Thompson -- BMO -- Analyst

And got you. Thanks, that's helpful. And maybe just [Speech Overlap].

Mitchell J. Krebs -- President and Chief Executive Officer

Ryan, I'll just -- let me just change the plug there on Wharf for -- it's great to hear about these opportunities to further extend that mine life. 2015, we bought that for $99 million. We've harvested $245 million of free cash flow. It had a six-year mine life when we bought it. It has a six-year mine life now. And with what Mick and Hans are doing out there, there's some opportunity to further extend that. So, it's a great piece of the portfolio. Sorry, I cut you off there. You were going to ask the question.

Ryan Thompson -- BMO -- Analyst

Yeah. Yeah, no worries. No, it's definitely been a good acquisition for you guys. And just as a follow-up. So, I think you guys had a sort of satellite property under option there, Richmond Hill I think it was called?

Mitchell J. Krebs -- President and Chief Executive Officer

Yeah.

Ryan Thompson -- BMO -- Analyst

Can you just give an update on that option as well?

Mitchell J. Krebs -- President and Chief Executive Officer

Yeah. We're doing more drilling. That option, I think, has an expiration in the third quarter, maybe September.

Michael Routledge -- Senior Vice President and Chief Operating Officer

Yeah.

Mitchell J. Krebs -- President and Chief Executive Officer

So we'll finish up the drilling, see what the results look like and then make a decision whether to go forward there or not. So, that decision remains still to be made probably middle part of the year, Richmond Hill.

Ryan Thompson -- BMO -- Analyst

Got you. Okay. Thanks. And then, maybe just one more for me, and I'll turn it over to other callers. But just switching over to Silvertip. Obviously, the messaging sounds constructive there and it sounds like you guys are feeling more confident about what you're finding. Can you maybe just touch on what a potential restart would look like in terms of timing, if you do get to that positive decision and capital and just how we should sort of be thinking about that?

Mitchell J. Krebs -- President and Chief Executive Officer

Yeah. Great question. It's a constant topic around here because -- on one hand, we want to make sure we're moving forward in a deliberate, disciplined way and not rushing to get to a result that we all want. At the same time, we don't want to -- you look at the outlook that we put out in our Investor Day, 2023 and beyond look really good for this company. And we really would not like to see Silvertip expansion delay that or defer that free cash flow profile. And so, between those constraints and that sort of -- those goalposts, that's kind of the timetable that we're working on. But we are prioritizing Rochester, that's job number one. And we're prioritizing getting this thing right, high confidence, derisk, go forward with confidence and do it in a way that is going to have the outcome that we all want there. Does that give you a little bit of context, Ryan?

Ryan Thompson -- BMO -- Analyst

Yeah. No, that's helpful. I appreciate the added color. And yeah, like I said, I think I'll turn it over to other callers, but appreciate the update, guys.

Mitchell J. Krebs -- President and Chief Executive Officer

Yeah. Thanks, Ryan.

Ryan Thompson -- BMO -- Analyst

Cheers.

Operator

[Operator Instructions] Our next question is from Joseph Reagor of Roth Capital Partners. Please go ahead.

Joseph Reagor -- Roth Capital Partners -- Analyst

Morning, guys. Congrats for the strong finish to the year.

Mitchell J. Krebs -- President and Chief Executive Officer

Hey, thanks.

Joseph Reagor -- Roth Capital Partners -- Analyst

So, just kind of a point of clarity. On Rochester, are you guys expecting Q2 stacking rates to be impacted at all by the swap out of the secondary crusher? Or is that part of the 38,000 tons? Is that already included in the 38,000 ton per day plan?

Mitchell J. Krebs -- President and Chief Executive Officer

Mick, go ahead.

Michael Routledge -- Senior Vice President and Chief Operating Officer

Yeah. So, it's built into the plan already, that swap out for the budget. And that budget looked like it was going to be about a 30-day swap out. We're already looking at about 18 days for that swap out now. So we're a little bit ahead of the game and continue to optimize that. And as said, we're looking to minimize that impact continually, but at the moment, that swap out is being really well-planned and built into the budget.

Mitchell J. Krebs -- President and Chief Executive Officer

And the guidance range.

Michael Routledge -- Senior Vice President and Chief Operating Officer

And the guidance range. Exactly.

Joseph Reagor -- Roth Capital Partners -- Analyst

Okay. Okay. Fair enough. Then, a lot of my other questions are already asked, but I guess I'll touch on the Crown Block C-Horst discovery. Your neighbors to the north have had some higher-grade intercepts. They're taking a slightly different approach to drilling part of the land that they have there. Do you guys expect that as you have -- drill from different pads that you might take a similar approach? I think they're drilling more west to east back into the structures. Or are you guys going to continue to use like the single-pad multi-directional drilling kind of plan?

Mitchell J. Krebs -- President and Chief Executive Officer

Yeah, great question. It's a lot of excitement, a lot still to learn out there, early days, but the drilling has been going exceptionally well. Hans, you want to take that?

Hans Rasmussen -- Senior Vice President, Exploration

Yeah, Joe. How much time do you have?

Joseph Reagor -- Roth Capital Partners -- Analyst

Fair question.

Hans Rasmussen -- Senior Vice President, Exploration

We're employing some real high-level geologists to understand what we've got at C-Horst because it's different than anything we've seen in the district for sure. By contrast to our neighbors to the north, their geologist comes from Bullfrog. His experience is Bullfrog. All the high-grade mineralized structures from the Bullfrog mine dip to the west, so they drill to the east and they've hit some great results. They've done a great job and oxidized to depth, just like what we're seeing. And as you alluded to correctly, we've been restricted by a five-acre permit, and so we stuck to four pads or five pads and done fans off of those, limiting the attack angle on these west-dipping structures. We are going to start stepping out and testing those. We expect to see the higher grades like they've got from theirs. And based on some of the high-power geologists we've employed, they expect to see much higher grades when we get what's called the feeder structure for these systems.

Now, we interpret our mineralization totally different. Oxide disseminated hosted by the Bullfrog formation. While structures are important, the host rock is actually giving us these larger tonnage and thicker intervals, like Mitch alluded to, from our news release, 710 feet of 0.03 [Phonetic] ounce per ton. So as we get an amended drill permit this year, we've got a 300-acre drill permit to strip 300 acres. We needed to amend that because we didn't have the C-Horst discovery when we got that. And we should get that in March. We'll start building pads south and west to test these structures and to test the growth of C-Horst to the south, but it's looking really good. Pure gold, nothing else, but pure gold. Oxide, normally in these systems you see things like arsenic and other things. So, it's given us a lot of confidence this is going to turn into something economic in future.

Joseph Reagor -- Roth Capital Partners -- Analyst

Okay. Thanks for the color there. And then, one final thing. You're kind of thinking about capital spending over the course of the year. If the balance sheet gets late [Phonetic] at any point because you have some bigger -- especially at Rochester, a big project this year, would you just draw on the revolver? Is that the plan? Or is there any chance you guys, if silver catches a bit again, would tap the equity markets?

Mitchell J. Krebs -- President and Chief Executive Officer

Well, that one is bottom of the list in terms of any equity. I think between -- Tom and his team have done a tremendous job, I think, of not only putting us in a position to fund this, but also have identified a pretty wide spectrum of other alternatives that we could pursue if we felt like we needed to. Tom, do you want to give a little more color?

Thomas S. Whelan -- Senior Vice President and Chief Financial Officer

Yes. Again, Joe, we've got -- between our cash on hand, the operating cash flow from the existing mines and the debt capacity, we've got the ability to keep to those guardrails that we've set for ourselves of a net debt-to-EBITDA of less than 2 times. And so, we've got some capital leases that I've already mentioned at Rochester. The revolver is fully available. And again, we'll delay drawing upon it as late as possible. In terms of hedging, look, that recent run-up on silver price absolutely caught our eye. And so, I think it's prudent to always be looking and understanding what's available and the like, and...

Mitchell J. Krebs -- President and Chief Executive Officer

And on the gold side, we have about half of this year's production with a $1,600 floor.

Thomas S. Whelan -- Senior Vice President and Chief Financial Officer

Yeah, correct.

Mitchell J. Krebs -- President and Chief Executive Officer

So, that gives us another sort of extra buffer in there. I don't know, Joe, does that give you some details on...

Joseph Reagor -- Roth Capital Partners -- Analyst

Yeah. No, that's good. Mostly -- some of your peers are slightly smaller companies that have been -- being opportunistic on the equity front, and it didn't seem like you guys needed to be, and I just wanted to confirm it.

Mitchell J. Krebs -- President and Chief Executive Officer

Yeah. No, fair enough.

Joseph Reagor -- Roth Capital Partners -- Analyst

Thanks, guys. I'll turn it over.

Mitchell J. Krebs -- President and Chief Executive Officer

All right. Thanks, Joe.

Operator

This concludes our question-and-answer session. Now I'd like to turn the conference back over to Mr. Mitchell Krebs for closing remarks.

Mitchell J. Krebs -- President and Chief Executive Officer

Okay. Well, hey, we appreciate everybody's time this morning. I know it's a busy reporting day. And we look forward to speaking with you again in the spring. Hopefully, the snow will be gone and we'll talk about our first quarter results. So have a good rest of the week. Thank you.

Operator

[Operator Closing Remarks]

Duration: 34 minutes

Call participants:

Paul DePartout -- Director of Investor Relations

Mitchell J. Krebs -- President and Chief Executive Officer

Michael Routledge -- Senior Vice President and Chief Operating Officer

Thomas S. Whelan -- Senior Vice President and Chief Financial Officer

Hans Rasmussen -- Senior Vice President, Exploration

Michael Dudas -- Vertical Research Partners -- Analyst

Ryan Thompson -- BMO -- Analyst

Joseph Reagor -- Roth Capital Partners -- Analyst

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