SEC Presses Coeur Mining on Non-GAAP Adjustments at Rochester, Las
Staff pushed Coeur Mining through months of comment letters over inventory-related add-backs to Adjusted EBITDA, forcing new disclosure but no retreat on the underlying adjustments.
The SEC's review of Coeur Mining (CDE) centered on a recurring question: how much of the company's non-GAAP earnings picture rested on excluding costs tied to its own mines rather than one-time events. Staff pressed hardest on two adjustments — inventory write-downs at the Rochester expansion and a purchase-accounting step-up on acquired Las Chispas inventory — and while Coeur added disclosure to satisfy some of the questions, it held its ground on keeping both adjustments in Adjusted EBITDA.
The Rochester dispute traced back to a multi-year expansion project that included a new heap leach pad, processing facility, and crusher circuit. Staff asked why write-downs and inventory adjustments tied to that construction period, which totaled $8 million in 2024 and as much as $49.1 million in 2022, should count as unusual rather than normal costs of running an expanding mine. Coeur's answer leaned on specifics: ore tons placed came in 18%, 24%, and 10% below plan from 2022 through 2024, driven by mine-plan disruptions and the early dismantling of the existing crushing circuit, and write-downs largely stopped once the new circuit reached commercial production in early 2024. The company also disclosed, for the first time in this exchange, that its revolving credit facility explicitly permits these add-backs in its leverage covenant calculation — a detail staff had asked Coeur to address directly under C&DI guidance on non-GAAP measures tied to debt agreements.
A newer and more contentious thread emerged after Coeur's $1.5 billion acquisition of SilverCrest Metals and its Las Chispas mine in Mexico. Purchase accounting forced a $93.5 million step-up in the cost basis of acquired inventory, which Coeur excluded from Adjusted EBITDA and Adjusted costs applicable to sales. Staff twice rejected the justification, telling Coeur outright in an August 2025 letter that it disagreed that the adjustment was appropriate under non-GAAP guidance and asking the company to remove it. Coeur declined, arguing GAAP costs at Las Chispas would otherwise show gold costs above $1,900 per ounce for the first half of 2025 — more than double the roughly $734 per ounce Las Chispas historically ran under prior ownership — and that publishing that figure without adjustment would mislead investors into thinking a low-cost mine had suddenly become expensive.
The company's defense of both adjustments followed the same pattern: point to investor and analyst requests for the stripped-out figures, and point to lender treatment of the same adjustments in credit-facility covenants. Coeur told staff that banks in its revolving facility exclude the inventory step-up from EBITDA when calculating its net leverage ratio, and that external analyst models built off Coeur's numbers already back out the same charges. That argument doubles as a disclosure obligation: having established that the credit facility is a material agreement whose covenant depends on these adjustments, Coeur committed to explaining the covenant's role more clearly for investors trying to assess liquidity risk.
Where Coeur did concede ground was on transparency rather than substance. After staff flagged a catch-all "Other adjustments" line in its EBITDA reconciliation, the company agreed to break that line into named components — including transaction costs, a Kensington royalty settlement, and a Mexico arbitration matter — rather than leave investors guessing at its composition. It also reconciled a discrepancy staff caught between figures cited in earlier correspondence and those published in earnings releases, tracing the gap to how fourth-quarter inventory write-downs get treated differently across two related metrics. Separately, in an unrelated proxy-statement review tied to the SilverCrest deal itself, staff pushed Coeur to disclose more of the negotiation timeline, including why talks with a rival bidder identified only as "Party 1" ended and the rationale for raising the exchange-ratio premium to SilverCrest shareholders to roughly 18%.
Taken together, the exchange shows a company willing to add granularity — reconciling tables, named adjustment lines, and merger-timeline detail — while resisting the SEC's core ask to strip contested items from its headline non-GAAP metrics. Investors reading Coeur's post-2025 disclosures will find clearer footnotes explaining the adjustments, but the adjustments themselves remain intact in the numbers the company presents as its operating performance.