<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 8, 1994
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
COEUR D'ALENE MINES CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
IDAHO 82-0109423
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
400 COEUR D'ALENE MINES BUILDING DENNIS E. WHEELER
505 FRONT AVENUE CHAIRMAN OF THE BOARD,
COEUR D'ALENE, IDAHO 83814 PRESIDENT AND CHIEF EXECUTIVE OFFICER
208-667-3511 COEUR D'ALENE MINES CORPORATION
(ADDRESS, INCLUDING ZIP CODE 400 COEUR D'ALENE MINES BUILDING
AND TELEPHONE NUMBER, INCLUDING 505 FRONT AVENUE
AREA CODE, OF REGISTRANT'S COEUR D'ALENE, IDAHO 83814
PRINCIPAL EXECUTIVE OFFICES) 208-667-3511
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
</TABLE>
------------------------
PLEASE SEND COPIES OF COMMUNICATIONS TO:
WALTER FREEDMAN, ESQ.
FREEDMAN, LEVY, KROLL & SIMONDS
1050 CONNECTICUT AVENUE, N.W.
WASHINGTON, D.C. 20036
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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- ----------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) FEE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6 3/8% Convertible Subordinated Debentures Due 2004......... $100,000,000 100% $100,000,000 $34,482.75
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Common Stock, par value $1.00 per share, and Rights to
purchase Series A Junior Preferred Stock attached
thereto................................................... (2) None
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee. The
price shown for the Debentures is based on the offering price of the
Debentures in January 1994.
(2) There are being registered hereunder the number of shares of Common Stock
and attached Rights required at the initial conversion price for conversion
of the Debentures being registered hereunder, together with such additional
indeterminate number of shares of Common Stock and attached Rights as may
become issuable upon conversion by reason of adjustments in the conversion
price. No registration fee is required for Common Stock and attached Rights
reserved for conversion because such shares will be issued for no additional
consideration.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
SUBJECT TO COMPLETION
DATED APRIL 8, 1994
$100,000,000
[LOGO] COEUR D'ALENE MINES CORPORATION
6 3/8% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
Interest payable July 31 and January 31
------------------------
This Prospectus relates to $100,000,000 aggregate principal amount of
6 3/8% Convertible Subordinated Debentures Due 2004 (the "Debentures") of Coeur
d'Alene Mines Corporation ("Coeur" or the "Company"), and the shares of common
stock, par value $1.00 per share (the "Common Stock"), of the Company which are
issuable from time to time upon conversion of the Debentures. Either the
Debentures or Common Stock issued upon conversion may be offered from time to
time for the account of holders of Debentures named herein (the "Selling
Debentureholders"). The Company will not receive any proceeds from this
offering. Prior to this offering, there has not been any public market for the
Debentures.
The Debentures are convertible into shares of Common Stock on or before
January 31, 2004, unless previously redeemed, at a conversion price of $26.20
per share, subject to adjustment in certain events. On April 7, 1994, the last
reported sale price of the Common Stock on the New York Stock Exchange Composite
Tape was $21.00 per share. The Common Stock is traded under the symbol "CDE."
The Debentures are redeemable, in whole or in part, at any time on or after
January 31, 1997, at the redemption prices set forth herein plus accrued
interest. The Debentures are required to be repurchased at the option of the
holder if a Designated Event (as defined herein) occurs, at 100% of the
principal amount thereof plus accrued interest.
The Debentures are unsecured and subordinate in right of payment to all
Senior Debt (as defined herein). The Debentures are also effectively
subordinated to liabilities of the Company's subsidiaries. The Indenture
relating to the Debentures does not restrict the incurrence of Senior Debt or
other indebtedness by the Company or any subsidiary. See "Description of
Debentures."
See "Risk Factors" for information that should be considered by prospective
investors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The Company has been advised by the Selling Debentureholders that the
Selling Debentureholders, acting as principals for their own account, directly,
through agents designated from time to time, or through dealers or underwriters
also to be designated, may sell all or a portion of the Debentures or shares of
Common Stock offered hereby from time to time on terms to be determined at the
time of sale. To the extent required, the principal amount of Debentures or the
number of shares of Common Stock to be sold, the names of the Selling
Debentureholders, the purchase price, the name of any such agent, dealer or
underwriter and any applicable commissions with respect to a particular offer
will be set forth in an accompanying Prospectus Supplement. The aggregate
proceeds to the Selling Debentureholders from the sale of Debentures and Common
Stock offered by the Selling Debentureholders hereby will be the purchase price
of such Debentures or Common Stock less any commissions. See "Plan of
Distribution" herein for indemnification arrangements between the Company and
the Selling Debentureholders.
The Selling Debentureholders and any broker-dealers, agents or underwriters
that participate with the Selling Debentureholders in the distribution of the
Debentures or shares of Common Stock may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933, as amended (the "Securities Act"), in
which event any commissions received by such broker-dealers, agents or
underwriters and any profit on the resale of the Debentures or shares of Common
Stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
The Debentures were issued by the Company in January and February 1994 in
connection with an offering to "qualified institutional buyers" as defined in
Rule 144A under the Securities Act and to certain non-U.S. persons in reliance
upon Regulation S under the Securities Act.
The date of this Prospectus is April , 1994.
<PAGE> 3
No dealer, salesman or other person has been authorized to give any
information or to make any representations not contained or incorporated by
reference in this Prospectus and, if given or made, such other information or
representation must not be relied upon as having been authorized by the Company,
any Selling Debentureholder or any other person. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company
since the date hereof. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy the securities offered hereby to any person or
by anyone in any jurisdiction in which such offer or solicitation may not
lawfully be made.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy or information statements and other information with the
Securities and Exchange Commission (the "Commission"). The Company's Common
Stock is listed on the New York Stock Exchange and The Pacific Stock Exchange.
Reports, proxy or information statements and other information filed by the
Company with the Commission under the Exchange Act can be inspected and copied
at prescribed rates at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549; at the following Regional Offices of the Commission: Suite 1300,
Seven World Trade Center, New York, New York, 10048; and Suite 1400,
Northwestern Atrium Center, 500 West Madison Street, Chicago, Illinois 60661;
and at the offices of the New York Stock Exchange at 20 Broad Street, New York,
New York 10005, and The Pacific Stock Exchange, 115 Sansome Street (Suite 1004),
San Francisco, California 94104.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act. This Prospectus does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information, reference is hereby made to the
Registration Statement.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1993 (the "1993 10-K"), as filed with the Commission (File No. 1-8641)
pursuant to Section 12 or 13 of the Exchange Act, is hereby incorporated by
reference in this Prospectus. In addition, all documents filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of the offering of the
Debentures or Common Stock shall be deemed to be incorporated by reference in
this Prospectus and to be part hereof from the date of filing of such documents.
Any statement contained herein or in any document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent any statement contained in this
Prospectus or in any subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statements so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should be
directed to William F. Boyd, Secretary, Coeur d'Alene Mines Corporation, 400
Coeur d'Alene Mines Building, 505 Front Avenue, Coeur d'Alene, Idaho 83814,
telephone number: (208)667-3511.
2
<PAGE> 4
SUMMARY OF TERMS OF THE DEBENTURES
The following summary is qualified in its entirety by the more detailed
description of the terms and provisions of the Debentures set forth herein under
"Description of Debentures."
Securities Offered......... $100,000,000 principal amount of 6 3/8% Convertible
Subordinated Debentures Due 2004.
Maturity Date.............. January 31, 2004
Interest Payment Dates..... July 31 and January 31, commencing July 31, 1994.
Conversion................. Convertible into Common Stock on or before January
31, 2004, unless previously redeemed, at a
conversion price of $26.20 per share, subject to
adjustment in certain events.
Optional Redemption........ Redeemable at the option of the Company, in whole
or in part at any time on or after January 31,
1997, at the redemption prices set forth herein
plus accrued interest. See "Description of
Debentures -- Optional Redemption of Debentures."
Repurchase at Option of
Holder Upon Occurrence of a
Designated Event........... The Debentures are required to be repurchased at
100% of their principal amount at the option of the
holder, if a Designated Event (as defined) occurs.
See "Description of Debentures -- Repurchase at
Option of Holder Upon Occurrence of a Designated
Event."
Subordination.............. The Debentures are subordinated to all Senior Debt
(as defined). The Debentures are also effectively
subordinated to liabilities of the Company's
subsidiaries. The Indenture does not restrict the
incurrence of Senior Debt or other indebtedness by
the Company or any subsidiary.
3
<PAGE> 5
THE COMPANY
The Company is principally engaged in the exploration, development,
operation and/or ownership of gold and silver mining properties located within
the United States in Nevada, Idaho and Alaska and abroad in New Zealand and
Chile. The Company's most significant properties are: (i) the Rochester Mine
located in northwestern Nevada, which is owned and operated by Coeur and on
which the Company has conducted silver and gold surface mining operations since
September 1986, and which is believed to be one of the largest and lowest cost
of production primary silver mines in the United States; (ii) the Golden Cross
Mine, an underground and surface mining operation located near Waihi, New
Zealand, which is operated by Coeur and in which the Company has an 80%
operating interest which it acquired on April 30, 1993; (iii) the Galena Mine,
an underground silver mine in the Coeur d'Alene Mining District in northern
Idaho in which the Company has a 62.5% non-operating interest and at which
mining operations were suspended on July 26, 1992 due to prevailing silver
prices; (iv) the Coeur Mine, an underground silver mine in the Coeur d'Alene
Mining District which Coeur owns and in which it has a 50% non-operating joint
venture interest and at which mining operations were suspended on April 3, 1991
due to prevailing silver prices; (v) the Kensington Property, located north of
Juneau, Alaska, which was acquired in 1987 and is being developed as an
underground gold mine jointly by Coeur and its 50% joint venture partner; and
(vi) the Fachinal Property, located in southern Chile, South America, which
Coeur acquired, along with certain Chilean exploratory properties, in 1990 and
at which a final feasibility study, expected to be completed in May 1994, is
being conducted with respect to proposed underground and surface gold and silver
mining activities. Coeur also has interests in other properties which are the
subject of silver or gold exploration activities and on which no commercially
minable ore bodies have been identified.
Through The Flexaust Company ("Flexaust") division of the Company's
wholly-owned subsidiary Callahan Mining Corporation ("Callahan"), Coeur is also
engaged in the manufacture and sale of lightweight flexible hose and duct and
metal tubing. Flexaust's products are used in a wide variety of industrial and
commercial applications for conveying air, dust, fumes and materials.
The Company is an Idaho corporation organized in 1928. Its executive
offices are located at 400 Coeur d'Alene Mines Building, 505 Front Avenue, Coeur
d'Alene, Idaho 83814. The telephone number is (208) 667-3511.
4
<PAGE> 6
SUMMARY FINANCIAL INFORMATION
The following table sets forth selected consolidated financial information
for the five fiscal years ended December 31, 1993. Such information should be
read in conjunction with, and is qualified by reference to, the financial
statements and other information and data contained or incorporated herein by
reference to the 1993 10-K. See "Incorporation of Certain Information by
Reference."
INCOME STATEMENT DATA(1)
(In thousands, except per share data)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1989 1990 1991 1992 1993
---------- ---------- -------- ------- --------
(RESTATED) (RESTATED)
<S> <C> <C> <C> <C> <C>
Revenues................................... $105,571 $ 73,451 $ 67,046 $56,428 $ 83,719
Total income............................... 22,793 17,874 14,183 9,612 14,827
Loss before cumulative effect of change in
accounting method........................ (3,846) (4,190) (14,399) (759) (13,290)
Cumulative effect of change in accounting
method................................... -- -- -- -- 5,181
Net loss................................... (3,846) (4,190) (14,399) (759) (8,109)
Loss per share before cumulative effect of
change in accounting method.............. (0.29) (0.30) (0.94) (0.05) (0.87)
Net loss per share(2)...................... (0.29) (0.30) (0.94) (0.05) (0.53)
Ratio of earnings to fixed charges(3)...... -- -- -- -- --
</TABLE>
BALANCE SHEET DATA
<TABLE>
<CAPTION>
DECEMBER
DECEMBER 31, 31,
------------------------------------------------------------ 1993 (AS
1989 1990 1991 1992 1993 ADJUSTED(4)
---------- ---------- -------- -------- -------- -----------
(RESTATED) (RESTATED)
<S> <C> <C> <C> <C> <C> <C>
Total assets................... $235,998 $276,402 $261,600 $325,256 $325,708 $ 425,708
Working capital................ 119,648 153,768 132,126 181,775 107,633 207,633
Long-Term debt(5).............. 61,461 59,548 57,902 131,134 129,234 229,234
Shareholders' equity........... 156,495 200,040 183,938 180,991 170,849 170,849
</TABLE>
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(1) Effective January 1, 1993, the Company changed its method of accounting for
income taxes by adopting Statement of Financial Accounting Standards (FAS)
109, "Accounting for Income Taxes." FAS 109 requires an asset and liability
approach to accounting for income taxes and establishes criteria for
recognizing deferred tax assets. The cumulative effect of the accounting
change on prior years at January 1, 1993 of $5,181,188, or $.34 per share,
is included above in the Income Statement Data for the year ended December
31, 1993. The results of operations for that year also reflect approximately
$9.4 million of nonrecurring write-offs relating to the settlement of
litigation, resolution of an environmental matter and the write-off of
uncollectible notes receivable. During 1991, Callahan effected certain
write-downs, primarily relating to abandonment of the Ropes Mine, in a net
amount of $5,744,000. In addition, Coeur incurred approximately $5,151,000
of nonrecurring expenses relating to the acquisition by merger of Callahan
during 1991. In 1990, Coeur wrote off $5,561,000 of its interest in the
Thunder Mountain Mine to net realizable value in connection with the
discontinuation of operations at that mine. During 1989, Callahan wrote down
its investment in the Ropes Mine by $8,511,000.
(2) Earnings per share are calculated based on the weighted average number of
common shares outstanding. The 6% Convertible Subordinated Debentures Due
2002 are considered to be Common Stock equivalents. Accordingly, such
debentures are assumed to be converted, and interest expense on such
debentures, net of income tax expense, has been considered in the
computation of earnings per share, except in those instances where the
effects of conversion would be antidilutive.
(3) For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of income from continuing operations before income taxes and fixed
charges. Fixed charges consist of interest and that portion of rent deemed
representative of interest. Earnings were insufficient to cover fixed
charges in the following amounts: $3,879,088 in 1989, $6,570,855 in 1990,
$17,204,300 in 1991, $7,501,107 in 1992 and $20,649,666 in 1993.
(4) As adjusted to reflect the total proceeds from the sale in January and
February 1994 of $100,000,000 principal amount of the Debentures before
giving effect to the expenses of that offering.
(5) Includes obligations under long-term leases.
5
<PAGE> 7
RATIO OF EARNINGS TO FIXED CHARGES
The Company's earnings were inadequate to cover fixed charges for each of
the last five years. The amounts by which earnings were inadequate to cover
fixed charges for such periods were approximately $3.9 million in 1989, $6.6
million in 1990, $17.2 million in 1991, $7.5 million in 1992 and $20.6 million
in 1993. The Company's net cash provided by operating activities during the year
ended December 31, 1993 was approximately $4.2 million. The availability in the
future of cash flow from operations or working capital to fund the payment of
interest on the Debentures and repayment of the principal amount of Debentures
upon maturity will be dependent upon numerous factors that cannot now be
predicted, including gold and silver prices, the amount of the Company's
expenditures for acquisitions as well as mining property developmental and
exploratory activities, the results of the Company's operations and the extent
to which the Debentures are converted or redeemed.
RISK FACTORS
Investors should carefully review the considerations set forth below as
well as the other information included in this Offering Circular and the
documents incorporated by reference herein.
DEPENDENCE UPON GOLD AND SILVER PRICES
The results of the Company's operations are significantly affected by the
market prices of gold and silver. Those prices may fluctuate widely and are
affected by many factors beyond the Company's control, including interest rates,
expectations regarding inflation, currency values, global and regional political
and economic conditions and other factors. The depressed price of silver led to
the suspension of mining activity at the Galena Mine (in July 1992, during which
month the average price of silver was $3.95 per ounce) and at the Coeur Mine (in
April 1991, during which month the average price of silver was $3.97 per ounce).
The Company's Rochester Mine, which it wholly owns and operates, and the Golden
Cross Mine, which the Company operates and in which it has an 80% operating
interest, are the Company's currently operating mining properties. Although the
Company believes operation of the Fachinal Property is economically feasible at
current gold and silver prices, a decision to proceed will not be made prior to
completion (expected in May 1994) of the recently commenced final feasibility
study. A production decision relating to the Kensington Property is subject to
the approval by the Company and its joint venture partner, a market price of
gold of at least $400 per ounce and certain required permits. The average market
prices of gold and silver in 1992 were $343.73 and $3.94, respectively, and in
1993 rose to $359.77 and $4.30 per ounce, respectively. No assurance can be
given with respect to such market prices in the future. See "Business -- Gold
and Silver Prices."
CONTINUING OPERATING LOSSES
Giving retroactive effect to the Company's acquisition of Callahan on
December 31, 1991, which was accounted for on a pooling of interests basis, the
Company recorded losses of approximately $3.8 million in 1989, $4.2 million in
1990, $14.4 million in 1991 and $759,000 in 1992. Those losses largely reflect
the significant non-recurring write-offs relating to the closure of the Ropes
and Thunder Mountain Mines and expenses incurred in connection with the
acquisition of Callahan, as well as the low silver and gold prices prevailing
during these periods. The mine closure write-offs amounted to approximately $8.5
million in 1989, $5.6 million in 1990 and $5.7 million in 1991, and the expenses
incurred in connection with Coeur's acquisition by merger of Callahan in 1991
approximated $5.2 million. Furthermore, a loss of approximately $13.3 million
before the cumulative effect of a change in accounting was recorded in 1993. The
loss before the cumulative effect of a change in accounting in 1993 primarily
resulted from approximately $9.4 million of non-recurring write-offs relating to
the settlement of litigation, resolution of an environmental matter and the
write-off of uncollectible notes receivable. The Company's return to
profitability will primarily depend upon future silver and gold prices and
production levels.
6
<PAGE> 8
ABSENCE OF EARNINGS TO SATISFY INTEREST AND OTHER FIXED CHARGES
Primarily as a result of the losses discussed above, the Company's earnings
have been inadequate to satisfy fixed charges (i.e., interest plus that portion
of rent deemed representative of interest) for each of the last five years. The
amounts by which earnings were inadequate to cover fixed charges for such
periods were approximately $3.9 million in 1989, $6.6 million in 1990, $17.2
million in 1991, $7.5 million in 1992, and $20.6 million in 1993. The Company
expects to satisfy its fixed charge and other expense obligations from cash flow
from operations and, to the extent that cash flow from operations is
insufficient, from working capital, which amounted to approximately $107.6
million at December 31, 1993. The Company's net cash provided by operating
activities during the year ended December 31, 1993 was approximately $4.2
million. The availability in the future of cash flow from operations or working
capital to fund the payment of interest on the Debentures and repayment of the
principal amount of the Debentures upon maturity will be dependent upon numerous
factors that cannot now be predicted, including silver and gold prices, the
amount of the Company's expenditures for acquisitions and for developmental and
exploratory activities, results of operations and the extent to which the
Debentures are converted or redeemed.
CASH FLOW; HOLDING COMPANY STRUCTURE
The Company may not generate sufficient cash flow to also cover its
interest obligations under presently outstanding debt instruments, including the
Debentures. On a long-term basis, the ability of the Company to pay interest
accruing on and the principal amount of the Debentures will be dependent upon
the success of the Company's operations and the operations of properties or
businesses which may hereafter be acquired by the Company, as to which there can
be no assurance. In addition, the Company's operating assets are presently in
subsidiaries and it is expected that any businesses acquired will be operated
through subsidiaries. The payment of the Debentures will be effectively
subordinated to all liabilities of the Company's subsidiaries. The Debentures
are also expressly subordinated in right of payment to all Senior Debt of the
Company (as defined).
POSSIBLE ACQUISITIONS
The Company periodically considers the acquisition of precious metals
mines, properties and businesses. As consideration for any acquisition, in
addition to the payment of cash, the Company may incur indebtedness or issue
debt or equity securities. Accordingly, any acquisition may result in
substantial dilution of the percentage ownership of public stockholders. The
Company intends to seek stockholder approval for any such acquisitions only to
the extent required by applicable law, regulations or stock exchange rules.
Indebtedness so issued may be senior in right of payment to the Debentures. The
Indenture does not restrict the amount of Senior Debt which may be issued by the
Company or the amount of indebtedness that may be incurred by any subsidiary.
RISKS ASSOCIATED WITH MINING ACTIVITIES
Mineral exploration, particularly for gold and silver, involves many risks
and frequently is nonproductive. Once mineralization is discovered, it may take
a number of years from the initial phases of drilling until production is
possible, during which time the economic feasibility of production may change.
Substantial expenditures are required to establish ore reserves through
drilling, to determine metallurgical processes to extract the metals from the
ore and, in the case of new properties, to construct mining and processing
facilities. No representation can be made as to whether or when, if ever, the
Fachinal or Kensington Properties will be placed into commercial production.
Following the commencement of production, the mining business continues to
be subject to risks and hazards, including quantity of production, environmental
hazards, industrial accidents, encountering unusual or unexpected formations,
cave-ins, flooding and periodic interruptions due to inclement or hazardous
weather conditions. Such risks could result in damage to, or destruction of,
mineral properties or producing facilities, personal injury, environmental
damage, reduced production and delays in mining, monetary losses and possible
legal liability. Insurance fully covering certain environmental risks (including
potential liability for
7
<PAGE> 9
pollution or other hazards as a result of disposal of waste products occurring
from exploration and production) is not generally available to the Company or to
other companies within the industry. The Company has been recognized for its
commitment to environmental responsibility, and knows of no material
environmental liabilities to which it currently is subject. However, if the
Company were to become subject to environmental liabilities, the payment of such
liabilities would reduce the funds available to the Company. Should the Company
be unable to fund fully the cost of remedying an environmental problem, the
Company might be required to suspend operations or enter into interim compliance
measures pending completion of the required remedy.
GOVERNMENT REGULATION
The Company's mining activities are subject to extensive federal, state and
local laws governing the protection of the environment, prospecting,
development, production, taxes, labor standards, occupational health, mine
safety, toxic substances and other matters. The costs associated with compliance
with such regulatory requirements are substantial and possible future
legislation and regulations could cause additional expense, capital
expenditures, restrictions and delays in the development of the Company's
properties, the extent of which cannot be predicted. In the context of
environmental permitting, including the approval of reclamation plans, the
Company must comply with known standards and regulations which may entail
significant costs and delays. Although Coeur has been recognized for its
commitment to environmental responsibility and it believes it is in substantial
compliance with applicable laws and regulations, amendments to current laws and
regulations, the more stringent implementation thereof through judicial review
or administrative action or the adoption of new laws, could have a materially
adverse effect upon the Company.
Mining wastes are currently exempt to a limited extent from the extensive
set of Environmental Protection Agency ("EPA") regulations governing hazardous
waste. The EPA is proceeding with development of a program to regulate mining
waste pursuant to its solid waste management authority under the Resource
Conservation and Recovery Act ("RCRA"). Certain processing and other wastes, as
well as high volume extraction and bonification wastes, are expected to
eventually be regulated by the EPA under RCRA. In this connection, legislative
re-authorization of RCRA is currently pending and the EPA is studying
regulations concerning how mine wastes should be managed and regulated. If the
Company's mine wastes were treated as hazardous waste or such wastes resulted in
operations being designated as a "Superfund" site under the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA" or "Superfund")
for cleanup, material expenditures would be required for the construction of
additional waste disposal facilities or for other remediation expenditures.
Under CERCLA, any owner or operator of the land since the time of its
contamination may be held liable and may be forced to undertake remedial cleanup
action or to pay for the government's cleanup efforts. Additional regulations or
requirements may also be imposed upon the Company's tailings and waste disposal
operations under the Nevada Water Pollution Control Law.
Legislation is presently pending in the U.S. Congress to change the Mining
Law of 1872 (the "Mining Act") under which the Company holds mining claims on
public lands. It is considered probable that the Mining Act will be amended or
be replaced by stricter legislation in 1994. The strictest pending legislation
contains new environmental standards and conditions, additional reclamation
requirements and extensive new procedural steps which would likely result in
delays in permitting. The legislation, as proposed, would impose an 8% gross
royalty on the value of minerals mined on public lands, payable to the U.S.
Government. Whether changes will be enacted or the extent of any changes is not
presently known and the potential impact on the Company's United States
activities is difficult to predict.
LIMITED PUBLIC MARKET FOR THE DEBENTURES
The Debentures are owned by a small number of investors. Prior to the date
of this Prospectus, there was no public market for the Debentures. There can be
no assurance that an active public market for the Debentures will develop. If an
active public market does not develop, purchasers may experience difficulty in
reselling the Debentures.
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<PAGE> 10
SELLING DEBENTUREHOLDERS
The Debentures being offered hereby were originally issued by the Company
to Kidder, Peabody & Co. Incorporated in January and February 1994 in connection
with an offering of the Debentures effected in accordance with Rule 144A and
Regulation S under the Securities Act. The following table sets forth
information concerning the principal amount of Debentures beneficially owned by
each Selling Debentureholder. Other than as a result of the ownership of
Debentures or Common Stock, none of the Selling Debentureholders has had any
material relationship with the Company within the past three years, except as
noted herein. The Debentures and shares of Common Stock offered by this
Prospectus may be offered from time to time by the Selling Debentureholders
named below:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT PRINCIPAL
OF DEBENTURES AMOUNT OF PERCENT OF
BENEFICIALLY DEBENTURES OUTSTANDING
NAME OWNED BEING OFFERED DEBENTURES
---------------------------------------------- ---------------- ------------- -----------
<S> <C> <C> <C>
$ $ %
------- ------------- -----------
Total $ $ %
</TABLE>
Because the Selling Debentureholders may offer all or some of the
Debentures which they hold and/or shares of Common Stock issued upon conversion
thereof pursuant to the offering contemplated by this Prospectus, and because
there are currently no agreements, arrangements or understandings with respect
to the sale of any of the Debentures or shares of Common Stock that will be held
by the Selling Debentureholders after completion of this offering, no estimate
can be given as to the principal amount of Debentures or shares of Common Stock
that will be held by the Selling Debentureholders after completion of this
offering. See "Plan of Distribution."
The Company and the Selling Debentureholders are obligated to indemnify
each other against certain liabilities arising under the Securities Act. The
Company has agreed to pay the costs and expenses incurred in connection with the
preparation and filing under the Securities Act of the Registration Statement of
which this Prospectus forms a part.
DESCRIPTION OF DEBENTURES
Debentures in the total principal amount of $100,000,000 were issued in
January and February 1994 pursuant to an Indenture (the "Indenture") between the
Company and Bankers Trust Company, as trustee (the "Trustee"), dated as of
January 26, 1994. The terms of the Debentures include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (the "Trust Indenture Act") as in effect on the date of
the Indenture. The Debentures are subject to all such terms, and holders of the
Debentures are referred to the Indenture and the Trust Indenture Act for a
statement thereof. The following summary of certain provisions of the Indenture
does not purport to be complete and is qualified in its entirety by reference to
the Indenture, including the definitions therein of certain terms used below. A
copy of the Indenture is an exhibit to the 1993 10-K and is available on request
from the Company.
GENERAL
The Debentures are general unsecured obligations of the Company limited to
$100,000,000 in aggregate principal amount. The Debentures bear interest at
6 3/8% per annum, payable semiannually on July 31 and January 31 in each year to
holders of record of Debentures at the close of business on the July 15 or
January 15 next preceding the interest payment date. The first interest payment
date will be July 31, 1994. Interest is computed on the basis of a 360-day year
of twelve 30-day months. The Debentures mature on January 31, 2004.
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<PAGE> 11
Holders must surrender the Debentures to a Paying Agent to collect
principal payments. The Company may pay principal and interest by its check and
may mail interest checks to a holder's registered address. The Trustee acts as
Conversion Agent, Paying Agent and Registrar. The Company may change the
Conversion Agent, Paying Agent or Registrar without prior notice to
Debenture-holders. The Company or any of its subsidiaries may act as Conversion
Agent, Paying Agent or Registrar.
CONVERSION OF DEBENTURES
The holder of any Debenture is entitled at any time prior to the close of
business on January 31, 2004, subject to prior redemption, to convert such
Debenture (or portions thereof which are in denominations of $1,000 or integral
multiples thereof) at the principal amount thereof, into shares of Common Stock,
at the conversion price set forth on the cover page of this Prospectus, subject
to adjustment as described below. No payment or adjustment will be made on
conversion of any Debenture for interest accrued thereon or dividends on any
Common Stock issued and the holder will lose any right to payment of interest on
the Debentures surrendered for conversion; provided, however, that upon a call
for redemption by the Company, accrued and unpaid interest to the redemption
date shall be payable with respect to Debentures that are converted after a
notice of redemption has been mailed and on or prior to the redemption date.
Debentures surrendered for conversion during the period from the regular record
date for an interest payment to the corresponding interest payment date (except
Debentures called for redemption as described in the preceding sentence) must be
accompanied by payment of an amount equal to the interest thereon which the
holder is to receive on such interest payment date. The Company is not required
to issue fractional shares of Common Stock upon conversion of Debentures and, in
lieu thereof, will pay a cash adjustment based upon the market price of the
Common Stock on the last business day prior to the date of conversion. In the
case of Debentures called for redemption, conversion rights will expire at the
close of business on the business day prior to the redemption date.
The conversion price will be subject to adjustment in certain events,
including (i) the issuance of dividends (and other distributions) payable in
Common Stock on any class of capital stock of the Company, (ii) the issuance to
all holders of Common Stock of rights or warrants entitling them to subscribe
for or purchase Common Stock at less than the current market price (as defined
in the Indenture), (iii) subdivisions, combinations and reclassifications of
Common Stock, and (iv) distributions to all holders of Common Stock of evidences
of indebtedness of the Company or assets (including securities, but excluding
those rights, warrants, dividends and distributions referred to above and
dividends and distributions paid in cash out of the earned surplus of the
Company). No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% of the conversion price then in
effect; provided, however, that any adjustment that would otherwise be required
to be made will be carried forward and taken into account in any subsequent
adjustment. In addition to the foregoing adjustments, the Company will be
permitted to make such reductions in the conversion price as it considers to be
advisable in order that any event treated for federal income tax purposes as a
dividend of stock or stock rights will not be taxable to the holders of the
Common Stock. In case of certain consolidations or mergers to which the Company
is a party or the sale or transfer of all or substantially all of the assets of
the Company, each Debenture then outstanding would, without the consent of any
Holders of Debentures, become convertible only into the kind and amount of
securities, cash and other property receivable upon the consolidation, merger,
sale or transfer by a holder of the number of shares of Common Stock of the
Company into which such Debenture might have been converted immediately prior to
such consolidation, merger, sale or transfer.
If the Company consolidates or merges into or sells, leases, conveys or
otherwise disposes of all or substantially all of its assets to any person, the
Debentures will become convertible into the kind and amount of securities, cash
or other assets which the holders of the Debentures would have owned immediately
after
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<PAGE> 12
the transaction if the holders had converted the Debentures immediately before
the effective date of the transaction at the conversion price in effect
immediately prior to such effective date.
OPTIONAL REDEMPTION OF DEBENTURES
The Debentures are redeemable at the option of the Company, in whole or in
part, on or after January 31, 1997, at the redemption prices (expressed as
percentages of the principal amount) set forth below plus accrued interest to
the redemption date, if redeemed during the 12 month period beginning January 31
of the years indicated below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
--------------------------------------------------------------- ----------
<S> <C>
1997........................................................... 103.643%
1998........................................................... 102.732%
1999........................................................... 101.821%
2000........................................................... 100.911%
2001 and thereafter............................................ 100.000%
</TABLE>
In the event of redemption of less than all of the Debentures, the
Debentures will be chosen by lot for redemption by the Trustee as provided in
the Indenture. Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Debentures to be
redeemed at its registered address. On and after the redemption date interest
ceases to accrue on Debentures or portions thereof called for redemption.
REPURCHASE AT OPTION OF HOLDER UPON OCCURRENCE OF A DESIGNATED EVENT
If at any time there occurs any Designated Event (as defined below) with
respect to the Company, each holder of Debentures shall have the right, at the
holder's option, to require the Company to repurchase all of such holder's
Debentures, or a portion thereof which is $1,000 or any integral multiple
thereof, on the date (the "Repurchase Date") that is 45 days after the date of
the Company Notice (as defined below), at 100% of their principal amount,
together with accrued interest to the Repurchase Date.
Within 30 days after the occurrence of a Designated Event, the Company is
obligated to mail to all holders of record of the Debentures a notice (the
"Company Notice") of the occurrence of such Designated Event and of the
repurchase right arising as a result thereof. The Company shall deliver a copy
of the Company Notice to the Trustee and shall cause a copy of such notice to be
published in a newspaper of general circulation in the Borough of Manhattan, The
City of New York. To exercise the repurchase right, holders of Debentures must
deliver on or before the 30th day after the date of the Company Notice
irrevocable written notice to the Company (or an agent designated by the Company
for such purpose) of the holder's exercise of such right, together with the
Debentures with respect to which the right is being exercised, duly endorsed for
transfer.
A Designated Event shall be deemed to have occurred upon the consummation
of a purchase, merger or acquisition constituting a "Change in Control." As used
herein, a "Change in Control" of the Company shall be deemed to have occurred
when: (i) all or substantially all of the Company's assets are sold as an
entirety to any person or related group of persons; (ii) there shall be
consummated any consolidation or merger of the Company (A) in which the Company
is not the continuing or surviving corporation (other than a consolidation or
merger with a wholly owned subsidiary of the Company in which all shares of
Common Stock outstanding immediately prior to the effectiveness thereof are
changed into or exchanged for the same consideration) or (B) pursuant to which
the Common Stock would be converted into cash, securities or other property, in
each case, other than a consolidation or merger of the Company in which the
holders of the Common Stock immediately prior to the consolidation or merger
have, directly or indirectly, at least a majority of the common stock of the
continuing or surviving corporation immediately after such consolidation or
merger, or (iii) any person, or any persons acting together which would
constitute a "group" for purposes of Section 13(d) of the Exchange Act (other
than the Company, any Subsidiary, any employee stock purchase
11
<PAGE> 13
plan, stock option plan or other stock incentive plan or program, retirement
plan or automatic dividend reinvestment plan or any substantially similar plan
of the Company or any Subsidiary or any person holding securities of the Company
for or pursuant to the terms of any such employee benefit plan), together with
any affiliates thereof, shall beneficially own (as defined in Rule 13d-3 under
the Exchange Act) at least 50% of the total voting power of all classes of
capital stock of the Company entitled to vote generally in the election of
directors of the Company.
Notwithstanding the foregoing, a Change in Control as described above shall
not be deemed to have occurred if (i) the Current Market Price (as defined in
the Indenture) of the Common Stock is at least equal to 105% of the conversion
price of the Debentures in effect immediately preceding the time of such Change
in Control, or (ii) all of the consideration (excluding cash payments for
fractional shares) in the transaction giving rise to such Change in Control to
the holders of Common Stock consists of shares of common stock that are, or
immediately upon issuance will be, listed on a national securities exchange or
quoted in the National Association of Securities Dealers, Inc. National Market
System ("NASDAQ-NMS"), and as a result of such transaction the Debentures become
convertible solely into such common stock, or (iii) the consideration in the
transaction giving rise to such Change in Control to the holders of Common Stock
consists of cash, securities that are, or immediately upon issuance will be,
listed on a national securities exchange or quoted in the NASDAQ-NMS, or a
combination of cash and such securities, and the aggregate fair market value of
such consideration (which, in the case of such securities, shall be equal to the
average of the daily closing prices of such securities during the ten
consecutive trading days commencing with the sixth trading day following
consummation of such transaction) is at least 105% of the conversion price of
the Debentures in effect on the date immediately preceding the closing date of
such transaction.
The right to require the Company to repurchase Debentures as a result of
the occurrence of a Change in Control could create an event of default under
Senior Debt of the Company, as a result of which any repurchase could, absent a
waiver, be blocked by the subordination provisions of the Debentures. See
"Subordination." Failure by the Company to repurchase the Debentures when
required will result in an Event of Default with respect to the Debentures
whether or not such repurchase is permitted by the subordination provisions. The
Company's ability to pay cash to the holders of Debentures upon a repurchase may
be limited by certain financial covenants contained in the Company's Senior
Debt.
If any repurchase pursuant to the foregoing provisions constitutes an
"issuer tender offer" as defined in Rule 13e-4 under the Exchange Act, such
transaction would be subject to the requirements of Rule 13e-4, including the
filing of an Issuer Tender Offer Statement on Schedule 13D-4 with the Commission
and the furnishing of certain information contained therein to the
Debentureholders. The holders' repurchase right upon the occurrence of a
Designated Event could discourage the acquisition of the Company by a potential
acquiror.
SUBORDINATION
The Debentures are subordinated and subject, to the extent and in the
manner set forth in the Indenture, to the prior payment in full of all Senior
Debt. Senior Debt is defined to include all indebtedness, whether now
outstanding or hereafter created, incurred, assumed or guaranteed by the Company
for money borrowed from others (including obligations under capitalized leases
or purchase money mortgages) or in connection with the acquisition by it or a
Subsidiary of any other business or entity, and, in each case, renewals,
extensions and funding thereof, other than (i) any such indebtedness as to
which, in the instrument creating or evidencing the same, it is provided that
such indebtedness is not superior in right of payment to the Debentures, (ii)
indebtedness of the Company to any Affiliate, (iii) the Company's 7% Convertible
Subordinated Debentures Due 2002 and the Company's 6% Convertible Subordinated
Debentures Due 2002 and (iv) the Debentures.
As of December 31, 1993, the Company had approximately $14.0 million of
Senior Debt outstanding. The Company's 6% Convertible Subordinated Debentures
Due 2002, of which $50 million principal amount is outstanding, and 7%
Convertible Subordinated Debentures Due 2002, of which $75 million principal
amount is outstanding, rank pari passu with the Debentures. The Company conducts
significant operations through its
12
<PAGE> 14
subsidiaries. The rights of the Company's creditors, including the holders of
the Debentures, to participate in the assets of any subsidiary will be subject
to prior claims of such subsidiary's creditors. The Indenture does not restrict
the incurrence of Senior Debt or other indebtedness, secured or unsecured, by
the Company or any subsidiary.
No payment of principal, if any, or interest on the Debentures may be made
and no Debentures may be purchased if the Company is then in default in the
payment of any Senior Debt or if at the time any other event of default under
the terms of any Senior Debt exists permitting acceleration thereof.
Furthermore, no Debentures may be purchased by the Company without the prior
approval of the syndicate of banks with whom the Company has its revolving
credit agreement. Upon any payment or distribution of assets of the Company in
the event of any insolvency, reorganization, liquidation or similar proceeding,
all Senior Debt must be repaid in full (including any interest thereon accruing
after the commencement of any proceeding) before the Holders of the Debentures
will be entitled to receive or retain any payment. If the Debentures are
declared due and payable before their stated maturity because of any Event of
Default, no payment may be made in respect of the Debentures unless and until
all senior Debt shall have been paid in full.
By reason of such subordination, in the event of insolvency, creditors of
the Company who are holders of Senior Debt may recover more, ratably, than
Holders of Debentures, and creditors of the Company who are neither holders of
Senior Debt nor Holders of Debentures may recover less, ratably, than holders of
Senior Debt.
MERGER, CONSOLIDATION, OR SALE OF ASSETS
The Company may not consolidate or merge with or into, or sell, lease,
convey or otherwise dispose of all or substantially all of its assets to,
another corporation, person or entity unless (i) the Company is the surviving
person or the successor or transferee is a corporation organized under the laws
of the United States, any state thereof or the District of Columbia, (ii) the
successor assumes all the obligations of the Company under the Debentures and
the Indenture and (iii) after such transaction no Event of Default exists.
COVENANTS
The Company shall not adopt any plan of liquidation which provides for,
contemplates or the effectuation of which is preceded by (i) the sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company otherwise than substantially as an entirety and (ii) the distribution of
all the proceeds of such sale, lease, conveyance or other disposition unless the
Company makes provisions for satisfaction of the Company's obligation to pay
principal and interest on the Debentures.
EVENTS OF DEFAULT AND REMEDIES
An Event of Default includes: (i) default in the payment of any interest,
continued for 30 days; (ii) default in the payment of principal or premium, if
any, when due; (iii) default in the payment of the repurchase price in respect
of any Debenture on the Repurchase Date in accordance with the Indenture; (iv)
default in the performance of any other covenant continued for 60 days after
written notice as provided in the Indenture; (v) default in respect of
indebtedness of the Company for money borrowed which results in acceleration of
the maturity of $1,000,000 or more of indebtedness, if such acceleration is not
rescinded or indebtedness discharged within 10 days after written notice to the
Company as provided in the Indenture; and (vi) certain events in bankruptcy,
insolvency or reorganization. If any Event of Default shall happen and be
continuing, the Trustee or the holders of 25% in principal amount of the
outstanding Debentures may declare the Debentures due and payable. At any time
after a declaration of acceleration with respect to the Debentures has been
made, but before a judgment or decree based on acceleration has been obtained,
the holders of a majority in principal amount of the outstanding Debentures may,
under certain circumstances, rescind and annul such acceleration.
The Indenture provides that the Trustee will be under no obligation,
subject to the duty of the Trustee during any Default to act with the required
standard of care, to exercise any of its rights or powers under the Indenture at
the request or direction of any of the holders, unless such holders shall have
offered to the Trustee
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<PAGE> 15
reasonable indemnification. Subject to such provisions for indemnification of
the Trustee, the holders of a majority in principal amount of the outstanding
Debentures will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee.
The holders of a majority in principal amount of the outstanding Debentures
may on behalf of the holders of all Debentures waive compliance by the Company
with certain restrictive provisions of the Indenture. The holders of a majority
in principal amount of the outstanding Debentures may on behalf of the holders
of all Debentures waive certain past defaults except a default in payment of the
principal of (or premium, if any) or interest on, any Debenture or in respect of
a provision which under the Indenture cannot be modified or amended without the
consent of the holder of each outstanding Debenture affected thereby.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and upon becoming aware of any Default
or Event of Default, a statement specifying such Default or Event of Default.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Debentures
or the Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each holder of the Debentures by accepting a
Debenture waives and releases all such liability. The waiver and release are
part of the consideration for issuance of the Debentures.
SATISFACTION AND DISCHARGE OF THE INDENTURE
The Company may terminate its obligations under the Indenture at any time
by delivering all outstanding Debentures to the Trustee for cancellation. After
all the Debentures have been called for redemption, the Company may terminate
all of its obligations under the Indenture, other than its obligations to pay
the principal of and interest on the Debentures and certain other obligations,
at any time, by depositing with the Trustee money or non-callable U.S.
Government obligations sufficient to pay all remaining indebtedness on the
Debentures.
REGISTRATION AND TRANSFER OF DEBENTURES
As of the date of this Prospectus, all Debentures are represented by two
global Debentures (the "Global Debentures") issued to Depository Trust Company
("DTC") and registered in the name of Cede & Co., as nominee of DTC. The
Trustee, as custodian (the "Custodian"), acts as custodian of the Global
Debentures for DTC. Currently, ownership of beneficial interests in the Global
Debentures is limited to participants in DTC's book-entry settlement system or
persons that hold interests through participants, and ownership of beneficial
interests in a Global Debenture is shown on records maintained by DTC (with
respect to interests of participants in DTC), or by participants in DTC or
persons that may hold interests through such participants (with respect to
persons other than participants in DTC).
Upon notification to the Trustee (on a form approved by the Company) of any
sale of any Debentures pursuant to this Prospectus, the Company will, unless
otherwise instructed, issue a Debenture in fully registered, certificated form
(a "Definitive Debenture") in exchange for the interest in the Global Debenture
representing the Debentures transferred. In the event such an exchange is to be
effected, the Trustee will cause, in accordance with the standing instructions
and procedures existing between DTC and the Custodian, the aggregate principal
amount of the Global Debenture to be reduced. Following such reduction, the
Company will execute and the Trustee will authenticate and deliver to the
transferee a Definitive Debenture, provided that the Trustee has received
written or electronic instructions to that effect from DTC or its nominee on
behalf of any person having a beneficial interest in the Debentures evidenced by
the Global Debenture and a written order of such person containing registration
instructions.
Upon surrender of any Definitive Debenture to the Trustee for exchange or
registration of transfer and upon receipt by the Trustee of a written order of
the person surrendering such Definitive Debenture containing any necessary
registration instructions, the Company will execute and the Trustee will
authenticate and deliver
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<PAGE> 16
to the holder making the exchange or to the transferee, as the case may be, one
or more new Definitive Debentures.
Any person having a beneficial interest in Debentures evidenced by a Global
Debenture may upon request exchange its interest in the Global Debenture for a
Definitive Debenture in the manner set forth in the Indenture. In addition, the
Company may at any time and in its sole discretion determine not to have a
Global Debenture, and, in such event, will issue Definitive Debentures in
exchange for the Debentures represented by the Global Debenture.
A Definitive Debenture may not be exchanged for a beneficial interest in a
Global Debenture.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Debentures may be
amended or supplemented with the consent of the holders of at least a majority
in principal amount of such then outstanding Debentures, and any existing
default or compliance with any provision may be waived with the consent of the
holders of a majority in principal amount of the then outstanding Debentures.
Without the consent of any holder of the Debentures, the Company and the Trustee
may amend or supplement the Indenture or the Debentures to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Debentures in addition to
or in place of certified Debentures, to provide for the assumption of the
Company's obligations to holders of the Debentures in the case of a merger or
acquisition, or to make any change that does not materially adversely affect the
legal rights of any holder of the Debentures. Without the consent of each holder
affected, the Company may not reduce the principal amount of Debentures the
holders of which must consent to an amendment of the Indenture; reduce the rate
or change the interest payment time of any Debenture; reduce the principal of or
change the fixed maturity of any Debenture or alter the redemption provision
with respect thereto; make any Debenture payable in money other than that stated
in the Debenture; make any change in the provisions concerning waiver of
Defaults or Events of Default by holders of the Debentures or rights of holders
to receive payment of principal or interest; make any change that adversely
affects the right to convert any Debenture; or make any change in the
subordination provisions that adversely affects the rights of any holder.
CONCERNING THE TRUSTEE
Bankers Trust Company is Trustee under the Indenture. The Trustee is also
trustee under an indenture in respect of $75 million principal amount of 7%
Convertible Subordinated Debenture Due 2002 issued by the Company in December
1992, which ranks pari passu with the Debentures.
The holders of a majority in principal amount of the then outstanding
Debentures have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee. The Indenture
provides that in case an Event of Default shall occur (which shall not be
cured), the Trustee will be required, in the exercise of its power, to use the
degree of care of a prudent man in the conduct of his own affairs. Subject to
such provisions, the Trustee will be under no obligation to exercise any of its
rights or powers under the Indenture at the request of any of the holders of the
Debentures, unless they shall have offered to the Trustee security and indemnity
satisfactory to it.
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company is authorized to issue up to 60,000,000 shares of Common Stock,
of which, at March 31, 1994, 15,354,627 shares were outstanding, 1,058,453
shares were held as treasury stock, 3,816,793 shares were reserved for possible
issuance upon the conversion of the Debentures, 4,783,163 shares were reserved
for issuance upon conversion of the Company's $75 million principal amount of 7%
Convertible Subordinated Debentures Due 2002, 1,923,076 shares were reserved for
issuance upon conversion of the Company's $50 million principal amount of 6%
Convertible Subordinated Debentures Due 2002, and 121,537 shares were reserved
for issuance under the Company's 1989 Long-Term Incentive Plan. In addition, the
Company has
15
<PAGE> 17
reserved an additional amount of shares (expected to approximate 190,000 shares
based on the closing sale price of the Common Stock reported on the New York
Stock Exchange Composite Tape on April 7, 1994) in connection with the expected
settlement of a lawsuit.
The holders of Common Stock are entitled to one vote for each share held of
record on each matter submitted to a vote of stockholders, and upon giving
notice required by law, may cumulate their votes in elections of directors.
Subject to preferences that may be applicable to any shares of Preferred Stock
of the Company outstanding at the time, holders of Common Stock are entitled to
receive ratably such dividends as may be declared by the Board of Directors out
of funds legally available therefor and, in the event of the liquidation,
dissolution or winding up of the Company, are entitled to share ratably in all
assets remaining after payment of liabilities. Holders of Common Stock have no
preemptive rights and have no rights to convert their Common Stock into any
other security. The outstanding Common Stock is fully-paid and non-assessable.
The Company's Articles of Incorporation include a "fair price" provision
applicable to certain business combination transactions in which the Company may
be involved. The provision requires that an Interested Stockholder (the holder
of 10% or more of the Company's outstanding shares of Common Stock) not engage
in certain specified transactions (e.g., mergers, sales of assets, dissolution
and liquidation) unless one of three conditions is met: (i) a majority of the
directors who are unaffiliated with the Interested Stockholder and were
directors before the Interested Stockholder became an Interested Stockholder
approve the transaction; (ii) holders of 80% of the outstanding shares of Common
Stock approve the transaction; or (iii) the stockholders are all paid a "fair
price," i.e., generally the higher of the fair market value of the shares or the
same price as the price paid to stockholders in the transaction in which the
Interested Stockholder acquired its block. By discouraging certain types of
hostile takeover bids, the fair price provision may tend to insulate current
management against the possibility of removal. The Company is not aware of any
person or entity proposing or contemplating such a transaction.
The transfer agent and registrar for the Company's Common Stock is First
Interstate Bank of Oregon, N.A., Portland, Oregon.
PREFERRED STOCK
The Company is authorized to issue up to 10,000,000 shares of Preferred
Stock, none of which have been issued. The Board of Directors has the authority
to determine the dividend rights, dividend rates, conversion rights, voting
rights, rights and terms of redemption and liquidation preferences, redemption
prices, sinking fund terms on any series of Preferred Stock, the number of
shares constituting any such series and the designation thereof. Holders of
Preferred Stock have no preemptive rights and have no rights to convert their
Preferred Stock into any other securities. While series may be designated and
Preferred Stock may be issued from time to time in the future, except upon
exercise of the Rights, the Company has no present plans to issue any such
shares.
On May 24, 1989, the Board of Directors of the Company declared a dividend
distribution of one Right for each outstanding share of the Company's Common
Stock to stockholders of record at the close of business on June 16, 1989. Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Preferred Stock at a purchase price of $100
in cash ("Purchase Price"), subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement dated as of May 24, 1989, (the
"Rights Agreement") between the Company and First Interstate Bank of Oregon,
N.A., as Rights Agent. The Rights are not exercisable or detachable from the
Common Stock until ten days after any person or group acquires 20% or more (or
commences a tender offer for 30% or more) of the Company's Common Stock. If any
person or group acquires 30% or more of the Company's Common Stock or acquires
the Company in a merger or other business combination, each Right (other than
those held by the acquiring person) will entitle the holder to purchase
Preferred Stock of the Company or common stock of the acquiring company having a
market value of approximately two times the $100 exercise price. The Rights
expire on May 24, 1999, and can be redeemed by the Company at any time prior to
their becoming exercisable. Shares of Common Stock issued prior to the
expiration date of the Rights upon conversion of the Debentures will be
accompanied by Rights.
16
<PAGE> 18
PLAN OF DISTRIBUTION
The Company, which received the proceeds from the original sale of the
Debentures in January and February 1994, will not receive any of the proceeds
from this offering. The Company has been advised by the Selling Debentureholders
that the Selling Debentureholders may sell all or a portion of the Debentures
offered hereby from time to time in the over-the-counter market and may sell all
or a portion of the shares of Common Stock offered hereby from time to time in
transactions effected on the New York Stock Exchange or otherwise on terms to be
determined at the times of such sales. The Selling Debentureholders may also
make private sales directly or through a broker or brokers. Alternatively, any
of the Selling Debentureholders may from time to time offer the Debentures or
shares of Common Stock through underwriters, including Kidder, Peabody & Co.
Incorporated ("Kidder, Peabody"), dealers or agents, who may receive
compensation in the form of underwriting discounts, commissions or concessions
from the Selling Debentureholders and/or the purchasers of the Debentures or
shares of Common Stock for whom they may act as agent. To the extent required,
the aggregate principal amount of Debentures and/or number of shares of Common
Stock to be sold, the names of the Selling Debentureholders, the purchase price,
the name of any such agent, dealer or underwriter and any applicable commissions
with respect to a particular offer will be set forth in an accompanying
Prospectus Supplement. The aggregate proceeds to the Selling Debentureholders
from the sale of the Debentures and Common Stock offered by the Selling
Debentureholders hereby will be the purchase price of such Debentures and shares
of Common Stock less any broker's commissions.
There is no assurance that the Selling Debentureholders will sell any or
all of the Debentures or shares of Common Stock offered hereby.
The Company has been advised by Kidder, Peabody that it is presently
making, and intends to continue making, a market in the Debentures; however, it
is not obligated to do so and any such market making may be discontinued at any
time. The Debentures have been designated as "PORTAL" securities eligible for
quotation in the National Association of Securities Dealers PORTAL system.
However, there can be no assurance that an active market for the Debentures will
develop.
In order to comply with the securities laws of certain states, if
applicable, the Debentures and shares of Common Stock will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the Debentures may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirement is available and is complied with.
The Selling Debentureholders and any broker-dealers, agents or underwriters
that participate with the Selling Debentureholders in the distribution of the
Debentures or shares of Common Stock may be deemed to be "underwriters" within
the meaning of the Securities Act, in which event any commissions received by
such broker-dealers, agents or underwriters and any profit on the resale of the
Debentures or shares of Common Stock purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
Pursuant to certain rules under the Exchange Act, any person who
participates in the offering of Debentures or shares of Common Stock made hereby
in one or more transactions that are distinguished from ordinary trading
transactions by the presence of special selling efforts and selling methods, may
not simultaneously engage in market making activities with respect to either the
Debentures or the Common Stock for a period of nine business days (two business
days in the case of Common Stock) prior to the commencement of such offering. In
addition, and without limiting the foregoing, each Selling Debentureholder will
be subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including, without limitation, Rules 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of Debentures or
shares of Common Stock by the Selling Debentureholders.
The Company will pay all expenses incident to the offering and sale of the
Debentures and Common Stock to the public other than underwriting discounts and
selling commissions and fees. See "Selling Debentureholders."
17
<PAGE> 19
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for the
Company by Freedman, Levy, Kroll & Simonds, Washington, D.C.
INDEPENDENT AUDITORS
The consolidated financial statements of the Company appearing in the
Company's Annual Report (Form 10-K) for the year ended December 31, 1993 have
been audited by Ernst & Young, independent auditors as set forth in their report
thereon included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The financial statements of Cyprus Gold New Zealand Limited for the years
ended December 31, 1992 and 1991 appearing in that Form 10-K were audited by
Price Waterhouse, independent auditors and are incorporated herein by reference.
18
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses to be paid by the Registrant in connection with the
securities being registered are as follows:
<TABLE>
<S> <C>
SEC registration fee............................................ $34,482.75
Printing and engraving expenses................................. *
Accounting fees and expenses.................................... *
Legal fees and expenses......................................... *
Blue Sky fees and expenses (including legal fees)............... *
Miscellaneous................................................... *
----------
Total................................................. $ *
----------
----------
</TABLE>
-------------------------------
* To be completed by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Title 30, Section 30-1-5 of the Idaho Code and Article VI(b) of the
Registrant's By-Laws, the Registrant's directors and officers may be indemnified
against certain liabilities which they may incur in their capacities as such.
The material terms of the indemnification provisions are indemnification (i)
with respect to civil, criminal, administrative or investigative proceedings
brought because the defendant is or was serving as an officer, director,
employee or agent of the Company; (ii) for judgments, fines and amounts paid in
settlement reasonably incurred; (iii) if the defendant acted in good faith and
in a manner he believed to be in the best interest of the Company; and (iv) if,
with respect to a criminal proceeding, he had no reasonable cause to believe his
conduct was unlawful. Attorney's fees are included in such indemnification to
the extent the indemnified party is successful on the merits in defense of the
proceeding. If the foregoing criteria are met, indemnification also applies to a
suit threatened or pending by the Company against the officer, director,
employee or agent with respect to attorney's fees unless there is negligence on
the part of the indemnified party. Indemnification is made only upon a
determination by the Company that it is proper under the circumstances because
the applicable standard is met. The determination shall be made by a majority
vote of (i) a quorum of the board of directors consisting of those persons who
are not parties to the proceeding; (ii) if such a quorum is not available, by
independent legal counsel in writing; or (iii) by the shareholders. Expenses for
defense may be paid in advance of final disposition of the proceeding if the
indemnified party provides an undertaking to repay such amounts if it is
determined the applicable standard has not been met. The Registrant also has an
officers' and directors' liability insurance policy. This insurance policy
contains a limit of liability of $10 million with a retention to the Company of
$500,000, on a claims made basis. The policy covers claims against officers and
directors for "wrongful acts" and also reimburses the Company to the extent the
Company indemnifies officers and directors in accordance with applicable law and
its by-laws. "Wrongful act" is defined to mean any breach of duty, neglect,
error, misstatement, misleading statement, omission or act by the directors or
officers of the Company in their respective capacities as such, or any matter
claimed against them solely by reason of their status as directors or officers
of the Company. The policy contains numerous exclusions of liability which are
exceptions to coverage.
II-1
<PAGE> 21
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
4(a) -- Indenture, dated as of January 26, 1994, between the Registrant and Bankers
Trust Company, as trustee, with respect to the Registrant's 6 3/8% Convertible
Subordinated Debentures Due 2004 (incorporated herein by reference to Exhibit
No. 10(gg) to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993).
4(b) -- Form of First Supplemental Indenture to the Indenture listed as Exhibit 4(a)
above. (Filed herewith.)
5 -- Legal opinion, dated April 8, 1994, of Freedman, Levy, Kroll & Simonds
regarding legality of securities offered. (Filed herewith.)
10 -- Registration Rights Agreement, dated January 18, 1994, between the Registrant
and Kidder, Peabody & Co. Incorporated (incorporated hereby by reference to
Exhibit No. 10(ii) to the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1993).
12 -- Computation of Ratio of Earnings to Fixed Charges. (Filed herewith.)
23.1 -- Consent of Ernst & Young. (Filed herewith.)
23.2 -- Consent of Freedman, Levy, Kroll and Simonds (included in Exhibit 5).
24 -- Power of Attorney. (See page II-4.)
25 -- Form of Statement of Eligibility on Form T-1 of Bankers Trust Company, as
trustee. (Filed herewith.)
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) The undersigned registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-2
<PAGE> 22
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT OR AMENDMENT THERETO TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN COEUR D'ALENE, IDAHO, ON THE SEVENTH DAY OF APRIL,
1994.
COEUR D'ALENE MINES CORPORATION
(Registrant)
By: DENNIS E. WHEELER
---------------------------------
DENNIS E. WHEELER
(CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER)
II-3
<PAGE> 23
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS DENNIS E. WHEELER, JAMES A. SABALA AND WILLIAM F.
BOYD HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS, EACH ACTING ALONE, WITH
FULL POWERS OF SUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN ANY
AND ALL CAPACITIES, TO SIGN ANY OR ALL AMENDMENTS (INCLUDING POST-EFFECTIVE
AMENDMENTS) TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH EXHIBITS
THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND
EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, EACH
ACTING ALONE, FULL POWER AND AUTHORITY TO DO AND PERFORM TO ALL INTENTS AND
PURPOSES AS HE MIGHT OR COULD DO IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL
THAT SAID ATTORNEYS-IN-FACT AND AGENTS, EACH ACTING ALONE, OR HIS SUBSTITUTE OR
SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE THEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT OR AMENDMENT THERETO HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------------- ------------------------------ --------------
<S> <C> <C>
Chairman of the Board
of Directors,
President, Chief
Executive Officer and
Director (Principal
DENNIS E. WHEELER Executive Officer) April 7, 1994
---------------------------------------
DENNIS E. WHEELER
Senior Vice
President -- Finance and
Treasurer, (Principal
Financial and Accounting
Officer)
JAMES A. SABALA and Director April 7, 1994
---------------------------------------
JAMES A. SABALA
JOSEPH C. BENNETT Director April 1, 1994
---------------------------------------
JOSEPH C. BENNETT
JAMES J. CURRAN Director April 7, 1994
---------------------------------------
JAMES J. CURRAN
JEFFERY T. RADE Director April 7, 1994
---------------------------------------
JEFFERY T. GRADE
DUANE B. HAGADONE Director April 7, 1994
---------------------------------------
DUANE B. HAGADONE
JAMES A. MCCLURE Director April 4, 1994
---------------------------------------
JAMES A. MCCLURE
</TABLE>
II-4
<PAGE> 24
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBITS PAGE
- ------ --------------------------------------------------------------------- -------------
<S> <C> <C>
4(a) -- Indenture, dated as of January 26, 1994, between the Registrant and
Bankers Trust Company, as trustee, with respect to the Registrant's
6 3/8% Convertible Subordinated Debentures Due 2004 (incorporated
herein by reference to Exhibit No. 10(gg) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1993).
4(b) -- Form of First Supplemental Indenture to the Indenture listed as
Exhibit 4(a) above. (Filed herewith.)
5 -- Legal opinion, dated April 8, 1994, of Freedman, Levy, Kroll &
Simonds regarding legality of securities offered. (Filed herewith.)
10 -- Registration Rights Agreement, dated January 18, 1994, between the
Registrant and Kidder, Peabody & Co. Incorporated (incorporated
hereby by reference to Exhibit No. 10(ii) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1993).
12 -- Computation of Ratio of Earnings to Fixed Charges. (Filed herewith.)
23.1 -- Consent of Ernst & Young. (Filed herewith.)
23.2 -- Consent of Freedman, Levy, Kroll and Simonds (included in Exhibit 5).
24 -- Power of Attorney. (See page II-4.)
25 -- Form of Statement of Eligibility on Form T-1 of Bankers Trust
Company, as trustee. (Filed herewith.)
</TABLE>
<PAGE> 1
Exhibit 4(b)
FIRST SUPPLEMENTAL INDENTURE, dated as of April __, 1994, to the Indenture
dated as of January 26, 1994 (hereinafter the "Original Indenture"), between
Coeur d'Alene Mines Corporation, a corporation duly organized and existing
under the laws of the State of Idaho (hereinafter referred to as the
"Company"), and Bankers Trust Company, a corporation duly organized and
existing under the laws of the State of New York (hereinafter referred to as
the "Trustee").
WHEREAS, the Company and the Trustee entered into the Original Indenture
providing for the creation, execution, authentication and delivery of
$100,000,000 principal amount of 6 3/8% Convertible Subordinated Debentures Due
2004 of the Company;
WHEREAS, the Company has requested the Trustee to join with it in the
execution and delivery of this First Supplemental Indenture in order to
supplement and amend the Original Indenture, by amending and adding certain
provisions thereof; and
WHEREAS, Section 9.01 of the Original Indenture provides, among other things,
that the Company and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental to the Original Indenture for the
purpose, inter alia, of curing any ambiguity or making such other change that
does not materially adversely affect the legal rights of any holders of
outstanding Debentures.
NOW, THEREFORE, in consideration of the mutual agreements herein contained
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE ONE
DEFINITIONS
Except as otherwise defined in or amended by this First Supplemental
Indenture, the capitalized words and terms used herein shall have the
respective meanings set forth in the Original Indenture.
ARTICLE TWO
MODIFICATION OF THE ORIGINAL INDENTURE
Section 10.11 of the Original Indenture is amended in its entirety to read as
follows:
Section 10.11. Adjustment for Adverse Tax Consequences. The Company may
make such reduction in the conversion price, in addition to those required by
<PAGE> 2
Sections 10.06, 10.07, 10.08, 10.09 and 10.10 of this Article, as it
considers to be advisable in order that any event treated for Federal income
tax purposes as a dividend of stock or stock rights shall not be taxable to
the recipients.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
A. The Original Indenture, as amended and modified by this First Supplemental
Indenture, hereby is in all respects ratified, confirmed and approved.
B. This First Supplemental Indenture shall be construed in connection with
and as a part of the Original Indenture.
C. This First Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
D. This First Supplemental Indenture shall be governed and construed in
accordance with the laws of the State of New York.
Bankers Trust Company hereby accepts the trusts in this First Supplemental
Indenture declared and provided, upon the terms and conditions hereinabove set
forth.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
2
<PAGE> 3
COEUR D'ALENE MINES CORPORATION
By: ------------------------------
Name:
Title:
SEAL
Attest:
- ------------------------------
Secretary
BANKERS TRUST COMPANY
By: -------------------------
Name:
Title
SEAL
Attest:
- -------------------------------
3
<PAGE> 1
[FREEDMAN, LEVY, KROLL & SIMONDS LETTERHEAD]
EXHIBIT 5
April 8, 1994
Coeur d'Alene Mines Corporation
505 Front Avenue
Coeur d'Alene, Idaho 83814
Gentlemen:
We have acted as counsel to Coeur d'Alene Mines Corporation, an Idaho
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), of a Registration Statement on Form S-3
(the "Registration Statement"), relating to $100,000,000 aggregate principal
amount of the Company's 6 3/8% Convertible Subordinated Debentures Due 2004
(the "Debentures") and a presently indeterminable number of shares (the
"Conversion Shares") of the Company's common stock, par value $1.00 per share
(the "Common Stock"), issuable upon conversion of the Debentures. The
Debentures were issued pursuant to an Indenture, dated as of January 26, 1994
(the "Indenture"), between the Company and Bankers Trust Company, as trustee
(the "Trustee").
This opinion is being delivered to the Commission as Exhibit 5 to the
Registration Statement.
We have examined copies of (i) the Articles of Incorporation and
ByLaws of the Company, as amended; (ii) the Registration Statement; (iii) the
Indenture; (iv) the two global certificates which currently evidence the
Debentures (the "Global Certificates"); (v) the form of definitive certificate
for the Debentures (the "Definitive Certificate"); and (vi) such other
corporate records, certificates, documents and other instruments as in our
opinion are necessary or appropriate in connection with expressing the opinions
set forth below. In our examination of such materials, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals and the conformity to original documents of all copies
submitted to us. As to various questions of fact material to this opinion, we
have relied, to the extent we deemed appropriate, upon representations,
statements and certificates of officers and representatives of the Company and
others.
<PAGE> 2
Based upon and subject to the foregoing, it is our opinion that:
1. The Debentures have been duly authorized and the Global
Certificates for the Debentures have been validly issued. The Global
Certificates for the Debentures constitute, and the Definitive Certificates for
the Debentures, when issued as provided in the Indenture, will constitute,
legal and binding obligations of the Company in accordance with their terms and
the terms of the Indenture. This opinion is subject to (i) the effect of
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and
similar laws now or hereafter in effect relating to or affecting creditors'
rights generally and court decisions with respect thereto and, (ii) the
application of equitable principles or remedies in any proceeding, whether at
law or in equity.
2. The Conversion Shares, when issued upon conversion of the
Debentures in accordance with the terms of the Debentures and the Indenture,
will be validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus which forms a part of the Registration
Statement.
Sincerely,
FREEDMAN, LEVY, KROLL & SIMONDS
<PAGE> 1
Coeur d'Alene Mines Corporation EXHIBIT 12
Calculation of
Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------------------------------------------------------------
1989 1990 1991 1992 1993
------------ ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Fixed Charges
- -------------
Interest
expense $ 3,075,377 $ 2,553,187 $ 1,544,433 $ 912,915 $ 4,820,251
Interest
capitalized 1,015,123 1,326,784 2,209,213 2,994,716 3,928,846
Amortization of
public offering
costs 163,594 163,594 163,594 183,858 544,323
Amortization of
capital lease costs 25,444 25,444 25,444 25,444 25,444
Portion of rent
expense repre-
sentative of
interest 254,942 285,845 330,707 317,691 298,912
------------ ------------ ------------- ------------ -------------
TOTAL FIXED
CHARGES $ 4,534,480 $ 4,354,854 $ 4,273,391 $ 4,434,624 $ 9,617,776
============ ============ ============= ============ =============
Earnings
- --------
Income (Loss) from
continuing opera-
tions before taxes $(2,863,965) $(5,244,071) $(14,995,087) $(4,506,391) $(16,720,820)
Fixed charges
per above 4,534,480 4,354,854 4,273,391 4,434,624 9,617,776
Less interest
capitalized (1,015,123) (1,326,784) (2,209,213) (2,994,716) (3,928,846)
Current period
amortization of
capitalized
interest -0- -0- -0- -0- -0-
------------- ------------ ------------- ------------ -------------
$ 655,392 $(2,216,001) $(12,930,909) $(3,066,483) $(11,031,890)
------------ ------------ ------------- ------------ -------------
Earnings insufficient
to cover fixed charges $ 3,879,088 $ 6,570,855 $ 17,204,300 $ 7,501,107 $ 20,649,666
============ ============ ============= ============ =============
Ratio of
earnings to
fixed charges * * * * *
============ ============ ============= ============ =============
</TABLE>
* Coverage ratio of less than 1.0
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent
Auditors" in this Registration Statement on Form S-3 and related prospectus of
Coeur d'Alene Mines Corporation pertaining to the registration of $100,000,000
of 6 3/8% Convertible Subordinated Debentures Due 2004 and to the incorporation
by reference therein of our report dated February 11, 1994 with respect to the
consolidated financial statements and schedules of Coeur d'Alene Mines
Corporation included in its Annual Report (Form 10-K) for the year ended
December 31, 1993 filed with the Securities and Exchange Commission.
ERNST & YOUNG
Seattle, Washington
April 7, 1994
<PAGE> 1
EXHIBIT 23.2
ATTORNEYS' CONSENT
The consent of Freedman, Levy, Kroll & Simonds to the use of Exhibit 5
hereto, and to the references to their name under the heading "Legal Matters" in
the Prospectus constituting a part of this Registration Statement, is included
in that Exhibit.
<PAGE> 1
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM T-1
STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305 (b)(2)
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BANKERS TRUST COMPANY
(Exact name of trustee as specified in its charter)
NEW YORK 13-4941247
(Jurisdiction of incorporation (I.R.S. Employer
if not a U.S. national bank) identification no.)
FOUR ALBANY STREET
NEW YORK, NEW YORK 10006
(Address of principal (Zip Code)
executive offices)
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COEUR D'ALENE MINES CORPORATION
(Exact name of obligor as specified in the charter)
IDAHO 82-0109423
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification no.)
400 COEUR D'ALENE MINES BUILDING
505 FRONT AVENUE 83814
(Address of principal (Zip Code)
executive offices)
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6 3/8% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2004
(Title of the indenture securities)
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ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee.
(a) Name and address of each examining or
supervising authority to which it is subject.
<TABLE>
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NAME ADDRESS
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<S> <C>
Federal Reserve Bank (2nd District) New York, N.Y.
Federal Deposit Insurance Corporation Washington,D.C.
New York State Banking Department Albany, N.Y.
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(b) Whether it is authorized to exercise
corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
If the obligor is an affiliate of the Trustee,
describe each such affiliation.
None.
ITEMS 3. - 15.
Not Applicable.
ITEM 16. LIST OF EXHIBITS.
EXHIBIT 1 - Restated Organization Certificate of Bankers
Trust Company dated August 7, 1990 and
Certificate of Amendment of the Organization
Certificate of Bankers Trust Company dated
June 23, 1992 - Incorporated herein by
reference to Exhibit 1 filed with Form T-1
Statement, Registration No. 33- 48267.
EXHIBIT 2 - Certificate of Authority to commence business
- Incorporated herein by reference to Exhibit
2 filed with Form T-1 Statement, Registration
No. 33-21047.
EXHIBIT 3 - Authorization of the Trustee to exercise
corporate trust powers - Incorporated herein
by reference to Exhibit 2 filed with Form T-1
Statement, Registration No. 33-21047.
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EXHIBIT 4 - Existing By-Laws of Bankers Trust Company,
dated September 21, 1993 - Incorporated
herein by reference to Exhibit 4 with Form
T-1 Statement, Registration No. 33-52359.
EXHIBIT 5 - Not applicable.
EXHIBIT 6 - Consent of Bankers Trust Company required by
Section 321(b) of the Act. - Incorporated
herein by reference to Exhibit 6 filed with
Form T-1 Statement, Registration No.
22-18864.
EXHIBIT 7 - A copy of the latest report of condition of
Bankers Trust Company dated as of December
31, 1993 - Incorporated herein by reference
to Exhibit 7 filed with Form T-1 Statement,
Registration No. 33- 76710.
EXHIBIT 8 - Not Applicable
EXHIBIT 9 - Not Applicable
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SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, Bankers Trust Company, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of eligibility to
be signed on its behalf by the undersigned, thereunto duly authorized, all in
The City of New York, and State of New York, on the 8th day of April, 1994.
BANKERS TRUST COMPANY
By: /S/ JENNA ROSSHEIM
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Jenna Rossheim
Assistant Vice President
