GOLDCORP INC. | ||
Date: July 31, 2014 | /s/ Anna M. Tudela | |
Name: Anna M. Tudela Title: Vice-President, Regulatory Affairs and Corporate Secretary |
Exhibit | Description of Furnished Exhibit | |
99.1 | Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three and Six Months Ended June 30, 2014 | |
99.2 | Condensed Interim Consolidated Financial Statements of the Company for the Three and Six Months Ended June 30, 2014 | |
99.3 | Form 52-109F2 Certification of Interim Filings - CEO | |
99.4 | Form 52-109F2 Certification of Interim Filings - CFO |
• | On June 9, 2014, the Company completed an issuance of $1.0 billion of senior unsecured notes and received net proceeds of $988 million. |
• | On April 4, 2014, the Company and its joint venture partner, Barrick Gold Corporation, completed the sale of their respective interests in the Marigold mine to Silver Standard Resources Inc. Total consideration received was $267 million in cash, after closing adjustments (Goldcorp's share – $184 million). |
• | Key consolidated financial information: |
◦ | Net earnings attributable to shareholders of Goldcorp, including discontinued operation, of $181 million ($0.22 per share), compared with a net loss, including discontinued operation, of $(1,934) million ($(2.38) per share) in 2013. |
◦ | Operating cash flows, including discontinued operation, of $275 million, compared with $80 million in 2013. |
◦ | Dividends paid of $122 million, compared to $121 million in 2013. |
◦ | $3.3 billion of liquidity, of which $863 million is intended to be used in August 2014 to repay the Company's $863 million convertible senior notes. (1) |
• | Key performance measures: (2) |
◦ | Goldcorp’s share of gold production increased to 648,700 ounces, compared with 646,000 ounces in 2013. |
◦ | Total cash costs of $470 per gold ounce, net of by-product silver, copper, lead and zinc credits, compared with $646 in 2013. On a co-product basis, cash costs of $643 per gold ounce, compared with $713 in 2013. (3) |
◦ | All-in sustaining costs of $852 per gold ounce, compared with $1,227 in 2013. All-in costs of $1,486 per gold ounce, compared with $1,768 in 2013. (4) |
◦ | Adjusted net earnings of $164 million ($0.20 per share), compared with $117 million ($0.14 per share) in 2013. (5) |
◦ | Goldcorp’s share of adjusted operating cash flows of $376 million, compared to $388 million in 2013. (6) |
◦ | Goldcorp’s share of negative free cash flows of $(240) million, compared to $(565) million in 2013. (7) |
(1) | At June 30, 2014, the Company held $1,220 million of cash and cash equivalents, $40 million of money market investments, and held an undrawn $2.0 billion revolving credit facility. |
(2) | The Company has included non-GAAP performance measures on an attributable (or Goldcorp’s share) basis throughout this document. Attributable performance measures include the Company’s mining operations, including its discontinued operation, and projects, and the Company’s share of Alumbrera and Pueblo Viejo. The Company believes that disclosing certain performance measures on an attributable basis is a more relevant measurement of the Company’s operating and economic performance, and reflects the Company’s view of its core mining operations. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company’s performance and ability to generate cash flow; however, these performance measures do not have any standardized meaning. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. |
(3) | The Company has included non-GAAP performance measures – total cash costs, by-product and co-product, per gold ounce, throughout this document. In the gold mining industry, total cash costs is a common performance measure but does not have any standardized meaning. The Company follows the recommendations of the Gold Institute Production Cost Standard. The Gold Institute, which ceased operations in 2002, was a non-regulatory body and represented a global group of suppliers of gold and gold products. The production cost standard developed by the Gold Institute remains the generally accepted standard of reporting cash costs of production by gold mining companies. In addition to conventional measures prepared in accordance with GAAP, the Company assesses this measure in a manner that isolates the impacts of gold production volumes, the by-product credits, and operating costs fluctuations such that the non-controllable and controllable variability is independently addressed. The Company uses total cash costs, by-product and co-product, per gold ounce, to monitor its operating performance internally, including operating cash costs, as well as in its assessment of potential development projects and acquisition targets. The Company believes these measures provide investors and analysts with useful information about the Company’s underlying cash costs of operations and the impact of by-product credits on the Company’s cost structure and is a relevant metric used to understand the Company’s operating profitability and ability to generate cash flow. When deriving the production cash costs associated with an ounce of gold, the Company includes by-product credits as the Company considers that the cost to produce the gold is reduced as a result of the by-product sales incidental to the gold production process, thereby allowing the Company’s management and other stakeholders to assess the net costs of gold production. The Company and certain investors use this information to evaluate the Company’s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Total cash costs on a by-product basis are calculated by deducting Goldcorp’s share of by-product silver, copper, lead and zinc sales revenues from Goldcorp’s share of production costs. |
2014 | 2013 | 2012 | |||||||
Gold | $ | 1,200 | $ | 1,600 | $ | 1,600 | |||
Silver | 20 | 30 | 34 | ||||||
Copper | 3.00 | 3.50 | 3.50 | ||||||
Lead | 1.00 | 0.90 | 0.90 | ||||||
Zinc | 0.90 | 0.90 | 0.90 |
(4) | All-in sustaining costs and all-in costs are non-GAAP performance measures that the Company believes more fully define the total costs associated with producing gold; however, these performance measures have no standardized meaning. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The Company reports these measures on a gold ounces sold basis. Effective June 2013, the Company conformed its all-in sustaining and all-in cost definitions to the guidance note released by the World Gold Council, which became effective January 1, 2014. The World Gold Council is a non-regulatory market development organization for the gold industry whose members comprise global senior gold mining companies. Refer to page 38 for a reconciliation of all-in sustaining costs. |
(5) | Adjusted net earnings and adjusted net earnings per share are non-GAAP performance measures. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company’s performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to page 40 for a reconciliation of adjusted net earnings to reported net earnings (loss) attributable to shareholders of Goldcorp. |
(6) | Adjusted operating cash flows is a non-GAAP performance measures which comprise Goldcorp’s share of operating cash flows before working capital changes and which the Company believes provides additional information about the Company’s ability to generate cash flows from its mining operations. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to page 41 for a reconciliation of adjusted operating cash flows before working capital changes to reported net cash provided by operating activities. |
(7) | Free cash flows is a non-GAAP performance measure which the Company believes, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use to evaluate the Company's ability to generate cash flows. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Free cash flows are calculated by deducting from net cash provided by operating activities, Goldcorp's share of expenditures on mining interests, deposits on mining interest expenditures and capitalized interest paid, and adding Goldcorp's share of net cash provided by operating activities from Alumbrera and Pueblo Viejo. Refer to page 41 for a reconciliation of free cash flows to reported net cash provided by operating activities. |
Three Months Ended | ||||||||||||||||||||||||
June 30 | March 31 | December 31 | September 30 | |||||||||||||||||||||
Consolidated financial information | 2014 | 2013 | 2014 | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Revenues (1)(2)(3) | $ | 906 | $ | 858 | $ | 898 | $ | 964 | $ | 970 | $ | 1,197 | $ | 895 | $ | 1,245 | ||||||||
Earnings (loss) from operations and associates (2) | $ | 216 | $ | (2,443 | ) | $ | 207 | $ | 308 | $ | (123 | ) | $ | 473 | $ | (2 | ) | $ | 682 | |||||
Net earnings (loss) from continuing operations (3) | $ | 202 | $ | (1,939 | ) | $ | 94 | $ | 299 | $ | (1,002 | ) | $ | 489 | $ | — | $ | 487 | ||||||
Net (loss) earnings from discontinued operation (3) | $ | (19 | ) | $ | 5 | $ | 4 | $ | 10 | $ | (87 | ) | $ | 15 | $ | 5 | $ | 11 | ||||||
Net earnings (loss) | $ | 183 | $ | (1,934 | ) | $ | 98 | $ | 309 | $ | (1,089 | ) | $ | 504 | $ | 5 | $ | 498 | ||||||
Net earnings (loss) attributable to shareholders of Goldcorp | $ | 181 | $ | (1,934 | ) | $ | 98 | $ | 309 | $ | (1,089 | ) | $ | 504 | $ | 5 | $ | 498 | ||||||
Net earnings (loss) from continuing operations per share(3) | ||||||||||||||||||||||||
– Basic | $ | 0.25 | $ | (2.39 | ) | $ | 0.12 | $ | 0.37 | $ | (1.23 | ) | $ | 0.60 | $ | — | $ | 0.60 | ||||||
– Diluted | $ | 0.24 | $ | (2.39 | ) | $ | 0.12 | $ | 0.32 | $ | (1.23 | ) | $ | 0.45 | $ | — | $ | 0.60 | ||||||
Net earnings (loss) per share | ||||||||||||||||||||||||
– Basic | $ | 0.22 | $ | (2.38 | ) | $ | 0.12 | $ | 0.38 | $ | (1.34 | ) | $ | 0.62 | $ | 0.01 | $ | 0.61 | ||||||
– Diluted | $ | 0.22 | $ | (2.38 | ) | $ | 0.12 | $ | 0.33 | $ | (1.34 | ) | $ | 0.47 | $ | — | $ | 0.61 | ||||||
Cash flows from operating activities of continuing operations (1)(2)(3) | $ | 276 | $ | 74 | $ | 270 | $ | 269 | $ | 295 | $ | 658 | $ | 268 | $ | 416 | ||||||||
Cash flows from operating activities including discontinued operation (1)(2)(3) | $ | 275 | $ | 80 | $ | 273 | $ | 294 | $ | 307 | $ | 678 | $ | 274 | $ | 433 | ||||||||
Dividends paid | $ | 122 | $ | 121 | $ | 122 | $ | 122 | $ | 121 | $ | 110 | $ | 122 | $ | 109 | ||||||||
Cash and cash equivalents (2) | $ | 1,220 | $ | 899 | $ | 1,001 | $ | 1,463 | $ | 625 | $ | 757 | $ | 972 | $ | 972 |
Three Months Ended | ||||||||||||||||||||||||
June 30 | March 31 | December 31 | September 30 | |||||||||||||||||||||
Key performance measures (4) | 2014 | 2013 | 2014 | 2013 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Gold produced (ounces) (3) | 648,700 | 623,500 | 658,100 | 582,900 | 740,800 | 672,100 | 611,900 | 569,900 | ||||||||||||||||
Gold sold (ounces) (1)(3) | 639,500 | 601,600 | 662,100 | 563,400 | 697,800 | 616,500 | 626,700 | 594,800 | ||||||||||||||||
Silver produced (ounces) | 8,984,000 | 7,180,000 | 9,581,400 | 5,633,400 | 9,768,100 | 7,158,600 | 7,744,600 | 8,509,300 | ||||||||||||||||
Copper produced (thousands of pounds) | 19,300 | 21,600 | 21,500 | 18,800 | 28,800 | 25,400 | 21,400 | 31,200 | ||||||||||||||||
Lead produced (thousands of pounds) | 38,600 | 35,400 | 49,500 | 29,100 | 53,600 | 29,200 | 41,000 | 39,400 | ||||||||||||||||
Zinc produced (thousands of pounds) | 91,900 | 70,100 | 87,900 | 52,000 | 80,900 | 67,000 | 76,300 | 98,400 | ||||||||||||||||
Average realized gold price (per ounce) | $ | 1,296 | $ | 1,357 | $ | 1,297 | $ | 1,622 | $ | 1,254 | $ | 1,692 | $ | 1,340 | $ | 1,687 | ||||||||
Average London spot gold price (per ounce) | $ | 1,289 | $ | 1,414 | $ | 1,294 | $ | 1,631 | $ | 1,272 | $ | 1,722 | $ | 1,327 | $ | 1,652 | ||||||||
Total cash costs – by-product (per gold ounce) (5) | $ | 470 | $ | 636 | $ | 488 | $ | 549 | $ | 447 | $ | 337 | $ | 536 | $ | 197 | ||||||||
Total cash costs – co-product (per gold ounce) (6) | $ | 643 | $ | 702 | $ | 658 | $ | 701 | $ | 632 | $ | 611 | $ | 696 | $ | 654 | ||||||||
All-in sustaining costs (per gold ounce) | $ | 852 | $ | 1,205 | $ | 828 | $ | 1,110 | $ | 794 | $ | 895 | $ | 975 | $ | 774 | ||||||||
Adjusted net earnings | $ | 162 | $ | 112 | $ | 205 | $ | 243 | $ | 75 | $ | 450 | $ | 185 | $ | 430 | ||||||||
Adjusted operating cash flow | $ | 377 | $ | 378 | $ | 278 | $ | 377 | $ | 432 | $ | 702 | $ | 364 | $ | 669 | ||||||||
Including discontinued operation (3) | ||||||||||||||||||||||||
Gold produced (ounces) | 648,700 | 646,000 | 679,900 | 614,600 | 768,900 | 700,400 | 637,100 | 592,500 | ||||||||||||||||
Gold sold (ounces) (1) | 639,500 | 624,300 | 684,000 | 595,100 | 725,700 | 645,100 | 652,100 | 617,800 | ||||||||||||||||
Total cash costs – by-product (per gold ounce) (5) | $ | 470 | $ | 646 | $ | 507 | $ | 565 | $ | 467 | $ | 360 | $ | 551 | $ | 220 | ||||||||
Total cash costs – co-product (per gold ounce) (6) | $ | 643 | $ | 713 | $ | 673 | $ | 710 | $ | 645 | $ | 621 | $ | 706 | $ | 660 | ||||||||
All-in sustaining costs (per gold ounce) | $ | 852 | $ | 1,227 | $ | 840 | $ | 1,134 | $ | 810 | $ | 915 | $ | 995 | $ | 801 | ||||||||
Adjusted net earnings | $ | 164 | $ | 117 | $ | 209 | $ | 253 | $ | 74 | $ | 465 | $ | 190 | $ | 441 | ||||||||
Adjusted operating cash flow | $ | 376 | $ | 388 | $ | 281 | $ | 400 | $ | 439 | $ | 723 | $ | 374 | $ | 686 |
(1) | Excludes pre-commissioning sales ounces from Pueblo Viejo, prior to January 1, 2013, as costs incurred, net of proceeds from sales, were credited against capitalized project costs. |
(2) | Effective January 1, 2013, the Company's 37.5% interest in Alumbrera was required to be accounted for as an investment in associate and accounted for using the equity method. The Company has restated the 2012 comparative periods to remove Alumbrera's revenues, cash flows from operating activities, and cash and cash equivalents, and to include the effect of Alumbrera on earnings from operations and associates. |
(3) | The Company's 66.7% interest in Marigold continues to be classified as a discontinued operation for the three and six months ended June 30, 2014. The comparative information has been restated in accordance with the requirements of IFRS 5 – Non-current assets held for sale and discontinued operations. |
(4) | The Company has included the Company’s share of the applicable production, sales and financial information of Alumbrera and Pueblo Viejo in the non-GAAP performance measures noted above. The Company believes that disclosing certain performance measures including Alumbrera and Pueblo Viejo is a more relevant measurement of the Company’s operating and economic performance, and reflects the Company’s view of its core mining operations. |
(5) | Total cash costs per gold ounce on a by-product basis is calculated net of Goldcorp’s share of by-product sales revenues (by-product copper sales revenues for Alumbrera; by-product silver sales revenues for Marlin and Pueblo Viejo; by-product lead and zinc sales revenues and 75% of silver sales revenues for Peñasquito at market silver prices, and 25% of silver sales revenues for Peñasquito at $4.05 per silver ounce (2013 – $4.02 per silver ounce) sold to Silver Wheaton). |
(6) | Total cash costs per gold ounce on a co-product basis is calculated by allocating Goldcorp’s share of production costs to each co-product (Alumbrera (copper); Marlin (silver); Pueblo Viejo (silver); Peñasquito (silver, lead and zinc)) based on the ratio of actual sales volumes multiplied by budget metal prices (see page 2). |
• | Revenues increased by $48 million, or 6%, primarily due to a $40 million increase in silver revenues and a $21 million increase in zinc revenues, net of refining charges; partially offset by a $16 million decrease in gold revenues. The increase in revenues is primarily a result of higher volumes for gold, silver, and zinc, and a higher zinc realized price, partially offset by a lower gold realized price during the second quarter of 2014; |
• | Production costs decreased by $18 million, or 3%, due to increased capitalized stripping costs at Peñasquito; the impact of the Los Filos operations suspension in the second quarter of 2014; lower employee and consumables costs; and favourable foreign exchange movements; partially offset by a $16 million increase in estimates in reclamation and closure cost obligations at certain of the Company's inactive and closed sites during the second quarter of 2014; |
• | Depreciation and depletion increased by $18 million, or 11%, due to higher sales volumes and new assets put into service; |
• | The Company’s share of net earnings of associates increased by $43 million primarily due to a $23 million increase in the Company's share of net earnings from Pueblo Viejo, which included a reversal of impairment of $6 million, net of tax in respect of certain power assets, and a $13 million increase in the Company's share of net earnings from Alumbrera in the second quarter of 2014; |
• | An impairment of mining interests and goodwill of $2,558 million was recognized in the second quarter of 2013. An impairment expense of $2,427 million and $131 million ($1,827 million and $131 million, net of tax) was recognized against the carrying amount of the Peñasquito mines and related goodwill and the Cerro Blanco project, respectively; |
• | Corporate administration, excluding share-based compensation expense, was $43 million, which was comparable to the second quarter of 2013. Share-based compensation expense of $16 million for the second quarter of 2014 decreased by $6 million compared to the second quarter of 2013 due to an increase in cancellations of share option awards during the second quarter of 2014; |
• | A $5 million gain on securities due to the sale of certain available-for-sale equity and marketable securities in the second quarter of 2014. A $9 million loss on securities was recognized in the second quarter of 2013 representing an impairment expense on certain of the Company's available-for-sale equity and marketable securities; |
• | An $11 million net gain on derivatives in the second quarter of 2014 comprised of a $9 million gain on foreign currency, heating oil, copper, lead, and zinc contracts; a $1 million unrealized gain on the conversion feature of the Company’s convertible notes (the “Convertible Notes”); and a $1 million gain on the Company’s contract to sell 1.5 million ounces of silver to Silver Wheaton at a fixed price over each of the four years ending August 5, 2014 (the “Silver Wheaton silver contract”). In the second quarter of 2013, a $22 million net gain on derivatives was comprised of a $17 million net gain on the Silver Wheaton silver contract; and a $13 million unrealized gain on the conversion feature of the Convertible Notes; partially offset by a $8 million net loss on foreign currency, heating oil, copper, lead, and zinc contracts; |
• | Other expenses increased by $10 million due to a decrease in interest income earned on the Company's cash and cash equivalents and loans held with certain of the Company's associates; partially offset by favourable foreign exchange movements during the second quarter of 2014 arising mainly on value added tax receivables denominated in Mexican and Argentinian pesos; |
• | Income tax expense for the three months ended June 30, 2014 totaled $14 million (three months ended June 30, 2013 – income tax recovery of $504 million) and was primarily impacted by: |
• | A $24 million foreign exchange gain on the translation of deferred income tax assets and liabilities arising primarily from the Placer Dome and Glamis acquisitions in 2006 and the Camino Rojo and Cerro Negro acquisitions in 2010, compared to a $74 million foreign exchange loss in the second quarter of 2013. The foreign exchange related deferred income tax impacts resulted from the strengthening Canadian dollar and Mexican peso, and the weakening Argentine peso (weakening Canadian dollar, Mexican peso and Argentine peso in the second quarter of 2013); |
• | In the second quarter of 2013 a deferred income tax recovery of $600 million arising on the impairment of mining interests and goodwill was recognized; |
• | A comparable effective tax rate of 16% after adjusting income taxes for the above noted items and the non-deductible share-based compensation expense and impairment of mining interests and goodwill from earnings before taxes; and |
▪ | A net loss from discontinued operation of $19 million for the second quarter of 2014 primarily due to the net loss recognized on the sale of the Company's 66.7% share of Marigold, which was classified as a discontinued operation during the second quarter of 2014. Net earnings of $5 million were recognized in the second quarter of 2013 on the Company's 66.7% share of Marigold. |
(1) | Adjusted net earnings and adjusted net earnings per share are non-GAAP performance measures. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company’s performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to page 40 for a reconciliation of adjusted net earnings to reported net earnings (loss) attributable to shareholders of Goldcorp. |
(2) | The Company has included non-GAAP performance measures – total cash costs, by-product and co-product, per gold ounce, throughout this document. In the gold mining industry, total cash costs is a common performance measure but does not have any standardized meaning. The Company follows the recommendations of the Gold Institute Production Cost Standard. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company’s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Total cash costs on a by-product basis are calculated by deducting Goldcorp’s share of by-product silver, copper, lead and zinc sales revenues from Goldcorp’s share of production costs. Refer to page 36 for a reconciliation of total cash costs to reported production costs. |
• | Revenues increased by $8 million, or 1%, due to a $13 million increase in gold revenues and a $2 million increase in silver revenues; partially offset by a $10 million decrease in lead and zinc revenues, net of refining charges. The increase in revenues resulted primarily from higher sales volumes for gold and silver, partially offset by a lower silver realized price and lower sales volumes for zinc during the second quarter of 2014; |
• | Production costs increased by $6 million, or 1%, due to revisions in estimates at the Company's inactive and closed mines during the second quarter of 2014 resulting in a $16 million increase in reclamation and closure costs; higher employee and contractor costs; and the impact of higher sales volumes; partially offset by the water use payments in Peñasquito in the first quarter of 2014; increased capitalized stripping costs at Peñasquito; and the impact of the Los Filos operations suspension in the second quarter of 2014; |
• | Depreciation and depletion increased by $9 million, or 5%, due to higher sales volumes; |
• | The Company’s share of net earnings of associates increased by $4 million from the prior quarter primarily due to a $14 million increase in the Company's share of net earnings from Pueblo Viejo, which included a reversal of impairment of $6 million, net of tax, in respect of certain power assets, offset by a $6 million decrease in the Company's share of net earnings from Alumbrera; |
• | Corporate administration, excluding share-based compensation expense, was $43 million, which was comparable to the prior quarter. Share-based compensation expense of $16 million for the second quarter of 2014 decreased by $8 million compared to the prior quarter due to an increase in cancellations of share option awards during the second quarter of 2014; |
• | An $11 million net gain on derivatives in the second quarter of 2014 comprised of a $9 million gain on foreign currency, heating oil, copper, lead, and zinc contracts; a $1 million unrealized gain on the conversion feature of the Convertible Notes; and a $1 million gain on the Silver Wheaton silver contract. A $3 million net loss on derivatives in the first quarter of 2014 comprised of a $1 million unrealized loss on the conversion feature of the Convertible Notes; a $1 million net loss on the Silver Wheaton silver contract; and a $1 million net loss on foreign currency, heating oil, copper, lead, and zinc contracts; |
• | An $18 million net gain on disposition of mining interests in the first quarter of 2014 as the Company sold its equity interest in Primero on March 26, 2014; |
• | Other expenses decreased by $16 million from the prior quarter due to favourable foreign exchange movements arising mainly on value added tax receivables denominated in Mexican and Argentinian pesos; |
• | Income tax expense for the three months ended June 30, 2014 totaled $14 million (three months ended March 31, 2014 – income tax expense of $90 million) and was impacted by: |
• | A $24 million foreign exchange gain on the translation of deferred income tax assets and liabilities primarily from the Placer Dome and Glamis acquisitions in 2006 and the Camino Rojo and Cerro Negro acquisitions in 2010, compared to a $106 million foreign exchange loss in the first quarter of 2014; |
• | An increase in the effective tax rate from a negative 8% to 16% in the second quarter of 2014 after adjusting for the non-deductible share-based compensation expense and the deferred income tax impacts of the strengthening Canadian dollar and Mexican peso, and the weakening Argentine peso (weakening Canadian dollar, Mexican peso, and Argentine peso in the first quarter of 2014). The first and second quarter of 2014 were both favourably impacted by income from associates not being subject to tax because of the previously unrecognized tax benefit of losses. The first quarter of 2014 was further favourably impacted by a higher tax benefit of tax deductible foreign exchange losses on US dollar denominated debt in Argentina and the gain on sale of Primero not being subject to tax; and |
• | A net loss from discontinued operation of $19 million for the second quarter of 2014 primarily due to the net loss recognized on the sale of the Company's 66.7% share of Marigold, which was classified as a discontinued operation during the first and second quarter of 2014. Net earnings of $4 million were recognized in the first quarter of 2014 on the Company's 66.7% share of Marigold. |
(1) | Adjusted net earnings and adjusted net earnings per share are non-GAAP performance measures. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company’s performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to page 40 for a reconciliation of adjusted net earnings to reported net earnings (loss) attributable to shareholders of Goldcorp. |
(2) | The Company has included non-GAAP performance measures – total cash costs, by-product and co-product, per gold ounce, throughout this document. In the gold mining industry, total cash costs is a common performance measure but does not have any standardized meaning. The Company follows the recommendations of the Gold Institute Production Cost Standard. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company’s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Total cash costs on a by-product basis are calculated by deducting Goldcorp’s share of by-product silver, copper, lead and zinc sales revenues from Goldcorp’s share of production costs. Refer to page 36 for a reconciliation of total cash costs to reported production costs. |
• | Revenues decreased by $18 million, or 1%, primarily due to a $132 million decrease in gold revenues, partially offset by a $61 million increase in lead and zinc revenues, net of refining charges, and a $51 million increase in silver revenues. The decrease in revenues is primarily a result of lower gold and silver realized prices during the six months ended June 30, 2014, partially offset by higher volumes for gold, silver, and zinc; |
• | Production costs increased by $6 million, or 1%, due to revisions in estimates at the Company's inactive and closed mines in the second quarter of 2014 resulting in a $16 million increase in reclamation and closure costs; and increased water use payments in Peñasquito in the first quarter of 2014; partially offset by the impact of the Los Filos operations suspension in the second quarter of 2014; and favourable foreign exchange movements; |
• | Depreciation and depletion increased by $44 million, or 14%, due to higher sales volume and new assets put into service; |
• | Exploration and evaluation costs decreased by $8 million due to timing of expenditures at the Company's Canadian and Mexican operations; |
• | The Company’s share of net earnings of associates of $116 million was comprised of net earnings of $76 million from Pueblo Viejo; net earnings of $18 million from Alumbrera; and net earnings of $22 million from the Company's investments in Tahoe and Primero as a result of the commencement of commercial production at Tahoe, effective January 1, 2014. The Company’s share of net earnings of associates of $54 million in the six months ended June 30, 2013 was comprised of $55 million of net earnings from Pueblo Viejo; $2 million of net earnings from Alumbrera; partially offset by a net loss of $3 million from the Company's equity investments in Primero and Tahoe; |
• | An impairment of mining interests and goodwill of $2,558 million during the six months ended June 30, 2013. An impairment expense of $2,427 million and $131 million ($1,827 million and $131 million, net of tax) was recognized against the carrying value of the Peñasquito mines and the Cerro Blanco project, respectively; |
• | Corporate administration, excluding share-based compensation expense, was $85 million, which was comparable to the six months ended June 30, 2013. Share-based compensation expense of $40 million for the six months ended June 30, 2014 was comparable to the six months ended June 30, 2013; |
• | A $4 million gain on securities primarily due to the sale of certain available-for-sale equity and marketable securities in the six months ended June 30, 2014. A $12 million loss on securities was recognized in the second quarter of 2013 representing an impairment expense on certain of the Company's available-for-sale equity and marketable securities; |
• | An $8 million net gain on derivatives for the six months ended June 30, 2014 comprised of a $8 million net gain on foreign currency, heating oil, copper, lead, and zinc contracts. In the six months ended June 30, 2013, a $71 million net gain on derivatives was comprised of a $46 million unrealized gain on the conversion feature of the Convertible Notes; a $19 million net gain on the Silver Wheaton silver contract; and a $6 million net gain on foreign currency, heating oil, copper, lead, and zinc contracts; |
• | An $18 million net gain on disposition of mining interests for the six months ended June 30, 2014 as the Company sold its equity interest in Primero on March 26, 2014; |
• | Other expenses increased by $28 million primarily as a result of a decrease in interest income earned on the Company's cash and cash equivalents, money market investments and loans held with certain of the Company's associates; |
• | Income tax expense for the six months ended June 30, 2014 totaled $104 million (six months ended June 30, 2013 – income tax recovery of $462 million). Excluding the tax effects of the impairment of mining interests and goodwill in the second quarter of 2013, income tax expense for the six months ended June 30, 2013 was $138 million. Income tax expense for the period was primarily impacted by: |
▪ | An $82 million foreign exchange loss on the translation of deferred income tax assets and liabilities arising primarily from the Placer Dome and Glamis acquisitions in 2006 and the Camino Rojo and Cerro Negro acquisitions in 2010, compared to a $57 million foreign exchange loss in the six months ended June 30, 2013. The foreign exchange related deferred income tax impacts resulted from the weakening Canadian dollar and Argentine Peso and the strengthening Mexican peso (six months ended June 30, 2013 – weakening Mexican peso, Canadian dollar and Argentine peso); |
▪ | In the second quarter of 2013 a deferred income tax recovery of $600 million arising on the impairment of mining interests and goodwill was recognized; |
▪ | A decrease in the effective tax rate for the six months ended June 30, 2014 from 16% to 5%, after adjusting income taxes for the above noted items and the non-deductible share-based compensation expense and impairment of mining interests and goodwill from earnings before taxes. The six months ended June 30, 2014 were favourably impacted when compared to the six months ended June 30, 2013 by an increase in the tax deductible foreign exchange losses on US dollar denominated debt in Argentina, higher income from associates not being subject to tax because of the previously unrecognized tax benefits of losses, and the gain on sale of Primero not being subject to tax, partially offset by non-taxable realized and mark-to-market gains on the conversion feature of the Convertible Notes and the Silver Wheaton silver contract of $65 million in the six months ended June 30, 2013; |
• | A net loss from discontinued operation of $15 million for the six months ended June 30, 2014 due to the $21 million net loss recognized on the sale of the Company's 66.7% share of Marigold, which was classified as a discontinued operation during the six months ended June 30, 2014, partially offset by net earnings of $6 million for the six months ended June 30, 2014. The Company had net earnings of $15 million for the six months ended June 30, 2013 on the Company's 66.7% share of Marigold. |
(1) | Adjusted net earnings and adjusted net earnings per share are non-GAAP performance measures. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company’s performance. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Refer to page 40 for a reconciliation of adjusted net earnings to reported net earnings (loss) attributable to shareholders of Goldcorp. |
(2) | The Company has included non-GAAP performance measures – total cash costs, by-product and co-product, per gold ounce, throughout this document. In the gold mining industry, total cash costs is a common performance measure but does not have any standardized meaning. The Company follows the recommendations of the Gold Institute Production Cost Standard. The Company believes that, in addition to conventional measures prepared in accordance with GAAP, the Company and certain investors use this information to evaluate the Company’s performance and ability to generate cash flow. Accordingly, it is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Total cash costs on a by-product basis are calculated by deducting Goldcorp’s share of by-product silver, copper, lead and zinc sales revenues from Goldcorp’s share of production costs. Refer to page 36 for a reconciliation of total cash costs to reported production costs. |
Revenues | Gold produced (ounces) | Gold sold (ounces) | Average realized gold price (per ounce) | Total cash costs – by-product (per gold ounce) (2) | All-in sustaining costs (per gold ounce) (3) | ||||||||||||
Red Lake | 2014 | $ | 117 | 89,500 | 89,800 | $ | 1,300 | $ | 656 | $ | 1,066 | ||||||
2013 | $ | 164 | 122,500 | 119,500 | $ | 1,371 | $ | 523 | $ | 955 | |||||||
Porcupine | 2014 | 91 | 68,800 | 69,600 | 1,302 | 658 | 895 | ||||||||||
2013 | 98 | 69,800 | 70,600 | 1,377 | 782 | 1,176 | |||||||||||
Musselwhite | 2014 | 87 | 67,800 | 67,000 | 1,292 | 605 | 794 | ||||||||||
2013 | 89 | 62,800 | 63,300 | 1,394 | 786 | 1,214 | |||||||||||
Peñasquito | 2014 | 424 | 167,400 | 170,900 | 1,305 | 124 | 362 | ||||||||||
2013 | 232 | 88,100 | 79,600 | 1,256 | 920 | 1,484 | |||||||||||
Los Filos | 2014 | 58 | 48,700 | 45,700 | 1,280 | 778 | 1,077 | ||||||||||
2013 | 118 | 83,500 | 85,100 | 1,381 | 624 | 1,217 | |||||||||||
El Sauzal | 2014 | 19 | 15,600 | 14,500 | 1,291 | 1,011 | 1,234 | ||||||||||
2013 | 30 | 19,700 | 22,100 | 1,356 | 890 | 950 | |||||||||||
Marlin | 2014 | 88 | 43,500 | 43,600 | 1,291 | 525 | 981 | ||||||||||
2013 | 105 | 50,000 | 50,000 | 1,355 | 260 | 729 | |||||||||||
Wharf | 2014 | 22 | 15,000 | 15,500 | 1,298 | 711 | 804 | ||||||||||
2013 | 22 | 16,200 | 15,500 | 1,377 | 808 | 1,076 | |||||||||||
Alumbrera (1) | 2014 | 67 | 25,300 | 17,300 | 1,287 | 238 | 1,050 | ||||||||||
2013 | 81 | 29,900 | 24,200 | 1,216 | 299 | 1,140 | |||||||||||
Pueblo Viejo (1) | 2014 | 143 | 107,100 | 105,600 | 1,286 | 438 | 618 | ||||||||||
2013 | 105 | 81,000 | 71,700 | 1,413 | 507 | 739 | |||||||||||
Other (3) | 2014 | — | — | — | — | — | 103 | ||||||||||
2013 | — | — | — | — | — | 125 | |||||||||||
Total – continuing operations | 2014 | $ | 1,116 | 648,700 | 639,500 | $ | 1,296 | $ | 470 | $ | 852 | ||||||
2013 | $ | 1,044 | 623,500 | 601,600 | $ | 1,357 | $ | 636 | $ | 1,205 | |||||||
Marigold (4) | 2014 | — | — | — | — | — | — | ||||||||||
2013 | 31 | 22,500 | 22,700 | 1,368 | 901 | 1,829 | |||||||||||
Total – including discontinued operation | 2014 | $ | 1,116 | 648,700 | 639,500 | $ | 1,296 | $ | 470 | $ | 852 | ||||||
2013 | $ | 1,075 | 646,000 | 624,300 | $ | 1,358 | $ | 646 | $ | 1,227 |
(1) | The Company has included certain non-GAAP performance measures including the Company’s share of the applicable production, sales and financial information of Alumbrera and Pueblo Viejo, throughout this document; however, these performance measures do not have any standardized meaning. The Company believes that disclosing certain performance measures including Alumbrera and Pueblo Viejo presents a more relevant measurement of the Company’s operating and economic performance, and reflects the Company’s view of its core mining operations. |
(2) | Total cash costs per gold ounce on a by-product basis is calculated net of Goldcorp’s share of by-product sales revenues (by-product copper sales revenues for Alumbrera; by-product silver sales revenues for Marlin and Pueblo Viejo; and by-product lead and zinc sales revenues and 75% of silver sales revenues for Peñasquito at market silver prices, and 25% of silver sales revenues for Peñasquito at $4.05 per silver ounce (2013 – $4.02 per silver ounce) sold to Silver Wheaton). |
(3) | For the purpose of calculating all-in sustaining costs, the Company includes corporate administration expense, capital expenditures incurred at the Company's regional and head office corporate offices and regional office exploration expense as corporate all-in sustaining costs in the "Other" category. These costs are not allocated to the individual mine sites as the Company measures its operations' performance on all-in sustaining costs directly incurred at the mine site. All-in sustaining costs for Other is calculated using total corporate expenditures and the Company's consolidated gold sales ounces. |
(4) | The Company's 66.7% interest in Marigold continues to be classified as a discontinued operation for the three and six months ended June 30, 2014. The 2013 comparative information has been restated in accordance with the requirements of IFRS 5 – Non-current assets held for sale and discontinued operations. |
Revenues | Gold produced (ounces) | Gold sold (ounces) | Average realized gold price (per ounce) | Total cash costs – by-product (per gold ounce) (2) | All-in sustaining costs (per gold ounce) (3) | ||||||||||||
Red Lake | 2014 | $ | 248 | 184,500 | 191,000 | $ | 1,297 | $ | 639 | $ | 1,007 | ||||||
2013 | $ | 385 | 268,000 | 254,600 | $ | 1,507 | $ | 498 | $ | 862 | |||||||
Porcupine | 2014 | 176 | 135,300 | 135,300 | 1,295 | 679 | 919 | ||||||||||
2013 | 202 | 137,000 | 134,500 | 1,496 | 789 | 1,175 | |||||||||||
Musselwhite | 2014 | 175 | 142,700 | 135,800 | 1,287 | 624 | 790 | ||||||||||
2013 | 179 | 121,900 | 118,700 | 1,496 | 812 | 1,210 | |||||||||||
Peñasquito | 2014 | 786 | 297,200 | 291,600 | 1,317 | 147 | 366 | ||||||||||
2013 | 485 | 148,200 | 147,400 | 1,414 | 778 | 1,380 | |||||||||||
Los Filos | 2014 | 164 | 128,700 | 127,600 | 1,286 | 688 | 903 | ||||||||||
2013 | 246 | 165,000 | 163,500 | 1,496 | 607 | 1,129 | |||||||||||
El Sauzal | 2014 | 36 | 30,700 | 27,400 | 1,284 | 1,003 | 1,203 | ||||||||||
2013 | 56 | 37,900 | 37,800 | 1,467 | 914 | 983 | |||||||||||
Marlin | 2014 | 177 | 88,800 | 85,500 | 1,295 | 404 | 897 | ||||||||||
2013 | 229 | 100,000 | 98,700 | 1,492 | 182 | 687 | |||||||||||
Wharf | 2014 | 42 | 30,000 | 28,900 | 1,292 | 729 | 828 | ||||||||||
2013 | 40 | 28,700 | 26,700 | 1,479 | 819 | 1,042 | |||||||||||
Alumbrera (1) | 2014 | 213 | 55,600 | 57,800 | 1,292 | 146 | 618 | ||||||||||
2013 | 174 | 54,600 | 46,700 | 1,418 | 161 | 1,023 | |||||||||||
Pueblo Viejo (1) | 2014 | 299 | 213,300 | 220,700 | 1,286 | 467 | 623 | ||||||||||
2013 | 216 | 145,100 | 136,400 | 1,513 | 490 | 821 | |||||||||||
Other (3) | 2014 | — | — | — | — | — | 106 | ||||||||||
2013 | — | — | — | — | — | 122 | |||||||||||
Total – continuing operations | 2014 | $ | 2,316 | 1,306,800 | 1,301,600 | $ | 1,296 | $ | 479 | $ | 840 | ||||||
2013 | $ | 2,212 | 1,206,400 | 1,165,000 | $ | 1,485 | $ | 594 | $ | 1,159 | |||||||
Marigold (4) | 2014 | 28 | 21,800 | 21,900 | 1,289 | 1,117 | 1,207 | ||||||||||
2013 | 82 | 54,200 | 54,400 | 1,516 | 874 | 1,664 | |||||||||||
Total – including discontinued operation | 2014 | $ | 2,344 | 1,328,600 | 1,323,500 | $ | 1,296 | $ | 490 | $ | 846 | ||||||
2013 | $ | 2,294 | 1,260,600 | 1,219,400 | $ | 1,487 | $ | 606 | $ | 1,182 |
(1) | The Company has included certain non-GAAP performance measures including the Company’s share of the applicable production, sales and financial information of Alumbrera and Pueblo Viejo, throughout this document; however, these performance measures do not have any standardized meaning. The Company believes that disclosing certain performance measures including Alumbrera and Pueblo Viejo presents a more relevant measurement of the Company’s operating and economic performance, and reflects the Company’s view of its core mining operations. |
(2) | Total cash costs per gold ounce on a by-product basis is calculated net of Goldcorp’s share of by-product sales revenues (by-product copper sales revenues for Alumbrera; by-product silver sales revenues for Marlin and Pueblo Viejo; and by-product lead and zinc sales revenues and 75% of silver sales revenues for Peñasquito at market silver prices, and 25% of silver sales revenues for Peñasquito at $4.05 per silver ounce (2013 – $4.02 per silver ounce) sold to Silver Wheaton). |
(3) | For the purpose of calculating all-in sustaining costs, the Company includes corporate administration expense, capital expenditures incurred at the Company's regional and head office corporate offices and regional office exploration expense as corporate all-in sustaining costs in the "Other" category. These costs are not allocated to the individual mine sites as the Company measures its operations' performance on all-in sustaining costs directly incurred at the mine site. All-in sustaining costs for Other is calculated using total corporate expenditures and the Company's consolidated gold sales ounces. |
(4) | The Company's 66.7% interest in Marigold continues to be classified as a discontinued operation for the three and six months ended June 30, 2014. The 2013 comparative information has been restated in accordance with the requirements of IFRS 5 – Non-current assets held for sale and discontinued operations. |
Three months ended | |||||||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | ||||||||||
Tonnes of ore milled | 157,700 | 175,100 | 189,700 | 204,200 | 196,100 | ||||||||||
Average mill head grade (grams/tonne) | 18.77 | 16.66 | 22.65 | 15.11 | 20.91 | ||||||||||
Average recovery rate | 96 | % | 95 | % | 95 | % | 95 | % | 96 | % | |||||
Gold (ounces) | |||||||||||||||
– Produced | 89,500 | 95,000 | 128,000 | 97,000 | 122,500 | ||||||||||
– Sold | 89,800 | 101,200 | 121,400 | 111,300 | 119,500 | ||||||||||
Average realized gold price (per ounce) | $ | 1,300 | $ | 1,294 | $ | 1,243 | $ | 1,325 | $ | 1,371 | |||||
Total cash costs – by-product (per ounce) | $ | 656 | $ | 625 | $ | 500 | $ | 640 | $ | 523 | |||||
All-in sustaining costs (per ounce) | $ | 1,066 | $ | 954 | $ | 822 | $ | 986 | $ | 955 | |||||
Mining cost per tonne | $ | 245.61 | $ | 223.17 | $ | 211.41 | $ | 216.72 | $ | 241.96 | |||||
Milling cost per tonne | $ | 51.38 | $ | 48.73 | $ | 47.51 | $ | 42.52 | $ | 51.58 | |||||
Financial Data | |||||||||||||||
Revenues | $ | 117 | $ | 131 | $ | 151 | $ | 148 | $ | 164 | |||||
Depreciation and depletion | $ | 26 | $ | 27 | $ | 29 | $ | 26 | $ | 25 | |||||
Earnings from operations | $ | 31 | $ | 40 | $ | 60 | $ | 49 | $ | 74 | |||||
Expenditures on mining interests (1) | $ | 56 | $ | 54 | $ | 56 | $ | 55 | $ | 57 |
(1) | Expenditures on mining interests includes expenditures incurred at the Company's Cochenour gold project |
Three months ended | |||||||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | ||||||||||
Tonnes of ore milled | 1,081,400 | 867,700 | 1,081,800 | 1,123,600 | 989,600 | ||||||||||
Hoyle Pond underground (tonnes) | 55,200 | 71,000 | 82,200 | 84,100 | 90,800 | ||||||||||
Hoyle Pond underground (grams/tonne) | 16.82 | 16.30 | 14.80 | 14.14 | 14.12 | ||||||||||
Dome underground (tonnes) | 125,500 | 103,500 | 91,300 | 112,000 | 135,800 | ||||||||||
Dome underground (grams/tonnes) | 4.96 | 5.44 | 5.84 | 5.23 | 3.24 | ||||||||||
Hollinger Open Pit (tonnes) | 25,700 | — | — | — | — | ||||||||||
Hollinger Open Pit (grams/tonnes) | 1.15 | — | — | — | — | ||||||||||
Stockpile (tonnes) | 875,000 | 693,200 | 908,300 | 927,500 | 763,000 | ||||||||||
Stockpile (grams/tonne) | 0.89 | 0.77 | 0.89 | 0.83 | 0.75 | ||||||||||
Average mill head grade (grams/tonne) | 2.19 | 2.60 | 2.37 | 2.26 | 2.32 | ||||||||||
Average recovery rate | 93 | % | 93 | % | 93 | % | 94 | % | 94 | % | |||||
Gold (ounces) | |||||||||||||||
– Produced | 68,800 | 66,500 | 78,900 | 76,000 | 69,800 | ||||||||||
– Sold | 69,600 | 65,700 | 84,300 | 73,200 | 70,600 | ||||||||||
Average realized gold price (per ounce) | $ | 1,302 | $ | 1,287 | $ | 1,265 | $ | 1,339 | $ | 1,377 | |||||
Total cash costs – by-product (per ounce) | $ | 658 | $ | 701 | $ | 671 | $ | 637 | $ | 782 | |||||
All-in sustaining costs (per ounce) | $ | 895 | $ | 945 | $ | 907 | $ | 921 | $ | 1,176 | |||||
Mining cost per tonne | $ | 121.54 | $ | 127.65 | $ | 136.15 | $ | 115.16 | $ | 112.14 | |||||
Milling cost per tonne | $ | 7.44 | $ | 8.76 | $ | 8.17 | $ | 7.82 | $ | 9.96 | |||||
Financial Data | |||||||||||||||
Revenues | $ | 91 | $ | 85 | $ | 107 | $ | 98 | $ | 98 | |||||
Depreciation and depletion | $ | 12 | $ | 13 | $ | 15 | $ | 13 | $ | 15 | |||||
Earnings from operations (1) | $ | 21 | $ | 27 | $ | 60 | $ | 40 | $ | 26 | |||||
Expenditures on mining interests | $ | 18 | $ | 19 | $ | 26 | $ | 21 | $ | 27 |
(1) | Earnings from operations for the three months ended June 30, 2014 and December 31, 2013 were impacted by an increase and a decrease, respectively, in non-cash provisions related to the revision in estimates in the reclamation and closure cost obligations for the Porcupine mines' closed sites of $11 million and $25 million, respectively. |
Three months ended | |||||||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | ||||||||||
Tonnes of ore milled | 313,400 | 332,200 | 345,500 | 364,500 | 356,500 | ||||||||||
Average mill head grade (grams/tonne) | 7.12 | 7.30 | 6.88 | 5.37 | 5.60 | ||||||||||
Average recovery rate | 96 | % | 96 | % | 96 | % | 96 | % | 96 | % | |||||
Gold (ounces) | |||||||||||||||
– Produced | 67,800 | 74,900 | 74,600 | 59,800 | 62,800 | ||||||||||
– Sold | 67,000 | 68,800 | 78,200 | 56,800 | 63,300 | ||||||||||
Average realized gold price (per ounce) | $ | 1,292 | $ | 1,281 | $ | 1,270 | $ | 1,333 | $ | 1,394 | |||||
Total cash costs – by-product (per ounce) | $ | 605 | $ | 643 | $ | 675 | $ | 768 | $ | 786 | |||||
All-in sustaining costs (per ounce) | $ | 794 | $ | 787 | $ | 883 | $ | 1,114 | $ | 1,214 | |||||
Mining cost per tonne | $ | 71.41 | $ | 85.34 | $ | 77.40 | $ | 76.15 | $ | 71.85 | |||||
Milling cost per tonne | $ | 15.25 | $ | 15.69 | $ | 14.66 | $ | 13.70 | $ | 12.65 | |||||
Financial Data | |||||||||||||||
Revenues | $ | 87 | $ | 88 | $ | 99 | $ | 75 | $ | 89 | |||||
Depreciation and depletion | $ | 15 | $ | 14 | $ | 17 | $ | 12 | $ | 13 | |||||
Earnings from operations | $ | 30 | $ | 29 | $ | 29 | $ | 19 | $ | 23 | |||||
Expenditures on mining interests | $ | 12 | $ | 9 | $ | 14 | $ | 19 | $ | 23 |
Three months ended | ||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | |||||
Tonnes of ore mined – sulphide | 10,280,100 | 10,025,400 | 13,971,100 | 14,723,000 | 12,098,100 | |||||
Tonnes of ore mined – oxide | 135,700 | 1,121,200 | 2,224,600 | 5,095,000 | 2,083,200 | |||||
Tonnes of waste removed | 40,595,300 | 33,628,000 | 28,376,400 | 24,968,400 | 30,770,200 | |||||
Tonnes of total material moved | 51,011,100 | 44,774,600 | 44,572,100 | 44,786,500 | 44,951,400 | |||||
Ratio of waste to ore | 3.9 | 3.0 | 1.8 | 1.3 | 2.2 | |||||
Average head grade | ||||||||||
Gold (grams/tonne) | 0.78 | 0.59 | 0.55 | 0.50 | 0.43 | |||||
Silver (grams/tonne) | 30.08 | 32.92 | 31.05 | 24.08 | 22.51 | |||||
Lead | 0.24 | % | 0.33 | % | 0.34 | % | 0.27 | % | 0.25 | % |
Zinc | 0.59 | % | 0.63 | % | 0.58 | % | 0.55 | % | 0.54 | % |
Sulphide Ore | ||||||||||
Tonnes of ore milled | 10,050,000 | 9,220,400 | 9,717,100 | 10,115,100 | 9,600,800 | |||||
Average recovery rate | ||||||||||
Gold | 74 | % | 72 | % | 76 | % | 66 | % | 63 | % |
Silver | 82 | % | 81 | % | 80 | % | 78 | % | 77 | % |
Lead | 77 | % | 79 | % | 78 | % | 72 | % | 72 | % |
Zinc | 82 | % | 80 | % | 76 | % | 74 | % | 72 | % |
Concentrates Produced – Payable Metal Produced | ||||||||||
Gold (ounces) | 159,400 | 115,500 | 119,900 | 96,000 | 76,000 | |||||
Silver (ounces) | 6,758,700 | 7,055,100 | 7,049,200 | 5,448,600 | 4,737,000 | |||||
Lead (thousands of pounds) | 38,600 | 49,500 | 53,600 | 41,000 | 35,400 | |||||
Zinc (thousands of pounds) | 91,900 | 87,900 | 80,900 | 76,300 | 70,100 | |||||
Lead Concentrate (DMT) | 41,400 | 47,100 | 49,700 | 38,800 | 37,200 | |||||
Zinc Concentrate (DMT) | 90,900 | 85,200 | 77,700 | 72,800 | 68,000 | |||||
Oxide Ore | ||||||||||
Tonnes of ore processed | 135,700 | 1,202,900 | 2,224,600 | 5,095,000 | 2,083,200 | |||||
Produced | ||||||||||
Gold (ounces) | 8,000 | 14,300 | 21,800 | 17,900 | 12,100 | |||||
Silver (ounces) | 248,100 | 341,200 | 377,800 | 444,000 | 458,200 | |||||
Sulphide & Oxide Ores – Payable Metal Produced | ||||||||||
Gold (ounces) | 167,400 | 129,800 | 141,700 | 113,900 | 88,100 | |||||
Silver (ounces) | 7,006,800 | 7,396,300 | 7,427,000 | 5,892,600 | 5,195,200 | |||||
Lead (thousands of pounds) | 38,600 | 49,500 | 53,600 | 41,000 | 35,400 | |||||
Zinc (thousands of pounds) | 91,900 | 87,900 | 80,900 | 76,300 | 70,100 | |||||
Gold Equivalent Ounces (1) | 376,300 | 346,000 | 356,400 | 291,000 | 245,600 |
Three months ended | |||||||||||||||
June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | |||||||||||
Sulphide and Oxide Ores – Payable Metal Sold | |||||||||||||||
Gold (ounces) | 170,900 | 120,700 | 135,700 | 106,600 | 79,600 | ||||||||||
Silver (ounces) | 7,863,400 | 7,118,400 | 6,687,600 | 6,056,300 | 5,067,000 | ||||||||||
Lead (thousands of pounds) | 43,200 | 45,300 | 46,100 | 40,800 | 36,800 | ||||||||||
Zinc (thousands of pounds) | 77,000 | 90,100 | 77,000 | 66,800 | 61,800 | ||||||||||
Average realized prices | |||||||||||||||
Gold (per ounce) | $ | 1,305 | $ | 1,333 | $ | 1,222 | $ | 1,370 | $ | 1,256 | |||||
Silver (per ounce) (2) | $ | 16.28 | $ | 16.73 | $ | 16.18 | $ | 17.84 | $ | 15.50 | |||||
Lead (per pound) | $ | 0.97 | $ | 0.91 | $ | 1.00 | $ | 0.95 | $ | 0.93 | |||||
Zinc (per pound) | $ | 1.00 | $ | 0.90 | $ | 0.91 | $ | 0.85 | $ | 0.82 | |||||
Total Cash Costs – by-product (per ounce) (4) | $ | 124 | $ | 179 | $ | 102 | $ | 403 | $ | 920 | |||||
Total Cash Costs – co-product (per ounce of gold) (4) | $ | 610 | $ | 707 | $ | 666 | $ | 843 | $ | 998 | |||||
All-in sustaining costs (per ounce) | $ | 362 | $ | 371 | $ | 473 | $ | 830 | $ | 1,484 | |||||
Mining cost per tonne | $ | 2.21 | $ | 2.22 | $ | 2.27 | $ | 2.18 | $ | 2.36 | |||||
Milling cost per tonne | $ | 7.05 | $ | 7.99 | $ | 7.25 | $ | 7.41 | $ | 7.89 | |||||
General and administrative cost per tonne milled | $ | 2.38 | $ | 2.36 | $ | 2.19 | $ | 2.18 | $ | 2.84 | |||||
Off-site cost per tonne sold (lead) (5) | $ | 839 | $ | 632 | $ | 730 | $ | 725 | $ | 632 | |||||
Off-site cost per tonne sold (zinc) (5) | $ | 369 | $ | 340 | $ | 341 | $ | 347 | $ | 360 | |||||
Financial Data | |||||||||||||||
Revenues (2) | $ | 424 | $ | 362 | $ | 348 | $ | 315 | $ | 232 | |||||
Depreciation and depletion | $ | 69 | $ | 56 | $ | 42 | $ | 41 | $ | 42 | |||||
Earnings (loss) from operations (2)(3) | $ | 131 | $ | 80 | $ | 106 | $ | 55 | $ | (2,455 | ) | ||||
Expenditures on mining interests (6) | $ | 56 | $ | 19 | $ | 68 | $ | 56 | $ | 61 |
(1) | Gold equivalent ounces are calculated using the following assumptions: $1,300 per ounce of gold; by-product metal prices of $22.00 per ounce of silver; $3.00 per pound copper; $0.90 per pound of zinc; and $0.90 per pound of lead (2013 – $1,350; $24.00; $3.00; $0.85; and $0.80 respectively). By-product metals are converted to gold equivalent ounces by multiplying by-product metal production with the associated by-product metal price and dividing it by the gold price. |
(2) | Includes 25% of silver ounces sold to Silver Wheaton at $4.05 per ounce (2013 – $4.02 ounce). The remaining 75% of silver ounces are sold at market rates. |
(3) | During the second quarter of 2013, the Company recorded impairment charges of $2,427 million before tax ($1,827 million after tax) related to Peñasquito as a result of the change in the metal pricing environment related to in-situ exploration ounces, in combination with the changes to the LOM plan and the Mexican mining duty. |
(4) | The calculation of total cash costs per ounce of gold is net of by-product silver, lead and zinc sales revenues. If silver, lead and zinc were treated as co-products, total cash costs for the three months ended June 30, 2014 would be $610 per ounce of gold, $9.30 per ounce of silver, $0.92 per pound of lead and $0.70 per pound of zinc (2013 – $998, $15.95, $0.87, and $0.77, respectively). Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 2). The actual and budget silver price for Peñasquito takes into consideration that 25% of silver ounces are sold to Silver Wheaton at $4.05 per ounce (2013 – $4.02 ounce) with the remaining 75% of silver ounces sold at market rates. Using actual realized sales prices, the co-product total cash costs for the three months ended June 30, 2014 would be $626 per ounce of gold, $8.97 per ounce of silver, $0.88 per pound of lead, and $0.72 per pound of zinc (2013 – $997, $13.61, $1.05, and $0.85, respectively). |
(5) | Off-site costs consist primarily of transportation, warehousing, and treatment and refining charges. |
(6) | Expenditures on mining interests includes expenditures incurred at the Company's Camino Rojo gold project |
Three months ended | |||||||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | ||||||||||
Tonnes of ore mined | 3,472,600 | 6,877,700 | 7,579,800 | 6,805,300 | 6,526,600 | ||||||||||
Tonnes of waste removed | 6,608,800 | 10,156,600 | 10,547,800 | 11,626,000 | 11,468,200 | ||||||||||
Ratio of waste to ore | 1.9 | 1.5 | 1.4 | 1.7 | 1.8 | ||||||||||
Tonnes of ore processed | 3,480,200 | 6,834,300 | 8,046,500 | 6,753,400 | 6,572,700 | ||||||||||
Average grade processed (grams/tonne) | 0.75 | 0.72 | 0.74 | 0.67 | 0.70 | ||||||||||
Average recovery rate (1) | 49 | % | 49 | % | 49 | % | 49 | % | 49 | % | |||||
Gold (ounces) | |||||||||||||||
– Produced | 48,700 | 80,000 | 94,000 | 73,400 | 83,500 | ||||||||||
– Sold | 45,700 | 81,900 | 88,800 | 73,600 | 85,100 | ||||||||||
Average realized gold price (per ounce) | $ | 1,280 | $ | 1,289 | $ | 1,263 | $ | 1,335 | $ | 1,381 | |||||
Total cash costs – by-product (per ounce) | $ | 778 | $ | 638 | $ | 637 | $ | 640 | $ | 624 | |||||
All-in sustaining costs (per ounce) | $ | 1,077 | $ | 805 | $ | 860 | $ | 891 | $ | 1,217 | |||||
Open-pit mining cost per tonne | $ | 1.65 | $ | 1.67 | $ | 1.84 | $ | 1.77 | $ | 1.74 | |||||
Processing cost per tonne leached | $ | 2.37 | $ | 2.15 | $ | 2.12 | $ | 2.31 | $ | 2.74 | |||||
Financial Data | |||||||||||||||
Revenues | $ | 58 | $ | 106 | $ | 113 | $ | 98 | $ | 118 | |||||
Depreciation and depletion | $ | 12 | $ | 16 | $ | 17 | $ | 13 | $ | 17 | |||||
Earnings from operations | $ | 10 | $ | 37 | $ | 40 | $ | 37 | $ | 47 | |||||
Expenditures for mining interests | $ | 11 | $ | 16 | $ | 13 | $ | 13 | $ | 44 |
(1) | Recovery is reported on a cumulative basis to reflect the cumulative recovery of ore on the leach pad, and does not reflect the true recovery expected over time. |
Three months ended | |||||||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | ||||||||||
Tonnes of ore mined | 476,400 | 572,900 | 559,100 | 587,300 | 556,000 | ||||||||||
Tonnes of waste removed | 3,343,700 | 3,062,300 | 3,379,600 | 3,121,900 | 3,030,400 | ||||||||||
Ratio of waste to ore | 7.0 | 5.3 | 6.0 | 5.3 | 5.5 | ||||||||||
Tonnes of ore milled | 453,700 | 493,300 | 461,800 | 504,500 | 485,500 | ||||||||||
Average mill head grade (grams/tonne) | 1.21 | 1.16 | 1.54 | 1.40 | 1.35 | ||||||||||
Average recovery rate | 88 | % | 82 | % | 93 | % | 94 | % | 93 | % | |||||
Gold (ounces) | |||||||||||||||
– Produced | 15,600 | 15,100 | 21,300 | 21,400 | 19,700 | ||||||||||
– Sold | 14,500 | 12,900 | 21,200 | 21,800 | 22,100 | ||||||||||
Average realized gold price (per ounce) | $ | 1,291 | $ | 1,277 | $ | 1,269 | $ | 1,334 | $ | 1,356 | |||||
Total cash costs – by-product (per ounce) | $ | 1,011 | $ | 994 | $ | 850 | $ | 751 | $ | 890 | |||||
All-in sustaining costs (per ounce) | $ | 1,234 | $ | 1,168 | $ | 880 | $ | 831 | $ | 950 | |||||
Mining cost per tonne | $ | 1.56 | $ | 1.81 | $ | 1.97 | $ | 1.77 | $ | 1.99 | |||||
Milling cost per tonne | $ | 13.16 | $ | 10.75 | $ | 13.79 | $ | 11.98 | $ | 13.11 | |||||
Financial Data | |||||||||||||||
Revenues | $ | 19 | $ | 17 | $ | 27 | $ | 30 | $ | 30 | |||||
Depreciation and depletion | $ | 4 | $ | 4 | $ | 8 | $ | 9 | $ | 9 | |||||
Earnings (loss) from operations (1) | $ | (1 | ) | $ | (1 | ) | $ | (28 | ) | $ | 2 | $ | — | ||
Expenditures on mining interests | $ | — | $ | — | $ | — | $ | — | $ | — |
(1) | During the fourth quarter of 2013, the Company recorded impairment charges of $29 million before tax ($20 million after tax) related to El Sauzal as a result of changes in metal price assumptions and the increase in estimated reclamation costs as it approaches the end of its mine life. |
Three months ended | |||||||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | ||||||||||
Tonnes of ore milled | 485,400 | 472,700 | 491,700 | 497,800 | 472,100 | ||||||||||
Average mill head grade (grams/tonne) | |||||||||||||||
– Gold | 2.88 | 3.15 | 3.36 | 3.24 | 3.44 | ||||||||||
– Silver | 109 | 132 | 131 | 118 | 127 | ||||||||||
Average recovery rate | |||||||||||||||
– Gold | 97 | % | 97 | % | 97 | % | 96 | % | 96 | % | |||||
– Silver | 94 | % | 94 | % | 93 | % | 92 | % | 92 | % | |||||
Produced (ounces) | |||||||||||||||
– Gold | 43,500 | 45,300 | 52,800 | 49,400 | 50,000 | ||||||||||
– Silver | 1,584,400 | 1,836,000 | 1,969,100 | 1,715,000 | 1,778,000 | ||||||||||
– Gold Equivalent Ounces (1) | 70,300 | 76,400 | 87,800 | 79,900 | 81,600 | ||||||||||
Sold (ounces) | |||||||||||||||
– Gold | 43,600 | 41,900 | 54,700 | 51,200 | 50,000 | ||||||||||
– Silver | 1,579,600 | 1,699,900 | 2,011,800 | 1,779,200 | 1,803,000 | ||||||||||
Average realized price (per ounce) | |||||||||||||||
– Gold | $ | 1,291 | $ | 1,300 | $ | 1,260 | $ | 1,344 | $ | 1,355 | |||||
– Silver | $ | 19.78 | $ | 20.62 | $ | 20.63 | $ | 21.43 | $ | 20.81 | |||||
Total cash costs – by-product (per ounce) (2) | $ | 525 | $ | 277 | $ | 159 | $ | 259 | $ | 260 | |||||
Total cash costs – co-product (per ounce) (2) | $ | 770 | $ | 658 | $ | 539 | $ | 603 | $ | 599 | |||||
All-in sustaining costs (per ounce) | $ | 981 | $ | 809 | $ | 515 | $ | 635 | $ | 729 | |||||
Mining cost per tonne | $ | 75.39 | $ | 70.64 | $ | 61.61 | $ | 65.96 | $ | 62.10 | |||||
Milling cost per tonne | $ | 25.24 | $ | 27.66 | $ | 24.11 | $ | 25.47 | $ | 30.62 | |||||
Financial Data | |||||||||||||||
Revenues | $ | 88 | $ | 89 | $ | 111 | $ | 107 | $ | 105 | |||||
Depreciation and depletion | $ | 36 | $ | 35 | $ | 39 | $ | 37 | $ | 35 | |||||
Earnings from operations | $ | (7 | ) | $ | 5 | $ | 18 | $ | 18 | $ | 17 | ||||
Expenditures on mining interests | $ | 22 | $ | 16 | $ | 15 | $ | 15 | $ | 17 |
(1) | Gold equivalent ounces are calculated using the following assumptions: $1,300 per ounce of gold; by-product metal prices of $22.00 per ounce of silver; $3.00 per pound of copper; $0.90 per pound zinc; and $0.90 per pound of lead (2013 – $1,350; $24.00; $3.00; $0.85; and $0.80, respectively). By-product metals are converted to gold equivalent ounces by multiplying by-product metal production with the associated by-product metal price and dividing it by the gold price. |
(2) | The calculation of total cash costs per ounce of gold is net of by-product silver sales revenues. If silver were treated as a co-product, average total cash costs at Marlin for the three months ended June 30, 2014 would be $770 per ounce of gold and $13.02 per ounce of silver (2013 – $599 and $11.44, respectively). Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 2). Using actual realized sales prices, the co-product total cash costs for the three months ended June 30, 2014 would be $794 per ounce of gold and $12.36 per ounce of silver (2013 – $645 and $10.14, respectively). |
Three months ended | |||||||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | ||||||||||
Tonnes of ore mined | 1,015,800 | 751,100 | 591,800 | 166,800 | 656,200 | ||||||||||
Tonnes of ore processed | 975,000 | 751,100 | 637,100 | 996,900 | 831,300 | ||||||||||
Average grade processed (grams/tonne) | 0.72 | 0.82 | 0.98 | 0.63 | 0.64 | ||||||||||
Average recovery rate | 80 | % | 80 | % | 79 | % | 80 | % | 81 | % | |||||
Gold (ounces) | |||||||||||||||
– Produced | 15,000 | 15,000 | 10,800 | 16,700 | 16,200 | ||||||||||
– Sold | 15,500 | 13,400 | 10,600 | 18,200 | 15,500 | ||||||||||
Average realized gold price (per ounce) | $ | 1,298 | $ | 1,285 | $ | 1,266 | $ | 1,310 | $ | 1,377 | |||||
Total cash costs – by-product (per ounce) (1) | $ | 711 | $ | 751 | $ | 1,092 | $ | 980 | $ | 808 | |||||
All-in sustaining costs (per ounce) | $ | 804 | $ | 856 | $ | 1,411 | $ | 1,204 | $ | 1,076 | |||||
Mining cost per tonne | $ | 2.97 | $ | 2.98 | $ | 3.01 | $ | 4.08 | $ | 4.04 | |||||
Processing cost per tonne | $ | 1.33 | $ | 1.76 | $ | 2.45 | $ | 1.56 | $ | 1.60 | |||||
Financial Data | |||||||||||||||
Revenues | $ | 22 | $ | 20 | $ | 14 | $ | 24 | $ | 22 | |||||
Depreciation and depletion | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | 1 | |||||
Earnings from operations | $ | 9 | $ | 6 | $ | 1 | $ | 5 | $ | 8 | |||||
Expenditures on mining interests | $ | 1 | $ | 1 | $ | 1 | $ | 4 | $ | 5 |
(1) | The calculation of total cash costs per ounce of gold is net of by-product silver sales revenues of $2 million for the three months ended June 30, 2014 (six months ended June 30, 2014 – $5 million). If silver were treated as a co-product, average total cash costs at Wharf for the three and six months ended June 30, 2014 would be $757 per ounce and $787 per ounce of gold, respectively, and $12.51 per ounce and $12.98 per ounce of silver, respectively. Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 2). Using actual realized sales prices, the co-product total cash costs for the three and six months ended June 30, 2014 would be $765 per ounce and $793 per ounce of gold, respectively, and $11.34 per ounce and $12.15 per ounce of silver, respectively. |
Three months ended | |||||||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | ||||||||||
Tonnes of ore mined | 1,455,100 | 1,409,200 | 3,585,800 | 2,420,700 | 1,844,400 | ||||||||||
Tonnes of waste removed | 4,568,200 | 4,504,600 | 4,098,200 | 4,847,400 | 5,871,700 | ||||||||||
Ratio of waste to ore | 3.1 | 3.2 | 1.1 | 2.0 | 3.2 | ||||||||||
Tonnes of ore milled | 3,492,300 | 3,324,400 | 3,634,800 | 3,304,300 | 3,561,700 | ||||||||||
Average mill head grade | |||||||||||||||
– Gold (grams/tonne) | 0.34 | 0.42 | 0.40 | 0.37 | 0.38 | ||||||||||
– Copper | 0.33 | % | 0.39 | % | 0.43 | % | 0.37 | % | 0.37 | % | |||||
Average recovery rate | |||||||||||||||
– Gold | 65 | % | 67 | % | 73 | % | 74 | % | 69 | % | |||||
– Copper | 74 | % | 77 | % | 84 | % | 81 | % | 77 | % | |||||
Produced | |||||||||||||||
– Gold (ounces) | 25,300 | 30,300 | 34,000 | 28,900 | 29,900 | ||||||||||
– Copper (thousands of pounds) | 19,300 | 21,500 | 28,800 | 21,400 | 21,600 | ||||||||||
– Gold Equivalent Ounces (1) | 69,700 | 79,900 | 98,000 | 76,500 | 77,900 | ||||||||||
Sold | |||||||||||||||
– Gold (ounces) | 17,300 | 40,500 | 24,900 | 32,000 | 24,200 | ||||||||||
– Copper (thousands of pounds) | 13,000 | 32,100 | 20,300 | 21,800 | 19,400 | ||||||||||
Average realized price | |||||||||||||||
– Gold (per ounce) | $ | 1,287 | $ | 1,293 | $ | 1,249 | $ | 1,379 | $ | 1,216 | |||||
– Copper (per pound) | $ | 3.39 | $ | 3.09 | $ | 3.21 | $ | 3.40 | $ | 2.63 | |||||
Total cash costs – by-product (per ounce) (2) | $ | 238 | $ | 106 | $ | (558 | ) | $ | (281 | ) | $ | 299 | |||
Total cash costs – co-product (2) | $ | 910 | $ | 784 | $ | 692 | $ | 777 | $ | 907 | |||||
All-in sustaining costs (per gold ounce) | $ | 1,050 | $ | 433 | $ | 37 | $ | 307 | $ | 1,140 | |||||
Mining cost per tonne | $ | 3.45 | $ | 3.53 | $ | 3.02 | $ | 3.17 | $ | 3.17 | |||||
Milling cost per tonne | $ | 6.07 | $ | 5.72 | $ | 5.80 | $ | 6.77 | $ | 6.70 | |||||
Financial Data (3) | |||||||||||||||
Revenues | $ | 67 | $ | 146 | $ | 95 | $ | 119 | $ | 81 | |||||
Depreciation and depletion | $ | 7 | $ | 7 | $ | 49 | $ | 28 | $ | 16 | |||||
Earnings (loss) from operations (4) | $ | 10 | $ | 41 | $ | (399 | ) | $ | 25 | $ | 3 | ||||
Expenditures on mining interests | $ | 10 | $ | 9 | $ | 10 | $ | 20 | $ | 20 |
(1) | Gold equivalent ounces are calculated using the following assumptions: $1,300 per ounce of gold; by-product metal prices of $22.00 per ounce of silver; $3.00 per pound of copper; $0.90 per pound of zinc; and $0.90 per pound of lead (2013 – $1,350; $24.00; $3.00; $0.85; and $0.80, respectively). By-product metals are converted to gold equivalent ounces by multiplying by-product metal production with the associated by-product metal price and dividing it by the gold price. |
(2) | The calculation of total cash costs per ounce of gold is net of by-product copper sales revenue. If copper were treated as a co-product, total cash costs for the three months ended June 30, 2014 would be $910 per ounce of gold and $2.56 per pound of copper (2013 – $907 and $2.18, respectively). Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 2). Using actual realized sales prices, the co-product total cash costs for the three months ended June 30, 2014 would be $888 per ounce of gold and $2.63 per pound for copper (2013 – $886 and $2.12, respectively). |
(3) | The Company’s 37.5% interest in Alumbrera is classified as an investment in associate and is accounted for using the equity method with the Company’s share of net earnings and net assets separately disclosed in the Consolidated Statements of Earnings and Consolidated Balance Sheets, respectively. The financial data disclosed in the table represents the financial data of Alumbrera on a proportionate rather than equity basis. |
(4) | During the fourth quarter of 2013, the Company recognized an impairment expense of $276 million before tax ($276 million, after tax) in respect of its investment in Alumbrera. |
Three months ended | |||||||||||||||
Operating Data | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | ||||||||||
Tonnes of ore mined | 2,008,600 | 2,541,800 | 1,720,100 | 672,200 | 943,700 | ||||||||||
Tonnes of waste removed | 1,492,000 | 867,000 | 915,900 | 186,900 | 134,400 | ||||||||||
Ratio of waste to ore | 0.74 | 0.34 | 0.53 | 0.28 | 0.14 | ||||||||||
Tonnes of ore processed | 650,200 | 653,900 | 632,400 | 407,200 | 443,400 | ||||||||||
Average grade (grams/tonne) | |||||||||||||||
– Gold | 5.47 | 5.52 | 5.68 | 6.23 | 6.02 | ||||||||||
– Silver | 28.6 | 29.0 | 37.7 | 48.9 | 40.0 | ||||||||||
Average recovery rate | |||||||||||||||
– Gold | 94 | % | 92 | % | 91 | % | 92 | % | 94 | % | |||||
– Silver | 66 | % | 58 | % | 49 | % | 23 | % | 36 | % | |||||
Produced | |||||||||||||||
– Gold (ounces) | 107,100 | 106,200 | 104,700 | 75,400 | 81,000 | ||||||||||
– Silver (ounces) | 392,800 | 349,100 | 372,000 | 137,000 | 206,800 | ||||||||||
– Gold Equivalent Ounces (1) | 113,700 | 112,100 | 111,300 | 77,800 | 84,700 | ||||||||||
Sold | |||||||||||||||
– Gold (ounces) | 105,600 | 115,100 | 78,000 | 82,000 | 71,700 | ||||||||||
– Silver (ounces) | 365,100 | 379,400 | 188,800 | 190,200 | 135,000 | ||||||||||
Average realized price | |||||||||||||||
– Gold (per ounce) | $ | 1,286 | $ | 1,287 | $ | 1,278 | $ | 1,318 | $ | 1,413 | |||||
– Silver (per ounce) | $ | 19.50 | $ | 20.65 | $ | 20.68 | $ | 20.89 | $ | 23.10 | |||||
Total cash costs – by-product (per ounce) (2) | $ | 438 | $ | 493 | $ | 592 | $ | 553 | $ | 507 | |||||
Total cash costs – co-product (per ounce) (2) | $ | 478 | $ | 532 | $ | 614 | $ | 576 | $ | 531 | |||||
All-in sustaining costs (per gold ounce) | $ | 618 | $ | 628 | $ | 688 | $ | 690 | $ | 739 | |||||
Mining cost per tonne | $ | 2.38 | $ | 2.64 | $ | 2.84 | $ | 7.01 | $ | 4.79 | |||||
Milling cost per tonne | $ | 56.23 | $ | 55.41 | $ | 74.30 | $ | 90.33 | $ | 63.98 | |||||
Financial Data (3) | |||||||||||||||
Revenues | $ | 143 | $ | 156 | $ | 103 | $ | 112 | $ | 105 | |||||
Depreciation and depletion | $ | 28 | $ | 25 | $ | 14 | $ | 16 | $ | 11 | |||||
Earnings from operations | $ | 71 | $ | 66 | $ | 43 | $ | 46 | $ | 52 | |||||
Expenditures on mining interests | $ | 16 | $ | 12 | $ | 10 | $ | 9 | $ | 42 |
(1) | Gold equivalent ounces are calculated using the following assumptions: $1,300 per ounce of gold; by-product metal prices of $22.00 per ounce of silver; $3.00 per pound of copper; $0.90 per pound of zinc; and $0.90 per pound of lead (2013 – $1,350; $24.00; $3.00; $0.85; and $0.80, respectively). By-product metals are converted to gold equivalent ounces by multiplying by-product metal production with the associated by-product metal price and dividing it by the gold price. |
(2) | The calculation of total cash costs per ounce of gold is net of by-product silver sales revenue. If silver were treated as a co-product, total cash costs for the three months ended June 30, 2014 would be $478 per ounce of gold and $8.01 per ounce of silver (2013 – $531 and $9.96, respectively). Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 2). Using actual realized sales prices, the co-product total cash costs for the three months ended June 30, 2014 would be $480 per ounce of gold and $7.32 per ounce of silver (2013 – $534 and $8.72, respectively). |
(3) | The Company’s 40% interest in Pueblo Viejo is classified as an investment in associate and is accounted for using the equity method with the Company’s share of net earnings and net assets separately disclosed in the Consolidated Statements of Earnings and Consolidated Balance Sheets, respectively. The financial data disclosed in the table represents the financial data of Pueblo Viejo on a proportionate rather than equity basis. |
• | Construction of processing facility scope related to the introduction of "first feed" 99% complete; |
• | Construction of the high voltage power line complete, with the first stage of commissioning completed by Transpa, the Argentinean power transportation authority; |
• | Construction of the Cerro Negro Substation approximately 92% complete, with the system expected to be completed in the third quarter of 2014; |
• | Completion of the tailings line and tailings storage facility; and |
• | Successful completion of water testing of the various circuits to capacities equal to design capacity of 4,000 tpd. |
Three Months Ended | ||||||||||||
Cerro Negro Production (Surface Stockpile) | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | Cumulative Project to date | ||||||
Tonnes | 121,926 | 125,200 | 127,500 | 67,300 | 38,700 | 532,026 | ||||||
Average grade (grams/tonne) | ||||||||||||
– Gold | 7.39 | 8.27 | 8.24 | 11.86 | 14.23 | 9.28 | ||||||
– Silver | 105.1 | 132.7 | 146.7 | 274.7 | 262.0 | 165.4 |
Three Months Ended | ||||||||||||
Development Area (Metres) | June 30 2014 | March 31 2014 | December 31 2013 | September 30 2013 | June 30 2013 | Cumulative Project to date | ||||||
Eureka | 1,355 | 626 | 966 | 1,185 | 1,273 | 14,098 | ||||||
Mariana Central | 1,053 | 475 | 684 | 630 | 442 | 4,098 | ||||||
Mariana Norte | — | — | 9 | 337 | 387 | 1,224 | ||||||
Total | 2,408 | 1,101 | 1,659 | 2,152 | 2,102 | 19,420 |
• | Completed construction of the administration building, garage and warehouse; and |
• | Completed commissioning of the Industrial Water Treatment Plant to its design capacity of 26,000 cubic metres per day. |
• | Reached 90% completion on construction of the processing plant; |
• | Rotated the Ball Mill on its own power in June; |
• | Reached the final stage of equipment installation while piping, electrical, and instrumentation activities were at their peak in all of the ore processing areas; and |
• | All major equipment has been received on site. |
• | The tailings management facility is now expected to be completed during the third quarter of 2014 after finalizing the installation of the remaining membrane. |
• | The exploration ramp reached 5,007 metres, corresponding to a depth of 733 metres below surface; |
• | The production shaft reached a depth of 842 metres; |
• | Ore stockpile on surface of 63,000 tonnes; |
• | Commissioning of underground ore handling system; |
• | First production blast occurred in May; and |
• | Commenced development of a new mining horizon in the upper mine. |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Continuing operations | ||||||||||||
Production costs per unaudited condensed interim consolidated financial statements (1) | $ | 506 | $ | 524 | $ | 1,006 | $ | 1,000 | ||||
Non-cash reclamation and closure cost obligations | (16 | ) | — | (16 | ) | — | ||||||
Treatment and refining charges on concentrate sales | 51 | 33 | 93 | 55 | ||||||||
Realized (gains) losses on foreign currency, heating oil and commodity contracts | (1 | ) | (11 | ) | 2 | (16 | ) | |||||
Other | (3 | ) | (6 | ) | (5 | ) | (6 | ) | ||||
Consolidated total cash costs | 537 | 540 | 1,080 | 1,033 | ||||||||
Alumbrera and Pueblo Viejo total cash costs | 106 | 106 | 279 | 203 | ||||||||
Goldcorp’s share of total cash costs | 643 | 646 | 1,359 | 1,236 | ||||||||
Goldcorp's share of by-product silver, copper, lead and zinc sales | (342 | ) | (264 | ) | (735 | ) | (545 | ) | ||||
Goldcorp’s share of total cash costs (by-product) | $ | 301 | $ | 382 | $ | 624 | $ | 691 | ||||
Divided by ounces of Goldcorp’s share of gold sold | 639,500 | 601,600 | 1,301,600 | 1,165,000 | ||||||||
Goldcorp’s share of total cash costs (by-product) per gold ounce (2) | $ | 470 | $ | 636 | $ | 479 | $ | 593 | ||||
Including discontinued operation | ||||||||||||
Goldcorp's share of total cash costs (by-product) from continuing operations | $ | 301 | $ | 382 | $ | 624 | $ | 691 | ||||
Total cash costs – Marigold | — | 21 | 24 | 48 | ||||||||
Goldcorp's share of total cash costs (by-product) including discontinued operation | $ | 301 | $ | 403 | $ | 648 | $ | 739 | ||||
Divided by ounces of Goldcorp's share of gold sold | 639,500 | 624,300 | 1,323,500 | 1,219,400 | ||||||||
Goldcorp’s share of total cash costs (by-product) per gold ounce (2) | $ | 470 | $ | 646 | $ | 490 | $ | 606 |
(1) | $17 million and $33 million in royalties are included in production costs for the three and six months ended June 30, 2014, respectively (three and six months ended June 30, 2013 – $12 million and $27 million, respectively). |
(2) | If silver, lead and zinc for Peñasquito, silver for Marlin and Pueblo Viejo, and copper for Alumbrera were treated as co-products, Goldcorp's share of total co-product cash costs from continuing operations for the three and six months ended June 30, 2014, would be $643 and $652 per ounce of gold, $9.85 and $10.18 per ounce of silver, $2.56 and $2.35 per pound of copper, $0.70 and $0.71 per pound of zinc, and $0.92 and $0.88 per pound of lead, respectively (three and six months ended June 30, 2013 – $702 and $702 per ounce of gold, $14.68 and $15.13 per ounce of silver, $2.18 and $2.24 per pound of copper, $0.77 and $0.79 per pound of zinc, and $0.87 and $0.92 per pound of lead, respectively). Goldcorp's share of total co-product cash costs including discontinued operations for the three and six months ended June 30, 2014, would be $643 and $659 per ounce of gold, $9.85 and $10.18 per ounce of silver, $2.56 and $2.35 per pound of copper, $0.70 and $0.71 per pound of zinc, and $0.92 and $0.88 per pound of lead, respectively (three and six months ended June 30, 2013 – $713 and $710 per ounce of gold, $14.68 and $15.13 per ounce of silver, $2.18 and $2.24 per pound of copper, $0.77 and $0.79 per pound of zinc, and $0.87 and $0.92 per pound of lead, respectively). |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 (2) | 2014 | 2013 (2) | |||||||||
Continuing operations | ||||||||||||
Total cash costs (by-product) | $ | 301 | $ | 382 | $ | 624 | $ | 691 | ||||
Corporate administration | 59 | 63 | 125 | 123 | ||||||||
Exploration and evaluation costs | 6 | 12 | 17 | 25 | ||||||||
Reclamation cost accretion and amortization | 16 | 10 | 33 | 16 | ||||||||
Sustaining capital expenditures | 163 | 255 | 294 | 493 | ||||||||
Other | — | 4 | — | 4 | ||||||||
All-in sustaining costs | $ | 545 | $ | 726 | $ | 1,093 | $ | 1,352 | ||||
Divided by ounces of Goldcorp's share of gold sold | 639,500 | 601,600 | 1,301,600 | 1,165,000 | ||||||||
All-in sustaining costs per gold ounce | $ | 852 | $ | 1,205 | $ | 840 | $ | 1,161 | ||||
Including discontinued operation | ||||||||||||
All-in sustaining costs from continuing operations | $ | 545 | $ | 726 | $ | 1,093 | 1,352 | |||||
All-in sustaining costs – Marigold | — | 41 | 26 | 90 | ||||||||
All-in sustaining costs – including discontinued operation | 545 | 767 | 1,119 | 1,442 | ||||||||
Divided by ounces of Goldcorp's share of gold sold | 639,500 | 624,300 | 1,323,500 | 1,219,400 | ||||||||
All-in sustaining costs per gold ounce – including discontinued operation | $ | 852 | $ | 1,227 | $ | 846 | $ | 1,182 |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013(2) | 2014 | 2013(2) | |||||||||
Expenditures on mining interests and deposits per unaudited condensed interim consolidated financial statements | $ | 524 | $ | 562 | $ | 1,018 | $ | 1,073 | ||||
Expenditures on mining interests by Alumbrera and Pueblo Viejo (1) | 26 | 50 | 47 | 89 | ||||||||
Goldcorp’s share of expenditures on mining interests and deposits | $ | 550 | $ | 612 | $ | 1,065 | $ | 1,162 | ||||
Sustaining capital expenditures | $ | 163 | $ | 255 | $ | 294 | $ | 493 | ||||
Project capital expenditures | 387 | 357 | 771 | 669 | ||||||||
$ | 550 | $ | 612 | $ | 1,065 | $ | 1,162 |
(1) | Expenditures on mining interests by Alumbrera and Pueblo Viejo represent mining interest expenditures, net of additional funding investments, which are included in expenditures on mining interests per the unaudited condensed interim consolidated financial statements. |
(2) | During the fourth quarter of 2013, the Company determined that certain capital expenditures incurred at Pueblo Viejo which had previously been included as sustaining capital expenditures met the definition of expansionary capital expenditures for the purposes of calculating all-in sustaining costs. The comparative 2013 quarterly amounts have been restated. |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Continuing operations | ||||||||||||
Net earnings (loss) from continuing operations attributable to shareholders of Goldcorp Inc. | $ | 200 | $ | (1,939 | ) | $ | 294 | $ | (1,640 | ) | ||
Revisions in estimates and liabilities incurred on reclamation and closure cost obligations at the Company's inactive and closed sites, net of tax | 11 | — | 11 | — | ||||||||
Share of net (earnings) losses of associates, net of tax | (15 | ) | 4 | (17 | ) | 8 | ||||||
Impairment of mining interests, net of tax | 1,958 | — | 1,958 | |||||||||
(Gains) losses on available-for-sale securities, net of tax | (4 | ) | 9 | (3 | ) | 12 | ||||||
Gains on derivatives, net of tax | (10 | ) | (16 | ) | (7 | ) | (57 | ) | ||||
Gain on disposition of mining interests, net of tax | — | — | (18 | ) | — | |||||||
Unrealized (gains) losses on foreign exchange translation of deferred income tax assets and liabilities | (24 | ) | 74 | 82 | 57 | |||||||
Foreign exchange losses on capital projects | 4 | 22 | 25 | 22 | ||||||||
Deferred income tax impact on Guatemalan tax election and other | — | — | — | (5 | ) | |||||||
Total adjusted net earnings | $ | 162 | $ | 112 | $ | 367 | $ | 355 | ||||
Weighted average shares outstanding (000’s) | 812,954 | 812,043 | 812,918 | 811,857 | ||||||||
Adjusted net earnings from continuing operations per share | $ | 0.20 | $ | 0.14 | $ | 0.45 | $ | 0.44 | ||||
Including discontinued operation | ||||||||||||
Total adjusted net earnings from continuing operations | $ | 162 | $ | 112 | $ | 367 | $ | 355 | ||||
Net (loss) earnings from discontinued operation attributable to shareholders of Goldcorp Inc. | (19 | ) | 5 | (15 | ) | 15 | ||||||
Loss on disposition, net of tax – Marigold | 21 | — | 21 | — | ||||||||
Total adjusted net earnings including discontinued operation | $ | 164 | $ | 117 | $ | 373 | $ | 370 | ||||
Weighted average shares outstanding (000’s) | 812,954 | 812,043 | 812,918 | 811,857 | ||||||||
Adjusted net earnings per share including discontinued operation | $ | 0.20 | $ | 0.14 | $ | 0.46 | $ | 0.46 |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Net cash provided by operating activities of continuing operations | $ | 276 | $ | 74 | $ | 546 | $ | 343 | ||||
Change in working capital | 66 | 260 | 23 | 308 | ||||||||
Dividends from associates | (33 | ) | (23 | ) | (67 | ) | (44 | ) | ||||
Adjusted operating cash flows provided by Alumbrera and Pueblo Viejo | 68 | 67 | 153 | 148 | ||||||||
Goldcorp’s share of adjusted operating cash flows | $ | 377 | $ | 378 | $ | 655 | $ | 755 | ||||
Including discontinued operation | ||||||||||||
Adjusted operating cash flows – Marigold | (1 | ) | 10 | 2 | 33 | |||||||
Goldcorp’s share of adjusted operating cash flows including discontinued operation | $ | 376 | $ | 388 | $ | 657 | $ | 788 |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Net cash provided by operating activities of continuing operations | $ | 276 | $ | 74 | $ | 546 | $ | 343 | ||||
Dividends from associates | (33 | ) | (23 | ) | (67 | ) | (44 | ) | ||||
Expenditures on mining interests | (497 | ) | (497 | ) | (963 | ) | (954 | ) | ||||
Deposits on mining interests expenditures | (27 | ) | (65 | ) | (55 | ) | (119 | ) | ||||
Interest paid | (2 | ) | — | (28 | ) | (9 | ) | |||||
Consolidated free cash flows | (283 | ) | (511 | ) | (567 | ) | (783 | ) | ||||
Free cash flows provided (used) by Alumbrera and Pueblo Viejo | 44 | (40 | ) | 162 | 18 | |||||||
Goldcorp’s share of free cash flows | $ | (239 | ) | $ | (551 | ) | $ | (405 | ) | $ | (765 | ) |
Including discontinued operation | ||||||||||||
Free cash flows – Marigold | (1 | ) | (14 | ) | — | (11 | ) | |||||
Goldcorp’s share of free cash flows including discontinued operation | $ | (240 | ) | $ | (565 | ) | $ | (405 | ) | $ | (776 | ) |
(i) | Credit risk |
(ii) | Liquidity risk |
(i) | Currency risk |
• | pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions and dispositions of assets of the Company; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS and that the Company’s receipts and expenditures are made only in accordance with authorizations of management and the Company’s Directors; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements. |
• | Sophie Bergeron, Eng., in the case of the Cerro Negro project; |
• | Denis Fleury, Eng., in the case of the Éléonore project; and |
• | Chris Osiowy, P. Geo., in the case of the Cochenour project. |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||
Note | 2014 | 2013 | 2014 | 2013 | |||||||||
Revenues | 8(c) | $ | 906 | $ | 858 | $ | 1,804 | $ | 1,822 | ||||
Mine operating costs | |||||||||||||
Production costs | 5 | (506 | ) | (524 | ) | (1,006 | ) | (1,000 | ) | ||||
Depreciation and depletion | 6(e) & 8 | (179 | ) | (161 | ) | (349 | ) | (305 | ) | ||||
(685 | ) | (685 | ) | (1,355 | ) | (1,305 | ) | ||||||
Earnings from mine operations | 221 | 173 | 449 | 517 | |||||||||
Exploration and evaluation costs | 6(b) | (6 | ) | (12 | ) | (17 | ) | (25 | ) | ||||
Share of net earnings of associates | 7 | 60 | 17 | 116 | 54 | ||||||||
Impairment of mining interests and goodwill | 8(e) | — | (2,558 | ) | — | (2,558 | ) | ||||||
Corporate administration | (59 | ) | (63 | ) | (125 | ) | (123 | ) | |||||
Earnings (loss) from operations and associates | 8 | 216 | (2,443 | ) | 423 | (2,135 | ) | ||||||
Gains (losses) on securities, net | 11(b) | 5 | (9 | ) | 4 | (12 | ) | ||||||
Gains on derivatives, net | 11(a) | 11 | 22 | 8 | 71 | ||||||||
Gain on disposition of mining interest, net | 6(c) | — | — | 18 | — | ||||||||
Finance costs | (11 | ) | (18 | ) | (27 | ) | (28 | ) | |||||
Other (expenses) income | (5 | ) | 5 | (26 | ) | 2 | |||||||
Earnings (loss) from continuing operations before taxes | 216 | (2,443 | ) | 400 | (2,102 | ) | |||||||
Income tax (expense) recovery | 10 | (14 | ) | 504 | (104 | ) | 462 | ||||||
Net earnings (loss) from continuing operations | 202 | (1,939 | ) | 296 | (1,640 | ) | |||||||
Net (loss) earnings from discontinued operation | 4 | (19 | ) | 5 | (15 | ) | 15 | ||||||
Net earnings (loss) | $ | 183 | $ | (1,934 | ) | $ | 281 | $ | (1,625 | ) | |||
Net earnings (loss) from continuing operations attributable to: | |||||||||||||
Shareholders of Goldcorp Inc. | $ | 200 | $ | (1,939 | ) | $ | 294 | $ | (1,640 | ) | |||
Non-controlling interest | 2 | — | 2 | — | |||||||||
$ | 202 | $ | (1,939 | ) | $ | 296 | $ | (1,640 | ) | ||||
Net earnings (loss) attributable to: | |||||||||||||
Shareholders of Goldcorp Inc. | $ | 181 | $ | (1,934 | ) | $ | 279 | $ | (1,625 | ) | |||
Non-controlling interest | 2 | — | 2 | — | |||||||||
$ | 183 | $ | (1,934 | ) | $ | 281 | $ | (1,625 | ) | ||||
Net earnings (loss) per share from continuing operations | |||||||||||||
Basic | 13 | $ | 0.25 | $ | (2.39 | ) | $ | 0.36 | $ | (2.02 | ) | ||
Diluted | 13 | 0.24 | (2.39 | ) | 0.35 | (2.03 | ) | ||||||
Net earnings (loss) per share | |||||||||||||
Basic | 13 | $ | 0.22 | $ | (2.38 | ) | $ | 0.34 | $ | (2.00 | ) | ||
Diluted | 13 | 0.22 | (2.38 | ) | 0.33 | (2.01 | ) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||
Note | 2014 | 2013 | 2014 | 2013 | |||||||||
Net earnings (loss) | $ | 183 | $ | (1,934 | ) | $ | 281 | $ | (1,625 | ) | |||
Other comprehensive income (loss), net of tax | |||||||||||||
Items that may be reclassified subsequently to net earnings (loss): | 11(b) | ||||||||||||
Mark-to-market gains (losses) on available-for-sale securities | 18 | (32 | ) | 22 | (66 | ) | |||||||
Reclassification adjustment for impairment losses included in net earnings (loss) | — | 9 | 1 | 13 | |||||||||
Reclassification adjustment for realized gains on disposition of available-for-sale securities recognized in net earnings (loss) | (5 | ) | — | (5 | ) | (1 | ) | ||||||
13 | (23 | ) | 18 | (54 | ) | ||||||||
Items that will not be reclassified to net earnings (loss): | |||||||||||||
Remeasurements on defined benefit pension plans | (2 | ) | — | (4 | ) | — | |||||||
Total other comprehensive income (loss), net of tax | 11 | (23 | ) | 14 | (54 | ) | |||||||
Total comprehensive income (loss) | $ | 194 | $ | (1,957 | ) | $ | 295 | $ | (1,679 | ) | |||
Total comprehensive income (loss) attributable to: | |||||||||||||
Shareholders of Goldcorp Inc. | $ | 192 | $ | (1,957 | ) | $ | 293 | $ | (1,679 | ) | |||
Non-controlling interest | 2 | — | 2 | — | |||||||||
$ | 194 | $ | (1,957 | ) | $ | 295 | $ | (1,679 | ) |
Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||
Note | 2014 | 2013 | 2014 | 2013 | |||||||||
Operating Activities | |||||||||||||
Net earnings (loss) from continuing operations | $ | 202 | $ | (1,939 | ) | $ | 296 | $ | (1,640 | ) | |||
Adjustments for: | |||||||||||||
Dividends from associate | 7 | 33 | 23 | 67 | 44 | ||||||||
Reclamation expenditures | (8 | ) | (5 | ) | (11 | ) | (8 | ) | |||||
Items not affecting cash: | |||||||||||||
Depreciation and depletion | 6(e) & 8 | 179 | 161 | 349 | 305 | ||||||||
Share of net earnings of associates | 7 | (60 | ) | (17 | ) | (116 | ) | (54 | ) | ||||
Impairment of mining interests and goodwill | 8(e) | — | 2,558 | — | 2,558 | ||||||||
Share-based compensation expense | 12(a) & (b) | 16 | 22 | 40 | 40 | ||||||||
(Gains) losses on securities, net | 11(b) | (5 | ) | 9 | (4 | ) | 12 | ||||||
Unrealized gains on derivatives, net | 11(a) | (10 | ) | (13 | ) | (12 | ) | (62 | ) | ||||
Gain on disposition of mining interest, net | 6(c) | — | — | (18 | ) | — | |||||||
Revision of estimates and accretion of reclamation and closure cost obligations | 22 | 5 | 29 | 10 | |||||||||
Deferred income tax recovery | 10 | (16 | ) | (488 | ) | (62 | ) | (577 | ) | ||||
Other | (11 | ) | 18 | 11 | 23 | ||||||||
Change in working capital | 14 | (66 | ) | (260 | ) | (23 | ) | (308 | ) | ||||
Net cash provided by operating activities of continuing operations | 276 | 74 | 546 | 343 | |||||||||
Net cash (used in) provided by operating activities of discontinued operation | (1 | ) | 6 | 2 | 31 | ||||||||
Investing Activities | |||||||||||||
Expenditures on mining interests | 8(i) | (497 | ) | (497 | ) | (963 | ) | (954 | ) | ||||
Deposits on mining interest expenditures | (27 | ) | (65 | ) | (55 | ) | (119 | ) | |||||
Proceeds from disposition of mining interest, net | 6(c) | — | — | 193 | — | ||||||||
Interest paid | 8(i) | (2 | ) | — | (28 | ) | (9 | ) | |||||
Purchases of money market investments and available-for-sale securities | (5 | ) | (45 | ) | (49 | ) | (598 | ) | |||||
Proceeds from maturities and sales of money market investments and available-for-sale securities, net | 25 | 105 | 25 | 113 | |||||||||
Other | 2 | (2 | ) | — | (1 | ) | |||||||
Net cash used in investing activities of continuing operations | (504 | ) | (504 | ) | (877 | ) | (1,568 | ) | |||||
Net cash provided by (used in) investing activities of discontinued operation | 14 | 210 | (20 | ) | 208 | (34 | ) | ||||||
Financing Activities | |||||||||||||
Debt borrowings, net of transaction costs | 9 & 11(d)(ii) | 1,463 | — | 2,313 | 1,481 | ||||||||
Debt repayments | 11(d)(ii) | (1,075 | ) | — | (1,325 | ) | — | ||||||
Dividends paid to shareholders | 13(b) | (122 | ) | (121 | ) | (244 | ) | (243 | ) | ||||
Common shares issued, net of issuance costs | 3 | — | 3 | — | |||||||||
Other | 11(d)(ii) | (31 | ) | — | (31 | ) | 131 | ||||||
Net cash provided by (used in) financing activities of continuing operations | 238 | (121 | ) | 716 | 1,369 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | — | 1 | — | 1 | |||||||||
Increase (decrease) in cash and cash equivalents | 219 | (564 | ) | 595 | 142 | ||||||||
Cash and cash equivalents, beginning of the period | 1,001 | 1,463 | 625 | 757 | |||||||||
Cash and cash equivalents, end of the period | 14 | $ | 1,220 | $ | 899 | $ | 1,220 | $ | 899 |
Note | At June 30 2014 | At December 31 2013 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | 14 | $ | 1,220 | $ | 625 | ||
Money market investments | 40 | — | |||||
Accounts receivable | 11(a) | 479 | 469 | ||||
Inventories and stockpiled ore | 791 | 727 | |||||
Note receivable | 11(d)(i) | — | 5 | ||||
Income taxes receivable | 81 | 182 | |||||
Assets held for sale | 4 | — | 227 | ||||
Other | 201 | 139 | |||||
2,812 | 2,374 | ||||||
Mining interests | |||||||
Owned by subsidiaries | 6 | 23,700 | 22,928 | ||||
Investments in associates | 6 & 7 | 2,083 | 2,210 | ||||
6 | 25,783 | 25,138 | |||||
Goodwill | 1,454 | 1,454 | |||||
Investments in securities | 59 | 77 | |||||
Note receivable | 11(d)(i) | — | 23 | ||||
Deposits on mining interest expenditures | 31 | 71 | |||||
Deferred income taxes | 23 | 19 | |||||
Other | 456 | 408 | |||||
Total assets | 8 | $ | 30,618 | $ | 29,564 | ||
Liabilities | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | $ | 850 | $ | 856 | |||
Income taxes payable | 69 | 6 | |||||
Current portion of long-term debt | 9 | 858 | 832 | ||||
Derivative liabilities | 11(a) | 38 | 57 | ||||
Liabilities relating to assets held for sale | 4 | — | 44 | ||||
Other | 194 | 238 | |||||
2,009 | 2,033 | ||||||
Deferred income taxes | 5,515 | 5,594 | |||||
Long-term debt | 9 | 2,471 | 1,482 | ||||
Provisions | 599 | 517 | |||||
Income taxes payable | 74 | 55 | |||||
Other | 103 | 125 | |||||
Total liabilities | 8 | 10,771 | 9,806 | ||||
Equity | |||||||
Shareholders’ equity | |||||||
Common shares, stock options and restricted share units | 17,229 | 17,191 | |||||
Accumulated other comprehensive income | 15 | 1 | |||||
Retained earnings | 2,388 | 2,353 | |||||
19,632 | 19,545 | ||||||
Non-controlling interest | 215 | 213 | |||||
Total equity | 19,847 | 19,758 | |||||
Total liabilities and equity | $ | 30,618 | $ | 29,564 |
Common Shares | Accumulated Other Comprehensive Income (Loss) | |||||||||||||||||||||||||
Shares issued, fully paid with no par value | Amount | Stock options and restricted share units | Investment revaluation reserve | Other | Retained earnings | Attributable to shareholders of Goldcorp Inc. | Non-controlling interest | Total | ||||||||||||||||||
At January 1, 2014 | 812,257 | $ | 16,895 | $ | 296 | $ | 3 | $ | (2 | ) | $ | 2,353 | $ | 19,545 | $ | 213 | $ | 19,758 | ||||||||
Total comprehensive income | ||||||||||||||||||||||||||
Net earnings | — | — | — | — | — | 279 | 279 | 2 | 281 | |||||||||||||||||
Other comprehensive income (loss) | — | — | — | 18 | (4 | ) | — | 14 | — | 14 | ||||||||||||||||
— | — | — | 18 | (4 | ) | 279 | 293 | 2 | 295 | |||||||||||||||||
Stock options exercised and restricted share units issued and vested (note 12(a)) | 1,143 | 43 | (40 | ) | — | — | — | 3 | — | 3 | ||||||||||||||||
Share-based compensation (note 12(a)) | — | — | 35 | — | — | — | 35 | — | 35 | |||||||||||||||||
Dividends (note 13(b)) | — | — | — | — | — | (244 | ) | (244 | ) | — | (244 | ) | ||||||||||||||
At June 30, 2014 | 813,400 | $ | 16,938 | $ | 291 | $ | 21 | $ | (6 | ) | $ | 2,388 | $ | 19,632 | $ | 215 | $ | 19,847 |
Common Shares | Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||
Shares issued, fully paid with no par value | Amount | Stock options and restricted share units | Investment revaluation reserve | Other | Retained earnings | Attributable to shareholders of Goldcorp Inc. | Non- controlling interest | Total | ||||||||||||||||||
At January 1, 2013 | 811,519 | $ | 16,865 | $ | 252 | $ | 51 | $ | — | $ | 5,548 | $ | 22,716 | $ | 213 | $ | 22,929 | |||||||||
Total comprehensive loss | ||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (1,625 | ) | (1,625 | ) | — | (1,625 | ) | ||||||||||||||
Other comprehensive loss | — | — | — | (54 | ) | — | — | (54 | ) | — | (54 | ) | ||||||||||||||
— | — | — | (54 | ) | — | (1,625 | ) | (1,679 | ) | — | (1,679 | ) | ||||||||||||||
Stock options exercised and restricted share units issued and vested (note 12(a)) | 572 | 27 | (27 | ) | — | — | — | — | — | — | ||||||||||||||||
Share-based compensation (note 12(a)) | — | — | 35 | — | — | — | 35 | — | 35 | |||||||||||||||||
Dividends (note 13(b)) | — | — | — | — | — | (243 | ) | (243 | ) | — | (243 | ) | ||||||||||||||
At June 30, 2013 | 812,091 | $ | 16,892 | $ | 260 | $ | (3 | ) | $ | — | $ | 3,680 | $ | 20,829 | $ | 213 | $ | 21,042 |
1. | DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS |
2. | BASIS OF PREPARATION |
• | IFRIC 21 – Levies (“IFRIC 21”), an interpretation of IAS 37 – Provisions, Contingent Liabilities and Contingent Assets ("IAS 37"), clarifies that the obligating event, as defined by IAS 37, that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. The Company has applied IFRIC 21 on a retrospective basis in compliance with the transitional requirements of IFRIC 21. The application of IFRIC 21 did not result in an adjustment to the Company's unaudited condensed interim consolidated financial statements. |
• | Certain amendments to IFRSs as issued by the IASB. These amendments did not have a significant impact on the Company's unaudited condensed interim consolidated financial statements. |
Direct parent company (mine site and operating segment) (note 8) | Location | Ownership interest | Mining properties and development projects owned (note 6) |
Red Lake Gold Mines Ontario Partnership (“Red Lake”) | Canada | 100% | Red Lake and Campbell Complexes, and Cochenour project |
Goldcorp Canada Ltd./Goldcorp Inc. (“Porcupine”) | Canada | 100% | Porcupine mines |
Goldcorp Canada Ltd./Goldcorp Inc. (“Musselwhite”) | Canada | 100% | Musselwhite mine |
Les Mines Opinaca Ltée (“Éléonore”) | Canada | 100% | Éléonore project |
Minera Peñasquito S.A. de C.V. and Camino Rojo S.A. de C.V. (“Peñasquito”) | Mexico | 100% | Peñasquito mines, and Camino Rojo project |
Desarrollos Mineros San Luis S.A. de C.V. (“Los Filos”) | Mexico | 100% | Los Filos mines |
Minas de la Alta Pimeria S.A. de C.V. (“El Sauzal”) | Mexico | 100% | El Sauzal mine |
Montana Exploradora de Guatemala S.A. (“Marlin”) | Guatemala | 100% | Marlin mine |
Wharf Resources (USA) Inc. (“Wharf”) | United States | 100% | Wharf mine |
Oroplata S.A. (“Cerro Negro”) | Argentina | 100% | Cerro Negro project |
Sociedad Contractual Minera El Morro (“El Morro”) | Chile | 70.0% | El Morro project |
Associates (mine site and operating segment) (notes 7 and 8) | Location | Ownership interest | Mining properties owned (note 6) |
Minera Alumbrera Limited (“Alumbrera”) | Argentina | 37.5% | Alumbrera mine |
Pueblo Viejo Dominicana Corporation (“Pueblo Viejo”) | Dominican Republic | 40.0% | Pueblo Viejo mine |
Tahoe | Guatemala | 39.4% | Escobal mine (note 7(b)) |
3. | CHANGES IN ACCOUNTING STANDARDS NOT YET EFFECTIVE |
4. | DISCONTINUED OPERATION |
Cash proceeds, net of transaction costs | $ | 182 | |
Net assets sold and derecognized: | |||
Inventories and stockpiled ore | 69 | ||
Other current assets | 6 | ||
Mining interest | 153 | ||
Accounts payable and accrued liabilities | (15 | ) | |
Deferred income taxes | (9 | ) | |
Provisions | (18 | ) | |
186 | |||
Loss on disposition | (4 | ) | |
Income tax expense on disposition, net | (17 | ) | |
Net loss on disposition | $ | (21 | ) |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Revenues | $ | — | $ | 31 | $ | 28 | $ | 82 | ||||
Mine operating costs | (2 | ) | (25 | ) | (26 | ) | (58 | ) | ||||
(Loss) earnings from mine operation | (2 | ) | 6 | 2 | 24 | |||||||
Corporate administration | — | — | — | — | ||||||||
(Loss) earnings from discontinued operation before taxes | (2 | ) | 6 | 2 | 24 | |||||||
Income tax recovery (expense) | 4 | (1 | ) | 4 | (9 | ) | ||||||
Earnings from discontinued operation | 2 | 5 | 6 | 15 | ||||||||
Loss on disposition | (4 | ) | — | (4 | ) | — | ||||||
Income tax expense on disposition, net | (17 | ) | — | (17 | ) | — | ||||||
Net loss on disposition of discontinued operation | (21 | ) | — | (21 | ) | — | ||||||
Net (loss) earnings from discontinued operation attributable to shareholders of Goldcorp Inc. | $ | (19 | ) | $ | 5 | $ | (15 | ) | $ | 15 | ||
Net (loss) earnings per share from discontinued operation | ||||||||||||
Basic | $ | (0.03 | ) | $ | 0.01 | $ | (0.02 | ) | $ | 0.02 | ||
Diluted | (0.02 | ) | 0.01 | (0.02 | ) | 0.02 |
5. | PRODUCTION COSTS |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Raw materials and consumables | $ | 234 | $ | 284 | $ | 500 | $ | 555 | ||||
Salaries and employee benefits (a) | 108 | 125 | 221 | 246 | ||||||||
Contractors | 101 | 102 | 191 | 196 | ||||||||
Royalties | 17 | 12 | 33 | 27 | ||||||||
Revision in estimates and liabilities incurred on reclamation and closure cost obligations | 16 | — | 16 | — | ||||||||
Change in inventories (b) | (16 | ) | (37 | ) | (54 | ) | (90 | ) | ||||
Other | 46 | 38 | 99 | 66 | ||||||||
$ | 506 | $ | 524 | $ | 1,006 | $ | 1,000 |
(a) | Excludes $23 million and $45 million of salaries and employee benefits included in corporate administration expense for the three and six months ended June 30, 2014, respectively (three and six months ended June 30, 2013 – $18 million and $38 million, respectively). |
(b) | The change in inventories for the three and six months ended June 30, 2014 represents an increase of $nil and $25 million in finished goods inventories, respectively; an increase of $5 million and $1 million in stockpiled ore, respectively; and an increase of $11 million and $28 million in work-in-process inventories, respectively (three and six months ended June 30, 2013 – a decrease of $1 million and an increase of $21 million in finished goods inventories, respectively; an increase of $20 million and $30 million in stockpiled ore, respectively; and an increase of $18 million and $39 million in work-in-process inventories, respectively). |
6. | MINING INTERESTS |
Mining properties | ||||||||||||||||||
Depletable | Non-depletable | |||||||||||||||||
Reserves and resources | Reserves and resources | Exploration potential | Plant and equipment (f)(g) | Investments in associates (note 7) | Total | |||||||||||||
Cost | ||||||||||||||||||
At January 1, 2014 | $ | 7,690 | $ | 7,582 | $ | 8,170 | $ | 5,138 | $ | 2,210 | $ | 30,790 | ||||||
Expenditures on mining interests (a)(b) | 213 | 355 | 1 | 452 | — | 1,021 | ||||||||||||
Share of net earnings of associates | — | — | — | — | 116 | 116 | ||||||||||||
Disposition of investment in associate (c) | — | — | — | — | (175 | ) | (175 | ) | ||||||||||
Dividends from associate | — | — | — | — | (67 | ) | (67 | ) | ||||||||||
Transfers and other movements (d) | (42 | ) | 156 | (209 | ) | 233 | (1 | ) | 137 | |||||||||
At June 30, 2014 | 7,861 | 8,093 | 7,962 | 5,823 | 2,083 | 31,822 | ||||||||||||
Accumulated depreciation and depletion and impairment | ||||||||||||||||||
At January 1, 2014 | (2,929 | ) | (234 | ) | (1,188 | ) | (1,301 | ) | — | (5,652 | ) | |||||||
Depreciation and depletion (e) | (231 | ) | — | — | (171 | ) | — | (402 | ) | |||||||||
Transfers and other movements (d) | — | — | — | 15 | — | 15 | ||||||||||||
At June 30, 2014 | (3,160 | ) | (234 | ) | (1,188 | ) | (1,457 | ) | — | (6,039 | ) | |||||||
Carrying amount – June 30, 2014 | $ | 4,701 | $ | 7,859 | $ | 6,774 | $ | 4,366 | $ | 2,083 | $ | 25,783 |
Mining properties | ||||||||||||||||||
Depletable | Non-depletable | |||||||||||||||||
Reserves and resources | Reserves and resources | Exploration potential | Plant and equipment (f)(g) | Investments in associates (note 7) | Total | |||||||||||||
Cost | ||||||||||||||||||
At January 1, 2013 | $ | 7,395 | $ | 6,528 | $ | 8,506 | $ | 4,278 | $ | 2,663 | $ | 29,370 | ||||||
Expenditures on mining interests (a)(b) | 530 | 652 | 3 | 880 | 49 | 2,114 | ||||||||||||
Expenditures on mining interests classified as held for sale (note 4) | 11 | — | — | 51 | — | 62 | ||||||||||||
Reclassifications to mining interests classified as held for sale (note 4) | (273 | ) | (18 | ) | — | (195 | ) | — | (486 | ) | ||||||||
Share of net losses and impairment of associates | — | — | — | — | (395 | ) | (395 | ) | ||||||||||
Dividends from associate | — | — | — | — | (108 | ) | (108 | ) | ||||||||||
Transfers and other movements (d) | 27 | 420 | (339 | ) | 124 | 1 | 233 | |||||||||||
At December 31, 2013 | 7,690 | 7,582 | 8,170 | 5,138 | 2,210 | 30,790 | ||||||||||||
Accumulated depreciation and depletion and impairment | ||||||||||||||||||
At January 1, 2013 | (1,942 | ) | — | — | (863 | ) | (2,805 | ) | ||||||||||
Depreciation and depletion (e) | (409 | ) | — | — | (300 | ) | (709 | ) | ||||||||||
Depreciation and depletion relating to mining interests classified as held for sale (note 4) | (13 | ) | — | — | (12 | ) | (25 | ) | ||||||||||
Reclassifications to mining interests classified as held for sale (note 4) | 187 | 8 | — | 139 | 334 | |||||||||||||
Impairment charges | (747 | ) | (242 | ) | (1,188 | ) | (318 | ) | (2,495 | ) | ||||||||
Transfers and other movements (d) | (5 | ) | — | — | 53 | 48 | ||||||||||||
At December 31, 2013 | (2,929 | ) | (234 | ) | (1,188 | ) | (1,301 | ) | (5,652 | ) | ||||||||
Carrying amount – December 31, 2013 | $ | 4,761 | $ | 7,348 | $ | 6,982 | $ | 3,837 | $ | 2,210 | $ | 25,138 |
Mining properties | ||||||||||||||||||
Depletable | Non-depletable | |||||||||||||||||
Reserves and resources | Reserves and resources | Exploration potential | Plant and equipment (f)(g) | At June 30 2014 | At December 31 2013 | |||||||||||||
Red Lake (h) | $ | 723 | $ | 1,047 | $ | 723 | $ | 476 | $ | 2,969 | $ | 2,906 | ||||||
Porcupine | 386 | 64 | — | 139 | 589 | 573 | ||||||||||||
Musselwhite | 183 | 4 | 111 | 232 | 530 | 537 | ||||||||||||
Éléonore (a) | — | 1,751 | — | 1,026 | 2,777 | 2,358 | ||||||||||||
Peñasquito (a)(h) | 2,410 | 927 | 4,267 | 968 | 8,572 | 8,624 | ||||||||||||
Los Filos | 562 | 36 | — | 179 | 777 | 786 | ||||||||||||
El Sauzal | 20 | — | — | 3 | 23 | 31 | ||||||||||||
Marlin | 386 | 68 | 32 | 137 | 623 | 654 | ||||||||||||
Cerro Blanco | — | 47 | — | 2 | 49 | 49 | ||||||||||||
Wharf | 31 | — | — | 15 | 46 | 45 | ||||||||||||
Cerro Negro (a) | — | 2,589 | 1,520 | 1,075 | 5,184 | 4,825 | ||||||||||||
El Morro (a) | — | 1,326 | 112 | 17 | 1,455 | 1,439 | ||||||||||||
Corporate and Other | — | — | 9 | 97 | 106 | 101 | ||||||||||||
$ | 4,701 | $ | 7,859 | $ | 6,774 | $ | 4,366 | $ | 23,700 | $ | 22,928 | |||||||
Investments in associates (note 7) | ||||||||||||||||||
Alumbrera | 123 | 172 | ||||||||||||||||
Pueblo Viejo | 1,603 | 1,528 | ||||||||||||||||
Other (c) | 357 | 510 | ||||||||||||||||
2,083 | 2,210 | |||||||||||||||||
$ | 25,783 | $ | 25,138 |
(a) | Includes capitalized borrowing costs incurred during the three and six months ended June 30 as follows: |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Éléonore | $ | 12 | $ | 6 | $ | 22 | $ | 10 | ||||
Camino Rojo (h) | 2 | 1 | 4 | 3 | ||||||||
Cerro Negro | 14 | 11 | 29 | 19 | ||||||||
El Morro | 4 | 4 | 8 | 7 | ||||||||
$ | 32 | $ | 22 | $ | 63 | $ | 39 |
(b) | During the three and six months ended June 30, 2014, the Company incurred $31 million and $61 million, respectively (three and six months ended June 30, 2013 – $40 million and $76 million, respectively), in exploration and evaluation expenditures, of which $25 million and $44 million, respectively (three and six months ended June 30, 2013 – $28 million and $51 million, respectively), have been capitalized and included in expenditures on mining interests. The remaining $6 million and $17 million, respectively (three and six months ended June 30, 2013 – $12 million and $25 million, respectively), were expensed. |
(c) | On March 26, 2014, the Company disposed of its interest in Primero to a syndicate of underwriters for gross proceeds of $201 million (C$224 million) and recognized a gain of $18 million, net of tax and selling costs of $8 million (note 7(d)). |
(d) | Transfers and movements primarily represent the reclassification of carrying amounts of reserves, resources and exploration potential as a result of the conversion of the categories of mining properties and deposits on mining interest expenditures which are capitalized and included in the carrying amounts of the related mining properties during the period. Transfers and movements also include changes to capitalized reclamation and closure costs, capitalized depreciation, and dispositions of mining properties during the period. |
(e) | Depreciation and depletion expensed for the three and six months ended June 30, 2014 was $179 million and $349 million, respectively (three and six months ended June 30, 2013 – $161 million and $305 million, respectively), as compared to total depreciation and depletion of $201 million and $402 million, respectively (three and six months ended June 30, 2013 – $179 million and $338 million, respectively), due to the capitalization of depreciation of $15 million and $26 million, respectively (three and six months ended June 30, 2013 – $11 million and $23 million, respectively), relating to development projects and movements in amounts allocated to work-in-progress inventories of $7 million and $27 million, respectively (three and six months ended June 30, 2013 – $7 million and $10 million, respectively). |
(f) | At June 30, 2014, assets under construction, and therefore not yet being depreciated, included in the carrying amount of plant and equipment amounted to $2,099 million (December 31, 2013 – $1,488 million). |
(g) | At June 30, 2014, finance leases included in the carrying amount of plant and equipment amounted to $70 million (December 31, 2013 – $75 million). |
(h) | The Company’s 100% interests in the Cochenour gold project in Canada and the Camino Rojo gold project in Mexico are included in the carrying amounts of the Red Lake and Peñasquito mining properties, respectively. |
7. | INVESTMENTS IN ASSOCIATES |
Alumbrera | Pueblo Viejo | Other (a)(b)(d) | Total | |||||||||
Carrying amount – at January 1, 2014 | $ | 172 | $ | 1,528 | $ | 510 | $ | 2,210 | ||||
Dividends from associate | (67 | ) | — | — | (67 | ) | ||||||
Company’s share of net earnings of associates (c) | 18 | 76 | 22 | 116 | ||||||||
Disposition of investment in associate and other (d) | — | (1 | ) | (175 | ) | (176 | ) | |||||
Carrying amount – at June 30, 2014 | $ | 123 | $ | 1,603 | $ | 357 | $ | 2,083 | ||||
Carrying amount – at January 1, 2013 | $ | 575 | $ | 1,546 | $ | 542 | $ | 2,663 | ||||
Expenditures and investments (note 6) | — | 49 | — | 49 | ||||||||
Dividends from associate | (108 | ) | — | — | (108 | ) | ||||||
Impairment of investments in associates | (276 | ) | — | (19 | ) | (295 | ) | |||||
Company’s share of net losses of associates | (19 | ) | (66 | ) | (15 | ) | (100 | ) | ||||
Other | — | (1 | ) | 2 | 1 | |||||||
Carrying amount – at December 31, 2013 | $ | 172 | $ | 1,528 | $ | 510 | $ | 2,210 |
Three months ended June 30, 2014 | Alumbrera | Pueblo Viejo | ||||
Revenues | $ | 178 | $ | 357 | ||
Production costs | (129 | ) | (134 | ) | ||
Depreciation and depletion | (19 | ) | (68 | ) | ||
Earnings from mine operations (e) | 30 | 155 | ||||
Net earnings of associates (e) | 17 | 111 | ||||
The Company's equity share of net earnings of associates | $ | 6 | $ | 45 | ||
Three months ended June 30, 2013 | ||||||
Revenues | $ | 218 | $ | 261 | ||
Production costs | (166 | ) | (99 | ) | ||
Depreciation and depletion | (44 | ) | (27 | ) | ||
Earnings from mine operations (e) | 8 | 135 | ||||
Net (losses) earnings of associates (e) | (19 | ) | 55 | |||
The Company’s equity share of net (losses) earnings of associates | $ | (7 | ) | $ | 22 |
Six months ended June 30, 2014 | Alumbrera | Pueblo Viejo | ||||
Revenues | $ | 568 | $ | 747 | ||
Production costs | (391 | ) | (295 | ) | ||
Depreciation and depletion | (38 | ) | (134 | ) | ||
Earnings from mine operations (e) | 139 | 318 | ||||
Net earnings of associates (e) | 49 | 189 | ||||
The Company's equity share of net earnings of associates | $ | 18 | $ | 76 | ||
Six months ended June 30, 2013 | ||||||
Revenues | $ | 465 | $ | 539 | ||
Production costs | (316 | ) | (190 | ) | ||
Depreciation and depletion | (84 | ) | (53 | ) | ||
Earnings from mine operations (e) | 65 | 296 | ||||
Net earnings of associates (e) | 5 | 137 | ||||
The Company’s equity share of net earnings of associates | $ | 2 | $ | 55 |
At June 30, 2014 | Alumbrera | Pueblo Viejo | ||||
Current assets | $ | 490 | $ | 748 | ||
Non-current assets | 295 | 6,767 | ||||
785 | 7,515 | |||||
Current liabilities | 182 | 683 | ||||
Non-current liabilities | 274 | 2,825 | ||||
456 | 3,508 | |||||
Net assets | 329 | 4,007 | ||||
The Company's equity share of net assets of associates | $ | 123 | $ | 1,603 | ||
At December 31, 2013 | ||||||
Current assets | $ | 688 | $ | 556 | ||
Non-current assets | 1,318 | 6,975 | ||||
2,006 | 7,531 | |||||
Current liabilities | 262 | 664 | ||||
Non-current liabilities | 550 | 3,047 | ||||
812 | 3,711 | |||||
Net assets | 1,194 | 3,820 | ||||
The Company’s share of net assets of associates | 448 | 1,528 | ||||
Impairment of investment in associate | (276 | ) | — | |||
The Company’s equity share of net assets of associates | $ | 172 | $ | 1,528 |
Three months ended June 30, 2014 | Alumbrera | Pueblo Viejo | ||||
Net cash provided by operating activities | $ | 30 | $ | 40 | ||
Net cash provided by (used in) investing activities | 16 | (16 | ) | |||
Net cash used in financing activities | (49 | ) | — | |||
Three months ended June 30, 2013 | ||||||
Net cash (used in) provided by operating activities | $ | (25 | ) | $ | 32 | |
Net cash used in investing activities | (21 | ) | (45 | ) | ||
Net cash (used in) provided by financing activities | (23 | ) | 17 |
Six months ended June 30, 2014 | Alumbrera | Pueblo Viejo | ||||
Net cash provided by operating activities | $ | 85 | $ | 124 | ||
Net cash provided by (used in) investing activities | 7 | (28 | ) | |||
Net cash used in financing activities | (85 | ) | (21 | ) | ||
Six months ended June 30, 2013 | ||||||
Net cash provided by operating activities | $ | 40 | $ | 69 | ||
Net cash used in investing activities | (140 | ) | (79 | ) | ||
Net cash (used in) provided by financing activities | (44 | ) | 29 |
(a) | The quoted market value of the Company’s investment in Tahoe at June 30, 2014 was $1.5 billion, based on the closing share price of Tahoe. |
(b) | On January 14, 2014, Tahoe announced that the Escobal mine in Guatemala achieved commercial production effective January 1, 2014. |
(c) | During the three months ended June 30, 2014, Pueblo Viejo recorded a reversal of $16 million after tax (Goldcorp's share – $6 million) of impairment expense previously recognized and included in the Company's share of net losses of associates during the year ended December 31, 2012 in respect of certain power assets. |
(d) | On March 26, 2014, the Company disposed of its interest in Primero to a syndicate of underwriters for gross proceeds of $201 million (C$224 million) and recognized a gain of $18 million, net of tax and selling costs of $8 million (note 6(c)). The Company's share of Primero's net earnings for the period January 1, 2014 to the date of disposition, were included in the Company's consolidated results for the six months ended June 30, 2014. |
(e) | The net expense for the three and six months ended June 30, 2014 and 2013, which reconciles earnings from mine operations to net earnings (losses) of Alumbrera and Pueblo Viejo, is comprised primarily of finance costs and income taxes. |
8. | SEGMENTED INFORMATION |
Revenues (c)(d) | Depreciation and depletion | Earnings (loss) from operations and associates (d)(f) | Expenditures on mining interests (i) | |||||||||||||||||||||
Three Months Ended June 30 | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Red Lake (a) | $ | 117 | $ | 164 | $ | 26 | $ | 25 | $ | 31 | $ | 74 | $ | 56 | $ | 57 | ||||||||
Porcupine | 91 | 98 | 12 | 15 | 21 | 26 | 18 | 27 | ||||||||||||||||
Musselwhite | 87 | 89 | 15 | 13 | 30 | 23 | 12 | 23 | ||||||||||||||||
Éléonore | — | — | — | — | — | — | 208 | 147 | ||||||||||||||||
Peñasquito (a)(e) | 424 | 232 | 69 | 42 | 131 | (2,455 | ) | 56 | 61 | |||||||||||||||
Los Filos | 58 | 118 | 12 | 17 | 10 | 47 | 11 | 44 | ||||||||||||||||
El Sauzal | 19 | 30 | 4 | 9 | (1 | ) | — | — | — | |||||||||||||||
Marlin | 88 | 105 | 36 | 35 | (7 | ) | 17 | 22 | 17 | |||||||||||||||
Cerro Blanco (e) | — | — | — | — | — | (131 | ) | — | 3 | |||||||||||||||
Wharf | 22 | 22 | 1 | 1 | 9 | 8 | 1 | 5 | ||||||||||||||||
Alumbrera (g)(h) | 67 | 81 | 7 | 16 | 10 | 3 | 10 | 20 | ||||||||||||||||
Cerro Negro | — | — | — | — | — | — | 161 | 112 | ||||||||||||||||
El Morro | — | — | — | — | — | — | 9 | 12 | ||||||||||||||||
Pueblo Viejo (g)(h) | 143 | 105 | 28 | 11 | 71 | 52 | 16 | 42 | ||||||||||||||||
Other (b) | — | — | 4 | 4 | (59 | ) | (67 | ) | 8 | 6 | ||||||||||||||
Attributable segment total for continuing operations (g)(h) | 1,116 | 1,044 | 214 | 188 | 246 | (2,403 | ) | 588 | 576 | |||||||||||||||
Alumbrera (g)(h) | (67 | ) | (81 | ) | (7 | ) | (16 | ) | (4 | ) | (10 | ) | (10 | ) | (20 | ) | ||||||||
Pueblo Viejo (g)(h) | (143 | ) | (105 | ) | (28 | ) | (11 | ) | (26 | ) | (30 | ) | (16 | ) | (27 | ) | ||||||||
Consolidated segment total for continuing operations | 906 | 858 | 179 | 161 | 216 | (2,443 | ) | 562 | 529 | |||||||||||||||
Consolidated segment total for discontinued operation (notes 4 & 14) | — | 31 | — | 4 | (2 | ) | 6 | — | 20 | |||||||||||||||
Consolidated segment total | $ | 906 | $ | 889 | $ | 179 | $ | 165 | $ | 214 | $ | (2,437 | ) | $ | 562 | $ | 549 |
Revenues (c)(d) | Depreciation and depletion | Earnings (loss) from operations and associates (d)(f) | Expenditures on mining interests (i) | |||||||||||||||||||||
Six Months Ended June 30 | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Red Lake (a) | $ | 248 | $ | 385 | $ | 53 | $ | 52 | $ | 71 | $ | 200 | $ | 110 | $ | 122 | ||||||||
Porcupine | 176 | 202 | 25 | 28 | 48 | 63 | 37 | 49 | ||||||||||||||||
Musselwhite | 175 | 179 | 29 | 24 | 59 | 53 | 21 | 42 | ||||||||||||||||
Éléonore | — | — | — | — | — | — | 377 | 259 | ||||||||||||||||
Peñasquito (a)(e) | 786 | 485 | 125 | 80 | 211 | (2,431 | ) | 75 | 109 | |||||||||||||||
Los Filos | 164 | 246 | 28 | 32 | 47 | 112 | 27 | 86 | ||||||||||||||||
El Sauzal | 36 | 56 | 8 | 15 | (2 | ) | 4 | — | 1 | |||||||||||||||
Marlin | 177 | 229 | 71 | 66 | (2 | ) | 58 | 38 | 35 | |||||||||||||||
Cerro Blanco (e) | — | — | — | — | — | (131 | ) | — | 6 | |||||||||||||||
Wharf | 42 | 40 | 2 | 2 | 15 | 16 | 2 | 6 | ||||||||||||||||
Alumbrera (g)(h) | 213 | 174 | 14 | 31 | 51 | 24 | 19 | 41 | ||||||||||||||||
Cerro Negro | — | — | — | — | — | — | 304 | 244 | ||||||||||||||||
El Morro | — | — | — | — | — | — | 17 | 28 | ||||||||||||||||
Pueblo Viejo (g)(h) | 299 | 216 | 53 | 21 | 137 | 116 | 28 | 79 | ||||||||||||||||
Other (b) | — | — | 8 | 6 | (118 | ) | (136 | ) | 13 | 13 | ||||||||||||||
Attributable segment total for continuing operations (g)(h) | 2,316 | 2,212 | 416 | 357 | 517 | (2,052 | ) | 1,068 | 1,120 | |||||||||||||||
Alumbrera (g)(h) | (213 | ) | (174 | ) | (14 | ) | (31 | ) | (33 | ) | (22 | ) | (19 | ) | (41 | ) | ||||||||
Pueblo Viejo (g)(h) | (299 | ) | (216 | ) | (53 | ) | (21 | ) | (61 | ) | (61 | ) | (28 | ) | (50 | ) | ||||||||
Consolidated segment total for continuing operations | 1,804 | 1,822 | 349 | 305 | 423 | (2,135 | ) | 1,021 | 1,029 | |||||||||||||||
Consolidated segment total for discontinued operation (notes 4 & 14) | 28 | 82 | — | 10 | 2 | 24 | 1 | 42 | ||||||||||||||||
Consolidated segment total | $ | 1,832 | $ | 1,904 | $ | 349 | $ | 315 | $ | 425 | $ | (2,111 | ) | $ | 1,022 | $ | 1,071 |
Total Assets | ||||||
At June 30 2014 | At December 31 2013 | |||||
Red Lake (a) | $ | 3,671 | $ | 3,736 | ||
Porcupine | 733 | 679 | ||||
Musselwhite | 689 | 635 | ||||
Éléonore | 2,927 | 2,491 | ||||
Peñasquito (a) | 9,390 | 9,414 | ||||
Los Filos | 1,544 | 1,456 | ||||
El Sauzal | 48 | 60 | ||||
Marlin | 717 | 850 | ||||
Cerro Blanco | 49 | 50 | ||||
Wharf | 93 | 77 | ||||
Alumbrera | 123 | 172 | ||||
Cerro Negro | 6,527 | 6,119 | ||||
El Morro | 1,495 | 1,484 | ||||
Pueblo Viejo | 1,603 | 1,528 | ||||
Marigold (note 4) | — | 227 | ||||
Other (b) | 1,009 | 586 | ||||
Total | $ | 30,618 | $ | 29,564 |
Total Liabilities | ||||||
At June 30 2014 | At December 31 2013 | |||||
Red Lake (a) | $ | 96 | $ | 97 | ||
Porcupine | 259 | 241 | ||||
Musselwhite | 80 | 77 | ||||
Éléonore | 526 | 541 | ||||
Peñasquito (a) | 3,020 | 3,031 | ||||
Los Filos | 245 | 258 | ||||
El Sauzal | 75 | 78 | ||||
Marlin | 179 | 183 | ||||
Cerro Blanco | 9 | 9 | ||||
Wharf | 44 | 38 | ||||
Alumbrera | — | — | ||||
Cerro Negro | 1,631 | 1,618 | ||||
El Morro | 459 | 467 | ||||
Pueblo Viejo | — | — | ||||
Marigold (note 4) | — | 44 | ||||
Other (b) | 4,148 | 3,124 | ||||
Total | $ | 10,771 | $ | 9,806 |
(a) | The Company’s 100% interests in the Cochenour gold project in Canada and Camino Rojo gold project in Mexico are included in the Red Lake and Peñasquito reportable operating segments, respectively. |
(b) | Other includes corporate activities and the Company’s share of net earnings/(losses) of Tahoe and Primero from January 1, 2014 to March 26, 2014, the date of disposition, certain exploration properties in Mexico and corporate assets which have not been allocated to the above segments. Total corporate assets and liabilities at June 30, 2014 were $643 million and $4,148 million, respectively |
(c) | The Company’s principal product is gold doré with the refined gold bullion sold primarily in the London spot market. Concentrate produced at Peñasquito and Alumbrera, containing both gold and by-product metals, is sold to third party refineries. |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Gold | $ | 669 | $ | 685 | $ | 1,325 | $ | 1,457 | ||||
Silver | 151 | 111 | 300 | 249 | ||||||||
Zinc | 58 | 37 | 120 | 73 | ||||||||
Lead | 23 | 23 | 52 | 38 | ||||||||
Copper | 5 | 2 | 7 | 5 | ||||||||
$ | 906 | $ | 858 | $ | 1,804 | $ | 1,822 |
Three Months Ended June 30 | Peñasquito | Marlin | Alumbrera | Pueblo Viejo | |||||||||
Gold | 2014 | $ | 221 | $ | 57 | $ | 21 | $ | 136 | ||||
2013 | $ | 99 | $ | 67 | $ | 29 | $ | 102 | |||||
Silver | 2014 | 117 | 31 | 2 | 7 | ||||||||
2013 | 71 | 38 | 3 | 3 | |||||||||
Lead | 2014 | 23 | — | — | — | ||||||||
2013 | 23 | — | — | — | |||||||||
Zinc | 2014 | 58 | — | — | — | ||||||||
2013 | 37 | — | — | — | |||||||||
Copper | 2014 | 5 | — | 41 | — | ||||||||
2013 | 2 | — | 46 | — | |||||||||
Molybdenum | 2014 | — | — | 3 | — | ||||||||
2013 | — | — | 3 | — | |||||||||
Total | 2014 | $ | 424 | $ | 88 | $ | 67 | $ | 143 | ||||
2013 | $ | 232 | $ | 105 | $ | 81 | $ | 105 |
Six Months Ended June 30 | Peñasquito | Marlin | Alumbrera | Pueblo Viejo | |||||||||
Gold | 2014 | $ | 380 | $ | 111 | $ | 74 | $ | 284 | ||||
2013 | $ | 207 | $ | 147 | $ | 66 | $ | 207 | |||||
Silver | 2014 | 227 | 66 | 4 | 15 | ||||||||
2013 | 162 | 82 | 6 | 9 | |||||||||
Lead | 2014 | 52 | — | — | — | ||||||||
2013 | 38 | — | — | — | |||||||||
Zinc | 2014 | 120 | — | — | — | ||||||||
2013 | 73 | — | — | — | |||||||||
Copper | 2014 | 7 | — | 130 | — | ||||||||
2013 | 5 | — | 98 | — | |||||||||
Molybdenum | 2014 | — | — | 5 | — | ||||||||
2013 | — | — | 4 | — | |||||||||
Total | 2014 | $ | 786 | $ | 177 | $ | 213 | $ | 299 | ||||
2013 | $ | 485 | $ | 229 | $ | 174 | $ | 216 |
(d) | Intersegment sales and transfers are eliminated in the above information reported to the Company’s chief operating decision maker. |
(e) | The Company recognized total impairment charges of $2,558 million, before tax, for the three and six months ended June 30, 2013, of which $283 million was applied against goodwill relating to Peñasquito and $2,275 million was applied to mining interests based on the relative carrying amounts of the assets as at June 30, 2013 that were subject to the impairment charges. The $2,275 million impairment charges to mining interests were applied as follows: |
Mining properties | |||||||||||||||
Depletable | Non-depletable | ||||||||||||||
Reserves and resources | Reserves and resources | Exploration potential | Plant and equipment | Total | |||||||||||
Peñasquito | $ | 647 | $ | 108 | $ | 1,129 | $ | 260 | $ | 2,144 | |||||
Cerro Blanco | — | 126 | — | 5 | 131 | ||||||||||
Total | $ | 647 | $ | 234 | $ | 1,129 | $ | 265 | $ | 2,275 |
(f) | The $nil and $23 million of net expenses for the three and six months ended June 30, 2014, respectively (three and six months ended June 30, 2013 – $nil and net earnings of $33 million), which reconciles the Company’s earnings of $216 million and $423 million from operations and associates, respectively (three and six months ended June 30, 2013 – loss of $2,443 million and $2,135 million), to the Company’s earnings of $216 million and $400 million from continuing operations before taxes, respectively (three and six months ended June 30, 2013 – loss of $2,443 million and $2,102 million, respectively), mainly arose from corporate activities that would be primarily allocated to the Other reportable operating segment, except for the net foreign exchange loss of $6 million and $25 million, respectively (three and six months ended June 30, 2013 – net loss of $25 million and $23 million, respectively), which is included in other expenses, that would be primarily allocated to the Cerro Negro, Éléonore and Other segments. |
(g) | The attributable segment total of earnings (loss) from operations and associates eliminates certain non-operating expenses/(income), including finance costs and income taxes that are included in Alumbrera and Pueblo Viejo’s net equity earnings on a consolidated basis. |
(h) | The Company includes certain Alumbrera and Pueblo Viejo operating results and expenditures on mining interests on a proportionate basis instead of on an equity basis in its attributable segment totals for segmented information disclosure purposes, consistent with how the operating results are reported to the Company’s chief operating decision maker. |
(i) | Segmented expenditures on mining interests include capitalized borrowing costs, are net of investment tax credits, exclude additions to reclamation assets arising from changes in estimates, and are presented on an accrual basis. Expenditures on mining interests and interest paid in the Condensed Interim Consolidated Statements of Cash Flows are presented on a cash basis. For the three and six months ended June 30, 2014, the change in accrued expenditures and investment tax credits was an increase of $63 million and $30 million, respectively (three and six months ended June 30, 2013 – an increase of $32 million and $66 million, respectively). |
9. | DEBT FINANCING |
At June 30 2014 | At December 31 2013 | |||||
$1.0 billion notes (a) | ||||||
$550 million 7-year notes | $ | 545 | $ | — | ||
$450 million 30-year notes | 443 | — | ||||
988 | — | |||||
$1.5 billion notes | ||||||
$500 million 5-year notes | 495 | 495 | ||||
$1.0 billion 10-year notes | 988 | 987 | ||||
1,483 | 1,482 | |||||
$863 million convertible senior notes | 858 | 832 | ||||
3,329 | 2,314 | |||||
Less: current portion of long-term debt | (858 | ) | (832 | ) | ||
$ | 2,471 | $ | 1,482 |
(a) | On June 9, 2014, the Company issued the $1.0 billion Notes, consisting of $550 million in 7-year notes with a coupon rate of 3.625% (the "2021 Notes") and $450 million in 30-year notes with a coupon rate of 5.45% (the "2044 Notes"), which mature on June 9, 2021 and June 9, 2044, respectively. The Company received total proceeds of $988 million from the issuance, net of transaction costs. The $1.0 billion Notes are unsecured and interest is payable semi-annually in arrears on June 9 and December 9 of each year, beginning on December 9, 2014. The 2021 Notes and 2044 Notes are callable at anytime by the Company prior to maturity, subject to make-whole provisions. The carrying amounts of the 2021 Notes and the 2044 Notes will be accreted to the face value over their respective terms using annual effective interest rates of 3.75% and 5.49%, respectively. |
10. | INCOME TAXES |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Current income tax expense (recovery) | $ | 30 | $ | (16 | ) | $ | 166 | $ | 115 | |||
Deferred income tax recovery | (16 | ) | (488 | ) | (62 | ) | (577 | ) | ||||
Income tax expense (recovery) | $ | 14 | $ | (504 | ) | $ | 104 | $ | (462 | ) |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Earnings (loss) from continuing operations before taxes | $ | 216 | $ | (2,443 | ) | $ | 400 | $ | (2,102 | ) | ||
Canadian federal and provincial income tax rates | 25% | 25% | 25% | 25% | ||||||||
Income tax expense (recovery) based on Canadian federal and provincial income tax rates | 54 | (611 | ) | 100 | (526 | ) | ||||||
(Decrease) increase attributable to: | ||||||||||||
Impact of foreign exchange on deferred income tax assets and liabilities | (24 | ) | 74 | 82 | 57 | |||||||
Other impacts of foreign exchange | (2 | ) | 1 | (55 | ) | (5 | ) | |||||
Mexican mining royalty tax | 6 | — | 11 | — | ||||||||
Non-deductible expenditures | 10 | 6 | 17 | 10 | ||||||||
Effects of different foreign statutory tax rates on earnings of subsidiaries | (14 | ) | (4 | ) | (19 | ) | (8 | ) | ||||
Non-taxable mark-to-market gains on the Convertible Notes | — | (3 | ) | — | (11 | ) | ||||||
Non-taxable portion of net earnings from associates | (16 | ) | (5 | ) | (30 | ) | (14 | ) | ||||
Impact of Mexican inflation on tax values | 4 | 2 | (3 | ) | (7 | ) | ||||||
Impact of impairment on mining interests | — | (32 | ) | — | (32 | ) | ||||||
Non-deductible impairment charges to goodwill | — | 71 | — | 71 | ||||||||
Other | (4 | ) | (3 | ) | 1 | 3 | ||||||
$ | 14 | $ | (504 | ) | $ | 104 | $ | (462 | ) |
11. | FINANCIAL INSTRUMENTS |
(a) | Financial assets and liabilities classified as at fair value through profit or loss (“FVTPL”) |
At June 30 2014 | At December 31 2013 | |||||
Current derivative assets (1) | ||||||
Foreign currency, heating oil, copper, lead, and zinc contracts | $ | 44 | $ | 41 | ||
Non-current derivative assets (1) | ||||||
Foreign currency contracts | $ | — | $ | 1 | ||
Current derivative liabilities | ||||||
Foreign currency, heating oil, copper, lead, and zinc contracts | $ | (35 | ) | $ | (43 | ) |
Non-financial contract to sell silver to Silver Wheaton (i) | (2 | ) | (13 | ) | ||
Conversion feature of the Convertible Notes | (1 | ) | (1 | ) | ||
$ | (38 | ) | $ | (57 | ) |
(1) | Included in other current and non-current assets on the Condensed Interim Consolidated Balance Sheets. |
At June 30 2014 | At December 31 2013 | |||||
Arising from sales of metal concentrates – classified as at FVTPL | $ | 291 | $ | 254 | ||
Not arising from sales of metal concentrates – classified as loans and receivables | 188 | 215 | ||||
Accounts receivable | $ | 479 | $ | 469 |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Realized gains (losses) | ||||||||||||
Foreign currency, heating oil, copper, lead, and zinc contracts | $ | 1 | $ | 11 | $ | (2 | ) | $ | 16 | |||
Non-financial contract to sell silver to Silver Wheaton (i) | — | (2 | ) | (2 | ) | (7 | ) | |||||
1 | 9 | (4 | ) | 9 | ||||||||
Unrealized gains (losses) | ||||||||||||
Foreign currency, heating oil, copper, lead, and zinc contracts | 8 | (19 | ) | 10 | (10 | ) | ||||||
Non-financial contract to sell silver to Silver Wheaton (i) | 1 | 19 | 2 | 26 | ||||||||
Conversion feature of the Convertible Notes | 1 | 13 | — | 46 | ||||||||
10 | 13 | 12 | 62 | |||||||||
$ | 11 | $ | 22 | $ | 8 | $ | 71 |
(i) | Non-financial contract to sell silver to Silver Wheaton |
(b) | Financial assets designated as available-for-sale |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Mark-to-market gains (losses) on available-for-sale securities | $ | 20 | $ | (37 | ) | $ | 25 | $ | (75 | ) | ||
Deferred income tax (expense) recovery in OCI | (2 | ) | 5 | (3 | ) | 9 | ||||||
Unrealized gains (losses) on securities, net of tax | 18 | (32 | ) | 22 | (66 | ) | ||||||
Reclassification adjustment for impairment losses included in net earnings (loss), net of tax of $nil for the three and six months ended June 30, 2014 (three and six months ended June 30, 2013 – $nil and $1 million, respectively) | — | 9 | 1 | 13 | ||||||||
Reclassification adjustment for realized gains on disposition of available-for-sale securities recognized in net earnings (loss), net of tax of $nil for the three and six months ended June 30, 2014 (three and six months ended June 30, 2013 – $nil and $1 million, respectively) | (5 | ) | — | (5 | ) | (1 | ) | |||||
$ | 13 | $ | (23 | ) | $ | 18 | $ | (54 | ) |
(c) | Fair value information |
(i) | Fair value measurements of financial assets and liabilities recognized on the Condensed Interim Consolidated Balance Sheets |
At June 30, 2014 | At December 31, 2013 | |||||||||||
Level 1 | Level 2 | Level 1 | Level 2 | |||||||||
Cash and cash equivalents (note 14) | $ | 1,220 | $ | — | $ | 625 | $ | — | ||||
Marketable securities (1) | 21 | 10 | 5 | — | ||||||||
Accounts receivable arising from sales of metal concentrates (note 11(a)) | — | 291 | — | 254 | ||||||||
Investments in securities | 59 | — | 77 | — | ||||||||
Current derivative assets (note 11(a)) | — | 44 | — | 41 | ||||||||
Non-current derivative assets (note 11(a)) | — | — | — | 1 | ||||||||
Current derivative liabilities (note 11(a)) | — | (38 | ) | — | (57 | ) |
(1) | Included in other current assets on the Condensed Interim Consolidated Balance Sheets. |
(ii) | Valuation methodologies for Level 2 financial assets and liabilities |
• | Commodity and currency forward and option contracts: |
• | Non-financial contract to sell silver to Silver Wheaton: |
• | Conversion feature of the Convertible Notes: |
(iii) | Fair values of financial assets and liabilities not already measured and recognized at fair value on the Condensed Interim Consolidated Balance Sheets |
(d) | Financial instruments and related risks |
(i) | Credit risk |
(ii) | Liquidity risk |
(iii) | Currency risk |
12. | SHARE-BASED COMPENSATION AND OTHER RELATED INFORMATION |
(a) | Stock options and restricted share units ("RSUs") |
Options Outstanding (000’s) | Weighted Average Exercise Price (C$/option) | ||||
At January 1, 2014 | 17,137 | $ | 40.49 | ||
Granted | 3,575 | 30.39 | |||
Exercised | (128 | ) | 22.38 | ||
Forfeited/expired | (3,152 | ) | 38.01 | ||
At June 30, 2014 – outstanding | 17,432 | $ | 39.00 | ||
At June 30, 2014 – exercisable | 11,500 | $ | 42.43 | ||
At January 1, 2013 | 16,345 | $ | 42.01 | ||
Granted | 3,281 | 32.64 | |||
Exercised | (9 | ) | 20.56 | ||
Forfeited/expired | (1,717 | ) | 40.38 | ||
At June 30, 2013 – outstanding | 17,900 | $ | 40.46 | ||
At June 30, 2013 – exercisable | 12,122 | $ | 40.94 |
2014 | 2013 | |||||
Expected life | 3.1 years | 3.1 years | ||||
Expected volatility | 37.7 | % | 33.7 | % | ||
Expected dividend yield | 2.4 | % | 2.1 | % | ||
Estimated forfeiture rate | 9.3 | % | 9.3 | % | ||
Risk-free interest rate | 1.2 | % | 1.1 | % | ||
Weighted average share price | $ | 24.93 | $ | 28.20 |
(b) | Other share-based compensation plans |
13. | PER SHARE INFORMATION |
(a) | Net earnings (loss) per share |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Basic net earnings (loss) from continuing operations | $ | 200 | $ | (1,939 | ) | $ | 294 | $ | (1,640 | ) | ||
Effect of dilutive securities: | ||||||||||||
Conversion feature of the Convertible Notes – change in fair value recognized in net earnings (loss) (note 11(a)) | (1 | ) | — | — | (46 | ) | ||||||
Diluted net earnings (loss) from continuing operations | $ | 199 | $ | (1,939 | ) | $ | 294 | $ | (1,686 | ) |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Basic net earnings (loss) | $ | 181 | $ | (1,934 | ) | $ | 279 | $ | (1,625 | ) | ||
Effect of dilutive securities: | ||||||||||||
Conversion feature of the Convertible Notes – change in fair value recognized in net earnings (loss) (note 11(a)) | (1 | ) | — | — | (46 | ) | ||||||
Diluted net earnings (loss) | $ | 180 | $ | (1,934 | ) | $ | 279 | $ | (1,671 | ) |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||
(in thousands) | 2014 | 2013 | 2014 | 2013 | ||||
Basic weighted average number of shares outstanding | 812,954 | 812,043 | 812,918 | 811,857 | ||||
Effect of dilutive securities: | ||||||||
Stock options | 168 | — | 184 | — | ||||
RSUs | 3,170 | — | 3,170 | — | ||||
Convertible Notes | 18,613 | — | 18,537 | 18,235 | ||||
Diluted weighted average number of shares outstanding | 834,905 | 812,043 | 834,809 | 830,092 |
June 30, 2013 | Three Months Ended | Six Months Ended | ||||
Effect on diluted net loss from continuing operations and diluted net loss: | ||||||
Conversion feature of the Convertible Notes – change in fair value recognized in net loss (note 11(a)) | $ | 13 | $ | — | ||
Effect on diluted weighted average number of shares outstanding (in thousands): | ||||||
Stock options | 316 | 431 | ||||
RSUs | 2,476 | 2,476 | ||||
Convertible Notes | 18,290 | — | ||||
Total | 21,082 | 2,907 |
(b) | Dividends declared |
14. | SUPPLEMENTAL CASH FLOW INFORMATION |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Change in operating working capital | ||||||||||||
Accounts receivable | $ | (13 | ) | $ | (23 | ) | $ | (49 | ) | $ | 68 | |
Inventories and stockpiled ore | (30 | ) | (57 | ) | (72 | ) | (121 | ) | ||||
Accounts payable and accrued liabilities | 3 | 36 | (4 | ) | (42 | ) | ||||||
Income taxes | 27 | (169 | ) | 154 | (163 | ) | ||||||
Other | (53 | ) | (47 | ) | (52 | ) | (50 | ) | ||||
$ | (66 | ) | $ | (260 | ) | $ | (23 | ) | $ | (308 | ) |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Operating activities include the following cash received (paid): | ||||||||||||
Interest received | $ | 3 | $ | 1 | $ | 3 | $ | 3 | ||||
Interest paid | (8 | ) | — | (15 | ) | (5 | ) | |||||
Income taxes received | 94 | — | 97 | — | ||||||||
Income taxes paid | (100 | ) | (151 | ) | (111 | ) | (274 | ) |
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Investing activities of discontinued operation include the following cash received (paid): | ||||||||||||
Proceeds on disposition of Marigold, net (note 4) | $ | 182 | $ | — | $ | 182 | $ | — | ||||
Principal repayment on promissory note receivable from Primero (note 11(d)(i)) | 28 | — | 28 | 8 | ||||||||
Expenditures on mining interest | — | (20 | ) | (2 | ) | (42 | ) | |||||
$ | 210 | $ | (20 | ) | $ | 208 | $ | (34 | ) |
At June 30 2014 | At December 31 2013 | |||||
Cash and cash equivalents are comprised of: | ||||||
Cash | $ | 339 | $ | 505 | ||
Short-term money market investments | 881 | 120 | ||||
$ | 1,220 | $ | 625 |
15. | CONTINGENCIES |
• | A gradual increase in the Tier 1 corporate income tax rate from 20% to 25% by 2017; |
• | Elimination of an existing tax concession which allowed the deferral of certain tax payments on profits that were retained in Chile for future investment; and |
• | As of January 1, 2016, the prospective repeal of the Decree Law No. 600, which currently provides that a foreign investment contract may be negotiated between the State of Chile and investors, that contains specific rules, including such clauses as tax stability, applicable to specific investments. |
CORPORATE OFFICE | STOCK EXCHANGE LISTING |
Park Place | Toronto Stock Exchange: G |
Suite 3400 – 666 Burrard Street | New York Stock Exchange: GG |
Vancouver, BC V6C 2X8 Canada | |
Tel: (604) 696-3000 | TRANSFER AGENT |
Fax: (604) 696-3001 | |
CST Trust Company | |
www.goldcorp.com | 1066 West Hastings Street |
Vancouver, BC V6E 3X1 Canada | |
TORONTO OFFICE | Toll free in Canada and the US: |
(800) 387-0825 | |
Suite 3201 – 130 Adelaide Street West | Outside of Canada and the US: |
Toronto, ON M5H 3P5 Canada | (416) 682-3860 |
Tel: (416) 865-0326 | |
Fax: (416) 359-9787 | inquiries@canstockta.com |
RENO OFFICE | www.canstockta.com |
Suite 310 – 5190 Neil Road | |
Reno, NV 89502 United States | |
Tel: (775) 827-4600 | AUDITORS |
Fax: (775) 827-5044 | |
Deloitte LLP | |
MEXICO OFFICE | Vancouver, BC |
Paseo de las Palmas 425-15 | INVESTOR RELATIONS |
Lomas de Chapultepec | |
11000 Mexico, D.F. | Jeff Wilhoit |
Tel: 52 (55) 5201-9600 | Vice President, Investor Relations |
Toll free: (800) 567-6223 | |
GUATEMALA OFFICE | Email: info@goldcorp.com |
5ta avenida 5-55 zona 14 Europlaza | REGULATORY FILINGS |
Torre 1 Nivel 6 oficina 601 | |
Guatemala City | The Company’s filings with the Ontario Securities Commission |
Guatemala, 01014 | can be accessed on SEDAR at www.sedar.com. |
Tel: 502 2329 2600 | |
The Company’s filings with the US Securities and | |
ARGENTINA OFFICE | Exchange Commission can be accessed on EDGAR |
at www.sec.gov. | |
Maipu 255, Piso 12 | |
C1084ABE Capital Federal | |
Buenos Aires, Argentina | |
Tel: 54 114 323 7000 | |
CHILE OFFICE | |
Avda. Apoquindo 4501, oficina 703 | |
Las Condes | |
Santiago 7580125, Chile | |
Tel: 562 898 9300 |
1. | Review: I have reviewed the unaudited condensed interim consolidated financial report and interim Management’s Discussion and Analysis (“MD&A”) (together, the “interim filings”) of Goldcorp Inc. (the “issuer”) for the interim period ended June 30, 2014; |
2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the unaudited condensed interim consolidated financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
4. | Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. |
5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings, |
(i) | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and |
(ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
(b) | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
5.1 | Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission. |
5.3 | N/A. |
6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2014 and ended on June 30, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
Date: July 31, 2014 | |
/s/ “Charles Jeannes” | |
Signature: Charles Jeannes | |
Title: President and Chief Executive Officer |
1. | Review: I have reviewed the unaudited condensed interim consolidated financial report and interim Management’s Discussion and Analysis (“MD&A”) (together, the “interim filings”) of Goldcorp Inc. (the “issuer”) for the interim period ended June 30, 2014; |
2. | No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings. |
3. | Fair presentation: Based on my knowledge, having exercised reasonable diligence, the unaudited condensed interim consolidated financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings. |
4. | Responsibility: The issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer. |
5. | Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer and I have, as at the end of the period covered by the interim filings, |
(i) | material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and |
(ii) | information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and |
(b) | designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP. |
5.1 | Control framework: The control framework the issuer’s other certifying officer and I used to design the issuer’s ICFR is Internal Control - Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission. |
5.2 | N/A. |
5.3 | N/A. |
6. | Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2014 and ended on June 30, 2014 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR. |
Date: July 31, 2014 | |
/s/ "Lindsay Hall" | |
Signature: Lindsay Hall | |
Title: Executive Vice President and Chief Financial Officer | |