GOLDCORP INC. | ||
Date: February 18, 2015 | /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 year ended December 31, 2014 | |
99.2 | Condensed Interim Consolidated Financial Statements of the Company for the Three and Audited Consolidated Financial Statements of the Company for the year ended December 31, 2014 | |
99.3 | Consent of Deloitte LLP, Independent Registered Public Accounting Firm | |
• | On January 30, 2015, the Company announced it had signed a Collaboration Agreement with the Wabauskang First Nations. The agreement paves the way for long-term economic benefits for the northwestern Ontario First Nations and provides a framework for strengthened collaboration in the development and operations of the Red Lake Gold Mines. With the signing of the agreement, the Company now has collaboration agreements in place with all the First Nations which assert Aboriginal and treaty rights in the vicinity of the Company's active operations in Canada. |
• | On January 19, 2015, the Company and Probe Mines Limited ("Probe") announced an agreement whereby the Company will acquire, through a friendly plan of arrangement, all the outstanding shares of Probe for total consideration of approximately C$526 million. Probe's principal asset is the 100%-owned Borden Gold project in Ontario, 160 kilometres west of the Company's Porcupine mine. Under the terms of the offer, each common share of Probe not owned by the Company will be exchanged for 0.1755 common shares of the Company. The Company currently owns 15.7 million shares and 2.8 million warrants of Probe, representing a 19.9% partially-diluted ownership interest, of which 7.3 million shares and 2.8 million warrants were purchased from Agnico Eagle Mines Limited on January 27, 2015 and February 2, 2015 for cash consideration of C$45 million. The offer is subject to customary conditions, including the acceptance by Probe shareholders owning a minimum of 66.67% of the outstanding common shares of Probe on a fully diluted basis. The offer is not subject to the Company's shareholders' approval. The transaction is expected to close by the end of March 2015. |
• | On January 12, 2015, the Company announced that it had entered into a definitive stock purchase agreement whereby it will sell its 100% interest in Wharf in Lead, South Dakota to Coeur Mining, Inc. Under the terms of the agreement, the Company will receive total consideration of $105 million in cash, subject to certain closing adjustments. The transaction is expected to close on February 20, 2015. |
• | Cerro Negro declared commercial production effective January 1, 2015. |
• | On November 24, 2014, the Company announced that it had signed a Resource Development Agreement ("RDA") with four First Nations communities, including the Mattagami First Nation, Wahgoshig First Nation, Matachewan First Nation, and Flying Post First Nation. The agreement establishes a framework for continued consultation on current and future operations in the Timmins area, including defining long-term benefits for the First Nations. |
• | Cerro Negro and Éléonore achieved first gold production on July 25, 2014 and October 1, 2014, respectively. |
• | On June 9, 2014, the Company completed an issuance of $1.0 billion of senior unsecured notes and received net proceeds of $988 million. A portion of these proceeds were used to repay, upon maturity on August 1, 2014, the Company's $863 million convertible senior notes. |
• | On April 4, 2014, the Company and its joint venture partner, Barrick Gold Corporation ("Barrick"), 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). |
• | On March 26, 2014, the Company completed the sale of 31,151,200 common shares of Primero Mining Corp. ("Primero") to a syndicate of underwriters for $201 million (C$224 million), recognizing a gain of $18 million, net of selling costs of $8 million. Goldcorp no longer owns any shares of Primero. |
• | On March 3, 2014, the Company secured a letter of credit in the amount of $36.3 million (C$40.1 million) to cover 100% of the closure obligation related to the Éléonore mine in northern Quebec. |
• | On January 8, 2014, the Company filed a National Instrument 43-101 updated technical report for Peñasquito. The new life-of-mine plan resulted in a 13 year mine life that positively impacts the five-year production profile and increased cash flows over the life of the mine. In addition, on March 28, 2014 the Company filed updated National Instrument 43-101 technical reports for Éléonore and Pueblo Viejo. |
• | Key consolidated financial information: |
◦ | A net loss attributable to shareholders of Goldcorp, including discontinued operations, of $(2,396) million, or $(2.94) per share, for the fourth quarter and $(2,161) million, or $(2.66) per share, for 2014, compared with a net loss, including discontinued operations, of $(1,089) million, or $(1.34) per share, and $(2,709) million, or $(3.34) per share, respectively, in 2013. |
◦ | Operating cash flows, including discontinued operations, of $274 million for the fourth quarter and $1,014 million for 2014, compared with $307 million and $955 million, respectively, in 2013. |
◦ | Dividends paid of $488 million in 2014, compared to $486 million in 2013. |
◦ | $1.7 billion of liquidity. (1) |
◦ | At December 31, 2014, the Company recognized an impairment charge of $2,300 million, net of tax, principally in respect of the Company's exploration potential at its Cerro Negro mine. |
• | Key performance measures: (2) |
◦ | Goldcorp’s share of gold production increased to 890,900 ounces for the fourth quarter and 2,871,200 ounces for 2014, compared with 768,900 ounces and 2,666,600 ounces, respectively, in 2013. |
◦ | Total cash costs of $589 per gold ounce for the fourth quarter and $542 per gold ounce for 2014, net of by-product silver, copper, lead and zinc credits, compared with $467 and $553 per gold ounce, respectively, in 2013. On a co-product basis, cash costs of $669 per gold ounce for the fourth quarter and $668 per gold ounce for 2014, compared with $645 and $687 per gold ounce, respectively, in 2013. (3) |
◦ | All-in sustaining costs of $1,035 per gold ounce for the fourth quarter and $949 per gold ounce for 2014, compared with $810 and $1,031 per gold ounce, respectively, in 2013. All-in costs of $1,544 per gold ounce for the fourth quarter and $1,499 per gold ounce for 2014, compared with $1,336 and $1,575 per gold ounce, respectively, in 2013. (4) |
◦ | Adjusted net earnings of $55 million, or $0.07 per share, for the fourth quarter and $498 million, or $0.61 per share, for 2014, compared with $74 million, or $0.09 per share, and $634 million, or $0.78 per share, respectively, in 2013. (5) |
◦ | Goldcorp’s share of adjusted operating cash flows of $337 million for the fourth quarter and $1,393 million for 2014, compared to $439 million and $1,601 million, respectively, in 2013. (6) |
◦ | Goldcorp’s share of negative free cash flows of $(241) million for the fourth quarter and $(1,003) million for 2014, compared to $(351) million and $(1,375) million, respectively, in 2013. (7) |
(1) | At December 31, 2014, the Company held $482 million of cash and cash equivalents, $53 million of money market investments, and had $1.2 billion undrawn on its $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 operations, 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 |
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 46 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 48 for a reconciliation of adjusted net earnings to reported net loss attributable to shareholders of Goldcorp. |
(6) | Adjusted operating cash flows is a non-GAAP performance measure 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 50 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 50 for a reconciliation of free cash flows to reported net cash provided by operating activities. |
Consolidated financial information | 2014 | 2013 | 2012 | ||||||
Revenues (1)(2)(3) | $ | 3,436 | $ | 3,609 | $ | 4,660 | |||
(Loss) earnings from operations and associates (2) | $ | (2,527 | ) | $ | (2,282 | ) | $ | 2,025 | |
(Loss) earnings from continuing operations (3) | $ | (2,168 | ) | $ | (2,657 | ) | $ | 1,695 | |
Net earnings (loss) from discontinued operations (3) | $ | 9 | $ | (52 | ) | $ | 54 | ||
Net (loss) earnings | $ | (2,159 | ) | $ | (2,709 | ) | $ | 1,749 | |
Net (loss) earnings attributable to shareholders of Goldcorp | $ | (2,161 | ) | $ | (2,709 | ) | $ | 1,749 | |
Net (loss) earnings from continuing operations per share(3) | |||||||||
– Basic | $ | (2.67 | ) | $ | (3.27 | ) | $ | 2.09 | |
– Diluted | $ | (2.67 | ) | $ | (3.27 | ) | $ | 1.89 | |
Net (loss) earnings per share | |||||||||
– Basic | $ | (2.66 | ) | $ | (3.34 | ) | $ | 2.16 | |
– Diluted | $ | (2.66 | ) | $ | (3.34 | ) | $ | 1.95 | |
Cash flows from operating activities of continuing operations (1)(2)(3) | $ | 982 | $ | 886 | $ | 1,900 | |||
Cash flows from operating activities including discontinued operations (1)(2)(3) | $ | 1,014 | $ | 955 | $ | 1,960 | |||
Dividends paid | $ | 488 | $ | 486 | $ | 438 | |||
Cash and cash equivalents (2) | $ | 482 | $ | 625 | $ | 757 | |||
Total assets | $ | 27,866 | $ | 29,564 | $ | 30,979 | |||
Non-current liabilities | $ | 9,235 | $ | 7,773 | $ | 6,982 |
Key performance measures (4) | 2014 | 2013 | 2012 | ||||||
Gold produced (ounces) (3) | 2,777,300 | 2,502,900 | 2,299,900 | ||||||
Gold sold (ounces) (1)(3) | 2,580,800 | 2,434,000 | 2,244,600 | ||||||
Silver produced (ounces) | 36,807,500 | 30,326,100 | 30,470,500 | ||||||
Copper produced (thousands of pounds) | 84,800 | 90,600 | 112,200 | ||||||
Lead produced (thousands of pounds) | 152,300 | 159,100 | 153,700 | ||||||
Zinc produced (thousands of pounds) | 329,700 | 279,300 | 324,200 | ||||||
Average realized gold price (per ounce) | $ | 1,264 | $ | 1,385 | $ | 1,672 | |||
Average London spot gold price (per ounce) | $ | 1,266 | $ | 1,410 | $ | 1,669 | |||
Total cash costs – by-product (per gold ounce) (5) | $ | 531 | $ | 529 | $ | 279 | |||
Total cash costs – co-product (per gold ounce) (6) | $ | 661 | $ | 672 | $ | 632 | |||
All-in sustaining costs (per gold ounce) | $ | 949 | $ | 1,008 | $ | 867 | |||
Adjusted net earnings | $ | 468 | $ | 600 | $ | 1,588 | |||
Adjusted operating cash flow | $ | 1,362 | $ | 1,527 | $ | 2,334 | |||
Including discontinued operations (3) | |||||||||
Gold produced (ounces) | 2,871,200 | 2,666,600 | 2,396,200 | ||||||
Gold sold (ounces) (1) | 2,672,800 | 2,597,200 | 2,340,600 | ||||||
Total cash costs – by-product (per gold ounce) (5) | $ | 542 | $ | 553 | $ | 300 | |||
Total cash costs – co-product (per gold ounce) (6) | $ | 668 | $ | 687 | $ | 638 | |||
All-in sustaining costs (per gold ounce) | $ | 949 | $ | 1,031 | $ | 884 | |||
Adjusted net earnings | $ | 498 | $ | 634 | $ | 1,642 | |||
Adjusted operating cash flow | $ | 1,393 | $ | 1,601 | $ | 2,409 |
(1) | Excludes pre-commissioning sales ounces from Cerro Negro, Éléonore, and 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 period 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) | In accordance with the requirements of IFRS 5 – Non-current assets held for sale and discontinued operations, the Company's 100% interest in Wharf was classified as a discontinued operation for the year ended December 31, 2014, accordingly the 2013 comparative information for Wharf has been re-presented however the 2012 comparative information has not been re-presented. The Company's 66.7% interest in Marigold was classified as a discontinued operation for the years ended December 31, 2014 and 2013, accordingly, the 2012 comparative information for Marigold has been re-presented. |
(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 3). |
• | Revenues decreased by $173 million, or 5%, primarily due to a $241 million decrease in gold revenues and a $13 million decrease in silver revenues, partially offset by an $85 million increase in zinc revenues, net of refining charges. The decrease in revenues is primarily a result of the decrease in gold and silver commodity prices during the year ended December 31, 2014, partially offset by higher sales volumes for silver and zinc; |
• | Production costs increased by $140 million, or 7%, primarily due to revisions in estimates at the Company's inactive and closed mines during the year ended December 31, 2014 resulting in a $72 million increase in reclamation and closure costs compared with a $25 million reduction during the year ended December 31, 2013; a $41 million and $31 million reduction of the carrying values of the low-grade stockpile at Peñasquito and the heap leach ore inventory at Los Filos, respectively, to net realizable value during the year ended December 31, 2014; and increased water use payments in Peñasquito in the first quarter of 2014; partially offset by increased capitalized stripping costs at Peñasquito during the year ended December 31, 2014; and favourable foreign exchange movements which decreased production costs by $70 million from prior year; |
• | Depreciation and depletion increased by $123 million, or 20%, due to higher overall sales volumes; new assets put into service; and a $14 million and $10 million reduction of the carrying values of the low-grade stockpile at Peñasquito and the heap leach ore inventory at Los Filos, respectively, to net realizable value during the year ended December 31, 2014; |
• | The Company’s share of net earnings of associates of $156 million was comprised of net earnings of $91 million from Pueblo Viejo; net earnings of $35 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; and net earnings of $30 million from Alumbrera. The Company’s share of net losses and impairments of associates of $395 million for the year ended December 31, 2013 was comprised of a net loss of $295 million from Alumbrera primarily due to a $276 million impairment expense recognized in respect of the Company's investment; a net loss of $66 million from Pueblo Viejo primarily due to the $183 million cumulative tax expense recognized as a result of the renegotiated Special Lease Agreement ("SLA") with the government of the Dominican Republic; and a net loss of $34 million from the Company's equity investments in Primero and Tahoe, primarily due to an impairment expense of $19 million recognized in respect of the Company's investment in Primero; |
• | An impairment of mining interests and goodwill of $2,999 million ($2,313 million, net of tax), comprised of an impairment expense of $2,980 million and $19 million ($2,300 million and $13 million, net of tax) recognized against the carrying amount of the Cerro Negro project and the El Sauzal mine, respectively, during the year ended December 31, 2014. An impairment of mining interests and goodwill of $2,646 million ($2,020 million, net of tax) was recognized during the year ended December 31, 2013, comprised of an impairment expense of $2,427 million ($1,827 million, net of tax) recognized against the carrying amount of the Peñasquito mine, $131 million ($131 million, net of tax) recognized against the carrying amount of the Cerro Blanco project, $59 million ($42 million, net of tax) recognized against the carrying amount of certain of the Company's Mexican exploration projects, and $29 million ($20 million, net of tax) recognized against the carrying amount of the El Sauzal mine; |
• | Corporate administration, excluding share-based compensation expense, was $175 million, an $11 million increase compared to the year ended December 31, 2013. Share-based compensation expense of $72 million for the year ended December 31, 2014 was comparable to the year ended December 31, 2013; |
• | A $17 million gain on securities primarily due to the sale of certain available-for-sale equity and marketable securities during the year ended December 31, 2014. A $32 million loss on securities was recognized during the year ended December 31, 2013 representing an impairment expense on certain of the Company's available-for-sale equity and marketable securities; |
• | A $40 million loss on derivatives for the year ended December 31, 2014 comprised of a loss on foreign currency, heating oil, copper, lead, and zinc contracts. During 2014, the Company repaid the $863 million convertible senior notes (the "Convertible Notes") upon maturity and delivered the remaining ounces of silver under the contract to sell 1.5 million ounces of silver to Silver Wheaton at a fixed price over each of the four years ended August 5, 2014 (the "Silver Wheaton silver contract"). For the year ended December 31, 2013, an $83 million gain on derivatives was comprised of a $57 million unrealized gain on the conversion feature of the Convertible Notes; a $17 million net gain on the Silver Wheaton silver contract; and a $9 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 year ended December 31, 2014 as the Company sold its equity interest in Primero on March 26, 2014. An $11 million loss ($8 million, net of tax) on disposition of mining interests during the year ended December 31, 2013 arose on the Company's sale of its 30.8% interest in the Cerro del Gallo property to Primero; |
• | Other expenses of $27 million for the year ended December 31, 2014 was comprised primarily of $22 million of net foreign exchange losses arising on value added tax receivables denominated in Mexican and Argentine pesos, and cash and cash equivalents denominated in Canadian dollars. Other expenses of $57 million for the year ended December 31, 2013 was comprised primarily of $43 million of net foreign exchange losses arising on value added tax receivables denominated in Mexican and Argentine pesos, and cash and cash equivalents denominated in Canadian dollars. The decrease in net foreign exchange losses compared to the prior year was a result of the weakening Mexican and Argentine peso and the Canadian dollar during the year ended December 31, 2014; |
• | Income tax recovery for the year ended December 31, 2014 totaled $440 million (year ended December 31, 2013 – income tax expense of $309 million) and was impacted by: |
• | An $272 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 $133 million foreign exchange loss for the year ended December 31, 2013. The foreign exchange related deferred income tax impacts resulted from the weakening Canadian dollar and Argentine and Mexican peso during the years ended December 31, 2014 and 2013; |
• | During the year ended December 31, 2014 a deferred income tax recovery of $686 million arising on the impairment of mining interests and goodwill was recognized compared to a $626 million deferred income tax recovery recognized during the year ended December 31, 2013; |
• | A decrease in the effective tax rate for the year ended December 31, 2014 from 18% to negative 6%, after adjusting income taxes for the above noted items, the non-deductible share-based compensation expense, the impairment of mining interests and goodwill from loss before taxes, and the deferred tax impacts of the Mexican tax law changes and electing to pay Guatemalan taxes on net income rather than gross revenues during the year ended December 31, 2013. The year ended December 31, 2014 was favourably impacted by higher income from associates primarily due to the impact of the renegotiated SLA and the impairments recognized in respect of Alumbrera and Primero during the year ended December 31, 2013, the gain on sale of Primero during the year ended December 31, 2014 not being subject to tax, and higher tax deductible foreign exchange losses on US dollar debt in Argentina. These favourable impacts were 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 $74 million during the year ended December 31, 2013; and |
• | Net earnings from discontinued operations of $9 million for the year ended December 31, 2014 due to net earnings of $24 million from Wharf and net earnings of $6 million from the Company's 66.7% share of Marigold, both of which were classified as discontinued operations during the year ended December 31, 2014, partially offset by the $21 million net loss recognized on the sale of the Company's 66.7% share of Marigold. The Company had a net loss of $52 million for the year ended December 31, 2013 as a result of an $86 million, net of tax, impairment expense on the Company's 66.7% share of Marigold, partially offset by $34 million of net earnings from Wharf and 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 48 for a reconciliation of adjusted net earnings to reported net 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 43 for a reconciliation of total cash costs to reported production costs. |
2014 | |||||||||||||||
Consolidated financial information | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Revenues (1)(2) | $ | 878 | $ | 884 | $ | 839 | $ | 835 | $ | 3,436 | |||||
Earnings (loss) from operations and associates | $ | 201 | $ | 207 | $ | 53 | $ | (2,988 | ) | $ | (2,527 | ) | |||
Net earnings (loss) from continuing operations (2) | $ | 89 | $ | 194 | $ | (48 | ) | $ | (2,403 | ) | $ | (2,168 | ) | ||
Net earnings (loss) from discontinued operations (2) | $ | 9 | $ | (11 | ) | $ | 4 | $ | 7 | $ | 9 | ||||
Net earnings (loss) | $ | 98 | $ | 183 | $ | (44 | ) | $ | (2,396 | ) | $ | (2,159 | ) | ||
Net earnings (loss) attributable to shareholders of Goldcorp | $ | 98 | $ | 181 | $ | (44 | ) | $ | (2,396 | ) | $ | (2,161 | ) | ||
Net earnings (loss) from continuing operations per share(2) | |||||||||||||||
– Basic | $ | 0.11 | $ | 0.24 | $ | (0.06 | ) | $ | (2.95 | ) | $ | (2.67 | ) | ||
– Diluted | $ | 0.11 | $ | 0.24 | $ | (0.06 | ) | $ | (2.95 | ) | $ | (2.67 | ) | ||
Net earnings (loss) per share | |||||||||||||||
– Basic | $ | 0.12 | $ | 0.22 | $ | (0.05 | ) | $ | (2.94 | ) | $ | (2.66 | ) | ||
– Diluted | $ | 0.12 | $ | 0.22 | $ | (0.05 | ) | $ | (2.94 | ) | $ | (2.66 | ) | ||
Cash flows from operating activities of continuing operations (1)(2) | $ | 263 | $ | 266 | $ | 188 | $ | 265 | $ | 982 | |||||
Cash flows from operating activities including discontinued operations (1)(2) | $ | 273 | $ | 275 | $ | 192 | $ | 274 | $ | 1,014 | |||||
Dividends paid | $ | 122 | $ | 122 | $ | 122 | $ | 122 | $ | 488 | |||||
Cash and cash equivalents | $ | 1,001 | $ | 1,220 | $ | 376 | $ | 482 | $ | 482 | |||||
Total assets | $ | 30,175 | $ | 30,618 | $ | 30,218 | $ | 27,866 | $ | 27,866 | |||||
Non-current liabilities | $ | 7,747 | $ | 8,762 | $ | 8,868 | $ | 9,235 | $ | 9,235 |
2014 | |||||||||||||||
Key performance measures (3) | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Gold produced (ounces) (2) | 643,100 | 633,700 | 635,500 | 865,000 | 2,777,300 | ||||||||||
Gold sold (ounces) (1)(2) | 648,700 | 624,000 | 627,000 | 681,100 | 2,580,800 | ||||||||||
Silver produced (ounces) | 9,581,400 | 8,984,000 | 7,815,800 | 10,426,300 | 36,807,500 | ||||||||||
Copper produced (thousands of pounds) | 21,500 | 19,300 | 16,800 | 27,200 | 84,800 | ||||||||||
Lead produced (thousands of pounds) | 49,500 | 38,600 | 37,000 | 27,200 | 152,300 | ||||||||||
Zinc produced (thousands of pounds) | 87,900 | 91,900 | 81,000 | 68,900 | 329,700 | ||||||||||
Average realized gold price (per ounce) | $ | 1,297 | $ | 1,296 | $ | 1,265 | $ | 1,203 | $ | 1,264 | |||||
Average London spot gold price (per ounce) | $ | 1,294 | $ | 1,289 | $ | 1,282 | $ | 1,201 | $ | 1,266 | |||||
Total cash costs – by-product (per gold ounce) (4) | $ | 482 | $ | 464 | $ | 590 | $ | 582 | $ | 531 | |||||
Total cash costs – co-product (per gold ounce) (5) | $ | 655 | $ | 641 | $ | 678 | $ | 665 | $ | 661 | |||||
All-in sustaining costs (per gold ounce) | $ | 827 | $ | 853 | $ | 1,067 | $ | 1,043 | $ | 949 | |||||
Adjusted net earnings | $ | 200 | $ | 154 | $ | 66 | $ | 48 | $ | 468 | |||||
Adjusted operating cash flow | $ | 272 | $ | 369 | $ | 392 | $ | 329 | $ | 1,362 | |||||
Including discontinued operations (2) | |||||||||||||||
Gold produced (ounces) | 679,900 | 648,700 | 651,700 | 890,900 | 2,871,200 | ||||||||||
Gold sold (ounces) (1) | 684,000 | 639,500 | 641,400 | 707,900 | 2,672,800 | ||||||||||
Total cash costs – by-product (per gold ounce) (4) | $ | 507 | $ | 470 | $ | 597 | $ | 589 | $ | 542 | |||||
Total cash costs – co-product (per gold ounce) (5) | $ | 673 | $ | 643 | $ | 682 | $ | 669 | $ | 668 | |||||
All-in sustaining costs (per gold ounce) | $ | 840 | $ | 852 | $ | 1,066 | $ | 1,035 | $ | 949 | |||||
Adjusted net earnings | $ | 209 | $ | 164 | $ | 70 | $ | 55 | $ | 498 | |||||
Adjusted operating cash flow | $ | 281 | $ | 376 | $ | 399 | $ | 337 | $ | 1,393 |
2013 | |||||||||||||||
Consolidated financial information | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Revenues (1)(2) | $ | 946 | $ | 836 | $ | 871 | $ | 956 | $ | 3,609 | |||||
Earnings (loss) from operations and associates | $ | 300 | $ | (2,451 | ) | $ | (7 | ) | $ | (124 | ) | $ | (2,282 | ) | |
Net earnings (loss) from continuing operations (2) | $ | 293 | $ | (1,946 | ) | $ | (3 | ) | $ | (1,001 | ) | $ | (2,657 | ) | |
Net earnings (loss) from discontinued operations (2) | $ | 16 | $ | 12 | $ | 8 | $ | (88 | ) | $ | (52 | ) | |||
Net earnings (loss) | $ | 309 | $ | (1,934 | ) | $ | 5 | $ | (1,089 | ) | $ | (2,709 | ) | ||
Net earnings (loss) attributable to shareholders of Goldcorp | $ | 309 | $ | (1,934 | ) | $ | 5 | $ | (1,089 | ) | $ | (2,709 | ) | ||
Net earnings (loss) from continuing operations per share(2) | |||||||||||||||
– Basic | $ | 0.36 | $ | (2.40 | ) | $ | — | $ | (1.23 | ) | $ | (3.27 | ) | ||
– Diluted | $ | 0.32 | $ | (2.40 | ) | $ | — | $ | (1.23 | ) | $ | (3.27 | ) | ||
Net earnings (loss) per share | |||||||||||||||
– Basic | $ | 0.38 | $ | (2.38 | ) | $ | 0.01 | $ | (1.34 | ) | $ | (3.34 | ) | ||
– Diluted | $ | 0.33 | $ | (2.38 | ) | $ | — | $ | (1.34 | ) | $ | (3.34 | ) | ||
Cash flows from operating activities of continuing operations (1)(2) | $ | 268 | $ | 66 | $ | 256 | $ | 296 | $ | 886 | |||||
Cash flows from operating activities including discontinued operations (1)(2) | $ | 294 | $ | 80 | $ | 274 | $ | 307 | $ | 955 | |||||
Dividends paid | $ | 122 | $ | 121 | $ | 122 | $ | 121 | $ | 486 | |||||
Cash and cash equivalents | $ | 1,463 | $ | 899 | $ | 972 | $ | 625 | $ | 625 | |||||
Total assets | $ | 32,632 | $ | 30,029 | $ | 29,933 | $ | 29,564 | $ | 29,564 | |||||
Non-current liabilities | $ | 8,323 | $ | 7,808 | $ | 6,995 | $ | 7,773 | $ | 7,773 |
2013 | |||||||||||||||
Key performance measures (3) | Q1 | Q2 | Q3 | Q4 | Total | ||||||||||
Gold produced (ounces) (2) | 570,400 | 607,300 | 595,200 | 730,000 | 2,502,900 | ||||||||||
Gold sold (ounces) (1)(2) | 552,200 | 586,100 | 608,500 | 687,200 | 2,434,000 | ||||||||||
Silver produced (ounces) | 5,633,400 | 7,180,000 | 7,744,600 | 9,768,100 | 30,326,100 | ||||||||||
Copper produced (thousands of pounds) | 18,800 | 21,600 | 21,400 | 28,800 | 90,600 | ||||||||||
Lead produced (thousands of pounds) | 29,100 | 35,400 | 41,000 | 53,600 | 159,100 | ||||||||||
Zinc produced (thousands of pounds) | 52,000 | 70,100 | 76,300 | 80,900 | 279,300 | ||||||||||
Average realized gold price (per ounce) | $ | 1,622 | $ | 1,357 | $ | 1,341 | $ | 1,254 | $ | 1,385 | |||||
Average London spot gold price (per ounce) | $ | 1,631 | $ | 1,414 | $ | 1,327 | $ | 1,272 | $ | 1,410 | |||||
Total cash costs – by-product (per gold ounce) (4) | $ | 543 | $ | 631 | $ | 523 | $ | 437 | $ | 529 | |||||
Total cash costs – co-product (per gold ounce) (5) | $ | 698 | $ | 699 | $ | 688 | $ | 625 | $ | 672 | |||||
All-in sustaining costs (per gold ounce) | $ | 1,113 | $ | 1,208 | $ | 969 | $ | 784 | $ | 1,008 | |||||
Adjusted net earnings | $ | 237 | $ | 105 | $ | 182 | $ | 76 | $ | 600 | |||||
Adjusted operating cash flow | $ | 369 | $ | 372 | $ | 358 | $ | 428 | $ | 1,527 | |||||
Including discontinued operations (2) | |||||||||||||||
Gold produced (ounces) | 614,600 | 646,000 | 637,100 | 768,900 | 2,666,600 | ||||||||||
Gold sold (ounces) (1) | 595,100 | 624,300 | 652,100 | 725,700 | 2,597,200 | ||||||||||
Total cash costs – by-product (per gold ounce) (4) | $ | 565 | $ | 646 | $ | 551 | $ | 467 | $ | 553 | |||||
Total cash costs – co-product (per gold ounce) (5) | $ | 710 | $ | 713 | $ | 706 | $ | 645 | $ | 687 | |||||
All-in sustaining costs (per gold ounce) | $ | 1,134 | $ | 1,227 | $ | 995 | $ | 810 | $ | 1,031 | |||||
Adjusted net earnings | $ | 253 | $ | 117 | $ | 190 | $ | 74 | $ | 634 | |||||
Adjusted operating cash flow | $ | 400 | $ | 388 | $ | 374 | $ | 439 | $ | 1,601 |
(1) | Excludes pre-commissioning sales ounces from Cerro Negro and Éléonore as costs incurred, net of proceeds from sales, were credited against capitalized project costs. |
(2) | The Company's 100% interest in Wharf and 66.7% interest in Marigold are classified as discontinued operations for the year ended December 31, 2014. The comparative information has been re-presented in accordance with the requirements of IFRS 5 – Non-current assets held for sale and discontinued operations. |
(3) | 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. |
(4) | 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). |
(5) | 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 3). |
• | Revenues decreased by $4 million, primarily due to a $22 million decrease in lead and zinc revenues, net of refining charges, at Peñasquito and a $19 million decrease in silver revenues, partially offset by a $36 million increase in gold revenues. The decrease in revenues resulted primarily from the decline in commodity prices during the fourth quarter of 2014 and lower sales volumes for silver and lead, partially offset by higher sales volumes for gold compared to the third quarter of 2014; |
• | Production costs increased by $66 million, or 13%, due to revisions in estimates at the Company's inactive and closed mines during the fourth quarter of 2014 resulting in a $56 million increase in reclamation and closure costs; a $31 million reduction of the carrying value of the heap leach ore inventory at Los Filos to net realizable value recognized during the fourth quarter of 2014; higher consumable and site costs; and lower capitalized stripping costs at Peñasquito during the fourth quarter of 2014; partially offset a $41 million reduction of the carrying value of the low-grade stockpile at Peñasquito to net realizable value recognized during the third quarter of 2014; and favourable foreign exchange movements; |
• | Depreciation and depletion increased by $24 million, or 13%, due to higher overall sales volumes; |
• | The Company’s share of net earnings of associates increased by $10 million from the prior quarter primarily due to a $20 million increase in the Company's share of net earnings of Alumbrera, partially offset by a $5 million decrease in the Company's share of net earnings of Pueblo Viejo; |
• | An impairment of mining interests and goodwill of $2,980 million ($2,300 million, net of tax) was recognized against the carrying amount of the Cerro Negro project in the fourth quarter of 2014. An impairment of mining interests of $19 million ($13 million, net of tax) was recognized against the carrying amount of the El Sauzal mine in the third quarter of 2014; |
• | Corporate administration, excluding share-based compensation expense, was $46 million, which was comparable to the prior quarter. Share-based compensation expense of $13 million for the fourth quarter of 2014 decreased by $6 million compared to the prior quarter due to a decrease in the fair value of the Company's performance share units; |
• | A $34 million loss on derivatives in the fourth quarter of 2014 comprised of a loss on foreign currency, heating oil, copper, lead, and zinc contracts. A $14 million net loss on derivatives in the third quarter of 2014 comprised of a $14 million net loss on foreign currency, heating oil, copper, lead, and zinc contracts; and a $1 million realized loss on the Silver Wheaton silver contract which was settled during the third quarter of 2014; partially offset by a $1 million gain on the conversion feature of the Convertible Notes which was repaid upon maturity during the third quarter of 2014; |
• | Finance costs decreased by $6 million from the prior quarter primarily due to an increase in interest expense eligible for capitalization to the Company's development projects; and |
• | Income tax recovery for the three months ended December 31, 2014 totaled $625 million (three months ended September 30, 2014 – income tax expense of $83 million) and was impacted by: |
• | A $105 million foreign exchange loss 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 an $85 million foreign exchange loss for the third quarter of 2014; |
• | During the fourth quarter of 2014 a deferred income tax recovery of $680 million arising on the impairment of mining interests and goodwill; |
• | After adjusting for the above noted items, the non-deductible share-based compensation expense, and the impairment of mining interests and goodwill from loss before taxes, the income tax recovery for the fourth quarter of 2014 was primarily a result of a higher tax benefit of inflationary adjustments in Mexico for the fourth quarter of 2014, partially offset by lower tax deductible foreign exchange losses on US dollar denominated debt in Argentina. |
(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 48 for a reconciliation of adjusted net earnings to reported net 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 43 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 | $ | 529 | 414,400 | 418,300 | $ | 1,262 | $ | 569 | $ | 934 | ||||||
2013 | $ | 684 | 493,000 | 487,300 | $ | 1,400 | $ | 531 | $ | 880 | |||||||
Porcupine | 2014 | 379 | 300,000 | 299,400 | 1,262 | 647 | 906 | ||||||||||
2013 | 407 | 291,900 | 292,000 | 1,390 | 717 | 1,034 | |||||||||||
Musselwhite | 2014 | 354 | 278,300 | 279,200 | 1,265 | 629 | 811 | ||||||||||
2013 | 353 | 256,300 | 253,700 | 1,390 | 760 | 1,088 | |||||||||||
Peñasquito | 2014 | 1,432 | 567,800 | 561,700 | 1,266 | 388 | 813 | ||||||||||
2013 | 1,148 | 403,800 | 389,700 | 1,335 | 440 | 914 | |||||||||||
Los Filos | 2014 | 326 | 258,700 | 257,500 | 1,265 | 796 | 993 | ||||||||||
2013 | 457 | 332,400 | 325,900 | 1,396 | 623 | 1,002 | |||||||||||
El Sauzal | 2014 | 49 | 37,700 | 37,200 | 1,289 | 1,440 | 1,666 | ||||||||||
2013 | 113 | 80,600 | 80,800 | 1,379 | 853 | 915 | |||||||||||
Marlin | 2014 | 367 | 186,500 | 183,800 | 1,262 | 384 | 862 | ||||||||||
2013 | 447 | 202,200 | 204,600 | 1,393 | 195 | 628 | |||||||||||
Alumbrera (1) | 2014 | 386 | 120,100 | 113,300 | 1,248 | 145 | 609 | ||||||||||
2013 | 388 | 117,500 | 103,600 | 1,365 | (148 | ) | 565 | ||||||||||
Pueblo Viejo (1) | 2014 | 575 | 443,400 | 430,400 | 1,268 | 462 | 608 | ||||||||||
2013 | 431 | 325,200 | 296,400 | 1,397 | 534 | 750 | |||||||||||
Cerro Negro (5) | 2014 | — | 152,100 | — | — | — | — | ||||||||||
2013 | — | — | — | — | — | — | |||||||||||
Éléonore (5) | 2014 | — | 18,300 | — | — | — | — | ||||||||||
2013 | — | — | — | — | — | — | |||||||||||
Other (3) | 2014 | — | — | — | — | — | 111 | ||||||||||
2013 | — | — | — | — | — | 107 | |||||||||||
Total – continuing operations | 2014 | $ | 4,397 | 2,777,300 | 2,580,800 | $ | 1,264 | $ | 531 | $ | 949 | ||||||
2013 | $ | 4,428 | 2,502,900 | 2,434,000 | $ | 1,385 | $ | 529 | $ | 1,008 | |||||||
Wharf (4) | 2014 | 94 | 72,100 | 70,100 | 1,254 | 770 | 870 | ||||||||||
2013 | 78 | 56,200 | 55,500 | 1,383 | 924 | 1,165 | |||||||||||
Marigold (4) | 2014 | 28 | 21,800 | 21,900 | 1,289 | 1,117 | 1,207 | ||||||||||
2013 | 151 | 107,500 | 107,700 | 1,404 | 914 | 1,503 | |||||||||||
Total – including discontinued operations | 2014 | $ | 4,519 | 2,871,200 | 2,672,800 | $ | 1,264 | $ | 542 | $ | 949 | ||||||
2013 | $ | 4,657 | 2,666,600 | 2,597,200 | $ | 1,385 | $ | 553 | $ | 1,031 |
(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 |
(4) | The Company's 100% interest in Wharf and 66.7% interest in Marigold are classified as discontinued operations for the year ended December 31, 2014. The 2013 comparative information has been re-presented in accordance with the requirements of IFRS 5 – Non-current assets held for sale and discontinued operations. |
(5) | Gold produced represents pre-commercial production ounces from Cerro Negro and Éléonore. However, revenues and gold sold are excluded as costs incurred, net of proceeds from sales, were credited against capitalized project 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 | $ | 156 | 130,300 | 128,700 | $ | 1,208 | $ | 493 | $ | 809 | ||||||
2013 | $ | 151 | 128,000 | 121,400 | $ | 1,243 | $ | 500 | $ | 822 | |||||||
Porcupine | 2014 | 116 | 90,400 | 95,700 | 1,210 | 591 | 857 | ||||||||||
2013 | 107 | 78,900 | 84,300 | 1,265 | 671 | 907 | |||||||||||
Musselwhite | 2014 | 98 | 73,100 | 81,100 | 1,208 | 619 | 779 | ||||||||||
2013 | 99 | 74,600 | 78,200 | 1,270 | 675 | 883 | |||||||||||
Peñasquito | 2014 | 285 | 141,100 | 126,100 | 1,184 | 728 | 1,472 | ||||||||||
2013 | 348 | 141,700 | 135,700 | 1,222 | 102 | 473 | |||||||||||
Los Filos | 2014 | 76 | 65,900 | 63,400 | 1,203 | 1,194 | 1,369 | ||||||||||
2013 | 113 | 94,000 | 88,800 | 1,263 | 637 | 860 | |||||||||||
El Sauzal (6) | 2014 | 1 | 900 | 100 | 1,099 | — | — | ||||||||||
2013 | 27 | 21,300 | 21,200 | 1,269 | 850 | 880 | |||||||||||
Marlin | 2014 | 103 | 52,300 | 53,800 | 1,208 | 273 | 703 | ||||||||||
2013 | 111 | 52,800 | 54,700 | 1,260 | 159 | 515 | |||||||||||
Alumbrera (1) | 2014 | 94 | 41,700 | 33,900 | 1,189 | (282 | ) | 89 | |||||||||
2013 | 95 | 34,000 | 24,900 | 1,249 | (558 | ) | 37 | ||||||||||
Pueblo Viejo (1) | 2014 | 126 | 117,900 | 98,300 | 1,215 | 477 | 630 | ||||||||||
2013 | 103 | 104,700 | 78,000 | 1,278 | 592 | 688 | |||||||||||
Cerro Negro (5) | 2014 | — | 133,100 | — | — | — | — | ||||||||||
2013 | — | — | — | — | — | — | |||||||||||
Éléonore (5) | 2014 | — | 18,300 | — | — | — | — | ||||||||||
2013 | — | — | — | — | — | — | |||||||||||
Other (3) | 2014 | — | — | — | — | — | 111 | ||||||||||
2013 | — | — | — | — | — | 72 | |||||||||||
Total – continuing operations | 2014 | $ | 1,055 | 865,000 | 681,100 | $ | 1,203 | $ | 582 | $ | 1,043 | ||||||
2013 | $ | 1,154 | 730,000 | 687,200 | $ | 1,254 | $ | 437 | $ | 785 | |||||||
Wharf (4) | 2014 | 32 | 25,900 | 26,800 | 1,195 | 772 | 832 | ||||||||||
2013 | 14 | 10,800 | 10,600 | 1,266 | 1,092 | 1,411 | |||||||||||
Marigold (4) | 2014 | — | — | — | — | — | — | ||||||||||
2013 | 35 | 28,100 | 27,900 | 1,258 | 969 | 1,216 | |||||||||||
Total – including discontinued operations | 2014 | $ | 1,087 | 890,900 | 707,900 | $ | 1,203 | $ | 589 | $ | 1,035 | ||||||
2013 | $ | 1,203 | 768,900 | 725,700 | $ | 1,254 | $ | 467 | $ | 810 |
(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 |
(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 100% interest in Wharf and 66.7% interest in Marigold are classified as discontinued operations for the year ended December 31, 2014. The 2013 comparative information has been re-presented in accordance with the requirements of IFRS 5 – Non-current assets held for sale and discontinued operations. |
(5) | Gold produced represents pre-commercial production ounces from Cerro Negro and Éléonore. However, sales and sales related revenues are excluded as they are credited against capitalized project costs. |
(6) | As a result of attempts to continue mining activities at El Sauzal during the fourth quarter of 2014 following the identification of the pit wall instability in the third quarter of 2014, incidental costs were incurred and gold ounces produced. While these costs have been included in the 2014 annual all-in sustaining and by-product cash costs, the fourth quarter impacts are not separately disclosed. |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||||||||
Tonnes of ore milled (1) | 175,100 | 157,700 | 164,400 | 186,900 | 684,100 | 786,900 | ||||||||||||
Average mill head grade (grams/tonne) | 16.66 | 18.77 | 20.80 | 21.52 | 19.47 | 20.33 | ||||||||||||
Average recovery rate | 95 | % | 96 | % | 97 | % | 96 | % | 96 | % | 95 | % | ||||||
Gold (ounces) | ||||||||||||||||||
– Produced (1) | 95,000 | 89,500 | 99,600 | 130,300 | 414,400 | 493,000 | ||||||||||||
– Sold | 101,200 | 89,800 | 98,600 | 128,700 | 418,300 | 487,300 | ||||||||||||
Average realized gold price (per ounce) | $ | 1,294 | $ | 1,300 | $ | 1,265 | $ | 1,208 | $ | 1,262 | $ | 1,400 | ||||||
Total cash costs – by-product (per ounce) | $ | 625 | $ | 656 | $ | 533 | $ | 493 | $ | 569 | $ | 531 | ||||||
All-in sustaining costs (per ounce) | $ | 954 | $ | 1,066 | $ | 955 | $ | 809 | $ | 934 | $ | 880 | ||||||
Mining cost per tonne | $ | 223.17 | $ | 245.61 | $ | 219.09 | $ | 195.29 | $ | 220.00 | $ | 233.36 | ||||||
Milling cost per tonne | $ | 48.73 | $ | 51.38 | $ | 46.97 | $ | 44.21 | $ | 47.69 | $ | 47.37 | ||||||
Financial Data | ||||||||||||||||||
Revenues | $ | 131 | $ | 117 | $ | 125 | $ | 156 | $ | 529 | $ | 684 | ||||||
Depreciation and depletion | $ | 27 | $ | 26 | $ | 28 | $ | 35 | $ | 116 | $ | 107 | ||||||
Earnings from operations | $ | 40 | $ | 31 | $ | 41 | $ | 56 | $ | 168 | $ | 309 | ||||||
Expenditures on mining interests (2) | $ | 54 | $ | 56 | $ | 65 | $ | 58 | $ | 233 | $ | 233 |
(1) | Included in tonnes of ore milled and gold ounces produced for the fourth quarter of 2014 are 900 tonnes and 200 ounces, respectively, from the Company's Cochenour gold project. |
(2) | Expenditures on mining interests includes expenditures incurred at the Company's Cochenour gold project of $76 million. |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||||||||
Tonnes of ore milled | 867,700 | 1,081,400 | 1,123,600 | 1,094,100 | 4,166,800 | 4,231,700 | ||||||||||||
Hoyle Pond underground (tonnes) | 71,000 | 55,200 | 73,300 | 122,000 | 321,500 | 349,000 | ||||||||||||
Hoyle Pond underground (grams/tonne) | 16.30 | 16.82 | 13.84 | 15.86 | 15.47 | 13.86 | ||||||||||||
Dome underground (tonnes) | 103,500 | 125,500 | 111,800 | 120,500 | 461,300 | 475,100 | ||||||||||||
Dome underground (grams/tonnes) | 5.44 | 4.96 | 4.05 | 4.36 | 4.48 | 4.36 | ||||||||||||
Hollinger Open Pit (tonnes) | — | 25,700 | 93,800 | 59,000 | 178,500 | — | ||||||||||||
Hollinger Open Pit (grams/tonnes) | — | 1.15 | 1.26 | 1.22 | 1.31 | — | ||||||||||||
Stockpile (tonnes) | 693,200 | 875,000 | 844,700 | 792,600 | 3,205,500 | 3,407,600 | ||||||||||||
Stockpile (grams/tonne) | 0.77 | 0.99 | 1.07 | 0.77 | 0.81 | 0.81 | ||||||||||||
Average mill head grade (grams/tonne) | 2.60 | 2.19 | 2.22 | 2.82 | 2.45 | 2.28 | ||||||||||||
Average recovery rate | 93 | % | 93 | % | 92 | % | 91 | % | 92 | % | 94 | % | ||||||
Gold (ounces) | ||||||||||||||||||
– Produced | 66,500 | 68,800 | 74,300 | 90,400 | 300,000 | 291,900 | ||||||||||||
– Sold | 65,700 | 69,600 | 68,400 | 95,700 | 299,400 | 292,000 | ||||||||||||
Average realized gold price (per ounce) | $ | 1,287 | $ | 1,302 | $ | 1,272 | $ | 1,210 | $ | 1,262 | $ | 1,390 | ||||||
Total cash costs – by-product (per ounce) | $ | 701 | $ | 658 | $ | 663 | $ | 591 | $ | 647 | $ | 717 | ||||||
All-in sustaining costs (per ounce) | $ | 945 | $ | 895 | $ | 946 | $ | 857 | $ | 906 | $ | 1,034 | ||||||
Mining cost per tonne | $ | 127.65 | $ | 121.54 | $ | 119.89 | $ | 93.96 | $ | 114.03 | $ | 120.54 | ||||||
Milling cost per tonne | $ | 8.76 | $ | 7.44 | $ | 8.72 | $ | 7.31 | $ | 8.03 | $ | 8.83 | ||||||
Financial Data | ||||||||||||||||||
Revenues | $ | 85 | $ | 91 | $ | 87 | $ | 116 | $ | 379 | $ | 407 | ||||||
Depreciation and depletion | $ | 13 | $ | 12 | $ | 11 | $ | 18 | $ | 54 | $ | 56 | ||||||
Earnings from operations (1) | $ | 27 | $ | 21 | $ | 31 | $ | 13 | $ | 92 | $ | 163 | ||||||
Expenditures on mining interests | $ | 19 | $ | 18 | $ | 19 | $ | 24 | $ | 80 | $ | 96 |
(1) | Earnings from operations for the three months ended December 31, 2014 and June 30, 2014 were impacted by an increase in non-cash provisions related to the revision in estimates in the reclamation and closure cost obligations for the Porcupine mines' closed sites of $28 million and $11 million, respectively (year ended December 31, 2013 – a reduction of $25 million). |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||||||||
Tonnes of ore milled | 332,200 | 313,400 | 263,600 | 312,000 | 1,221,200 | 1,391,800 | ||||||||||||
Average mill head grade (grams/tonne) | 7.30 | 7.12 | 7.67 | 7.46 | 7.38 | 5.92 | ||||||||||||
Average recovery rate | 96 | % | 96 | % | 96 | % | 96 | % | 96 | % | 96 | % | ||||||
Gold (ounces) | ||||||||||||||||||
– Produced | 74,900 | 67,800 | 62,500 | 73,100 | 278,300 | 256,300 | ||||||||||||
– Sold | 68,800 | 67,000 | 62,300 | 81,100 | 279,200 | 253,700 | ||||||||||||
Average realized gold price (per ounce) | $ | 1,281 | $ | 1,292 | $ | 1,292 | $ | 1,208 | $ | 1,265 | $ | 1,390 | ||||||
Total cash costs – by-product (per ounce) | $ | 643 | $ | 605 | $ | 654 | $ | 619 | $ | 629 | $ | 760 | ||||||
All-in sustaining costs (per ounce) | $ | 787 | $ | 794 | $ | 897 | $ | 779 | $ | 811 | $ | 1,088 | ||||||
Mining cost per tonne | $ | 85.34 | $ | 71.41 | $ | 82.17 | $ | 71.91 | $ | 77.61 | $ | 77.67 | ||||||
Milling cost per tonne | $ | 15.69 | $ | 15.25 | $ | 16.01 | $ | 15.25 | $ | 15.53 | $ | 13.90 | ||||||
Financial Data | ||||||||||||||||||
Revenues | $ | 88 | $ | 87 | $ | 81 | $ | 98 | $ | 354 | $ | 353 | ||||||
Depreciation and depletion | $ | 14 | $ | 15 | $ | 14 | $ | 20 | $ | 63 | $ | 53 | ||||||
Earnings from operations | $ | 29 | $ | 30 | $ | 23 | $ | 29 | $ | 111 | $ | 101 | ||||||
Expenditures on mining interests | $ | 9 | $ | 12 | $ | 11 | $ | 12 | $ | 44 | $ | 75 |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||
Tonnes of ore mined – sulphide | 10,025,400 | 10,280,100 | 8,437,600 | 9,172,400 | 37,915,500 | 50,612,200 | ||||||
Tonnes of ore mined – oxide | 1,121,200 | 135,700 | 272,100 | 844,000 | 2,373,000 | 10,471,500 | ||||||
Tonnes of waste removed | 33,628,000 | 40,595,300 | 38,173,700 | 32,778,100 | 145,175,100 | 120,194,200 | ||||||
Tonnes of total material moved | 44,774,600 | 51,011,100 | 46,883,400 | 42,794,500 | 185,463,600 | 181,277,900 | ||||||
Ratio of waste to ore | 3.0 | 3.9 | 4.4 | 3.3 | 3.6 | 2.0 | ||||||
Average head grade | ||||||||||||
Gold (grams/tonne) | 0.59 | 0.78 | 0.59 | 0.65 | 0.65 | 0.45 | ||||||
Silver (grams/tonne) | 32.92 | 30.08 | 23.21 | 21.61 | 26.78 | 23.95 | ||||||
Lead | 0.33 | % | 0.24 | % | 0.23 | % | 0.19 | % | 0.25 | % | 0.27 | % |
Zinc | 0.63 | % | 0.59 | % | 0.52 | % | 0.52 | % | 0.56 | % | 0.53 | % |
Sulphide Ore | ||||||||||||
Tonnes of ore milled | 9,220,400 | 10,050,000 | 10,446,900 | 10,195,800 | 39,913,100 | 38,762,400 | ||||||
Average recovery rate | ||||||||||||
Gold | 72 | % | 74 | % | 71 | % | 66 | % | 70 | % | 66 | % |
Silver | 81 | % | 82 | % | 81 | % | 75 | % | 79 | % | 77 | % |
Lead | 79 | % | 77 | % | 75 | % | 67 | % | 74 | % | 73 | % |
Zinc | 80 | % | 82 | % | 79 | % | 78 | % | 80 | % | 73 | % |
Concentrates Produced – Payable Metal Produced | ||||||||||||
Gold (ounces) | 115,500 | 159,400 | 124,000 | 132,300 | 531,200 | 341,500 | ||||||
Silver (ounces) | 7,055,100 | 6,758,700 | 5,413,300 | 5,648,400 | 24,875,500 | 20,763,300 | ||||||
Lead (thousands of pounds) | 49,500 | 38,600 | 37,000 | 27,200 | 152,300 | 159,100 | ||||||
Zinc (thousands of pounds) | 87,900 | 91,900 | 81,000 | 68,900 | 329,700 | 279,300 | ||||||
Lead Concentrate (DMT) | 47,100 | 41,400 | 36,600 | 29,100 | 154,200 | 155,100 | ||||||
Zinc Concentrate (DMT) | 85,200 | 90,900 | 78,200 | 73,700 | 328,000 | 267,300 | ||||||
Oxide Ore | ||||||||||||
Tonnes of ore processed | 1,202,900 | 135,700 | 563,100 | 1,151,300 | 3,053,000 | 10,471,500 | ||||||
Produced | ||||||||||||
Gold (ounces) | 14,300 | 8,000 | 5,500 | 8,800 | 36,600 | 62,300 | ||||||
Silver (ounces) | 341,200 | 248,100 | 156,000 | 186,300 | 931,600 | 1,684,100 | ||||||
Sulphide & Oxide Ores – Payable Metal Produced | ||||||||||||
Gold (ounces) | 129,800 | 167,400 | 129,500 | 141,100 | 567,800 | 403,800 | ||||||
Silver (ounces) | 7,396,300 | 7,006,800 | 5,569,300 | 5,834,700 | 25,807,100 | 22,447,400 | ||||||
Lead (thousands of pounds) | 49,500 | 38,600 | 37,000 | 27,200 | 152,300 | 159,100 | ||||||
Zinc (thousands of pounds) | 87,900 | 91,900 | 81,000 | 68,900 | 329,700 | 279,300 | ||||||
Gold Equivalent Ounces (1) | 350,100 | 376,300 | 305,400 | 306,400 | 1,338,200 | 1,073,000 |
Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | |||||||||||||
Sulphide and Oxide Ores – Payable Metal Sold | ||||||||||||||||||
Gold (ounces) | 120,700 | 170,900 | 144,000 | 126,100 | 561,700 | 389,700 | ||||||||||||
Silver (ounces) | 7,118,400 | 7,863,400 | 6,439,300 | 5,210,700 | 26,631,800 | 21,663,900 | ||||||||||||
Lead (thousands of pounds) | 45,300 | 43,200 | 41,400 | 29,400 | 159,300 | 147,900 | ||||||||||||
Zinc (thousands of pounds) | 90,100 | 77,000 | 85,400 | 84,000 | 336,500 | 256,000 | ||||||||||||
Average realized prices | ||||||||||||||||||
Gold (per ounce) | $ | 1,333 | $ | 1,305 | $ | 1,236 | $ | 1,184 | $ | 1,266 | $ | 1,335 | ||||||
Silver (per ounce) (2) | $ | 16.73 | $ | 16.28 | $ | 14.70 | $ | 13.12 | $ | 15.40 | $ | 17.97 | ||||||
Lead (per pound) | $ | 0.91 | $ | 0.97 | $ | 0.98 | $ | 0.83 | $ | 0.93 | $ | 0.97 | ||||||
Zinc (per pound) | $ | 0.90 | $ | 1.00 | $ | 1.07 | $ | 0.99 | $ | 0.99 | $ | 0.87 | ||||||
Total Cash Costs – by-product (per ounce) (4)(7) | $ | 179 | $ | 124 | $ | 579 | $ | 728 | $ | 388 | $ | 440 | ||||||
Total Cash Costs – co-product (per ounce of gold) (4)(7) | $ | 707 | $ | 610 | $ | 819 | $ | 820 | $ | 731 | $ | 870 | ||||||
All-in sustaining costs (per ounce) (7) | $ | 371 | $ | 362 | $ | 1,142 | $ | 1,472 | $ | 813 | $ | 914 | ||||||
Mining cost per tonne | $ | 2.22 | $ | 2.21 | $ | 2.49 | $ | 2.82 | $ | 2.42 | $ | 2.21 | ||||||
Milling cost per tonne | $ | 7.99 | $ | 7.05 | $ | 6.22 | $ | 5.92 | $ | 6.76 | $ | 7.48 | ||||||
General and administrative cost per tonne milled | $ | 2.36 | $ | 2.38 | $ | 2.64 | $ | 2.55 | $ | 2.49 | $ | 2.34 | ||||||
Off-site cost per tonne sold (lead) (5) | $ | 644 | $ | 842 | $ | 753 | $ | 769 | $ | 744 | $ | 673 | ||||||
Off-site cost per tonne sold (zinc) (5) | $ | 352 | $ | 372 | $ | 384 | $ | 351 | $ | 358 | $ | 343 | ||||||
Financial Data | ||||||||||||||||||
Revenues (2) | $ | 362 | $ | 424 | $ | 361 | $ | 285 | $ | 1,432 | $ | 1,148 | ||||||
Depreciation and depletion (8) | $ | 56 | $ | 69 | $ | 78 | $ | 67 | $ | 270 | $ | 163 | ||||||
Earnings (loss) from operations (2)(3) | $ | 80 | $ | 131 | $ | 15 | $ | (8 | ) | $ | 218 | $ | (2,270 | ) | ||||
Expenditures on mining interests (6) | $ | 19 | $ | 56 | $ | 87 | $ | 164 | $ | 326 | $ | 233 |
(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 year ended December 31, 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 year ended December 31, 2014 would be $731 per ounce of gold, $10.87 per ounce of silver, $0.95 per pound of lead and $0.78 per pound of zinc (2013 – $870, $13.98, $0.78, and $0.70, respectively). Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 3). 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 year ended December 31, 2014 would be $752 per ounce of gold, $10.28 per ounce of silver, $0.90 per pound of lead, and $0.81 per pound of zinc (2013 – $851, $12.67, $0.91, and $0.76, 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. |
(7) | Includes a $41 million cash reduction of the carrying value of the low-grade stockpile to net realizable value in the third quarter of 2014. Excluding the impact of the carrying value reduction, total cash costs – by-product were $292 per ounce, total cash costs – co-product were $694 per ounce, and all-in sustaining costs were $854 per ounce for the third quarter of 2014. |
(8) | Depreciation and depletion in the third quarter of 2014 includes a $14 million reduction of the carrying value of the low-grade stockpile inventory to net realizable value. |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||||||||
Tonnes of ore mined | 6,877,700 | 3,472,600 | 5,727,700 | 7,184,100 | 23,262,100 | 27,682,200 | ||||||||||||
Tonnes of waste removed | 10,156,600 | 6,608,800 | 10,910,200 | 9,685,000 | 37,360,600 | 45,805,200 | ||||||||||||
Ratio of waste to ore | 1.5 | 1.9 | 1.9 | 1.4 | 1.6 | 1.7 | ||||||||||||
Tonnes of ore processed | 6,834,300 | 3,480,200 | 5,722,600 | 7,227,200 | 23,264,300 | 28,113,300 | ||||||||||||
Average grade processed (grams/tonne) | 0.72 | 0.75 | 0.73 | 0.53 | 0.67 | 0.70 | ||||||||||||
Average recovery rate (1) | 49 | % | 49 | % | 49 | % | 49 | % | 49 | % | 49 | % | ||||||
Gold (ounces) | ||||||||||||||||||
– Produced | 80,000 | 48,700 | 64,100 | 65,900 | 258,700 | 332,400 | ||||||||||||
– Sold | 81,900 | 45,700 | 66,500 | 63,400 | 257,500 | 325,900 | ||||||||||||
Average realized gold price (per ounce) | $ | 1,289 | $ | 1,280 | $ | 1,281 | $ | 1,203 | $ | 1,265 | $ | 1,396 | ||||||
Total cash costs – by-product (per ounce) | $ | 638 | $ | 778 | $ | 623 | $ | 1,194 | $ | 796 | $ | 623 | ||||||
All-in sustaining costs (per ounce) | $ | 805 | $ | 1,077 | $ | 808 | $ | 1,369 | $ | 993 | $ | 1,002 | ||||||
Open-pit mining cost per tonne | $ | 1.67 | $ | 1.65 | $ | 1.78 | $ | 1.78 | $ | 1.73 | $ | 1.73 | ||||||
Processing cost per tonne leached | $ | 2.15 | $ | 2.37 | $ | 2.51 | $ | 2.30 | $ | 2.32 | $ | 2.42 | ||||||
Financial Data | ||||||||||||||||||
Revenues | $ | 106 | $ | 58 | $ | 86 | $ | 76 | $ | 326 | $ | 457 | ||||||
Depreciation and depletion (3) | $ | 16 | $ | 12 | $ | 13 | $ | 22 | $ | 63 | $ | 62 | ||||||
Earnings (loss) from operations (2) | $ | 37 | $ | 10 | $ | 30 | $ | (20 | ) | $ | 57 | $ | 189 | |||||
Expenditures for mining interests | $ | 16 | $ | 11 | $ | 11 | $ | 13 | $ | 51 | $ | 112 |
(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. |
(2) | Includes a $31 million cash reduction of the carrying value of the heap leach ore inventory to net realizable value in the fourth quarter of 2014. Excluding the impact of the carrying value reduction, total cash costs – by-product were $708 per ounce and all-in sustaining costs were $883 per ounce for the fourth quarter of 2014. |
(3) | Depreciation and depletion in the fourth quarter of 2014 includes a $10 million reduction of the carrying value of the heap leach ore inventory to net realizable value. |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||||||||
Tonnes of ore mined | 572,900 | 476,400 | 163,100 | 59,000 | 1,271,400 | 2,247,000 | ||||||||||||
Tonnes of waste removed | 3,062,300 | 3,343,700 | 2,584,000 | 600,600 | 9,590,600 | 12,738,800 | ||||||||||||
Ratio of waste to ore | 5.3 | 7.0 | 15.8 | 10.2 | 7.5 | 5.7 | ||||||||||||
Tonnes of ore milled | 493,300 | 453,700 | 169,700 | 44,400 | 1,161,100 | 1,930,800 | ||||||||||||
Average mill head grade (grams/tonne) | 1.16 | 1.21 | 1.20 | 0.67 | 1.17 | 1.40 | ||||||||||||
Average recovery rate | 82 | % | 88 | % | 91 | % | 86 | % | 86 | % | 92 | % | ||||||
Gold (ounces) | ||||||||||||||||||
– Produced | 15,100 | 15,600 | 6,100 | 900 | 37,700 | 80,600 | ||||||||||||
– Sold | 12,900 | 14,500 | 9,700 | 100 | 37,200 | 80,800 | ||||||||||||
Average realized gold price (per ounce) | $ | 1,277 | $ | 1,291 | $ | 1,307 | $ | 1,099 | $ | 1,289 | $ | 1,379 | ||||||
Total cash costs – by-product (per ounce) (1) | $ | 994 | $ | 1,011 | $ | 2,004 | $ | — | $ | 1,440 | $ | 853 | ||||||
All-in sustaining costs (per ounce) (1) | $ | 1,168 | $ | 1,234 | $ | 2,198 | $ | — | $ | 1,666 | $ | 915 | ||||||
Mining cost per tonne | $ | 1.81 | $ | 1.56 | $ | 2.51 | $ | 3.83 | $ | 2.02 | $ | 1.95 | ||||||
Milling cost per tonne | $ | 10.75 | $ | 13.16 | $ | 23.31 | $ | 60.90 | $ | 15.44 | $ | 12.87 | ||||||
Financial Data | ||||||||||||||||||
Revenues | $ | 17 | $ | 19 | $ | 12 | $ | 1 | $ | 49 | $ | 113 | ||||||
Depreciation and depletion | $ | 4 | $ | 4 | $ | 4 | $ | 1 | $ | 13 | $ | 32 | ||||||
Loss from operations (1)(2)(3) | $ | (1 | ) | $ | (1 | ) | $ | (30 | ) | $ | (25 | ) | $ | (57 | ) | $ | (22 | ) |
Expenditures on mining interests | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1 |
(1) | As a result of attempts to continue mining activities during the fourth quarter of 2014, incidental costs were incurred and gold ounces produced. While these costs have been included in the 2014 annual all-in sustaining and by-product cash costs, the fourth quarter impacts are not separately disclosed. |
(2) | During the third quarter of 2014, the Company recorded impairment charges of $19 million before tax ($13 million after tax) related to El Sauzal as a result of a decrease in recoverable ounces and associated cash flows over the remaining life of mine due to the instability conditions of the Trini Pit. 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 approached the end of its mine life. |
(3) | Loss from operations for the three months ended December 31, 2014 was impacted by an increase in non-cash provisions related to the revision in estimates in the reclamation and closure cost obligations for the El Sauzal mine of $18 million. |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||||||||
Tonnes of ore milled | 472,700 | 485,400 | 485,000 | 490,800 | 1,933,900 | 1,941,900 | ||||||||||||
Average mill head grade (grams/tonne) | ||||||||||||||||||
– Gold | 3.15 | 2.88 | 2.98 | 3.41 | 3.11 | 3.33 | ||||||||||||
– Silver | 132 | 109 | 113 | 151 | 126 | 121 | ||||||||||||
Average recovery rate | ||||||||||||||||||
– Gold | 97 | % | 97 | % | 97 | % | 96 | % | 97 | % | 96 | % | ||||||
– Silver | 94 | % | 94 | % | 91 | % | 92 | % | 93 | % | 92 | % | ||||||
Produced (ounces) | ||||||||||||||||||
– Gold | 45,300 | 43,500 | 45,400 | 52,300 | 186,500 | 202,200 | ||||||||||||
– Silver | 1,836,000 | 1,584,400 | 1,658,000 | 2,216,700 | 7,295,100 | 7,045,100 | ||||||||||||
– Gold Equivalent Ounces (1) | 76,400 | 70,300 | 73,500 | 89,800 | 310,000 | 327,400 | ||||||||||||
Sold (ounces) | ||||||||||||||||||
– Gold | 41,900 | 43,600 | 44,500 | 53,800 | 183,800 | 204,600 | ||||||||||||
– Silver | 1,699,900 | 1,579,600 | 1,626,500 | 2,301,200 | 7,207,200 | 7,081,000 | ||||||||||||
Average realized price (per ounce) | ||||||||||||||||||
– Gold | $ | 1,300 | $ | 1,291 | $ | 1,264 | $ | 1,208 | $ | 1,262 | $ | 1,393 | ||||||
– Silver | $ | 20.62 | $ | 19.78 | $ | 18.64 | $ | 16.60 | $ | 18.71 | $ | 22.82 | ||||||
Total cash costs – by-product (per ounce) (2) | $ | 277 | $ | 525 | $ | 478 | $ | 273 | $ | 384 | $ | 195 | ||||||
Total cash costs – co-product (per ounce) (2) | $ | 658 | $ | 770 | $ | 716 | $ | 569 | $ | 670 | $ | 613 | ||||||
All-in sustaining costs (per ounce) | $ | 809 | $ | 981 | $ | 985 | $ | 703 | $ | 862 | $ | 628 | ||||||
Mining cost per tonne | $ | 70.64 | $ | 75.39 | $ | 80.60 | $ | 69.88 | $ | 73.99 | $ | 65.19 | ||||||
Milling cost per tonne | $ | 27.66 | $ | 25.24 | $ | 26.33 | $ | 25.60 | $ | 26.20 | $ | 27.20 | ||||||
Financial Data | ||||||||||||||||||
Revenues | $ | 89 | $ | 88 | $ | 87 | $ | 103 | $ | 367 | $ | 447 | ||||||
Depreciation and depletion | $ | 35 | $ | 36 | $ | 38 | $ | 48 | $ | 157 | $ | 142 | ||||||
Earnings (loss) from operations | $ | 5 | $ | (7 | ) | $ | (3 | ) | $ | (1 | ) | $ | (6 | ) | $ | 94 | ||
Expenditures on mining interests | $ | 16 | $ | 22 | $ | 19 | $ | 21 | $ | 78 | $ | 65 |
(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 year ended December 31, 2014 would be $670 per ounce of gold and $11.39 per ounce of silver (2013 – $593 and $11.33, respectively). Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 3). Using actual realized sales prices, the co-product total cash costs for the year ended December 31, 2014 would be $701 per ounce of gold and $10.62 per ounce of silver (2013 – $624 and $10.44, respectively). |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||||||||
Tonnes of ore mined | 1,409,200 | 1,455,100 | 884,500 | 2,600,000 | 6,348,800 | 9,544,100 | ||||||||||||
Tonnes of waste removed | 4,504,600 | 4,568,200 | 3,466,500 | 3,370,900 | 15,910,200 | 20,682,600 | ||||||||||||
Ratio of waste to ore | 3.2 | 3.1 | 3.9 | 1.3 | 2.5 | 2.2 | ||||||||||||
Tonnes of ore milled | 3,324,400 | 3,492,300 | 2,964,100 | 3,526,200 | 13,307,000 | 14,014,000 | ||||||||||||
Average mill head grade | ||||||||||||||||||
– Gold (grams/tonne) | 0.42 | 0.34 | 0.34 | 0.47 | 0.39 | 0.37 | ||||||||||||
– Copper | 0.39 | % | 0.33 | % | 0.32 | % | 0.39 | % | 0.36 | % | 0.37 | % | ||||||
Average recovery rate | ||||||||||||||||||
– Gold | 67 | % | 65 | % | 70 | % | 77 | % | 70 | % | 70 | % | ||||||
– Copper | 77 | % | 74 | % | 79 | % | 90 | % | 80 | % | 79 | % | ||||||
Produced | ||||||||||||||||||
– Gold (ounces) | 30,300 | 25,300 | 22,800 | 41,700 | 120,100 | 117,500 | ||||||||||||
– Copper (thousands of pounds) | 21,500 | 19,300 | 16,800 | 27,200 | 84,800 | 90,600 | ||||||||||||
– Gold Equivalent Ounces (1) | 79,900 | 69,700 | 61,600 | 104,600 | 315,800 | 318,900 | ||||||||||||
Sold | ||||||||||||||||||
– Gold (ounces) | 40,500 | 17,300 | 21,600 | 33,900 | 113,300 | 103,600 | ||||||||||||
– Copper (thousands of pounds) | 32,100 | 13,000 | 18,600 | 20,200 | 83,900 | 78,000 | ||||||||||||
Average realized price | ||||||||||||||||||
– Gold (per ounce) | $ | 1,293 | $ | 1,287 | $ | 1,223 | $ | 1,189 | $ | 1,248 | $ | 1,365 | ||||||
– Copper (per pound) | $ | 3.09 | $ | 3.39 | $ | 2.98 | $ | 2.82 | $ | 3.05 | $ | 3.15 | ||||||
Total cash costs – by-product (per ounce) (2) | $ | 106 | $ | 238 | $ | 819 | $ | (282 | ) | $ | 145 | $ | (148 | ) | ||||
Total cash costs – co-product (per ounce) (2) | $ | 784 | $ | 910 | $ | 1,006 | $ | 512 | $ | 781 | $ | 849 | ||||||
All-in sustaining costs (per gold ounce) | $ | 433 | $ | 1,050 | $ | 1,404 | $ | 89 | $ | 609 | $ | 565 | ||||||
Mining cost per tonne | $ | 3.53 | $ | 3.45 | $ | 4.36 | $ | 3.76 | $ | 3.73 | $ | 2.99 | ||||||
Milling cost per tonne | $ | 5.72 | $ | 6.07 | $ | 7.28 | $ | 5.69 | $ | 6.15 | $ | 6.31 | ||||||
Financial Data (3) | ||||||||||||||||||
Revenues | $ | 146 | $ | 67 | $ | 79 | $ | 94 | $ | 386 | $ | 388 | ||||||
Depreciation and depletion | $ | 7 | $ | 7 | $ | 7 | $ | 18 | $ | 39 | $ | 108 | ||||||
Earnings (loss) from operations (4) | $ | 41 | $ | 10 | $ | 2 | $ | 32 | $ | 85 | $ | (350 | ) | |||||
Expenditures on mining interests | $ | 9 | $ | 10 | $ | 20 | $ | 11 | $ | 50 | $ | 71 |
(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 year ended December 31, 2014 would be $781 per ounce of gold and $2.23 per pound of copper (2013 – $809 and $2.00, respectively). Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 3). Using actual realized sales prices, the co-product total cash costs for the year ended December 31, 2014 would be $800 per ounce of gold and $2.24 per pound for copper (2013 – $794 and $2.07, 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 Loss 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 year ended December 31, 2013, the Company recognized an impairment expense of $276 million before tax ($276 million, after tax) in respect of its investment in Alumbrera. |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||||||||
Tonnes of ore mined | 2,541,800 | 2,008,600 | 1,599,700 | 955,600 | 7,105,700 | 4,492,000 | ||||||||||||
Tonnes of waste removed | 867,000 | 1,492,000 | 2,002,900 | 2,568,800 | 6,930,700 | 1,635,700 | ||||||||||||
Ratio of waste to ore | 0.34 | 0.74 | 1.25 | 2.69 | 0.98 | 0.36 | ||||||||||||
Tonnes of ore processed | 653,900 | 650,200 | 655,600 | 725,200 | 2,684,900 | 1,771,700 | ||||||||||||
Average grade (grams/tonne) | ||||||||||||||||||
– Gold | 5.52 | 5.47 | 5.72 | 5.42 | 5.53 | 6.14 | ||||||||||||
– Silver | 29.0 | 28.6 | 33.9 | 35.0 | 31.7 | 42.4 | ||||||||||||
Average recovery rate | ||||||||||||||||||
– Gold | 92 | % | 94 | % | 93 | % | 93 | % | 93 | % | 93 | % | ||||||
– Silver | 58 | % | 66 | % | 49 | % | 55 | % | 57 | % | 37 | % | ||||||
Produced | ||||||||||||||||||
– Gold (ounces) | 106,200 | 107,100 | 112,200 | 117,900 | 443,400 | 325,200 | ||||||||||||
– Silver (ounces) | 349,100 | 392,800 | 354,800 | 445,100 | 1,541,800 | 833,600 | ||||||||||||
– Gold Equivalent Ounces (1) | 112,100 | 113,700 | 118,200 | 125,500 | 469,500 | 340,000 | ||||||||||||
Sold | ||||||||||||||||||
– Gold (ounces) | 115,100 | 105,600 | 111,400 | 98,300 | 430,400 | 296,400 | ||||||||||||
– Silver (ounces) | 379,400 | 365,100 | 388,600 | 375,600 | 1,508,700 | 715,800 | ||||||||||||
Average realized price | ||||||||||||||||||
– Gold (per ounce) | $ | 1,287 | $ | 1,286 | $ | 1,280 | $ | 1,215 | $ | 1,268 | $ | 1,397 | ||||||
– Silver (per ounce) | $ | 20.65 | $ | 19.50 | $ | 20.12 | $ | 16.74 | $ | 19.26 | $ | 23.87 | ||||||
Total cash costs – by-product (per ounce) (2) | $ | 493 | $ | 438 | $ | 438 | $ | 477 | $ | 462 | $ | 534 | ||||||
Total cash costs – co-product (per ounce) (2) | $ | 532 | $ | 478 | $ | 481 | $ | 509 | $ | 500 | $ | 549 | ||||||
All-in sustaining costs (per gold ounce) | $ | 628 | $ | 618 | $ | 559 | $ | 630 | $ | 608 | $ | 750 | ||||||
Mining cost per tonne | $ | 2.64 | $ | 2.38 | $ | 3.55 | $ | 3.01 | $ | 2.90 | $ | 4.41 | ||||||
Milling cost per tonne | $ | 55.41 | $ | 56.23 | $ | 61.68 | $ | 59.80 | $ | 58.32 | $ | 77.76 | ||||||
Financial Data (3) | ||||||||||||||||||
Revenues | $ | 156 | $ | 143 | $ | 150 | $ | 126 | $ | 575 | $ | 431 | ||||||
Depreciation and depletion | $ | 25 | $ | 28 | $ | 29 | $ | 24 | $ | 106 | $ | 51 | ||||||
Earnings from operations | $ | 66 | $ | 71 | $ | 60 | $ | 45 | $ | 242 | $ | 205 | ||||||
Expenditures on mining interests | $ | 12 | $ | 16 | $ | 12 | $ | 14 | $ | 54 | $ | 98 |
(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 year ended December 31, 2014 would be $500 per ounce of gold and $8.30 per ounce of silver (2013 – $566 and $10.62, respectively). Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 3). Using actual realized sales prices, the co-product total cash costs for the year ended December 31, 2014 would be $503 per ounce of gold and $7.60 per ounce of silver (2013 – $568 and $9.71, 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 Loss 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 complete; |
• | Construction of the high voltage power line and the ET Aike Substation, which connects the Cerro Negro Substation to the national grid, completed, and commissioning by Transpa, the Argentine power transportation authority, complete; |
• | Construction of the Cerro Negro Substation complete. Energization of the Cerro Negro and ET Aike Substations and permanent power from the national grid achieved on February 2, 2015, following completion of commissioning by Transpa; |
• | Completion of commissioning of the tailings line, tailings storage facility, and water recovery system; and |
• | The 18 km haul road and the Primary Crusher Station and Delivery System were turned over to the operations team. |
Processing Data | Q3 | Q4 | Total 2014 | |||
Tonnes of ore milled | 84,900 | 290,300 | 375,200 | |||
Average mill head grade (grams/tonne) | ||||||
– Gold | 12.48 | 15.15 | 14.54 | |||
– Silver | 272.5 | 288.7 | 285.0 | |||
Average recovery rate | ||||||
– Gold | 88 | % | 92 | % | 91 | % |
– Silver | 55 | % | 71 | % | 67 | % |
Produced (ounces) (1) | ||||||
– Gold | 19,000 | 133,100 | 152,100 | |||
– Silver | 233,700 | 1,929,800 | 2,163,500 | |||
Sold (ounces) (1) | ||||||
– Gold | — | 36,900 | 36,900 | |||
– Silver | — | 495,100 | 495,100 | |||
Average realized price (per ounce) | ||||||
– Gold | — | 1,204 | 1,204 | |||
– Silver | — | 16.33 | 16.33 | |||
Financial Data | ||||||
Sales revenues credited to mining interests (1) | — | 53 | 53 |
(1) | Production represents pre-commerical production ounces with costs incurred, net of proceeds from sales during the fourth quarter of 2014, credited against capitalized project costs. |
Three Months Ended | ||||||||||||||||
Cerro Negro Production and Surface Stockpile | December 31 2014 | September 30 2014 | June 30 2014 | March 31 2014 | December 31 2013 | Cumulative Project to date | Tonnes of ore milled at December 31, 2014 | Surface Stockpile at December 31, 2014 | ||||||||
Tonnes | 156,000 | 93,100 | 121,900 | 125,200 | 127,500 | 781,100 | 375,200 | 405,900 | ||||||||
Average grade (grams/tonne) | ||||||||||||||||
– Gold | 8.12 | 9.28 | 7.39 | 8.27 | 8.24 | 9.05 | 14.54 | 5.31 | ||||||||
– Silver | 146.5 | 168.7 | 105.1 | 132.7 | 146.7 | 162.0 | 285.0 | 84.3 |
Three Months Ended | ||||||||||||
Development Area (Metres) | December 31 2014 | September 30 2014 | June 30 2014 | March 31 2014 | December 31 2013 | Cumulative Project to date | ||||||
Eureka | 1,422 | 1,194 | 1,355 | 626 | 966 | 16,714 | ||||||
Mariana Central | 1,054 | 1,137 | 1,053 | 475 | 684 | 6,289 | ||||||
Mariana Norte | — | — | — | — | 9 | 1,224 | ||||||
Total | 2,476 | 2,331 | 2,408 | 1,101 | 1,659 | 24,227 |
• | Completed construction of the processing plant; |
• | Completed the tailings management facility and the pumping station; |
• | Completed construction of administration building, garage, warehouse, and site services; |
• | Completed commissioning of the Industrial Water Treatment Plant to its design capacity of 26,000 cubic metres per day; |
• | Completed construction of the 25 kV electrical lines; and |
• | Resumed construction of the permanent cafeteria and commenced construction of the services and recreational infrastructure for completion in the first quarter of 2015. |
• | Production shaft reached a depth of 1,106 metres: |
• | Exploration ramp reached a depth of 865 metres; |
• | Production of ore from two main production horizons; |
• | Ore stockpile on surface of 337,000 tonnes; and |
• | Project to date completed over 25 kilometres of lateral development. |
Operating Data | Q1 | Q2 | Q3 | Q4 | Total 2014 | Total 2013 | ||||||||||||
Tonnes of ore mined | 751,100 | 1,015,800 | 1,105,600 | 929,000 | 3,801,500 | 2,115,100 | ||||||||||||
Tonnes of ore processed | 751,100 | 975,000 | 1,082,900 | 1,002,600 | 3,811,600 | 3,158,400 | ||||||||||||
Average grade processed (grams/tonne) | 0.82 | 0.72 | 0.73 | 0.82 | 0.77 | 0.72 | ||||||||||||
Average recovery rate | 80 | % | 80 | % | 80 | % | 80 | % | 80 | % | 80 | % | ||||||
Gold (ounces) | ||||||||||||||||||
– Produced | 15,000 | 15,000 | 16,200 | 25,900 | 72,100 | 56,200 | ||||||||||||
– Sold | 13,400 | 15,500 | 14,400 | 26,800 | 70,100 | 55,500 | ||||||||||||
Average realized gold price (per ounce) | $ | 1,285 | $ | 1,298 | $ | 1,291 | $ | 1,195 | $ | 1,254 | $ | 1,383 | ||||||
Total cash costs – by-product (per ounce) (1) | $ | 751 | $ | 711 | $ | 845 | $ | 772 | $ | 770 | $ | 924 | ||||||
All-in sustaining costs (per ounce) | $ | 856 | $ | 804 | $ | 1,028 | $ | 832 | $ | 870 | $ | 1,165 | ||||||
Mining cost per tonne | $ | 2.98 | $ | 2.97 | $ | 2.93 | $ | 6.66 | $ | 3.50 | $ | 3.19 | ||||||
Processing cost per tonne | $ | 1.76 | $ | 1.33 | $ | 1.57 | $ | 2.12 | $ | 1.69 | $ | 1.78 | ||||||
Financial Data | ||||||||||||||||||
Revenues | $ | 20 | $ | 22 | $ | 20 | $ | 32 | $ | 94 | $ | 78 | ||||||
Depreciation and depletion | $ | 1 | $ | 1 | $ | 1 | $ | 2 | $ | 5 | $ | 4 | ||||||
Earnings from operations | $ | 6 | $ | 9 | $ | 5 | $ | 8 | $ | 28 | $ | 22 | ||||||
Expenditures on mining interests | $ | 1 | $ | 1 | $ | 1 | $ | 1 | $ | 4 | $ | 11 |
(1) | The calculation of total cash costs per ounce of gold is net of by-product silver sales revenues of $6 million for the year ended December 31, 2014 (year ended December 31, 2013 – $1 million). If silver were treated as a co-product, average total cash costs at Wharf for the year ended December 31, 2014 would be $800 per ounce of gold and $13.26 per ounce of silver. Production costs are allocated to each co-product based on the ratio of actual sales volumes multiplied by budget metal prices (see page 3). Using actual realized sales prices, the co-product total cash costs for the year ended December 31, 2014 would be $803 per ounce gold and $12.65 per ounce of silver. |
Year ended December 31 | 2014 | 2013 | ||||
Continuing operations | ||||||
Production costs per consolidated financial statements (1) | $ | 2,079 | $ | 1,939 | ||
Non-cash reclamation and closure cost obligations | (72 | ) | 25 | |||
Treatment and refining charges on concentrate sales | 179 | 135 | ||||
Realized losses (gains) on foreign currency, heating oil and commodity contracts | 9 | (23 | ) | |||
Other | (2 | ) | (5 | ) | ||
Consolidated total cash costs | 2,193 | 2,071 | ||||
Alumbrera and Pueblo Viejo total cash costs | 515 | 431 | ||||
Goldcorp’s share of total cash costs | 2,708 | 2,502 | ||||
Goldcorp's share of by-product silver, copper, lead and zinc sales | (1,338 | ) | (1,215 | ) | ||
Goldcorp’s share of total cash costs (by-product) | $ | 1,370 | $ | 1,287 | ||
Divided by ounces of Goldcorp’s share of gold sold | 2,580,800 | 2,434,000 | ||||
Goldcorp’s share of total cash costs (by-product) per gold ounce (2) | $ | 531 | $ | 529 | ||
Including discontinued operations | ||||||
Goldcorp's share of total cash costs (by-product) from continuing operations | $ | 1,370 | $ | 1,287 | ||
Total cash costs – Wharf | 54 | 52 | ||||
Total cash costs – Marigold | 24 | 98 | ||||
Goldcorp's share of total cash costs (by-product) including discontinued operations | $ | 1,448 | $ | 1,437 | ||
Divided by ounces of Goldcorp's share of gold sold | 2,672,800 | 2,597,200 | ||||
Goldcorp’s share of total cash costs (by-product) per gold ounce (2) | $ | 542 | $ | 553 |
Three months ended | December 31 2014 | September 30 2014 | December 31 2013 | ||||||
Continuing operations | |||||||||
Production costs per consolidated financial statements (1) | $ | 582 | $ | 516 | $ | 470 | |||
Non-cash reclamation and closure cost obligations | (56 | ) | — | 25 | |||||
Treatment and refining charges on concentrate sales | 40 | 46 | 42 | ||||||
Realized losses (gains) on foreign currency, heating oil and commodity contracts | 8 | (1 | ) | (2 | ) | ||||
Other | 1 | 2 | (1 | ) | |||||
Consolidated total cash costs | 575 | 563 | 534 | ||||||
Alumbrera and Pueblo Viejo total cash costs | 103 | 133 | 107 | ||||||
Goldcorp’s share of total cash costs | 678 | 696 | 641 | ||||||
Goldcorp's share of by-product silver, copper, lead and zinc sales | (282 | ) | (326 | ) | (341 | ) | |||
Goldcorp’s share of total cash costs (by-product) | $ | 396 | $ | 370 | $ | 300 | |||
Divided by ounces of Goldcorp’s share of gold sold | 681,100 | 627,000 | 687,200 | ||||||
Goldcorp’s share of total cash costs (by-product) per gold ounce (2) | $ | 582 | $ | 590 | $ | 437 | |||
Including discontinued operations | |||||||||
Goldcorp's share of total cash costs (by-product) from continuing operations | $ | 396 | $ | 370 | $ | 300 | |||
Total cash costs – Wharf | 21 | 13 | 12 | ||||||
Total cash costs – Marigold | — | — | 27 | ||||||
Goldcorp's share of total cash costs (by-product) including discontinued operations | $ | 417 | $ | 383 | $ | 339 | |||
Divided by ounces of Goldcorp's share of gold sold | 707,900 | 641,400 | 725,700 | ||||||
Goldcorp’s share of total cash costs (by-product) per gold ounce (2) | $ | 589 | $ | 597 | $ | 467 |
(1) | $13 million and $60 million in royalties are included in production costs for the three months and year ended December 31, 2014, respectively (year ended December 31, 2013 – $52 million; three months ended September 30, 2014 – $17 million; three months ended December 31, 2013 – $15 million). |
(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 year ended December 31, 2014, would be $661 per ounce of gold, $10.88 per ounce of silver, $2.23 per pound of copper, $0.78 per pound of zinc, and $0.95 per pound of lead (2013 – $672 per ounce of gold, $13.26 per ounce of silver, $2.00 per pound of copper, $0.70 per pound of zinc, and $0.78 per pound of lead). Goldcorp's share of total co-product cash costs including discontinued operations for the year ended December 31, 2014, would be $668 per ounce of gold, $10.88 per ounce of silver, $2.23 per pound of copper, $0.78 per pound of zinc, and $0.95 per pound of lead (2013 – $687 per ounce of gold, $13.26 per ounce of silver, $2.00 per pound of copper, $0.70 per pound of zinc, and $0.78 per pound of lead). |
Year ended December 31 | 2014 | 2013 | ||||
Continuing operations | ||||||
Total cash costs (by-product) | $ | 1,370 | $ | 1,287 | ||
Corporate administration | 247 | 236 | ||||
Exploration and evaluation costs | 41 | 45 | ||||
Reclamation cost accretion and amortization | 60 | 29 | ||||
Sustaining capital expenditures | 731 | 856 | ||||
All-in sustaining costs | 2,449 | 2,453 | ||||
Divided by ounces of Goldcorp's share of gold sold | 2,580,800 | 2,434,000 | ||||
All-in sustaining costs per gold ounce | $ | 949 | $ | 1,008 | ||
Including discontinued operations | ||||||
All-in sustaining costs from continuing operations | $ | 2,449 | 2,453 | |||
All-in sustaining costs – Wharf | 61 | 64 | ||||
All-in sustaining costs – Marigold | 26 | 162 | ||||
All-in sustaining costs – including discontinued operations | 2,536 | 2,679 | ||||
Divided by ounces of Goldcorp's share of gold sold | 2,672,800 | 2,597,200 | ||||
All-in sustaining costs per gold ounce – including discontinued operations | $ | 949 | $ | 1,031 |
Three months ended | December 31 2014 | September 30 2014 | December 31 2013 | ||||||
Continuing operations | |||||||||
Total cash costs (by-product) | $ | 396 | $ | 370 | $ | 300 | |||
Corporate administration | 59 | 63 | 47 | ||||||
Exploration and evaluation costs | 12 | 12 | 11 | ||||||
Reclamation cost accretion and amortization | 13 | 15 | 9 | ||||||
Sustaining capital expenditures | 230 | 209 | 176 | ||||||
Other | — | — | (4 | ) | |||||
All-in sustaining costs | $ | 710 | $ | 669 | $ | 539 | |||
Divided by ounces of Goldcorp's share of gold sold | 681,100 | 627,000 | 687,200 | ||||||
All-in sustaining costs per gold ounce | $ | 1,043 | $ | 1,067 | $ | 784 | |||
Including discontinued operations | |||||||||
All-in sustaining costs from continuing operations | $ | 710 | $ | 669 | $ | 539 | |||
All-in sustaining costs – Wharf | 23 | 15 | 15 | ||||||
All-in sustaining costs – Marigold | — | — | 34 | ||||||
All-in sustaining costs – including discontinued operations | 733 | 684 | 588 | ||||||
Divided by ounces of Goldcorp's share of gold sold | 707,900 | 641,400 | 725,700 | ||||||
All-in sustaining costs per gold ounce – including discontinued operations | $ | 1,035 | $ | 1,066 | $ | 810 |
Year ended December 31 | 2014 | 2013 | ||||
Expenditures on mining interests and deposits per consolidated financial statements | $ | 2,021 | $ | 2,177 | ||
Expenditures on mining interests by Alumbrera and Pueblo Viejo (1) | 105 | 119 | ||||
Goldcorp’s share of expenditures on mining interests and deposits | $ | 2,126 | $ | 2,296 | ||
Sustaining capital expenditures | $ | 731 | $ | 856 | ||
Project capital expenditures | 1,395 | 1,440 | ||||
$ | 2,126 | $ | 2,296 |
Three months ended | December 31 2014 | September 30 2014 | December 31 2013 | ||||||
Expenditures on mining interests and deposits per consolidated financial statements | $ | 507 | $ | 498 | $ | 585 | |||
Expenditures on mining interests by Alumbrera and Pueblo Viejo (1) | 26 | 32 | — | ||||||
Goldcorp’s share of expenditures on mining interests and deposits | $ | 533 | $ | 530 | $ | 585 | |||
Sustaining capital expenditures | $ | 230 | $ | 209 | $ | 176 | |||
Project capital expenditures | 303 | 321 | 409 | ||||||
$ | 533 | $ | 530 | $ | 585 |
(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 consolidated financial statements. |
Year ended December 31 | 2014 | 2013 | ||||
Continuing operations | ||||||
Net loss from continuing operations attributable to shareholders of Goldcorp Inc. | $ | (2,170 | ) | $ | (2,657 | ) |
Revisions in estimates and liabilities incurred on reclamation and closure cost obligations at the Company's inactive and closed sites, net of tax | 50 | (17 | ) | |||
Share of net (earnings) losses of associates, net of tax | (26 | ) | 29 | |||
Pueblo Viejo SLA amendment | — | 157 | ||||
Impairment of mining interests, net of tax | 2,313 | 2,315 | ||||
(Gains) losses on available-for-sale securities, net of tax | (15 | ) | 28 | |||
Losses (gains) on derivatives, net of tax | 26 | (60 | ) | |||
(Gain) loss on disposition of mining interests, net of tax | (18 | ) | 8 | |||
Unrealized losses on foreign exchange translation of deferred income tax assets and liabilities | 272 | 133 | ||||
Initial recognition impact of Mexican mining tax reform | — | 504 | ||||
Foreign exchange losses on capital projects | 29 | 51 | ||||
Deferred income tax impact on Guatemalan tax election and other | 7 | 109 | ||||
Total adjusted net earnings | $ | 468 | $ | 600 | ||
Weighted average shares outstanding (000’s) | 813,206 | 812,040 | ||||
Adjusted net earnings from continuing operations per share | $ | 0.58 | $ | 0.74 | ||
Including discontinued operations | ||||||
Total adjusted net earnings from continuing operations | $ | 468 | $ | 600 | ||
Net earnings (loss) from discontinued operation attributable to shareholders of Goldcorp Inc. | 9 | (52 | ) | |||
Loss on disposition, net of tax – Marigold | 21 | — | ||||
Impairment, net of tax – Marigold | — | 86 | ||||
Total adjusted net earnings including discontinued operations | $ | 498 | $ | 634 | ||
Weighted average shares outstanding (000’s) | 813,206 | 812,040 | ||||
Adjusted net earnings per share including discontinued operations | $ | 0.61 | $ | 0.78 |
Three months ended | December 31 2014 | September 30 2014 | December 31 2013 | ||||||
Continuing operations | |||||||||
Net loss from continuing operations attributable to shareholders of Goldcorp Inc. | $ | (2,403 | ) | $ | (48 | ) | $ | (1,001 | ) |
Revisions in estimates and liabilities incurred on reclamation and closure cost obligations at the Company's inactive and closed sites, net of tax | 39 | — | (17 | ) | |||||
Share of net (earnings) losses of associates, net of tax | (6 | ) | (3 | ) | 18 | ||||
Pueblo Viejo SLA Amendment | — | — | (4 | ) | |||||
Impairment of mining interests, net of tax | 2,300 | 13 | 357 | ||||||
(Gains) losses on available-for-sale securities, net of tax | (7 | ) | (5 | ) | 13 | ||||
Losses on derivatives, net of tax | 19 | 14 | — | ||||||
Gain on disposition of mining interests, net of tax | — | — | 8 | ||||||
Initial recognition impact of Mexican mining tax reform | — | — | 504 | ||||||
Unrealized losses on foreign exchange translation of deferred income tax assets and liabilities | 105 | 85 | 67 | ||||||
Foreign exchange (gains) losses on capital projects | (2 | ) | 6 | 17 | |||||
Deferred income tax impact on Guatemalan tax election and other | 3 | 4 | 114 | ||||||
Total adjusted net earnings | $ | 48 | $ | 66 | $ | 76 | |||
Weighted average shares outstanding (000’s) | 813,792 | 813,572 | 812,217 | ||||||
Adjusted net earnings from continuing operations per share | $ | 0.06 | $ | 0.08 | $ | 0.09 | |||
Including discontinued operations | |||||||||
Total adjusted net earnings from continuing operations | $ | 48 | $ | 66 | $ | 76 | |||
Net earnings (loss) from discontinued operations attributable to shareholders of Goldcorp Inc. | 7 | 4 | (88 | ) | |||||
Impairment, net of tax – Marigold | — | — | 86 | ||||||
Total adjusted net earnings including discontinued operations | $ | 55 | $ | 70 | $ | 74 | |||
Weighted average shares outstanding (000’s) | 813,792 | 813,572 | 812,217 | ||||||
Adjusted net earnings per share including discontinued operations | $ | 0.07 | $ | 0.09 | $ | 0.09 |
Year ended December 31 | 2014 | 2013 | ||||
Net cash provided by operating activities of continuing operations | $ | 982 | $ | 886 | ||
Change in working capital | 206 | 513 | ||||
Dividends from associates | (108 | ) | (108 | ) | ||
Adjusted operating cash flows provided by Alumbrera and Pueblo Viejo | 282 | 236 | ||||
Goldcorp’s share of adjusted operating cash flows | $ | 1,362 | $ | 1,527 | ||
Including discontinued operations | ||||||
Adjusted operating cash flows – Wharf | 29 | 24 | ||||
Adjusted operating cash flows – Marigold | 2 | 50 | ||||
Goldcorp’s share of adjusted operating cash flows including discontinued operations | $ | 1,393 | $ | 1,601 |
Three months ended | December 31 2014 | September 30 2014 | December 31 2013 | ||||||
Net cash provided by operating activities of continuing operations | $ | 265 | $ | 188 | $ | 296 | |||
Change in working capital | (6 | ) | 186 | 70 | |||||
Dividends from associates | (1 | ) | (38 | ) | (37 | ) | |||
Adjusted operating cash flows provided by Alumbrera and Pueblo Viejo | 71 | 56 | 99 | ||||||
Goldcorp’s share of adjusted operating cash flows | $ | 329 | $ | 392 | $ | 428 | |||
Including discontinued operations | |||||||||
Adjusted operating cash flows – Wharf | 8 | 7 | 4 | ||||||
Adjusted operating cash flows – Marigold | — | — | 7 | ||||||
Goldcorp’s share of adjusted operating cash flows including discontinued operations | $ | 337 | $ | 399 | $ | 439 |
Year ended December 31 | 2014 | 2013 | ||||
Net cash provided by operating activities of continuing operations | $ | 982 | $ | 886 | ||
Dividends from associates | (108 | ) | (108 | ) | ||
Expenditures on mining interests | (1,882 | ) | (1,982 | ) | ||
Deposits on mining interests expenditures | (139 | ) | (195 | ) | ||
Interest paid | (101 | ) | (23 | ) | ||
Consolidated free cash flows | (1,248 | ) | (1,422 | ) | ||
Free cash flows provided by Alumbrera and Pueblo Viejo | 220 | 51 | ||||
Goldcorp’s share of free cash flows | $ | (1,028 | ) | $ | (1,371 | ) |
Including discontinued operations | ||||||
Free cash flows – Wharf | 25 | 9 | ||||
Free cash flows – Marigold | — | (13 | ) | |||
Goldcorp’s share of free cash flows including discontinued operations | $ | (1,003 | ) | $ | (1,375 | ) |
Three months ended | December 31 2014 | September 30 2014 | December 31 2013 | ||||||
Net cash provided by operating activities of continuing operations | $ | 265 | $ | 188 | $ | 296 | |||
Dividends from associates | (1 | ) | (38 | ) | (37 | ) | |||
Expenditures on mining interests | (473 | ) | (448 | ) | (553 | ) | |||
Deposits on mining interests expenditures | (34 | ) | (50 | ) | (32 | ) | |||
Interest paid | (33 | ) | (40 | ) | — | ||||
Consolidated free cash flows | (276 | ) | (388 | ) | (326 | ) | |||
Free cash flows provided (used) by Alumbrera and Pueblo Viejo | 27 | 31 | (28 | ) | |||||
Goldcorp’s share of free cash flows | $ | (249 | ) | $ | (357 | ) | $ | (354 | ) |
Including discontinued operations | |||||||||
Free cash flows – Wharf | 8 | 2 | (4 | ) | |||||
Free cash flows – Marigold | — | — | 7 | ||||||
Goldcorp’s share of free cash flows including discontinued operations | $ | (241 | ) | $ | (355 | ) | $ | (351 | ) |
At December 31, 2014 | At December 31, 2013 | |||||||||||||||||
Within 1 year | 2 to 3 years | 4 to 5 years | Over 5 years | Total | Total | |||||||||||||
Accounts payable and accrued liabilities (1) | $ | 1,016 | $ | — | $ | — | $ | — | $ | 1,016 | $ | 829 | ||||||
Current and non-current derivative liabilities (2) | 48 | 1 | — | — | 49 | 56 | ||||||||||||
Debt repayments (principal portion) | 154 | 970 | 500 | 2,000 | 3,624 | 2,565 | ||||||||||||
Interest payments on debt | 178 | 202 | 168 | 761 | 1,309 | 417 | ||||||||||||
Capital expenditure commitments (3) | 318 | 34 | — | — | 352 | 522 | ||||||||||||
Reclamation and closure cost obligations (4) | 66 | 48 | 84 | 1,629 | 1,827 | 1,847 | ||||||||||||
Minimum rental and lease payments | 11 | 8 | 10 | 45 | 74 | 40 | ||||||||||||
Other | 166 | 32 | 11 | 46 | 255 | 124 | ||||||||||||
$ | 1,957 | $ | 1,295 | $ | 773 | $ | 4,481 | $ | 8,506 | $ | 6,400 |
(1) | Excludes accrued interest on the Company's debt which is disclosed separately in the above table. |
(2) | Excludes conversion feature of the Convertible Notes. |
(3) | Contractual commitments are defined as agreements that are enforceable and legally binding. Certain of the contractual commitments may contain cancellation clauses; however, the Company discloses the contractual maturities of the Company's operating and capital commitments based on management's intent to fulfill the contract. |
(4) | The Company's reclamation and closure cost obligations were $695 million at December 31, 2014, an increase of $166 million from prior year primarily due to a $202 million revision in estimates and obligations incurred at the Company's continuing operations of which $130 million was capitalized and $72 million was expensed. |
Producing mining properties: | |
Musselwhite | 1 – 5% of NPI |
Peñasquito | 2% of NSR and 0.5% of gross income on sale of gold and silver (1) |
Los Filos | 0.5% of gross income on sale of gold and silver (1) |
El Sauzal | 0.5% of gross income on sale of gold and silver (1) |
Marlin (2) | 5% of NSR |
Marigold (3) | 5 – 10% of NSR |
Alumbrera | 3% of modified NSR plus 20% YMAD royalty |
Pueblo Viejo | 3.2% of NSR |
Development projects: | |
Éléonore | 2.2 – 3.5% of NSR |
Cerro Negro | 3 – 4% of modified NSR and 1% of net earnings |
El Morro | 2% of NSR |
(1) | Effective January 1, 2014. |
(2) | On November 28, 2014, the Guatemalan government passed legislation increasing the royalties paid on the production of precious metals in Guatemala to 10% of NSR effective January 1, 2015. |
(3) | Marigold was classified as a discontinued operation during the year ended December 31, 2014. As a result, the royalty expense for the years ended December 31, 2014 and 2013 exclude the royalty expenses incurred at Marigold. |
(i) | Credit risk |
At December 31 2014 | At December 31 2013 | |||||
Cash and cash equivalents | $ | 482 | $ | 625 | ||
Accounts receivable arising from sales of metal concentrates | 187 | 254 | ||||
Other current and non-current receivables | 62 | 60 | ||||
Money market investments | 53 | — | ||||
Current and non-current derivative asset | 17 | 42 | ||||
Current and non-current notes receivable | — | 28 | ||||
Accrued interest receivable | 49 | 24 | ||||
$ | 850 | $ | 1,033 |
(ii) | Liquidity risk |
(iii) | Market risk |
At December 31, 2014 | Cash and cash equivalents | Accounts receivable and other current and non-current assets | Accounts payable and accrued liabilities and non-current liabilities | Income taxes receivable (payable), current and non-current | Deferred income tax liabilities | ||||||||||
Canadian dollar | $ | 14 | $ | 49 | $ | (357 | ) | $ | 26 | $ | (979 | ) | |||
Mexican peso | 23 | 150 | (222 | ) | 108 | (2,858 | ) | ||||||||
Argentine peso | 1 | 222 | (393 | ) | (3 | ) | (574 | ) | |||||||
Guatemalan quetzal | 1 | 6 | (36 | ) | 6 | (107 | ) | ||||||||
Chilean peso | 1 | 11 | (8 | ) | — | — | |||||||||
$ | 40 | $ | 438 | $ | (1,016 | ) | $ | 137 | $ | (4,518 | ) | ||||
At December 31, 2013 | |||||||||||||||
Canadian dollar | $ | 13 | $ | 75 | $ | (328 | ) | $ | 18 | $ | (954 | ) | |||
Mexican peso | 25 | 134 | (180 | ) | 138 | (2,860 | ) | ||||||||
Argentine peso | 18 | 165 | (162 | ) | 2 | (1,237 | ) | ||||||||
Guatemalan quetzal | 3 | 7 | (41 | ) | (3 | ) | (103 | ) | |||||||
Chilean peso | 3 | 12 | (6 | ) | — | — | |||||||||
$ | 62 | $ | 393 | $ | (717 | ) | $ | 155 | $ | (5,154 | ) |
At December 31 2014 | At December 31 2013 | |||||
Shareholders’ equity | $ | 16,960 | $ | 19,545 | ||
Debt | 3,592 | 2,507 | ||||
20,552 | 22,052 | |||||
Less: Cash and cash equivalents | (482 | ) | (625 | ) | ||
Money market investments | (53 | ) | — | |||
$ | 20,017 | $ | 21,427 |
i. | Ejido Land Claims |
i. | Province of Santa Cruz, Argentina |
ii. | Argentine 10% Withholding Tax |
iii. | Government Controls |
(a) | Operating levels intended by management |
(b) | Economic recoverability and probability of future economic benefits of exploration, evaluation and development costs |
(c) | Functional currency |
(d) | Asset held for sale |
(a) | Impairment of mining interests and goodwill |
(b) | Heap leach ore inventories and mine operating costs |
(c) | Heap leach ore inventory net realizable value |
(d) | Estimated recoverable ounces |
(e) | Deferred stripping costs |
(f) | Income taxes |
(g) | Estimated reclamation and closure costs |
(h) | Contingencies |
(i) | In 2005, prior to construction of the Peñasquito Mine, an agreement was negotiated with the Cerro Gordo Ejido for the use of 600 hectares (approximately 1,483 acres) of surface land located within the confines of the proposed Peñasquito Mine site. These lands now include 60% of the mine pit area, a portion of the waste rock facilities and explosive magazine storage area. The terms of the agreement were based on comparable surface valuations in the region as well as on similar agreements at the Peñasquito Mine and other Mexican mining operations. In 2009, the Cerro Gordo Ejido commenced an action against Minera Peñasquito in Mexico’s agrarian courts challenging the land use agreement. Following a series of legal proceedings, the agrarian courts ruled on June 18, 2013, that the land use agreement was null and ordered the land to be returned to the Cerro Gordo Ejido for payment of 2.4 million pesos. Constitutional claims are currently proceeding in the First District Court of Zacatecas by the Cedros and Mazapil Ejidos and a local transportation union. The State of Zacatecas has filed its own constitutional claim against the agrarian court’s ruling. |
(ii) | In 2012, the Mexican government amended the Federal labour law regarding subcontracting arrangements to prevent using service companies to avoid labour and tax obligations. The Company currently operates in Mexico using these subcontracting arrangements as is the common practice. The amendments also provided clarification on certain regulatory requirements associated with an employer’s obligation to compensate employees with appropriate statutory profit sharing within Mexico. The Company has determined that it is probable that no additional obligation for statutory profit sharing payments is required to be recorded in the Company’s consolidated financial statements as at and for the years ended December 31, 2014, other than what is presently recorded. |
• | 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. |
Reserves | Contained Gold (Moz) | Contained Silver (Moz) |
Proven | 18.7 | 440.5 |
Probable | 30.9 | 348.1 |
Proven & Probable | 49.6 | 788.5 |
Resources | ||
Measured | 6.0 | 136.1 |
Indicated | 30.2 | 474.0 |
Measured & Indicated | 36.2 | 610.1 |
Inferred | 24.0 | 85.7 |
GOLDCORP INC PROVEN AND PROBABLE RESERVES (1)(4)(5) As of December 31, 2014 Based on attributable ounces | ||||
GOLD | Mt | Au g/t | Moz | |
Peñasquito Mill | Mexico | 546.98 | 0.55 | 9.70 |
Los Filos | Mexico | 247.19 | 0.85 | 6.77 |
El Morro (70.0%) | Chile | 419.34 | 0.46 | 6.24 |
Pueblo Viejo (40.0%) | Dominican Republic | 58.35 | 3.31 | 6.21 |
Cerro Negro | Argentina | 16.87 | 9.70 | 5.26 |
Éléonore | Canada | 24.57 | 6.30 | 4.97 |
Porcupine | Canada | 57.94 | 1.60 | 2.98 |
Red Lake | Canada | 6.42 | 9.96 | 2.06 |
Camino Rojo | Mexico | 84.52 | 0.68 | 1.85 |
Musselwhite | Canada | 7.61 | 6.79 | 1.66 |
Peñasquito Heap Leach | Mexico | 89.74 | 0.29 | 0.85 |
Alumbrera (37.5%) | Argentina | 56.25 | 0.31 | 0.55 |
Marlin | Guatemala | 1.85 | 5.26 | 0.31 |
Dee (40.0%) | United States | 1.14 | 4.40 | 0.16 |
TOTAL GOLD | 49.58 |
SILVER | Mt | Ag g/t | Moz | |
Peñasquito Mill | Mexico | 546.98 | 30.12 | 529.65 |
Peñasquito Heap Leach | Mexico | 89.74 | 28.25 | 81.52 |
Los Filos | Mexico | 247.19 | 5.17 | 41.11 |
Cerro Negro | Argentina | 16.87 | 80.43 | 43.63 |
Pueblo Viejo (40.0%) | Dominican Republic | 58.35 | 20.73 | 38.89 |
Camino Rojo | Mexico | 84.52 | 13.80 | 37.49 |
Marlin | Guatemala | 1.85 | 269.44 | 16.00 |
Dee (40.0%) | United States | 1.14 | 6.62 | 0.24 |
TOTAL SILVER | 788.53 | |||
COPPER | Mt | % Cu | Mlbs | |
El Morro (70.0%) | Chile | 419.34 | 0.49 | 4,552 |
Alumbrera (37.5%) | Argentina | 56.25 | 0.33 | 406 |
Pueblo Viejo (40.0%) | Dominican Republic | 58.35 | 0.11 | 142 |
TOTAL COPPER | 5,100 | |||
LEAD | Mt | % Pb | Mlbs | |
Peñasquito Mill | Mexico | 546.98 | 0.31 | 3,757 |
TOTAL LEAD | 3,757 | |||
ZINC | Mt | % Zn | Mlbs | |
Peñasquito Mill | Mexico | 546.98 | 0.75 | 9,081 |
TOTAL ZINC | 9,081 |
GOLDCORP INC MEASURED AND INDICATED RESOURCES (1)(2)(3)(4)(6) As of December 31, 2014 Based on attributable ounces | ||||
GOLD | Mt | Au g/t | Moz | |
Porcupine | Canada | 168.31 | 1.41 | 7.61 |
Camino Rojo | Mexico | 221.41 | 0.87 | 6.20 |
Peñasquito Mill | Mexico | 504.75 | 0.28 | 4.50 |
Pueblo Viejo (40.0%) | Dominican Republic | 49.83 | 2.62 | 4.20 |
Los Filos | Mexico | 123.70 | 1.04 | 4.13 |
Red Lake | Canada | 4.11 | 17.74 | 2.34 |
Cerro Blanco | Guatemala | 2.52 | 15.64 | 1.27 |
Éléonore | Canada | 5.19 | 6.34 | 1.06 |
Noche Buena | Mexico | 71.75 | 0.42 | 0.96 |
Dee (40.0%) | United States | 20.47 | 1.30 | 0.86 |
El Morro (70.0%) | Chile | 64.65 | 0.41 | 0.85 |
Peñasquito Heap Leach | Mexico | 116.69 | 0.21 | 0.77 |
Cerro Negro | Argentina | 3.80 | 5.32 | 0.65 |
San Nicolas (21.0%) | Mexico | 19.26 | 0.46 | 0.28 |
El Sauzal | Mexico | 2.86 | 2.29 | 0.21 |
GOLDCORP INC MEASURED AND INDICATED RESOURCES (1)(2)(3)(4)(6) As of December 31, 2014 Based on attributable ounces | ||||
Musselwhite | Canada | 0.98 | 5.62 | 0.18 |
Marlin | Guatemala | 0.62 | 4.29 | 0.09 |
TOTAL GOLD | 36.15 | |||
SILVER | Mt | Ag g/t | Moz | |
Peñasquito Mill | Mexico | 504.75 | 22.77 | 369.57 |
Peñasquito Heap Leach | Mexico | 116.69 | 17.18 | 64.45 |
Camino Rojo | Mexico | 221.41 | 7.37 | 52.46 |
Noche Buena | Mexico | 71.75 | 14.06 | 32.44 |
Los Filos | Mexico | 123.70 | 7.77 | 30.91 |
Pueblo Viejo (40.0%) | Dominican Republic | 49.83 | 15.26 | 24.45 |
San Nicolas (21.0%) | Mexico | 19.26 | 26.70 | 16.53 |
Cerro Blanco | Guatemala | 2.52 | 72.00 | 5.83 |
Cerro Negro | Argentina | 3.80 | 45.81 | 5.59 |
Dee (40.0%) | United States | 20.47 | 6.67 | 4.39 |
Marlin | Guatemala | 0.62 | 174.12 | 3.47 |
TOTAL SILVER | 610.11 | |||
COPPER | Mt | % Cu | Mlbs | |
El Morro (70.0%) | Chile | 64.65 | 0.42 | 597 |
San Nicolas (21.0%) | Mexico | 19.26 | 1.24 | 527 |
Pueblo Viejo (40.0%) | Dominican Republic | 49.83 | 0.08 | 93 |
TOTAL COPPER | 1,216 | |||
LEAD | Mt | % Pb | Mlbs | |
Peñasquito Mill | Mexico | 504.75 | 0.22 | 2,395 |
Camino Rojo | Mexico | 221.41 | 0.08 | 388 |
TOTAL LEAD | 2,784 | |||
ZINC | Mt | % Zn | Mlbs | |
Peñasquito Mill | Mexico | 504.75 | 0.48 | 5,379 |
Camino Rojo | Mexico | 221.41 | 0.25 | 1,224 |
San Nicolas (21.0%) | Mexico | 19.26 | 1.68 | 713 |
TOTAL ZINC | 7,316 |
GOLDCORP INC INFERRED RESOURCES (1)(2)(3)(4)(6) As of December 31, 2014 Based on attributable ounces | ||||
GOLD | Mt | Au g/t | Moz | |
Los Filos | Mexico | 175.86 | 0.82 | 4.64 |
El Morro (70.0%) | Chile | 474.65 | 0.30 | 4.52 |
Cochenour | Canada | 9.30 | 11.55 | 3.45 |
Éléonore | Canada | 12.09 | 7.19 | 2.80 |
Camino Rojo | Mexico | 86.14 | 0.78 | 2.17 |
Red Lake | Canada | 3.00 | 19.58 | 1.89 |
Porcupine | Canada | 16.92 | 2.87 | 1.56 |
Musselwhite | Canada | 7.02 | 5.61 | 1.27 |
Cerro Blanco | Guatemala | 1.35 | 15.44 | 0.67 |
Cerro Negro | Argentina | 1.54 | 6.44 | 0.32 |
Noche Buena | Mexico | 17.67 | 0.42 | 0.24 |
Peñasquito Heap Leach | Mexico | 24.44 | 0.19 | 0.15 |
Pueblo Viejo (40.0%) | Dominican Republic | 1.33 | 2.51 | 0.11 |
Peñasquito Mill | Mexico | 17.47 | 0.13 | 0.08 |
Dee (40.0%) | United States | 3.87 | 0.68 | 0.08 |
Marlin | Guatemala | 0.09 | 7.17 | 0.02 |
San Nicolas (21.0%) | Mexico | 2.28 | 0.26 | 0.02 |
El Sauzal | Mexico | 0.04 | 1.33 | — |
TOTAL GOLD | 23.97 | |||
SILVER | Mt | Ag g/t | Moz | |
Los Filos | Mexico | 175.86 | 6.31 | 35.67 |
Camino Rojo | Mexico | 86.14 | 4.43 | 12.28 |
Peñasquito Mill | Mexico | 17.47 | 19.46 | 10.93 |
Peñasquito Heap Leach | Mexico | 24.44 | 13.72 | 10.78 |
Noche Buena | Mexico | 17.67 | 13.92 | 7.91 |
Cerro Blanco | Guatemala | 1.35 | 59.60 | 2.59 |
Cerro Negro | Argentina | 1.54 | 37.64 | 1.86 |
San Nicolas (21.0%) | Mexico | 2.28 | 17.40 | 1.27 |
Marlin | Guatemala | 0.09 | 358.29 | 1.08 |
Pueblo Viejo (40.0%) | Dominican Republic | 1.33 | 21.22 | 0.91 |
Dee (40.0%) | United States | 3.87 | 3.46 | 0.43 |
TOTAL SILVER | 85.70 | |||
COPPER | Mt | % Cu | Mlbs | |
El Morro (70.0%) | Chile | 474.65 | 0.35 | 3,633 |
San Nicolas (21.0%) | Mexico | 2.28 | 1.24 | 62 |
Pueblo Viejo (40.0%) | Dominican Republic | 1.33 | 0.02 | 1 |
TOTAL COPPER | 3,696 |
GOLDCORP INC INFERRED RESOURCES (1)(2)(3)(4)(6) As of December 31, 2014 Based on attributable ounces | ||||
LEAD | Mt | % Pb | Mlbs | |
Peñasquito Mill | Mexico | 17.47 | 0.24 | 93 |
Camino Rojo | Mexico | 86.14 | 0.03 | 51 |
TOTAL LEAD | 143 | |||
ZINC | Mt | % Zn | Mlbs | |
Camino Rojo | Mexico | 86.14 | 0.17 | 315 |
Peñasquito Mill | Mexico | 17.47 | 0.48 | 186 |
San Nicolas (21.0%) | Mexico | 2.28 | 0.97 | 49 |
TOTAL ZINC | 550 |
Goldcorp December 31, 2014 Reserve and Resource Reporting Notes: | |||
1 | All Mineral Reserves and Mineral Resources have been calculated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101, or the AusIMM JORC equivalent. | ||
2 | All Mineral Resources are reported exclusive of Mineral Reserves. | ||
3 | Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. | ||
4 | Reserves and Resources are reported as of December 31, 2014, with the following conditions or exceptions: | ||
(i) (ii) (iii) | Reserves and Resources for Pueblo Viejo are as per information provided by Barrick Gold Corporation. Reserves and Resources for Dee are as per information provided by Barrick Gold Corporation. Resources for San Nicolas are as per information provided by Teck Resources Limited (2012 Study). | ||
5 | Mineral Reserves are estimated using appropriate recovery rates and US$ commodity prices of $1,300 per ounce of gold, $22 per ounce of silver, $3.00 per pound of copper, $0.90 per pound of lead, and $0.90 per pound of zinc, unless otherwise noted below: | ||
(i) | Alumbrera | $1,332/oz gold and $3.17/lb copper | |
(ii) | Pueblo Viejo, Dee | $1,100/oz gold, $17/oz silver, $3.00/lb copper | |
6 | Mineral Resources are estimated using US$ commodity prices of $1,500 per ounce of gold, $24 per ounce of silver, $3.50 per pound of copper, $1.00 per pound of lead, and $1.00 per pound of zinc, unless otherwise noted below; | ||
(i) | Pueblo Viejo, Dee | $1,400/oz gold, $19/oz silver, $3.50/lb copper | |
(ii) | San Nicolas | $1,275/oz gold, $22.50/oz silver, $2.75/lb copper, $1.00/lb zinc | |
(iii) | Éléonore | $1,300/oz gold |
Charles Jeannes | Lindsay Hall |
President and Chief Executive Officer | Executive Vice President and Chief Financial Officer |
Vancouver, Canada | |
February 18, 2015 |
i. | pertain to the maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions and dispositions of assets of Goldcorp; |
ii. | provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and that Goldcorp’s receipts and expenditures are made only in accordance with authorizations of management and Goldcorp’s directors; and |
iii. | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Goldcorp’s assets that could have a material effect on Goldcorp’s consolidated financial statements. |
Charles Jeannes | Lindsay Hall |
President and Chief Executive Officer | Executive Vice President and Chief Financial Officer |
Vancouver, Canada | |
February 18, 2015 |
Note | 2014 | 2013 | |||||
Revenues | 9(c) | $ | 3,436 | $ | 3,609 | ||
Mine operating costs | |||||||
Production costs | 10, 15(b) | (2,079 | ) | (1,939 | ) | ||
Depreciation and depletion | 9, 15(b), 17(e) | (753 | ) | (630 | ) | ||
(2,832 | ) | (2,569 | ) | ||||
Earnings from mine operations | 604 | 1,040 | |||||
Exploration and evaluation costs | 17(b) | (41 | ) | (45 | ) | ||
Share of net earnings (loss) of associates | 18, 20 | 156 | (395 | ) | |||
Impairment of mining interests and goodwill | 20 | (2,999 | ) | (2,646 | ) | ||
Corporate administration | 10(a), 27 | (247 | ) | (236 | ) | ||
Loss from operations and associates | 9 | (2,527 | ) | (2,282 | ) | ||
Gains (losses) on securities, net | 25(c) | 17 | (32 | ) | |||
(Losses) gains on derivatives, net | 25(b) | (40 | ) | 83 | |||
Gain (loss) on disposition of mining interests, net | 17(d), 18(b) | 18 | (11 | ) | |||
Finance costs | 11 | (49 | ) | (49 | ) | ||
Other expenses | (27 | ) | (57 | ) | |||
Loss from continuing operations before taxes | (2,608 | ) | (2,348 | ) | |||
Income tax recovery (expense) | 12 | 440 | (309 | ) | |||
Net loss from continuing operations | (2,168 | ) | (2,657 | ) | |||
Net earnings (loss) from discontinued operations | 8 | 9 | (52 | ) | |||
Net loss | $ | (2,159 | ) | $ | (2,709 | ) | |
Net (loss) earnings from continuing operations attributable to: | |||||||
Shareholders of Goldcorp Inc. | $ | (2,170 | ) | $ | (2,657 | ) | |
Non-controlling interest | 2 | — | |||||
$ | (2,168 | ) | $ | (2,657 | ) | ||
Net (loss) earnings attributable to: | |||||||
Shareholders of Goldcorp Inc. | $ | (2,161 | ) | $ | (2,709 | ) | |
Non-controlling interest | 2 | — | |||||
$ | (2,159 | ) | $ | (2,709 | ) | ||
Net loss per share from continuing operations | |||||||
Basic | 13 | $ | (2.67 | ) | $ | (3.27 | ) |
Diluted | 13 | (2.67 | ) | (3.27 | ) | ||
Net loss per share | |||||||
Basic | 13 | $ | (2.66 | ) | $ | (3.34 | ) |
Diluted | 13 | (2.66 | ) | (3.34 | ) |
Note | 2014 | 2013 | |||||
Net loss | $ | (2,159 | ) | $ | (2,709 | ) | |
Other comprehensive income (loss), net of tax | |||||||
Items that may be reclassified subsequently to net loss: | 25(c) | ||||||
Mark-to-market gains (losses) on available-for-sale securities | 9 | (76 | ) | ||||
Reclassification adjustment for available-for-sale securities impairment losses included in net loss | 5 | 29 | |||||
Reclassification adjustment for realized gains on disposition of available-for-sale securities recognized in net loss | (20 | ) | (1 | ) | |||
(6 | ) | (48 | ) | ||||
Items that will not be reclassified to net loss: | |||||||
Remeasurements on defined benefit pension plans | — | (2 | ) | ||||
Total other comprehensive loss, net of tax | (6 | ) | (50 | ) | |||
Total comprehensive loss | $ | (2,165 | ) | $ | (2,759 | ) | |
Total comprehensive (loss) income attributable to: | |||||||
Shareholders of Goldcorp Inc. | $ | (2,167 | ) | $ | (2,759 | ) | |
Non-controlling interest | 2 | — | |||||
$ | (2,165 | ) | $ | (2,759 | ) |
Note | 2014 | 2013 | |||||
Operating activities | |||||||
Net loss from continuing operations | $ | (2,168 | ) | $ | (2,657 | ) | |
Adjustments for: | |||||||
Dividends from associates | 18 | 109 | 108 | ||||
Reclamation expenditures | 24 | (33 | ) | (14 | ) | ||
Items not affecting cash: | |||||||
Impairment of inventories | 15(b) | 72 | — | ||||
Depreciation and depletion | 9, 15(b), 17(e) | 753 | 630 | ||||
Share of net (earnings) loss of associates | 18, 20 | (156 | ) | 395 | |||
Impairment of mining interests and goodwill | 20 | 2,999 | 2,646 | ||||
Share-based compensation | 27(a), (b), (c) | 72 | 72 | ||||
(Gains) losses on securities, net | 25(c) | (17 | ) | 32 | |||
Unrealized loss (gains) on derivatives, net | 25(b) | 28 | (70 | ) | |||
(Gain) loss on disposition of mining interests, net | 17(d), 18(b) | (18 | ) | 11 | |||
Revision of estimates and accretion of reclamation and closure cost obligations | 10, 11 | 95 | (6 | ) | |||
Deferred income tax (recovery) expense | 12 | (575 | ) | 212 | |||
Other | 27 | 40 | |||||
Change in working capital | 14 | (206 | ) | (513 | ) | ||
Net cash provided by operating activities of continuing operations | 982 | 886 | |||||
Net cash provided by operating activities of discontinued operations | 8 | 32 | 69 | ||||
Investing activities | |||||||
Expenditures on mining interests | 9(g) | (1,882 | ) | (1,982 | ) | ||
Deposits on mining interest expenditures | (139 | ) | (195 | ) | |||
Proceeds from disposition of mining interest, net of transaction costs | 17(d), 18(b) | 193 | 8 | ||||
Interest paid | 9(g) | (101 | ) | (23 | ) | ||
Purchases of money market investments and available-for-sale securities | 14 | (133 | ) | (615 | ) | ||
Proceeds from maturities and sales of money market investments and available-for-sale securities, net | 14 | 116 | 621 | ||||
Net cash used in investing activities of continuing operations | (1,946 | ) | (2,186 | ) | |||
Net cash provided by (used in) investing activities of discontinued operations | 14 | 203 | (60 | ) | |||
Financing activities | |||||||
Debt borrowings, net of transaction costs | 23 | 1,223 | 1,641 | ||||
Debt repayments | 23 | (994 | ) | — | |||
Draw down of credit facility, net of repayments | 23 | 840 | — | ||||
Dividends paid to shareholders | 13(b) | (488 | ) | (486 | ) | ||
Common shares issued | 5 | 3 | |||||
Net cash provided by financing activities of continuing operations | 586 | 1,158 | |||||
Effect of exchange rate changes on cash and cash equivalents | — | 1 | |||||
Decrease in cash and cash equivalents | (143 | ) | (132 | ) | |||
Cash and cash equivalents, beginning of the year | 625 | 757 | |||||
Cash and cash equivalents, end of the year | 14 | $ | 482 | $ | 625 |
Note | At December 31 2014 | At December 31 2013 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | 14 | $ | 482 | $ | 625 | ||
Money market investments | 53 | — | |||||
Accounts receivable | 25(b) | 394 | 469 | ||||
Inventories | 15 | 772 | 727 | ||||
Income taxes receivable | 207 | 182 | |||||
Assets held for sale | 8 | 81 | 227 | ||||
Other | 16 | 158 | 144 | ||||
2,147 | 2,374 | ||||||
Mining interests | |||||||
Owned by subsidiaries | 17 | 22,458 | 22,928 | ||||
Investments in associates | 18 | 2,087 | 2,210 | ||||
17, 20 | 24,545 | 25,138 | |||||
Goodwill | 19, 20 | 479 | 1,454 | ||||
Investments in securities | 21 | 43 | 77 | ||||
Deposits on mining interest expenditures | 32 | 71 | |||||
Deferred income taxes | 12 | 26 | 19 | ||||
Inventories | 15 | 249 | 141 | ||||
Other | 22 | 345 | 290 | ||||
Total assets | 9 | $ | 27,866 | $ | 29,564 | ||
Liabilities | |||||||
Current liabilities | |||||||
Accounts payable and accrued liabilities | $ | 1,039 | $ | 856 | |||
Income taxes payable | 45 | 6 | |||||
Debt | 23 | 150 | 997 | ||||
Liabilities relating to assets held for sale | 8 | 55 | 44 | ||||
Other | 24 | 167 | 130 | ||||
1,456 | 2,033 | ||||||
Deferred income taxes | 12 | 4,959 | 5,594 | ||||
Debt | 23 | 3,442 | 1,510 | ||||
Provisions | 24 | 671 | 517 | ||||
Income taxes payable | 80 | 55 | |||||
Other | 83 | 97 | |||||
Total liabilities | 9 | 10,691 | 9,806 | ||||
Equity | |||||||
Shareholders’ equity | |||||||
Common shares, stock options and restricted share units | 17,261 | 17,191 | |||||
Accumulated other comprehensive (loss) income | (5 | ) | 1 | ||||
(Deficit) retained earnings | (296 | ) | 2,353 | ||||
16,960 | 19,545 | ||||||
Non-controlling interest | 215 | 213 | |||||
Total equity | 17,175 | 19,758 | |||||
Total liabilities and equity | $ | 27,866 | $ | 29,564 |
Charles Jeannes, Director | Ian Telfer, Director |
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 | Deficit | 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 loss | ||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (2,161 | ) | (2,161 | ) | 2 | (2,159 | ) | ||||||||||||||
Other comprehensive loss | — | — | — | (6 | ) | — | — | (6 | ) | — | (6 | ) | ||||||||||||||
— | — | — | (6 | ) | — | (2,161 | ) | (2,167 | ) | 2 | (2,165 | ) | ||||||||||||||
Stock options exercised and restricted share units issued and vested (note 27(a)) | 1,328 | 46 | (42 | ) | — | — | — | 4 | — | 4 | ||||||||||||||||
Share-based compensation (note 27(a)) | — | — | 66 | — | — | — | 66 | — | 66 | |||||||||||||||||
Dividends (note 13(b)) | — | — | — | — | — | (488 | ) | (488 | ) | — | (488 | ) | ||||||||||||||
At December 31, 2014 | 813,585 | $ | 16,941 | $ | 320 | $ | (3 | ) | $ | (2 | ) | $ | (296 | ) | $ | 16,960 | $ | 215 | $ | 17,175 |
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, 2013 | 811,519 | $ | 16,865 | $ | 252 | $ | 51 | $ | — | $ | 5,548 | $ | 22,716 | $ | 213 | $ | 22,929 | |||||||||
Total comprehensive loss | ||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (2,709 | ) | (2,709 | ) | — | (2,709 | ) | ||||||||||||||
Other comprehensive loss | — | — | — | (48 | ) | (2 | ) | — | (50 | ) | — | (50 | ) | |||||||||||||
— | — | — | (48 | ) | (2 | ) | (2,709 | ) | (2,759 | ) | — | (2,759 | ) | |||||||||||||
Stock options exercised and restricted share units issued and vested (note 27(a)) | 738 | 30 | (27 | ) | — | — | — | 3 | — | 3 | ||||||||||||||||
Share-based compensation (note 27(a)) | — | — | 71 | — | — | — | 71 | — | 71 | |||||||||||||||||
Dividends (note 13(b)) | — | — | — | — | — | (486 | ) | (486 | ) | — | (486 | ) | ||||||||||||||
At December 31, 2013 | 812,257 | $ | 16,895 | $ | 296 | $ | 3 | $ | (2 | ) | $ | 2,353 | $ | 19,545 | $ | 213 | $ | 19,758 |
1. | DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS |
2. | BASIS OF PREPARATION |
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(a) | Basis of measurement |
(b) | Currency of presentation |
(c) | Basis of consolidation |
Direct parent company (mine sites and operating segments) (note 9) | Location | Ownership interest | Mining properties and development projects owned (note 17) |
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 (1) |
Montana Exploradora de Guatemala S.A. ("Marlin") | Guatemala | 100% | Marlin mine |
Wharf Resources (USA) Inc. ("Wharf") | United States | 100% | Wharf mine (note 8) |
Oroplata S.A. ("Cerro Negro") | Argentina | 100% | Cerro Negro project |
Sociedad Contractual Minera El Morro ("El Morro") | Chile | 70% | El Morro project |
(1) | In reclamation effective January 1, 2015. |
Associates (mine sites and/or operating segments) (notes 9 and 18) | Location | Ownership interest | Mining properties (note 17) |
Minera Alumbrera Limited ("Alumbrera") | Argentina | 37.5% | Alumbrera mine |
Pueblo Viejo Dominicana Corporation ("Pueblo Viejo") | Dominican Republic | 40.0% | Pueblo Viejo mine |
Tahoe | Guatemala | 39.3% | Escobal mine |
(d) | Investments in associates |
(e) | Impairment of investments in associates |
(f) | Business combinations |
(i) | Has begun planned principal activities; |
(ii) | Has employees, intellectual property and other inputs and processes that could be applied to those inputs; |
(iii) | Is pursuing a plan to produce outputs; and |
(iv) | Will be able to obtain access to customers that will purchase the outputs. |
(i) | The identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree; |
(ii) | The consideration transferred in exchange for an interest in the acquiree; |
(iii) | In a business combination achieved in stages, the equity interest in the acquiree previously held by the acquirer; and |
(iv) | The resulting goodwill or gain on a bargain purchase. |
(g) | Discontinued operation |
(h) | Assets and liabilities held for sale |
(i) | The non-current asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets or disposal groups; and |
(ii) | The sale of the non-current asset or disposal group is highly probable. For the sale to be highly probable: |
a. | The appropriate level of management must be committed to a plan to sell the asset or disposal group; |
b. | An active program to locate a buyer and complete the plan must have been initiated; |
c. | The non-current asset or disposal group must be actively marketed for sale at a price that is reasonable in relation to its current fair value; |
d. | The sale should be expected to qualify for recognition as a completed sale within one year from the date of classification as held for sale (with certain exceptions); and |
e. | Actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
(i) | Foreign currency translation |
(j) | Revenue recognition |
(k) | Earnings per share |
(l) | Cash and cash equivalents |
(m) | Inventories and stockpiled ore |
(n) | Mining interests |
(i) | Costs of acquiring production, development and exploration stage properties in asset acquisitions; |
(ii) | Costs attributed to mining properties acquired in business combinations; |
(iii) | Expenditures incurred to develop mining properties; |
(iv) | Economically recoverable exploration and evaluation expenditures; |
(v) | Borrowing costs incurred that are attributable to qualifying mining properties; |
(vi) | Certain costs incurred during production, net of proceeds from sales, prior to reaching operating levels intended by management; and |
(vii) | Estimates of reclamation and closure costs (note 3(r)). |
(i) | Geology: there is sufficient geologic certainty of converting a mineral deposit into a proven and probable reserve. There is a history of conversion to reserves at operating mines; |
(ii) | Scoping or feasibility: there is a scoping study or preliminary feasibility study that demonstrates the additional reserves and resources will generate a positive commercial outcome. Known metallurgy provides a basis for concluding there is a significant likelihood of being able to recover the incremental costs of extraction and production; |
(iii) | Accessible facilities: the mineral deposit can be processed economically at accessible mining and processing facilities where applicable; |
(iv) | Life of mine plans: an overall life of mine plan and economic model to support the economic extraction of reserves and resources exists. A long-term life of mine plan and supporting geological model identifies the drilling and related development work required to expand or further define the existing ore body; and |
(v) | Authorizations: operating permits and feasible environmental programs exist or are obtainable. |
(i) | It is probable that a future economic benefit will flow to the Company; |
(ii) | The Company can obtain the benefit and controls access to it; |
(iii) | The transaction or event giving rise to the future economic benefit has already occurred; and |
(iv) | Costs incurred can be measured reliably. |
(i) | Operational commissioning of major mine and plant components is complete; |
(ii) | Operating results are being achieved consistently for a period of time; |
(iii) | There are indicators that these operating results will be continued; and |
(iv) | Other factors are present, including one or more of the following: A significant portion of plant/mill capacity has been achieved; a significant portion of available funding is directed towards operating activities; a pre-determined, reasonable period of time has passed; or significant milestones for the development of the mining property have been achieved. |
Mill and mill components | life of mine |
Underground infrastructure | life of mine |
Mobile equipment components | 3 to 15 years |
(o) | Goodwill |
(p) | Leases |
(q) | Income taxes |
(r) | Provisions |
(i) | The Company has a present obligation (legal or constructive) as a result of a past event; |
(ii) | It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and |
(iii) | A reliable estimate can be made of the amount of the obligation. |
(i) | By an established pattern of past practice, published policies or a sufficiently specific current statement, the Company has indicated to other parties that it will accept certain responsibilities; and |
(ii) | As a result, the Company has created a valid expectation on the part of those other parties that it will discharge those responsibilities. |
(s) | Financial instruments |
(t) | Share-based payments |
(u) | Non-controlling interests |
4. | CHANGES IN ACCOUNTING STANDARDS |
• | 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, which was effective January 1, 2014, did not result in any adjustments to the Company's consolidated financial statements. |
• | The IASB made certain amendments to the following IFRSs and IASs effective January 1, 2014: |
5. | CHANGES IN ACCOUNTING STANDARDS NOT YET EFFECTIVE |
6. | CRITICAL JUDGEMENT IN APPLYING ACCOUNTING POLICIES |
(a) | Operating levels intended by management |
(b) | Economic recoverability and probability of future economic benefits of exploration, evaluation and development costs |
(c) | Functional currency |
(d) | Asset held for sale |
7. | KEY SOURCES OF ESTIMATION UNCERTAINTY |
(a) | Impairment of mining interests and goodwill |
(b) | Heap leach ore inventories and mine operating costs |
(c) | Inventory net realizable value |
(d) | Estimated recoverable ounces |
(e) | Deferred stripping costs |
(f) | Income taxes |
(g) | Estimated reclamation and closure costs |
(h) | Contingencies |
(i) | In 2005, prior to construction of the Peñasquito Mine, an agreement was negotiated with the Cerro Gordo Ejido for the use of 600 hectares (approximately 1,483 acres) of surface land located within the confines of the proposed Peñasquito Mine site. These lands now include 60% of the mine pit area, a portion of the waste rock facilities and explosive magazine storage area. The terms of the agreement were based on comparable surface valuations in the region as well as on similar agreements at the Peñasquito Mine and other Mexican mining operations. In 2009, the Cerro Gordo Ejido commenced an action against Minera Peñasquito in Mexico’s agrarian courts challenging the land use agreement. Following a series of legal proceedings, the agrarian courts ruled on June 18, 2013, that the land use agreement was null and ordered the land to be returned to the Cerro Gordo Ejido for payment of 2.4 million pesos. Constitutional claims are currently proceeding in the First District Court of Zacatecas by the Cedros and Mazapil Ejidos and a local transportation union. The State of Zacatecas has filed its own constitutional claim against the agrarian court’s ruling. |
(ii) | In 2012, the Mexican government amended the Federal labour law regarding subcontracting arrangements to prevent using service companies to avoid labour and tax obligations. The Company currently operates in Mexico using these subcontracting arrangements as is the common practice. The amendments also provided clarification on certain regulatory requirements associated with an employer’s obligation to compensate employees with appropriate statutory profit sharing within Mexico. The Company has determined that it is probable that no additional obligation for statutory profit sharing payments is required to be |
8. | DISCONTINUED OPERATIONS |
(a) | Wharf disposition |
2014 | 2013 | |||||
Revenues | $ | 94 | $ | 78 | ||
Production costs | (61 | ) | (52 | ) | ||
Depreciation and depletion | (5 | ) | (4 | ) | ||
Earnings from mine operation | 28 | 22 | ||||
Finance costs | (1 | ) | (1 | ) | ||
Other expenses | — | (1 | ) | |||
Earnings from discontinued operation before taxes | 27 | 20 | ||||
Income tax expense | (3 | ) | (5 | ) | ||
Net earnings from discontinued operation | $ | 24 | $ | 15 | ||
Net earnings per share from discontinued operation | ||||||
Basic | $ | 0.03 | $ | 0.02 | ||
Diluted | 0.03 | 0.02 |
2014 | 2013 | |||||
Net cash provided by operating activities | $ | 30 | $ | 20 | ||
Net cash used in investing activities | (5 | ) | (11 | ) |
At December 31 2014 | |||
Assets | |||
Current assets | |||
Inventories | $ | 25 | |
Other | 3 | ||
28 | |||
Mining interests | 51 | ||
Other | 2 | ||
Total assets held for sale | $ | 81 | |
Liabilities | |||
Current liabilities | |||
Accounts payable and accrued liabilities | $ | 8 | |
Income taxes payable | 1 | ||
Provisions | 2 | ||
11 | |||
Deferred income taxes | 8 | ||
Provisions | 32 | ||
Other | 4 | ||
Total liabilities relating to assets held for sale | $ | 55 | |
Net assets held for sale | $ | 26 |
(b) | Marigold disposition |
Cash proceeds, net of transaction costs | $ | 182 | |
Net assets sold and derecognized: | |||
Inventories | 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 | (17 | ) | |
Net loss on disposition | $ | (21 | ) |
2014 | 2013 | |||||
Revenues | $ | 28 | $ | 151 | ||
Production costs | (22 | ) | (99 | ) | ||
Depreciation and depletion | (4 | ) | (21 | ) | ||
Earnings from mine operation | 2 | 31 | ||||
Impairment of mining interest (1) | — | (132 | ) | |||
Other expenses | — | (2 | ) | |||
Earnings (loss) from discontinued operation before taxes | 2 | (103 | ) | |||
Income tax recovery | 4 | 36 | ||||
Earnings (loss) from discontinued operation | 6 | (67 | ) | |||
Loss on disposition | (4 | ) | — | |||
Income tax expense on disposition | (17 | ) | — | |||
Net loss on disposition of discontinued operation | (21 | ) | — | |||
Net loss from discontinued operation | $ | (15 | ) | $ | (67 | ) |
Net loss per share from discontinued operation | ||||||
Basic | $ | (0.02 | ) | $ | (0.09 | ) |
Diluted | (0.02 | ) | (0.09 | ) |
(1) | As Marigold met the criteria for classification as held for sale at December 31, 2013, its assets and liabilities were presented separately under current assets and current liabilities, respectively, and measured at the lower of its carrying amount and FVLCD, being FVLCD. As a result, the Company recognized an impairment expense of $86 million, net of tax ($132 million before tax) against the carrying amount of Marigold's mining interests at December 31, 2013. |
2014 | 2013 | |||||
Net cash provided by operating activities | $ | 2 | $ | 49 | ||
Net cash provided by (used in) investing activities | 180 | (62 | ) |
9. | SEGMENTED INFORMATION |
Revenues (c)(d) | Depreciation and depletion | Earnings (loss) from operations and associates (d)(e) | Expenditures on mining interests (g) | |||||||||||||||||||||
Years Ended December 31 | ||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Red Lake (a) | $ | 529 | $ | 684 | $ | 116 | $ | 107 | $ | 168 | $ | 309 | $ | 233 | $ | 233 | ||||||||
Porcupine | 379 | 407 | 54 | 56 | 92 | 163 | 80 | 96 | ||||||||||||||||
Musselwhite | 354 | 353 | 63 | 53 | 111 | 101 | 44 | 75 | ||||||||||||||||
Éléonore | — | — | — | — | — | — | 687 | 589 | ||||||||||||||||
Peñasquito (a) (note 20) | 1,432 | 1,148 | 270 | 163 | 218 | (2,270 | ) | 326 | 233 | |||||||||||||||
Los Filos | 326 | 457 | 63 | 62 | 57 | 189 | 51 | 112 | ||||||||||||||||
El Sauzal (note 20) | 49 | 113 | 13 | 32 | (57 | ) | (22 | ) | — | 1 | ||||||||||||||
Marlin | 367 | 447 | 157 | 142 | (6 | ) | 94 | 78 | 65 | |||||||||||||||
Alumbrera (f)(h) (note 20) | 386 | 388 | 39 | 108 | 85 | (350 | ) | 50 | 71 | |||||||||||||||
Cerro Negro (h) (note 20) | — | — | — | — | (2,980 | ) | — | 524 | 560 | |||||||||||||||
El Morro | — | — | — | — | — | — | 34 | 55 | ||||||||||||||||
Pueblo Viejo (f) | 575 | 431 | 106 | 51 | 242 | 205 | 54 | 98 | ||||||||||||||||
Wharf (note 8) | 94 | 78 | 5 | 4 | 28 | 22 | 4 | 11 | ||||||||||||||||
Marigold (notes 8 and 20) | 28 | 151 | — | 21 | 2 | (101 | ) | 1 | 62 | |||||||||||||||
Other (b) (note 20) | — | — | 17 | 15 | (251 | ) | (485 | ) | 41 | 35 | ||||||||||||||
Attributable segment total (f) | 4,519 | 4,657 | 903 | 814 | (2,291 | ) | (2,145 | ) | 2,207 | 2,296 | ||||||||||||||
Alumbrera (f)(h) | (386 | ) | (388 | ) | (39 | ) | (108 | ) | (55 | ) | 55 | (50 | ) | (71 | ) | |||||||||
Pueblo Viejo (f) | (575 | ) | (431 | ) | (106 | ) | (51 | ) | (151 | ) | (271 | ) | (54 | ) | (49 | ) | ||||||||
Discontinued operations (note 8) | (122 | ) | (229 | ) | (5 | ) | (25 | ) | (30 | ) | 79 | (5 | ) | (73 | ) | |||||||||
Consolidated total from continuing operations | $ | 3,436 | $ | 3,609 | $ | 753 | $ | 630 | $ | (2,527 | ) | $ | (2,282 | ) | $ | 2,098 | $ | 2,103 |
Total Assets | ||||||
At December 31 2014 | At December 31 2013 | |||||
Red Lake (a) | $ | 3,703 | $ | 3,736 | ||
Porcupine | 716 | 679 | ||||
Musselwhite | 621 | 635 | ||||
Éléonore | 3,257 | 2,491 | ||||
Peñasquito (a) | 9,390 | 9,414 | ||||
Los Filos | 1,487 | 1,456 | ||||
El Sauzal | 17 | 60 | ||||
Marlin | 716 | 850 | ||||
Alumbrera | 94 | 172 | ||||
Cerro Negro | 3,945 | 6,119 | ||||
El Morro | 1,515 | 1,484 | ||||
Pueblo Viejo | 1,624 | 1,528 | ||||
Wharf (note 8) | 81 | 77 | ||||
Marigold (note 8) | — | 227 | ||||
Other (b) | 700 | 636 | ||||
Total | $ | 27,866 | $ | 29,564 |
Total Liabilities | ||||||
At December 31 2014 | At December 31 2013 | |||||
Red Lake (a) | $ | 97 | $ | 97 | ||
Porcupine | 312 | 241 | ||||
Musselwhite | 91 | 77 | ||||
Éléonore | 574 | 541 | ||||
Peñasquito (a) | 3,273 | 3,031 | ||||
Los Filos | 319 | 258 | ||||
El Sauzal | 60 | 78 | ||||
Marlin | 193 | 183 | ||||
Alumbrera | — | — | ||||
Cerro Negro | 1,096 | 1,618 | ||||
El Morro | 466 | 467 | ||||
Pueblo Viejo | — | — | ||||
Wharf (note 8) | 55 | 38 | ||||
Marigold (note 8) | — | 44 | ||||
Other (b) | 4,155 | 3,133 | ||||
Total | $ | 10,691 | $ | 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) | Total corporate assets and liabilities at December 31, 2014 were $321 million and $4,155 million, respectively (December 31, 2013 – $118 million and $3,133 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. |
2014 | 2013 | |||||
Gold | $ | 2,568 | $ | 2,809 | ||
Silver | 514 | 527 | ||||
Zinc | 252 | 167 | ||||
Lead | 92 | 99 | ||||
Copper | 10 | 7 | ||||
$ | 3,436 | $ | 3,609 |
Years Ended December 31 | Peñasquito | Marlin | Alumbrera | Pueblo Viejo | |||||||||
Gold | 2014 | $ | 703 | $ | 232 | $ | 141 | $ | 546 | ||||
2013 | $ | 516 | $ | 285 | $ | 141 | $ | 414 | |||||
Silver | 2014 | 375 | 135 | 6 | 29 | ||||||||
2013 | 359 | 162 | 9 | 17 | |||||||||
Zinc | 2014 | 252 | — | — | — | ||||||||
2013 | 167 | — | — | — | |||||||||
Lead | 2014 | 92 | — | — | — | ||||||||
2013 | 99 | — | — | — | |||||||||
Copper | 2014 | 10 | — | 231 | — | ||||||||
2013 | 7 | — | 227 | — | |||||||||
Molybdenum | 2014 | — | — | 8 | — | ||||||||
2013 | — | — | 11 | — | |||||||||
Total | 2014 | $ | 1,432 | $ | 367 | $ | 386 | $ | 575 | ||||
2013 | $ | 1,148 | $ | 447 | $ | 388 | $ | 431 |
(d) | Intersegment sales and transfers are eliminated in the above information reported to the Company’s chief operating decision maker. For the year ended December 31, 2014, intersegment purchases include ounces purchased from Pueblo Viejo of $575 million (2013 – $431 million) and revenues related to the sale of those ounces to external third parties were $575 million (2013 – $431 million). |
(e) | The $81 million of net expenses for the year ended December 31, 2014 (2013 – $66 million), which reconciles the Company’s loss from operations and associates of $2,527 million (2013 – $2,282 million), to the Company’s loss from continuing operations before taxes of $2,608 million (2013 – $2,348 million), mainly arose from corporate activities that would be primarily allocated to the Other reportable operating segment, except for net foreign exchange loss of $22 million (2013 – $43 million), which is included in other expenses, that would be primarily allocated to the Cerro Negro, Éléonore and Other segments. |
(f) | Includes certain non-operating expenses, such as finance costs and income taxes of Alumbrera and Pueblo Viejo, which are included in the Company's net equity earnings on a consolidate basis, in order to reconcile attributable segment total to consolidated total from continuing operations. |
(g) | 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 Consolidated Statements of Cash Flows are presented on a cash basis. For the year ended December 31, 2014, the change in accrued expenditures and investment tax credits was an increase of $115 million (2013 – $98 million). |
(h) | On September 17, 2014, the Argentine government enacted a law which seeks to protect consumers, stem job losses and ensure a steady supply of goods. The new law gives the government broad discretionary powers to control the economy and business decisions of private enterprise. The scope of the legislation is wide and covers all "economic activities" involving goods and services which may satisfy the welfare of the Argentines. It is possible that the new law could extend to the mining industry. |
10. | PRODUCTION COSTS |
Years ended December 31 | 2014 | 2013 | ||||
Raw materials and consumables | $ | 955 | $ | 1,088 | ||
Salaries and employee benefits (a) | 429 | 451 | ||||
Contractors | 388 | 374 | ||||
Royalties (note 17(h)) | 60 | 52 | ||||
Revision in estimates and liabilities incurred on reclamation and closure cost obligations | 72 | (25 | ) | |||
Change in inventories (notes 15(b) and 17(e)) | 9 | (126 | ) | |||
Other | 166 | 125 | ||||
$ | 2,079 | $ | 1,939 |
(a) | Salaries and employee benefits excludes $93 million of salaries and employee benefits included in corporate administration expense for the year ended December 31, 2014 (2013 – $85 million). |
11. | FINANCE COSTS |
Years ended December 31 | 2014 | 2013 | ||||
Interest expense | $ | 21 | $ | 25 | ||
Finance fees | 5 | 4 | ||||
Accretion of reclamation and closure cost obligations (note 24) | 23 | 20 | ||||
$ | 49 | $ | 49 |
12. | INCOME TAXES |
Years ended December 31 | 2014 | 2013 | ||||
Current income tax expense | $ | 135 | $ | 97 | ||
Deferred income tax (recovery) expense | (575 | ) | 212 | |||
Income tax (recovery) expense | $ | (440 | ) | $ | 309 |
Years ended December 31 | 2014 | 2013 | ||||
Loss from continuing operations before taxes | $ | (2,608 | ) | $ | (2,348 | ) |
Canadian federal and provincial income tax rates | 25% | 25% | ||||
Income tax recovery based on Canadian federal and provincial income tax rates | (652 | ) | (587 | ) | ||
(Decrease) increase attributable to: | ||||||
Impact of Mexican mining royalty and tax reform | 7 | 655 | ||||
Impact of foreign exchange on deferred income tax assets and liabilities | 272 | 133 | ||||
Other impacts of foreign exchange | (70 | ) | (51 | ) | ||
Non-deductible expenditures | 49 | 18 | ||||
Effects of different foreign statutory tax rates on earnings of subsidiaries | (56 | ) | (34 | ) | ||
Non-taxable mark-to-market gains on the Convertible Notes (note 25(b)) | — | (14 | ) | |||
Non-(taxable) deductible portion of net (earnings) loss from associates | (40 | ) | 91 | |||
Investment write-downs not tax effected | 1 | 13 | ||||
Changes in reserves for tax positions | 23 | (42 | ) | |||
Impact of Mexican inflation on tax values | (23 | ) | (27 | ) | ||
Provincial mining taxes and resource allowance | 10 | 27 | ||||
Impact of Guatemala tax election on deferred income taxes | — | 80 | ||||
Impact of impairment on mining interests (note 20) | (194 | ) | (32 | ) | ||
Non-deductible impairment charges to goodwill (note 20) | 244 | 71 | ||||
Other | (11 | ) | 8 | |||
$ | (440 | ) | $ | 309 |
Years ended December 31 | 2014 | 2013 | ||||
Net valuation losses on available-for-sale securities recognized in other comprehensive income | $ | (2 | ) | $ | 11 | |
Net valuation losses on available-for-sale securities recognized in net loss | (1 | ) | (4 | ) | ||
Gain on disposition of securities recognized in net loss | 3 | — | ||||
$ | — | $ | 7 |
At December 31 2014 | At December 31 2013 | |||||
Deferred income tax assets (a) | ||||||
Unused non-capital losses | $ | 263 | $ | 121 | ||
Investment tax credits | 91 | 42 | ||||
Deductible temporary differences relating to: | ||||||
Reclamation and closure cost obligations | 203 | 116 | ||||
Other | 198 | 105 | ||||
755 | 384 | |||||
Deferred income tax liabilities | ||||||
Taxable temporary differences relating to: | ||||||
Mining interests | (5,509 | ) | (5,831 | ) | ||
Other | (179 | ) | (128 | ) | ||
(5,688 | ) | (5,959 | ) | |||
Deferred income tax liabilities, net | $ | (4,933 | ) | $ | (5,575 | ) |
Balance sheet presentation | ||||||
Deferred income taxes assets | $ | 26 | $ | 19 | ||
Deferred income taxes liabilities | (4,959 | ) | (5,594 | ) | ||
Deferred income tax liabilities, net | $ | (4,933 | ) | $ | (5,575 | ) |
(a) | The Company believes that it is probable that the results of future operations will generate sufficient taxable income to realize the above noted deferred income tax assets. Deferred tax assets that have not been recognized were as follows: |
At December 31 2014 | At December 31 2013 | |||||
Unused capital losses (1) | $ | 5 | $ | 11 | ||
Alternative minimum tax ("AMT") credits (1) | — | 10 | ||||
Deductible temporary differences relating to: | ||||||
Unrealized capital losses | 41 | 15 | ||||
Other | 9 | 4 | ||||
$ | 55 | $ | 40 |
(1) | Capital losses and AMT credits have no expiry date. |
13. | PER SHARE INFORMATION |
(a) | Net loss per share |
2014 | 2013 | |||||
Basic and diluted net loss from continuing operations | $ | (2,170 | ) | $ | (2,657 | ) |
Basic and diluted net loss | $ | (2,161 | ) | $ | (2,709 | ) |
Basic and diluted weighted average number of shares outstanding (in thousands) | 813,206 | 812,040 |
2014 | 2013 | |||
Effect on diluted weighted average number of shares outstanding (in thousands): | ||||
Stock options | 119 | 270 | ||
RSUs | 2,989 | 2,370 | ||
Convertible senior notes | 10,766 | 18,235 | ||
Total | 13,874 | 20,875 |
(b) | Dividends declared |
14. | SUPPLEMENTAL CASH FLOW INFORMATION |
At December 31 2014 | At December 31 2013 | |||||
Cash and cash equivalents are comprised of: | ||||||
Cash | $ | 431 | $ | 505 | ||
Short-term money market investments | 51 | 120 | ||||
$ | 482 | $ | 625 |
Years ended December 31 | 2014 | 2013 | ||||
Change in operating working capital | ||||||
Accounts receivable | $ | (32 | ) | $ | (60 | ) |
Inventories and stockpiled ore | (192 | ) | (190 | ) | ||
Accounts payable and accrued liabilities | 61 | (19 | ) | |||
Income taxes | (15 | ) | (235 | ) | ||
Other | (28 | ) | (9 | ) | ||
$ | (206 | ) | $ | (513 | ) |
Years ended December 31 | 2014 | 2013 | ||||
Operating activities include the following cash received (paid): | ||||||
Interest received | $ | 4 | $ | 5 | ||
Interest paid | (23 | ) | (23 | ) | ||
Income taxes refunded | 97 | 22 | ||||
Income taxes paid | (237 | ) | (355 | ) | ||
Investing activities include the following cash (paid) received: | ||||||
Purchases of money-market investments | $ | (105 | ) | $ | (613 | ) |
Proceeds from the maturity of money-market investments | 52 | 613 | ||||
Purchases of available-for-sale securities | (28 | ) | (2 | ) | ||
Proceeds from the sale of available-for-sale securities | 64 | 8 | ||||
Investing activities of discontinued operation include the following cash received (paid): | ||||||
Proceeds on disposition of Marigold, net of transaction costs (note 8) | $ | 182 | $ | — | ||
Principal repayment on promissory note receivable from Primero (note 25(e)(i)) | 28 | 13 | ||||
Expenditures on mining interest (note 8) | (7 | ) | (73 | ) |
15. | INVENTORIES |
At December 31 2014 | At December 31 2013 | |||||
Supplies | $ | 257 | $ | 225 | ||
Finished goods | 194 | 87 | ||||
Work-in-process | 38 | 27 | ||||
Heap leach ore (b) | 383 | 349 | ||||
Stockpiled ore (b) | 149 | 180 | ||||
1,021 | 868 | |||||
Less: non-current heap leach and stockpiled ore | (249 | ) | (141 | ) | ||
$ | 772 | $ | 727 |
(a) | The costs of inventories recognized as expense for the year ended December 31, 2014 amounted to $2,587 million (2013 – $2,473 million), $1,852 million (2013 – $1,858 million) and $735 million (2013 – $615 million) of which was included in production costs and depreciation and depletion on the Consolidated Statements of Loss, respectively. |
(b) | The Company recognized total impairment expense of $96 million during the year ended December 31, 2014, of which $55 million and $41 million were recognized against non-current stockpiled ore and heap leach ore, respectively. Of the total impairment expense, $72 million and $24 million was recognized as production costs and depreciation and depletion expense on the Consolidated Statements of Loss, respectively. |
16. | OTHER CURRENT ASSETS |
At December 31 2014 | At December 31 2013 | |||||
Current derivative assets (note 25(b)) | $ | 15 | $ | 41 | ||
Prepaid expenses | 58 | 48 | ||||
Notes receivable | — | 5 | ||||
Marketable securities (note 21) | 14 | 5 | ||||
Accrued interest receivable (note 18(f)) | 26 | — | ||||
Other receivables | 45 | 45 | ||||
$ | 158 | $ | 144 |
17. | MINING INTERESTS |
Mining properties | ||||||||||||||||||
Depletable | Non-depletable | |||||||||||||||||
Reserves and resources | Reserves and resources | Exploration potential | Plant and equipment (f)(g) | Investments in associates (note 18) | Total | |||||||||||||
Cost | ||||||||||||||||||
At January 1, 2014 | $ | 7,690 | $ | 7,582 | $ | 8,170 | $ | 5,138 | $ | 2,210 | $ | 30,790 | ||||||
Expenditures on mining interests (a)(b) | 562 | 714 | 2 | 820 | — | 2,098 | ||||||||||||
Expenditures on mining interests classified as held for sale (note 8) | 1 | — | — | 3 | — | 4 | ||||||||||||
Reclassifications to mining interests classified as held for sale (note 8) | (46 | ) | — | — | (54 | ) | (100 | ) | ||||||||||
Share of net earnings of associates | — | — | — | — | 156 | 156 | ||||||||||||
Disposition of investment in associate | — | — | — | — | (175 | ) | (175 | ) | ||||||||||
Dividends from associates | — | — | — | — | (109 | ) | (109 | ) | ||||||||||
Transfers and other movements (c) | 6 | 175 | (209 | ) | 383 | 5 | 360 | |||||||||||
At December 31, 2014 | 8,213 | 8,471 | 7,963 | 6,290 | 2,087 | 33,024 | ||||||||||||
Accumulated depreciation and depletion and impairment | ||||||||||||||||||
At January 1, 2014 | (2,929 | ) | (234 | ) | (1,188 | ) | (1,301 | ) | (5,652 | ) | ||||||||
Depreciation and depletion (e) | (500 | ) | — | — | (355 | ) | (855 | ) | ||||||||||
Depreciation and depletion relating to mining interests classified as held for sale (note 8) | (3 | ) | — | — | (3 | ) | (6 | ) | ||||||||||
Reclassifications to mining interests classified as held for sale (note 8) | 12 | — | — | 37 | 49 | |||||||||||||
Impairment charges (note 20) | (17 | ) | (957 | ) | (585 | ) | (465 | ) | (2,024 | ) | ||||||||
Transfers and other movements (c) | — | — | — | 9 | 9 | |||||||||||||
At December 31, 2014 | (3,437 | ) | (1,191 | ) | (1,773 | ) | (2,078 | ) | (8,479 | ) | ||||||||
Carrying amount – December 31, 2014 | $ | 4,776 | $ | 7,280 | $ | 6,190 | $ | 4,212 | $ | 2,087 | $ | 24,545 |
Mining properties | ||||||||||||||||||
Depletable | Non-depletable | |||||||||||||||||
Reserves and resources | Reserves and resources | Exploration potential | Plant and equipment (f)(g) | Investments in associates (note 18) | 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 8) | 11 | — | — | 51 | — | 62 | ||||||||||||
Reclassifications to mining interests classified as held for sale (note 8) | (273 | ) | (18 | ) | — | (195 | ) | — | (486 | ) | ||||||||
Share of net loss and impairment of associates | — | — | — | — | (395 | ) | (395 | ) | ||||||||||
Dividends from associate | — | — | — | — | (108 | ) | (108 | ) | ||||||||||
Transfers and other movements (c) | 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 8) | (13 | ) | — | — | (12 | ) | (25 | ) | ||||||||||
Reclassifications to mining interests classified as held for sale (note 8) | 187 | 8 | — | 139 | 334 | |||||||||||||
Impairment charges (note 20) | (747 | ) | (242 | ) | (1,188 | ) | (318 | ) | (2,495 | ) | ||||||||
Transfers and other movements (c) | (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 December 31 2014 | At December 31 2013 | |||||||||||||
Red Lake | $ | 738 | $ | 1,090 | $ | 723 | $ | 484 | $ | 3,035 | $ | 2,906 | ||||||
Porcupine | 431 | 64 | — | 137 | 632 | 573 | ||||||||||||
Musselwhite (h) | 185 | 4 | 111 | 223 | 523 | 537 | ||||||||||||
Éléonore (a)(h) | — | 1,955 | — | 1,137 | 3,092 | 2,358 | ||||||||||||
Peñasquito (a)(h) (note 20) | 2,463 | 975 | 4,267 | 1,014 | 8,719 | 8,624 | ||||||||||||
Los Filos (h) | 585 | 36 | — | 170 | 791 | 786 | ||||||||||||
El Sauzal (h) (note 20) | — | — | — | — | — | 31 | ||||||||||||
Marlin (h) | 374 | 64 | 32 | 126 | 596 | 654 | ||||||||||||
Cerro Blanco (note 20) | — | 47 | — | 1 | 48 | 49 | ||||||||||||
Wharf (note 8) | — | — | — | — | — | 45 | ||||||||||||
Cerro Negro (a)(h) (note 20) | — | 1,702 | 935 | 792 | 3,429 | 4,825 | ||||||||||||
El Morro (a)(h) | — | 1,343 | 112 | 18 | 1,473 | 1,439 | ||||||||||||
Corporate and Other (d) (note 20) | — | — | 10 | 110 | 120 | 101 | ||||||||||||
$ | 4,776 | $ | 7,280 | $ | 6,190 | $ | 4,212 | $ | 22,458 | $ | 22,928 | |||||||
Investments in associates (note 18) | ||||||||||||||||||
Alumbrera (h) (note 20) | 94 | 172 | ||||||||||||||||
Pueblo Viejo (h) | 1,624 | 1,528 | ||||||||||||||||
Other (note 20) | 369 | 510 | ||||||||||||||||
2,087 | 2,210 | |||||||||||||||||
$ | 24,545 | $ | 25,138 |
(a) | Includes capitalized borrowing costs incurred during the years ended December 31 as follows: |
2014 | 2013 | |||||
Éléonore | $ | 45 | $ | 26 | ||
Camino Rojo | 7 | 7 | ||||
Cerro Negro | 69 | 43 | ||||
El Morro | 13 | 15 | ||||
$ | 134 | $ | 91 |
(b) | During the year ended December 31, 2014, the Company incurred $151 million (2013 – $152 million), in exploration and evaluation expenditures, of which $110 million (2013 – $107 million), had been capitalized and included in expenditures on mining interests. The remaining $41 million (2013 – $45 million) were expensed. |
(c) | Transfers and other movements primarily represent the conversion of reserves, resources and exploration potential within mining interests, utilization of deposits on mining interest expenditures, capitalized reclamation and closure costs, capitalized depreciation, and dispositions of mining properties during the period. |
(d) | Corporate and Other includes exploration properties in Mexico with a carrying amount at December 31, 2014 of $10 million. |
(e) | Depreciation and depletion expensed for year ended December 31, 2014 was $753 million (2013 – $630 million), as compared to total depreciation and depletion $855 million (2013 – $705 million), due to the capitalization of depreciation of $50 million (2013 – $43 million) relating to development projects (note 17(c)) and movements in amounts allocated to inventories of $52 million (2013 – $32 million). |
(f) | At December 31, 2014, assets under construction, and therefore not yet being depreciated, included in the carrying amount of plant and equipment amounted to $547 million (December 31, 2013 – $1,488 million). |
(g) | At December 31, 2014, finance leases included in the carrying amount of plant and equipment amounted to $67 million (December 31, 2013 – $75 million). |
(h) | Certain of the mining properties in which the Company has interests are subject to royalty arrangements based on their net smelter returns ("NSR"s), modified NSRs, net profits interest ("NPI"), net earnings, and/or gross revenues. Royalties are expensed at the time of sale of gold and other metals. For the year ended December 31, 2014, royalties included in production costs amounted to $60 million (2013 – $52 million) (note 10). At December 31, 2014, the significant royalty arrangements of the Company and its associates were as follows: |
Producing mining properties: | |
Musselwhite | 1 – 5% of NPI |
Peñasquito | 2% of NSR and 0.5% of gross income on sale of gold and silver (1) |
Los Filos | 0.5% of gross income on sale of gold and silver (1) |
El Sauzal | 0.5% of gross income on sale of gold and silver (1) |
Marlin (2) | 5% of NSR |
Marigold (note 8) | 5 – 10% of NSR |
Alumbrera | 3% of modified NSR plus 20% YMAD royalty |
Pueblo Viejo | 3.2% of NSR |
Development projects: | |
Éléonore | 2.2 – 3.5% of NSR |
Cerro Negro | 3 – 4% of modified NSR and 1% of net earnings |
El Morro | 2% of NSR |
(1) | Effective January 1, 2014. |
(2) | On November 28, 2014, the Guatemalan government passed legislation increasing the royalties paid on the production of precious metals in Guatemala to 10% of NSR effective January 1, 2015. |
18. | INVESTMENTS IN ASSOCIATES |
Alumbrera (a) | Pueblo Viejo (f) | Other (a)(b)(1) | Total | |||||||||
Carrying amount – at January 1, 2014 | $ | 172 | $ | 1,528 | $ | 510 | $ | 2,210 | ||||
Dividends from associates | (108 | ) | — | (1 | ) | (109 | ) | |||||
Company’s share of net earnings of associates | 30 | 91 | 35 | 156 | ||||||||
Disposition of investment in associate | — | — | (175 | ) | (175 | ) | ||||||
Other | — | 5 | — | 5 | ||||||||
Carrying amount – at December 31, 2014 | $ | 94 | $ | 1,624 | $ | 369 | $ | 2,087 | ||||
Carrying amount – at January 1, 2013 | $ | 575 | $ | 1,546 | $ | 542 | $ | 2,663 | ||||
Expenditures and investments | — | 49 | — | 49 | ||||||||
Dividends from associate | (108 | ) | — | — | (108 | ) | ||||||
Impairment of investments in associates | (276 | ) | — | (19 | ) | (295 | ) | |||||
Company’s share of net loss of associates | (19 | ) | (66 | ) | (15 | ) | (100 | ) | ||||
Other | — | (1 | ) | 2 | 1 | |||||||
Carrying amount – at December 31, 2013 | $ | 172 | $ | 1,528 | $ | 510 | $ | 2,210 |
(1) | Includes results of Tahoe, and Primero to its disposition date of March 26, 2014. |
Year ended December 31, 2014 | Alumbrera | Pueblo Viejo (d)(f) | Other (b) | Total | ||||||||
Revenues | $ | 1,028 | $ | 1,438 | $ | 399 | $ | 2,865 | ||||
Production costs | (698 | ) | (570 | ) | (176 | ) | (1,444 | ) | ||||
Depreciation and depletion | (104 | ) | (264 | ) | (57 | ) | (425 | ) | ||||
Earnings from mine operations (c) | 226 | 604 | 166 | 996 | ||||||||
Net earnings of associates (c) | $ | 80 | $ | 227 | $ | 87 | $ | 394 | ||||
Company's equity share of net earnings of associates | $ | 30 | $ | 91 | $ | 35 | $ | 156 | ||||
Year ended December 31, 2013 | ||||||||||||
Revenues | $ | 1,034 | $ | 1,078 | $ | 200 | $ | 2,312 | ||||
Production costs | (628 | ) | (439 | ) | (88 | ) | (1,155 | ) | ||||
Depreciation and depletion | (289 | ) | (128 | ) | (39 | ) | (456 | ) | ||||
Earnings from mine operations (c) | 117 | 511 | 73 | 701 | ||||||||
Net losses of associates (c) | $ | (51 | ) | $ | (165 | ) | $ | (44 | ) | $ | (260 | ) |
Company's share of net loss of associates | $ | (19 | ) | $ | (66 | ) | $ | (15 | ) | $ | (100 | ) |
Impairment of investments in associates (a) | $ | (276 | ) | $ | — | $ | (19 | ) | $ | (295 | ) | |
Company’s equity share of net loss of associates | $ | (295 | ) | $ | (66 | ) | $ | (34 | ) | $ | (395 | ) |
At December 31, 2014 | Alumbrera | Pueblo Viejo | ||||
Current assets | $ | 389 | $ | 830 | ||
Non-current assets | 318 | 6,627 | ||||
707 | 7,457 | |||||
Current liabilities | 180 | 632 | ||||
Non-current liabilities (e)(f) | 276 | 2,764 | ||||
456 | 3,396 | |||||
Net assets | 251 | 4,061 | ||||
Company's equity share of net assets of associates | $ | 94 | $ | 1,624 | ||
At December 31, 2013 | ||||||
Current assets | $ | 688 | $ | 556 | ||
Non-current assets (a) | 299 | 6,975 | ||||
987 | 7,531 | |||||
Current liabilities | 262 | 664 | ||||
Non-current liabilities (e)(f) | 267 | 3,047 | ||||
529 | 3,711 | |||||
Net assets | 458 | 3,820 | ||||
Company’s equity share of net assets of associates | $ | 172 | $ | 1,528 |
Year ended December 31, 2014 | Alumbrera | Pueblo Viejo (e) | Other | Total | ||||||||
Net cash provided by operating activities | $ | 115 | $ | 209 | $ | 44 | $ | 368 | ||||
Net cash provided by (used in) investing activities | 21 | (68 | ) | (24 | ) | (71 | ) | |||||
Net cash (used in) provided by financing activities | (132 | ) | (41 | ) | 3 | (170 | ) | |||||
Year ended December 31, 2013 | ||||||||||||
Net cash provided by (used in) operating activities | $ | 128 | $ | 43 | $ | (7 | ) | $ | 164 | |||
Net cash used in investing activities | (169 | ) | (96 | ) | (79 | ) | (344 | ) | ||||
Net cash (used in) provided by financing activities | (107 | ) | 65 | 9 | (33 | ) |
(a) | The quoted market value of the Company’s investment in Tahoe at December 31, 2014 was $808 million ($2013 – $1.0 billion) , based on the closing share price of Tahoe. |
(b) | On March 5, 2014, Primero issued approximately 41 million common shares to a third party as consideration paid for a business acquisition. As a result, the Company's equity interest in Primero was diluted from 26.9% on December 31, 2013 to 19.5% on March 5, 2014. Subsequently, 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. The Company's share of Primero's net earnings for the period January 1, 2014 to March 26, 2014, the date of disposition, were included in the Company's consolidated results for the year ended December 31, 2014. |
(c) | The net expense of $602 million for the year ended December 31, 2014 (2013 – $961 million), which reconciles earnings from mine operations of $996 million (2013 – $701 million), to net earnings of associates of $394 million (2013 – net losses of $260 million), is comprised primarily of finance costs, accretion on the reclamation and closure costs, and income taxes. |
(d) | During the third quarter of 2013, Pueblo Viejo reached an agreement with the Government of the Dominican Republic concerning amendments to the Special Lease Agreement ("SLA") for the Pueblo Viejo mine clarifying various administrative and operational matters. These amendments included the following items: elimination of a 10% return embedded in the initial capital investment for purposes of the NPI; an extension of the period over which Pueblo Viejo will recover its capital investment; a delay of application of NPI deductions; a reduction of depreciation rates; and the establishment of a graduated minimum tax. The graduated tax will be adjusted up or down based on metal prices. The agreement also included the following broad parameters consistent with the SLA: corporate income tax rate of 25%; net smelter royalty of 3.2%; and a NPI of 28.8%. |
(e) | In April 2010, Barrick, the project operator, and Goldcorp finalized the terms for $1.035 billion (100% basis) in project financing for Pueblo Viejo (Goldcorp’s share – $414 million) which was fully drawn during the year ended December 31, 2013. The lending syndicate is comprised of international financial institutions including two export credit agencies and a syndicate of commercial banks. |
(f) | In June 2009, the Company entered into a $400 million shareholder loan agreement with Pueblo Viejo with a term of fifteen years. In April 2012, additional funding of $300 million was issued to Pueblo Viejo with a term of twelve years. Both loans bear interest at 95% of LIBOR plus 2.95% payable semi-annually in arrears on February 28 and August 31 of each year. With the consent of the Company, repayments of interest and principal have been deferred for three years. The carrying amount of the loans are included as part of the carrying amount of the Company's investment in Pueblo Viejo. At December 31, 2014, the carrying amount of the loans was $600 million (December 31, 2013 – $585 million), which is being accreted to face value over the term of the loans. Included in other current and non-current assets of the Company was $49 million (December 31, 2013 – $24 million) of interest receivable. |
19. | GOODWILL |
Cerro Negro | Red Lake | Peñasquito | Los Filos | Total | |||||||||||
At December 31, 2012 | $ | 975 | $ | 405 | $ | 283 | $ | 74 | $ | 1,737 | |||||
Impairment expense (note 20) | — | — | (283 | ) | — | (283 | ) | ||||||||
At December 31, 2013 | 975 | 405 | — | 74 | 1,454 | ||||||||||
Impairment expense (note 20) | (975 | ) | — | — | — | (975 | ) | ||||||||
At December 31, 2014 | $ | — | $ | 405 | $ | — | $ | 74 | $ | 479 |
20. | IMPAIRMENT |
Mining properties | |||||||||||||||||||||
Depletable | Non-depletable | ||||||||||||||||||||
2014 | Reserves and resources | Reserves and resources | Exploration potential | Plant and equipment | Investments in associates | Goodwill | Total | ||||||||||||||
Cerro Negro | $ | — | $ | 957 | $ | 585 | $ | 463 | $ | — | $ | 975 | $ | 2,980 | |||||||
El Sauzal | 17 | — | — | 2 | — | — | 19 | ||||||||||||||
Total impairment | $ | 17 | $ | 957 | $ | 585 | $ | 465 | $ | — | $ | 975 | $ | 2,999 | |||||||
2013 | |||||||||||||||||||||
Peñasquito | $ | 647 | $ | 108 | $ | 1,129 | $ | 260 | $ | — | $ | 283 | $ | 2,427 | |||||||
Cerro Blanco | — | 126 | — | 5 | — | — | 131 | ||||||||||||||
El Sauzal | 26 | — | — | 3 | — | — | 29 | ||||||||||||||
Mexico exploration properties | — | — | 59 | — | — | — | 59 | ||||||||||||||
Impairment – continuing operations | 673 | 234 | 1,188 | 268 | — | 283 | 2,646 | ||||||||||||||
Alumbrera (1) | — | — | — | — | 276 | — | 276 | ||||||||||||||
Primero (1) | — | — | — | — | 19 | — | 19 | ||||||||||||||
Marigold (note 8) (2) | 74 | 8 | — | 50 | — | — | 132 | ||||||||||||||
Total impairment | $ | 747 | $ | 242 | $ | 1,188 | $ | 318 | $ | 295 | $ | 283 | 3,073 |
(1) | Included in share of net earnings (loss) of associates on the Consolidated Statements of Loss. |
(2) | Included in net earnings (loss) from discontinued operations on the Consolidated Statements of Loss. |
(a) | Impairment testing |
(i) | Weighted average cost of capital |
(ii) | Pricing assumptions |
At December 31, 2014 | At December 31, 2013 | |||||||||||||||||||
Metal price assumptions | 2015 to 2016 | 2017 to 2018 | 2019 and Long-term | 2014 | 2015 to 2018 | Long-term | ||||||||||||||
Gold (per ounce) | $ | 1,200 | $ | 1,300 | $ | 1,300 | $ | 1,200 | $ | 1,300 | $ | 1,300 | ||||||||
Silver (per ounce) | 18 | 21 | 22 | 20 | 22 | 22 | ||||||||||||||
Copper (per pound) | 3.00 | 3.00 | 3.00 | 3.00 | 3.04 | 3.00 | ||||||||||||||
Zinc (per pound) | 1.00 | 1.00 | 0.90 | 0.90 | 0.90 | 0.90 | ||||||||||||||
Lead (per pound) | 0.95 | (1 | ) | 1.00 | 0.90 | 1.00 | 0.90 | 0.90 |
(1) | 2016 lead price assumption at $1.00 per pound. |
(iii) | Additional CGU-specific assumptions affecting the recoverable amount assessment |
b) | Sensitivity analysis |
Long-term price – $ per ounce required for recoverable amount to equal carrying amount | At December 31 2014 | ||
Red Lake | $ | 1,222 | |
Éléonore | 1,067 | ||
Los Filos | 987 | ||
Marlin | 1,192 |
% increase required for recoverable amount to equal carrying amount | At December 31 2014 | |
Red Lake | 5.1 | % |
Éléonore | 25.5 | % |
Los Filos | 24.8 | % |
Marlin | 0.4 | % |
21. | INVESTMENTS IN SECURITIES |
At December 31 2014 | At December 31 2013 | |||||
Equity securities – available-for-sale | $ | 57 | $ | 82 | ||
Less: marketable securities included in other current assets (note 16) | (14 | ) | (5 | ) | ||
$ | 43 | $ | 77 |
22. | OTHER NON-CURRENT ASSETS |
At December 31 2014 | At December 31 2013 | |||||
Sales/indirect taxes recoverable | $ | 298 | $ | 208 | ||
Accrued interest receivable | 23 | 24 | ||||
Notes receivable | — | 23 | ||||
Other | 24 | 35 | ||||
$ | 345 | $ | 290 |
23. | DEBT |
At December 31 2014 | At December 31, 2013 (1) | |||||
$1.0 billion Notes (a) | ||||||
$550 million 7-year notes | $ | 545 | $ | — | ||
$450 million 30-year notes | 443 | — | ||||
988 | — | |||||
$1.5 billion Notes (b) | ||||||
$500 million 5-year notes | 496 | 495 | ||||
$1.0 billion 10-year notes | 988 | 987 | ||||
1,484 | 1,482 | |||||
$863 million convertible senior notes (c) | — | 832 | ||||
425 million Argentine pesos loan (d) | 49 | — | ||||
1.6 billion Argentine pesos loan (e) | 184 | — | ||||
180 million Argentine pesos loan (f) | 21 | 28 | ||||
$131 million credit facility (g) | — | 131 | ||||
469 million Argentine peso credit facility (h) | 26 | 34 | ||||
$2.0 billion credit facility (i) | 840 | — | ||||
3,592 | 2,507 | |||||
Less: current portion of debt (c)(e)(f)(g)(h) | (150 | ) | (997 | ) | ||
$ | 3,442 | $ | 1,510 |
(1) | The Argentine pesos denominated debt was included in other current and non-current liabilities at December 31, 2013 and has been reclassifed to current and non-current debt in the comparative at December 31, 2014. |
(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 $1.0 billion Notes are callable at anytime by the Company prior to maturity, subject to make-whole provisions. The 2021 Notes and the 2044 Notes are accreted to the face value over their respective terms using annual effective interest rates of 3.75% and 5.49%, respectively. |
(b) | On March 20, 2013, the Company issued the $1.5 billion Notes, consisting of $500 million in 5-year notes ("5-year Notes") with a coupon rate of 2.125% and $1.0 billion in 10-year notes ("10-year Notes") with a coupon rate of 3.70% which mature on March 15, 2018 and March 15, 2023, respectively. The Company received total proceeds of $1.48 billion, net of transaction costs. The $1.5 billion Notes are unsecured and interest is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2013. The $1.5 billion Notes are callable at anytime by the Company prior to maturity, subject to make-whole provisions. The 5-year Notes and the 10-year Notes are accreted to their face value over their respective terms using annual effective interest rates of 2.37% and 3.84%, respectively. |
(c) | On June 5, 2009, the Company issued Convertible Notes with an aggregate principal amount of $863 million. Upon maturity on August 1, 2014, the Company repaid the $863 million of outstanding principal on the Convertible Notes. |
(d) | On October 14, 2014, the Company, through its wholly-owned subsidiary, Oroplata S.A. ("Oroplata S.A."), entered into a 425 million Argentine peso ($50 million, net of transaction costs) loan agreement with a third party in Argentina, repayable on December 30, 2016. The facility bears interest at the average interest rate paid on short-term deposits over 1 million Argentine pesos ("Badlar"), plus a floating margin including 3.5%, payable monthly, with Badlar subject to a floor of 15%. During the year ended December 31, 2014, the average interest rate paid by the Company on the loan was 29.0%. |
(e) | On October 17, 2014, the Company, through Oroplata S.A., entered into a 1.6 billion Argentine peso ($185 million, net of transaction costs) loan agreement with third parties in Argentina repayable in three consecutive monthly installments beginning in November 2015. The facility bears interest at Badlar, plus a floating margin including 3.5%, payable monthly. During the year ended December 31, 2014, the average interest rate paid by the Company on the loan was 29.2%. |
(f) | On October 29 and November 13, 2013, the Company, through Oroplata S.A., entered into two 3-year Argentine peso loan agreements totaling 180 million Argentine pesos ($30 million) with third parties in Argentina. Both loans bear interest at 15.25% per annum to be repaid in eight quarterly installments beginning early 2015. |
(g) | On January 14, 2013, the Company, through Oroplata S.A., entered into a 1-year $131 million credit facility agreement with Alumbrera. The principal drawn bears interest at 2% per annum. In December 2013, the credit facility was extended to January 17, 2015 under the same terms and conditions. During the year ended December 31, 2014, the facility was repaid in full. |
(h) | On December 18, 2012, the Company entered into a 1-year 469 million Argentine peso ($100 million) credit facility with a third party in Argentina. In June 2014, the facility was extended to December 12, 2014 and further extended in December 2014 to June 11, 2015. Both extensions were under the same terms and conditions. The facility bears interest at Badlar, plus a floating margin based on 75% of the differential between the general lending rate and the deposit rate set by the Standard Bank Argentina S.A. At December 31, 2014, the Company had drawn 220 million Argentine pesos under the credit facility (December 31, 2013 – 220 million Argentine pesos). During the year ended December 31, 2014, the average interest rate paid by the Company on the loan was 21.8% (2013 – 18.9%). |
(i) | On July 18, 2014, the Company extended the maturity date of its $2.0 billion revolving credit facility under the same terms and conditions from March 6, 2018 to July 18, 2019. During the year ended December 31, 2014, the Company drew down a total of $4.58 billion (2013 – $300 million) on the credit facility, of which $3.74 billion (2013 – $300 million) was repaid during the the year. The credit facility bears interest rate of LIBOR plus 1.2%. During the year ended December 31, 2014, the average interest rate paid by the Company on the loan was 1.4% (2013 – nominal). |
24. | NON-CURRENT PROVISIONS |
At December 31 2014 | At December 31 2013 | |||||
Reclamation and closure cost obligations | $ | 695 | $ | 529 | ||
Less: current portion included in other current liabilities | (63 | ) | (27 | ) | ||
632 | 502 | |||||
Other | 39 | 15 | ||||
$ | 671 | $ | 517 |
2014 | 2013 | |||||
Reclamation and closure cost obligations – beginning of year | $ | 529 | $ | 500 | ||
Reclamation expenditures | (33 | ) | (14 | ) | ||
Reclamation expenditures for discontinued operations | (2 | ) | (1 | ) | ||
Accretion expense, included in finance costs (note 11) | 23 | 20 | ||||
Accretion expense for discontinued operation (note 8) | 1 | 1 | ||||
Revisions in estimates and obligations incurred | 202 | 40 | ||||
Revisions in estimates and obligations incurred for discontinued operations | 9 | — | ||||
Reclassification of reclamation and closure cost obligations to discontinued operation (note 8) | (34 | ) | (17 | ) | ||
Reclamation and closure cost obligations – end of year | $ | 695 | $ | 529 |
25. | FINANCIAL INSTRUMENTS |
(a) | Financial assets and liabilities by categories |
At December 31, 2014 | Loans and receivables | Available for sale securities | FVTPL | Held to maturity/other financial liabilities | Total | ||||||||||
Financial assets | |||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | 482 | $ | — | $ | 482 | |||||
Money market investments | 53 | — | — | — | 53 | ||||||||||
Accounts receivable arising from sale of metal concentrates | — | — | 187 | — | 187 | ||||||||||
Investments in securities | — | 57 | — | — | 57 | ||||||||||
Derivative assets | — | — | 17 | — | 17 | ||||||||||
Other current and non-current financial assets | 113 | — | — | — | 113 | ||||||||||
Total financial assets | $ | 166 | $ | 57 | $ | 686 | $ | — | $ | 909 | |||||
Financial liabilities | |||||||||||||||
Debt | $ | — | $ | — | $ | — | $ | (3,592 | ) | $ | (3,592 | ) | |||
Accounts payable and accrued liabilities | — | — | — | (1,039 | ) | (1,039 | ) | ||||||||
Derivative liabilities | — | — | (49 | ) | — | (49 | ) | ||||||||
Other current and non-current financial liabilities | — | — | — | (34 | ) | (34 | ) | ||||||||
Total financial liabilities | $ | — | $ | — | $ | (49 | ) | $ | (4,665 | ) | $ | (4,714 | ) | ||
At December 31, 2013 | |||||||||||||||
Financial assets | |||||||||||||||
Cash and cash equivalents | $ | — | $ | — | $ | 625 | $ | — | $ | 625 | |||||
Accounts receivable arising from sale of metal concentrates | — | — | 254 | — | 254 | ||||||||||
Investments in securities | — | 82 | — | — | 82 | ||||||||||
Derivative assets | — | — | 42 | — | 42 | ||||||||||
Other current and non-current financial assets | 112 | — | — | — | 112 | ||||||||||
Total financial assets | $ | 112 | $ | 82 | $ | 921 | $ | — | $ | 1,115 | |||||
Financial liabilities | |||||||||||||||
Debt | $ | — | $ | — | $ | — | $ | (2,507 | ) | $ | (2,507 | ) | |||
Accounts payable and accrued liabilities | — | — | — | (856 | ) | (856 | ) | ||||||||
Derivative liabilities | — | — | (57 | ) | — | (57 | ) | ||||||||
Other current and non-current financial liabilities | — | — | — | (34 | ) | (34 | ) | ||||||||
Total financial liabilities | $ | — | $ | — | $ | (57 | ) | $ | (3,397 | ) | $ | (3,454 | ) |
(b) | Financial assets and liabilities classified as at FVTPL |
At December 31 2014 | At December 31 2013 | |||||
Current derivative assets (1) | ||||||
Foreign currency, heating oil, copper, lead, and zinc contracts | $ | 15 | $ | 41 | ||
Non-current derivative assets (1) | ||||||
Foreign currency contracts | $ | 2 | $ | 1 | ||
Current derivative liabilities (2) | ||||||
Foreign currency, heating oil, copper, lead, and zinc contracts | $ | (48 | ) | $ | (43 | ) |
Non-financial contract to sell silver to Silver Wheaton (i) | — | (13 | ) | |||
Conversion feature of the Convertible Notes (ii) | — | (1 | ) | |||
$ | (48 | ) | $ | (57 | ) | |
Non-current derivative liabilities (2) | ||||||
Foreign currency contracts | $ | (1 | ) | $ | — |
(1) | Included in other current and non-current assets on the Consolidated Balance Sheets. |
(2) | Included in other current and non-current liabilities on the Consolidated Balance Sheets. |
At December 31 2014 | At December 31 2013 | |||||
Arising from sales of metal concentrates – classified as at FVTPL | $ | 187 | $ | 254 | ||
Not arising from sales of metal concentrates (1) | 207 | 215 | ||||
Accounts receivable | $ | 394 | $ | 469 |
2014 | 2013 | |||||
Realized (losses) gains | ||||||
Foreign currency, heating oil, copper, lead, and zinc contracts | $ | (9 | ) | $ | 23 | |
Non-financial contract to sell silver to Silver Wheaton (i) | (3 | ) | (10 | ) | ||
(12 | ) | 13 | ||||
Unrealized (losses) gains | ||||||
Foreign currency, heating oil, copper, lead, and zinc contracts | (31 | ) | (14 | ) | ||
Non-financial contract to sell silver to Silver Wheaton (i) | 2 | 27 | ||||
Conversion feature of the Convertible Notes (ii) | 1 | 57 | ||||
(28 | ) | 70 | ||||
$ | (40 | ) | $ | 83 |
(i) | Non-financial contract to sell silver to Silver Wheaton |
(ii) | Conversion feature of convertible senior notes |
(c) | Financial assets designated as available-for-sale |
2014 | 2013 | |||||
Mark-to-market gains (losses) on available-for-sale securities | $ | 11 | $ | (87 | ) | |
Deferred income tax (expense) recovery in OCI | (2 | ) | 11 | |||
Unrealized gains (losses) on securities, net of tax | 9 | (76 | ) | |||
Reclassification adjustment for impairment losses included in net loss, net of tax of $1 (2013 – $4 million) | 5 | 29 | ||||
Reclassification adjustment for realized gains on disposition of available-for-sale securities recognized in net loss, net of tax of $3 million (2013 – $nil) | (20 | ) | (1 | ) | ||
$ | (6 | ) | $ | (48 | ) |
(d) | Fair value information |
(i) | Fair value measurements of financial assets and liabilities recognized on the Consolidated Balance Sheets |
At December 31, 2014 | At December 31, 2013 | |||||||||||
Level 1 | Level 2 | Level 1 | Level 2 | |||||||||
Cash and cash equivalents (note 14) | $ | 482 | $ | — | $ | 625 | $ | — | ||||
Investment in securities (note 21) | 47 | 10 | 82 | — | ||||||||
Accounts receivable arising from sales of metal concentrates (note 25(b)) | — | 187 | — | 254 | ||||||||
Current and non-current derivative assets (note 25(b)) | — | 17 | — | 42 | ||||||||
Current and non-current derivative liabilities (note 25(b)) | — | (49 | ) | — | (57 | ) |
(ii) | Valuation methodologies for Level 2 financial assets and liabilities |
(iii) | Fair values of financial assets and liabilities not already measured and recognized at fair value on the Consolidated Balance Sheets |
Level | Input | Carrying value (2) | Fair value | |||||
$1.0 billion notes | 1 | Closing price | $ | 991 | $ | 1,011 | ||
$1.5 billion notes | 1 | Closing price | 1,498 | 1,485 | ||||
425 million Argentine pesos loan | 2 | 30.9% (1) | 49 | 52 | ||||
1.6 billion Argentine pesos loan | 2 | 30.9% (1) | 186 | 189 | ||||
180 million Argentine pesos loan | 2 | 30.9% (1) | 21 | 19 |
(1) | Represents market quoted yield on similar borrowings by the Company in Argentina on December 31, 2014. |
(2) | Includes accrued interest payable. |
(e) | Financial instruments and related risks |
(i) | Credit risk |
At December 31 2014 | At December 31 2013 | |||||
Cash and cash equivalents (note 14) | $ | 482 | $ | 625 | ||
Accounts receivable arising from sales of metal concentrates (note 25(b)) | 187 | 254 | ||||
Other current and non-current receivables (notes 16 and 22) | 62 | 60 | ||||
Money market investments | 53 | — | ||||
Current and non-current derivative asset (note 25(b)) | 17 | 42 | ||||
Current and non-current notes receivable (notes 16 and 22) (1) | — | 28 | ||||
Accrued interest receivable (notes 16 and 22) | 49 | 24 | ||||
$ | 850 | $ | 1,033 |
(1) | On May 16, 2014, Primero repaid the outstanding balance of $28 million on the $50 million 5-year promissory note receivable prior to its maturity date of August 5, 2015. |
(ii) | Liquidity risk |
At December 31, 2014 | At December 31, 2013 | |||||||||||||||||
Within 1 year | 2 to 3 years | 4 to 5 years | Over 5 years | Total | Total | |||||||||||||
Accounts payable and accrued liabilities (1) | $ | 1,016 | $ | — | $ | — | $ | — | $ | 1,016 | $ | 829 | ||||||
Current and non-current derivative liabilities (note 25(b)) (2) | 48 | 1 | — | — | 49 | 56 | ||||||||||||
Debt repayments (principal portion) (note 23) | 154 | 970 | 500 | 2,000 | 3,624 | 2,565 | ||||||||||||
Interest payments on debt (note 23) | 178 | 202 | 168 | 761 | 1,309 | 417 | ||||||||||||
Capital expenditure commitments (3) | 318 | 34 | — | — | 352 | 522 | ||||||||||||
Reclamation and closure cost obligations (note 24) | 66 | 48 | 84 | 1,629 | 1,827 | 1,847 | ||||||||||||
Minimum rental and lease payments | 11 | 8 | 10 | 45 | 74 | 40 | ||||||||||||
Other | 166 | 32 | 11 | 46 | 255 | 124 | ||||||||||||
$ | 1,957 | $ | 1,295 | $ | 773 | $ | 4,481 | $ | 8,506 | $ | 6,400 |
(1) | Excludes accrued interests on debts which are disclosed separately in the above table. |
(2) | Excludes conversion feature of the Convertible Notes. |
(3) | Contractual commitments are defined as agreements that are enforceable and legally binding. Certain of the contractual commitments may contain cancellation clauses; however, the Company discloses the contractual maturities of the Company's operating and capital commitments based on management's intent to fulfill the contract. |
(iii) | Market risk |
At December 31, 2014 | Cash and cash equivalents | Accounts receivable and other current and non-current assets | Accounts payable and accrued liabilities and non-current liabilities | Income taxes receivable (payable), current and non-current | Deferred income tax liabilities | ||||||||||
Canadian dollar | $ | 14 | $ | 49 | $ | (357 | ) | $ | 26 | $ | (979 | ) | |||
Mexican peso | 23 | 150 | (222 | ) | 108 | (2,858 | ) | ||||||||
Argentine peso | 1 | 222 | (393 | ) | (3 | ) | (574 | ) | |||||||
Guatemalan quetzal | 1 | 6 | (36 | ) | 6 | (107 | ) | ||||||||
Chilean peso | 1 | 11 | (8 | ) | — | — | |||||||||
$ | 40 | $ | 438 | $ | (1,016 | ) | $ | 137 | $ | (4,518 | ) | ||||
At December 31, 2013 | |||||||||||||||
Canadian dollar | $ | 13 | $ | 75 | $ | (328 | ) | $ | 18 | $ | (954 | ) | |||
Mexican peso | 25 | 134 | (180 | ) | 138 | (2,860 | ) | ||||||||
Argentine peso | 18 | 165 | (162 | ) | 2 | (1,237 | ) | ||||||||
Guatemalan quetzal | 3 | 7 | (41 | ) | (3 | ) | (103 | ) | |||||||
Chilean peso | 3 | 12 | (6 | ) | — | — | |||||||||
$ | 62 | $ | 393 | $ | (717 | ) | $ | 155 | $ | (5,154 | ) |
26. | MANAGEMENT OF CAPITAL |
At December 31 2014 | At December 31 2013 | |||||
Shareholders’ equity | $ | 16,960 | $ | 19,545 | ||
Debt | 3,592 | 2,507 | ||||
20,552 | 22,052 | |||||
Less: Cash and cash equivalents | (482 | ) | (625 | ) | ||
Money market investments | (53 | ) | — | |||
$ | 20,017 | $ | 21,427 |
27. | 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 (1) | 3,577 | 30.39 | |||
Exercised (2) | (267 | ) | 20.12 | ||
Forfeited/expired | (4,068 | ) | 38.56 | ||
At December 31, 2014 – outstanding | 16,379 | $ | 39.09 | ||
At December 31, 2014 – exercisable | 10,970 | $ | 42.45 | ||
At January 1, 2013 | 16,345 | $ | 42.01 | ||
Granted (1) | 3,332 | 32.56 | |||
Exercised (2) | (168 | ) | 18.14 | ||
Forfeited/expired | (2,372 | ) | 41.40 | ||
At December 31, 2013 – outstanding | 17,137 | $ | 40.49 | ||
At December 31, 2013 – exercisable | 11,516 | $ | 41.09 |
(1) | Stock options granted during the year ended December 31, 2014 vest over a period of 3 years (2013 – 3 years), are exercisable at C$27.20 to C$31.03 per option (2013 – C$26.66 to C$33.48), expire in 2018 (2013 – in 2017) and had a total fair value of $20 million (2013 – $22 million) at the date of grant. |
(2) | The weighted average share price at the date stock options were exercised was C$27.04 (2013 – C$29.24). |
2014 | 2013 | |||||
Expected life | 3.1 years | 3.1 years | ||||
Expected volatility | 38.0 | % | 35.2 | % | ||
Expected dividend yield | 2.2 | % | 1.9 | % | ||
Estimated forfeiture rate | 9.2 | % | 9.3 | % | ||
Risk-free interest rate | 1.2 | % | 1.1 | % | ||
Weighted average share price | $ | 27.43 | $ | 31.71 |
Options Outstanding | Options Exercisable | |||||||||||||
Exercise Prices (C$/option) | Options Outstanding (000’s) | Weighted Average Exercise Price (C$/option) | Weighted Average Remaining Contractual Life (years) | Options Outstanding and Exercisable (000’s) | Weighted Average Exercise Price (C$/option) | Weighted Average Remaining Contractual Life (years) | ||||||||
$19.23 | 329 | $ | 19.23 | 0.5 | 324 | $ | 19.23 | 0.5 | ||||||
$24.40 – $27.53 | 804 | 26.23 | 2.8 | 618 | 25.87 | 2.5 | ||||||||
$28.84 – $31.93 | 4,244 | 30.44 | 3.7 | 817 | 30.81 | 1.8 | ||||||||
$33.48 – $35.66 | 2,308 | 33.53 | 3.1 | 875 | 33.58 | 3.0 | ||||||||
$37.82 – $40.79 | 41 | 40.26 | 2.2 | 34 | 40.36 | 2.1 | ||||||||
$44.50 – $46.76 | 3,523 | 44.54 | 0.4 | 3,523 | 44.54 | 0.4 | ||||||||
$48.16 – $48.72 | 5,130 | 48.28 | 1.4 | 4,779 | 48.25 | 1.3 | ||||||||
16,379 | $ | 39.09 | 2.1 | 10,970 | $ | 42.45 | 1.3 |
(b) | Performance share units ("PSUs") compensation expense |
2014 | 2013 | |||||
Expected life | 3 years | 3 years | ||||
Expected volatility | 31.9 | % | 33.6 | % | ||
Expected dividend yield | 1.8 | % | 1.9 | % | ||
Estimated forfeiture rate | 7.7 | % | 9.9 | % | ||
Risk-free interest rate | 1.0 | % | 1.2 | % | ||
Weighted average share price | $ | 23.51 | $ | 33.62 |
(c) | Phantom restricted units ("PRUs") |
(d) | Employee share purchase plan ("ESPP") |
(e) | Issued share capital |
28. | RELATED PARTY TRANSACTIONS |
(a) | Related party transactions |
(b) | Compensation of directors and other key management personnel |
2014 | 2013 | |||||
Short-term employee benefits (1) | $ | 10 | $ | 13 | ||
Post-employment benefits | 2 | 7 | ||||
Share-based compensation | 19 | 21 | ||||
$ | 31 | $ | 41 |
(1) | Short-term employee benefits include salaries, bonuses payable within twelve months of the balance sheet date and other annual employee benefits. |
29. | CONTINGENCIES |
(a) | Article 27 of the Mexican Constitution and subsequent legislation established the "ejido" and communal landholding as forms of land tenure in Mexico. There are 22 ejido communities in the vicinity of the Company's Mexican mining operations and ejido lands cover all of the lands used by the Company for its current mining operations at its Peñasquito (note 7(h)(i)), Los Filos and El Sauzal mines. The Corporation enters into temporary occupation agreements ranging from five to 30 years with the ejido communities which allow the Company to use the surface of the lands for its mining operations. In Mexico, mining rights that are covered under a concession do not include direct ownership or possession rights over the surface, or surface access, and at any particular time the Company may be involved in negotiations with various ejido communities to enter into new temporary occupation agreements or amend existing agreements. Failure to reach agreement may cause suspension of operations, delays to projects, and on occasion, may lead to legal disputes. |
(b) | Issued in 2013, Law 3318 created a new form of tax in Argentina's Province of Santa Cruz for mining companies. The tax is levied on 1% of the value of mine reserves reported in feasibility studies and financial statements inclusive of variations resulting from ongoing exploitation. The regulations require that the tax is calculated on "measured" reserves and the Company has interpreted this to mean "proven" reserves. The Province has disputed the Company's interpretation but has not provided further clarification on the definition of "measured" reserves, and the outcome is not clear at this time. The Company filed a legal claim disputing the constitutionality of the tax with the National Supreme Court of Argentina which has accepted jurisdiction of the matter. The Company continues to pay the required tax installments under protest for the years ended December 31, 2014 and 2013. |
(c) | On September 23, 2013, Argentina’s federal Income Tax Statute was amended to include a 10% income tax withholding on dividend distributions by Argentine corporations and branch profit distributions by foreign corporations. It is the Company's position that the withholding tax violates tax stability rights provided to mining projects by Mining Investment Law No. 24,196 ("MIL"). Mining projects subject to MIL would generally pay the new withholding tax under protest and request a refund or tax credit for the excess of the overall tax burden. The Company believes that both Alumbrera and Cerro Negro. are subject to the MIL, and accordingly should be entitled a refund or tax credit for withholding taxes paid under the new law. During the year ended December 31, 2014, the Company has accrued an additional $4 million (December 31, 2013 – $19 million) included in net (loss) earnings of associates for earned but undistributed profits with regards to its 37.5% interest in Alumbrera. |
(d) | In October 2014, Pueblo Viejo received a copy of an action filed in an administrative court in the Dominican Republic by Rafael Guillen Beltre (the "Petitioner"), who claims to be affiliated with the Dominican Christian Peace Organization. The Government of the Dominican Republic has also been notified of the action. The action alleges that environmental contamination in the vicinity of the Pueblo Viejo mine has caused illness and affected water quality in violation of the Petitioner’s fundamental rights under the Dominican Constitution and other laws. The primary relief sought in the action, which is styled as an "Amparo" remedy, is the suspension of operations at the Pueblo Viejo mine as well as other mining projects in the area until an investigation into the alleged environmental contamination has been completed by the relevant governmental authorities. On November 24, 2014, the Administrative Court granted Pueblo Viejo's motion to remand the matter to a trial court in the Municipality of Cotuí ("Trial Court") on procedural grounds. On January 27, 2015, the Trial Court granted Pueblo Viejo's motion to suspend action pending receipt of the litigation file from the Administrative Court. No amounts have been recorded for any potential liability or asset impairment arising from this matter, as Pueblo Viejo cannot reasonably predict any potential losses. |
30. | SUBSEQUENT EVENTS |
(a) | Cerro Negro commercial production |
(b) | Probe Mines Limited ("Probe") acquisition |
(c) | Tahoe and Rio Alto Mining Limited ("Rio Alto") business combination |
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 | AUDITORS |
Reno, NV 89502 United States | |
Tel: (775) 827-4600 | Deloitte LLP |
Fax: (775) 827-5044 | Vancouver, BC |
MEXICO OFFICE | INVESTOR RELATIONS |
Paseo de las Palmas 425-15 | Jeff Wilhoit |
Lomas de Chapultepec | Vice President, Investor Relations |
11000 Mexico, D.F. | Toll free: (800) 567-6223 |
Tel: 52 (55) 5201-9600 | Email: info@goldcorp.com |
GUATEMALA OFFICE | REGULATORY FILINGS |
5ta avenida 5-55 zona 14 Europlaza | The Company’s filings with the Ontario Securities Commission |
Torre 1 Nivel 6 oficina 601 | can be accessed on SEDAR at www.sedar.com. |
Guatemala City | |
Guatemala, 01014 | The Company’s filings with the US Securities and |
Tel: 502 2329 2600 | Exchange Commission can be accessed on EDGAR |
at www.sec.gov. | |
ARGENTINA OFFICE | |
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 |
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