VANCOUVER, Oct. 25, 2017 /CNW/ - GOLDCORP INC. (TSX:
G, NYSE: GG) ("Goldcorp" or the "Company") today reported its
third quarter 2017 results.
Third Quarter Highlights
- Net earnings were $111
million, or $0.13 per share,
compared to net earnings of $59
million, or $0.07 per share,
for the third quarter of 2016. Operating cash flows for the
third quarter of 2017 were $315
million compared to $267
million for the same period in the prior year. Adjusted
operating cash flows were $308
million(1) for the third quarter of 2017 compared
to $401 million for the same period
in the prior year.
- Gold production of 633,000 ounces at all-in sustaining costs
("AISC") of $827 per ounce, compared
to 715,000 ounces at AISC of $812 per
ounce for the third quarter of 2016(1). 2017
guidance reconfirmed for gold production of 2.5 million ounces (+/-
5%) and AISC of $825(2)
per ounce (+/- 5%), previously improved from $850 per ounce, reflecting the progress the
Company has made on its efficiency program.
- Program to implement $250
million of sustainable annual efficiencies by the middle of
2018 is on track with $200 million
expected to be achieved in 2017 across our portfolio. More than
100% of the $250 million in
efficiencies have been identified, with the program likely to be
extended and the efficiency target increased, after the Company
achieves its current target.
- Solid reserve growth and project execution enhances
confidence in the Company's 20/20/20 growth plan. An increase
in proven and probable gold reserves to 53.5 million ounces, strong
project delivery of expansions at Peñasquito, Musselwhite and
Porcupine (Borden) underpin our plan for a 20% increase
in gold production, a 20% increase in gold reserves and a 20%
reduction in AISC by 2021, while delivering increasing cash flows
over the next five years.
"We have delivered another quarter of on target gold production
at low costs, led by strong operating performance at Peñasquito and
Cerro Negro. The success of our
efficiency program is evident in continued low operating costs and
an expanded margin per ounce of gold produced," said David
Garofalo, President & Chief Executive Officer. "With the
optimization of our portfolio now complete, we have a full and
robust pipeline of development projects poised to deliver value
growth in the short, medium and long-term."
FINANCIAL AND OPERATING RESULTS
|
($ millions, except
where indicated)
|
Three months
ended
September 30, 2017
|
Three months
ended
September 30, 2016
|
|
Gold
production(1) (ounces)
|
633,000
|
715,000
|
|
Gold
sales(1) (ounces)
|
606,000
|
686,000
|
|
Operating cash
flows
|
$315
|
$267
|
|
Adjusted operating
cash flows(1),(2)
|
$308
|
$401
|
|
Net
earnings
|
$111
|
$59
|
|
Net earnings per
share
|
$0.13
|
$0.07
|
|
By-product cash
costs(1),(3) (per ounce)
|
$483
|
$554
|
|
AISC(1),(3) (per ounce)
|
$827
|
$812
|
Net earnings and net earnings per share for the third quarter of
2017 were affected by, among other things, a negative impact from
the buildup of unsold gold at the end of the quarter, and the
following non-cash item that management believes is not reflective
of the performance of the underlying operations (item is denoted as
an (increase)/decrease to net income and net income per share):
|
($ millions, except
where indicated)
|
Pre-tax
|
After-tax
|
$/share
|
|
Positive deferred tax
effects of foreign
exchange on tax assets and liabilities
and losses
|
($ -)
|
($40)
|
($0.04)
|
Please refer to the Company's financial statements, related
notes and accompanying Management Discussion and Analysis for a
full review of its operations and projects. This can be accessed by
clicking on this link: Q3-2017 MD&A and Financial
Statements.
About Goldcorp
Goldcorp is a senior gold producer focused on responsible mining
practices with safe, low-cost production from a high-quality
portfolio of mines.
Conference Call and Webcast
|
Date:
|
Thursday, October 26,
2017
|
|
Time:
|
10:00 a.m.
(PST)
|
|
Dial-in:
|
1-800-355-4959
(toll-free) or 1-416-340-2216 (outside Canada and the
US)
|
|
Replay:
|
1-800-408-3053
(toll-free) or 1-905-694-9451 (outside Canada and the
US)
|
|
Replay end
date:
|
November 26,
2017
|
|
Replay
Passcode:
|
Conference ID#:
2296992
|
A live and archived webcast will also be available.
|
Footnotes
|
|
|
|
1.
|
The Company has
included certain performance measures, including non-GAAP
performance measures on an attributable basis (Goldcorp share)
throughout this release. Attributable performance measures include
the Company's mining operations and projects and the Company's
share from Pueblo Viejo, Alumbrera, Leagold and
NuevaUnión.
|
|
|
|
2.
|
Adjusted operating
cash flows comprises Goldcorp's share of operating cash flows
before working capital changes, calculated on an attributable basis
to include the Company's share of Alumbrera, Pueblo Viejo, Leagold
and NuevaUnión's operating cash flows before working capital
changes. 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 operate without reliance on additional
external funding or use of available cash.
|
|
|
|
The following table
provide a reconciliation of net cash provided by operating
activities in the consolidated financial statements to Goldcorp's
share of adjusted operating cash flows:
|
|
Three months
ended
September
30
|
|
($
millions)
|
2017
|
2016
|
|
Net cash provided
by operating activities of continuing operations
|
$315
|
$267
|
|
Change in working
capital
|
(57)
|
32
|
|
Adjusted operating
cash flows provided by Pueblo Viejo, Alumbrera, Leagold and
NuevaUnión
|
50
|
102
|
|
Goldcorp's share
of adjusted operating cash flows
|
$308
|
$401
|
|
3.
|
"Cash costs: by
product" per ounce and "AISC" per ounce are non-GAAP financial
performance measures.
|
|
|
|
Cash costs:
by-product:
|
|
|
|
Total cash costs:
by-product incorporate Goldcorp's share of all production costs,
including adjustments to inventory carrying values, adjusted for
changes in estimates in reclamation and closure costs at the
Company's closed mines which are non-cash in nature, and include
Goldcorp's share of by-product silver, lead, zinc and copper
credits, and treatment and refining charges included within
revenue. Additionally, cash costs are adjusted for realized gains
and losses arising on the Company's commodity and foreign currency
contracts which the Company enters into to mitigate its exposure to
fluctuations in by-product metal prices, heating oil prices and
foreign exchange rates, which may impact the Company's operating
costs.
|
|
|
|
In addition to
conventional measures, the Company assesses this per ounce 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 per gold
ounce to monitor its operating performance internally, including
operating cash costs, as well as in its assessment of potential
development projects and acquisition targets. The Company believes
this measure provides investors and analysts with useful
information about the Company's underlying cash costs of operations
and the impact of by-product credits on the Company's cost
structure and is a relevant metric used to understand the Company's
operating profitability and ability to generate cash flow. When
deriving the production costs associated with an ounce of gold, the
Company includes by-product credits as the Company considers that
the cost to produce the gold is reduced as a result of the
by-product sales incidental to the gold production process, thereby
allowing the Company's management and other stakeholders to assess
the net costs of gold production.
|
|
|
|
The Company reports
total cash costs: by-product on a gold ounces sold basis. In the
gold mining industry, this 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 producers 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.
|
|
|
|
AISC:
|
|
|
|
AISC include total
production cash costs incurred at the Company's mining operations,
which forms the basis of the Company's by-product cash costs.
Additionally, the Company includes sustaining capital expenditures,
corporate administrative expense, mine-site exploration and
evaluation costs, and reclamation cost accretion and amortization.
The measure seeks to reflect the full cost of gold production from
current operations, therefore expansionary capital and
non-sustaining expenditures are excluded. Certain other cash
expenditures, including tax payments, dividends and financing costs
are also excluded.
|
|
|
|
The Company believes
that this measure represents the total costs of producing gold from
current operations, and provides the Company and other stakeholders
of the Company with additional information of the Company's
operational performance and ability to generate cash flows. AISC,
as a key performance measure, allows the Company to assess its
ability to support capital expenditures and to sustain future
production from the generation of operating cash flows. This
information provides management with the ability to more actively
manage capital programs and to make more prudent capital investment
decisions.
|
|
|
|
The Company reports
AISC on a gold ounces sold basis. This performance measure was
adopted as a result of an initiative undertaken within the gold
mining industry; however, this performance measure has no
standardized meaning and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with GAAP. The Company follows 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.
|
|
|
|
The following tables
provide a reconciliation of total cash costs: by product to
reported production costs:
|
|
Three months ended
September 30, 2017
|
|
($ millions unless
stated otherwise)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
costs( a)
|
By-Product
Credits
|
Treatment and
Refining Charges
on Concentrate
Sales
|
Other
|
Total Cash
Costs:
by- product
|
Ounces
(000's)
|
Total Cash Costs:
by-product per
ounce (b)(c)
|
|
Total before
associates and joint venture
|
$
|
459
|
$
|
(268)
|
$
|
32
|
$
|
(3)
|
$
|
220
|
490
|
$
|
451
|
|
Associates and joint
venture
|
$
|
106
|
$
|
(22)
|
$
|
2
|
$
|
(15)
|
$
|
71
|
116
|
$
|
617
|
|
Total -
Attributable
|
$
|
565
|
$
|
(290)
|
$
|
34
|
$
|
(18)
|
$
|
291
|
606
|
$
|
483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2016
|
|
($ millions unless
stated otherwise)
|
|
|
|
|
|
|
|
|
|
Production
costs (a)
|
By-Product
Credits
|
Treatment and
Refining Charges
on Concentrate
Sales
|
Other
|
Total Cash
Costs:
by-product
|
Ounces
(000's)
|
Total Cash Costs:
by-product per
ounce (b)(c)
|
|
Total before
associates and joint venture
|
$
|
523
|
$
|
(233)
|
$
|
36
|
$
|
-
|
$
|
326
|
537
|
$
|
609
|
|
Associates and joint
venture
|
$
|
92
|
$
|
(43)
|
$
|
5
|
$
|
-
|
$
|
54
|
149
|
$
|
355
|
|
Total -
Attributable
|
$
|
615
|
$
|
(276)
|
$
|
41
|
$
|
-
|
$
|
380
|
686
|
$
|
554
|
|
(a)
|
Production costs
includes $19 million in royalties for the three months ended
September 30, 2017 (three months ended September 30, 2016 – $23
million).
|
|
|
|
(b)
|
Total cash costs:
by-product per ounce may not calculate based on amounts presented
in these tables due to rounding.
|
|
|
|
(c)
|
If silver, copper,
lead and zinc were treated as co-products, total cash costs for the
three months ended September 30, 2017 would have been $663 per
ounce of gold (three months ended September 30, 2016 –
$657).
|
|
|
|
As described above,
AISC include total production cash costs incurred at the Company's
mining operations, which forms the basis of the Company's cash
costs: by-product and which are reconciled to reported production
costs in the tables above. The following tables provide a
reconciliation of AISC per ounce to total cash costs: by
product:
|
|
Three months ended
September 30, 2017
|
|
($ millions unless
stated otherwise)
|
|
|
|
|
|
|
|
|
|
|
Total cash
costs:
by-product
|
Corporate
Administration
|
Exploration &
evaluation
costs
|
Reclamation
cost accretion
and
amortization
|
Sustaining
capital
expenditures
|
Total
AISC
|
Ounces
(thousands)
|
Total AISC
per ounce(a)
|
|
Total before
associates and joint venture
|
$
|
220
|
$
|
40
|
$
|
13
|
$
|
9
|
$
|
127
|
$
|
409
|
490
|
$
|
835
|
|
Associates and joint
ventures
|
$
|
71
|
$
|
-
|
$
|
-
|
$
|
6
|
$
|
16
|
$
|
93
|
116
|
$
|
793
|
|
Total -
Attributable
|
$
|
291
|
$
|
40
|
$
|
13
|
$
|
15
|
$
|
143
|
$
|
502
|
606
|
$
|
827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2016
|
|
($ millions unless
stated otherwise)
|
|
|
|
|
|
|
|
|
|
|
Total cash
costs:
by-product
|
Corporate
Administration
|
Exploration &
evaluation
costs
|
Reclamation
cost accretion
and
amortization
|
Sustaining
capital
expenditures
|
Total
AISC
|
Ounces
(thousands)
|
Total AISC
per ounce(a)
|
|
Total before
associates and joint venture
|
$
|
326
|
$
|
42
|
$
|
7
|
$
|
15
|
$
|
103
|
$
|
493
|
537
|
$
|
917
|
|
Associates and joint
ventures
|
$
|
54
|
$
|
-
|
$
|
-
|
$
|
2
|
$
|
9
|
$
|
65
|
149
|
$
|
436
|
|
Total –
Attributable
|
$
|
380
|
$
|
42
|
$
|
7
|
$
|
17
|
$
|
112
|
$
|
558
|
686
|
$
|
812
|
|
(a)
|
AISC may not
calculate based on amounts presented in these tables due to
rounding.
|
Cautionary Statement Regarding Forward Looking
Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the United States Securities Act of
1933, as amended, Section 21E of the United States Exchange Act of
1934, as amended, the United States Private Securities
Litigation Reform Act of 1995, or in releases made by the United
States Securities and Exchange Commission, all as may be amended
from time to time, and "forward-looking information" under the
provisions of applicable Canadian securities legislation,
concerning the business, operations and financial performance and
condition of Goldcorp. Forward-looking statements include, but are
not limited to, the future price of gold, silver, copper, lead and
zinc, the estimation of Mineral Reserves (as defined below) and
Mineral Resources (as defined below), the realization of Mineral
Reserve estimates, the timing and amount of estimated future
production, costs of production, targeted cost reductions, capital
expenditures, free cash flow, costs and timing of the development
of new deposits, success of exploration activities, permitting time
lines, hedging practices, currency exchange rate fluctuations,
requirements for additional capital, government regulation of
mining operations, environmental risks, unanticipated reclamation
expenses, timing and possible outcome of pending litigation, title
disputes or claims and limitations on insurance coverage.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as "plans", "expects" ,
"is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" , "believes", or variations or comparable
language of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "should",
"might" or "will be taken", "occur" or "be achieved" or the
negative connotation thereof.
Forward-looking statements are necessarily based upon a number
of factors and assumptions that, if untrue, could cause the actual
results, performances or achievements of Goldcorp to be materially
different from future results, performances or achievements
expressed or implied by such statements. Such statements and
information are based on numerous assumptions regarding present and
future business strategies and the environment in which Goldcorp
will operate in the future, including the price of gold,
anticipated costs and ability to achieve goals. Certain important
factors that could cause actual results, performances or
achievements to differ materially from those in the forward-looking
statements include, among others, gold price volatility,
discrepancies between actual and estimated production, Mineral
Reserves and Mineral Resources and metallurgical recoveries, mining
operational and development risks, litigation risks, regulatory
restrictions (including environmental regulatory restrictions and
liability), changes in national and local government legislation,
taxation, controls or regulations and/or change in the
administration of laws, policies and practices, expropriation or
nationalization of property and political or economic developments
in Canada, the United States and other jurisdictions in
which the Company does or may carry on business in the future,
delays, suspension and technical challenges associated with capital
projects, higher prices for fuel, steel, power, labour and other
consumables, currency fluctuations, the speculative nature of gold
exploration, the global economic climate, dilution, share price
volatility, competition, loss of key employees, additional funding
requirements and defective title to mineral claims or property.
Although Goldcorp believes its expectations are based upon
reasonable assumptions and has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events
or results not to be as anticipated, estimated or intended.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other important factors that may cause the
actual results, level of activity, performance or achievements of
Goldcorp to be materially different from those expressed or implied
by such forward-looking statements, including but not limited to:
risks related to international operations, including economic and
political instability in foreign jurisdictions in which Goldcorp
operates; risks related to current global financial conditions;
risks related to joint venture operations; actual results of
current exploration activities; actual results of current
reclamation activities; environmental risks; conclusions of
economic evaluations; changes in project parameters as plans
continue to be refined; future prices of gold, silver, copper, lead
and zinc; possible variations in ore reserves, grade or recovery
rates; failure of plant, equipment or processes to operate as
anticipated; mine development and operating risks; accidents,
labour disputes and other risks of the mining industry; risks
associated with restructuring and cost-efficiency initiatives;
delays in obtaining governmental approvals or financing or in the
completion of development or construction activities; risks related
to the integration of acquisitions; risks related to indebtedness
and the service of such indebtedness, as well as those factors
discussed in the section entitled "Description of the Business –
Risk Factors" in Goldcorp's most recent annual information
form available on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov. Although Goldcorp has attempted to identify important
factors that could cause actual results to differ materially from
those contained in forward-looking statements, there may be other
factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will prove
to be accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements. Forward-looking statements are made as of the date
hereof and, accordingly, are subject to change after such date.
Except as otherwise indicated by Goldcorp, these statements do not
reflect the potential impact of any non-recurring or other special
items or of any disposition, monetization, merger, acquisition,
other business combination or other transaction that may be
announced or that may occur after the date hereof. Forward-looking
statements are provided for the purpose of providing information
about management's current expectations and plans and allowing
investors and others to get a better understanding of Goldcorp's
operating environment. Goldcorp does not intend or undertake to
publicly update any forward-looking statements that are included in
this document, whether as a result of new information, future
events or otherwise, except in accordance with applicable
securities laws.
SOURCE Goldcorp Inc.