VANCOUVER, Oct. 24, 2018 /CNW/ - GOLDCORP INC. (TSX:
G, NYSE: GG) ("Goldcorp" or the "Company") is pleased to report
its third quarter 2018 results.
Third Quarter Highlights
- Net loss was $101 million, or
$0.12 per share. Results for the
three months ended September 30, 2018
included a non-cash foreign currency translation loss of
$0.04 per share. Operating results
were impacted primarily by lower production of all metals at the
Peñasquito mine due to lower throughput and planned lower grades
from stockpiles during the commissioning of the now fully
constructed Peñasquito Pyrite Leach Project. Operating cash flows
and adjusted operating cash flows(1) for the three
months ended September 30, 2018 were
$193 million and $171 million, respectively, compared to
$315 million and $308 million, respectively, for the three months
ended September 30, 2017.
- Gold production of 503,000 ounces at all-in sustaining
costs(1) ("AISC") of $999
per ounce, compared to 633,000 ounces at AISC of $827 per ounce for the three months ended
September 30, 2017. Goldcorp
expects gold production and operating costs to improve
substantially in the fourth quarter of 2018 to approximately
620,000 ounces of gold at AISC of approximately $750 per ounce as substantially all of
Peñasquito's production will come from higher grade ore from the
main Peñasco pit, and Éléonore and Cerro Negro continue their ramp
ups to optimum production rates.
- Significant project milestones reached in support of the
Company's 20/20/20 growth plan and Beyond 20/20 program.
Commissioning of the Peñasquito Pyrite Leach Project commenced,
with first gold and commercial production expected in the fourth
quarter of 2018. The Century Gold Project submitted its Associated
Project Description to regulatory authorities in July 2018 and the Yukon Environmental and
Socio-Economic Board deemed the Coffee Project adequate in
August 2018.
- An additional $30 million of
sustainable annual efficiencies identified, bringing the Company
closer to reaching its goal of achieving $350 million of sustainable annual efficiencies
by the end of 2019. Building on the momentum from achieving
$250 million of the efficiencies by
mid-2018 and identifying the additional $30
million of efficiencies during the third quarter of 2018,
work is underway across Goldcorp's operations to identify the
remaining opportunities that are expected to drive the Company
towards realizing its 20/20/20 plan.
- Proven and Probable Gold Mineral Reserves are 52.8 Million
Ounces. Goldcorp mineral reserves increased at Musselwhite with
the higher-grade extension of PQ Deeps and the addition of the WEL
zone and at Cerro Negro, with an inaugural mineral reserve estimate
at the Silica Cap. Overall mineral reserves additions at
Goldcorp-operated sites essentially replaced depletion over the
12-month period.
"Steady project execution in the third quarter during a
transition period at our flagship Peñasquito mine continued a
process of de-risking our 20/20/20 production growth and cost
reduction plans. The commissioning of the PLP at Peñasquito,
ongoing development of the Materials Handling system at Musselwhite
and the near completion of the ramp up at both Cerro Negro and
Éléonore are expected to lead to significantly improved gold
production and costs in the fourth quarter of 2018", said
David Garofalo, President and Chief
Executive Officer of Goldcorp. "At the same time, with our renewed
focus on exploration, we essentially replaced gold reserve
depletion across our operating assets, establishing a strong
foundation to achieve our gold reserve target of 60 million ounces
by 2021."
Goldcorp is also announcing the appointment of Cristina
Bitar to the Company's Board of Directors, effective as
of October 24, 2018.
"We are excited about adding Cristina to our Board of
Directors," said Ian Telfer,
Chairman of the Board of Goldcorp. "Her experience and
knowledge will benefit the company and shareholders by enhancing
the effectiveness of our board with communication, stakeholder
management, strategy, innovation and diversity of thinking."
Mrs. Bitar is a senior partner at Azerta, one of the
leading strategic communication and public affair agency in
Chile and Peru where she executes on complex business
crisis, regulatory matters and highly visible media and social
issues for corporate clients. She previously founded one of the
most dynamic and fastest growing communication firms in
Chile, Captiva, which in 1999
merged with Hill & Knowlton. She has been elected nine times as
one of 100 Leading Women in the country by El Mercurio, a leading
Chilean newspaper, and Mujeres Empresarias, a women's business
leadership organization. She was also awarded the Universidad del
Pacífico's Women of the XXI Century recognition, granted to
professional women for their contributions in different
sectors.
Mrs. Bitar holds a BA in Economics and Sociology from
Dartmouth College and an MBA from the
Universidad de Chile and
Tulane University. She is a Board
member of the largest private pension fund in Chile- AFP Provida, a Metlife Company, she is
also a permanent columnist in La Segunda newspaper, a member of the
think tank Public Policy Council Libertad y Desarrollo, and a
Founding and Council Member of Comunidad Mujer, an NGO that
promotes women's rights and gender equality. She is also a
professor in the Masters in Communications Degree
program at the Universidad Adolfo Ibañez in Santiago, Chile. Since 2008, she has also been
a member of the Young Global Leaders organization at the World
Economic Forum.
FINANCIAL AND OPERATING RESULTS
($ millions, except
where indicated)
|
Three months
ended
September 30,
2018
|
Three months
ended
September 30,
2017
|
Gold
production(1) (ounces)
|
503,000
|
633,000
|
Gold
sales(1) (ounces)
|
508,000
|
606,000
|
Operating cash
flows
|
$193
|
$315
|
Adjusted operating
cash flows(1),(2)
|
$171
|
$308
|
Net (loss)
earnings
|
($101)
|
$111
|
Net (loss) earnings
per share
|
($0.12)
|
$0.13
|
By-product cash
costs(1),(3) (per ounce)
|
$683
|
$483
|
AISC(1),(3) (per ounce)
|
$999
|
$827
|
Net earnings and net earnings per share for the third quarter of
2018 were affected by, among other things, the following non-cash
or other items that management believes are not reflective of the
performance of the underlying operations (items are denoted as
having (increased)/decreased net earnings and net earnings per
share in the three months ended September
30, 2018):
|
Three months
ended
September 30,
2018
|
($
millions,
after
tax)
|
$/share
|
Non-cash foreign
exchange loss on deferred tax balances and other
|
$37
|
$0.04
|
Please refer to the Company's financial statements, related
notes and accompanying Management's Discussion and Analysis for a
full review of its operations and projects. This can be accessed by
clicking on this link: Q3-2018 MD&A and Financial
Statements.
Third Quarter 2018 Conference Call and Webcast
details:
Date:
|
|
Thursday, October 25,
2018
|
Time:
|
|
10:00 a.m.
(PT)
|
Toll Free (US and
Canada):
|
|
1-800-355-4959
|
Outside US and
Canada:
|
|
1-416-340-2216
|
A live and archived webcast will also be available on Goldcorp's
website at www.goldcorp.com.
The conference call will be available for replay by phone
at:
Toll Free (US and
Canada):
|
|
1-800-408-3053
|
Outside US and
Canada:
|
|
1-905-694-9451
|
Replay end
date:
|
|
November 25,
2018
|
Replay
Passcode:
|
|
4818060#
|
Footnotes
- The Company has included certain performance measures,
including non-GAAP performance measures on an attributable basis
(Goldcorp share) throughout this release. Attributable performance
measures include the Company's mining operations and projects and
the Company's share from Pueblo Viejo, Alumbrera and NuevaUnión
- Adjusted operating cash flows are comprised of Goldcorp's share
of operating cash flows before working capital changes, calculated
on an attributable basis to include the Company's share of Pueblo
Viejo, Alumbrera and NuevaUnión's operating cash flows before
working capital changes. The Company believes that, in addition to
conventional measures prepared in accordance with GAAP, the Company
and certain investors use this information to evaluate the
Company's performance and ability to operate without reliance on
additional external funding or use of available cash.
The following table provides a reconciliation of net cash
provided by operating activities in the consolidated financial
statements to Goldcorp's share of adjusted operating cash
flows:
|
|
Three months
ended
September
30
|
|
($
millions)
|
|
2018
|
|
2017
|
Net cash provided
by operating activities of continuing operations
|
|
$193
|
|
$315
|
Change in working
capital
|
|
(63)
|
|
(57)
|
Adjusted operating
cash flows provided by Pueblo Viejo and Alumbrera
|
|
41
|
|
50
|
Goldcorp's share of adjusted
operating cash flows
|
|
$171
|
|
$308
|
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,
2018
($ 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
|
$
|
424
|
$
|
(161)
|
$
|
17
|
$
|
2
|
$
|
282
|
|
395
|
$
|
713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates and joint
venture
|
$
|
70
|
$
|
(21)
|
$
|
1
|
$
|
16
|
$
|
66
|
|
113
|
$
|
576
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total -
Attributable
|
$
|
494
|
$
|
(182)
|
$
|
18
|
$
|
18
|
$
|
348
|
|
508
|
$
|
683
|
|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
|
(a)
|
Production costs
includes $12 million in royalties for the three months ended
September 30, 2018 (three months ended September 30, 2017– $19
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, 2018 would have been $701 per
ounce of gold (three months ended September 30, 2017 – $663 per
ounce).
|
|
As described above,
AISC include total production cash costs incurred at the Company's
mining operations, which forms the basis of the Company's cash
costs: by-product and which are reconciled to reported production
costs in the tables above. The following tables provide a
reconciliation of AISC per ounce to total cash costs: by
product:
|
Three months ended September 30,
2018
($ 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
|
$
|
282
|
$
|
21
|
$
|
2
|
$
|
5
|
$
|
107
|
$
|
417
|
|
395
|
$
|
1,056
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Associates and joint
ventures
|
$
|
66
|
$
|
-
|
$
|
-
|
$
|
3
|
$
|
22
|
$
|
91
|
|
113
|
$
|
798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total -
Attributable
|
$
|
348
|
$
|
21
|
$
|
2
|
$
|
8
|
$
|
129
|
$
|
508
|
|
508
|
$
|
999
|
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
|
(a)
|
AISC may not
calculate based on amounts presented in these tables due to
rounding.
|
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.
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, zinc, copper and lead, the
estimation of mineral reserves and mineral resources, 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 and certification time lines, hedging
practices, currency exchange rate fluctuations, requirements for
additional capital, government regulation of mining operations,
environmental risks, unanticipated reclamation expenses, health,
safety and diversity initiatives, 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 words 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", "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 Goldcorp's
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, Mexico, Argentina, the Dominican Republic, Chile or 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:
future prices of gold, silver, zinc, copper and lead; mine
development and operating risks; possible variations in ore
reserves, grade or recovery rates; 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; failure of plant,
equipment or processes to operate as anticipated; accidents, labour
disputes and other risks of the mining industry; risks associated
with 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.
For further information please contact:
INVESTOR CONTACT:
Shawn Campbell, Director, Investor
Relations, Telephone: (800) 567-6223, E-mail: info@goldcorp.com
MEDIA CONTACT:
Christine Marks, Director, Corporate
Communications, Telephone: (604) 696-3050, E-mail:
media@goldcorp.com
View original
content:http://www.prnewswire.com/news-releases/goldcorp-reports-third-quarter-2018-results-300737437.html
SOURCE Goldcorp Inc.