VANCOUVER, British Columbia,
Feb. 22, 2018 /PRNewswire/ --
Tahoe Resources Inc. ("Tahoe" or the "Company") (TSX: THO,
NYSE: TAHO) today announced solid financial and operating results
for the fourth quarter and twelve months ended December 31,
2017. The Company's balance sheet remains strong, with cash and
cash equivalents of $125.7 million at
December 31, 2017 and very little debt.
Ron Clayton, President and CEO of
Tahoe, commented: "Tahoe achieved record gold production of
445,900 ounces in 2017, realizing the high end of its annual gold
production guidance range of 400,000 to 450,000 ounces. The strong
gold production for the year was driven primarily by La Arena. The
outstanding performance from the gold business in 2017 underscores
the increasingly meaningful contribution of the gold segment to the
overall financial performance of the Company. Despite the
challenges in Guatemala during the
second half of 2017, I am very pleased to report earnings of
$81.8 million for the year, or
$0.26 per share. Looking forward, I
expect 2018 will be a pivotal year for the Company. We remain
optimistic that based on legal precedent, the Guatemalan
Constitutional Court will issue a favorable ruling reinstating the
Escobal mining license. We are focused on a positive resolution at
the Casillas roadblock, located 16 kilometers from the mine, which,
in conjunction with a favorable court ruling, will put us in
position to resume operations at Escobal. In the meantime, we are
executing on our strategy to complete our two near-term development
projects in Canada and
Peru by late summer, which will
position us to achieve our target of 500,000 ounces of gold
production in 2019."
Key Financial and Operating Results
$ millions unless
otherwise indicated
|
|
Q4
2017
|
Q4 2016
|
2017
|
2016
|
Revenue
|
|
$
|
117.7
|
|
$
|
189.4
|
|
$
|
733.6
|
|
$
|
784.5
|
|
Earnings (loss) and
total comprehensive income (loss)(4)
|
|
$
|
(18.0)
|
|
$
|
0.3
|
|
$
|
81.8
|
|
$
|
117.9
|
|
Earnings (loss) per
share
|
|
$
|
(0.06)
|
|
$
|
—
|
|
$
|
0.26
|
|
$
|
0.41
|
|
Adjusted earnings
(loss)(1)(4)
|
|
$
|
(17.7)
|
|
$
|
18.4
|
|
$
|
84.0
|
|
$
|
180.4
|
|
Cash provided by
operating activities
|
|
$
|
18.1
|
|
$
|
107.8
|
|
$
|
234.3
|
|
$
|
249.5
|
|
Cash provided by
operating activities before changes in working capital
|
|
$
|
24.0
|
|
$
|
74.7
|
|
$
|
287.0
|
|
$
|
385.9
|
|
|
|
|
|
|
|
Silver production
(moz)
|
|
—
|
|
4.8
|
|
9.9
|
|
21.3
|
|
Gold production
(koz)
|
|
105.8
|
|
119.9
|
|
445.9
|
|
385.2
|
|
Total cash cost per
silver oz produced ($/oz)(1)(2)
|
|
$
|
—
|
|
$
|
6.48
|
|
$
|
6.15
|
|
$
|
5.84
|
|
AISC per silver oz
produced ($/oz)(1)(2)
|
|
$
|
—
|
|
$
|
9.76
|
|
$
|
8.91
|
|
$
|
8.06
|
|
Total cash cost per
gold oz produced ($/oz)(1)(2)
|
|
$
|
648
|
|
$
|
594
|
|
$
|
641
|
|
$
|
620
|
|
AISC per gold oz
produced ($/oz)(1)(2)
|
|
$
|
1,033
|
|
$
|
945
|
|
$
|
973
|
|
$
|
943
|
|
Sustaining capital
(incl. capitalized drilling)
|
|
$
|
32.1
|
|
$
|
41.9
|
|
$
|
124.0
|
|
$
|
118.4
|
|
Project
capital
|
|
$
|
29.9
|
|
$
|
19.2
|
|
$
|
99.1
|
|
$
|
93.0
|
|
Exploration
expense
|
|
$
|
3.9
|
|
$
|
6.9
|
|
$
|
18.5
|
|
$
|
14.4
|
|
Corporate
G&A(3)
|
|
$
|
11.0
|
|
$
|
9.5
|
|
$
|
45.8
|
|
$
|
47.5
|
|
Weighted average
shares outstanding (basic, in millions)
|
|
313.19
|
|
311.65
|
|
312.80
|
|
289.73
|
|
|
|
(1)
|
See "Cautionary
Note on Non-GAAP Financial Measures" at the end of this press
release.
|
(2)
|
Total cash costs and
AISC are presented net of by-product credits; costs per ounce
silver are through June 30, 2017 as cessation of mining activities
occurred in June at the Escobal mine.
|
(3)
|
Corporate G&A
includes non-cash, stock-based compensation.
|
(4)
|
Includes adjusted
depreciation for Peru mines. See segmented operational results in
MD&A.
|
Q4 2017 Summary & Highlights:
Strong operating and financial results from gold segments
– Q4 2017 gold production totaled 105.8 thousand ounces. Production
and costs in Q4 2017 reflected strong results at all of the
Company's gold mines, with total cash costs and AISC of
$648 and $1,033 per ounce, respectively.
Q4 2017 earnings were impacted by Escobal and a one-time
non-cash depreciation charge – Q4 2017 earnings were negatively
impacted by the cessation of mining activities at the Escobal mine
which resulted in no material revenue for the quarter from the mine
and care and maintenance costs of $11.1
million ($0.04 per share) and
a one-time pre-tax $11 million
cumulative adjustment ($0.04 per
share) during the quarter to true-up the depletion related to the
purchase price on the acquisition of the Peruvian mines in 2015.
Except for these items, reported earnings for the quarter would
have been positive on the strength of the gold segment alone.
Near-term expansion projects remain on time and in-line with
guidance – Both major expansion projects - the Shahuindo
crushing and agglomeration expansion and the Bell Creek shaft
project - remained on track during the quarter and within their
respective estimated total project spend of $80 million each.
2017 Summary & Highlights:
Record gold production of 445.9 thousand ounces
– The Company achieved record gold production of 445.9
thousand ounces in 2017, achieving the high end of the annual gold
production guidance range of 400,000 to 450,000 ounces, which was
revised upward in September 2017. The
strong gold production for the year was driven primarily by La
Arena in Peru, which exceeded its
guidance due to on-going positive mine plan reconciliation with
both higher grade and additional ore tonnes mined. The outstanding
performance from the gold business in 2017 underscores the
increasingly meaningful contribution of the gold segment to the
overall financial performance of the Company.
Gold operations met or exceeded 2017 revised guidance
including lower costs
$ millions unless
otherwise indicated
|
|
Initial 2017
Guidance
|
|
Revised 2017
Guidance
|
2017 Year-end
Actual
|
Gold Production
(koz)
|
|
375 - 425
|
|
400 - 450
|
|
445.9
|
|
Total cash cost per
gold oz produced ($/oz)(1)(2)
|
$
|
700 - 750
|
$
|
650 - 700
|
$
|
641
|
|
AISC per gold oz
produced ($/oz)(1)(2)
|
$
|
1,150 -
1,250
|
$
|
1,050 -
1,150
|
$
|
973
|
|
Sustaining Capital
(incl. capitalized drilling)
|
$
|
125 - 137
|
$
|
100 - 135
|
$
|
124
|
|
Project
Capital
|
$
|
150 -175
|
$
|
100 - 115
|
$
|
99
|
|
Exploration
Expense
|
$
|
35 - 43
|
$
|
14 - 20
|
$
|
19
|
|
Corporate
G&A(3)
|
$
|
45 - 55
|
$
|
45 - 55
|
$
|
46
|
|
|
|
(1)
|
See "Cautionary
Note on Non-GAAP Financial Measures" at the end of this press
release.
|
(2)
|
Total cash costs and
AISC are presented net of by-product credits.
|
(3)
|
Corporate G&A
includes non-cash, stock-based compensation.
|
Silver production reflects suspension at Escobal
– The Company produced 9.9 million ounces of silver during
2017 at total cash costs of $6.15 per
silver ounce and all-in sustaining costs of $8.91 per silver ounce. Silver production
reflects the impact of the Escobal suspension, where no production
has been recorded since July
2017.
Positive cash flow and earnings – Cash flow provided
by operating activities before changes in working capital totaled
$287.0 million for 2017, despite the
ongoing suspension at Escobal in Guatemala. The Company generated positive
earnings of $81.8 million, or
$0.26 per share, for 2017. Earnings
reflected the impact of the suspension at the Escobal mine, where
no material revenues have been recorded since July 2017, and $24.9
million ($0.08 per share) in
care and maintenance costs have been incurred during the second
half of the year.
Shahuindo expansion remains on track – Construction
of leach Pad 2B continued in Q4 2017
as planned and is scheduled to be placed into production in Q3
2018. Commissioning of the 12,000 tpd crushing and agglomeration
circuit was substantially completed in early February 2018 and the production ramp-up was
initiated. Construction of the 24,000 tpd circuit has begun with
commissioning of the full 36,000 tpd plant scheduled for mid-year
2018. Of the $80 million guidance for
the crushing and agglomeration circuit, approximately $48.8 million has been spent through December 31, 2017. The project remains on
schedule and within guidance.
Bell Creek shaft expansion in-line with guidance – The
Bell Creek shaft project remains on track for commissioning in
mid-year and on track with its $80
million budget. Excavation of the third and final pilot
raise from the shaft bottom is complete and slashing of this raise
to the final dimensions has begun. Pilot raises for the underground
ore and waste bins are complete and slashing of the raises is
underway. Surface construction is focused primarily on the hoist
room and headframe. Mechanical installation of the hoists started
in early February and the headframe civil work is progressing with
a projected start of steel installation by the end of Q1 2018. Of
the $80 million guidance for the Bell
Creek shaft project, approximately $51.6
million has been spent to December
31, 2017. The project remains on schedule and within
guidance.
Strong cash position with $125.7
million at year-end – Despite the on-going
interruption of mining operations at Escobal, Tahoe ended the year
with cash and cash equivalents of $125.7
million.
Strengthened Financial Position with Amended $175 Million Revolving Credit Facility
On February 16th 2018, the Company
closed its revised revolving credit facility with its bank
syndicate. The Company now has access to a $175 million revolving credit facility plus a
$25 million accordion feature, for
total access of $200 million in
capital. The revised facility matures on July 19, 2021. This facility is structured on the
strength of Tahoe's gold business alone, and access to the facility
does not rely on, nor have covenants related to, the operation of
Escobal. The Bank of Nova Scotia
and HSBC Securities (USA) Inc. are
the co-leads for the facility.
In addition, on February 20, 2018,
the Company repaid the $35 million in
debt in Peru that was due on
April 9, 2018 from existing cash
balances. Subsequent to this repayment, the company has no debt
outstanding and approximately $8
million in capital leases.
2018 Gold Guidance and Long-term Outlook
Tahoe Resources' gold guidance for 2018 and multi-year gold
outlook is provided below. While Tahoe expects the Guatemalan
Constitutional Court to rule in favor of reinstating the Escobal
mining license based on existing legal precedent, the Company will
not be providing guidance or long-term outlook for silver
production or costs until steady operations at Escobal resume and
the export credential is issued.
2018 Gold Guidance by Mine
|
Production
(gold - koz)
|
Cash Costs
($/oz)
|
All-in
Sustaining
Costs ($/oz)
|
Project
Capital
($ millions)
|
Sustaining
Capital ($ millions)
|
Exploration ($ millions)
|
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
High
|
La Arena
|
160
|
185
|
650
|
700
|
|
950
|
|
1,050
|
|
—
|
|
—
|
|
35
|
40
|
1
|
2
|
Shahuindo
|
80
|
110
|
750
|
800
|
|
1,050
|
|
1,100
|
|
80
|
100
|
15
|
20
|
8
|
10
|
Timmins
Mines
|
160
|
175
|
800
|
850
|
|
1,050
|
|
1,150
|
|
45
|
50
|
40
|
55
|
6
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gold
total
|
400
|
475
|
725
|
775
|
|
1,000
|
|
1,100
|
|
125
|
150
|
90
|
115
|
15
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
See "Cautionary
Statement on Forward-Looking Information" and "Cautionary
Note on Non-GAAP Financial Measures" in this press
release.
|
(2)
|
All per ounce costs
are based on gold ounces recovered.
|
(3)
|
The top end of the gold
production range includes approximatively 5 thousand ounces from
Escobal.
|
(4)
|
Numbers may not
calculate due to rounding.
|
Key Highlights for 2018 Guidance:
- 2018 gold production guidance has shifted downward by 25,000
ounces at either end of the range compared to the initial 2018
guidance provided in January 2017.
This change reflects the higher risk of the growth profile related
to the timing of the commissioning of the Bell Creek shaft project
mid-year and the ramp up of the Shahuindo expansion to 36,000
tonnes per day by the end of 2018. 2018 guidance is also impacted
by the initial 144 Gap Mineral Reserve estimate issued on
September 21, 2017 which, although
increasing the Proven and Probable Mineral Reserves at the Timmins
West Mine from 233,000 to 738,000 ounces of gold, was at a lower
grade than expected.
- The production forecasts at Shahuindo and Timmins are weighted to the second half of
2018, with the commissioning of the complete crushing and
agglomeration circuit at Shahuindo and the Bell Creek shaft
expected to begin in the third quarter. The operational ramp up to
36,000 tpd and the completion of the Shahuindo expansion is
expected by the end of 2018. Production at La Arena is also
weighted in the second half of the year.
- 2018 will be a transition year and the Company anticipates
seeing higher total cash costs in 2018 than we saw in 2017 at a
range of $725 to $775 per ounce. This increase is being
driven by the lower grade in the 144 Gap deposit, along with more
ounces coming from Shahuindo, both of which have higher cost
profiles than La Arena. As expected, the lower cost La Arena will
make up a smaller proportion of total production in 2018 than in
previous years which will also impact costs. Tahoe is continuously
focused on finding ways to increase the profitability of all its
mines and lower costs, however this focus is a priority in 2018 at
the Timmins operations given the
lower grade profile.
- Higher unit costs per ounce of gold produced in 2018 are
expected as a result of lower anticipated production levels at La
Arena, the increased proportion of production from Shahuindo, as
well as a stronger forecasted Canadian dollar impacting the
Timmins operations.
- 2018 reflects peak project capital expenditure levels to
complete the two near-term expansion projects - with the Shahuindo
expansion (including the 36,000 tpd crushing and agglomeration
plant) accounting for approximately 65% of the total and the
remainder the Bell Creek shaft project. Project capital at the
Shahuindo expansion is associated with the completion of the
crushing and agglomeration plant, process plant expansion, leach
Pad 2B (stated as sustaining capital
in previously issued guidance), waste dumps and the power
substation. Project capital in Canada relates primarily to the Bell Creek
shaft and tailings pond expansion. Approximately $60 million in project capital was deferred from
2017 and is now expected to be spent in 2018. Despite this shift in
timing of spending, both projects remain within their original
guidance.
- Sustaining capital expenditures in 2018 are targeted at
$90 to $115
million for the gold operations. Canada will account for approximately 45% of
total gold sustaining capital expenditures in 2018, while La Arena
is approximately 30%. A significant proportion of these
expenditures relate to the underground drilling and development in
Canada, as well as leach pad and
waste dump construction at La Arena.
- Exploration expenses (excluding capitalized drilling in the
mines) are anticipated to be between $15 and $25 million
in 2018, including drilling programs designed to expand Mineral
Resources at existing operations and to advance longer-term
projects in Canada and
Peru.
2018 gold cost guidance was calculated based on certain
commodity and currency assumptions. The table below includes a
sensitivity of the impact of a change in these assumptions on total
cash costs and all-in sustaining costs:
|
|
2018
Guidance
|
Change
(+/-)
|
Impact
(+/-)
|
Commodity
assumptions
|
|
|
|
|
|
|
|
Silver
($/oz)
|
|
|
$17.50
|
|
$1.00/oz
|
|
nil
|
Diesel
(US$/gal)
|
|
|
$2.40
|
|
10%
|
|
$6/oz gold
|
Currency
assumptions
|
|
|
|
|
|
|
|
CAD/USD
|
|
|
$1.20
|
|
1%
|
|
$9/oz gold
|
Peruvian
sol/USD
|
|
|
3.3
|
|
1%
|
|
$2/oz gold
|
Long-term outlook
As outlined below, the Company is on track to achieve annual
gold production of over a half million ounces in 2019. At that
time, total cash costs net of by-product credits and all-in
sustaining costs per ounce of gold produced are also projected to
improve.
Multi-Year Gold Guidance
|
|
|
2018
|
|
2019
|
|
2020
|
Gold ounces produced
(000's)
|
|
|
|
400-475
|
|
500-550
|
|
500-550
|
|
|
|
|
|
|
|
|
|
Total cash costs per
ounce gold produced net of by-product credits
|
|
|
$
|
725-775
|
$
|
650-700
|
$
|
650-750
|
All-in sustaining
costs per ounce gold produced net of by-product credits
|
|
|
$
|
1,000-1,100
|
$
|
950-1,050
|
$
|
900-1,000
|
|
|
|
|
|
Total corporate
G&A ($millions)
|
|
|
$
|
45-55
|
$
|
45-55
|
$
|
45-55
|
Exploration
($millions)
|
|
|
$
|
15-25
|
$
|
15-25
|
$
|
15-25
|
Sustaining capital -
gold ($millions)
|
|
|
$
|
90-115
|
$
|
100-125
|
$
|
80-100
|
Project capital
($millions)
|
|
|
$
|
125-150
|
$
|
50-70
|
$
|
0-10
|
|
|
(1)
|
See "Cautionary
Statement on Forward-Looking Information" and "Cautionary
Note on Non-GAAP Financial Measures" in this press
release.
|
(2)
|
Commodity and
currency price assumptions used in the calculation of 2019 and 2020
guidance are the same as those used in the calculation of 2018
guidance. Refer to the "2018 Guidance by mine" section of this
press release.
|
(3)
|
The top end of the
gold production range includes approximately 5,000 ounces from
Escobal in 2018.
|
(4)
|
All per ounce costs
are based on gold ounces recovered.
|
(5)
|
Guidance does not
include inflation adjustments.
|
Key Highlights for Long-term Outlook:
- The Company anticipates that a favorable Constitutional Court
ruling would enable it to resume operations at the Escobal mine and
that, over a period of 3 to 6 months, it will be able to ramp up
its annual silver production to 2014-2016 levels.
- The Company's goal is to reach and sustain 18-21 million ounces
of silver production and 500-550 thousand ounces of gold production
annually. Meeting this goal for gold production depends on
exploration success in delivering additional resources and reserves
to replace those mined annually.
- Sustaining capital expenditures for the gold segment are
targeted at $90 to $115 million for 2018, $100 - $125 million
in 2019 and $80 to $100 million in 2020. Once production is restored
to normal levels at the Escobal mine, the Company anticipates
annual sustaining capital expenditures for the silver segment
targeted at $30 to $40 million.
- Although Tahoe expects to continue its evaluation of the La
Arena II project with the intent of advancing the project to the
prefeasibility or feasibility stage at the appropriate time, the
timeline and estimated capital required to progress the project to
the next stage are under review. As such, no additional spending
has been considered in the multi-year guidance. Until the Company
decides to commence the development of any significant new
projects, growth capital expenditures will be substantially
complete in 2019.
- Exploration expenditures are likely to remain between
$15 and $25
million annually over the next two years as the Company
works to advance its exploration targets to increase gold Mineral
Resources and to convert existing gold Mineral Resources into
Mineral Reserves. With exploration programs being largely success
driven, future expenditure targets will be developed following
completion of 2018 drilling programs.
Mineral Resources and Mineral Reserves Update
On February 15, the Company
released updated Mineral Resources and Mineral Reserves effective
January 1, 2018, including updated
resources for the La Arena II project and increased resources and
reserves at Shahuindo that resulted from exploration successes at
the La Chilca, San Jose, San Lorenzo and El Sauce areas proximal to
the current Shahuindo pit. The Company's updated Mineral Reserves
and Mineral Resources are summarized by the following tables:
TOTAL MINERAL
RESERVES AS OF JANUARY 1, 2018
|
Reserve
Classification
|
Gold
(koz)
|
Silver
(koz)
|
Copper
(mlbs)
|
Lead
(ktonnes)
|
Zinc
(ktonnes)
|
Proven
|
1,356
|
54,288
|
0
|
26
|
44
|
Probable
|
2,366
|
233,345
|
0
|
170
|
276
|
Proven +
Probable
|
3,721
|
287,633
|
0
|
196
|
320
|
TOTAL MINERAL
RESOURCES AS OF JANUARY 1, 2018
|
Resource
Classification
|
Gold
(koz)
|
Silver
(koz)
|
Copper
(mlbs)
|
Lead
(ktonnes)
|
Zinc
(ktonnes)
|
Measured
|
3,101
|
74,911
|
1,279
|
33
|
58
|
Indicated
|
10,904
|
327,642
|
4,511
|
224
|
369
|
Measured +
Indicated
|
14,005
|
402,552
|
5,790
|
256
|
427
|
Inferred
|
8,816
|
57,726
|
349
|
4
|
8
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
(2)
|
Please refer to the
Technical Disclosure of this press release for inputs and
assumptions used for the Mineral Resource and Mineral Reserve
estimates for each deposit.
|
For full details, please refer to the February 15, 2018 press release and available on
the Company's website at www.tahoeresources.com. Details of Mineral
Resource and Mineral Reserve estimates for each operating mine and
for each exploration/development project are included in the
Technical Information section of this press release and in the
MD&A.
La Arena II Preliminary Economic Assessment
On February 20th, the Company
released a new NI 43-101 technical report for the La Arena property
which includes an update of the existing La Arena Mine oxide gold
heap leach operation and a Preliminary Economic Assessment ("PEA")
of the La Arena II copper-gold porphyry project.
Tahoe expects to continue its evaluation of the La Arena II
project with the intent of advancing the project to the
prefeasibility or feasibility stage at the appropriate time. The
timeline and estimated capital required to progress the project to
the next stage are under review by management. The project will be
evaluated in the context of existing operations and pipeline
opportunities. Tahoe intends to progress the project responsibly
and to maximize value for its shareholders.
For full details, please refer to the February 20, 2018 press release and the NI 43-101
technical report which is available on the Company's website at
http://www.tahoeresources.com/operations/la-arena-mine/ and on
SEDAR at www.sedar.com and EDGAR (www.sec.gov).
UN Global Compact and 2018 CSR Initiatives
On February 5, 2018, Tahoe
announced that it has joined the United Nations Global Compact
(UNGC), the world's largest corporate sustainability initiative. As
an official participant of the UNGC, Tahoe joins other
international businesses, including a number of industry-leading
mining companies, in committing to align its strategies and
operations with the ten principles of the UNGC on human rights,
labor, environment and anti-corruption, and take actions that
advance these societal goals. As part of its commitment, Tahoe will
make the UN Global Compact and its principles part of the strategy,
policy, culture and day-to-day operations of the company, and
continue to engage collaboratively on programming that advances the
UN Sustainable Development Goals. Tahoe will also participate
in the Global Compact's Canada Local Network to work with other
companies, with the aim to scale the impact of sustainability
efforts on a global level.
Guatemala Update
Update on Escobal mining license and export credential
- On July 5, 2017, the Company
was notified that the Supreme Court of Guatemala issued a temporary decision to
provisionally suspend the Escobal mining license of Minera San Rafael ("MSR") in response to an
action brought by CALAS, an anti-mining NGO, against the Ministry
of Energy and Mines ("MEM"). On September
10, 2017, the Guatemalan Supreme Court issued a definitive
decision that reinstated the Escobal mining license. The ruling
also ordered MEM to consult with the Xinka indigenous communities
within certain geographic areas within 12 months. The ruling allows
Escobal to restart operations immediately and to continue to
operate during the consultation process. Although Tahoe believes
that MEM complied with ILO Convention 169 before it issued the
Escobal license, it will fully support MEM in any of its future
indigenous engagement to the extent permitted.
CALAS and other interested parties appealed the Supreme Court's
decision reinstating the Escobal mining license to the
Constitutional Court, the highest court in Guatemala, which heard the matter on
October 25, 2017. According to
Guatemalan law, the Constitutional Court was required to have
issued its ruling within 5 calendar days of the public hearing,
however, the Constitutional Court has yet to rule.
In June 2017, the Company filed
its annual request to renew the export credential with MEM.
However, MEM did not renew the credential because its renewal had
become contingent on the Supreme Court's reinstatement of the
Escobal mining license. The credential therefore expired in
August 2017. After the Supreme Court
reinstated the mining license in September
2017, MEM publicly stated to local press that the export
credential could be legally renewed. However, contrary to such
public declaration, in December MEM indicated in a written
communication to MSR that it will not renew the credential given
the pending ruling from the Constitutional Court. The Company
expects that MEM will renew the export credential upon a favorable
ruling of the Constitutional Court on the appeal reinstating the
license.
Update on Guatemala Road Block - Since June 7, 2017, a group of protesters near the town
of Casillas has blocked the municipal road that connects
Guatemala City to San Rafael Las
Flores and the Escobal mine. Operations were reduced between June 8 and June 19 to conserve fuel and
were further curtailed on June
19.
While some of the protestors come from Casillas, which is 16
kilometers from the mine, many more are from outside the
municipality. The Company has reason to believe that the blockade
is politically motivated and is being substantially funded by
anti-mining groups.
MSR representatives have been pursuing engagement with community
leaders, indigenous groups, government agencies, and international
mediation experts to positive effect. The Company's dialogue
process is making headway in bringing communities together with an
aim to peaceably resolve the roadblock.
Escobal Workforce Reduction - Tahoe has been committed to
maintaining Escobal's full workforce since the July 5, 2017 mining license
suspension. Given the delay and the inability of the Company
to resume mining operations, the Company terminated 250 Minera San
Rafael employees on January 15, 2018.
Prior to the license suspension, Minera San
Rafael employed 1,030 people, 97% of whom are Guatemalan and
50% of whom are from the Santa Rosa region.
Despite this difficult decision, Tahoe remains optimistic that
based on legal precedent, the Constitutional Court will issue a
favorable ruling reinstating the mining license and that Escobal
will resume operations. At such time, Tahoe will seek to
restore its workforce.
Assuming that the Supreme Court ruling is confirmed by the
Constitutional Court and the export credential is renewed, the
Company anticipates it will take approximately one month to resume
production at Escobal. Once the mine resumes steady operations for
a period of time, the Company will seek to establish guidance
outlook for Escobal.
Conference Call
Tahoe's senior management will host a conference call and
webcast to discuss the Q4 2017 and year-end 2017 results on
Friday, February 23, 2018 at
10:00 a.m. ET (7:00 a.m. PT).
Dial-in:
1-800-319-4610 (toll free from Canada and the U.S.)
+1-604-638-5340 (from outside Canada and the U.S.)
The webcast will be available on the Company's website at
http://www.tahoeresources.com/investor-relations/ as will a
recording of the call later in the day. Complete financial results
for Q4 2017 and year-end 2017 including the Company's management
discussion and analysis and other filings will be posted on SEDAR
(www.sedar.com) and EDGAR (www.sec.gov) and on the Company's
website.
The Company has filed its 2017 Annual Report on Form 40-F with
the United States Securities Exchange Commission on EDGAR at
www.sec.gov/edgar on February 22,
2018. Copies of the Company's financial statements are
available through the Company's website at www.tahoeresources.com.
Hard copies may be requested, free of charge, by emailing
investors@tahoeresources.com.
About Tahoe Resources Inc.
Tahoe's strategy is to responsibly operate mines to world
standards and to develop high quality precious metals assets in the
Americas. Tahoe is a member of the S&P/TSX Composite and TSX
Global Mining indices and the Russell 3000 on the NYSE. The Company
is listed on the TSX as THO and on the NYSE as TAHO.
Qualified Person Statement
Technical information in this press release has been approved by
Charlie Muerhoff, Vice President
Technical Services, Tahoe Resources Inc., a Qualified Person as
defined by NI 43-101.
For further information, please contact:
Tahoe Resources Inc.
Alexandra Barrows, Vice President
Investor Relations
investors@tahoeresources.com
Tel: 775-448-5812
TECHNICAL DISCLOSURE
Technical information in this press release has been approved by
Charlie Muerhoff, Vice President
Technical Services, Tahoe Resources Inc., a Qualified Person as
defined by NI 43-101.
Mineral Resource estimates reported herein have been classified
as Measured, Indicated or Inferred based on the confidence of the
input data, geological interpretation and grade estimation
parameters. Mineral Reserve estimates reported herein are based on
known inputs that include metallurgical performance,
taxation/royalty obligations, geologic and geotechnical
characterization, operational costs, and other economic parameters.
The company is not currently aware of any known factors that are
reasonably likely to have a negative material impact on the
Company's Mineral Resources or Mineral Reserves. The Mineral
Resource and Mineral Reserve estimates were prepared in accordance
with NI 43-101 and classifications adopted by the CIM Council.
Mineral Resources are inclusive of Mineral Reserves.
The basis of the Mineral Resource and Mineral Reserve estimates
for the Escobal mine is from Escobal Mine Guatemala NI 43-101
Feasibility Study, dated November 5,
2014 with effective dates of January
23, 2014 for the Mineral Resource estimate and July 1, 2014 for the Mineral Reserve estimate.
Mineral Resources and Mineral Reserves reported at January 1, 2018 were calculated by subtracting
mine depletion volumes from the Mineral Resource and Mineral
Reserve estimates stated in the aforementioned technical
report.
The basis of the Mineral Resource and Mineral Reserve estimates
for the La Arena mine and the Mineral Resource estimate for the La
Arena II project is from Technical Report on the La Arena
Project, Peru, dated
February 20, 2018 with an effective
date of January 1, 2018.
The basis of the Mineral Resource and Mineral Reserve estimate
for the Shahuindo mine is from the NI 43-101 Technical Report on
the Shahuindo Mine, Cajabamba, Peru, dated January
25, 2016, with effective dates of April 15, 2015 for the Mineral Resource estimate
and November 1, 2015 for the Mineral
Reserve estimate. Mineral Resources and Mineral Reserves reported
at January 1, 2018 were calculated by
applying the mine topographic surface at January 1, 2018 to an updated Mineral Resource
estimate completed July 1, 2017.
The basis of the Timmins West Mine Mineral Resources and Mineral
Reserves is from NI 43-101 Technical Report, Timmins West Mine,
Timmins, Ontario, Canada,
dated September 20, 2017 with an
effective date of May 15, 2017.
Mineral Resources and Mineral Reserves for the Timmins West Mine
reported at January 1, 2018 were
calculated by subtracting mining depletion through the end of 2017
from an updated resource model completed in May 2017.
The basis of the Mineral Resource and Mineral Reserve estimates
for the Bell Creek mine is from NI 43-101 Technical Report,
Updated Mineral Reserve Estimate for Bell Creek Mine, Hoyle
Township, Timmins, Ontario,
Canada, dated March 27,
2015 with an effective date of December 31, 2014. Mineral Resources and Mineral
Reserves reported at January 1, 2018
were calculated by subtracting mining depletion through the end of
2017 from an updated resource model completed in May 2017.
The Mineral Resource estimate for the Whitney project is from Technical Report
and Resource Estimate on the Upper Hallnor, C-Zone, and Broulan
Reef Deposits, Whitney Gold Property, Timmins Area, Ontario, Canada, dated February 26, 2014 with an effective date of
January 14, 2014.
The Mineral Resource estimate for the Gold River project is from
Technical Report on the Update of Mineral Resource Estimate for
the Gold River Property, Thorneloe Township, Timmins, Ontario, Canada, dated
April 5, 2012 with an effective date
of January 17, 2012.
The Mineral Resource estimate for the Juby project is from
Technical Report on the Updated Mineral Resource Estimate for
the Juby Gold Project, Tyrrell Township, Shining Tree Area,
Ontario, dated February 24, 2014 with an effective date of
February 24, 2014.
The Mineral Resource estimate for the Fenn-Gib project is from
Fenn-Gib Resource Estimate Technical Report, Timmins Canada, dated December 23, 2011 with an effective date of
November 17, 2011.
The Marlhill Mineral Resource estimate is from Technical
Report on the Marhill Project, Hoyle Township, Timmins, Ontario, Canada, dated
March 1, 2011 with an effective date
of March 1, 2011.
The Vogel/Schumacher Mineral Resource estimate is from
Technical Report on the Initial Mineral Resource Estimate for
the Vogel/Schumacher Deposit, Bell Creek Complex, Hoyle Township,
Timmins, Ontario, Canada,
dated June 14, 2011. The effective
date of the Mineral Resource estimate is May
2, 2011.
Escobal Mine
The Escobal Mine is an underground silver-gold-lead-zinc mine
with mineral recovery by differential flotation producing precious
metal-rich lead concentrates and zinc concentrates. The mine is
located in southeast Guatemala,
approximately 40 kilometres east-southeast of Guatemala City and 2 kilometres east of the
town of San Rafael las Flores in the Department of Santa Rosa.
Mining at Escobal is done by transverse longhole stoping methods
with lesser longitudinal longhole stoping. The nominal production
rate at the Escobal Mine is 4,500 tonnes/day.
The Mineral Resource estimate for the Escobal Mine, as of
January 1, 2018, is summarized
below:
ESCOBAL MINERAL
RESOURCES
|
Classification
|
Tonnes
(M)
|
Silver
(g/t)
|
Gold
(g/t)
|
Lead
(%)
|
Zinc
(%)
|
Silver
(Moz)
|
Gold
(koz)
|
Lead
(kt)
|
Zinc
(kt)
|
Measured
|
4.8
|
374
|
0.33
|
0.68
|
1.20
|
58
|
51
|
33
|
58
|
Indicated
|
36.3
|
271
|
0.29
|
0.62
|
1.02
|
317
|
337
|
224
|
369
|
Measured +
Indicated
|
41.1
|
283
|
0.29
|
0.62
|
1.04
|
375
|
388
|
256
|
427
|
Inferred
|
1.9
|
180
|
0.90
|
0.22
|
0.42
|
11
|
54
|
4
|
8
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Mineral Resources are reported using a 100 g/t silver-equivalent
cut-off grade. Silver-equivalent calculated using metal prices of
$20.00/oz silver, $1,300/oz gold, $1.00/lb lead and $1.10/lb zinc. The Escobal Mineral Resource
estimate at January 1, 2018 was
calculated by subtracting mine depletion volumes (tonnes and
contained metal) from the Mineral Resource estimate stated in the
Escobal Feasibility Study.
The Mineral Reserve estimate for the Escobal Mine, as of
January 1, 2018, is summarized
below:
ESCOBAL MINERAL
RESERVES
|
Classification
|
Tonnes
(M)
|
Silver
(g/t)
|
Gold
(g/t)
|
Lead
(%)
|
Zinc
(%)
|
Silver
(Moz)
|
Gold
(koz)
|
Lead
(kt)
|
Zinc
(kt)
|
Proven
|
2.5
|
486
|
0.42
|
1.02
|
1.75
|
40
|
34
|
26
|
44
|
Probable
|
22.1
|
316
|
0.34
|
0.77
|
1.25
|
225
|
244
|
170
|
276
|
Proven +
Probable
|
24.7
|
334
|
0.35
|
0.79
|
1.30
|
264
|
278
|
196
|
320
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Mineral Reserves as of January 1,
2018 were calculated by applying an updated mine plan to the
Mineral Resource estimate stated in the Escobal Feasibility Study
taking into account mining depletion through the end of 2017.
Cut-off grades to define the January 1,
2018 Mineral Reserves were calculated from the NSR value of
the resource model blocks contained within the life-of-mine plan
minus the production cost to account for variability in mining
method and metallurgical response. Metal prices used to determine
the NSR value are $20.00/oz silver,
$1,300/oz gold, $1.00/lb lead and $1.10/lb zinc. Actual mining, processing and
general and administrative (G&A) costs, metallurgical
performance and smelter contract rates from the Escobal Mine were
used to derive operating costs used in the reserve calculation.
Proven and Probable Mineral Reserves include approximately 33%
dilution that takes into account internal and external mining
dilution and dilution from paste backfill where applicable.
Subeconomic material internal to the stope designs and external
mining dilution account for approximately 30% of the dilution total
and paste backfill dilution accounts for about 3% of the dilution
total. Mineral Resources within the mine plan classified as
Inferred have been given metal grades of zero for the calculation
of Mineral Reserves.
La Arena Mine
The La Arena Mine is an open pit, run-of-mine heap leach oxide
gold mine located in northern Peru, 480 kilometres north-northwest of
Lima, Peru, in the Huamachuco
District, Department of La Libertad. The current mining rate is
approximately 45,000 tonnes of ore per day.
The Mineral Resource estimate for the La Arena Mine, as of
January 1, 2018, is summarized
below:
LA ARENA MINE
MINERAL RESOURCES
|
Material
Type
|
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Oxide
|
Measured
|
0.3
|
0.38
|
3.3
|
|
Indicated
|
49.6
|
0.40
|
640.2
|
|
Measured +
Indicated
|
49.9
|
0.40
|
643.5
|
|
Inferred
|
0.4
|
0.32
|
4.3
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
The oxide resource is reported at a cut-off grade of 0.10 g/t Au
within an optimized undiscounted cash flow pit shell using a metal
price of $1,400/oz Au and actual
costs experienced at the La Arena Mine. The La Arena Mine Mineral
Resource estimate at January 1, 2018
was calculated by applying the mine topographic surface at
January 1, 2018 to an updated Mineral
Resource estimate completed in mid-year 2017.
The Mineral Reserve estimate for the La Arena Mine, as of
January 1, 2018, is summarized
below:
LA ARENA MINE
MINERAL RESERVES
|
Material
Type
|
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Oxide
|
Proven
|
0.3
|
0.38
|
3
|
|
Probable
|
43.7
|
0.40
|
565
|
|
Proven +
Probable
|
44.0
|
0.40
|
568
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Oxide Mineral Reserves for the La Arena Mine are reported at a
0.10 g/t gold cut-off grade and have been constrained to the final
pit design based on an optimized pit shell using $1,200/oz gold and actual operating costs
incurred. The Mineral Reserves were calculated from Measured and
Indicated oxide Mineral Resources. As the resource block model is a
diluted block model, no additional dilution or mining losses were
applied. The life-of-mine strip ratio is 1.9 (waste:ore).
Shahuindo Mine
The Shahuindo Mine is an open pit heap leach oxide gold
operation which is currently in production. The mine is located in
northern Peru, approximately 970
kilometers by road north-northwest of Lima. The life-of-mine mining schedule at the
Shahuindo Mine consists of mining higher grade starter pits
providing run-of mine material to the leach pads through mid-2018;
after which, the mine plan is designed to deliver ore to a crushing
and agglomeration circuit with lesser amounts of run-of-mine
material delivered directly to the leach pads. The average mining
rate in 2017 was approximately 17,800 tonnes of ore per day, with
an average of 14,900 tonnes of ore per day placed on the leach
pads. Over the course of the next two years, mining is projected to
ramp up to a nominal 36,000 tonnes of ore per day.
The Mineral Resource estimate for Shahuindo, as of January 1, 2018, is summarized below:
SHAHUINDO MINERAL
RESOURCES
|
Material
Type
|
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Silver
(g/t)
|
Gold
(koz)
|
Silver
(koz)
|
Oxide
|
Measured
|
89.1
|
0.47
|
5.9
|
1,358
|
16,807
|
|
Indicated
|
67.6
|
0.42
|
5.1
|
921
|
11,122
|
|
Measured +
Indicated
|
156.7
|
0.45
|
5.5
|
2,278
|
27,929
|
|
Inferred
|
13.4
|
0.41
|
4.5
|
177
|
1,925
|
Sulfide
|
Inferred
|
97.4
|
0.74
|
14.4
|
2,323
|
45,055
|
All
Material
|
Measured
|
89.1
|
0.47
|
5.9
|
1,358
|
16,807
|
|
Indicated
|
67.6
|
0.42
|
5.1
|
921
|
11,122
|
|
Measured +
Indicated
|
156.7
|
0.45
|
5.5
|
2,278
|
27,929
|
|
Inferred
|
110.8
|
0.70
|
13.2
|
2,500
|
46,980
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
The Shahuindo Mineral Resources are reported using a gold
cut-off grade for oxide material of 0.15 g/t. Oxide resources are
reported within a $1,400/oz gold
optimized pit shell. The sulfide Mineral Resources at Shahuindo are
classified entirely as Inferred due to limited metallurgical
characterization and wider drill spacing than in the oxide portion
of the deposit. There have been no economic or mining studies of
the sulfide portion of the Shahuindo deposit completed to date; the
Inferred sulfide Mineral Resource is reported at a 0.5 g/t
gold-equivalent cut-off grade using a silver-to-gold ratio of
80.
The Mineral Reserve estimate for Shahuindo, as of January 1, 2018, is summarized below:
SHAHUINDO MINERAL
RESERVES
|
Material
Type
|
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Silver
(g/t)
|
Gold
(koz)
|
Silver
(koz)
|
Oxide
|
Proven
|
77.9
|
0.48
|
5.9
|
1,203
|
14,756
|
|
Probable
|
49.9
|
0.44
|
5.2
|
704
|
8,384
|
|
Proven +
Probable
|
127.8
|
0.46
|
5.6
|
1,907
|
23,140
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Oxide Mineral Reserves were reported at a 0.18 g/t gold cut-off
grade and have been constrained to the final pit design based on an
optimized pit shell using $1,200/oz
gold and actual operating costs incurred. The Mineral Reserves were
calculated from Measured and Indicated oxide Mineral Resources only
and include 5% dilution and mining losses of 2%. The life-of-mine
strip ratio is 1.1 (waste:ore). There are no sulfide Mineral
Reserves reported for Shahuindo.
In 2017, exploration drilling focused on identification of
mineralized zones peripheral to the current Shahuindo pit with the
potential to contribute to an expansion of the Mineral Resources
and Mineral Reserves. A total of 17,500 metres were drilled during
the year testing the San José, San Lorenzo, San Jose and La Chilca
near-pit targets exploration success at these proximal targets
replaced gold ounces produced in 2017 and added approximately 50
thousand additional gold ounces to the 2018 Mineral Reserve.
Timmins West Mine
The Timmins West Mine is an underground gold mine located
approximately 19 kilometres west of the city of Timmins, Ontario and is comprised of the
Timmins, Thunder Creek and 144 Gap
deposits. Production comes from a combination of ore development
and transverse and longitudinal longhole stoping. In 2017, the
average mining rate at the Timmins West Mine was approximately
2,800 tonnes of ore per day. Ore from the Timmins West Mine is
trucked to the Company's Bell Creek Mill for processing.
The Mineral Resource estimate for the Timmins West Mine, as of
January 1, 2018, is summarized
below:
TIMMINS WEST MINE
MINERAL RESOURCES
|
Deposit
|
Classification
|
Tonnes
(k)
|
Gold
(g/t)
|
Gold
(koz)
|
Timmins
|
Measured
|
0
|
0
|
0
|
|
Indicated
|
1,256
|
4.46
|
180
|
|
Measured &
Indicated
|
1,256
|
4.46
|
180
|
|
Inferred
|
357
|
4.32
|
50
|
Thunder
Creek
|
Measured
|
0
|
0
|
0
|
Indicated
|
1,107
|
3.39
|
121
|
|
Measured &
Indicated
|
1,107
|
3.39
|
121
|
|
Inferred
|
39
|
2.61
|
3
|
144 Gap
|
Measured
|
247
|
4.86
|
39
|
|
Indicated
|
4,751
|
3.82
|
584
|
|
Measured &
Indicated
|
4,998
|
3.88
|
623
|
|
Inferred
|
695
|
3.60
|
81
|
Total
Timmins
West Mine
|
Measured
|
247
|
4.86
|
39
|
Indicated
|
7,114
|
3.87
|
885
|
|
Measured &
Indicated
|
7,361
|
3.90
|
923
|
|
Inferred
|
1,091
|
3.80
|
133
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Mineral Resources for the Timmins West Mine as of January 1, 2018 were reported by subtracting
mining depletion through the end of 2017 from an updated resource
model completed on May 15, 2017. The
Timmins West Mine Mineral Resources are reported as in situ
resources using a gold cut-off grade of 1.5 g/t.
The Mineral Reserve estimate for the Timmins West Mine, as of
January 1, 2018, is summarized
below:
TIMMINS WEST MINE
MINERAL RESERVES
|
Deposit
|
Classification
|
Tonnes
(k)
|
Gold
(g/t)
|
Gold
(koz)
|
Timmins
|
Proven
|
0
|
0
|
0
|
|
Probable
|
984
|
3.59
|
114
|
|
Proven +
Probable
|
984
|
3.59
|
114
|
Thunder
Creek
|
Proven
|
0
|
0
|
0
|
Probable
|
466
|
2.89
|
43
|
|
Proven +
Probable
|
466
|
2.89
|
43
|
144 Gap
|
Proven
|
407
|
3.61
|
47
|
|
Probable
|
4,605
|
3.03
|
449
|
|
Proven +
Probable
|
5,012
|
3.08
|
496
|
Total
Timmins
West Mine
|
Proven
|
407
|
3.61
|
47
|
Probable
|
6,055
|
3.11
|
606
|
|
Proven +
Probable
|
6,462
|
3.15
|
654
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Mineral Reserves were calculated by applying the life-of-mine
plan at January 1, 2018 to the
Measured and Indicated Mineral Resources using a gold price of
$1,275/oz and a gold cut-off grade of
2.0 g/t. Mineral Reserves are supported by a mine plan that
features variable stope thicknesses designed on the updated Mineral
Resource model using operating costs of $78.64/tonne ore with 95% mining recovery,
external dilution of 15% and metallurgical recovery of 97%. Mineral
Resources are inclusive of Mineral Reserves.
Bell Creek Mine
The Bell Creek Mine is an underground gold mine and processing
facility located in Hoyle Township, Porcupine Mining Division,
approximately 20 kilometres by road northeast of Timmins, Ontario. Narrow vein longitudinal
longhole stoping with unconsolidated rock fill is the primary
mining method used at the Bell Creek Mine. The processing plant
consists of a one-stage crushing circuit, ore storage dome,
one-stage grinding circuit with gravity recovery, followed by
pre-oxidation and cyanidation of the slurry with carbon-in-leach
(CIL) and carbon-in-pulp (CIP) recovery.
The Mineral Resource estimate for the Bell Creek deposit, as of
January 1, 2018, is summarized
below:
BELL CREEK MINERAL
RESOURCES
|
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Measured
|
1.2
|
4.43
|
167
|
Indicated
|
4.1
|
4.27
|
569
|
Measured &
Indicated
|
5.3
|
4.31
|
736
|
Inferred
|
3.0
|
4.36
|
415
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Mineral Resources for the Bell Creek deposit as of January 1, 2018 were reported by subtracting
mining depletion through the end of 2017 from an updated resource
model completed in May 2017. The Bell
Creek Mineral Resources are reported as in situ resources
using a gold cut-off grade of 2.2 g/t.
The Mineral Reserve estimate for the Bell Creek deposit, as of
January 1, 2018, is summarized
below:
BELL CREEK MINERAL
RESERVES
|
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Proven
|
0.5
|
3.90
|
68
|
Probable
|
1.9
|
4.12
|
246
|
Proven &
Probable
|
2.4
|
4.07
|
315
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Mineral Reserves were calculated by applying the life-of-mine
plan as of January 1, 2018 to the
Measured and Indicated Mineral Resources using a long-term gold
price of $1,275/oz and reported at a
gold cut-off grade of 2.3 g/t. Mineral Reserves are supported by a
mine plan that features variable stope thicknesses designed on the
Mineral Resource model using operating costs of $87.42/tonne ore with 95% mining recovery,
external dilution of 16% and metallurgical recovery of 94.5%.
Mineral Resources are inclusive of Mineral Reserves.
EXPLORATION AND DEVELOPMENT PROPERTIES
La Arena II
The La Arena II project is a porphyry-hosted copper and gold
deposit located adjacent to, and east of, the La Arena oxide gold
mine currently in production. The Mineral Resource estimate for the
La Arena II project, effective January 1,
2018, is summarized below:
LA ARENA II
MINERAL RESOURCES
|
Material
Type
|
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Copper
(%)
|
Gold
(koz)
|
Copper
(Mlbs)
|
Oxide
|
Measured
|
5.9
|
0.27
|
0
|
51
|
0
|
|
Indicated
|
43.2
|
0.28
|
0
|
388
|
0
|
|
Meas +
Ind
|
49.1
|
0.28
|
0
|
440
|
0
|
|
Inferred
|
41.3
|
0.26
|
0
|
349
|
0
|
Sulfide
|
Measured
|
149.7
|
0.25
|
0.39
|
1,214
|
1,279
|
|
Indicated
|
543.5
|
0.23
|
0.38
|
3,984
|
4,511
|
|
Meas +
Ind
|
693.2
|
0.23
|
0.38
|
5,197
|
5,790
|
|
Inferred
|
50.4
|
0.21
|
0.31
|
344
|
349
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
The La Arena II Mineral Resources are reported within an
optimized undiscounted cash flow pit shell using metal prices of
$4.00/lb copper and $1,500/oz gold and operating cost parameters
developed for the La Arena II PEA. Oxide Mineral Resources are
reported using a 0.10 g/t gold cut-off grade; sulfide Mineral
Resources are reported using a 0.18% copper-equivalent cut-off
grade. There are no Mineral Reserves reported for La Arena II.
The 2018 La Arena II PEA supersedes the 2015 feasibility study
completed by Rio Alto. The prior
study included Probable Mineral Reserves of 63.1 million tonnes at
average grades of 0.43% copper and 0.31 g/t gold containing 579
million pounds of copper and 633 thousand ounces of gold. There are
no Mineral Reserves reported in the 2018 PEA as the scope of the
project has changed significantly with a refined geologic model, an
updated Mineral Resource estimate, increased mining and processing
rates, modified processing scheme, and the use of alternative
tailings disposal facilities. While a portion of the data generated
for the 2015 feasibility study provides support for some of the
assumptions incorporated into the 2018 PEA, much of the mining,
processing, geotechnical, hydrological, social, and capital and
operating cost parameters used in the 2015 study are no longer
applicable to the project as envisioned in the 2018 PEA.
WHITNEY
The Whitney gold property is
located in the township of Whitney, within the city limits of
Timmins, Ontario. The property is
held in joint venture by Tahoe (79%) and Goldcorp (21%), with Tahoe
as operator. Gold mineralization at Whitney is broadly classified as mesothermal
quartz-carbonate vein deposits within the Archean-age Abitibi
Greenstone Belt.
The Mineral Resource estimate for Whitney, with an effective date of
January 24, 2014, is summarized
below:
WHITNEY MINERAL
RESOURCES
|
Resource
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Measured
|
1.0
|
7.02
|
218
|
Indicated
|
2.3
|
6.77
|
491
|
Measured +
Indicated
|
3.2
|
6.85
|
709
|
Inferred
|
1.0
|
5.34
|
171
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
The Whitney Mineral Resource estimate is reported using a gold
cut-off grade of 3.0 g/t, which was derived using a gold price of
$1,200/oz, operating costs of
$96.75/tonne milled, mining dilution
of 20% and process recovery of 95%. There are no Mineral Reserves
reported for the Whitney
property.
GOLD RIVER
The Gold River gold property is located approximately 20
kilometres southwest of the city of Timmins, Ontario. The Gold River deposit is
situated in the western portion of the Archean-age Abitibi
Greenstone Belt, hosted in metasedimentary rocks of the Porcupine
assemblage. Mineralization generally occurs as steeply-dipping
irregular lenses which vary from less than one metre to locally
five metres in width.
The Mineral Resource estimate for the Gold River deposit, with
an effective date of January 17,
2012, is summarized below:
GOLD RIVER MINERAL
RESOURCES
|
Resource
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Indicated
|
0.7
|
5.29
|
117
|
Inferred
|
5.3
|
6.06
|
1,028
|
The Gold River Mineral Resource estimate is reported using a
gold cut-off grade of 2.0 g/t, which was derived using a gold price
of $1,200/oz, operating costs of
$82.00/tonne milled and process
recovery of 85%. A minimum thickness of two metres was used to
constrain the reported Mineral Resources There are no Measured
Mineral Resources or Mineral Reserves reported for the Gold River
property.
JUBY
The Juby gold property is located approximately 15 kilometres
southwest of the town of Gowganda,
Ontario and about 100 kilometres southwest of the city of
Timmins, Ontario in the Shining
Tree area of northern Ontario.
Gold mineralization is associated with discreet narrow quartz
veins, quartz-carbonate-pyrite veins within broad zones of
ankerite-albite-silica-sericite alteration, and feldspar (± quartz)
porphyry dikes. Structural and stratigraphic contacts and
rheological contrasts appear to be the primary controls of mineral
emplacement.
The Mineral Resource estimate for the Juby deposit, with an
effective date of February 24, 2014,
is summarized below:
JUBY MINERAL
RESOURCES
|
Resource
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Indicated
|
26.6
|
1.28
|
1,090
|
Inferred
|
96.2
|
0.94
|
2,909
|
Mineral Resources are reported as in situ resources using
a gold cut-off grade of 0.40 g/t. There are no Measured Mineral
Resources or Mineral Reserves reported for the Juby property.
FENN-GIB
The Fenn-Gib gold property is located approximately 80
kilometres east of the city of Timmins,
Ontario and 21 kilometres east of Matheson, Ontario. The property is situated in
the southern portion of the Abitibi Subprovince and is underlain by
metavolcanics and metasediments of the Hoyle Sedimentary Assemblage
and Kidd-Munro Volcanic Assemblage. Gold mineralization is
primarily associated with disseminated pyrite in syenites and
basalts in proximity to the fault contact between the two
assemblages.
The Mineral Resource estimate for the Fenn-Gib deposit, with an
effective date of November 17, 2011,
is summarized below:
FENN-GIB MINERAL
RESOURCES
|
Resource
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Inside Pit
Shell
|
Indicated
|
40.8
|
0.99
|
1,300
|
|
Inferred
|
23.3
|
0.90
|
670
|
Below Pit
|
Indicated
|
0.04
|
1.89
|
2
|
|
Inferred
|
1.2
|
1.90
|
80
|
All
Material
|
Indicated
|
40.8
|
0.99
|
1,300
|
|
Inferred
|
24.5
|
0.95
|
750
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Nearly all of the Indicated Mineral Resources and approximately
90% of Inferred Mineral Resources are reported within a
$1,190/oz gold pit shell using a gold
cut-off grade of 0.50 g/t, operating costs of $13.00/tonne ore and process recovery of 85%. The
remaining Indicated and Inferred Mineral Resources which occur
below the pit limits are reported using a gold cut-off grade of 1.5
g/t. There are no Measured Mineral Resources or Mineral Reserves
reported for the Fenn-Gib property.
MARLHILL
The Marlhill gold deposit is located within the Company's Bell
Creek Mine property in Hoyle Township, approximately 20 kilometres
northeast of the city of Timmins,
Ontario. The deposit is situated in the western part of the
Archean-age Southern Abitibi Greenstone Belt and is hosted in
metavolcanic and clastic metasedimentary rocks. Gold is hosted in
quartz veins generally within magnesium-rich tholeiitic mafic
metavolcanics.
The Mineral Resource estimate for the Marlhill deposit, with an
effective date of March 1, 2011, is
summarized below:
MARLHILL MINERAL
RESOURCES (M1 VEIN)
|
Resource
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Indicated
|
0.4
|
4.52
|
57
|
Mineral Resources are reported as in situ resources using
a gold cut-off grade of 0.2.9 g/t and a minimum width of two
metres. The cut-off grade was determined using a gold price of
$1,125/oz, operating costs of
C$100/tonne and metallurgical
recovery of 90%. There are no Measured or Inferred Mineral
Resources or Mineral Reserves reported for the Marlhill
property.
VOGEL/SCHUMACHER
The Vogel/Schumacher gold
property is located Hoyle Township, approximately 20 kilometres
east of the city of Timmins,
Ontario. The deposit is situated within the Western Abitibi
Subprovince, hosted in Archean-age carbonate-altered greenschist
facies metavolcanic and metasedimentary rocks. Gold mineralization
occurs within zones of quartz veining associated with pyrite and
ankerite-albite-sericite alteration. Mineralized zones vary from
less than one metre to in excess of 20 metres.
The Mineral Resource estimate for the Vogel/Schumacher deposit, with an effective date of
May 2, 2011, is summarized below:
VOGEL/SCHUMACHER
MINERAL RESOURCES
|
Resource
Classification
|
Tonnes
(M)
|
Gold
(g/t)
|
Gold
(koz)
|
Inside Pit
Shell
|
Indicated
|
2.2
|
1.75
|
125
|
|
Inferred
|
0.7
|
1.43
|
32
|
Below Pit
|
Inferred
|
0.8
|
5.56
|
137
|
All
Material
|
Indicated
|
2.2
|
1.75
|
125
|
|
Inferred
|
1.5
|
3.60
|
169
|
|
|
(1)
|
Totals may not sum
due to rounding.
|
Mineral Resources labeled as 'Inside Pit Shell' are those
resources which occur inside an optimized pit shell developed using
a gold price of $1,150/oz, operating
costs of $24.75/tonne and process
recovery of 95%. 'Inside Pit Shell' Mineral Resources are reported
at a gold cut-off grade of 0.63 g/t. Mineral Resources which occur
below the pit shell are reported using a gold cut-off grade of 2.9
g/t. There are no Measured Mineral Resources or Mineral Reserves
reported for the Vogel/Schumacher
property.
Technical terms used in this press release but not otherwise
defined herein are as described in the Company's AIF available on
SEDAR at www.sedar.com, on EDGAR at www.sec.gov or on the Company's
website at www.tahoeresources.com.
SELECT SEGMENTED OPERATIONAL RESULTS
Selected segmented operational information from continuing
operations for 2017 and 2016 is as follows:
|
|
2017/
2016
|
|
|
Escobal
|
|
La
Arena
|
|
Shahuindo(4)
|
|
Timmins
mines
|
|
Total
|
Revenues
|
|
$
|
192,510
|
|
|
$
|
233,782
|
|
|
$
|
95,425
|
|
|
$
|
211,840
|
|
|
$
|
733,557
|
|
|
|
$
|
355,812
|
|
|
$
|
244,397
|
|
|
$
|
47,174
|
|
|
$
|
137,120
|
|
|
$
|
784,503
|
|
Silver
produced (000's ozs)
|
|
9,692
|
|
|
34
|
|
|
116
|
|
|
21
|
|
|
9,863
|
|
|
|
21,189
|
|
|
24
|
|
|
54
|
|
|
—
|
|
|
21,267
|
|
Gold produced
(000's ozs)
|
|
4.3
|
|
|
195.6
|
|
|
79.0
|
|
|
167.0
|
|
|
445.9
|
|
|
|
10.7
|
|
|
204.4
|
|
|
49
|
|
|
122
|
|
|
385.2
|
|
Silver sold
(000's ozs)
|
|
9,951
|
|
|
29
|
|
|
112
|
|
|
21
|
|
|
10,113
|
|
|
|
18,996
|
|
|
22
|
|
|
47
|
|
|
—
|
|
|
19,065
|
|
Gold sold
(000's ozs)
|
|
3.3
|
|
|
187.8
|
|
|
74.6
|
|
|
169.5
|
|
|
435.2
|
|
|
|
7.7
|
|
|
198.6
|
|
|
44
|
|
|
108
|
|
|
358.2
|
|
Average realized
price(1) (per oz)
|
|
|
|
|
|
|
|
|
|
|
Silver
|
|
$
|
17.71
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.71
|
|
|
|
$
|
17.57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.57
|
|
Gold
|
|
$
|
1,294
|
|
|
$
|
1,233
|
|
|
$
|
1,246
|
|
|
$
|
1,243
|
|
|
$
|
1,239
|
|
|
|
$
|
1,291
|
|
|
$
|
1,227
|
|
|
$
|
1,258
|
|
|
$
|
1,272
|
|
|
$
|
1,245
|
|
Costs per
ounce produced(2)(3)
|
|
|
|
|
|
|
|
|
|
|
Total cash costs net
of by-product credits silver
|
|
$
|
6.15
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
6.15
|
|
|
|
$
|
5.84
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.84
|
|
Total cash costs net
of by-product credits gold
|
|
$
|
—
|
|
|
$
|
599
|
|
|
$
|
668
|
|
|
$
|
678
|
|
|
$
|
641
|
|
|
|
$
|
—
|
|
|
$
|
596
|
|
|
$
|
775
|
|
|
$
|
615
|
|
|
$
|
620
|
|
All-in sustaining
costs net of by-product credits silver
|
|
$
|
8.91
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.91
|
|
|
|
$
|
8.06
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8.06
|
|
All-in sustaining
costs net of by-product credits gold
|
|
$
|
—
|
|
|
$
|
837
|
|
|
$
|
1,124
|
|
|
$
|
1,062
|
|
|
$
|
973
|
|
|
|
$
|
—
|
|
|
$
|
837
|
|
|
$
|
1,162
|
|
|
$
|
1,057
|
|
|
$
|
943
|
|
Capital
Expenditures
|
|
|
|
|
|
|
|
|
|
|
Sustaining
Capital
|
|
$
|
22.9
|
|
|
$
|
32.0
|
|
|
$
|
22.2
|
|
|
$
|
46.8
|
|
|
$
|
124.0
|
|
|
|
$
|
27.0
|
|
|
$
|
35.3
|
|
|
$
|
11.0
|
|
|
$
|
45.1
|
|
|
$
|
118.4
|
|
Non-Sustaining
Capital
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
47.1
|
|
|
$
|
51.9
|
|
|
$
|
99.1
|
|
|
|
$
|
3.0
|
|
|
$
|
0.4
|
|
|
$
|
52.9
|
|
|
$
|
36.6
|
|
|
$
|
93.0
|
|
|
|
(1)
|
The realized price is
for silver sold in concentrate and the realized price is for gold
sold in doré.
|
(2)
|
Non-GAAP financial
measures are described in the "Cautionary Note on Non-GAAP
Financial Measures" section of this press release.
|
(3)
|
Total cash cost per
silver ounce produced at the Escobal mine and total cash cost per
gold ounce produced at the La Arena, Shahuindo and Timmins mines,
are net of by-product credits. For a reconciliation to cash costs
before by-product credits, refer to the "Cautionary Note on
Non-GAAP Financial Measures" section of this press
release.
|
(4)
|
Commercial production
at Shahuindo was declared on May 1, 2016. Revenues presented are
generated from the sale of gold ounces in doré beginning May 1,
2016. Pre-commercial production revenues at Shahuindo were
considered pre- operating revenues and 44.3 thousand gold ounces
sold at Shahuindo for 2016 as presented include four months of
pre-commercial production ounces produced and sold (13.4 thousand
gold ounces in doré produced and 7.6 thousand ounces of gold in
doré sold for the period of January through April 2016).
|
(5)
|
Numbers may not
calculate due to rounding.
|
Selected quarterly segmented operational information from
continuing operations for Q4 2017 and Q4 2016 is as follows:
|
|
Q4 2017 / Q4
2016
|
|
|
Escobal
|
|
La Arena
|
|
Shahuindo
|
|
Timmins
mines
|
|
Total
|
Revenues
|
|
(844)
|
|
|
49,873
|
|
|
24,415
|
|
|
44,290
|
|
|
117,734
|
|
|
|
70,527
|
|
|
62,555
|
|
|
16,084
|
|
|
40,232
|
|
|
189,398
|
|
Silver produced
(000's ozs)
|
|
—
|
|
|
9.1
|
|
|
24.1
|
|
|
5.0
|
|
|
38.2
|
|
|
|
4,802
|
|
|
5.0
|
|
|
20.0
|
|
|
4.8
|
|
|
4,831.8
|
|
Gold produced
(000's ozs)
|
|
—
|
|
|
47.2
|
|
|
18.6
|
|
|
40.0
|
|
|
105.8
|
|
|
|
2.4
|
|
|
58.4
|
|
|
13.8
|
|
|
45.3
|
|
|
119.9
|
|
Silver sold (000's
ozs)
|
|
—
|
|
|
7.1
|
|
|
34.1
|
|
|
5.0
|
|
|
46.2
|
|
|
|
4,468
|
|
|
7
|
|
|
21
|
|
|
4.8
|
|
|
4,500.8
|
|
Gold sold (000's
ozs)
|
|
—
|
|
|
39.5
|
|
|
18.7
|
|
|
34.7
|
|
|
92.9
|
|
|
|
1.8
|
|
|
53
|
|
|
12.9
|
|
|
33
|
|
|
100.7
|
|
Average realized
price(1) (per oz)
|
|
|
|
|
|
|
|
|
|
|
Silver
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
14.45
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14.45
|
|
Gold
|
|
$
|
—
|
|
|
$
|
1,257
|
|
|
$
|
1,271
|
|
|
$
|
1,275
|
|
|
$
|
1,266
|
|
|
|
$
|
—
|
|
|
$
|
1,180
|
|
|
$
|
1,224
|
|
|
$
|
1,216
|
|
|
$
|
1,197
|
|
Costs per ounce
produced(2)(3)
|
|
|
|
|
|
|
|
|
|
|
Total cash costs net
of by-product credits silver
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
6.48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.48
|
|
Total cash costs net
of by-product credits gold
|
|
$
|
—
|
|
|
$
|
520
|
|
|
$
|
737
|
|
|
$
|
756
|
|
|
$
|
648
|
|
|
|
$
|
—
|
|
|
$
|
516
|
|
|
$
|
989
|
|
|
$
|
575
|
|
|
$
|
594
|
|
All-in sustaining
costs net of by-product credits silver
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
9.76
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9.76
|
|
All-in sustaining
costs net of by-product credits gold
|
|
$
|
—
|
|
|
$
|
855
|
|
|
$
|
1,313
|
|
|
$
|
1,112
|
|
|
$
|
1,033
|
|
|
|
$
|
—
|
|
|
$
|
787
|
|
|
$
|
1,508
|
|
|
$
|
976
|
|
|
$
|
945
|
|
Capital
Expenditures
|
|
|
|
|
|
|
|
|
|
|
Sustaining
Capital
|
|
$
|
2.2
|
|
|
$
|
12.0
|
|
|
$
|
7.4
|
|
|
$
|
10.6
|
|
|
$
|
32.1
|
|
|
|
$
|
10.3
|
|
|
$
|
13.6
|
|
|
$
|
2.3
|
|
|
$
|
15.7
|
|
|
$
|
41.9
|
|
Non-Sustaining
Capital
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17.6
|
|
|
$
|
12.2
|
|
|
$
|
29.9
|
|
|
|
$
|
0.6
|
|
|
$
|
0.1
|
|
|
$
|
9.2
|
|
|
$
|
9.3
|
|
|
$
|
19.2
|
|
|
|
(1)
|
The realized price is
for silver sold in concentrate and the realized price is for gold
sold in doré.
|
(2)
|
Non-GAAP financial
measures are described in the "Cautionary Note on Non-GAAP
Financial Measures" section of this press release.
|
(3)
|
Total cash cost per
silver ounce produced at the Escobal mine and total cash cost per
gold ounce produced at the La Arena, Shahuindo and Timmins mines,
are net of by-product credits. For a reconciliation to cash costs
before by-product credits, refer to the "Cautionary Note on
Non-GAAP Financial Measures" section of this press
release.
|
(4)
|
Numbers may not
calculate due to rounding.
|
CAUTIONARY NOTE ON NON-GAAP FINANCIAL MEASURES
The Company has included certain non-GAAP financial measures
throughout this document which include total cash costs, all-in
sustaining costs per silver and per gold ounce ("all-in sustaining
costs"), adjusted earnings, adjusted earnings per share, and cash
provided by operating activities before changes in working capital.
These measures are not defined under IFRS and should not be
considered in isolation. The Company's Escobal mine primarily
produces silver in concentrates with other metals (gold, lead and
zinc), produced simultaneously in the mining process, the value of
which represents a small percentage of the Company's revenue from
Escobal and is therefore considered "by-product". The Company's La
Arena, Shahuindo and Timmins mines
primarily produce gold with other metals (primarily silver),
produced simultaneously in the mining process, the value of which
represents a small percentage of the Company's revenue from these
mines and is therefore considered "by-product". The Company
believes these measures may provide investors and analysts with
useful information about the Company's underlying earnings, cash
costs of operations, the impact of by-product credits on the
Company's cost structure and its ability to generate cash flow, as
well as providing a meaningful comparison to other mining
companies. Accordingly, these measures are intended to provide
additional information and should not be substituted for GAAP
measures. These non-GAAP financial measures may be calculated
differently by other companies depending on the underlying
accounting principles and policies applied.
The Company also reports total operating costs (cost of sales)
per ounce. The Company believes that this metric is important in
assessing the performance of each of the Company's sold metals and
as a meaningful GAAP-based comparison to other mining companies.
Total operating costs (cost of sales) per ounce sold is calculated
by dividing total the operating costs by gold ounces sold. Total
operating costs (cost of sales) includes production costs,
depreciation and depletion and royalties. The reconciliation of
total operating costs (cost of sales) to total cash costs is
included in the total cash cost and total production cost tables
below. Comparative periods have been updated to reflect current
period presentation. There is no impact to current or prior period
disclosed numbers due to the inclusion of this metric.
Consolidated adjusted earnings and consolidated adjusted
earnings per share
The Company has adopted the reporting of consolidated adjusted
earnings ("adjusted earnings)" and consolidated adjusted earnings
per share ("adjusted earnings per share") as a non-GAAP measure of
a precious metals mining company's operating performance. This
measure has no standardized meaning and the Company's presentation
of adjusted measures are not meant to be substituted for GAAP
measures of consolidated earnings or consolidated earnings per
share and should be read in conjunction with such GAAP measures.
Adjusted earnings and adjusted earnings per share are calculated as
earnings excluding i) non-cash impairment losses and reversals on
mineral interests and other assets, ii) unrealized foreign exchange
gains or losses related to the revaluation of deferred income tax
assets and liabilities on non-monetary items, iii) unrealized
foreign exchange gains or losses related to other items, iv)
unrealized gains or losses on derivatives other than provisionally
priced trade receivables, v) loss on extinguishment of the Lake
Shore Debentures, vi) gains or losses on sale of assets and vii)
costs related to the acquisition of Lake Shore Gold and the related
tax impact of these adjustments calculated at the statutory
effective rate for the same jurisdiction as the adjustment.
Non-recurring adjustments from unusual events or circumstances are
reviewed periodically based on materiality and the nature of the
event or circumstance.
The Company calculates adjusted earnings and adjusted earnings
per share on a consolidated basis.
|
Q4
2017
|
|
Q4 2016
|
|
2017
|
|
2016
|
Earnings
(loss)
|
$
|
(18,010)
|
|
|
$
|
315
|
|
|
$
|
81,793
|
|
|
$
|
117,876
|
|
Unrealized foreign
exchange loss
|
$
|
332
|
|
|
$
|
(1,284)
|
|
|
$
|
2,218
|
|
|
$
|
539
|
|
Acquisition
costs(2)
|
—
|
|
|
$
|
49
|
|
|
—
|
|
|
$
|
11,134
|
|
Deferred
tax(3)
|
—
|
|
|
$
|
19,335
|
|
|
—
|
|
|
$
|
19,335
|
|
Loss on conversion of
debentures
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
32,304
|
|
Loss (gain) on
derivative instruments (currency swap)
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(803)
|
|
Adjusted earnings
(loss)
|
$
|
(17,678)
|
|
|
$
|
18,415
|
|
|
$
|
84,011
|
|
|
$
|
180,385
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
Basic
(000's)
|
313,193
|
|
|
311,653
|
|
|
312,804
|
|
|
289,727
|
|
Diluted
(000's)
|
313,200
|
|
|
311,786
|
|
|
312,834
|
|
|
289,988
|
|
Adjusted earnings
(loss) per share
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.06)
|
|
|
$
|
0.06
|
|
|
$
|
0.27
|
|
|
$
|
0.62
|
|
Diluted
|
$
|
(0.06)
|
|
|
$
|
0.06
|
|
|
$
|
0.27
|
|
|
$
|
0.62
|
|
|
|
(1)
|
Results of the
Timmins mines prior to the date of acquisition of Lake Shore Gold
on April 1, 2016 were excluded.
|
(2)
|
Costs related to the
acquisition of Lake Shore Gold on April 1, 2016.
|
(3)
|
Adjustment to reflect
the impact of a non-cash deferred tax charge resulting from a
change in enacted rates in Peru.
|
Total cash costs before and net of by-product credits
The Company reports total cash costs on a silver ounce and a
gold ounce produced basis for the Escobal mine and the La Arena,
Shahuindo and Timmins mines,
respectively. The Company follows the recommendation of the cost
standard as endorsed by the Silver Institute ("The Institute") for
the reporting of total cash costs (silver) and the generally
accepted standard of reporting total cash costs (gold) by precious
metal mining companies. The Institute is a nonprofit international
association with membership from across the silver industry and
serves as the industry's voice in increasing public understanding
of the many uses and values of silver. This remains the generally
accepted standard for reporting cash costs of silver production by
silver mining companies. The Company believes that these generally
accepted industry measures are realistic indicators of operating
performance and are useful in performing year over year
comparisons. However, these non-GAAP measures should be considered
together with other data prepared in accordance with IFRS, and
these measures, taken alone, are not necessarily indicative of
operating costs or cash flow measures prepared in accordance with
IFRS. Total cash costs are divided by the number of silver
ounces contained in concentrate or gold ounces recovered from the
leach pads to calculate per ounce figures. When deriving the total
cash costs associated with an ounce of silver or gold, the Company
deducts by-product credits from sales which are incidental to
producing silver and gold.
Total cash costs per ounce of produced silver net of by-product
credits incorporate all production costs, including adjustments to
inventory carrying values, adjusted for changes in estimates in
reclamation which are non-cash in nature, and include by-product
gold, lead and zinc credits, and treatment and refining charges
included within revenue.
In addition to conventional measures, the Company assesses this
per ounce measure in a manner that isolates the impacts of silver
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 per ounce of produced silver net of by-product credits 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 silver, the Company
includes by-product credits as the Company considers that the cost
to produce the silver is reduced as a result of the by-product
sales incidental to the silver production process, thereby allowing
the Company's management and other stakeholders to assess the net
costs of silver production.
Total cash costs
(silver)
|
Total cash
costs per ounce of produced silver, net of by-product
credits
|
|
|
Q4
2017
|
|
Q4 2016
|
|
2017
|
|
2016
|
Total operating costs
(cost of sales)(1)
|
$
|
—
|
|
|
$
|
52,524
|
|
|
$
|
95,854
|
|
|
$
|
200,497
|
|
Depreciation and
depletion
|
—
|
|
|
$
|
(12,903)
|
|
|
$
|
(29,052)
|
|
|
$
|
(53,204)
|
|
Change in product
inventory
|
—
|
|
|
$
|
(2,558)
|
|
|
$
|
6,329
|
|
|
$
|
(1,139)
|
|
Treatment and
refining charges
|
—
|
|
|
$
|
8,173
|
|
|
$
|
16,205
|
|
|
$
|
32,600
|
|
Total cash costs
before by-product credits
|
$
|
—
|
|
|
$
|
45,236
|
|
|
$
|
89,336
|
|
|
$
|
178,754
|
|
By-product
credits(2)
|
—
|
|
|
$
|
(14,121)
|
|
|
$
|
(29,740)
|
|
|
$
|
(54,925)
|
|
Total cash costs
net of by-product credits
|
$
|
—
|
|
|
$
|
31,115
|
|
|
$
|
59,596
|
|
|
$
|
123,829
|
|
Silver ounces sold in
concentrate (000's)
|
—
|
|
|
4,470
|
|
|
9,773
|
|
|
18,996
|
|
Silver ounces
produced in concentrate (000's)
|
—
|
|
|
4,801
|
|
|
9,692
|
|
|
21,189
|
|
Total operating
costs (cost of sales) per ounce sold
|
$
|
—
|
|
|
$
|
11.75
|
|
|
$
|
9.81
|
|
|
$
|
10.55
|
|
Total cash costs
per ounce produced before by-product credits
|
$
|
—
|
|
|
$
|
9.42
|
|
|
$
|
9.22
|
|
|
$
|
8.44
|
|
Total cash costs
per ounce produced net of by-product credits
|
$
|
—
|
|
|
$
|
6.48
|
|
|
$
|
6.15
|
|
|
$
|
5.84
|
|
|
|
(1)
|
Total operating costs
(cost of sales) includes production costs, depreciation and
depletion and royalties. All 2017 YTD costs for silver were through
Q2 2017 as no silver was produced in Q3 or Q4 2017.
|
(2)
|
Gold, lead and zinc
by-product credits were calculated as follows:
|
|
|
|
Q4
2017
|
|
Q4 2016
|
|
Quantity
|
|
Unit
Price
|
|
Total
Credit
|
|
Credit per
ounce
|
|
Quantity
|
|
Unit Price
|
|
Total
Credit
|
|
Credit per
ounce
|
Gold
Ounces
|
—
|
|
—
|
|
—
|
|
—
|
|
1,820
|
|
$1,050
|
|
$1,910
|
|
$0.40
|
Lead
Tonnes
|
—
|
|
—
|
|
—
|
|
—
|
|
2,288
|
|
$3,303
|
|
$7,554
|
|
$1.57
|
Zinc
Tonnes
|
—
|
|
—
|
|
—
|
|
—
|
|
2,840
|
|
$1,640
|
|
$4,657
|
|
$0.97
|
|
2017
|
|
2016
|
|
Quantity
|
|
Unit
Price
|
|
Total
Credit
|
|
Credit per
ounce
|
|
Quantity
|
|
Unit Price
|
|
Total
Credit
|
|
Credit per
ounce
|
Gold
Ounces
|
3,554
|
|
$1,281
|
|
$4,555
|
|
$0.47
|
|
7,676
|
|
$1,330
|
|
$10,213
|
|
$0.48
|
Lead
Tonnes
|
4,085
|
|
$2,369
|
|
$9,679
|
|
$1.00
|
|
8,993
|
|
$2,448
|
|
$22,019
|
|
$1.04
|
Zinc
Tonnes
|
5,568
|
|
$2,785
|
|
$15,508
|
|
$1.60
|
|
12,345
|
|
$1,838
|
|
$22,693
|
|
$1.07
|
|
|
(3)
|
Table has been
updated to reflect current period presentation with no impact to
the cash costs previously presented.
|
(4)
|
Numbers in tables may
not calculate due to rounding.
|
Total cash costs
(gold)
|
Total cash
costs per ounce of produced gold, net of by-product
credits
|
|
|
Q4
2017
|
|
La
Arena
|
|
Shahuindo
|
|
Timmins
mines
|
|
Total
|
Total operating costs
(cost of sales)(1)
|
$
|
58,070
|
|
|
$
|
10,660
|
|
|
$
|
41,924
|
|
|
$
|
110,654
|
|
Depreciation and
depletion
|
$
|
(28,499)
|
|
|
$
|
3,374
|
|
|
$
|
(15,522)
|
|
|
$
|
(40,647)
|
|
Change in product
inventory
|
$
|
(5,141)
|
|
|
$
|
196
|
|
|
$
|
3,888
|
|
|
$
|
(1,057)
|
|
Smelting and refining
charges
|
$
|
221
|
|
|
$
|
75
|
|
|
$
|
36
|
|
|
$
|
332
|
|
Total cash costs
before by-product credits
|
$
|
24,651
|
|
|
$
|
14,305
|
|
|
$
|
30,326
|
|
|
$
|
69,282
|
|
Silver
credit(2)
|
$
|
(118)
|
|
|
$
|
(571)
|
|
|
$
|
(83)
|
|
|
$
|
(772)
|
|
Total cash costs
net of by-product credits
|
$
|
24,533
|
|
|
$
|
13,734
|
|
|
$
|
30,243
|
|
|
$
|
68,510
|
|
Gold ounces sold
(000's)
|
39.5
|
|
|
18.7
|
|
|
34.7
|
|
|
92.9
|
|
Gold ounces
produced (000's)
|
47.2
|
|
|
18.6
|
|
|
40.0
|
|
|
105.8
|
|
Total operating
costs (cost of sales) per ounce sold
|
$
|
1,471
|
|
|
$
|
570
|
|
|
$
|
1,208
|
|
|
$
|
1,191
|
|
Total cash costs
per ounce produced before by-product credits
|
$
|
523
|
|
|
$
|
768
|
|
|
$
|
759
|
|
|
$
|
655
|
|
Total cash costs
per ounce produced net of by-product
credits(2)
|
$
|
520
|
|
|
$
|
737
|
|
|
$
|
756
|
|
|
$
|
648
|
|
|
2017
|
|
La
Arena
|
|
Shahuindo
|
|
Timmins
mines
|
|
Total
|
Total operating costs
(cost of sales)(1)
|
$
|
174,468
|
|
|
$
|
65,313
|
|
|
$
|
171,638
|
|
|
$
|
411,419
|
|
Depreciation and
depletion
|
$
|
(48,092)
|
|
|
$
|
(11,452)
|
|
|
$
|
(60,614)
|
|
|
$
|
(120,158)
|
|
Change in product
inventory
|
$
|
(9,739)
|
|
|
$
|
483
|
|
|
$
|
2,323
|
|
|
$
|
(6,933)
|
|
Smelting and refining
charges
|
$
|
1,031
|
|
|
$
|
384
|
|
|
$
|
175
|
|
|
$
|
1,590
|
|
Total cash costs
before by-product credits
|
$
|
117,668
|
|
|
$
|
54,728
|
|
|
$
|
113,522
|
|
|
$
|
285,918
|
|
Silver
credit(2)
|
$
|
(487)
|
|
|
$
|
(1,917)
|
|
|
$
|
(358)
|
|
|
$
|
(2,762)
|
|
Total cash costs
net of by-product credits
|
$
|
117,181
|
|
|
$
|
52,811
|
|
|
$
|
113,164
|
|
|
$
|
283,156
|
|
Gold ounces sold
(000's)
|
187.8
|
|
|
74.6
|
|
|
169.5
|
|
|
431.9
|
|
Gold ounces produced
(000's)
|
195.6
|
|
|
79.0
|
|
|
167.0
|
|
|
441.6
|
|
Total operating
costs (cost of sales) per ounce sold
|
$
|
929
|
|
|
$
|
876
|
|
|
$
|
1,013
|
|
|
$
|
953
|
|
Total cash costs
per ounce produced before by-product credits
|
$
|
602
|
|
|
$
|
692
|
|
|
$
|
680
|
|
|
$
|
647
|
|
Total cash costs
per ounce produced net of by-product
credits(2)
|
$
|
599
|
|
|
$
|
668
|
|
|
$
|
678
|
|
|
$
|
641
|
|
|
|
(1)
|
Total operating costs
(cost of sales) includes production costs, depreciation and
depletion and royalties.
|
(2)
|
Consolidated silver
by-product credits were calculated as follows:
|
|
Q4
2017
|
|
2017
|
|
Quantity
|
|
Unit
Price
|
|
Total
Credit
|
|
Credit per
ounce
|
|
Quantity
|
|
Unit
Price
|
|
Total
Credit
|
|
Credit per
ounce
|
Silver Ounces
(000's)
|
46,452
|
|
$16.61
|
|
$772
|
|
$7.29
|
|
162,415
|
|
$17.01
|
|
$2,762
|
|
$6.25
|
|
|
(3)
|
Numbers in table may
not calculate due to rounding.
|
|
Q4
2016(3)
|
|
La
Arena
|
|
Shahuindo
|
|
Timmins
mines
|
|
Total
|
Total operating costs
(cost of sales)(4)
|
$
|
36,083
|
|
|
$
|
18,929
|
|
|
$
|
34,016
|
|
|
$
|
89,028
|
|
Depreciation and
depletion
|
$
|
(9,732)
|
|
|
$
|
(5,548)
|
|
|
$
|
(14,320)
|
|
|
$
|
(29,600)
|
|
Change in product
inventory
|
$
|
2,951
|
|
|
$
|
469
|
|
|
$
|
6,389
|
|
|
$
|
9,809
|
|
Smelting and refining
charges
|
$
|
810
|
|
|
$
|
92
|
|
|
$
|
49
|
|
|
$
|
951
|
|
Total cash costs
before by-product credits
|
$
|
30,112
|
|
|
$
|
13,942
|
|
|
$
|
26,134
|
|
|
$
|
70,188
|
|
Silver
credit(6)
|
$
|
(100)
|
|
|
$
|
(348)
|
|
|
$
|
(83)
|
|
|
$
|
(531)
|
|
Total cash costs
net of by-product credits
|
$
|
30,012
|
|
|
$
|
13,594
|
|
|
$
|
26,051
|
|
|
$
|
69,657
|
|
Gold ounces sold
(000's)
|
53.0
|
|
|
12.9
|
|
|
33.0
|
|
|
98.9
|
|
Gold ounces
produced(5) (000's)
|
58.1
|
|
|
13.8
|
|
|
45.3
|
|
|
117.2
|
|
Total operating
costs (cost of sales) per ounce sold
|
$
|
680
|
|
|
$
|
1,473
|
|
|
$
|
1,030
|
|
|
$
|
900
|
|
Total cash costs
per ounce produced before by-product credits
|
$
|
518
|
|
|
$
|
1,014
|
|
|
$
|
576
|
|
|
$
|
599
|
|
Total cash costs
per ounce produced net of by-product credits
|
$
|
516
|
|
|
$
|
989
|
|
|
$
|
575
|
|
|
$
|
594
|
|
|
2016(1)(2)(3)
|
|
La
Arena
|
|
Shahuindo
|
|
Timmins
mines
|
|
Total
|
Total operating costs
(cost of sales)(4)
|
$
|
143,008
|
|
|
$
|
35,134
|
|
|
$
|
101,739
|
|
|
$
|
279,881
|
|
Depreciation and
depletion
|
$
|
(27,779)
|
|
|
$
|
(10,016)
|
|
|
$
|
(33,745)
|
|
|
$
|
(71,540)
|
|
Change in product
inventory
|
$
|
4,994
|
|
|
$
|
2,471
|
|
|
$
|
6,843
|
|
|
$
|
14,308
|
|
Smelting and refining
charges
|
$
|
1,814
|
|
|
$
|
262
|
|
|
$
|
133
|
|
|
$
|
2,209
|
|
Total cash costs
before by-product credits
|
$
|
122,037
|
|
|
$
|
27,851
|
|
|
$
|
74,970
|
|
|
$
|
224,858
|
|
Silver
credit(6)
|
$
|
(385)
|
|
|
$
|
(721)
|
|
|
$
|
(261)
|
|
|
$
|
(1,367)
|
|
Total cash costs
net of by-product credits
|
$
|
121,652
|
|
|
$
|
27,130
|
|
|
$
|
74,709
|
|
|
$
|
223,491
|
|
Gold ounces sold
(000's)
|
198.6
|
|
|
36.7
|
|
|
107.6
|
|
|
343.0
|
|
Gold ounces
produced(5) (000's)
|
204.1
|
|
|
35.0
|
|
|
121.6
|
|
|
360.7
|
|
Total operating
costs (cost of sales) per ounce sold
|
$
|
720
|
|
|
$
|
956
|
|
|
$
|
946
|
|
|
$
|
816
|
|
Total cash costs
per ounce produced before by-product credits
|
$
|
598
|
|
|
$
|
796
|
|
|
$
|
617
|
|
|
$
|
623
|
|
Total cash costs
per ounce produced net of by-product credits
|
$
|
596
|
|
|
$
|
775
|
|
|
$
|
615
|
|
|
$
|
620
|
|
|
|
(1)
|
2016 figures include
data from the Timmins mines beginning April 1, 2016, the date of
acquisition of Lake Shore Gold.
|
(2)
|
2016 figures include
data from Shahuindo beginning May 1, 2016, the commencement date of
commercial production.
|
(3)
|
Change in product
inventory at Shahuindo for Q4 2016 and 2016 includes costs related
to gold produced in doré, but not sold as at December 31, 2016.
Costs associated with the build-up of stockpile during the
commissioning phase which remained work in process inventory at
December 31, 2016 have been excluded from the inventory movements
in the period.
|
(4)
|
Total operating costs
(cost of sales) includes production costs, depreciation and
depletion, royalties and smelting and refining charges.
|
(5)
|
Gold ounces produced
at La Arena are gold ounces produced in doré.
|
(6)
|
Silver by-product
credits were calculated as follows:
|
|
Q4 2016
|
|
2016
|
|
Quantity
|
|
Unit Price
|
|
Total
Credit
|
|
Credit per
ounce
|
|
Quantity
|
|
Unit Price
|
|
Total
Credit
|
|
Credit per
ounce
|
Silver
Ounces
|
26,310
|
|
$20.18
|
|
$531
|
|
$4.53
|
|
68,830
|
|
$19.86
|
|
$1,367
|
|
$3.79
|
(7)
|
Table has been updated to reflect
current period presentation with no impact to the cash costs
previously presented.
|
(8)
|
Numbers in table may not calculate
due to rounding.
|
All-in sustaining costs
The Company has also adopted the reporting of all-in sustaining
costs as a non-GAAP measure of a precious metals mining company's
ability to generate cash flow from operations. This measure has no
standardized meaning and the Company has utilized an adapted
version of the guidance released by the World Gold Council ("WGC"),
the market development organization for the gold industry. The WGC
is not a regulatory industry organization and does not have the
authority to develop accounting standards or disclosure
requirements.
All-in sustaining costs include total cash costs incurred at the
Company's mining operations, sustaining capital expenditures,
corporate administrative expense, exploration and evaluations
costs, and reclamation and closure accretion. The Company believes
that this measure represents the total costs of producing silver
and 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.
All-in sustaining costs (silver)
Total all-in sustaining costs per ounce of produced
silver, net of by-product credits
The following tables reconciling total all-in sustaining costs
per ounce of produced silver, net of by-product credits to the
consolidated financial statements should be read in conjunction
with the prior tables which reconcile total cash costs net of
by-product credits to total operating costs.
|
Q4
2017
|
|
Q4 2016
|
|
2017
|
|
2016
|
Total cash costs
net of by-product credits
|
$
|
—
|
|
|
$
|
31,115
|
|
|
$
|
59,596
|
|
|
$
|
123,829
|
|
Sustaining
capital(1)
|
—
|
|
|
$
|
10,295
|
|
|
$
|
19,062
|
|
|
$
|
27,030
|
|
Exploration
|
—
|
|
|
$
|
281
|
|
|
$
|
498
|
|
|
$
|
1,002
|
|
Reclamation cost
accretion
|
—
|
|
|
$
|
57
|
|
|
$
|
123
|
|
|
$
|
198
|
|
General and
administrative expenses
|
—
|
|
|
$
|
5,129
|
|
|
$
|
7,032
|
|
|
$
|
18,655
|
|
All-in sustaining
costs
|
$
|
—
|
|
|
$
|
46,877
|
|
|
$
|
86,311
|
|
|
$
|
170,714
|
|
Silver ounces
produced in concentrate (000's)
|
—
|
|
|
4,801
|
|
|
9,692
|
|
|
21,189
|
|
All-in sustaining
costs per ounce produced net of by-product credits
|
$
|
—
|
|
|
$
|
9.76
|
|
|
$
|
8.91
|
|
|
$
|
8.06
|
|
|
|
(1)
|
Sustaining capital
includes underground development and surface sustaining capital
expenditures.
|
(2)
|
Q4 YTD 2017 silver
numbers reflect actual through Q2 2017 as no silver was produced in
Q3 or Q4 2017.
|
(3)
|
Numbers in table may
not calculate due to rounding.
|
All-in sustaining
costs (gold)
|
Total all-in
sustaining costs per ounce of produced gold, net of by-product
credits
|
|
|
Q4
2017
|
|
La
Arena
|
|
Shahuindo
|
|
Timmins
mines
|
|
Total
|
Total cash costs
net of by-product credits
|
$
|
24,533
|
|
|
$
|
13,734
|
|
|
$
|
30,243
|
|
|
$
|
68,510
|
|
Sustaining
capital
|
$
|
12,013
|
|
|
$
|
7,388
|
|
|
$
|
10,565
|
|
|
$
|
29,966
|
|
Exploration
|
$
|
126
|
|
|
$
|
979
|
|
|
$
|
1,458
|
|
|
$
|
2,563
|
|
Reclamation cost
accretion
|
$
|
336
|
|
|
$
|
219
|
|
|
$
|
43
|
|
|
$
|
598
|
|
General and
administrative expenses
|
$
|
3,301
|
|
|
$
|
2,142
|
|
|
$
|
2,160
|
|
|
$
|
7,603
|
|
All-in sustaining
costs
|
$
|
40,309
|
|
|
$
|
24,462
|
|
|
$
|
44,469
|
|
|
$
|
109,240
|
|
Gold ounces produced
(000's)
|
47.2
|
|
|
18.6
|
|
|
40.0
|
|
|
105.8
|
|
All-in sustaining
costs per ounce produced net of by-product credits
|
$
|
855
|
|
|
$
|
1,313
|
|
|
$
|
1,112
|
|
|
$
|
1,033
|
|
|
2017
|
|
La
Arena
|
|
Shahuindo
|
|
Timmins
mines
|
|
Total
|
Total cash costs
net of by-product credits
|
$
|
117,181
|
|
|
$
|
52,811
|
|
|
$
|
113,164
|
|
|
$
|
283,156
|
|
Sustaining
capital
|
$
|
32,019
|
|
|
$
|
22,222
|
|
|
$
|
46,825
|
|
|
$
|
101,066
|
|
Exploration
|
$
|
975
|
|
|
$
|
4,701
|
|
|
$
|
7,809
|
|
|
$
|
13,485
|
|
Reclamation cost
accretion
|
$
|
1,358
|
|
|
$
|
868
|
|
|
$
|
138
|
|
|
$
|
2,364
|
|
General and
administrative expenses
|
$
|
12,079
|
|
|
$
|
8,248
|
|
|
$
|
9,328
|
|
|
$
|
29,655
|
|
All-in sustaining
costs
|
$
|
163,612
|
|
|
$
|
88,850
|
|
|
$
|
177,264
|
|
|
$
|
429,726
|
|
Gold ounces produced
(000's)
|
195.6
|
|
|
79.0
|
|
|
167.0
|
|
|
441.6
|
|
All-in sustaining
costs per ounce produced net of by-product credits
|
$
|
837
|
|
|
$
|
1,124
|
|
|
$
|
1,062
|
|
|
$
|
973
|
|
|
|
(1)
|
Numbers in table may
not calculate due to rounding.
|
|
Q4 2016
|
|
La Arena
|
|
Shahuindo
|
|
Timmins
mines
|
|
Total
|
Total cash costs net
of by-product credits
|
$
|
30,012
|
|
|
$
|
13,594
|
|
|
$
|
26,051
|
|
|
$
|
69,657
|
|
Sustaining
capital
|
$
|
13,560
|
|
|
$
|
2,307
|
|
|
$
|
14,686
|
|
|
$
|
30,553
|
|
Exploration
|
$
|
568
|
|
|
$
|
1,594
|
|
|
$
|
2,518
|
|
|
$
|
4,680
|
|
Reclamation cost
accretion
|
$
|
308
|
|
|
$
|
177
|
|
|
$
|
41
|
|
|
$
|
526
|
|
General and
administrative expenses(3)
|
$
|
1,268
|
|
|
$
|
3,132
|
|
|
$
|
938
|
|
|
$
|
5,338
|
|
All-in sustaining
costs
|
$
|
45,716
|
|
|
$
|
20,804
|
|
|
$
|
44,234
|
|
|
$
|
110,754
|
|
Gold ounces produced
in doré (000's)
|
58.1
|
|
|
13.8
|
|
|
45.3
|
|
|
117.2
|
|
All-in sustaining
costs per ounce produced net of by-product credits
|
$
|
787
|
|
|
$
|
1,508
|
|
|
$
|
976
|
|
|
$
|
945
|
|
|
2016(1)(2)
|
|
La Arena
|
|
Shahuindo
|
|
Timmins
mines
|
|
Total
|
Total cash costs net
of by-product credits
|
$
|
121,652
|
|
|
$
|
27,130
|
|
|
$
|
74,709
|
|
|
$
|
223,491
|
|
Sustaining
capital
|
$
|
35,272
|
|
|
$
|
5,833
|
|
|
$
|
45,123
|
|
|
$
|
86,228
|
|
Exploration
|
$
|
1,664
|
|
|
$
|
3,751
|
|
|
$
|
5,062
|
|
|
$
|
10,477
|
|
Reclamation cost
accretion
|
$
|
1,266
|
|
|
$
|
816
|
|
|
$
|
90
|
|
|
$
|
2,172
|
|
General and
administrative expenses(3)
|
$
|
11,024
|
|
|
$
|
3,135
|
|
|
$
|
3,559
|
|
|
$
|
17,718
|
|
All-in sustaining
costs
|
$
|
170,878
|
|
|
$
|
40,665
|
|
|
$
|
128,543
|
|
|
$
|
340,086
|
|
Gold ounces produced
in doré (000's)
|
204.1
|
|
|
35.0
|
|
|
121.6
|
|
|
360.7
|
|
All-in sustaining
costs per ounce produced net of by-product credits
|
$
|
837
|
|
|
$
|
1,162
|
|
|
$
|
1,057
|
|
|
$
|
943
|
|
|
|
(1)
|
2016 figures include
data from the Timmins mines beginning April 1, 2016, the date of
acquisition of Lake Shore Gold.
|
(2)
|
2016 figures include
data from Shahuindo beginning May 1, 2016, the commencement date of
commercial production.
|
(3)
|
General and
administrative expenses at Shahuindo included a year-to-date
adjustment to assign certain costs to production and other
expense.
|
(4)
|
Numbers in table may
not calculate due to rounding.
|
The reconciliation
which formed the basis for the ranges in the 2018 total cash cost
and all-in sustaining cost guidance is as follows ($ in
thousands):
|
|
Total cash
costs
|
|
La
Arena
|
|
Shahuindo
|
|
Timmins
Mines
|
|
Gold
|
Production
costs
|
$
|
115,000
|
|
$
|
70,000
|
|
$
|
140,000
|
|
$
|
325,000
|
|
Treatment and
refining charges
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total cash costs
before by-product credits
|
$
|
115,000
|
|
$
|
70,000
|
|
$
|
140,000
|
|
$
|
325,000
|
|
By-product
credits
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total cash costs net
of by-product credits
|
$
|
115,000
|
|
$
|
70,000
|
|
$
|
140,000
|
|
$
|
325,000
|
|
|
|
|
|
|
|
|
|
|
Gold ounces produced
in doré (000's)
|
|
170
|
|
|
90
|
|
|
175
|
|
|
435
|
|
Total cash costs
per ounce before by-product credits
|
$
|
676
|
|
$
|
778
|
|
$
|
800
|
|
$
|
747
|
|
Total cash costs
per ounce net of by-product credits
|
$
|
676
|
|
$
|
778
|
|
$
|
800
|
|
$
|
747
|
|
All-in sustaining
costs
|
|
La
Arena
|
|
Shahuindo
|
|
Timmins
Mines
|
|
Gold
|
Total cash costs net
of by-product credits
|
$
|
115,000
|
|
$
|
70,000
|
|
$
|
140,000
|
|
$
|
325,000
|
|
Sustaining
capital
|
|
35,000
|
|
|
15,000
|
|
|
45,000
|
|
|
95,000
|
|
Exploration
|
|
—
|
|
|
—
|
|
|
4,500
|
|
|
4,500
|
|
Reclamation cost
accretion
|
|
1,000
|
|
|
1,000
|
|
|
1,000
|
|
|
3,000
|
|
General and
administrative expenses
|
|
12,000
|
|
|
9,000
|
|
|
9,000
|
|
|
30,000
|
|
All-in sustaining
costs
|
$
|
163,000
|
|
$
|
95,000
|
|
$
|
199,500
|
|
$
|
457,500
|
|
|
|
|
|
|
|
|
|
|
Gold ounces produced
in doré (000's)
|
|
170
|
|
|
90
|
|
|
175
|
|
|
435
|
|
All-in sustaining
costs per ounce produced
net of by-product credits
|
$
|
959
|
|
$
|
1,056
|
|
$
|
1,140
|
|
$
|
1,052
|
|
The reconciliation
which formed the basis for the ranges in the multi-year total cash
cost and all-in sustaining cost guidance for gold is as
follows:
|
Total cash costs
(gold)
|
|
2018
|
2019
|
2020
|
Production
costs
|
$
|
325,000
|
|
$
|
354,500
|
|
$
|
354,500
|
|
Treatment and
refining charges
|
|
—
|
|
|
—
|
|
|
—
|
|
Total cash costs
before by-product credits
|
$
|
325,000
|
|
$
|
354,500
|
|
$
|
354,500
|
|
By-product
credits
|
|
—
|
|
|
—
|
|
|
—
|
|
Total cash costs net
of by-product credits
|
$
|
325,000
|
|
$
|
354,500
|
|
$
|
354,500
|
|
|
|
|
|
|
|
|
Gold ounces produced
in doré (000's)
|
|
435
|
|
|
525
|
|
|
525
|
|
Total cash costs
per ounce before by-product credits
|
$
|
747
|
|
$
|
675
|
|
$
|
675
|
|
Total cash costs
per ounce net of by-product credits
|
$
|
747
|
|
$
|
675
|
|
$
|
675
|
|
All-in sustaining
costs (gold)
|
|
2018
|
2019
|
2020
|
Total cash costs net
of by-product credits
|
$
|
325,000
|
|
$
|
354,500
|
|
$
|
354,500
|
|
Sustaining
capital
|
$
|
95,000
|
|
$
|
125,000
|
|
$
|
107,000
|
|
Exploration
|
$
|
4,500
|
|
$
|
10,000
|
|
$
|
6,000
|
|
Reclamation cost
accretion
|
$
|
3,000
|
|
$
|
3,000
|
|
$
|
3,000
|
|
Corporate
G&A(1)
|
$
|
30,000
|
|
$
|
32,500
|
|
$
|
28,500
|
|
All-in sustaining
costs
|
$
|
457,500
|
|
$
|
525,000
|
|
$
|
499,000
|
|
|
|
|
|
|
|
|
Gold ounces produced
in doré (000's)
|
|
435
|
|
|
525
|
|
|
525
|
|
All-in sustaining
costs per ounce produced
net of by-product credits
|
$
|
1,052
|
$
|
1,000
|
|
$
|
950
|
|
|
|
(1)
|
Numbers may not
calculate due to rounding
|
(2)
|
General and
administrative expenses have been allocated to gold at 60% of total
corporate G&A consistent with 2018.
|
Cash provided by operating activities before changes in
working capital
Cash provided by operating activities before changes in working
capital represents the cash flows generated by operating activities
after adjusting for interest expense, income tax expense and
financing fees as well as items not involving cash but before
changes in working capital. Net cash provided by operating
activities represents the cash flows generating by operating
activities after changes in working capital and income taxes paid.
Management believes that these measures provide useful information
to investors to evaluate the Company's ability to generate cash
flows from its mining operations.
The non-GAAP measures described above do not have standardized
meanings prescribed by IFRS. As such, there are likely to be
differences in the method of computation when compared to similar
measures presented by other reporting issuers.
|
Q4
2017
|
|
Q4 2016
|
|
2017
|
|
2016
|
Cash provided by
operating activities before changes in working
capital(1)
|
$
|
23,988
|
|
|
$
|
74,669
|
|
|
$
|
287,014
|
|
|
$
|
385,926
|
|
Net cash provided
by operating activities(1)
|
$
|
18,081
|
|
|
$
|
107,804
|
|
|
$
|
234,264
|
|
|
$
|
249,454
|
|
Basic weighted
average common shares outstanding
|
313,193
|
|
|
311,653
|
|
|
312,804
|
|
|
289,727
|
|
|
|
(1)
|
Refer to the
condensed interim consolidated statements of cash flows in the
Company's interim financial statements for a detailed
reconciliation from earnings and total comprehensive income to cash
provided by operating activities before changes in working capital
and net cash provided by operating activities.
|
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
This press release contains "forward-looking information"
"forward-looking information" within the meaning of Section 27A of
the United States Securities Act of 1933, as amended, Section 21E
of the US Exchange Act, 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 the Company. All statements, other than statements of
historical fact, are forward-looking statements. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects", "is
expected", "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 include, but are not limited to,
statements related to the following: in regards to the appeals to
the Guatemalan Constitutional Court of the decision by the Supreme
Court of Guatemala ordering the
Guatemalan Ministry of Energy and Mining ("MEM") to conduct
consultation with indigenous populations in certain designated
locations in and around the Escobal Mine, reinstating the Company's
mining license in respect of the Escobal mine, the timeline for
such appeals to be heard and decided and the likelihood of an
adverse decision by the Constitutional Court; the timing and
results of other court proceedings; the timing and likelihood of
peacefully resolving the road blockage affecting the Escobal mine;
timing and possible outcome of pending litigation; the continuation
of the expansion plans at Shahuindo and Bell Creek; the future
price of gold, silver, copper, lead and zinc, the estimation of
Mineral Reserves and Mineral Resources, the realization of Mineral
Reserve estimates; production and cost targets for the Company's
gold operations in 2018 of 400,000 to 475,000 ounces of gold, total
cash costs of $725 to $775 per ounce and all-in sustaining costs of
$1,000 to $1,100 per ounce, as well as estimated 2018
production, cash costs, all-in sustaining costs, project capital,
sustaining capital and exploration expenditures on a per gold mine
basis; project capital expenditures in 2018 of $125 to $150
million; sustaining capital expenditures in 2018 of
$90 to $115
million; exploration expenditures in 2018 of $15 to $25 million;
corporate G&A expenses in 2018 of $45 to $55 million;
gold production by mine in 2018; multi-year gold guidance (2018 to
2020) relating to gold ounces produced, total cash costs per ounce
gold produced net of by-product credits, all-in sustaining costs
per ounce gold produced net of by-product credits, sustaining and
project capital expenditures, corporate general and administration
expenses, and exploration expenses; the timing and amount of
estimated future production, costs of production, capital
expenditures and requirements for additional capital; the
expectation of meeting production targets; growing gold production
to over a half million ounces in 2019 and the costs of production
and capital and other expenditures associated with such growth; the
Company's goal to reach and sustain 18-21 million ounces of silver
production and 500-550 thousand ounces of gold production annually;
the continued evaluation of the La Arena II project and the
economic analysis provided in the PEA, including the timeline and
estimated capital required; the timing and cost of the design,
procurement, construction and commissioning of the 24,000 tpd
crushing and agglomeration circuit at Shahuindo, as well as the
expansion of the Shahuindo mine to a production capacity of 36,000
tpd with commissioning by mid-year 2018 and achieving the full
36,000 tpd production rate by the end of 2018; the timing of the
receipt of permits at Shahuindo; the steps being taken to optimize
leaching permeability at Shahuindo; the timing for construction of
Pad 2B at Shahuindo and the
commencement of production at Pad 2B
in the second half of 2018; the expectation of the capacity of the
south waste rock dump at Shahuindo; the timing of completion of the
Bell Creek shaft project; the completion of construction of the
Phase 5 tailings facility expansion at the Bell Creek Mill ready
for operation in accordance with the life of mine plan; care and
maintenance plans at Escobal; production, costs, cash flows returns
on investment and net present values presented in the La Arena II
preliminary economic assessment; providing further updates to
guidance when additional information regarding the Escobal license
is available; the expected working capital requirements; the
sufficiency of capital resources and the consideration of
alternative financing arrangements to meet strategic needs; the
expected depreciation and depletion rates; exploration and review
of prospective mineral acquisitions; the anticipated timing of
updated Mineral Resource and Mineral Reserve estimates; the timing
for completion of the underground dewatering project at Escobal;
the cost and timing of sustaining capital projects; and the timing,
costs, results and impacts of purported class action lawsuits filed
against the Company and certain of its officers and directors.
Forward-looking statements are based on the reasonable
assumptions, estimates, analysis and opinions of management made in
light of its experience and its perception of trends, current
conditions and expected developments, as well as other factors that
management believes to be relevant and reasonable in the
circumstances at the date that such statements are made, but which
may prove to be incorrect. Management believes that the assumptions
and expectations reflected in such forward-looking statements are
reasonable. Assumptions have been made regarding, among other
things: the Company's performance and ability to implement
operational improvements at the Escobal, La Arena, Shahuindo and
Timmins mines; the Company's
ability to carry on exploration and development activities,
including land acquisition and construction; the availability and
sufficiency of power and water for operations; the timely receipt
of permits and other approvals; the successful outcomes of
consultations with indigenous populations; the price of silver,
gold and other metals; prices for key mining supplies, including
labor costs and consumables, remaining consistent with the
Company's current expectations; production meeting expectations and
being consistent with estimates; plant, equipment and processes
operating as anticipated; there being no material variations in the
current tax and regulatory environment; the Company's ability to
operate in a safe, efficient and effective manner; the exchange
rates among the Canadian dollar, Guatemalan quetzal, Peruvian sol
and the USD remaining consistent with current levels; the Company's
ability to peacefully resolve the protests and road blockages of
the Escobal Mine; the timing and ability of the Company to resume
operations once the suspension of the mining license to
Minera San Rafael for the Escobal
Mine is lifted and all licenses, permits and credentials affecting
the operation of the Company's mines, including the Escobal Mine,
are renewed or re-issued and all roadblocks are cleared, and
relationships with our partners, including employees, vendors and
community populations are maintained or effectively managed; the
Company's ability to obtain financing as and when required and on
reasonable terms; and the Company's ability to continue to comply
with the terms of the credit agreements with its lenders. Readers
are cautioned that the foregoing list is not exhaustive of all
factors and assumptions which may have been used.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other factors that may cause actual
results to be materially different from those expressed or implied
by such forward-looking statements. Such risks, uncertainties and
other factors include summarized above and discussed in more detail
in our public filings available on SEDAR at www.sedar.com, on EDGAR
at www.sec.gov or on the Company's website at
www.tahoeresources.com.
Although management 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 forward-looking statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such forward-looking
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 the Company, 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 the Company's operating environment. The Company
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 as, and to
the extent required by, applicable securities laws.
CAUTIONARY NOTE TO INVESTORS IN THE
UNITED STATES REGARDING RESERVES AND RESOURCES
The Mineral Resource and Mineral Reserve estimates contained in
this press release have been prepared in accordance with the
requirements of the securities laws in effect in Canada, which differ from the requirements of
United States securities laws and
use terms that are not recognized by the United States Securities
and Exchange Commission ("SEC"). Canadian reporting requirements
for disclosure of mineral properties are governed by NI 43-101. The
definitions used in NI 43-101 are incorporated by reference from
the CIM Definition Standards adopted by CIM Council on May 10, 2014 (the "CIM Definition Standards").
U.S. reporting requirements are governed by the SEC Industry Guide
7 ("Industry Guide 7") under the United States Securities Act of
1933, as amended. These reporting standards have similar goals in
terms of conveying an appropriate level of confidence in the
disclosures being reported, but embody difference approaches and
definitions. For example, the terms "Mineral Reserve", "Proven
Mineral Reserve" and "Probable Mineral Reserve" are Canadian mining
terms as defined in in NI 43-101, and these definitions differ from
the definitions in Industry Guide 7. Under Industry Guide 7
standards, a "final" or "bankable" feasibility study is required to
report reserves and the primary environmental analysis or report
must be filed with the appropriate governmental authority. Further,
under Industry Guide 7, mineralization may not be classified as
"reserve" unless the determination has been made that the
mineralization could be economically and legally produced or
extracted at the time the reserve determination is made.
While the terms "Mineral Resource", "Measured Mineral Resource",
"Indicated Mineral Resource" and "Inferred Mineral Resource" are
defined in and required to be disclosed by NI 43-101, these terms
are not defined terms under Industry Guide 7 and are normally not
permitted to be used in reports and registration statements filed
with the SEC. United States
readers are cautioned not to assume that any part or all of mineral
deposits in these categories will ever be converted into reserves.
In addition, "Inferred Mineral Resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. A significant amount of
exploration must be completed in order to determine whether an
Inferred Mineral Resource may be upgraded to a higher category.
Under Canadian regulations, estimates of Inferred Mineral Resources
may not form the basis of feasibility or pre-feasibility studies,
except in rare cases. United
States readers are cautioned not to assume that all or any
part of an Inferred Mineral Resource exists or is economically or
legally mineable. Disclosure of "contained ounces" in a resource is
permitted disclosure under Canadian regulations if such disclosure
includes the grade or quality and the quantity for each category of
Mineral Resource and Mineral Reserve; however, the SEC normally
only permits issuers to report mineralization that does not
constitute "reserves" by SEC standards as in place tonnage and
grade without reference to unit measures.
Accordingly, information contained in this press release
containing descriptions of the Company's mineral deposits may not
be comparable to similar information made public by United States companies subject to the
reporting and disclosure requirements under the United States federal securities laws and
the rules and regulations thereunder.
SELECTED QUARTERLY CONSOLIDATED FINANCIAL RESULTS
Selected quarterly and YTD consolidated financial information
from continuing operations is as follows:
|
|
Q4
2017
|
|
Q4 2016
|
|
2017
|
|
2016
|
Metal
Sold
|
|
|
|
|
|
|
|
|
Silver (000's
ozs)
|
|
46.2
|
|
|
4,496
|
|
|
10,113
|
|
|
19,065
|
|
Gold (000's
ozs)(2)
|
|
92.9
|
|
|
100.7
|
|
|
435.2
|
|
|
358.2
|
|
Lead (000's
t)
|
|
—
|
|
|
2.3
|
|
|
4.0
|
|
|
9.0
|
|
Zinc (000's
t)
|
|
—
|
|
|
2.8
|
|
|
5.6
|
|
|
12.3
|
|
Realized
Price
|
|
|
|
|
|
|
|
|
Silver in concentrate
(per oz)
|
$
|
—
|
|
$
|
14.45
|
|
$
|
17.71
|
|
$
|
17.57
|
|
Gold in doré (per
oz)
|
$
|
1,272
|
|
$
|
1,197
|
|
$
|
1,246
|
|
$
|
1,245
|
|
Lead (per
t)
|
$
|
—
|
|
$
|
2,036
|
|
$
|
2,379
|
|
$
|
1,886
|
|
Zinc (per
t)
|
$
|
—
|
|
$
|
2,872
|
|
$
|
2,864
|
|
$
|
2,268
|
|
LBMA/LME
Price(3)
|
|
|
|
|
|
|
|
|
Silver (per
oz)
|
$
|
16.84
|
|
$
|
17.19
|
|
$
|
17.16
|
|
$
|
17.14
|
|
Gold (per
oz)
|
$
|
1,278
|
|
$
|
1,220
|
|
$
|
1,251
|
|
$
|
1,250
|
|
Lead (per
t)
|
$
|
2,334
|
|
$
|
2,149
|
|
$
|
2,259
|
|
$
|
1,872
|
|
Zinc (per
t)
|
$
|
2,963
|
|
$
|
2,517
|
|
$
|
2,783
|
|
$
|
2,095
|
|
Revenues
|
$
|
117,734
|
|
$
|
189,398
|
|
$
|
733,557
|
|
$
|
784,503
|
|
Total operating
costs
|
$
|
122,997
|
|
$
|
141,552
|
|
$
|
541,587
|
|
$
|
480,378
|
|
Earnings from
operations
|
$
|
(20,219)
|
|
$
|
31,466
|
|
$
|
191,970
|
|
$
|
242,268
|
|
Earnings
(loss)(6)(7)
|
$
|
(18,010)
|
|
$
|
315
|
|
$
|
81,793
|
|
$
|
117,876
|
|
Earnings (loss)
per common share
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.06)
|
|
$
|
—
|
|
$
|
0.26
|
|
$
|
0.41
|
|
Diluted
|
$
|
(0.06)
|
|
$
|
—
|
|
$
|
0.26
|
|
$
|
0.41
|
|
Adjusted earnings
(loss)(4)
|
$
|
(17,678)
|
|
$
|
18,415
|
|
$
|
84,011
|
|
$
|
180,385
|
|
Adjusted earnings
(loss) per common share(4)
|
|
|
|
|
|
|
|
|
Basic(4)
|
$
|
(0.06)
|
|
$
|
0.06
|
|
$
|
0.27
|
|
$
|
0.62
|
|
Diluted(4)
|
$
|
(0.06)
|
|
$
|
0.06
|
|
$
|
0.27
|
|
$
|
0.62
|
|
Weighted average
shares outstanding - Basic
|
|
313,193
|
|
|
311,653
|
|
|
312,804
|
|
|
289,726
|
|
Weighted average
shares outstanding - Diluted
|
|
313,200
|
|
|
311,786
|
|
|
312,834
|
|
|
289,988
|
|
Dividends
paid
|
$
|
—
|
|
$
|
18,672
|
|
$
|
43,686
|
|
$
|
69,402
|
|
Cash flow provided
by operating activities
|
$
|
18,081
|
|
$
|
107,021
|
|
$
|
234,264
|
|
$
|
249,454
|
|
Cash flow provided
by operating activities before changes in working
capital(4)
|
$
|
23,988
|
|
$
|
74,669
|
|
$
|
287,014
|
|
$
|
385,926
|
|
Cash and cash
equivalents
|
$
|
125,665
|
|
$
|
163,368
|
|
$
|
125,665
|
|
$
|
163,368
|
|
Total
assets
|
$
|
3,080,638
|
|
$
|
3,071,253
|
|
$
|
3,080,638
|
|
$
|
3,071,253
|
|
Total long-term
liabilities
|
$
|
299,920
|
|
$
|
348,663
|
|
$
|
299,920
|
|
$
|
348,663
|
|
Costs per silver
ounce produced
|
|
|
|
|
|
|
|
|
Total cash costs net
of by-product credits(4)
|
$
|
—
|
|
$
|
6.48
|
|
$
|
6.15
|
|
$
|
5.84
|
|
All-in sustaining
costs per silver ounce net of by-product
credits(4)
|
$
|
—
|
|
$
|
9.76
|
|
$
|
8.91
|
|
$
|
8.06
|
|
Costs per gold
ounce produced
|
|
|
|
|
|
|
|
|
Total cash costs net
of by-product credits(4)
|
$
|
648
|
|
$
|
594
|
|
$
|
641
|
|
$
|
620
|
|
All-in sustaining
costs per gold ounce net of by-product
credits(4)(5)
|
$
|
1,033
|
|
$
|
945
|
|
$
|
973
|
|
$
|
943
|
|
|
|
(1)
|
2016 numbers
include operational and financial information from the Timmins
mines beginning April 1, 2016, the date of acquisition of Lake
Shore Gold and operational and financial information from Shahuindo
beginning May 1, 2016, the commencement of commercial
production.
|
(2)
|
Included in the 358.2
thousand gold ounces sold for 2016 are 44.3 thousand gold ounces
sold at Shahuindo which include four months of pre-commercial
production ounces sold (7.6 thousand ounces of gold in doré sold in
the period January through April 2016).
|
(3)
|
London Bullion Market
Association (LBMA)/London Metal Exchange (LME) average closing
prices for each period presented.
|
(4)
|
Refer to the
"Cautionary Note on Non-GAAP Financial Measures" section of
this press release.
|
(5)
|
All-in sustaining
costs net of by-product credits per gold ounce produced for 2016
exclude the impact of $11.1 million in non-recurring transaction
costs related to the acquisition of Lake Shore Gold.
|
(6)
|
Earnings of $0.3
million for Q4 2016 were negatively impacted by the change in
enacted tax rates in Peru, resulting in a charge of approximately
$19.3 million to deferred income tax expense. Refer to the
Company's adjusted earnings described and calculated in the
"Cautionary Note on Non-GAAP Financial Measures" section of
this press release.
|
(7)
|
Earnings of $117.9
million for 2016 were impacted by the result of a change in enacted
tax rates in Peru for $19.3 million, a non-cash loss on the
redemption of the Lake Shore Gold debentures of $32.3 million and
non-recurring transaction costs of $11.1 million related to the
acquisition of Lake Shore Gold. Refer to the Company's adjusted
earnings described and calculated in the "Cautionary Note on
Non-GAAP Financial Measures" section of this press
release.
|
(8)
|
Numbers may not
calculate due to rounding.
|
View original
content:http://www.prnewswire.com/news-releases/tahoe-reports-strong-2017-financial-results-and-updates-2018-and-multi-year-gold-guidance-300603135.html
SOURCE Tahoe Resources Inc.