TSX: G NYSE: GG
All amounts in $US
VANCOUVER, Jan. 16, 2018 /CNW/ - GOLDCORP INC. (TSX:
G, NYSE: GG) ("Goldcorp" or the "Company") is pleased to report
its preliminary gold production for the fourth quarter and full
year 2017 of 646,000 and 2,569,000 ounces, respectively, exceeding
the midpoint of gold production guidance of 2,500,000 ounces.
All-in sustaining costs ("AISC") for the full year are expected to
be in line with the improved midpoint guidance of $825 per ounce. Goldcorp's complete 2017
financial results will be released on February 14, 2018.1,2
"Since we restructured our business during the first half of
2016 to drive a culture of accountability and sound operating
principles, we have delivered consistent, predictable and low-cost
gold production," said David
Garofalo, President and Chief Executive Officer of
Goldcorp. "We are well underway to deliver on our 5-year plan
of growing gold production and gold reserves by 20% and reducing
AISC by 20% by 2021. With the most robust growth pipeline
among global senior gold companies, we are making an initial
investment of $100 million in our
long-term portfolio 'Beyond 20/20'. Together with an
enhanced exploration budget of $125
million, the objective of Beyond 20/20 is to maximize the
net asset value of our existing mines and projects by
continuing to grow low-cost gold production from our growing gold
reserves."
Goldcorp will host its Investor Day on Tuesday, January 16, 2018 at 8:00am Eastern Time. The Company will provide a
detailed update of its 20/20/20 plan, its exploration program and
Beyond 20/20. The event will be available by webcast at
www.goldcorp.com.
2018 Guidance in line with 20/20/20 plan2
Goldcorp expects to produce 2.5 million ounces (+/- 5%) of gold
in 2018, in line with previous guidance; AISC are expected to
decline further to approximately $800
per ounce (+/- 5%) as the Company continues to realize savings from
its program targeting $250 million of
annual sustainable efficiencies.
The Company's 20/20/20 plan remains unchanged. As previously
guided, gold production is expected to increase 20% to 3 million
ounces by 2021. AISC are expected to decrease by 20% to
approximately $700 per ounce over the
same period driven by increased gold production and the ongoing
focus on cost efficiencies and productivity improvements.
Building on the successful conversion of 4.7 million ounces of gold
into reserves at the Century project in 2017, gold reserves are
expected to increase by 20% to 60 million ounces by 2021 supported
by the exploration potential and ongoing programs at Coffee, Norte
Abierto (formerly Cerro
Casale/Caspiche), Cerro Negro
and Pueblo Viejo.
Complete production and cost guidance to 2021 is provided below.
For more detailed guidance on mines and projects, please refer to
our website at www.goldcorp.com.
20/20/20 Outlook
Production (+/-
5%)
|
Units
|
2018E
|
2019E
|
2020E
|
2021E
|
|
Gold
Production1,2
|
Moz
|
2.5
|
2.7
|
3.0
|
3.0
|
|
Silver
Production1,2
|
Moz
|
30
|
50
|
40
|
35
|
|
Zinc
Production1,2
|
Mlbs
|
300
|
425
|
450
|
400
|
|
Lead
Production1,2
|
Mlbs
|
160
|
300
|
250
|
150
|
|
Gold Equivalent
Production1,2
|
Moz
|
3.3
|
4.0
|
4.1
|
4.1
|
|
|
|
|
|
|
Costs (+/-
5%)
|
|
|
|
|
|
|
AISC1,2,3,4
|
$/oz
|
800
|
750
|
700
|
700
|
|
By-product Cash
Costs1,2,5
|
$/oz
|
450
|
400
|
400
|
400
|
|
|
|
|
|
|
Capital
Expenditures (+/- 5%)
|
|
|
|
|
|
|
Sustaining
Capital1,2,6
|
$M
|
550
|
575
|
575
|
575
|
|
Growth
Capital1,2,6
|
$M
|
525
|
250
|
300
|
300
|
|
Unspent 2017 Pyrite
Leach Project Capital1
|
$M
|
125
|
-
|
-
|
-
|
|
Beyond 20/20
Capital1,2,7
|
$M
|
100
|
-
|
-
|
-
|
Other 2018
Financial Estimates
|
|
|
Corporate
Administration ($M)1 (including non-cash stock
compensation of $40M)
|
$140
|
|
Exploration
Investment ($M)1,2,8
|
$125
|
|
Depreciation
($/oz)1,2
|
$485
|
|
Tax rate
(%)1,2
|
40 – 45%
|
Footnotes
- Guidance projections used in this document ("Guidance") are
considered "forward-looking statements" and represent management's
good faith estimates or expectations of future production results
as of the date hereof. Guidance is based upon certain assumptions,
including, but not limited to, metal prices, oil prices, certain
exchange rates and other assumptions. 2018-2019 guidance assumes
Au=$1,300/oz, Ag=$19.00/oz, Cu=$2.75/lb, Zn=$1.30/lb, Pb=$1.10/lb, $1.25
CAD/USD, 19.00 MXN/USD. 2020-2021 guidance assumes
Au=$1,300/oz, Ag=$18.00/oz, Cu=$3.00/lb, Zn=$1.15/lb, Pb=$1.00/lb, $1.25
CAD/USD, 19.00 MXN/USD. Such assumptions may prove to be
incorrect and actual results may differ materially from those
anticipated. Consequently, Guidance cannot be guaranteed. As such,
investors are cautioned not to place undue reliance upon Guidance
and forward-looking statements as there can be no assurance that
the plans, assumptions or expectations upon which they are placed
will occur.
- The Company has included certain performance measures,
including non-GAAP performance measures, in this release, which
have been calculated on an attributable (or Goldcorp's share)
basis. Attributable performance measures include the Company's
mining operations and projects, and the Company's share of Pueblo
Viejo, Alumbrera, Leagold and NuevaUnión. The Company believes that
disclosing certain performance measures on an attributable basis is
a more relevant measurement of the Company's operating and economic
performance, and reflects the Company's view of its core mining
operations. The Company believes that, in addition to conventional
measures prepared in accordance with GAAP, the Company and certain
investors use this information to evaluate the Company's
performance and ability to generate cash flow; however, these
performance measures do not have any standardized meaning.
Accordingly, it is intended to provide additional information and
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP.
- The Company's projected all-in sustaining costs are not based
on GAAP total production cash costs, which forms the basis of the
Company's by-product cash costs. The projected range of all-in
sustaining costs is anticipated to be adjusted to include
sustaining capital expenditures, corporate administrative expense,
mine-site exploration and evaluation costs and reclamation cost
accretion and amortization, and exclude the effects of expansionary
capital, tax payments, dividends and financing costs. Projected
GAAP total production cash costs for the full year would require
inclusion of the projected impact of future included and excluded
items, including items that are not currently determinable, but may
be significant, such as sustaining capital expenditures,
reclamation cost accretion and amortization and tax payments. Due
to the uncertainty of the likelihood, amount and timing of any such
items, we do not have information available to provide a
quantitative reconciliation of projected all-in sustaining costs to
a total production cash costs projection.
- All-in sustaining costs is a non-GAAP performance measure that
the Company believes more fully defines the total costs associated
with producing gold; however, this performance measure has no
standardized meaning. Accordingly, it is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with GAAP. The Company reports this measure on a gold ounces sold
basis. The Company's all-in sustaining cost definition follows the
guidance note released by the World Gold Council, which became
effective January 1, 2014. The World
Gold Council is a non-regulatory market development organization
for the gold industry whose members comprise global senior gold
mining companies.
- The Company has included a non-GAAP performance measure - total
cash costs: by-product in this document. Total cash costs:
by-product incorporate Goldcorp's share of all production costs,
including adjustments to inventory carrying values, adjusted for
changes in estimates in reclamation and closure costs at the
Company's closed mines which are non-cash in nature, and include
Goldcorp's share of by-product silver, lead, zinc and copper
credits, and treatment and refining charges included within
revenue. Additionally, cash costs are adjusted for realized gains
and losses arising on the Company's commodity and foreign currency
contracts which the Company enters into to mitigate its exposure to
fluctuations in by-product metal prices, heating oil prices and
foreign exchange rates, which may impact the Company's operating
costs.
In addition to conventional measures, the Company assesses this per
ounce measure in a manner that isolates the impacts of gold
production volumes, the by-product credits, and operating costs
fluctuations such that the non-controllable and controllable
variability is independently addressed. The Company uses total cash
costs: by product per gold ounce to monitor its operating
performance internally, including operating cash costs, as well as
in its assessment of potential development projects and acquisition
targets. The Company believes this measure provides investors and
analysts with useful information about the Company's underlying
cash costs of operations and the impact of by-product credits on
the Company's cost structure and is a relevant metric used to
understand the Company's operating profitability and ability to
generate cash flow. When deriving the production costs associated
with an ounce of gold, the Company includes by-product credits as
the Company considers that the cost to produce the gold is reduced
as a result of the by-product sales incidental to the gold
production process, thereby allowing the Company's management and
other stakeholders to assess the net costs of gold production.
The Company reports total cash costs: by-product on a gold ounces
sold basis. In the gold mining industry, this is a common
performance measure but does not have any standardized meaning. The
Company follows the recommendations of the Gold Institute
Production Cost Standard. The Gold Institute, which ceased
operations in 2002, was a non-regulatory body and represented a
global group of producers of gold and gold products. The production
cost standard developed by the Gold Institute remains the generally
accepted standard of reporting cash costs of production by gold
mining companies.
- Excludes capitalized exploration costs. Growth capital includes
capital costs for those projects which are in execution and/or have
an approved feasibility study. Projects without an approved
feasibility study only include capital costs to the next stage
gate.
- Beyond 20/20 capital expenditures can vary year over year based
on study results. As project studies are completed and show
adequate returns, additional funds will be committed to move
projects to the next stage of development.
- Approximately 50% of exploration spending is considered
sustaining (including expensed costs) and approximately 50% is
considered as expansionary.
Cautionary Note Regarding Forward Looking Statements
This press release contains "forward-looking statements", within
the meaning of Section 27A of the United States Securities Act of
1933, as amended, Section 21E of the United States Exchange Act of
1934, as amended, or the United States Private Securities
Litigation Reform Act of 1995 and "forward-looking information"
under the provisions of applicable Canadian securities legislation,
concerning the business, operations and financial performance and
condition of Goldcorp. Forward-looking statements include, but are
not limited to, statements with respect to the future price of
gold, silver, copper, lead and zinc, the estimation of mineral
reserves and mineral resources, the realization of mineral
reserve estimates, the timing and amount of estimated future
production, costs of production, targeted cost reductions, capital
expenditures, free cash flow, costs and timing of the development
of new deposits, success of exploration activities, permitting time
lines, hedging practices, currency exchange rate fluctuations,
requirements for additional capital, government regulation of
mining operations, environmental risks, unanticipated reclamation
expenses, timing and possible outcome of pending litigation, title
disputes or claims and limitations on insurance coverage.
Generally, these forward-looking statements can be identified by
the use of words such as "plans", "expects", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "believes" or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "would", "should", "might" or "will", "occur" or "be
achieved" or the negative connotation thereof.
Forward-looking statements are necessarily based upon a number
of factors that, if untrue, could cause the actual results,
performances or achievements of Goldcorp to be materially different
from future results, performances or achievements expressed or
implied by such statements. Such statements and information are
based on numerous assumptions regarding present and future business
strategies and the environment in which Goldcorp will operate in
the future, including the price of gold and other by-product
metals, anticipated costs and ability to achieve goals. Certain
important factors that could cause actual results, performances or
achievements to differ materially from those in the forward-looking
statements include, among others, gold and other by-product metals
price volatility, discrepancies between actual and estimated
production, mineral reserves and mineral resources and
metallurgical recoveries, mining operational and development risks,
litigation risks, regulatory restrictions (including environmental
regulatory restrictions and liability), changes in national and
local government legislation, taxation, controls or regulations
and/or change in the administration of laws, policies and
practices, expropriation or nationalization of property and
political or economic developments in Canada, the United
States and other jurisdictions in which Goldcorp does or may
carry on business in the future, delays, suspension and technical
challenges associated with capital projects, higher prices for
fuel, steel, power, labour and other consumables, currency
fluctuations, the speculative nature of gold exploration, the
global economic climate, dilution, share price volatility,
competition, loss of key employees, additional funding requirements
and defective title to mineral claims or property. Although
Goldcorp believes its expectations are based upon reasonable
assumptions and has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as
anticipated, estimated or intended.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other important factors that may cause the
actual results, level of activity, performance or achievements of
Goldcorp to be materially different from those expressed or implied
by such forward-looking statements, including but not limited to:
risks related to international operations including economic and
political instability in foreign jurisdictions in which Goldcorp
operates; risks related to current global financial conditions;
risks related to joint venture operations; actual results of
current exploration activities; actual results of current
reclamation activities; environmental risks; conclusions of
economic evaluations; changes in project parameters as plans
continue to be refined; future prices of gold and other by-product
metals; possible variations in ore reserves, grade or recovery
rates; failure of plant, equipment or processes to operate as
anticipated; risks related to the integration of acquisitions;
accidents, labour disputes; delays in obtaining governmental
approvals or financing or in the completion of development or
construction activities and other risks of the mining industry, as
well as those factors discussed in the section entitled
"Description of the Business – Risk Factors" in Goldcorp's most
recent annual information form available on SEDAR at www.sedar.com
and on EDGAR at www.sec.gov. Although Goldcorp has attempted to
identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. The forward-looking
statements contained herein are made as of the date hereof and,
accordingly, are subject to change after such date. Except as
otherwise indicated by Goldcorp, these statements do not reflect
the potential impact of any non-recurring or other special items or
of any dispositions, monetizations, mergers, acquisitions, other
business combinations or other transactions that may be announced
or that may occur after the date hereof. Forward-looking statements
are provided for the purpose of providing information about
management's current expectations and plans and allowing investors
and others to get a better understanding of Goldcorp's operating
environment. Goldcorp does not intend or undertake to publicly
update any forward-looking statements that are included in this
document, whether as a result of new information, future events or
otherwise, except in accordance with applicable securities
laws.
About Goldcorp
Goldcorp is a senior gold producer focused on responsible mining
practices with safe, low-cost production from a high-quality
portfolio of mines.
SOURCE Goldcorp Inc.