VANCOUVER, July 25, 2018 /PRNewswire/ - GOLDCORP
INC. (TSX: G, NYSE: GG) ("Goldcorp" or the "Company") is
pleased to report its second quarter 2018 results.
Second Quarter Highlights
- Net loss was $131 million, or
$0.15 per share, which was impacted
by non-cash foreign exchange losses of $178
million, or $0.20 per share,
primarily arising on deferred tax balances. Operating cash
flows and adjusted operating cash flows(1) for the three
months ended June 30, 2018 were
$158 million and $310 million, respectively, compared to
$158 million and $320 million, respectively, for the three months
ended June 30, 2017.
- Gold production of 571,000 ounces at all-in
sustaining costs(1) ("AISC") of
$850 per ounce, compared
to 635,000 ounces at AISC of $800 per ounce for the three months ended
June 30, 2017. Ramp-up of sustainable capacity at
Éléonore and Cerro Negro continued
and are expected to be key contributors to increasing production in
the second half of the year. Full year 2018 guidance reconfirmed
for gold production of 2.5 million ounces (+/-5%) at AISC of
$800(2) per ounce (+/-
5%).
- Project pipeline continues to advance in support of the
Company's 20/20/20 growth plan. The Peñasquito Pyrite Leach has
completed construction with commissioning further accelerated to
the third quarter of 2018, now two quarters ahead of schedule,
while the Musselwhite Materials Handling project advanced to 76%
completion, on schedule and 10% below budget.
- Significant milestones reached at Coffee and Borden with the signing of agreements with
First Nation communities. On April 30,
2018, Goldcorp signed a collaboration agreement with
Tr'ondëk Hwëch'in relating to the Coffee project and, on
June 6, 2018, signed an Impacts and
Benefits Agreement with three First Nation communities with respect
to the development and operation of the Borden project.
- Successfully executed on the Company's $250 million sustainable annual efficiency
program with target now increased by a further $100 million. Through the execution of
numerous cost reduction and productivity improvements across the
portfolio, the Company achieved its target of $250 million of sustainable efficiencies and
extended the program, targeting additional improvements of
$100 million by the end of 2019.
"With the ongoing successful ramp up of the Éléonore and
Cerro Negro mines, on plan gold
production across the portfolio and our pipeline of growth projects
being advanced on budget and on schedule, we continue to
execute on the delivery of our 20/20/20 plan of growing production
and reducing AISC by 20% by 2021," said David Garofalo, President and Chief Executive
Officer of Goldcorp. "In addition, the strong exploration results
achieved during the quarter, highlighted by the results at
Musselwhite and Cerro Negro, demonstrate our exploration team's
ability to find new discoveries within Goldcorp's highly
prospective and underexplored land packages in order to achieve 20%
reserve growth by 2021."
FINANCIAL AND OPERATING RESULTS
($ millions, except
where indicated)
|
Three months
ended June 30, 2018
|
Three months
ended
June 30, 2017
|
Gold
production(1) (ounces)
|
571,000
|
635,000
|
Gold
sales(1) (ounces)
|
562,000
|
649,000
|
Operating cash
flows
|
$158
|
$158
|
Adjusted operating
cash flows(1)(2)
|
$310
|
$320
|
Net earnings
(loss)
|
($131)
|
$135
|
Net earnings (loss)
per share
|
($0.15)
|
$0.16
|
By-product cash
costs(1)(3) (per ounce)
|
$527
|
$510
|
AISC(1)(3)
(per ounce)
|
$850
|
$800
|
Please refer to the Company's financial statements, related
notes and accompanying Management's Discussion and Analysis for a
full review of its operations and projects. This can be accessed by
clicking on this link: Q2-2018 MD&A and Financial
Statements.
Second Quarter 2018 Conference Call and Webcast
details:
Date:
|
|
Thursday, July 26,
2018
|
Time:
|
|
10:00 a.m.
(PT)
|
Toll Free (US and
Canada):
|
|
1-800-355-4959
|
Outside US and
Canada:
|
|
1-416-340-2216
|
A live and archived webcast will also be available on Goldcorp's
website at www.goldcorp.com.
The conference call will be available for replay by phone
at:
Toll Free (US and
Canada):
|
|
1-800-408-3053
|
Outside US and
Canada:
|
|
1-905-694-9451
|
Replay end
date:
|
|
August 26,
2018
|
Replay
Passcode:
|
|
4818060#
|
Footnotes
- The Company has included certain performance measures,
including non-GAAP performance measures on an attributable basis
(Goldcorp share) throughout this release. Attributable performance
measures include the Company's mining operations and projects and
the Company's share from Pueblo Viejo, Alumbrera and
NuevaUnión. Attributable performance measures also include
the Company's share from Leagold up to May
24, 2018, the date on which Goldcorp ceased to have
significant influence over Leagold.
- Adjusted operating cash flows are comprised of Goldcorp's share
of operating cash flows before working capital changes, calculated
on an attributable basis to include the Company's share of Pueblo
Viejo, Alumbrera, NuevaUnión and Leagold's operating cash flows
before working capital changes. The Company believes that, in
addition to conventional measures prepared in accordance with GAAP,
the Company and certain investors use this information to evaluate
the Company's performance and ability to operate without reliance
on additional external funding or use of available cash.
The following table provides a reconciliation of net cash
provided by operating activities in the consolidated financial
statements to Goldcorp's share of adjusted operating cash
flows:
|
Three months
ended
June 30
|
($
millions)
|
2018
|
2017
|
Net cash provided
by operating activities of continuing operations
|
$158
|
$158
|
Change in working
capital
|
112
|
77
|
Adjusted operating
cash flows provided by Pueblo Viejo, Alumbrera and
Leagold
|
40
|
85
|
Goldcorp's share of adjusted
operating cash flows
|
$310
|
$320
|
3.
"Cash costs: by product" per ounce and "AISC" per ounce are
non-GAAP financial performance measures.
|
Cash costs: by-product:
Total cash costs: by-product incorporate Goldcorp's share of all
production costs, including adjustments to inventory carrying
values, adjusted for changes in estimates in reclamation and
closure costs at the Company's closed mines which are non-cash in
nature, and include Goldcorp's share of by-product silver, lead,
zinc and copper credits, and treatment and refining charges
included within revenue. Additionally, cash costs are adjusted for
realized gains and losses arising on the Company's commodity and
foreign currency contracts which the Company enters into to
mitigate its exposure to fluctuations in by-product metal prices,
heating oil prices and foreign exchange rates, which may impact the
Company's operating costs.
In addition to conventional measures, the Company assesses this
per ounce measure in a manner that isolates the impacts of gold
production volumes, the by-product credits, and operating costs
fluctuations such that the non-controllable and controllable
variability is independently addressed. The Company uses total cash
costs: by product per gold ounce to monitor its operating
performance internally, including operating cash costs, as well as
in its assessment of potential development projects and acquisition
targets. The Company believes this measure provides investors and
analysts with useful information about the Company's underlying
cash costs of operations and the impact of by-product credits on
the Company's cost structure and is a relevant metric used to
understand the Company's operating profitability and ability to
generate cash flow. When deriving the production costs associated
with an ounce of gold, the Company includes by-product credits as
the Company considers that the cost to produce the gold is reduced
as a result of the by-product sales incidental to the gold
production process, thereby allowing the Company's management and
other stakeholders to assess the net costs of gold production.
The Company reports total cash costs: by-product on a gold
ounces sold basis. In the gold mining industry, this is a common
performance measure but does not have any standardized meaning. The
Company follows the recommendations of the Gold Institute
Production Cost Standard. The Gold Institute, which ceased
operations in 2002, was a non-regulatory body and represented a
global group of producers of gold and gold products. The production
cost standard developed by the Gold Institute remains the generally
accepted standard of reporting cash costs of production by gold
mining companies.
AISC:
AISC include total production cash costs incurred at the
Company's mining operations, which forms the basis of the Company's
by-product cash costs. Additionally, the Company includes
sustaining capital expenditures, corporate administrative expense,
mine-site exploration and evaluation costs, and reclamation cost
accretion and amortization. The measure seeks to reflect the full
cost of gold production from current operations, therefore
expansionary capital and non-sustaining expenditures are excluded.
Certain other cash expenditures, including tax payments, dividends
and financing costs are also excluded.
The Company believes that this measure represents the total
costs of producing gold from current operations, and provides the
Company and other stakeholders of the Company with additional
information of the Company's operational performance and ability to
generate cash flows. AISC, as a key performance measure, allows the
Company to assess its ability to support capital expenditures and
to sustain future production from the generation of operating cash
flows. This information provides management with the ability to
more actively manage capital programs and to make more prudent
capital investment decisions.
The Company reports AISC on a gold ounces sold basis. This
performance measure was adopted as a result of an initiative
undertaken within the gold mining industry; however, this
performance measure has no standardized meaning and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. The Company follows
the guidance note released by the World Gold Council, which became
effective January 1, 2014. The World
Gold Council is a non-regulatory market development organization
for the gold industry whose members comprise global senior gold
mining companies.
The following tables provide a reconciliation of total cash
costs: by product to reported production costs:
Three months ended June 30,
2018
($ millions unless stated otherwise)
|
Production
costs (a)
|
By-Product
Credits
|
Treatment and
Refining Charges
on Concentrate
Sales
|
Other
|
Total Cash
Costs: by-
product
|
Ounces
(000's)
|
Total Cash Costs:
by-product per
ounce (b)(c)
|
Total before
associates and joint
venture
|
$
|
442
|
$
|
(220)
|
$
|
15
|
$
|
(1)
|
$
|
236
|
|
457
|
$
|
516
|
Associates and joint
venture
|
$
|
87
|
$
|
(29)
|
$
|
2
|
$
|
-
|
$
|
60
|
|
105
|
$
|
578
|
Total -
Attributable
|
$
|
529
|
$
|
(249)
|
$
|
17
|
$
|
(1)
|
$
|
296
|
|
562
|
$
|
527
|
|
Three months ended
June 30, 2017
|
($ millions unless
stated otherwise)
|
|
Production
costs (a)
|
By-Product
Credits
|
Treatment and
Refining Charges
on Concentrate
Sales
|
Other
|
Total Cash
Costs: by-
product
|
Ounces
(000's)
|
Total Cash Costs:
by-product per
ounce (b)(c)
|
Total before
associates and joint
venture
|
$
|
456
|
$
|
(224)
|
$
|
30
|
$
|
(2)
|
$
|
260
|
|
497
|
$
|
520
|
Associates and joint
venture
|
$
|
111
|
$
|
(42)
|
$
|
3
|
$
|
-
|
$
|
72
|
|
152
|
$
|
478
|
Total -
Attributable
|
$
|
567
|
$
|
(266)
|
$
|
33
|
$
|
(2)
|
$
|
332
|
|
649
|
$
|
510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Production costs
includes $17 million in royalties for the three months ended June
30, 2018 (three months ended June 30, 2017– $18
million).
|
|
|
(b)
|
Total cash costs:
by-product per ounce may not calculate based on amounts presented
in these tables due to rounding.
|
|
|
(c)
|
If silver, copper,
lead and zinc were treated as co-products, total cash costs for the
three months ended June 30, 2018 would have been $700 per ounce of
gold (three months ended June 30, 2017 – $644).
|
As described above, AISC include total production cash costs
incurred at the Company's mining operations, which forms the basis
of the Company's cash costs: by-product and which are reconciled to
reported production costs in the tables above. The following
tables provide a reconciliation of AISC per ounce to total cash
costs: by product:
Three months ended June 30,
2018
($ millions unless stated otherwise)
|
Total cash
costs: by-
product
|
Corporate
Administration
|
Exploration
& evaluation
costs
|
Reclamation
cost accretion
and
amortization
|
Sustaining
capital
expenditures
|
Total AISC
|
Ounces
(thousands)
|
Total AISC
per ounce(a)
|
Total before
associates and
joint venture
|
$
|
236
|
$
|
39
|
$
|
8
|
$
|
6
|
$
|
120
|
$
|
409
|
|
457
|
$
|
896
|
Associates and joint
ventures
|
$
|
60
|
$
|
-
|
$
|
-
|
$
|
1
|
$
|
7
|
$
|
68
|
|
105
|
$
|
650
|
Total -
Attributable
|
$
|
296
|
$
|
39
|
$
|
8
|
$
|
7
|
$
|
127
|
$
|
477
|
|
562
|
$
|
850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2017
($ millions unless stated otherwise)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cash
costs: by-
product
|
Corporate
Administration
|
Exploration
& evaluation
costs
|
Reclamation
cost accretion
and
amortization
|
Sustaining
capital
expenditures
|
Total AISC
|
Ounces
(thousands)
|
Total AISC
per ounce(a)
|
Total before
associates and
joint venture
|
$
|
260
|
$
|
36
|
$
|
5
|
$
|
9
|
$
|
123
|
$
|
433
|
|
497
|
$
|
868
|
Associates and joint
ventures
|
$
|
72
|
$
|
-
|
$
|
-
|
$
|
4
|
$
|
10
|
$
|
86
|
|
152
|
$
|
574
|
Total –
Attributable
|
$
|
332
|
$
|
36
|
$
|
5
|
$
|
13
|
$
|
133
|
$
|
519
|
|
649
|
$
|
800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
AISC may not calculate based on amounts presented in these tables
due to rounding.
|
About Goldcorp
Goldcorp is a senior gold producer focused on responsible mining
practices with safe, low-cost production from a high-quality
portfolio of mines.
Cautionary Statement Regarding Forward Looking
Statements
This press release contains "forward-looking statements" within
the meaning of Section 27A of the United States Securities Act of
1933, as amended, Section 21E of the United States Exchange Act of
1934, as amended, the United States Private Securities
Litigation Reform Act of 1995, or in releases made by the United
States Securities and Exchange Commission, all as may be amended
from time to time, and "forward-looking information" under the
provisions of applicable Canadian securities legislation,
concerning the business, operations and financial performance and
condition of Goldcorp. Forward-looking statements include, but are
not limited to, the future price of gold, silver, zinc, copper and
lead, the estimation of mineral reserves and mineral resources, the
realization of mineral reserve estimates, the timing and amount of
estimated future production, costs of production, targeted cost
reductions, capital expenditures, free cash flow, costs and timing
of the development of new deposits, success of exploration
activities, permitting and certification time lines, hedging
practices, currency exchange rate fluctuations, requirements for
additional capital, government regulation of mining operations,
environmental risks, unanticipated reclamation expenses, health,
safety and diversity initiatives, timing and possible outcome of
pending litigation, title disputes or claims and limitations on
insurance coverage. Generally, these forward-looking statements can
be identified by the use of words such as "plans", "expects", "is
expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" , "believes", or variations or comparable
language of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "should",
"might" or "will", "occur" or "be achieved" or the negative
connotation thereof.
Forward-looking statements are necessarily based upon a number
of factors and assumptions that, if untrue, could cause the actual
results, performances or achievements of Goldcorp to be materially
different from future results, performances or achievements
expressed or implied by such statements. Such statements and
information are based on numerous assumptions regarding Goldcorp's
present and future business strategies and the environment in which
Goldcorp will operate in the future, including the price of gold,
anticipated costs and ability to achieve goals. Certain important
factors that could cause actual results, performances or
achievements to differ materially from those in the forward-looking
statements include, among others, gold price volatility,
discrepancies between actual and estimated production, mineral
reserves and mineral resources and metallurgical recoveries, mining
operational and development risks, litigation risks, regulatory
restrictions (including environmental regulatory restrictions and
liability), changes in national and local government legislation,
taxation, controls or regulations and/or change in the
administration of laws, policies and practices, expropriation or
nationalization of property and political or economic developments
in Canada, the United States, Mexico, Argentina, the Dominican Republic, Chile or other jurisdictions in which the
Company does or may carry on business in the future, delays,
suspension and technical challenges associated with capital
projects, higher prices for fuel, steel, power, labour and other
consumables, currency fluctuations, the speculative nature of gold
exploration, the global economic climate, dilution, share price
volatility, competition, loss of key employees, additional funding
requirements and defective title to mineral claims or property.
Although Goldcorp believes its expectations are based upon
reasonable assumptions and has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events
or results not to be as anticipated, estimated or intended.
Forward-looking statements are subject to known and unknown
risks, uncertainties and other important factors that may cause the
actual results, level of activity, performance or achievements of
Goldcorp to be materially different from those expressed or implied
by such forward-looking statements, including but not limited to:
future prices of gold, silver, zinc, copper and lead; mine
development and operating risks; possible variations in ore
reserves, grade or recovery rates; risks related to international
operations, including economic and political instability in foreign
jurisdictions in which Goldcorp operates; risks related to current
global financial conditions; risks related to joint venture
operations; actual results of current exploration activities;
actual results of current reclamation activities; environmental
risks; conclusions of economic evaluations; changes in project
parameters as plans continue to be refined; failure of plant,
equipment or processes to operate as anticipated; accidents, labour
disputes and other risks of the mining industry; risks associated
with restructuring and cost-efficiency initiatives; delays in
obtaining governmental approvals or financing or in the completion
of development or construction activities; risks related to the
integration of acquisitions; risks related to indebtedness and the
service of such indebtedness, as well as those factors discussed in
the section entitled "Description of the Business – Risk Factors"
in Goldcorp's most recent annual information form available
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Although
Goldcorp has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause
results not to be as anticipated, estimated or intended. There can
be no assurance that such statements will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. Forward-looking
statements are made as of the date hereof and, accordingly, are
subject to change after such date. Except as otherwise indicated by
Goldcorp, these statements do not reflect the potential impact of
any non-recurring or other special items or of any disposition,
monetization, merger, acquisition, other business combination or
other transaction that may be announced or that may occur after the
date hereof. Forward-looking statements are provided for the
purpose of providing information about management's current
expectations and plans and allowing investors and others to get a
better understanding of Goldcorp's operating environment. Goldcorp
does not intend or undertake to publicly update any forward-looking
statements that are included in this document, whether as a result
of new information, future events or otherwise, except in
accordance with applicable securities laws.
For further information please contact:
INVESTOR CONTACT:
Shawn Campbell, Director, Investor
Relations, Telephone: (800) 567-6223, E-mail:
info@goldcorp.com;
MEDIA CONTACT:
Christine Marks, Director, Corporate
Communications, Telephone: (604) 696-3050, E-mail:
media@goldcorp.com
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SOURCE Goldcorp Inc.