ENP Newswire -
Release date- 01082014 -
Reported net earnings attributable to shareholders of Goldcorp were
Second Quarter 2014 Highlights
Gold sales1 of 639,500 ounces on gold production1 of 648,700 ounces.
Adjusted revenues of
All-in sustaining costs of
Adjusted net earnings of
Adjusted operating cash flow of
Dividends paid of
Completed sale of Marigold mine on
'Continued solid production and cost performance across the portfolio contributed to strong financial results in the second quarter,' said
In addition, the three new gold projects under construction that underpin Goldcorp's leading growth profile continued to advance steadily. We were very pleased to announce last week the commencement of gold production at Cerro Negro on schedule and within our capital cost guidance. I congratulate the team at Cerro Negro for this outstanding performance and look forward to strong production and financial results over a long mine life from this important new mine.
This achievement signals the start of a prolonged period of increased production, decreasing costs and reduced capital spending for Goldcorp, resulting in significant expected free cash flow generation in 2015 and beyond.'
Second quarter gold production and sales increased over last year's second quarter despite the loss of gold production from the recently-divested Marigold mine and lower production from Los Filos as a result of a 43-day work stoppage. Gold sales in the second quarter were 639,500 ounces on production of 648,700 ounces compared to sales of 624,300 ounces on production of 646,000 ounces in the second quarter of 2013.
Silver production totaled 9.0 million ounces compared 7.2 million ounces in the prior year's second quarter. Increased production efficiencies and lower sustaining capital led to a decrease in all-in sustaining costs to
Adjusted revenues of
Adjusted net earnings in the second quarter of 2014 primarily exclude the gains from the foreign exchange translation of deferred income tax assets and liabilities, shares of net earnings of associates, gains on derivatives, the loss from the disposition of mining interests, and revisions in estimates on reclamation and closure cost obligations for closed mine sites but include the impact of non-cash stock-based compensation expenses which amounted to approximately
Adjusted operating cash flow was
During the quarter, the Company completed a
Driven by higher mill throughput, grades and recoveries, gold production at Penasquito totaled a record 167,400 ounces in the quarter at a record-low all-in sustaining cost of $362per ounce. Initial permits for the Northern Well Field ('NWF') were received, allowing construction to commence, with completion expected mid-year 2015. Contingency plans remain in place for fresh water supply to Penasquito until the NWF is operational.
The exploration program at Penasquito continues to focus on defining the copper-gold sulphide rich skarn deposit located below and adjacent to the diatreme ore body. Current exploration activities include drilling to establish the vertical and horizontal size and extent of the skarn deposit.
Also at Penasquito, pre-feasibility studies for the concentrate enrichment process project and the pyrite leach project are advancing and are expected to be completed in late 2014 and early 2015, respectively. Successful implementation of one or both of these projects has the potential to significantly improve the overall economics and add to the reserves and resources of Penasquito through the addition of another saleable product, and increasing gold and silver recoveries, respectively.
Gold production at Los Filos was 48,700 ounces in the second quarter at an all-in sustaining cost of
The construction of the expansion phase of the heap leach pad, including additional contingency solution storage capacity, was completed in
During the quarter, exploration continued from surface on HG Young, an exciting new discovery 1.5 kilometers northwest of the
At Porcupine in
Cerro Negro in
Construction of the Cerro Negro substation is approximately 92% complete, with the system expected to be completed in the third quarter of 2014. The initial capital guidance range for Cerro Negro has been reduced by
Construction at the Eleonore gold project in
At the Camino Rojo project near Penasquito, positive exploration results continue to support the project's potential to be a major new gold operation. The Company expects to commence a pre-feasibility study before the end of 2014, approximately five months later than expected due to the complexity of the metallurgical testing. The study is expected to be completed by the first quarter of 2016. Metallurgical testing continues and waste rock characterization studies are underway. The pit geotechnical drilling program commenced in
2014 Guidance Outlook
The Company reconfirmed 2014 production guidance of between 2.95 and 3.10 million gold ounces. In light of lower-than-expected all-in sustaining costs in the first half of 2014, the Company expects all-in costs toward the low end of its guidance range of between
Goldcorp is one of the world's fastest growing gold producers. Its low-cost gold production is located in safe jurisdictions in the
This release should be read in conjunction with Goldcorp's second quarter 2014 interim consolidated financial statements and MD&A report on the Company's website, in the 'Investor Resources - Reports & Filings' section under 'Quarterly Reports'.
The Company has included non-GAAP performance measures on an attributable (or Goldcorp's share) basis throughout this document. Attributable performance measures include the Company's mining operations, including its discontinued operation, and projects, and the Company's share of Alumbrera and
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.
Adjusted net earnings and adjusted net earnings per share are non-GAAP performance measures. 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.
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. Refer to page 40 of the Q2 2014 Management Discussion & Analysis ('MD&A') for a reconciliation of adjusted net earnings to reported net earnings attributable to shareholders of Goldcorp.
Adjusted operating cash flows and adjusted operating cash flows per share are non-GAAP performance measures which comprises Goldcorp's share of operating cash flows before working capital changes and which the Company believes provides additional information about the Company's ability to generate cash flows from its mining operations.
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. Refer to page 41 of the Q2 2014 MD&A for a reconciliation of adjusted operating cash flows to reported net cash provided by operating activities.
For 2013, the Company adopted an 'all-in sustaining cost' non-GAAP performance measure that the Company believes more fully defines the total costs associated with producing gold. All-in sustaining costs include by-product cash costs, sustaining capital expenditures, corporate administrative expense, exploration and evaluation costs and reclamation cost accretion and amortization.
As the measure seeks to reflect the full cost of gold production from current operations, new project capital is not included in the calculation. 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 sales basis. Refer to page 38 of the Q2 2014 MD&A for a reconciliation of all-in sustaining costs.
Cautionary Note Regarding Forward Looking Statements
This press release contains 'forward-looking statements', within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of
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 resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, hedging practices, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, timing and possible outcome of pending litigation, title disputes or claims and limitations on insurance coverage.
Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as 'plans', 'expects', 'is expected', 'budget', 'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates', 'believes' or variations of such words and phrases or statements that certain actions, events or results 'may', 'could', 'would', 'might' or 'will be taken', 'occur' or 'be achieved' or the negative connotation thereof.
Forward-looking statements are made based upon certain assumptions and other important 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, 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 resources and metallurgical recoveries, mining operational and development risks, litigation risks, regulatory restrictions (including environmental regulatory restrictions and liability), activities by governmental authorities (including changes in taxation), 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 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 the integration of acquisitions; 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; environmental risks; future prices of gold, silver, copper, lead and zinc; possible variations in ore reserves, grade or recovery rates; mine development and operating risks; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; 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 annual information form for the year ended
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 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 our operating environment. Goldcorp does not undertake to update any forward-looking statements that are included in this document, except in accordance with applicable securities laws.
Tel: (604) 696-3074
Fax: (604) 696-3001
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