2 q 2014 cc slides final
TRANSCRIPT
Second Quarter 2014 Conference Call
July 31, 2014
FORWARD LOOKING STATEMENTS
2
This presentation 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 Goldcorp Inc. (“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
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” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”,
“anticipates” or “does not anticipate”, “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”. Forward-looking statements are subject to known and unknown risks, uncertainties and other 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; risks related to joint
venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in
project parameters as plans continue to be refined; future prices of gold, silver, copper, lead and zinc; possible variations in ore reserves, grade or recovery rates;
failure of plant, equipment or processes to operate as anticipated; 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 annual information form for the year ended December 31, 2013 available at www.sedar.com. 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. Goldcorp does not undertake to update any forward-looking statements that are included in this document, except in accordance with
applicable securities laws.
All amounts are in U.S. dollars, unless otherwise stated.
MANAGEMENT PARTICIPANTS
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Chuck Jeannes
President and
Chief Executive Officer
Lindsay Hall
EVP & Chief Financial
Officer
George Burns
EVP & Chief Operating
Officer
Russell Ball
EVP Capital Management
Second Quarter 2014 Highlights EXECUTING ON PLAN
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• Solid gold productiona of 648,700 ounces
• All-in sustaining costsa,d of $852/oz
• Adjusted revenuesa of $1.1B
• Adjusted net earningsa,h of $164M, or $0.20/share
• Adjusted operating cash flowa,i of $376M, or $0.46/share
Second Quarter 2014 Highlights EXECUTING ON PLAN
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• First gold achieved at Cerro Negro on July 25
• On schedule
• Initial capital guidance reduced by $100 million
• Éléonore expected to pour first gold in Q4
• Cochenour to deliver development ore in Q4
• Peñasquito gaining momentum
• Issued $1 billion of senior unsecured notes
• Completed sale of Marigold mine
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(1) 2014 price assumptions: Au=$1,200/oz, Ag=$20.00/oz, Cu=$3.00/lb, Zn=$0.90/lb, Pb=$1.00/lb
(2) Revised to exclude Marigold post Q1 2014
(3) Includes capitalized exploration
Financial Discipline POSITIVE MOMENTUM THROUGH GROWTH AND LOWER COSTS
2013 Actual January 2014 Updated (2)
Gold production (oz) 2.67M 3.0M - 3.15M 2.95M - 3.10M
Cash costs $ / oz
All-in sustaining $1,031 $950 - $1,000 $950 - $1,000
By-product $553 $550 - $600 $550 - $600
Co-product $687 $650 - $700 $650 - $700
Capital expenditures $2.4B $2.3B - $2.5B $2.3B - $2.4B
Exploration expenditures(3) $156M $190M $190M
Corporate administration $165M $185M $185M
Depreciation / oz $314 $385 $350
Tax rate 36% 41% 26%
2014E Guidance (1)
Proven Strategy GOLDCORP’S FUTURE
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L O N G - L I F E , L O W - C O S T M I N E S T O G E N E R AT E L O N G T E R M VA L U E
Gold production (Moz)
0.0
5.5
2013A 2014E 2015E 2016E 2017E 2018E
Gold ounces GEO
2.95 – 3.1
3.6 – 3.8 3.7 – 4.0
3.5 – 3.8 3.5 – 3.8
2.7
Revised to exclude Marigold post Q1 2014
OPERATIONAL
HIGHLIGHTS
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Second Quarter 2014 – Operational Highlights SOLID PERFORMANCE
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• Gold production of 648,700 ounces
• Recoveries, grade and throughput drive record
production at Peñasquito
• Low all-in sustaining costs of $852/oz
• Successful negotiations for 5-year land occupancy
agreement at Los Filos
• Operating for Excellence initiatives driving down costs
Operational Update
INTEGRATING COCHENOUR
RED LAKE
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• Second quarter 2014
• Gold production: 89,500oz
• AISC: $1,066/oz
• Gold production
• 2014E: 440,000 - 480,000oz
• Integration plan underway for Cochenour
• Exploration focus
• HG Young target
• HGZ at depth
• NXT zone up-plunge
• Footwall and R zone
Red Lake HG YOUNG EXPLORATION TARGET
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1 km
14L
21L
Cochenour Shaft
Shaft 3
Shaft 1
Reid Shaft Campbell Shaft
67.3gpt/6.3m
31.9gpt/6.9m
35.2gpt/1.2m
157.6gpt/1.3m
Scientific and technical information pertaining to Red Lake Gold Mines was reviewed and approved by Chris Osiowy, P.GEO, Manager of
Exploration and a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”)
PEÑASQUITO
Operational Update
DELIVERING VALUE
• Second quarter 2014
• Gold production: 167,400oz
• AISC: $362/oz
• Gold production
• 2014E: 530,000 – 560,000oz
• Northern Well Field project construction
commenced
• Pre-feasibility studies advancing on CEP
and pyrite leach projects.
• In-fill drilling continues on copper-gold
skarn
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PROJECT
HIGHLIGHTS
13
Project Update FIRST GOLD ON JULY 25
CERRO NEGRO
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• Production/start-up
• >5M man-hours without a LTI
• First gold poured on July 25
• ~130-180kozs expected in 2014
• Commercial production expected in Q4
• Construction
• EPCM: ~88%1
• Lowered initial capital range ~$100m
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• Mining: Development
• 2,408 meters in Q2
• 19.4km at June 30
• Mining: Production
• 122k tonnes in Q2
• 532k tonnes at June 30 1 Includes initial capital deferred to 2015
Cerro Negro ON SCHEDULE FOR COMMERCIAL PRODUCTION IN Q4
July 25, 2014
First Gold
Q3 2014
Permanent
Power
Q4 2014
Commercial
Production
T R A N S I T I O N T O O P E R AT I O N S W E L L U N D E R WAY F I R S T G O L D P O U R E D O N J U LY 2 5
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July 15, 2014
Plant Startup
Dec. 31, 2013
285kt
Stockpile
First Gold First Gold Pour
Ore on Conveyor Mill in Operation
Cerro Negro
STATUS/UPDATE
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Project Update
ON TRACK FOR GOLD IN Q4
ÉLÉONORE
1 After ramp-up to full capacity in 2018 17
• Production/start-up
• 40-60kozs expected in 2014
• Commercial production expected
Q1’15
• 575-625kozs annually1
• Construction
• Overall progress at 93%
• Turned ball mill in June
• Initial capital remains ~$1.8-1.9B
• Mining
• Ramp at 5,007m (depth 733m)
• Production shaft at 842m
• First production blast in May
• Surface stockpile ~63k tonnes
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Éléonore
ON SCHEDULE, ON BUDGET FOR FIRST GOLD IN Q4 2014
Q3 2014
Process Plant
Commissioning
H1 2018
Mine & Mill
Sustain
7,000 tpd
D E L I V E R I N G A W O R L D - C L A S S M I N E A N D P L A N T
Q4 2014
First Gold
Q1 2015
Commercial
Production
Year-End
Mine & Mill
Sustain
3,500 tpd
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Industrial Water Treatment Plant Site Layout
Completion of the membrane at the TMF
Concentrator
Éléonore
STATUS/UPDATE
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Project Update
ON SCHEDULE, ON BUDGET
COCHENOUR
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• Production/Start-Up
• Development ore expected Q4’14
• Production ore expected Q3’15
• Commercial production expected H2’16
• Production ~225-250kozs annually1
• Construction
• Haulage drift at 96% complete
• Ramp to 3540 level at 62%
• Shaft at final depth of 1,116m
• Initial capital remains ~$496M
• Exploration
• Drilling Bruce Channel from haulage
drift
• Currently 7 drills increasing to 9 by y/e
1 After ramp-up to full capacity
Cochenour
DEVELOPMENT ON SCHEDULE
March 13, 2014
Shaft Sinking
Complete
F O C U S H A S S H I F T E D T O I N T E G R AT I O N W I T H R E D L A K E
Q3 2014
Haulage drift
Complete
Q3 2015
First
Production Ore
H2 2016
Commercial
Production
Q4 2014
First
Development
Ore
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Project Update
ADVANCING TOWARDS
PREFEASIBILITY STUDY
CAMINO ROJO
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• Reserves and Resources (12/31/13)
• Reserves: 1.6Moz (oxide)
• M&I Resources: 5.1Moz
• Inferred Resources: 4.9Moz
• Metallurgical Test Program Ongoing
• Commenced Geotechnical Drill Program
• Prefeasibility Study
• Expected to commence by year-end
• Start delayed by 5 months due to
additional metallurgical test work
• Completion expected in Q1 2016
Project Update
ENGAGING COMMUNITIES
AND ADDRESSING LEGAL
CHALLENGES
EL MORRO
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• Reserves (12/31/13)
• Gold 6.73Moz; Copper 4.9Blb
• Environment License (RCA)
• Court of Appeals dismissed all claims
• Ruling appealed to Supreme Court
• Decision expected late 2014
• Exploration
• Planning underway for restart in Q4
• Focus on infill & geotechnical drilling
• Infill drilling targeted to convert in-pit
waste to ore
• Community and stakeholder engagement
activities ongoing
FINANCIAL
HIGHLIGHTS
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25
Q2 2014 Q1 2014 Q2 2013
Gold production (oz) 648,700 679,900 646,000
Gold sales (oz) 639,500 684,000 624,300
Cash costs by-product ($/oz) (b) 470 507 646
Cash costs co-product ($/oz) (b) (c) 643 673 713
Realized gold price ($/oz) 1,296 1,297 1,357
All-in sustaining cash costs ($/oz) (d) 852 840 1,227
Margin, All-in sustaining ($/oz) (e) 444 457 130
Non-GAAP Measures Presented on Goldcorp Share Basis(a)
Q2 2014 HIGHLIGHTS
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3.6 – 3.8 3.7 – 4.0
3.5 – 3.8 3.5 – 3.8
2.7
OTHER
Q2 2014 TOTAL $852 per oz
SUSTAINING CAPEX (f)
$255 G&A(g)
$92
$9
Q1 2014 TOTAL $840 per oz
$26
EXPLORATION
OPERATING COST (b)
$509 SUSTAINING CAPEX (f)
$194
G&A(g)
$96 $25
EXPLORATION
$16
OPERATING COST
OPERATING COST (b)
$470
Non-GAAP Measures Presented on Goldcorp Share Basis(a)
ALL-IN SUSTAINING COSTS(d)
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($ millions except per share amounts) Q2 2014 Q1 2014 Q2 2013
Net earnings (loss) attributable to shareholders of
Goldcorp $181 $98 ($1,934)
Earnings (loss) per share $0.22 $0.12 ($2.38)
Unrealized foreign exchange (gains) losses on deferred
income tax (24) 106 74
Losses (gains) on dispositions of mining interests, net of tax 21 (18) -
Foreign exchange on capital projects 4 21 22
Revisions in estimates and liabilities on reclamation and
closure costs on closed mine sites, net of tax 11 - -
Impairment, net of tax - - 1,958
Share of net (earnings) losses of associates * (15) (2) 4
(Gains) losses on derivatives, net of tax and other (14) 4 (7)
Adjusted net earnings attributable to shareholders of
Goldcorp, including discontinued operation (h) $164 $209 $117
Adjusted net earnings per share, including discontinued
operation (h) $0.20 $0.26 $0.14
(*) net of FX on deferred taxes for Alumbrera
Non-GAAP Measures Presented on Goldcorp Share Basis(a)
Q2 2014 ADJUSTED EARNINGS
GOLDCORP ADVANTAGE
Quality
Growth
Safe,
Profitable
Production
Peer-
Leading
Balance
Sheet
Responsible
Mining
Practices
Gold
Focused
Low
Political
Risk
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SUPERIOR
INVESTMENT
PROPOSITION
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a) 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 Pueblo Viejo. 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.
b) Total cash costs, by-product and co-product, per gold ounce is a non-GAAP performance measure. In the gold mining industry,
total cash costs is a common performance measure but does not have any standardized meaning. The Company follows the
recommendations of the Gold Institute Production Cost Standard (refer to page 2 of the Q2 2014 MD&A for further information on
the Gold Institute). The Company believes these measures provide 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 cash 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 and certain
investors use this information to evaluate the Company’s performance and ability to generate cash flow. 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. Total cash costs on a by-product basis are calculated by deducting Goldcorp’s share of by-product
silver, copper, lead and zinc sales revenues from Goldcorp’s share of production costs. Refer to page 36 of the Q2 2014 MD&A for
a calculation of total cash cost per gold ounce.
c) Total cash costs per gold ounce on a co-product basis is calculated by allocating Goldcorp’s share of production costs to each co-
product (Alumbrera (copper); Marlin (silver); Pueblo Viejo (silver); Peñasquito (silver, lead and zinc)) based on the ratio of actual
sales volumes multiplied by budget metal prices, as compared to realized sales prices. The Company uses budget prices to
eliminate price volatility and improve co-product cash cost reporting comparability between periods (refer to page 2 of the Q2 2014
MD&A for budget metal prices use).
FOOTNOTES
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d) The Company, in conjunction with an initiative undertaken within the gold mining industry, has adopted all-in sustaining cost and
all-in cost non-GAAP performance measures that the Company believes more fully defines the total costs associated with
producing gold; however, these performance measures have 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 these measures on a gold ounces sold basis. Refer to page 38 of the Q2 2014
MD&A for a reconciliation of all-in sustaining costs.
e) Margin per gold ounce is a non-GAAP performance measure. The Company reports margin on an attributable sales basis. 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. 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.
f) Sustaining capital expenditures are defined as those expenditures which do not increase annual gold ounce production at a mine
site and excludes all expenditures at the Company’s projects and certain expenditures at the Company’s operating sites which are
deemed expansionary in nature. Refer to pages 38 and 39 of the Q2 2014 MD&A for a reconciliation of sustaining capital
expenditures.
g) Including share-based compensation expense.
h) 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
MD&A for a reconciliation of adjusted net earnings to reported net earnings attributable to shareholders of Goldcorp.
i) 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 before
working capital changes to reported net cash provided by operating activities.
FOOTNOTES