The Daily Thursday, April 27, 2017

Date:

Thursday, April 27, 2017

Time:

10:00 a.m. (PST)

Dial-in:

1-800-355-4959 (toll-free) or 1-416-340-2216 (outside Canada and the US)

Replay:

1-800-408-3053 (toll-free) or 1-905-694-9451 (outside Canada and the US)

Replay end date:

May 28, 2017

Replay Passcode:

Conference ID#: 2296992

Footnotes 

1.

The Company has included non-GAAP performance measures on an attributable basis (Goldcorp share) throughout this document. Attributable performance measures include the Company’s mining operations and projects and the Company’s share from Pueblo Viejo, Alumbrera and NuevaUnión. 

2.

Adjusted operating cash flows comprises Goldcorp’s share of operating cash flows, calculated on an attributable basis to include the Company’s share of Alumbrera, Pueblo Viejo and NuevaUnión’s operating cash flows. 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 provide 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
March 31

($ millions)

2017

2016

Net cash provided by operating activities of continuing operations

$227

$59

Adjusted operating cash flows provided by Pueblo Viejo, Alumbrera and NuevaUnión

$42

$30

Goldcorp’s share of adjusted operating cash flows

$269

$89

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, 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 growth capital is 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 March 31, 2017

($ millions unless stated otherwise)

Production

Costs ^(a)

By-Product
Credits

Treatment and
Refining Charges
on Concentrate
Sales

Total Cash
Costs: by-
product

Ounces
(thousands)

Total Cash Costs:
by-product per
ounce ^{(b), (c)}

Peñasquito

$

194

$

(227)

$

45

$

12

138

$

85

Cerro Negro

53

(12)

—

41

88

459

Red Lake

46

—

—

46

54

861

Éléonore

61

—

—

61

72

850

Porcupine

52

—

—

52

62

843

Musselwhite

40

—

—

40

56

713

Other mines

74

(24)

—

50

69

740

Corporate

—

—

—

—

—

—

Total before associates

$

520

$

(263)

$

45

$

302

539

$

561

Pueblo Viejo

47

(5)

—

42

95

439

Other associate

29

(27)

3

5

12

415

TOTAL

$

596

$

(295)

$

48

$

349

646

$

540

Three months ended March 31, 2016

($ millions unless stated otherwise)

Production

Costs ^(a)

By-Product
Credits

Treatment and
Refining Charges
on Concentrate
Sales

Total Cash
Costs: by-
product

Ounces
(thousands)

Total Cash Costs:
by-product per
ounce ^{(b), (c)}

Peñasquito

$

172

$

(142)

$

31

$

61

122

$

513

Cerro Negro

68

(19)

—

49

128

381

Red Lake

46

—

—

46

84

546

Éléonore

56

—

—

56

70

804

Porcupine

47

—

—

47

75

624

Musselwhite

30

—

—

30

67

447

Other mines

108

(23)

—

85

112

752

Corporate

1

—

—

1

—

—

Total before associates

$

528

$

(184)

$

31

$

375

658

$

596

Pueblo Viejo

45

(5)

—

40

112

359

Other associate

66

(41)

6

31

29

1,036

TOTAL

$

639

$

(230)

$

37

$

446

799

$

557

Three months ended March 31, 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)

Peñasquito

$

12

$

–

$

1

$

1

$

40

$

54

138

$

391

Cerro Negro

41

–

1

2

14

58

88

651

Red Lake

46

–

1

–

14

61

54

1,149

Éléonore

61

–

1

–

14

76

72

1,057

Porcupine

52

–

–

3

7

62

62

1,011

Musselwhite

40

–

2

–

7

49

56

871

Other mines

50

–

1

2

2

55

69

800

Corporate

—

36

–

–

6

42

–

66

Total before
associates

$

302

$

36

$

7

$

8

$

104

$

457

539

$

849

Pueblo Viejo

42

–

–

–

9

51

95

541

Other
associate

5

–

–

3

–

8

12

623

TOTAL

$

349

$

36

$

7

$

11

$

113

$

516

646

$

800

Three months ended March 31, 2016

($ 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)

Peñasquito

$

61

$

–

$

1

$

2

$

57

$

121

122

$

1,004

Cerro Negro

49

–

–

2

14

65

128

503

Red Lake

46

–

3

1

21

71

84

842

Éléonore

56

–

–

–

11

67

70

965

Porcupine

47

–

–

3

12

62

75

837

Musselwhite

30

–

2

–

5

37

67

553

Other mines

85

–

2

4

7

98

112

876

Corporate

1

57

2

–

4

64

–

80

Total before
associates

$

375

$

57

$

10

$

12

$

131

$

585

658

$

891

Pueblo Viejo

40

–

–

1

9

50

112

443

Other
associate

31

–

–

2

–

33

29

1,115

TOTAL

$

446

$

57

$

10

$

15

$

140

$

668

799

$

836