.
Exhibit 99.2
Second Quarter Report – 2016
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS
(In millions of United States dollars, except for per share amounts – Unaudited) |
| | | | | | | | | | | | | |
| | | Three Months Ended
June 30 | Six Months Ended
June 30 |
| Note | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Revenues | 4 | $ | 753 |
| $ | 1,188 |
| $ | 1,697 |
| $ | 2,205 |
|
| Mine operating costs |
| | | | |
| Production costs | 5, 10 | (499 | ) | (640 | ) | (1,027 | ) | (1,260 | ) |
| Depreciation and depletion | 4, 10, 11(e) | (232 | ) | (356 | ) | (503 | ) | (678 | ) |
| | | (731 | ) | (996 | ) | (1,530 | ) | (1,938 | ) |
| Earnings from mine operations |
| 22 |
| 192 |
| 167 |
| 267 |
|
| Exploration and evaluation costs | 11(b) | (7 | ) | (14 | ) | (17 | ) | (28 | ) |
| Share of net earnings (loss) of associates and joint venture | 12 | 28 |
| (19 | ) | 64 |
| 16 |
|
| Corporate administration | 5(a) | (50 | ) | (53 | ) | (107 | ) | (108 | ) |
| Restructuring costs | 6 | (16 | ) | — |
| (39 | ) | — |
|
| (Loss) earnings from operations, associates and joint venture | 4 | (23 | ) | 106 |
| 68 |
| 147 |
|
| Gain (loss) on derivatives, net | 13(b) | — |
| 8 |
| 1 |
| (34 | ) |
| Gain on dilution of ownership interest in associate | 12(c) | — |
| 99 |
| — |
| 99 |
|
| Gain on dispositions of mining interests, net of transaction costs | 11(d), 12(c) | — |
| 315 |
| — |
| 315 |
|
| Finance costs | | (35 | ) | (43 | ) | (69 | ) | (70 | ) |
| Other income (expenses), net | | 12 |
| 3 |
| (6 | ) | 21 |
|
| (Loss) earnings from continuing operations before taxes |
| (46 | ) | 488 |
| (6 | ) | 478 |
|
| Income tax (expense) recovery | 7 | (32 | ) | (90 | ) | 8 |
| (219 | ) |
| Net (loss) earnings from continuing operations | | (78 | ) | 398 |
| 2 |
| 259 |
|
| Net (loss) earnings from discontinued operation | 3 | — |
| (6 | ) | — |
| 46 |
|
| Net (loss) earnings | | $ | (78 | ) | $ | 392 |
| $ | 2 |
| $ | 305 |
|
| Net (loss) earnings per share from continuing operations |
| | | | |
| Basic | 8(a) | $ | (0.09 | ) | $ | 0.48 |
| $ | — |
| $ | 0.31 |
|
| Diluted | 8(a) | (0.09 | ) | 0.48 |
| — |
| 0.31 |
|
| Net (loss) earnings per share | | | | | |
| Basic | 8(a) | $ | (0.09 | ) | $ | 0.47 |
| $ | — |
| $ | 0.37 |
|
| Diluted | 8(a) | (0.09 | ) | 0.47 |
| — |
| 0.37 |
|
The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.
Second Quarter Report – 2016
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In millions of United States dollars – Unaudited)
|
| | | | | | | | | | | | | |
|
| Three Months Ended
June 30 | Six Months Ended
June 30 |
| | Note | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Net (loss) earnings | | $ | (78 | ) | $ | 392 |
| $ | 2 |
| $ | 305 |
|
| Other comprehensive income (loss), net of tax | | | | | |
| Items that may be reclassified subsequently to net (loss) earnings: | | | | | |
| Unrealized gains on available-for-sale securities | | 36 |
| — |
| 55 |
| 1 |
|
| Reclassification adjustment for impairment losses on available-for-sale securities recognized in net earnings | | — |
| 1 |
| — |
| 4 |
|
| Reclassification adjustment for realized gains on disposition of available-for-sale securities recognized in net (loss) earnings | | (5 | ) | — |
| (9 | ) | (1 | ) |
| Reclassification of cumulative unrealized gains on shares of Probe Mines Ltd. ("Probe") on acquisition | 4(e) | — |
| — |
| — |
| (3 | ) |
| | | 31 |
| 1 |
| 46 |
| 1 |
|
| Items that will not be reclassified subsequently to net (loss) earnings: | | | | | |
| Remeasurements on defined benefit pension plans | | (1 | ) | 1 |
| (1 | ) | (1 | ) |
| Total other comprehensive income, net of tax | | 30 |
| 2 |
| 45 |
| — |
|
| Total comprehensive (loss) income | | $ | (48 | ) | $ | 394 |
| $ | 47 |
| $ | 305 |
|
The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.
Second Quarter Report – 2016
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions of United States dollars – Unaudited) |
| | | | | | | | | | | | | |
| | | Three Months Ended
June 30 | Six Months Ended
June 30 |
| | Note | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Operating activities | | | | | |
| Net (loss) earnings from continuing operations | | $ | (78 | ) | $ | 398 |
| $ | 2 |
| $ | 259 |
|
| Adjustments for: | |
|
|
|
|
| Dividends from associates | | — |
| 4 |
| — |
| 7 |
|
| Reclamation expenditures | | (8 | ) | (18 | ) | (16 | ) | (32 | ) |
| Items not affecting cash: | |
|
|
|
|
| Depreciation and depletion | 4, 10, 11(e) | 232 |
| 356 |
| 503 |
| 678 |
|
| Share of net (earnings) loss of associates and joint venture | 12 | (28 | ) | 19 |
| (64 | ) | (16 | ) |
| Share-based compensation | | 4 |
| 15 |
| 30 |
| 30 |
|
| Unrealized (gains) losses on derivatives, net | 13(b) | (1 | ) | (22 | ) | (3 | ) | 4 |
|
| Gain on dilution of ownership interest in associate | 12(c) | — |
| (99 | ) | — |
| (99 | ) |
| Gain on dispositions of mining interests, net of transaction costs | 11(d), 12(c) | — |
| (315 | ) | — |
| (315 | ) |
| Revision of estimates and accretion of reclamation and closure cost obligations | | 6 |
| 5 |
| 13 |
| 33 |
|
| Deferred income tax (recovery) expense | 7 | (7 | ) | (29 | ) | (81 | ) | 46 |
|
| Other | | 25 |
| 12 |
| 26 |
| 2 |
|
| Change in working capital | 9 | 89 |
| 202 |
| (117 | ) | (18 | ) |
| Net cash provided by operating activities of continuing operations | | 234 |
| 528 |
| 293 |
| 579 |
|
| Net cash provided by operating activities of discontinued operation | 3 | — |
| — |
| — |
| 7 |
|
| Investing activities | | | |
|
|
| Acquisition of mining interest, net of cash acquired | 4(e) | — |
| (4 | ) | — |
| (43 | ) |
| Expenditures on mining interests | 4, 11(c) | (166 | ) | (313 | ) | (339 | ) | (706 | ) |
| Return of capital investment in associate | | — |
| 20 |
| — |
| 20 |
|
| Proceeds from dispositions of mining interests, net of transaction costs | 9 | — |
| 788 |
| — |
| 788 |
|
| Interest paid | 11(c) | (6 | ) | (19 | ) | (15 | ) | (49 | ) |
| Proceeds (purchases) of money market investments and available-for-sale securities, net | 9 | 27 |
| (10 | ) | 27 |
| (11 | ) |
| Other | | 5 |
| (1 | ) | 2 |
| (1 | ) |
| Net cash (used in) provided by investing activities of continuing operations | | (140 | ) | 461 |
| (325 | ) | (2 | ) |
| Net cash (used in) provided by investing activities of discontinued operation | 3, 9 | — |
| (3 | ) | — |
| 97 |
|
| Financing activities | | | |
|
|
| Debt repayments | | (1 | ) | (9 | ) | (3 | ) | (12 | ) |
| Credit facility (repayment) drawdown, net | 13(d)(i) | (125 | ) | (305 | ) | 125 |
| (5 | ) |
| Finance lease payments | | (1 | ) | — |
| (2 | ) | — |
|
| Dividends paid to shareholders | 8(b) | (16 | ) | (124 | ) | (67 | ) | (246 | ) |
| Common shares issued | | 1 |
| 7 |
| 3 |
| 20 |
|
| Other | | (23 | ) | 21 |
| (22 | ) | 21 |
|
| Net cash (used in) provided by financing activities of continuing operations | | (165 | ) | (410 | ) | 34 |
| (222 | ) |
| Effect of exchange rate changes on cash and cash equivalents | | (2 | ) | (1 | ) | — |
| (1 | ) |
| (Decrease) increase in cash and cash equivalents | | (73 | ) | 575 |
| 2 |
| 458 |
|
| Cash and cash equivalents, beginning of the period | | 401 |
| 365 |
| 326 |
| 482 |
|
| Cash and cash equivalents, end of the period | 9 | $ | 328 |
| $ | 940 |
| $ | 328 |
| $ | 940 |
|
Supplemental cash flow information (note 9)
The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.
Second Quarter Report – 2016
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(In millions of United States dollars – Unaudited)
|
| | | | | | | |
| Note | At June 30
2016 |
| At December 31
2015 |
|
| Assets | | | |
| Current assets | | | |
| Cash and cash equivalents | 9 | $ | 328 |
| $ | 326 |
|
| Money market investments | | 37 |
| 57 |
|
| Accounts receivable | | 400 |
| 346 |
|
| Inventories | 10 | 462 |
| 469 |
|
| Income taxes receivable | | 21 |
| 67 |
|
| Other | | 73 |
| 66 |
|
| | | 1,321 |
| 1,331 |
|
| Mining interests | | | |
| Owned by subsidiaries | 11 | 17,508 |
| 17,630 |
|
| Investments in associates and joint venture | 12 | 1,914 |
| 1,839 |
|
| | | 19,422 |
| 19,469 |
|
| Investments in securities | | 106 |
| 51 |
|
| Deferred income taxes | | 36 |
| 50 |
|
| Inventories | 10 | 213 |
| 255 |
|
| Other | | 173 |
| 272 |
|
| Total assets | 4 | $ | 21,271 |
| $ | 21,428 |
|
| Liabilities |
| | |
| Current liabilities |
| | |
| Accounts payable and accrued liabilities |
| $ | 515 |
| $ | 680 |
|
| Debt | | 205 |
| 212 |
|
| Income taxes payable |
| 43 |
| 104 |
|
| Other | | 54 |
| 53 |
|
| |
| 817 |
| 1,049 |
|
| Deferred income taxes | | 3,657 |
| 3,749 |
|
| Debt | | 2,603 |
| 2,476 |
|
| Provisions | | 808 |
| 775 |
|
| Finance lease obligations | | 265 |
| 267 |
|
| Income taxes payable |
| 155 |
| 161 |
|
| Other | | 105 |
| 103 |
|
| Total liabilities | 4 | 8,410 |
| 8,580 |
|
| Shareholders' equity | | | |
| Common shares, stock options and restricted share units | | 17,638 |
| 17,604 |
|
| Accumulated other comprehensive income (loss) | | 39 |
| (6 | ) |
| Deficit | | (4,816 | ) | (4,750 | ) |
| | 4 | 12,861 |
| 12,848 |
|
| Total liabilities and shareholders' equity | | $ | 21,271 |
| $ | 21,428 |
|
Commitments and contingency (notes 13(d)(i) and 14); subsequent event (note 15)
The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.
Second Quarter Report – 2016
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In millions of United States dollars, shares in thousands – Unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Common Shares | | | | | | |
| Shares issued, fully paid with no par value | Amount | Stock options and restricted share units | Accumulated other comprehensive (loss) income | Deficit | Attributable to shareholders of Goldcorp Inc. | Non-controlling interest | Total |
| At January 1, 2016 | 830,337 |
| $ | 17,276 |
| $ | 328 |
| $ | (6 | ) | $ | (4,750 | ) | $ | 12,848 |
| $ | — |
| $ | 12,848 |
|
| Total comprehensive income |
|
|
|
|
|
|
| |
| Net earnings | — |
| — |
| — |
| — |
| 2 |
| 2 |
| — |
| 2 |
|
| Other comprehensive income | — |
| — |
| — |
| 45 |
| — |
| 45 |
| — |
| 45 |
|
| | — |
| — |
| — |
| 45 |
| 2 |
| 47 |
| — |
| 47 |
|
| Stock options exercised and restricted share units issued and vested | 1,964 |
| 48 |
| (45 | ) | — |
| — |
| 3 |
| — |
| 3 |
|
| Share-based compensation | — |
| — |
| 30 |
| — |
| — |
| 30 |
| — |
| 30 |
|
Dividends (note 8(b)) | 80 |
| 1 |
| — |
| — |
| (68 | ) | (67 | ) | — |
| (67 | ) |
| At June 30, 2016 | 832,381 |
| $ | 17,325 |
| $ | 313 |
| $ | 39 |
| $ | (4,816 | ) | $ | 12,861 |
| $ | — |
| $ | 12,861 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Common Shares | | | | | | |
| Shares issued, fully paid with no par value | Amount | Stock options, restricted share units and warrants | Accumulated other comprehensive loss | Deficit | Attributable to shareholders of Goldcorp Inc. | Non- controlling interest | Total |
| At January 1, 2015 | 813,585 |
| $ | 16,941 |
| $ | 320 |
| $ | (5 | ) | $ | (296 | ) | $ | 16,960 |
| $ | 215 |
| $ | 17,175 |
|
| Total comprehensive income |
|
|
|
|
| |
| |
| Net earnings | — |
| — |
| — |
| — |
| 305 |
| 305 |
| — |
| 305 |
|
| Other comprehensive income | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| | — |
| — |
| — |
| — |
| 305 |
| 305 |
| — |
| 305 |
|
Shares, stock options and warrants issued pursuant to the acquisition of Probe (note 4(e)) | 13,264 |
| 250 |
| 20 |
| — |
| — |
| 270 |
| — |
| 270 |
|
| Stock options and warrants exercised and restricted share units issued and vested | 3,349 |
| 82 |
| (62 | ) | — |
| — |
| 20 |
| — |
| 20 |
|
| Share-based compensation | — |
| — |
| 27 |
| — |
| — |
| 27 |
| — |
| 27 |
|
Dividends (note 8(b)) | — |
| — |
| — |
| — |
| (246 | ) | (246 | ) | — |
| (246 | ) |
| At June 30, 2015 | 830,198 |
| $ | 17,273 |
| $ | 305 |
| $ | (5 | ) | $ | (237 | ) | $ | 17,336 |
| $ | 215 |
| $ | 17,551 |
|
The accompanying notes form an integral part of these unaudited condensed interim consolidated financial statements.
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2016
| |
| 1. | DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS |
Goldcorp Inc. is the ultimate parent company of its consolidated group ("Goldcorp" or "the Company"). The Company is incorporated and domiciled in Canada, and its registered office is at Suite 3400 – 666 Burrard Street, Vancouver, British Columbia, V6C 2X8.
The Company is a gold producer focused on responsible mining practices, with safe production throughout the Americas from a portfolio of long-lived high quality assets, positioning the Company to deliver long-term value. The Company’s current sources of operating cash flows are primarily from the sale of gold, silver, lead, zinc and copper.
The Company’s principal producing mining properties are comprised of the Red Lake, Porcupine, Musselwhite and Éléonore mines in Canada; the Peñasquito mine in Mexico; the Cerro Negro mine in Argentina; and the Pueblo Viejo mine (40% interest) in the Dominican Republic. In addition, the Company has a significant project, NuevaUnión (50% interest), in Chile. NuevaUnión was referred to as Project Corridor prior to June 2016.
The Wharf gold mine ("Wharf") in the United States was disposed of on February 20, 2015 and its results have been presented as discontinued operation for the three and six months ended June 30, 2015 (note 3).
These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB"). Accordingly, certain disclosures included in annual financial statements prepared in accordance with International Financial Reporting Standards ("IFRSs") as issued by the IASB have been condensed or omitted. These unaudited condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2015.
The accounting policies applied in the preparation of these unaudited condensed interim consolidated financial statements are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2015, except for the following:
The Company has adopted the amendments to IFRSs included in the Annual Improvements 2012-2014 cycle and a number of narrow scope amendments to certain IFRSs and IASs which are effective for annual periods beginning on or after January 1, 2016. The amendments did not have an impact on the Company's unaudited condensed interim consolidated financial statements.
The Company’s interim results are not necessarily indicative of its results for a full year. All amounts are expressed in US dollars, unless otherwise noted. References to C$ are to Canadian dollars.
Significant judgements and estimates
The Company’s management makes judgements in its process of applying the Company’s accounting policies in the preparation of its unaudited condensed interim consolidated financial statements. In addition, the preparation of the financial data requires that the Company’s management makes assumptions and estimates of the impacts of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting impacts on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.
In preparing the Company’s unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2016, the Company applied the critical judgements and estimates disclosed in notes 5 and 6 of its audited consolidated financial statements for the year ended December 31, 2015.
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
The components of net (loss) earnings from discontinued operation included in these unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2015 relating to Wharf, which was disposed of on February 20, 2015, are as follows:
|
| | | | | | |
| | Three Months Ended
June 30 | Six Months Ended
June 30 |
| Revenues | $ | — |
| $ | 19 |
|
| Production costs | — |
| (15 | ) |
| Earnings from mine operation | — |
| 4 |
|
| Other expenses | — |
| (1 | ) |
| Earnings from discontinued operation before taxes | — |
| 3 |
|
| Income tax expense | — |
| — |
|
| Earnings from discontinued operation | — |
| 3 |
|
Net (loss) gain on disposition of discontinued operation (a) | (6 | ) | 43 |
|
| Net (loss) earnings from discontinued operation | $ | (6 | ) | $ | 46 |
|
| Net (loss) earnings per share from discontinued operation | | |
| Basic | $ | (0.01 | ) | $ | 0.06 |
|
| Diluted | (0.01 | ) | 0.06 |
|
|
| | | | | | |
| (Loss) gain on disposition | $ | (8 | ) | $ | 65 |
|
| Income tax recovery (expense) on disposition | 2 |
| (22 | ) |
Net (loss) gain on disposition (a) | $ | (6 | ) | $ | 43 |
|
| |
(a) | The net loss incurred during the three months ended June 30, 2015 relates to deferred taxes arising on the disposition. |
Operating results of operating segments are reviewed by the Company's chief operating decision maker ("CODM") to make decisions about resources to be allocated to the segments and to assess their performance. The Company’s 100% interests in the Cochenour and Borden projects in Canada and the Camino Rojo project in Mexico are included in the Red Lake, Porcupine and Peñasquito reportable operating segments, respectively.
Effective January 1, 2016, the Company's CODM reviews the results of its mines and associate that have short mine lives and are headed for closure together as one operating segment. Accordingly, the Company has grouped Los Filos and Marlin into one operating segment, Other mines, and presented its 37.5% interest in Alumbrera as the Other associate operating segment. The segment information for the three and six months ended June 30, 2015 has been restated to reflect the Company's reportable operating segments for the three and six months ended June 30, 2016.
The Company’s principal product is gold doré with the refined gold bullion sold primarily in the London spot market. Concentrate produced at Peñasquito and Alumbrera, containing both gold and by-product metals, is sold to third party smelters and traders.
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
Significant information relating to the Company’s reportable operating segments is summarized in the tables below:
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Revenues (a)(b) | Depreciation and depletion | (Loss) earnings from operations, associates and joint venture (b)(c) | Expenditures on mining interests (d) |
| Three Months Ended June 30 | 2016 |
| 2015 |
| 2016 |
| 2015 |
| 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Red Lake | $ | 91 |
| $ | 109 |
| $ | 28 |
| $ | 30 |
| $ | 12 |
| $ | 18 |
| $ | 24 |
| $ | 38 |
|
Porcupine (e) | 93 |
| 88 |
| 17 |
| 13 |
| 29 |
| 22 |
| 14 |
| 32 |
|
| Musselwhite | 77 |
| 71 |
| 17 |
| 15 |
| 23 |
| 19 |
| 7 |
| 6 |
|
| Éléonore | 94 |
| 52 |
| 37 |
| 30 |
| (6 | ) | (39 | ) | 18 |
| 78 |
|
| Peñasquito | 129 |
| 522 |
| 38 |
| 108 |
| (58 | ) | 190 |
| 58 |
| 57 |
|
| Cerro Negro | 121 |
| 186 |
| 46 |
| 71 |
| 11 |
| 7 |
| 26 |
| 64 |
|
Pueblo Viejo (f) | 125 |
| 111 |
| 7 |
| 27 |
| 69 |
| 32 |
| 10 |
| 11 |
|
El Morro (g) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| 4 |
|
NuevaUnión (f)(g) | — |
| — |
| — |
| — |
| — |
| — |
| 2 |
| — |
|
Wharf (h) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Other mines | 148 |
| 160 |
| 43 |
| 82 |
| — |
| (31 | ) | 8 |
| 25 |
|
Other associate (f) | 43 |
| 18 |
| — |
| 5 |
| 10 |
| (16 | ) | — |
| 6 |
|
Other (i) | — |
| — |
| 6 |
| 7 |
| (62 | ) | (65 | ) | 9 |
| 9 |
|
| Attributable segment total | 921 |
| 1,317 |
| 239 |
| 388 |
| 28 |
| 137 |
| 176 |
| 330 |
|
Excluding attributable amounts from associates and joint venture (f) | (168 | ) | (129 | ) | (7 | ) | (32 | ) | (51 | ) | (31 | ) | (10 | ) | (17 | ) |
Excluding discontinued operation (h) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| Consolidated total for continuing operations | $ | 753 |
| $ | 1,188 |
| $ | 232 |
| $ | 356 |
| $ | (23 | ) | $ | 106 |
| $ | 166 |
| $ | 313 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Six Months Ended June 30 | 2016 |
| 2015 |
| 2016 |
| 2015 |
| 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Red Lake | $ | 190 |
| $ | 240 |
| $ | 59 |
| $ | 64 |
| $ | 25 |
| $ | 60 |
| $ | 55 |
| $ | 92 |
|
Porcupine (e) | 182 |
| 154 |
| 35 |
| 24 |
| 47 |
| 32 |
| 30 |
| 48 |
|
| Musselwhite | 155 |
| 139 |
| 32 |
| 28 |
| 54 |
| 32 |
| 12 |
| 15 |
|
| Éléonore | 177 |
| 52 |
| 73 |
| 30 |
| (15 | ) | (39 | ) | 39 |
| 194 |
|
| Peñasquito | 393 |
| 886 |
| 95 |
| 185 |
| (23 | ) | 248 |
| 120 |
| 102 |
|
| Cerro Negro | 295 |
| 420 |
| 113 |
| 175 |
| 49 |
| — |
| 51 |
| 168 |
|
Pueblo Viejo (f) | 264 |
| 288 |
| 20 |
| 63 |
| 150 |
| 101 |
| 19 |
| 24 |
|
El Morro (g) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| 9 |
|
NuevaUnión (f)(g) | — |
| — |
| — |
| — |
| — |
| — |
| 4 |
| — |
|
Wharf (h) | — |
| 19 |
| — |
| — |
| — |
| 3 |
| — |
| 1 |
|
| Other mines | 305 |
| 314 |
| 82 |
| 160 |
| 7 |
| (56 | ) | 15 |
| 59 |
|
Other associate (f) | 116 |
| 75 |
| 7 |
| 14 |
| 11 |
| (16 | ) | — |
| 7 |
|
Other (i) | — |
| — |
| 14 |
| 12 |
| (140 | ) | (138 | ) | 12 |
| 19 |
|
| Attributable segment total | 2,077 |
| 2,587 |
| 530 |
| 755 |
| 165 |
| 227 |
| 357 |
| 738 |
|
Excluding attributable amounts from associates and joint venture (f) | (380 | ) | (363 | ) | (27 | ) | (77 | ) | (97 | ) | (77 | ) | (18 | ) | (31 | ) |
Excluding discontinued operation (h) | — |
| (19 | ) | — |
| — |
| — |
| (3 | ) | — |
| (1 | ) |
| Consolidated total for continuing operations | $ | 1,697 |
| $ | 2,205 |
| $ | 503 |
| $ | 678 |
| $ | 68 |
| $ | 147 |
| $ | 339 |
| $ | 706 |
|
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
|
| | | | | | | | | |
| At June 30, 2016 | Assets |
| Liabilities |
| Net Assets |
|
| Red Lake | $ | 2,497 |
| $ | 324 |
| $ | 2,173 |
|
Porcupine (e) | 1,015 |
| 296 |
| 719 |
|
| Musselwhite | 715 |
| 155 |
| 560 |
|
| Éléonore | 2,798 |
| 379 |
| 2,419 |
|
| Peñasquito | 8,023 |
| 2,915 |
| 5,108 |
|
| Cerro Negro | 3,631 |
| 989 |
| 2,642 |
|
Pueblo Viejo (f) | 1,035 |
| — |
| 1,035 |
|
NuevaUnión (f)(g) | 879 |
| — |
| 879 |
|
| Other mines | 627 |
| 184 |
| 443 |
|
Other (i) | 51 |
| 3,168 |
| (3,117 | ) |
| Total | $ | 21,271 |
| $ | 8,410 |
| $ | 12,861 |
|
|
| | | | | | | | | |
| At December 31, 2015 | |
| Red Lake | $ | 2,538 |
| $ | 371 |
| $ | 2,167 |
|
Porcupine (e) | 969 |
| 295 |
| 674 |
|
| Musselwhite | 672 |
| 165 |
| 507 |
|
| Éléonore | 2,842 |
| 435 |
| 2,407 |
|
| Peñasquito | 7,918 |
| 2,988 |
| 4,930 |
|
| Cerro Negro | 3,694 |
| 994 |
| 2,700 |
|
Pueblo Viejo (f) | 967 |
| — |
| 967 |
|
NuevaUnión (f)(g) | 872 |
| — |
| 872 |
|
| Other mines | 734 |
| 232 |
| 502 |
|
Other (i) | 222 |
| 3,100 |
| (2,878 | ) |
| Total | $ | 21,428 |
| $ | 8,580 |
| $ | 12,848 |
|
| |
| (a) | The Company’s consolidated revenues from continuing operations (excluding attributable share of revenues from the Company's associates and joint venture) for the three and six months ended June 30 were derived from the following: |
|
| | | | | | | | | | | | |
| | Three Months Ended
June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Gold | $ | 643 |
| $ | 952 |
| $ | 1,432 |
| $ | 1,746 |
|
| Silver | 73 |
| 141 |
| 170 |
| 287 |
|
| Zinc | 32 |
| 65 |
| 74 |
| 120 |
|
| Lead | 3 |
| 30 |
| 19 |
| 51 |
|
| Copper | 2 |
| — |
| 2 |
| 1 |
|
| | $ | 753 |
| $ | 1,188 |
| $ | 1,697 |
| $ | 2,205 |
|
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
The following reportable operating segments (including the Company's associates and joint venture) supplemented their gold revenues with the sale of other metals. All other operating segments principally derived their revenues from gold sales.
|
| | | | | | | | | | | | | | | | |
| Three Months Ended June 30 | | Peñasquito |
| Cerro Negro |
| Pueblo Viejo |
| Other mines |
| Other associate |
|
| Gold | 2016 | $ | 55 |
| $ | 109 |
| $ | 121 |
| $ | 125 |
| $ | 22 |
|
| | 2015 | $ | 348 |
| $ | 156 |
| $ | 109 |
| $ | 129 |
| $ | 7 |
|
| Silver | 2016 | 37 |
| 12 |
| 3 |
| 23 |
| 1 |
|
| | 2015 | 79 |
| 30 |
| 1 |
| 31 |
| — |
|
| Zinc | 2016 | 32 |
| — |
| — |
| — |
| — |
|
| | 2015 | 65 |
| — |
| — |
| — |
| — |
|
| Lead | 2016 | 3 |
| — |
| — |
| — |
| — |
|
| | 2015 | 30 |
| — |
| — |
| — |
| — |
|
| Copper | 2016 | 2 |
| — |
| 1 |
| — |
| 20 |
|
| | 2015 | — |
| — |
| 1 |
| — |
| 11 |
|
| Molybdenum | 2016 | — |
| — |
| — |
| — |
| — |
|
| | 2015 | — |
| — |
| — |
| — |
| — |
|
| Total | 2016 | $ | 129 |
| $ | 121 |
| $ | 125 |
| $ | 148 |
| $ | 43 |
|
| | 2015 | $ | 522 |
| $ | 186 |
| $ | 111 |
| $ | 160 |
| $ | 18 |
|
|
| | | | | | | | | | | | | | | | |
| Six Months Ended June 30 | | | | | | |
| Gold | 2016 | $ | 207 |
| $ | 264 |
| $ | 255 |
| $ | 258 |
| $ | 59 |
|
| | 2015 | $ | 558 |
| $ | 350 |
| $ | 278 |
| $ | 254 |
| $ | 31 |
|
| Silver | 2016 | 91 |
| 31 |
| 8 |
| 47 |
| 1 |
|
| | 2015 | 156 |
| 70 |
| 9 |
| 60 |
| 1 |
|
| Zinc | 2016 | 74 |
| — |
| — |
| — |
| — |
|
| | 2015 | 120 |
| — |
| — |
| — |
| — |
|
| Lead | 2016 | 19 |
| — |
| — |
| — |
| — |
|
| | 2015 | 51 |
| — |
| — |
| — |
| — |
|
| Copper | 2016 | 2 |
| — |
| 1 |
| — |
| 55 |
|
| | 2015 | 1 |
| — |
| 1 |
| — |
| 42 |
|
| Molybdenum | 2016 | — |
| — |
| — |
| — |
| 1 |
|
| | 2015 | — |
| — |
| — |
| — |
| 1 |
|
| Total | 2016 | $ | 393 |
| $ | 295 |
| $ | 264 |
| $ | 305 |
| $ | 116 |
|
| | 2015 | $ | 886 |
| $ | 420 |
| $ | 288 |
| $ | 314 |
| $ | 75 |
|
| |
| (b) | Intersegment sales and transfers are eliminated in the above information reported to the Company’s CODM. For the three and six months ended June 30, 2016, intersegment purchases included $124 million and $263 million, respectively, of gold and silver ounces purchased from Pueblo Viejo (three and six months ended June 30, 2015 – $110 million and $287 million, respectively) and revenues related to the sale of these ounces to external third parties were $124 million and $263 million, respectively (three and six months ended June 30, 2015 – $110 million and $287 million, respectively). |
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
| |
| (c) | A reconciliation of attributable segment total earnings from operations, associates and joint venture to the Company's (loss) earnings from continuing operations before taxes per the Condensed Interim Consolidated Statements of (Loss) Earnings is as follows: |
|
| | | | | | | | | | | | |
| | Three Months Ended June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Attributable segment total earnings from operations, associates and joint venture | $ | 28 |
| $ | 137 |
| $ | 165 |
| $ | 227 |
|
| Adjustment to account for Pueblo Viejo, NuevaUnión and Alumbrera on an equity method basis | (51 | ) | (31 | ) | (97 | ) | (77 | ) |
| Excluding earnings from discontinued operation | — |
| — |
| — |
| (3 | ) |
Gain (loss) on derivatives, net (i) | — |
| 8 |
| 1 |
| (34 | ) |
Gain on dilution of ownership interest in associate (note 12(c)) (i) | — |
| 99 |
| — |
| 99 |
|
Gain on dispositions of mining interests, net of transaction costs (notes 11(d) and 12(c)) (i) | — |
| 315 |
| — |
| 315 |
|
Finance costs (i) | (35 | ) | (43 | ) | (69 | ) | (70 | ) |
Other income (expenses), net (i) | 12 |
| 3 |
| (6 | ) | 21 |
|
| (Loss) earnings from continuing operations before taxes | $ | (46 | ) | $ | 488 |
| $ | (6 | ) | $ | 478 |
|
| |
(i) | Arose from corporate activities that would primarily be allocated to the Other segment except for $6 million and $12 million of finance costs incurred during the three and six months ended June 30, 2016, respectively, which would be allocated to the Peñasquito segment (three and six months ended June 30, 2015 – $19 million and $39 million, respectively, which would be allocated to the Cerro Negro segment). In addition, during the three and six months ended June 30, 2016, the Company recognized a net foreign exchange loss of $14 million and $47 million, respectively, which would be primarily allocated to the Peñasquito and Cerro Negro segments (three and six months ended June 30, 2015 – net gain of $9 million and $24 million, respectively, which would be primarily allocated to the Peñasquito and Cerro Negro segments). |
| |
| (d) | Segmented expenditures on mining interests are presented on a cash basis. The amounts include deposits on mining interests and exclude reclamation expenditures and interest paid relating to capitalized borrowing costs. |
| |
| (e) | The Borden project included in the Porcupine reportable operating segment was acquired on March 13, 2015 in connection with the acquisition of 100% of the outstanding shares of Probe, excluding the 19.7% interest already held by the Company. |
| |
| (f) | The attributable segment information relating to Pueblo Viejo, NuevaUnión and Alumbrera, as reviewed by the CODM, is based on the Company's proportionate share of profits and expenditures on mining interests. However, as required by IFRS, the Company's investments in Pueblo Viejo, NuevaUnión and Alumbrera are accounted for in these unaudited condensed interim consolidated financial statements using the equity method (note 12). Alumbrera is presented as the Other associate operating segment. |
| |
| (g) | On November 24, 2015, the Company acquired New Gold Inc.'s 30% interest in the El Morro project, increasing the Company's interest to 100%. In conjunction with the acquisition, the Company and Teck Resources Ltd. ("Teck") entered into a joint venture agreement whereby their respective 100% interests in the El Morro and Relincho deposits were combined into a single project (NuevaUnión) in exchange for a 50% interest in the NuevaUnión joint venture. On November 24, 2015, the carrying amount of the El Morro project was derecognized and the Company's 50% interest in NuevaUnión was recognized using the equity method (note 12). |
| |
| (h) | The Company completed the sale of Wharf on February 20, 2015. The results of Wharf up to the date of disposition have been presented in these unaudited condensed interim consolidated financial statements as a discontinued operation (note 3). |
| |
| (i) | Included in the other segment results of the Company for the three and six months ended June 30, 2016 were $6 million and $16 million, respectively, in restructuring costs (note 6). Included in the other segment results of the Company for the three and six months ended June 30, 2015 were the Company's share of net (loss) earnings of Tahoe Resources Inc. ("Tahoe") in the amount of ($4) million and $8 million, respectively. The Company disposed of its 25.9% interest in Tahoe, which was accounted for using the equity method, on June 30, 2015 (note 12(c)). |
The Other segment assets include corporate assets, the Company's closed and inactive mines and certain exploration properties in Mexico. The Other segment liabilities include the Company's $1.0 billion notes, $1.5 billion notes, revolving credit facility, asset retirement obligations at the Company's closed and inactive mines and certain income taxes payable.
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
|
| | | | | | | | | | | | |
| Three Months Ended
June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Raw materials and consumables | $ | 214 |
| $ | 251 |
| $ | 451 |
| $ | 486 |
|
Salaries and employee benefits (a) | 135 |
| 160 |
| 262 |
| 291 |
|
| Contractors | 100 |
| 134 |
| 199 |
| 236 |
|
| Royalties | 9 |
| 29 |
| 26 |
| 53 |
|
| Revision in estimates and liabilities incurred on reclamation and closure cost obligations | — |
| (1 | ) | 1 |
| 21 |
|
| Change in inventories | (3 | ) | 19 |
| 7 |
| 77 |
|
Write down of inventories to net realizable value (note 10(b)) | 5 |
| — |
| 7 |
| — |
|
| Other | 39 |
| 48 |
| 74 |
| 96 |
|
| | $ | 499 |
| $ | 640 |
| $ | 1,027 |
| $ | 1,260 |
|
| |
| (a) | Salaries and employee benefits exclude $19 million and $36 million of salaries and employee benefits included in corporate administration in the Condensed Interim Consolidated Statements of (Loss) Earnings for the three and six months ended June 30, 2016, respectively (three and six months ended June 30, 2015 – $24 million and $44 million, respectively). |
During the three and six months ended June 30, 2016, the Company incurred $16 million and $39 million, respectively (three and six months ended June 30, 2015 – $nil and $nil, respectively) in restructuring costs. The restructuring costs relate to severance costs associated with involuntary and voluntary workforce reduction initiatives to improve efficiencies at mine sites and corporate offices. At June 30, 2016, included in accrued liabilities was $9 million of restructuring costs (December 31, 2015 – $nil).
|
| | | | | | | | | | | | |
| Three Months Ended
June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Current income tax expense | $ | 39 |
| $ | 119 |
| $ | 73 |
| $ | 173 |
|
| Deferred income tax (recovery) expense | (7 | ) | (29 | ) | (81 | ) | 46 |
|
| Income tax expense (recovery) | $ | 32 |
| $ | 90 |
| $ | (8 | ) | $ | 219 |
|
The income tax rate for the three months ended June 30, 2016 was negative 70% (three months ended June 30, 2015 – positive 18%). After adjusting the income tax expense for the impacts of foreign exchange losses on the translation of deferred income tax assets and liabilities of $69 million (three months ended June 30, 2015 – $22 million), tax deductible Argentine Peso denominated foreign exchange losses on US dollar debt of $9 million (three months ended June 30, 2015 – $12 million), and other tax expense items of $7 million (three months ended June 30, 2015 – $nil), and adjusting the (loss) earnings from continuing operations before taxes for net non-taxable items of $24 million (three months ended June 30, 2015 – non-deductible items of $33 million), the effective tax rate for the three months ended June 30, 2016 was 50% (three months ended June 30, 2015 – 33% including an adjustment for the gains on sale of associates of $358 million, net of tax).
The income tax rate for the six months ended June 30, 2016 was 133% (six months ended June 30, 2015 – expense rate of 46%). After adjusting the tax recovery (expense) for the impacts of foreign exchange losses on the translation of deferred income tax assets and liabilities of $91 million (six months ended June 30, 2015 – $144 million), tax deductible Argentine Peso denominated foreign exchange losses on US dollar debt of $71 million (six months ended June 30, 2015 – $24 million), and other tax recovery items of $10 million (six months ended June 30, 2015 – $1 million), and adjusting (loss) earnings from continuing operations before taxes for net non-taxable items of $34 million (six months ended June 30, 2015 – net non-deductible items of $15 million), the effective tax rate for the six months ended June 30, 2016 was 45% (six months ended June 30, 2015 – 56% including an adjustment for the gains on the sale of associates of $358 million, net of tax).
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
| |
| (a) | Net (loss) earnings per share |
Net (loss) earnings per share from continuing operations and net (loss) earnings per share for the three and six months ended June 30 were calculated based on the following:
|
| | | | | | | | | | | | |
| | Three Months Ended June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Basic and diluted net (loss) earnings from continuing operations | $ | (78 | ) | $ | 398 |
| $ | 2 |
| $ | 259 |
|
| Basic and diluted net (loss) earnings | $ | (78 | ) | $ | 392 |
| $ | 2 |
| $ | 305 |
|
The weighted average number of shares used in the calculation of net (loss) earnings per share from continuing operations and net (loss) earnings per share for the three and six months ended June 30 were based on the following:
|
| | | | | | | | |
| | Three Months Ended June 30 | Six Months Ended
June 30 |
| (in millions) | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Basic weighted average number of shares outstanding | 832 |
| 830 |
| 832 |
| 823 |
|
| Effect of dilutive equity instruments: | | | | |
| Stock options and restricted share units | — |
| 4 |
| 4 |
| 4 |
|
| Diluted weighted average number of shares outstanding | 832 |
| 834 |
| 836 |
| 827 |
|
The outstanding equity instruments that could potentially dilute basic earnings per share in the future, but were not included in the calculation of diluted net (loss) earnings per share from continuing operations and diluted net (loss) earnings per share for the three and six months ended June 30 because they were anti-dilutive were as follows:
|
| | | | | | | | |
| | Three Months Ended June 30 | Six Months Ended
June 30 |
| (in millions) | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Stock options | 12 |
| 15 |
| 10 |
| 15 |
|
| Restricted share units | 4 |
| — |
| — |
| — |
|
| Total | 16 |
| 15 |
| 10 |
| 15 |
|
On February 25, 2016, the Company announced a quarterly dividend of $0.02 per share, effective April 1, 2016, with the first payment in June 2016. During the three and six months ended June 30, 2016, the Company declared dividends of $0.02 per share and $0.08 per share for total dividends of $17 million and $68 million, respectively (three and six months ended June 30, 2015 – $0.15 per share and $0.30 per share for dividends of $124 million and $246 million, respectively).
On May 11, 2016, the Company announced that it implemented a Dividend Reinvestment Plan ("DRIP") which allows shareholders the opportunity to increase their investment in Goldcorp without additional transaction costs by receiving dividend payments in the form of common shares of the Company. The DRIP allows shareholders to reinvest their cash dividends into additional common shares issued from treasury at a 3% discount to the average market price calculated at the time of dividend payment. Participation in the DRIP is optional and will not affect shareholders’ cash dividends unless they elect to participate in the DRIP. During the three and six months ended June 30, 2016, the Company issued $1 million in common shares under the DRIP.
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
| |
| 9. | SUPPLEMENTAL CASH FLOW INFORMATION |
|
| | | | | | |
| At June 30
2016 |
| At December 31
2015 |
|
| Cash and cash equivalents are comprised of: | | |
Cash (a) | $ | 234 |
| $ | 290 |
|
| Short-term money market investments | 94 |
| 36 |
|
| | $ | 328 |
| $ | 326 |
|
| |
(a) | Included in cash at December 31, 2015 was $23 million designated to pay outstanding amounts payable relating to the NuevaUnión transaction (note 4(g)). The amount due was paid by the Company during the three months ended June 30, 2016. |
|
| | | | | | | | | | | | |
| | Three Months Ended
June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Change in working capital | | | | |
| Accounts receivable | $ | 100 |
| $ | (7 | ) | $ | (53 | ) | $ | (161 | ) |
| Inventories | 7 |
| 9 |
| 15 |
| 55 |
|
| Accounts payable and accrued liabilities | (49 | ) | 88 |
| (109 | ) | 2 |
|
| Income taxes receivable and payable | 36 |
| 124 |
| 12 |
| 104 |
|
| Other | (5 | ) | (12 | ) | 18 |
| (18 | ) |
| | $ | 89 |
| $ | 202 |
| $ | (117 | ) | $ | (18 | ) |
|
| | | | | | | | | | | | |
| | Three Months Ended June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Operating activities include the following cash received (paid): | | | | |
| Interest received | $ | 3 |
| $ | — |
| $ | 34 |
| $ | 37 |
|
| Interest paid | (21 | ) | (26 | ) | (41 | ) | (43 | ) |
| Income taxes refunded | 14 |
| 12 |
| 14 |
| 15 |
|
| Income taxes paid | (20 | ) | (22 | ) | (86 | ) | (73 | ) |
| Investing activities of continuing operations include the following cash received (paid): | | | | |
| Proceeds from dispositions of mining interests, net of transaction costs | | | | |
Tahoe (note 12(c)) | $ | — |
| $ | 768 |
| $ | — |
| $ | 768 |
|
Other (note 11(d)) | — |
| 20 |
| — |
| 20 |
|
| | $ | — |
| $ | 788 |
| $ | — |
| $ | 788 |
|
| Net proceeds (purchases) of money market investments and available-for-sale securities | | | | |
| Purchases of money market investments | $ | (43 | ) | $ | (26 | ) | $ | (43 | ) | $ | (35 | ) |
| Proceeds from maturity of money market investments | 63 |
| 26 |
| 63 |
| 33 |
|
| Purchases of available-for-sale securities | (7 | ) | (10 | ) | (19 | ) | (10 | ) |
| Proceeds from sale of available-for-sale securities | 14 |
| — |
| 26 |
| 1 |
|
| | $ | 27 |
| $ | (10 | ) | $ | 27 |
| $ | (11 | ) |
| Investing activities of discontinued operation: | | | | |
(Payment) proceeds on disposition of Wharf, net of transaction costs (notes 3 and 4(h)) | $ | — |
| $ | (3 | ) | $ | — |
| $ | 98 |
|
| Expenditures on mining interest | — |
| — |
| — |
| (1 | ) |
| | $ | — |
| $ | (3 | ) | $ | — |
| $ | 97 |
|
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
|
| | | | | | |
| At June 30
2016 |
| At December 31
2015 |
|
| Supplies | $ | 272 |
| $ | 281 |
|
| Finished goods | 93 |
| 90 |
|
| Work-in-process | 46 |
| 51 |
|
| Heap leach ore | 231 |
| 260 |
|
| Stockpiled ore | 33 |
| 42 |
|
| | 675 |
| 724 |
|
| Less: non-current heap leach and stockpiled ore | (213 | ) | (255 | ) |
| | $ | 462 |
| $ | 469 |
|
| |
| (a) | The costs of inventories recognized as expense for the three and six months ended June 30, 2016 amounted to $697 million and $1,463 million, respectively (three and six months ended June 30, 2015 – $939 million and $1,801 million, respectively), of which $476 million and $973 million, respectively (three and six months ended June 30, 2015 – $588 million and $1,135 million, respectively), were included in production costs and $221 million and $490 million, respectively (three and six months ended June 30, 2015 – $351 million and $666 million, respectively), were included in depreciation and depletion in the Condensed Interim Consolidated Statements of (Loss) Earnings. |
| |
| (b) | During the three and six months ended June 30, 2016, the Company recorded a write down of inventories of $5 million and $8 million, respectively, relating to materials and supplies at Marlin and Peñasquito and Peñasquito stockpiled ore (three and six months ended June 30, 2015 – $nil and $nil, respectively). Of the total write down, $5 million and $7 million, respectively were recognized as production costs and $nil and $1 million, respectively were recognized as depreciation and depletion in the Condensed Interim Consolidated Statements of (Loss) Earnings. |
| |
| (c) | During the three and six months ended June 30, 2016, the Company incurred excess current period costs of $nil and $3 million, respectively (three and six months ended June 30, 2015 – $33 million and $44 million, respectively). Of the total costs incurred, $nil and $2 million, respectively (three and six months ended June 30, 2015 – $20 million and $27 million, respectively) were recognized as production costs and $nil and $1 million, respectively (three and six months ended June 30, 2015 – $13 million and $17 million, respectively) were recognized as depreciation and depletion in the Condensed Interim Consolidated Statements of (Loss) Earnings. |
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
| |
| 11. | MINING INTERESTS – OWNED BY SUBSIDIARIES |
|
| | | | | | | | | | | | | | | |
| | Mining properties | | |
| | Depletable | Non-depletable | | |
| Reserves and resources | Reserves and resources | Exploration potential | Plant and equipment (f)(g) | Total |
| Cost | | | | | |
| At January 1, 2016 | $ | 11,964 |
| $ | 4,346 |
| $ | 7,991 |
| $ | 6,733 |
| $ | 31,034 |
|
Expenditures on mining interests (a)(b)(c) | 178 |
| 51 |
| 1 |
| 84 |
| 314 |
|
Transfers and other movements (d) | 322 |
| 238 |
| (531 | ) | 6 |
| 35 |
|
| At June 30, 2016 | 12,464 |
| 4,635 |
| 7,461 |
| 6,823 |
| 31,383 |
|
| Accumulated depreciation and depletion and impairment | | | | | |
| At January 1, 2016 | (5,608 | ) | (2,510 | ) | (2,263 | ) | (3,023 | ) | (13,404 | ) |
Depreciation and depletion (e) | (281 | ) | — |
| — |
| (201 | ) | (482 | ) |
Transfers and other movements (d) | — |
| — |
| — |
| 11 |
| 11 |
|
| At June 30, 2016 | (5,889 | ) | (2,510 | ) | (2,263 | ) | (3,213 | ) | (13,875 | ) |
| Carrying amount – At June 30, 2016 | $ | 6,575 |
| $ | 2,125 |
| $ | 5,198 |
| $ | 3,610 |
| $ | 17,508 |
|
|
| | | | | | | | | | | | | | | |
| Cost | | | | | |
| At January 1, 2015 | $ | 8,213 |
| $ | 8,471 |
| $ | 7,963 |
| $ | 6,290 |
| $ | 30,937 |
|
Acquisition of mining interest (note 4(e)) | — |
| — |
| 340 |
| — |
| 340 |
|
Formation of a joint venture (note 4(g)) | — |
| (1,384 | ) | (112 | ) | (5 | ) | (1,501 | ) |
Expenditures on mining interests (a)(b)(c) | 488 |
| 226 |
| 5 |
| 504 |
| 1,223 |
|
Transfers and other movements (d) | 3,263 |
| (2,967 | ) | (205 | ) | (56 | ) | 35 |
|
| At December 31, 2015 | 11,964 |
| 4,346 |
| 7,991 |
| 6,733 |
| 31,034 |
|
| Accumulated depreciation and depletion and impairment | | | | | |
| At January 1, 2015 | (3,437 | ) | (1,191 | ) | (1,773 | ) | (2,078 | ) | (8,479 | ) |
| Depreciation and depletion | (1,005 | ) | — |
| — |
| (509 | ) | (1,514 | ) |
| Impairment charges | (1,165 | ) | (1,319 | ) | (490 | ) | (536 | ) | (3,510 | ) |
Transfers and other movements (d) | (1 | ) | — |
| — |
| 100 |
| 99 |
|
| At December 31, 2015 | (5,608 | ) | (2,510 | ) | (2,263 | ) | (3,023 | ) | (13,404 | ) |
| Carrying amount – At December 31, 2015 | $ | 6,356 |
| $ | 1,836 |
| $ | 5,728 |
| $ | 3,710 |
| $ | 17,630 |
|
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
A summary by property of the carrying amount of mining interests owned by subsidiaries is as follows:
|
| | | | | | | | | | | | | | | | | | |
| | Mining properties | | | |
| | Depletable | Non-depletable | | | |
| Reserves and resources | Reserves and resources | Exploration potential | Plant and equipment (f)(g) | At June 30
2016 |
| At December 31
2015 |
|
Red Lake (a) | $ | 785 |
| $ | 605 |
| $ | 494 |
| $ | 395 |
| $ | 2,279 |
| $ | 2,273 |
|
Porcupine (note 4(e)) (a) | 410 |
| 136 |
| 222 |
| 121 |
| 889 |
| 898 |
|
| Musselwhite | 210 |
| 23 |
| 65 |
| 187 |
| 485 |
| 503 |
|
Éléonore (a) | 1,239 |
| 499 |
| — |
| 944 |
| 2,682 |
| 2,714 |
|
Peñasquito (a) | 2,388 |
| 757 |
| 3,463 |
| 1,018 |
| 7,626 |
| 7,607 |
|
| Cerro Negro | 1,411 |
| 83 |
| 930 |
| 816 |
| 3,240 |
| 3,287 |
|
Other mines (h) | 132 |
| — |
| 10 |
| 32 |
| 174 |
| 220 |
|
Corporate and other (i) | — |
| 22 |
| 14 |
| 97 |
| 133 |
| 128 |
|
| | $ | 6,575 |
| $ | 2,125 |
| $ | 5,198 |
| $ | 3,610 |
| $ | 17,508 |
| $ | 17,630 |
|
| |
| (a) | Includes capitalized borrowing costs incurred during the three and six months ended June 30 as follows: |
|
| | | | | | | | | | | | |
| | Three Months Ended
June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Cochenour | $ | 6 |
| $ | 5 |
| $ | 11 |
| $ | 8 |
|
| Borden | 1 |
| — |
| 1 |
| — |
|
| Éléonore | — |
| — |
| — |
| 17 |
|
| Camino Rojo | — |
| 4 |
| — |
| 6 |
|
| El Morro | — |
| 6 |
| — |
| 11 |
|
| | $ | 7 |
| $ | 15 |
| $ | 12 |
| $ | 42 |
|
During the three and six months ended June 30, 2016 and 2015, the Company's borrowings eligible for capitalization included its $1.0 billion notes, $1.5 billion notes, revolving credit facility (note 13(d)(i)), and certain financing arrangements held by Cerro Negro and were accounted for as general borrowings.
Capitalization of borrowing costs to the carrying amount of the Éléonore mining interest ceased following achievement of commercial production on April 1, 2015.
During the three and six months ended June 30, 2015, the Company capitalized $6 million and $11 million, respectively, in borrowing costs to the carrying amount of the El Morro project. Capitalization of borrowing costs ceased on derecognition of the carrying amount of the El Morro project on November 24, 2015, as a result of the Company's contribution of El Morro to the NuevaUnión joint venture (note 4(g)).
A reconciliation of total eligible borrowing costs incurred to the amount recognized as an expense in the Condensed Interim Consolidated Statements of (Loss) Earnings is as follows:
|
| | | | | | | | | | | | |
| | Three Months Ended June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Total borrowing costs incurred | $ | 25 |
| $ | 28 |
| $ | 49 |
| $ | 55 |
|
| Less: amounts capitalized to mining interests | (7 | ) | (15 | ) | (12 | ) | (42 | ) |
| Total borrowing costs included in finance costs in the Condensed Interim Consolidated Statements of (Loss) Earnings | $ | 18 |
| $ | 13 |
| $ | 37 |
| $ | 13 |
|
| Weighted average rate used in capitalization of borrowing costs during the period | 3.74 | % | 3.13 | % | 3.67 | % | 3.10 | % |
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
| |
| (b) | Exploration and evaluation costs incurred by the Company during the three and six months ended June 30 were as follows: |
|
| | | | | | | | | | | | |
| | Three Months Ended
June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Total exploration and evaluation expenditures | $ | 24 |
| $ | 45 |
| $ | 48 |
| $ | 80 |
|
| Less: amounts capitalized to mining interests | (17 | ) | (31 | ) | (31 | ) | (52 | ) |
| Total exploration and evaluation costs recognized in the Condensed Interim Consolidated Statements of (Loss) Earnings | $ | 7 |
| $ | 14 |
| $ | 17 |
| $ | 28 |
|
| |
| (c) | Expenditures on mining interests include finance lease additions, capitalized borrowing costs (note 11(a)) and deposits on mining interests, are net of investment tax credits and exclude capitalized reclamation and closure costs. |
The following is a reconciliation of capitalized expenditures on mining interests to expenditures on mining interests in the Condensed Interim Consolidated Statements of Cash Flows:
|
| | | | | | | | | | | | |
| | Three Months Ended June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Capitalized expenditures on mining interests |
|
|
|
|
|
|
| Owned by subsidiaries | $ | 179 |
| $ | 224 |
| $ | 314 |
| $ | 488 |
|
Investments in associates and joint venture (note 12) | 2 |
| — |
| 5 |
| — |
|
| $ | 181 |
| $ | 224 |
| $ | 319 |
| $ | 488 |
|
| Amounts per Condensed Interim Consolidated Statements of Cash Flows | | | | |
| Expenditures on mining interests | $ | 166 |
| $ | 313 |
| $ | 339 |
| $ | 706 |
|
| Interest paid | 6 |
| 19 |
| 15 |
| 49 |
|
| Increase (decrease) in accrued expenditures | 9 |
| (108 | ) | (35 | ) | (267 | ) |
| | $ | 181 |
| $ | 224 |
| $ | 319 |
| $ | 488 |
|
| |
| (d) | Transfers and other movements primarily represent the conversion of reserves, resources and exploration potential within mining interests, capitalized reclamation and closure costs, capitalized depreciation, dispositions of mining interests and the reclassification of non-depletable to depletable mining properties following achievement of commercial production. On June 2, 2015, the Company completed the sale of its 40% interest in the South Arturo project in the United States and recognized a gain on disposition of $16 million ($11 million, net of tax). |
| |
| (e) | A reconciliation of depreciation and depletion during the three and six months ended June 30 to depreciation and depletion recognized in the Condensed Interim Consolidated Statements of (Loss) Earnings is as follows: |
|
| | | | | | | | | | | | |
| | Three Months Ended
June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Total depreciation and depletion | $ | 234 |
| $ | 356 |
| $ | 482 |
| $ | 741 |
|
| Less: amounts capitalized to development projects | (7 | ) | (4 | ) | (10 | ) | (18 | ) |
| Movement in amounts allocated to ending inventories | 5 |
| 4 |
| 31 |
| (45 | ) |
| Total depreciation and depletion recognized in the Condensed Interim Consolidated Statements of (Loss) Earnings | $ | 232 |
| $ | 356 |
| $ | 503 |
| $ | 678 |
|
| |
| (f) | At June 30, 2016, assets under construction, and therefore not yet being depreciated, included in the carrying amount of plant and equipment amounted to $248 million (December 31, 2015 – $284 million). |
| |
| (g) | At June 30, 2016, finance leases included in the carrying amount of plant and equipment amounted to $318 million (December 31, 2015 – $334 million). |
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
| |
| (h) | Other mines owned by subsidiaries at June 30, 2016 and December 31, 2015 include Los Filos and Marlin. |
| |
| (i) | Included in corporate and other at June 30, 2016 was $22 million (December 31, 2015 – $22 million) relating to Cerro Blanco. |
| |
| 12. | MINING INTERESTS – INVESTMENTS IN ASSOCIATES AND JOINT VENTURE |
At June 30, 2016, the Company had a 40% interest in Pueblo Viejo, a 50% interest in NuevaUnión (note 4(g)) and a 37.5% interest in Alumbrera. These investments are accounted for using the equity method and included in mining interests. The Company adjusts each associate and joint venture’s financial results, where appropriate, to give effect to uniform accounting policies.
The following table summarizes the change in the carrying amount of the Company's investments in associates and joint venture: |
| | | | | | | | | | | | |
| | Pueblo Viejo (a)(b) |
| NuevaUnión |
| Other (c) |
| Total |
|
| At January 1, 2016 | $ | 967 |
| $ | 872 |
| $ | — |
| $ | 1,839 |
|
| Company’s share of net earnings of associates and joint venture | 62 |
| 2 |
| — |
| 64 |
|
| Capital investment | — |
| 5 |
| — |
| 5 |
|
| Other | 6 |
| — |
| — |
| 6 |
|
| At June 30, 2016 | $ | 1,035 |
| $ | 879 |
| $ | — |
| $ | 1,914 |
|
| At January 1, 2015 | $ | 1,624 |
| $ | — |
| $ | 463 |
| $ | 2,087 |
|
| Company’s share of net earnings (loss) of associates and joint venture | 53 |
| — |
| (54 | ) | (1 | ) |
| Gain on dilution of ownership interest in associate | — |
| — |
| 99 |
| 99 |
|
Acquisition through formation of a joint venture (note 4(g)) | — |
| 870 |
| — |
| 870 |
|
| Disposition of investment in associate | — |
| — |
| (469 | ) | (469 | ) |
| Capital investment | — |
| 2 |
| — |
| 2 |
|
| Return of capital investment | (112 | ) | — |
| — |
| (112 | ) |
Impairment of investments in associates | (610 | ) | — |
| (32 | ) | (642 | ) |
| Dividends received | — |
| — |
| (7 | ) | (7 | ) |
| Other | 12 |
| — |
| — |
| 12 |
|
| At December 31, 2015 | $ | 967 |
| $ | 872 |
| $ | — |
| $ | 1,839 |
|
| |
| (a) | During the three and six months ended June 30, 2016, total repayments of $nil and $98 million, respectively (three and six months ended June 30, 2015 – $nil and $115 million, respectively) were made by Pueblo Viejo on its third party project financing (Goldcorp's share – $nil and $39 million, respectively (three and six months ended June 30, 2015 – $nil and $46 million, respectively)). At June 30, 2016, the outstanding balance of the project financing was $579 million (December 31, 2015 – $677 million) (Goldcorp's share – $232 million (December 31, 2015 – $271 million)). |
| |
| (b) | At June 30, 2016, the carrying amount of the Company's share of shareholder loans to Pueblo Viejo was $555 million (December 31, 2015 – $549 million), which is included in the Company's investments in associates and being accreted to the face value over the term of the loans. Included in other current and non-current assets of the Company was a total of $57 million (December 31, 2015 – $75 million) in interest receivable. |
| |
| (c) | The Company's investments in other associates are comprised of its interests in Alumbrera and Tahoe, which was disposed of on June 30, 2015 (note 4(i)). |
At December 31, 2015, the Company recognized an impairment of its investment in Alumbrera and the carrying amount of its interest was reduced to zero. Effective January 1, 2016, the Company has discontinued recognizing its share of losses of Alumbrera and did not recognize its share of losses of Alumbrera for the three and six months ended June 30, 2016. Additional losses in the future will be provided for to the extent the Company has incurred legal or constructive obligations or made payments on behalf of Alumbrera. Any future earnings of Alumbrera will be recognized by the Company only after the Company's share of future earnings equals its share of losses not recognized.
On June 30, 2015, the Company disposed of its 25.9% interest in Tahoe and recognized a gain on disposition of $299 million ($252 million, net of tax). Prior to the disposition, the Company's interest in Tahoe was diluted to 25.9% on April 1, 2015 which resulted in the recognition of a dilution gain of $99 million ($95 million, net of tax).
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
| |
| (a) | Financial assets and liabilities by categories |
|
| | | | | | | | | | | | | | | |
| At June 30, 2016 | Loans and receivables |
| Available-for-sale |
| Fair value through profit or loss |
| Held to maturity/other financial liabilities |
| Total |
|
| Financial assets | | | | | |
| Cash and cash equivalents | $ | — |
| $ | — |
| $ | 328 |
| $ | — |
| $ | 328 |
|
| Money market investments | 37 |
| — |
| — |
| — |
| 37 |
|
| Accounts receivable arising from sales of metal concentrates | — |
| — |
| 35 |
| — |
| 35 |
|
| Investments in securities | — |
| 106 |
| — |
| — |
| 106 |
|
| Derivative assets | — |
| — |
| 3 |
| — |
| 3 |
|
| Other current and non-current financial assets | 92 |
| — |
| — |
| — |
| 92 |
|
| Total financial assets | $ | 129 |
| $ | 106 |
| $ | 366 |
| $ | — |
| $ | 601 |
|
| Financial liabilities | | | | | |
| Debt | $ | — |
| $ | — |
| $ | — |
| $ | (2,808 | ) | $ | (2,808 | ) |
| Accounts payable and accrued liabilities | — |
| — |
| — |
| (442 | ) | (442 | ) |
| Derivative liabilities | — |
| — |
| (3 | ) | — |
| (3 | ) |
| Other current and non-current financial liabilities | — |
| — |
| — |
| (277 | ) | (277 | ) |
| Total financial liabilities | $ | — |
| $ | — |
| $ | (3 | ) | $ | (3,527 | ) | $ | (3,530 | ) |
|
| | | | | | | | | | | | | | | |
| At December 31, 2015 | | | | | |
| Financial assets | | | | | |
| Cash and cash equivalents | $ | — |
| $ | — |
| $ | 326 |
| $ | — |
| $ | 326 |
|
| Money market investments | 57 |
| — |
| — |
| — |
| 57 |
|
| Accounts receivable arising from sales of metal concentrates | — |
| — |
| 49 |
| — |
| 49 |
|
| Investments in securities | — |
| 51 |
| — |
| — |
| 51 |
|
| Derivative assets | — |
| — |
| 1 |
| — |
| 1 |
|
| Other current and non-current financial assets | 81 |
| — |
| — |
| — |
| 81 |
|
| Total financial assets | $ | 138 |
| $ | 51 |
| $ | 376 |
| $ | — |
| $ | 565 |
|
| Financial liabilities | | | | | |
| Debt | $ | — |
| $ | — |
| $ | — |
| $ | (2,688 | ) | $ | (2,688 | ) |
| Accounts payable and accrued liabilities | — |
| — |
| — |
| (680 | ) | (680 | ) |
| Derivative liabilities | — |
| — |
| (4 | ) | — |
| (4 | ) |
| Other current and non-current financial liabilities | — |
| — |
| — |
| (280 | ) | (280 | ) |
| Total financial liabilities | $ | — |
| $ | — |
| $ | (4 | ) | $ | (3,648 | ) | $ | (3,652 | ) |
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
| |
| (b) | Net gain (loss) on derivatives |
The net gain (loss) on derivatives for the three and six months ended June 30 were comprised of the following:
|
| | | | | | | | | | | | |
| | Three Months Ended
June 30 | Six Months Ended
June 30 |
| | 2016 |
| 2015 |
| 2016 |
| 2015 |
|
| Realized losses | | | | |
| Foreign currency, heating oil, lead, and zinc contracts | $ | (1 | ) | $ | (14 | ) | $ | (2 | ) | $ | (30 | ) |
| Unrealized gains (losses) | | | | |
| Foreign currency, heating oil, lead, and zinc contracts | — |
| 22 |
| 1 |
| (4 | ) |
| Other | 1 |
| — |
| 2 |
| — |
|
| | 1 |
| 22 |
| 3 |
| (4 | ) |
| | $ | — |
| $ | 8 |
| $ | 1 |
| $ | (34 | ) |
| |
| (c) | Fair value information |
| |
| (i) | Fair value measurements of financial assets and liabilities measured at fair value |
The levels of the fair value hierarchy within which the Company’s financial assets and liabilities that are measured at fair value on the Condensed Interim Consolidated Balance Sheets on a recurring basis are categorized were as follows:
|
| | | | | | | | | | | | |
| At June 30, 2016 | | At December 31, 2015 | |
| Level 1 |
| Level 2 |
| Level 1 |
| Level 2 |
|
| Cash and cash equivalents | $ | 328 |
| $ | — |
| $ | 326 |
| $ | — |
|
| Accounts receivable arising from sales of metal concentrates | — |
| 35 |
| — |
| 49 |
|
| Investments in securities | 96 |
| 10 |
| 43 |
| 8 |
|
Current and non-current derivative assets (1) | — |
| 3 |
| — |
| 1 |
|
Current derivative liabilities (1) | — |
| (3 | ) | — |
| (4 | ) |
| |
(1) | Included in other current and non-current assets and other current liabilities, respectively, on the Condensed Interim Consolidated Balance Sheets. |
At June 30, 2016, there were no financial assets or liabilities measured at fair value on the Condensed Interim Consolidated Balance Sheet on a non-recurring basis.
There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the three and six months ended June 30, 2016. At June 30, 2016, there were no financial assets or liabilities measured at fair value on the Condensed Interim Consolidated Balance Sheet that would be categorized within Level 3 of the fair value hierarchy.
| |
| (ii) | Valuation methodologies used in the measurement of fair value for Level 2 financial assets and liabilities |
Accounts receivable arising from sales of metal concentrates:
The Company’s metal concentrate sales contracts are subject to provisional pricing with the final selling price adjusted at the end of the quotational period. At the end of each reporting period, the Company’s accounts receivable relating to these contracts are marked-to-market based on quoted forward prices for which there exists an active commodity market.
Derivative assets and liabilities:
At June 30, 2016, the Company's derivative assets and liabilities were comprised of investments in warrants and foreign currency option contracts, respectively. The fair values of the warrants and foreign currency option contracts are calculated using an option pricing model which utilizes a combination of quoted prices and market-derived inputs, including volatility estimates and option adjusted credit spreads.
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
| |
| (iii) | Fair values of financial assets and liabilities not already measured at fair value |
At June 30, 2016, the fair values of the Company's notes, as compared to the carrying amounts, were as follows:
|
| | | | | | | | |
| | Level | Input | Carrying amount (3) | Fair value |
$1.0 billion notes (1) | 1 | Closing price | $ | 992 |
| $ | 1,033 |
|
$1.5 billion notes (2) | 1 | Closing price | $ | 1,502 |
| $ | 1,540 |
|
| |
(1) | Comprised of $550 million, due June 2021, and $450 million, due June 2044. |
| |
(2) | Comprised of $500 million, due March 2018, and $1 billion, due March 2023. |
| |
(3) | Includes accrued interest payable. |
At June 30, 2016, the carrying amounts of the Company's money market investments, other current financial assets, accounts payable and accrued liabilities, current debt held by Cerro Negro and other current financial liabilities are considered to be reasonable approximations of their fair values due to the short-term nature of these instruments.
| |
| (d) | Financial instruments and related risks |
The Company manages its exposures to financial risks, including credit risk, liquidity risk, currency risk, interest rate risk and price risk in accordance with its Financial Risk Management Policy. The Company's exposures to financial risks and how the Company manages each of those risks are described in note 27(e) to the Company's consolidated financial statements for the year ended December 31, 2015. There were no significant changes to the Company's exposures to those risks or to the Company's management of its exposures during the three and six months ended June 30, 2016, except as noted below.
During the three and six months ended June 30, 2016, the Company generated operating cash flows from continuing operations, one of the Company's main sources of liquidity, of $234 million and $293 million, respectively (three and six months ended June 30, 2015 – $528 million and $579 million, respectively). At June 30, 2016, Goldcorp held cash and cash equivalents of $328 million (December 31, 2015 – $326 million), money market investments of $37 million (December 31, 2015 – $57 million), and had working capital of $504 million (December 31, 2015 – $282 million), which the Company defines as current assets less current liabilities.
On June 22, 2016, the Company extended the term of its $3.0 billion revolving credit facility to June 22, 2021. During the three and six months ended June 30, 2016, the Company utilized its revolving credit facility and made a net repayment of $125 million and a net draw down of $125 million, respectively (three and six months ended June 30, 2015 – net repayment of $305 million and $5 million, respectively). At June 30, 2016, the balance outstanding on the revolving credit facility was $125 million (December 31, 2015 – $nil) and included in non-current debt on the Condensed Interim Consolidated Balance Sheets, with $2.875 billion available for the Company's use (December 31, 2015 – $3.0 billion).
At June 30, 2016, the Company had letters of credit outstanding in the amount of $632 million (December 31, 2015 – $580 million) of which $307 million (December 31, 2015 – $275 million) represents guarantees for reclamation obligations and $211 million (December 31, 2015 – $211 million) represents guarantees for certain of the Company's Argentine debt. The Company's capital commitments for the next twelve months amounted to $78 million at June 30, 2016.
Currency risk
During the three and six months ended June 30, 2016, the Company recognized a net foreign exchange loss of $14 million and $47 million, respectively (three and six months ended June 30, 2015 – gain of $9 million and $24 million, respectively), excluding the foreign exchange loss relating to taxes. Based on the Company’s net foreign currency exposures (other than those relating to taxes) at June 30, 2016, a 10% depreciation or appreciation of applicable foreign currencies against the US dollar would have resulted in a $4 million decrease or increase in the Company’s net earnings, respectively.
During the three and six months ended June 30, 2016, the Company recognized a net foreign exchange loss of $66 million and $81 million, respectively, in income tax expense on income taxes receivable/(payable) and deferred income taxes (three and six months ended June 30, 2015 – $25 million and $156 million, respectively). Based on the Company’s net foreign currency exposures relating to taxes at June 30, 2016, a 10% depreciation or appreciation of applicable foreign currencies against the US dollar would have resulted in a $207 million decrease or increase in the Company's net earnings, respectively.
Second Quarter Report – 2016
(In millions of United States dollars, except where noted)
Issued in 2013, Law 3318 created a new form of tax in Argentina's Province of Santa Cruz for mining companies. The tax was levied on 1% of the value of mine reserves reported in feasibility studies and financial statements inclusive of variations resulting from ongoing exploitation. The Company filed a legal claim disputing the constitutionality of the tax with the National Supreme Court of Argentina which accepted jurisdiction of the matter. The Company paid the required tax installments under protest for the years ended December 31, 2015, 2014 and 2013. On December 31, 2015, Law 3318 was abrogated. The Company and the Province entered into a settlement agreement approved by the National Supreme Court of Argentina and the claim has been withdrawn.
On July 19, 2016, the Company completed the acquisition of 100% of the issued and outstanding common shares of Kaminak Gold Corporation ("Kaminak") by way of a plan of arrangement (the "Arrangement") for total consideration of approximately C$530 million, including transaction costs. Pursuant to the Arrangement, each common share of Kaminak was exchanged for 0.10896 of a common share of Goldcorp for a total issuance of approximately 21 million common shares of Goldcorp. Kaminak's principal asset is the 100% owned Coffee gold project ("Coffee"), a hydrothermal gold deposit located approximately 130 kilometres south of the City of Dawson, Yukon. Coffee is a high-grade, open pit, heap leach mining project.
The Company concluded that the acquired assets and assumed liabilities do not constitute a business and accordingly the acquisition will be accounted for as an asset acquisition.
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| CORPORATE OFFICE | STOCK EXCHANGE LISTING |
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| Park Place | Toronto Stock Exchange: G |
| Suite 3400 – 666 Burrard Street | New York Stock Exchange: GG |
| Vancouver, BC V6C 2X8 Canada | |
| Tel: (604) 696-3000 | TRANSFER AGENT |
| Fax: (604) 696-3001 | |
| www.goldcorp.com | CST Trust Company |
| | 1066 West Hastings Street, Suite 1600 |
| TORONTO OFFICE | Vancouver, BC V6E 3X1 Canada |
| | Toll free in Canada and the US: (800) 387-0825 |
| Suite 3201 – 130 Adelaide Street West | Outside of Canada and the US: (416) 682-3860 |
| Toronto, ON M5H 3P5 Canada | inquiries@canstockta.com |
| Tel: (416) 865-0326 | www.canstockta.com |
| Fax: (416) 359-9787 | |
| | AUDITORS |
| MEXICO OFFICE | |
| | Deloitte LLP |
| Paseo de las Palmas 425-15 | Vancouver, BC |
| Lomas de Chapultepec | |
| 11000 Mexico, D.F. | INVESTOR RELATIONS |
| Tel: 52 (55) 5201-9600 | |
| | Lynette Gould |
| GUATEMALA OFFICE | Toll free: (800) 567-6223 |
| | Email: info@goldcorp.com |
| 5ta avenida 5-55 zona 14 Europlaza | |
| Torre 1 Nivel 6 oficina 601 | REGULATORY FILINGS |
| Guatemala City | |
| Guatemala, 01014 | The Company’s filings with the Ontario Securities Commission |
| Tel: (502) 2329-2600 | can be accessed on SEDAR at www.sedar.com. |
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| ARGENTINA OFFICE | The Company’s filings with the US Securities and |
| | Exchange Commission can be accessed on EDGAR |
| Avda. Leandro N. Alem 855, Piso 27 | at www.sec.gov. |
| C1001AAD Capital Federal | |
| Buenos Aires, Argentina | |
| Tel: 54 114 323 7000 | |
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