Mr. Ron Clayton reports
TAHOE REPORTS STRONG 2017 FINANCIAL RESULTS AND UPDATES 2018 AND MULTI-YEAR GOLD GUIDANCE
Tahoe Resources Inc. has released solid financial and operating results for the fourth quarter and 12 months ended Dec. 31, 2017. The company's balance sheet remains strong, with cash and cash equivalents of $125.7-million at Dec. 31, 2017, and very little debt.
Ron Clayton, President and CEO of Tahoe, commented: "Tahoe achieved record gold production of 445,900 ounces in 2017, realizing the high end of its annual gold production guidance range of 400,000 to 450,000 ounces. The strong gold production for the year was driven primarily by La Arena. The outstanding performance from the gold business in 2017 underscores the increasingly meaningful contribution of the gold segment to the overall financial performance of the Company. Despite the challenges in Guatemala during the second half of 2017, I am very pleased to report earnings of $81.8 million for the year, or $0.26 per share. Looking forward, I expect 2018 will be a pivotal year for the Company. We remain optimistic that based on legal precedent, the Guatemalan Constitutional Court will issue a favorable ruling reinstating the Escobal mining license. We are focused on a positive resolution at the Casillas roadblock, located 16 kilometers from the mine, which, in conjunction with a favorable court ruling, will put us in position to resume operations at Escobal. In the meantime, we are executing on our strategy to complete our two near-term development projects in Canada and Peru by late summer, which will position us to achieve our target of 500,000 ounces of gold production in 2019."
Key Financial and Operating Results
$ millions unless otherwise indicated
Q4 2017Q4 2016 2017 2016
Revenue $ 117.7 $189.4$733.6$784.5
Earnings (loss) and total
comprehensive income (loss)(4) $(18.0) $ 0.3$ 81.8$117.9
Earnings (loss) per share $(0.06) $ -$ 0.26$ 0.41
Adjusted earnings (loss)(1)(4) $(17.7) $ 18.4$ 84.0$180.4
Cash provided by
operating activities $ 18.1 $107.8$234.3$249.5
Cash provided by
operating activities
before changes in working capital $ 24.0 $ 74.7$287.0$385.9
Silver production (moz) - 4.8 9.9 21.3
Gold production (koz) 105.8 119.9 445.9 385.2
Total cash cost per silver
oz produced ($/oz)(1)(2) $ - $ 6.48$ 6.15$ 5.84
AISC per silver oz
produced ($/oz)(1)(2) $ - $ 9.76$ 8.91$ 8.06
Total cash cost per gold
oz produced ($/oz)(1)(2) $ 648 $ 594$ 641$ 620
AISC per gold oz
produced ($/oz)(1)(2) $ 1,033 $ 945$ 973$ 943
Sustaining capital (incl.
capitalized drilling) $ 32.1 $ 41.9$124.0$118.4
Project capital $ 29.9 $ 19.2$ 99.1$ 93.0
Exploration expense $ 3.9 $ 6.9$ 18.5$ 14.4
Corporate G&A(3) $ 11.0 $ 9.5$ 45.8$ 47.5
1) See "Cautionary Note on Non-GAAP Financial Measures" at the
end of this press release.
(2) Total cash costs and AISC are presented net of by-product credits;
costs per ounce silver are through June 30, 2017 as cessation of
mining activities occurred in June at the Escobal mine.
(3) Corporate G&A includes non-cash, stock-based compensation.
(4) Includes adjusted depreciation for Peru mines.
See segmented operational results in MD&A.
Q4 2017 Summary & Highlights:
Strong operating and financial results from gold segments {A –} Q4 2017 gold production totaled 105.8 thousand ounces. Production and costs in Q4 2017 reflected strong results at all of the Company's gold mines, with total cash costs and AISC of $648 and $1,033 per ounce, respectively.
Q4 2017 earnings were impacted by Escobal and a one-time non-cash depreciation charge {A –} Q4 2017 earnings were negatively impacted by the cessation of mining activities at the Escobal mine which resulted in no material revenue for the quarter from the mine and care and maintenance costs of $11.1 million ($0.04 per share) and a one-time pre-tax $11 million cumulative adjustment ($0.04 per share) during the quarter to true-up the depletion related to the purchase price on the acquisition of the Peruvian mines in 2015. Except for these items, reported earnings for the quarter would have been positive on the strength of the gold segment alone.
Near-term expansion projects remain on time and in-line with guidance {A –} Both major expansion projects - the Shahuindo crushing and agglomeration expansion and the Bell Creek shaft project - remained on track during the quarter and within their respective estimated total project spend of $80 million each.
2017 Summary & Highlights:
Record gold production of 445.9 thousand ounces {A –} The Company achieved record gold production of 445.9 thousand ounces in 2017, achieving the high end of the annual gold production guidance range of 400,000 to 450,000 ounces, which was revised upward in September 2017. The strong gold production for the year was driven primarily by La Arena in Peru, which exceeded its guidance due to on-going positive mine plan reconciliation with both higher grade and additional ore tonnes mined. The outstanding performance from the gold business in 2017 underscores the increasingly meaningful contribution of the gold segment to the overall financial performance of the Company.
Gold operations met or exceeded 2017 revised guidance including lower costs
$ millions unless otherwise indicated
Initial 2017 Guidance Revised 2017 Guidance2017 Year-end Actual
Gold Production (koz) 375 - 425 400 - 450 445.9
Total cash cost per gold
oz produced ($/oz)(1)(2) 700 - 750$ 650 - 700 $ 641
AISC per gold oz produced
($/oz)(1)(2) 1,150 - 1,250$ 1,050 - 1,150 $ 973
Sustaining Capital
(incl. capitalized drilling) 125 - 137$ 100 - 135 $ 124
Project Capital 150 -175$ 100 - 115 $ 99
Exploration Expense 35 - 43$ 14 - 20 $ 19
Corporate G&A(3) 45 - 55$ 45 - 55 $ 46
(1) See "Cautionary Note on Non-GAAP Financial Measures" at the end of this press release.
(2) Total cash costs and AISC are presented net of by-product credits.
(3) Corporate G&A includes non-cash, stock-based compensation.
Silver production reflects suspension at Escobal -- The Company produced 9.9 million ounces of silver during 2017 at total cash costs of $6.15 per silver ounce and all-in sustaining costs of $8.91 per silver ounce. Silver production reflects the impact of the Escobal suspension, where no production has been recorded since July 2017.
Positive cash flow and earnings -- Cash flow provided by operating activities before changes in working capital totaled $287.0 million for 2017, despite the ongoing suspension at Escobal in Guatemala. The Company generated positive earnings of $81.8 million, or $0.26 per share, for 2017. Earnings reflected the impact of the suspension at the Escobal mine, where no material revenues have been recorded since July 2017, and $24.9 million ($0.08 per share) in care and maintenance costs have been incurred during the second half of the year.
Shahuindo expansion remains on track -- Construction of leach Pad 2B continued in Q4 2017 as planned and is scheduled to be placed into production in Q3 2018. Commissioning of the 12,000 tpd crushing and agglomeration circuit was substantially completed in early February 2018 and the production ramp-up was initiated. Construction of the 24,000 tpd circuit has begun with commissioning of the full 36,000 tpd plant scheduled for mid-year 2018. Of the $80 million guidance for the crushing and agglomeration circuit, approximately $48.8 million has been spent through December 31, 2017. The project remains on schedule and within guidance.
Bell Creek shaft expansion in-line with guidance -- The Bell Creek shaft project remains on track for commissioning in mid-year and on track with its $80 million budget. Excavation of the third and final pilot raise from the shaft bottom is complete and slashing of this raise to the final dimensions has begun. Pilot raises for the underground ore and waste bins are complete and slashing of the raises is underway. Surface construction is focused primarily on the hoist room and headframe. Mechanical installation of the hoists started in early February and the headframe civil work is progressing with a projected start of steel installation by the end of Q1 2018. Of the $80 million guidance for the Bell Creek shaft project, approximately $51.6 million has been spent to December 31, 2017. The project remains on schedule and within guidance.
Strong cash position with $125.7 million at year-end -- Despite the on-going interruption of mining operations at Escobal, Tahoe ended the year with cash and cash equivalents of $125.7 million.
Strengthened Financial Position with Amended $175 Million Revolving Credit Facility
On February 16th 2018, the Company closed its revised revolving credit facility with its bank syndicate. The Company now has access to a $175 million revolving credit facility plus a $25 million accordion feature, for total access of $200 million in capital. The revised facility matures on July 19, 2021. This facility is structured on the strength of Tahoe's gold business alone, and access to the facility does not rely on, nor have covenants related to, the operation of Escobal. The Bank of Nova Scotia and HSBC Securities (USA) Inc. are the co-leads for the facility.
In addition, on February 20, 2018, the Company repaid the $35 million in debt in Peru that was due on April 9, 2018 from existing cash balances. Subsequent to this repayment, the company has no debt outstanding and approximately $8 million in capital leases.
2018 Gold Guidance and Long-term Outlook
Tahoe Resources' gold guidance for 2018 and multi-year gold outlook is provided below. While Tahoe expects the Guatemalan Constitutional Court to rule in favor of reinstating the Escobal mining license based on existing legal precedent, the Company will not be providing guidance or long-term outlook for silver production or costs until steady operations at Escobal resume and the export credential is issued.
2018 Gold Guidance by Mine
Production Cash Costs All-in Sustaining Project Capital Sustaining Capital Exploration
(gold - koz) ($/oz) Costs ($/oz) ($ millions) ($ millions) ($ millions)
Low High Low High Low High Low High Low High Low High
La Arena 160 185 650 700 950 1,050 - - 35 40 1 2
Shahuindo 80 110 750 800 1,050 1,100 80 100 15 20 8 10
Timmins Mines 160 175 800 850 1,050 1,150 45 50 40 55 6 12
Gold total 400 475 725 775 1,000 1,100 125 150 90 115 15 25
(1) See "Cautionary Statement on Forward-Looking Information" and "Cautionary Note on Non-GAAP Financial Measures"
in this press release.
(2) All per ounce costs are based on gold ounces recovered.
(3) The top end of the gold production range includes approximatively 5 thousand ounces from Escobal.
(4) Numbers may not calculate due to rounding.Key Highlights for 2018 Guidance:
2018 gold production guidance has shifted downward by 25,000 ounces at either end of the range compared to the initial 2018 guidance provided in January 2017. This change reflects the higher risk of the growth profile related to the timing of the commissioning of the Bell Creek shaft project mid-year and the ramp up of the Shahuindo expansion to 36,000 tonnes per day by the end of 2018. 2018 guidance is also impacted by the initial 144 Gap Mineral Reserve estimate issued on September 21, 2017 which, although increasing the Proven and Probable Mineral Reserves at the Timmins West Mine from 233,000 to 738,000 ounces of gold, was at a lower grade than expected.
The production forecasts at Shahuindo and Timmins are weighted to the second half of 2018, with the commissioning of the complete crushing and agglomeration circuit at Shahuindo and the Bell Creek shaft expected to begin in the third quarter. The operational ramp up to 36,000 tpd and the completion of the Shahuindo expansion is expected by the end of 2018. Production at La Arena is also weighted in the second half of the year.
2018 will be a transition year and the Company anticipates seeing higher total cash costs in 2018 than we saw in 2017 at a range of $725 to $775 per ounce. This increase is being driven by the lower grade in the 144 Gap deposit, along with more ounces coming from Shahuindo, both of which have higher cost profiles than La Arena. As expected, the lower cost La Arena will make up a smaller proportion of total production in 2018 than in previous years which will also impact costs. Tahoe is continuously focused on finding ways to increase the profitability of all its mines and lower costs, however this focus is a priority in 2018 at the Timmins operations given the lower grade profile.
Higher unit costs per ounce of gold produced in 2018 are expected as a result of lower anticipated production levels at La Arena, the increased proportion of production from Shahuindo, as well as a stronger forecasted Canadian dollar impacting the Timmins operations.
2018 reflects peak project capital expenditure levels to complete the two near-term expansion projects - with the Shahuindo expansion (including the 36,000 tpd crushing and agglomeration plant) accounting for approximately 65% of the total and the remainder the Bell Creek shaft project. Project capital at the Shahuindo expansion is associated with the completion of the crushing and agglomeration plant, process plant expansion, leach Pad 2B (stated as sustaining capital in previously issued guidance), waste dumps and the power substation. Project capital in Canada relates primarily to the Bell Creek shaft and tailings pond expansion. Approximately $60 million in project capital was deferred from 2017 and is now expected to be spent in 2018. Despite this shift in timing of spending, both projects remain within their original guidance.
Sustaining capital expenditures in 2018 are targeted at $90 to $115 million for the gold operations. Canada will account for approximately 45% of total gold sustaining capital expenditures in 2018, while La Arena is approximately 30%. A significant proportion of these expenditures relate to the underground drilling and development in Canada, as well as leach pad and waste dump construction at La Arena.
Exploration expenses (excluding capitalized drilling in the mines) are anticipated to be between $15 and $25 million in 2018, including drilling programs designed to expand Mineral Resources at existing operations and to advance longer-term projects in Canada and Peru.
2018 gold cost guidance was calculated based on certain commodity and currency assumptions. The table below includes a sensitivity of the impact of a change in these assumptions on total cash costs and all-in sustaining costs:
2018 GuidanceChange (+/-)Impact (+/-)
Commodity assumptions
Silver ($/oz) $17.50 $1.00/oz nil
Diesel (US$/gal) $2.40 10% $6/oz gold
Currency assumptions
CAD/USD $1.20 1% $9/oz gold
Peruvian sol/USD 3.3 1% $2/oz gold
Long-term outlook
As outlined below, the Company is on track to achieve annual gold production of over a half million ounces in 2019. At that time, total cash costs net of by-product credits and all-in sustaining costs per ounce of gold produced are also projected to improve.
Multi-Year Gold Guidance
2018 2019 2020
Gold ounces produced (000's) 400-475 500-550 500-550
Total cash costs per ounce gold
produced net of by-product credits $ 725-775$ 650-700$ 650-750
All-in sustaining costs per ounce
gold produced net of by-product credits $1,000-1,100$950-1,050$900-1,000
Total corporate G&A ($millions) $ 45-55$ 45-55$ 45-55
Exploration ($millions) $ 15-25$ 15-25$ 15-25
Sustaining capital - gold ($millions) $ 90-115$ 100-125$ 80-100
Project capital ($millions) $ 125-150$ 50-70$ 0-10
(1) See "Cautionary Statement on Forward-Looking Information" and "Cautionary
Note on Non-GAAP Financial Measures" in this press release.
(2) Commodity and currency price assumptions used in the calculation of 2019
and 2020 guidance are the same as those used in the calculation of 2018
guidance. Refer to the "2018 Guidance by mine" section of this press release.
(3) The top end of the gold production range includes approximately 5,000 ounces
from Escobal in 2018.
(4) All per ounce costs are based on gold ounces recovered.
(5) Guidance does not include inflation adjustments.
Key Highlights for Long-term Outlook:
The Company anticipates that a favorable Constitutional Court ruling would enable it to resume operations at the Escobal mine and that, over a period of 3 to 6 months, it will be able to ramp up its annual silver production to 2014-2016 levels.
The Company's goal is to reach and sustain 18-21 million ounces of silver production and 500-550 thousand ounces of gold production annually. Meeting this goal for gold production depends on exploration success in delivering additional resources and reserves to replace those mined annually.
Sustaining capital expenditures for the gold segment are targeted at $90 to $115 million for 2018, $100 - $125 million in 2019 and $80 to $100 million in 2020. Once production is restored to normal levels at the Escobal mine, the Company anticipates annual sustaining capital expenditures for the silver segment targeted at $30 to $40 million.
Although Tahoe expects to continue its evaluation of the La Arena II project with the intent of advancing the project to the prefeasibility or feasibility stage at the appropriate time, the timeline and estimated capital required to progress the project to the next stage are under review. As such, no additional spending has been considered in the multi-year guidance. Until the Company decides to commence the development of any significant new projects, growth capital expenditures will be substantially complete in 2019.
Exploration expenditures are likely to remain between $15 and $25 million annually over the next two years as the Company works to advance its exploration targets to increase gold Mineral Resources and to convert existing gold Mineral Resources into Mineral Reserves. With exploration programs being largely success driven, future expenditure targets will be developed following completion of 2018 drilling programs.
Mineral Resources and Mineral Reserves Update
On February 15, the Company released updated Mineral Resources and Mineral Reserves effective January 1, 2018, including updated resources for the La Arena II project and increased resources and reserves at Shahuindo that resulted from exploration successes at the La Chilca, San Jose, San Lorenzo and El Sauce areas proximal to the current Shahuindo pit. The Company's updated Mineral Reserves and Mineral Resources are summarized by the following tables:
TOTAL MINERAL RESERVES AS OF JANUARY 1, 2018
Reserve ClassificationGold (koz)Silver (koz)Copper (mlbs)Lead (ktonnes)Zinc (ktonnes)
Proven 1,356 54,288 0 26 44
Probable 2,366 233,345 0 170 276
Proven + Probable 3,721 287,633 0 196 320
TOTAL MINERAL RESOURCES AS OF JANUARY 1, 2018
Resource ClassificationGold (koz)Silver (koz)Copper (mlbs)Lead (ktonnes)Zinc (ktonnes)
Measured 3,101 74,911 1,279 33 58
Indicated 10,904 327,642 4,511 224 369
Measured + Indicated 14,005 402,552 5,790 256 427
Inferred 8,816 57,726 349 4 8
(1) Totals may not sum due to rounding.
(2) Please refer to the Technical Disclosure of this press release for inputs and assumptions
used for the Mineral Resource and Mineral Reserve estimates for each deposit.
For full details, please refer to the February 15, 2018 press release and available on the Company's website at www.tahoeresources.com. Details of Mineral Resource and Mineral Reserve estimates for each operating mine and for each exploration/development project are included in the Technical Information section of this press release and in the MD&A.
La Arena II Preliminary Economic Assessment
On February 20th, the Company released a new NI 43-101 technical report for the La Arena property which includes an update of the existing La Arena Mine oxide gold heap leach operation and a Preliminary Economic Assessment ("PEA") of the La Arena II copper-gold porphyry project.
Tahoe expects to continue its evaluation of the La Arena II project with the intent of advancing the project to the prefeasibility or feasibility stage at the appropriate time. The timeline and estimated capital required to progress the project to the next stage are under review by management. The project will be evaluated in the context of existing operations and pipeline opportunities. Tahoe intends to progress the project responsibly and to maximize value for its shareholders.
For full details, please refer to the February 20, 2018 press release and the NI 43-101 technical report which is available on the Company's website at http://www.tahoeresources.com/operations/la-arena-mine/ and on SEDAR at www.sedar.com and EDGAR (www.sec.gov).
UN Global Compact and 2018 CSR Initiatives
On February 5, 2018, Tahoe announced that it has joined the United Nations Global Compact (UNGC), the world's largest corporate sustainability initiative. As an official participant of the UNGC, Tahoe joins other international businesses, including a number of industry-leading mining companies, in committing to align its strategies and operations with the ten principles of the UNGC on human rights, labor, environment and anti-corruption, and take actions that advance these societal goals. As part of its commitment, Tahoe will make the UN Global Compact and its principles part of the strategy, policy, culture and day-to-day operations of the company, and continue to engage collaboratively on programming that advances the UN Sustainable Development Goals. Tahoe will also participate in the Global Compact's Canada Local Network to work with other companies, with the aim to scale the impact of sustainability efforts on a global level.
Guatemala Update
Update on Escobal mining license and export credential - On July 5, 2017, the Company was notified that the Supreme Court of Guatemala issued a temporary decision to provisionally suspend the Escobal mining license of Minera San Rafael ("MSR") in response to an action brought by CALAS, an anti-mining NGO, against the Ministry of Energy and Mines ("MEM"). On September 10, 2017, the Guatemalan Supreme Court issued a definitive decision that reinstated the Escobal mining license. The ruling also ordered MEM to consult with the Xinka indigenous communities within certain geographic areas within 12 months. The ruling allows Escobal to restart operations immediately and to continue to operate during the consultation process. Although Tahoe believes that MEM complied with ILO Convention 169 before it issued the Escobal license, it will fully support MEM in any of its future indigenous engagement to the extent permitted.
CALAS and other interested parties appealed the Supreme Court's decision reinstating the Escobal mining license to the Constitutional Court, the highest court in Guatemala, which heard the matter on October 25, 2017. According to Guatemalan law, the Constitutional Court was required to have issued its ruling within 5 calendar days of the public hearing, however, the Constitutional Court has yet to rule.
In June 2017, the Company filed its annual request to renew the export credential with MEM. However, MEM did not renew the credential because its renewal had become contingent on the Supreme Court's reinstatement of the Escobal mining license. The credential therefore expired in August 2017. After the Supreme Court reinstated the mining license in September 2017, MEM publicly stated to local press that the export credential could be legally renewed. However, contrary to such public declaration, in December MEM indicated in a written communication to MSR that it will not renew the credential given the pending ruling from the Constitutional Court. The Company expects that MEM will renew the export credential upon a favorable ruling of the Constitutional Court on the appeal reinstating the license.
Update on Guatemala Road Block - Since June 7, 2017, a group of protesters near the town of Casillas has blocked the municipal road that connects Guatemala City to San Rafael Las Flores and the Escobal mine. Operations were reduced between June 8 and June 19 to conserve fuel and were further curtailed on June 19.
While some of the protestors come from Casillas, which is 16 kilometers from the mine, many more are from outside the municipality. The Company has reason to believe that the blockade is politically motivated and is being substantially funded by anti-mining groups.
MSR representatives have been pursuing engagement with community leaders, indigenous groups, government agencies, and international mediation experts to positive effect. The Company's dialogue process is making headway in bringing communities together with an aim to peaceably resolve the roadblock.
Escobal Workforce Reduction - Tahoe has been committed to maintaining Escobal's full workforce since the July 5, 2017 mining license suspension. Given the delay and the inability of the Company to resume mining operations, the Company terminated 250 Minera San Rafael employees on January 15, 2018. Prior to the license suspension, Minera San Rafael employed 1,030 people, 97% of whom are Guatemalan and 50% of whom are from the Santa Rosa region.
Despite this difficult decision, Tahoe remains optimistic that based on legal precedent, the Constitutional Court will issue a favorable ruling reinstating the mining license and that Escobal will resume operations. At such time, Tahoe will seek to restore its workforce.
Assuming that the Supreme Court ruling is confirmed by the Constitutional Court and the export credential is renewed, the Company anticipates it will take approximately one month to resume production at Escobal. Once the mine resumes steady operations for a period of time, the Company will seek to establish guidance outlook for Escobal.
Conference Call
Tahoe's senior management will host a conference call and webcast to discuss the Q4 2017 and year-end 2017 results on Friday, February 23, 2018 at 10:00 a.m. ET (7:00 a.m. PT).
Dial-in:
1-800-319-4610 (toll free from Canada and the U.S.)
+1-604-638-5340 (from outside Canada and the U.S.)
The webcast will be available on the Company's website at http://www.tahoeresources.com/investor-relations/ as will a recording of the call later in the day. Complete financial results for Q4 2017 and year-end 2017 including the Company's management discussion and analysis and other filings will be posted on SEDAR (www.sedar.com) and EDGAR (www.sec.gov) and on the Company's website.
The Company has filed its 2017 Annual Report on Form 40-F with the United States Securities Exchange Commission on EDGAR at www.sec.gov/edgar on February 22, 2018. Copies of the Company's financial statements are available through the Company's website at www.tahoeresources.com. Hard copies may be requested, free of charge, by emailing investors@tahoeresources.com.
About Tahoe Resources Inc.
Tahoe's strategy is to responsibly operate mines to world standards and to develop high quality precious metals assets in the Americas. Tahoe is a member of the S&P/TSX Composite and TSX Global Mining indices and the Russell 3000 on the NYSE. The Company is listed on the TSX as THO and on the NYSE as TAHO.
Qualified Person Statement
Technical information in this press release has been approved by Charlie Muerhoff, Vice President Technical Services, Tahoe Resources Inc., a Qualified Person as defined by NI 43-101.
SELECTED QUARTERLY CONSOLIDATED FINANCIAL RESULTS
Selected quarterly and YTD consolidated financial information from continuing operations is as follows:
Q4 2017 Q4 2016 2017 2016
Metal Sold
Silver (000's ozs) 46.2 4,496 10,113 19,065
Gold (000's ozs)(2) 92.9 100.7 435.2 358.2
Lead (000's t) - 2.3 4.0 9.0
Zinc (000's t) - 2.8 5.6 12.3
Realized Price
Silver in concentrate (per oz) $ -$ 14.45$ 17.71$ 17.57
Gold in dore (per oz) $ 1,272$ 1,197$ 1,246$ 1,245
Lead (per t) $ -$ 2,036$ 2,379$ 1,886
Zinc (per t) $ -$ 2,872$ 2,864$ 2,268
LBMA/LME Price(3)
Silver (per oz) $ 16.84$ 17.19$ 17.16$ 17.14
Gold (per oz) $ 1,278$ 1,220$ 1,251$ 1,250
Lead (per t) $ 2,334$ 2,149$ 2,259$ 1,872
Zinc (per t) $ 2,963$ 2,517$ 2,783$ 2,095
Revenues $ 117,734$ 189,398$ 733,557$ 784,503
Total operating costs $ 122,997$ 141,552$ 541,587$ 480,378
Earnings from operations $ (20,219)$ 31,466$ 191,970$ 242,268
Earnings (loss)(6)(7) $ (18,010)$ 315$ 81,793$ 117,876
Earnings (loss) per common share
Basic $ (0.06)$ -$ 0.26$ 0.41
Diluted $ (0.06)$ -$ 0.26$ 0.41
Adjusted earnings (loss)(4) $ (17,678)$ 18,415$ 84,011$ 180,385
Adjusted earnings (loss) per common share(4)
Basic(4) $ (0.06)$ 0.06$ 0.27$ 0.62
Diluted(4) $ (0.06)$ 0.06$ 0.27$ 0.62
Dividends paid $ -$ 18,672$ 43,686$ 69,402
Cash flow provided by operating activities $ 18,081$ 107,021$ 234,264$ 249,454
Cash flow provided by operating activities
before changes in working capital(4) $ 23,988$ 74,669$ 287,014$ 385,926
Cash and cash equivalents $ 125,665$ 163,368$ 125,665$ 163,368
Total assets $3,080,638$3,071,253$3,080,638$3,071,253
Total long-term liabilities $ 299,920$ 348,663$ 299,920$ 348,663
Costs per silver ounce produced
Total cash costs net of by-product credits(4) $ -$ 6.48$ 6.15$ 5.84
All-in sustaining costs per silver
ounce net of by-product credits(4) $ -}$ 9.76$ 8.91$ 8.06
Costs per gold ounce produced
Total cash costs net of by-product credits(4) $ 648$ 594$ 641$ 620
All-in sustaining costs per gold
ounce net of by-product credits(4)(5) $ 1,033$ 945$ 973$ 943
(1) 2016 numbers include operational and financial information from the Timmins mines
beginning April 1, 2016, the date of acquisition of Lake Shore Gold and operational and
financial information from Shahuindo beginning May 1, 2016, the commencement of
commercial production.
(2) Included in the 358.2 thousand gold ounces sold for 2016 are 44.3 thousand gold
ounces sold at Shahuindo which include four months of pre-commercial production ounces
sold (7.6 thousand ounces of gold in dore sold in the period January through April 2016).
(3) London Bullion Market Association (LBMA)/London Metal Exchange (LME) average closing
prices for each period presented.
(4) Refer to the "Cautionary Note on Non-GAAP Financial Measures" section of
this press release.
(5) All-in sustaining costs net of by-product credits per gold ounce produced for 2016
exclude the impact of $11.1 million in non-recurring transaction costs related to the
acquisition of Lake Shore Gold.
(6) Earnings of $0.3 million for Q4 2016 were negatively impacted by the change in
enacted tax rates in Peru, resulting in a charge of approximately $19.3 million to
deferred income tax expense. Refer to the Company's adjusted earnings described and
calculated in the "Cautionary Note on Non-GAAP Financial Measures" section of
this press release.
(7) Earnings of $117.9 million for 2016 were impacted by the result of a change in
enacted tax rates in Peru for $19.3 million, a non-cash loss on the redemption of
the Lake Shore Gold debentures of $32.3 million and non-recurring transaction costs
of $11.1 million related to the acquisition of Lake Shore Gold. Refer to the Company's
adjusted earnings described and calculated in the "Cautionary Note on Non-GAAP Financial
Measures" section of this press release.
(8) Numbers may not calculate due to rounding.
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