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AGM 2014 Presentation
 

AGM 2014 Presentation

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    AGM 2014 Presentation AGM 2014 Presentation Presentation Transcript

    • Annual Shareholders Meeting May 1, 2014
    • 2 FORWARD LOOKING STATEMENTS This presentation contains “forward-looking statements”, within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of Goldcorp Inc. (“Goldcorp”). Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, silver, copper, lead and zinc, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, hedging practices, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, timing and possible outcome of pending litigation, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, “believes” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Goldcorp to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold, silver, copper, lead and zinc; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes; delays in obtaining governmental approvals or financing or in the completion of development or construction activities and other risks of the mining industry, as well as those factors discussed in the section entitled “Description of the Business – Risk Factors” in Goldcorp’s annual information form for the year ended December 31, 2013 available at www.sedar.com. Although Goldcorp has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Goldcorp does not undertake to update any forward-looking statements that are included in this document, except in accordance with applicable securities laws. All amounts are in U.S. dollars, unless otherwise stated.
    • AGENDA • Strategic Overview • 2013 and Q1 2014 Review • Creating Sustainable Value
    • 2013 Highlights SOLID FINISH TO THE YEAR • Adjusted revenues totaled $4.7B • Record gold production of 2.7 million ounces • All-in sustaining costs of $1,031 per gold ounce • Adjusted operating cash flow of $1.6B, or $1.97/share • Adjusted net earnings of $634 million, or $0.78/share • Dividends paid totaled $486 million, maintained at $0.60/share annually ($0.05/share monthly) • Proven and probable gold reserves totaled 54 million 4
    • Proven Strategy CONSISTENT FOCUS Quality Growth Safe, Profitable Production Peer- Leading Balance Sheet Responsible Mining Practices Gold Focused Together, creating sustainable value Low Political Risk Strategy to succeed in a volatile market 5
    • Proven Strategy KEY PRIORITIES 6 FINANCIAL DISCIPLINE Continued focus on execution – only SAFE production Mine planning and budgets – focus on high margin ounces Operating for Excellence – achieving operating cost reductions Portfolio Management – disciplined review and investment
    • Operational Update FOCUS IN LOW-RISK JURISDICTIONS 35% 33% 14% 9% 6% 3% Dominican Republic Canada Chile Mexico Guatemala US Argentina 2014E Gold Production1 Operating mines Development projects Canada Mexico Dominican Republic Argentina Guatemala US 7 (1) Based on 2014 guidance as per January 8, 2014 press release, revised to exclude Marigold post Q1 2014
    • Proven Strategy HIGH QUALITY GROWTH FROM NEW PROJECTS IN 2014 8 Cerro Negro - First gold mid-year 2014 - Commercial production Q4 2014 - Detailed engineering completed, total EPCM ~84% - High voltage power line and substation expected completion early May, approval end of May - Ore stockpile contains ~410,000 tonnes at an average grade of 9.84g/t Au and 183.4g/t Ag Éléonore - First gold late-2014 - Commercial production Q1 2015 - Production drilling commenced - Production shaft reached a depth of 735 metres - Ore stockpile on surface contains ~25,104 tonnes at an average grade of 3.9 g/t Au - Exploration drilling focus on conversion of resources to reserves Cochenour - First development ore late-2014 - Haulage drift advanced to 90% completion - Shaft reached final depth of 1,116 metres - Focus on integration with Red Lake - Exploration continues with four drills on site, results consistent with expectations
    • Proven Strategy GOLDCORP’S FUTURE 9 Gold production (Moz) 0.0 5.5 2013A 2014E 2015E 2016E 2017E 2018E Gold ounces GEO 2.95 – 3.1 3.6 – 3.8 3.7 – 4.0 3.5 – 3.83.5 – 3.8 2.7 L O N G - L I F E , L O W - C O S T M I N E S T O G E N E R AT E L O N G T E R M VA L U E Revised to exclude Marigold post Q1 2014
    • Proven Strategy FREE CASH FLOW 10 US$/M F O R E C A S T F R E E C A S H F L O W P O S I T I V E I N 2 0 1 4 2014 price assumptions: Au=$1,200/oz, Ag=$20.00/oz, Cu=$3.00/lb, Zn=$0.90/lb, Pb=$1.00/lb FCF excludes dividends Revised to exclude Marigold post Q1 2014 -600 -500 -400 -300 -200 -100 0 100 200 Q1'14A Q2'14E Q3'14E Q4'14E
    • Proven Strategy CASH FLOW ALLOCATION PRIORITIES 11 + Fund existing growth profile Invest in high return organic growth Flexibility for selective M&A Regular dividend growth + + Creating shareholder value
    • AGENDA • Strategic Overview • 2013 and Q1 2014 Review • Creating Sustainable Value
    • Financial Discipline FIRST QUARTER 2014 13 Q1 2014 Actual Gold production (oz) 679,900 Cash costs $ / oz All-in sustaining $840 By-product $507 Co-product $673 Capital expenditures $480M Exploration expenditures(3) $30M Corporate administration $42M Depreciation / oz $295 Tax rate 8%
    • Financial Discipline POSITIVE MOMENTUM THROUGH GROWTH AND LOWER COSTS 14 (1) 2014 price assumptions: Au=$1,200/oz, Ag=$20.00/oz, Cu=$3.00/lb, Zn=$0.90/lb, Pb=$1.00/lb (2) Revised to exclude Marigold post Q1 2014 (3) Includes capitalized exploration 2013 Actual January 2014 Updated for Marigold disposition (2) Gold production (oz) 2.67M 3.0M - 3.15M 2.95M - 3.10M Cash costs $ / oz All-in sustaining $1,031 $950 - $1,000 $950 - $1,000 By-product $553 $550 - $600 $550 - $600 Co-product $687 $650 - $700 $650 - $700 Capital expenditures $2.4B $2.3B - $2.5B $2.3B - $2.5B Exploration expenditures(3) $156M $190M $190M Corporate administration $165M $185M $185M Depreciation / oz $314 $385 $350 Tax rate 36% 41% 26% 2014E Guidance (1)
    • Financial Discipline ALL-IN SUSTAINING COSTS 15 US$/oz C O S T M A N A G E M E N T I N I T I AT I V E S & N E W L O W - C O S T M I N E S D R I V E D E C R E A S I N G C O S T S 0 200 400 600 800 1,000 1,200 1,400 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 2013A 2014E Sustaining capex Operating cost G&A Exploration Other $1,031 $950 - $1,000 $1,134 $1,227 $995 $810 $840
    • Financial Discipline STRONG BALANCE SHEET MAINTAINED 16 I N V E S T M E N T G R A D E B A L A N C E S H E E T $2.4B L I Q U I D I T Y $1.0B(1) $1.4B(1) CASH & EQUIVALENTS UNDRAWN REVOLVING CREDIT FACILITY Net Debt in $B and as a % of Market Cap.(2) (1) Cash & equivalents and revolving credit facility based on financial information as of March 31, 2014. Revolving credit facility of $2B of which $600M has been drawn. (2) As of April 30, 2014; All amounts as reported in company financial statements and adjusted for subsequent transactions. Goldcorp’s net debt position adjusted to include $393M of attributable Pueblo Viejo project debt 12% 22% 22% 30% 42% 43% 50% 51% Goldcorp PF Agnico PF Yamana Kinross AngloGold Newmont Barrick Newcrest $3.8B$10.1B$5.3B$3.1B$1.4B$1.4B$1.3B$2.3B
    • Financial Discipline STRONG BALANCE SHEET MAINTAINED 17 H I G H E S T % O F O P E R AT I N G C A S H F L O W A M O N G P E E R S ( 1 ) (1) See Appendix A Source: Bloomberg - gold price data (Jan. 1, 2005 – April 30, 2014) $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 US$/share US$/ounce Gold Price Dividend per share
    • AGENDA • Strategic Overview • 2013 and Q1 2014 Review • Creating Sustainable Value
    • Safety Update SAFE ENOUGH FOR OUR FAMILIES 19 • October 30th 2013, Day of Remembrance • March 2014: Cerro Negro Project surpasses 3 million hours without a Lost Time Injury • Fighting Fatalities training
    • Environmental Stewardship OUR PLANET. OUR CHOICES. OUR LEGACY. 20 • Sustainability Excellence Management System Framework and Standards • Water Stewardship Strategy • Progress on Energy Efficiency Goals: • Red Lake Gas Line • On Demand Ventilation System at Éléonore
    • Commitment to Communities OUR PLANET. OUR CHOICES. OUR LEGACY 21 • Two New Collaboration Agreements with First Nations • Lac Seul (Red Lake) • Mishkeegogamang (Musselwhite) • Advanced Local Sourcing of goods and services: • 94% local, regional or in-country
    • GOLDCORP ADVANTAGE Quality Growth Safe, Profitable Production Peer- Leading Balance Sheet Responsible Mining Practices Gold Focused Low Political Risk SUPERIOR INVESTMENT PROPOSITION 22
    • Appendix A STRONG DIVIDEND TRACK RECORD 23 Dividend as % of Operating Cash Flow 2014E 2015E 0% 3% 8% 11% 16% 32% 0% 2% 7% 10% 13% 23% Kinross Newmont Barrick Agnico Yamana Goldcorp