agm 2014 presentation
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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 – 3.8 3.5 – 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 2014Updated 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 facil ity 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 PFYamana
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
$/s
hare
U
S$/o
unce
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