Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - Thompson Creek Metals Co Inc. | pressreleaseq22016.htm |
| 8-K - 8-K - Thompson Creek Metals Co Inc. | a8-kq22016.htm |
Second Quarter 2016 Financial Results
Investor Conference Call
August 9, 2016
TSX: TCM OTCQX: TCPTF
2
Webcast Information
Webcast:
This Webcast can be accessed on the Thompson Creek Metals Company website
under the Events Section: www.thompsoncreekmetals.com
Q&A Instructions:
If you would like to ask a question, please press star 1 on your telephone keypad.
If you’re using a speakerphone, please make sure your mute function is turned off
to allow your signal to reach the operator.
3
Cautionary Statement
Certain statements in this release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995,
Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and applicable
Canadian securities legislation, and are intended to be covered by the safe harbors provided by these regulations. All statements other than
statements of historical fact set forth or incorporated herein by reference are forward-looking statements. These forward-looking statements
may, in some cases, be identified by the use of terms such as "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Our forward-looking
statements may include, without limitation, statements with respect to: future financial or operating performance of the Company or its
subsidiaries and its projects; future liquidity; the proposed arrangement with Centerra Gold Inc., including, but not limited to, the timing,
expectations and risks associated with the proposed arrangement; our ability to access financing arrangements and our ability to refinance or
reduce debt on favorable terms or at all; future inventory, production, sales, payments from customers, cash costs, capital expenditures and
exploration expenditures; future earnings and operating results; expected mining and concentrate grades and recoveries; estimates of mineral
reserves and mineral resources, including estimated mine life and annual production; expectations regarding the optimization of Mount Milligan
Mine and construction of a permanent secondary crushing circuit, including timing and cost of construction and the effects of secondary
crushing; future concentrate shipment dates and shipment sizes; future operating plans and goals, including expected financial and operating
results of the molybdenum business; expected costs, including any severance costs; personnel decisions, including reductions in work force;
future copper, gold, and molybdenum prices; and future foreign exchange rates.
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to
have a reasonable basis. However, our forward-looking statements are based on current expectations and assumptions that are subject to risks
and uncertainties, which may cause actual results to differ materially from future results expressed, projected or implied by those forward-
looking statements. Important factors that could cause actual results and events to differ from those described in such forward-looking
statements can be found in the section entitled "Risk Factors" in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other
documents filed on EDGAR at www.sec.gov and on SEDAR at www.sedar.com. Although we have attempted to identify those material factors
that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors, currently
unknown to us or deemed immaterial at the present time that could cause results or events to differ from those anticipated, estimated or
intended. Many of these factors are beyond our ability to control or predict. Given these uncertainties, the reader is cautioned not to place undue
reliance on our forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as
a result of new information, future events or otherwise.
4
Overview
Jacques Perron
President and Chief Executive Officer
5
Improving Safety Performance
Company All Incident Recordable Rate (AIRR)1
1
Includes Lost Time and Reportable Incidents.
2.60
2.25
1.40
2.48 2.46
0.67
1.71
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2010 2011 2012 2013 2014 2015 YTD 2016
Thompson Creek Metals Company U.S. Metals Manufacturing AIRR Average
Surface Metals Mining U.S. AIRR Average Mining Association British Columbia AIRR Average
6
Q216 Achievements
Ended the quarter with ~ $130 million of working capital, including ~ $120 million
of cash
Molybdenum business generated net cash flow of ~ $3 million
Payable production
Copper ~ 15 million pounds
Gold ~ 46,000 ounces
Achieved unit cash cost of $0.37
1
per pound of copper produced on a by-
product basis net of gold credits, a decrease of 23% from Q215
Completed four copper and gold concentrate shipments
Construction of the Mount Milligan permanent secondary crushing circuit
proceeded as planned and remained on schedule
1 Please refer to Appendix for non-GAAP reconciliation.
7
Financial Review
Pam Saxton
Executive Vice President and Chief Financial Officer
8
Selected Financial Results
24
41
49
68
$0
$10
$20
$30
$40
$50
$60
$70
Q216 Q115 H116 H115
Non-GAAP EBITDA
129 134
226
257
$0
$50
$100
$150
$200
$250
$300
Q216 Q215 H116 H115
Revenue
[millions US$, except per share data]
1 Please refer to Appendix for GAAP net income and reconciliation.
(4)
12
4
17
-$6
-$1
$4
$9
$14
$19
Q216 Q215 H116 H115
Operating (loss) Income
6
24
(9)
19
-$15
-$5
$5
$15
$25
Q216 Q215 H116 H115
Operating Cash Flow (Drain)
(27)
(14)
(46)
(28)
-$60
-$50
-$40
-$30
-$20
-$10
$0
$10
$20
Q216 Q215 H116 H115
Non-GAAP Adjusted Net Loss1
(28)
0.3
7
(87)
-$100
-$80
-$60
-$40
-$20
$0
$20
$40
Q216 Q215 H116 H115
Net (loss) Income
9
Three Months Ended
6/30/16 6/30/15
Six Months Ended
6/30/16 6/30/15
Cash Generated (Used) from Operations 6.3
23.9
(9.4)
18.6
Cash (Used) in Investing Activities (19.3) (9.9) (35.2) (16.7)
Cash (Used) in Financing Activities (6.5) (41.1) (12.7) (55.4)
Effect of Exchange Rate Changes on Cash 0.1 -- 0.2 (1.0)
Decrease in Cash and Cash Equivalents (19.4) (27.1) (57.1) (54.5)
Cash and Cash Equivalents, beginning of period 139.1 238.2 176.8 265.6
Cash and Cash Equivalents, end of period 119.7 211.1 119.7 211.1
Summary of Statement of Cash Flows
[US$ in millions]
10
2016 Production and Cash Cost Guidance
Year Ending
December 31, 2016
(Estimate)
Mount Milligan Mine Copper and Gold 1
Concentrate production (000’s dry tonnes) 125 – 135
Copper payable production (millions lb) 55 – 65
Gold payable production (000’s oz) 1 240 – 270
Unit cash cost – By-product (US$/payable lb copper production) 2 $0.25 – $0.70
Cash Capital Expenditures (US$ in millions, plus or minus 10%)
Mount Milligan operations $5
Mount Milligan tailings dam $20
Mount Milligan secondary crusher 3 $47
Total Capital Expenditures $72
1 Estimates for cash costs and capital expenditures assume an average foreign exchange rate of US$1.00 = C$1.28 for 2016.
2 Assumes gold by-product credits at a weighted average gold price of $867/oz, which takes into account the $435/oz under the streaming
arrangement with Royal Gold (the “Gold Stream Arrangement”).
3 Excluded $6.2 million in accruals as of December 31, 2015 that were paid in 2016.
The following table presents our guidance for the full year 2016, which remains unchanged from the guidance issued
previously. We currently expect that our 2016 copper production will be on the high end of our guidance range, and
our 2016 gold production, by-product cash costs and capital expenditures to be at the low end of our guidance. See
footnotes below for changes in underlying foreign exchange rate and gold price assumptions.
11
Sales Summary,
Operations Review and
Key Messages
Jacques Perron
President and Chief Executive Officer
12
35.3 36.0
H116 H115
Copper (Cu) Sales
1 Please refer to Appendix for non-GAAP reconciliation.
20.3 21.2
Q216 Q215
Cu Sales
(millions lbs)
Average Realized Sales Price1
(US$/lb)
Cu Sales
(millions lbs)
Average Realized Sales Price1
(US$/lb)
$37.6
$49.3
Q216 Q215
$65.7
$81.5
H116 H115
$2.16
$2.56
H116 H115
Cu Revenue
(millions US$)
Cu Revenue
(millions US$)
$2.15
$2.63
Q216 Q215
Three Months Ended June 30 Six Months Ended June 30
13
$92.3
H116 H115
Gold (Au) Sales
1 Please refer to Appendix for non-GAAP reconciliation.
62.3
57.9
Q216 Q215
Au Sales
(000’s oz)
Average Realized Sales Price1
(US$/oz)
Au Sales
(000’s oz)
Average Realized Sales Price1
(US$/oz)
$64.6
$56.3
Q216 Q215
$1,035
$979
H116 H115
Au Revenue
(millions US$)
Au Revenue
(millions US$)
$1,041
$975
Q216 Q215
Three Months Ended June 30 Six Months Ended June 30
106.7
94.7
H116 H115
$109.9
14
Molybdenum Sales
Total Sales
Tolling, Calcining and Other
$22.3 $20.9
$41.9
$63.7
$4.2
$7.6 $8.6
$19.6
Q216 Q215 H116 H115
3.0
2.3
6.1
6.5
Q216 Q215 H116 H115
Avg Realized
Mo Price/Lb.
$6.92 $9.73
Mo Sales Volumes
[US$ in millions] [millions of pounds]
$7.38 $9.23
1
2
1 Roasted Molybdenum concentrate sourced from third parties
2 Includes inventory produced from our mines during 2014, in addition to third party sourced production.
1
2
15
Operating Statistics
Copper (Cu)
1 Please refer to Appendix for non-GAAP reconciliation.
14.7
20.2
33.7
35.6
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Q216 Q215 H116 H115
Cu-Payable Production (millions lbs)
$0.37
$0.48
$0.60
$0.75
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
Q216 Q215 H116 H115
Cu-Cash cost ($/payable lb produced)
By-Product
1
Q216 Q215 H116 H115
Cu Ore Grade 0.20% 0.28% 0.22% 0.27%
Cu Recovery 77.2% 85.5% 75.9% 82.7%
16
Operating Statistics
Gold (Au)
1 Please refer to Appendix for non-GAAP reconciliation.
46.4
59.9
99.7
106.0
0.0
20.0
40.0
60.0
80.0
100.0
Q216 Q215 H116 H115
Au-Payable Production (000's oz)
$728
$434
$618
$462
-$50
$50
$150
$250
$350
$450
$550
$650
$750
Q216 Q215 H116 H115
Au-Cash cost ($/payable oz produced)
Co-Product
1
Q216 Q215 H116 H115
Au Ore Grade (g/tonne) 0.54 0.65 0.55 0.64
Au Recovery 60.4% 72.7% 59.8% 70.0%
17
Key Messages
Continuous optimization of Mount Milligan Mine
Permanent secondary crushing circuit
• Construction and commissioning expected to be completed by year-end 2016
• Total capex expected to be less than $60 million, inclusive of ~ $22 million
incurred during the first half of 2016 and ~ $15 million incurred in 2015
• Q316 scheduled shutdown equivalent to 8 production days for tie in of the new
conveyor
• Once completed and commissioned, average daily mill throughput is expected
to increase to 62,500 tpd and above
Continuous enhancements to Mount Milligan mill to better process increased
throughput and to achieve increases in recoveries
Molybdenum business is expected to generate sufficient revenue in 2016 to
substantially cover care and maintenance costs and maintain option value of assets
Previously announced transaction with Centerra Gold is expected to close in the
second half of 2016
18
Thompson Creek and Centerra
Proposed Transaction
Jacques Perron
President and Chief Executive Officer
19
Transaction
Summary
Total transaction value of ~US$1.1 Billion:
• Purchase of TCM shares outstanding ~US$140MM(1)
• Redemption of TCM bonds at the call price plus accrued and unpaid interest (US$889MM)(2)
• Assumption of TCM capital leases (US$40MM) as of June 30, 2016
Result of Robust
Process
• Extensive process conducted by the Company and its advisors to evaluate all available alternatives to address its high debt level
amid a challenging commodity price environment
• Parallel process was run evaluating restructuring / refinancing and M&A alternatives
• Extensive strategic review process whereby over 100 qualified strategic and financial parties were invited to participate
Consideration
• Each existing TCM share outstanding at closing will be exchanged for 0.0988 Centerra shares pursuant to a plan of arrangement
providing TCM shareholders with an approximate 8% interest in Centerra
• The Exchange Ratio implies a premium of 33% to Thompson Creek common shares based on each company’s 20-day volume
weighted average price on the TSX for the period ending July 4, 2016
• In connection with the closing of arrangement, the Company’s 9.75% secured notes due 2017, 7.375% unsecured notes due 2018,
and 12.5% unsecured notes due 2019 will be redeemed for cash in accordance with the indenture terms
Financing
Redemption of
TCM Notes
The redemption of TCM’s notes will be financed by Centerra with a combination of:
• Equity Offering: Net proceeds from a C$195MM bought deal subscription receipt financing by Centerra
• New Credit Facilities: US$300MM drawdown of the new US$325MM credit facility provided by Scotiabank to Centerra(3)
• Use of Cash on Hand: Balance of approximately US$435MM will be financed by cash on hand at Thompson Creek and Centerra
Conditions
• Thompson Creek shareholder approval (66⅔% of votes cast)
• Customary regulatory and court approvals
Governance
• Centerra’s leadership will lead the combined company
• Appointment of one current member of the TCM board of directors to the Centerra board
Other • Customary non-solicitation covenants and a termination fee is payable in customary circumstances
Closing • Expected to close in the second half of 2016
1. Calculated based on the closing price of Centerra’s shares on the TSX as of July 4, 2016
2. Assumes redemption date of September 30, 2016
3. Pursuant to a commitment letter from Scotiabank dated June 13, 2016 and subject to the terms and conditions contained therein
Transaction Summary
20
Mount Milligan and Kumtor: Two Flagship Gold Assets
Mount Milligan
2016E
Guidance
Gold Production (koz) 240-270
Copper Production (Mlbs) 55-65
Remaining Reserve Life (years) (1) 22 years
Gold Copper
P&P Reserves (1) 5.69Moz 2,185Mlbs
Grade 0.349g/t 0.196%
Proposed Amended Royal Gold
Stream (4)
35% @
US$435/oz
18.75% @ 15%
of spot Cu price
Source: Centerra’s public filings on SEDAR, including the Kumtor Mine NI 43-101 Technical Report (March 20, 2015); and TCM’s public filings on SEDAR and EDGAR, including its
Form 10-K for the year ended December 31, 2015.
1. See Note i on slide 24.
2. See Note ii on slide 24.
3. See Note iii on slide 24.
4. Source: Centerra’s public filings on SEDAR.
Kumtor
2015
2016E
Guidance
Gold Production (koz) 521 500-530
Adjusted Operating Costs (US$/oz) (2) $326 $369-$391
Growth Capital (US$MM) (2) $14 $33
Projected Asset Life (years) +10
P&P Reserves (Moz) (3) 5.6
Au Grade (g/t) 2.5
M&I Resource (Moz) (3) 2.6
Au Grade (g/t) 2.7
22 years of production from existing P&P reserves (1)
5.7 million gold reserve ounces (1)
Low cost, long life production
Stable, mining-friendly jurisdiction
Restructured stream to provide additional gold upside
+19 years of uninterrupted profitable production
Over 10M ounces produced since 1997
5.6M ounces remaining in P&P reserves (3)
Low cost, long life production
High-grade underground opportunity
21
Closing Remarks
Jacques Perron
President and Chief Executive Officer
22
OTCQX: TCPTF TSX:TCM
Thompson Creek Metals Company
www.thompsoncreekmetals.com
Pamela Solly
Director, Investor Relations
and Corporate Responsibility
Phone (303) 762-3526
Email psolly@tcrk.com
23
Appendix
24
(i) The mineral reserve estimates for Mount Milligan Mine are as of December 31, 2015 and were prepared by Robert Clifford, Thompson Creek’s Director of Mine
Engineering, who is a Qualified Person under NI 43-101. The mineral reserve estimates were prepared using an ultimate open pit design optimized at spot metal prices
of $2.95/lb copper, $1,250/oz gold, an exchange rate of US$1.00/C$1.10, a cut-off grade of 0.176% copper equivalent and takes into consideration metallurgical
recoveries, concentrate grades, transportation costs, smelter treatment charges and royalty and streaming arrangements in determining economic viability. The mineral
reserve estimates are based on the cost assumptions included in the NI 43-101 technical report entitled "NI 43-101 Technical Report-Mount Milligan Mine-Northern
Central British Columbia" dated January 21, 2015 and filed on SEDAR on January 21, 2015. Mill recoveries vary by rock type and region but average 85.0% copper and
71.5% gold. Anticipated losses resulting from beneficiation average approximately 4.5% copper and 2.5% gold.
(ii) Adjusted operating costs, all-in costs and all-in costs - including taxes as well as sustaining capital, growth capital, average realized gold price per ounce and cost of
sales per ounce sold are non-GAAP measures and are discussed under “Non-GAAP Measures” in the Company’s annual MD&A filed on SEDAR.
(iii) The mineral reserves at Kumtor have been estimated based on a gold price of US$1,200 per ounce, as at December 31, 2015. The open pit reserves and resources
at Kumtor are estimated based on a cut-off grade of 0.85 grams of gold per tonne for the Central Pit and 1.0 grams of gold per tonne for the Southwest and Sarytor
deposits. Open Pit resources at Kumtor are constrained by a pit shell developed using a gold price of US$1,450 per ounce. Mineral resources are in addition to reserves.
Mineral resources do not have demonstrated economic viability. Further information including key assumptions, parameters and methods used to estimate mineral
resources and reserves, as well as legal, political, environmental and other risks are described in Centerra’s 2015 Annual Information Form dated March 31, 2016 filed
on SEDAR.
Notes to mineral properties slides
Notes Regarding Mineral Properties
25
Non-GAAP EBITDA Reconciliation Last Twelve Months
1 Includes gain (loss) from debt extinguishment
2 Certain prior year reclassifications were made to DD&A to conform with current year presentation.
(US$ in millions)
Three Months
Ended
June 30, 2016
Three Months
Ended
June 30, 2015
Six Months
Ended
June 30, 2015
Six Months
Ended
June 30, 2015
Net income (loss) (27.9) 0.3 7.2 (86.9)
(Interest income)/expense, net 20.4 25.4 41.4 47.6
Tax expense (benefit) 0.6 5.1 8.1 (11.6)
DD&A 1 29.1 26.8 48.9 46.8
Accretion 0.6 0.6 1.2 1.2
(Gain) loss on foreign exchange 1.4 (16.9) (58.0) 71.3
Non-GAAP EBITDA 24.2 41.3 48.8 68.4
Non-GAAP EBITDA
26
Non-GAAP Reconciliation
Adjusted Net Income (Loss)
(US$ in millions, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2016 2015 2016 2015
Net (loss) income $ (27.9 ) $ 0.3 $ 7.2 $ (86.9 )
Add (Deduct):
Loss (gain) on foreign exchange (1) 1.4 (17.2 ) (59.2 ) 72.6
Tax (benefit) expense on foreign exchange (gain) loss (0.4 ) 3.4 5.8 (13.4 )
Non-GAAP adjusted net loss $ (26.9 ) $ (13.5 ) $ (46.2 ) $ (27.7 )
Net (loss) income per share
Basic $ (0.13 ) $ 0.00 $ 0.03 $ (0.40 )
Diluted $ (0.13 ) $ 0.00 $ 0.03 $ (0.40 )
Adjusted net (loss) income per share
Basic $ (0.13 ) $ (0.06 ) $ (0.21 ) $ (0.13 )
Diluted $ (0.13 ) $ (0.06 ) $ (0.21 ) $ (0.13 )
Weighted-average shares
Basic 221.7 218.0 222.4 216.2
Diluted 221.7 218.0 222.4 216.2
(1) Included a foreign exchange gain of nil and $1.2 million presented in income and mining tax expense (benefit) on the Condensed Consolidated
Statements of Operations for the three and six months ended June 30, 2016, respectively. Included a foreign exchange gain of $0.3 million and a
foreign exchange loss of $1.3 million presented in income and mining tax expense (benefit) on the Condensed Consolidated Statements of Operations
for the three and six months ended June 30, 2015, respectively.
Non-GAAP Reconciliation
27
Non-GAAP Reconciliation
Copper-Gold Operations Non-GAAP Cash Cost
(US$ in millions)
(1) Mining, milling and on-site general and administration costs. Mining includes all stripping costs but excludes costs capitalized related to the construction of
the tailings dam. Stripping costs that provide access to mineral reserves that will be produced in future periods are expensed as incurred under US GAAP.
(2) Silver sales are reflected as a credit to operating costs.
Three Months Ended Six Months Ended
Reconciliation to amounts reported below (US$ in millions) Jun 30 2016 Jun 30 2015 Jun 30 2016 Jun 30 2015
Copper-Gold segment US GAAP operating expenses $ 61.9 $ 49.6 $ 97.9 $ 83.4
Adjustments:
Direct costs $ 8.6 $ 8.4 $ 15.0 $ 14.9
Changes in inventory (11.8 ) (1.8 ) (0.3 ) 5.2
Silver by-product credits (2) 1.7 1.2 2.7 2.4
Non cash costs and other 0.4 (0.2 ) 0.2 (0.4 )
Non-GAAP cash costs $ 60.8 $ 57.2 $ 115.5 $ 105.5
Three Months Ended Six Months Ended
Non-GAAP cash costs (US$ in millions) Jun 30 2016 Jun 30 2015 Jun 30 2016 Jun 30 2015
Direct mining costs (1) $ 48.1 $ 45.0 $ 92.9 $ 82.4
Truck and rail transportation and warehousing costs 4.1 3.8 7.6 8.2
Costs reflected in inventory and operations costs $ 52.2 $ 48.8 $ 100.5 $ 90.6
Refining and treatment costs 6.4 6.6 11.0 11.1
Ocean freight and insurance costs 2.2 1.8 4.0 3.8
Direct costs reflected in revenue and selling and marketing costs $ 8.6 $ 8.4 $ 15.0 $ 14.9
Non-GAAP cash costs $ 60.8 $ 57.2 $ 115.5 $ 105.5
28
By-Product
(US$ in millions, except pounds and per pound amounts)
Non-GAAP Reconciliation Copper-Gold
Operations By-Product Unit Cost Per Pound Produced
Three Months Ended Six Months Ended
June 30,
2016
June 30,
2015
June 30,
2016
June 30,
2015
Copper payable production (000's lbs) 14,687
20,159
33,749
35,564
Non-GAAP cash cost $ 60.8
$ 57.2
$ 115.5
$ 105.5
Less by-product credits
Gold sales (1) 64.9
$ 56.5
110.4
$ 92.7
Gold sales related to deferred portion of Gold Stream Arrangement (2) (11.4 ) (10.0 ) (18.0 ) (16.4 )
Net gold by-product credits $ 53.5
$ 46.5
$ 92.4
$ 76.3
Silver by-product credits (3) 1.7
1.3
2.7
2.5
Total by-product credits $ 55.2
$ 47.8
$ 95.1
$ 78.8
Non-GAAP cash cost net of by-product credits $ 5.6
$ 9.4
$ 20.4
$ 26.7
Non-GAAP cash cost per pound, on a by-product basis $ 0.37
$ 0.48
$ 0.60
$ 0.75
(1) Excluded refining and treatment charges.
(2) The three and six months ended June 30, 2016 included a $1.5 million reduction related to five provisional invoices from 2015. The decrease resulted from
a downward revision to the rate at which the deferred revenue liability resulting from the Gold Stream Arrangement was amortized. This rate is calculated
based on the remaining deferred revenue liability and total ounces of refined gold owed to Royal Gold.
(3) Silver sales are reflected as a credit to operating costs.
29
Co- Product
(US$ in millions, except pounds, ounces and per unit amounts)
Non-GAAP Reconciliation
Copper-Gold Operations Co-Product Costs
Three Months Ended Six Months Ended
June 30,
2016
June 30,
2015
June 30,
2016
June 30,
2015
Copper payable production (000’s lbs) 14,687
20,159
33,749
35,564
Gold payable production in Cu eq. (000’s lbs) (1) 17,880
17,317
37,818
31,399
Payable production (000’s lbs) 32,567
37,476
71,567
66,963
Non-GAAP cash cost allocated to Copper 27.0
$ 30.8
53.8
$ 56.0
Non-GAAP cash cost per pound, on a co-product basis 1.84
$ 1.55
1.59
$ 1.59
Non-GAAP cash cost allocated to Gold $ 33.8
$ 26.4
$ 61.7
$ 49.5
Gold payable production (ounces) 46,383
59,917
99,712
106,036
Non-GAAP cash cost per ounce, on a co-product basis $ 728
$ 434
$ 618
$ 462
(1) Gold has been converted from payable ounces to thousands of copper equivalent pounds by using the gold production for the periods presented,
using a gold price of $824 and $795 per ounce for the three months ended June 30, 2016 and June 30, 2015, respectively, (adjusted for the Royal
Gold price of $435 per ounce) and a copper price of $2.14 and $2.75 per pound for the three months ended June 30, 2016 and June 30, 2015,
respectively.
30
Non-GAAP Reconciliation
Copper-Gold Operations Average Realized Sales Prices
(US$ in millions, except pounds, ounces and per unit amounts)
Three Months Ended Six Months Ended
Average Realized Sale Price for Copper June 30, 2016 June 30, 2015 June 30, 2016 June 30, 2015
Copper sales reconciliation ($)
Copper sales, excluding adjustments $ 43.9 $ 58.4 $ 76.0 $ 96.7
Final pricing adjustments 0.5 1.6 (1.9 ) (5.7 )
Mark-to-market adjustments (0.7 ) (4.3 ) 2.1 1.2
Copper sales, net of adjustments 43.7 55.7 76.2 92.2
Less Refining and treatment costs 6.1 6.4 10.5 10.7
Copper sales $ 37.6 $ 49.3 $ 65.7 $ 81.5
Pounds of Copper sold (000's lb) 20,309 21,195 35,271 35,986
Average realized sales price for Copper on a per pound basis
Copper sales excluding adjustments $ 2.16 $ 2.76 $ 2.15 $ 2.69
Final pricing adjustments 0.02 0.08 $ (0.05 ) $ (0.16 )
Mark-to-market adjustments (0.03 ) (0.21 ) $ 0.06 $ 0.03
Average realized Copper sales price per pound sold $ 2.15 $ 2.63 $ 2.16 $ 2.56
Average Realized Sales Price
31
Non-GAAP Reconciliation (continued)
Copper-Gold Operations Average Realized Sales Prices
(US$ in millions, except pounds, ounces and per unit amounts)
(1) The six months ended June 30, 2016 reflect a $1.5 million reduction related to five provisional invoices from 2015. The decrease resulted from a downward
revision of $27/oz. to the rate at which the deferred revenue liability resulting from the Gold Stream Arrangement was amortized. This rate is calculated based
on the remaining deferred revenue liability and total ounces of refined gold owed to Royal Gold.
Three Months Ended June 30, Six Months Ended June 30,
Average Realized Sales Price for Gold 2016 2015 2016 2015
Gold sales reconciliation ($)
Gold sales related to cash portion of Gold Stream Arrangement $ 14.1 $ 13.1 $ 24.1 $ 21.4
Gold sales related to deferred portion of Gold Stream Arrangement(1) 11.4 10.0 18.0 16.4
Gold sales under Gold Stream Arrangement 25.5 23.1 42.1 37.8
TCM share of gold sales to MTM Customers 38.1
34.0
64.3
55.2
Final pricing adjustments 0.8 (1.1 ) 1.4 (0.4 )
Mark-to-market adjustments 0.5 0.4 2.6 —
Gold sales TCM Share 39.4 33.3 68.3 54.8
Gold sales, net of adjustments 64.9
56.4
110.4
92.6
Less Refining and treatment costs 0.3 0.1 0.5 0.3
Gold sales 64.6 56.3 109.9 92.3
Ounces of gold sold to Royal Gold 32,294
30,070
55,373
49,224
TCM share of ounces of gold sold to MTM customers 30,020 27,850 51,332 45,446
Total ounces of Gold sold 62,314 57,920 106,705 94,670
Average realized sales price for Gold on a per ounce basis
Gold sales related to cash portion of Gold Stream Arrangement $ 435 $ 435 $ 435 $ 435
Gold sales related to deferred portion of Gold Stream Arrangement 351 334 324 334
Average realized sales price per ounce sold to Royal Gold $ 786 $ 769 $ 759 $ 769
TCM share of gold sales to MTM Customers $ 1,269
$ 1,221
1,253
1,215
Final pricing adjustments 27 (39 ) 27 (10 )
Mark-to-market adjustments 19 15 52 —
Average realized sales price per ounce sold for TCM share $ 1,315 $ 1,197 $ 1,332 $ 1,205
Average realized sales price per ounce sold $ 1,041
$ 975
$ 1,035
$ 979