Economic Performance

Our business generates a wide range of economic benefits for our stakeholders and broader society. We are proud of the benefits that we create for our employees through salaries and benefits, our investors and shareholders through financial returns, and our host governments and communities through taxes, royalties, and community investments.

We generate value for our stakeholders by delivering excellence in all that we do. We place a particular emphasis on Operational Excellence to maximize value at our operating mines. We take a disciplined approach to acquiring new mines and we have a successful track record in this area with the acquisition of the Marigold mine and the Seabee Gold Operation in 2014 and 2016, respectively.

We pride ourselves on delivering on our commitments to our investors and shareholders. In 2018, we met our consolidated annual production and cost guidance for the seventh consecutive year. We delivered a total of 345,000 ounces of gold equivalent production at cash costs of $736 per payable gold equivalent ounce sold.

Operationally, we had another highly successful year at the Marigold mine and the Seabee Gold Operation. At the Marigold mine, we produced 205,161 ounces of gold at cash costs of $723 per payable ounce of gold sold. Production levels at the Marigold mine were the second highest in the mine’s nearly 30-year history. The Seabee Gold Operation achieved its fifth consecutive annual production record by producing 95,602 ounces of gold at cash costs of $505 per payable ounce of gold sold.

The past year was one of transition for Puna Operations while we brought the Chinchillas project online. We achieved commercial production at the Chinchillas mine on December 1, 2018 and look forward to it generating significant economic value for our stakeholders going forward.

Based on the mid-points of our 2019 guidance, we expect to produce – on a total consolidated basis – 395,000 gold equivalent ounces at gold equivalent cash costs of $700 per payable gold equivalent ounce sold. If we meet our production guidance at the Marigold mine and the Seabee Gold Operation, each operation will set a new production record. We will continue to review our corporate and operational business plans to identify opportunities to generate even greater business value and economic benefits for our stakeholders.

Table 2. Economic Performance Metrics (Consolidated)3

Metric $000s
Direct economic value generated (DEVG)
Revenues $424,437
   
Direct economic value distributed (DEVD)
Operating costs4 $294,497
Employee wages and benefits5 $120,936
Payments to providers of capital6 $7,807
Payments to governments7 $28,885
Marigold $5,874
Seabee Gold Operation $2,318
Puna Operations $18,454
Corporate $2,238
Community investments8 $782

3 Values presented are in US dollars and presented on a cash paid basis for the period referenced.
4 All payments to third parties for expenditures to produce revenues or construct or procure capital items.
5 Gross amounts paid to or on behalf of employees for wages, benefits, pensions and other compensation.
6 Cash interest payments for loans and other borrowings.
7 Payments for income and mining taxes, fees and penalties paid to any governmental agency excluding payroll and related taxes included in employee wages and benefits.
8 Actual expenditures incurred for voluntary payment or contributions to communities.
NOTE: Cash costs per payable ounce of gold sold is a non-GAAP financial measure. Please see “Cautionary Note Regarding Non-GAAP Financial Measures” in this report.