Continuing operations

South America region

Peru

Cerro Corona

		Year ended
		Dec 2018	Dec 2017
Gold produced	000’oz	149.9	159.0
Copper produced	tonnes	32,000	30,200
Total equivalent gold produced	000’eq oz	314.1	306.7
Total equivalent gold sold	000’eq oz	299.1	313.8
Yield – gold	g/t	0.73	0.76
– copper	per cent	0.50	0.46
– combined	eq g/t	1.47	1.40
AISC and AIC	US$/oz	282	203
AISC and AIC	US$/eq oz	699	673
Gold price*	US$/oz	1,271	1,255
Copper price*	US$/t	6,547	6,131

*	Average daily spot price for the period used to calculate total equivalent gold ounces produced.

Gold production decreased by 6 per cent from 159,000 ounces in 2017 to 149,900 ounces in 2018. Copper production increased by 6 per cent from 30,200 tonnes to 32,000 tonnes. Equivalent gold production increased by 2 per cent from 306,700 ounces to 314,100 ounces. The increase in equivalent gold production was due to the higher copper price ratio as well as higher copper production due to higher copper head grade. Gold head grade decreased by 2 per cent from 1.08 grams per tonne to 1.06 grams per tonne and copper head grade increased by 8 per cent from 0.52 per cent to 0.56 per cent

Gold recoveries decreased by 3 per cent from 70.4 per cent to 68.1 per cent with ore processed from the south zone of the pit with a higher clay content, typically with different metallurgical behaviour. Copper recoveries decreased by 1 per cent from 88.9 per cent to 88.0 per cent. Gold yield decreased by 4 per cent from 0.76 grams per tonne to 0.73 grams per tonne. Copper yield increased by 9 per cent from 0.46 per cent to 0.50 per cent.

In 2018, concentrate with a payable content of 141,041 ounces of gold was sold at an average price of US$1,254 per ounce and 30,742 tonnes of copper was sold at an average price of US$5,767 per tonne, net of treatment and refining charges. This compared with 164,715 ounces of gold that was sold at an average price of US$1,261 per ounce and 30,377 tonnes of copper that was sold at an average price of US$5,546 per tonne, net of treatment and refining charges in 2017. Total equivalent gold sales decreased by 5 per cent from 313,800 ounces in 2017 to 299,100 ounces in 2018 due to lower gold produced and higher concentrate stock on hand in December 2018.

Total tonnes mined increased by 38 per cent from 15.75 million tonnes in 2017 to 21.78 million tonnes in 2018 in line with the mining sequence and life extension plan. Ore mined decreased by 3 per cent from 7.09 million tonnes to 6.85 million tonnes. Waste tonnes mined increased by 72 per cent from 8.66 million tonnes to 14.93 million tonnes. The strip ratio increased from 1.22 to 2.18 as a result of the increased waste mined in 2018.

Ore processed decreased by 2 per cent from 6.80 million tonnes in 2017 to 6.64 million tonnes in 2018 mainly due to lower plant throughput (802 tonnes per hour in 2018 versus 815 tonnes per hour in 2017) and lower utilisation due to harder ore.

Cost of sales before amortisation and depreciation, increased marginally from US$154 million in 2017 to US$155 million in 2018. The higher cost was due to higher mining expenditure as a result of increased tonnes mined in 2018, partially offset by a US$6 million credit to costs of concentrate inventory in 2018 compared with a US$3 million charge to costs in 2017.

Capital expenditure decreased by 3 per cent from US$34 million to US$33 million due to lower expenditure on the tailings dam and waste storage facilities.

All-in sustaining costs and total all-in cost increased by 39 per cent from US$203 per ounce in 2017 to US$282 per ounce in 2018, mainly due to lower by-product credits, lower gold sold and higher cost of sales before amortisation and depreciation. All-in sustaining costs and total all-in costs per equivalent ounce increased by 4 per cent from US$673 per equivalent ounce to US$699 per equivalent ounce mainly due to the same reasons as above and lower equivalent ounces sold.

Guidance
The estimate for calendar 2019 is as follows:

For purposes of calculating equivalent ounces

Gold equivalents produced ~ 291,000 ounces
Gold only produced ~ 153,000 ounces
Copper tonnes produced ~ 27,684 tonnes
Capital expenditure ~ US$55 million
Copper price ~ US$2.70 per pound
Gold price ~ US$1,200 per ounce
All-in sustaining costs ~ US$802 per equivalent ounce
Total all-in cost ~ US$802 per equivalent ounce
All-in sustaining costs ~ US$566 per ounce
Total all-in cost ~ US$566 per ounce

The decrease in copper tonnes produced is due to lower copper head grades based on mining sequence.

The increase in capital expenditure is due to construction of the waste storage facilities (WSF) as part of the 2030 Lom expansion.