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Tahoe Reports Q3 2018 Results; On Track to Meet Full-Year Guidance

VANCOUVER, British Columbia--(BUSINESS WIRE)--

Expansion Projects Near Completion

Tahoe Resources Inc. (“Tahoe” or the “Company”) (TSX: THO, NYSE: TAHO) today announced financial and operating results for the third quarter ended September 30, 2018. The Company produced 91.2 thousand ounces of gold during the quarter at total cash costs and all-in sustaining costs ("AISC") of $807 and $1,263 per ounce, respectively.

Jim Voorhees, President and CEO of Tahoe: "The Company remains on track for its full year 2018 guidance near the low end of production and the high end of costs. During the third quarter, La Arena production was impacted by stacking at the highest levels of the leach pad which delayed gold production. In October, La Arena solution grades started improving and the mine achieved its second highest production month for the year, contributing to the expected production rebound in the fourth quarter. Construction at the Shahuindo Expansion and Bell Creek shaft projects continues to progress well. We received our 36,000 tpd operating permit for Shahuindo in mid-October and we expect to begin hoisting ore at the Bell Creek shaft in the coming weeks. By achieving these milestones, both projects remain on track for completion, positioning the business for an improved fourth quarter and execution of our 2019 growth plans."

Mr. Voorhees continued: “During the third quarter, we reported a loss of $(0.61) per share reflecting a $170 million non-cash impairment of our Escobal mine, the continued impact of the Escobal mine suspension and our ongoing care and maintenance costs. Excluding the impairment charge, we reported an adjusted loss of $(0.06) per share. On September 3rd we received the final resolution from the Constitutional Court on the Escobal mining license. Although the mining license remains suspended, the resolution provides a path forward to a restart of Escobal. We are encouraged that Stage 1 of the four-stage ILO 169 consultation process is well advanced. The relevant entities have agreed on the area of influence, which is the same as the original EIS boundary. The proposed boundary has been submitted to MARN for their approval, which is expected soon. Once finalized, Stage 2 of the consultation process can commence."

Key Financial and Operating Results

                       
$ millions unless otherwise indicated       Q3 2018       Q3 2017       Q3 YTD 2018       Q3 YTD 2017
Revenue $ 111.8 $ 155.2 $ 378.9 $ 615.8
Earnings (loss) and total comprehensive income (loss) $ (190.0 ) $ (8.4 ) $ (212.4 ) $ 99.8
Earnings (loss) per share $ (0.61 ) $ (0.03 ) $ (0.68 ) $ 0.32
Adjusted earnings (loss)(1) $ (19.4 ) $ (7.2 ) $ (41.7 ) $ 101.7
Adjusted earnings (loss) per share(1)       $ (0.06 )       $ (0.02 )       $ (0.13 )       $ 0.33
Cash provided by operating activities $ 18.0 $ 48.7 $ 58.4 $ 223.3
Cash provided by operating activities before changes in working capital(1)       $ 19.4         $ 37.0         $ 89.7         $ 269.3
Silver Production (moz)(3) 0.1 9.8
Gold production (koz) 91 109 285 340
Total cash cost per silver oz produced ($/oz)(1)(2) $ $ $ $ 6.15
AISC per silver oz produced ($/oz)(1)(2) $ $ $ $ 8.91
Total cash cost per gold oz produced ($/oz)(1)(2) $ 807 $ 747 $ 767 $ 639
AISC per gold oz produced ($/oz)(1)(2) $ 1,263 $ 1,088 $ 1,156 $ 954
Sustaining capital $ 29.7 $ 17.5 $ 52.2 $ 36.3
Project capital $ 37.0 $ 26.9 $ 125.2 $ 74.1
Exploration expense $ 4.5 $ 4.5 $ 11.7 $ 14.6
Corporate G&A $ 11.9 $ 11.7 $ 37.4 $ 34.7
Weighted average shares outstanding (basic, in millions)       313.77         313.15         313.41         312.67
      (1)       See “Cautionary Note on Non-GAAP Financial Measures” at the end of this news release.
(2) Total cash costs and AISC are presented net of by-product credits.
(3) No silver was produced from Escobal during Q3 2018 while the mine remained on care and maintenance.
 
Q3 2018 Summary & Highlights:

2018 performance expected to come in at the low end of production and high end of cost guidance – Q3 2018 gold production totaled 91.2 thousand ounces at total cash costs and AISC of $807 and $1,263 per ounce, respectively. For the nine months ended September 30, 2018, production totaled 285 thousand ounces at total cash costs and AISC of $767 and $1,156 per ounce, respectively. Despite low Q3 production, the Company expects to meet the low end of its production guidance (400 to 475 thousand ounces of gold) and the high end of its total cash cost, AISC, and capital guidance for the full year 2018, with gold production weighted to the fourth quarter.

Shahuindo gold production on track to increase in Q4 2018 – Gold production at Shahuindo during the third quarter totaled 20.3 thousand ounces. Heap leach recoveries have met expectations and year-to-date gold ounces placed on pads have exceeded the model by approximately 30% when comparing actual blast hole results to the reserves model. Q3 production was limited to 16,000 tpd as the Company awaited the full 36,000 tpd operating permit. With receipt of the expansion permit on October 16th, fourth quarter mine production is ramping up to full capacity.

La Arena production impacted by ore timing; expected to improve in Q4 – La Arena produced 33.3 thousand ounces during Q3. Low gold production resulted from the timing of ore placement and longer solution migration times due to stacking at the highest levels of the leach pad. New leach pad construction is expected to be completed in the fourth quarter. In October, solution gold grades increased by more than 30% and it was the second highest production month at La Arena this year, supporting the improved production expected in the fourth quarter.

Bell Creek Mill achieved record quarterly throughput of 4,287 tpd – Mill operations averaged a record 4,287 tpd in Q3 2018 as part of the Company's efforts to optimize the Timmins operations. Once the Bell Creek shaft project is complete and the mine ramps up by year-end, management expects the mill to achieve sustainable throughput exceeding 4,400 tpd with minimal additional capital expenditure. This is expected to lead to improved Q4 gold production.

Positive cash flow of $18.0 million – Cash flow provided by operating activities was $18.0 million and cash flow provided by operating activities before changes in working capital totaled $19.4 million for the quarter, despite the ongoing suspension of mining at Escobal.

Net liquidity position of $48.4 million – Tahoe ended the quarter with $48.4 million in cash and cash equivalents. During the quarter, the Company drew an additional $25.0 million on its revolving credit facility, for total outstanding debt of $100 million. The Company has a remaining available undrawn balance of $75.0 million plus a $25.0 million accordion on its credit facility. The Company has taken advantage of opportunities to accelerate certain capital spend into 2018 and as a result, the Company now expects to draw an additional $25.0 million on its credit facility before the end of year.

Shahuindo Expansion on track for 36,000 tpd ramp-up by year-end – Construction of the 24,000 tpd crushing and agglomeration (C&A) circuit has advanced, and mechanical completion of the full 36,000 tpd plant is expected in Q4 2018. Expansion of the adsorption, desorption and refining (ADR) process plant was completed in Q3. The electrical substation and transmission line for the project is substantially complete, with the transmission lines expected to be energized in the fourth quarter.

The Shahuindo Expansion project remains on time and on budget. The Shahuindo Expansion includes the 36,000 tpd C&A circuit (with estimated capital guidance of $80 million) as well as the expansion of the ADR plant to 36,000 tpd, the installation of a 220kV transmission line and substation, leach pad 2B and other associated secondary projects such as the water treatment facilities. Total estimated costs for the Shahuindo Expansion (including the $80 million C&A circuit) is $170 to $180 million, of which $142.2 million has been spent through September 30, 2018 ($21.4 million in Q3 2018), excluding capitalized interest, with an additional $9.2 million committed. Approximately $30 to $35 million of the total Shahuindo Expansion guidance is expected to be spent for the secondary projects in 2019.

Bell Creek shaft project progressing towards completion in early Q4 2018 – The Bell Creek shaft project continues to progress well. All shaft excavation is now complete, the headframe has been installed, commissioning of the two hoists has begun, and the final electrical work is being completed on the surface plant. The Company now estimates the shaft project will be completed within 10% of the original $80 million guidance with the majority of the increase over guidance driven by hoist electrical installation and certain indirect costs through the end of the year. Approximately $82.5 million has been spent through September 30, 2018 ($11.1 million spent in Q3 2018), excluding capitalized interest. The Company has committed $5 million, which is substantially all of the remaining costs for the project.

Escobal impairment test triggered by final Constitutional Court resolution – The September 3rd Constitutional Court resolution that ordered the continued suspension of the Escobal mine until completion of the ILO 169 consultation triggered an impairment test resulting in a non-cash impairment of $170 million. The impairment was primarily driven by the extended suspension of Escobal operations, a decrease in the long-term silver price assumption, and an increase in the discount rate. Given the lack of certainty on an Escobal restart date, a sensitivity analysis was run with restart dates ranging from 6 to 18 months, with a final restart date of December 31, 2019 used in the analysis. The impairment negatively impacted earnings by $170 million or $0.54 per share, for a total quarterly loss of $(190.0) million or $(0.61) per share. Should the Escobal restart occur prior to December 31, 2019, or if there is significant change in other key assumptions used in the analysis, the impairment would be reevaluated for potential reversal.

Adjusted earnings adversely impacted by the Escobal mine suspension – Adjusted loss of $19.4 million ($0.06 per share) for the quarter was negatively impacted by the ongoing suspension of mining activities at the Escobal mine, which included care and maintenance costs of $6.6 million ($0.02 per share). Going forward, care and maintenance costs for Escobal are expected to decrease to approximately $1.5 million per month, or less than $5.0 million per quarter.

Guatemala Update:

Update on Escobal Mining License – On September 3, 2018, the Constitutional Court issued its ruling which ordered the continued suspension of the Escobal mining license while MEM conducts an ILO 169 consultation with the Xinka communities residing in the area of influence of the Escobal mine. Five parties requested clarification from the Constitutional Court regarding its September 3rd resolution. In response to the clarification requests, on October 8, 2018, the Constitutional Court issued a final resolution. The final resolution outlines a four-stage consultation process: (1) review, (2) pre-consultation, (3) consultation and (4) Supreme Court verification. The Supreme Court's verification is subject to a limited appeal to the Constitutional Court by the parties to the original amparo. In addition to the ILO 169 consultation process led by MEM, the Constitutional Court also established other requirements that must be completed as a condition for the Company to restart operations at Escobal, including studies related to archaeology, health, and environmental compliance which are intended to confirm that the mine is meeting regulatory and national standards.

Timeline for Completion of ILO 169 Consultation – The Constitutional Court's final resolution does not define a timeline for completion of the entire ILO 169 consultation process and the Company cannot predict when the consultation will be completed. For purposes of the Q3 Escobal impairment test, the company ran various scenarios with restart dates ranging from 6 to 18 months, based on its understanding of the process so far, and selected a final restart date of December 31, 2019 for the analysis. There can be no certainty that the restart date will occur on December 31, 2019.

As of November 6, 2018, Stage 1 of the four-stage ILO 169 consultation process was well advanced. MSR, the original EIS consultant and the two Guatemalan universities have agreed on the area of influence, which is the same as the original EIS boundary. The proposed area of influence has been submitted to MARN for their approval. Once finalized by MARN, MEM can formally commence Stage 2 of the consultation process.

Update on Guatemala Roadblock – Since June 7, 2017, a group of protesters near the town of Casillas continues to block the primary highway that connects Guatemala City to San Rafael Las Flores and the Escobal mine. The roadblock has at times limited the transport of necessary supplies and fuel for the purpose of mine maintenance, although the Company has maintained sufficient supplies to ensure compliance with environmental mitigation measures.

For more information on Escobal, the ILO 169 consultation, or the roadblock, please refer to press releases dated October 10, 2018, September 7, 2018, and the Q3 2018 MD&A available on the Company’s website.

Conference Call

Tahoe’s senior management will host a conference call and webcast to discuss the Q3 2018 results on Wednesday, November 7, 2018 at 10:00 a.m. ET (7:00 a.m. PT). To join the call, please dial:

1-800-319-4610 (toll free from Canada and the U.S.)

+1-604-638-5340 (from outside Canada and the U.S.)

The webcast will be available on the Company’s website at http://www.tahoeresources.com/investor-relations/, as will a recording of the call later in the day. Complete financial results for Q3 2018 including the Company’s Management Discussion & Analysis and other filings will be posted on SEDAR (www.sedar.com) and EDGAR (www.sec.gov) and on the Company’s website.

About Tahoe Resources Inc.

Tahoe Resources is a mid-tier precious metals company with a diverse portfolio of mines and projects in Canada, Guatemala and Peru. Tahoe is led by experienced mining professionals dedicated to creating sustainable value for all of its stakeholders through responsible mining. The company is listed on the TSX (“THO”) and NYSE (“TAHO”) and is a member of the S&P/TSX Composite, the TSX Global Mining indices and the Russell 2000 on the NYSE.

Qualified Person Statement

Technical information in this news release has been approved by Thomas F. Fudge, Vice President Operations, Tahoe Resources Inc., a Qualified Person as defined by NI 43-101.

SELECTED OPERATIONAL RESULTS

Selected quarterly segmented operational information from continuing operations for Q3 2018 and Q3 2017 was as follows:

        Q3 2018/Q3 2017
        Escobal       La Arena       Shahuindo       Timmins
mines
      Total
Revenues ($ 000's)       $       $ 34,656       $ 33,854       $ 43,278       $ 111,788
$ 6,831 $ 68,134 $ 25,760 $ 54,476 $ 155,201
Silver produced (000’s ozs) 7 22 4 33
0 10 27 5 42
Gold produced (000’s ozs) 33 20 38 91
48 19 42 109
Silver sold (000’s ozs) 5 23 4 32
455 9 20 5 489
Gold sold (000's ozs) 29 28 36 92
0 54 20 43 116
Average realized price (per oz)
Silver $ $ $ $ $
$ 18.12 $ $ $ $ 18.12
Gold $ $ 1,195 $ 1,210 $ 1,213 $ 1,206
$ 977 $ 1,257 $ 1,271 $ 1,275 $ 1,226
Costs per ounce produced(1)
Total cash costs net of by-product credits silver $ $ $ $ $
$ $ $ $ $
Total cash costs net of by-product credits gold $ $ 764 $ 883 $ 803 $ 807
$ $ 794 $ 774 $ 681 $ 747
All-in sustaining costs net of by-product credits silver $ $ $ $ $
$ $ $ $ $
All-in sustaining costs net of by-product credits gold $ $ 1,182 $ 1,359 $ 1,283 $ 1,263
$ $ 1,038 $ 1,328 $ 1,034 $ 1,088
Capital Expenditures
Sustaining Capital ($ 000's) $ $ 10,029 $ 6,146 $ 13,516 $ 29,691
$ 1,685 $ 7,687 $ 7,622 $ 9,824 $ 17,455
Non-Sustaining Capital ($ 000's) $ $ $ 22,492 $ 14,513 $ 37,005
        $         $         $ 11,692         $ 15,223         $ 26,915
      (1)       Non-GAAP financial measures are described in the “Cautionary Note on Non-GAAP Financial Measures” section of this news release.
(2) Numbers may not calculate due to rounding.
 

Selected quarterly segmented operational information from continuing operations for Q3 YTD 2018 and Q3 YTD 2017 was as follows:

        Q3 YTD 2018/Q3 YTD 2017
        Escobal       La Arena       Shahuindo       Timmins
mines
      Total
Revenues       $ (7 )       $ 147,363       $ 87,128       $ 144,378       $ 378,862
$ 193,354 $ 183,909 $ 71,010 $ 167,550 $ 615,823
Silver produced (000’s ozs) 18 71 14 103
9,692 25 92 16 9,825
Gold produced (000’s ozs) 112 63 110 285
4 148 60 127 340
Silver sold (000’s ozs) 21 71 14 106
10,229 22 78 16 10,345
Gold sold (000's ozs) 115 67 113 295
3 148 56 135 342
Average realized price (per oz)
Silver $ $ $ $ $
$ 17.71 $ $ $ $ 17.71
Gold $ $ 1,281 $ 1,275 $ 1,282 $ 1,280
$ 1,294 $ 1,233 $ 1,246 $ 1,243 $ 1,239
Costs per ounce produced(1)
Total cash costs net of by-product credits silver $ $ $ $ $
$ 6.15 $ $ $ $ 6.15
Total cash costs net of by-product credits gold $ $ 764 $ 883 $ 803 $ 807
$ $ 624 $ 647 $ 653 $ 639
All-in sustaining costs net of by-product credits silver $ $ $ $ $
$ 8.91 $ $ $ $ 8.91
All-in sustaining costs net of by-product credits gold $ $ 1,182 $ 1,359 $ 1,283 $ 1,263
$ $ 831 $ 1,066 $ 1,046 $ 954
Capital Expenditures
Sustaining Capital ($ 000's) $ 1,559 $ 24,916 $ 16,791 $ 35,407 $ 52,224
$ 22,729 $ 20,005 $ 14,834 $ 36,260 $ 36,318
Non-Sustaining Capital ($ 000's) $ $ $ 78,221 $ 47,002 $ 125,223
        $         $         $ 29,511         $ 44,554         $ 74,065
      (1)       Non-GAAP financial measures are described in the “Cautionary Note on Non-GAAP Financial Measures” section of this news release.
(2) Numbers may not calculate due to rounding.
 

CAUTIONARY NOTE ON NON-GAAP FINANCIAL MEASURES

The Company has included certain non-GAAP financial measures throughout this document which include total cash costs, all-in sustaining costs per silver and per gold ounce (“all-in sustaining costs”), adjusted earnings, adjusted earnings per share, and cash provided by operating activities before changes in working capital. These measures are not defined under IFRS and should not be considered in isolation. The Company’s La Arena, Shahuindo and Timmins mines primarily produce gold with other metals (primarily silver), produced simultaneously in the mining process, the value of which represents a small percentage of the Company’s revenue from these mines and is therefore considered “by-product”. The Company’s Escobal mine primarily produces silver in concentrates with other metals (gold, lead and zinc), produced simultaneously in the mining process, the value of which represents a small percentage of the Company’s revenue from the Escobal mine and is therefore considered “by-product”. The Company believes these measures may provide investors and analysts with useful information about the Company’s underlying earnings, cash costs of operations, the impact of by-product credits on the Company’s cost structure and its ability to generate cash flow, as well as providing a meaningful comparison to other mining companies. Accordingly, these measures are intended to provide additional information and should not be substituted for GAAP measures. These non-GAAP financial measures may be calculated differently by other companies depending on the underlying accounting principles and policies applied.

The Company also reports total operating costs (cost of sales) per ounce. The Company believes that this metric is important in assessing the performance of each of the Company’s sold metals and as a meaningful GAAP-based comparison to other mining companies. Total operating costs (cost of sales) per ounce sold is calculated by dividing the total operating costs by gold ounces sold. Total operating costs (cost of sales) includes production costs, depreciation and depletion and royalties. The reconciliation of total operating costs (cost of sales) to total cash costs is included in the total cash cost and total production cost tables below.

Consolidated adjusted earnings and consolidated adjusted earnings per share

The Company has adopted the reporting of consolidated adjusted earnings (“adjusted earnings”) and consolidated adjusted earnings per share (“adjusted earnings per share”) as non-GAAP measures of a precious metals mining company’s operating performance. These measures have no standardized meaning and the Company’s presentation of adjusted measures are not meant to be substituted for GAAP measures of consolidated earnings or consolidated earnings per share and should be read in conjunction with such GAAP measures. Adjusted earnings and adjusted earnings per share are calculated as earnings excluding i) non-cash impairment losses and reversals on mineral interests and other assets, ii) unrealized foreign exchange gains or losses related to the revaluation of deferred income tax assets and liabilities on non-monetary items, iii) unrealized foreign exchange gains or losses related to other items, iv) unrealized gains or losses on derivatives other than provisionally priced trade receivables, v) gains or losses on sale of assets and the related tax impact of these adjustments calculated at the statutory effective rate for the same jurisdiction as the adjustment. Adjustments from unusual events or circumstances are reviewed periodically based on materiality and the nature of the event or circumstance.

The Company calculates adjusted earnings and adjusted earnings per share on a consolidated basis.

                                 
$ thousands unless otherwise indicated       Q3 2018       Q3 2017       Q3 YTD 2018       Q3 YTD 2017
Earnings (loss)       $ (190,000 )       $ (8,380 )       $ (212,415 )       $ 117,561
Impairment, net of tax 170,000 170,000
Unrealized foreign exchange loss (gain) 585 1,155 685 1,823
Adjusted earnings (loss) $ (19,415 ) $ (7,225 ) $ (41,730 ) $ 101,689
 
Weighted average common shares outstanding
Basic (000’s) 313,767 313,152 313,412 312,673
Diluted (000’s) 313,767 313,152 313,412 312,722
Adjusted earnings (loss) per share
Basic $ (0.06 ) $ (0.02 ) $ (0.13 ) $ 0.33
Diluted       $ (0.06 )       $ (0.02 )       $ (0.13 )       $ 0.33
 

Total cash costs before and net of by-product credits

The Company reports total cash costs on a silver ounce and a gold ounce produced basis for the Escobal mine and the La Arena, Shahuindo and Timmins mines, respectively. The Company follows the recommendation of the cost standard as endorsed by the Silver Institute ("The Institute”) for the reporting of total cash costs (silver) and the generally accepted standard of reporting total cash costs (gold) by precious metal mining companies. The Institute is a nonprofit international association with membership from across the silver industry and serves as the industry’s voice in increasing public understanding of the many uses and values of silver. This remains the generally accepted standard for reporting cash costs of silver production by silver mining companies. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in performing year over year comparisons. However, these non-GAAP measures should be considered together with other data prepared in accordance with IFRS, and these measures, taken alone, are not necessarily indicative of operating costs or cash flow measures prepared in accordance with IFRS. Total cash costs are divided by the number of silver ounces contained in concentrate or gold ounces recovered from the leach pads to calculate per ounce figures. When deriving the total cash costs associated with an ounce of silver or gold, the Company deducts by-product credits from sales which are incidental to producing silver and gold.

Total cash costs per ounce of produced silver net of by-product credits incorporate all production costs, including adjustments to inventory carrying values, adjusted for changes in estimates in reclamation which are non-cash in nature, and include by-product gold, lead and zinc credits, and treatment and refining charges included within revenue.

In addition to conventional measures, the Company assesses this per ounce measure in a manner that isolates the impacts of silver production volumes, the by-product credits, and operating costs fluctuations such that the non-controllable and controllable variability is independently addressed. The Company uses total cash costs per ounce of produced silver net of by-product credits to monitor its operating performance internally, including operating cash costs, as well as in its assessment of potential development projects and acquisition targets. The Company believes this measure provides investors and analysts with useful information about the Company’s underlying cash costs of operations and the impact of by-product credits on the Company’s cost structure and is a relevant metric used to understand the Company’s operating profitability and ability to generate cash flow. When deriving the production costs associated with an ounce of silver, the Company includes by-product credits as the Company considers that the cost to produce the silver is reduced as a result of the by-product sales incidental to the silver production process, thereby allowing the Company’s management and other stakeholders to assess the net costs of silver production.

Total cash costs (silver)

Total cash costs per ounce of produced silver, net of by-product credits

                                 
$ thousands unless otherwise indicated       Q3 2018       Q3 2017       Q3 YTD 2018       Q3 YTD 2017
Total operating costs (cost of sales)(1)       $       $ 21,970       $       $ 117,825
Depreciation and depletion (2,794 ) (31,847 )
Change in product inventory 6,329
Treatment and refining charges                               16,205  
Total cash costs before by-product credits $ $ $ $ 89,336
By-product credits(2)                               (29,740 )
Total cash costs net of by-product credits $ $ $ $ 59,596
Silver ounces sold in concentrate (000’s) 9,773
Silver ounces produced in concentrate (000’s) 9,692
Total operating costs (cost of sales) per ounce sold $ $ $ $ 9.81
Total cash costs per ounce produced before by-product credits       $         $         $         $ 9.22  
Total cash costs per ounce produced net of by-product credits       $         $         $         $ 6.15  
      (1)       Total operating costs (cost of sales) includes production costs, depreciation and depletion and royalties.
(2) Gold, lead and zinc by-product credits are calculated as follows:
                       
        Q3 2018       Q3 2017
        Quantity      

Unit Price

      Total
Credit
      Credit per
ounce
      Quantity       Unit Price      

Total
Credit

      Credit per
ounce
Gold Ounces                               0       $ 0       $ 0       $ 0.00
Lead Tonnes 0 $ 0 $ 0 $ 0.00
Zinc Tonnes                               0       $ 0       $ 0       $ 0.00
                                                                       
              Q3 YTD 2018       Q3 YTD 2017
        Quantity      

Unit Price

      Total
Credit
      Credit per
ounce
      Quantity       Unit Price      

Total
Credit

      Credit per
ounce
Gold Ounces                               3,554       $ 1,281       $ 4,555       $ 0.47
Lead Tonnes 4,085 $ 2,369 $ 9,679 $ 1.00
Zinc Tonnes                               5,568       $ 2,785       $ 15,508       $ 1.60
      (3)       Numbers in tables may not calculate due to rounding.
 
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Total cash costs (gold)

Total cash costs per ounce of produced gold, net of by-product credits

         
$ thousands unless otherwise indicated       Q3 2018
        La Arena       Shahuindo      

Timmins
mines

      Total
Total operating costs (cost of sales)(1)       $ 29,215       $ 31,180       $ 43,780       $ 104,175
Depreciation and depletion (11,244 ) (7,702 ) (15,242 ) (34,188 )
Change in product inventory 7,418 (5,286 ) 1,658 3,790
Smelting and refining charges       181         84         26         291  
Total cash costs before by-product credits 25,570 18,276 30,222 74,068
Silver credit(2)       (93 )       (334 )       (64 )       (491 )
Total cash costs net of by-product credits 25,477 17,942 30,158 73,577
Gold ounces sold (000’s) 28.9 27.7 35.7 92.3
Gold ounces produced (000’s) 33.3 20.3 37.6 91.2
Total operating costs (cost of sales) per ounce sold $ 1,011 $ 1,125 $ 1,226 $ 1,129
Total cash costs per ounce produced before by-product credits       $ 767         $ 900         $ 804         $ 812  
Total cash costs per ounce produced net of by-product credits(3)       $ 764         $ 883         $ 803