Unformatted text preview: . During 2011, the above mentioned gold
hedges reduced the average price realized by $66 per ounce. The Company had entered into offsetting gold
purchase contracts in 2010 and in early 2011 to neutralize the impact of all remaining gold forward sales
contracts, resulting in gold production being 100% exposed to the spot gold price subsequent to the dates
these purchase contracts were entered into. During the third quarter of 2011, the Company closed out and
early settled all outstanding gold forward sales and purchase contracts. Mark-to-market losses on those gold
forward sales contracts incurred up to the dates the offsetting purchase contracts were entered into
affected metal sales (and the average realized gold price) up to June 30, 2012. Metal sales during the second
half of 2012 were not affected by such losses.
Production cost of sales from continuing operations increased by 20% to $1,850.8 million in 2012 compared
with $1,546.1 million during 2011, largely due to an increase in the processing of lower grade ore and higher
input costs such as labour, energy and consumables.
During 2012, depreciation, depletion and amortization from continuing operations increased by 21%
compared with 2011, primarily due to an increase in gold equivalent ounces sold at Chirano, lower mineral
reserves at Chirano as at December 31, 2011, and an increase in the depreciable asset base at Paracatu,
offset largely by lower gold equivalent ounces sold at Kupol.
Upon completion of its annual assessment of the carrying value of its cash generating units (“CGU”), the
Company recorded after-tax impairment charges aggregating $3,206.1 million, comprised of $3,094.8 million
for Tasiast and $111.3 million for Chirano. The impairment charge at Tasiast included a charge of $2,130.3
million related to goodwill and a charge of $964.5 million related to property, plant and equipment, net of a
tax recovery of $321.5 million. The impairment test for Tasiast was based on a 30,000 tonne per day
optimized mill model, compared with the 60,000 tonne per day model used for the 2011 annual impairmen...
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- Spring '14