(metal contained in concentrate)
2020 Cash Cost Guidance3
Candelaria’s C1 cash costs are expected to reduce year-on-year to $1.35/lb4 copper in 2020, after by-product credits. By-product credits have been adjusted for the terms of the streaming agreement.
At Chapada, C1 cash costs are expected to approximate $0.85/lb copper after significant gold by-product credits. Effects of copper stream agreements are to be reflected in the realized copper revenue.
Eagle’s C1 cash costs in 2020 are expected to reduce year-on-year to $1.00/lb nickel after by-product credits as higher grades from Eagle East reduce per pound unit costs.
At Neves-Corvo, C1 cash costs for 2020 are expected to approximate $2.10/lb5 copper after zinc and lead by-product credits.
Zinkgruvan’s C1 cash costs are expected to approximate $0.60/lb zinc after copper and lead by-product credits.
2020 Capital Expenditure Guidance6
2020 Exploration Expenditure Guidance
Exploration expenditures are planned to be $35 million in 2020. Approximately $31 million will be spent supporting significant in-mine and near-mine targets at our operations ($15 million at Candelaria, $7 million at Zinkgruvan, $7 million at Chapada, and $2 million at Neves-Corvo). The remaining $10 million is planned to advance activities on exploration stage projects.
1 Production guidance is based on certain estimates and assumptions, including but not limited to: Mineral Resources and Mineral Reserves, geological formations, grade and continuity of deposits and metallurgical characteristics.
2 68% of Candelaria’s total gold and silver production are subject to a streaming agreement.
3 C1 cash costs are based on various assumptions and estimates, including, but not limited to: production volumes, as noted above, commodity prices (2020 - Cu: $2.25/lb, Zn: $0.85/lb, Ni: $5.00/lb, Pb: $0.75/lb, Au: $1,500/oz) foreign currency exchange rates (2020 - €/USD:1.10, USD/SEK:9.50, CLP/USD:850, SD/BRL:4.75) and operating costs. All figures in are in US$ unless otherwise noted.
4 68% of Candelaria’s total gold and silver production are subject to a streaming agreement and as such C1 cash costs are calculated based on receipt of $412/oz and $4.12/oz, respectively, on gold and silver sales in the year. No consideration has been made for the upfront payment received in the calculation of C1 cash costs.
5 Silver production at Zinkgruvan and Neves-Corvo are also subject to streaming agreements, and cash costs are calculated based on approximately $4.40/oz and $4.30/oz.
6 Forecast capital expenditures have been reported on a cash basis. Discrepancies may exist with other external reports which have been reported on an accrual basis.