87
CONSOLIDATED FINANCIAL STATEMENTS
DRIVING GROWTH FROM WITHIN
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
(All amounts in US$‘000’s unless otherwise stated)
The recoverable amounts of the Company’s cash generating units (“CGUs”), which include mineral properties, plant and
equipment are determined on an annual basis, or where facts and circumstances provide impairment indicators. The
recoverable amounts are based on each CGUs future after-tax cash flows expected to be derived from the Company’s
mineral properties and represent each CGUs FVLCTS. The after-tax cash flows are determined based on life-of-mine
(“LOM”) after-tax cash flow projections which incorporate management’s best estimates of future metal prices, production
based on current estimates of recoverable reserves and resources, exploration potential, future operating costs and
non-expansionary capital expenditures. Projected cash flow are discounted using a weighted average cost of capital.
Management’s estimate of the FVLCTS of its CGUs is classified as level 3 in the fair value hierarchy.
For December 31, 2014, the Company performed an annual review of the recoverable amounts of its CGU’s which resulted
in no impairment or reversal of previously recorded impairments.
For the year ended December 31, 2013, the Company performed an annual review of the recoverable amounts of its
CGUs and recognized a $20,400, net of tax ($30,000, before tax) impairment charge, on the carrying value of net assets
of $78,064, in respect to the Company’s investment in Caylloma, which was driven by a reduction in silver prices. The
impairment charge was allocated on a pro rata basis against the net book value of the mineral properties, plant and
equipment of $79,413.
For December 31, 2014 and 2013, the key assumptions used for fair value less cost to sell calculations were as follows:
December 31, 2014
Metal Price Assumptions
2015
2016
2017
2018
2019
2020-2021
Gold price $ per ounce
$ 1,248.00
$ 1,261.00
$ 1,263.00
$ 1,270.00
$ 1,270.00
$ 1,270.00
Silver price $ per ounce
$ 17.98
$ 18.27
$ 19.39
$ 19.60 $ 19.60
$ 19.60
Lead price $ per tonne
$ 2,206.00
$ 2,294.00
$ 2,320.00
$ 2,062.00
$ 2,062.00
$ 2,062.00
Zinc price $ per tonne
$ 2,374.00 $ 2,533.00
$ 2,599.00
$ 2,200.00
$ 2,200.00
$ 2,200.00
Weighted average cost of capital
7.20%
7.20%
7.20%
7.20%
7.20%
7.20%
December 31, 2013
Metal Price Assumptions
2014
2015
2016
2017
2018
2019-2026
Gold price $ per ounce
$ 1,361.50 $ 1,362.50 $ 1,392.50 $ 1,336.50 $ 1,336.50 $ 1,336.50
Silver price $ per ounce
$ 21.35 $ 22.66 $ 23.00 $ 22.40 $ 22.40 $ 22.40
Lead price $ per tonne
$ 2,212.49 $ 2,290.89 $ 2,340.63 $ 2,355.65 $ 2,373.00 $ 2,068.21
Zinc price $ per tonne
$ 2,028.25 $ 2,204.62 $ 2,385.50 $ 2,129.00 $ 2,149.00 $ 2,149.00
Weighted average cost of capital
7.42%
7.42%
7.42%
7.42%
7.42%
7.42%
Expected future cash flows to determine the FVLCTS in the impairment testing of non-current assets are inherently
uncertain and could materially change over time. The cash flows are significantly affected by a number of factors including
estimates of production levels, operating costs, and capital expenditures reflected in the Company’s life of mine plans,
as well as economic factors beyond management’s control, such as silver and gold prices, discount rates, and observable
net asset valuation multiples. Should management’s estimate of the future not reflect actual events, further impairments,
or reversals of impairments may be identified.
8. Trade and Other Payables
December 31,
December 31,
2014
2013
Trade accounts payable
$ 10,105
$
9,928
Payroll payable
8,005
4,216
Restricted share unit payable
1,386
625
Other payables
1,962
1,128
$ 21,458
$ 15,897
7. Mineral Properties, Plant and Equipment (Continued)
d) Impairment of Mineral Properties, Plant and Equipment (Continued)
