This document summarizes the results of PwC's annual survey of approximately 150 gold, silver, and copper mining companies. It finds that 2013 was a difficult year for metals prices, with gold, silver, and copper all declining significantly from record highs in 2011. Gold prices fell from nearly $1,700 per ounce to around $1,200, silver dropped 40% to below $19 per ounce, and copper declined from around $3.70 per pound to just above $3. Mining companies expect further volatility and uncertainty in metals prices in the short-term.

1. 8
interview:
Dundee
Corporation
16
interview:
Pan American
Silver
20
interview:
KGHM
24
interview:
Coeur Mining
Metals mired in
global uncertainty
Gold, silver and copper price report 2014
www.pwc.com/ca/mining

2. Annually, PwC surveys gold mining companies from
around the world. This year, we also include copper and
silver companies from a cross-section of approximately
150 senior, mid-tier and junior companies.
Contents
2
pwc’s point of view:
Metals struggle to find
footing in 2013
14
Silver has seen better days
4
A dim year for gold
16
6
Gold ETFs a “washout”
in 2013
18
8
interview:
Dundee Corporation
10
Mining’s New Frontier:
Digging deeper into
sustaining costs
ii
24
Pan American Silver
Coeur Mining
26
Oversupply concerns
weigh on copper
interview:
28
20
22
interview:
interview:
Q&A with KGHM
Coping with lower
commodity prices
Points of interest
Mining Excellence at PwC
Back Contacts
cover

3. Survey participants
Adriana Resources Inc.
Defiance Silver Corp.
Kincora Copper Ltd.
Ressources Appalaches Inc.
Africo Resources Ltd.
Delta Gold Corp.
Kinross Gold Corp.
Royal Nickel Corp.
Agnico Eagle Mines Ltd.
Detour Gold Corp.
Kiska Metals Corp.
Sandstorm Gold Ltd.
Aldridge Minerals Inc.
Dong Won Resource Group
Luna Gold Corp.
Santa Fe Metals Corp.
Alexco Resource Corp.
Dundee Precious Metals Inc.
Lundin Mining Corp.
SD Gold International
Almaden Minerals Ltd.
Eagle Hill Exploration Corp.
Lupaka Gold Corp.
Semafo Inc.
Americas Bullion Royalty Corp.
East Africa Metals Inc.
Magellan Minerals Ltd.
Sherritt International Corp.
Amerigo Resources Ltd.
Eco Oro Minerals Corp.
Marathon Gold Corp.
Silver Bear Resources Inc.
Amerix Precious Metals Corp.
Edgewater Exploration Ltd.
Marlin Gold Mining Ltd.
Silver Standard Resources Inc.
Apogee Silver Ltd.
Eldorado Gold Corp.
Masuparia Gold Corp.
Silver Wheaton Corp.
Augusta Resource Corp.
Elgin Mining Inc.
McEwen Mining Inc.
Silvermet Inc.
Banro Corp.
Exeter Resource Corp.
McLeod Williams Capital Corp. Stonegate Agricom Ltd.
Barrick Gold Corp.
Firesteel Resources Inc.
Midas Gold Corp.
Strait Minerals Inc.
Braeval Mining Corp.
First Majestic Silver Corp.
Minaurum Gold Inc.
Sulliden Gold Corp.
Brigus Gold Corp.
Fortuna Silver Mines Inc.
Minerx Inc.
SUN Gold
Brixton Metals Corp.
Fortune Minerals Ltd.
New Gold Inc.
Sunset Cove Mining Inc.
Cangold Ltd.
Franco-Nevada Corp.
Newmont Mining Corp.
Superior Copper Corp.
Capstone Mining Corp.
Frontline Gold Corp.
Northern Star Resources Ltd.
Tamaka Gold Corp.
Carlisle Goldfields Ltd.
Gibraltar Mines Ltd.
NovaCopper Inc.
Tankoos Yarmon Group
Caza Gold Corp.
Ginguro Exploration Inc.
NovaGold Resources Inc.
Tanzania Minerals Corp.
Centerra Gold Inc.
Goldcorp Inc.
Orca Gold Inc.
Taseko Mines Ltd.
China Gold International
Golden Arrow Resources Corp.
Orex Minerals Inc.
Teck Resources Ltd.
Clairmont Metals Corp.
Golden Star Resources Ltd.
Orsu Metals Corp.
Thane Minerals Inc.
Claude Resources Inc.
Goldgroup Mining Inc.
Orvana Minerals Corp.
Turquoise Hill Resources Ltd.
CMC Metals Ltd.
Goldrush Resources Ltd.
Oxygen Capital Corp.
TVI Pacific Inc.
Cobar Consolidated Resources Ltd. Graymont Corp.
Pan American Silver Corp.
U.S. Silver & Gold Inc.
Codelco
Great Panther Silver Ltd.
Pilot Gold Inc.
Unity Mining Ltd.
Coeur Mining Inc.
Helio Resource Corp.
PJX Resources Inc.
Vale Canada Ltd.
Colossus Minerals Inc.
Hudbay Minerals Inc.
Platinum Group Metals Ltd.
Victoria Gold Corp.
Compass Gold Corp.
Hunter Dickinson Inc.
PMI Gold Corp.
Votorantim Cement North America
Concordia Resource Corp.
IAMGOLD Corp.
PNG Gold Corp.
Wesdome Gold Mines Ltd.
Copper One Inc.
Impact Silver Corp.
Potash Corp.
Wildcat Exploration Ltd.
CopperZONE Resources Ltd.
International Tower Hill Mines Ltd. Quaterra Resources Inc.
Yamana Gold Inc.
Cream Minerals Ltd.
INV Metals Inc.
Red Eagle Mining Corp.
Yellowhead Mining Inc.
Creso Exploration Inc.
Karmin Exploration Inc.
Redzone Resources Ltd.
Yukon Zinc Corp.
Crocodile Gold Inc.
KGHM Polska Miedz SA
Regis Resources Ltd.
Zazu Metals Corp.
1

4. PwC’s POINT OF VIEW
Metals struggle to find footing in 2013
It’s been another tough year for mining
companies. Lower commodity prices put
more pressure on company profits and
squeezed shareholder returns across the
industry. That led many investors to put
their money elsewhere, creating what
we’re calling a confidence crisis across
the mining sector.
2

5. While the drop in prices for some metals
hasn’t been as severe as during the 200809 global recession, the fall from record
or near-record levels in 2011 has created
some setbacks. A drop in commodity
prices has led to lower revenues for mining
companies, causing most to cut back on
operations and spending. In some extreme
cases, companies have taken billions of
dollars worth of write downs to account for
the lower value of their assets compared to
only a couple years earlier.
Few commodities in the mining sector have
escaped the downturn caused by global
economic uncertainty and volatile markets.
Gold, silver and copper are among the
most closely watched metals. They’ve also
been some of the hardest hit in 2013.
Gold started the year trading just below
$1,700 (US)1 per ounce, but by the
summer fell to around $1,200. The
commodity, considered a currency and
a hedge against inflation, began losing
its lustre after the US Federal Reserve
signaled it would cut back its stimulus
program. That led to a stronger US dollar
and gold demand weakened, with fewer
investors turning to it as a safe haven.
As the year draws to a close, gold prices
are hovering around $1,300, down
considerably from a record above
$1,900 in 2011.
Silver is more of a multi-purpose metal,
acting as both a currency and an industrial
play for investors, given its use in a widerange of applications such as jewelry
and medical equipment. The price of
silver plummeted by about 40% in 2013,
starting the year around $32 per ounce
and falling below $19. In fact, it’s the worst
performing metal of 2013. Silver hit an
inflation-adjusted record of just under $50
in April 2011. Oversupply is partially to
blame for the drop in silver prices in 2013.
Its correlation with gold as a store of value
for some investors also contributed to its
price depreciation in recent months.
Copper is largely an industrial metal,
used in everything from plumbing to
automobiles and computers and its
demand often reflects the health of the
economy. Growing demand for copper
means there’s more manufacturing and
construction underway around the world,
which is good for the price of the red
metal. The reverse is also true when copper
demand falls. The price of copper has
fallen from about $3.70 per pound at the
start of the year to just above $3 by the end
of the year. That’s well below the metal’s
record of $4.60 in early 2011. Oversupply
is also to blame for copper’s price drop,
due largely to slowing global growth,
particularly in China, the world’s largest
consumer of the metal. China’s economic
growth is slowing to between 7% and 8%,
after years of double-digit gains.
To put things into perspective, China’s
economic growth is still considered strong.
That’s providing hope for mining companies
that continue to sell their commodities to
the world’s second-largest economy. The
gradual economic recovery in the US and
Europe should also help to increase demand
long-term for commodities.
While 2013 has been a tough year for
miners, the industry is positioning itself
for a time, hopefully in the not too-distant
future, when fundamentals will improve.
Still, luring investors back into the mining
space will require strict cost management
strategies and responsible investment in
production growth. Miners are already
heading in the right direction on both fronts.
We believe the long-term fundamentals
supporting metal prices remain strong and
will help to drive the industry’s turnaround
story. While gold, silver and copper may
not reach record levels in the near future,
we expect prices to increase, alongside a
stabilizing global economy.
After all, it’s called a mining cycle for
a reason.
John Gravelle
Global Mining Leader, PwC
“ This year’s sharp fall in the (gold) price has put the
industry under more pressure than it has known for
almost a decade and heightened investors’ interest in
miners’ true profitability. – Financial Times, September 16 2013.
”
1. All prices in the report are in US dollars
3

6. A dim year for gold
Gold has been the big mining story
of 2013. The metal, which surpassed
$1,900 per ounce in 2011, fell to
around $1,200 in 2013.
What gold prices are you applying to your
reserves in 2013? (individual responses)
<$1,000
9
4
$1,000 – $1,250
>$1,250
34 33

7. Where do you see the price of gold within the
next 12 months?
Increase Decrease
The price drop has reignited the bull-versusbear debate over bullion, with some calling
for an end to the high-price of gold, while
others call it a blip for a metal that will
continue to serve as a backstop currency for
central banks and investors alike.
Regardless of this age-old battle, gold miners
are preparing for another challenging year
ahead. Expectations for where the gold
price is headed are conservative, with the
exception of a few very bullish companies.
Among gold miners surveyed, 47% said they
expect the price to increase in the next 12
months, which is down from 88% with the
same hopes a year ago – reflecting lower
levels of confidence. Last year, none of the
respondents expected the price of gold to
drop. This year, 7% said they expect gold
to head lower in the next year, while 46%
expect the price to remain roughly the same.
When we did this survey a year ago, and
gold was trading near $1,800 per ounce,
most executives expected the metal’s
long-term price to trade at around $1,400.
There was a similar forecast when the
survey was conducted two years ago.
While the forecasts are more muted today
(see results below), given that the spot
price of gold has fallen to about $1,300,
the long-term forecasts show companies
continue to show belief in their long-term
pricing estimates with a price of $1,369
(down only 2% from last year).
When asked what gold price companies are
using to determine reserves, the average
among respondents was $1,251 per ounce,
with a range of between $900 and $1,500.
7%
For resources, the average was $1,284, with
a range of between $800 and $2,000.
The average price of gold for 2014 being
used for impairment testing among
respondents is an average of $1,309 an
ounce, according to the survey results, and
ranges from a low of $1,000 to a high of
$1,600. Those predictions increase over
time. For instance, the forecast for 2016 gold
prices is an average of $1,378 an ounce, with
estimates ranging from $1,000 to $1,900.
The fight between the bulls and bears
intensifies in the long-term, with the average
price predicted to be $1,369, and a range
between $1,000 and $2,000 for beyond
2016.
Today, most companies are focused on
near-term pricing data to estimate their
reserves. According to our survey, reserve
prices are based on a number of factors
including internal estimates, historical
average prices, forward curve, spot and
consensus pricing as the three-year trailing
average price become less relevant in a
declining price environment.
When it comes to long-term pricing,
33% of respondents said they relied on
management’s internal estimates and
consensus, while 14% looked at the forward
curve, 13% considered historical averages
and 9% the spot price.
Stay the same
47%
46%
The numbers were roughly the same in
determining resource prices among gold
producers.
The survey shows 39% of gold producers
believe their costs will be similar in the
next 12 months as they were in 2013 and
28% expect them to fall. Only 12% expect
costs to increase.
As for the factors driving cost adjustments,
about half of gold miners surveyed (49%)
cited mine sequencing and grade mix as a
main factor, followed by wage costs (29%),
input commodity prices (22%), and a mix
of either lower-or-higher-cost mines in the
production mix (8%).
For reserve pricing determinations, 65%
turned to management’s internal estimates,
39% looked at consensus, 23% historical
averages, 15% spot price and 9% the
forward curve.
% change between 52 week high and
52 week low — Gold Companies
S&P Capital IQ Gold Concensus
2009 2010 2011 2012 Oct 31, 2013
2,000
Seniors
44% 33% 39% 38%
53%
Mid-Tiers 76% 54% 56% 55%
What is the long term price of gold?
67%
$2,500
2,000
1,500
1,000
1,500
1,000
500
0
2014
Low
2015
2016
Average
Long-term
High
500
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Low
Median
High
5

8. Gold ETFs a “washout” in 2013
Nothing demonstrates investors’ recent
exit from gold as clearly as the sell-off in
exchange-traded funds (ETFs).
Gold ETFs holdings (millions of ounces)
Silver ETFs holdings (millions of ounces)
100
800
700
80
600
60
500
40
20
6
400
2009
2010
2011
202
2013
300
2009
2010
2011
202
2013

9. According to the World Gold Council, gold
demand to the end of the third quarter
of 2013 was down 12% compared to the
same period a year earlier, driven almost
entirely by outflows from ETFs.
“Tactical investors in western markets
exited their positions as they began to
speculate on the early tapering of US
quantitative easing amid signs of apparent
improvement in the US economy,” the
World Gold Council (WGC) says in its Gold
Demand Trends report for Q3 2013.
“By the end of September, ETFs had seen
outflows to the tune of almost 700 tonnes.”
That’s after steadily rising inflows since
at least 2008 (see chart).
Most of that selloff happened in the second
quarter, at the same time the price of gold
fell sharply to around $1,200 per ounce.
It was a “washout,” according to the
WGC. However, it believes there will be
a turnaround in the coming months.
“We have almost seen a cessation of
outflows and, in fact, we had some net
inflows globally in the last two to three
weeks into November,” Marcus Grubb,
Managing Director, Investments at the
World Gold Council, told Mineweb.
“The rise in investors’ allocations
to commodities reflects a general
improvement in investor sentiment
towards the asset class as the global
industrial cycle has picked up, confidence
in China’s growth prospects have
improved and the prices of a number
of key commodities have dropped to
perceived attractive accumulation levels,”
says Nicholas Brooks, head of research
and investment strategy at ETF Securities.
“Assuming the global manufacturing
revival continues, and US and European
political issues do not derail the general
improvement in the global economic
outlook, we believe that Q3 2013
potentially marks an important positive
turning point for commodities.”
Excluding gold, key commodity ETPs saw
$1.9 billion of inflows in the third quarter,
“more than compensating for the outflows
in Q2,” ETF Securities says.
When gold is included, global commodity
ETPs saw $2.3 billion of outflows in the
third quarter.
Still, ETF Securities says that’s a
“substantial improvement” when
compared to the record $19.6 billion of
outflows in the second quarter of 2013.
Silver ETFs have also been rising steadily
over the past five years (see chart).
“After seeing a more than 50% decline in
the silver price from its peak, it appears
that investors view silver as one of the
better value ways to gain exposure to the
turn in the global industrial cycle,” says
ETF Securities in its third-quarter report.
“Its hybrid nature as both an industrial
metal and as a store of value ‘hard
currency’ like gold appeals to many
investors who recognize we are
experiencing a cyclical pick-up in growth,
but remain concerned about growing
developed country debt levels and
continued risks of currency debasement
stemming from extraordinarily easy
monetary policies.”
There was $195 million in industrial
metal outflows in the third quarter, which
ETF Securities saw as surprising given the
improved outlook for demand in China,
the world’s largest consumer of these
metals such as copper and nickel.
“The most likely explanation for the trend
is that despite the improving demand
outlook, the expected increased supply of
a few key industrial metals, particularly
copper has kept investors away,” says ETF
Securities. “Therefore it appears that in
Q3 investors chose to play the rebound
of the industrial cycle through platinum,
silver, oil and broad commodities rather
than industrial metals.”
It wasn’t all bad news for ETFs in the
commodities sector. While investors
fled gold, many headed into other
commodities investments such as silver,
energy and platinum.
Silver ETPs performed strongly, as
the price of the metal stabilized in the
$22 per ounce range, with $706 million of
net inflows in the third quarter compared
to three months earlier.
According to ETF Securities, assets in
commodity exchange-traded products
(ETP)2 rose by $8.4 billion to $135.9 billion
in the third quarter of 2013, which was the
first quarterly rise since the third quarter
of 2012. That includes a wide-range of
commodities from metals and energy to
agriculture products.
“ We have almost seen a cessation of
outflows and, in fact, we had some
The rise was driven by a combination of
price increases and the largest quarterly
inflows into non-gold commodity ETPs
since the first quarter of 2012, ETF
Securities says.
net inflows globally in the last two
to three weeks into November.
”
– Marcus Grubb, Managing Director, Investments
at the World Gold Council
2. ETP is the umbrella term used to describe ETFs, exchange-traded commodities (ETCs), exchange-traded notes (ETNs), and US Grantor and
other statutory trusts. They are collateralized or uncollateralized open-ended securities listed on a stock exchange tracking an underlying asset.
7

10. INTERVIEW
Dundee Corporation
As a self-described “gold bug,” you might
expect Dundee Corp. founder and CEO
Ned Goodman to be disillusioned by the
commodity’s recent price drop.
8

11. Quite the opposite.
“I have never been so bullish on gold in
my entire career,” says Ned, a legendary
Canadian investor whose firm’s investments
include real estate, agriculture, asset
management, precious metals, energy
and infrastructure.
His optimism comes from a belief that the
US is mishandling its finances, through
what he calls “botox economics.” That’s
the stimulus money the US Federal
Reserve has been injecting to plump up
the economy.
“They’re trying to make everything look
good. It’s an illusion,” Ned says. “The US
is in deep trouble.”
That’s why, despite the sinking price
of gold in recent months, Ned remains
bullish on bullion for its reputation as an
investment haven.
In fact, he believes the bull market for
gold and gold stocks that began around
the turn of the century will continue, even
though the metal has slumped from its
record above $1,900 in 2011 to just above
$1,200 in late 2013.
While he believes the drop in gold’s price
in recent months is “disappointing,” Ned
recommends investors pay attention to
the sector.
In Dundee’s 2012 annual report, Ned says
he expects an “unbelievable opportunity for
significant gains” in the months to come.
“The overall market for gold is still in a
bull market but the current situation is
acting like a bear market,” he writes. “The
view that we are continuing with is that
gold and gold stocks are very inexpensive,
below real value.”
Ned believes the fundamentals for gold
haven’t changed.
While the US Fed has talked about
tapering, Ned expects the U.S. and some
European countries to continue excessive
printing of money in the near term to
prop up their economies.
One reason he cites is labour participation
in the US, which is near an all-time low as
more people drop out of the workforce,
while unemployment remains high.
“The entire so-called US economic
recovery we are witnessing is almost
entirely driven by those ultra low interest
rates and money printing they are
enjoying,” his annual report states.
As for the mining sector as an investment,
Ned says it’s increasingly difficult to
find exceptionally good buys across the
sector right now. Part of the problem is
that junior companies don’t have cash to
advance projects, while seniors are also
holding back on as they work to clean up
their balance sheets.
“I’m favoured to mining companies that
have good reserves in the ground that
they can take out when they want. The
current moment isn’t the time to take [the
ore] out because the price is too low, so
they have to sit tight,” he says.
That means investors need to be patient
too, while abiding by the Warren Buffett
philosophy of “value” investing.
“Buffett has said, and I certainly agree,
that the best philosophy for successful
investing is to buy something for a lot less
than it is really worth,” Ned wrote in his
annual report.
He also buys a gold stock every day, which
in this market could mean a number of
value plays.
9

12. Mining’s New Frontier:
Digging deeper into sustaining costs
In a climate of high commodity prices,
a focus on mine site cash costs may be
appropriate to identify where on the
cost curve operations sit. However cash
costs alone, the industry’s traditional
yardstick of operational efficiency,
do not capture many of the expenses
required to maintain a sustainable,
value adding mining operation.
10

13. With margins squeezed by the recent
decline in commodity prices, investors and
analysts increasingly want more transparent
disclosure of total costs. It is clear that the
greatest area for improved reporting lies in
the reporting of all-in production costs and
capital expenditures. “Improved reporting”
means increased transparency (more
information), and consistency of definitions
across the industry.
Sustaining costs – such as spending to
maintain and replace equipment – may
be ratcheted back at times of low metal
prices to conserve cash. However, these
investments cannot be eliminated entirely
without posing a high risk to a mine’s longterm productivity.
As with cash costs, there is no reporting
standard that currently requires companies
to disclose sustaining or growth capital.
However, the World Gold Council has
taken a step towards formalizing the
concept with the publication in June 2013
of a “guidance note” on the components of
“all-in sustaining costs” and “all-in costs”
that gold mining companies can use as part
of their overall reporting disclosure.
A PwC survey of the top 40 global mining
companies by market capitalization found
that, as of the third quarter of 2013:
• 14 companies publish a figure for
sustaining capital, and only seven
provide an all-in cost figure.
• Only six companies -- Barrick Gold,
Goldcorp, Gold Fields, Kinross Gold,
Newmont Mining and Vale SA -- disclose
their definition of sustaining capital.
• As these numbers show, very few
companies currently disclose their
all‑in costs or a sustaining capital
value, and even less provide a
definition of what is included within
sustaining capital.
Some companies have raised concerns
about the extra cost and effort required to
prepare details of sustaining and growth
capital in addition to normal financial
reporting requirements. But the main
concern is uncertainty -- even confusion –
over the definitions used by companies for
significant capital expenditure items, more
specifically, what is a sustaining cost and
what is a growth cost?
Development costs, exploration costs
and general and administrative (G&A)
expenses are among the most challenging
grey areas. All of these reasons have made
companies hesitant to be early adopters
however many are internally exploring the
concepts without disclosure so that they can
be prepared if pressured by shareholders
and analysts to disclose, or at a minimum
respond to market queries.
The concept of all-in costs should be
a relevant and useful yardstick for the
investment community as well as for
miners themselves to benchmark and
compare companies and operations.
A clear picture of sustaining and growth
costs is a valuable tool to demonstrate
effective cost management over the longer
term, and thus improve capital spending
discipline. In the current environment, it is
critical to achieve tight discipline of capital
expenditures, which means tightly defining
what are truly sustaining costs so that
greater visibility is gained in the capital
allocation process.
If all-in sustaining costs and all-in costs are
not being used in 2013, in 2014 will you:
What is the Company’s overall approximate all-in sustaining
cost forecast for 2014? Per ounce for gold companies
Use all-in sustaining
costs/all-in costs
Greater than $1,300
Continue to use cash costs
41% 59%
5%
$1,201–$1,300
9%
Less than $900
66%
$1,101–$1,200
14%
$1,001–$1,100
25%
$901–$1,000
23%
11

14. What costs have you reduced and by how much to address lower
revenue levels?
Expansion
projects
Exploration
57%
23%
G&A
56%
Capital Project
development
32%
What are your two most important business
imperatives in 2014?
Cost management 66%
Raising financing 55%
A truer measure of overall costs can
demonstrate to governments, employees
and others that the industry operates on
more slender margins than often seems to
be the case based on a cash-cost model.
Transparency on costs can help
management make the case for difficult
decisions, such as workforce reductions,
care-and-maintenance announcements
and divestitures.
The prospect of continuing tight margins for
the foreseeable future suggests that analysts
and shareholders will keep up the pressure
on miners for improved disclosure.
The World Gold Council guidance
provides a good framework, however
standardisation of definitions and levels
of disclosure would certainly facilitate
external comparison of companies and
understanding of the sustainability of
operations. Companies can be reluctant
to lead in making disclosures where
inconsistencies may exist, though from our
discussions, most would follow once clear
guidelines and definitions are put in place.
The longer term question is whether
companies continue to desire and drive
transparency around disclosing full
costs? If prices start to increase, will the
focus from shareholders and analysts be
diminished? In a forecasted period of
expected tight margins, we should expect
the focus to remain for a while to come.
disguised our true
“ For decades, we havecapital by focusing costs to look
better to providers of
solely on
cash costs, rather than reporting all the costs that go
into mining. This created the impression that, even
at present depressed prices, the industry is making
healthy profits, when it is, in fact, marginal.
”
– Nick Holland, Gold Fields chief executive, writing in Business Day (South Africa),
August 15 2013.
12

15. How are you reporting costs in 2014?
How will your costs change during the next
12 months? Percentage of respondents for each
What are the key drivers for the change
in costs? Percentage of respondents for each
commodity
commodity
Significantly
higher
Cash costs
Adjusted
operating costs
All-in costs
Moderately
higher
All-in sustaining
costs
Similar
levels
Other
Wage costs
Decreased
costs
%
0
5
10
15
20
25
30
Input commodity prices
Mix of lower/higher cost mines in the production mix
Don’t know
% 0
10
Gold
20
30
Silver
40
50
60
70
Mine sequencing and grade mix
Copper
Other
% 0
10
Gold
20
Silver
30
40
50
60
Copper
13

16. Silver has seen better days
Silver has had a terrible year. It started
2013 trading at around $32 per ounce, but
then fell to around $18 by mid-year. That’s
a reversal from 2012, when silver was the
best-performing metal, ranging in price
between about $26 and $37.
14

17. While it was a tough year for silver miners
to make a profit, our survey shows they’re
optimistic for 2014.
Among survey respondents, 53% said
they expect the price of silver to increase
in the next 12 months, while 38% expect
it will remain at current levels. Only 9%
are anticipating the price of silver to fall
further in the next year. These statistics are
similar to how gold companies responded
to our survey.
The long-term silver price being used for
impairment testing among respondents
was an average of $22 for 2014, and
ranged between $15 and $28. The average
increased to $23 for 2015 and beyond.
What silver prices are you applying to your
reserves in 2013? (individual responses)
<$20
$20–$25
>$25
When asked what silver price companies
are using to determine reserves, the average
price was $22 per ounce, and ranges from
a low of $17 to a high of $28. For resources,
the average price was $22, with a range of
between $19 and $28.
When it comes to long-term pricing of
silver, 55% of respondents said they relied
on management’s internal estimates, 19%
looked at the consensus, 16% the historical
average, 6% spot prices and 3% the
forward curve.
Among silver miners surveyed, the most
important input used to determine the
reserve price was management’s internal
estimates (65%), followed by consensus
pricing (20%), historical price averages
(13%), spot prices (7%) and forward curve
(3%). For resource prices, the numbers were
higher for management’s internal estimates
(74%) and lower for historical averages
(19%), while other factors were consistent
with reserve price determinations.
About two-thirds (61%) of silver miners
expected their cash costs to remain the same
in 2014, while 21% are preparing for higher
costs and 18% for lower costs.
What is the long term price of silver?
S&P Capital IQ silver concensus
$35
45
40
35
30
25
20
15
10
5
0
30
12 15
25
20
2
15
10
5
2014
Low
2015
Average
2016
Long-term
High
Silver producers said the key drivers for
costs include mine sequencing and grade
mix (54%), followed by wages (29%),
input commodity prices (29%) and a
mix of higher and lower grades in the
production mix (18%).
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Low
Median
High
15

18. INTERVIEW
Pan American Silver Corp.
Like most mining companies, Pan American
Silver Corp. has been forced to adjust to
slumping metal prices.
Photo courtesy of Pan American Silver Corp.
16

19. As silver prices fell to around $20 per
ounce in recent months, from above $30
at the start of 2013, the company scoured
its operations across Mexico, Peru, Bolivia
and Argentina for cost savings.
The results showed up in its third-quarter
earnings, when the company reported
lower expenses on higher production. That
helped to offset a drop in revenues and net
income due to lower commodity prices.
“We’ve taken the long-term approach and
said ‘What can we do here to recognize
that the price of silver isn’t $30 anymore?
It’s much closer to $20,’” says Geoff Burns,
Pan American’s President & CEO.
Unfortunately, the adjustments made
included laying off about 1,000 people,
or about 10 per cent of its workforce,
while maintaining projected silver and
gold production.
Silver production rose 7% in the third
quarter and Pan American achieved a new
quarterly record for gold production. At
the same time, it trimmed its mine site
production costs by 9% compared to the
same period last year, which resulted in
a healthy 25% reduction in its cash costs
per ounce.
Pan American’s full-year 2013 guidance
is for 25 to 26 million ounces of silver and
125,000 to 135,000 ounces of gold. It
says cash costs will be below the original
forecast of $11.50 to $12.80, net of byproduct credits. It also expects to produce
38,500 to 41,500 tonnes of zinc, 12,500 to
13,500 tonnes of lead and 4,500 to 5,000
tonnes of copper for 2013.
“The good news for Pan American is
that, as a consequence of that effort - of
reducing, refocusing and retuning - we’ve
become a stronger company and much
more able to survive the volatile world of
the silver miner,” he says.
“We enjoyed a long time of good prices
... and within seven or eight months
we’ve been reminded commodities is
a volatile business.”
Prices aren’t the only challenge facing Pan
American and other miners, particularly
those doing business in Mexico.
In October, the Mexican Senate approved
a bill to introduce a royalty of 7.5% on
mine operating income, as well as a 0.5%
royalty on revenues derived from silver,
gold and platinum. The bill also proposes
a 10% withholding tax on dividends paid
to non-resident shareholders (subject to
tax treaty reductions).
Pan American warned in its third-quarter
earnings report that this change, effective
in 2014, could result in a “significant noncash adjustment to deferred taxes,” in the
fourth quarter of 2013.
About half of Pan American’s revenues
come from Mexico, which last year was
around a half a billions dollars, says Geoff.
While Mexico is following measures that
other countries such as Peru, Australia,
Chile and Canada have taken, it’s the
magnitude of the taxes that Geoff says is
tough to take. Pan American and other
miners weren’t expecting the rates to be
as high.
“It is going to change the amount of
investment in Mexico,” he says. “Money
flows where the potential for returns is
the greatest and to any extent where you
create an additional impediment to returns,
money will look for a better home.”
He predicts some smaller companies
might pull out of Mexico as a result of
the new taxes, but Pan American plans
to continue producing there and is
evaluating expansion projects at two of
its three properties there because the
economics continue to make sense.
“Mexico is also still one of the best mining
jurisdictions in the world,” he says.
While the restructuring efforts were
difficult moves, Geoff believes they were
necessary to help strengthen the company.
17

20. Oversupply concerns weigh on copper
Among the three key metals discussed here,
copper clearly outperformed in 2013. Still,
the drop in price – from about $3.70 per
pound at the start of the year to just above
$3 as we finish of the year – has weighed
on margins for copper companies.
18

21. Much of the price drop seen in 2013 is said
to be the result of a demand and supply
imbalance, which is expected to continue
into 2014.
Many copper producers are anticipating
another challenging year as copper
inventories remain high and the global
economy struggles to gain traction. Copper
producers are also watching closely to see
how the US Federal Reserve’s tapering
program will impact prices next year.
“Possible quantitative easing tapering may
affect base metals with a stronger dollar,
which is in general negatively correlated
with commodities prices,” KGHM CEO
Herbert Wirth told us.
Still, he’s confident the price will recover
longer-term.
“I personally believe the commodities super
cycle is not over yet and I think that there
is still some room for prices to increase in
the future,” he said. “I believe in copper’s
positive price outlook in the coming years.”
When asked what copper price companies
are using to determine reserves, the average
price was $2.77 per pound, with a range of
between $1.87 and $3.26. For resources,
the average was $2.87, ranging from $2 to
$3.50.
The long-term copper price being used for
impairment testing among respondents
averaged $2.83. However, this forecast has
a wide range of between $1.20 and $3.50.
Those predictions don’t change much for
2015, and increase slightly in 2016, when
the average price forecast for impairment
testing is $2.87 per pound, ranging from a
low of $1.30 to a high of $4.
The most important input used to determine
the long-term price view was consensus
pricing (47%), followed by management’s
internal estimate (41%), with historical price
averages and the forward curve both at 6%.
Our survey shows about two-thirds of
copper miners (62%) believe the metal’s
price will remain around current levels for
the next 12 months, while 21% expect an
increase and 17% a decrease.
What copper prices are you applying to your
reserves in 2013? (individual responses)
<$2
2
$2 – $3
21
>$3
7
For reserves, 67% look at management’s
internal estimates, 42% consensus pricing,
18% historical averages and 9% for both
the spot and forward curve. Resourceprice determinations were lower for
management’s internal estimates (62%),
and lower for consensus pricing (38%), but
higher for historical averages (21%).
When it comes to cash costs, 47% of copper
miners expect theirs to remain at similar
levels in the next 12 months compared to
2013. Meantime, 20% anticipate costs to
increase moderately and 3% are anticipating
significantly higher costs for their
operations, compared to 30% of respondents
who expects costs to decrease in 2014.
What will drive costs in the coming year for
copper miners? Mine sequencing and grade
mix was the top response (37%) followed
closely by wage costs (33%) and both input
commodity prices and the mix of lower-andhigher-grade mines into the production mix
at 19%. Other costs accounted for about
one third (35%) of what copper miners
said would drive a change in prices in 2014,
including higher production fees, mine and
capital expansion costs and lower cost of
services in some cases.
What is the long term price of copper?
S&P Capital IQ copper concensus
$4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
6
5
4
3
2
1
2014
Low
2015
2016
Average
Long-term
High
0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Low
Median
High
19

22. INTERVIEW
Q&A with KGHM
PwC partners Jacek Socha and Mariusz
Dziurdzia recently sat down with
KGHM CEO Herbert Wirth to discuss the
current commodities market and what
opportunities it presents for his company.
Photo courtesy of KGHM
20

23. How would you describe
today’s commodity market? Is
the super cycle over, or is this
just a down part of the cycle?
Naturally, most commodity producers
are positive about the potential price
development of the market in the long
run. Otherwise they would not invest in
their core business. I personally believe
the commodities super cycle is not over,
and think there is still some room for
prices to increase in the future. Many
authorities in developing countries have
understood that their greatest potential
comes through increased urbanization,
which requires intense commodities
usage. I am an optimistic person in
general, believing in progress and people’s
ability to evolve and increase productivity.
What are your thoughts on the
current copper price?
In recent quarters, copper prices have
experienced a major correction after several
strong years. This downtrend is mainly
driven by investors’ increasing interest in
equities markets and potential oversupply
on the copper concentrate market. Scrap
availability is still low, which has also led
to production downtime across scrapdependent smelters. The global economic
situation has also been perceived as
moderately pessimistic in the recent months,
leaving investors worried that the assumed
growth in key countries driving commodities
consumption will not be delivered.
How has the lower copper price
impacted your company?
It has caused a moderation of the company’s
earnings and margins. However, thanks to
hedging positions built up over the past few
years, some headwinds have been alleviated.
We started building our hedging position in
our three core markets – copper, silver and
Polish zloty. Today we are benefiting from
the hedging transactions. We watch the
market closely on a daily basis.
What is your outlook for copper?
Recent macroeconomic data shows signs
of global economic recovery, which might
cause a pick-up in overall demand, in turn
driving up base metals prices. Although
copper stocks are down and the number of
cancelled warrants is high, global financial
institutions anticipate many mining projects
will add supply to the market. Additional
output, if delivered without any delays,
might put downside pressure on prices in
the coming months. Possible tapering of
quantitative easing in the US may also affect
base metal prices. Still, I believe in copper’s
positive price outlook in the coming years.
What projects and initiatives
are helping to drive growth
at KGHM?
One of the most important projects for
us right now is development of the Sierra
Gorda project in Chile, which will be one
of the biggest copper mines in the world,
being built together in a joint venture
scheme with our partner Sumitomo Metals
Mining and Sumitomo Corporations.
Construction of the project should be
finished in the second quarter 2014 and
we are focused on delivering the planned
production on time. We have also two
big projects located in Canada waiting
for development: Victoria and Ajax. The
optimal financing structure for these
projects is currently under discussion.
What is your current position on
M&A? Are you a buyer or seller
in today’s market?
KGHM has been successfully maintaining
stable production level in Polish mines
for many years. That said, it would be
very hard to grow organically based
only on local resources. The acquisition
of Quadra FNX in 2011, which included
Sierra Gorda and other projects, was the
beginning of a new era in KGHM’s history.
It’s allowing the company to strengthen
its growth potential. Right now we
are continuing to integrate all of these
additional assets into KGHM, while at the
same time still closely monitoring other
M&A possibilities. We are looking for
interesting assets, especially at the early
stage of development.
21

24. Coping with lower commodity prices
Falling commodity prices have led to an
inevitable drop in revenues for mining
companies. After years of spending on
mergers and acquisitions and expanding
operations with money generated from
high metal prices, miners are now
cutting back.
22

25. % change in metal prices — 2013 (Comex)
Managing costs and finding financing are
among the top priorities for miners amid
less optimistic future price expectations,
our survey shows.
When asked to identify their top two
business imperatives in 2014, executives
selected managing their spending and
raising financing. Productivity and
mergers and acquisitions followed closely
behind. M&A activity has been muted in
the past couple of years as a result of tight
financing conditions, volatile markets,
and as many miners focus inward on
cutting costs and managing current
production over buying future growth.
To fund corporate development and
other activities, nearly half (47%) said
they tapped equity markets over the
past 12 months, despite how difficult it
has been to raise this form of financing
10%
5
0
(5)
(10)
(15)
(20)
(25)
(30)
(35)
(40)
(45)
Jan
Feb
Mar
Copper
Apr
Silver
May
Jun
Jul
Aug
Sep
Oct
Nov
Gold
given the volatile markets and lagging
commodity prices. Another 23% said
they turned to corporate debt, while 8%
found project financing. About one-third
(33%) of miners surveyed said they
received no financing over the past 12
months. That result can be attributed
to the difficult conditions many miners
have cited when it comes to raising funds
for future exploration, development or
production growth.
For the coming year, 53% said they
anticipate going to the equity markets to
raise capital, while 29% expect to raise
project financing and another 14% plan
to raise corporate debt. Streaming and
royalty agreements remain on the radar of
miners with 6% of respondents looking at
streaming agreements and 3% checking
out royalty deals.
Where do you see the price of commodities within the next 12 months?
53%
47%
46%
Gold
Silver
38%
21%
62%
Copper
17%
9%
7%
Increase
Decrease
Stay the same
23

26. INTERVIEW
Coeur Mining Inc.
Coeur Mining Inc. may have been around
for 85 years, but the company considers
itself a newcomer in the industry lately.
Photo courtesy of Coeur Mining Inc.
24

27. “We do describe ourselves as an 85-yearold startup because there is so much new
here at this company over the last few
years,” said Mitchell J. Krebs, Coeur’s
President and Chief Executive Officer.
Some of the biggest changes have taken
place in 2013 alone.
They include the producer’s purchase
of Orko Silver Corp. and its La Preciosa
development in Mexico. Coeur also
increased its stake in Mexico-based
exploration company International
Northair Mines Ltd. to 19% and formed
a new wholly owned subsidiary, Coeur
Capital, Inc., to hold its existing and any
future-acquired royalty and streaming
interests, along with its portfolio of
strategic equity investments. The goal of
the new company is to provide stockholders
with higher-margin, less-volatile free cash
flow as well as diversified metal exposure
and future avenues for growth, Mitch says.
If that wasn’t enough, Coeur also recently
appointed several new executives and
moved its head office to Chicago from
Idaho.
The changes are taking place alongside
a readjustment across the industry as
miners cope with the recent drop in metal
prices and prepare for what’s expected to
be a volatile future.
“This industry is undergoing a tremendous
amount of change, which makes it very
exciting,” says Mitch. “There is a healthy
shakeout underway that is going to end up
making the industry a lot better.”
Coeur’s recent moves are also part of its
focus to be among the most-attractive
mining companies for stockholders,
particularly as Mitch hopes more investors
start returning to the sector.
He acknowledges many investors have
been scared off by the industry’s big
spending past, decisions that left a number
of miners in financial turmoil as a result of
the recent slump in commodities prices.
What’s more, companies are competing
with other forms of investment such
as ETFs, where they don’t have to risk
putting their money into one stock.
“Companies are being forced to rethink
‘What is their purpose for investors,
why should investors buy the shares of a
mining company?’” says Mitch.
In 2013, Coeur expects to produce
between 18 million and 19.1 million
ounces of silver and between 250,000 and
258,000 ounces of gold. Cash operating
costs per silver ounce are expected to be
between $9.50 and $10.50 for 2013. At its
Kensington gold operation, cash operating
costs per ounce for 2013 are expected to
be between $950 and 1,000.
Mitch says the company plans to reduce
costs across its operations, and further
explore in areas with the most potential.
“In the past some in the industry have
focused on growth for growth’s sake and
establishing as much scale as possible,” he
says. “You don’t have to be the biggest to
be the best in this industry.”
Coeur is working to attract more investors
by further de-risking the company and
trying to provide a more stable platform
of high-margin cash flow to generate
stronger stockholder returns.
The company, which has a growing silver
and gold portfolio, has assets in the
United States, Mexico and Bolivia. It also
owns strategic minority shareholdings
in eight silver and gold development
companies in North and South America.
25

28. Points of interest
What foreign exchange rate do you use for the following
currencies in your mine planning?
Metals predominantly mined
Year
US$: Canadian
US$: Australian
71%
2011
1.01
0.97
2012
1.00
1.00
32%
2013
1.02
0.96
25%
How have you raised financing on the past 12 months?
Gold
Copper
Silver
Equity
Corporate debt
Project financing
Royalties
Streaming arrangement
No financing raised
% 0
26
10
20
30
40
50

29. What have you done with your dividends in the past year?
Maintained
at the same
levels
Increased
5%
8%
Have not paid
dividends
Decreased
6% 81%
59%
Expect to increase
corporate development
activity in 2014
What geographical region(s) does your business cover?
78%
North America
South America
Do not plan on
hedging their principle
commodity in 2014
Europe
Africa
Australia
Asia
0
20
40
60
80
100
27

30. Mining Excellence at PwC
Delivering local solutions to global challenges
The mining sector is facing a range of competing trends and a rapidly changing global
business environment. Against the backdrop of commodity price fluctuations, miners
need to balance shareholder dividend expectations whilst maintaining an investment
pipeline in the midst of increasing operating costs. Safety, environmental and
community principles also continue to shape the industry as miners look to achieve
their licence to operate and deliver on corporate responsibilities.
Mining Excellence at PwC has been designed to mobilise and leverage PwC’s collective
global knowledge and connections to deliver an exceptional and tailored client
experience, helping our clients navigate the complex industry landscape and meet
their growth aspirations. Our team of specialists is exclusively focused on the sector
and brings an industry-based approach to deliver value for you and your organisation.
John Gravelle, PwC Global Mining Leader
Mining Excellence at PwC provides our clients:
leading edge
knowledge and global
thought leadership
With significant investment in
the research behind our mining
publications and a comprehensive
industry learning and development
program, our professionals can share
both industry and technical insight
with our clients, such as:
• A library of industry publications designed
to help challenge “conventional” thinking
and delve into topical industry issues. This
includes:
– global thought leadership publications
including Mine and Mining Deals
– flagship territory publications focused on
regional and industry-specific issues
• an extensive industry development
program for our people and clients.
This features our annual learning and
development programs:
connections to our vast
network of mining experts
and global client portfolio
the delivery of an
experience that meets our
clients’ definition of ‘value’
We have the widest network of industry
experts who work out of strategic
mining hubs across the globe to help
better connect you to vital mining
markets.
Our connections provide:
With mining experts working around
the globe, our award winning teams
are helping clients deliver on specific
projects and organisational growth
aspirations. We offer advisory, tax and
audit services to global corporations
and locally listed companies.
• seamless client service delivered with
collaborative cross-border account
management
• maximised deal potential through a wellconnected global community of mining
leaders
• a mobile workforce to ensure effective
service delivery in even the most remote
mining locations.
Mining Excellence at PwC complements
this with:
• a suite of niche mining consulting
capabilities focused on optimising
value across mining operations and
effectively managing risk to help our
clients grow their business and deliver
shareholder value
• a comprehensive client feedback program
to ensure we are always improving and
delivering on individual client needs.
Global Mining Leader
Ken Su Beijing
John Gravelle Toronto
John Campbell
Moscow
– Americas School of Mines
(North America)
– London School of Mines
(United Kingdom)
“The positive story for miners
is that the long-term growth
fundamentals remain in tact.
But, mining companies are
facing significant downward
pressure. As an industry,
we need to fully address the
confidence crisis, before we
are able to move on to the next
phase of the cycle.”
Kameswara Rao
Hyderabad
Jason Burkitt London
Steve Ralbovsky Phoenix
– Asia School of Mines
– Hard Hat: The Mining Experience
(Australia)
Ronaldo
Valino
Rio de
Janeiro
Sacha Winzenreid Jakarta
Hein Boegman Johannesburg
Jock O’Callaghan Melbourne
28

31. Photo courtesy of KGHM
29

32. Contacts
Global
Global Mining Leader
John Gravelle
Canada
T: +1 416 869 8727
E: john.gravelle@ca.pwc.com
Steve Ralbovsky
U.S.A
T: +1 (602) 364 8193
E: steve.ralbovsky@us.pwc.com
Ronaldo Valino
Brazil
T: +55 (21) 3232 6139
E: ronaldo.valino@br.pwc.com
Jock O’Callaghan
Australia
T: +61 3 8603 6137
E: jock.ocallaghan@au.pwc.com
Jason Burkitt
UK
T: +44 (20) 7213 2515
E: jason.e.burkitt@uk.pwc.com
Key contributors
Hein Boegman
South Africa
T: +27 11 797 4335
E: hein.boegman@za.pwc.com
Ken Su
Amy Hogan
James Lusby
Sachin Mehta
A special thank you to writer Brenda Bouw
China
T: +86 (10) 6533 7290
E: ken.x.su@cn.pwc.com
Sources
Kameswara Rao
Bloomberg
India
T: +91 40 6624 6688
E: kameswara.rao@in.pwc.com
Sacha Winzenried
Indonesia
T: +62 21 5289 0968
E: sacha.winzenried@id.pwc.com
Capital IQ
Intierra
World Gold Council
ETF Securities
Frank Rittner
Russia
T: +7 (495) 232-5536
E: frank.rittner@ru.pwc.com
A special thank you to the executives
we interviewed for this report.
To view the full interviews visit
www.pwc.com/ca/commoditiesdig
© 2013 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved.
PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. 3796-01 1113