24 on m e ta l p r ic e s f or gol d G ol d pr ic e is a ff e c t e d b y n um e r ous fa c tor s s uc h a s th e s a l e o r pu r c ha s e of gol d b y va r ious c e n t r a l b a n k s a n d fin a n c ia l in s ti tutio n s in t e r e s t r a t e s e xc ha n g e r a te s in fl a tion de fl a tio n fl uc tua tion s in th e va l ue of th e Unit e d S ta te s dol l a r a n d f or e ig n c ur r e n c ie s gl o b a l a n d r e gi on a l s up pl y a n d d e ma n d a n d th e pol itica l a n d e c on omic c on d itio n s o f ma j or gol d pr oduc in g c ount r i e s thr ough out t h e w or l d A 10 in c r e a s e o r de c r e a s e i n the pr ic e of gol d w oul d r e s ul t in a 3 7 mil l ion in c r e a s e or d e c r e a s e i n th e C om pa n ys pr e ta x e a r n i n gs fo r th e p e r i od s e e Ca p i t a l Res ou rc es A t J un e 3 0 201 3 the C om pa n y d oe s n ot hol d a n y h e dg e positio n s o n its gol d pr oduc tio n Durin g Q2 20 13 t h e p r ic e o f gol d de c l in e d s ig n ifi c a n tl y to a l e ve l whic h ha s imp a c t ed the C o mpa n y s c a s h fl ow a n d op e r a ti n g r e s ul ts The r e is n o c e r ta i n ty th a t the pr ic e of gol d wi l l in c r e a s e i n the n e a r te r m W ith this in min d the C omp a n y r e vis e d its mi n in g pl a n e x pl or a tio n a n d c a pi ta l e xpe n ditu r e pr og r a ms wi th the o b j e c tiv e t o ma in ta i n a s t r o n g fin a n c ia l position s e e In v e s ti n g a c tiviti e s The C omp a n y b e l i e ve s tha t it is a b l e to g e n e r a te n e t c a s h fl ow a t a n a ve r a ge gol d p r ic e of US13 00 p e r ounce wi thou t a n y s ig n ifi c a n t r e duc ti on or c ur ta il me n t of its c ur r e n t o pe r a ti n g pl a n s The C o mpa n y c on tin u e s to mon itor this r i s k a n d w il l r e v ise its o pe r a t in g pl a n s a c c or di n gl y i n o r d e r t o e n s ur e i ts n e a r t e r m a n d l on g t e r m c a s h fl ow ob j e c tiv e s a r e m e t Curre n c y ri s k C urr e n c y e xc ha n g e r a t e s a r e s ubj e c t t o fl uc tua tion A s the p r ic e of gol d is pr i ma r il y e s ta b l ish e d in Unit e d Sta t e s dol l a r s the C omp a n y is e xpo s e d to c u r r e n c y r isk to the e xt e n t of a fl uc tua tion in th e for e ign e xc ha n g e r a te s b e t we e n th e C a n a d ia n a n d U n it e d Sta te s dol l a r s Und e r th e C omp a n y s F or e ig n E xc ha n g e R isk M a n a ge m e n t P ol ic y a pp r ov e d b y th e B oa r d of D ir e c tor s th e C omp a n y ma y fr om t im e to ti me e m pl oy de r iva tive f i n a n c ia l in s t r um e n ts t o ma n a g e e xpo s ur e t o fl uc tua tion s in for e ign c urr e n c y e xc ha n ge r a te s A t J u n e 30 2013 th e C omp a n y de s ig n a te d for e ig n c urr e n c y fo r wa r d c on t r a c ts to s e l l US2 55 mil l ion in to C a n a dia n dol l a r s whic h ma tur e i n 2013 a n d 2 014 In a ddit io n the C om pa n y ha d outs ta n di n g de r iva tive o pti o n c o n t r a c ts to s e l l b e t we e n U S210 mil l ion a n d US38 5 mil l io n i n to C a n a dia n dol l a r s a t J un e 30 201 3 A five c e n t in c r e a s e o r d e c r e a s e i n th e C a n a d ia n a n d Uni t e d Sta t e s dol l a r e xc ha n g e r a t e a s a t J un e 30 20 13 wo ul d ha ve r e s ul te d in a n a p pr o xima t e 12 mil l ion i n c r e a s e o r de c r e a s e i n th e C om pa n ys pr e ta x e a r n in gs fo r th e p e r iod This imp a c t wo ul d ha ve n o e ff e c t o n th e C omp a n ys c a s h fl ow s u n til t he fo r wa r d f or e ig n c ur r e n c y c on tr a c t ma tu r e s Prop er t i es a n d p r oject s The C o mpa n y c o mm e n c e d a dr il l pr o gr a m a t Ta yl or a t t he b e gi n n in g of Q2 2013 in or d e r t o im pr ov e the g e ol ogica l a n d s tr uc tu r a l und e r s ta n d in g of th e W PZ a n d e xp e c ts to c om pl e t e this pr og r a m du r in g Q3 201 3 s e e Ad vance d St a g e E x p lora t i o n Project T a yl or Pro ject The W PZ c on ta in s 173000 ounce s 98500 0 ton n e s a t a n a v e r a g e gr a d e of 545 g t A u of m i n e r a l r e s e r v e s a n d 1590 00 ounc e s 10 mil l ion to n n e s a t a n a ve r a ge gr a d e of 492 g t A u of m e a s ure d a n d i n dic a te d m i n e r a l r e s our c e s Shoul d the r e s ul ts of th e dr i l l in g pr og r a m a t Ta yl or n o t b e fa vou r a b l e it ma y ha ve a ma te r ia l imp a c t on th e fin a n c ia l c on diti o n c a s h fl ow a n d o pe r a tio n s of th e C om pa n y L i t i g a t i o n a n d cla i m s The C omp a n y is i n vol ve d i n l itiga ti on a n d c l a ims f r o m tim e to tim e The C omp a n y is c ur r e n tl y disputin g the va l idit y of c e r t a in r oya l tie s o n its H ol l ow a y pr op e r ty wi th r e s p e c t to t he va l idit y of th e unde r l ying r oya l ti e s T h e C omp a n y b e l ie v e s the a mou n t s of the disput e d r oya l tie s wi l l n ot ha v e a ma te r ia l imp a c t o n th e fin a n c ia l c on diti o n c a s h fl ow or ope r a tion s of the C omp a n y