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Tahoe: Condensed Interim Consolidated Financial Statements For The Three And Nine Months Ended September 30, 2015 And 2014

The following excerpt is from the company's SEC filing.

Exhibit 99.1

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

For the three and nine months ended September 30, 2015 and 2014

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CONDENSED INTERIM CONSOLIDATED STATEMENTS

OF FINANCIAL POSITION

(Expressed in thousands of United States dollars) – Unaudited

September 30,

December 31,

ASSETS

Current

Cash and cash equivalents

110,553

80,356

Trade and other receivables

45,397

Inventories

71,272

40,570

233,242

134,584

Non-c urrent

Mineral interests

1,869,514

828,742

VAT and other receivables

38,752

12,302

Goodwill

63,761

1,972,027

841,044

Total Assets

2,205,269

975,628

LIABILITIES

Accounts payable and accrued liabilities

118,825

40,246

35,000

49,804

Lease obligations

Income tax payable

166,999

91,875

Reclamation provision

29,810

Deferred tax liability

206,353

10,060

Total Liabilities

422,625

97,568

SHAREHOLDERS’ EQUITY

Share capital

1,912,819

1,014,656

Share-based payment reserve

18,485

11,793

Deficit

(148,660

(148,389

Total Shareholders’ Equity

1,782,644

878,060

Total Liabilities and Shareholders’ Equity

Commitments and Contingencies (notes 23b and 25)

APPROVED BY THE DIRECTORS

Kevin McArthur

Dan Rovig

Kevin McArthur

DAN ROVIG

CEO AND BOARD CHAIR

INDEPENDENT LEAD DIRECTOR

See accompanying notes to the condensed interim consolidated financial statements.

Condensed Interim Consolidated Financial Statements

CONDENSED INTERIM CONSOLIDATED STATEMENTS

OF OPERATIONS AND TOTAL COMPREHENSIVE INCOME

(Expressed in thousands of United States dollars, except per share and share information) – Unaudited

Three Months Ended

Nine Months Ended

Revenues

14, 21

145,736

90,279

364,830

284,869

Operating costs

Production costs

72,537

34,871

174,989

97,786

Royalties

29,431

16,833

Depreciation and depletion

24,819

12,167

55,576

33,713

Total operating costs

105,614

53,397

259,996

148,332

Mine operating earnings

40,122

36,882

104,834

136,537

Other operating expenses

Exploration

General and administrative

10,682

31,557

26,094

Total other operating expenses

14,004

37,413

29,094

Earnings from operations

26,118

28,754

67,421

107,443

Other expense

Interest expense

Foreign exchange loss

Total other expense

Earnings before income taxes

22,921

26,447

62,890

101,144

Current income tax expense

10,662

32,912

20,190

Deferred income tax benefit

(5,828

Earnings and total comprehensive income attributable to common shareholders

13,255

20,036

35,806

80,954

Earnings per share

Diluted

Weighted average shares outstanding

227,372,229

147,541,414

200,969,554

147,024,700

227,590,131

149,402,463

201,213,140

148,885,749

Tahoe Resources Inc.

OF CASH FLOWS

(Expressed in thousands of United States dollars) – Unaudited

OPERATING ACTIVITIES

Net earnings for the period

Adjustments for:

Income tax expense

27,084

Items not involving cash:

25,370

12,276

56,458

34,300

Loss on disposition of plant and equipment

Loss on currency swap

Share-based payments

Unrealized foreign exchange loss

Accretion

Cash provided by operating activities before changes in working capital

52,962

42,083

129,882

146,920

Changes in working capital

13,938

27,535

14,555

(25,926

66,900

69,618

144,437

120,994

Income taxes paid

(14,210

(7,297

(31,523

(19,445

Net cash provided by operating activities

52,690

62,321

112,914

101,549

INVESTING ACTIVITIES

Mineral interests additions

(38,070

(8,618

(77,430

(36,090

Cash acquired through acquisition

61,713

Net cash used in investing activities

(15,717

FINANCING ACTIVITIES

Proceeds from issuance of common shares on exercise of share options and warrants

26,535

10,358

Borrowings on credit facility

25,000

Repayments of credit facility

(25,000

(50,000

Dividends paid to shareholders

(13,627

(36,077

Loan origination fees

(1,391

Interest expense paid

(1,607

(2,782

(3,646

Payments on finance leases

(1,644

(3,279

Net cash (used in) provided by financing activities

(14,657

(25,698

(65,867

Effect of exchange rates on cash and cash equivalents

(1,636

(1,133

(Decrease) increase in cash and cash equivalents

(1,669

27,391

30,197

70,059

Cash and cash equivalents, beginning of period

112,222

51,506

Cash and cash equivalents, end of period

78,897

Supplemental cash flow information (note

See accompanying notes to the condensed interim consolidated financial statements.

OF CHANGES IN EQUITY

(Expressed in thousands of United States dollars, except share information) – Unaudited

Number of

Shares

Capital

Reserves

At January 1, 2015

147,644,671

Shares issued under the Share Plan

190,167

(2,938

Shares and options issued on acquisition of Rio Alto

75,991,381

856,198

11,536

867,734

Shares issued on exercise

of stock options

1,402,708

15,608

(5,654

of warrants

2,011,244

22,690

At September 30, 2015

227,240,171

Shares

Capital

At January 1, 2014

146,094,407

996,076

14,304

(236,226

774,154

140,667

(2,130

Exercise of stock options

1,350,874

15,172

(4,814

147,585,948

1,014,152

10,750

(155,272

869,630

NOTES TO THE CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

(Expressed in thousands of United States dollars, except as otherwise stated) - Unaudited

Three and nine months ended September 30, 2015 and 20

Tahoe Resources Inc. (“Tahoe”) was incorporated under the Business Corporations Act (British Columbia) on November 10, 2009. These condensed interim consolidated financial statements (“interim financial statements”) include the accounts of Tahoe and its wholly owned subsidiaries (together referred to as the “Company”). The Company’s principal business activities are the operation of mineral properties for the mining of precious metals and the acquisition, exploration and development of mineral interests in the Americas.

The Company’s registered office is located at 1500 Royal Centre, 1055 West Georgia Street, P.O. Box 11117, Vancouver, BC V6E 4N7, Canada.

The Audit Committee of the Company’s Board of Directors authorized the issuance of these interim financial statements on November 12, 2015.

BASIS OF PREPARATION

These interim financial statements have been prepared in accordance with International Accounting Standard 34 -

Interim Financial Reporting

using accounting policies consistent with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). As such, certain disclosures required by IFRS have been condensed or omitted. These interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto as at and for the years ended December 31, 2014 and 2013 (“consolidated financial statements”).

SIGNIFICANT ACCOUNTING POLICIES

Basis of measurement

These interim financial statements have been prepared using the same accounting policies and methods of application as those disclosed in note 3 to the Company’s consolidated financial statements, except as disclosed in note 4. In addition, due to the acquisition in the year (note 5), notes 3f) and 3g) to the consolidated financial statements have been expanded for these new accounting policies as follows:

Note

3f) Inventories

has been expanded to include doré and heap leach ore.

Finished goods, work-in-process, heap leach ore and stockpiled ore are measured at the lower of average cost or net realizable value. Net realizable value is calculated as the estimated price at the time of sale based on prevailing metal prices less estimated future costs to convert the inventories into saleable form and estimated costs to sell.

Ore extracted from the mine may be stockpiled and subsequently processed into finished goods (gold and by-products in doré or silver and by-products in concentrate form). The costs of finished goods represent the costs of work-in process inventories incurred prior to the sale of doré or concentrate. Costs are included in inventory based on current costs incurred to produce doré and concentrate, including applicable depreciation and depletion of mining interests, and removed at the cost per ounce of doré produced (gold) or cost per tonne of concentrate produced (silver and by-products).

NOTES TO THE INTERIM FINANCIAL STATEMENTS

(expressed in 000’s of USD, except as otherwise stated)

The recovery of gold and by-products from certain oxide ore is achieved through a heap leaching process at the La Arena mine. Costs are included in heap leach ore inventory based on current mining and leaching costs, including applicable depreciation and depletion of mining interest, and removed from heap leach ore inventory as ounces of gold are recovered at the average cost per recoverable ounce of gold on the leach pads. Estimates of recoverable gold on the leach pads are calculated based on the quantities of ore placed on the leach pads (measured tonnes added to the leach pads), the estimated grade of ore placed on the leach pads, and an estimated recovery percentage.

3g) Mineral interest, plant and equipment

has been expanded to include a deferred stripping policy in accordance with

IFRIC 20 – Stripping Costs in the Production Stage of a Surface Mine.

In open pit mining operations, it is necessary to remove mine waste materials or overburden to gain access to mineral ore deposits. Stripping costs incurred during the development phase of the mine (prior to commercial production) are capitalized and deferred as part of the cost of building, developing and constructing the mine (included in mineral interests) if the costs relate to anticipated future benefits and meet the definition of an asset. Once commercial production begins, the capitalized stripping costs are amortized using the units of production (“UOP”) method over the estimated life of the component to which they pertain.

During the production phase, to the extent the benefit from the stripping activity is realized in the form of inventory produced, the stripping costs are considered variable production costs and are included in the costs of the inventory during the period in which they are incurred. If the benefit from the stripping activity during the production phase provides access to deeper levels of material that will be mined in future periods, the stripping costs, including directly attributable overhead costs, are capitalized as part of mineral interests and amortized using the UOP method over the estimated life of the component to which they pertain. Stripping costs during the production phase are recognized as an asset if all the following criteria are met:

It is possible that the future benefit, i.e. improved access to the ore body, associated with the stripping activity will flow to the entity;

The Company can identify the component of the ore body for which access has been improved; and

The stripping activity costs associated with the component can be measured reliably.

Stripping activity occurs on separately identifiable components of the open pit and the amount capitalized is calculated by multiplying the tonnes removed for stripping purposes from each identifiable component during the period by the mining cost per tonne. If the stripping costs cannot be attributed to a separately identifiable component, they are allocated to inventory and mineral interests based on the actual waste-to-ore ratio (“strip ratio”) of material extracted compared to the estimated strip ratio.

As at September 30, 2015 and December 31, 2014, the Company has no capitalized stripping costs.

NOTES TO THE INTERIM FINANCIAL STATEMENTS

Business combinations

A business combination is defined as an acquisition of assets and liabilities that constitute a business. A business is an integrated set of activities and assets that consist of inputs, including non-current assets, and processes, including operational processes that, when applied to those inputs, have the ability to create outputs that provide a return to the Company and its shareholders. A business also includes those assets and liabilities that do not necessarily have all the inputs and processes required to produce outputs, but can be integrated with the inputs and processes of the Company to create outputs. When acquiring a set of activities or assets in the exploration and development stage, which may not have outputs, the Company considers other factors to determine whether the set of activities or assets is a business.

Business combinations are accounted for using the acquisition method whereby identifiable assets acquired and liabilities assumed, including contingent liabilities, are recorded at their fair values at acquisition date. The acquisition date is the date at which the Company obtains control over the acquiree, which is generally the date that consideration is transferred and the Company acquires the assets and assumes the liabilities of the acquiree. The Company considers all relevant facts and circumstances in determining the acquisition date.

The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the fair values of the assets at the acquisition date transferred by the Company, the liabilities, including contingent consideration, incurred and payable by the Company to former owners of the acquiree and the equity interests issued by the Company. The measurement date for equity interests issued by the Company is the acquisition date. Acquisition-related costs are expensed as incurred.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports in its consolidated financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Company will retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. During the measurement period, the Company will also recognize additional assets or liabilities if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have resulted in the recognition of those assets and liabilities as of that date. The measurement period ends as soon as the Company receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable and shall not exceed one year from the acquisition date.

Non-controlling interests (“NCI”) are the equity in a subsidiary not attributable, directly or indirectly, to a parent. NCI are recorded at their proportionate share of the fair value of identifiable net assets acquired on initial recognition. Goodwill is recognized as the sum of the total consideration (acquisition date fair value) transferred by the Company, including contingent consideration and the NCI in the acquiree, less the fair value of net assets acquired.

Goodwill typically arises on the Company’s acquisitions due to: i) the ability of the Company to capture certain synergies through management of the acquired operation within the Company; and ii) the requirement to record a deferred tax liability for the difference between the assigned fair values and the tax bases of assets acquired and liabilities assumed.

Goodwill is not amortized. The Company performs an impairment test for goodwill annually and when events or changes in circumstances indicate that the related carrying amount may not be recoverable. If the carrying amount of a mine site to which goodwill has been allocated exceeds the recoverable amount, an impairment loss is recognized for the amount in excess. The impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the mine site to nil and then to the other assets of the mine site based on the relative carrying amounts of those assets. Impairment losses recognized for goodwill are not reversed in subsequent periods should its value recover.

Upon disposal or abandonment of a mine site to which goodwill has been attributed, the carrying amount of goodwill allocated to that mine site is derecognized and included in the calculation of the gain or loss on disposal or abandonment.

Currency of presentation

The interim financial statements are presented in United States dollars (“USD$”), which is the functional and presentation currency of the Company and all of its subsidiaries. Certain values are presented in Canadian dollars and described as CAD$.

Basis of consolidation

The accounts of the Company’s subsidiaries are included in the interim financial statements from the date that control commenced until the date that control ceases.

The principal subsidiaries (operating mine sites and projects) of the Company and their geographic locations at September 30, 2015 are as follows:

Direct parent company

(operating segment)

Location

Ownership

Percentage

Mining Properties

projects owned

Minera San Rafael, S.A. (Silver segment)

Guatemala

El Escobal mine

La Arena S.A. (Gold segment)

Shahuindo S.A.C. (Gold segment)

Shahuindo project

Intercompany balances, transactions, income and expenses arising from intercompany transactions are eliminated in full on consolidation.

Critical judgments and estimates

The preparation of interim financial statements in conformity with IFRS requires management to make judgments and estimates that affect the application of accounting policies and the reported amounts of assets, liabilities, contingent liabilities, income and expenses. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and applied prospectively.

Information about critical judgments and estimates in applying accounting policies that have the most significant effect on the amounts recognized in the...


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