Toronto Stock Exchange:
G
New York Stock Exchange: GG (All Amounts in $US unless stated
otherwise) VANCOUVER, Jan. 9, 2012 /CNW/ - GOLDCORP INC. today
announced 2011 gold production and provided production and cash
cost guidance for 2012 and the five-year period ending 2016.
Highlights -- Total 2011 gold production of 2.51 million ounces. --
Fourth quarter 2011 gold production totaled 687,900 ounces. --
Total 2012 gold production forecast of 2.6 million ounces,
including first production from Pueblo Viejo. -- Five-year gold
production forecast increase of 70% to 4.2 million ounces in 2016.
-- Total cash costs expected to remain below $400 per ounce over
the next five years. -- Decision to commence construction of El
Morro; first production expected in 2017. Goldcorp's year-end
financial statements are scheduled to be released on February 15,
2012. The final calculation of operating costs has not yet been
completed, but total cash costs((1)) for all of 2011 are expected
to be approximately $220 per ounce of gold on a by-product basis
and approximately $530 per ounce of gold on a co-product basis,
meeting guidance on both measures. The Company ends the
year with approximately $1.7 billion in cash. "Very strong gold
production in the fourth quarter of 2011 underscores the overall
high quality of our mine portfolio," said Chuck Jeannes, President
and Chief Executive Officer. "Peñasquito met its production target
and continued to emerge as the linchpin of our asset base in 2011,
with strong operating cash flow in just its first full year of
production. Also in Mexico, the Los Filos mine achieved
record production of 336,500 ounces while continuing with its
excellent safety performance. Red Lake in 2011 remained the
anchor of our overall gold production at very low cash costs while
Porcupine and Musselwhite mines in Ontario provided stable
production and exciting exploration results. In Guatemala,
the last year of open pit mining in the highest grade portion of
the pit at Marlin resulted in record gold production of 382,400
ounces. "Our forecast gold production of 2.6 million ounces in 2012
will be driven by another strong year throughout the portfolio,
while significantly increased production at Peñasquito will be
offset by lower production at Marlin as the mine transitions to
100% underground mining. Year over year growth in our overall
production target comes from new gold production from the Pueblo
Viejo joint venture in the Dominican Republic but at a
significantly reduced level due to previously reported project
delays. Consistent production levels at other mines
throughout the portfolio will create a stable foundation for the
years ahead. "We begin 2012 with the primary drivers of Goldcorp's
outstanding growth profile well-positioned to contribute steady,
regular growth in gold production over the next several
years. During 2011, exploration success led to significantly
expanded production expectations at Cerro Negro in Argentina and
Éléonore in Quebec. Looking beyond our five-year 70% growth
forecast, the decision to proceed with construction of the El Morro
project in Chile ensures that another major source of new
production will come on stream to supplement our growth profile
over the longer term. "Goldcorp's increasing production profile and
balance sheet strength affords us the flexibility to fund our
operations and projects internally while also returning value to
shareholders in the form of increasing dividends. This
combination of strong, achievable growth and a meaningful dividend
creates a highly differentiated investment proposition in the gold
industry and a key competitive advantage for Goldcorp as we begin
2012." Goldcorp also provided cash cost guidance for the 2012
year. The Company expects to produce approximately 2.6
million ounces of gold at a total cash cost of $250 to $275 per
ounce on a by-product basis and $550 to $600 per ounce on a
co-product basis. Forecast 2012 silver production of
approximately 34 million ounces (including approximately 26 million
ounces at Peñasquito) would place Goldcorp among the largest silver
producers in the world. Copper production is forecast at
approximately 110 million pounds; zinc production is expected to be
approximately 400 million pounds and lead production is forecast at
approximately 180 million pounds. Assumptions used to forecast
total cash costs for 2012 include: $1,600 per ounce for gold;
by-product metals prices of $34.00 per ounce silver; $3.50 per
pound copper; $0.90 per pound zinc; $0.90 per pound lead, an oil
price of $95 per barrel and the Canadian dollar and Mexican peso at
$1.00 and $13.00 respectively to the US dollar. The Company
continues to evaluate opportunities to contain input costs and
minimize foreign exchange risk through the hedging of both diesel
and currencies. For year-over-year comparative purposes,
using actual metals prices and foreign exchange rates realized in
2011, Goldcorp's by-product cash costs for 2012 would be forecast
at $235 per ounce of gold. Mine-by-mine actual 2011 gold
production results and estimated 2012 gold production are as
follows: _______________________________________________ | Mine
|2011 Production|2012 Forecast|
|_________________|_______________|_____________| | Red Lake |
622,000 | 650,000 |
|_________________|_______________|_____________| | Peñasquito |
254,100 | 425,000 |
|_________________|_______________|_____________| | Los Filos |
336,500 | 345,000 |
|_________________|_______________|_____________| | Musselwhite |
242,600 | 270,000 |
|_________________|_______________|_____________| | Porcupine |
273,100 | 265,000 |
|_________________|_______________|_____________| | Marlin |
382,400 | 210,000 |
|_________________|_______________|_____________| |Alumbrera
(37.5%)| 133,500 | 140,000 |
|_________________|_______________|_____________| | Pueblo Viejo |
0 | 85,000 | |_________________|_______________|_____________| | El
Sauzal | 100,500 | 80,000 |
|_________________|_______________|_____________| |Marigold (66.7%)
| 102,500 | 75,000 |
|_________________|_______________|_____________| | Wharf | 67,500
| 55,000 | |_________________|_______________|_____________| |
Total | 2,514,700 | 2,600,000 |
|_________________|_______________|_____________| Canada At Red
Lake, production is expected to benefit from an increase in tonnes
mined from lower-grade zones consistent with the Company's
long-term initiative to utilize excess milling capacity. The
focus in the year ahead will remain on enhancing the overall
flexibility of the High Grade Zone (HGZ) through continued
investments in development. Construction of the 5-kilometre haulage
drift to connect the Cochenour shaft with the Red Lake mine on the
5400 foot level has advanced to a completion level of more than 36%
at the end of 2011 and targeted for 66% completion by year-end
2012. Upon completion, the drift will enable ore from the
Cochenour/Bruce Channel deposit to be hauled directly to the Red
Lake mine for processing at the existing mill facilities.
Forecast life-of-mine gold production from Cochenour is
approximately 250,000 to 275,000 ounces per year at low cash costs
commencing near the end of 2014. During 2012, exploration
drilling from the haulage drift will continue to test the
unexplored ground at depth in the heart of the prolific Red Lake
gold district. At Porcupine in Ontario, the Hoyle Pond Deep project
continued advancing toward shaft sinking in the first quarter of
2012 in an effort to target newly discovered zones of gold
mineralization. Exploration at Hoyle Pond remains focused on
lateral and depth extension of current mineralized zones, as well
as expansion of the TVZ zone. This zone has been successfully
extended up-dip and remains open at depth and to the east.
Seven drills on surface continued to intercept mineralized zones
similar to those found at depth with positive results throughout
2011. The Company also announced today approval for the
Hollinger open pit project near the Porcupine complex in
Timmins. The $75 million construction phase for the project
has begun and will continue for a period of 12-18 months, with
initial focus on equipment procurement, installation of the
dewatering system, site clearing, and development of the
five-kilometre haulage road between the Hollinger site and the Dome
mill. The mine is expected to begin production in the third
quarter of 2012. At Musselwhite in Ontario, increased production in
2012 will be driven by increasing grades in the PQ Deeps.
Exploration drilling continued to focus on the underground
extension of both the Lynx zone discovery and PQ Deeps
resources. The Lynx resource has been extended 200 metres
north and 100 metres to the south of the resource boundary, with
mineralization open along strike and up- and down-dip.
Underground drilling in the PQ Deeps has extended the resource 200
metres north of the resource boundary and remains open along
strike. Surface drilling on the north shore of Opapamiskin
Lake continues to investigate the projection of the Lynx zone. Upon
reaching initial gold production in late 2014, Éléonore in Quebec
will be a sustained source of large, low-cost gold production in
one of the most stable mining jurisdictions in the world. A
February 2011 pre-feasibility study update significantly expanded
the gold production profile through a development plan that will
access the Roberto deposit through two shafts and feed mill
throughput of 7,000 tonnes per day. In November, the
Environmental and Social Impact Assessment permit was received, and
full construction is now well underway. Over 46,000 metres of
surface diamond drilling was completed in 2011 aimed at in-fill
drilling in the central portion of the ore body and to test
high-grade results to the north. The exploration ramp has now
advanced 831 metres in length, the completion of which will provide
drilling locations for further resource definition. The
exploration shaft has reached a depth of 640 metres with completion
to a full 718 metre depth targeted for the second quarter of 2012.
Mexico At Peñasquito, both 50,000 tonne-per-day SAG lines are
routinely operating at capacity. During the month of December
throughput reached an average of 107,000 tonnes per day and reached
a new record of 140,000 tonnes on December 26. The
supplemental ore feed system to supply pebble feed to the 30,000
tonne-per-day high pressure grinding roll (HPGR) circuit will be
completed shortly and hauling of additional material to the
tailings dam walls is now complete. Ramp-up to full 130,000
tonne-per-day design throughput remains on track for the end of the
first quarter of 2012. With mining progressing deeper
into the heart of the sulphide ore body, higher grades and
throughput rates are expected to drive a significant production
increase in the year ahead. With expected production of
425,000 ounces of gold, Peñasquito is forecast to become Mexico's
largest gold producer and the Company's largest generator of cash
flow in 2012. Construction of an in-pit crushing and conveying
(IPCC) system is progressing well and commissioning of the system
is expected to commence in the second half of 2012. The IPCC
system will result in operating cost savings compared to truck
haulage. During 2011, successful exploration and development work
continued at Camino Rojo, an advanced-stage project near
Peñasquito. Over 77,000 metres were drilled during the year,
including 132 resource expansion and in-fill core holes, plus 38
condemnation holes in anticipation of site facilities. Bulk
samples have been shipped to Peñasquito for metallurgical column
tests and an updated resource block model has now been
completed. At Noche Buena, another advanced-stage district
project near Peñasquito, new exploration drilling has confirmed
structurally controlled higher grade mineralization trends within
the resource envelope. Follow-up drilling has been planned in
2012 to in-fill and expand the resource along these trends. Los
Filos mine in Guerrero state will continue to be a major
contributor to Goldcorp's overall production profile in 2012.
Gold production is forecast to increase slightly to 345,000
ounces. Exploration success continues to support the
potential for significant additions in gold reserves at Los Filos
over the longer term. Central and South America At Marlin in
Guatemala, production in 2012 will decline consistent with the
planned transition to an exclusively underground operation as
mining in the primary open pit is now complete. Stockpiled
material with an average grade of approximately 1.1 grams per tonne
is expected to make up approximately 40% of the mill feed at Marlin
in 2012. The development of recent high grade discoveries in the
West Vero zone will continue, with first production expected in the
second half of 2012. Exploration success continues at the Delmy
vein discovery adjacent to current underground mining
operations. Access to the vein has been developed at three
levels and two ventilation raises to the surface have been
completed. Mining of the Delmy vein, which remains open along
strike and at depth, began in late 2011 and is expected to
contribute to Marlin production throughout 2012. Gold production
from Pueblo Viejo, the 40% owned gold project in the Dominican
Republic operated by Barrick, is expected to contribute slightly to
the Company's overall 2012 production profile starting in mid-2012,
with a subsequent ramp-up to a forecast annual average of 415,000
to 450,000 ounces of gold in the first five years of full
production at cash costs of less than $350 per ounce. Project
construction is more than 85% complete following a delay caused by
damage to the partially constructed starter tailings dam facility
due to a heavy rainfall event in May 2011. Remediation of the
starter tailings dam continues to progress, with the joint venture
in receipt of all necessary approvals to allow construction of the
dam to its full height. As part of a longer-term, optimized
power solution for Pueblo Viejo, a plan is underway to build a
dual-fuel power plant at an additional cost to construct of
approximately $300 million (100%) to the joint venture (or $120
million representing Goldcorp's 40% share). The new plant is
expected to provide lower cost, longer term power to the project.
Following Pueblo Viejo, the high grade Cerro Negro deposit is
positioned to be the next source of new gold production for the
Company in 2013. The project includes several high-grade
veins located on the low-elevation Patagonian plains of southern
Argentina. With production expected to average approximately
550,000 ounces of gold in its first five full years of production,
Cerro Negro is well-positioned as Goldcorp's next cornerstone gold
mine. The development plan for Cerro Negro includes plant
throughput of 4,000 tonnes per day and allows for concurrent mining
from multiple veins. With the December 2011 approval of the
amended Environmental Impact Assessment (EIA) by the Provincial
authorities in the Santa Cruz province, mining will initially take
place in the Eureka, Mariana Central and Mariana Norte veins.
Development of the Eureka vein continues to advance on schedule and
development of the Mariana Central and Mariana Norte veins has
commenced. The Company also announced today that the Goldcorp Board
of Directors has approved a decision to proceed with construction
of the El Morro copper-gold project in Chile. Construction
will commence in September, 2012 following the end of winter and
extend over a five-year period at a capital cost of $3.9 billion.
Development activities in 2012 will include access road
construction, engineering, equipment procurement and
exploration. Drilling will focus on additional condemnation
for site infrastructure and testing potential extensions of the La
Fortuna deposit. Initial production is expected in 2017 with
full production expected in 2018. Over its 17-year mine life,
El Morro is expected to produce an average of over 210,000 ounces
of gold and 200 million pounds of copper per year to Goldcorp's
account. Life-of-mine cash costs are expected to be
approximately ($700) per ounce of gold on a by-product basis and
approximately $550 per ounce of gold on a co-product basis.
Metals price assumptions used to calculate average life-of-mine El
Morro cash costs are $1,200 per ounce of gold and $2.75 per pound
of copper. The El Morro project is located in the Huasco Province,
Atacama region of northern Chile, approximately 800 km north of
Santiago. The project currently comprises mining and milling
of sulphide copper and gold ore from the La Fortuna mineral
deposit. Current open pit proven and probable mineral
reserves on a 100% basis total 537 million tonnes at 0.52% copper
and 0.49 grams per tonne gold (6.1 billion pounds copper and 8.4
million ounces gold) and will support a 90,000 tonne-per-day
concentrator. Plant design includes a crushing plant,
semi-autogenous grinding (SAG) circuit, rougher flotation and
regrind circuit, and cleaner and scavenger flotation banks.
Additional project-related infrastructure includes a desalination
plant, power plant and concentrate filtration plant. The
construction of a new access route to the Pan American highway from
the project is also planned. This access route will also
serve as the concentrate and water pipeline route, and the
preferred location for the project power line. Water supply is
planned to be sourced from a reverse-osmosis desalination plant, to
be constructed approximately 60 kilometres north of Huasco.
The projected desalination plant will produce 740 litres per second
of agricultural-quality water, which will be conveyed to site along
a 193 kilometre-long water pipeline. Concentrate will be
transferred via pipeline to a concentrate filter plant at the port
site for overseas shipment. Financial Guidance An estimated
$1.7 billion in cash at year-end, an undrawn $2 billion credit
facility and continuing strong cash flows in 2012 are expected to
provide the necessary flexibility to fund the Company's
peer-leading growth profile. Goldcorp will invest aggressively in
2012 to fund its suite of growth projects, with capital
expenditures for 2012 forecast at approximately $2.6 billion of
which approximately 60% is allocated to projects and 40% for
operations. Major project capital expenditures in 2012
include approximately $500 million at Cerro Negro, $400 million at
Éléonore, $350 million at Pueblo Viejo, and $185 million at El
Morro. Spurred by significant exploration successes in and around
many of its key properties, company-wide exploration expenditures
in 2012 are expected to total approximately $200 million, of which
approximately one third will be expensed. Goldcorp's primary
focus will remain on the replacement of reserves mined throughout
the year and on extending existing gold zones at all of its
prospective mines and projects. In addition, investments will
be made in enhancing the Company's early-stage exploration
pipeline. General and administrative expense is forecast at
$160 million which excludes stock option expense estimated to be
$90 million for the year. Depreciation, depletion and amortization
expense is expected to be approximately $325 per ounce of gold sold
subject to the Company finalizing its year-end 2011 reserve and
resource calculation. The Company expects an overall
effective tax rate of 30% for 2012. Five Year Forecast Goldcorp's
production profile continues to evolve toward a model comprised of
sustained, low-cost gold production from large cornerstone
projects. Gold production is forecast to grow approximately
70% over the next five years to 4.2 million ounces in 2016.
New projects will make significant contributions to this growth,
with first gold production forecast from new projects as follows:
Pueblo Viejo, mid-2012; Cerro Negro, second-half 2013; Cochenour,
late 2014; Camino Rojo, 2014; Éléonore, late 2014; and El Morro,
2017. Year-by-year gold production is forecast as follows:
____________________________ |Year|ForecastGold Production|
|____|_______________________| |2012| 2.6 Million ounces |
|____|_______________________| |2013| 3.2 Million ounces |
|____|_______________________| |2014| 3.8 Million ounces |
|____|_______________________| |2015| 4.0 Million ounces |
|____|_______________________| |2016| 4.2 Million ounces |
|____|_______________________| At metals prices of $26 per ounce
silver, $3.30 per pound copper, $0.90 per pound zinc and $0.90 per
pound lead, average by-product cash costs over the five-year period
are expected to remain below $400 per ounce over the 5-year plan,
positioning the Company for outstanding, sustained margins and cash
flows over the long term. Goldcorp is one of the world's fastest
growing senior gold producers. Its low-cost gold production
is located in safe jurisdictions in the Americas and remains 100%
unhedged. The scientific and technical information concerning
Goldcorp's mineral properties contained herein is based upon
information prepared by or under the supervision of Maryse
Belanger, Vice President, Technical Services of Goldcorp who is a
"qualified person" within the meaning of National Instrument
43-101. 1. The Company has included a non-GAAP performance measure,
total cash cost per gold ounce, throughout this document. The
Company reports total cash costs on a sales basis. In the gold
mining industry, this is a common performance measure but does not
have any standardized meaning, and is a non-GAAP measure. The
Company follows the recommendations of the Gold Institute standard.
The Company believes that, in addition to conventional measures,
prepared in accordance with GAAP, certain investors use this
information to evaluate the Company's performance and ability to
generate cash flow. Accordingly, it is intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with GAAP. Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements", within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 and applicable Canadian securities legislation,
concerning the business, operations and financial performance and
condition of Goldcorp Inc. ("Goldcorp"). Forward-looking statements
include, but are not limited to, statements with respect to the
future price of gold, silver, copper, lead and zinc, the estimation
of mineral reserves and resources, the realization of mineral
reserve estimates, the timing and amount of estimated future
production, costs of production, capital expenditures, costs and
timing of the development of new deposits, success of exploration
activities, permitting time lines, hedging practices, currency
exchange rate fluctuations, requirements for additional capital,
government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, timing and possible outcome of
pending litigation, title disputes or claims and limitations on
insurance coverage. Generally, these forward-looking
statements can be identified by the use of forward-looking
terminology such as "plans", "expects", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", "believes" or variations of such words and phrases
or statements that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur" or "be
achieved" or the negative connotation thereof. Forward-looking
statements are made based upon certain assumptions and other
important factors that, if untrue, could cause the actual results,
performances or achievements of Goldcorp to be materially different
from future results, performances or achievements expressed or
implied by such statements. Such statements and information
are based on numerous assumptions regarding present and future
business strategies and the environment in which Goldcorp will
operate in the future, including the price of gold, anticipated
costs and ability to achieve goals. Certain important factors that
could cause actual results, performances or achievements to differ
materially from those in the forward-looking statements include,
among others, gold price volatility, discrepancies between actual
and estimated production, mineral reserves and resources and
metallurgical recoveries, mining operational and development risks,
litigation risks, regulatory restrictions (including environmental
regulatory restrictions and liability), activities by governmental
authorities (including changes in taxation), currency fluctuations,
the speculative nature of gold exploration, the global economic
climate, dilution, share price volatility, competition, loss of key
employees, additional funding requirements and defective title to
mineral claims or property. Although Goldcorp has attempted
to identify important factors that could cause actual actions,
events or results to differ materially from those described in
forward-looking statements, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. Forward-looking statements are subject to known and
unknown risks, uncertainties and other important factors that may
cause the actual results, level of activity, performance or
achievements of Goldcorp to be materially different from those
expressed or implied by such forward-looking statements, including
but not limited to: risks related to the integration of
acquisitions; risks related to international operations, including
economical and political instability in foreign jurisdictions in
which Goldcorp operates; risks related to current global financial
conditions; risks related to joint venture operations; actual
results of current exploration activities; environmental risks;
future prices of gold, silver, copper, lead and zinc; possible
variations in ore reserves, grade or recovery rates; mine
development and operating risks; accidents, labour disputes and
other risks of the mining industry; delays in obtaining
governmental approvals or financing or in the completion of
development or construction activities; risks related to
indebtedness and the service of such indebtedness, as well as those
factors discussed in the section entitled "Description of the
Business - Risk Factors" in Goldcorp's annual information form for
the year ended December 31, 2010 available at www.sedar.com.
Although Goldcorp has attempted to identify important factors that
could cause actual results to differ materially from those
contained in forward-looking statements, there may be other factors
that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such statements will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on
forward-looking statements. Forward-looking statements are
made as of the date hereof and accordingly are subject to change
after such date. Except as otherwise indicated by Goldcorp,
these statements do not reflect the potential impact of any
non-recurring or other special items or of any dispositions,
monetizations, mergers, acquisitions, other business combinations
or other transactions that may be announced or that may occur after
the date hereof. Forward-looking statements are provided for
the purpose of providing information about management's current
expectations and plans and allowing investors and others to get a
better understanding of our operating environment. Goldcorp does
not undertake to update any forward-looking statements that are
included in this document, except in accordance with applicable
securities laws. Goldcorp Inc. CONTACT: Jeff
WilhoitVice President, Investor RelationsGoldcorp Inc.Telephone:
(604) 696-3074Fax: (604) 696-3001E-mail: info@goldcorp.comwebsite:
www.goldcorp.com
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