Toronto Stock Exchange: G
New York Stock Exchange: GG
(All Amounts in $US unless stated otherwise)
VANCOUVER, July 10, 2012 /PRNewswire/ - GOLDCORP INC.
(TSX: G, NYSE: GG) today announced gold production for the
second quarter of 2012 and updated production and cash cost
guidance for 2012.
Second Quarter Production
Gold production totaled 578,600 ounces, an
increase of 10% compared to the first quarter of 2012. The
final calculation of operating costs has not yet been completed,
but total cash costs(1) on a by-product basis for the
second quarter are expected to be approximately $370 per ounce. By-product cash costs for
the first half of 2012 are expected to be approximately
$310 per ounce. On a co-product
basis, cash costs are expected to be approximately $620 per ounce for the second quarter and
$635 per ounce for the first half of
2012.
Red Lake gold
production in the second quarter continued to be affected by the
previously-announced operating delays in the High Grade Zone due to
the need for rock de-stressing cuts at the 41 and 45 levels. The
impact of continued seismic activity has increased over the last
several weeks, and in connection with the Company's continued
commitment to the highest possible safety standards has slowed the
advance of de-stressing efforts. The first de-stress cut at
the 41 level has been completed and the second at the 45 level is
expected to be completed later in the third quarter. This is
expected to deliver improved operating performance in the High
Grade Zone over the second half of 2012. Inconsistent
mineralization in the Footwall Zone encountered in the first
quarter has also continued into the second quarter while production
in the Campbell Zone improved slightly compared to the first
quarter. This has resulted in a change in forecast gold
production at Red Lake to between
460,000 and 510,000 ounces in 2012 compared to previous guidance of
650,000 ounces. Over the balance of 2012, the Company will
evaluate the impact of these conditions on Red Lake's long-term production profile.
At Peñasquito, second quarter mill throughput
was affected by inadequate water supply in the month of June.
Prolonged drought conditions in the region have contributed to
lower-than-expected water recharge in the well field as well as
lower-than-expected water production from the pit dewatering
program. This condition limited plant throughput in June and
is also expected to affect plant throughput in the second half of
2012. The Company holds permits for sufficient quantities of
water and is currently working to drill additional wells to
increase water production. Concurrently, work is also underway to
increase the quantity of water reclaimed from the tailings
facility.
The current water deficit is expected to limit
plant throughput to between approximately 98,000 and 107,000 tonnes
per day over the balance of 2012. This is expected to result
in gold production of between 370,000 to 390,000 ounces in 2012
compared to previous guidance of 425,000 ounces. Production
of silver at Peñasquito is expected to total 23 to 24 million
ounces; zinc production is expected to total 310 to 325 million
pounds and lead production is expected to total 155 to 160 million
pounds in 2012.
2012 Guidance Update
In light of reduced first half production at
Red Lake and lower second half
production expectations at Peñasquito, full-year 2012 gold
production guidance has been revised to between to 2.35 and 2.45
million ounces compared to previous guidance of 2.6 million
ounces. Due to the lower expected production, total
cash cost guidance has also been revised, to $310 to $340 per ounce of gold on a by-product
basis(2) and $625 to $650
per ounce on a co-product basis. This compares to previous
guidance of $250 to $275 per ounce on
a by-product basis and $550 to $600
per ounce on a co-product basis. Production of
by-product metals for 2012 is forecast at approximately 30 - 31
million ounces of silver compared to previous guidance of 34
million ounces; and 310 - 325 million pounds of zinc and 155 - 160
million pounds of lead compared to previous guidance of 400 million
pounds and 180 million pounds respectively. Production
guidance for copper remains unchanged at 110 million pounds.
"We are disappointed with reducing production
guidance due to operational issues at our two most important
mines," said Chuck Jeannes, Goldcorp
President and Chief Executive Officer. "Our focus is on
addressing these issues promptly and in a manner supporting the
long-term opportunities at these key assets. At Red Lake, we look forward to the resumption of
mining in areas of the High Grade Zone that have been inaccessible
due to de-stressing activities, but grade inconsistencies in the
Footwall Zone experienced in the first six months of 2012
necessitate a conservative approach with regard to forecasting
production during the second half of the year. Our highest
priority at Red Lake and
everywhere we operate is on the safety of our employees and
contractors. At Peñasquito, the team is assessing
opportunities to address water deficits as soon as possible.
We are optimistic that sufficient water will be secured to
accommodate long-term throughput forecasts but until those sources
are secured, we have reduced the forecasts for ongoing throughput
and production. We remain encouraged that the ore body continues to
meet expectations with respect to grade and recoveries.
"Our 2012 production guidance at the rest of the
mines remains unchanged, providing a stable base to our operating
portfolio. 2012 capital spending plans remain within
expectations as we invest in our suite of growth projects."
Mine-by-mine actual second quarter and
year-to-date gold production results are as follows:
Mine |
Q2 2012A Production |
2012A YTD Production |
Red Lake |
104,000 |
218,200 |
Peñasquito |
103,800 |
172,400 |
Los Filos |
85,200 |
167,900 |
Porcupine |
74,900 |
135,600 |
Marlin |
56,700 |
109,900 |
Musselwhite |
56,500 |
109,700 |
Alumbrera (37.5%) |
36,700 |
64,300 |
Marigold (66.7%) |
18,900 |
45,400 |
El Sauzal |
23,600 |
45,000 |
Wharf |
18,300 |
34,900 |
Total |
578,600 |
1,103,300 |
Goldcorp's second quarter financial results are
scheduled to be released prior to the market open on July 26, 2012.
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 Company has included a non-GAAP performance measure, total
cash costs, by-product and co-product, 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. The Company
follows the recommendations of the Gold Institute Production Cost
Standard. The Company believes that, in addition to conventional
measures, prepared in accordance with GAAP the Company and 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.
- Price assumptions used to forecast total cash costs for
remainder of 2012 include $1,600 per
ounce of gold; by-product metal prices of $30.00 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.
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, 2011
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.
SOURCE Goldcorp Inc.