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Goldcorp announces plans for 2013

By Lindsay Briscoe

To kick off the new year, Goldcorp upper management made a stop last week at the company’s flagship operation in Red Lake as part of a tour of its various mines and projects and to announce the 2013 guidance and five year growth profiles.

Red Lake

After production delays earlier in 2012 due partly to seismicity issues, Goldcorp President and Chief Executive Officer Chuck Jeannes said the year ended on a positive note. He also noted the High Grade Gold reserves are “intact” and that the newly discovered mineralized zones have the potential to contribute to long-term production.

Red Lake closed 2012 having produced 507,500 of the 2,392,500 total ounces from 11 different properties. In 2013, Red Lake is expected to reach anywhere from 475,000 – 510,000 ounces.

Construction is moving forward on an exploration drift at the 47 level which will provide a platform to provide ease of access to the NXT zone – which was discovered in 2012 and runs adjacent to the High Grade Zone.

“With limited drilling we may see an initial resource on the NXT Zone as early this year and this quarter we anticipate the completion of the new access drift that will enable systematic drilling of the zone through 2013 and beyond.”

Exploration will continue on the High Grade Zone focusing on a newly discovered structure at the bottom of the 4699 ramp.

Cochenour

A recent development update has revealed that the orientation of the Bruce Channel ore body is different than what the company had originally anticipated.

“We had significant white space data on the ore body – we didn’t have the top part identified and made some assumptions – and now that we’ve drilled it off, it’s lower than we expected,” said Jeannes.

The shaft will now have to be sunk an additional 245 metres. This will increase the start-up cost and push production into the first half of 2015.

Jeannes added that the five kilometre, high speed tram drift, which is being constructed between the Cochenour shaft and the Red Lake Mine and is now over 68 per cent complete, is expected to be finished by this time next year. It is getting close to the ore body and will be able to provide a drilling platform to reach the middle of the ore body – which management has always “understood to have the better grade” – later this year.

Once in full production, Cochenour is expected to take over declining Campbell production and produce 225,000 – 250,000 ounces a year.

Key financial notes and five year forecast

-Dividend increase of 11 per cent to $0.60 per share annually.
-Total 2012 cash costs expected to be $315 per ounce of gold on a by-product basis and $645 per ounce of gold on a co-product basis.
-2013 production growth expected to reach 10 per cent – with significant increases in the second half – to a total expected increase of 70 per cent over the next five years.

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