Goldcorp achieves 2012 gold production and cash cost forecast;
Five-year gold production growth profile forecast at 70%
Toronto Stock Exchange: G
New York Stock Exchange: GG
(All Amounts in $US unless stated otherwise)
VANCOUVER, Jan. 7, 2013 /PRNewswire/ - GOLDCORP INC.
(TSX: G, NYSE: GG) today announced gold production and cash
costs for 2012 and provided production and cash cost guidance for
2013 and the five-year period ending 2017.
Highlights
- Strong fourth quarter 2012 gold production totaling 696,700
ounces, with total 2012 gold production of 2.39 million ounces,
within previous guidance.
- Forecast 2013 gold production to grow approximately 10% to
between 2.55 and 2.80 million ounces.
- Forecast five-year gold production to increase to 4.0 - 4.2
million ounces by 2017.
- Forecast average five year by-product cash costs1
expected to remain below $500 per
ounce.
- Dividend increases 11% to $0.60
per share.
- Adopting all-in sustaining cash cost1 reporting
measure for 2013.
Goldcorp's year-end financial statements are
scheduled to be released on February 14,
2013. The final calculation of operating costs has not yet
been completed, but total cash costs for all of 2012 are expected
to be approximately $315 per ounce of
gold on a by-product basis and approximately $645 per ounce of gold on a co-product basis.
"Delivering a strong fourth quarter and
achieving our revised forecast gold production and cash cost
guidance is a very positive conclusion to what was a challenging
year," said Chuck Jeannes, Goldcorp
President and Chief Executive Officer. After earlier
production delays at Red Lake,
this cornerstone mine ended the year with operational stability,
High Grade Zone gold reserves intact, and newly-discovered
mineralized zones that hold the potential to contribute to the
production profile over the longer term. At Peñasquito,
water availability issues limited throughput rates and affected
economic efficiency, masking the emerging strength of the operation
as a key engine of cash flow growth in just its second full year in
commercial production. The rest of our mine portfolio performed
according to expectations in 2012.
"Looking forward, we expect to deliver
meaningful production growth in 2013, driven by solid performance
expected throughout the portfolio as well as the ramp-up in
production at the Pueblo Viejo
joint venture in the Dominican
Republic. Pueblo Viejo
represents the first leg of new gold growth as a result of our
multi-year investment in new growth projects. Cerro Negro in
Argentina remains positioned to be
the next, adding substantial new gold production in 2014, with
Éléonore expected to make a significant contribution in 2015.
Our five-year gold production profile builds steadily over the next
several years, culminating in forecast gold production growth of
approximately 70% by 2017.
"Just as important as the number of gold ounces
we expect to add is the quality of those gold ounces, which we
believe is critical to growing shareholder value over time.
Goldcorp's emphasis has always been on growth in cash flow as
opposed to growth in new ounces. We will remain disciplined
stewards of shareholder capital by focusing on high quality, high
return projects and returning capital to shareholders in the form
of increased dividends, and we were pleased to announce today an
11% dividend increase to $0.60 per
share annually. We remain committed to continuous
improvements in the way in which we assess and account for the
risks inherent in our business. We believe this has resulted
in a carefully considered, high quality and realistic five-year
growth plan that demonstrates the unique investment proposition
that Goldcorp shares continue to represent."
2013 Guidance
Goldcorp expects to produce between 2.55 and
2.80 million ounces of gold in 2013. Production is
expected to build in the second half of the year based on the ramp
up at Pueblo Viejo and higher
grades late in the year at Peñasquito.
Working with the World Gold Council, the Company
is adopting an "all-in sustaining cash cost" measure that the
Company believes more fully defines the total costs associated with
producing gold. All-in sustaining cash costs include
by-product cash costs, sustaining capital, corporate general &
administrative expenses and exploration expense. As the
measure seeks to reflect the full cost of gold production from
current operations, new project capital is not included in the
calculation. A full reporting of cash activities will
continue to be available in the Company's quarterly financial
statements and Goldcorp will continue to report cash costs on a
by-product and co-product basis in addition to all-in sustaining
cash costs. For 2013, the Company estimates all-in sustaining
cash costs of $1,000 to $1,100 per
ounce compared to approximately $865
per ounce in 2012. Cash costs are forecast at between
$525 to $575 per ounce on a
by-product basis and between $700 to
$750 per ounce on a co-product basis. Cash costs are
expected to rise from 2012 levels primarily due to industry-wide
cost inflation and the impacts of lower grades and by-product
production at Peñasquito.
Forecast 2013 silver production is expected at
between 29 and 31 million ounces (including approximately 20 to 21
million ounces at Peñasquito). Zinc production is expected to be
between 285 and 305 million pounds and lead production is forecast
between 145 and 160 million pounds. Copper production is forecast
between 95 and 100 million pounds. On a gold equivalent
basis2, Company-wide forecast 2013 gold production
totals approximately 3.5 million to 3.8 million ounces.
Assumptions used to forecast total cash costs
and gold equivalent calculation for 2013 include:
$1,600 per ounce for gold; by-product
metals 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
$100.00 per barrel and the Canadian
dollar and Mexican peso at $1.00 and
$12.75 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 fuel and currencies. For year-over-year
comparative purposes, using actual metals prices and foreign
exchange rates realized in 2012, Goldcorp's by-product cash costs
for 2013 would be forecast at $500
per ounce of gold. Mine-by-mine actual 2012 gold production
results and estimated 2013 gold production are as follows:
Mine |
2012 Production |
2013 Forecast |
Red Lake |
507,500 |
475,000 - 510,000 |
Peñasquito |
411,300 |
360,000 - 400,000 |
Los Filos |
340,400 |
340,000 - 350,000 |
Pueblo Viejo (40.0%) |
41,200 |
330,000 - 435,000 |
Porcupine |
262,800 |
270,000 - 280,000 |
Musselwhite |
239,200 |
250,000 - 260,000 |
Marlin |
207,300 |
185,000 - 200,000 |
Alumbrera (37.5%) |
136,600 |
120,000 - 125,000 |
Marigold (66.7%) |
96,300 |
95,000 - 100,000 |
El Sauzal |
81,800 |
70,000 - 80,000 |
Wharf |
68,100 |
55,000 - 60,000 |
Total |
2,392,500 |
2,550,000 - 2,800,000 |
Canada
At Red Lake,
gold production is expected to remain stable at between 475,000 to
510,000 ounces. An increase in tonnes through the mill from mining
of additional sulphide areas at the Red
Lake complex is expected to slightly decrease gold
grade. De-stressing activities are expected to effectively
manage seismicity, with a single de-stress slot planned at the
46/47 level.
Successful drilling during 2012 resulted in the
discovery of the NXT zone adjacent to the High Grade
Zone. Five drills will continue to define and extend
the zone between the 48 and 57 levels and beyond, with the
objective of identifying the up-plunge extents. Construction
is progressing on an exploration drift at the 47 level with
expected completion by the end of the current quarter that will
provide a platform to increase drill density for conversion of
resources to reserves. Additional exploration work in the
High Grade Zone will focus on a newly-discovered structure at the
bottom of the 4699 ramp.
At Cochenour,
construction of the five-kilometre haulage drift to connect the
Cochenour shaft with the
Red Lake mine on the 5100 level
advanced to 68% complete at the end of 2012 with expected
completion by the end of the first quarter of 2014. 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. During 2013,
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.
A study of the overall project has been
completed that has concluded that the center of the Bruce Channel
ore body is lower than previously expected, necessitating the
deepening of the Cochenour shaft
by 245 meters. This has resulted in a scope change that is
expected to increase the initial capital spend to $540 million in current dollars and move first
gold production into the first half of 2015. Following
ramp-up to full production, forecast life-of-mine gold production
from Cochenour is expected to be
between 225,000 - 250,000 ounces per year.
At Porcupine in Ontario, gold production in 2013 is expected
to be between 270,000 and 280,000 ounces. The Hoyle Pond Deep
project continued to advance to access both depth extensions of
current ore bodies and newly-discovered zones and to enhance
flexibility and efficiencies throughout the operation.
Pending the receipt of permits, initial production from the new
Hollinger open pit project is expected early in 2013.
At Musselwhite in Ontario, gold production is expected to
increase slightly as mining continues to progress in the PQ Deeps
and Lynx zones. Exploration will continue to focus on the northern
extension of the Lynx Zone from surface and underground, drilling
of the West Limb and the underground extension of the PQ
Deeps. Surface drilling from barges has returned encouraging
results on the Lynx Zone and additional mineralized shear zones
have been intersected on the West Limb.
At Éléonore in Quebec, first gold production remains on track
for late 2014. In December, the production shaft sinking
commenced. Underground exploration drilling from the
recently-completed Gaumond exploration shaft will accelerate in
2013, enabling further definition drilling of the deep portion of
the Roberto deposit to proceed. The exploration ramp
excavation continued to progress and has now reached over 2,500
metres in length. Currently, four diamond drills are
conducting definition drilling from strategic working platforms in
the ramp. Consistent with the Company's focus on capital
discipline, the results of this drilling effort will guide the pace
of progress and overall capital spending of the production shaft
sinking, which stood at 83 metres at year-end. Work to date
indicates an increase in initial capital to $1.75 billion in current dollars due to
additional permitting required related to water treatment as well
as overall project cost escalation. Ongoing work with regard to
mine planning and initial development capital is expected to be
completed during the current quarter and may result in a further
increase to initial capital. Forecast average
life-of-mine gold production from Éléonore at full production is
approximately 600,000 ounces per year.
Mexico
At Peñasquito, the Company will continue to
bring additional water wells into production within the
Cedros Basin in addition to new
dewatering wells within the Chile Colorado pit. The
additional water wells in 2013 are expected to increase mill
throughput to 105,000 tonnes per day compared to 98,800 tonnes per
day achieved in the fourth quarter of 2012. A water and
tailings study to develop a comprehensive long-term water strategy
for the Peñasquito district is underway and expected to be
completed during the first half of 2013. Mining in a
lower grade portion of the pit over the first half of the year is
also expected to impact overall production, which is forecast
between 360,000 and 400,000 gold ounces for 2013. On a gold
equivalent basis, Peñasquito production is expected to total
approximately 895,000 to 970,000 ounces.
During 2013, a number of efficiency improvements
are being implemented that are expected to provide incremental but
meaningful improvements in productivity during the year.
Construction and commissioning of the Waste Rock Overland Conveyor
System was completed in the fourth quarter of 2012 and is expected
to result in important operating cost savings compared to truck
haulage.
During 2012, a study of the Camino Rojo project
near Peñasquito was completed that contemplates a heap leach
facility to process near-surface oxide and transition
mineralization. The study demonstrated strong financial
returns but does not consider recent positive exploration results
in the sulphide portions of the deposit. Until the sulphide
opportunity is more thoroughly understood, development and
construction of the heap leach facility will be deferred.
Work will continue in 2013 on exploration, permitting and
metallurgical testing.
Central and South
America
At Marlin in Guatemala, production in 2013 is expected to
decrease slightly, with a greater proportion of the production from
the lower-grade West Vero zone. The mine will remain
exclusively an underground operation. Exploration drilling
will continue to focus on near-mine targets including the West
Marlin, Delmy and Coral mineralization.
At Pueblo
Viejo, modifications to one of the four autoclaves were
successfully completed in December and will be replicated on the
other three autoclaves in first half of 2013. Completion is
expected to drive strong 2013 production of between 330,000 and
435,000 gold ounces on a 40% basis. Risks included in the
guided production range include slower-than expected plant
throughput ramp-up in the initial year of commercial production and
potential impacts of power availability, although grid power has
been reliable to date. As part of a longer-term, optimized
power solution for Pueblo
Viejo, construction progressed on a 215 MW dual fuel
power plant which is expected to commence operations in
mid-2013. Upon commissioning, the new plant is expected to
provide dedicated long-term power to the project.
The Cerro Negro project in the province of
Santa Cruz, Argentina remains on track for first gold
production in late 2013 with negligible gold production
anticipated. With production expected to average 525,000 ounces of
gold in its first five full years of production and cash costs
expected to average less than $350
per ounce, Cerro Negro is well-positioned as Goldcorp's next
cornerstone gold mine. Underground ramp development of the
Eureka vein has advanced to more than 2,100 metres of the total
3,900 metres planned. The Eureka stockpile now contains an
estimated 40,300 tonnes at an estimated grade of 11.1 grams per
tonne gold and 204 grams per tonne silver. Along with
Eureka, the Mariana Central and Mariana Norte veins will
provide the initial production at Cerro Negro, where work on
the production ramps continues to progress on schedule. Ramp
development at Mariana Central has reached 475 metres and at
Mariana Norte, ramp development has reached 310 metres.
Overall Engineering, Procurement and Construction Management was
55% complete at the end of 2012. Exploration drilling planned for
2013 will focus on extending Mariana Central, Mariana Norte and
San Marcos veins, all of which
remain open at depth and along strike, as well as on testing
newly-discovered veins. Significant cost inflation in
Argentina, country factors and
overall cost escalation has increased the initial estimated capital
expenditure at Cerro Negro to $1.35
billion in current dollars.
The El Morro project in Chile remains suspended since April 30, 2012 pending the resolution by the
Chilean environmental permitting authority (the Servicio de
Evaluación Ambiental or SEA) of certain permitting deficiencies
specifically identified by a decision of the Antofogasta Court of
Appeals. The Company continues to work with the Chilean authorities
and local communities to rectify these deficiencies which include
advancing the consultation process. Other project activities are
focused on gathering information to support permit applications for
submission following the completion of the administrative process
and optimization of the project economics including securing
long-term power supply.
Financial Guidance
Approximately $900
million in cash at year-end, an undrawn $2 billion credit facility and continuing strong
cash flows in 2013 are expected to provide the liquidity to fund
the Company's peer-leading growth profile. Capital
expenditures for 2013 are forecast at approximately $2.8 billion, of which approximately 60% is
allocated to projects and 40% to operations. Major project
capital expenditures in 2013 include approximately $775 million at Cerro Negro, $650 million at Éléonore, $100 million at Cochenour, and $50
million at Camino Rojo.
Exploration expenditures in 2013 are expected to
total approximately $225 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 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 $180 million which excludes stock option expense
estimated at $80 million for the
year. Depreciation, depletion and amortization expense is expected
to be approximately $335 per ounce of
gold sold subject to the Company finalizing its year-end 2012
reserve and resource calculation. The Company expects an
overall effective tax rate of 29% for 2013.
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
4.0 to 4.2 million ounces in 2017. New projects will make
significant contributions to this growth, with first gold
production forecast from new projects as follows: Cerro Negro, late
2013; Éléonore, late 2014; Cochenour, first half 2015; Camino Rojo,
2016. Year-by-year gold production is forecast as
follows:
Year |
Forecast Gold
Production |
2013 |
2.55 to 2.8 million ounces |
2014 |
3.2 to 3.5 million ounces |
2015 |
3.5 to 3.8 million ounces |
2016 |
3.8 to 4.0 million ounces |
2017 |
4.0 to 4.2 million ounces |
At metals prices of $27.60 per ounce silver, $3.50 per pound copper, $0.94 per pound zinc and $0.94 per pound lead, forecast average five year
by-product cash costs are expected to remain below $500 per ounce, positioning the Company for
sustained margins and cash flow growth over the long term.
Conference Call Details
A conference call will be held on January 8, 2013 at 8:00
a.m. (PDT) to discuss the guidance release. Participants may
join the call by dialing toll free 866-223-7781 or 416-340-8018 for
calls from outside Canada and the
US. A recorded playback of the call can be accessed after the
event until February 8, 2013 by
dialing 800-408-3053 or 905-694-9451 for calls outside Canada and the US. Pass code:
3793211. A live and archived audio webcast will also be
available at www.goldcorp.com.
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, P. Geo., Senior
Vice President, Technical Services of Goldcorp who is a "qualified
person" within the meaning of National Instrument 43-101.
1. |
The Company has included non-GAAP performance measures, total
cash cost per gold ounce and all-in sustaining cash cost per gold
ounce, throughout this document. The Company reports both of these
measures on a sales basis. |
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Total cash cost per gold ounce in the gold mining industry 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. All-in sustaining
cash costs include by-product cash costs, sustaining capital,
corporate general & administrative expenses and exploration
expense. |
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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, they are 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. |
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2. |
Gold equivalent ounces are calculated using the following
assumptions: $1,600 per ounce for gold; by-product metal prices of
$30.00 per ounce silver; $3.50 per pound copper; $0.90 per pound
zinc; and $0.90 per pound lead. By-product metals are
converted to gold equivalent ounces by multiplying by-product metal
production with the associated by-product metal price and dividing
it with the gold price. |
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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
economic 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.