Canada NewsWire


“Operational strength throughout Goldcorp’s mine portfolio and a record high realized gold price resulted in a strong first quarter and a great start to 2011,” said Chuck Jeannes, Goldcorp President and Chief Executive Officer. “Growth in adjusted earnings and cash flow of 150% and 108%, respectively, from the first quarter of 2010, while realized gold prices increased 26% over the same period, highlights the strong leverage to gold price enjoyed by Goldcorp shareholders. Operationally, Red Lake Mine in Ontario anchored solid gold production while another record performance at Los Filos in Mexico further established its position as a key contributor to our asset portfolio. Our first quarter gold production at a cash cost of just $188 per ounce on a by-product basis was driven by continued work on cost containment throughout the organization in light of inflationary pressures as well as strong by-product metals prices. We remain comfortable with 2011 gold production guidance of between 2.65 million and 2.75 million ounces of gold, but if the improving trend in cash costs continues we may revisit our guidance of between $280 – $320 per ounce cash costs as the year progresses. Amid the current precious metals price environment, Goldcorp continues to provide the best gold margins in the industry. Also during the first quarter, we were pleased to present detailed development plans for Cerro Negro, Éléonore and Cochenour – three important new growth projects that will anchor our 60% growth in gold production to 4 million ounces in 2015.”

Financial Review

Gold sales in the first quarter were 627,300 ounces on production of 637,600 ounces. This compares to sales of 544,200 ounces on production of 600,100 ounces in the first quarter of 2010. Total cash costs were $188 per ounce of gold on a by-product basis. On a co-product basis, cash costs were $504 per ounce.

Reported net earnings from continuing operations in the quarter were $651 million compared to $232 million in the first quarter of 2010. Adjusted net earnings from continuing operations in the first quarter totaled $397 million, or $0.50 per share, compared to $159 million or $0.22 per share, in the first quarter of 2010. Adjusted net earnings primarily exclude the gains from the foreign exchange translation of future income tax liabilities and the disposition of the Osisko shares, the two mark to market losses relating to a term silver sales contract and the conversion feature of convertible senior notes but include the impact of non-cash stock option expenses which amounted to approximately $22 million or $0.03 per share for the quarter. Operating cash flow was $586 million compared to $282 million in last year’s first quarter. Included in the operating cash flows is a non-cash working capital add back of $108 million of current income taxes payable which will be paid over the balance of 2011. Gold margin4 was $1,206 per ounce of gold sold.

Mexico: Penasquito Reaches Design Capacity; Los Filos Sets Another Production Record

On March 30, 2011, Penasquito achieved its designed milling capacity of 130,000 tonnes per day. Mill throughput averaged 94,400 tonnes per day for the month of March. Second quarter activities will be directed towards stabilizing plant performance at full capacity of 130,000 tpd. Gold and silver production totaled 57,600 and 4,374,400 ounces, respectively, for the first quarter. Lead and zinc production for the first quarter totaled 36.5 million pounds and 55.6 million pounds, respectively. Strong by-product silver, lead, and zinc credits contributed to by-product cash costs during the quarter of negative $1,488 per ounce of gold.

Exploration drilling commenced early in the second quarter of 2011, with the main objectives being to test the continuity of the gold, silver, zinc, and lead manto resources and the extension of the underground potential below and outside of the Penasquito open pit.

Record quarterly gold production of 94,600 ounces at Los Filos during the first quarter was 11% higher than the previous quarter. Increased ore processed through the crushing and agglomeration plant drove higher grades and recoveries. Construction of a fourth stage of the heap leach pad commenced during the fourth quarter of 2010 and is on target for completion late in the second quarter of 2011. Plans for further expansion of leaching capacity at Los Filos are under development amid continued ongoing successful gold reserve additions.

Canada: New Opportunities at Long-Lived Gold Mines

At Red Lake, gold production was 186,100 ounces during the first quarter at total cash costs of $322 per ounce. During the quarter, accelerated diamond drilling activities continued to successfully extend the High Grade Zone below the 52 level. A significant amount of exploration and development is also continuing to bring the Upper Red Lake and Far East zones into sustained production, both as alternate sources of ore and to complement the fill the mills program.

First quarter gold production at Musselwhite in Ontario was 67,300 ounces at a total cash cost of $621 per ounce. Exploration in the first quarter of 2011 focused on further definition of the Lynx zone, both from surface and underground drill platforms. Surface drilling was conducted at 0.8km and 1.2km north of the resource boundary of the Lynx zone, targeting the down plunge extent to provide confirmation of the Lynx projection. Underground drilling has focused on extending the Lynx resource to the north and south.

At Porcupine in Ontario, gold production during the first quarter totaled 59,800 ounces at a total cash cost of $733 per ounce. The Hoyle Pond Deep project continued to progress, the completion of which will enable access to newly-discovered zones of gold mineralization and enhance operational flexibility and efficiencies throughout the Hoyle Pond underground complex.

Commitment to Sustainable Prosperity Continues in Guatemala

At Marlin in Guatemala gold production was 77,800 ounces at a total cash cost of negative $324 per ounce. Silver production totaled 1,769,000 ounces. Gold and silver production was 16% and 18% lower than the fourth quarter 2010, respectively.

Operations at Marlin continue normally pending conclusion of the Guatemalan government’s administrative process which was prompted by precautionary measures issued by the Inter-American Commission on Human Rights (IACHR). Goldcorp strongly believes the IACHR’s action is based on environmental allegations that are demonstrably without merit. The government’s responses to the IACHR expressly confirm that studies conducted by the Ministry of Energy and Mines, the Ministry of Health and Social Welfare, and the Ministry of Environment and Natural Resources in Guatemala demonstrate there is no evidence of pollution or ill effects to public health or the environment as a result of operations at Marlin. On May 3, 2011, Goldcorp and Montana published a second update on the implementation of the Human Rights Assessment that was published in May 2010. This update and the other HRA documents are available on the Company’s website at In addition, among the other significant initiatives undertaken by the Government of Guatemala and supported by Goldcorp are the initiation of a mesa de dialogo (roundtable discussion) with participation by representatives of the Municipalities of San Miguel Ixtahuacan and Sipacapa, the national government, and Goldcorp; the confirmation of Guatemala’s acceptance as a candidate country by the Extractive Industries Transparency Initiative; and Guatemala’s issuance of a proposed regulation to implement a consultation process with indigenous people in compliance with Convention 169 of the International Labor Organization. The Company expects that normal operations at the Marlin mine will continue as the government continues to engage with the IACHR.

Industry-Best Project Pipeline Advances

At the Cerro Negro project in Argentina, recently announced results from an updated feasibility study and a new development plan have detailed a more than doubling of the plant throughput to 4,000 tonnes per day, contributing to an average of 550,000 ounces of gold production per year over the first five full years. Average cash costs during the first five years of production are expected to be less than $200 per ounce of gold. Based only on existing reserves, annual gold production is expected to average 340,000 ounces per year at cash costs of approximately $290 per ounce over a 12-year mine life. The mining of multiple veins creates significant flexibility for optimization of the mine plan as additional reserves are developed.

The Eureka, Mariana Central and Mariana Norte veins will comprise the initial sources of production at Cerro Negro. Development of the decline at the Eureka vein has already been advanced to more than 900 metres. The declines at Mariana Central and Mariana Norte are expected to commence construction in the fourth quarter of 2011 following the issuance of necessary permits. Exploration drilling continues, with a total of 10 drill rigs expected on site during the second quarter.

At the Pueblo Viejo project in the Dominican Republic construction continues advancing with first production expected in the first quarter of 2012. Overall construction is 55% complete and about 80% of the pre-production capital budget of $3.3 – $3.5 billion (100% basis) has been committed. The environmental permits for temporary power sources, necessary for commissioning to commence in Q4 2011, were secured during the quarter. Two of the four autoclaves have been brick-lined in preparation for operation. About 85% of the planned concrete has been poured, approximately 85% of the steel has been erected and more than 3.2 million tons of ore have been stockpiled. Work continues toward achieving key milestones including the connection of power to the site.

At the Éléonore project in Quebec, the advanced exploration activities continue. A new mine plan provides for doubling the plant throughput to 7,000 tonnes per day starting in 2017 with gold production averaging approximately 600,000 ounces per year over 15 years. Initial gold production is scheduled to start in the fourth quarter of 2014. Life-of-mine cash costs are expected to be below $400 per ounce and the total capital cost to full production is approximately $1.4 billion. During the first quarter of 2011, over 12,000 metres of surface diamond drilling was completed. The program was designed to better define the mineralized zones between the 400 and 650 metre levels below surface where the first levels of the mine will be developed and to convert inferred resources into measured and indicated resources. At quarter end, the 725 metre deep exploration shaft had reached a depth of 200 metres below surface and is expected to reach its target depth in the second quarter of 2012. The project is expected to receive final clearance to commence construction with the receipt of the Environmental and Social Impact Assessment (ESIA) permit in the third quarter of 2011.

Following the completion of a scoping study at Cochenour, full-scale development of this project is underway. Ore from Bruce Channel will be transported via the high speed haulage drift and processed at Red Lake’s existing Campbell milling facilities at a rate of approximately 1,500 tonnes per day. Estimated life-of-mine gold production is expected to average between 250,000 – 275,000 ounces per year over an approximate 20-year mine life at total cash costs below $350 per ounce. In the first quarter, work advanced on the upgrade and expansion of the Cochenour shaft and development of the high speed haulage drift. Exploration drilling is ramping up on surface with four drills working on delineating and expanding the resource at Cochenour.

Exploration and development work continued at Camino Rojo an advanced-stage district exploration project near Penasquito. A total of 20,300 metres were drilled from five rigs. Shallow RAB-style drilling has expanded the known extent of the prospective, hydrothermally altered rocks for 1.5 kilometres east of the Represa resource, beneath post-mineral cover.

At the El Morro project, approval of the Environmental Impact Assessment (EIA) was received on March 14, 2011 which authorizes El Morro, upon receipt of the required sectoral permits, to build the mine and facilities as presented in the EIA submitted in late 2008. Studies are ongoing to evaluate the optimum configuration of the plant and facilities including an assessment of any resulting impacts to costs and schedule. An update to the feasibility study will be completed in the third quarter and any changes will be incorporated into that study.

This release should be read in conjunction with Goldcorp’s first quarter 2011 financial statements and MD&A report on the Company’s website,, in the “Investors” section under “Financials”.

A conference call will be held on May 5, 2011 at 10:00 a.m. (PDT) to discuss the first quarter results. Participants may join the call by dialing toll free 1-866-223-7781 or 1-416-340-8018 for calls from outside Canada and the US. A recorded playback of the call can be accessed after the event until June 5, 2011 by dialing 1-800-408-3053 or 1-905-694-9451 for calls outside Canada and the US. Pass code: 2100211. A live and archived audio webcast will also be available at

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.


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