Red Lake Gold production surges ahead. - Feasibility target reached in 5 months! - 240,000 ounces produced, cash cost $57 per ounce
TORONTO, June 11 /CNW/ - Goldcorp Inc. (G, TSE, GG, NYSE) is pleased to
announce that on June 8th production at its new Red Lake Mine for the year
2001 reached 240,000 ounces of gold at a cash cost of $57 per ounce. This is a
remarkable achievement considering that the original Feasibility Study for Red
Lake anticipated production of 240,000 ounces for the first full year of
production.
RED LAKE: CANADA'S LARGEST GOLD MINE
As a result of this performance, we are increasing our 2001 forecasts to
440,000 ounces of gold at a cash cost of less than $70 per ounce from our
previous forecast of 400,000 ounces at $75 per ounce. The Red Lake Mine is now
the largest gold producer in Canada.
$57 PER OUNCE, 2.57 OUNCES PER TON
To the end of May, 98,154 tons of ore had been processed at an average
grade of 2.57 ounces of gold per ton (opt) or 88.1 grams per tonne (gpt) with
a recovery rate of 89.3%. The average production rate was 650 tons per day
over this period. Production to May 31 was 233,874 ounces and includes the one-
time effect of a 9,000 ounce inventory adjustment discussed in previous news
releases. Year to date cash costs have averaged $57 per ounce.
The forecast average grade of the reserves mined to the end of May was
2.00 opt. (68.6gpt) The realized grade of 2.57 opt, therefore represents a 29%
improvement relative to this forecast.
MORE TONS, HIGHER GRADE, MORE GOLD
Commercial production at our new Red Lake Mine commenced on January 1st
2001. However, mining of the high grade mineralization began earlier, in 2000
during development of the orebody.
For the material mined project to date the reserves had indicated 156,800
tons at a grade of 1.90 opt gold (65.2 gpt) for a total of 298,700 ounces of
contained gold.
However, actual mining has produced better results. We have extracted
184,675 tons at a grade of 2.21 opt gold (75.8 gpt) for a total of 408,175
ounces of contained gold. This represents a 37% improvement relative to
forecasts.
INCREASED EARNINGS AND CASH FLOW ESTIMATES
As a result of our improved production forecasts at Red Lake, we are
increasing our corporate earnings estimates for 2001 from $0.42 to $0.49 per
share, and our cash flow estimates from $0.86 to $0.97 per share.
NEW RESERVE ESTIMATE PLANNED
Production forecasts for the remainder of 2001 continue to be based on
the grades and tonnages forecast by the reserves announced on January 25,
2001. The fact that we continue to realize higher grades and tonnages than
indicated by the reserves suggests that we may be consistently underestimating
the ore reserve grade and tonnage. We are currently conducting a detailed
review of our ore reserve calculation methodology, particularly with respect
to grade and anticipate being able to publish a revised reserve estimate in
September 2001.
EXPLORATION UPDATE - RED LAKE REGIONAL PROGRAM
The three highest grade mines in the Red Lake district are our own Red
Lake and Cochenour Mines and the Campbell Mine. Together they have contributed
more than 80% of the past production and current reserves in the Red Lake
district. The exploration history of other major gold districts and our own
exploration success demonstrates that this is most likely to occur around
existing mines. That is why the major part of our Red Lake land package is
centred around these three mines.
Two of our highest priority exploration targets are the Cochenour Mine
area and the Abino prospect. The Cochenour Mine is located 5 miles (8
kilometers) northwest of our Red Lake Mine. Compilation of all past
exploration at Cochenour is now complete. Some of the best drilling results
are comparable to those obtained in drilling our high grade Red Lake
discovery, and include 22.66 opt gold across 12.5 feet (777 gpt across 3.8
meters), 9.68 opt across 23.8 feet (331.9 gpt across 7.3 meters) and 30.89 opt
across 10.7 feet (1059.2 gpt across 3.26 meters). The mine has also yielded
some spectacular gold samples, with some on display at the Royal Ontario
Museum in Toronto, Ontario.
The Abino prospect is located 6 miles (10 kilometers) north of the
Cochenour Mine and is the site of a shallow shaft and ramp. It is a
particularly exciting target, which has not received any exploration since
1986. Some of the best results include 6.2 opt across 1.52 feet (212.6 gpt
across 0.46 metres) and 2.95 opt across 3.4 feet (101.2 gpt across 1.0
metres). We are accelerating the exploration program on the Cochenour Mine
property.
We will be providing a more complete exploration update encompassing both
mine site and Red Lake regional work in the near future.
Goldcorp is a North American based gold producer. In addition to its
rich, high-grade Red Lake Mine, Goldcorp owns a gold mine located in South
Dakota and one industrial mineral operation in Saskatchewan.
Forward-Looking Statements
This press release includes certain "Forward-Looking Statements" within
the meaning of section 21E of the United States Securities Exchange Act of
1934, as amended. All statements, other than statements of historical fact,
included herein, including without limitation, statements regarding potential
mineralization and reserves, exploration results and future plans and
objectives of Goldcorp Inc., are forward-looking statements that involve
various risks and uncertainties. There can be no assurance that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements. Important
factors that could cause actual results to differ materially from Goldcorp
expectations are disclosed under the heading "Risk Factors" and elsewhere in
Goldcorp documents filed from time to time with the Toronto Stock Exchange,
The United States Securities and Exchange Commission and other regulatory
authorities.
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For further information: contact: Chris Bradbrook, Vice President,
Corporate Development, Telephone: (416) 865-0326, Fax: (416) 361-5741,
info@goldcorp.com
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