Goldcorp pumps more money into projects
miningweekly.com
By: Liezel Hill
30th July 2009
Updated 3 hours ago
TORONTO (miningweekly.com) – Canada's second-biggest gold-miner, Goldcorp, is accelerating spending on growth projects, as it enjoys the benefits of higher gold prices and easing costs, and after successfully raising around $840-million in a convertible note issue last month.
The Vancouver-based miner slowed capital expenditure when metals prices slumped last year, but has now approved an additional $88-million in spending for this year, CEO Chuck Jeannes said on Thursday.
Most of the money will be spent at the company's flagship Red Lake camp, in Ontario, and at the Eleonore project, in Quebec, where the miner plans to complete an internal prefeasibility study by year-end.
“When you combine our growing ability to generate cash flow, the existing $1,5-billion credit facility and essentially zero debt, our available liquidity is outstanding,” Jeannes said.
“This strength led us to accelerate investment in a number of growth projects in the second quarter that we had slowed down when metals prices were under pressure late last year.”
The $88-million includes $14-million for exploration, which brings the total allocated for exploration this year to around $110-million, he said.
Goldcorp, which has mines in Canada, Argentina, the US, Mexico, Honduras and Guatemala, plans to increase total production by more than 50%, to 3,5-million ounces, by 2013.
But Jeannes said this target does not include potential production from projects like Eleonore and Cerro Blanco, in Guatemala, or expansions at existing operations, including a planned openpit at Red Lake, the high-grade Cochenour/Bruce Channel underground deposit at Red Lake, or underground mining opportunities at Goldcorp's new Penasquito mine, in Mexico.
Goldcorp poured the first gold at the big new Penaquito mine from the leaching of oxide ore in May last year, announced mechanical completion of the first sulphide process line earlier this month and expects to sell the first concentrates from the operation by year-end, Jeannes said.
Commercial production is scheduled for early 2010.
Goldcorp shares rose 2,3% on Thursday, to C$39,44 apiece by 16:15 in Toronto.
On Wednesday evening, the company reported a $231,6-million net loss for the second quarter, compared with a $9,2-million loss in the same period last year, after recording a noncash foreign exchange loss on the revaluation of future income tax liabilities.
Excluding this charge, adjusted net earnings were $99,2-million, compared with $83,2-million a year earlier.
The group produced 582 400 oz during the second quarter, an increase of 5% year-on-year, and cash flow increased 22%, to $276,6-million.
Cash costs for the quarter were $310/oz on a by-product basis, slightly up from $308/oz a year ago.
On a coproduct basis, costs improved to $402/oz, from $432/oz in the second quarter of 2008. |
